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CME: Livestock, Poultry Weights Show Upward Trend

22 July 2013

US - Harvest (the more politically-correct term being used these days in place of slaughter) weights are, obviously, a major determinant of meat and poultry supplies, write Steve Meyer and Len Steiner.

The trend for weights for all species has continued upward for many, many years with that growth being driven by changes in technology and, primarily, genetic capability for lean growth. Cattle and hog feeders would have raised larger animals years ago except for the fact that they matured physiologically and began depositing too much fat.

Relentless selection for animals that would put on less fat and more lean at heavier weights enables producers to economically take them to larger weights, spreading fixed costs of buildings and land and the sunk costs of sows and cows over more pounds of output.

Packers encouraged the increase with larger and larger discounts on lighter-weight animals for the same reason: It takes no more buildings or labor to process a large animal than it does to process a small one thus making large animals more profitable.

About the only costs that get larger as cattle and hogs get larger are utilities (more electricity to chill big carcasses) and packaging. While lean growth has been less of a factor in larger chickens, the same cost-spreading applies to birds. Selection for growth rate has driven bird weights higher and the advent of boneless products and the fact that those can be more efficiently taken from larger birds continue to push weights higher.

And there are seasonal components as well, especially for hogs and cattle. Hog weights dip in the summer months when feed intake falls due to hot weather and growth rates slow.

The normal seasonal swing is 3-4 per cent. Cattle weights decline in the late winter and spring as harsh winter weather takes its toll on cattle performance. The normal seasonal swing for cattle is roughly 6 per cent. While the seasonal variation for chicken appears smaller, it still represents 3-4 per cent of the average slaughter weight.



What are weights telling us about this year’s supply situation? We think there are three pretty distinct patterns and stories:

  • Chicken weights represent the relentless move from whole birds to chicken parts to boneless product. As we have pointed out before, we believe this spring’s adoption of boneless product into KFC’s original recipe line is important and this week’s announcement that the company will build a new concept store called “KFC eleven” (in homage to the original recipe’s 11 secret herbs and spices) near its Louisville headquarters that will serve only boneless chicken underscores that impact.
  • The normal seasonal weight pattern for hogs was disrupted last year by summer heat and high feed costs. Weights have now caught up to year-ago levels. Cooler temps are helping summer weights. Possibly much lower feed costs could push weights to 209-211 pounds this fall, adding significantly to pork output.
  • Cattle weights jumped in early 2012 as beta-agonists became widely used in feedlots. The higher weights persisted in spite of higher feed costs as the beta-agonists changed the marginal costmarginal revenue relationship of the last few weeks of the feeding period. Will lower feed costs will push them higher this fall?


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


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