June’s monthly commercial beef production held above last year where it has been for five of the first six months of the year. Production has been above the 2012-2016 average all year.
Data from the USDA-National Agricultural Statistics Service showed commercial beef production, the sum of Federally Inspected and non-inspected production, totaled 2.30 billion pounds. This was slightly below May’s production of 2.31 billion pounds.
In June 2017, commercial beef production totaled 2.28 billion pounds, the data showed. This means production this June was up 20 million pounds, or 0.88%.
Compared with the 2012-2016 average of 2.13 billion pounds, June 2018 production was up 170 million, or 7.98%.
OUTLOOK UP
If monthly beef production follows the average trend, it will continue moving higher with a dip in July and a major drop in September before setting an annual peak in October.
However, last year, the annual peak came with August’s production when 2.40 billion pounds were produced.
Beef production follows closely the trends in cattle slaughter, and monthly slaughter through June also has been above last year in five of the first six months of the year.
USDA-NASS data show commercial cattle slaughter in June at 2.879 million head, down from May’s 2.908 million but up 20,000, or 0.70%, from June 2017’s 2.859 million and 204,000, or 7.63%, above the 2012-2016 average of 2.675 million.
Based on the USDA’s monthly Cattle on Feed report, fed cattle slaughter could rise again in July before tailing off a bit in August. But the average of the two months looks like it could remain above the average of the 2017 months. In all cases, monthly slaughter and beef production could remain above the 2012-2016 average.
RISING SUPPLIES AN ISSUE
The latest USDA-NASS Cold Storage report showed total pounds of beef in freezers were down 3% on June 30 at 448.6 million pounds but up 8% from June 30, 2017, total of 415.3 million.
That total does not appear to show any backlog that could be attributed to any tariff tiffs, but a market analyst said the longer such trade issues go, the more production backlogs could go into cold storage and pressure wholesale product prices.
And cattle slaughter and beef production are likely to continue rising at least through next year. The latest semi-annual cattle inventory report showed a 2% decline in the number of heifers held for beef cow replacement.
However, a decline in heifer retention may be met with a decline in cow culling and a net-zero effect on the breeding herd. In addition, assuming the decline in heifer retentions translates to a smaller breeding herd, the effects of a lower calf crop won’t be felt until 2020 at the earliest.
CATTLE, BEEF RECAP
851 head of fed cattle sold Wednesday on the Livestock Exchange Video Auction at an average price of $110.07 per cwt, down from the last sale at $112 two weeks previous.
Cash cattle traded last week at $112 per cwt on a live basis, steady to down $1 from the previous week. Cattle traded on a dressed basis at $176 to $178 per cwt, down $2.
The USDA choice cutout Wednesday was down $0.52 per cwt at $203.75, while select was off $0.80 at $197.58. The choice/select spread widened to $6.17 from $5.89 with 95 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday, was $149.39 per cwt, up $0.35. This compares with Wednesday’s Aug settlement of $151.82, up $2.50.