Beef production, per capita availability estimates up
Tuesday, Dec. 11 saw the release of the most recent World Agricultural Supply and Demand Estimates (WASDE) report by USDA.
Corn predictions were left almost entirely unchanged from previous reports, but this was unsurprising as USDA isn’t expected to change its estimates on corn until January’s WASDE. Wheat estimates were mostly unchanged with slight decreases in export estimates and soybeans saw some changes. Beef production estimates rose for both 2012 and 2013 while pork production predictions fell.
Overall meat—beef, pork, veal, lamb, mutton, chicken and turkey—production estimates for 2012 increased to 92.43 billion pounds (bp) from 92.16 bp, mostly on increased predictions of beef and chicken production. Despite this, 2013 estimates for overall meat production decreased 100 million pounds (mp) in December.
Beef production estimates for 2012 rose in December’s WASDE to 25.97 bp, up 285 mp compared to November’s report. Production estimates for 2013 also rose—from 24.62 bp to 24.68 bp—but both projections are below 2011’s beef production level of 26.29 bp.
Beef import projections for the current and coming years remained unchanged at 2.24 bp and 2.62 bp, respectively. Export expectations also remained unchanged at 2.47 bp and 2.45 bp. This means USDA still foresees the U.S. becoming a net beef importer by volume by 2013.
Projected average prices paid for a steer in 2012 moved up slightly in the recent WASDE, from $122.47 to $122.85. Estimates for average annual prices paid in 2013 moved a dollar higher on both sides of the spectrum, from $123-133 projected last month, to $124-134 projected this month.
The increased production estimates for both this year and next were enough to move the needle on expected per capita availability of beef. Last month’s WASDE predicted 56.8 pounds of beef available per person in 2012 and 54.8 available next year. This month’s report raised per capita availability expectations to 57.5 pounds and 54.9 pounds per person, respectively.
Pork and chicken (broilers specifically) production estimates were mixed in the most recent WASDE. Pork production estimates were down for both 2012 and 2013 compared to last month’s estimates. This year’s production dropped 80 mp to 23.2 bp and next year’s estimates dropped 165 mp to 22.79 bp. Despite the drops, both estimates are above 2011’s 22.78 bp of pork produced.
Chicken production had a reversed pattern from pork. Estimates for 2012’s broiler production rose 50 mp, and 2013’s estimates held steady at 36.06 bp. Both numbers were still below 2011’s broiler production of 36.8 bp.
There was relatively little movement in two big-name crops to beef—corn and wheat—but soybeans did see some estimate adjustments in December’s WASDE.
Every estimate for 2012/2013 corn, save the average annual farm price, stayed the same with last month’s expectations. Area harvested was 87.7 million acres with a yield of 122.3 bushels per acre and a total production of 10.73 billion bushels (bb). Imports remained at 100 million bushels (mb) and exports remained at 1.15 bb. Feed use estimates stayed at 4.15 bb and ethanol and residual use predictions were steady at 4.5 bb. The aforementioned change in the estimated average annual farm prices paid for corn dropped from $6.95- 8.25/bu to $6.80-8/bu.
The almost complete lack of change on corn was not a surprise to CME.
“While USDA will not provide a final estimate of the US corn crop until the January report (after having reviewed the grain stocks numbers), by now we pretty much know how much corn was harvested this fall. Any changes will likely be small and unlikely to alter the overall supply picture.”
CME response to December’s WASDE included pointing out the wildcard in the world of corn usage is use by livestock feeders.
“Feed demand is pretty much an unknown/unknowable factor and it is derived as a residual. Basically we know how much was fed to livestock and poultry after taking an inventory of grain stocks and deducting how much corn went to industrial use or was shipped outside of the country.”
Wheat also saw very little alterations to USDA’s predictions, but a few more changes than corn. Production and yield estimates were not among those changes, however. Area harvested for wheat remained at 49 million acres with a per-acre yield of 46.3 bushels at a total production of 2.27 bb. Imports and feed usage of wheat in the 2012/2013 growing year remained at 130 mb and 315 mb, respectively.
Estimates of wheat export in 2012/2013 dropped 50 mb in this most recent WASDE, down to 1.05 bb, thus increasing projections of overall ending stocks up 50 mb to 754 mb. This in turn brought estimates of average annual farm prices paid down slightly, from $7.75- 8.45/bu to $7.70-8.30/bu.
Soybeans saw some similar movement in projections to wheat, but given the soybean-derived commodities of oil and meal, even slight alterations in the estimates for one had impacts on the others.
Soybean production remained at 75.7 million acres harvested with a per-acre yield of 39.3 bushels and an overall production of 2.97 bb. And import and export estimates remained at 20 mb and 1.35 bb, respectively. The change in soybeans was a 10 mb increase in projected crushings. This in turn upped total usage by the same amount to 3.03 bb and reduced projected 2012/2013 ending stocks to 130 mb.
Soybean oil production estimates understandably rose 460 mp to 18.29 bp. Expectations of oil exports rose 600 mp, and both predictions of food, feed and industrial use and ending stocks declined to 13 bp and 1.48 bp, respectively.
Soybean meal estimates similarly increased in December’s WASDE. Production increased 200,000 short tons to 37.35 million short tons. Estimated exports of soybean meal increased 300,000 short tons to 8.2 million short tons. — Kerry Halladay, WLJ Editor