The U.S. Department of Agriculture’s June “World Agricultural Supply & Demand Estimates” (WASDE) report revealed a reduction in the forecast for 2019 red meat and poultry production versus the May report. USDA said the decrease to 104.2 billion lb. was due to lower projected beef, pork and turkey production, which more than offset higher broiler production.
According to the WASDE report, the lower beef production forecast of 27.2 billion lb. largely reflects reduced steer and heifer slaughter in the second half of the year. The pork production forecast, at 27.3 billion lb., was lowered from last month primarily because the pace of slaughter to date has been slower than expected. USDA raised the broiler production forecast to 43.1 billion lb. based on recent hatchery data and expectations for heavier bird weights. Turkey production, on the other hand, was lowered slightly to 5.9 billion lb.
USDA also lowered the 2020 red meat and poultry production forecast to 105.7 billion lb. from the previous month.
“Production growth for livestock and poultry is expected to be slower as producers respond to higher feed costs,” USDA noted, adding that the beef production forecast was reduced due to lower expected steer and heifer slaughter as incentives to add weight on pasture will slow the pace of feedlot placements.
For 2019, the cattle, hog and broiler price forecasts were reduced from last month, reflecting current price weakness. However, the 2019 turkey price forecast was raised slightly based on higher second-quarter prices. For 2020, USDA reduced cattle, broiler and egg price forecasts on continued demand weakness. The 2020 hog price forecast remained unchanged as slower production growth and stronger exports should support prices. The 2020 turkey price forecast was also left unchanged.
USDA raised the beef import forecast for 2019 based on recent trade data, but the export forecast was reduced from the previous month on the current pace of beef exports to a number of trading partners. No change was made to the 2020 beef trade forecasts.
The removal of Mexico’s tariffs on U.S. pork products in late May led USDA to raise both the 2019 and 2020 export forecasts.
On the poultry side, USDA slightly reduced the 2019 broiler export forecast but left the 2020 forecast unchanged. The turkey export forecasts remained unchanged for 2019 and 2020.