US - The latest USDA monthly production statistics illustrate the dramatic swing in terms of supply availability for beef, pork and chicken so far this year, write Steve Meyer and Len Steiner.
Beef supplies remain limited even as on feed supplies are slightly above year ago levels.
Cow calf operators are holding back more heifers in an effort to rebuild the cow herd, supported by good pasture conditions and historically high calf values.
Pork and chicken producers have the ability to respond more quickly to market signals and we already are seeing a significant rebound in available supplies relative to last year.
Pork and chicken production is up sharply and further increases are currently in the pipeline.
Below is a brief recap of the latest numbers and implications for market going forward.
Cattle: Total cattle slaughter in May was 2.378 million head, 9.8 per cent lower than a year ago. But there was one less marketing day in May 2015.
Adjusting for this, the average daily cattle slaughter in May was down 5.2 per cent compared to last year and it has averaged 5.9 per cent in the first five months of this year.
Cattle are coming to market at heavier weights, which has helped offset some of this decline. But in order to get the heavier weights producers are delaying marketings, which in turn has limited daily availability and forced packers to pay up in order to run minimal required levels.
Average cattle carcass weight in May was 813 pounds, 2.9 per cent higher than a year ago. The report continued to show few heifers in the slaughter mix, which fits with the placement numbers and reports of herd rebuilding.
Average daily steer slaughter in May was 2.3 per cent lower than a year ago while average daily heifer slaughter was down 9.4 per cent and daily cow slaughter declined 7.0 per cent.
Average beef production in May was 96.2 million pounds/day, 2.4 per cent lower than a year ago. The decline is entirely due to lower female slaughter.
Beef production from steers in May was actually up 0.4 per cent (on a daily basis) while production from heifers was down 7.4 per cent and production from cows was down 3.9 per cent.
Hogs: Commercial hog slaughter in May was 8.745 million head, up 1.5 per cent from a year ago. But remember that one less marketing day.
When adjusting for it, average daily hog slaughter in May was up 6.5 per cent compared to a year ago and has averaged 6.7 per cent in the first five months of the year.
Average carcass weights are down from last year but they still are some of the highest on record and thus overall pork production is much higher than the levels we saw in 2012 and 2013.
Average daily pork production in May was 93.1 million pounds/day, 5.2 per cent higher than last year, 7.9 per cent higher than in May 2013 and 6.3 per cent higher than in May 2012.
It will be interesting to see in the next few months if producers start to reduce the breeding herd given the recovery in productivity.
May sow slaughter was 230.3 million head. When adjusted on a per day basis, average sow slaughter was up 8.2 per cent compared to a year ago.
Sow slaughter for Mar-May was 711,700 head. This is lower than probably analysts are using in their hog inventory calculations and we could very well see a breeding herd as of June 1 that far exceeds what analysts are projecting.
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