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Beef, pork, broiler production boost USDA protein forecast

Beef, pork, broiler production boost USDA protein forecast
Higher feed costs expected to limit broiler and pork production in 2021.

The U.S. Department of Agriculture released the latest “World Agricultural & Supply Demand Estimates” report this week, raising its forecast for 2020 total red meat and poultry production to 106.61 billion lb. due to higher beef, pork and broiler production.

Beef production was raised to 27.22 billion lb. from the previous month's report as a result of higher expected slaughter of both fed and non-fed cattle. USDA raised its pork production forecast to 28.18 billion lb. on a more rapid pace of slaughter.

The broiler production forecast was raised to 44.71 billion lb. on expectations for higher production for the fourth quarter. Turkey production was virtually unchanged, at 5.74 billion lb., as higher production in the third quarter largely offset a lower fourth-quarter forecast.

Egg production was reduced very slightly to 9.5 billion doz. eggs as lower reported table egg production in the third quarter more than offset higher hatching egg production.

Compared to the previous month, USDA raised the milk production forecasts for 2020 and 2021 to 222.5 billion lb. and 225.9 billion lb., respectively, on stronger growth in milk per cow and higher expected dairy cow inventory.

USDA raised the 2021 total red meat and poultry forecast to 107.47 billion lb. as expectations for increased broiler production more than offset a lower pork production forecast. Broiler production was raised from the previous month, but higher feed costs are expected to temper production growth. The pork production forecast was reduced slightly due to higher feed costs. Beef and turkey production forecasts were unchanged from last month. USDA raised the 2020 egg production forecast from last month based on higher expected hatching egg production.

The 2020 and 2021 cattle price forecasts were unchanged from last month, at $108.71/cwt. and $114/cwt., respectively. USDA reduced the fourth-quarter 2020 hog price forecast to $43/cwt. on recent price weakness but made no change to the 2021 hog price forecast.

The 2020 broiler and turkey price forecasts, at 78.1 cents/lb. and $1.06/lb., respectively, were raised from the previous month based on current prices, but no changes were made to 2021 prices.

The 2020 and 2021 egg price forecasts were unchanged from the previous month.

USDA raised the 2020 and 2021 all-milk price forecasts to $18.25/cwt. and $17.70/cwt., respectively.

Market recap

February live cattle futures posted strong gains on Monday, closing at $115.075/cwt. Contracts closed higher Wednesday at $115.275/cwt. before falling Thursday to $114.08/cwt.

January feeder cattle futures started the week sharply higher, closing at $140.725/cwt. on Monday. Contracts fell Tuesday and Wednesday, but the losses were recovered by Thursday’s close of $140.725/cwt.

The Choice cutout closed higher at $226.50/cwt., while the Select cutout closed lower at $208.24/cwt.

February lean hog futures closed higher Monday at $67.45/cwt. but fell Tuesday and Wednesday. However, contracts recovered some of the losses by Thursday’s close of $66.725/cwt.

The pork cutout was mixed this week. The wholesale pork cutout was lower at $83.08/cwt. Loins were higher at $75.25/cwt., while hams were lower at $84.27/cwt., respectively. Bellies continued to fall, closing lower at $103.69/cwt.

Hogs delivered to the western Corn Belt were lower, closing at $60.07/cwt.

The U.S. Department of Agriculture reported the Eastern Region whole broiler/fryer weighted average price at 67.32 cents/lb. on Nov. 6.

According to USDA, egg prices were unchanged, with a usually steady undertone. Supplies were usually moderate to, in some instance, available. Offerings were light to moderate, and demand was moderate to good.

Large eggs delivered to the Northeast were unchanged at $1.07-1.11/doz. Prices in the Southeast and Midwest were unchanged at $1.12-1.15/doz. and 99 cents to $1.02/doz., respectively. Large eggs delivered to California were unchanged at $1.76/doz.

For turkeys, USDA said the market was steady to weak, and demand was light to good. The price range for hens and toms was $1.15-1.20/lb.

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