January 13, 2010

US meat output seen up on higher pork production

The forecast for US meat production for 2010 is raised from last month as pork production is raised.

USDA's Quarterly Hogs and Pigs report indicated that producers are reducing sow farrowings at a slower rate than expected and continued gains in pigs per litter support higher than previously forecast pig crops.

In addition, hog imports are increased for 2010. Beef production is reduced slightly from last month as cattle weights in the first quarter are expected to be lower.

Beef and broiler export forecasts for 2009 are raised but the pork export forecast is lowered. For 2010, beef exports are raised from last month but pork and broiler exports are reduced. Recently announced quotas and sanitary requirements for imports by Russia are expected to constrain exports of pork and broilers to that country, and broiler exports may also be limited by trade uncertainties in several other countries.

The hog price forecast is raised for 2010 as stronger-than-expected demand in late 2009 is expected to carry forward into 2010. Broiler prices are forecast higher as late 2009 strength in broiler demand should continue into 2010. Cattle prices are unchanged from last month.

The milk production forecast is raised for 2010 reflecting the relatively slow pace of cow liquidation in late 2009. Commercial dairy exports for 2009 are adjusted reflecting stronger skim-basis sales, but slightly weaker fat-basis sales. Import forecasts are reduced for 2009. Meanwhile, trade forecasts are unchanged for 2010.