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CME: 'Trade War' Topic of Last Week's Agri Talks

05 June 2018

US - The talk of the agriculture sector last week was "trade war". On Thursday, the US announced the imposition of new tariffs at the rate of 25 per cent on all steel and 10 per cent for imported aluminum, reports Steiner Consulting Group, DLR Division, Inc.

Those penalties were enacted under a 1962 law that gives the president broad power to increase or reduce tariffs on goods deemed critical to national security. Apparently, the US is also moving ahead with additional tariffs explicitly targeted at China.

From a livestock perspective, the immediate reaction of Mexico, which specifically listed retaliatory tariffs on US pork products, was very concerning. Mexico is the largest foreign market for US pork sector products. Also, the situation has heightened concern regarding the NAFTA negotiations, which were thought to moving toward consensus on key provisions.

We highlight three items from the weekly actual slaughter data released last Thursday on the USDA-AMS Market News Division website. Those data are for the week ending 19 May. Federally Inspected (FI) heifer slaughter surged, increasing 23 per cent (nearly 33,000 head) year-over-year (see the following graphic).

For comparison purposes, steer slaughter posted an increase of 4 per cent (about 12,800 head). For the next few months, heifer slaughter levels, along with that of cows, will be monitored closely for their implications on the size of the nation’s breeding herd. FI steer carcass weight declined week-over-week (note the graphic below).

Even though the dressed weight is above 2017’s (up 10 pounds), it has drifted below the prior five-year average (2012-16) by 4 pounds. As is clear from the graphic, the seasonal turn-higher in cattle weights is near. To-date, fed cattle have continued to be marketed in a timely fashion.

Barrow and gilt dressed weight was unchanged week-over-week and remained above 2017’s and the prior five-year average (third graphic). Year-over-year, the FI carcass weight increased 3 pounds (1.4 per cent). In coming weeks, hog weights will start to be dampened by summer heat, but will they remain 3 pounds above 2017’s?

Below is a summary compiled from various reports by the Market News Division of USDA-AMS. We highlight the Northeast boneless wholesale chicken breast price, which slipped for the week and was 27.5 per cent below a year ago.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

TheCattleSite News Desk

Top image via Shutterstock


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