Weekly US beef production is at a crossroad. It can either follow last year’s trend and move higher for the next two weeks, or it can follow the previous five-year average and drift lower.
So far this year, weekly beef production has followed last year’s trend more closely than the five-year average, although at a lower level.
Last week, the US produced 428.2 million pounds of beef, down 8.0 million, or 1.83%, from 436.2 million in the same week a year ago. Production also was down 58.54 million pounds, or 12.0%, from the average 486.74 million.
The USDA does not project weekly beef production, preferring to go with quarterly and annual estimates. In this regard, the latest World Agricultural Supply and Demand Estimates indicate expectations for first-quarter 2015 beef production to remain below last year. The March 10 report suggested quarterly production of 5.670 billion pounds, compared with 5.868 billion in the same quarter of 2014.
Quarterly production was expected to remain below year-earlier levels through the first half, with output rising in the second half. Annual beef production still is expected to remain subdued, however.
PORK PRODUCTION TO RISE
If the beef industry hopes to get some price help from competing meats, it is liable to be disappointed. The USDA raised its estimate of first-quarter US commercial pork production by 30 million pounds in its latest outlook report to 6.160 billion pounds, almost 7% above a year ago, as February slaughter and dressed weights were higher than expected.
Estimated federally inspected hog slaughter in February reached nine million head, more than 4% above a year ago, the USDA said. Average dressed weights likely will finish the quarter more than two pounds heavier than last year.
Hog prices were expected to average $49 to $50 per cwt in the first quarter, down about 28% from a year earlier as production increases.
First-quarter pork exports are trending below a year ago, mostly to Asian customers as shipments were slowed by work slowdowns at West Coast ports. The labor disputes have been resolved, but product backlogs are likely to hamper the resumption of smooth export flows for weeks.
CASH CATTLE MARKET REMAINS QUIET
The cash cattle market Wednesday remained quiet with bids at $159 per cwt on a live basis and asking prices at $163. In dressed markets, bids were reported at $254 to $256 per cwt with asking prices at $260 to $263. Last week, cattle traded at $160 to $163 live and $258 to $260 on a dressed basis.
Wholesale beef prices were weak Wednesday in moderate demand and offerings. Ribs and chucks were weak, while rounds and loins were steady to firm. Trimmings were lower in light-to-moderate demand and moderate offerings.
The USDA’s choice cutout Wednesday was down $0.24 per cwt at $246.80, and select was down $0.32 at $244.47.
The choice/select spread widened to $2.33, and a moderate-to-heavy 137 loads were sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was $212.62 per cwt, down $0.40 on the day. This compares with the Mar settlement of $214.25, up $2.67.