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Livestock, Dairy, and Poultry Outlook Summary

Core Content Overview

This report provides an analysis of the U.S. livestock, dairy, and poultry markets for early 2017, highlighting trends in production, prices, and trade. It covers key segments including cattle/beef, dairy, pork/hogs, sheep/lamb, and poultry, offering forecasts and insights into market dynamics.

Key Highlights

Cattle/Beef

• Production: Beef production is forecast to increase due to higher slaughter volumes and slightly heavier dressed weights.
• Imports: Live cattle imports from Mexico rose 27% in February compared to January, driven by a weaker U.S. Dollar and rebuilding Mexican herds. Imports from Canada were lower.
• Exports: Beef exports increased by 19% year-over-year in February, with the majority going to Japan, South Korea, Mexico, and Canada.
• Prices: First-quarter fed steer prices averaged $122.96 per cwt, declining from a peak in March. Second-quarter prices are expected to average $117–$121 per cwt.
• Demand: Packer demand weakened due to declining wholesale prices, but early-quarter sales ahead of grilling season supported prices.

Dairy

• Prices: Dairy product prices declined in early 2017, with cheddar cheese, butter, and nonfat dry milk (NDM) prices dropping. Dry whey prices increased slightly.
• Production: February milk production reached 16.7 billion pounds, a 2.3% increase from 2016. Milk per cow averaged 63.6 pounds per day, up 1.7%.
• Imports/Exports: February dairy imports were lower than the previous month and year, while exports of NDM and cheese increased. Exports on a milk-fat basis rose to 450 million pounds.
• Stocks: Ending stocks for major dairy products rose year-over-year, with butter and NDM stocks increasing by 20% and 19.9%, respectively.
• Forecasts: 2017 all-milk price is forecast at $17.40–$17.90 per cwt, a decrease from previous estimates. Domestic use of butter and cheese is expected to remain weak, leading to a lower forecast for commercial use.

Pork/Hogs

• Production: March 1 hog and pig inventories indicate a strong increase in second-half 2017 pork production.
• Prices: Third-quarter hog prices are expected to be $43–$47 per cwt, and fourth-quarter prices at $36–$38 per cwt, both below 2016 levels.
• Exports: February pork exports reached 450 million pounds, a 16% increase from 2016. Mexico and South Korea were the top destinations.
• Imports: Mexican pork imports are expected to reach over 2.4 billion pounds in 2017, up 8% from 2016. U.S. pork exports to Mexico and Canada are expected to remain strong.

Sheep/Lamb

• Prices: Lamb and mutton prices remained stable in the first quarter, with slight increases before Easter and Passover. Prices are expected to decline slightly in the second quarter.
• Production: First-quarter lamb and mutton production was 37 million pounds, 3% below 2016. Production is expected to rise in April to meet holiday demand.
• Imports: Lamb and mutton imports surged in January and February, reaching 24.0 and 21.9 million pounds, respectively, due to tight domestic supplies and a strong U.S. Dollar. Australia and New Zealand are the primary suppliers.
• Exports: February exports totaled 0.30 million pounds, a 10% increase from 2016. Exports are mainly to the Caribbean and Latin America.

Poultry

• Production: February broiler production was 3.2 billion pounds, a 1.7% increase from 2016. Egg production also increased, with year-to-date production up 3%.
• Prices: February egg prices were higher than expected, leading to upward revisions in the price forecast. Turkey production remained slightly above 2016 levels.
• Imports: Broiler egg sets in incubators increased by 2.1% year-to-date, but a lower proportion of hatched chicks were used for meat production.
• Exports: February poultry exports increased, with the U.S. forecast to produce 6.110 billion pounds for the full year, a 2% increase over 2016.

Main Points and Key Information

• Market Conditions: Prices for beef, dairy, and pork products were influenced by supply-demand dynamics, exchange rates, and seasonal factors.
• Trade Trends: U.S. exports to key markets like Mexico, Japan, and South Korea increased significantly, while imports from some countries declined.
• Production Trends: Overall production for most livestock and poultry segments rose, but with varying weight and yield outcomes.
• Price Forecasts: Prices for all major livestock and dairy products are expected to remain lower than previous months, reflecting weak demand and strong supply.
• Seasonal Impact: Easter and Passover holidays had a noticeable effect on lamb and mutton production and trade, with increased demand and imports in early 2017.

Tables and Reports

• Red Meat and Poultry: Includes data on dressed weights and production forecasts.
• Dairy Forecast: Provides detailed projections for milk and dairy product prices and use.
• USDA Reports: Weekly and monthly data on cattle, hogs, and poultry production, as well as export and import volumes.

Outlook Summary

• Cattle/Beef: Increased production and export volumes, with declining prices due to surplus supply and weak packer margins.
• Dairy: Weak domestic use and lower product prices led to revised forecasts, with expectations of lower milk and dairy product prices in 2017.
• Pork/Hogs: Strong production outlook for second-half 2017, with modest price declines due to increased slaughter capacity.
• Sheep/Lamb: Stable prices, with production and imports rising in anticipation of holiday demand.
• Poultry: Increased production and export volumes, with a shift in the proportion of eggs used for meat production.

Contacts and Links

• Authors: Mildred Haley, Keithly Jones, Russell Knight, Lekhnath Chalise, Jerry Cessna, Jonathan Law
• Sources: USDA Economic Research Service, National Agricultural Statistics Service, Agricultural Marketing Service, and other relevant USDA reports.