The volume of competing meats continues to keep a lid on cattle and beef markets as wholesale pork and chicken prices keep undercutting beef prices and attracting buyers. Domestic and export beef demand is suffering as a result.
Dressed cash hog prices last week were quoted at $68.75 per cwt, about 25% below last year. Retail chicken prices also have moved down smartly in the last two months as supplies mount.
And aside from fewer placements than expected in the latest USDA Cattle-on-Feed report, there is little to recommend higher prices for cattle or beef.
What’s worse, exports of all three are off, and imports of beef and pork are up as a stronger US dollar makes US products more expensive for foreign buyers but makes foreign meats less expensive for US importers.
In the past, US meat industries have relied on exports to clear burdensome inventories. This has not been the case this year, and if currency market jitters over the possible raising of the Fed Funds interest rate is any clue, the US dollar is likely to remain relatively strong through the year. Currency and equity traders now have their sights set on the December meeting of the Federal Open Market Committee where higher rates may be announced.
BEEF MUSCLE CUT EXPORTS VERY LOW
US exports of beef muscle cuts are the lowest they have been since the last week of last year, a holiday week. USDA data show weekly exports in the week ended Sep. 12 of 8,800 tonnes, down from 9,300 tonnes the week before. This is the lowest since 8,713 tonnes the week ended Dec. 27, 2014.
A Livestock Marketing Information Center graph shows that once that December 2014 low has been breached, one has to go back to the week ended March 3, 2012, to find a lower export week. In that week, exports of beef muscle cuts totaled 8,054 tonnes.
Graphing the data also shows the general decline in beef exports for the last year or more as the tops in weekly cycles tended to work lower over time.
PORK EXPORTS ALSO DOWN
USDA data also show that pork exports are challenging multi-year lows. Pork exports in the week ended Sep. 12 were placed at 14,900 tonnes, up slightly from this year’s low of 14,300 tonnes set just the week before. The next lowest week was 13,600 tonnes, which, coincidentally, was struck the same week as the last low in beef exports – the week ended Dec. 27, 2014.
This year also saw a spike in weekly pork exports to a record 38,800 tonnes the week ended June 27, but exports just two weeks later recorded one of the lowest readings of the year at 14,700 tonnes.
CHICKEN EXPORTS TAKE A HIT
Just because it is the cheapest meat, doesn’t mean chicken exports are close to normal either. Monthly USDA export data show July exports at 501.9 million pounds, down from 563.8 million the week before and down from 631.9 million in the same month a year earlier.
This year’s peak occurred in March when 603.1 million pounds were exported. From there, the figure has slipped as the US dollar value grew.
Market analysts say chicken exports, along with beef and pork, is likely to decline in coming months as the greenback retains its value relative to other currencies.
CASH FED CATTLE TRADE QUIET
No cash cattle trade was reported in the Plains Monday, and with futures jumping sharply, bids and offers remained closely held secrets. However, if normal starting ranges are used, bids might be expected to show up around $133 to $134 per cwt on a live basis and $212 to $213 dressed. Asking prices could begin around $137 to $138 live and $216 to $217 dressed.
Cash cattle traded last week at $135 to mostly $136 per cwt on a live basis last week, about $4 to $6 lower than the previous week, with light trading in Texas. In Nebraska’s dressed market, sales were done at $214 to $215, down $3 to $5.
The USDA reported mixed boxed beef prices Monday with its choice cutout down $0.76 per cwt at $225.54 and select up $0.89 at $220.15 with 99 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $198.04 per cwt, down $1.98. This compares with the Sep futures settlement Monday of $194.70, up $1.90.