USDA Cuts 2019 Red Meat, Poultry Production Estimate

The USDA’s Office of the Chief Economist Friday reduced its estimate of 2019 total red meat and poultry production to 50.203 billion pounds from 50.246 billion last month as lower forecasts for pork and turkey production more than offset predictions of higher beef production.

The forecasts came in the USDA’s monthly World Agricultural Supply and Demand Estimates report, which was received as almost neutral to markets by grain and soybean traders.

For 2020, the total red meat and poultry production forecast was increased fractionally to 51.845 billion pounds from 51.721 billion last month as higher broiler production more than offset lower expected beef, pork and turkey production.




The 2019 beef production estimate was raised to 27.151 billion pounds from 27.136 billion in December on the pace of late-year slaughter.

The 2020 beef production forecast was reduced to 27.440 billion pounds from 27.515 billion in December on lighter expected carcass weights.

However, expected quarterly beef production was increased in the first half of the year and reduced in the second half because of higher-than-expected cattle placements in late 2019 and a reduced placement forecast for early 2020.

The USDA is scheduled to release its semi-annual Cattle (Inventory) report on Jan. 31, providing estimates of heifers held for breeding and an insight into the number of feeder cattle available for placement this year.

The beef import forecast was increased for 2019 to 3.061 billion pounds from 3.046 billion a month ago on recent trade data.  No change was made to the 2020 import forecast of 2.880 billion.

The 2019 beef export forecast was reduced to 3.024 billion pounds from 3.074 billion to reflect a slower pace late in the year, but no change was made to the 2020 beef export forecast of 3.305 billion.

The first-quarter 2020 fed steer price was raised to $125 per cwt, reflecting current early year price strength.




The 2019 pork production estimate was reduced to 27.639 billion pounds from 27.694 billion in December on the slower pace of slaughter in late 2019.

The 2020 pork production forecast was reduced from December to 28.645 billion pounds from 28.680 billion.

The USDA’s Quarterly Hogs and Pigs report estimated the 2019 September-November pig crop 2% more than the prior year, which supports a higher first-half 2020 slaughter and production forecast.

However, the report also indicated producers intended to expand farrowings only about 1% in the first half of 2020, which, coupled with adjustments to the rate of growth in pigs per litter, resulted in reduced hog slaughter forecast for the second half of 2020.

The pork export forecasts for 2019 and 2020 were left unchanged from December at 6.296 billion and 7.100 billion pounds, respectively.

First-half 2020 hog price forecasts were reduced to $50 per cwt in the first quarter and $56 in the second on current prices and increased production.




Cash cattle trading was reported last week at mostly $124 to $126 per cwt, steady to $1 higher than the previous week, although mostly at the lower end of the range.  Dressed-basis trading was done at mostly $200 per cwt, steady to up $2.

The USDA choice cutout Friday was up $0.08 per cwt at $210.04, while select was down $0.13 at $206.55.  The choice/select spread widened to $3.49 from $3.28 with 112 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Thursday was $146.83 per cwt, up $0.39.  This compares with Friday’s Jan contract settlement of $147.60, up $0.67.