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US meat to be cheaper in 2016
05 November 2015
More cattle on feed, higher beef production, lower feed costs for poultry, and a drop in export demand for US beef and poultry are all factors contributing to an expectation that meat prices will be cheaper in the US in 2016.
The Steiner Consulting Group (SCG) forecasts an 8% decline in cattle prices, and a 9% drop in broiler (young chicken) prices, next year, which should flow into cheaper meat at the wholesale level.
Cattle and beef
SCG expect the US cattle herd to reach its highest point in five years at the 1 January herd estimates – 92.2375 million head. This would be a 2.7% increase on the beginning of 2015, and 4.2% higher than the start of 2014. A large part of this has been due to cow and heifer retention, and consequent higher calf crops in the last two years.
The larger number of cattle on hand will allow for higher slaughter in 2016, with little expectation of a drop in average carcase weights – although this will depend heavily on what feed costs do. Beef production is forecast 2.8% higher in 2016, to 11.11 million tonnes carcase weight (cwt), and a further 3.4% higher in 2017, at 11.46 million tonnes cwt.
Broilers and chicken
Chicken production has increased significantly in 2015 in response to low production and very high prices in 2013 and 2014. As a result, prices this year have dropped significantly, and are expected to fall further in 2016. SCG expect broiler slaughter to increase 2.1% in 2016, and the resulting chicken production to be 2.9% higher – due to heavier bird carcases.
The price of poultry next year will be largely dependent on the impact of bird flu this winter – so far there have been no outbreaks, but should they occur, export markets could be closed for an extended period of time again – reducing chicken prices further.
