US beef output well down for two years

By Jon Condon17 Feb 2012

 

This week’s release of the US Department of Agriculture’s Agricultural Projections, commonly known as the Baseline, is the US Government’s first stab this year at long-term supply, demand, trade and price levels out to 2021.

The forecast is based on November data, and will be updated to some degree before USDA’s Agricultural Outlook Forum in Washington next week.

As seen in the graphs here, and at bottom of page for USDA’s Baseline predictions:

• Beef output is forecast to fall the next two years before expanding and reaching record levels in 2017 and beyond.
• Chicken output is likely to decline in 2012 and then a resume strong growth - slower than rates of increase seen in the 1980s and 90s, but about the same as the rate from 2000-2006.
• Pork production is expected to resume the constant but relatively slow growth path it has seen for most years since 2000. USDA’s forecast for total pork production in 2021 is 13pc larger than that of 2011, and 2021 exports are expected to be 22pc higher than they are today.

USDA projects total meat/poultry annual consumption in the US to fall to under 198 pounds (90kg) in 2013, before beginning to grow again, driven mostly be economic circumstances. The Baseline says that consumption will grow back to 213 pounds by 2021.

Contrast this with the historic peak at just over 221 pounds in the boom 2004-2007 period.

Analyst Len Steiner, from Chicago Mercantile Exchange’s Daily Livestock Report, said he was surprised by the size of USDA’s forecast (longer-term) increases in beef production, given declining cow numbers and expected resource and land-use challenges.

“Per capital chicken consumption increases as output grows and actually returns to its 1986 levels in 2020. Pork consumption is forecast to remain within one pound of 47 pounds per person from 2012 onward,” he said.

The USDA report suggests the record-high prices of beef cattle will remain through 2014, before declining. Note that no annual average forecast for fed steers, though, is below $110/cwt.

In other commodities relevant to Australian beef’s competitive position on the export front, USDA expects planted corn area to reach 94 million acres this spring, just short of analysts’ recent estimates.

If plantings reach that level, it will be the largest US corn crop since 1944 and will eclipse the recent high in 2007 of 92.89m acres. USDA’s Baseline predicts that 86.8m acres will be harvested this year.

USDA also increased feed and residual corn usage dramatically to 5.225 billion bushels for 2012-13. That compares to its forecast of only 4.6 billion this year, a 13.6pc increase.
 

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