Needless to say, cattle-buying activity Monday will be limited to the assessment of new showlists. We assume that late-month business will be characterized by both larger packer appetites and larger feedlot offerings. Live and feeder futures should open at least moderately higher, supported in part by recovering post-Thanksgiving beef demand.
Look for the cash hog trade to open the week with bids steady to $1 higher. As in the cash of the holiday-checked cattle chain, hog slaughter will significantly accelerate this week. Look for the kill to resume this week to near 2.6 million head, if not more. Lean contracts seem geared to open higher with the help of follow-through buying and new year board premiums.
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Beef packer and retail appetite should grow substantially this week. Following the holiday-shorted slaughter of 570,000 head, slaughter is expected to jump up toward 640,000 head through the last week of November.
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For the week ended Nov. 10, fed cattle carcass weights continued to increase. For example, heifer carcasses jumped to 838 lbs., 3 lbs. heavier than the prior week. Again, weights tend to peak in late November or early December.
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Going into the full production weeks of late November and early December, with fed cattle numbers remaining relatively tight, producers may be able to get some more money, with potential toward $120 for late fall.
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Despite the fading of late-month turkey demand, traditional, beef cutout values are expected by many market watchers to come under pressure once again in late November and early December.
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Hams were slightly stronger right before the holiday break before closing some lower on Friday. Mexico will be buying at these motivating levels, as it celebrates the Christmas holiday with a ham at the table. Do not look for weakness until after those final preparations.
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Bellies took huge hits on Wednesday, down $11 on the primal (and recovered only moderately on Friday), to just below $104. Lows will be likely in the first week of December.
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| 4) |
While market hog numbers this fall have been little short of ample, harvest levels are not matching up with hogs suggested available per the September inventory, with some analysts believing this current quarter will be revised lower in future quarters. Hogs are showing up throughout the prior year for this fall, simply not to the magnitude suggested by the USDA's report.
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Looking forward to the start of 2019, live hog weights are expected to remain on the heavier side of the average, at least through most of the first quarter, until tariffs from Mexico can be lifted should the new trade deal go through.
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CATTLE: (GlobalMeatNews) -- The National Cattlemen's Beef Association (NCBA) has hailed the decision by the US Department of Agriculture (USDA) and US Food and Drug Administration (FDA) to collaborate on overseeing the production of cultured meats from livestock and poultry.
The two agencies concluded the joint agreement this week following a series of discussions over the use of livestock and poultry cells to develop cell-cultured food products.
As part of the deal, the FDA will oversee cell collection, cell banks and cell growth, as well as differentiation. The USDA will be responsible for the production and labelling of food products derived from the cells of livestock and poultry.
NCBA's senior vice president of government affairs Colin Woodall praised the move by the two agencies, but warned that there was still lots of work to do on this issue.
"This announcement that USDA would have primary jurisdiction over the most important facets of lab-produced fake meat is a step in the right direction," said Woodall. "But there is still a lot of work to do on this issue to ensure that real beef producers and consumers are protected and treated fairly.
"We look forward to continuing our work with the Administration and Congress as this moves forward, and we continue to encourage producers to file official comments with USDA and FDA between now and 26 December."
HOGS: (Nikkei Asian Review) -- China is fighting an uphill battle against deadly and highly contagious African swine fever, which is threatening the domestic pork industry in the world's largest market for the meat.
Despite all-out efforts by the government to contain the disease, which started more than three months ago, the fever has spread, with possibly dire consequences for China's agriculture and economy as a whole.
The crisis took another troubling turn last Friday, when the country confirmed the first case in a wild boar, raising the difficulty of containment. Authorities also confirmed that the outbreak has spread to the southwestern province of Sichuan, the top pig-raising region.
China's first case of African swine fever was reported in early August on a farm in Shenyang, in the northeastern province of Liaoning, where 47 pigs were confirmed to have died from the disease. The initial claim by the Ministry of Agriculture and Rural Affairs that the outbreak had been controlled has since proved to be wrong.
African swine fever is nearly always fatal to pigs but does not affect humans. It was once confined mainly to Africa but started spreading to other regions about a decade ago. There is no vaccine, nor is there any effective treatment, limiting the options for controlling the disease.
Since pork is a vital food staple in China, the virus could have a serious effect on eating habits. Chinese Premier Li Keqiang convened an executive meeting of the State Council on Sept. 26 and ordered that every possible effort be made to prevent the spread of the virus.
But Beijing does not seem to be winning the fight. The disease has also spread to the provinces of Heilongjiang, Henan, Anhui, Jiangsu, Zhejiang and Shanxi, as well as the Inner Mongolian Autonomous Region. The disease was found in a dead wild boar in Jilin Province, according to the ministry.
On Oct. 16, Vice Agriculture Minister Yu Kangzhen called for greater efforts to contain the contagion in a meeting held to deal with the threat in the Liaoning Province city of Jinzhou. While noting that measures taken so far are "powerful and effective," Yu stressed that more needs to be done.
Pork prices regularly fluctuate in China in what is known as the "pig cycle." This happens because much pork comes from small farmers who do not have the means to track market trends and adapt when things turn rough, according to Ruan Wei, research counselor at Norinchukin Research Institute.
Small pork farmers ramp up production when prices rise without knowing the overall market picture, thereby causing oversupply and a decline in prices, which in turn forces financially weak operations to close.
This is not a problem in countries where pork is mostly produced by large pig farms. Also, China does not import much pork, relying mainly on domestic production, which makes pork prices more vulnerable to supply fluctuations.
Observers are now wondering how the fever will affect the industry. Ruan suggested the outbreak could be a blessing in disguise. She predicts it will trigger consolidation in the industry, weeding out inefficient small farmers and leaving only large players.
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| #chh |
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