USDA Trims 2016 Meat, Poultry Production Estimate

The USDA’s World Agricultural Outlook Board Friday reduced its estimate of 2016 meat and poultry production as lower estimates for pork and chicken production more than offset estimates of gains in beef and turkey.

In its World Agricultural Supply and Demand Estimates report, the USDA said total red meat and poultry production for this year was expected to total 97.610 billion pounds, down 99 million, or 0.10%, from the July estimate of 97.709 billion.

However, production forecasts for red meat and poultry in 2017 were raised from a month ago as expectations for lower feed prices were expected to encourage production.  The new estimate for next year was 100.296 billion pounds, up 130 million, or 0.13%, from 100.166 billion in the July report.




The USDA said its estimate of annual beef production was raised from its July estimate by 17 million pounds, or 0.07%, to 24.962 billion pounds from 24.945 billion because of higher-than-expected fed steer and heifer slaughter.

However, second quarter beef production numbers were adjusted lower to reflect June production data, the report said.  The adjustments make the second-quarter production estimate 6.187 billion pounds, down three million, or 0.05%, from 6.190 billion in the July report.

The beef import forecasts for 2016 and 2017 was raised to 2.955 billion and 2.600 billion, respectively, from 2.908 billion and 2.550 billion in the July report, in part because of expectations for increased imports from Brazil beginning in late 2016, the USDA said.  This market was opened to trade on Aug. 1 despite US beef industry fears of Foot-and-Mouth Disease being imported accidentally from Brazil.

US 2016 beef export expectations were lowered 19 million pounds, or 0.77%, to 2.450 billion pounds from 2.469 billion a month ago based on more complete June trade data, the USDA said.  However, no change was made to the 2017 export forecast of 2.580 billion pounds.




The WASDE report’s lower pork production estimate for the year was based on expectations of slightly lighter carcass weights for the rest of the year.

The new estimate for US pork production was 24.907 billion pounds, down 93 million, or 0.37%, from 25.000 billion in July.  The new estimate also is up 406 million, or 1.66%, from 24.501 billion last year.




The USDA estimate for 2016 chicken production was lowered on expectations for lower production growth in the fourth quarter, the USDA said.  The new estimate was 40.996 billion pounds, compared with 41.064 billion in July.

Broiler export estimates for 2016 also were lowered based on a slower pace of exports in June.  No change was made to the 2017 estimate, nor was any change made to the estimate of turkey exports.




Second-half 2016 price forecasts for cattle, hogs and chickens were reduced from the July report because of weakness in current prices.  Price expectations for 2017 were reduced from July as production forecasts rose.




Cash cattle markets last week were steady to weaker with cattle flat at $118 to mostly $119 per cwt on a live basis, and at 187 on a dressed basis, down $1 to $3 from the previous week.

The USDA’s choice cutout Friday was $0.39 per cwt lower at $201.19, while select was up $0.80 at $193.62.  The choice/select spread narrowed to $7.57 from $8.76 with 85 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $147.95 per cwt, up $0.13.  This compares with the Aug settlement Friday of $149.07, up $0.35.