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FEEDSTUFFS MEAT PRICE OUTLOOK: March 12, 2019

Lower leg quarter prices, global economy and more positive exchange rate contribute to higher U.S. broiler meat exports.

Beef: Instead of holding off until late Friday afternoon like the prior weeks, cash cattle trade began to develop on Thursday last week. Live trade at mostly $128/cwt. and dressed trade at $205 were fully steady with last week. There were a few live sales reported at $128.50/cwt. Volumes were considered moderate to active. Cutout values continued moving higher this week, with the blended cutout reaching $224/cwt. in late-week trade. This was a couple of dollars above early March of last year and not far off from the spring highs of last May. While there were gains across the primals, the largest increase was in the primal loin. Spot market sales volumes were smaller among the major primals, particularly on the loin and round cuts. Last week's cattle harvest came in at 603,000 head, even with the previous week and 4,000 head above last year.

Pork: End-of-January cold storage levels are in. Bone-in ham stocks were 37 million lb., near the average for the past few year years, but the annual average has been shrinking in the last three years on increased fresh supply, which was expected. Boneless hams were 75.4 million lb., 9% below the prior year but still the second highest in history for any January. Ribs stocks were 127 million lb., 11% above the prior year. The industry continues to evaluate if these strong levels are needed or at least if the pace of additions can slow; hence, this is part of the price reset for ribs the last several weeks. Bone-in loins were higher than December but are at a record low for January for the past 20 years. There was a reduction of trimmings from December levels, down 1.34 million lb., which was atypical, with levels on par with last year at 47 million lb.

Poultry: U.S. broiler meat exports during December totaled 581 million lb., an increase of 1.7% compared with December 2017 and in line with IEG Vantage estimates. Lower leg quarter prices as well as a supporting global economy and a more positive exchange rate contributed to a return to progressively higher U.S. broiler meat exports in 2018. For 2018, U.S. broiler exports totaled 7.068 billion lb., up 4.3% from the 2017 total. It was the strongest December export total in two years. A slightly stronger Mexican peso was supportive to the disappearance of U.S. broiler meat destined for Mexico. U.S. broiler exports to Mexico were up 5.5% in December 2018, totaling just more than 122 million lb. For calendar 2018, Mexico imported more than 1.4 billion lb. of broiler meat from the U.S., up 8.5% from the previous year and the largest annual total for the country in three years. U.S. broiler exports for 2019 are not expected to fare as well as last year, totaling 1.37 billion lb., down approximately 4.6% from the 2018 total.

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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