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Saturday March 24, 2018

Grilling season outlook

Just as summer grilling season goes into full-bore mode, the U.S. Department of Agriculture published red-meat and poultry production forecasts for 2018 predicting production of the major animal protein components to increase next year vs. this year. The only exceptions are expected to be veal, down 3 percent vs. this year, and lamb, down 2 percent. Otherwise, USDA predicts, total red meat production should rise 2.8 percent, and total poultry will grow 1.9 percent.

All meat production is expected to rise


In the first quarter of 2017, USDA reports, commercial beef production climbed 6 percent from the same period in 2016, to 6.3 billion pounds. Meatpackers achieved three consecutive months of year-over-year increases in production, harvesting over a half million more cattle than in 2016. USDA forecasts 2.3 percent growth in U.S. beef production in 2018, based on larger 2016—and expected 2017—calf crops that are projected to support increases in the number of cattle available to go onto feed in late 2017 and early 2018. Marketings of cattle ready for slaughter are expected to be higher during 2018, even as the average weight of each animal carcass is expected to also increase. Both add up to higher expected supplies of beef into next year.

Beef price trends


Commercial pork production in the first quarter of 2017 wound up at slightly more than 6.4 billion pounds, 2.9 percent larger than a year earlier. USDA predicts the opening of new packing plants in the Corn Belt will mean increased capacity to handle increasing number of hogs, which equals support for higher pork production in 2018. Commercial pork production next year is forecast at 26.9 billion pounds, 3.3 percent higher than expected this year. Despite significantly larger hog numbers, 2018 prices of live hogs are only expected to fall about 3 percent over 2017's predicted average. Those relatively strong prices coupled with expected cheaper feed price predictions means most hog farmers will still be able to cover feed costs, which should spell no significant cutbacks in herd size. Forecast production increases next year will result in around 900 million additional pounds of pork products available to consumers, which will likely pressure pork prices, incentivizing both domestic and foreign consumption. Recent robust U.S. consumer demand for pork is expected to continue into next year, bolstered by forecasts for faster U.S. economic growth. USDA expects the average American to eat 51.3 pounds in 2018, compared with 50.5 pounds forecast for 2017.

Pork price trends


In March, broiler meat production was 3.6 billion pounds, about 1.6 percent above last year on a per-day basis. Preliminary data suggested that April production was a bit higher than a year earlier but was held back by relatively low bird weights. USDA reduced its second-quarter forecast for production by 50 million pounds to 10.4 billion pounds. The broiler industry has continued to see weak growth in bird weights, but production growth is expected to continue into 2018 on stable farm profitability. Broiler production for 2018 is forecast at nearly 42.3 billion pounds.

Poultry price trends


Despite tight domestic supplies, first-quarter 2017 lamb and mutton prices remain fairly stable in all segments of the market, showing only slight increases before the Easter and Passover holidays. However, in the ensuing months, continued tight supplies are expected to keep prices well above 2016 levels.

Poultry price trends


USDA's forecast for 2018 turkey production is 6.255 billion pounds, a 2 percent increase over the current 2017 forecast of 6.122 billion pounds. The rate of growth for 2018 would mirror the current growth expectations for 2017, also forecast to grow 2 percent compared with 2016. This growth would mark three consecutive years of production growth following the supply crash in 2015 caused by bird flu losses and trade restrictions on U.S poultry products. Per capita domestic use is expected to increase by just under 2 percent in 2018, with the remaining production increases going to export markets.

Lamb price trends

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The farm and ranch families represented by Nebraska Farm Bureau are proud sponsors of the Farmer Goes to Market program. We take great pride in supporting Nebraska's agricultural foundation. A key part of that effort is to make sure we produce safe and affordable food. This newsletter is an important part of our effort to connect the two most important parts of the food chain -- the farmer and the grocer -- with the goal of increasing consumer awareness and information about how their food is raised in Nebraska.

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The Nebraska Grocery Industry Association was formed in 1903 by a group of Omaha grocery store owners, wholesalers and vendors to allow them to promote independent food merchants and members of the food industry, and to promote education and cooperation among its membership. NGIA continues to represent grocery store owners and operators, along with wholesalers and vendors located throughout Nebraska, by promoting their success through proactive government relations, innovative solutions and quality services. NGIA offers efficient and economical programs. NGIA also lobbies on both a state and national level, ensuring that the voice of the food industry in Nebraska is heard by our representatives.

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The Nebraska Corn Board, on behalf of 23,000 corn farmers in Nebraska, invests in market development, research, promotion and education of corn and value-added products. The board aims to work closely with the farmer-to-consumer food chain, to educate everyone about the role corn has in our everyday healthy lives. The Nebraska Corn Board is proud to sponsor the Farmer Goes to Market program to help bring its mission of expanding demand and value of Nebraska corn to the consumer, through the strongest touch point in that chain: the Nebraska retail grocer.

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