ARLINGTON, Va., Feb. 26, 2016 – Beef, pork, and poultry prices are all projected to experience price drops this year as herds and flocks rebuild and production skyrockets.
Projections released at USDA’s annual Agricultural Outlook Forum are pointing to a drop in prices in the beef, pork, chicken, turkey, and dairy sectors. Almost across the board, USDA is expecting increased production – record-setting in some cases – which could potentially hurt producers at the sale barn but help consumers at the meat counter.
The beef herd’s rebuilding in 2015 led to only a 1 percent increase in cattle on feed at the beginning of 2016 compared to the previous year’s figures. Even so, commercial beef production is pegged up 4 percent to 24.58 billion pounds, partially due to increased commercial slaughter and higher carcass weights. From a trade perspective, beef exports are projected 9 percent higher at 2.48 billion pounds after dropping 12 percent in 2015. Imports are projected to drop 16 percent to 2.85 billion pounds due to increased domestic slaughter and lower prices. Overall, steer prices are expected to drop 7.3 percent.
Pork production is looking at a record 25 billion pounds of production, a 2 percent bump over 2015, but that increased supply will help contribute to a 5.9 percent drop in prices, USDA said. The department’s most recent inventory showed 68.3 million head at the beginning of December, a 1 percent increase over the year-earlier figure. Higher numbers of pigs per litter are expected to be a driving force in the recovery as producers work to rebuild herds from the Porcine Epidemic Diarrhea virus (PEDv). Pork trade is expected to mimic beef, with exports up 4 percent and imports down 10 percent.
On the poultry side, egg production is projected to jump 4 percent in 2016 to 8.18 billion dozen, as layer flocks recover from last year’s highly pathogenic avian influenza (HPAI) outbreak. Broiler production, although not directly hit by the HPAI outbreak, is estimated at a record 41 billion pounds, a 3 percent bump over last year. Prices are pegged to drop 3.3 percent from last year’s figures. Broiler meat exports will be up 7 percent after dropping 13.4 percent in 2015 due to trade barriers resulting from the HPAI outbreak.
Turkey production, which was hit hard by HPAI last year, is projected to rise about 6 percent. Like broiler meat, turkey exports will experience a sizable increase, up a projected 29 percent after dropping 34 percent last year. USDA says that as production recovers, prices “are expected to moderate further,” with the national turkey hen price averaging between $1.10-$1.18 a pound compared to $1.16 in 2015.
The dairy outlook calls for depressed price levels across the product line. Herd expansion and increased per cow production will drive up milk production to just shy of 212 billion pounds, 2 percent higher than 2015.
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