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CME: Total Commercial Cattle Slaughter in March Down

30 April 2019

US - The official USDA-NASS statistics for US beef, pork and poultry production were released last week, which allows us to finalise the numbers for Q1 supplies, reports Steiner Consulting Group, DLR Division, Inc.

Keep in mind that the per capita disappearance numbers will remain estimates for another couple of weeks since we still don’t have the official data for US meat trade in March. Below is a quick update as to what March numbers showed and the trend through the first quarter of the year:

Total commercial cattle slaughter in March was 2.649 million head, 1.9 percent lower than the previous year. The decline was entirely due to one less marketing day last month. Daily slaughter was 126,167 head/wk, 2.7 percent higher than the previous year.

In the first three months of the year daily cattle slaughter has averaged about 2.3 percent higher than a year ago. Total US cattle slaughter in the first quarter of the year was 7.934 million head, only 0.7 percent higher than a year ago.

Q1 of 2019 also had one less marketing day than the previous year. Please keep in mind these marketing day differences when either looking or coming up with estimates for monthly and quarterly supplies.

One thing that stands out looking at the slaughter data is the shift towards bringing more female stock to market. In March US steer slaughter was 1.222 million head, 8 percent lower than a year ago. Even after adjusting for the difference in marketing days steer slaughter was down 3.6 percent in March and down 2.5 percent for the first quarter.

On the other hand, heifer slaughter in March was 797,300 head, 5.7 percent higher than a year ago. Adjusted on a daily basis heifer slaughter in March was up 10.7 percent and up 9.5 percent for Q1. Cow slaughter has also been running well ahead of year ago levels.

In March, daily cow slaughter was 26,210 head/wk, 8.2 percent higher than a year go. For the entire quarter cow slaughter has averaged around 25,600 head/wk, 5.1 percent higher than a year ago. The ratio of female slaughter to total slaughter since the start of the year has been around 50 percent, above the 47 percent level we consider as the long run maintenance level.

We may not be at herd liquidation levels yet since there is a significant seasonality in the ratio of female slaughter but, if current trends persist, we could start talking about liquidation in the second half of the year and a lower beef cow herd by 1 January 2020.

Beef production in Q1 barely increased compared to a year ago, even when we adjust for the difference in marketing days. Total production in March was 2.118 billion pounds, 3.9 percent lower than year ago.

Daily beef production in March averaged 100.8 million pounds per day, 0.7 percent higher than year ago. For all of Q1 beef production averaged less than 1 percent higher than last year, with lighter weights and more heifers in the mix offsetting the effect of higher slaughter (see y/y growth charts above).

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