The quarterly survey of hog operations means that beef provide in 2024 will likely be modestly upper than in 2023. The breeding herd stock is down 2% from a yr in the past however the relief has been greater than offset through productiveness positive factors.
Highlights
- The quarterly survey of hog operations means that beef provide in 2024 will likely be modestly upper than in 2023. The breeding herd stock is down 2% from a yr in the past however the relief has been greater than offset through productiveness positive factors.
- Futures markets in large part disregarded the file, setting up lifetime of contract highs through the top of the week. Call for has been a ways more potent than maximum anticipated, leading to secure positive factors for past due spring and summer time.
- There may be hypothesis that buyers could also be buying and selling down, which has a tendency to fortify decrease priced protein choices like beef. Red meat costs at retail have greater at a a ways decrease tempo than pork and hen, making it extra aggressive.
- Ham costs surged upper after Easter, partly because of the relief in slaughter all the way through the vacations but additionally two weeks of huge export gross sales (55k MT) to Mexico.
- Trim costs company and anticipated to transport upper in Would possibly/Jun.
Complete File
Hog futures final week in large part disregarded the results of the most recent Hogs and Pigs survey. The consequences got here in at the top finish of estimates in maximum classes however, for now, marketplace members are as an alternative that specialize in close to time period call for. The guess is that call for in home and export markets will dangle up within the spring and summer time and greater than offset the anticipated building up in provide implied through the most recent survey. Finally, beef provides had been upper than anticipated for a lot of Q1 and but hog/beef costs have proved to be moderately resilient. Additionally, previously the marketplace has no longer traded quarterly file numbers, or no less than to not the level that it trades some grain studies just like the quarterly shares or planting intentions. Nonetheless, you will need to be aware the most recent survey because it provides the most productive baseline to be had for provide forecasts within the subsequent twelve months.
Will there be extra or fewer hogs than a yr in the past this summer time?
The USDA survey says extra. The Dec-Feb pig crop kind of corresponds to hogs coming to marketplace Jun-Aug. Analysts had been anticipating a 1.3% building up vs. a 1.9% building up within the USDA March survey. The Dec-Feb pig crop building up is upper than the rise marketplace hog stock numbers. This might indicate that provide this summer time could also be a bit of higher than many be expecting. USDA has made important upward revisions to the provision from earlier quarters, so the upper provide for the summer time must no longer come as a marvel.
Extra hogs from a smaller herd, what provides?
Within the final six months there was numerous communicate/center of attention at the breeding herd, particularly following bulletins final yr about main providers final sow farms. Farrowings knowledge showed what the December herd knowledge recommended, with the survey knowledge appearing Dec-Feb farrowings 2.6% decrease thana yr in the past. It’s all the time just right to test farrowings relative to the breeding herd. The ratio to the Dec. 1 breeding herd at 47.9% is a bit of upper than final yr however in keeping with fresh development and nonetheless underneath pre-COVID ranges. However even with the lower-than-expected farrowings, the pig crop ended up being upper. The reason being the upper productiveness we have now skilled the previous few months in comparison to 2020-2022. Pigs in keeping with muddle within the quarter jumped 4.6% y/y. Analysts had been anticipating 3.3% building up, which we famous in our pre-report evaluate as being low making an allowance for earlier quarters. Even at +4.6% pigs in keeping with muddle had been rather underneath pre-COVID development. The chart above presentations that Dec-Feb pigs in keeping with muddle have a tendency to be not up to all the way through Sep-Nov. The q/q decline was once no longer as large because the final two years however it does no longer seem out of line with the ones pre-COVID years.
Fall provide may well be rather above yr in the past.
Mar-Would possibly farrowing intentions had been down 0.9% however the present development in pigs in keeping with muddle may greater than offset that.
Red meat Exports had been Tough in February, with Robust Mexico Call for Serving to Offset Weaker Gross sales to Asia
Exports of clean, frozen and cooked beef in February had been 201,089 MT, 29,335 MT (+17%) upper than a yr in the past. Shipments to Mexico had been up 15,102 MT, a 23% building up from a yr in the past. Shipments to a number of different markets registered robust expansion. Exports to South Korea had been up 68% and exports to Australia greater 152%. That expansion helped offset the decrease exports to Japan (-2.8%) in addition to decrease exports to China (-31%) and the Philippines (-26%). Tough gross sales to Mexico in March are more likely to stay beef export cargo quantity above yr in the past ranges. On the other hand, exceptional beef export gross sales are lately operating underneath yr in the past ranges. This will curtail export attainable in past due spring and summer time.
Worth Chart
Forecasts
Steiner Consulting Team produces the Nationwide Red meat Board publication in keeping with knowledge we consider is correct and dependable. On the other hand neither NPB nor Steiner and Corporate warrants or promises the accuracy of or accepts any legal responsibility for the knowledge, evaluations or suggestions expressed.