“A less drastic reduction” in the number of broiler chick being placed for growout points to possibly a smaller decline than previously expected in broiler meat production during January-June this year, according to yesterday’s “Livestock, Dairy and Poultry Outlook” report from USDA’s Economic Research Service (ERS).

The five-week (December 10 through January 7) moving averages of chicks placed for growout averaged 3.6 percent lower than the previous year or about one-half the rate in mid November, the report stated.  The actual reduction in production during the first-half of 2012 depends on slaughter liveweights remaining below a year earlier, as the weights did in mid November, or if they average higher as they did during the first 10 months of 2011.  The ERS estimate for broiler production during the first half of 2012 is for 4.7 percent fewer pounds.

ERS reported that November marketings of fed cattle from 1,000-plus-head feedlots were less than 1 percent below marketings a year earlier. However, marketings for all of 2011 are likely to exceed 2010’s marketings.  Further, based on the large placements of lightweight calves in 2011, marketings for much of the first half of 2012 are expected to exceed those of first-half 2011. Heavy marketings during the first half of 2012 could also result in some downward pressure on fed cattle prices, although anticipation of smaller marketings later in 2012 will likely keep declines from being sharp. The outlook for steer and heifer prices is slightly more bullish for the second half of 2012 and beyond, as second-half 2012 slaughter is expected to be lower than second-half 2011 slaughter. Activities in feedlots of less than 1,000 head could alter this scenario, the report noted.

Increasing net placements of feeder cattle and reducing placement weight of cattle moving into feedlots weights are in opposition with respect to total beef production because lighter weight placements generally are marketed at lighter finished weights. The result is more beef from more cattle, but less beef from each animal. Other factors also affect total beef production, including the proportion of heifers in the slaughter mix (more of which decreases average dressed weights); cow slaughter (more of which tends to lower average dressed weights of all cattle while increasing total beef production); bull slaughter (which tends to increase dressed weights and total beef production); and feeding activity in feedlots of less than 1,000-head capacity (more of which increases fed beef and total beef production), ERS analysts explained.

A somewhat steady outlook is likely for pork production with the estimates published in USDA’s latest “Quarterly Hogs and Pigs” report, suggesting that there will be a small increase in the supply of slaughter-ready hogs in 2012. Such increases will likely be the product of modest farrowing increases and continued-strong gains in litter rates. Unlike most recent sector expansions, expected increases in hog production in 2012 appear set to depend less on expanded breeding inventory numbers, and more on increasing litter rates via genetic improvements, along with enhanced management and animal care technologies, the report concluded.

 

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