Chicken Competing Hard For Beef Business

Many long-term students of retail meat and poultry prices and consumption feel that pork does not compete with beef at the retail counter as well as chicken.

That seems like heresy to some, but many analysts swear it’s true, so it pays to take a look at the feathered version of the meat counter now and then to size up the competition.

In its latest World Agricultural Supply and Demand Estimates report, the USDA figured 2016 broiler production at 41.1 billion pounds, unchanged from the March estimate but up 1.05 billion, or 2.63%, from last year’s 40.0 billion.  And 2016’s estimated production would be up 2.535 billion, or 6.57%, above the 2014 total of 38.6 billion.

USDA National Agricultural Statistics Service data of monthly production of federally inspected, ready-to-cook chicken showed that monthly production last year was above the 2010-2014 average every month.

 

IMPORT/EXPORT MARKETS REOPENING

 

Most of the US broiler meat export markets have reopened after last year’s bout with Highly Pathogenic Avian Influenza.  The USDA is estimating 2016 broiler exports at 6.74 billion pounds, unchanged from the March estimate but up 421 million, or 6.67%, from 2015’s 6.32 billion.

However, that would be down 561 million, or 7.68%, from 2014 exports of 7.30 billion pounds.

Broiler imports were estimated at 123 million pounds, also unchanged from the March estimate, but down 7 million, or 5.38%, from last year’s 130 million.  However, this would be up 6 million, or 5.13%, from 117 million in 2014.

 

TOTAL SUPPLIES PROBLEMATIC

 

With broiler production up and exports still not up to 2014 levels, total supplies are an issue for competing meats – beef.  Imports are seen down from last year as domestic production rises, but they remain above 2014.

The USDA is estimating total supplies of broilers at 41.616 billion pounds, unchanged from the March report but up 1.186 billion, or 2.93%, from 40.430 billion last year and up 2.678 billion, or 6.88%, from 38.938 billion in 2014.

The problem with that increased broiler production is that beef production also is expected to rise.  LMIC forecasts production to rise in the first three quarters of this year, dipping in the last quarter but staying above last year in all quarters.

With more production, US beef producers will need more demand, but with more production and cheaper prices, per capita chicken consumption is expected to outpace beef by 60.5%.

 

CASH CATTLE MARKET TRADE QUIET

 

Cash cattle markets Monday were quiet with no discernible bids or offers.  Markets Friday traded lightly at $124 per cwt on a live basis and $195 to $197 on a dressed basis.  Both were down $3 to $5 from the previous week.

The USDA’s choice cutout Monday was down $1.68 per cwt at $209.77, while select was off $2.31 at $199.96.  The choice/select spread widened to $9.81 from $9.18 with 88 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Friday was $143.43 per cwt, down $0.87.  This compares with the May settlement Monday of $141.42, up $1.00.