CME: Carcass Weights Affecting Pork, Beef Supply

US - Beef and pork packers may be trying to limit the number of animals processed each week but some of the slaughter reduction has so far been offset by heavier animals coming to market, write Len Steiner and Steve Meyer in their Daily Livestock Report for 14 October.
calendar icon 15 October 2009
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In the case of hogs, carcass weights this year declined only briefly and for the most part were just a few pounds off the annual highs. This past summer temperatures across much of Iowa and other Midwest states with large hog operations were especially cool, which limited heat stress and allowed animals to put on more pounds than they usually do. Also, cooler weather during the summer tends to improve feed use both in hogs and cattle. Currently hog weights have held steady, which should be seen as positive for the hog market. We will have to a wait a couple more weeks as recent numbers are only preliminary estimates but the fact that weights have held steady likely indicates that producers are relatively current in their marketings. We should eventually see hog weights drift higher but the expectation is that in Q4 they will be very close to year ago levels.

In the case of fed cattle, carcass weights remain above year ago levels and we suspect that weights could move past the 870 pound mark at some point this month, which would be a new all time record. Feedlot marketings slowed down a bit in September and this may have contributed to the surge in steer weights that we saw last month. In the four September weeks, steer carcass weights were on average 866 lb./carcass, about 8 pounds heavier than a year ago. Overall cattle carcass weights in September (based on weekly numbers) were around 798 pounds compared to 790 pounds a year ago.

The increase in carcass weights does not impact only the supply of beef and pork coming to market, although that is the more immediate impact. Higher carcass weights tend to generate more trimmings. Beef and pork trim prices have been pressured lower this fall, in part due to the increase in the amount of fat on animals currently going to market.

And that is not just surface fat but also higher intramuscular far, significantly improving cattle grading this fall. The latest data available shows that about 63 per cent of cattle were grading choice (data is for August), compared to 59.3 per cent grading choice last year and a five year average of 57.7 per cent. Indeed, we have seen a significant increase in choice grading animals since last fall and in the process a narrowing of the spread between choice and select beef.

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