The USDA discontinued the voluntary National Carlot Pork Report and will instead track two mandatory pork reports providing pricing on an FOB Plant and FOB Omaha basis. This change was made to provide better visibility into wholesale pork pricing. While some wanted the reports published side by side for six months, continuing the voluntary report proved impractical as packers stopped reporting to it once the mandatory reports began on April 1st. The mandatory reports have consistently shown prices around 4 cents or 5% higher than the voluntary report, suggesting the voluntary report did not provide full visibility previously.

1. Sponsored by
Vol. 12, No. 70 / April 15, 2013
USDA announced on Friday that as of Friday, April Voluntary Pork Reporting
12, the USDA National Carlot Pork Report would be discon- Moving 5-Day Volume of Pork Loads since Jan 2, 2013
tinued. In its place, USDA now will track two reports that rely 120.0
on actual data that packers report to USDA twice a day. The two Loads of Cuts
so-called mandatory pork reports will report pricing both as FOB 100.0
Loads of Trimmings
Plant and FOB Omaha. As we have noted in several previous is-
sues, the change to the mandatory pork price reporting should 80.0
provide better visibility of pricing in the wholesale pork market.
Market participants have had three months to prepare for the 60.0
eventual change although the decision by USDA to stop the volun-
tary report still caught some in the market by surprise. The ex- 40.0
pectation was that USDA probably would continue to report the
voluntary prices until the end of the month. The chart to the right 20.0
shows the volume of loads in the voluntary report since January 2.
It is obvious that once USDA decided to report the mandatory
0.0
prices concurrently with the voluntary prices on April 1, the vol-
ume of pork reported in the voluntary Carlot Pork Report fell off
dramatically. On April 10 and April 11, there were no pork loads
reported in the voluntary report, which forced the USDA to pull
the plug. While some, including this writer, would have wanted $/CWT PORK CUTOUT: VOLUNTARY VS. MANDATORY REPORTS
USDA to continue publishing the two reports side by side for at 93.0
least six months in order to have a more complete data series, that
91.0
proved to be impractical in reality.
The expectation coming into the implementation of the 89.0
mandatory pork report was that the prices presented by the volun- 87.0
tary report would be higher than prices in the mandatory reports.
Given that the pork market in recent years had become increas- 85.0
ingly opaque, some speculated that packers had an incentive to 83.0
report only the highest prices in the voluntary Carlot Report. The
reality of the pork price reporting in the last three months has
Mandatory
81.0
shown that the opposite was true. The pork cutout as reported by
79.0
the mandatory price report has been consistently above the pork
cutout calculated using voluntary prices. The average spread in 77.0 Voluntary
the cutout values was 3.95 cents or 5%, quite a significant differ-
75.0
ence. Indeed, given this wide difference between the two reports,
most packers had an incentive to discontinue to report voluntary Jan-13 Feb-13 Mar-13 Apr-13
prices and did so as soon as was possible, again making the pro-
duction of a voluntary report by USDA no longer viable. As to the ing at various levels of the supply chain into alignment with the
reasons for the big spread between the prices in the voluntary changes in the USDA pricing sheets.
report and in the mandatory report we have a pretty good opinion On page 2 we have included pricing on a number of items,
why. However, our stand is to limit as much as possible giving hams, loins, bellies, based on the new mandatory price reporting
our opinion on trade matters, especially since both packers and system. As a result, for now, we are not comparing those numbers
end users are currently involved in renegotiating their formula- to a year ago given the discrepancy in prices. We are still working
tions to account for the changes in pricing references. Those that on a way to correct for this issue but until we figure this out, there
we work with, already know our position on this matter. Suffice to will be an N/A in the summary table. See full details on prices
say that more work will be done in the coming weeks to bring pric- and production on page 2.
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2. Page 2
Sponsored by
Vol. 12, No. 70 / April 15, 2013
PRODUCTION & PRICE SUMMARY Week Ending 4/13/2013
Current Y/Y %
Item Units Week Last Week Pct. Change Last Year Pct. Change YTD Change
13-Apr-13 6-Apr-13 14-Apr-12
Total Red Meat & Poultry mil lbs., cwe 1,694 1,644 3.07% 1,607 5.42% 24,444 0.6%
FI Slaughter Thou. Head 606 593 2.19% 581 4.29% 8,843 -2.7%
C FI Cow Slaughter ** Thou. Head 120 126 -4.79% 116 3.28% 1,598 -0.2%
A Avg. Live Weight Lbs. 1304 1315 -0.84% 1283 1.64% 1,321 1.4%
T Avg. Dressed Weight Lbs. 791 794 -0.38% 779 1.54% 797 1.4%
T Beef Production Million Lbs. 478.5 469.5 1.92% 451.4 6.00% 6,995 -1.9%
L Live Fed Steer Price $ per cwt 127.23 128.29 -0.83% 122.16 4.15%
E Dressed Fed Steer Price $ per cwt 200.36 204.41 -1.98% 195.03 2.73%
OKC Feeder Steer, 600-700 $ per cwt 155.45 152.29 2.07% 164.71 -5.62%
& Choice Beef Cutout $ per cwt 190.60 191.29 -0.36% 177.79 7.21%
Hide/Offal $ per cwt, live wt 14.44 14.23 1.48% 13.23 9.15%
B Rib, Choice $ per cwt 275.99 281.91 -2.10% 261.15 5.68%
E Round, Choice $ per cwt 161.44 162.86 -0.87% 153.54 5.15%
E Chuck, Choice $ per cwt 159.99 161.38 -0.86% 143.73 11.31%
F Trimmings, 50% $ per cwt 96.46 92.34 4.46% 52.80 82.69%
Trimmings, 90% $ per cwt 217.80 218.70 -0.41% 220.99 -1.44%
FI Slaughter Thou. Head 2,082 2,093 -0.53% 2,052 1.46% 31,833 -0.7%
FI Sow Slaughter ** Thou. Head 57.2 58.0 -1.36% 55.9 2.35% 732 1.0%
H Avg. Dressed Weight Lbs. 207.0 208.0 -0.48% 209.0 -0.96% 207 -0.7%
O Pork Production Million Lbs. 431.9 434.3 -0.55% 428.6 0.77% 6,603 -1.3%
G Iowa-S. Minn. Direct Wtd. Avg. 80.83 78.88 2.47% 79.93 1.13%
S Natl. Base Carcass Price Wtd. Avg. 80.28 78.22 2.63% 80.89 -0.75%
Natl. Net Carcass Price Wtd. Avg. 82.68 80.64 2.53% 83.31 -0.76%
Pork Cutout 200 Lbs. 81.53 80.41 1.39% NA #VALUE!
Hams $ per cwt 62.72 59.41 5.57% NA #VALUE!
Loins $ per cwt 86.18 86.25 -0.08% NA #VALUE!
Bellies $ per cwt 139.44 136.16 2.41% NA #VALUE!
72CL Pork Trim $ per cwt NQ 51.84 NA 47.32 #VALUE!
C Young Chicken Slaughter * Million Head 153.2 149.7 2.36% 147.8 3.71% 2,120 1.3%
H Avg. Weight (Live) Lbs. 5.83 5.64 3.37% 5.65 3.19% 5.82 1.6%
I Chicken Production (RTC) Million Lbs. 679.0 641.7 5.81% 630.3 7.72% 9,377 4.3%
C Eggs Set Million 199.4 200.3 -0.46% 199.3 0.02% 2,777 1.3%
K Chicks Placed Million Head 165.2 163.7 0.95% 165.2 0.02% 2,289 0.6%
E 12-City Broiler Price Composite 106.94 106.51 0.40% 85.41 25.21%
N Georgia Dock Broiler Price 2.5-3 Lbs. 102.57 102.28 0.28% 92.01 11.48%
Northeast Breast, B/S $/cwt 153.24 152.27 0.64% 136.35 12.39%
Northeast Legs $/cwt 72.2 69.85 3.36% 71.51 0.96%
T Young Turkey Slaughter * Million Head 4.220 3.993 5.68% 3.953 6.75% 58.813 -1.1%
U Avg. Live Weight Lbs. 31.14 30.83 1.01% 30.7 1.43% 31.26 0.2%
R Turkey Production (RTC) Million Lbs. 105.1 98.5 6.77% 97.1 8.30% 1,469 -0.9%
K Eastern Region Hen Price 8-16 Lbs. 100.47 97.00 3.58% 107.25 -6.32%
G Corn, Omaha $ per Bushel 6.81 6.59 3.34% 6.47 5.26%
R DDGs, Minnesota $ per Ton 235.00 245.00 -4.08% 205.00 14.63%
A Wheat, Kansas City $ per Bushel 7.26 6.99 3.86% 6.16 17.86%
I Soybeans, S. Iowa $ per Bushel 14.61 14.24 2.60% 14.46 1.04%
N Soybn Meal, 48% Decatur $ per Ton 411.50 407.10 1.08% 388.10 6.03%
* Chicken & turkey slaughter & production are 1 week earlier than the date at the top of this sheet.
** Cow and sow slaughter reflect levels from two weeks ago due to reporting lag.
The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable
and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com
to contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003.
Thank you for your support!