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FEEDSTUFFS MEAT PRICE OUTLOOK: Dec. 11, 2017

Pork product exports for October record large.

Beef: The U.S. Department of Agriculture (USDA) recently released export data for October, revealing another month of larger year-over-year imports at 246.6 million lb., up 16 million lb. (7%) from the prior month and 20.9 million lb. (9.3%) larger than a year ago. Not to be outdone, beef exports posted a record-large total -- the third monthly record in a row -- reported at 260 million lb., just 10 million lb. below the all-time July 2011 high of 270 million lb. Month to month, October's export total was up 17 million lb. (7%) from September's record-large monthly total and was 30.1 million lb. (13.1%) larger than the year prior. Larger exports eclipsing seasonally smaller imports left the U.S. a net beef importer for the second consecutive month. Beef imports tend to decline further into the winter months, and while exports exhibit the same general easing pattern, the decline is not nearly as sharp and should keep the U.S. a net beef exporter through the balance of 2017.

Pork: Along with record hog harvest and pork production levels for October 2017, exports set another milestone. Total pork product exports for October were record large at 494.64 million lb. While this is not a record over every month (which was set in March), it does represent an all-time high for any October. It exceeds the highest historical October by 43 million lb. (9.5%) from 2016. Total pork exports are projected to exceed fourth-quarter 2016 levels by more than 6%, on average, with additional records expected for November and December. Export markets are helping keep domestic markets tight on available supply, despite the record-large fresh supplies of hogs. Exports for the fourth quarter are forecasted to absorb 22.68% of total pork production, an increase of 3.7% over 2016. The net increases during the fourth quarter could be near an additional 97 million lb.

Poultry: As expected, U.S. broiler exports performed better during October than they did in September. According to the latest USDA data, broiler meat exports reached an astonishing 642 million lb. during the month. That monthly total was up 13.3% from a year ago and represents the highest monthly total for 2017. It was nearly even with peak levels attained during 2014 and within 50 million lb. of the historic monthly total achieved in 2011, when both Russia and China consuming the majority of U.S. broiler meat exports. The October total is especially encouraging given the outlook for expansion both within the broiler meat arena and competing proteins. In the aftermath of restrictions to trade related to highly pathogenic avian influenza, U.S. broiler meat exporters were slow to return to growth but appear to be on a growth pattern superior to efforts made prior to 2015. Total U.S. broiler meat exports are expected to reach 6.77 billion lb. this year, which would be a 1.8% increase from the prior year.

For a more detailed look at the weekly forecasts for the various meat sectors and meat cuts, subscribe to the "Meat Price Outlook." Contact Susan Dahlgren at [email protected] for more information.

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