January 10, 2005

 

 

New Year Ushers In Uncertainty For US Livestock Markets

 

The first week of the new year has ushered in a significant dose of uncertainty for the U.S. livestock markets.

 

Mother Nature affected hog movement and slaughter rates this week while making it tough for cattle producers and feeders as well. Winter storms produced freezing rain, sleet and/or snow across much of the Midwest, while flooding from melting snow and heavy rains occurred in the Ohio Valley.

 

The inclement weather and squeezed pork packer margins resulted in the smallest hog-slaughter total for a non-holiday week since the fourth week of August. Obviously wintry weather occurs in the Midwest every January, but the storms this week were more severe than normal in some areas, sources said.

 

In addition to the weather concerns, two of the major beef packers announced temporary cutbacks in their slaughtering operations, citing poor market conditions.

 

Tyson Foods announced Thursday that as of Jan. 10 it would curtail operations for three to five weeks at three of its smaller beef plants plus drop a shift at another facility. The company also said operations at a non-slaughtering beef plant would be ceased for a similar period. The affected plants are in Iowa, Nebraska, Idaho and Washington.

 

Kansas City-based National Beef Co. announced Thursday that it would make its "largest production cutback in several years." The company said slaughter operations at both of its beef plants would be idled Saturday and again on Monday.

 

Meanwhile, there has been considerable and ongoing debate about the U.S. Department of Agriculture's final rule to reopen the U.S. border to imports of Canadian cattle effective March 7. Some industry groups and politicians are attempting to overturn the final rule via the courts, while others defend USDA's action. Cattle imports from Canada have not been allowed since May 20, 2003 after Canada's first domestic case of bovine spongiform encephalopathy, or mad-cow disease, was discovered.

 

Another case of BSE was confirmed in Canada last week in an Alberta cow that was born in 1996, one year before a ban on feeding ruminant protein -- or meat-and-bone meal -- to cattle was imposed.

 

Reduced cattle slaughter this week and restricted slaughter hog plant operations resulted in the smallest combined meat output for a non-holiday week since early April 2004.

 

CATTLE/HOG SLAUGHTER

 

USDA estimated this week's cattle slaughter at 574,000 head, compared with 538,000 a week ago and 561,000 a year ago.

 

This week's hog slaughter was estimated at 1.989 million head, compared with 1.806 million last week and 2.011 million a year ago.

 

TOTAL MEAT PRODUCTION

 

The USDA estimated total beef, pork and lamb production for the week at 843.4 million pounds, versus 779.3 million last week and 832.8 million a year ago.

 

Young chickens slaughtered under USDA inspection for the week totaled 157.297 million head, compared with 137.675 million a week ago and 158.835 million a year ago.