Source: Rita Jane Gabbett, MEATINGPLACE, 1/12/17
 


USDA raised its estimate for total red meat and poultry production for 2016 slightly, as well as its price forecasts for main feed ingredients corn and soybeans in its latest monthly World Agricultural Supply and Demand Estimates report.  

Beef production is raised on increased fed cattle slaughter and heavier carcass weights. Pork production for 2016 is raised based on slaughter data. Broiler and turkey production for 2016 is slightly lower based on the recent slaughter.

For 2017, USDA’s red meat and poultry production forecast is raised largely on higher forecast pork production, although forecasts of beef and broilers are also raised.

Beef
Higher expected cattle placements in late 2016 and early 2017 underpin higher forecast beef production in 2017.
USDA will release its semi-annual Cattle on Feed report on Jan. 31, which will provide estimates of heifers held for breeding along with indications of the availability of cattle for placement during 2017.

USDA raised its 2016 beef export estimate, based on November exports and expectations of strong export demand in December while lowering its beef import estimate.

For 2017, beef exports are raised as current demand strength is expected to carry into 2017. Imports are forecast higher on expectations of slightly larger supplies from Oceania in early 2017.

The 2017 cattle price forecast is increased on continued strong demand into the first part of 2017. Steer prices (total all grades) are now forecast to average $106 to $113 per hundredweight, up from last month’s forecast range of $103 to $111.

Pork
Pork production for 2017 is raised based on estimates from the December Quarterly Hogs and Pigs report. The 5 percent year-over-year increase in the September–November pig crop will be slaughtered largely in the second quarter of 2017.
Producers indicated intentions to farrow 1 percent 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.

USDA raised its 2016 pork export estimate, based on November exports and expectations of strong export demand in December.

The hog price forecast for first quarter 2017 is raised on demand strength, but price forecasts for subsequent quarters are lowered as hog supplies are expected to be large. The average 2017 prices for barrows and gilts are forecast in a range of $38 to $41 per hundredweight, down from last month’s range of $39 to $41.

Poultry
Broiler production is raised for early 2017 on recent hatchery data, but the turkey production forecast is unchanged.
Broiler and turkey 2016 exports are lowered on recent trade data.

Broiler prices are raised slightly on early-year demand strength and are now expected to average 80 cents to 86 cents per pound in 2017, up from last month’s forecast range of 80 cents to 85 cents per pound.  

Turkey prices are forecast lower on relatively soft demand and are now projected to average $1.05 to $1.13 per pound, down from last month’s forecast range of $1.07 to $1.15 per pound.

Corn
The U.S. corn outlook is for lower production, reduced feed and residual use, increased corn used to produce ethanol, and smaller stocks.

The projected range for the season-average corn price received by producers is raised 5 cents on both ends to $3.10 to $3.70 per bushel.

Soybeans
Soybean production is estimated at a record 4.307 million bushels, down 54 million from last month on lower yields. Soybean supplies are down 60 million bushels on lower production and imports. With exports and crush unchanged, ending stocks are projected at 420 million bushels, down 60 million from last month. Although soybean crush is unchanged, soybean meal production is reduced on a lower extraction rate. Soybean meal exports are also reduced on lagging sales.

The 2016/17 U.S. season-average farm price forecast for soybeans is projected at $9.00 to $10.00 per bushel, from $8.70 to $10.20, up 5 cents at the midpoint. The soybean meal price forecast is unchanged at $305 to $345 per short ton.

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