CME: Livestock Slaughter Shows Decline29 October 2012
US - Livestock slaughter data for September showed a dramatic decline in beef production as well as a lower monthly pork output, reports Steve Meyer and Len Steiner.
Total beef production for the month was
reported to be 2.016 billion pounds, 9% lower than a year ago.
While the decline appears quite significant, it is important to
keep in mind that in September 2012 there were just 19
slaughter days, compared to 21 days a year ago. The mismatch
in production days is an issue that comes up frequently
when doing monthly comparisons and one that analysts often adjust
for in order to assess supply trends.
Data shows that total beef/pork production divided by the number of slaughter days. Using this metric, beef production in September averaged about 106.1 million pounds per slaughter day, 0.6% more than a year ago. It’s quite a reversal from the precipitous decline indicated in the raw monthly numbers.
The point we are trying to make is even more obvious when looking at the monthly statistics for pork. Total pork production in September was reported to be 1.911 billion pounds, 2.2% lower than the previous year. The decline would come as a surprise to all those looking at record weekly slaughter and production numbers last month. When adjusting for the difference in slaughter days, we calculate that pork production in September averaged 100.6 million pounds per day, 8.1% higher than the same period a year ago. This was also the largest amount of average daily pork production ever recorded.
Daily beef production was higher than a year ago despite fewer cattle coming to market. Total cattle slaughter in September was 2.543 million head, 12% smaller than a year ago. When adjusting for the marketing days, daily slaughter was down 2.3% from last year.
The big difference so far this year continues to be the increase in cattle carcass weights. In part this is due to the fact that there are more steers in the slaughter this mix than a year ago. Consider that a dressed steer carcass averaged about 871 pounds in September, compared to 599 pounds for a cow carcass. In September 2012, steers made up 49% of overall slaughter compared to 47% last year. Steer weights also are sharply higher and they have established all time record highs for the past three months. At 871 pounds, dressed steer weights are the heaviest ever recorded.
The heavier weights are one way for producers to keep up production levels as calf numbers steadily decline. Some also argue that feedlots have become less current as retailers and foodservice operators struggle to pass along the higher beef costs to consumers.
Others have pointed out repeatedly that more effective feed additives have dramatically improved weight gains and efficiencies for cattle in some areas. Regardless of the reasons, and it is likely a combination of the above, the rise in cattle carcass weights was big enough to offset the reduction in cattle numbers in September.
Hog weights, on the other hand, were reported to be about the same as a year ago as producers accelerated marketings and limited feeding times.
TheCattleSite News Desk