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WASDE: Increase in Pork Production, Decrease in Beef

07:20AM May 10, 2012


LIVESTOCK, POULTRY, AND DAIRY: 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. Lower forecast feed costs and relatively strong, albeit declining hog, broiler, and turkey prices are expected to provide incentives for continued pork and poultry expansion. 
Pork production 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. 
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. Beef production will decline in 2013 due to tighter supplies of fed cattle and lower cow slaughter. Egg production is expected to decline in 2013 as producer returns in 2012 are affected by sharply lower egg prices. 
The total meat production forecast for 2012 is raised from last month as production of beef, pork, broiler, and turkey is forecast higher. Beef production is raised on heavier carcass weights and larger expected cow slaughter. 
Pork production is raised fractionally on slightly heavier carcass weights. Broiler and turkey production forecasts for 2012 are raised on first-quarter production data; production forecasts for subsequent quarters are unchanged. Egg production is forecast higher, largely due to higher first-quarter production.
Tight U.S. beef supplies and high cattle prices are expected to constrain beef exports in 2013. Pork exports are expected to gain in 2013 as supplies increase and hog prices decline. Broiler exports are forecast lower in the face of improving domestic demand. Beef imports are expected to be higher in 2012 as U.S. cow slaughter declines in response to reduced cow inventories and increased retention. Pork imports are forecast unchanged from 2012.
The beef export forecast for 2012 is reduced from last month on expected weaker first-quarter exports. Forecasts for subsequent quarters are unchanged. The pork export forecast is raised marginally as stronger expected first-quarter exports more than offset a slightly weaker forecast for the second half of the year. Broiler exports are raised on higher expected first-quarter shipments. 
For 2013, cattle prices are forecast above 2012 due to tight supplies of fed cattle. Hog, broiler, and turkey prices are forecast to decline from 2012 as production increases for all three meats. Egg prices are forecast higher on lower production.
The cattle price forecast for 2012 is reduced from last month based on recent declines in cattle prices. The hog price forecast is reduced on weaker pork demand. Broiler prices are reduced, but turkey and egg prices are forecast higher.
Milk production for 2013 is forecast to increase slightly. High feed prices and weakening milk prices during 2012 are expected to pressure producer returns, leading to declines in 2013 cow numbers. However, improvements in returns during 2013 will moderate the rate of decline. Milk per cow is expected to continue to grow, supporting increased milk production. Commercial exports are forecast to increase as the global economy improves and milk production increases. Imports will be slightly lower as domestic supplies increase. 
With improving demand and only modest increases in production, cheese, butter, and nonfat dry milk (NDM) prices are forecast higher. Whey prices will average near 2012 levels. Both Class III and Class IV prices are forecast higher, and the all milk price is forecast at $17.25 to $18.25 per cwt for 2013.
Forecast milk production in 2012 is raised from last month, primarily reflecting a slower decline in cow numbers and slightly faster growth in milk per cow. Cheese, butter, and NDM prices are reduced from last month on weaker-than-expected demand but whey demand has been stronger than expected and the price forecast has been raised. Class price forecasts are reduced. The milk price is forecast to average $16.90 to $17.40 per cwt.
See all of the data, coverage and analysis of today's World Agricultural Supply and Demand Estimates and Crop Production reports.