Pasture conditions fall below five-year average.
June 19, 2018
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Beef: Pasture conditions were updated and released in the U.S. Department of Agriculture’s latest “Crop Progress” report on June 11. Informa Economics IEG weighted the condition ratings and indexed the total, with the latest pasture condition index holding near 80. Given all the talk surrounding drought conditions plaguing the South and Southwest regions of the U.S., it comes as no surprise that pasture conditions fell four points from last year and were seven points below the five-year average. Dryness continues to spread in key cattle-producing regions, with 64% of cattle in Texas residing in an area classified as being in moderate drought or worse; 43% of Texas pastures were estimated to be in poor/very poor condition in the latest report. Comparisons have been made against drought conditions that spanned 2010 into 2013 during which drought plagued Texas and Mexico but eventually spread into much of the Central U.S., but the area -- and especially the intensity -- is largely dissimilar. Regardless of the comparisons, poor pasture conditions continue, leading to more aggressive female harvests, and are expected to augment the expansion plans moving into the end of the decade.
Pork: Iowa/southern Minnesota barrow and gilt live weights, a common industry measure of hog weights, have been making aggressive changes over the last three to four weeks. Hog weights usually trend lower into the summer as warming temperatures in the U.S. put additional stress on hogs. The temperature rise cannot be eliminated from the hog barns, and increasing temperatures usually create a biological response to shed weight among mammals. Over the last 30-day period, temperatures in regions that supply the largest volume of live animals have seen an increase over last year by 5-8°F. This additional heat stress on animals has lowered weight significantly, putting the curve this year in stark contrast to the recent movement of the first quarter. Hogs have lost more than 7 lb. in the last five weeks, which is a strong shift.
Poultry: According to the most recent USDA “Turkey Hatchery” report released last Friday, turkey eggs set in incubators on June 1 were reported just more than 28 million -- down 5.1% from the same month a year earlier and down 2.6% from the previous month. Based on IEG’s expectations for hatchery output during the second quarter, the current projection for the fall period calls for a 2.0% increase in young turkeys slaughtered during October this year compared with last year and a 3.0% decline during November. Young turkeys slaughtered during peak use are expected to be up just 0.3% overall compared with the year prior. This should provide a bit of relief for any end users concerned over tighter availability of fresh turkeys for the holidays this year. However, as discussed in recent weeks, the larger toms likely will be fetching a strong premium and will see limited availability, as has been the case in the past when the cutout received a boost from fresh tom breast meat.
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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