Beef: Boxed beef sales were fairly active through the first four months of this year, but total sales have slowed since late April, running mostly below year-ago levels. Total boxed beef sales volumes reported by the U.S. Department of Agriculture from April to the first week of July were 7% lower than last year, yet steer and heifer slaughter over that period was estimated to be 5% larger than a year ago. Lighter carcass weights tempered fed beef tonnage, but boxed beef sales over the last several weeks appear to be somewhat small compared to the level of slaughter and beef production. Forward bookings were down 18%, and the favorable forward sold position that packers had taken into this spring has now shifted to much lower forward sales going into the summer, when fed beef supplies will be peaking. Packers are searching for price levels low enough to re-ignite interest in more forward sales. After peaking above $250/cwt in mid-June, the Choice cutout has fallen by about $40/cwt. Larger beef production and more product available to the spot market could lead to further declines towards the low $190s.
Pork: Product continues to leave the country at quicker paces than ever anticipated. May numbers released last week show a record amount of product leaving the nation, at nearly 515 million lb., up from the prior-year time frame by roughly 12% and a record for any May time period. Led by Mexico, which set a 10th consecutive single-month high, exports have been helping clear product and continue to keep product and supply levels very tight. When the second quarter is finalized, it could still certainly set a record for largest second quarter in history. The third quarter, even if exports cool off from second-quarter levels, could still set a record for a third quarter-time period as well.
Poultry: The U.S. broiler industry’s export program fared a little better during May than was listed in April, with total U.S. broiler exports for the month reaching 574 million lb., 11% higher than the previous month and up 1.9% from total broiler exports during 2016. While proposed policy changes within the U.S. may have some basis for a change in the broiler balance sheet out front, the impact is expected to be quite minimal between now and the end of the year. As such, broiler exports are expected to remain within a 15-20% range of the May total, providing monthly annual average broiler exports for 2017 of just under 580 million lb. Wholesale leg quarters showed a slight discount to the five-year average during the second quarter, at an average of 40 cents/lb., according to USDA market reports.
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.