Livestock Monitor – 9/6/2024

RETAIL MEAT PRICES

On Wednesday, the USDA Economic Research Service published retail meat prices for August 2024. Overall, retail beef, pork, and chicken prices remain elevated, with beef and pork experiencing some contra-seasonal behavior. Year-over-year the consumer price index for all goods has increased +2.5%, with food products up +2.1% and meat products up +2.8%.

Relative to beef, composite rates show the all fresh retail beef price at $8.16 per pound and choice beef at $8.52 per pound, up +4.3% and +3.5%, respectively, from August 2023. Ground beef was $5.58 per pound, up +9.9% from last year and up +1.5% from July; round roast was $7.63 per pound, up +7.6% from last year and up +0.6% from July; and Choice sirloin steak was $11.54 per pound, up +0.9% from last year but down -1.6% from July.

In August, the retail pork price remained elevated at $4.90 per pound, up +1.3% from last year but down -0.5% from July. Within this, bacon sits at $6.79 per pound, up +4.4% from last year and down -1.4% from July; boneless chops are $4.62 per pound, up +1.4% from last year and down -0.6% from July; and boneless hams are $5.63 per pound, down -4.4% from last year and down -1.6% from July.

Broiler composite prices are sitting at $2.44 per pound in August, down -3.4% from last year but up +1.2% from July. In August, bone-in leg prices sat at $1.84 per pound, down -9.7% from last year and up +2.7% from July while boneless breasts have decreased -5.4% year-over-year to $3.95 per pound, up +0.2% from July. Unlike beef and pork, broiler prices are tracking with seasonal patterns.

Grade A egg prices are up as well, increasing +56.8% from August 2023 and +4.0% from July to $3.20 per dozen. Fresh milk is up +3.0% to $4.04 per gallon from last year and up +1.5% from July. American processed cheese year-over-year is up +2.3% at $4.84 per pound in August while natural cheddar cheese decreased -2.3% to $5.76 per pound.

CORN, SOYBEAN HARVEST ESTIMATES LITTLE CHANGED OVER PAST MONTH

USDA-National Agriculture Statistics Service (NASS) made few changes to its estimates of corn and soybean harvests in upcoming months that were released on September 12. Corn production this year is pegged at 15.186 billion bushels, a 40-million-bushel increase from the projection made in August. This year’s production is down slightly from last year’s 15.342 billion bushels. Production is based on an average yield per acre of 183.6 bushels, up 0.5 bushels from the August estimate. There was some market sentiment prior to the report that average yields could be as high as 188 bushels per acre, based on favorable crop development weather. Following the release of the report, corn prices for December delivery at the Chicago Mercantile Exchange moved up from $3.98 per bushel to $4.05.

The September soybean production estimate was adjusted down 3 million bushels from the August estimate, effectively unchanged at 4.586 billion bushels. This compares with last year’s harvest of 4.165 billion bushels. The September estimate was close to market expectations.

The sorghum production estimate was the exception of the report. September production was raised from 279 million bushels in August to 302 million bushels this month. World Supply and Demand Estimates (WASDE), that were also released on September 12 by the USDA Office of the Chief Economist, showed most of the increase in sorghum supply being absorbed by exports.

There were no significant adjustments to corn and soybean market forecasts in the WASDE report. The additional corn production was assumed to lead to larger end-of-year inventories next September 1, and the average corn price at the farm for the coming year was adjusted down $0.10 per bushel to $4.10 per bushel. The Livestock Marketing Information Center (LMIC) has taken a slightly different tack to the corn market outlook with the additional corn production moving into animal feed use channels at the lower $4.10 per bushel price. LMIC has recently extended its forecast horizon for all crops and livestock into 2026. The lower corn price forecast is assumed to reduce corn plantings next spring by two million acres. Trend line assumptions for average yield lead to a 2025 corn crop that is 900 million bushels less than this year and corn prices for the 2025 crop year that are around $5.00 per bushel.

BEEF AND PORK DEMAND INDEX

The all fresh retail beef demand index for the first and second quarters of 2024 showed gains over the prior year. During the first quarter of 2024, LMIC calculated a beef demand index of 129, compared to 124 for the first quarter of 2023. In 2022, the first quarter beef demand index was 135, the highest calculated value over the last two decades for the first quarter. During the second quarter of 2024, the beef demand index was 118, which was a tie for second highest with 2022 and behind 2021’s beef demand index value of 120. Despite the elevated retail beef prices, the beef demand index for the first and second quarters of 2024 is signaling robust demand.

Compared to a year ago, the retail pork demand index weakened during the first quarter of 2024, but the second quarter index posted an increase. The first quarter retail pork demand index was 109, which was down from the prior year’s 118 and below the recent high of 130 in 2022. The last time the first quarter retail pork demand index reached this low was 2019 when it was 109. During the second quarter, the retail pork demand index was 107, an increase from the prior year’s 102 but down from the recent high of 129 in 2022, and it was also the third highest level over the last decade.

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