Source: MEATINGPLACE, 2/24/17

Record meat and poultry production will outpace demand in 2017, pressuring prices for cattle and hogs, while broiler prices remain flat, USDA economists projected at USDA’s annual Agricultural Outlook Forum.

Production of beef, pork, broilers and turkey are all projected to increase, as lower feed costs and improved forage conditions spur expansion of flocks and herds, USDA Chief Economist Robert Johansson said in prepared remarks. Disease outbreaks that affected hog production in 2014 and turkey production in 2015 provided further impetus for growth, he noted.

Fed steer prices are forecast to decline to $112 per hundredweight, down about 7 percent. Hog prices are expected to fall below $44/cwt, down nearly 6 percent from last year. Broiler prices are expected to average 85 cents per pound, up fractionally from 2016.

“Domestic U.S. consumption can only grow so much given our projection of U.S. population and income growth. Furthermore, U.S. livestock can only eat so much feed, and alternative uses such as ethanol for the motor fuel pool are assumed to be relatively stable over the next 10 years. As a result, increases in beef, pork, poultry, dairy, feed and food grains, and oilseeds for the most part need to be sold abroad,” Johansson said.

U.S. meat exports are expected to increase in 2017 as larger supplies and lower prices increase the attractiveness of U.S. products. Over the next 10 years, broiler exports are expected to grow by about 20 percent, pork exports are expected to expand about 22 percent, and beef and veal exports are expected to grow by 37 percent. This, despite Russia’s continued ban on imports of U.S. meat and relatively slow economic growth in a number of markets, he noted.

100 billion pounds
Total red meat and poultry production is forecast to increase more than 3 percent and breach the 100-billion-pound-level for the first time, said livestock analyst Shayle Shagam of USDA’s World Agricultural Outlook Board.

Commercial beef production is forecast to increase by about 3 percent, to 26 billion pounds, as the U.S. cattle herd enters its fourth year of expansion in 2017.

Commercial pork production is forecast at a record 26.17 billion pounds, up 5 percent from last year. Although the increase will be driven by higher slaughter hog numbers, carcass weights are forecast at about 212 pounds, slightly above 2016.

Broiler meat production is forecast 2 percent higher at a record 41.53 billion pounds. After broiler-type layer flocks increased through the first quarter of 2016, flocks were steadily below year-earlier levels for the remainder of the year.

Turkey production is expected to increase 2 percent to a record 6.12 billion pounds, after producers increased flocks in 2016 as the sector recovered from highly pathogenic avian influenza (HPAI).

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