Global beef, pork demand booming

Global beef, pork demand booming

International demand for U.S. meat still strong despite high prices.

GLOBAL consumers, so far, are willing to pay the high prices for U.S. beef and pork, according to the latest export statistics released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF).

"Even with a plentiful supply of (European Union) pork products in the marketplace and large volumes of Australian beef, we are still seeing demand grow in most of our key markets and remain steady in others," USMEF president and chief executive officer Philip Seng said.

For the month of April, U.S. beef and pork exports continued their upward trend, with double-digit growth in volume and vigorous increases in value, USMEF reported.

In April, U.S. beef exports totaled 99,297 metric tons, with a value of $537.4 million. Compared to a year ago, this is a 10% increase in volume and a 17% rise in value. April beef exports accounted for 14% of total U.S. beef production, and the export value per head equated to $262.41 for the month.

While Mexico and Japan remain the leading destinations for U.S. beef, strong exports to Asia boosted total sales in April, according to USMEF. The Association of Southeast Asian Nations region registered the largest jump for the month, with a 71% increase in volume from April 2013.

Likewise, U.S. pork exports climbed 11% from last year to 192,924 mt, which represented 28% of total U.S. pork production, USMEF reported. In April, U.S. pork exports were valued at $596 million, up 26% from 2013, and the export value per head computed to $67.35 for the month.

Mexico was the leading export market for U.S. pork, with growth of 42% in value but only a 1% increase in volume. Still, Japan hit a new monthly record at 48,507 mt, while South Korea imported its largest volume — 17,126 mt — since March 2012.

 

USDA projections

The latest USDA projection for red meat production in 2014 is now at 91.949 billion lb., down from the previous month's forecast.

USDA, in its "World Agricultural Supply & Demand Estimates" report, increased the 2014 pork production forecast to 22.820 billion lb. (Table 1) based on larger second-quarter slaughter and higher carcass weights; however, the next "Quarterly Hogs & Pigs" report, to be released June 27, may tell a different story.

Since the slaughter rate for steers and heifers was at a slower tempo than expected in the second quarter, USDA lowered the 2014 beef production estimate by 245 million lb.

A lack of expansion prompted USDA to decrease the broiler production estimate for this year to 38.233 billion lb. On the other hand, 2014 turkey production was raised based on a higher second-quarter production rate.

Robust egg prices are expected to fuel production growth, leading USDA to increase its egg production forecast.

USDA projected prices for cattle, hogs and turkeys to remain unchanged, while broiler and egg prices were raised (Table 2).

Milk production forecasts for 2014 and 2015 were both unchanged from last month. For milk and dairy product exports, USDA increased the projection on a fat basis for 2014 and 2015, with a rise in cheese exports. However, growth, in general, will be limited as weak butter sales are an indication that U.S. prices are too high to be competitive globally.

Strong demand for cheese and butter influenced USDA to increase the price projection for 2014, and the strength is likely to continue into 2015.

 

Market roundup

Elsewhere in the livestock, poultry and dairy markets, stronger cash fed cattle fueled a rise in cattle futures. While the hog market was adjusting in anticipation of the June 27 hogs and pigs report, the chicken market continued its seasonal rise, and prices for dairy products slipped.

After breaking the $200 threshold a week ago last Friday, fed cattle futures lingered above the new highs last week, with support from higher-than-expected cash feed trade.

At the close of markets last Thursday, fed cattle futures were up the limit and settled at a new all-time record of $205.85/cwt. June live cattle futures gained $2.97 to finish at $146, a six-week closing high, Farm Progress analyst John Otte reported.

Trading activity for cash cattle picked up last Thursday, according to the daily USDA reports. Bids were $3-5 higher in all feeding regions. In the southern Plains, some processors paid $148/cwt.

After starting out higher last week, beef cutout values finished lower last Thursday, with the Choice cutout at $230.89/cwt. and the Select cutout at $223.60/cwt. Packer margins tightened as cash fed cattle traded higher.

In the hog markets, market participants were still trying to get a fix on the supply that will be available in the upcoming months and ahead of the June 27 USDA report.

Cash hog prices climbed steadily last week. At the close of markets last Thursday, the average price was $111.71/cwt. for the eastern Corn Belt, up $1.59 on the week, and $116.44/cwt. for the western Corn Belt, up 93 cents. Rumors on the trading floor are that packers will begin aggressively seeking hogs this week.

Pork cutout values advanced last week and settled at $123.45/cwt., gaining $2.90 from the previous Friday. Packer margins are improving with the boost in pork cutout prices.

Hog futures ended mostly higher last Thursday on support from cattle price gains. While lean hog futures for the June contract stayed flat at $115.97/cwt., July contracts rose 90 cents to $125.92.

Strong prices persisted in the chicken market, with the Georgia dock for whole broilers at $1.1075/lb., up 5.25 cents from last year. Breast meat advanced last week to settle at $2.43/lb. on Wednesday, while leg quarters held at 55.5 cents/lb. and wings were $1.33/lb.

In the dairy markets, spot butter prices dropped last week from their 10-year highs to settle at $2.185/lb. Cheddar blocks and barrels pushed back to $2.03/lb. and $1.9575/lb., respectively. USDA announced the May Class III price at $22.57, which was $1.74 lower than April but still $4.05 higher than the May 2013 price.

For April, U.S. cheese production totaled 950 million lb., up 2.2% from last year. U.S. cheese exports in April were at a healthy 74.4 million lb., just short of the record highs set in March.

Alternatively, butter production was down 4.9% from 2013 at 158 million lb. U.S. butter exports weakened to the lowest level in 10 months. Likewise, U.S. nonfat dry milk exports also slipped 1.2% below April 2013 to 158.2 million lb.

 

1. U.S. quarterly animal product production

 

 

 

Total

 

 

Total

Total meat/

 

 

Year/

Beef

Pork

meat

Broiler

Turkey

poultry

poultry

Eggs,

Milk,

quarter

-Million lb.-

mil. doz.

bil. lb.

2014/I

5,868

5,785

11,716

9,283

1,332

10,739

22,455

1,982

51,1

  II

6,160

5,490

11,714

9,575

1,425

11,135

22,849

2,000

52.8

  III

6,310

5,435

11,807

9,750

1,450

11,340

23,147

2,035

50.9

  IV

6,070

6,110

12,243

9,625

1,500

11,255

23,498

2,085

51.3

May annual proj.

24,563

22,655

47,469

38,428

5,697

44,659

92,128

8,065

206.1

June annual proj.

24,480

22,820

47,480

38,233

5,707

44,469

91,949

8,102

206.1

2015/I

5,795

5,750

11,608

9,450

1,400

10,975

22,583

2,005

52.5

May annual proj.

24,315

23,310

47,872

39,275

5,925

45,745

93,617

8,180

212.1

June annual proj.

24,315

23,310

47,872

39,275

5,925

45,745

93,617

8,180

212.1

 

2. U.S. quarterly prices for animal products

Year/

Steers

Barrows/gilts

Broilers

Turkeys

Eggs,

Milk,

quarter

-$/cwt.-

-$/lb.-

$/doz.

$/cwt.

2014/I

146.34

68.69

0.984

1.007

1.427

24.53

  II

145-148

84-85

1.13-1.16

1.03-1.06

1.36-1.39

24.40-24.60

  III

140-148

83-87

1.05-1.11

1.04-1.10

1.22-1.28

21.95-22.45

  IV

142-154

70-76

1.03-1.11

1.06-1.14

1.33-1.45

20.85-21.65

May annual proj.

143-149

76-80

1.01-1.06

1.03-1.08

1.29-1.35

22.70-23

June annual proj.

143-149

76-80

1.05-1.09

1.03-1.08

1.33-1.39

22.90-23.30

2015/I

146-158

68-74

1.01-1.09

0.98-1.06

1.30-1.40

20.50-21.50

May annual proj.

145-157

70-76

1.00-1.08

1.02-1.11

1.22-1.32

19.70-20.70

June annual proj.

145-157

70-76

1.00-1.08

1.02-1.11

1.22-1.32

19.75-20.75

*Source for Tables: U.S. Department of Agriculture.

 

Volume:86 Issue:24

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