USDA: Meat To See Larger Supplies In 2018

The USDA’s Economic Research Service Monday said all except lamb and eggs would be affected by larger year-over-year supplies and lower prices during the first half of next year.




Higher second-half 2017 feedlot placements were expected to lead to higher first-half 2018 fed cattle marketings and seasonally higher beef production.  The seasonal increase in beef production was placed at 5.1%.

First-half 2018 cattle prices were expected to be 7.3% below prices in the first half of 2017.

Cattle on feed inventories remain above year-earlier levels, and placements continue to reflect the larger inventory, the ERS said.  However, the pace of beef cow and heifer slaughter suggests the rate of expansion may have slowed.

Prices across the cattle complex appear to have peaked, and fourth-quarter values are under pressure.

Higher monthly beef exports through October resulted in year-to-date export growth of 14.3% above 2016.  Export forecasts for 2017 and 2018 were revised upward from November forecasts based on the current pace of growth and strong global demand.

The beef cow inventory has been expanding since 2015, with inventories on Jan. 1, 2015, 2016 and 2017 up 0.7%, 2.9% and 3.5%, respectively.  However, the pace of beef cow and heifer slaughter suggests the rate of expansion may have slowed in 2017.

Beef cow slaughter through October was 11% higher than the same period in 2016.  Preliminary federally inspected beef cow slaughter in November also has been fairly strong and higher than November last year.

Heifer slaughter has seen a 12% increase through October, while steer slaughter has only increased about 3%.




Higher first-half 2018 pork production of 4.3% derived mostly from expected higher second-half 2017 pig crops.  As a result, hog prices were expected to fall 2.4% below those in the first half of 2017.

Pork packer margins recovered in November, largely because of strong product prices, the USDA said.

Fourth-quarter commercial pork production was expected to be record-high at almost 6.8 billion pounds, about 2% higher than a year ago.

Fourth-quarter, pork prices were expected to average $44 to $45 per cwt, more than 20% above a year ago.

October pork exports were 495 million pounds, 9.5% higher than a year ago.  Strong exports were attributable to Mexico, most of Asia and Colombia.




For broilers, expected higher producer returns drove relatively small production increase expectations.  First-half broiler prices were forecast to decline by 6.8%.

The broiler market has been stable, but price projections were slightly decreased, and year-ending stock projections were increased on recent data.

Hatchery data, indicators for future production, reveal producers may expand their flocks, the ERS said.

For turkeys, a modest recovery in domestic demand and exports drove expectations for a small, 0.24% increase in production, but low prices could continue underscoring the slow pace of demand recovery relative to supplies.  First-half 2018 prices were expected to fall 9.8%.




Only 75 head of fed cattle sold on the Livestock Exchange video auction Wednesday at $116 per cwt.

The bulk of the cash trade took place on Friday from $118 to $120.50 per cwt on a live basis, mostly $119 to $120, up $2 to $3.  Dressed-basis trade was mostly at $188 per cwt, steady to up $1.

The USDA’s choice cutout Monday was up $1.28 per cwt at $203.15, while select was up $1.76 at $185.01.  The choice/select spread narrowed to $18.14 from $18.62 with 91 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Friday was $152.62 per cwt, down $1.78.  This compares with Monday’s Jan settlement at $147.65 per cwt, down $0.10.