Food Business News - August 7, 2018 - 32
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PLENTY OF MEAT
available as prices decline
CONTINUED FROM PAGE 1
2017, and drop further to $40 to $44 per
cwt in 2019.
and Canada fourth at about 9%. Mexico
Beef should fare somewhat better, at
imposed 10% tariffs on most U.S. pork on
June 5 and increased those to 20% on July least on the export front, with about 11%
of total production exported. Japan was
5, although pork exports to Mexico were
up about 5% in May, while exports to Chi- the largest importer of U.S. beef in 2017,
taking 24%, followed by Mexico at 19%,
na/Hong Kong were down 45%. China's
duties on U.S. pork total about 80% when South Korea at 16%, Hong Kong at 10%
including a pre-existing 10% value-added
tax along with two tariff increases.
Still, hog numbers keep increasing,
although slaughter hog profits were
forecast by one analyst at less than $2 per
head in 2018 compared with $21 in 2017.
"The (hog) industry has been setting in million lbs
quarterly inventory records almost since
2015, and litter rates have been consistently breaking records, mostly since the
early 2000s, interrupted only by serious
disease outbreaks in 2014," the U.S.D.A.
said in its Outlook report. And there
appears no let-up in sight. "One aspect
of the report that likely fell outside most
expectations was the extent of the exSource: U.S. Department of Agriculture
pansion of the breeding inventory," the
U.S.D.A. continued, noting that the naand Canada at 9%. Canada put a 10% tax
tion's breeding herd on June 1 increased
on some U.S. beef, while China added
more than 3%, or by more than 200,000
tariffs of 37%. Beef exports have been
head, more than 60% of which was in
states proximate to new processing facil- higher than a year ago for every month
(through May) of 2018, with May exports
ities in Michigan, Minnesota and Iowa.
Prices for barrows and gilts (slaugh- up 21% and up for all major destinater hogs) were forecast by the U.S.D.A. to tions except Hong Kong (down 2%), the
U.S.D.A. said. Demand has remained
average between $45 and $46 per cwt in
strong from the three major Asian
2018, down 10% from $50.48 per cwt in
Food Business News
U.S. beef and
Trade issues cloud
markets of South Korea, Japan and Taiwan.
Placement of calves in feedlots,
slaughter numbers and weights and ultimately beef supply have been affected by
ongoing drought across parts of the Great
Plains and the intermountain region,
the U.S.D.A. noted in its Outlook report.
That resulted in more cattle moved into
feedlots at lighter weights that ultimately were sold for slaughter at lighter
weights. The drought also contributed
to increased cow and heifer slaughter
as pastures could not support as many
livestock, with cow slaughter expected to
increase in the second half of 2018.
Total U.S. cattle inventory on July 1
was up 1% from a year earlier, suggesting
the cattle herd still was growing but at
a slower rate than in the past few years.
Perhaps more importantly, the number
of beef replacement heifers was down 2%
from a year ago, suggesting the multiyear expansion was slowing or coming
to an end, which will have a longer-term
impact on beef supply.
Slaughter steer prices were forecast
by the U.S.D.A. to average between $114
and $117 per cwt in 2018, down 5% from
$121.52 per cwt in 2017 but firm slightly in
2019 to $113 to $122 per cwt. Feedlot profits were forecast at about $50 per head in
2018, down 79% from $236 in 2017. FBN
August 7, 2018