Compared with the fourth quarter a year earlier, October-December 2011 broiler production was down 6.6 percent, first quarter 2012 was lower by 2.2 percent, second quarter 2012 was off 1.4 percent, and third quarter 2012 is expected to decline 2.0 percent before fourth quarter 2012 marketings increase by 3.3 percent, according to the “Livestock, Dairy & Poultry Outlook” report this week from USDA’s Economic Research Service (ERS).  During the first-half of this year, 4.2 billion broilers were slaughtered, a 2.4 percent-decrease from January-June 2011, while the average liveweight at slaughter was 5.83 pounds, a 0.7-percent increase over the first six months of 2011.  During the second half of 2012, ERS sees the number of broilers declining but average liveweights to remain somewhat equal to the second half of 2011.

Sharply higher prices for corn and soybeans and “continued economic uncertainties in both the domestic and foreign sectors” are expected to “push” companies to cut broiler production.  With lower production in 2012, ERS estimates the whole bird (12-city average wholesale) price at 84-90 cents per pound, compared with 82-84 cents per pound for 2012.

USDA’s July “Cattle” report indicated that expansion plans have been “temporarily suspended” as there was no year-over-year changes in beef replacement heifer inventories and dairy replacement heifer inventories declined 2 percent.  ERS expects continuing liquidation of cows and heifers until at least the new year.  At the same time, the national beef-cow herd appears to be getting younger on average, the analysts said.  Producers seem to be replacing beef cows with younger beef heifers which are slightly less costly to maintain, but at the possible expense of pounds of calf for sale due to the heifers’ productive immaturity.  Retained heifers for herd rebuilding in 2012 will not result in slaughtered beef until 2016 or 2017, ERS noted.

 ERS reported that persistent negative feeding spreads for hogs suggested that most producers, unable to cover variable costs of production, will exercise some means of reducing hog production to limit operating losses.  Lower 2012 pork production is expected to be achieved primarily through a combination of lower farrowings–from reduced breeding inventory numbers–and lower slaughter weights.  Hog prices in 2012 are expected to increase almost 3 percent above prices this year.

Lower per capita consumption estimates for pork, beef, and poultry when combined results in U.S. per capita meat and poultry consumption to decline next year to 197.7 pounds per person, 2.5 percent lower than 2012.  This would be the first time since 1990 that total meat and poultry consumption per capita has dropped below 200 pounds per year.  Combined meat and poultry consumption reached a record high in 2004 at 221.7 pounds, retail weight, per person on average.

 

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