Source: Susan Kelly, MEATINGPLACE, 10/12/18


USDA lowered its forecast for total red meat and poultry production from the previous month, citing reduced fed cattle and commercial hog slaughter levels.

Beef production is reduced due to lower expected fourth-quarter fed cattle slaughter, and lower forecast carcass weights on a higher proportion of cows in the slaughter mix, USDA said in its World Agricultural Supply and Demand Estimates (WASDE) report released Thursday. The pork production forecast is lowered on smaller second-half commercial hog slaughter and lighter carcass weights.

Analysts at the Daily Livestock Report noted beef prices have held up better than many expected due to robust demand as well as domestic supplies that did not reach projected levels. But building inventories of cattle on feed imply more cattle available for marketing next year, causing USDA to revise its 2019 estimates upward, the DLR analysts said.

USDA reduced its broiler and turkey production forecasts on expectations for slightly lower slaughter for the remainder of the year.
For 2019, the total red meat and poultry production forecast is raised from the previous month as higher expected beef production more than offsets lowered forecasts for pork and broiler production. Beef production is raised from last month as larger placements in late 2018 and early 2019 are marketed during 2019. However, carcass weights are lowered for the early part of the year.

Pork
Pork production is forecast slightly lower from last month. Both hog slaughter and carcass weight forecasts are reduced.
Pork production next year is forecast up 5.2 percent and per capita consumption up 4.5 percent, according to the DLR analysts. However, “futures currently hold a significant premium for next year,” they wrote. “Clearly the market thinks production may not be as big as USDA thinks, and (African Swine Fever) should bolster trade.”

The 2019 broiler production forecast is reduced from last month while the turkey production forecast is unchanged.
Imports and exports

Beef import forecasts are lowered for 2018 and 2019 while beef export forecasts remain unchanged. Pork import forecasts for 2018 and 2019 are reduced from last month.

No change is made to the 2018 pork export forecast, but the 2019 export forecast is raised on strong global demand for competitively priced U.S. pork products. The 2018 and 2019 turkey export forecasts are reduced from last month on recent trade data and slower expected demand into next year.

Prices
The 2018 cattle price for the fourth quarter is raised from last month, but no change is made to the 2019 price forecast. The hog price forecast is raised for the last quarter of 2018 and into 2019 on expected demand strength. Broiler and turkey price forecasts are unchanged at the midpoint for 2018 and 2019.

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