1. Vol. 10, No. 246 December 21, 2012
ries were down 10% from last year’s very high levels but up 18%
from last month. Stocks of leg products, which include leg quar-
ters, thighs, drumsticks and thigh meat, were up 11% from 2011
but nearly 7% lower than last month. It appears that there will be
plenty of wings available for holiday parties as there were nearly
“For a child will be born to us, a son will be given 75 million pounds of them in freezers at the end of November,
to us; And the government will rest on His shoulders; And +56% from last year and +7% from October.
His name will be called Wonderful Counselor, Might God, Friday, will likelyDecember Cattle On Feed bearishalsoLive Cattle
USDA’s
be viewed as moderately
report,
for
released
Eternal Father Prince of Peace.” Isaiah 9:6, NASB futures with that sentiment driven primarily by larger-than-
Best wishes for a joyous Christmas from all expected November placements. The key national data from the
report appear in the table below. The key numbers and takeaways
of us at CME Group, Paragon Economics are:
and Steiner Consulting Group.  November placements into lots with capacities of 1000 head and
more numbered 1.923 million head. That number is 5.6% lower
than last year but over 3% higher than the average of analysts’
USDA’s monthly Cold Storage Report, released on Fri- pre-report estimates. The number implies somewhat larger fed
day, indicates a sizable reduction during November of the cattle supplies than what was being expected in late spring and
amount of meat and poultry in frozen storage but still large sup- early summer. But those supplies will still be very tight relative to
plies relative to one year ago. The November decline is not at all last year and will still almost certainly result in record beef and
unusual as stocks of turkeys, hams and other seasonal items are usu- cattle prices. We say “almost certainly” because stuff happens
ally reduced during the month but just the fact that it occurred as usual (see our earlier reference to LFTB) and much could go wrong but
will likely allay some of the concern over recent large freezer stocks. the supply side of this equation will be tight indeed.
The total amount of meat and poultry in freezers on November 30 was  November placements were much closer to last year’s level than
9.7% lower than at the end of October. The November 30 total of have been placements since June. The November figures is only
1.956 billion pounds, however, was still 8.1% larger than last year. 2.2% lower than the 5-year average. Still, 378,000 head FEWER
Cut-by-cut inventories appear on page 2. Some highlights are: cattle (10.5%) have been placed over these past 6 months.
 Beef inventories were slightly higher after the big drop we have  The cumulative impact of those lower monthly placements is seen
seen since April. That drop, of course, has been from inventory clearly in the feedlot inventory levels. December 1’s 11.328 mil-
levels that were swelled by a significant amount of 50CL (the CL lion head marked the largest year-on-year decline that we have
stands for Chem Lean) trimmings that backed up during the lean seen thus far in both numeric and percentage terms. That figure
finely-textured beef (LFTB) smear campaign last spring. Total is 727,000 head fewer than last year and 335,000 head fewer
boneless beef stocks are still 3.5% lower than one year ago. than the average Dec 1 inventory over the past 5 years. And the
 Pork inventories have been large this fall but it appears that a gap will likely grow as there aren’t going to be any more feeder
good portion of that may have been product being prepared for cattle available for a while.
export. This happened last year and, given the largest October  Placement weights were higher in November with the average
exports on record, apparently has been happening again. The being 683.1 pounds, up 1.7% from last year and 0.6% from the
November drawdown of pork stocks was 7.5% versus the 5-year five year average. The average was pushed higher by more 800
average of about 2%, suggesting that November exports were -lb. and over cattle —enough so to outweigh a 34% increase in
good. the number of <600 lb. cattle. Those light-weights were likely
 Ham inventories were down by nearly 50% for the month and driven into lots by continued poor pasture conditions.
were only 3% larger than one year ago. That pace of
reduction is much higher than the 5-year average of USDA Cattle on Feed Report -- December 2012
35%. Getting ham inventories more in line will be posi- Thous. Hd. 2012 as Pct. of 2011
tive for ham prices going into 2013, likely supporting Esti- Differ-
the spring rally. Note that Easter falls relatively early 2011 2012 Actual
mate* ence
this year — on March 31. On Feed, December 1 12,055 11,328 94.0 93.4 0.6
 The contrarian to these reductions was chicken, stocks Placed on Feed in November 2,037 1,923 94.4 91.2 3.2
of which were 3.4% larger than at the end of October Fed Cattle Marketed, November 1,774 1,761 99.3 100.2 -0.9
and 3.6% larger than last year. Breast meat invento- *Dow Jones survey
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2. Vol. 10, No. 246 December 21, 2012
USDA Cold Storage Report
December 21, 2012
Quantity (Thousand Pounds) Current as pct. of:
11/30/11 10/30/12 11/30/12 11/30/11 10/30/12
Chicken -------------- Thous. Lbs. ----------------
Whole Chickens 16225 12,743 11,536 71.1 90.5
Hens, Mature Chickens 1232 1,751 1,213 98.5 69.3
Breasts & Breast Meat 138481 104,956 124,222 89.7 118.4
Drumsticks 21707 17,893 17,079 78.7 95.5
Leg Quarters 71682 99,507 84,822 118.3 85.2
Legs 10760 12,785 17,152 159.4 134.2
Thigh & Thigh Quarters 10015 5,851 7,779 77.7 133.0
Thigh Meat 19651 15,413 16,902 86.0 109.7
Wings 48103 69,734 74,832 155.6 107.3
Paws and Feet 30980 22,492 24,686 79.7 109.8
Other 282380 289,412 294,616 104.3 101.8
Total Chicken 651,216 652,537 674,839 103.6 103.4
Turkey
Whole Turkeys 49,582 256,091 75,169 151.6 29.4
Toms (Whole) 27,138 133,053 38,088 140.3 28.6
Hens (Whole) 22,444 123,038 37,081 165.2 30.1
Breasts 29,832 53,321 48,952 164.1 91.8
Legs 17,161 12,738 15,475 90.2 121.5
Mech. Deboned Turkey 7,352 8,736 8,044 109.4 92.1
Other Turkey 23,952 34,546 28,091 117.3 81.3
Unclassified 66,348 87,946 82,041 123.7 93.3
Total Turkey 194,227 453,378 257,772 132.7 56.9
Ducks 2,606 1,688 1,540 59.1 91.2
Total Poultry 848,049 1,107,603 934,151 110.2 84.3
Frozen Pork -------------- Thous. Lbs. ----------------
Picnics, Bone-in 10,499 8,086 8,512 81.1 105.3
Hams, Total 94,747 186,177 97,668 103.1 52.5
Bone-in 48,889 104,697 48,000 98.2 45.8
Boneless 3/ 45,858 81,480 49,668 108.3 61.0
Bellies 26,599 18,720 24,357 91.6 130.1
Loins, Total 39,423 31,983 48,876 124.0 152.8
Bone-in 14,197 9,496 15,659 110.3 164.9
Boneless 4/ 25,226 22,487 33,217 131.7 147.7
Ribs 5/ 64,096 79,458 103,232 161.1 129.9
Butts 21,879 29,391 29,319 134.0 99.8
Trimmings 6/ 42,796 45,461 47,497 111.0 104.5
Other 7/ 103,220 105,650 104,391 101.1 98.8
Variety Meats 8/ 30,597 30,560 28,824 94.2 94.3
Unclassified 9/ 61,261 68,016 65,359 106.7 96.1
Total Pork 495,117 603,502 558,035 112.7 92.5
Frozen Beef
Boneless 1/ 381,485 355,966 367,987 96.5 103.4
Beef Cuts 2/ 62,279 74,374 73,054 117.3 98.2
Total Beef 443,764 430,340 441,041 99.4 102.5
Other Meat
Veal 3,243 3,833 3,954 121.9 103.2
Lamb & Mutton 19,014 23,210 18,978 99.8 81.8
Total Other Meat 22,257 27,043 22,932 103.0 84.8
Total Meat 961,138 1,060,885 1,022,008 106.3 96.3
Total Meat & Poultry 1,809,187 2,168,488 1,956,159 108.1 90.2