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FEEDSTUFFS MEAT PRICE OUTLOOK: Dec. 26, 2018

erdinhasdemir/iStock/Thinkstock cattle in feedlot
Pork cutout eases as Christmas holiday buying concludes.

Beef: The U.S. Department of Agriculture’s December “Cattle on Feed” report showed another decline in placements, while marketings remained above year-ago levels. November placements of just under two million head were 95% of last year and the third month in a row of year-over-year declines. But this followed four consecutive months of year-over-year increases. Drought in certain parts of the country caused early movement of cattle off parched pastures last summer. Placements of cattle weighing under 600 pounds were up by 13% and 19%, respectively, for July and August. Placements of cattle weighing 600 to 699 pounds increased by 23% and 18%, respectively, for July and August. Placements of cattle weighing 700 to 799 pounds were also larger than last year, while placements of cattle weighing 800 pounds and heavier were modestly smaller. This early movement of light-weight cattle took away from the feeder cattle supply that might have been available coming into the fall for feedlot placements.

Pork: The cutout eased last week, as forecast. With product secure for the Christmas holiday and no longer able to make it to the table for December 25, the strong buying stepped back. Specifically, hams were complete, which put a great deal of weakness in the cutout. Further weakening the cutout were softer belly and trimmings markets, which are not going to secondary processors in large volume the week of Christmas. This put some extra product on the fresh market last week, removing some of the price support. The next two weeks will see abbreviated harvest levels from holiday schedules, which will shorten the fresh product a bit, helping to lift the cutout back up.

Poultry: In USDA’s most recent “Chicken and Eggs” report, the number of broiler-type chicks hatched during November totaled 766.5 million, which was down 1% from November 2017. Whereas, the cumulative pace relative to year prior was ascending during the late part of 2017, spurred by relatively attractive cutout valuation, cumulative chick hatchings have narrowed from 1.7% above year prior during July this year, to a 1% gain to year prior at the end of November. As has been the case with weekly egg sets, pullet placement by leading breeders portends limited growth of the layer flock and overall broiler supplies mid-year in 2019 as just 7.33 million broiler-type pullet chicks were placed for future domestic hatchery supply flocks during November 2018. The November pullet placement was down 7.7% from year prior, yet up 0.8% from the October placement total. A continuation of lower-than expected pullet placement is trimming expectations for the layer flock during the middle of 2019.

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 susan.dahlgren@farmprogress.com for more information

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