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CME: US Cattle, Hog Slaughter - Week Ending 5 March

by 5m Editor
8 March 2011, at 1:14am

US - US cattle slaughter for the week ending 5 March was reported at 643,000 head, 1.3 per cent lower than the previous week but still 3.6 per cent higher than a year ago, and hog slaughter for the week was reported at 2.140 million head, 1.5 per cent higher than the previous week but still about 1 per cent lower than a year ago, write Steve Meyer and Len Steiner.

The composition of the weekly slaughter is reported by USDA with a two week lag but our estimates indicate that for the latest slaughter week, steer and heifer slaughter was 508,000 head, 5.4 per cent higher than the previous year. Cow and bull slaughter, on the other hand, is estimated at 135,000 head, 2.9 per cent lower than a year ago, with cow slaughter estimated at 123,000 head, 3 per cent lower than a year ago. The chart below illustrates the trend in US weekly cow slaughter so far this year. Slaughter rates are down compared to where they were last fall but so far cow slaughter remains well above five year average levels. Indeed, we estimate that for the week ending 5 March, US cow slaughter was sill about 10 per cent over the 2006-10 average for the comparable week. Cattle supplies in the US remain very tight despite the recent increases in fed cattle slaughter. Feedlots have responded to record out front cattle prices by placing more cattle on feed but the feeder supply is one of the tightest on record. If anything, poor winter wheat grazing and high cattle prices simply shifted the placement trends and we suspect placing more cattle on feed this spring and summer will be more challenging. Given the smaller cow herd and the smallest calf crop in half a century, it will become increasingly difficult to find enough feeders. And unless we stem the flow of cull cows in the marketplace, that situation will not be remedied for the foreseeable future. Yes, feeder cattle prices are up, which should encourage producers to hold on to their cows but so is the price of cull cows. The latest data we have seen shows prices for live breaking cows up 41 per cent from a year ago while boning cow prices are running some 36 per cent ahead of last year’s levels. High cow prices are a reflection of tight supplies of lean processing beef, high overall beef prices and escalating prices for feeder cattle.

Despite the year over year reduction in hog slaughter, pork production has been trending higher due to much heavier hog carcasses coming to market. Weights fort the latest reported week were pegged at 208 pounds, 2.5 per cent higher than a year ago. Sow slaughter has trended modestly higher in recent weeks but it remains below year ago levels. For the week ending 5 March we estimate sow slaughter at 59,500 head, down 4 per cent from year ago.