In its May 19th monthly cattle report, the USDA said feedlot inventories totaled 11.6M head on May 1, down 3.4% from a year ago. Total new placements onto feedlots in April were 4.2% below a year ago, and April marketings (from feedlots) were down 10.1%. Cattle slaughter for the 4 weeks headed into Memorial Day weekend was close to 4% below 2022 levels.
Read MoreAfter interviewing suppliers, commodity experts, and supply chain professionals of major chain restaurant companies who were in Chicago this weekend – the only real consensus on CA’s Prop 12 (effective July 1), and Mass’ Question 3 (effective June 10), is mass confusion. Both states’ laws restrict the sale of uncooked, whole pork cuts from hogs that do not meet the new gestation crate requirements.
Read MoreFriday’s WASDE report, which contained the USDA’s first estimates for 2024, provided good news, bad news, big assumptions, and a few surprises. Getting the bad news out of the way, the hard red winter wheat crop is in worse shape than previously thought because of drought and freeze damage – and all-wheat ending stocks will drop to 16-year lows.
Read MoreWith cattle herd numbers historically low, and hog farrowing intentions slim, the 2nd half of 2023 is going to be all about chicken – and the poultry industry appears to be geared up to handle it. The USDA reported the current breeding stock of broiler‐type hatching layers was at record high levels on April 1st, 2.3% above a year ago.
Read MoreIn April’s WASDE report, the USDA projected whole turkey prices will average a record-high $1.71/lb for 2023, up from $1.54 in 2022. Those yearly average numbers are a bit misleading, given what has happened so far in 2023. Whole (16-22 lb) tom turkey prices, which peaked at $1.91/lb in Oct 2022, have been steadily declining and averaged $1.65 last week.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.6M head on April 1, down 4.4% from a year ago. Total new placements onto feedlots in March were down 0.6%, however, placements in the lowest, under-600lb, weight category were up 11.4% vs. a year ago – indicating the drought-induced herd liquidation has not abated.
Read MoreHighly Pathogenic Avian Influenza (HPAI or Avian Flu) has claimed the lives of 58.65M U.S. birds since Jan 2022 - mostly turkeys and egg layers - and that trend is continuing in 2023. Another 58,000 turkeys were infected/destroyed in Pennsylvania in March. Springtime means large numbers of migrating birds in U.S. flyways – and lots of chances for commercial flocks to become infected.
Read MoreFollowing multiple years of drought, the transition from a La Nina to an El Nino weather pattern is expected to bring welcome precipitation to the Midwest corn belt this spring/summer. In its Prospective Plantings report on March 31, the USDA released its first official, survey-based estimates. U.S. farmers said they intend to plant 92.0M acres of corn in 2023, up 4% from last year.
Read MoreLast week’s Hogs & Pigs report should be neutral-to-bearish for near-term hog prices, but more bullish for the 2nd half of the year. The USDA said all hogs and pigs in the U.S. on March 1 totaled 72.86M head, up just 0.2% from a year ago and down 2.1% from 3 months ago. The herd breaks down to 66.7M market hogs and 6.13M kept for breeding – just slightly above a year ago.
Read MoreAt last week’s Market Vision Conference, Brian Williams of Macquarie Bank pointed out that U.S. renewable diesel production capacity will more than double from 2.6B barrels per day (bpd) in 2022 to 5.9B bpd by the end of 2025. Thus, most analysts are very bullish on all veg-oil prices for 2024/2025. But currently, bank failures and recession fears have helped crude oil futures drop roughly $10 per barrel over the past 3 weeks.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.6M head on March 1, down 4.5% from a year ago. New placements onto feedlots in Feb were down 7.2%. In March’s WASDE, the USDA projected a huge 6.0% drop in beef production for 2023. The USDA raised its forecast 2023 cattle prices from $159.00 to $162.00/cwt, up 12.1% from $144.40 for 2022.
Read MoreFollowing multiple years of drought, the transition from a La Nina to an El Nino weather pattern is expected to bring welcome precipitation to the Midwest corn belt this spring/summer. So far, the USDA hasn’t made any adjustments to its corn balance sheets.
Read MoreWith cattle futures setting new 8-year highs last week at $167.50/cwt on 2/28, and beef supplies looking to be constrained for the foreseeable future, the restaurant industry will need to rely on alternative proteins for some food-cost relief.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.7M head on Feb 1, down 4.1% from a year ago.
Read MoreBeef markets look to be quite challenging in 2023 and 2024. In Jan’s annual cattle inventory report, the USDA said that total U.S. cattle numbers were 3% below a year ago and the lowest since 1962. The USDA expects beef production for 2023 to be 6.3% below a year ago. Looking ahead, a developing El Nino weather pattern should bring more moisture this spring to both crops and grazing pasture.
Read MoreButter prices were out-of-sight in 2022, hitting a record-high $3.2675 per pound in Oct and averaging $2.87 for the year, up 65.5% from $1.73 in 2021. Butter production in 2022 was down 0.7% from 2021 and 10.1% below 2020 output. But cold storage stocks at the end of Dec were 8.1% above year-ago, suggesting high prices suppressed at least some demand - and that there is enough supply to keep prices relatively tame.
Read MoreA big boost to Q4 2022 broiler output has pushed Jan 1st (2023) cold storage supplies to 25.4% above a year ago. Producers were finally able to significantly increase output – but at a time when sky-high retail prices were turning off consumers and demand was falling. Breaking it down: wing inventories were up 11%; whole birds up 14%; leg quarters up 22%; and breast meat 63% higher than last year, albeit coming off 9-year lows to start 2022.
Read MoreU.S. GDP growth was 2.9% for Q4 2022, following 3.2% growth in Q3 2022. Those are great numbers after several years of Covid, supply shocks, war, and inflation. What’s next? The U.S. will flirt with recession for most of 2023 as a result to the Fed’s (inflation-fighting) interest rate increases. We’re only not in a recession right now because of a resilient labor market and unexpectedly lower energy prices.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories totaled 11.68M head on Jan 1, down 2.9% from a year ago. New placements onto feedlots in Dec were down 8.0%. Heifers (breeding stock) accounted for 39.8% of feedlot inventory, far exceeding the 36% threshold that historically indicates herd liquidation. CME cattle futures set fresh 8-year highs at $158.50/cwt on 12/29/22 and remain high at $156.62 (1/20/23).
Read MoreHighly Pathogenic Avian Influenza (HPAI or Avian Flu) claimed the lives of nearly 58M U.S. birds in 2022 - mostly turkeys & egg layers - and that trend will likely continue in 2023. Effective vaccination exists. Unfortunately, trade barriers that would exclude vaccinated U.S. poultry from several important foreign markets have discouraged domestic vax usage.
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