USDA Expects Red Meat & Poultry Output to Decline in 2010

February 21, 2010 06:00 PM

Roger Bernard, Farm Journal Policy & Washington Editor

Red meat and turkey production is expected to continue to decline in 2010 while broiler production is seen rising gradually which will be "price supportive for livestock and poultry," according to USDA predictions released at their Outlook Forum.

CATTLE: The U.S. cattle herd is not seen expanding in 2010 and USDA noted that "with nearly 50 and 60-year lows for the beef cow herd and calf crop, herd expansion and consequently increased beef production will be a gradual process with a potential rebound in beef output not occurring until 2013."

Commercial beef production is seen at 25.7 billion lbs., in 2010, down1% from 2009. Cattle slaughter is expected down 1% and cattle carcass weights are seen declining to 777 lbs., down 2 lbs. from 2009.

Beef exports are forecast to rise 9% to 2.04 billion lbs., but still are not reaching pre-BSE levels. USDA noted the 275 million lbs., of beef exported to Japan in 2009 was up 19% but still was "less than a third of pre-BSE level shipments. Mexico was the top customer for U.S. beef and Canada the second largest despite a 13% decline for Mexico and 7% drop for Canada, USDA noted.

Choice Nebraska steer prices are forecast at $85 to $91 per cwt., after the 2009 steer price of $82.68 per cwt. was the lowest since 2002. Retail beef prices are expected slightly higher than 2009.

HOGS: While returns to hog producers are forecast to return to the positive side later this year, USDA noted that for 26 of the last 28 months, hog producers have had negative returns -- losses of $21.53 per head in 2008, $26.04 per head in 2009 and $2.23 per head in January 2010 for farrow-to-finish operations, according to Iowa State University.

Commercial pork production is forecast at 22.5 billion lbs., down 2% from 2009 and carcass weights are forecast down from severe winter weather. USDA says carcass weights are down about 1 lb. so far in 2010 with more-normal levels expected for the second and third quarter.

Expectations are pork exports will reach 4.5 billion lbs., up 9% from 2009, still behind the record level of 4.7 billion lbs. registered in 2008. Pork exports began to improve in the fourth quarter of 2009 and USDA says exports in 2010 "will be supported by continued recovery in the global economy and the relatively weak U.S. dollar."

USDA expects live equivalent lean hog prices of $46 to $49 per cwt in 2010, up from $41.24 in 2009. Retail pork prices are expected down slightly from 2009.

BROILERS: Production is seen at 35.9 billion lbs., up about 1% from 2009 as a gradual increase is seen for the first three quarters of 2010 and a 3% boost is forecast for the fourth quarter.

Broiler meat exports, at 5.83 billion lbs., are seen down nearly 15% as "exporters face additional challenges that are expected to constrain shipments this year." USDA outlined issues with Russia and China that are expected to constrain U.S. broiler exports.

DAIRY: USDA analysts say there are several factors which likely keep milk prices from exceeding the prior peak of $19.21 per cwt. despite a three-year cyclical nature of milk prices since 1998. Milk supplies are expected to be at 188.9 billion lbs. in 2010, down 0.2% from 2009. Milk-per-cow is seen reaching 20,950 lbs., up 1.8% from 2009.

Dairy exports are also seen rising "significantly" in 2010 on both a fat solids and skim-solids basis, but USDA does not expect they will match loft levels seen in 2008.

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