US Meat Production Seen Up In 2017

Forecast beef, pork and poultry production totals for 2016 are down from last month, while 2017 projections are above 2016 and continue the year-over-year trend.

The USDA’s World Agriculture Outlook Board made the predictions Tuesday in its monthly World Agricultural Supply and Demand Estimates report.

Red meat and poultry exports were expected to increase in 2017 with expanding production and moderating prices.

 

LOWER WEIGHTS CUT BEEF PRODUCTION ESTIMATE

 

The USDA said declining slaughter weights over the last month reduced beef output expectations for this year.  However, 2017 beef production likely will rise as larger 2015 and 2016 calf crops are expected to support year-over-year increases in cattle placements in late 2016 and early 2017.

Fed cattle 2017 marketings were forecast higher while carcass weights were expected to increase with good forage conditions and lower feed costs.

And, while 2017 beef exports were expected to be up, beef imports were expected to decline.  For 2016, the beef trade forecast was adjusted to reflect March trade data; no change was made to the forecast.

 

2017 PORK PRODUCTION SEEN UP

 

Pork production was expected to increase next year with larger hog supplies and heavier carcass weights, the USDA said.

A modest expansion of farrowings also was expected during the latter part of 2016 and early 2017, and continued growth in pigs per litter will support larger pig crops.

The 2016 pork export forecast was adjusted to reflect March data.  Import estimates were reduced on the slow pace of trade to date.

 

2017 BROILER PRODUCTION ESTIMATE UP

 

Broiler production was forecast higher as the industry continues its current expansion path.  The 2016 broiler production estimate was adjusted to reflect first quarter data.

Broiler exports are forecast weaker on a slower expected pace of recovery in the first half of the year.

 

PRICES FORECAST TO DECLINE

 

For 2017, prices of fed cattle, hogs, broilers, and turkeys were forecast below 2016 as supplies of meat were expected higher.

For 2016, the annual fed cattle price forecast was lowered to a range of $124 to $129 per cwt on a live basis from last month’s $131 to $137, a decline of $7.50, or 5.60%, as prices have weakened and cattle supplies remain relatively large.

The annual average hog price forecast was unchanged from last month at $46 to $48 per cwt on a live basis.

Annual broiler and turkey prices were forecast higher, at $0.86 to $0.90 per pound, compared with $0.84 to $0.88 last month as prices remain strong with slower expected growth in production.

 

CASH CATTLE MARKET QUIET

 

Cash cattle markets Tuesday were quiet with no packer buyer bids.  Asking prices were seen from $132 to $134 per cwt on a live basis and $204 to $205 on a dressed basis.

Cash cattle markets last week were $2 to $4 per cwt higher at $126 to $128 per cwt on a live basis and $3 higher in dressed markets at $198 to $200.

The USDA’s choice cutout Tuesday was sharply higher at $210.70 per cwt, up $3.13, while select was up $4.55 at $199.49.  The choice/select spread narrowed to $11.21 from $12.63 with 79 loads of fabricated product sold into the spot market.

The USDA said wholesale beef demand was moderate to fairly good, even though offerings were only moderate.  Select and choice loins, rounds and chucks were firm to higher, while ribs were steady to weak.  Trimmings were sharply lower in light to moderate demand against heavy offerings.

The CME Feeder Cattle Index for the seven days ended Monday was $144.23 per cwt, up $0.60.  This compares with the May settlement Tuesday of $150.20, down $0.60.