However, the increase in first-half farrowings more than offset the decline in second-half farrowings, and with continued increases in pigs per litter, hog supplies increased in 2012. In response to higher feed costs, producers reduced market weights in late 2012, but the confluence of higher slaughter numbers and slightly heavier weights earlier in the year resulted in a slight increase in 2012 pork production.

Broiler production in 2012 was below 2011, reflecting industry retrenchment in the later part of 2011 and through much of 2012 in response to poor returns. However, the sector began to expand production in the later part of 2012, relative to the severely reduced fourth-quarter 2011 production, likely in response to stronger broiler prices during the year.

The outlook for 2013

Feed prices are likely to remain high through the summer of 2013, but later in the year feed prices are expected to decline sharply as the 2013/14 corn and soybean crops are harvested. In the first 3 quarters, producers will be facing corn prices that will reflect a forecast crop year average of $6.75-$7.65 per bushel, compared with $6.22 in 2011/2012.

However, with expectations of a relatively large planted area and trend yield growth, prices in the last quarter are expected to average below the $4.80-per-bushel price forecast for the 2013/14 crop year. Soybean meal prices for 2012/13 are forecast to average $430-$460 per ton, up from $394 the previous year, but like corn, prices will decline with the harvest of next year’s soybean crop.

Soybean meal prices are forecast to average $300 per ton in 2013/14 with prices averaging lower in the early part of the marketing year.

Real U.S. GDP is expected to grow somewhat over 2 percent, higher than last year’s growth and with gradually declining unemployment. Internationally, economic growth is forecast to be slightly more rapid than for the U.S.

The U.S. dollar will likely remain relatively weak against most countries in the coming year, helping U.S. exports, but the dollar’s current strength against the Yen may limit red meat export opportunities.

Production of pork and poultry meat are forecast to increase as producer returns in those sectors will likely improve with declining feed prices in the later part of the year, slightly higher hog prices, and record broiler prices.

However, increases in non-ruminant meat production will be insufficient to offset lower beef production which will face tighter supplies of cattle available for slaughter as the year progresses.

Despite increased meat imports and slightly lower red meat and poultry exports, total domestic meat supplies in 2013 will be lower and total domestic per capita disappearance of red meat and poultry for 2013 is expected to average 201.9 pounds, the lowest level of disappearance on a per capita basis since 1991.

Cattle and whole-bird broiler prices are forecast to reach record levels; cattle prices will reflect tight supplies of beef and broiler prices will be supported by strong demand.