WASDE Raises 2017 Meat Production Forecast

The USDA Thursday raised its forecast for total 2017 US meat production from its outlook a month ago as increases in commercial beef and broiler production more than offset expected declines in pork and turkey production.

The USDA’s World Outlook Board made the predictions in its monthly World Agricultural Supply and Demand Estimates report, where it went on to say the increase in beef production reflected relatively large placements of cattle into feedlots in the second quarter.  This likely will affect fourth-quarter cattle slaughter, the report said.




Specifically, 2017 beef production was forecast at 26.699 billion pounds, up 204 million pounds, or 0.77%, from the July projection of 26.495 billion.  This would be a gain of 1.478 billion pounds, or 5.86% from last year’s production of 25.221 billion.

In Thursday’s report, the World Outlook Board also estimated 2018 beef production at 27.360 billion pounds, up 295 million, or 1.09%, from the July projection of 27.065 billion.  If both forecasts are accurate, this would be a gain of 661 million pounds, or 2.48%, over this year’s estimate of 26.699 billion.

Fed cattle prices for 2017 and 2018 were reduced in the latest report from a month ago as larger forecast supplies of fed cattle were expected to pressure prices from the supply side.

The latest projected average fed steer price was expected to fall into a range of $120 to $122 per cwt, down from the July estimate of $121 to $125.  For 2018, the estimated cattle price falls even more to a range of $112 to $121, down from July’s estimate of $113 to $123.  This compares with the 2016 average price of $120.86 per cwt.




The estimate for 2017 US pork production was lowered from a month ago because of lower expected slaughter in the third quarter, the WASDE report said.

Pork production for the year was estimated at 25.806 billion pounds, down 28 million, or 0.11%, from the July estimate of 25.834 billion.  Still, this was up 865 million, or 3.47%, from the 2016 total of 24.941 billion.

For 2018, the World Outlook Board estimated US pork production at 26.735 billion pounds, unchanged from a month ago, but up from this year’s new estimate.

Prices for barrows and gilts this year were expected to average $51 to $52 per cwt, up from the July estimate of $48 to $50.  This also was up from the 2016 average of $46.16.

However, the 2018 average price was estimated at $46 to $50, up slightly from the July estimate of $46 to $49.




The weighted average of fed cattle sold on the livestock exchange video auction Wednesday was $115.04 per cwt, down $0.96 from $116.00 last week.  Cattle with 1- to 9-day delivery sold at $115.28, versus $116 last week.  Those with 1- to 17-day delivery sold at $114.50, and cattle with 17- to 30-day delivery sold at $114.00.

Cash trading took place this week at $114 to $116 per cwt on a live basis, mostly $115, down about $2 from last week.  Dressed action was reported at $184 to $185, down about $2.

The USDA’s choice cutout Thursday was down $1.03 per cwt at $200.63, while select was off $0.42 at $196.19.  The choice/select spread narrowed to $4.44 from $5.05 with 108 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Wednesday was $147.93 per cwt, down $1.55.  This compares with Thursday’s Aug settlement at $141.17, down $0.35.