CME: Pork and Poultry Production Will Expand as Beef Declines15 May 2013
US - Pork and poultry production should expand in 2014 while beef supplies will decline further in the coming months and years, write Steve Meyer and Len Steiner.
According to the latest USDA supply/demand updates, total beef production in 2013 is currently estimated at 25.190 billion pounds, 806 million pounds or 3.1 per cent less than a year ago.
Beef estimates for the current year have been slowly revised higher in recent months, in part reflecting the impact of heavier carcass weights but also larger than expected cow slaughter numbers. The first USDA forecast for 2014 currently pegs total US beef production at 24.188 billion pounds, 4 per cent lower than in 2013.
The decline in beef production should help support beef prices into next year. High beef prices in the US market will likely encourage more beef imports while reducing the volume of beef going to export.
Beef imports in 2013 are expected to be close to 2012 levels but they are forecast to hit 2.8 billion pounds in 2014, a 10 per cent increase compared to 2013 levels and the largest beef import volume since 2007. Beef exports for 2014 are forecast at 2.3 billion pounds, down 5 per cent from 2013 levels.
At this point, USDA expects the US to once again become a significant net beef importer. The increase in imports will help offset only a portion of the big decline in domestic output. Per capita beef availability in the domestic market in 2013 is currently forecast at 56.1 pounds per person (retail wt. basis), 0.7 per cent higher than a year ago.
Per capita beef availability in 2014 is forecast at 54.3 pounds per person, down 3.2 per cent from 2013 levels and 5.4 per cent lower than what it was in 2012.
While beef supplies will remain limited, USDA currently forecasts both pork and poultry production and availability to expand in 2013 and 2014. The forecast for higher output next year reflects estimates for a big rebound in US corn supplies and lower feed input costs. Corn production is currently expected to jump 31.2 per cent compared to a year ago and 14.4 per cent compared to two years ago.
USDA slightly lowered its estimate for US pork production in 2013 but that forecast is still about 1 per cent higher than 2012 levels. Producers have been able to bring more pork to market so far this year despite sharply higher feed costs.
Back in December, USDA expected 2013 pork output to contract but recent producer survey indicated that they appear to have weathered the spike in feed costs without much long term
impact on production potential.
Total pork production for 2014 is currently pegged at 24.042 billion pounds, half a billion pounds or 2.3 per cent higher than a year ago and only a few million pounds shy of US beef production. However, pork exports remain a key driver in the pork market, expected to increase 4.5 per cent in 2014. As a result, per capita pork availability in 2013 and 2014 will rise by less than 1 per cent .
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