The USDA Tuesday raised its projections for 2015 meat production, boosting the estimated output of red meat and poultry output from its January estimate. As a result, price projections for all meat classes declined.
In its World Agricultural Supply and Demand Estimates report, the USDA upped its outlook for beef production by 390 million pounds, or 1.64%, to 24.22 billion from its January estimate of 23.83 billion. However, this was down slightly, 32 million pounds, or 0.13%, from the revised 2014 estimate of 24.252 billion.
The Jan. 30 cattle inventory report revised the 2014 calf crop higher and pointed to more cattle outside of feedlots on Jan. 1, the USDA said. Given a greater calf crop, feedlot placements through the year were expected to decline less rapidly resulting in more cattle available for slaughter and more beef production.
Beef imports also were expected to climb as demand for processing beef remains strong and the strengthening US Dollar makes it easier to buy and import more grinding beef.
Annual pork production was projected at 24.090 billion pounds, up 195 million, or 0.82%, from the January estimate of 23.895 billion. The February estimate also is up 1.246 billion pounds, or 5.45%, from the 2014 estimate, which was revised downward slightly from January.
Annual broiler production was estimated at 39.950 billion pounds, up 320 million, or 0.81%, from the January estimate of 39.630 billion. The new estimate also was up 1.402 billion pounds, or 3.64%, from last year’s 38.548 billion.
The WASDE report projected turkey output at 6.075 billion pounds, up 150 million, or 2.53%, from 5.925 billion in the January report. The new estimate also is up 320 million pounds, or 5.56%, from last year’s revised estimate of 5.755 billion.
LOWER FARM-GATE PRICES THE RESULT
As might be expected with higher production estimates, the USDA also lowered its estimate of farm-gate prices for all meat classes from January, although slaughter steer prices are expected to be up from a year ago.
The USDA’s 2015 five-area direct steer price was moved down from the January estimate by $2.00 to $4.00 to a range of $157 to $167 per cwt on a live basis. However, this is up about $2.50 to $12.50 from last year’s average of $154.56.
Estimated prices for barrows and gilts were revised downward from January to a range of $54 to $58 per cwt from $60 to $65, a $6 to $7 drop. What’s more, the new range drops even farther away from last year’s $76.03 average, roughly a 26% drop.
Broiler price estimates were lowered to a range of $0.97 to $1.03 a pound from the January estimate of $1.00 to $1.07 and drops about 4.67% below last year’s average of $1.049 a pound.
Turkeys, always vulnerable to competition from other meats, were expected to bring $1.02 to $1.08 a pound this year, a decline of $1 to $3 from the January estimate of $1.03 to $1.11. The new forecast is down about 2.42% from last year’s $1.076 a pound.
CASH CATTLE REMAINS QUIET
No cash cattle trading was reported Tuesday. Feedlot asking prices were around $164 to $165 per cwt on a live basis and $260 to $262 dressed. Cattle traded last week from $160 to $162 live and around $252 dressed.
Wholesale beef markets Tuesday were mixed, with choice at $238.43 per cwt, down $0.05, but select up $1.26 at $233.56 as 90 loads were sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Monday was $208.90 per cwt, up $0.24, and well above Tuesday’s Mar futures settlement of $202.02.