USDA Raises Total Meat Production Estimate

The USDA Thursday raised its estimate of 2016 total red meat and poultry production from its December estimate.

The new estimates came out in the monthly World Agriculture Supply and Demand Estimates report, which said the beef production estimate was

The new estimates came out in the monthly World Agriculture Supply and Demand Estimates report, which estimated beef production at 25.225 billion pounds based on increased fed cattle slaughter and heavier carcass weights.  The new estimate of pork production was raised to 24.936 billion pounds based on new slaughter data.  Total poultry production’s estimate was lowered to 47.204 billion pounds based on new slaughter data.

 

2017 PRODUCTION ESTIMATES EVEN HIGHER

 

For 2017, the estimate for red meat and poultry production was raised again largely on higher forecasts for pork production, although forecasts of beef and broilers also were raised.

Higher expected cattle feedlot placements in late 2016 and early 2017 underpinned the higher forecast beef production in 2017, the WASDE report said.  The USDA is scheduled to release its semi-annual Cattle report Jan. 31, which will provide estimates of heifers held for breeding along with indications of the availability of cattle for placement during 2017.

The WASDE estimate for 2017 pork production was raised based on estimates from the December Quarterly Hogs and Pigs report.  The 5% year-over-year increase in the September–November pig crop will be slaughtered largely in the second quarter of 2017.

Pork producers also indicated intentions to farrow 1% more sows in the first half of 2017, which, coupled with expected growth in pigs per litter, will support a higher level of slaughter during the second half of the year, the report said.

The estimate for broiler production was raised for early 2017 on recent hatchery data, but the turkey production forecast was unchanged.

 

FOREIGN TRADE ESTIMATED HIGHER

 

Beef and pork 2016 export estimates were raised based on November trade data and expectations of strong export demand in December, WASDE said.  Beef import estimates were lowered, but no change was made to pork imports.

Broiler and turkey export estimates were lowered on the basis of recent trade data.

For 2017, beef export estimates were raised as 2016 demand strength was expected to carry into 2017.  Imports were forecast higher on expectations of slightly larger supplies from Oceania in early 2017.

No changes were made to pork, broiler, or turkey trade forecasts.

 

PRICES

 

Estimates for annual livestock and poultry prices for 2016 were adjusted to reflect December price data, the WASDE report said.  The 2017 cattle price forecast was increased on continued strong demand into the first part of 2017.

The hog price forecast for first quarter 2017 was raised on demand strength, but price forecasts for subsequent quarters were lowered as hog supplies were expected to be large.

Broiler price estimates were raised slightly on early year demand strength.  Turkey prices were forecast lower on relatively soft demand.

 

CASH CATTLE TRADE QUIET

 

Average fed exchange auction prices Wednesday were $2.38 per cwt higher at $119.17, versus $116.79 a week earlier.  Cash cattle then traded at $118 to $120 on a live basis, steady to up $2.50.  No dressed-basis trades were reported against last week’s $188.

The USDA’s choice cutout Thursday was down $0.29 per cwt at $189.10 per cwt, while select was off $1.40 at $186.55.  The choice/select spread widened to $2.55 from $1.44 with 126 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Wednesday was $132.60 per cwt, down $0.29.  This compares with Thursday’s Jan settlement of $130.32, down $1.72.