CME: Hog Slaughter High; Cattle Slaughter Drops

US - The latest weekly production data for the four main species has been updated, highlighting a few inconsistencies that are always the case at the start of the new year, write Steve Meyer and Len Steiner.
calendar icon 11 January 2011
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The year-to-date slaughter and production comparisons are skewed by the fact that last year’s data included a few more production days, hence the current 8.7 per cent decline in cattle slaughter and six per cent decline in hog slaughter. As the weeks progress, this discrepancy will be come increasingly less relevant but for now keep it in mind when looking at the year to date info. The table in the full report (see link below) includes a year-to-date number for broiler and turkey slaughter and production. However, the poultry data is reported with a one week lag, and as a result the year to data supply info still references 2010 (week ending 1 January).

Cattle slaughter for the week ending 8 January shows a 1.2 per cent decline compared to a year ago. The reduction was due to fewer steers and heifers coming to market while cow slaughter remains above year ago levels. Based on the daily slaughter reports, cow slaughter for the week was estimated at 140,000 head, about two per cent higher than the comparable week a year ago. Grinding beef prices have increased significantly in recent weeks, in part reflecting the lack of imported beef supplies but also better demand going into January and February. This has contributed to a significant appreciation in cow carcass values and, for the moment, producers are responding by bringing more animals to market. Weather reports forecasts significant snow and ice across much of the Southeast in the next few days and this will tend to slow cow marketings, further exacerbating the shortage of grinding beef. Imports remain especially tight with flooding in Australia further limiting shipments to the US market. Some US importers are finding it difficult to fill orders they put on the books last year and imported beef deliveries will likely be delayed for weeks, if not months.

Hog slaughter for the week was pegged at 2.189 million head, 4.38 per cent higher than a year ago. And with heavier hogs coming to market, total production for the week topped 453 million pounds, a 6.2 per cent increase from a year ago. Despite both more hogs and larger hogs coming to market, prices remain well above year ago levels, indicating that for the moment pork demand remains robust. The IA/MN lean hog carcass price was quoted this week at $70.89/cwt, 7.4 per cent higher than a year ago. The pork cutout rose 1.22 per cent from the previous week and it currently is 12.6 per cent higher than last year.

Further Reading

- You can view the full report by clicking here.
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