Dollar squeezing U.S. packer margins

by Editor
Friday, November 28, 2008

During October, 1.06 million tonnes of beef was produced in the U.S. – down 4% on the same time last year (United States Department of Agriculture).

Declines in slaughter were recorded across steer, heifer and dairy cow categories, with the slaughter of steers down 6%, heifers 7% and dairy cows 4%.

The fall in production volume can largely be attributed to the tightening of fed cattle supplies, as cattle on feed numbers have been declining since May this year.

Recent reports also indicate that U.S. processors are hesitant to process larger numbers, as operating margins are being squeezed by the stronger Dollar and declining by-product values – this is particularly so for U.S. hide prices which are largely driven by export markets.