Beef: In the fall of 2016, China agreed to resume importing beef from the U.S., 13 years after a BSE-related ban. Discussions regarding U.S. beef access to China have rapidly developed, with Secretary of Agriculture Sonny Perdue stating the details would be released within the next two weeks. Access to China’s booming consumer market may eventually be a rather large positive for the U.S. beef industry, but in the short term may be hampered by a litany of regulations and red tape. Additionally, the effect of a trade deal with China may be largely net-neutral as transshipments from Hong Kong to China would be shifted directly to China. India also made beef news last week, announcing a ban on cattle slaughter, including buffalo (carabeef). India makes up approximately 20% of the global beef market, with their largest export country being China, indirectly through transshipment via Vietnam. Abruptly losing the second largest global beef exporter could create a massive void in the global market for low price, low quality beef.
Pork: The cutout moved higher last week, a very modest amount, as some of the primals slowed in price ascents from the recent weeks. Several primals could be at or near seasonal highs and trending sideways for June. The major risk components on the cutout are the bellies, hams and trim. Those items certainly could help the cutout move from current prices (levels previously thought to be the highs) higher, but modestly at best. Highs for the summer are reforecast higher to the $94 area, with risk near $99 depending on how severe the belly pricing ascends for the next eight weeks. Bellies should be the only upward risk component in July and August, while all other cuts will help to bring the cutout back down on a seasonal basis.
Poultry: Ready-to-cook broiler production in the U.S. totaled 3.21 billion pounds in April, according to the latest “Poultry Slaughter” report from the U.S. Department of Agriculture. This was down 2.7% from the same month last year, which was a bit of a surprise. But, given that there was one less working day than was available to processors in April 2017, the reduction is accounted for as broilers slaughtered per processing day were up 2.4% from a year ago at 34 million. Average slaughter weights were up 0.2% in January this year but have trended down or neutral in subsequent months, resulting in a downward revision to the outlook for average bird weights through the end of 2017. Year-to-date ready-to-cook (RTC) broiler production now stands at 13.45 billion pounds, up 0.8% from the January-April period last year. The steady to lower bird weights are drawing expectations of slightly lower year-over-year improvements to overall RTC production this summer, but total output will still to be up 2.3% for the year at 41.6 billion pounds.
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.