20180918-USDA-Livestock,_Dairy,_and_Poultry_Outlook_2018.09.18_25页_1mb

Summary of Livestock, Dairy, and Poultry Outlook

Core Content

This document provides an overview of the U.S. livestock, dairy, and poultry markets as of early 2018, highlighting production, price, export, and import trends for each sector.

Main Points

U.S. Exports of Animal Proteins

• Total exports (Jan–Jul 2018): 10.1 billion pounds, valued at $9.8 billion.
• Volume shares: Broiler exports accounted for the largest share (40%), followed by pork (35%), beef and veal (18%), turkey (4%), eggs (3%), and lamb (<1%).
• Value shares: Beef and veal represented the largest share (42%), followed by pork (32%), broiler (19%), turkey (3%), eggs (3%), and lamb (<1%).
• Beef exports: Increased significantly in 2018, with a 17% rise in July compared to 2017. The 2018 export forecast was raised to 3.164 billion pounds, and 2019 to 3.245 billion pounds.
• Pork exports: Rose by nearly 9% in July, with third-quarter exports expected to be 1.3 billion pounds, a 6% increase from the previous year. Total 2018 pork exports are projected to exceed 2017 levels by over 6%.
• Poultry and egg exports: Broiler exports increased by 5% in July, while egg exports showed a slight decline. Broiler exports remain a significant component of U.S. meat exports.

Cattle and Beef Production

• 2018 beef production forecast: Unchanged at 27.1 billion pounds.
• Third-quarter production: Lower than expected due to reduced steer and heifer slaughter, partially offset by higher fourth-quarter production.
• 2019 beef production forecast: Unchanged at 27.7 billion pounds.
• Feeder cattle prices: Showed strength in summer but are expected to decline in the fourth quarter due to seasonal factors.
• Fed steer prices: Forecasted to be $108–$111/cwt in third-quarter 2018, and $108–$114/cwt in fourth-quarter 2018.
• 2019 fed steer prices: Unchanged from last month's forecast.

Dairy Market Trends

• Milk production (July 2018): 18.350 billion pounds, only 0.4% above July 2017.
• Milk cow numbers (July 2018): 9.396 million head, down 8,000 from June 2018.
• 2018 milk production forecast: 217.8 billion pounds, slightly lower than the previous forecast.
• Dairy product prices: Most dairy product prices increased in 2018, with cheddar cheese and nonfat dry milk (NDM) seeing notable rises.
• Import and export forecasts: Imports on a milk-fat basis are expected to rise to 6.2 billion pounds in 2018, while exports are forecast at 10.3 billion pounds, slightly lower than previously expected. For 2019, imports are expected to increase to 6.0 billion pounds, and exports to 9.8 billion pounds.
• Domestic use: Increased slightly for both 2018 and 2019.
• USDA assistance programs: New programs, including the Dairy Revenue Protection and Market Facilitation Program, were announced to support the dairy industry.

Pork and Hogs

• Pork production (Jan–Jul 2018): Increased by 3.8% compared to the same period in 2017.
• Cold stocks: Remained at or below 3- and 5-year averages.
• Pork prices: Declined due to increased supply, with an average wholesale pork carcass cutout of $75.66/cwt in 2018, down 12% from 2017.
• 2019 hog prices: Expected to remain lower than 2018, with first-half prices likely averaging $36–$38/cwt and $41–$45/cwt in the second half.
• Pork exports (July 2018): 425 million pounds, up 9% from July 2017, despite tariffs from Mexico and China. Exports to South Korea, Japan, and the Philippines were strong.

Feed Prices

• 2017/18 corn price estimate: $3.40 per bushel, unchanged from last month.
• 2017/18 soybean meal price estimate: $345 per short ton, $5 lower than last month.
• 2018/19 corn price forecast: $3.00–$4.00 per bushel, with a midpoint 10 cents lower than last month.
• 2018/19 soybean meal price forecast: $290–$330 per short ton, $5 lower at the midpoint than last month.

Key Information

Export Highlights

• Beef exports (2018): Strong growth driven by Asian markets, with a 15% increase through July.
• Pork exports (2018): Increased by 6.5% compared to the same period in 2017, with strong performance in South Korea, Japan, and the Philippines.
• Broiler exports (2018): Up 5% in July, but values declined due to lower prices.

Import Trends

• Beef imports (July 2018): Slightly down compared to the previous year.
• Dairy imports (July 2018): Notable increases in butter and cheese imports, with Ireland being the main supplier of butter.
• Pork imports (July 2018): Increased slightly, reflecting strong demand in the U.S.

Price Forecasts

• 2018 all-milk price: Forecast at $16.30–$16.50 per cwt, up 20 cents from the previous month.
• 2019 all-milk price: Forecast at $16.75–$17.75 per cwt.
• 2018 Class III milk price: $14.85–$15.05 per cwt.
• 2018 Class IV milk price: $14.00–$14.30 per cwt.
• 2019 Class III milk price: $15.20–$16.20 per cwt.
• 2019 Class IV milk price: $14.30–$15.40 per cwt.

USDA Support Programs

• Dairy Revenue Protection: New program to insure against revenue declines, with sign-up beginning in October 2018.
• Market Facilitation Program: Payments to producers based on 2018 production, capped at $125,000 per person or entity.
• Food Purchase and Distribution Program: USDA plans to purchase up to $84.918 million in dairy products for distribution to nutrition assistance programs.
• Trade Mitigation Package: Includes three programs to support farmers affected by foreign trade actions.

Outlook for 2019

• Milk production forecast: 221.0 billion pounds, up 0.1 billion pounds from the previous forecast.
• Milk cow forecast: 9.405 million head, reflecting a slight increase due to higher milk prices and lower feed prices.
• Import and export forecasts: Slight increases in imports and decreases in exports for 2019 due to reduced whey product exports.
• Domestic use: Expected to increase slightly in both 2018 and 2019.

Broiler Production and Export

• 2018 broiler production: Growth expected at 2.3%, with no revision in production projections.
• Breeder inventory: Declined seasonally, with a 1% reduction in August.
• Broiler exports (July 2018): Increased by 5% in volume, but values declined by 2%.

Poultry and Egg Production

• Egg production: Revised down slightly for the remainder of 2018 due to recent production indicators.
• Poultry exports: Broiler exports remain the largest component of U.S. poultry exports, with Mexico as the top market.

Conclusion

The U.S. livestock, dairy, and poultry sectors showed mixed performance in 2018. Beef exports surged, driven by strong demand in Asian markets, while pork and poultry exports also grew, despite some challenges like tariffs and lower prices. Dairy prices increased due to strong demand and lower feed costs, but export volumes for whey products declined. USDA support programs were introduced to stabilize the dairy industry, and production forecasts for 2019 indicated a slight increase in milk output and herd size. Overall, the outlook suggests continued growth in some sectors and challenges in others, particularly related to global trade dynamics and domestic price trends.