Drought causes higher feed prices, tightens production

21-08-2012 | |
Drought causes higher feed prices, tightens production
Drought causes higher feed prices, tightens production

The recent US Department of Agriculture outlook for livestock, dairy and poultry predicts higher prices for feed and more difficult production for farmers.

By species USDA expects the following:
Beef/Cattle: Drought-motivated increases in cow slaughter and feeder cattle movements have adversely affected all cattle and beef prices and plans to increase the national cow herd.

Beef/Cattle Trade: US beef imports were 19% higher through the first half of 2012. Exports, however, were 11% lower. Cattle imports were 22% higher through June, but are expected to tighten into next year.

Pork/Hogs: High feed costs from lower US corn and soybean production is expected to reduce US pork production in 2013. Per capita consumption of pork products in 2013 are expected to decline by 1.23%.
Next year, per capita consumption of red meat and poultry is expected to drop below 200 pounds (90.7 kg) per person for the first time since 1990. US pork exports increased more than 8% year-over-year in the second quarter of 2012.
In the first 6 months of 2012, China was the third largest foreign destination for US pork products. Exports in 2013 are expected to be about equal to shipments in 2012.

Poultry: With sharply higher prices expected for corn and soybeans, poultry meat and egg production forecast were lowered for 2013. The broiler meat production forecast was lowered in 2013 by 600 million pounds (272,000 tonnes) to 36.5 billion pounds (16.55 million tonnes).
Turkey production in 2013 is now forecast at 5.8 billion pounds (2.63 m t), down 135 million pounds (61234 t) from the previous forecast.
Egg production in 2013 was lowered to 7.5 billion dozen, down 1.3% or 100 million dozen from the previous estimate.

Dairy: The severe drought that is lowering crop yields in much of the United States is already lowering milk yield per cow and next year will lower herd size and milk production. Prices will be higher than forecast earlier but still below 2011 prices.

The full outlook report can be viewed at the USDA website

Contributors Global Feed Sector Authors