Pork, Chicken Production, Consumption Seen Rising

Annual pork and chicken production are expected to rise this year, and the lower prices the extra production is likely to bring will increase per capita consumption, but the lower prices also are expected to curb production next year.

Per capita disappearance, often called consumption, for pork is expected to decline to historically normal levels, so total production next year may drop back to only keeping pace with population growth, says the Livestock Marketing Information Center.  For this year, per capita pork consumption is expected to be 49.63 pounds, the highest since 2009 when it was 50.19 pounds.

Consumption rates of meat are derived figures and not measured.  Total production, imports and carryover stocks can be measured; from this are subtracted condemnations at the packing plant and exports.  The result is then divided by population to arrive at a per capita disappearance, or consumption, assuming all of the product purchased by consumers is actually consumed.

US pork production is expected to be 24.4 billion pounds this year, 6.6% above 2014’s 22.9 billion and setting a new record high.  Federally inspected chicken production is expected to be 40.6 billion pounds, 5% above a year ago and also record large.

Per capita disappearance for pork and chicken in 2015 on a retail weight basis are 49.6 and 90.1 pounds, respectively.  Individual pork consumption is set to rise 3.2 pounds, or 6.9%, from 2014.  Chicken consumption is expected to jump 5.5 pounds, or 6.5%.

 

CONSUMPTION PROBLEMS

 

A recent study by Oklahoma State University shows consumers are willing to pay more for steak, chicken breasts and chicken wings than they were in March, but the amount they are willing to pay for hamburger, pork chops and deli ham declined.  The survey said consumers were willing to pay 1.65% more for steak than they were in March, but their willingness to pay for pork chops fell 6.59%, and their inclination to pay for deli ham dropped 10.04%.

Per capita beef consumption is expected to continue sliding while pork consumption is expected to remain around the 50 pounds figure.  Chicken consumption, however, is expected to continue rising, showing that, over time, chicken is the real competition for beef.

Retail grocers have said that pork sales respond less to advertising and weekly features than beef or chicken.  They have found that they must keep pork in the ads, but that a feature does not increase purchasing to the same degree as beef or chicken.

Likely the largest depressant for beef consumption is the perception of increased fat in the diet over that of chicken, especially chicken breasts.  Price may play a part as well, and many analysts fear the decline in poultry exports because of H5N2 bird flu could put more chicken and turkey meat in front of shoppers at a low enough price to steal more market share from beef.

 

CASH CATTLE MARKET QUIET

 

No trading was reported in Plains cash cattle markets Monday.  Asking prices were expected to surface at $161 per cwt on a live basis and $263 on a dressed basis.

Private sources reported cash cattle markets last week traded lower to $157.50 to $160, mostly $158 on a live basis and at $252 to $254, mostly $253 on a dressed basis.  These were $3 to $6 below the previous week’s mostly $160 to $161 and $256 to $260.

The USDA’s beef cutout value Monday was mixed with choice at $256.89 per cwt, down $0.10 from Friday and select at $247.98, up $0.36.  Volume was active with 110 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Friday was $214.35 per cwt, up $1.38 on the day and $0.55 below the Apr settlement of $214.90.