Meat and Milk Production To Decline

Projected meat and milk production is expected to decline in 2001 and rebound in 2002. Relatively strong demand has boosted prices. The stronger prices along with relatively low feed costs are improving producers’ returns.

The improved returns are expected to boost pork, poultry, and milk production in 2002. However, due to continued cattle inventory reduction in recent years and the biological lag, beef production is expected to continue to decline.

Price prospects have become clouded following the tragic events of September 11 and likely impacts on an already slowing economy.

While consumer purchases have fueled the economy over the past year aided by a strong wealth effect from expanding stock portfolios, stock market declines since late spring have been exacerbated in September.

Consumer response to these uncertainties will significantly influence meat and dairy demand over the coming months.

Pork Production To Decline

Pork production in 2001 is expected to decline fractionally as hog slaughter has been lower than expected. Also, dressed weights were lighter than expected in the third quarter due to the summer heat wave.

Lower production along with strong exports have tightened domestic pork supplies. Stocks of pork in cold storage are running well below year-earlier levels.

Retail pork prices were a record high $2.76 a pound in August. Retail prices for all of 2001 are expected to average 3-4 percent above a year ago.

The Quarterly Hogs and Pigs report, to be released on September 28, will provide additional information on market hog inventories and producers’ intentions.

More information including figures and graphs is avaiable in the full 26 page report, see below for details.

Links

For more information view the full Livestock, Dairy and Poultry Situation and Outlook (pdf)

Source: Livestock, Dairy and Poultry Situation and Outlook - U.S. Department of Agriculture, Economic Research Service - September 26, 2001