TheBeefSite.com - news, features, articles and disease information for the beef industry

News

CME: Fed Cattle Slaughter During W26 Higher Than a Year Ago

03 July 2018

US - Before we review some of the production data for last week, a quick note on the Canadian tariffs on 13 billion dollars of US products. The list of US products that will be subject to a Canadian retaliatory tariffs does not include any pork items, reports Steiner Consulting Group, DLR Division, Inc.

The only beef products that will be subject to a 10 per cent tariff are cooked beef products. Last year the value of cooked beef exports to Canada was $169.7 million. Overall the impact of the Canadian tariffs on US beef is quite small. For a complete listing of the products that will be subject to a tariff in Canada, click here.

Fed cattle prices rallied on Friday on reports of more robust cash cattle prices and possibly due to quarter end trading activity. Total cattle slaughter for the week ending 30 June was 646,000 head, 1.2 per cent higher than a year ago.

We estimate fed cattle slaughter for last week at 518,000 head, 0.8 per cent higher than last year. Fed slaughter in June slowed down from May levels. There is one less marketing day in June 2018, which also impacts the monthly calculation.

Based on USDA daily slaughter estimates, we calculate fed cattle slaughter for the month of June at 2.293 million head, 0.7 per cent higher than a year ago. If we were to adjust for the one less marketing day, slaughter would be 5.5 per cent higher than last year.

In May fed slaughter was 5 per cent higher than the previous year. Supplies of market ready cattle remain above year ago levels but a robust slaughter pace should help keep feedlots current going into the fall.

Beef features have been excellent until this point and large forward sales for the summer months point to continued good featuring in July and August. Having said that, it is normal for beef demand to ease from May levels.

Additionally, there will be more competition from lower priced proteins and retailers will look to shift away from higher priced steak items featured for Memorial Day and Father’s Day. Loin and rib primal values decline into the summer and already we have seen significant price erosion for ribs.

Seasonally, loins decline in July, August and September. Still, packer margins remain in excellent shape and robust sales should continue support high slaughter numbers through the summer. Much of the additional increase in slaughter will come through running more Saturday shifts.

Saturday slaughter last week was 18 per cent higher than a year ago and it has averaged 52 per cent higher than a year ago since the first week of May.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


TheCattleSite News Desk

Our Sponsors

Partners


Seasonal Picks

Animal Welfare in EPS - 5m Books