United States-Animal production for meat.
UNITED STATES-FARM PRODUCTION BEEF —
Based on weekly data, production is down only fractionally this year with production each of the past three weeks being higher than one year earlier. Dressed weights are contributing to the increase slightly but slaughter has been larger in recent weeks as well. These slaughter totals correspond to cattle placed in July — the last month in which placements exceeded year-earlier levels. August placements were down 2.7% year-over-year so we can expect slaughter levels to decline. But the cattle placed in August were over 18 pounds/head heavier than one year earlier so finished weights may more than offset slaughter declines — at least for a couple of months based on very high placements weights last summer and lower-priced feed. Fed cattle at $81 and losses of $200/ head, though, should be driving some cattle to market earlier. Let’s hope so.
PORK — FI hog slaughter has been almost precisely at the levels suggested by the December Hogs and Pigs report. Put that with carcass weights very close to last year’s levels and you get production that is about as expected as well. If this report holds, expect hog and pork supplies to fall relative to last year as we progress through the rest of Q1 and Q2.. That short Sep-Nov pig crop will begin reaching market weights in late February.
BROILERS — The most dramatic and out-of-character changes are occurring here. Never in our careers have we seen this kind of reduction in broiler supplies. The USDA daily data say –5.7% while the weekly data say –5.2%. Here, too, weights are about constant so the reductions are coming from slaughter numbers and it appears that even lower numbers are on the way. Nearly 200 million (7.1%) fewer broiler eggs were placed in incubators in Q4-2008. Since it takes from 8-11 weeks, depending on slaughter weight, for an egg to result in a market bird, the birds that reached slaughter by January 31 came from eggs set in November or early December. Reductions of roughly 7% have continued through January, so we should expect to see lower slaughter numbers through March/ April. The correlation between egg sets and chick placements is not perfect and year/year placement changes have been about 2% less than corresponding egg set changes. Still, 5% LOWER chick placements are an unusual occurrence indeed — and one that appears likely to continue for the foreseeable future.
