US meat inventories are growing, increasing the competition for consumer attention. Beef, pork and chicken industries give every indication of having ample, or even growing, supplies through 2016.
Volumes of red meat and poultry in cold storage surpass year-ago and 2009-2013 averages by wide margins, and breeding herds and flocks either are near record large or are growing.
WEEKLY COW SLAUGHTER BELOW AVERAGE
Cow/calf operations remain profitable, although high replacement costs have limited a headlong push toward accumulating cows. A retained heifer will have to produce calves for years to make the investment in keeping, breeding and caring for her worthwhile.
USDA data show accumulated cow slaughter to be well below the 2009-2013 average and last year. Through mid-September, 3.62 million cows have been slaughtered, compared with 3.83 million a year ago and the previous five-year average of 4.45 million.
In the second week of September, total cow slaughter jumped to 104,677 head from a holiday-depressed 87,934 head the week before. This was above the year-earlier rate of 98,600 head.
This year’s weekly cow slaughter rate has followed last year fairly closely, although at a mostly lower level. This shows that the emphasis in herd expansion has shifted to more heifer retention, which is precisely what weekly USDA data shows.
WEEKLY SOW SLAUGHTER UP SEASONALLY
Sow slaughter in mid-September took a seasonal bounce and remains above the year-earlier rate but below the previous five-year average, an indication the breeding herd is not growing. However, the USDA’s quarterly Hogs and Pigs report shows the breeding herd at 5.99 million head, up 1% from last year and up 1% from the previous quarter.
The market hog inventory, at 62.4 million, was up 1% from last year and up 1% from the previous quarter.
It would appear, then, that the industry is becoming more efficient, and the average number of pigs saved per litter was a record high 10.39 for the June-August period, compared with 10.16 in the year-earlier period.
All that led to the highest inventory of hogs and pigs since quarterly estimates began in 1988.
EGG SETS SHOW SIGNS OF CRACKING
Expansion in the chicken sector has continued this year after beginning last year, although there are signs that production is declining more than the seasonal summer slowdown as producer margins drop into the red.
Egg sets have declined in recent weeks to levels that are below last year and the previous five-year average. However, some analysts believe fourth-quarter production will be above a year ago, with the trend continuing into the first quarter of 2016.
CASH FED CATTLE TRADE QUIET
Cash fed cattle markets Tuesday were quiet as futures prices soared limit up. Some credited the futures rally to delivery notices of 15 contracts. Others said the futures market was looking for an excuse to relieve some of its technically oversold condition, and that deliveries and modest gains in midday wholesale beef prices punched the ticket higher.
Live-basis cash prices last week plunged $10 to $12 to $116 to $124 per cwt on a live basis. Dressed-basis sales were at $187 to $190, down $12 to $14.
The USDA reported mixed boxed beef prices Tuesday with its choice cutout up $0.20 per cwt at $204.17 and select off $0.18 at $198.87 with 143 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Monday was $182.29 per cwt, down $0.47. This compares with the Oct settlement Tuesday of $182.52, up $4.40.