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CME: May Beef Production Higher Than a Year Ago

24 June 2019

US - The official USDA-NASS statistics for US beef, pork and poultry production were released last Thursday, giving us the slaughter and production picture for the month of May, writes Steiner Consulting Group, DLR Division, Inc.

Total commercial cattle slaughter in May was 2.939 million head, 1.1 percent higher than the previous year. Daily slaughter was 133,591 head, also 1.1 percent higher than the previous year since the number of marketing days were even with a year ago.

The May data suggests the shift towards bringing more female stock to market in 2019 continues. In May US steer slaughter was 1.524 million head, 1.4 percent lower than a year ago. On a daily basis, steer marketings were 69,250 head.

On the other hand, heifer slaughter in May was 802,100 head 5.8 percent higher than a year ago. On a daily basis this comes out to 36,459 head. Cow slaughter also continues to exceed year ago levels. In May, cow slaughter was 526,200 head, 2.6 percent higher than a year ago. Cow slaughter totaled 23,918 head per day.

The ratio of female slaughter to total slaughter in May was 45 percent, the highest ratio during May since 2013. Since the start of the year the ratio has been around 48 percent, above the 47 percent level we consider as the long run maintenance level and above the 46 percent we saw during the same five months of 2018.

These past two months have brought the ratio down from Q1 levels, as seasonally expected, but still exceed April and May 2018 by nearly two percent. Part of this is that dairy cow slaughter that was running heavy in March slowed down during May. Dairy slaughter during March averaged 70,655 head, 9.6 percent above year ago levels.

May saw dairy cow slaughter average 57,388 head, just 3.6 percent above year ago levels. As producers push more heifers into feedlots rather than retain them for herd rebuilding, this will slow down and eventually cause the expansion to come to an end.

We may not be at herd liquidation levels yet but low cow-calf margins and escalating feed costs could potentially spell the end of the current cattle cycle and result in a lower beef cow herd by 1 January 2020.

Beef production in May was 2.328 billion pounds, 0.9 percent higher than a year ago. Daily beef production in May averaged 105.8 million pounds per day, also just slightly higher than year ago. The increase in beef production has not been keeping pace with the increase in slaughter due to lighter weights and more heifers in the mix.


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


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