Total US Meat Production Holding Above 2014

Led by pork production increases, total weekly US red meat production is above last year but below the average of the previous five years, according to USDA data.

Total red meat production last week amounted to 921.8 million pounds, compared with 900.8 million in the same week a year ago and the 2009-2013 average of 960.04 million.  This week will see a significant production drop as major slaughter and packing firms take a day off to observe the Labor Day holiday.

Weekly chicken production also is up this year, remaining above the 2009-2013 average for all but two weeks and above last year for all but three.  In two of the weeks in which broiler production fell below previous years, the holiday weeks fell a week earlier than in previous years.  Had they fallen in the same weeks, broiler production would have been below a year ago only once and been never below the average.

Broiler production rose last week to 1.022 billion pounds from 965.5 million in the same week last year and 926.5 million in the 2009-2013 average.  Weekly production also was up from 1.008 million the previous week.

Despite common beliefs in the meat industries, consumers are slow to switch between their meats of choice.  Price differentials over time may cause some long-term shifting, but it’s more common for beef consumers to switch to cheaper cuts or to eat less than to switch the type of meat consumed.

 

BEEF PRODUCTION FOLLOWING SEASONAL PATTERN

 

Weekly beef production is following the seasonal pattern, albeit at a lower level, USDA figures show.  Weekly ups and downs have almost mirrored the average since April when accounting for the one week difference in holiday weeks.

This week’s beef production likely will be down because of Labor Day holiday plant closures.  Once that is in the record books, the trend is for weekly beef production to decline slightly into year end.

 

PORK PRODUCTION CLIMBING

 

Pork production, however, is climbing seasonally and at a higher level than the average.

For traders, this presents a problem, as they see it as direct competition for consumer dollars.  At the right retail price, it could be an issue since price always rules if the spread is wide enough, but consumers may simply eat a little more pork rather than switch much beef consumption to pork.

 

CASH FED CATTLE TRADE QUIET

 

This week’s cash cattle trading got started Thursday with widely scattered activity at $140 to $142 per cwt on a live basis, steady to down $1 from last week, and at $218 to $220 on a dressed basis, $2 to $3 lower.

The USDA reported lower boxed beef prices Thursday with its choice cutout down $0.41 per cwt at $239.06 and select off $0.60 at $228.10 with 114 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $205.54, down $0.17.  This compares with the Sep settlement Thursday of $203.95, up $0.12.