click image to zoom Carcass weights for both cattle and hogs have been sharply higher this year, skewing the supply picture for beef and pork protein supplies YTD. By far the most dramatic impact of the higher carcass weights has been in the cattle complex. Different from hogs who spend their time indoors, cattle are exposed to the elements and therefore tend to be greatly affected by winter weather. In cold and wet weather, cattle will spend a lot of their energy trying to stay warm. However, this past winter was one of the warmest on record, helping cattle retain more body fat than in past years.. Cattle dressed carcass weights peaked at 792 pounds in early March, a 2.7% grain from the same period a year ago and an all time record for Q1. For the week ending May 5, USDA estimated total cattle carcass weights at 780 pounds per carcass, a 20 pound gain (+2.6%) from the similar week a year ago. Seasonally weights decline between January and May but that has hardly happened this year and current cattle weights, which should be the lowest for the year, match some of the highs that we saw in the fall of 2011.
One of the arguments for the higher carcass weights is that we now have fewer cows in the cattle mix. Indeed, looking at the decline in cow slaughter recently, this would seem to make sense. However, the weekly statistics does not seem to support this explanation. Since the beginning of the year, steer slaughter is down 5% compared to a 7% decline in heifer slaughter and 3% decline in cow slaughter. Year to date, steers have made up about 48% of the overall slaughter, about the same as a year ago. Since the beginning of March, steer slaughter has been down 5% from last year compared to a 3% decline for heifers and 4% reduction in cow slaughter At this point, changes in the slaughter mix do not seem to have had much effect on weights. Rather, we are seeing big gains in weights for steers, heifers and cows. Year to date steer weights are up 16 pounds or 1.9% from the same period a year ago, heifer weights are up 17 pounds or 2.2% and cow weights are up 6 pounds or 0.9%. The higher weights effectively have negated some of the effect of lower slaughter. They also tend to negatively impact feedlot returns as more discounts are taken for over finished animals. Retailers and foodservice operators have been complaining for some time about the size of cuts coming to market and the current situation does little to alleviate those concerns. It’s actually making things worse.
As we have noted before, the gains in hog carcass weights have been quite significant this year, as well. Based on the daily MPR data, hog carcass weights are currently hovering at around 208 pounds per carcass, about 1.3 pounds or 1% higher than a year ago. Seasonally lower hog weights will limit both the overall supply of pork and particularly the supply of pork trim. 72CL pork trim is up 20 cents in the last two weeks. It is one of the arguments for hog futures being oversold at this time.