WASHINGTON, D.C. – Wednesday’s WASDE report shared mostly supportive news to the beef and cattle markets and mixed news for the hog complex.
Beef production for 2022 was raised. Third and fourth quarters expect larger production than what was originally anticipated a month ago as a result of the packing sector remaining current as well as heavier carcass weights. Production for 2022 rose by 130 million pounds from last month’s report. The third quarter’s average steer price gained $0.42 from September’s report to average $143.42, and fourth quarter steer prices are now expected to average $148.00, which is a $1.00 increase from last month.
Both the first and second quarters of 2023 are unchanged for price projections as in the first quarter of 2023 steers are expected to average $151, and in the second quarter $152.
Beef imports for 2022 were fell by 25 million pounds, while beef exports grew by 10 million pounds.
The report shared mixed news for the hog complex. Pork production for 2022 grew by 15 million pounds from September’s report as slaughter speeds have been running more aggressively than originally assumed for the third quarter. The third quarter saw a slight price reduction as third quarter prices are now expected to average $71.30, as opposed to $73.80, which was September’s projection. Barrow and gilt prices in the fourth quarter saw a minor reduction as they’re now anticipated to average $71.08, as opposed to September’s projection of $71.30. Pork imports for 2022 were reduced by 20 million pounds, but exports also fell by 105 million pounds.
LIVESTOCK, POULTRY, AND DAIRY
The forecast for 2022 red meat and poultry production is raised from last month, as higher beef, pork, and broiler forecasts are partly offset by lower turkey. Beef is raised for the second half with higher expected slaughter as well as higher carcass weights for the period. Pork for the third quarter is raised on a higher than-expected slaughter; no change is made to the fourth-quarter forecast. Broiler production is raised on current slaughter data and higher eggs set and chicks placed. Turkey is lowered, with an increase in the third quarter more than offset by a reduction in the fourth quarter due in part to recent Highly Pathogenic Avian Influenza (HPAI) discoveries. Egg production is lowered from last month on recent hatchery data and recent HPAI discoveries.
For 2023, the red meat and poultry production forecast is raised on higher beef and broiler production. Beef is raised on higher expected placements in late 2022 which will be marketed in the first half of 2023. Broiler production is raised on expected growth in eggs set and chicks placed during the year. Pork is lowered on expected farrowings and modest growth in pigs per litter. Turkey is lowered slightly for the first two quarters. Egg production is raised, with a raised second half forecast more than offsetting a reduction in first half production.
Beef imports for 2022 are lowered on slower third quarter exports. Exports are raised on the current pace of trade in the third quarter but the forecast for the fourth quarter is unchanged. Beef imports for 2023 are raised. 2023 exports are forecast higher on expectations of firm demand in a number of Asian markets. Pork imports and exports are lowered for 2022 on recent data. For 2023, pork exports are lowered on tighter domestic supplies and weaker demand in several markets. Broiler export forecasts for 2022 and 2023 are unchanged. Turkey exports are lowered for 2022 but raised for 2023.
Cattle price forecasts for 2022 are raised on current strength in packer demand, but forecasts for 2023 are unchanged. The 2022 hog price forecast is lowered on recent prices, and 2023 prices are also lowered on weaker expected demand and competition from increased broiler supplies. Broiler price forecasts for 2022 and 2023 are lowered on higher forecast production. Turkey price forecasts for both 2022 and 2023 are raised with lowered production forecasts. Egg price forecasts for 2022 and 2023 are raised on recent prices and expectations of continued firm demand.
The milk production forecasts for 2022 and 2023 are raised from last month. The cow inventory is raised reflecting a more rapid pace of expansion in late 2022 and the first half of 2023. Output-per-cow is raised for the remainder of 2022 and into the first part of 2023. Fat and skim-solids basis imports for 2022 are raised, largely driven by recent trade data and higher expected imports of cheese and a number of other products; the skim imports increase also reflects strong milk protein concentrate and casein imports. Forecasts for 2023 imports for both bases are also raised largely on stronger imports of butter. Exports for both years are raised on expectations of stronger whey, lactose, and butterfat product exports. However, export growth in skim milk powder is expected to be slower in 2022.
For 2022, forecasts for butter and cheese prices are raised on current price strength, but nonfat dry milk (NDM) and whey prices are lowered. Both Class III and Class IV prices are raised, reflecting the higher butter and cheese prices respectively. For 2023, price forecasts for butter and cheese are raised while the NDM prices is lower. The Class III price is raised on higher cheese and Class IV price forecast is raised as the higher butter price more than
GRAINS
This month’s 2022-23 U.S. corn outlook is for reduced supplies, greater feed and residual use, lower exports and corn used for ethanol, and smaller ending stocks, USDA says in the report. Soybean exports are reduced 40 million bushels to 2.05 billion with increased competition from South America. With lower exports partly offset by increased crush, ending stocks are unchanged from last month at 200 million bushels.
According to USDA, this month’s 2022-23 U.S. corn outlook is for reduced supplies, greater feed and residual use, lower exports and corn used for ethanol, and smaller ending stocks.
Soybean exports are reduced 40 million bushels to 2.05 billion with increased competition from South America. With lower exports partly offset by increased crush, ending stocks are unchanged from last month at 200 million bushels.”
U.S. ENDING STOCKS
For corn, USDA pegged the U.S. 2022-2023 ending stocks at 1.172 billion bushels. This is above the trade estimate of 1.126 billion bushels and below USDA’s September estimate of 1.219 billion bushels.
For soybeans, the U.S. ending stocks were 200 million bushels, below the trade’s expectation of 245 million bushels and reflecting no change from USDA’s September estimate.
USDA pegged the U.S. wheat ending stocks at 576 million bushels, below September’s estimate of 610 million, but above the trade’s expectation was 563 million.
U.S. YIELD PROJECTIONS
For corn, USDA is projecting 2022-2023 yield to be 171.9 bushels per acre. This is below the trade expectation of 172.1 bushels per acre. The September estimate was 172.5 bushels per acre.
USDA is expecting total corn production to be 13.895 billion bushels. The trade expectation was 13.904 billion bushels and the September estimate was 13.944 billion.
USDA pegged U.S. soybean yield at 49.8 bushels per acre. The trade expectation was 50.6 bushels per acre. The USDA’s September estimate was 50.5 bushels per acre.
U.S. soybean production was pegged at 4.313 billion bushels versus the trade expectation of 4.380 billion bushels and the September estimate of 4.378 billion.
USDA is projecting the 2022-2023 wheat yield to be 46.5 bushels per acre, down from the September estimate of 47.5.
The report projects 1.650 billion bushels of wheat production, down from the September estimate of 1.783 billion bushels.
WORLD ENDING STOCKS
USDA pegged the world’s corn ending stocks at 301.2 million metric tons (mmt) vs. the trade’s expectation of 301.9 mmt and USDA’s September estimate of 304.5 mmt.
For soybeans, the world ending stocks are estimated at 100.5 mmt, above the trade’s expectation of 99.7 mmt, and USDA’s estimate last month of 98.9 mmt.
For wheat, the USDA pegged world ending stocks at 267.5 mmt vs. the trade’s expectation of 267.9 mmt and the September estimate of 268.6 mmt.
