Del.icio.us  Digg  facebook  MySpace  Twitter  Google  Bookmark Me  LinkedIn  StumbleUpon  Permalink

More Red Meat and Poultry Coming in 2006

Last year was a good year for livestock producers. Returns continued to be favorable. Red meat and poultry production were record high. Pork and broilers both set output records. Despite record meat output, prices held strong with beef and turkeys setting new records. Americans ate almost 220 pounds of meat per person. That's just under 2004's record of 221.3 pounds.

Participants at last week's USDA Outlook Forum learned this year could be more challenging. Total red meat and poultry supplies will rise 3%. While the economy remains strong, concerns exist that higher energy prices and rising interest rates could cut consumer spending on meat. A strengthening dollar, and still relatively high meat prices, could affect export growth.

Beef. Larger supplies, demand uncertainties and lower prices characterize 2006 cattle prospects. USDA expects 2006 fed cattle marketings to be 3% higher than in 2005. Commercial slaughter will be up about 5%. Commercial cow slaughter was down 6% last year, but is forecast to rise about 2% in 2006.

Waning interest in low-carbohydrate diets dim demand here at home. Fallout from BSE and the false start at resuming trade with Japan cloud export prospects. Both USDA the U. S. Meat Export Federation's Phil Seng are optimistic exports to Japan will resume soon. But it's hard to pin down just when "soon" is.

Choice steers averaged $87.28 in 2005. The 2006 average is forecast to be $83 to $87.

Hogs. Larger supplies, demand uncertainties and lower prices characterize 2006 pork prospects. USDA projects commercial pork production at a record 21.2 billion pounds, more than 2.5% larger than 2005's record output of 20.7 billion pounds.

Last fall's outbreak of foot-and-mouth disease in Brazil is restricting Brazil's pork exports thus expanding U.S. export opportunities particularly to Russia where Brazil had been supplying more than 60% of total Russian pork imports.

Still, USDA pegs pork exports up only 4% in 2006 compared to a 21% rise last year. That means U.S. consumers will have to eat a larger share of the rise in pork output. Price incentives to entice them to buy it will likely result in this year's 51% to 52% national base price averaging $42 to $45, compared to $50.05 last year.

Broilers. Larger supplies, demand uncertainties and lower prices also characterize 2006 chicken prospects. USDA forecasts broiler production at a record 36.1 billion pounds, up 2% from 2005. Potential adverse impacts from the expanding avian influenza infected areas are a huge demand cloud, particularly for exports.

USDA forecasts the 12-city wholesale broiler price to average 65 to 69 cents, down from a record 73.4 cents per pound last year.

Milk. USDA believes milk production will rise just under 3% this year.  Prospects for continued increases in product use in 2006 are favorable. However the demand picture will more likely resemble 2005 where price declines balanced markets rather than 2004 when prices rationed supplies.

In the face of generally weaker dairy markets, USDA forecasts the 2006 all milk price to average $13.10 to $13.80 compared to $15.15 last year.

Turkeys. You guessed it. USDA projects larger supplies. But production will climb a modest 1%. As a result, prices could hold firm at 70 to 75 cents compared to 73.4 cents last year.