March Red Meat Stocks Rise

The US red meat supply likely rose in March with increased cattle and hog slaughter rates, something that may moderate rising product prices for consumers and fed cattle and hog prices for producers.

Supplies and beef production do not yet appear to be burdensome, but rising pork supplies at a time of seasonal production declines could pressure pork, and then beef, prices.  Market traders hope continued strong consumer and export demand will keep support firmly under prices for the foreseeable future.

An analysis of USDA National Agricultural Statistics Service data show some areas of legitimate concern.  Slaughter rates, and presumed beef and pork production, rose in March.  This is typical for both, but barrow and gilt slaughter for the month was much above last year and the 2011-2015 average.

 

HOG SLAUGHTER JUMPS

 

March hog slaughter jumped to 10.308 million head from 9.051 million in February, a move of 1.258 million, or 13.9%.  However, last year, March slaughter rose 632,000 head, or 6.94%, to 9.737 million head from 9.105 million a month earlier.

By comparison, March hog slaughter last year was up 632,000 head, or 6.94%, to 9.737 million from February’s 9.105 million, NASS data showed.  And the previous five-year average had March hog slaughter rising 648,000 head, or 7.66%, to 9.112 million head from 8.464 million a month earlier.

The good news for cattle producers is that hog slaughter has a strong seasonal downturn in April.  However, it may remain above last year and the 2011-2015 average.

 

MARCH CATTLE SLAUGHTER UP

 

March cattle slaughter also was up, with the most notable gains coming in heifer and beef cow slaughter rates, NASS figures showed.

Monthly commercial cattle slaughter for March was up to 2.766 million head from 2.369 million in February, a gain of 397,000, or 16.8%.  March’s rate also was 232,000, head, or 9.16%, above the year-earlier rate of 2.534 million, and it was 140 million, or 5.33%, above the previous five-year average of 2.626 million.

Federally inspected heifer slaughter in March at 764,100 head, was up 126,500, or 19.9%, from 634,600 in February.  This put it 95,700, or 14.3%, above last year’s March rate of 668,400 head but only 12,760, or 1.64%, below the 2011-2015 average of 776,860.

Federally inspected steer slaughter also was up, but the gains over last year and the previous five-year average were less dramatic.

In March, 1.413 million fed steers were killed, up 212,000, or 17.7%, from 1.201 million in February and 98,000, or 7.45%, above last year’s 1.315 million and 150,000, or 11.9%, above the 2011-2015 average of 1.263 million.

Beef cow slaughter, at 231,100 head, was up 29,000, or 14.3%, from 202,100 in February; 24,000, or 11.6%, above last March’s 207,100 and 3,929, or 1.67% below the five-year average of 235,020.

 

CASH CATTLE QUIET

 

Cattle traded on the livestock exchange last Wednesday at an average of $131.14 per cwt, up $2.54 from the previous week.  Deferred sales ranged from $125.37 for steers and $125.48 for heifers.

Cash cattle traded last week at mostly $135 to $138 per cwt on a live basis, up $5 to $6, and at $215 to $219 dressed, up $5 to $9.

The USDA’s choice cutout Tuesday was up $3.18 per cwt at $229.45, while select was up $3.83 at $213.28.  The choice/select spread narrowed to $16.17 from $16.82 with 70 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Monday was $142.76 per cwt, up $1.04.  This compares with Tuesday’s May settlement at $149.62, up $1.02.