The USDA’s Economic Research Service’s new forecast for 2018 red meat exports is higher for red meats, poultry, eggs and dairy products as production in most products rises.
The forecasts came in the ERS’ June Livestock, Dairy, and Poultry Outlook report, which was released Thursday.
In the report, forecasts for more exports of lamb and mutton in 2018 were the only category of meat exports not based on rising production estimates. Exports of these products were expected to rise to eight million pounds from seven million this year.
Third-quarter 2017 commercial beef production was expected to be 6.8 billion pounds, an increase of 175 million pounds, or 2.64% from 6.625 billion in the same period last year, the report said. Beef production expectations for the entire year were revised downward slightly to 26.225 billion pounds, but remain1.004 billion, or 3.98% above last year.
Commercial beef production for April was fractionally below a year ago, the report said. However, with one less slaughter day in the month, packers slaughtered 2%, or 54,000 head, more cattle than last year.
But, according to the USDA/NASS Livestock Slaughter report, dressed weights for federally inspected steers and heifers declined 25 and 22 pounds, respectively, year over year. The decrease in the average carcass weight more than offset the increase in cattle slaughter and kept beef production from increasing.
The USDA report on beef production under federal inspection for the week ending May 27 indicates average dressed weights for steers and heifers continue to decline, falling another 9 and 13 pounds, respectively, from the week ending April 29. Weights were expected to move higher seasonally, but gains were expected to be limited as long as there are incentives to market cattle as rapidly as possible.
Beef trade forecasts for 2017 and 2018 were unchanged from last month, with beef and veal exports at 2.806 billion and 2.835 billion pounds, respectively. Beef and veal import estimates for 2017 were unchanged at 2.759 billion pounds and for 2018 were steady at 2.825 billion.
Prices for 1,100- to 1,300-pound choice steers were expected to average $118 to $124 per cwt for the third quarter and $122 to $126 for the year.
April US beef exports rose 15% to 218 million pounds over the same month a year ago, supported by growth in four major destinations: Japan (+18%), South Korea (+8%), Hong Kong (+7%), and Canada (+4%). Export increases likely were fueled by higher domestic production and lower prices.
The US dollar weakened slightly over the past 2 months, making US beef less expensive. Exports for the first 4 months of 2017 were 20% higher than the same period last year at 869 million pounds.
CASH CATTLE LOWER
No trade was reported on the livestock exchange video auction amid more technical troubles. Light trade was reported in Nebraska at $130 per cwt on a live basis, down $2 to $3 from Tuesday and off $6 to $8 from last week.
Cash cattle traded Tuesday at $132 to $133 per cwt on a live basis, down $4 to $5 from the bulk of last week’s action and at $215 dressed, down $3 to $5. Some reports have this week’s cattle being sold for the first week of July.
The USDA’s choice cutout Thursday was down $1.29 per cwt at $249.74, while select was off $0.13 at $220.53. The choice/select spread narrowed to $29.21 from $30.37 with 103 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $152.73 per cwt, down $1.18. This compares with Thursday’s Aug settlement at $147.07, up $0.95.