Beef: The seasonal lull in beef prices, coupled with relatively muted spot beef sales, has led to a less-than-aggressive October slaughter rate through the first two weeks. Last week headed lower towards an estimated 622,000 head after the prior week’s dip towards the lower 630,000-head area. Weekly volumes through the first half of October have eased from the more aggressive 6% year-over-year increases seen throughout September towards a more modest 3% year-over-year increase and have led to a more muted outlook on slaughter moving forward. Levels will likely be in the lower 630,000-head area through the balance of October and well into November. The aggressive placements from late summer have been worked through the system without a hitch thus far, and a continuation of larger year-over-year placements is expected to supply early 2018 at levels modestly above the prior year. Weekly cow slaughter is expected to increase from around 112,000-115,000 head towards peaks in the low 120,000-head area by late fall.
Pork: Export numbers in August were not a good indication of any trend for the remainder of the year. However, with fourth-quarter production set to increase this year by more than 4.5%, exports will need to increase to clear additional product. Export numbers were up from the July low by 28 million lb. but were only higher than last year by 2 million lb. It will take a significant increase in exports off of this slight gain in order to beat last year's fourth-quarter export records or even come close to absorbing some of the additional supply moving forward. If calculated available product is in excess of 2016 by 300-350 million lb., then exports would have to beat the fourth quarter of 2016 by 20%,which is not a likely scenario.
Poultry: The U.S. Department of Agriculture showed that broiler exports totaled 578 million lb. during August. Given the resistance exporters received with respect to weather during August, that total was surprisingly high when compared with the broiler meat total exported during July. The August total was slightly lower than last year and brings cumulative U.S. broiler meat exports to 3.3% above year-ago levels. Mexico imported 110.5 million lb. of broiler meat from the U.S. during August. That total was down nearly 9% from the same month last year and brings cumulative U.S. broiler meat exports to Mexico down 8.7% from the 2016 year to date. This is not surprising, given the reported growth in the middle class in Mexico and their preference for pork. Cumulative U.S. pork exports are up 206 million lb. through August, which represents a 21% increase compared with 2016. The shift towards increasing U.S. pork supplies to Mexico is not expected to weigh heavily on the U.S.'s ability to export broiler meat, however, as emerging markets are keeping pace.
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.