A mountain of meat looms - production increases by 4 billion lbs.

U.S. livestock producers have shown the world how efficient they’ve become. Over the past two years, total red meat and poultry production in the U.S. has increased an estimated 4 billion pounds. That increase has dramatically changed profitability from the fall of 2014, when livestock producers experienced a windfall of profits driven by tight supplies. Today, live-stock producers are witnessing the opposite, with prices withering under the pressure of ever-increasing meat supplies—and the pain is most evident in the cattle industry. “After falling to 202 lb. per person in 2014, per capita supplies of red meat and poultry are racing higher,” says John Nalivka, president of Sterling Marketing, Vale, Ore. “I project per capita red meat and poultry sup-plies will reach 215 lb. this year.” The result has been significant price declines for both lean hogs and fed cattle. Negotiated lean hog carcass prices were trading $17 to $18 per cwt lower in late September than the same time a year ago. Cash fed cattle traded in the $104 range the last week of September 2016, $25 per cwt lower than the same time in 2015, and $10 to $12 per cwt lower than what was the anticipated “summer low” of eight weeks earlier...more