Beef supplies to remain tight through 2014

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Several long- and short-term trends point to continued short supplies of feeder and fed cattle and lower beef production over the next year, according to USDA’s February Livestock Dairy & Poultry Outlook report released January 16.

The report projects 2013 total commercial cow slaughter at almost 3 percent lower than that during 2012, however, as a percentage of total cow numbers, the slaughter rate remained remined about as high as the previous three years. Total annual commercial cow slaughter has exceeded 15 percent of January 1 total cow inventories in 11 of the years since 1980, and for six consecutive years from 2008 through 2013.

Dairy cow slaughter meanwhile, is on track for the second highest rate of slaughter relative to January 1 dairy cow inventories since 1980.

The next cattle-inventory report, due on January 31, likely will show another significant decline in total cow numbers during 2013. Cow slaughter is likely to decline during 2014 as more producers turn toward rebuilding herds, with cull-cow prices moving higher accordingly.

As we’ve seen, fed-cattle prices have increased considerably during the first few weeks of this year. The report cites several reasons, including packers not lining up enough cattle ahead of the holidays and cold weather disrupting shipments to packers, in addition to overall short supplies of finished cattle.

The report projects Southern Plains feedlot breakevens below $130 through April. Lower corn prices could encourage longer feeding periods and heavier end weights, and a larger percentage of steers in the slaughter mix also could boost weights. The authors also note that high cattle prices could encourage feeders to pull cattle forward for marketing and place more cattle at lighter weights, both of which could counter any trend toward heavier finished weights.

Other key points in the report include:

  • Packer margins will improve if cutout values continue to increase at rates higher than the increase in fed-cattle prices.
  • Retail beef prices are expected to average higher in 2014 than they did in 2013. Consumer acceptance of the higher prices could be influenced by the anticipated increase in pork and poultry supplies.
  • Through November, U.S. cattle imports were 16 percent below year-earlier levels as a 37 percent decline in shipments from Mexico outweighed a 22 increase in imports from Canada.
  • Cattle imports in 2014 are forecast at 1.95 million head, 2 percent lower than in 2013.
  • U.S. beef imports through November are up 1 percent year-over-year. Beef imports have risen this
  • year from New Zealand, where an early-season drought led to higher cattle slaughter and beef production. Production rose for the same reason in Australia, but imports have fallen 6 percent due to rising demand from China.
  • U.S. beef exports through November are up 4 percent for the year, largely due to strong growth in exports to Asia. Exports to Japan increased by 48 percent with relaxed trade restrictions.
  • Exports have also risen through November by 71 percent to Hong Kong, 82 percent to Taiwan and 9 percent to Mexico.
  • The report projects an increase in U.S. pork production during 2014, although Porcine Epidemic Diarrhea (PED) remains a significant source of production uncertainty.
  • Over the first 11 months of 2013, broiler meat production reached 34.7 billion pounds, 1.6 percent higher than during the same period in 2012.

Read the full Livestock Dairy & Poultry Outlook report from USDA.



Comments (2) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Michael J. Marsalek    
Bel Air, Maryland  |  January, 17, 2014 at 09:43 AM

Beef supplies are tight but exports are up and domestic consumer beef prices are way up headed towards unaffordable. Holy cow !!

Ken    
Missouri  |  January, 17, 2014 at 11:07 AM

Pickup truck prices..........35-40 thousand.............already unaffordable for me!!!!!! Holy Cow!!


RTV-X Series Utility Vehicles

Get ready for a whole new RTV experience. Kubota RTVs have been the best-selling diesel utility vehicles in North America since ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight