Livestock Monitor – 11/8/2024

MEAT TRADE UPDATE

On Wednesday, the USDA, ERS released its September meat and livestock trade data, wrapping up the third quarter of 2024. Beef imports are up +21.1% year to date through September, reaching 3.4 billion pounds, while exports have declined by -2.9% to 2.3 billion pounds. Notably, imports from Australia, Uruguay, and Brazil have risen sharply by +68.4%, +64.8%, and +44.9%, respectively, totaling 747, 214, and 543 million pounds. Canadian imports grew slightly across the three quarters, up +2.7% to 748 million pounds, while imports from Mexico dropped -13.4% to 440 million pounds. The largest export declines were to China (down -10.7%), South Korea (down -10.3%), and Canada (down -5.5%), with totals of 349, 458, and 195 million pounds, respectively. Increases were seen in exports to Mexico and Japan, up +10.9% and +0.6%, respectively, to 255 and 499 million pounds.

Pork trade has seen gains through the first nine months of the year, with exports up +4.9% to 5.2 billion pounds and imports up +2.8% to 862 million pounds. The strongest export increases were to South Korea, up +24.7% to 525 million pounds, and Mexico, up +5.9% to nearly 2 billion pounds. However, exports to China, Canada, and Japan declined by -24.7%, -5.1%, and -2.3%, respectively, to 313, 391, and 812 million pounds. Pork imports from the Netherlands and Denmark surged by +73.4% and +29.6%, respectively, from January to September, reaching 15 and 60 million pounds while imports from Canada fell -5.4% to 528 million pounds.

Lamb exports to Mexico rose significantly over the same nine-month period, up +177.1% to 327 thousand pounds, with total lamb exports increasing by +20.9% to 558 thousand pounds. Lamb imports also saw a boost, up +34.7% to 234 million pounds, primarily due to increases from Australia (+35.6% to 172 million pounds) and New Zealand (+33.2% to 59 million pounds).

Broiler imports increased by +26.1% to 114 million pounds, driven mainly by a +39.1% increase from Chile, totaling 83 million pounds. Broiler exports fell -7.6% to around 5 billion pounds, with the largest drop in demand coming from China, down -74.4% to 62 million pounds. Exports to Iraq, have risen +49.1% to 83 million pounds. With regards to turkey trade, imports grew by +2.7% to 27 million pounds, while exports increased by +4.9% to 362 million pounds.

DAIRY MARKET UPDATE

USDA’s National Agriculture Statistics Service (NASS) reported that the monthly average milk price received by farmers in September was $25.50 per cwt, the highest monthly average price since July 2022. The monthly average milk price in January was $20.10, and prices have risen steadily since then. Milk prices averaged $23.97 during the July-September quarter, up from $19.27 during the same period in 2023. Milk prices have trended above expectations this year as consumer demand for butter and cheese has been very good, and fluid milk product demand has also been a positive surprise.

Milk production during the summer quarter was unchanged from a year earlier, topping expectations slightly. USDA, NASS revised up its initial estimates of cows in the dairy herd in July and August, showing a 9,000 head increase in August. Milk cow productivity was also adjusted upward slightly. Arizona, Idaho, and Texas accounted for all the increase in dairy cow numbers in August.

Demand for milk in September was highlighted by butter production that was up +11% from a year earlier. The increase in production kept inventories in cold storage from declining as much as they usually do during the summer months. At the end of September, butter inventories were at 303 million pounds, up +13% from a year earlier. At mid-year, butter inventories had only been up +8%. Even with higher inventories, however, butter prices during the summer were marching higher, averaging $3.09 per pound at the wholesale level, compared to $3.03 in the spring and $2.71 a year ago. Preliminary estimates of domestic butter usage during the summer quarter are up +8% from a year ago. The big increase in butter production in September is weighing on butter prices this quarter. Wholesale butter prices fell $0.12 per pound in September and $0.35 per pound in October.

CONDITION RATINGS AND FEEDER STEER PRICES

USDA, NASS recently published the last range and pasture condition ratings for the May through October season. Nationally, range and pasture conditions finished the season at 51% rated as poor and very poor, which was the highest for the year and well above last year (37%). The Western region finished the season with a rating of about 41%, which was higher than last year (37%). The Great Plains region ended the season with a rating of 46%, well above last year’s rating of 19%. By the end of the season, ratings for the Southern Plains region were over 57%, an increase from last year’s rating of 47%. For the Cornbelt region, range and pasture conditions started to deteriorate in mid-August and ended the season at 43%, which was above last year (35%). The Southeast region ended the season with a rating of just over 40%, which was slightly higher than last year’s rating of 38%.

As many of the regions reported a deterioration in range and pasture conditions over the last few months, this coincided with feeder cattle moving from grazing into feedlots. Across various regions, feeder steer prices (700-800 pounds) have been holding steady in recent weeks. The Billings, MT, weekly auction data reported last week’s feeder steer price at $264 per cwt, which is slightly better than where prices were a few months ago. Prices have been ranging from about $250 to $280 per cwt since the start of the year. In South Dakota, last week’s feeder steer price was $265 per cwt, but prices have been ranging from about $250 to $280 per cwt since July. Feeder cattle prices in Nebraska peaked at $295 per cwt in mid-July; since then prices have been ranging from $260 to $274 per cwt and last week were $267 per cwt. In the Southern Plains (KS & OK), feeder steer prices have been ranging from about $246 to $270 per cwt since March, and last week’s price was $257 per cwt.

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