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CME: Estimates for 2020 Beef Production Revised Down Slightly

14 January 2020

US - On 10 January 2020, USDA released a slew of reports and this DLR will highlight a few key points from select reports, writes Steiner Consulting Group, DLR Division, Inc.

Particularly the World Agricultural Supply and Demand Estimates (WASDE) report was released which is estimating beef production at 27.2 billion pounds for 2019, up marginally from last month. The revision is revised based on the pace of slaughter in late 2019. Estimates for 2020 production were revised down slightly for both beef and pork. Beef is expected lower due to lighter weights.

Beef and pork exports are estimated at 3.024 and 6.296 billion pounds, respectively, for 2019. Based on recently released trade data through November, this implies that December beef and pork exports are slated to be 257.2 and 655.6 million pounds, respectively. No changes were made to the 2020 beef and pork export forecasts.

Also in USDA’s WASDE report were estimates for harvested corn and soybean acres which are both down slightly to 81.5 and 75.0 million acres, respectively for the 2019/20 crop year. Yield estimates for both crops were revised up to 168.0 and 47.4 bushels per acre, respectively, which gives production forecasts of 13.692 and 3.558 billion bushels. Both production forecasts are marginally higher than last months.

USDA’s National Agricultural Statistics Service (NASS) also released the crop production report with survey results for the US hay stocks as of 1 December 2019. National and state data were reported. For the US in total, stocks were above a year earlier (rising 5.4 million tons or by 6.9 percent). The national stock was similar to two years ago (1 December 2018). National hay disappearance between 1 May 2019 (beginning of the new crop-year) and 1 December was 59.3 million tons, that was 0.6 million tons (1.0 percent) less than a year earlier.

The year-over-year changes in state-level stocks largely reflected their 2019 growing season. Of the 48 reported states, as of 1 December 2019, two were unchanged from the prior year, 18 posted increases, and 28 declined. States with annual percentage increases in hay stocks of 20 percent or larger were Arizona, Arkansas, Kansas, Louisiana, Missouri, Montana, Nevada, New Mexico, and Utah. Four states had declines of 20 percent or more (Alabama, Maine, New Hampshire, and New Jersey).

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