USDA forecast rising utilization of red meats, poultry, eggs and milk in 2019 to balance the expected supply increases of these commodities.
The new predictions come in the July release of the Livestock, Dairy, and Poultry Outlook from the USDA’s Economic Research Service, which was released on Tuesday.
The ERS looked at “total utilization” of the commodities, which consists of domestic disappearance, exports and ending stocks. As with supply, the World Agricultural Supply and Demand Estimates report forecasted utilization to grow.
For beef, that growth was seen to be up 2.1%; pork was up 3.4%, lamb was up 2.3%, broilers up 2.0%, and turkey up 0.3%.
Higher disappearance was expected to be the main constituent of rising usage for all of the commodities. Expanded exports also were expected to make up a notable portion of the increase in utilization for pork, broilers beef and lamb.
BEEF/CATTLE
The forecast for 2018 beef production was increased slightly, reflecting higher expected second-half cow and bull slaughter that was offset, partially, by lower second-quarter cattle dressed weights.
The 2019 beef production forecast was reduced on lower anticipated first-quarter steer and heifer slaughter.
The feeder cattle price forecast was raised for second-half 2018 and 2019 on an improved feeding outlook.
The beef export forecast for this year and 2019 was raised on expectations of strong demand from Asian markets.
First-half 2018 saw higher cow and heifer slaughter, reducing the proportion of steers in the slaughter mix and lowering average cattle dressed weights. A faster marketing pace of steers and heifers also contributed to lower estimated cattle dressed weights.
The beef production forecast for third-quarter 2018 was raised on higher cow and bull slaughter. As a result, the full-year forecast for 2018 was raised by 25 million pounds to 27.2 billion.
May US beef exports were 273 million pounds, up 47 million, or 20.7%, from a year earlier. Shipments to all major destinations increased except for a slight 1.8% decline to Hong Kong.
Exports were higher in each month through May, compared with a year earlier. For June, weekly USDA estimates also indicate a year-over-year increase.
The second-quarter export forecast was revised upward by 20 million pounds from June to 765 million, bringing the 2018 forecast to 2.070 billion.
PORK/HOGS
The June Quarterly Hogs and Pigs report told of record-high inventories of all hogs and pigs and litter rates for the March-May quarter. These increases, along with a 3% increase in the US breeding inventory, point to large pork production increases in the second-half of 2018 and the first half of next year.
Hog prices were expected to respond increased supplies, and the effects of tariffs on export competitiveness, averaging about 16% below a year earlier in the second half of this year and about 12% below prices a year earlier in the first half of 2019.
CATTLE, BEEF RECAP
One pen of fed cattle sold on the Livestock Exchange Video Auction Wednesday at $112 per cwt, up $6 from the last sale three weeks previous.
Cash trade was reported last week at $110 to $111 per cwt on a live basis, steady to up $1 from the previous week and at a steady $173 to $175 per cwt on a dressed basis.
The USDA choice cutout Wednesday was up $0.41 per cwt at $204.80, while select was up $0.23 at $197.09. The choice/select spread widened to $7.71 from $7.53 with 103 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday, was $148.59 per cwt, up $0.22. This compares with Wednesday’s Aug settlement of $154.45, up $3.17.