080213 Beef, Pork & Poultry Production Projections

Production of all meats slows or declines in the first half of the projection period, reflecting higher feed costs as more corn is used in ethanol production. Distillers grains, a coproduct of ethanol production, can be used in livestock rations, partially substituting for corn and sometimes for soybean meal. However, distillers grains can more easily be used by ruminants (such as cattle) compared to monogastric animals (such as hogs and chickens). Beef cattle feedlots located close to ethanol plants are best situated to benefit from a steady supply of distillers grains, also reflecting the ability of those animals to use the wet form of distillers grains. Meanwhile, distillers grains are less suitable in poultry and hog rations.

Higher grain prices as well as effects of drought in recent years hold down cattle inventories, pushing U.S. beef production down in 2008-10. Production then rises in the remainder of the projection period as returns improve and herds are rebuilt. The cattle inventory remains in a range of 96-99 million head throughout the projections. Rising slaughter weights contribute to the moderate expansion of beef production beyond 2010. Higher costs of feedlot gain will result in stocker cattle remaining on pasture to heavier weights before entering feedlots.

Pork production declines in 2009-11 in response to higher feed prices and then grows for the remainder of the projections as higher hog prices improve returns. Production coordination and market integration between the United States and Canada continue in the hog sector. Canada is the major supplier of live swine imported by the United States. Imported feeder pigs from Canada are finished and processed in the United States, where both finishing and processing costs are lower.

Poultry production slows in 2009-13 while adjusting to higher feed costs, but begins to rise towards the end of the projections period. During the period, rising exports account for a larger share of total production.

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