Pork and beef exports start year strong.

March 20, 2018

2 Min Read
FEEDSTUFFS MEAT PRICE OUTLOOK: March 20, 2018
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Beef: Monthly U.S. Department of Agriculture export data released in early March revealed a continuation of larger shipments throughout January, with weekly Foreign Agricultural Service data for the week ending March 10 confirming more of the same. Exports were 13% larger than the prior year, with accumulated year-to-date exports coming in 16.5% over the first 10 weeks of 2017. Aggressive shipments aren't expected to slow heading into the second quarter as total outstanding beef sales -- beef that has been sold for export but has not yet shipped -- for the current marketing year (January through December) sit at a record-large 317.5 million lb. Of the record volume waiting to ship, just more than 70% of the outstanding sales will be destined for Japan, Hong Kong or South Korea. While Japan is still slated to be the top U.S. beef export destination, Korea is rapidly gaining in volume, with accumulated U.S. exports showing a difference of just 13 million lb. compared to an average 30 million lb. over the past two years.

Pork: The start of the year is going well for pork exports, and 2018 is expected to see another record of total product over the growth of 2017. January’s export level was 486 million lb., a 6.22% increase over the prior January. This level was by no means a record for the month, which was 501 million lb. in January 2012. Still, it is the highest level since that time, and the industry is coming off a record fourth quarter. Last year’s record of 5.6 billion lb. of total pork exported was the result of expansion purposed for the export markets. That endeavor will likely continue this year as the industry has already banked on foreign entities requiring more product, with U.S. prices being the second most competitive on a worldwide basis. The hog/pork industry realized that the growth rate of domestic markets was nearly maxed out, nominal to population growth and income levels.

Poultry: The expansionary path of animal protein producers has been reliant on two main factors: (1) a prolonged favorable feeding environment and (2) the ability to broaden consumption both domestically and via growth opportunities throughout the globe. On the other side of the spectrum, USDA’s weighted broiler cutout during the first quarter is expected to be up 3% from a year ago, but with wings and whole birds currently projected to be below year-ago values during the second quarter, the weighted broiler cutout is projected to decrease 9% year over year during the second quarter. Despite the disparity, weighted broiler margins are projected to be nearly 9 cents/lb. during the second quarter, which compares to 9.7% during the average of the previous five years for the same quarter.

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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