Forecasts issued by the US Department of Agriculture have lifted expectations for domestic US beef production next year since the last projection made a month ago, but they remain well below beef output in 2013.
USDA now expects total US beef production in 2014 to reach 11.04 million tonnes, up about 0.5pc compared with this same forecast made in November.
US beef supplies for next year are still expected to decline sharply and the most recent update forecasts total US beef production in 2014 to decline by 669,000 tonnes (-5.7pc) compared to 2013 levels.
Steiner Consulting’s Daily Livestock Report says the decline in total output reflects expectations for a sharp reduction in the number of cattle coming to market.
USDA did not issue a July estimate of the US calf crop, but analysts pegged the 2013 calf numbers down about 2pc compared to the previous year. Supplies of cattle on feed remain limited and the expectation is for placements to remain constrained for much of 2014, according to the Daily Livestock Report.
Demand for replacement heifers remains strong and this should limit the number of female calves going into US feedlots next year.
“USDA indicated that it had raised domestic production mostly because it now thinks US steer carcase weights in 2014 may be a bit higher than earlier thought,” DLR said yesterday.
“There was some expectation earlier in the northern hemisphere autumn that the removal from the market of the beta agonist, Zilmaxx (see Beef Central’s earlier story here), could cause steer weights to drift below year-ago levels, but that has not yet happened,” DLR publisher Len Steiner said.
However, it is not entirely clear that the US industry will continue to advance weights higher in 2014.
“After all, there is a push to develop programs that are ractopamine free and thus would open opportunities in markets that so far ban US beef on that basis,” Mr Steiner said.
“Also, it is possible that part of the reason weights continued to perform well this northern hemisphere autumn was because feedlots placed more yearlings on feed during the summer months than a year ago. It remains to be seen how steer weights will fare once placements return to a more normal placement pattern,” he said.
USDA’s latest forecast issued yesterday made no changes to its estimate for beef imports, which are expected to be flat in 2014.
“This will largely depend, in our view, on what China does in terms of sourcing beef from Australia, New Zealand and Uruguay,” Mr Steiner said.
“Limited US cow meat supplies should push up lean beef prices in the US, and thus create more opportunities for those countries to supply the US market.”
As for US beef exports, USDA changed figures for next year only slightly, and the expectation remains for a sharp 7.7pc reduction in export activity next year.
“Key wild cards here will be exports to Russia, which were suspended in 2013 and ever-expanding demand for beef in Asia. Underestimating exports remains a potential bullish surprise for the market in 2014,” Len Steiner said.
These charts show the changes made by USDA yesterday to the 2014 US beef production forecast compared to last month’s estimates, and the year/year change in output and supply availability.
Source: Daily Livestock Report.
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