Tighter beef supplies expected to boost prices
April 21, 2010
by Bryan Salvage
WASHINGTON – In 2010, U.S. beef exports are expected to grow nearly 10%, reaching a total of 2.05 billion lbs., writes Rachel J. Johnson in the most recent Livestock, Dairy, and Poultry Outlook from the U.S. Department of Agriculture’s Economic Research Service (E.R.S.). However, beef supplies are tightened globally and the subsequent reduction in beef imports to the U.S., along with stronger demand for beef, is expected to ratchet beef prices higher throughout the year.
U.S. imports of beef from Australia and New Zealand were below 2009 levels by double digits—45% and 25%, respectively. Strong price signals from the domestic live cattle markets, however, should rally U.S. live cattle imports to the U.S. in the coming months, particularly from Canada.
The Quarterly Hogs and Pigs report released by U.S.D.A. on March 26 showed year-over-year lower March 1 inventories of market hogs and breeding animals, year-over-year lower producer farrowing intentions for the spring and summer pig crops, and a slowing rate of increase in the winter pigs per litter. The lower U.S. hog production implied by the report, combined with expected lower U.S live swine imports, points to lower hog supplies for the balance of 2010 and into 2011. Lower hog supplies, at a time when a recovery of pork demand is expected to get under way, foreshadows continued higher hog prices.
The forecast for U.S. broiler meat production in 2010 was increased by 375 million lbs. to 36.3 billion lbs., 2% higher than in 2009. With a large decline in broiler production expected in first-quarter 2009, the estimates for broiler ending stocks were also reduced. Even with expected higher production and
lower exports, wholesale prices for many broiler products have continued to remain above the previous year.
Turkey production in January and February was 850 million lbs., down 7% from the previous year. Lower production and lower cold storage holdings have placed upward pressure on turkey prices. Whole bird prices for first-quarter 2010 were up 7% from the year earlier.