After record 1999 meat production, U.S. producers may be cutting back

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U.S. producers who put record-large meat supplies on consumers’ tables in 1999 are expected to cut output over the next two years, a Kansas State University economist said.

James Mintert, agricultural economist with K-State Research and Extension, said domestic beef production could fall 3 percent in 2000 from 1999 levels with further decreases likely in 2001.

?Pork supplies should also be smaller in 2000, perhaps declining as much as percent from the 1999 level and could continue to decline into 2001,? he said.

Mintert expects domestic chicken output to rise 2 to 3 percent in 2000 and 3 to 5 percent in 2001.

?Domestic turkey production is likely to remain flat the next several years as turkey growers struggle to regain profitability,? he said.

The expected drop in overall meat output comes on the heels of record large 1999 supplies.

Preliminary data indicates U.S. per capita consumption of beef, pork, poultry, lamb, and veal reached 220 pounds per capita (retail weight) in 1999, up 2.5 percent from the previous record of 214.6 pounds set in 1998.

?Given the strength we’ve seen in both slaughter cattle and hog prices during 1999, it’s hard to believe domestic per capita meat supplies established a new record last year,? Mintert said.

Indeed, cattle and hog prices climbed in 1999 despite the record-large supplies, a phenomenon that surprised economists and provided evidence that red meat demand was stronger than in 1998.

Western Kansas fed steer prices averaged near $66 per hundredweight (cwt) in 1999, a 6 percent increase from 1998, and 700- to 800-lb feeder steers at Dodge City averaged $76, also a 6 percent gain.

But year-end price differences were even more dramatic, especially in feeder cattle. Mid-December values for 550-pound steer prices hit the mid $90s, 28 percent above a year earlier and 700- to 800-pound steers sold near $87, up 33 percent from the previous year, Mintert said.

Hog prices in 1999 averaged near $33 per cwt in the key Iowa/southern Minnesota market, up modestly from $32 a year earlier. But the 1999 fourth quarter hog price averaged $36, up a dramatic 88 percent from a year earlier, he noted.

Fueling the increase in 1999 meat production was record-large beef and pork output, he said. Beef production was up nearly 3 percent over 1998 levels and imports jumped almost 7 percent.

Beef exports increased 8 percent, which more than offset the import increase, Mintert said.

?As a result, domestic beef consumption rose to about 69 pounds per capita, just 1.6 percent above the 1998 level,? Mintert said.

Pork output topped 19 billion pounds in 1999, up 1 percent from the previous record set in 1998.

Pork imports rose dramatically and could wind up as much as 17 percent higher than a year earlier, he said. In contrast, pork exports were flat.

?As a result, the U.S. was still a net (pork) exporter in 1999, but a significantly smaller one than in 1998,? Mintert said. ?The combination of increasing domestic pork production, larger imports and flat exports meant that domestic pork consumption per capita increased to 53.7 pounds, an increase of more than 2 percent from the 1998 level.?

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