Increases in both broiler and turkey production led the U.S. Department of Agriculture to raise its 2019 forecast for total meat production to 104.62 billion lb. in August. The increase in poultry production more than offset declines in beef and pork production, the agency said.
Broiler production was raised to 43.31 billion lb. based on June production data and the expectation for a continued higher proportion of heavier-weight birds in the slaughter mix. Turkey production was raised to 5.89 billion lb.
According to USDA, the beef production forecast decrease to 27.04 billion lb. was largely the result of a slower pace of cattle slaughter in the third quarter and expectations for lighter carcass weights through 2019. The pork production forecast was reduced to 27.33 billion lb. on a slower expected pace of slaughter during the third quarter.
For 2020, USDA raised the red meat and poultry production forecast to 106.48 billion lb. based on anticipated increases in beef and poultry production.
USDA said the beef production forecast was raised from the previous month due to a higher pace of first-half marketings. However, it also noted that the 2019 calf crop estimate in the July “Cattle” report implies lower-than-previously expected marketings in the latter part of 2020.
On the broiler side, continued growth in average bird weights is expected to result in increased broiler production in 2020, USDA noted. Turkey production was raised only slightly.
USDA left the forecast for pork production unchanged from the previous month.
Regarding prices, USDA raised the fed cattle prices for 2019 to $116.50/cwt. on current price strength. The 2020 price forecast was also raised to $119/cwt.
The 2019 hog price forecast was lowered to $51.00/cwt. due to recent price pressure, but the 2020 price forecast was unchanged from last month, at $59/cwt.
Based on an expectation for larger supplies, USDA lowered the broiler price forecasts for 2019 and 2020 to 86.50 cents/lb. and 92 cents/lb., respectively. The turkey price forecast for 2019 was raised to 88.50 cents/lb., but no change was made to the 2020 turkey price forecast.
The milk production forecasts for 2019 and 2020 were reduced from last month based on expectations for a smaller dairy herd and slower growth in milk per cow.
For 2019, USDA raised the fat basis import forecast from last month on strong demand for imported butter, while the fat basis export forecast was reduced slightly. For 2020, the fat basis import forecast was raised on continued strong import demand for butter, while the export forecast was reduced due to slowing sales of butterfat.
The skim-solids basis import forecast for 2019 was raised on higher imports of milk protein concentrates and other dairy products, but the export forecast was reduced primarily on weaker-than-expected sales of nonfat dry milk (NDM). USDA raised the skim-solids basis import forecast for 2020 but lowered the export forecast due to anticipated continued weak demand for NDM and increased global competition.
USDA raised cheese, butter and whey price forecasts for 2019 and reduced the NDM price forecast based on current price weakness and slowing demand. For 2020, price forecasts for cheese, butter and NDM were lowered from the previous month, but the whey price forecast was unchanged. The 2019 Class III price forecast was raised to $16.30/cwt. on higher cheese and whey price forecasts. The 2019 Class IV price forecasts was reduced to $18.30/cwt. from the previous month as the lower NDM price forecast more than offsets the higher butter price. For 2020, the Class III and Class IV product price forecasts were lowered due to weaker dairy product prices. USDA raised the 2019 all milk price forecast to $18.30/cwt. but lowered the forecast for 2020 from the previous month to $18.80/cwt.