U.S. meat supply to fall amid higher corn prices

The U.S. meat supply will fall by 1.7 pounds per person this year because demand for ethanol motor fuel has pushed corn prices to their highest level in a decade, boosting livestock feed costs, the government said Tuesday.

Beef, pork and chicken output will fall by 1 billion pounds, the U.S. Department of Agriculture said. Overall, it forecast 220 pounds of meat and poultry per American in 2007, down from 221.7 pounds per capita in 2006.

Meat output tends to rise every year, but the USDA has trimmed its 2007 forecast by 1.07 billion pounds, or 1.2%, since January. Output is pegged at 89.78 billion pounds for the year.

Feeders are using less corn and more wheat in their rations and are sending cattle and broiler chickens to market at lower weights because of rising costs.

With feed use down, the corn stockpile will tally 877 million bushels when this year’s crop is ready for harvest, the USDA said. That would equal a four-week supply, compared with the USDA’s previous estimate of a skimpy three-week carry-over of 752 million bushels.

The USDA said the 2006 corn crop would sell for an average $3.10 a bushel at the farm gate, the highest price in a decade.

Farmers say they will expand corn plantings by 15% this year, making a record crop possible.

Food prices will rise by 2.5% to 3.5% this year, the USDA said.