050513 2006 Beef Consumption & Prices Projected DownMay 15, 2005
Total U.S. meat production in 2006 is forecast above 2005 as gains are expected in both red meat and poultry production. Although beef production likely will be constrained by heifer retention and lower cow numbers, normalized trade in cattle less than 30 months old and higher slaughter weights are expected to raise beef production. Pork production is forecast slightly higher as producers continue their cautious expansion. Although returns to hog producers have been good and feed prices are expected to remain moderate, increased meat supplies are expected to result in lower hog prices, pressuring returns for hog producers during late 2005 and into 2006. Broiler and turkey production is forecast to rise as moderate feed costs and relatively stable broiler and turkey prices encourage expansion. Egg production is forecast higher in 2006 as prices in the latter part of 2005 recover.
Red meat and poultry production in 2005 is reduced from last month. The beef production forecast is reduced because slaughter in the second quarter is expected to be lower than previously forecast. Small changes are made to production of other meats.
Meat exports in 2006 are forecast higher than 2005 due to increased pork and poultry shipments. Small gains in 2006 beef exports are currently forecast as major markets are assumed closed due to the BSE discovery in 2004. Meat imports are forecast to increase slightly in 2006.
Import forecasts for 2005 are reduced slightly from last month reflecting weaker-than-expected beef and pork shipments during the first quarter. Beef imports are also reduced slightly due to expected short-term disruptions in imports of beef from Brazil. The broiler export forecast for 2005 is reduced as first quarter shipments were smaller than previously expected.
Cattle and hog prices in 2006 are forecast to weaken as supplies of meat are expected to increase. Broiler prices are expected to be little changed as increases in broiler production are moderate. Turkey prices are forecast to decline slightly. Egg prices will increase as production increases modestly.
In 2005, the cattle price forecast is increased to $85 to $89 per cwt and hogs are raised to $48 to $51 per cwt. Tight supplies of cattle and hogs are pushing prices higher. Broiler and turkey prices are unchanged.