The US Dept. of Agriculture in its October Livestock Slaughter report said September production of beef and pork both were up 2 percent from a year ago with pork and total red meat outturn record high for the month. January-September production of red meat was up 4 percent from the same period last year, with beef up 5 percent and pork up 3 percent.
Supplies of pork are expected to remain ample, with the USDA estimating the total US hog inventory on Sept. 1 near 74 million head, the highest for the date since records began in 1988 largely due to breeding herd expansion that began in 2011. In its October Livestock, Dairy and Poultry Outlook, the USDA forecast record high pork production in the fourth quarter of 2017 and in all of 2018. Slaughter hog prices fell more than 40 percent between late July and late September, but still were slightly above a year ago. Prices are expected to decline further in 2018.
Adding to the meat mix is ample supplies of chicken (broilers) and turkey, for which demand has not been as robust as it has been for red meat, especially for turkey. It should be noted that per capita domestic chicken consumption surpasses that of beef and pork individually, and has for years. Demand for chicken has been hurt by a 10 percent drop in exports to Mexico, which has boosted its domestic production, and increased imports from Brazil.
For turkey, ample supplies are weighing on prices. Although production has shown signs of slowing, supplies in freezers on Sept. 30 were up 11 percent from a year earlier, with frozen whole turkey stocks up 23 percent with Thanksgiving fast approaching. In comparison, frozen chicken stocks on Sept. 30 were up 7 percent from a year earlier, frozen beef stocks were down 6 percent and frozen pork stocks were down 4 percent.
“Wholesale whole turkey prices fell in 2017, relative to 2016, and have remained below historical averages since January, indicating that demand may not be keeping up with current supply levels,” the USDA said, noting that whole turkey prices averaged 96 cents a lb. in late September. “The last time wholesale prices were below $1 per lb. as late as September was in 2010.”
That begs the question: how much will Thanksgiving turkeys cost this year? The USDA suggests lower wholesale prices for whole turkey may translate into lower retail prices. On the other hand, retailers may choose to not decrease their average markup from wholesale as much this year, which may keep turkey prices at higher levels.
An area of concern is ongoing renegotiation of the North American Free Trade Agreement. Mexico is the largest export market for US turkey (59 percent of total exports in 2016), broiler meat (21 percent) and pork (31 percent) and is the third largest for beef. Canada is the third largest export market for US pork and fourth largest for beef. Changes to NAFTA could have a major impact on US pork and poultry meat exports.