USDA Ups 2017 Total Meat Production Forecast

The forecast for total meat production in 2017 was raised from last month as increases in commercial beef and broiler production more than offset declines in pork and turkey output.

The USDA’s Agricultural Marketing Service, along with the World Outlook Board, made the prediction in Thursday’s release of its monthly World Agricultural Supply and Demand Estimates.

 

BEEF PRODUCTION ESTIMATE HIGHER

 

The month-to-month increase in the beef production estimate reflects relatively large second-quarter cattle placements, which likely will boost fourth-quarter cattle slaughter, the report said.

Beef production for the year was estimated at 26.699 billion pounds, up from 26.495 billion in the July estimate and up 1.478 billion, or 5.86%, from last year’s 25.221 billion.  However, it is 661 million, or 2.42%, short of the new 2018 beef production estimate of 27.360 billion.

For 2017, the estimate for total beef imports were raised to 2.832 billion pounds from July’s estimate of 2.789 billion, as higher-than-expected shipments of lean processing beef from Oceania in June were expected to carry into the third quarter.  The beef export forecast was lowered from last month to 2.784 billion pounds from July’s 2.816- billion-pound projection on recent trade data and an expected slowdown in global demand for the rest of 2017.

For 2018, the beef import forecast was left unchanged from the previous month at 2.870 billion pounds while exports are lowered slightly to 2.860 billion from 2.870 billion.

Fed cattle price expectations were reduced for 2017 to a range of $120 to $122 per cwt on a live basis from July’s projection of $121 to $125, and 2018 projections were trimmed to $112 to $121 per cwt from $113 to $123 as current prices have weakened and larger expected supplies of fed cattle were expected to pressure prices.

 

PORK PRODUCTION SEEN DOWN WITH SLAUGHTER

 

Pork production estimates for the year were reduced on lower expected slaughter in the third quarter.  Total production now is estimated at 25.806 billion pounds, compared with 25.834 billion in the July report.

The new estimate for total 2017 pork production was 865 million pounds, or 3.47%, above 2016’s production of 24.941 billion but 929 million, or 3.47%, below the 2018 estimate of 26.735 billion.

The 2017 pork import estimate was raised slightly to 935 million pounds on recent trade data.  The pork export forecast was adjusted for June data, but the forecast for the remainder of the year was unchanged, resulting in a new 2017 export forecast of 5.753 billion pounds, compared with a month ago at 5.747 billion.

Hog price forecasts were raised for 2017 and 2018 on continued strength in demand.  The new 2017 forecast is within a range from $51 to $52 per cwt live, versus July’s projection of $48 to $50.

 

CATTLE, BEEF RECAP

 

Cattle traded last Wednesday on the livestock exchange video auction at $105.10 per cwt on a live basis for 1- to 9-day delivery and at $105 live and $166 dressed for 1- to 17-day delivery.

Cash trading was reported last week at $104 to mostly $105 per cwt on a live basis, down $2 from the previous week.  Cattle traded in Nebraska’s dressed market at mostly $165 up to $166, down $7.

The USDA’s choice cutout Thursday was down $0.80 per cwt at $192.13, while select was off $0.51 at $190.16.  The choice/select spread narrowed to $1.97 from $2.26 with 57 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday was $147.05 per cwt, up $1.20.  This compares with Thursday’s Sep settlement of $145.55, up $2.25.