WASHINGTON – Beef production declined by less than slaughter would indicate, according to the US Department of Agriculture’s Economic Research Service (ERS).

“Cattle feeders’ and beef packers’ poor margins will likely continue until cattle and beef prices reach levels that generate positive margins for both sectors, or until grain prices decline to levels that make cattle feeding profitable enough for packers to achieve positive margins,” ERS said in its meat production outlook. “Currently, retail Choice beef prices continue to struggle to move above $5 per pound.”

ERS forecast 2013 pork production to decline 1.4 percent. In 2013, hog prices are expected to climb 6 percent above average hog prices in 2012, ERS said. Fourth-quarter 2012 pork production is forecast 1 percent above the comparable year-ago period, while hog prices in the quarter are expected to average roughly 10 percent below 2011 prices, ERS said.

Broiler meat production in fourth-quarter 2012 is forecast at 9.05 billion lbs. up about 2 percent compared to a year ago. But broiler meat production in 2013 is forecast to decline 1 percent to 36.4 billion lbs.
“Broiler integrators are not expected to have any incentive to expand production due to the combination of continued high prices for corn and soybean meal and expected relatively modest growth in broiler prices,” ERS said.

Fourth-quarter turkey meat production is forecast at 1.55 billion lbs., which would be almost a 4-percent increase from the comparable year-ago period. At the end of September, stocks of whole turkeys were up 9 percent to an estimated 305 million lbs.

Broiler shipments in September declined while turkey shipments advanced compared to a year ago. Broiler shipments totaled 615.7 million lbs., a decline of 3.3 percent from September 2011, ERS said. Turkey shipments totaled 74.1 million lbs., a 26-percent increase from last year.

Third-quarter 2012 slaughter lamb prices at San Angelo, Texas dropped to their lowest levels since 2009, according to ERS. The agency attributed the rapid reduction in lamb prices to both supply and demand components.

"Production and imports have increased over the same period last year, but issues of over-finished animals appear to be affecting demand," ERS said. "Prices rebounded slightly in October and are expected to strengthen further in the fourth quarter."