The latest USDA projections for beef and pork output in 2010 indicate supplies next year will be even tighter than predicted.
Beef production in 2009 is expected to be 25.879 billion lbs., down 2.6% compared with a year ago. USDA expects 2010 U.S. beef production to decline to 25.485 billion lbs., or 1.5%. The December beef-production forecast was about 25 million lbs. lower than November projections as concerns about the state of beef demand likely influenced USDA’s thinking.
U.S. beef producers are looking at poor margins out front, which will tend to limit the number of cattle placed on feed in the first half of 2010, and negatively affect beef production later next year. Looking at the quarterly numbers, beef supplies in the second half of 2010 are expected to be down some 250 million lbs. or 2% from 2009 levels, and half a billion pounds (4% lower) than in the second half of 2008.
Pork-production estimates for 2009 were left unchanged; USDA expects total supplies for the current year to be 23.052 billion lbs., 1.3% lower than the prior year. USDA reduced 2010 pork-production estimates by 25 million lbs.; at 22.410 billion lbs., next year’s pork production is expected to be some 642 million lbs. or 2.8% lower than 2009 levels.
Trade will continue to be a significant factor for beef and pork markets in 2010. USDA raised its 2009 and 2010 estimates of U.S. beef and pork exports. Beef exports for 2009 are currently projected to be 1.846 billion lbs., 21 million lbs. higher than the earlier forecast but still 2% lower than 2008 levels. For 2010, USDA projects beef exports to be 1.985 billion lbs., a 60-million-lb. increase over the November estimate and 7.5% larger than in 2009.
Pork exports for 2009 were raised by 41 million lbs. to 4.176 billion lbs. but current year volume is still 10.5% lower than in 2009. Pork exports are expected to bounce back in 2010 and the latest USDA estimate pegs 2010 U.S. pork exports at 4.6 billion lbs., 10.1% higher than in 2009.
At this point, pork exports in 2010 are expected to be close to 2008 levels at a time when U.S. pork production in 2010 is expected to be almost 1 billion lbs. or 4% lower than in 2008.
-- CME Group Daily Livestock Report