Expect flat livestock, dairy production

WASHINGTON — According to the USDA Economic Research Service, the outlook for total red meat and poultry production will be down slightly next year.

Beef/cattle

Deteriorating pasture and range conditions over much of the Plains and increasing livestock production costs are adversely affecting all cattle and beef sectors.

Smaller inventories of U.S. cows, calf crops and feeder cattle are likely in 2009, because of relatively heavy cow slaughter and apparent low levels of heifer retention thus far in 2008. Continued high demand for corn will likely lead to higher corn and feed prices, with declining profit margins, for most of 2008.

Beef/cattle trade

Exports are expected to increase at a faster rate with the market reopening in Korea. Beef imports are expected to drop in 2008, but pick up in 2009.

The weak dollar and heavy cow slaughter will affect imports in 2008. Lower cow slaughter in 2009, will cause imports to increase next year.

Dairy

Milk production is forecast to rise only slightly in 2009. Exports on both a fats and skims/solids basis will be lower next year, limit domestic commercial use and keep prices firm for most dairy products.

Pork/hogs

USDA expects commercial pork production to be 22.9 billion pounds next year, 2.4 percent below the 2008 production forecast. Lower hog supplies next year should result in prices ranging between $46 and $50 per hundredweight for live equivalent 51-52 percent hogs, more than 9 percent above expected prices in 2008.

The 2008 pork export forecast was raised to 4.3 billion pounds, more than 37 percent above export volumes last year. The export forecast for 2009, at just under 4 billion pounds (3.985 billion), is 7.5 percent below export expectations for 2008, reflecting the assumption that China will succeed this year in bringing its swine disease problems under control.

Poultry

Broiler production is expected to increase only slightly in 2009, after an expected increase of 2 percent in 2008. With higher feed and energy costs impacting both growing and processing costs, broiler integrators will have little incentive to expand production.

Little or no growth in broiler production is expected in the second half of 2008, and the first half of 2009. Broiler production is expected to increase in the second half of 2009, in response to rising prices.

Exports of broiler and turkey products are expected to hit record highs in both 2008, and 2009, benefiting from their enhanced competitiveness on world markets due to the decline of the dollar.

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