USDA Lowers Meat Production Forecasts

The USDA has lowered its forecast for 2015 and 2016 red meat and poultry production as the pace of third-quarter slaughter slows, more than compensating for heavier beef carcass weights.

The USDA revealed its predictions Friday in its World Agricultural Supply and Demand Estimates report.

Broiler production estimates for this year and next year also were lowered in the report.  The USDA said producers would contract output as margins weaken.

 

BEEF PRODUCTION ESTIMATE CUT

 

The USDA cut its estimate of 2015 beef production to 23.6 billion pounds from 23.8 billion in the August WASDE report, a dip of 210 million pounds, or 0.88%.

However, the 2016 beef production estimate grew 95.0 million pounds, or 0.38%, to 24.994 billion from the August estimate of 24.899 billion as slaughter rates increase with the growing US cattle herd.

The USDA estimated 2015 beginning stocks at 591 million pounds, but it lowered its estimated total imports to 3.437 billion pounds from 3.467 billion in the August report.  Beef imports in 2016 also were lowered from 2015 to 3.045 billion pounds, although they were raised from the August estimate of 3.020 billion.

The USDA said its estimate of 2015 beef imports was lowered based on the import pace in July, but the forecast for 2016 was raised as product shipped late in 2015 may not arrive until early 2016.

The estimate of beef exports for 2015 was lowered 55 million pounds to 2.307 billion, as world demand through the second half of the year was expected to remain relatively weak.  The USDA did not say, but a strong US dollar could have something to do with projections for lowered world demand for US beef.

Per capita US beef consumption estimates were lowered 0.5 pound to 53.9 pounds from the August estimate of 54.4 pounds.  This also was down from the 2014 total of 54.1 pounds.  Consumption next year was expected to increase again to 55.2 pounds, up slightly from 55.1 pounds in the August estimate.

 

PORK PRODUCTION ESTIMATE DOWN

 

The USDA’s pork production estimate for 2015 was lowered slightly from its August estimate.  The new estimate is 24.544 billion pounds, compared with the August estimate of 24.599 billion.  But even though it is down from the August estimate, it remains above the estimate of beef production by 930 million pounds, or 3.94%.

Pork production next year was expected to rise 179 million pounds to 24.723 billion pounds as the USDA left the August estimate unchanged.

Pork imports this year were expected to total 1.097 billion pounds, unchanged from the August estimate.  Imports next year also were left alone at 1.0 billion pounds.

Export estimates for 2015 and 2016 also were unchanged at 4.999 billion pounds and 5.225 billion, respectively.

US Per capita pork consumption for 2015 was estimated at 49.6 pounds, down slightly from the August estimate of 49.8 pounds.  However, pork consumption next year was expected to decline a bit to 49.1 pounds, compared with the August estimate of 49.2 pounds.

 

CASH FED CATTLE TRADE LOWER

 

Last week’s cash cattle markets traded lower in a range from $139 to $142 per cwt on a live basis, about $1 below the previous week.  On a dressed basis, cattle traded from $217 to $220 per cwt, compared with $220 to $223.

The USDA reported lower boxed beef prices Friday with its choice cutout down $2.97 per cwt at $236.09 and select off $1.37 at $226.73 with 158 loads of fabricated product sold into the spot market.  For the week, choice was off $4.72 from $240.81, and select was down $1.71 from $228.44.

The CME Feeder Cattle Index for the seven days ended Thursday was $205.18, down $0.36.  This compares with the Sep settlement Friday of $200.70, down $3.25.