USDA lowers meat production outlook, raises soybean meal price

Meatingplace, By Rita Jane Gabbett on 11/9/2017

USDA lowered its forecast for 2017 total red meat and poultry production from last month as lower beef, pork and turkey production more than offsets higher broiler production in its latest World Agricultural Supply and Demand Estimates report.

For 2018, USDA raised its total red meat and poultry forecast from the previous month, as higher expected beef and pork production more than offsets lower expected turkey production.

Beef

For 2017, the beef production forecast declined on a slower expected marketing pace for fed cattle in the fourth quarter and lighter carcass weights.

For 2018, beef production is raised from last month, as higher placements in the latter part of 2017 and first-half 2018 are expected to support higher marketings and fed cattle slaughter in 2018. However, carcass weights are expected to be slightly lower.

The beef import forecast for 2017 is raised from the previous month, but no changes are made to the 2018 beef import forecasts. Beef export forecasts for 2017 and 2018 are raised from the previous month on expected strong global demand for U.S. beef.

Average cattle price forecasts are raised for 2017 to $121.80 per hundredweight from $119.55 last month (steers, all grades). For 2018, the average price was raised to a range of $113 to $120 from last month’s range of $111 to $120.

Pork

USDA’s 2017 pork production forecast is reduced as lower expected fourth-quarter commercial hog slaughter is expected to more than offsets slightly heavier carcass weights.

For 2018, pork production is raised from last month on higher expected first-quarter slaughter and slightly heavier carcass weights. No changes are made to outlying quarters.

For 2017, the pork import forecast was reduced fractionally on recent third-quarter trade data, but no change is made to the outlying pork import forecasts. The 2017 and 2018 pork export forecasts are lowered from the previous month on slower-than-expected export demand in the third quarter, which will carry forward into 2018.

The hog price (barrows and gilts) forecast is unchanged for 2017 at $49.01 per hundredweight. USDA reduced its forecast for first-quarter 2018 hog prices on larger slaughter hog availability, but the annual hog price forecast remains unchanged at $43 to $47.

Poultry

For 2017, the broiler production forecast is raised on third-quarter slaughter data, but no change is made to the fourth-quarter forecast. The turkey forecast is reduced slightly on lower-than-expected third-quarter slaughter data; no change is made to the fourth-quarter forecast.

The 2018 broiler production forecast is unchanged from the previous month. Turkey production forecasts are lowered on weakness in prices, which will dampen expansion in 2018.

Both 2017 and 2018 broiler export forecasts are reduced from the previous month on an expected slower pace in global demand. The annual turkey import forecast is reduced for 2017, while the export forecast is raised. No changes are made to 2018 turkey trade forecasts.

Broiler price forecasts remain unchanged from the previous month at 93.8 cents per pound for 2017 and a range of 85 cents to 92 cents per pound for 2018.

Turkey price forecasts are lowered for 2017 to 96.9 cents a pound from 98.8 cents per pound last month and lowered for 2018 to a range of 96 cents to $1.03 from last month’s range of $1.00 to $1.08, reflecting current price weakness.

Soybean meal

USDA decreased its soybean production forecast by 5 million bushels to 4.425 billion bushels on fractionally lower yields.

The agency raised its U.S. season-average soybean price projection to $9.30 per bushel, up 10 cents at the midpoint and raised the soybean meal price forecast to a range of $295 to $335 per short ton, up $5 on both ends of the range.

Corn

USDA raised its U.S. corn production forecast by 298 million bushels to 14.578 billion bushels, but also forecast increased feed and residual use and exports.

With supply rising faster than use, the corn ending stocks forecast was raised by 147 million bushels, but the season-average corn price was left unchanged with a midpoint of $3.20 per bushel.