CME: Estimated Pork Production up for 2012

by 5m Editor
16 August 2011, at 7:16am

US - The USDA report issued on Thursday (11 August) contained few surprises with regard to beef and pork production estimates for 2011 and 2012, write Steve Meyer and Len Steiner.

The authors write it is interesting to review those estimate as they have evolved through this year. Keep in mind that the first estimate for 2012 was issued in May.

Beef: Total beef production for 2011 is currently estimated at 26.220 billion pounds, 0.3 per cent lower than a year ago.

The August estimate was just 16 million pounds lower than what USDA projected back in July but it is almost half a billion pounds or 1.8 per cent higher than the forecast issued in January.

As the year unfolded, some of the assumptions made, particularly with regard to cow slaughter and heifer retention, did not materialise.

Drought conditions across much of the Southern Plains forced producers to liquidate. As drought pressures mounted, producers were forced to place cattle on feed earlier than normal.

This accelerated production gains and added more pounds to total beef output.

Despite the larger than expected 2011 production, however, cattle prices have managed to hit record levels, in large part due to strong exports.

USDA is forecasting beef exports for 2011 at 2.713 billion pounds, 18 per cent higher than a year ago.

Back in January, USDA forecasted 2011 beef exports at 2.445 billion pounds, almost 300 million pounds less than the most recent forecast.

For 2012, USDA forecasts beef production at 25.085 billion pounds, 4.3 per cent less than the 2011 estimate.

The reduction likely represents expectations for yet another year of declining calf numbers as well as some herd rebuilding following years of liquidation.

The latter greatly depends on weather conditions. With projected record high corn prices, cow-calf operators will try to keep calves on pastures and also add heifers – but only if there is plentiful grass to be had.

Pork: The latest USDA forecast for pork production in 2011 is currently pegged at 22.680 billion pounds, 19 million pounds lower than the July estimate and 0.4 per cent lower than a year ago.

Pork production estimates for 2011 have been much more consistent and are only 0.5 per cent higher than what they were projected to be back in January.

What has changed is the estimate of pork exports, a variable that is inherently a wild card.

Back in January, pork exports for 2011 were projected at 4.615 billion pounds, compared to 5.012 billion pounds forecasted in August.

For 2012, USDA expects pork production to be 23.049 billion pounds, 1.6 per cent higher than in 2011 while pork exports are forecasted at 5.135 billion, 2.45 per cent higher than in 2011.

Further Reading

- You can view the full report by clicking here.