The USDA is cutting back on its forecasts for total meat production this year and next as industries reduce slaughter rates and feedlot placements.
The USDA made its new forecasts known Wednesday in its December World Agricultural Supply and Demand Estimates report.
The USDA’s total red meat production estimate for this year was reduced 123 million pounds, or 0.25%, to 48.424 billion from the November estimate of 48.457 billion. But for 2016, production was expected to rise 1.41 billion pounds, or 2.91%, to 49.834 billion from 2015. Still, the new 2016 estimate was lowered from the November estimate of 50.004 billion.
BEEF
In the report, the USDA lowered its 2015 beef production estimate because of a slower pace of fed cattle marketings and slaughter in November. Its new 2015 annual beef production estimate is 23.665 billion pounds, down 50.0 million, or 0.21%, from its November estimate of 23.715 billion.
The USDA’s new 2016 beef production estimate was 24.680 billion pounds, down 170 million, or 0.68%, from its November estimate of 24.850 billion. However, the new 2016 beef production estimate was 1.015 billion pounds, or 4.29%, above the 2015 estimate.
The USDA added that the decline in beef production estimates did not have a linear correlation to slaughter rates. As the pace of marketings slowed, heavier carcass weights were providing a slight counterbalance to lower slaughter.
For 2016, lower expected feedlot placements in late 2015 will result in lower slaughter and beef production in mid-2016, the USDA said. However, as with this year, there likely will be a slight offset from higher expected carcass weights early in the year.
Expected beef imports for 2015 and 2016 were reduced to reflect this year’s pace, and weakening prices for processing beef. 2015 beef imports were put at 3.382 billion pounds, down 50 million, or 1.46%, from the November estimate of 3.432 billion. Beef imports were expected to decline further in 2016 to 2.945 billion pounds, down 437 million, or 12.9%, from this year and off 100 million, or 3.28%, from the November estimate of 3.045 billion
The forecast for 2015 and 2016 beef exports were left unchanged at 2.223 billion and 2.425 billion, respectively.
PORK
The 2015 pork production forecast was raised amid a faster pace of slaughter in November and early December, but no change was made to 2016. This year’s production was estimated at 6.485 billion pounds, down from the November estimate of 5.957 billion but ahead of the expected beef production at 6.080 billion.
Pork production next year was expected to expand its lead on beef production, rising to 24.925 billion pounds, compared with beef’s 24.680 billion. This pork production estimate was unchanged from November.
The WASDE forecasts for pork imports were unchanged with 2015 imports seen at 1.106 billion pounds, and 2016 imports were expected to be about 1.0 billion.
However, export forecasts for 2015 and 2016 were reduced as the strength of the US dollar limits export competitiveness. For pork, this led to forecasts of 4.946 billion pounds this year and 5.125 billion next year, down from the November estimates of 4.996 billion and 5.225 billion, respectively.
CASH FED CATTLE MARKETS QUIET
Scattered cash cattle sales were reported Wednesday, mostly in the western Corn Belt. Private sources reported trades at $118 to $119 per cwt on a live basis and at $186 to $190 on a dressed basis.
Prices last week were down about $3.00 per cwt to a range of $123 to $125, mostly $124 on a live basis. On a dressed basis, cattle traded at $190 to $192, down $3 to $5.
Wholesale beef prices Wednesday were lower, with the USDA choice cutout off $1.06 per cwt on the day at $203.08 and the select cutout down $0.73 at $190.00. The choice/select spread narrowed to $13.08 from $13.41 on Tuesday, and there were 157 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was $162.33, down $1.37. This compares with the Jan settlement Wednesday of $150.62, down $3.22.