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CME: Beef Production Forecast for 2019 Lowered

15 July 2019

US - USDA made some modest adjustments to its beef supply/demand balance sheet following the release of the June inventory survey results, according to Steiner Consulting Group, DLR Division, Inc.

The beef production forecast for 2019 was lowered by 75 million pounds. USDA notes the revision is due to lighter carcass weights than earlier expected and a downward revision in fed cattle slaughter in Q3.

The decline in output is offset somewhat by a modest shift in trade flows, with imports revised up by 10 million pounds and exports reduced by a similar amount.

Still, the net impact is a decline in domestic availability and per capita beef consumption was lowered and it is now expected to be just 0.6 percent higher than a year ago.

USDA made no changes to its estimates for 2020, something that may change when the July cattle inventory survey results become available at the end of this month.

Interestingly, despite the downward revision in beef supply numbers USDA lowered its projected steer price for 2019 by 1.3 percent, likely reflecting the lower prices for spot cattle and futures.

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