Looking Ahead At US Meat Production

US - The forecast for total 2007 U.S. meat production is raised reflecting stronger fourth - quarter production estimates for red meat and poultry, reports the USDA in the latest World Agricultural Supply and Demand Estimates (WASDE) report.

12 November 2007

3 minute read

North America

Cattle slaughter forecasts are increased as packers bid aggressively for fed cattle and cow slaughter remains large. Hog slaughter is expected to remain strong through the fourth quarter. The broiler production forecast is raised as September production was larger than expected and hatchery data point to continued expansion. Turkey production forecasts are also raised. For 2008, total meat production is increased as higher broiler and turkey production forecasts more than offset lower beef production. Pork production is reduced slightly as higher feed prices are expected to limit weight gains. Egg production forecasts are reduced as the hatching egg flock is expanding slower than expected despite record egg prices.

The 2007 and 2008 meat export forecasts are reduced. U.S. beef export forecasts are reduced reflecting the suspension of exports to South Korea pending successful negotiation of new import protocols. Pork exports are raised as lower prices and a weaker dollar are expected to support increased sales.

Forecasts for 2007 and 2008 cattle prices are reduced. Current cattle prices are weakening and larger supplies of meat are expected to pressure cattle prices. Hog prices are lower for 2007 and early 2008 reflecting large slaughter and higher total meat supplies. The broiler price forecast is reduced for 2007 but unchanged for 2008 as continued demand strength is expected to support near-record prices despite somewhat larger supplies. Egg prices are increased slightly for 2007 reflecting current demand strength but are unchanged for 2008.

Forecast milk production for 2007 and 2008 is reduced. Cow herds and milk per cow are expanding gradually although USDA's Milk Production report released in October indicated that the pace is slightly below earlier expectations. Imports are reduced for both 2007 and 2008. A weak U.S. dollar and tight milk supplies in major exporting countries are expected to result in lower imports on both a fat and skim-solids basis. Ending stocks for 2007 on a fat basis are forecast higher than last month reflecting continued large supplies of butter. Skim-solids stocks are unchanged from last month as nonfat dry milk (NDM) stocks are expected to diminish as product moves into export channels.

Dairy product prices are changed slightly in 2007 and 2008. Cheese price forecasts are raised in both years reflecting good demand and modest growth in supplies. Butter prices are reduced for 2007 and early 2008 as supplies have been building. NDM prices are reduced for 2007 on rising inventories. Dry whey prices are little changed. As a result of stronger cheese price forecasts, the Class III price forecast is raised for 2007 and 2008. The Class IV price forecast is lowered for 2007, but unchanged in 2008. The all milk price is forecast at $18.95 to $19.05 per cwt for 2007 and $17.70 to $18.60 per cwt for 2008, unchanged from last month.