Beef, Other Meat Exports Seen Higher

US meat and poultry export prospects look more secure after the US, Mexico and Canada agreed on a new trade agreement Sunday, which was given the new moniker the US-Mexico-Canada Trade Agreement.

The USDA’s most recent Livestock, Dairy, and Poultry Outlook said July US beef exports reached 279 million pounds, an almost 17% increase from 2017, bringing total beef exports for 2018 through July 15 to more than the same period a year ago.

US beef exports to North American markets also were exhibiting growth, with a year-over-year share of 24% of the market through July, a 6% growth so far this year, the Outlook report said.  Mexico led North America with 10% year-over-year growth, while exports to Canada were 0.7% above last year.

Through July, the major Asian markets for the US – Japan, South Korea, Taiwan, Hong Kong and the Philippines – drove this record pace with a combined share of nearly 65% of the volume of US beef exports, the USDA said.

Based on what was called “the strong pace of exports through July and the USDA Foreign Agricultural Service Export Sales reports through August, the 2018 beef export forecast was raised by 40 million pounds to 3.164 billion.  The 2019 beef export forecast was raised 40 million pounds from last month to 3.245 billion.

 

LIGHTER WEIGHTS SEEN OFFSETTING HIGHER SLAUGHTER

 

The USDA’s 2018 beef production forecast was unchanged from August’s at 27.1 billion pounds.  However, the 2018 production forecast reflected lower expected third-quarter production that offsets higher anticipated fourth-quarter production

In third-quarter 2018, the pace of steer and heifer slaughter in July and August was slower than expected.  Although slaughter in September likely will reflect rates of per-day slaughter slightly more than last year, there was one less slaughter day in September than last year.

Based on the latest National Agricultural Statistics Service Cattle on Feed report, a higher percentage of steers and heifers were on feed longer than a year ago, which hadn’t showed up in the weekly average dressed weights through August, the Outlook Report said.  As a result, for the week ending Sep. 1, average dressed weights for heifers were eight pounds above last year, while steers were two pounds below a year ago.

The slower pace of steer and heifer slaughter may suggest that some of the cattle that might have been marketed in the third quarter will be marketed in the fourth, the USDA said.

On the other hand, cow slaughter remained strong through the third quarter, but the higher proportion of typically lighter-weight cows negated some of the seasonal increases in steer and heifer dressed weights, the Outlook report said.  As a result, the third-quarter beef production forecast was reduced as higher anticipated cow slaughter is nullified by the lower-than-expected steer and heifer slaughter and lower dressed weights.

 

CATTLE, BEEF RECAP

 

No fed cattle sold Wednesday on the Livestock Exchange Video Auction, compared with 280 that traded five weeks previous at $109.50 per cwt.

Cash trading was reported last week at $110 to mostly $111, per cwt on a live basis and at $173 to $174 dressed, compared with the previous week’s range of $110.50 to $111 live and $170 to $175 dressed.

The USDA choice cutout Monday was up $1.20 per cwt at $205.08, while select was up $1.19 at $194.63.  The choice/select spread widened to $10.45 from $10.44 with 56 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday, was $157.48 per cwt, up $0.59.  This compares with Monday’s Oct settlement of $158.65, up $0.48.