Livestock Monitor – 9/27/2024

SEPTEMBER 1 HOGS & PIGS REPORT

The September 1 Hogs and Pigs report released by USDA NASS showed a slight increase in All Hogs and Pigs inventory levels of +0.5% to nearly 76.5 million head. The average pre-report estimate had All Hogs and Pigs up +0.5% from a year ago. Hogs kept for breeding was just over 6.0 million head, a decline of -2.2% from the previous year. Analysts’ pre-report estimates were expecting an average decline in hogs kept for breeding of -3.2%.

The June-to-August farrowings was 2.989 million head, down -1.7% from last year, which was close to the average pre-report estimate of down -1.8%. Pigs per litter came in at 11.72, an increase of +0.9% and close to the average pre-report expectations of a +1.1% increase. The June-to-August pig crop was down -0.8% to 35.0 million head, which is what analysts’ average pre-report estimates were expecting. Farrowing intentions for September-to-November were 2.950 million head, down -0.5% and close to the average pre-report estimate of down -0.6%. The December-to-February farrowing intentions were down -0.6% to 2.933 million head, which was the opposite direction of average pre-report expectations of a +0.2% increase over last year.

Market hogs posted an increase of +0.7% to 70.4 million head, which was near the average pre-report estimate of up +0.8%. Looking further into the market hog weight categories, declines were seen in the lighter weight categories while increases were posted for the heavier weight categories. Hogs weighing under 50 pounds declined -1.5% to 22.2 million head, which differed from pre-report expectations that had an average of even with a year ago. Hogs weighing 50-to-119 pounds decreased -1.3% to 20.2 million head, which was the opposite direction of average pre-report expectations of a +0.6% increase. Analysts were expecting hogs weighing 120-to-179 pounds to increase +1.4% on average, but the actual was above expectations, increasing +3.5% to nearly 15.0 million head. Hogs weighing 180 pounds and over increased +4.8% to 13.0 million head, which was above the average pre-report estimate of +1.7%.

CATTLE ON FEED

Last week USDA NASS reported cattle on feed totaled 11.198 million head as of September 1st, marking a +0.6% increase from the previous year. Analysts had projected pre-report estimates ranging from 11.209 to 11.344 million head, up +0.1% and +1.3%, respectively, and an average forecast of up +0.7%. Fed cattle marketings in August totaled 1.818 million head, down -3.6% from last year. Marketings were on par with pre-report expectations, which predicted a -3.5% decline on average with estimates ranging from a -4.0% to -2.5% decrease.

Placements were also close to projections, reaching 1.975 million head, down -1.4% from last year. Analysts had forecasted an average -1.5% decline in placements, with estimates ranging from a -6.5% decrease to a +2.3% increase. As of September 1st, the number of cattle on feed over 120 days was nearly unchanged from last year at 4.140 million head, up just +0.05%. However, cattle on feed over 150 days remained above historical averages, rising +4.6% to 2.540 million head.

By weight group, seasonal gains in placements from July to August were recorded across all categories, though most saw year-over-year declines. Cattle weighing less than 600 pounds decreased by -4.8% compared to the previous year, while the 600-699-pound group remained unchanged. The 700-799-pound and 800-899-pound groups dropped by -4.4% and -1.6%, respectively. Cattle in the 900-999-pound category saw the largest year-over-year increase, up +8.2%. Cattle weighing 1,000 pounds or more remained unchanged.

POULTRY OUTLOOK UPDATE

Broiler production (ready-to-cook weight) in August was down -3.0% from a year earlier as there was one less slaughter day in the month than in 2023. Average bird weights were almost +2.0% heavier. Given the adjustment in slaughter days, broiler production this quarter is still on track to be up +2.0% from last summer but is about -2.0% less than was expected for the quarter a couple months ago.

Consumer demand for chicken this summer remains at elevated levels, improving from what had been expected at the beginning of the quarter as normal seasonal trends that usually are declining as August moves to September have not materialized. Wholesale breast meat prices averaged $1.75 per pound in the spring quarter and are on track to average $1.80 per pound or better this summer. Last summer, breast meat prices went from a spring quarter average of $1.37 per pound to a summer quarter average of $1.34 per pound and then dropped to $1.13 per pound in the fall quarter. Fall quarter prices are expected to decline to about $1.40 per pound. Leg quarter prices have shown a similar resilience, holding steady from the spring through the summer, even as export interest has been dulled by the high prices relative to traditional norms. Broiler production this fall is forecast to be up +3.5% from last year with next year forecast to be up +1.7%.

Turkey production in August was down -11.0% from a year ago. Production for the quarter is pegged to be down -5.0% from the summer of 2023. The industry is girding for lower levels of turkey consumption for the Thanksgiving and Christmas seasons that has become a trend since the pandemic. Wholesale whole turkey prices will average in the low $0.90 per pound range this summer, down -30.0% from the summer of 2023 and down -45.0% from the summer of 2022. Turkey production this fall is forecast to be down -1.0% from last year, and cold storage inventories at the end of the year should be down -15% to -20% from the start of the year (but still in line with normal year-end inventories prior to 2023). Reduced frozen inventories at year-end should support a price recovery next year.

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