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Weather affects feedlot performance and causes plant closures.

Beef: Weather-related issues affected more than just feedlot performance this past week, as early-week slaughter schedules were interrupted as well. Last week's total was initially expected to be in the area of 610,000 head, but following weather-related plant closures on Monday and reduced shift schedules early Tuesday, Saturday served as a makeup day, posting 47,000 head and salvaging the week's total, which was estimated at 588,000 head -- 4.4% smaller than last week but 1.3% larger than a year ago. Slaughter levels are expected to remain in the low 600,000s or upper-590,000-head area heading into February, but the weather-related slowdown may have been more helpful than disruptive, as cutouts were well supported throughout the week and could incentivize packers to continue harvesting cattle in the low 600,000-head range if margins hold together and cattle costs ease moving forward.

Pork: Total hams in inventory last month were at a record 81 million lb., ending 18% higher than December 2016. Bone-in hams have been at historic lows for two months in a row now, while boneless hams are at record highs, reaching 39% over December 2016 and setting records in seven out of 12 months throughout 2017. Lean trimmings in cold stocks increased significantly. Many were short on raw material during peak seasonal demand in 2017. The year before, the industry did not prepare well during December 2016, and end-of-year stocks currently are on par with relatively normal amounts. Bellies in cold storage ended 121% over prior-year levels after significant efforts but still were the third lowest in more than 18 years. This additional 21 million lb. should help reduce the price spike for the upcoming February time frame, but it may not be sufficient to reduce price increases in July just yet.

Poultry: The U.S. Department of Agriculture recently released its monthly “Poultry Slaughter” report, which indicated that a total of 704 million young chickens were harvested during December. The December total was within 2 million head of the amount Informa Economics IEG had projected for the month and was down 0.7% from the December 2016 total. Average broiler live weights were in line with the previous month, at 6.27 lb. -- up from IEG’s expectations and 1.1% higher than the December 2016 broiler live weight average. Broiler live weights were up 1.2% overall during the fourth quarter, which is causing discontentment with respect to the first-half 2018 outlook for flat live weights versus the prior year. Broiler live weights are trending higher again and are now pushing the projected growth expectation in ready-to-cook broiler meat during 2018 closer to a 3% gain compared with 2017.

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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