US - So far this week, corn and soybean futures and cash prices were stronger due to excessive moisture damaging crops in Argentina and drought impacting major regions of Brazil, write Steve Meyer and Len Steiner.
Hog and the pork cutout value are on their seasonal upswing, right on schedule.
The cattle markets, cash and futures, remain confusing and difficult to align with fundamental market forces.
What is clear in the cattle/beef arena is that packers are making good money for this time of year and wholesale beef prices are not as pressured as have been those of animals (both fed cattle and feeders).
Now we will glean through the weekly cattle slaughter data released yesterday (note that the USDA-NASS monthly Livestock Slaughter report with March data for all livestock species also was released yesterday).
In the latest data (week ending 9 April), dressed weights slipped lower. For the week, the average steer carcass was 880 pounds, down 4 pounds week-over-week and 9 pounds (1 per cent) above a year ago.
Heifer carcasses averaged 818 pounds, 11 pounds below the prior week’s and were 9 pounds over 2015’s. So, we are still seeing some of the normal seasonal drop in cattle slaughter weights, but weights remain above year ago levels.
Recent weight trends do not seem to imply slaughter ready supplies are backing-up, at least not significantly, yet.
Federally Inspected cattle slaughter was above a year ago for the week ending April 9th (up 6.4 per cent compared to a year earlier), as it had been for most weeks so far this year.
The increase in slaughter was driven by more steers and heifers in the slaughter mix and fewer cows (down 1.0 per cent). Year to-date the slaughter trends are rather clear, compared to 2015’s:
- Cattle slaughter was up 1.9 per cent year-over-year
- Steer slaughter was up 6.0 per cent
- Heifer slaughter dropped 4.0 per cent
- Cow slaughter was up 2 per cent and within that category dairy cow harvest was down about 1.0 per cent, while beef-type animals increased about 2.0 per cent.
Year-to-date slaughter numbers imply that the US trends in place in 2015 have continued, including beef cowherd growth.
In terms of beef cow slaughter, even though it is up year-over-year, the rate is still below a culling rate that is normal for herd stabilisation.
For the balance of 2016, the Livestock Marketing Information Center (LMIC) forecasts that the beef cow culling rate will increase some, but still result in a larger herd as of January 1, 2017.
Also, as 2016 progresses, steer slaughter will probably post smaller year-over-year increases, bringing it more in-line with the size of the 2015 calf crop, which USDA-NASS reported as up 2.3 per cent in 2015 compared to 2014.
LMIC forecasts that later this year heifer slaughter will begin to rather consistently post above year ago numbers, rebounding from the very low levels of the last few years. If those expectations materialise, the national cattle herd growth rate in 2017 will begin to dampen.
TheCattleSite News Desk