Livestock and Poultry
In the July Supply/Demand report, USDA lowered the forecast for 2022 red meat and poultry production as higher beef and turkey production forecasts were more than offset by lower pork and broiler production estimates. Pork production is expected to be lower on slower-than-expected slaughter pace in June and expectations for lower carcass weights. Broiler production was lowered on second quarter slaughter data but was partly offset by higher expected production in the third quarter. Lower beef production in the third quarter is projected to be more than offset by higher fourth-quarter slaughter.
Beef imports for 2022 were unchanged from last month while export forecasts were raised on firm international demand. Pork import forecasts were raised and export forecasts were lowered based upon the current pace of trade. Both broiler and turkey export forecasts for 2022 were increased based upon recent data.
In the July Supply/Demand report, USDA lowered milk production forecasts for 2022 and 2023 due to slower expected growth in milk per cow. Imports on a fat basis were raised for 2022 on stronger expected imports of butterfat containing products, but imports on a skim solids-basis were unchanged. Exports on both a skim-solids and a fat basis were also raised for 2022, indicating stronger demand for butter, cheese, whey, skim milk powder, and lactose. The 2022 butter price forecast was raised from last month on firm demand, and the cheese price forecast was lowered as stocks are more than ample to cover demand. The Class III price was lowered on lower cheese prices, while Class IV was raised on higher butter prices. The all-milk price for 2022 was lowered to $26.15 per cwt.
Corn plantings were pegged at 89.921 million acres in the June acreage report, which was near the average of trade expectations and up 431,000 acres from the March 1 estimate. Arkansas farmers have seeded 710,000 acres of corn this year. USDA also reported corn stocks of 4.346 billion bushels, up 6% from the previous year. The July supply/demand report showed higher beginning stocks, increased production, and ending stocks up 70 million bushels at 1.47 billion bushels. The average on-farm price was lowered 10 cents to $6.65. Exports continue to be disappointing, with weekly sales of only 16 million bushels reported today. That is up from an abysmal 1.8 million bushels last week, however. The December contract is trading a 6-month lows and has support at the recent low of $5.66 ½.
USDA surprised the market with a soybean acreage estimate of 88.325 million acres, down from a March 1 planting intentions estimate of 90.955 million acres, and below the lowest pre-report trade guess. Arkansas farmers have seeded 3.2 million acres to soybeans. Stocks were estimated to be 971 million bushels, up 26% from the previous year. In the July supply/demand report, production was pegged at 4.5 billion bushels, down 135 million bushels on lower harvested acreage. The lower production estimate was partially offset by the higher beginning stocks, 22/23 supplies were estimated to be down 125 million bushels from the previous report. The U.S. season average soybean price for 22/23 was pegged at $14.40, down 30 cents from last month. Weekly export sales were negative 9.1 million bushels as cancellations of 13.3 million bushels outpaced sales of only 4.2 million bushels. Despite hot, dry conditions, 62% of the crop remains in good to excellent condition. November is building support just above $13, and longer term support is at $12.75.
Rice acreage was pegged at 2.343 million acres nationwide, with 1.151 million of those acres in Arkansas. In the July supply/demand report, USDA forecast higher domestic use, lower exports, and larger ending stocks. Supplies were raised slightly on increased beginning stocks and imports, which more than offset the lower production estimate, which was reduced 8.2 million cwt to 174.5 million cwt. Most of the reduction was in medium- and short-grain, as California, in a severe long-term drought, has cut production to the lowest level since 1958. In Arkansas, 75% of the crop is in good to excellent condition. September futures have seen some weakness but are currently holding above support at $16.
Cotton plantings are estimated to be 12.478 million acres, up from the March planting intentions estimate of 12.058 million and near the top of the range of pre-report estimates. Arkansas acres are pegged at 500,000 acres. Despite the increase in planted acres, continued drought has increased the number of acres expected to be abandoned, and harvested acres were down 600,000 acres in this month’s supply/demand report. Lower production, exports and ending stocks are now projected. The production estimate was down 1 million bales from the June report, now pegged at 15.5 million. U.S. exports were also projected lower at 14 million bales. Crop conditions improved slightly last week, with 39% of the crop rated good to excellent. In Texas, however, only 21% of the crop is rated good to excellent. In Arkansas 80% of the crop is in good to excellent condition. The average on-farm price was unchanged at 95 cents.