April 11, 2007

 

US 2007 meat production seen to drop by 1.2 percent due to corn prices
 

 

As corn reaches an all-time high in a decade due to ethanol phenomenon, the US pork, beef and chicken will be slashed by 1 billion pounds in production this year as meat supply is seen to fall by 1.7 pounds per person, reports the US Department of Agriculture.

 

Overall, there will be 220 pounds (100 kg) of red meat and poultry per American in 2007, compared with 221.7 pounds (100.6 kg) per capita in 2006, the department said.

 

Despite upward trend on meat production annually, USDA has to cut its 2007 forecast by 1.07 billion pounds, or 1.2 percent, since January due to rising costs.

 

Breeders are using less corn and more wheat in their rations and are sending cattle and broiler chickens to market at lower weights.

 

With feed use down, the corn stockpile will tally 877 million bushels (22.3 million tonnes) when this year's crop is ready for harvest, USDA said. That would equal a four-week supply, compared with USDA's previous estimates of a meagre three-week carry-over of 752 million bushels.

 

The USDA said the 2006 corn crop would sell for an average US$3.10 a bushel at the farm gate, the highest price in a decade. The estimate was down 10 cents from March, "reflecting higher projected carryout, larger 2007 intended (planting) area and prices received by producers to date," said USDA.

 

Farmers say they will expand corn plantings by 15 percent this year, making a record crop possible.

 

USDA projects food prices will increase by 2.5 to 3.5 percent this year. Beef prices jumped 1.3 percent in February while pork fell 0.5 percent and poultry was stable.

 

The monthly outlook for crop and usage has USDA foresee soybean stockpile at a record 615 million bushels (16.7 million tonnes) when the fall harvest begins.

 

USDA also forecast record soybean crops in South America -- 58.8 million tonnes in Brazil and 45.5 million tonnes in Argentina.

 

Private analyst John Schnittker said bumper crops in Brazil and Argentina "will help the soybean situation a little bit next year, when we reduced acreage" of the oilseed. Many growers were expected to plant more corn.

 

The Agriculture Department said a slowdown in cotton exports could result in the largest year-end cotton stockpile since 1966/67 -- 9.2 million bales weighing 480 lbs (218 kg) each.

 

Soybean futures prices fell at the Chicago Board of Trade, pressured by the forecast of ample supplies. At mid-morning, soybeans for November delivery sold for US$7.86 a bushel, down 7-1/4 cents. December corn was US$3.86 a bushel, down ½ cent. September wheat was US$4.78, up 4-1/2 cents a bushel.