As the US beef industry sets out to rebuild its herd from a 63-year low, pork production could overtake beef production by 2016 – or sooner, according to some estimates.
USDA’s National Agricultural Statistics Service predicts 2014 beef production at 24.5 billion pounds, compared with pork production of 22.9 billion. Beef production in 2015 is seen at 24.1 billion pounds versus pork production of 23.5 billion.
However, by 2016, NASS expects beef production of 24.0 billion pounds to be surpassed by 24.2 billion pounds of pork.
American Farm Bureau Chief Economist Bob Young thinks pork production could surpass beef as early as next year. If it does, it will be the first time in more than 50 years.
Once accomplished, the situation could remain in place for five to six years, Young said. Lower feed costs and better pasture conditions are prompting many to keep heifers for breeding, which reduces the number of cattle going to slaughter.
Cattle grow and reproduce more slowly than hogs or chickens. It will take a long time – years even – to bring the herd and beef production back.
Even when cattle herds numbers peak, it’s not likely to get back to 1975’s high of 132 million head. Each subsequent peak in US herd size has been at a lower level, and competition from lower-cost pork and poultry may cap the cattle herd again by limiting beef price gains and profits.
POULTRY PRODUCTION SEEN HIGHER
As herd rebuilding cuts into beef production for the next few years and pork production steps up, poultry production also is expected to rise and attempt to steal consumer demand.
NASS project chicken production this year at 38.6 billion pounds, up 700 million, or 1.85%, from last year’s 37.9 billion. For 2015, chicken production is expected to be up to 40.1 billion pounds, a gain of 1.5 billion, or 3.89%, from the 2014 estimate.
NASS projects even more gains in chicken production for 2016, out to 40.9 billion pounds.
Turkey production is expected to decline this year as high-priced feed earlier in the year cut into profits. However, production next year is expected to climb 200 million pounds, or 3.51%, to 5.89 billion pounds from an estimated 5.66 billion this year.
For 2016, NASS predicts turkey production to rise slightly, hitting 5.95 billion pounds.
CASH CATTLE REMAIN UNTRADED
Cash cattle markets remain inactive with a few packer bids of $165 to $168 and asking prices of $172 to $173 per cwt on a live basis. Cattle traded last week up $6 to $7 at mostly $170 live and $265 on a dressed basis, and sources think this week’s trade will be about steady, although they see a better chance for activity on Friday than for today as buyers and sellers square off over price and profitability.
Packers are pushing product prices hard this week, resulting in higher prices but lower volume. Wednesday’s USDA load count of fabricated product into the spot market, at 140, was the first time this week that short-term sales topped 100 loads.
But wholesale beef prices have been up every day this week and surpass week-earlier levels. The USDA’s choice cutout was $253.63 per cwt up $2.07 for the day and up $2.63 for the week. Select was up $0.67 for the day and $4.70 for the week at $239.77.
Cash feeder cattle prices are stabilizing as shown by the CME Feeder Cattle Index, which for the seven days ended Tuesday was up $0.32 per cwt $238.83 after being up $0.31 through Monday. The Oct futures contract settled Wednesday at $238.85, up $0.57.