Beef: Last week's estimated federally inspected cattle slaughter was within expectations, at 637,000 head, down 5,000 head from the prior week but more than 41,000 head larger than last year. Weekly cattle slaughter is expected to average near 635,000 head going into October. Weekly steer and heifer slaughter is estimated to average around 518,000 head for September, nearly 5% larger than last year. Steer and heifer slaughter should decline seasonally in October toward 507,000 head, on average, while cow slaughter will increase. Average weekly steer and heifer slaughter should then rebound seasonally higher toward 514,000 head in November before easing lower once again in December. Fourth-quarter steer and heifer slaughter is expected to average near 3% larger than last year. This is still significant, given that the fourth-quarter average for last year was nearly 12% above 2015.
Pork: The August U.S. Department of Agriculture “Cold Storage” report revealed more pork in inventories, as expected. This comes with a caveat that the only thing that moved as expected was the total amount, in near-perfect seasonal fashion from July. Total stocks were 576 million lb., almost 25 million lb. more than in July -- a rate of increase on par with normal behavior. Totals were, however, 5.5% less than a year ago and had been trending below the prior year since last fall. In looking at behavior, this May, June, July and now August all have moved in a perfect seasonal fashion while maintaining a similar discount to the average. These are months where typically storage levels are drawn upon for continuity of supply, per planning that occurred in the previous months.
Poultry: At the end of August, total frozen broiler meat stocks stood at 772 million lb., a drawdown of 17 million lb. from the previous month but 9 million lb. higher than the end of August of last year. Leg quarters were the main single-segment contributor to the drawdown during the month, followed by breast meat. Still, breast meat could be regarded as slightly troublesome for the industry, as frozen breast meat in cold storage still is more than 12% larger than one year ago. Stocks of breast meat at the end of August totaled 169 million lb., which represented a 12% decline from February of this year. Informa IEG expects stocks of breast meat to further decline through September and the remainder of the year; however, the risk is likely to the upside, as seasonal demand is again expected to fade from breast meat. Frozen wing stocks did build during August to 62.5 million lb. but were still 30% smaller than August of last year. The challenge of refilling the pipeline and putting away additional product leading into peak demand season continues.
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