WASDE Raises Beef Production Forecast, Lowers Pork & Poultry
USDA’s October World Agricultural Supply & Demand Estimates released Tuesday project an overall decline in 2021 red meat and poultry production. The October overall forecast was lowered as pork, broiler and turkey forecasts more than offset a higher beef forecast.
Total red meat and poultry production forecast for 2021 is 106.561 billion pounds, a decline of 54 million pounds from its September estimates.
WASDE raised its beef forecast 90 million pounds from September as lower expected steer and heifer slaughter are more than offset by higher cow slaughter and heavier average carcass weights. The October forecast calls for annual beef production to reach 27.832 billion pounds, which would be 658 million pounds more (2.4%) than 2020.
As a result of slightly higher beef production, USDA lowered its price projection for fed cattle. The October projection for fed steer prices on an annual basis for 2021 was $121.06 per cwt., revised down $1.14 from the previous month. For the fourth quarter of 2021, USDA projects an average fed steer price of $127.00 per cwt.
For the first quarter of 2022, USDA projects a fed steer price of $130 per cwt., followed by a second quarter average price of $128 per cwt.
The pork production forecast was reduced on lower expected fourth quarter hog slaughter. Broiler and turkey production forecasts were reduced on recent hatchery and slaughter data.
USDA’s Quarterly Hogs and Pigs report, released on September 24, estimated a lower pig crop for June-August and lower farrowing intentions for September November. This supports lower hog slaughter expectations for first half 2022. Slower expected growth in pigs per litter during 2022 resulted in lower expected hog supplies in the second half of the year.
Broiler and turkey production forecasts are reduced on expectations of a relatively slow response to improving margins.
USDA said that while higher expected placements of cattle in the second half of 2021 are expected to support higher early-year supplies of fed cattle, placements projections in the first half of 2022 are lowered and fed cattle supplies in the second half of 2022 are expected to be tighter.
