Meat and poultry processors are expected to produce less beef and chicken this year and next amid sluggish exports while pork production should remain steady, according to the U.S. Department of Agriculture’s recent monthly supply demand estimates report.
The USDA reduced its beef production estimates to 23.6 billion pounds for this year, down slightly from the 23.7 billion pounds projected in last month’s report. Higher weights are expected to partially offset the reduction in slaughter, according to the report.
Fewer cattle are going to slaughter but carcass weights are expected to be heavier, according to industry experts. Much of the same is expected for 2016, as the USDA predicts beef production to be 24.6 billion pounds, recently lowered from the former estimate of 24.8 billion pounds.
Cattle prices were reduced for 2016 resulting from weaker-than-expected packer demand. The USDA price projections in the recent report range from $132 to $142 per hundredweight, down from $136 to $147 per hundredweight last month.
Broiler chicken production was also lowered in the recent report for 2015 and 2016 based on hatchery data. Broiler prices have been soft because of excess production thus far this year. The recent pullback on egg sets should provide a lift to prices in the spring of 2016.
Poultry exports remain challenged because of Avian Influenza bans which have taken leg-quarter prices below their historical five-year low. USDA expects prices to rebound some next year.
Pork production is the only meat protein expected to see more production this year over previous estimates. USDA said slaughter numbers picked up steam in November and early December. The 2016 pork intentions report will be released on Dec. 23.
In the meantime, hog price expectations have come down. USDA expects barrows and gilts to range between $47 and $49 per hundredweight in the first quarter of 2016. Prices are expected to rise as high as $53 per hundredweight later in 2016.