LIVESTOCK REPORT
By Glenn Grimes
Our demand index for beef at the consumer level was down 5.3 percent from a year earlier for the January to April period. The good news for producers is that the demand index for live fed cattle was up 2.8 percent compared to these months a year ago.
Beef production for January to April was up 5.8 percent but due to an increase in cold storage stocks and increases in beef exports, our calculations showed per capita consumption of beef in the U.S. was basically flat with a year earlier.
Retail beef prices in May were 1.8 percent below April and 7.3 percent below May 2005. For January to May 2006, choice retail beef prices were 4 percent below 12 months earlier.
During the 5-month period of January to May, beef consumers benefited from narrower marketing margins. The total marketing margin was 3.7 percent smaller and fed cattle prices were also down by 4.3 percent compared to these 5 months in 2005.
Total stocks of meat were more manageable at the end of May 2006 than earlier in the year. Cold storage stocks at the end of May were up 1 percent from the end of April and up 37 percent from May 31, 2005. Boneless beef stocks on May 31 were up 3 percent from April 30 and up 40 percent from May 31, 2005. Stocks of beef cuts at the end of May were down 10 percent from April 30. Cold storage stocks of poultry on May 31 were up 17 percent from a year earlier but down about
8 percent from the end of April 2006. Pork in cold storage was down 9 percent from the end of April 2006 and down 8 percent from May 31, 2005.
Total cow slaughter for 2006 through the week ending June 10 was up 3.2 percent compared to a year ago. Dairy cow slaughter for this period was down 1.5 percent, but beef cow slaughter was up 8.8 percent.
For the 4 weeks ending June 10, total cow slaughter was up 7.3 percent from 12 months earlier. The trend in dairy cow slaughter changed from earlier in the year and increased 5.3 percent compared to a year ago. Beef cow slaughter was up 8.7 percent from the same period in 2005.
The growth in the cow herd at least has been slowed by this larger cow slaughter but we still believe the size of the cow herd will increase some in 2006Ņunless feed production is reduced substantially by dry weather. The reduction of the cow herd in the southwestern and western United States is probably due to dry weather.
SWINE
Cash hog prices increased sharply in June due to some reduction in slaughter. The reduction in slaughter was the result of death loss from circovirus, breeding problems due to hot weather in the late summer of 2005 and reduced rates of gain in the western cornbelt because of hot weather in late May and early June.
Barrow and gilt live-hog weights for the week ending June 17 were
4.3 lbs. below a year earlier. In May the average weights of barrows and gilts were a pound above a year ago.
The export market for pork slowed in April 2006 relative to a year ago and U.S. pork exports were up only 1.7 percent from April 2005. However, this comparison is a little deceiving because exports during the month of April 2006 were the second highest on record. Net export in April at 11 percent was also a record high. And, our export of 15.9 percent of total U.S. pork production was a record monthly high.
For the January to April period, total U.S. pork exports increased 16 percent from a year earlier. Exports to all of our major international markets for pork except Japan were up for January to April compared to 2005. Japan was down 9.7 percent for these 4 months. However, Canada was up 12.4 percent; Mexico was up 27.9 percent; Russia was up 141.6 percent; South Korea was up 64 percent; Mainland China, including Hong Kong, was up 42.6 percent; Taiwan was up 63.8 percent; and the Caribbean was up 59.7 percent.
For January to April, pork imports were up 5.4 percent from 12 months earlier. However, net pork export for these 4 months was 9.9 percent, a record high. January to April live hog prices were probably 8 to 10 percent higher than they would have been if net pork export in 2006 had stayed the same as it was in 2005 during these months.
Live hog imports from Canada for January to April were up 12.3 percent from a year earlier. Feeder pig imports were up 16.1 percent and slaughter hog imports were up 4.2 percent from the same period of 2005.
Cold storage stocks at the end of May were more manageable than earlier in the year. On May 31 total chicken stocks were down 8 percent from a year ago. Beef stocks were up but were mostly boneless beef due to the larger cow slaughter. Pork stocks at the end of May were down 8 percent from a year earlier with belly stocks down 21 percent from a year ago.
Our demand index for pork at the consumer level for January to April was down 5.7 percent, beef at the consumer level was down 5.3 percent, and young chicken at the consumer level was down 6.0 percent. The good news is that live-hog demand for January through April was down only 2.9 percent. For these 4 months in 2005, live-hog demand was up over 15 percent from the same months of 2003.
The demand loss for January to April for live hogs was less than 20 percent of the growth in the prior 2 years when demand had increased due to the high protein diets, increased exports, and population growth. We hope that during the next year we will not lose more than 50 percent of the live hog demand growth gained in 2004 and 2005.