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With the monthly livestock slaughter data released on Friday, we can now calculate the production numbers for the first quarter of the year. The attached chart shows quarterly production for the past two years as well as the quarterly estimates from the USDA WASDE reports. Included are the most recent estimates as well as what those estimates were at the beginning of the year to. Below are only the latest supply data on beef and pork, the broiler statistics will be released Wednesday afternoon. It will be interesting to see what the March broiler data will show since January and February production levels have been very far from what the weekly statistics indicate.
Beef: Total US commercial cattle slaughter in March was 2.751 million head, 208,000 head or 7% smaller than a year ago. Keep in mind that we had on less slaughter day in March 2012. Adjusting for the extra day, March slaughter (using head slaughtered per day) was down 2.8% from a year ago. Fed cattle slaughter was lower for the month but the magnitude was skewed by the number of slaughter days. Steer slaughter for the month was down 106,700 head or 7.6% (daily slaughter down 3.4%) while heifer slaughter was down 64,700 head or 7.2% (daily down 2.9%). Heifer slaughter has been trending lower in recent months, reflecting some heifer retention. Total heifer slaughter in Q1 was 2.386 million head, 144,300 head or 5.7% lower than a year ago. Steer slaughter for the quarter is down 3.6% from last year. The fact that heifer slaughter is down by more than steers provides an indication that fewer female animals are coming to slaughter but keep in mind that the magnitude of the shift remains relatively small in the overall scheme and we are still far from truly entering an expansion phase in US cattle production. In January, USDA estimated Q1 US beef production at 6.195 billion pounds. However, based on the actual numbers published on Friday, Q1 beef production actually came in at 6.280 billion, about 85 million pounds or 1.4% more than earlier forecasts. The larger supply reflects heavier than expected cattle carcass weights but in itself does not explain the sharp pullback we have seen in cattle and beef prices recently. At this point the price effects appear to be more demand than supply related.
Pork: Hog slaughter in March was down 350,900 head (-3.6%) than a year ago. However, daily slaughter was up 0.8% from last year, in line with the increases in the pig crop from the hog inventory survey. For the first quarter, which has the same number of slaughter days, hog slaughter was 28.103 million head, 2.3% higher than a year ago. This increase in the number of hogs coming to market combined with heavier carcass weights caused US pork production in Q1 to be 2.4% higher than a year ago. As you can see in the top chart, the Q1 supply was fairly close to the USDA estimates from January and yet, pork prices have pulled back sharply, an indication that demand so far has failed to materialize as expected. The data also shows that any changes to the sow herd are coming from gilt retention rather than sow slaughter, as Q1 sow slaughter was up 0.2% from 2011.
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