Pass the Meat, Please

November 3, 2017 03:56 PM

Sow numbers and pigs per litter are up. Beef producers are saving almost every heifer possible to add to the cowherd. And chicken producers have expanded flocks.  

“As long as we keep increasing record amounts of meat each year, prices will decline,” says Scott Brown, University of Missouri Extension specialist.

The problem becomes what to do with the growing meat supply. “We eat it, export it or cut the price to sell it,” Brown says. “The old adage that ‘the cure for high prices is high prices’ still applies.”

Total Red Meat and Poultry Production

The U.S. is on track to produce slightly more than 100 billion pounds of read meat and poultry in 2017.

January through August:

2016: 63.9 billion pounds

2017: 65.8 billion pounds

Pig Productivity Adds to Expansion

The average pigs saved per litter has been on a steady incline, with the exception of a large drop in 2014 because of Porcine Epidemic Diarrhea (PED) virus. Pigs saved per litter by size of operation range from 7.80 for operations with 1 to 99 hogs to 10.70 for those with more than 5,000 hogs, according to the most recent USDA report.

Exports and domestic demand for pork are key to maintain producer profits, say industry analysts. Both appear to be on the upswing, and new packing capacity will help maintain profitable prices.

Supply Challenges in Beef Production

Beef herd expansion from 2014 to 2017 has been the “most aggressive three-year start to any expansion on record,” says Trevor Amen, animal protein economist at CoBank. “Recent slaughter numbers and the cattle on feed mix indicate the expansion rate is slowing, but barring significant export market disruptions or weather events, expansion will continue through the end of the decade.”

USDA estimates the 2017 calf crop will top 36 million head, an increase of 2.9% versus 2016 and an 8.3% increase compared with the cyclical low calf crop in 2014.

Poultry Prices Slightly Lower

In response to high meat prices, chicken producers quickly built flocks in July. However, estimates of August production suggest only marginal growth versus 2016, contributing to a downward revision of third-quarter production to 10.35 billion pounds. Production in the fourth-quarter was cut to 10.30 billion pounds. Weekly prices for whole broilers declined to 90¢ per pound in early September following typical seasonal patterns.

Turkey production in July totaled 468 million pounds. Prices are forecast at $1 per pound for the end of year.


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