USDA Lowers Meat Production Outlook

The USDA’s World Agricultural Outlook Board Tuesday said it had lowered its 2017 forecast of total US red meat and poultry production from a month earlier on lower beef and pork production forecasts.

The WOB made its predictions in its monthly World Agricultural Supply and Demand Estimates report and went on to say its new 2017 beef production forecast of 26.305 billion pounds was based on the current pace of cattle slaughter and lighter carcass weights.  The November forecast was 26.400 billion pounds.

Weekly fed steer and heifer slaughter rates were down through the fourth week of November.

Cattle dressed weights have been rising seasonally but remain below year-ago levels.

The 2017 pork production forecast was lowered to 25.560 billion pounds from 25.740 billion a month earlier on smaller-than-anticipated slaughter rates this quarter, although partly offset by higher carcass weights.

The 2017 broiler production forecast of 41.541 billion pounds was raised from November’s 41.540 billion on a revision to third-quarter production data.  Turkey production estimates of 5.997 billion pounds were unchanged.

Beef and turkey export forecasts for 2017 were raised on strong global demand, which was expected to carry into first-quarter 2018.

No change was made to pork and broiler trade forecasts.

The cattle price forecast for 2017 was lowered on recent price softness, but the 2018 forecast was unchanged from the November report.

The hog price forecast for 2017 was raised on current demand strength.  This strength was expected to carry over into 2018, leading the way to higher price forecasts for next year.

The broiler price forecast was lowered for 20176 but left unchanged for 2018, and turkey prices expectations were lowered for this year and next year amid relatively weak product demand.

 

2018

 

The 2018 total red meat and poultry production forecast or 100.155 billion pounds was lowered from 100.430 billion last month because of lower expected beef and pork production, the report said.

Beef production for 2018 was forecast lower at 27.590 billion pounds from 27.620 billion, reflecting expectations for slightly lighter carcass weights next year.

Next year’s pork production of 26.915 billion pounds was expected to be lower than the November estimate of 26.925 billion as fractionally heavier first-quarter carcass weights only partially offset smaller-than-expected hog slaughter.  The Dec. 22 Quarterly Hogs and Pigs report was expected to provide more direction in terms of farrowing intentions into the first half of 2018.

Broiler and turkey production forecasts for next year were unchanged from the November report at 42.275 billion pounds and 6.025 billion pounds, respectively.

 

CATTLE, BEEF RECAP

 

Scattered cash cattle trade came last Tuesday at $117.50 to $118.50 per cwt on a live basis, down $1.50 to $3 from the previous week with more Wednesday at $118 and at $188 on a dressed basis, down $1 to $2.  However, more trade came Thursday at $117 live and $187 dressed, down $2 and down $2 to $3, respectively.

No trading took place on the Livestock Exchange video auction last Wednesday.

The USDA’s choice cutout Tuesday was down $1.47 per cwt at $204.06, while select was up $0.26 at $185.92.  The choice/select spread narrowed to $18.14 from $19.87 with 88 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Monday was $153.89 per cwt, down $0.43.  This compares with Tuesday’s Jan settlement at $147.10 per cwt, up $1.65.