The most recent World Agricultural Supply and Demand Estimates report showed an increase in many things. Beef production and availability was up. Soybean acres increased. Ending stocks of corn went up… again. And for the first time in months, per-capita availability of beef rose even as the market deals with one of the lowest cattle herds in recent history.
Overall meat (total red meat plus all poultry) production for 2014 was estimated up 82 million pounds (mp) to 91.72 billion pounds (bp). Most of this increase came from increased beef production.
Everything was up in the beef estimates last week. Production estimates for 2014 increased 130 mp to 24.61 bp and for 2015 they rose 60 mp to 24.45 bp. The report cited higher than expected steer, heifer, and cow slaughter and slightly higher than expected carcass weights in the past quarter for the 2014 numbers. The changes to the 2015 numbers stem mostly from the increased (or larger than expected) placements so far this summer.
Beef trade for the most part is expected to increase in both years. Import estimates for this year increased to 2.52 bp (up from 2.45 bp) and increased to 2.56 bp (also up from 2.45 bp) for 2015. Import increases come mostly from the pace of imported grinding meat so far this year, as well as the surprisingly resilient demand for ground beef products. Export estimates for this year increased to 2.52 bp and stayed steady in 2015 at 2.43 bp. Export estimate changes for this year came from the pace of beef export so far. The new changes in trade estimates for this year actually put the U.S. in a net importing position (same numbers here result from rounding) by volume.
As mentioned, the most recent estimates show per-capita beef availability up for the first time in months. The increased production and imports, combined with less mobile exports, resulted in some increases to available beef. For 2014, the per person beef availability estimate jumped to 54.2 pounds per person, up a half pound compared to the prior report. For 2015, availability estimates increased by 0.4 lbs, bringing it to 53.6 pounds per person.
Pork projections didn’t fare as well in the most recent report. For 2014, pork production estimates decreased by 60 mp to 22.77 bp. The 2015 numbers decreased by 70 mp to 23.25 bp. Decreases in pork production was attributed to “slower than expected expansions in farrowings” in the second quarter. The impacts of Porcine Epidemic Diarrhea virus was not mentioned directly, though analysts implicated it.
Chicken was having similar difficulties. Slower expansion of the flock resulted in stagnant estimates for 2014 at 37.82 bp. Production estimates for 2015 rose by 89 mp to 38.89 bp.
Trade estimates in pork and chicken remained stagnant to up. Chicken import projections remained unchanged at 120 mp for 2014 and 116 mp for 2015. Pork imports for 2014 rose very slightly to 927 mp, but remained steady at 890 mp for 2015. Export expectations were more interesting, however. Pork export estimates for 2014 rose to 5.01 bp and rose to 5.09 bp for 2015. Chicken export projections rose 50 mp for this year but stayed steady at 7.48 bp for next year.
Crop activities were perhaps more interesting than the movement in meats. Recent data from the June 30 Acreage report informed the acreage estimates for corn. Planted acre estimates decreased slightly to 91.6 million acres planted and 83.8 million acres harvested. This combined with a static yield estimate of 165.3 bushels per acre resulted in a lower production estimate for corn: 13.86 billion bushels. However, an increase in the beginning stocks for the 2014/2015 crop tempered some of the decline.
Feed and residual use estimates decreased for corn by 50 million bushels (mb). This was credited to the decreased hog and stagnant chicken production estimates. Ending stocks for corn were estimated up 75 mb to 1.8 billion bushels. As such, estimated average farm prices shifted 20 cents lower to $3.85-4.55/bu.
Steve Meyer and Len Steiner summed up the crop movements of the report by saying: “Bottom line, livestock/poultry production costs are falling!” — Kerry Halladay, WLJ Editor