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Slaughter, weights push red meat production forecast higher

Fed cattle and hog price forecasts both lowered on recent price movements.

The U.S. Department of Agriculture raised its 2020 forecast for total red meat and poultry production from last month due to higher projected beef, pork, and broiler production.

USDA’s latest “World Agricultural Supply & Demand Estimates” report raised the beef production forecast from the previous month based on higher cattle slaughter and heavier cattle weights in the first half of the year. However, USDA lowered the forecast for beef production in the second half of the year due to lower anticipated steer and heifer slaughter in the second half.

“This reflects a smaller number of cattle outside feedlots implied by the Jan. 1 ‘Cattle’ report, which results in lower placements during 2020,” USDA said.

The pork production forecast was raised on expectations for increased hog slaughter and heavier carcass weights.

Regarding poultry and eggs, USDA raised the broiler production forecast based on recent hatchery data showing continued growth in the laying flock. The turkey production forecast, however, was lowered because hatchery data point to slower expected production growth. The egg production forecast was increased.

For 2020, USDA lowered the beef export forecast, slightly reflecting weakness in several markets, but no change was made to the beef import forecast. The pork export forecast was raised from last month based on expected robust global demand. The turkey export forecast was reduced from last month. Broiler and egg trade forecasts were unchanged for 2020.

USDA lowered fed cattle price estimates for the first quarter of 2020 from last month based on recent prices. As such, the 2020 annual price was lowered to $117/cwt. Hog price forecasts were also reduced -- from $54.50/cwt. last month to $49/cwt. -- due to increased production. Broiler, turkey and egg price forecasts were raised from the previous month as demand remains strong.

The milk production forecast for 2020 was unchanged from last month, as were the 2020 fat basis export and import forecasts. On a skim-solids basis, the import forecast was unchanged, while USDA raised the export forecast based on the strength of international demand for nonfat dry milk/skim milk powder. Annual product price forecasts for cheese and butter were lowered from the previous month because demand remains relatively weak. The 2020 nonfat dry milk forecast was unchanged, while the whey price forecast was raised from last month. The Class III price was reduced due to the lower cheese price forecast, and the Class IV price also was reduced, reflecting a lower butter price forecast. USDA reduced the 2020 all-milk price forecast to $18.85/cwt.

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