USDA Increases Meat Supplies, Decreases Prices

USDA has increased its 2010 commercial meat production forecast from 47.9 billion a month ago to 48.2 billion pounds in today's monthly World Agricultural Supply and Demand Report. Hog and cattle price estimates were revised lower as demand remains relatively weak in the face of higher output.

In USDA's report, pork supply forecasts moved higher based on increased slaughter and heavier dressed weights, which has mainly occurred during the second quarter. On the beef side, cow slaughter remains relatively high which has pushed beef production up for the year. Higher forecast mid-year cattle placements also are expected to boost steer and heifer slaughter later this year and on into early 2011.

USDA projects the 2010 average price for live barrows and gilts to be around $54 to $56 per hundredweight, down from last month's range of $54 to $56 last month. For beef, USDA cut its 2010 average steer price estimate to a range of $92 to $95 per hundredweight versus June's projection at $92 to $96.

Broiler production 2010 and 2011 is expected to increase. Hatchery data point toward continued growth in bird numbers and processing weights have been moving up as well. Now that Russia is back looking to buy broilers, U.S. prospects are brighter. USDA raised its 2010 broiler price estimate to a range of 83 cents to 85 cents per pound from the previous 82 cents to 85 cents.