The U.S. Department of Agriculture this week released the September “World Agricultural Supply & Demand Estimates” report, in which it reduced the forecast for total meat production in 2017 from last month's forecast as decreases in commercial beef and broiler production more than offset increases in pork and turkey production.
USDA reduced second-half beef production forecasts, reflecting expectations for a slower marketing pace for fed cattle, although the cow slaughter estimate was higher. Total 2017 beef production is now projected to be 26.6 billion lb.
The 2017 pork production forecast was raised slightly to 25.8 billion lb. based on higher expected carcass weights. USDA will release the "Quarterly Hogs & Pigs" report on Sept. 28 to provide an indication of producer farrowing intentions into early 2018.
The third- and fourth-quarter broiler production forecasts were reduced based on hatchery data and the current pace of slaughter. USDA forecasted total 2017 broiler production at 41.3 billion lb.
USDA raised its third-quarter turkey production forecast slightly but made no changes to the outlying quarter.
The annual egg production forecast was increased to 8.8 billion doz., reflecting second-quarter production data.
The 2018 beef production forecast was lowered from the previous month to 27.3 billion lb. due to a slower rate of placements during the second half of 2017, which was expected to result in reduced steer and heifer slaughter in the first half of 2018.
USDA slightly reduced annual pork production to 26.7 billion lb., while poultry and egg production forecasts for 2018 were unchanged.
No changes were made to 2017 and 2018 red meat, poultry or egg trade forecasts.
Cattle prices were reduced from last month to $118-120/cwt. for the remainder of 2017 and into early 2018 due to current price weakness, USDA said. The hog price forecast for 2017 was also lowered to $50-51/cwt., but the 2018 price forecast remained unchanged.
The annual broiler price forecasts for 2017 and 2018 were unchanged at 93-95 cents/lb. and 85-92 cents/lb., respectively while the 2017 turkey price forecast was reduced to 99 cents to $1.01/lb. as slightly higher third-quarter turkey prices will be more than offset by expected declines in the fourth quarter. USDA left the 2018 forecast unchanged at $1.01-1.09/lb.
USDA slightly raised the egg price forecast for 2017 to 87-89 cents/doz. due to recent price strength, but no change was made to the 2018 price forecast.
The milk production forecast for 2017 was raised to 216 billion lb. as increases in milk per cow more than offset a slower rate of milk cow expansion, USDA said.
For 2017, fat basis exports were reduced from the previous month due to slowing cheese shipments, while fat basis imports were raised based on increased purchases of butterfat. On a skim-solids basis, the export forecast for 2017 was lowered on weaker-than-expected skim milk powder sales, while the import forecast was raised due to stronger demand for a number of dairy products.
For 2018, the milk production forecast was reduced from the previous month on slower growth in cow inventories.
The annual fat basis export forecast was unchanged from the previous month, but the import forecast was reduced because of an expected decline in cheese imports. The skim-solids basis export forecast was reduced from the previous month as competition in international powder markets is expected to remain strong, USDA said. Imports were reduced on lower milk protein and cheese shipments.
Butter, nonfat dry milk and whey prices are all projected to be lower for 2017, while the cheese price forecast was raised versus the previous month.
The 2017 Class III price was raised as forecasts for higher cheese prices offset lower whey prices. The Class IV price was reduced due to lower butter and nonfat dry milk prices. For 2018, USDA reduced all dairy product prices, resulting in lower Class III and Class IV product prices. The all milk price was reduced to $17.70-17.90/cwt. for 2017 and $17.75-18.55/cwt. for 2018.