December 13, 2010

 

USDA raised beef, pork count for 2010-11

 

 

USDA increased on Friday (Dec 10) its US beef and pork output forecast for 2010-2011 and trimmed its exports estimates in its monthly supply and demand report, changes that mildly drew bearish reactions from industry analysts.

 

"That is a surprise to us," Rich Nelson, analyst at Allendale, said of USDA raising 2010 US beef production to 26.288 billion lbs, up 1.3% from its November estimate.

 

He said the change could weigh on cattle futures on Friday (Dec 10).

 

USDA said the increase in 2010 beef production reflected higher slaughter levels in the fourth quarter, while the increase in pork was due to higher slaughter and an increase in hog weights.

 

In electronic trading, cattle futures were down US$0.0225 per lb Friday (Dec 10) morning. Hog futures were slightly higher in reaction to higher cash hogs on Thursday (Dec 11) and higher pork prices, analysts said.

 

The slight increase in USDA's 2011 beef production estimate to 25.637 billion lbs from November's 25.547 billion, surprised Dennis Smith, broker at Archer Financial Services.

 

"I don't believe the increase in beef production. The animals are not going to be there," he said.

 

The beef export estimate was lowered for 2010 to 2.303 billion lbs from 2.313 billion, but raised for 2011 to 2.300 billion from 2.270 billion.

 

USDA also lowered its beef import estimates for this year and next year, which has been in line with recent trends. Less beef production overseas has lessened imports, USDA said.

 

Beef imports for 2010 were estimated at 2.361 billion lbs, down 4.4% from the November estimate and the 2011 import estimate was cut 3.4% from November to 2.455 billion.

 

Pork exports for 2010 were trimmed to 4.255 billion lbs from 4.368 billion, while 2011 exports were unchanged at 4.675 billion.