In its balance sheet update Friday, USDA made little change to its pork production forecast for 2019, but it did add 71 million lbs. to its export forecast that now stands at 6.246 billion pounds. That’s an impressive 6.4% gain from the 2018 season, with USDA explaining it expects strong exports the second half of the year to make up for a slower-than-expected export pace to date, with demand stemming from African swine fever-related losses playing no small role in this outlook.
USDA calls for even stronger exports of 6.675 billion lbs. in 2020 amid “stronger global demand.” To meet this demand, U.S. producers are expected to expand hog supplies late this year and into 2020, with hog carcass weights likely to rise next year thanks to low feed prices.
Amid strong demand prospects, USDA hiked its 2019 average cash hog price projection by $9.50 from April to $54.50 per hundredweight, and it expects that figure to climb to an average of $60 per cwt. in 2020.
On beef, USDA made few notable changes to the supply side of its balance sheet for this year versus April, but it did subtract 84 million lbs. from its export forecast that now stands at 3.171 million lbs., up 2.7% from year-ago levels. The department explained slower-than-anticipated exports to key trading partners to date drove its decision. But it does expect tighter beef supplies among competitors and firm global demand to lift beef exports in 2020. USDA projects beef exports will climb 2.3% in 2020 to 3.245 billion pounds.
Beef production is also expected to rise in 2020 “primarily on higher projected steer and heifer slaughter and heavier carcass weights.”
Recent price weakness prompted USDA to lower its average cash steer price forecast for 2019 by $1 to $118.50 per cwt., but it expects that average price to climb to $121 per cwt. in 2020.