US - USDA issued its monthly production statistics for beef and pork, reports Steiner Consulting Group, DLR Division, Inc.
The numbers give us one more piece of data to build the demand picture for red meat in February. It is always important to look at these supply numbers in the broader context of supply flows through the economy rather than as individual data points.
Also important is to recognize that calendar differences often will tend to skew the numbers so one should look past the headline and understand what was the true availability in the domestic market. Below are some of the highlights and implications for beef.
Total commercial cattle slaughter in February was 2.369 million head, 3.5 per cent higher than the previous year. But there was one less slaughter day last month. Average slaughter last month was 118,460 head/day, 8.7 per cent higher than in February 2016.
Steer slaughter in February averaged 60,070 head/day, 9 per cent more than last year while heifer slaughter at 31,730 head was 7.8 per cent higher. While the increase in heifer slaughter slowed down slightly last month, in the last six months the number of heifers coming to market has averaged about 12 per cent above the previous year.
Cow slaughter also was higher last month, averaging 22,765 head/slaughter day or 7.6 per cent more than the same period a year ago. Larger slaughter numbers bolstered overall beef production but output did not increase by the same degree due to lighter carcass weights.
Total beef production for the month was 1.934 billion pounds, 48.7 million pounds more than in February 2016. Average daily beef output last month was 96.7 million pounds, about 7.7 per cent higher than what it was a year ago. But more beef produced does not always mean that there is more beef available for the US domestic consumer.
To come up with that number, we need to adjust for the supply of beef trading in and out of the US and adjust for the starting and ending cold stocks. Trade data is not yet available but we estimate that US beef imports were down about 11 per cent last month while exports were up 15 per cent.
The shift in trade flows reduced domestic availability by about 52 million pounds, more than offsettng the production increase. End users appear to have countered that by relying on their cold storage stocks.
According to our calculations (which will be revised when trade data comes out) total disappearance in February was 1.978 billion pounds, just 0.3 per cent less than a year ago. Adjusting for 21.92 slaughter days in a month, disappearance was 5.3 per cent higher than last year or 4.4 per cent on a per capita basis.
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