2004 Beef Business Bulletin Stories Archive
Cattle-Fax: Beef Production Down, Net Supply Could Be Up
CATTLE-FAX
Beef production during the second quarter was about 9 percent smaller than a year earlier and production during the third quarter is expected to about 7 percent smaller than last year. Second quarter 2004 beef production was the smallest since 1994 and third quarter production is expected to be the smallest since 1996.
The lack of export markets and tight cattle supplies have limited cattle slaughter and beef production and are expected to do so through the balance of the year. Through the first half of the year, beef production was down 9 percent (1.4 billion pounds), fed cattle slaughter was down 7 percent and cow and bull slaughter was down 14 percent. Beef production during 2004 is expected to total about 24.7 billion pounds.
The decline in beef supplies from the third quarter to the fourth quarter is expected to be much smaller this year compared to a year ago when weekly average beef production declined about 85 million pounds per week. This year supplies are expected to decline a more normal 25 to 30 million pounds per week, putting fourth quarter beef production nearly 5 percent larger than a year ago.
If carryover fed cattle supplies grow during the third quarter, due to slower than expected steer and heifer slaughter, beef production during the fourth quarter could be larger than currently forecast. Any change in the status of the U.S.-Canadian border late in the year in terms of fed cattle and feeder cattle imports could also increase fourth quarter 2004 and first quarter 2005 beef production.
Net beef supplies during 2004 are expected to total 27.3 to 27.4 billion pounds during 2004 — up about 2 percent (650 million pounds) from a year earlier and the second largest on record.
The increase in 2004 net beef supplies is driven by the lack of beef export markets, which is expected to leave nearly 2 billion pounds of beef in the domestic market. About 75 percent of this increase is projected to be offset by smaller domestic beef production.
An additional increase in net beef supplies will be due to a projected 7 percent increase in beef imports during the year. Net beef supplies during the first half of 2004 were about 1 percent larger than a year ago and are expected to be 1 percent to 1.5 percent larger during the third quarter of 2004. Fourth quarter net beef supplies are expected to be 7 percent larger than last year, largely driven by the expected 5 percent increase in quarterly beef production.