The U.S. Department of Agriculture raised its 2019 red meat and poultry production forecast from last month to 104.5 billion lb., which it said was due to forecasts for greater pork and broiler production that more than offset lower beef and turkey production forecasts.
The 2019 beef production forecast was reduced to 27.1 billion lb., primarily as a result of lighter carcass weights and slightly lower third-quarter steer and heifer slaughter, USDA said. The “Cattle” report will be released July 19, which USDA said will provide a midyear estimate of U.S. cattle inventory as well as producer intentions regarding retention of heifers for beef cow replacement.
USDA raised the pork production forecast to 27.6 billion lb. from last month on higher-than-expected second-quarter commercial hog slaughter. Additionally, the “Quarterly Hogs & Pigs” report, released on June 27, indicated a first-half pig crop 4% above 2018, which supported a higher second-half production forecast.
Second-quarter broiler production was raised on slaughter data, but no change was made to the outlying quarters. Turkey production was lowered slightly on second-quarter production data.
USDA also raised its 2020 red meat and poultry production forecast to 105.9 million lb. based on expectations for increased pork production.
“Although producers indicated intentions to farrow about the same number of sows in the second half of 2019, growth in pigs per litter will help support higher numbers of pigs for slaughter in 2020,” USDA noted.
Beef, broiler and turkey forecasts remained unchanged from the previous month.
The beef import forecast was raised for 2019, but the export forecast was lowered from the previous month on recent trade data. The 2020 beef trade forecasts were unchanged from last month.
The pork export forecast for 2019 was lowered due to recent trade data, but no change was made to the 2020 export forecast. The 2019 broiler export forecast was raised on recent trade data and stronger expected global demand in the second half of the year, while the turkey export forecast was little changed. USDA left both the 2020 broiler and turkey export forecasts unchanged.
As for prices, USDA lowered the 2019 cattle price forecast to $115.50/cwt. but left the 2020 forecast unchanged from the previous month at $119.
Hog price forecasts were lowered to $51.50/cwt. based on recent prices and expectations of pressure from increased pork production in late 2019. Hog prices for 2020 were reduced slightly to $59/cwt. based on increased supply pressure.
Broiler price forecasts were lowered to 88.0 cents/lb. for 2019 due to current price weakness and continued slow demand, but no changes were made to the 2020 broiler price forecasts. USDA raised the turkey price forecasts for 2019 and 2020.
The milk production forecast for 2019 was unchanged, but the forecast for 2020 was reduced on slower expected growth in milk per cow. The USDA “Cattle” report will also provide a midyear estimate of the dairy cow inventory and producer intentions regarding retention of heifers for dairy cow replacement, the agency relayed.
USDA raised the fat basis import forecasts for both 2019 and 2020 from the previous month based on expectations for increased imports of butterfat products. Fat-basis exports for 2019 were reduced on slower expected shipments of butterfat products. The 2020 fat basis export forecast was also reduced on expectations that U.S. butter exports will continue to be less competitive globally.
The skim solids-basis import forecasts for 2019 and 2020 were unchanged from the previous month. However, USDA reduced its skim-solids basis exports for 2019 and 2020 from the previous month based on smaller exports of lactose, whey products and other dairy products. The 2019 cheese and nonfat dry milk (NDM) price forecasts were increased from the previous month, while butter and whey price forecasts were reduced.
USDA raised the 2020 cheese price forecast fractionally as demand is expected to improve, but it lowered the butter price forecast. The whey price forecast was also reduced as export prospects remain relatively weak. The NDM price forecast was unchanged. USDA raised the 2019 Class III price as the higher cheese price more than offsets a lower whey price, and the Class IV price was raised as a higher NDM price more than offsets the lower butter price. The 2020 Class III price forecast was unchanged as the fractionally higher cheese price will be offset by a lower whey price. USDA said the Class IV price forecast reflects a lower butter price. The 2019 all milk price is projected to be higher, at $18.20/cwt., but the all-milk price forecast for 2020 was slightly lower than the previous month, at $18.85.