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CME: Significant Increase in Pace of Cow/Bull Slaughter

19 September 2017

US - While hog producers have shown few signs of liquidation, the pace of cow/bull slaughter has increased significantly in the last three months, reports Steiner Consulting Group, DLR Division, Inc.

For the last six weeks, cow/bull slaughter was a total 730,700 head, 11.2 per cent higher than a year ago. Beef cow slaughter during this period is up some 39,000 head (+14.2 per cent) while dairy cow slaughter is up 23,000 head (+7.2 per cent).

Large placements of cattle on feed in March, April and May continue to fuel weekly fed slaughter, which last week was the largest so far this year. We are waiting for the latest USDA estimates but we think last week fed slaughter was 519,000 head, 5.6 per cent higher than a year ago.

Prior to this week, the largest weekly fed slaughter week was 24 June, with 516,000 head. The choice beef cutout was for the most part steady last week despite the steady erosion in the value of 50CL beef trimmings.

Large weekly slaughter and seasonally higher fed cattle weights have increased the supply of fat trim in the spot market. But the cutout continues to be supported by robust prices for end cuts. Prices for middle meats holding steady.

Export business appears to be in pretty good shape (based on weekly export volumes and we expect to see another round of strong forward sales when the comprehensive cutout comes out).

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