WASDE: Beef Production Down, Cattle Prices To Increase

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Total U.S. meat production for 2011 is projected to be slightly higher than 2010 as increased pork and poultry production more than offset declines in beef production. Beef production for 2011 declines on tighter supplies of cattle. Declining cow inventories and calf crops over the past several years, coupled with expected lower imports of cattle during 2011 will result in a smaller pool of cattle available for slaughter. Pork production for 2011 is expected to increase as improved returns encourage increased sows farrowing and carcass weights are heavier. Both broiler and turkey production for 2011 are forecast higher as producers respond to improved returns. Egg production is forecast higher as production gradually builds upon the measured expansion currently underway.

The total meat production forecast for 2010 is reduced from last month as lower red meat production more than offsets higher broiler and turkey production.

Forecast beef production is reduced as slightly higher cattle slaughter is offset by expected lighter cattle weights. The pork production forecast is reduced as supplies of hogs for slaughter are tighter than expected. Broiler production is raised as improved returns are expected to encourage increased hatchery activity. The turkey production forecast for the first half of the year is raised based on the most recent slaughter data.

Despite an improved world economy, U.S. beef exports for 2011 are expected to be lower as U.S. production declines and more competitor beef becomes available. Pork and broiler exports are expected to benefit from an improved global economic climate and increased U.S. production. Beef imports are expected to be higher for 2011 as U.S. cow slaughter declines in response to lower cow inventories. Pork imports are forecast higher with relatively strong U.S. pork demand.

The 2010 red meat export forecast is little changed from last month with fractionally higher beef exports reflecting the pace of trade to date. Pork exports are unchanged. Beef imports are forecast lower as competitor supplies of beef are tight and global beef demand is improving with the economic recovery. Broiler exports are forecast lower than last month on weaker shipments to several markets.

For 2011, cattle prices are forecast to rise as demand improves and production declines. Hog prices are forecast lower due to increased production. Broiler and egg prices are also forecast higher on demand strength carried over from 2010. Turkey prices will be slightly lower in 2011.

Cattle, hog, and broiler price forecasts for 2010 are raised from last month as demand improves and supplies are tight. However, turkey and egg price forecasts are reduced.

Source: USDA/WASDE



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