Tue, 10 Oct 2017
US - In the futures markets last week, using the average of the daily closing prices, livestock prices were higher, reports Steiner Consulting Group, DLR Division, Inc.
December 2017 Live Cattle averaged $115.25 per cwt., up $0.63 week-over-week. February 2018 Live Cattle averaged $119.04, up $1.00 per cwt. and was the highest for that contract month since the week ending July 21st of this year. The March 2018 Feeder Cattle contract averaged $149.50 per cwt. (up $1.45 week-over-week), which was the highest for that contract month since mid-April 2016. Last week, the December 2017 Lean Hog contract jumped-up by $3.25 per cwt. from the prior week’s average. At $76.86 per cwt. the May 2018 Lean Hog contract was the highest for that contract month since mid-May 2016. For a summary table of production and cash prices, see the bottom of this page.
Last Friday, USDA’s Economic Research Service (ERS) released their monthly compilation of US international meat and livestock trade data for August. In the meat categories, ERS converts the product weight data into carcass weight equivalents. Those data are available here. The link to the ERS documentation, including conversion factors, is here. Today, we only discuss the August results for beef and pork in terms of tonnage and not the dollar value of that trade nor the data on byproducts (variety meats, tallow, hides, etc.). Regarding exports, as was the case in July, the highlight was beef tonnage sold, while pork remained lackluster.
US beef export tonnage during August was the largest for any month since July 2013. Year-over-year a 14.7 per cent increase was posted. More sales occurred than a year earlier to Canada, Hong Kong, Japan, and Vietnam. Of course, it is likely that transshipment continues from Hong Kong and Vietnam to mainland China (see below for more comments on China).
US pork shipments increased a modest 0.7 per cent year-over-year in August. There was a 7.1 per cent rise compared July’s disappointing sales.
In August, ERS reported direct US beef sales to 91 countries and 87 pork destinations. On a carcass weight basis, beef exports in August totaled 263.8 million pounds. Japan was the biggest foreign beef market (84.9 million pounds), followed by Mexico (40.8 million pounds). Pork exports for the month were 418.0 million pounds. Mexico bought the most pork (148.7 million pounds), followed by Japan (99.5 million pounds).
Mainland China remains in the news as a market for both US beef and pork. US direct beef sales to mainland China have been growing since that country re-opened to US products. US direct beef sales to mainland China were zero in May of this year and in August had increased to 1.1 million pounds. That made it the 15th largest US foreign destination for US beef. In August, mainland China was the 5th largest market for US pork (20.5 million pounds). Note that in August, year-over-year pork tonnage to China fell by 27.3 per cent (down 7.7 million pounds).
Month-over-month US beef imported tonnage declined while pork increased. Both beef and pork were higher than a year earlier. Compared to a year ago, beef imports in August were up 7.9 per cent with almost all of the increase coming from Australia and New Zealand. Pork tonnage purchased was 10.3 per cent above 2016’s. That rise was not from the largest pork supplier to the U.S., which is Canada, the majority of the jump was from countries in the European Union.