Green’s Dictionary of Slang

1. (US gay, also pencil meat) a long, thin penis.

1972		B. Rodgers Queens’ Vernacular 185: small penis [...] pencil dick = long, skinny cock.
2012		(con. early 1960s) E. White in N.Y. Rev. Bks 25 Oct. 🌐 Because I’d hung out in Chicago’s gay coffee shops [...] I knew that someone who liked well-hung men was ‘a size queen,’ just as someone with a small penis was ‘Princess Pencil Meat’.

2. (US) a general term of abuse, the implication being that the person in question has a small penis.

1993–2003		R.H. Rimmer on Urban Dict. 🌐 needle A derogatory term used to imply a lack of genital size in the pants. syn. Pencil dick You have a real needle.
1995		C. Hiaasen Stormy Weather 216: He hated answering questions from pencil dicks like Reedy.
2000		J. Baker Chinese Girl (2001) 153: I hate to disturb your coma, pencil dick, but you’ve no more brains’n a dog’s got feathers.
2018		‘Aidan Truhen’ Price You Pay 148: I’m sorry pencildick I can’t hear you over the sound of the arctic wind.