The USDA Wednesday reduced its estimate of this year’s total red meat and poultry production by 113 million pounds, or 0.12%, to 97.439 billion pounds from its estimate of 97.552 billion last month.
However, all of the cuts came in a reduced estimate of chicken production, as the forecasts for total beef and pork production were raised slightly.
The estimates came in USDA’s monthly World Agricultural Supply and Demand Estimates report from its World Outlook Board. The data was perceived bearishly by futures traders who already were concerned about burgeoning supplies of all meat.
For 2017, the total red meat and poultry production forecast was raised 78 million pounds, or 0.08%, to 100.319 billion pounds from 100.241 billion last month, primarily because of estimates of higher pork production, the WASDE report said. The 2017 broiler production forecast was lowered from last month’s estimate on more moderate production growth continuing from 2016.
The turkey production forecast was unchanged.
Cattle, hog, broiler and turkey prices for the last quarter of 2016 were reduced from last month as estimated supplies of all products are large, the USDA said. Next year, the continued large supplies of beef, pork and chicken meat were expected to pressure prices through the year.
BEEF PRODUCTION SEEN HIGHER
Total US beef production for 2016 was raised on higher expected slaughter, the WASDE report said. Estimated carcass weights were reduced slightly in the calculations, but it was not enough to offset the higher slaughter levels totally.
The 2016 estimate was 24.967 billion pounds, up 25 million, or 0.10%, from the September estimate of 24.942 billion.
For 2017, total beef production for the year also was seen slightly higher at 25.880 billion pounds, compared with the previous estimate of 25.800 billion, but the estimate was mostly on expectations of higher first-quarter production. First-quarter 2017 beef production was raised 80 million pounds, or 1.32%, to 6.130 billion pounds from 6.050 billion in the September report.
Beef import and export forecasts for 2016 and 2017 were raised slightly as somewhat larger supplies of beef in some exporting countries supported higher imports and lower US beef prices make the US more competitive in world markets, the WASDE report said.
PORK PRODUCTION FORECAST RAISED
Pork production for 2016 was raised on the pace of a new third-quarter slaughter estimate. The new production estimate came in at 6.095 billion pounds, up 20 million, or 0.33%, from 6.075 billion a month ago.
The new 2016 pork production estimate of 24.912 billion pounds was up 20 million, or 0.08%, from the September estimate of 24.892 billion.
For 2017, pork production was boosted 355 million pounds to 25.865 billion, or 1.39%, from 25.510 billion in the September report.
The pork export forecast for 2017 was raised on expectations of higher sales to Asia, the USDA said.
CASH CATTLE MARKETS TRADE LOWER
Cash cattle markets Wednesday traded lower, with limited action at $98 per cwt on a live basis and at $154 to $156 dressed. Cattle traded last week at mostly $102 live and $158 to $160 dressed.
The USDA’s choice cutout Wednesday was $1.68 per cwt lower at $181.50, while select was off $0.57 at $172.18. The choice/select spread narrowed to $9.32 from $10.43 with 129 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was $126.93 per cwt, down $0.40. This compares with the Oct settlement Wednesday of $122.00, down $2.12.