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WASDE: Meat Production Forecast Raised

07:20AM Jan 12, 2012

LIVESTOCK, POULTRY, AND DAIRY: The 2012 forecast of total red meat and poultry production is raised from last month, largely reflecting increased pork production.

USDA’s Quarterly Hogs and Pigs report estimated that the second-half 2011 pig crop was just over 2 percent higher than 2010 and indicated that producers plan a slight decline in sows farrowing in the first half of 2012. However, with continued gains in pigs per litter, more hogs are expected to be available for slaughter and the 2012 pork production forecast is raised from last month.

Beef production is little changed from last month although adjustments are made to the quarters. USDA will release its Cattle report on January 27, providing an indication of producer intentions for heifer retention in 2012 and feeder calf availability. Poultry production forecasts are unchanged. Egg production is lowered slightly for 2012. For 2011, small changes are made, with beef and pork production estimates raised, but broiler and turkey estimates lowered.

The egg production estimate is unchanged. Trade forecasts for beef, pork, broilers, and turkeys are unchanged for 2012. Beef, pork, and turkey estimates for 2011 are unchanged but broiler exports are raised due to stronger-thanexpected shipments in October.

Cattle prices for 2012 are unchanged from last month. The annual average hog price is lowered reflecting a lower first-quarter price forecast. The first-quarter broiler price is raised but the annual price range is unchanged. Turkey and egg prices are raised from last month. Prices for 2011 are adjusted to reflect December estimates.

The milk production forecast for 2011 is lowered slightly on lower expected cow numbers for the fourth quarter, but the forecast for 2012 is unchanged from last month. Larger-than-expected cheese imports for 2011 and into 2012 boost fat-basis import forecasts, but the strength of cheese imports in 2012 is offset by lower expected imports of skim products resulting in a lower 2012 skim-solids import forecast. The skim-solids exports estimate for 2011 is raised on higherthan-expected October exports.

The forecast 2012 cheese price is lowered, but forecasts for nonfat dry milk (NDM) and whey prices are raised. The higher whey price is expected to more than offset the lowered cheese price forecast, resulting in a higher forecast Class III price. The higher forecast NDM price results in a higher Class IV price. The all milk price for 2012 is raised to $18.30 to $19.10 per cwt.

Full WASDE report.

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