Total meat production will be down this year and next if the USDA’s latest estimates are correct.
The USDA’s World Agricultural Supply and Demand Estimates report Thursday said beef production this year, at 24.321 billion pounds, is down from August’s projection of 24.561 billion because the number of cattle exiting feedlots has been below expectations.
That below-expectations slaughter has been partially offset by higher slaughter weights as lower feed costs and higher replacement costs prompted feedlots to keep cattle on feed longer. Average slaughter weights also have been boosted by lower heifer and cow slaughter.
The WASDE report cut its estimate of 2015 beef production to 23.640 million pounds from 24.325 million in the August report as expected lower fourth-quarter placements trim first-half 2015 slaughter. Expected heavier carcass weights are not expected to make up the entire difference.
Beef export expectations for 2014 and 2015 were left unchanged at 2.620 billion pounds in 2014 and 2.525 billion in 2015. This compares with 2013 exports of 2.590 billion.
Beef import expectations for this year and next, however, were raised because of tightening cull cow slaughter and strong consumer demand for hamburger and other processed beef products. The USDA estimated 2014 imports at 2.614 billion pounds, versus the August estimate of 2.584 billion. The 2015 import estimate was raised to 2.700 billion pounds from 2.600 billion.
The US habitually does not produce enough very lean grinding beef and must import this product to meet demand. In turn, the US exports high-quality, high-value beef.
Amid tightening supplies of fed cattle, the USDA’s estimated fed steer prices for this year were raised to $151 to $154 per cwt from $150 to $153 a month ago. However, the price forecasts for 2015 were left unchanged at $149 to $162.
As production fades, and retail beef prices continue rising, per-capita beef consumption is expected to decline. The USDA estimated 2014 consumption at 53.9 pounds, declining to 52.1 pounds next year. This compares with 56.3 pounds in 2013.
PORK PRODUCTION SEEN SLIGHTLY LOWER
Where beef production is expected to decline, pork production is expected to be only marginally lower this year as higher carcass weights are more than offset by a reduction in slaughter. It appears producers still haven’t conquered the Porcine Epidemic Diarrhea virus, although they have made gains through inoculation of sows, increased herd sizes, larger slaughter weights and now a new vaccine.
The USDA estimated 2014 total pork production at 22.774 billion pounds, down slightly from 22.779 billion in the August WASDE report. For 2015, the USDA estimated a production gain to 23.325 billion pounds from its August estimate of 23.280 billion.
The USDA’s estimate of pork imports and exports is unchanged for this year and next. Pork exports this year were projected at 5.066 billion pounds and for next year were pegged at 5.145 billion. Imports for this year were estimated at 947 million pounds and for next year were placed at 920 million.
Price forecasts for barrows and gilts this year and 2015 were lowered from August’s estimates as lower prices seen the last month are expected to carry into next year. The USDA projected 2014 slaughter hog prices at $77 to $78 per cwt, down from the August estimate of $79 to $81. For 2015, the WASDE report forecasted hog prices to average $67 to $73, versus the August estimate of $72 to $78. By comparison, the annual 2013 price was $64.05.
Per-capita pork consumption is expected to be bottom this year at 45.6 pounds and rise to 46.1 pounds next year, although it still will be below 2013’s 46.8 pounds.