CME: Changes in Forecasts for Meat Sectors

US - CME's Daily Livestock Report for 15 December 2008.
calendar icon 16 December 2008
clock icon 4 minute read

Last week’s USDA World Supply and Demand Estimates (WASDE) report included several changes in USDA’s forecasts for meat and poultry production in 2008 and 2009. The changes were not huge and kept USDA firmly in the pessimistic camp from an output standpoint for 2009. Perhaps the most noteworthy fact regarding USDA’s forecasts is that, if they come true, 2009 will mark the first year since 1973 when the output of all four of the major species has fallen in the same year. That is a pretty remarkable record! The graph at left shows historical data back to 1960 as well as USDA’s ‘08 and ‘09 forecasts from both the November and December WASDEs.

First, one explanation. Note that the label on the Y axis says “carcass/ready-to-cook” as the weight measurement. Those are the official names of the units for beef and pork (carcass weight) and chicken and turkey (ready-to-cook weight). Beef carcasses are weighed without the head and feet and have the hide removed. Hog carcasses are also weighed without the head but have the feet still attached. Most still have the de-haired skin intact but a few plants skin hog carcasses and make the necessary adjustment to get a skin-on carcass weight. Carcass weight for neither cattle nor pigs include any internal organs. Chickens and turkeys also have the head and feet removed but both include the skin, heart, liver and gizzard as well as the neck in ready-to-cook weight. So, these measures aren’t precisely comparable but they are what USDA provides and the comparisons are consistent over time.

Some of the highlights from last week’s numbers are:

  • 2008 production for all species is still expected to be larger than 2007 levels (that is certainly not going to change at this late date!) but the forecast 2008 increases shrunk slightly in December. 2008 chicken output is still expected to be 2.4 per cent larger than last year, down from 2.8 per cent in the November report. Pork production this year is now forecast to be 6.8 per cent larger, down from 7 per cent in November. The expected increase in beef production fell from 1.4% in November to 1.0 per cent in December. The 2008 growth estimate for turkey fell from 5.2 per cent to 4.9 per cent.

  • A forecast for the first actual reduction in chicken output since 1975. Per capita chicken consumption has fallen four times (’95, ’00, ’01 and ’07) during that time span due to production increases that did not keep pace with population and export growth. But this is the first time that production itself will fall — and egg sets and chick placements still suggest that USDA’s forecast 1.3 per cent decline may be very optimistic.

  • USDA expects the pork industry’s string of record production years to end at seven. 2009 output is expected for fall by roughly 300 million pounds (1.3 per cent) to 23.1 billion - still the second highest total ever.

Further Reading

- You can view the WASDE report by clicking here.
© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.