According to the USDA's WASDE report, the 2012 total meat production forecast increased from last month as higher pork and poultry production more than offset lower beef production.
Pork production increases are due to heavier than expected carcass weights. USDA’s next Quarterly Hogs and Pigs report will be released on June 29 and will provide a look at producers' farrowing intentions for the remainder of the year.
From mid-April to Mid-May, pork production was running 6.3 percent higher than in 2011 due to more hogs coming to market and at heavier slaughter weights, points out Steve Meyer, president of Paragon Economics.
The question now is whether the U.S. sow herd is growing. Some indications are that more sows are entering the breeding herd, but the overall number is hard to add up. U.S. producers have grown litter size by 2 percent annually for more than four years. Even if the pigs-per-litter gains slow to 1.5 percent to 1.7 percent over then next few years, producers will continue to produce more market hogs even if breeding herd numbers hold steady. Meyer adds that packing plant capacity is the real concern, it will be tested this fall. "If you add 2 percent more hogs to the fall of 2013," with no major additions to packer capacity, things could get tight enough to have "significant negative impacts on hog prices," he says.
Meanwhile, the WASDE report shows that beef production was reduced slightly as lower steer and heifer slaughter more than offsets higher dressed weights and higher cow slaughter. Small changes are made to 2013 beef and pork forecasts, largely reflecting higher expected carcass weights.
Although remaining below last year, hatchery data point towards smaller declines in eggs sets and heavier bird weights, which are adding to production. Turkey production is also forecast slightly higher, based on recent production data.
Broiler and turkey production forecasts for 2013 are unchanged. Offsetting changes are made to 2012 quarterly egg production forecasts but the annual forecasts for 2012 and 2013 are unchanged from last month.
USDA adjusted forecasts for 2012 beef, broiler and turkey trade to reflect first-quarter data. Forecasts for 2013 are unchanged from last month. Pork exports for 2012 are raised from last month on the strength of trade data to date with a slight increase in forecast exports for 2013.
The cattle and turkey price forecasts for 2012 are unchanged from last month, but hog and broiler prices are reduced, reflecting larger production. Egg prices for 2012 are raised as recent prices have been stronger than expected. USDA left 2013 price forecasts unchanged.