US livestock markets respond to higher feed costs

Continued heavy cow slaughter and high placements of heifers in feedlots keep a lid on cow herd expansion.

 

Feedlots continue to place cattle despite higher corn prices and declining fed cattle prices, and packers continue to slaughter cattle at rates inconsistent with declining wholesale prices.

 

Beef exports for 2010 are forecast at 2.29 billion pounds (1.037 million tonnes), which is 17% growth year-over-year.

 

Although demand for US beef among major trading partners should be equally as strong, or stronger, next year, smaller production will tighten supplies and puts the export forecast for 2011 at 2.27 billion pounds (1.028 million tonnes).

 

With the beef supplies of major US beef trading partners also tight into next year, the outlook on imports for 2011 may be much the same as it has been this year.

 

Higher hog weights and higher-than-expected pork cold stocks were factors in lower October hog and pork prices.

 

Next year the US pork industry will struggle to adjust to expected higher feed costs, with little attention given to expansion.

 

Pork production next year is expected to be 1.5% above the 2010 level. Lower third-quarter exports are likely attributable to higher US pork prices.

 

Broiler meat production in fourth-quarter 2010 is forecast at 9.2 billion pounds (4.17 billion tonnes), up 4% from the previous year.

 

For 2010, broiler meat production is forecast at 36.6 billion pounds (16.44 billion tonnes), 3% higher than in 2009.

 

Broiler meat production is expected to increase only 1.5% in 2011 due to the impact of a slowly growing economy and higher prices for both corn and soybean meal.

 

Turkey meat production in fourth-quarter 2010 is expected to total 1.45 billion pounds (657 million tonnes), slightly higher than the previous year.

 

Turkey meat production in 2010 is forecast at 5.6 billion pounds (252 million tonnes), making it 1% lower than 2009 and the second consecutive year of declining production.

 

The full November report of the Economic Research Service of the USDA can be read HERE.