US 2016 and 2017 red meat and poultry production forecasts were lowered from those made a month ago, although 2017 forecasts continue to forecast production growth.
The USDA’s World Agricultural Supply and Demand Estimates report Friday credited higher feed costs for dampening the rate of production growth.
Southern Plains corn, sorghum and wheat prices have gone up since early April, a problem for local cattle feeders. And central Illinois weekly soybean meal prices have rocketed higher in the same period, a serious issue for hog and poultry producers.
BEEF PRODUCTION FORECAST DIP
The forecast for 2016 beef production is down mostly on lower carcass weights, which feedlot managers say is a function of higher feed costs and lower live cattle futures prices.
Beef production expectations next year were lowered on ideas of continued lower carcass weights as feeders respond to higher feed costs by marketing cattle earlier to minimize the amount of time cattle are on feed.
However, the pace of second-quarter slaughter is slightly lower than expected a month ago, the USDA’s World Agricultural Outlook Board said.
The WASDE report put 2016 beef production at 24.67 billion pounds, down 135 million, or 0.54%, from the May estimate of 24.810 billion. However, this still is up from 2015’s beef production of 23.698 billion pounds.
For 2017, the WASDE report estimated beef production at 25.785 billion pounds, down 5 million, or 0.02%, from 25.790 billion in the May report. But even though next year’s beef production estimate was lowered from a month ago, it continues to show a progressive increase year to year.
Per-capita beef consumption continues to grow, the USDA said with first-quarter consumption up 4.0% from a year earlier at 19.5 pounds.
Year-to-date beef exports remain 1,249 tonnes above a year ago at 343,176 tonnes, but April’s export volume lagged a year earlier by 4,073 tonnes, or 4.41%, as the US dollar inches higher relative to other currencies.
The result is a projection for lower cattle prices over the next two years.
PORK PRODUCTION ESTIMATE REDUCED
The WASEE pork production estimate for this year and next was lowered 30,000 pounds from the May estimate to 24.960 million from 24.990 million. In addition, the 2017 pork production estimate was reduced 30,000 pounds to 25.610 million from 25.640 million.
However, annual pork production estimates continue to rise. Next year’s production estimate was 650,000 pounds, or 2.60%, above the 2016 estimate and 1.109 million, or 4.53%, above 2015’s 24.501 million.
First-quarter per-capita pork consumption was estimated by the LMIC at 16.2 pounds, up 2% from 15.9 pounds a year earlier. And year-to-date pork exports are down 3,457 pounds, or 0.48%.
CASH CATTLE MARKET QUIET
Cash cattle markets last week were steady on a live basis and up $2 to $3 on a dressed basis at $128 per cwt live and $208 to $210 dressed. Volume was thought to be light to moderate, leaving room for this week’s feedlot showlists to grow.
The USDA’s choice cutout Friday was $0.82 per cwt higher at $227.67 per cwt, while select was up $1.46 at $204.30. The choice/select spread narrowed to $23.37 from $24.25 with 83 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Thursday was $148.91 per cwt, up $0.26. This compares with the Aug settlement Friday of $145.55, down $1.75.