Beef: Weekly export data from the U.S. Department of Agriculture's Foreign Agricultural Service continues to show strong year-over-year increases in total beef export shipments, with the most recent export data revealing a 20% year-over-year increase, while the cumulative year-to-date export total is 17% over the prior year. The large year-over-year increases to Japan have slowed, but other key Asian trading partners — Korea, Hong Kong and Taiwan — coupled with large increases in shipments to Mexico, have fueled the growth in year-to-date accumulated exports. Even China has stepped back in as a buyer this year, accumulating imports of 1.7 million lb. of U.S. beef year to date. Despite being relatively light on the overall scale -- representing just 0.7% of the total -- year-to-date exports to China still are the largest since 2003.
Pork: End-of-January cold storage levels were roughly 568 million lb., about 10% below January's record highs but up almost 15% from last December. The average addition to total stocks in January from December is 16%, so the behavior suggests that the industry is working hard to perform as usual in response to the errors of 2017. Recall that last year, additions from December to January were only 10%, but the December level was historically low. This was significantly to blame for the price spikes experienced in some of the primals during 2017 and the record-high prices of bellies last summer. The industry did not prepare adequately for continuity of supply last year, and all indications are that it is correcting that mistake, starting 2018 from a much healthier position. The forecast is for continued additions to cold storage stocks and from a healthier base formed in December over the prior year.
Poultry: Front-end broiler supplies have been falling somewhat behind expectations for quite some time as hatchery operations grapple with lower-than-anticipated hatchability and productivity rates from the current layer flock. The most recent USDA “Chicken & Eggs” report showed that 822.8 million broiler-type chicks were hatched during January from a total of 57.4 million broiler-type hatching egg layers. That works out to a total of 14.34 broiler chicks hatched per layer. The per-layer broiler chick hatch rate was down 2% from the same month a year earlier and was the lowest of any January since 2011. While the lower-than-expected harvest totals have been blamed on broiler-type laying hen productivity in really only the last 12 months, the total number of broiler chicks hatched per layer has followed a declining trend since achieving a lofty annual average of 14.69 chicks per layer during 2012. For 2018, the annual average hatching rate is projected to drop to 14.06, which would be the lowest annual average since 2010.
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