April Mica Monthly Report

Transcription

April Mica Monthly Report
April 20, 2015
World Meat Market Monthly Update
Volume 14, Issue 4
Prepared by: Steiner Consulting Group, 800-526-4612
US Markets: Monthly Update
US cattle futures have been on a roller coaster in the
last few trading sessions as market participants have been disappointed by the limited cash cattle trade and lower prices. The
spring and summer live cattle contracts declined the daily permissible limit (300 points) and deferred contracts also declined
by more than 200 points. The decline followed USDA reports
that cash cattle traded around $160/cwt compared to $163/cwt
a week before and $167/cwt two weeks ago. The sharp erosion
in fed cattle prices in the cash market has added to the anxiety
of market participants that fed cattle prices are poised to break
sharply lower into May and June. Fed cattle supplies normally
increase this time of year and limited slaughter in March and
April has added to the supply of cattle that will be available for
marketing in the coming weeks. Feedlots so far this year have
been able to hold the line and force packers to pay up. It appeared that April would end up following the same predictable
path. That did not seem to happen, however. Poor packer
margins (see chart in the next page) have caused them to sharply
reduce kills, in the process backing cattle up in feedlots while at
the same time pushing the beef cutout near all time record levels. For the week ending April 25, we calculate steer and heifer
slaughter was around 437,000 head, 8.9% lower than a year ago
and 10.1% below the five year average. This is an estimate as
USDA will print the Friday and Saturday steer/heifer estimates
on Monday. Slaughter the previous Friday (4/17) was a mere
100,000 head while Saturday
Inside this issue:
slaughter was just 4,000 head. This
week is not expected to be any betUnited States Update
1
ter. The concern among market
participants is that supplies of marAustralian Update
2
ket ready cattle are expected to increase in the coming weeks, a funcNew Zealand Update
2
tion of larger placements of heavy
Canadian Update
3
steers last fall and the seasonally
large total placement numbers last
Uruguay Update
3
October. Beef production for the
week was down 2.7% as heavier
Brazil Update
4
weights offset half of the reduction
in slaughter. The choice cutout
Argentina Update
4
was modestly higher for the week
although Friday the cutout lost
Quota Situation
5
about $3/cwt from the previous
close, further fueling the retreat in
US STEER & HEIFER SLAUGHTER, JAN - DEC
000 HEAD
PRELIMINARY DATA BASED ON DAILY SLAUGHTER ESTIMATES - 7 DAY RUNNING TOTAL
600
2010-14 Avg.
Jan - Dec 2014
Jan - Dec 2015
560
520
480
440
Thanks
giving
400
New Year
Memorial
Day
Labor
Day
4th of July
Christmas
360
JAN
FEB
MAR
APR
MAY
JUN
JUL
Aug
Sep
Oct
Nov
Dec
the fed cattle complex. Currently futures are reflecting a significant decline in fed prices into the summer and fall prices
are under $150/cwt, substantially lower than the high of
$170/cwt paid in November 2014. In the short term, the
market reaction appears justified considering the backlog of
marketings. However, feedlot placements in the first two
months of 2015 were 10% lower than a year ago and March
placements are expected to decline by as much as 7% compared to last year. This will continue to limit the availability
of fed cattle going into the year end holidays. So while end
users may see a bit of a break in terms of beef prices this
summer, we remain concerned about the potential for ongoing beef price inflation later in the year. Lower prices in
broader commodity markets certainly continue to exert some
influence but it will take time for cattle and beef prices to ease
lower. Expectations for a quick correction may be overstated
and it is important not to confuse seasonal declines for a major trend correction in the cattle complex. Lower year/year
beef prices are coming, it is just that the process will be longer
than some may expect.
World Meat Market Monthly Update
Volume 14, Issue 4
Australian Market: Monthly Update
Page 2
Australian Cattle Slaughter Data
T
% Ch. vs
% Ch. vs
10-Apr-15 3-Apr-15 Last Wk. 11-Apr-14 Last Yr.
he Australian June 1 cattle invento- USA: March shipments to the US were
Queensland
ry is now forecast at 26.8 million 42,027 MT, 39.6% higher than the previous
67,054
63,391 5.8%
79,386 -15.5%
head, 8.5% lower than a year ago year. In the first three months of 2015, Aus- NSW
and 9.5% lower than two years ago. tralian shipments of fresh/frozen beef to the Victoria 33,900 35,473 -4.4% 38,679 -12.4%
27,444
26,671 2.9%
29,823 -8.0%
Drought conditions have dramatically impact- US are running about 38,085 MT (+56%)
ed beef production in Australia, forcing a higher than a year ago. We currently project SA
8,330
6,977 19.4%
8,743 -4.7%
major liquidation of the cattle herd. As noted April shipments at around 36,500 MT, 46% Total
in the Australian report, weather remains a higher than a year ago.
Week
140,752 136,466 3.1%
161,854 -13.0%
key driver for the market in the next few Japan: Exports in March were 28,074 MT,
AUSTRALIAN CATTLE SLAUGHTER, HEAD
months. The outlook is for above average 24.1% higher than last year. Chilled beef
moisture conditions and if the outlook proves exports were 13,276 MT, +23.2% higher
correct, this could significantly impact beef than last year while frozen beef exports at
availability for export in Q2 and Q3. April 14,717 MT, increased by 25.2%. April shipexports are already expected to be lower than ments are projected at 24,213 MT, 16.7%
February and March, largely due to holiday higher than a year ago
shortened slaughter (Easter, Anzac). Below is
a recap of the March export data and an early S. Korea. Exports to South Korea, which
have been limited in previous months, imindication as to the export pace for April.
proved in March. Total shipments of fresh/
frozen beef were 14,681 MT, 14.7% higher
than a year ago. April exports are
AUSTRALIAN BEEF EXPORTS TO THE US
MT
projected at 13,457 MT, 11.5% high- Exch. Rate: USD PER 1 AUD
50,000
120 day range, Daily, latest close April 10
er.
45,000
40,000
China: China beef demand remains 0.92
Est
35,000
a major wild card. While they have 0.90
hinders
0.88
30,000
AU exports
slowed down the pace of purchases in 0.86
25,000
Australia, they still remain the third 0.84
20,000
largest market for Australian beef 0.82
0.80
15,000
Exports in March were 13,209 MT, 0.78
helps
10,000
7% lower than a year ago but a nota- 0.76
AU exports
0.74
5,000
ble increase over the 9,874 that was 0.72
27-Oct 16-Nov 6-Dec 26-Dec 15-Jan 4-Feb 24-Feb 16-Mar 5-Apr
shipped in March.
head
Based on Oct - Sep Period
200,000
180,000
160,000
140,000
120,000
100,000
80,000
5-Yr Avg.
60,000
2012-13
2013-14
40,000
2014-15
20,000
Oct
Jan Feb Mar Apr May Jun
2013
2015
2010-14
Improving moisture conditions and
holiday shortened weeks have limited cattle
slaughter numbers in March and early April.
Total cattle slaughter for the last six weeks
was 383,025 head, 10.6% lower than a year
ago but still about 16% higher that the five
year average. Slaughter in New Zealand is
New Zealand Weekly Cattle Slaughter
Based on Oct - Sep Marketing Year
90,000
5-Yr Avg.
80,000
2012-13
70,000
2013-14
60,000
2014-15
50,000
40,000
30,000
20,000
Christmas
Plant Closures
10,000
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
expected to remain low for the next couple
of weeks before one final increase in May
before the seasonal decline. High slaughter
rates earlier in the marketing year are expected to limit availability but overall slaughter should remain above the five year average
given the increase in the number of dairy
cattle in recent years
Total shipments of fresh/frozen
beef in February were 42,062 MT, 0.5% lower than a year ago. Exports to the US were
22,992 MT, 2,048 MT (+10%) higher than a
year ago. Exports to China, the second largest market for New Zealand beef, were 5,440
MT 11% higher than last year. Exports to
Japan, on the other hand, were down 29%.
Exch. Rate: NZD PER 1 US$
120 day range, Daily, latest close April 10
0.82
hinders
NZ exports
0.80
0.78
0.76
0.74
helps
NZ exports
0.72
0.70
27-Oct 16-Nov 6-Dec
26-Dec 15-Jan
4-Feb
24-Feb 16-Mar 5-Apr
New Zealand Fresh/Frozen Beef Exports: February 2015 Update
45,000
40,000
-0.5%
Feb-14
Feb-15
35,000
30,000
25,000
10%
20,000
15,000
-18%
10,000
11%
-29%
5,000
1%
US
China
Japan
South Korea
Other
Total
Oct
Nov
Dec
Jan
Feb
Mar
Apr
Sep
Jul Aug Sep Oct Nov Dec
2014
New Zealand Market: Monthly Update
head
Nov
May
Jun
Jul
Aug
Sep
Change (MT)
% Change
2,048
9.8%
551
11.3%
(667)
-28.6%
25
1.0%
(2,163)
-18.4%
(207)
-0.5%
World Meat Market Monthly Update
Volume 14, Issue 4
Page 3
Canadian F.I. Slaughter
Canadian Market: Monthly Update
A
ccording to USDA Canadian beef
production in 2015 is now forecast to decline 5.6% compared to
the previous year. This forecast is
only slightly higher than what was presented
in October and reflects both the inventory
situation and slaughter trends in the Canadian
market. Extremely strong prices for cattle in
the US and a strong US$ have dramatically
impacted the Canadian beef market. More
fed and feeder cattle are going to the US rather than slaughtered in Canada. This will
continue to limit beef availability in the Cana-
dian market and we think demand for beef
imports, especially for imports from Australia and New Zealand should be sustained.
Imports from the US are actually down so
far this year. USDA data shows shipments
of US beef to Canada in the first two
months of the year were down 21% from a
year ago and March shipments were only
slightly higher than last year.
The reduction in US beef imports
and lower domestic beef production is expected to bolster demand for Australian/
NZ beef. The Uruguayan beef supply is
capped by the TRQ limit (see chart).
Permits issued for Australian beef are
currently running 13.9% above last
year while permits issued for New
Zealand beef are up 17.7%. Foodservice and retail demand improves into
the spring but market reports from
Canada indicate that forward sales
have been limited. Uncertainty about
domestic cattle prices and competition
from the US are the main problems
facing Canadian importers at this time.
Canada Annual Beef Production
'000 MT
'000 MT, carcass wt. basis. USDA
1,200
1,150
1,100
1,050
1,000
950
Cattle
Cows
51,198
6,587
% Ch. vs. Last Week
28.0%
22.2%
% Ch. vs. Last Year
-9.5%
-16.3%
4/4/2015
40,006
5,391
4/12/2014
56,596
7,869
2015 YTD
711,009
117,585
2014 YTD
773,769
138,602
-8.1%
-15.2%
4/11/2015
% Ch.
Source: CanFax
Metric Ton
QUOTA SITUATION FOR IMPORTED BEEF IN CANADA
Based on Permits Issued Through March 26, 2015
40,000
2014
Quota = 35,000 MT
2015
35,000
Quota = 29,600 MT
30,000
25,000
20,000
15,000
Quota = 11,809
13.9%
10,000
77.1%
17.7%
5,000
-
Australia
New Zealand
Uruguay
900
2012
2013
2014
2015 Oct
2015 Apr
Uruguayan Market: Monthly Update
Steer and cow prices in Uruguay remain weak and under year ago levels. According to data from World Beef Report, Uruguay
steer prices in early April were priced around
300 US$/k cwt, 7% lower than a year ago and
21% lower than in 2013. Uruguay beef production is expected to remain well above year
ago levels in 2015, which has contributed to
the price decline. The latest USDA forecast
projected Uruguayan beef supplies to increase
4.5% compared to a year ago and 9.5% above
Uruguay Cattle Slaughter, Head
55,000
50,000
45,000
40,000
35,000
30,000
25,000
5-Yr. Avg.
2014
2015
20,000
15,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
2013 levels. Weekly slaughter so far this
year helps support that forecast. In the last
six weeks total slaughter is up 2.3% from a
year ago, with cow slaughter 14.4% above
year ago levels. Since January, Uruguayan
slaughter has been running about 9% above
2014.
Uruguayan Shipments of Fresh/Frozen Beef: March Exports
30,000
21%
Mar-14
Mar-15
25,000
20,000
metric ton
2011
15,000
77%
-31%
10,000
24%
98%
5,000
-63%
-
China
EU
Russia
Mar-14
6,399
3,526
1,239
2,493
8,847
22,504
Mar-15
11,357
4,360
457
4,948
US
Other
6,111
27,233
Total
China remains the top market for
Uruguayan beef and recent reports indicate Uruguay Beef Export Markets: Mar. 2015
that Chinese demand has been increasing.
Russia
Total March exports were 27,233 MT, 21%
2%
higher than last year. Exports to the
EU
US in March were 4,948 MT, double
13%
Other
what they were last year. In the first
23%
three months of this year, Uruguay has
Israel
13%
shipped 11,567 MT of beef to the US
against a quota of just 20,000 MT. At
USA
this pace, the quota may be filled by
14%
China
mid-year. Exports to China in March
29%
were 11,357 MT, 77% higher than last
year. In the first three months, China
Brazil
has bought 25,206 MT, 52% more
Chile
3%
Venezuela
2%
Dec
1%
than last year.
Volume 14, Issue 4
Brazilian Market: Monthly Update
T
he early aggressive forecasts for
higher beef production in Brazil
have not materialized and USDA
lowered its estimates for the year.
Total production for the year is now forecast
at 9.820 million MT (carcass wt. basis), 395k
MT lower than the early estimate and now
just 1% higher than a year ago. Demand in
the Brazilian domestic market has struggled as
the economy is poised to enter recession. It
is interesting looking at the data that even as
the cattle inventory in Brazil has been steadily
Brazil Annual Beef Production
'000 MT
'000 MT, carcass wt. basis. USDA
10,400
10,200
10,000
9,800
9,600
9,400
9,200
9,000
8,800
8,600
8,400
2011
2012
2013
2014
2015 Oct
increasing, the growth of the calf crop has
been very limited. Inventory as of January 1,
2014 was 207.959 million head, +2.3% from a
year ago. IN 2015 the inventory increased
another 2.4% and in 2016 it is expected to be
up 2.6%. However, the calf crop in 2014 was
down 1.2% and it is expected to increase
0.6% in 2015. Weather has been a critical
factor for the cattle industry in Brazil, negatively impacting productivity and limiting
overall supplies. But the inventory in Brazil
remains significantly higher than just a few
years ago and improving feed conditions could lead to a rapid increase in
cattle numbers. This is unlikely in
2015 but there is very strong potential
for higher beef supplies in Brazil in
2016 and 2017 based on the growing
cattle herd.
Brazil exports of fresh/
frozen beef in March were 89,641
MT, 4% higher than a year ago. Total
exports in Q1 of 2015 were down
22% from the previous year due to a
45% decline in exports to Russia and
49% reduction in shipments to Vene2015 Apr
zuela.
Argentine Market: Monthly Update
USDA revised lower its estimates of
Argentine beef production recently. The latest forecast pegs Argentine beef production
for 2015 at 2.7 million MT (carcass weight
basis), 150 million MT lower than the earlier
forecast in October and now steady with
2014 levels. Cattle slaughter has been lower
than earlier forecast and USDA reports also
indicate that producers have limited the numArgentine Annual Beef Production
'000 MT
'000 MT, carcass wt. basis. USDA
2,900
2,800
2,700
2,600
2,500
2,400
ber of heavy cattle coming to market due to
ongoing limits on beef exports (heavy steers
are normally fed for the export market). The
cattle inventory in Argentina as of January 1
was estimated at 51.895 million head, 0.7%
higher than a year ago. A larger calf crop in
2015 and smaller than expected slaughter is
expected to further bolster inventories and
January 1, 2016 stock is now projected to
increase another 1.8%.
General
elections in Argentina have the potential to dramatically change the
outlook for the Argentine cattle and
beef industry. The current government has significantly limited the
supply of beef going to export markets but that could change if a new
government comes to power. Exports of Argentine fresh/frozen beef
were 10,341 MT in February, 31%
higher than a year ago.
2,300
2011
2012
2013
2014
2015 Oct
2015 Apr
Page 4
Brazil Fr/Fz. Beef Exports
Fresh/Frozen Beef, March 2015
Other
44%
Egypt
10%
Russia
19%
Hong
Kong
21%
Venezuela
6%
Fresh/Frozen: March 2015 Update
100,000
4%
90,000
80,000
70,000
metric ton
World Meat Market Monthly Update
60,000
50,000
30%
40,000
30,000
-12%
7%
20,000
-44%
-10%
10,000
-
Russia
Hong Kong
Venezuela
Egypt
Mar-14
19,281
17,438
8,764
10,425
30,660
86,569
Mar-15
17,028
18,620
4,924
9,334
39,735
Other
89,641
Total
Argentine Fr/Fz. Beef Exports
Fresh/Frozen Beef, February 2015, MT & %
Other
14%
Russia
12%
EU
8%
China
25%
Chile
26%
Israel
15%
ARGENTINE BEEF EXPORTS: 2003 - 2015
MT
50,000
40,000
30,000
20,000
10,000
-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
FR/FZ BEEF
OFFAL
PROCESSED
HILTON CUTS
World Meat Market Monthly Update
C
Volume 14, Issue 4
Page 5
Irish Market: Monthly Update
ow prices in Ireland have increased
sharply in the last few months,
widening the gap with EU-28 values. For week ending April 12, the
O3 cow price was quoted at $3.43/kg
(dressed wt), 21.8% higher than the same
week a year ago. The average price for EU28 was around $3.00/kg, only 2% higher than
a year ago. Smaller than expected supplies
and strong demand for Irish beef, especially
grinding beef, has helped underpin prices. It
is interesting to note that prices for Irish R3
steers have not received the same kind of
O3 Cow Price, Ireland & EU-28, Euro per 100kg
380.0
360.0
340.0
320.0
300.0
280.0
260.0
240.0
220.0
2013
2014
2015
IRELAND BEEF PRODUCTION, 1000 TON
support, again underscoring the fact that the
main driver behind the surge in cow prices is
stiff demand (and higher world prices) for
grinding beef. The price of R3 steers in Ireland was last quoted at $4.09/kg (week ending
April 12), 9.1% higher than a year ago. Irish
steer prices are under the EU-28 average
(currently $4.32/kg).
Beef production in Ireland in February was reported at 45,500 MT, 0.8% higher USD per 1 EURO
than a year ago. Production in January was
47,190 MT, 4.3% lower than last year. More
recent data, however, shows a steep drop in
cattle availability. According to an Irish
Food Board report, “cattle supplies at
export meat plants for the week ending
Ireland
April 11th stood at just under 29,000
EU-28
head which was 11% behind supplies
for the same week last year. Cumulative
supplies for the year to date are down
around 11,000 head on supplies for the
corresponding period last year standing
at around 460,000 head. “ We do not
have data as to the pace of export shipments to the US at this time but will
report on progress in future updates.
000 tons
Source: Eurostat
60.00
55.00
50.00
45.00
40.00
35.00
30.00
Jan
Feb
Mar
Apr
May
Jun
5-Yr Avg.
Jul
2014
IRELAND BEEF PRODUCTION, 1000 TON. SOURCE: EUROSTAT
Ireland
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
2010
2011
2012
2013
2014
2015
41.11
40.01
42.06
45.95
49.31
47.19
45.83
41.89
39.75
42.50
45.14
45.500
51.81
48.66
37.95
38.16
48.20
44.87
45.05
37.36
40.94
49.13
43.70
44.55
39.50
41.62
48.70
45.40
44.96
35.18
36.41
46.13
43.42
38.89
38.41
43.70
45.72
44.55
47.60
42.79
39.88
46.31
52.63
51.87
42.18
47.74
53.28
48.71
50.80
51.56
51.50
53.91
54.31
53.47
48.81
47.26
48.23
41.71
37.69
39.06
41.03
46.55
558.05
545.44
494.61
516.69
580.61
5-Yr Avg.
43.69
43.02
44.96
43.47
43.61
41.62
42.03
44.23
49.54
51.30
50.42
41.21
539.08
Y/Y % Ch.
%. Ch vs. 5-
-4.3%
0.8%
8%
6%
Aug
Sep
Oct
2015
Nov
Dec
World Meat Market Monthly Update
Volume 14, Issue 4
Beef Within TRQ Entries into the US
Page 6
Cold Storage Stocks
THOUSAND
POUNDS
Amount YTD in Kilograms as of April 20, 2015
BONELESS BEEF, COLD STORAGE STOCKS
460,000
Quota Levels
% Filled
2015
Year to Date
440,000
Country
4/21/2014
4/20/2015 % Change
Australia
55,711,476
99,828,669
79%
418,214,000
Canada
53,535,802
55,804,959
4%
N/A
Mexico
27,546,421
36,894,326
34%
N/A
New Zealand
56,169,794
68,187,147
21%
213,402,000
32.0%
35,927
45,955
0%
200,000
23.0%
4,411,935
4,791,221
9%
20,000,000
24.0%
0
0
#DIV/0!
20,000,000
0.0%
320,000
14,804,019
18,001,827
22%
64,805,000
27.8%
300,000
212,215,374
283,554,104
34%
420,000
Japan
23.9%
BONELESS BEEF, COLD STORAGE STOCKS, THOUSAND POUNDS, END OF MONTH INVENTORIES
400,000
380,000
360,000
340,000
Uruguay
Argentina
Other Countries
JAN
FEB
MAR
APR
5-Year Average
Total
THOUSAND
POUNDS
Year/Year Comparison of Shipments
Kilogram
MAY
JUN
JUL
AUG
2010 - 2014
SEP
OCT
2014
NOV
DEC
2015
BEEF CUTS, COLD STORAGE STOCKS
65,000
120,000,000
60,000
2014
100,000,000
2015
55,000
BEEF CUTS, COLD STORAGE STOCKS, THOUSAND POUNDS, END OF MONTH INVENTORIES
80,000,000
50,000
60,000,000
45,000
40,000,000
40,000
35,000
20,000,000
30,000
JAN
0
Australia Canada
Mexico
New
Zealand
Japan
Uruguay Argentina
FEB
MAR
APR
5-Year Average
Other
Countries
MAY
2010 - 2014
JUN
JUL
AUG
SEP
OCT
2014
NOV
DEC
2015
US Weekly Cow Slaughter, 000 Head
Total
Dairy
Beef
2/21/2015
101.7
57.3
44.4
2/28/2015
102.8
58.4
44.4
3/7/2015
102.3
60.1
42.2
3/14/2015
102.0
60.5
41.5
3/21/2015
103.2
60.4
42.8
3/28/2015
104.5
59.1
45.3
6-wk Average
102.7
59.3
43.5
% ch. from year
ago same period
-8.0%
-0.1%
-16.9%
2015 (Jan-Feb)
903
517
385
2014 (Jan-Feb)
975
507
468
-7.4%
2.0%
-17.7%
ESTIMATED WEEKLY FEDERALLY INSPECTED TOTAL COW SLAUGHTER
145
5 YEAR AVERAGE
2014
2015
135
115
105
95
2014 SATURDAY DATES
12/5/2015
12/19/2015
11/7/2015
11/21/2015
10/24/2015
9/26/2015
10/10/2015
9/12/2015
8/29/2015
8/1/2015
8/15/2015
7/4/2015
7/18/2015
6/6/2015
6/20/2015
5/9/2015
5/23/2015
4/25/2015
4/11/2015
3/28/2015
3/14/2015
2/28/2015
2/14/2015
1/31/2015
75
1/3/2015
85
1/17/2015
THOUSAND HEAD
125
% Ch.