August 20, 2012

The USDA's total US beef production forecast has been raised up to 11.604 million tonnes due to expected higher placement of feeder cattle into US feedlots and increased cow slaughter in late 2012 but 2.3% below 2011 levels.

Influenced by the higher feed prices and historically low US cattle slaughter, US beef production for 2013 is projected to decline 3.9%, to 11.147 million tonnes cwt (World Agricultural Supply and Demand Estimates (WASDE)).

While US cattle carcase weight are forecast to continue their upwards trend in 2012, the growth for the remaining of this year is expected to be tempered by higher feed costs, with 2013 average weights forecast to ease. US beef production for the third quarter 2012 is projected to remain 1.7% below year ago levels, before declining 4.4% on-year in the final quarter of the year.

US cattle price forecasts for 2012 have been revised down from July estimates, with the expectation of larger fed cattle marketing in 2012. However, prices are likely to remain strong in 2013, as total meat supplies remain historically tight.

Alongside an upwards revision in US beef production for 2012, the USDA anticipates US beef imports to ease slightly from last month's estimates, at 1.114 million tonnes cwt - 19% above 2011 levels. US beef exports have also been revised lower from July, to 1.124 million tonnes - 11% lower on-year.

US pork production has been revised down from the previous July forecast for both 2012 (10.5 million tonnes cwt) and 2013 (10.4 million tonnes cwt) - influenced by lower hog slaughter in the third quarter and lighter than expected carcase weights. The USDA's forecast pig crop is also lower in the second half of 2012, with declines continuing into 2013 - largely the result of sharply higher feed prices.

Meanwhile, US broiler production forecasts have been raised for 2012. Although broiler prices have fallen in 2012 following forecast increase in supplies and somewhat weaker demand, prices are expected to increase on the back of the tighter supplies in 2013.