The U.S. meat industry is set to post another strong production year and an abundant supply of pork, beef and poultry is lowering prices for consumers, industry experts say.
The 2016 forecast for total red meat and poultry production rose about 100 million tons from last month's estimate, according to the United States Department of Agriculture's November World Agricultural Supply and Demand Estimates report.
Last year, the poultry and red meat industries produced a record 94.2 billion pounds, according to the USDA. Poultry production was a record of 46.3 billion pounds.
But this year could top even that, with November's predictions for 2016 coming in at 97.5 billion pounds for red meat and poultry. The USDA estimated in October that the country's meat industry would produce 97.4 billion pounds of red meat and poultry.
Expanded cattle herds and low grain prices are driving the growth, said Travis Justice, the Arkansas Farm Bureau's chief economist. He said cattle herds are back to their normal, full size after a drought devastated the cattle market a few years ago and lowered beef prices to record levels.
Coupled with low grain prices, which results in higher carcass weights, red meat production has increased from 48 billion pounds in 2015 to 50.2 billion pounds in 2016 according to November estimates.
"The meat supply this year will probably be a record for the country for total meat being produced," Justice said. "We've set a new record here. "
While low supply and high prices created an incentive for cattle ranchers to rebuild their herds, it also encouraged poultry and pork producers to raise their prices and production levels, Justice said.
"We've caught the beef industry in expansion mode," he said. "Poultry is also in an expansion area as domestic supplies are backed up. It's all just come together."
Good weather this year for livestock, low feed grain prices and a tougher export environment that's keeping some product in the domestic market are all factors adding to lower prices.
"We've got kind of a perfect storm that's created a huge supply of meat on the market to be dealt with," he said. "We expect to see consumer prices continue to drop a little lower as a result."
High supply with even demand has pushed prices down. Last year's price for broiler chickens settled at about 90 cents a pound. The annual price for broilers this year is estimated at about 83 cents per pound. The average price for steers last year was $148 per hundredweight. The USDA put its 2016 prediction at $119.94 per hundredweight.
"It means depressed farm prices and some lowering of consumer prices as well," Justice said.
Business on 11/11/2016