CME: US Red Meat Production Up in Year so Far

US - USDA’s National Agricultural Statistics Service (NASS) released their monthly Livestock Slaughter report on Thursday with data for May, write Steve Meyer and Len Steiner.
calendar icon 27 June 2016
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Lots of national and by-state data on slaughter levels, weights, etc., are provided for several species in that report.

Here we will provide a quick overview of the meat production numbers for beef and pork, which provides some useful background as we prepare for this afternoon’s more forward looking NASS reports on those sectors (Quarterly Hogs and Pigs and monthly Cattle on Feed).

First we will digress a bit. The NASS headline on the May Livestock Slaughter report was “Record High Pork Production for May”, that is correct, but is a bit of an overstatement.

Last year, NASS moved the number of working days (often referred to as slaughter days) to the top of the monthly slaughter reports at the request of industry analysts in both the private sector and by Extension economists at US state universities.

Still, many in the media and other users overlook the impact when slaughter days change from one year to the next.

In May of this year there were 21 slaughter days compared to 20 last year, a percentage difference of 5 per cent. Slaughter days even-out over time but caution is required for some individual months.

US Commercial pork production in May was 1.95 billion pounds, up 5 per cent year-over-year.

Adjusting for slaughter days, US pork production in May was essentially unchanged compared to 2015’s. Graphically, the adjustment for the number of slaughter days can be represented either daily or weekly, weekly is used for comparative purposes here.

Tonnage of beef produced in May was 2.05 billion pounds, up 5 per cent unadjusted for slaughter days and unchanged from a year earlier when adjusted.

The same applies to commercial red meat production (beef, pork, lamb, and veal), up 5 per cent unadjusted for slaughter days and more realistically or correctly in terms of market impact unchanged from 2015’s.

From January through May, US commercial red meat production (beef, pork, lamb, and veal) was 20.2 billion pounds, up 3 per cent compared to 2015’s. The adjustment for the year-to-date difference in slaughter days (106 in 2016 versus 105 last year) is pragmatically a 1 per cent increase for the one extra day.

After adjusting for slaughter days, year-to-date (January through May) US red meat production was 2 per cent above 2015’s.

NASS will release May’s Poultry Slaughter report on Monday. If you really want a gauge on what happened in that sector, don’t forget to adjust production down to reflect the number of slaughter days.

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