On Friday, USDA cut its 2019 pork export forecasts 175 million lbs. (2.8%) to 6.125 billion lbs., despite the recent uptick in weekly sales. Unshipped sales as of Feb. 28 are up 3.5% from a year ago but shipments are down 5.8%. But USDA’s export projection is still up 4.3% from last year and that may be too low, depending on the outcome of U.S./China trade talks and China and other Asian nation’s success at containing African swine fever.
USDA also raised its pork production forecast to 27.444 billion lbs., a 4.2% gain from the 2018 season, citing “the current pace of slaughter and heavier first-quarter carcass weights.” Given higher production prospects and a smaller export outlook, the department lowered its projection for average farm prices in 2019 to a range of $41 to $43, for an average price $3.93 under 2018 levels.
On the other hand, USDA lowered its beef production forecast by 310 million lbs. “on the pace of fed cattle slaughter in the first quarter and lower expected marketings in mid-2019” and lighter carcass weights. But it adds that higher-than-expected cow slaughter helped to partly offset the lower fed cattle slaughter. Production of 27.363 million lbs. would still be up 1.6% from year-ago.
USDA made no change to its beef import or export outlook for March. Current price strength and expectations for solid demand through the year prompted USDA to raise its cattle price forecast for 2019 to $116 to $123, up $1 on both sides of the range. That yields an average price of $119.50, up $2.38 from 2018’s average.