Close
Home News  Reality conflicts with USDA projections
. . . . . .
Monday, February 24, 2014

Reality conflicts with USDA projections

by Mark Mendiola - WLJ Correspondent

California’s prolonged drought, a decimating contagious hog disease and other unanticipated changes could somewhat skew the U.S. Department of Agriculture’s 10-year projections since the US- DA prepared most of a report last November.

Jim Robb, Director of the Denver-based Livestock Marketing Information Center (LMIC), cautions that the USDA’s long-term baseline report issued this month may not be as accurate as data indicated three months ago, especially regarding the crop outlook.

“Mother Nature has thrown us a lot of curves,” he told the Western Livestock Journal.

The LMIC has provided economic analysis and market projections regarding the livestock industry since 1955. It is a unique cooperative effort between state university extension specialists, USDA economists, industry representatives and staff. The extension services of 28 states also participate.

Drought conditions in the Midwest and Southern Plains are expected to improve in 2014, but California remains a major concern because a third year of extreme drought has the potential of sharply slowing down herd building, Robb said, estimating the Golden State has about 600,000 head of beef cows.

Rebuilding herds, which are down in numbers not seen since the 1950s nationwide, could have begun a lot sooner had it not been for drought conditions throughout the United States, he said.

There are reports California cattle are being shipped out of state as far east as Colorado as green grazing areas are parched brown in coastal and foothill areas. “That becomes a devastating thing to the beef cattle industry,” Robb said. “They’ve really missed out on fundamental grazing.”

When the USDA was preparing its 10-year baseline projections report in November, widespread Porcine Epidemic Diarrhea Virus (PEDV) had not afflicted the hog industry in the United States and Canada as it is now doing, potentially raising pork prices, Robb said.

The disease already has killed an estimated 2.5 million pigs—primarily sows and piglets—in those North American countries. The USDA estimates the U.S. swine herd totals nearly 66 million.

“The only state without it is Colorado,” Robb said, noting the virulent pig disease has spread into Montana, the Carolinas, Oklahoma, Iowa, Virginia and many other states and Canadian provinces. Smaller, independent producers with fewer hogs and minimal contact with other farms are having the most success preventing the virus from infecting their herds.

PEDV, which thrives in colder temperatures, spreads within barns and from farm to farm because it can survive in tiny bits of manure that travel on boots or trucks. Adult pigs typically recover from the disease, but baby pigs are more vulnerable because of the dehydration brought on by acute diarrhea and vomiting.

Forty to 50 new cases are diagnosed each week in the U.S., according to National Hog Farmer, noting one thimble-full of feces could contain enough virus to infect all the pigs in the United States.

PEDV has very high mortality—approaching 100 percent—in suckling piglets. Herd immunity helps mitigate losses starting about three weeks after herd infection. It is likely that three to five weeks of production will be lost in continuous farrowing operations.

Robb said he agrees with the USDA’s 10-year projection that beef cow numbers and exports will increase through 2023. However, its report states low cow inventories will limit recovery from recent drought conditions for several years.

Lower beef cow inventories and expected heifer retention are expected to lead to declines in beef production through 2016. At more than $8.4 billion, the combined value of U.S. cattle, beef and beef product exports set a new record high in 2013 and has more than doubled in the last eight years. Last year, the nation imported $5.6 billion in cattle, beef and beef products, about 1 percent more than 2012.

The USDA projects beef cow numbers will rise from about 29 million head at the start of 2014 to more than 33 million in 2023. The total cattle inventory is expected to drop below 88 million at the start of 2014 before expanding to about 96 million in 2023.

Since 2007, lower overall meat production and increased net exports have resulted in higher consumer prices and lower per capita consumption in the United States. Annual average consumption of red meats has fallen from more than 221 pounds per capita in 2004-07. It is projected to be less than 203 pounds in 2014. As production increases, per capita consumption of red meats is projected to rise to about 215 pounds by 2023.

Per capita beef consumption is expected to decline through 2016 because of reductions in production before rising moderately through 2023. Beef cattle prices are projected to fall in 2017 and then rise more moderately than earlier years as beef production increases.

The USDA projects a rise in red meat exports the next 10 years, reflecting steady global economic growth, a continued weak U.S. dollar and foreign demand for selected meat cuts and parts from the U.S. market.

Most U.S. beef exports are high quality, grain fed beef that typically goes to Mexico, Canada and Pacific Rim countries. A continuing recovery is assumed for U.S. beef exports to Japan and South Korea, which closed beef imports from the United States for several years after the first case of bovine spongiform encephalopathy (mad cow disease) was detected in December 2003.

The USDA expects imports of processing beef to increase the next 10 years as herd rebuilding and relatively low beef cow slaughter in the U.S. raise import demand. This import demand most likely will mean increased purchases from Australia, New Zealand, Mexico and Canada. — Mark Mendiola, WLJ correspondent

 
 


  • Currently 3.5/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
 
User Box (click to open)
 
SEARCH IN WLJ
Get WLJ In Your Inbox!
   
 
S M T W T F S
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17* 18* 19* 20*
21 22* 23 24* 25* 26* 27*
28* 29* 30
 
 

© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.