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FEEDSTUFFS MEAT PRICE OUTLOOK: Nov. 20, 2018

Photology1971/iStock/Thinkstock raw meat cuts
Turkey hatchery report suggests strong turkey poult placements are afoot.

Beef: Cash cattle trade began to develop late Friday afternoon, with live sales in the South at mostly $114/cwt. and dressed trade in the North at $178. These levels were steady to weak compared to trade in the prior week. Packers this week will be purchasing for a full production week following Thanksgiving and may have to pay a bit more for cattle. After rising nearly $16 from early October into early November, the blended cutout dropped back more than $5 to just under $210/cwt. at the end of last week. Most of the weakness has come from the round, chuck and loin primals. Further weakness is expected into December. Following a slow start, packers did some catchup at the end of this week, with cattle harvest at 641,000 head, down 1,000 head from last week and even with last year. Beef production, estimated at 526.3 million lb., was practically the same week to week but 0.8% smaller than last year. Fed cattle carcass weights continued to increase during the week of Nov. 3.

Pork: The movement of animal weights over the last five weeks appears to be in line with the seasonal, albeit at a slightly muted, pace. Hogs typically gain weight this time of year due to the colder weather. Currently, hogs are not as heavy as last year. Hogs were gaining weight at a stronger pace last year as the availability of hogs was more than packers were demanding (while packer capacity was slow to wake up the additional shackle space) and suppressed price November and December. Last week was when hogs are pulled on to get ahead of this week's holiday schedule as well as product needs. Hogs are not expected to have gained weight this week due to a healthy demand for hogs. That does not mean hogs will continue losing weight, as product requirements are no greater than last year. Still, the industry is harvesting 3-4% more hogs over 2017 for this last quarter.

Poultry: Released late Friday afternoon, the latest U.S. Department of Agriculture’s “Turkey Hatchery” report suggested that stronger turkey poult placements are afoot. The Nov. 1 turkey eggs in incubators total came in at 30.27 million eggs, which was the largest single-month total since Jan. 1, 2017. It was also the strongest Nov. 1 total in more than a decade. The third-quarter incubation rate was 3.5% below a year earlier, at a total of 85 million eggs in incubators on the first of the month for those months. During the fourth quarter, IEG Vantage is projecting that eggs in incubators on the first of the month will be 2.7% higher than a year earlier. Current projections suggest that eggs in incubators on the first of the month during the fourth quarter will be the largest for the same period since 2007. Stronger incubation rates mean higher poult placements. However, the relationship has been pared down in recent years with higher destruction rates. For the fourth quarter, IEG Vantage that projects net poults placed will be up 1.5% from the same period a year earlier. 

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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