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CME: Beef Production for 2019 Projected to Rise

14 May 2019

US - USDA issued last week its first forecasts for meat supplies/prices in 2020, reports Steiner Consulting Group, DLR Division, Inc.

Beef production for 2019 is currently projected to be 27.335 billion pounds, 397 million pounds or 1.5 percent higher than a year ago. This forecast is notably lower than what was expected last fall and reflects both a slower than expected slaughtering rate and lower fed cattle weights.

While beef production is expected to increase again next year, a function of higher slaughter and weights, the rate of increase will continue to slow down. USDA now expects beef output next year to be 27.576 billion pounds, 241 million pounds or 0.9 percent higher than a year ago.

Beef per capita disappearance, arguably a better indicator of price direction that simply production estimates, are expected to be unchanged in 2020 vs. 2019 and only marginally higher than in 2018. Beef trade will be a key factor for the market next year.

USDA is currently forecasting that the US will have a positive beef trade balance of 285 million pounds, with imports down 52 million (-1.8 percent) and exports up 74 million lb. (+2.3 percent). Global economic outlook and spread of ASF in Southeast Asia remain bullish for beef prices in the short to medium term.

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