This is a rather imprecise estimate given that the numbers will be revised in the coming weeks and also because the poultry data is reported with a lag. Still, as the following chart shows, red meat and poultry production has been trending lower since early spring and the latest data is only a continuation of this trend towards tighter supplies.

Record beef and pork prices underscore the shift in overall product availability at a time when demand has shown a marked improvement compared to late last year. The most significant change in overall product availability has come in the cattle/beef complex.

Last week, USDA pegged total cattle slaughter at 577,000 head, down 11.7 per cent compared to year ago levels. We estimate that steer/heifer slaughter for the week was 463,000 head, down 13 per cent compared to a year ago while cow/bull slaughter at 114,000 head was also down about 13 per cent from a year ago.

Both steer and heifer slaughter has been particularly limited since April, with heifer slaughter down sharply as producers retain more heifers while steer slaughter down as feedlots try to stretch out the marketing window for cattle they have on feed.

In past years, feedlots have been able to make up some of the short cattle supplies by bringing cattle to market at heavier weights. Different from hogs, cattle weights this year have been about steady with year ago levels.

Steer carcass weights since April have averaged about –0.1 per cent below year ago levels while heifer weights have been almost unchanged. The situation is about the same if we run the calcula- tion from the start of 2014.

At this point, feedlots are bringing to market steers and heifers that are at about he same weight as a year ago even though data shows that on average those cattle are spending more time on feed than last year.

Overall average carcass weights are up about 6 per cent compared to last year but this is largely a function of the mix of cattle coming to market, with more steers and heifers than a year ago. Overall cow slaughter numbers have been particularly limited this year given short cull cow supplies and big incentives for cow-calf operators to retain as many cows they can.

Pork production has not declined as much as earlier expected as producers have been able to offset some of the piglets lost to PEDv by increasing overall carcass weights. USDA estimated the average carcass weight of hogs coming to market at 213 pounds, about 5 per cent higher than a year ago.

As a result, even though total hog slaughter for the week was down 8.9 per cent from a year ago, total hog production was down less than 4 per cent. So if pork production is not down as much as expected, why are hog prices up almost 33 per cent from a year ago.

In part this is a function of demand for pork but also because producers have had to slow down the flow of hogs coming to market in order to achieve those heavy carcass weights. In part years, extra heavy carcass weights implied producers were behind in marketings and prices would be pressured lower.

Today, producers are delaying marketings on purpose in order to keep weights up and offset the number of pigs lost in Q1. The producer unwillingness to market hogs until they have hit much heavier weights at a time when packers have sought to find enough hog s to keep lines running and fill orders has contributed to the dramatic increase in hog and pork prices.

What could cause this to change is if for some reason those pork orders slow down (hard to do given where beef prices are) and if the number of hogs on the ground increases significantly come October and November. For now, however, supplies are tight and likely to remain tight through the end of summer.