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USDA predicts more pork and poultry, less beef, lower feedgrain prices
Story Date: 5/11/2012
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Source: Rita Jane Gabbett, MEATINGPLACE, 5/10/12
Total U.S. meat production in 2013 is projected to be above 2012 as higher pork and poultry production more than offsets continued declines in beef production, according to USDA’s World Agricultural Supply and Demand Estimates report.
In its first 2013 forecasts, USDA predicted lower feed costs and relatively strong, albeit declining, hog, broiler and turkey prices would provide incentives for continued pork and poultry expansion.
The total meat production forecast for 2012 is raised from last month as production of beef, pork, broilers and turkey is forecast higher.
Beef
Beef production will decline in 2013 due to tighter supplies of fed cattle and lower cow slaughter. Tight U.S. beef supplies and high cattle prices are expected to constrain beef exports in 2013.
Beef production in 2012 is raised on heavier carcass weights and larger expected cow slaughter. The beef export forecast for 2012 is reduced from last month on expected weaker first-quarter exports. Forecasts for subsequent quarters are unchanged. Beef imports are expected to be higher in 2012 as U.S. cow slaughter declines in response to reduced cow inventories and increased retention.
The cattle price forecast for 2012 is reduced to $123 to $128 per hundredweight from last month’s forecast of $124 to $130. For 2013, cattle prices are forecast to rise to a range of $124 to $135 per hundredweight due to tight supplies of fed cattle.
Pork
Pork production is raised fractionally on slightly heavier carcass weights.
Pork production in 2013 is expected to increase at about the same rate as 2012 as producers increase farrowings modestly, but the number of pigs per litter continues to grow.
Pork exports are expected to gain in 2013 as supplies increase and hog prices decline. Pork imports are forecast unchanged from 2012. The pork export forecast for 2012 is raised marginally as stronger expected first-quarter exports more than offset a slightly weaker forecast for the second half of the year.
The hog price forecast for 2012 is reduced to a range of $61-$63 per hundredweight from $62 to $65 forecast last month on weaker pork demand. For 2013, USDA forecast average hog prices at $57 to $61 per hundredweight.
Poultry
Broiler and turkey production for 2013 are also forecast higher as producers benefit from lower feed costs; however, increasing production will weigh on broiler and turkey prices, moderating the rate of expansion.
Broiler and turkey production forecasts for 2012 are raised on first-quarter production data; production forecasts for subsequent quarters are unchanged.
Broiler exports for 2012 are raised on higher expected first-quarter shipments. Broiler exports for 2013 are forecast lower in the face of improving domestic demand.
Broiler prices in 2012 are reduced to a range of 86 cents to 89 cents a pound from last month’s range of 87 cents to 91 cents per pound. Broiler prices in 2013 are forecast in a range of 82 cents to 89 cents per pound.
Impact on processors
Deutsch Bank analyst Christina McGlone called the lower hog prices negative for Smithfield Foods.
She said heifer retention and eventual herd rebuild was positive for Tyson Foods, but noted the interim period will lead to tighter cattle supplies.
McGlone also said potential rebuild in poultry flocks merits watching for Tyson Foods and Sanderson Farms investors.
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