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CME: Poultry Supplies Lower

by 5m Editor
7 June 2011, at 10:24am

US - Beef, pork and poultry supplies were lower last week both compared to the week before (holiday shortened week) as well as year-ago levels, report Steve Meyer and Len Steiner.

Beef, pork and poultry supplies were lower last week both compared to the week before (holiday shortened week) as well as year ago levels. Cattle slaughter for the week was reported at 617,000 head, 8.6 per cent lower than the week before and 1.9 per cent lower than the comparable week in 2010.

We estimate that steer and heifer slaughter for the week at 505,000 head, one per cent lower than a year ago. Cow slaughter, on the other hand, is estimated at 112,000 head, 5.1 per cent lower than a year ago. Cattle carcass weights are currently 0.7 per cent higher than a year ago but slightly below the five year average. The share of cow in the overall slaughter mix continues to run above five year average levels, which has contributed to the somewhat lighter cattle weights coming to market.

Steer weights are reported with a two week lag but the latest data for the week ending May 21 were 819 pounds per carcass, 1.4 per cent higher than a year ago and 1.2 per cent over the five year average. Steer weights have been trending higher on improved feed quality compared to last year and steady improvement in operational efficiencies and better genetics.

Hog slaughter for the week ending June 4 were reported at 1.746 million head, 14 per cent lower than the previous week and 2.4 per cent lower than a year ago. Heavier carcass weights offset some of the decline in hog slaughter but not entirely. Total pork supplies for the week were reported at 360.9 million pounds, 1.3 per cent less than the comparable week a year ago.

Sow slaughter numbers are reported with a two week lag and for the week ending May 21 it was 59,200 head, per cent higher than a year ago but still some five per cent lower than the five year average. US sow slaughter was running below year ago for much of Q1 and into April but the sharp pullback in out front hog prices and escalating corn values appear to be pushing more sows to market. Through April 23, US sow slaughter was 2.7 per cent lower than the comparable period in 2010. Since then, however, US sow slaughter has been 4.4 per cent higher than a year ago.

Poultry supplies have been running above year ago levels for much of this year but there are signs the industry is striving hard to rein in production. There are significant concerns about the financial performance of poultry companies in light of escalating feed prices. Whatever hedges there were, companies will eventually have to cope with the rise in input costs. The share price of Pilgrim’s Pride, one of the major poultry producers in the US and a company that only recently came out of bankruptcy protection, has gone from $7.59/share on April 1 to $4.05/share on June 3.

Broiler egg averaged about one per cent over year ago levels through April but in the last three weeks have declined two per cent. One issue the broiler industry still continues to have trouble with is the weight of birds coming to market. So far this year, dressed broiler weights have averaged 2.6 per cent over year ago levels. Even though broiler slaughter for the year is slightly lower compared to last year, total production is up 2.4 per cent.