It’s clear that US beef and cattle producers could use more product exports since year-to-date beef production is up more than exports.
To be clear, beef exports are up, but they lag the increase in beef production, and the excess may be part of why cattle prices aren’t being supported better.
BEEF PRODUCTION UP
The sum of weekly beef production data through last week from the USDA’s Agricultural Marketing Service and the USDA’ National Agricultural Statistics Service that was compiled and published by the Livestock Marketing Information Center in Denver was 13.276 billion pounds. This was up 1.059 billion pounds, or 8.67%, from 12.217 billion pounds a year ago and up 1.315 billion, or 10.1%, from the 2015-2019 average of 11.961 billion.
However, direct comparisons with last year are somewhat skewed by the drop in production linked to COVID-19 related packing plant shutdowns from March into late April last year. Post-COVID beef production resumed the pre-COVID trend of being above the previous five-year average, but did not show a spike in production that would have balanced the COVID-related springtime drop.
This year, weekly beef production is holding above the 2015-2019 average, and the line on a graph appears to follow the 2020 line closely except for the springtime drop. It takes adding the weekly production numbers up to conclude that year-to-date beef production has surpassed year-to-date last year and the same period in the five-year average.
EXPORTS UP BUT NOT ENOUGH
The total of known and unknown beef exports this year through last week comes to 428,000 tonnes, up 608, or 16.6%, from 367,200 tonnes in the same period last year, according to USDA Foreign Agricultural Service data.
That fell short of the increase in beef production, yet total supplies of beef in cold storage as of May 31 came to 414.047 million pounds, down about 8% from a month earlier and down about 1% from 417.356 million a year earlier, according to the latest USDA Cold Storage report.
It seems the combined domestic and export demand for beef is keeping up with production and even sucking a little out of cold storage.
However, frozen stocks often don’t affect prices for fresh product unless they get way out of proportion, a market analyst said. The data sometimes is used to augment trends or data from other sources to explain what is going on but often isn’t a mover by itself.
And, a stronger US dollar may preclude expanded US beef exports, the analyst said, unless beef exports from competing countries are cut, and buyers are forced to buy US beef.
CATTLE, BEEF RECAP
Fed cattle traded this week at $122 to $126.50 per cwt on a live basis, steady to up $1.50 from last week. Dressed-basis trading last week was at $197 to $198, up $2 to $8.
The USDA choice cutout Monday was down $7.13 per cwt at $297.43, while select was off $2.22 at $273.96. The choice/select spread narrowed to $23.47 from $28.38 with 103 loads of fabricated product and 16 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.05 to $1.12 a bushel over the Jul futures and for southwest Kansas were unchanged at $0.70 over Jul, which settled at $6.75 1/2 a bushel, up $0.39.
No live cattle delivery notices were tendered Monday against the Jun contract.
The CME Feeder Cattle Index for the seven days ended Friday was $146.18 per cwt down $0.11. This compares with Monday’s Aug contract settlement of $156.35 per cwt, down $3.20.