Bullish beef, more corn
John Maday | Tuesday, May 11, 2010
Drovers
This month’s World Agricultural Supply and Demand Estimates from USDA indicate that beef supplies will remain tight through 2011, but face increased competition from pork and poultry.
The report, released May 11, projects that while production will drop off again next year, total U.S. meat production will be slightly higher than 2010 due to higher pork and poultry production. Declining cattle imports and lighter weights are helping offset slightly higher slaughter weights this year, the report notes.
Corn production meanwhile will increase again this year on more planted acres and yields projected to be above average.
Some other highlights from the report:
· Declining cow inventories and calf crops over the past several years, coupled with expected lower imports of cattle during 2011 will result in a smaller pool of cattle available for slaughter.
· Pork production for 2011 is expected to increase as improved returns encourage increased sows farrowing and carcass weights are heavier.
· Both broiler and turkey production for 2011 are forecast higher as producers respond to improved returns.
· Egg production is forecast higher as production gradually builds upon the measured expansion currently underway.
· The total meat production forecast for 2010 is reduced from last month as lower red meat production more than offsets higher broiler and turkey production.
· Forecast beef production is reduced as slightly higher cattle slaughter is offset by expected lighter cattle weights.
· Pork production forecast is reduced as supplies of hogs for slaughter are tighter than expected.
· Broiler production is raised as improved returns are expected to encourage increased hatchery activity.
· Despite an improved world economy, U.S. beef exports for 2011 are expected to be lower as U.S. production declines and more beef becomes available from competing export countries.
· Pork and broiler exports are expected to benefit from an improved global economic climate and increased U.S. production.
· Beef imports are expected to be higher for 2011 as U.S. cow slaughter declines in response to lower cow inventories.
· Pork imports are forecast higher with relatively strong U.S. pork demand.
· The 2010 red meat export forecast is little changed from last month with fractionally higher beef exports reflecting the pace of trade to date.
· Beef imports are forecast lower is competitor supplies of beef are tight and global beef demand is improving with the economic recovery.
· For 2011, cattle prices are forecast to rise as demand improves and production declines.
· Hog prices are forecast lower due to increased production.
· Broiler and egg prices are also forecast higher on demand strength carried over from 2010.
· Cattle, hog, and broiler price forecasts for 2010 are raised from last month as demand improves and supplies are tight.
· For U.S. feed grains, the 2010-2011 outlook is for larger supplies with higher beginning stocks and production, buy tising use is expected to limit the growth in ending stocks.
· Corn production for 2010/11 is projected at 13.4 billion bushels, up 260 million from 2009/10 as a 2.3-million-acre increase in intended plantings more than offsets a projected decline in yield from last year’s record.
· Based on the rapid pace of 2010 planting as reported in Crop Progress, the 2010/11 yield is projected at 163.5 bushels per acre, 2.7 bushels above the 1990-09 trend.
· Corn supplies are projected at a record 15.1 billion bushels, 325 million higher than in 2009/10.
· The 2010/11 season-average farm price is projected at $3.20 to $3.80 per bushel compared with the 2009/10 forecast of $3.50 to $3.70 per bushel.
The full report is available online from USDA.
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