Record Meat Production Projected for 2015

Speaking at USDA’s Annual Outlook Conference, USDA Chief Economist Robert Johansson, projected a record high meat and poultry production of 95 billion pounds in 2015. The increase reflects falling feed costs and producer response to the record high prices for livestock, dairy and poultry products in 2014. Expansion in the Beef area has been limited by tight cattle supplies. January 1st of 2014 saw the lowest cattle and calf inventory since 1952. Cow-calf operators have seen an increase in profits this past year, which supports herd retention and could point to a turnaround in the cattle cycle. With producers increasing their herds, the number of beef cows are up 2% on January 1, 2015, from the same time last year.

The latest cattle inventory, put out by the National Agricultural Statistics Service, for last month shows the first increase in the herd size since 2007. We are seeing similar action in the Hog sector. Hog producers in 2014 saw decent profits and lower feed costs, which points to a healthy expansion in 2015. Producers increased the slaughter weights of Hogs in response to the Porcine Epidemic Diarrhea Virus (PEDV). PEDV cases usually increase over the winter months, but this winter has not been as significant as last year, and the number of piglets per litter has increased on average.

How does this affect us as small producers? Prices for hogs and broilers are expected to fall in 2015 as a result of increased production and a falling demand for export. Hog prices could fall to $56 per hundred weight.  That is a 26% decrease from last year’s record high prices. Broiler prices will see a modest decrease of 4%. The bad news is that steer prices are expected to increase to record levels in 2015 because of tight supplies and demand.