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Meat Supplies Up Despite Lower Harvest Numbers

Article-Meat Supplies Up Despite Lower Harvest Numbers

Meat Supplies Up Despite Lower Harvest Numbers
The bottom line is that producers in a free-market system respond to incentives. Producers need to use the best science that money can buy so as to meet society’s requirements. They have done a pretty darn good job at that.

Meat protein supplies are currently hovering above year-ago levels. Combined red meat and poultry production for the week ending Dec. 17 was 1.778 billion lbs., 21.2 million lbs. or 1.2% above year-ago levels. The increase in pounds has come even as producers see fewer numbers of cattle and hogs coming to market.

For the latest reported week, USDA noted that compared to a year ago, cattle slaughter was 0.632 million head, down 1.86%; while hog slaughter was 2.304 million head, down 1.93%; broiler slaughter was 152.2 million head, up just 0.80%; and turkey slaughter at 4.610 million head, was up only 0.07%.

So far, producers have been able to offset the decline in slaughter by increasing carcass weights. The average cattle carcass weight (this includes steers, heifers and cows) is currently running at 797 lbs. That’s about 24 lbs. or 3.1% above year-ago levels.

As a result, beef production is up 1.3%, even as slaughter levels decline. That is one big reason why price increases for a number of cuts continue to hover at or below year-ago levels, helping contain price inflation and depressing overall cutout values.

Hog weights have been well below year-ago levels since August, largely because producers pulled hogs forward in an effort to limit the supply of pork coming to market. The strategy worked and it helped contain losses as record corn prices turned pork production systems upside down. It appears that producers may be returning to a more regular production schedule, as evidenced by the steady gains in hog carcass weights and hog slaughter that is running below year-ago levels. While USDA pegs the weekly hog carcass weight at around 206 lbs., the mandatory price reporting (MPR) data indicates that weights are actually closer to 207 lbs., about the same as a year ago.

Finally, broiler weights continue to run well above last year, with the average live weight pegged at 5.94 lbs., which is a 2.6% increase over last year, and helping push total broiler production up 4% compared to a year ago.

The increase in weights reflects efforts on the part of producers to improve productivity and lower marginal costs. The use of feed ingredients, such as ractopamine, has greatly contributed to such improvements. According to the literature, cattle fed Optaflexx (active ingredient ractopamine hydrochloride) show live weight gains of 10-21 lbs., and improved feed efficiency of 14-21%. This last point is critical, as improved feed efficiency means that more of the feed that goes into an animal is converted into muscle, lowering the overall cost of bringing those cattle to market.

Similarly, the gains for pigs are also as impressive. According to the literature, Paylean (ractopamine) fed to pigs at “18 gms/ton improved feed efficiency by 13%, increased average daily gain by 10%, reduced average daily intake by 6% and increased lean gain by 25-37%.”

The bottom line is that producers in a free-market system respond to incentives. The producer today is told to produce more meat so as to feed a growing population (+1 billion people in the past decade). That charge also includes producing more meat with fewer animals so as to limit the impact on the environment; and the extra meat protein should come from using less feed, as part of that feed is now needed to drive our cars. The producer is also told to provide meat that is leaner, so as to limit the amount of fat in our diets.

Given such lofty goals, producers need to use the best science that money can buy so as to meet society’s requirements. They have done a pretty darn good job at that.

TAGS: Outlook
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