The USDA’s January WASDE report continues forecasting very big domestic Meat supplies for 2016. Cheaper Soybean Meal prices will reduce livestock production costs in 2016. Unchanged Steer prices with lower Farm level Hogs but higher Broiler Prices forecast for 2016 from a month ago.
January’s USDA WASDE report forecast expanded further the 2016 Red Meat and Poultry Per Capita forecast to 213.6# vs. a year ago at 210.9#. Increases were forecast for Beef, Pork and particularity for Turkey production due to last year’s Bird Flu outbreaks now has passed.
Fed Steer prices for 2016 remained unchanged from the previous month at a mid- point forecast at $137.00 per cwt at 95.5%of a year ago. Beef Imports were scaled back to only 84.4% of a year ago with Beef exports expanding by +7.2% year-over-year to 2,475 million pounds, carcass weight; the U.S. will continue to be a NET Beef importer in 2016. For 2016, Beef imports are forecast to shrink more than -12% with a small expansion see for Beef exports, up +7%.
Market Hog prices were reduced by -$1.00 per cwt. for 2016 with expanded domestic Pork availability. The U.S. Red Meat sector is likely to be challenged to expand meat exports substantially in 2016 due to a very strong US$ and slower worldwide growth rates. We expect the U.S. Pork sector will continue to expand Pork Output due to the trend to record high Pigs per litter.
Total Red Meat and Poultry Per Capita availability for 2016 is forecast to expand to 213.6 in 2016, up +1.3% above last year. THIS IS SEEN AS A VERY AMPLE MEAT AVAILABILITY FOR CONSUMERS, we expect this will pressure livestock and poultry price levels in 2016.
Lower Soybean Meal values forecast by the January WASDE report should help lower livestock and Poultry feeding costs. Also, worldwide Total Grain stocks at the end of MY 2015/16 are near Record high levels. Brazil has developed several grain export ports on the Amazon River and the expansion proposed for the Panama Canal likely will allow cheaper grains and oilseed seed imports into the Eastern U.S. states than from the interior of the U.S. in coming years.
By: John Ginzel