1. Vol. 10, No. 245 December 20, 2012
The Christmas holiday calendar for livestock and grain TURKEY PRODUCTION, MONTHLY
products at CME Group is as follows:
600,000
 CME Globex grain futures: CBOT and KCBT close at 12:00 noon
on Monday, December 24. MGEX close at 12:15 and CBOT Min-
is close at 12:30. All are closed on December 25 and open for 500,000
trade date December 26 at 9:30 a.m.
 CME Globex livestock futures and options close at 12:15 p.m. on .
t 400,000
December 24 and will be closed all day December 25. They will W
C
re-open at 9:05 a.m. on December 26. T
R
 Trading floors: Commodities futures close at 12:00 noon on Mon-
,
.
s300,000
b
day, December 24. Commodities options close at 12:002 and L
.
s
CBOT Mini Grains close at 12:30. All are closed all day Decem- u
o
h200,000
ber 25. T
Complete holiday calendars for all CME Group trading platforms can
be found at http://www.cmegroup.com/tools-information/holiday- 100,000
calendar/.
As is the case for virtually every other U.S. agricultural
enterprise, the U.S. turkey business is a picture of growing 0
productivity. More product from fewer animals applies to this sector 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
just as it does to beef, pork and chicken. But the business is in a bit of
a defensive mode these days as placements of both eggs and poultry MONTHLY TURKEY EGGS PLACED IN
moderate from last year in response to high feed costs and challeng- INCUBATORS & POULTS PLACED
ing operating margins. 45000
The turkey business is also very akin to the chicken and pork Eggs in Incubators
sectors in another manner: Declining seasonality. It is clear from the 40000
Net Poults placed
charts at right that, though still extremely seasonal given the place of 35000
honor turkey holds at U.S. Thanksgiving Day (and, to a lesser degree,
Christmas) celebrations, the within-year variation of egg placements, 30000
poultry placements and production has been reduced dramatically. s
d25000
This reduction is, of course, a testament to aggressive product devel- n
a
s
opment which has seen turkey become a major player in the pro- u
o
h20000
cessed meats sector and improved turkey usage in the traditional “off- T
season.” Once non-existent, turkey versions of virtually every lunch 15000
meat and processed product are now widely available. We’re still not
sure about calling any turkey product “ham” or “bacon” but it’s good 10000
business if you can do it and the courts have said turkey companies
5000
can.
At first glace, it appears that October turkey production grew 0
substantially — and, in fact, it did. The monthly output of 579 million 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
pounds was the third largest on record and was over 10% larger than
larger than the 26.010 million set in November 2009 — and that was
last year. But the October data (and, in fact all three of those huge
the lowest monthly total since 1989. September poultry placements of
months dating back to 2007) contains a trap: It involved 23 slaughter
20.848 million were the smallest since November 2008 and the sec-
days. When we adjust this year’s October output for the 2 extra
ond smallest monthly total since the fall of 1990.
slaughter days versus one year ago, output was up only 0.9%.
All of this, of course, is driven by higher feed costs and a
So what should we expect from the turkey business in 2013?
portion of the reduction in numbers will be made up for, we believe,
USDA, in last month’s World Agricultural Supply and Demand Esti-
by ever-increasing bird weights. It is difficult to change the size of
mates, expects U.S. turkey output to decline by just over 3% next
whole birds sold for holiday usage but the size of the bird that produc-
year. That is very close to our expectation and quite logical given this
ers processing product is strictly a matter of efficiency and more
year’s cost increases. September’s egg sets of 26.366 million were
pounds spreads fixed and quasi-fixed costs at both the farm and pro-
the smallest since the 26.223 million of October 2010 and only 1.3%
cessing plant level.
The Daily Livestock Report is published by Steve Meyer and Len Steiner. To subscribe/unsubscribe visit www.dailylivestockreport.com.
Disclaimer: The Daily Livestock Report is intended solely for information purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade any
commodities or securities whatsoever. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are
attempted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indication of future performance. Futures are a leveraged investment, and because only a percentage of a con-
tract’s value is require to trade, it is possible to lose more than the amount of money initially deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their life-
style. And only a portion of those funds should be devoted to any one trade because a trader cannot expect to profit on every trade.
CME Group is the trademark of CME Group, Inc. The Globe logo, Globex® and CME® are trademarks of Chicago Mercantile Exchange, Inc. CBOT® is the trademark of the Board of Trade of the City of Chicago. NYMEX,
New York Mercantile Exchange, and ClearPort are trademarks of New York Mercantile Exchange. Inc. COMEX is a trademark of Commodity Exchange, Inc. Copyright © 2012 CME Group. All rights reserved.