This month’s World Agricultural Supply and Demand Estimates (WASDE) from USDA indicate U.S. beef supplies will shrink even further this year than previously expected. Beef imports will pick up, according to the projections, but not enough to account for lower production and continued strong exports.
The March report raises its forecast for total red meat and poultry production from last month, with higher broiler and turkey production expected to more than offset lower forecast beef production, while the pork production forecast is unchanged.
The March report estimates 2012 U.S. beef production at 25.14 million pounds, down from 25.22 million pounds projected in February and well below the 26.31 million pounds for 2011.
Shorter production will drive 2012 beef imports to an estimated 2.23 million pounds, up from the February estimate of 2.1 million. The report projects total 2012 beef exports at 2.76 million pounds, steady with the February estimate and down slightly from 2.79 million pounds in 2011
The report projects U.S. per-capita supplies at 54.9 pounds for 2012, down from 57.3 pounds in 2011 and 59.6 pounds in 2010.
Short beef supplies will drive cattle prices higher, according to the WASDE report. It projects finished steer prices to average between $124 and $131 per hundredweight for 2012. For the first quarter, prices will average from $125 to $126 per hundredweight, followed by ranges from $123 to $129, $123 to $133 and $125 to $135 per hundredweight during the second, third and fourth quarters respectively.
Those prices, as expected, are well above the 2011 annual average of $114.73 and the 2010 price of $95.38 per hundredweight.
The agency left its projections for coarse grains unchanged from February’s, and narrowed its projected range of corn prices from $5.90 to $6.50 for the 2011-2012 marketing year.
Read the full March WASDE report online from USDA.