Total 2016 red meat and poultry production was projected to be above 2015, with beef production showing gains as the herd rebuilds and feedlots begin placing more cattle on feed.
The USDA made that prediction in Tuesday’s monthly World Agricultural Supply and Demand Estimates report. It went on to say marketings of fed cattle to packers were expected to rise next year, while market incentives will conspire to keep slaughter weights high.
The USDA said it expected 2016 meat and poultry production to be 97.2 billion pounds, up 1.595 billion, or 1.67%, from the projected 95.6 billion this year.
Beef imports were expected to rise on continued strong demand for grinding beef and tight supplies of domestic processing beef. Pork imports were seen down on expected production increases. Exports were expected to rise.
BEEF PRODUCTION SEEN HIGHER
The new 2015 beef production estimate was 24.3 billion pounds, up 0.26% from 24.210 billion in April. Second-quarter production was seen as the greatest at 6.3 billion pounds, followed by third-quarter production of 6.2 billion and fourth-quarter at 6.1 billion.
The increased production was expected to weigh on fed cattle prices, further pinching already red cattle feeding margins. The latest annualized estimated range of 2015 fed steer prices was $159 to $166 per cwt on a live basis, down $1 from the April projection.
For 2016, fed steer prices were expected to be up $1 to $2 into a range of $156 to $169.
PORK PRODUCTION SEEN UP, WEIGHING ON PRICES
Estimated pork production for 2015 was up from the April forecast at 24.4 billion pounds, a gain of 156 million, or 0.64%, from 24.2 billion. For 2016, pork production was expected to rise to 24.7 billion pounds, a gain of 304 million, or 1.25%, from the 2015 projection.
But that extra output likely will weigh on hog prices, the USDA said. Prices in 2015 were seen at $48 to $50 per cwt, down slightly from a range of $48 to $51 in the April report. But for 2016, prices for slaughter-ready hogs could be anywhere within a range of $44 to $48, a decline of $2 to $4.
After being tagged at $48.47 per cwt in the first quarter this year, second-quarter hog prices were expected to range from $49 to $51 per cwt with third quarter prices rising to $50 to $54 before falling in the fourth quarter to $43 to $47.
CHICKEN PRODUCTION SEEN UP DESPITE BIRD FLU
Chicken production this year was expected to rise in spite of millions of birds being destroyed to control avian influenza. The USDA said it expected annual broiler production of 40.2 billion pounds from its April estimate of 40.0 billion, a gain of 0.34%.
Quarterly production was pegged at 9.7 billion pounds, 10.1 billion, 10.3 billion and 10.2 billion respectively.
Prices this year were expected to range from $0.99 to $1.03 a pound, up $0.02 from April. Prices next year were seen ranging from $0.99 to $1.07.
The highest prices this year were expected to be in the second quarter at $1.03 to $1.07.
CASH CATTLE QUIET
Cash cattle markets remain quiet with no bids and offers around $163 per cwt on a live basis and $258 to $260 dressed.
Beef prices Monday were mixed after being higher at midday, with the USDA reporting its choice cutout at $260.96 per cwt, up $1.39, and the select cutout at $247.75, down $0.35.
The CME Feeder Cattle Index for the seven days ended Monday was unchanged at $219.26 per cwt.