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Fast Rise In Meat Production May Cause Price Dip
November U.S. beef exports exceeded beef imports for the first month since February 2014. U.S. beef imports during November were down 26.6 percent compared to a year earlier thanks to a sharp decline in shipments from Australia, New Zealand and Canada. November imports equaled 9.8 percent of U.S. beef production. U.S. beef exports were down 0.9 percent compared to November 2014 with less beef going to Japan and more to Mexico and South Korea. U.S. beef exports equaled 10.5 percent of production.
Imports of cattle were down 44 percent during November with a 59 percent decline in cattle coming south from Canada and a 30 percent decline in cattle coming north from Mexico.
USDA estimates 2015 U.S. meat production was 2.8 percent higher than in 2014 and is forecasting a 2.7 percent increase in production during 2016. That is much faster growth than for the population, thus meat prices are expected to decline. USDA expects a 4.3 percent increase in beef production, a 1.6 percent increase in pork production, a 1.8 percent increase in broiler production and a 7.5 percent increase in turkey production compared to 2015. They expect pork production to exceed beef production for the second year in a row.
Cattle prices were lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $131.84/cwt, down $2.13 from last week’s average and down $38.04 from a year ago. The 5 area average dressed price this week for steers was $210.02/cwt, down $1.50 for the week and down $60.60 compared to the same week last year.
This morning the choice boxed beef cutout value was $231.23/cwt, up $20.40 from the previous Friday. The select carcass cutout was $224.59/cwt, up $21.46 from last week.
This week’s cattle slaughter totaled 550,000 head, up 25.3 percent from last week and up 1.5 percent from a year ago.
The average steer dressed weight for the week ending on December 26 was 906 pounds, down 1 pound from the week before, but up 9 pounds from a year ago. This was the 80th consecutive week with weights above the year-ago level.
There were no feeder cattle auctions at Oklahoma City the last two weeks because of the holidays. This week feeder cattle prices at the Oklahoma City Stockyards were $10 to $25 higher than three weeks ago. Prices for medium and large frame #1 steers by weight group were: 400-450# $194-$229, 450-500# $209-$225, 500-550# $192.50-$208.50, 550-600# $176-$195, 600-650# $158-$186.50, 650-700# $169-$179.75, 700-750# $163-$174, 750-800# $164-$171, 800-900# $155-$169 and 900-1000# $162-$166.50/cwt.
Cattle futures were lower this week. The February live cattle futures contract settled at $132.87/cwt today, down $3.93 for the week. April fed cattle settled at $133.82/cwt, down $4.15 from the previous week. The June contract ended the week at $124.27/cwt. January feeder cattle ended the week at $159.42/cwt, down $4.40 from a week earlier. March futures lost $6.33 this week to close at $157.32/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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