Average fed cattle prices this year were expected to decline, even though the 2017 beef production estimate was lowered from a month ago, in the face of higher pork and poultry production.
That prediction was made in the latest World Agricultural Supply and Demand Estimates report issued by the USDA’s World Outlook Board Thursday. The report raised its estimate of 2017 US pork production to 26.170 billion pounds from the January estimate of 26.205 billion and its total poultry production estimate to 48.190 billion from 48.250 billion.
However, the WASDE report lowered its estimate of 2017 US beef production to 26.000 billion pounds from 25.955 billion in the January report, a decline of 45 million pounds, or 0.17%.
ALL MEAT PRICES SEEN DOWN FROM 2016
Actually, when compared with 2016, annual prices for all meats were expected to be down this year from last year.
Average fed steer prices this year were expected to range from $109 to $116 per cwt, down 9.81% to 4.02%, from last year’s $120.86.
Average 2017 barrow and gilt prices were expected to range from $42 to $45 per cwt, down 9.01% to 2.51% from the 2016 average of $46.16.
Average broiler prices for the year were expected to range from 82 to 87 cents a pound, down from the 2016 average of 84.3 cents.
NITTY-GRITTIES
Fed cattle placements into feedlots and marketings to packers for the year were raised in the monthly Cattle on Feed report, resulting in higher cattle slaughter estimates, WASDE said. The January Cattle inventory report estimated total cattle and calf numbers Jan. 1 to be up for the third straight year.
Beef cow numbers were above 2016, and producers indicated they were holding more heifers for addition to the breeding herd, WASDE said. The report also indicated a year-over-year increase in the number of cattle outside feedlots.
The January Cattle on Feed report showed higher-than-expected placement numbers in December, implying more fed cattle will be marketed during the spring quarter.
Cattle weights were reduced for 2017 as producers were expected to remain current in feedlot marketings.
First-quarter pork production was reduced on the current pace of slaughter and slightly lighter carcass weights.
Broiler production was lowered as first-quarter production increases were more than offset by second-half reductions.
No changes were made to turkey production estimates.
TRADE ESTIMATES RAISED
For 2017, forecast beef imports were raised on expectations of higher shipments of processing beef from Pacific Rim countries.
Robust demand for US beef supported higher forecast beef exports for the year, WASDE said. The forecast went up to 2.715 billion pounds from the January estimate of 2.640 billion.
No changes were made to pork, poultry or egg trade forecasts.
Cattle, hog, and broiler price forecasts were raised to reflect demand strength.
Turkey prices were forecast lower on current price weakness.
CASH CATTLE TRADE MIXED
Average fed cattle exchange auction prices Wednesday were $3.13 per cwt lower at $118.84, versus $121.97 a week earlier.
Cash cattle then traded at $119 to $120.50, mostly $119.75 to $120.50, on a live basis, up $0.50 to $0.75. Dressed-basis trades took place at $190 to $190.50, steady to up $0.50 from last week’s $190.
The USDA’s choice cutout Thursday was down $0.72 per cwt at $188.71, while select was off $0.67 at $185.82. The choice/select spread narrowed to $2.89 from $2.94 with 99 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Wednesday was $128.11 per cwt, up $0.83. This compares with Thursday’s Mar settlement of $123.62, up $1.32.