20160418-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2016.4.18_24页_955kb

Economic Outlook for Livestock, Dairy, and Poultry (April 18, 2016)

Core Content

This report provides an overview of the U.S. livestock, dairy, and poultry sectors in early 2016, including export and import trends, production forecasts, and price outlooks. It also includes a special article on the factors affecting the decline in U.S. broiler exports.

Main Points

Cattle/Beef

• Export Trends: U.S. beef exports for 2016 are forecast at 2.45 billion pounds, an 8% increase from 2015.
• Import Trends: Beef imports are expected to decline by 14% year over year, with Australia's decline being the most significant.
• Price Outlook: Fed cattle and beef prices have not yet rebounded, but a seasonal increase is expected in the spring quarter due to grilling demand.
• Supply Dynamics: Feeder cattle supplies are ample, with heavier carcass weights due to favorable weather and low feed prices. This is expected to increase beef supply and exert downward pressure on prices.
• Carcass Weights: Year-to-date carcass weights for fed cattle are 15 pounds higher than last year, contributing to increased supply.

Dairy

• Export and Import Trends: Dairy exports to Mexico and other countries remain strong, while high imports of milk-fat products and elevated stock levels may pressure prices downward.
• Price Forecast: The all-milk price is forecast at $15.00–$15.50 per cwt, unchanged from the previous month. Butter and NDM prices are slightly lowered, while cheese prices are mixed.
• Production: Milk production is expected to increase to 211.8 billion pounds in 2016, with higher milk per cow and a slightly increased number of milk cows.
• Feed Costs: Feed prices, including corn, soybean meal, and alfalfa hay, remain relatively low, supporting increased milk production.

Pork/Hogs

• Inventory and Production: Hog inventories on March 1 were largely unchanged from the previous year, with a 1% lower winter pig crop and reduced farrowing intentions.
• Export Trends: U.S. pork exports in February totaled 387 million pounds, up 2.5% year over year, with notable exports to China.
• Price Outlook: Pork prices are expected to be $46–$48 per cwt in 2016, 7% lower than last year. The second quarter is forecast to see similar production levels but slightly lower prices.
• Exchange Rates: A weaker U.S. dollar compared to major trading partners has improved the competitiveness of U.S. pork in international markets.

Sheep/Lamb

• Production and Prices: First-quarter 2016 Choice slaughter lamb prices were $133.33/cwt, down $14/cwt from the previous year. Prices are expected to remain below 2015 levels for the rest of 2016.
• Export and Import Trends: U.S. lamb and mutton exports in February were down 58% year over year, while imports from Australia and New Zealand increased significantly.
• Market Dynamics: The strong U.S. dollar and increased supply are expected to suppress export volumes, but production is forecast to slightly exceed 2015 levels.

Poultry

• Broiler Production and Prices: Broiler production and prices are forecast to remain stable through the first four quarters of 2016. First-quarter production was up 3% year over year.
• Turkey Production: Turkey production in the first half of 2016 is forecast to increase by 3% compared to the same period in 2015. Cold storage stocks are up, with higher prices for whole birds and breast meat.
• Export Trends: Broiler exports are forecast to remain unchanged, while turkey exports declined sharply in February. Egg exports also dropped by 37% in February.

Key Information

• Export Destinations: Mexico, Japan, Canada, China-Hong Kong, and South Korea account for the majority of U.S. beef, dairy, and poultry exports.
• Special Article: The 2015 HPAI outbreak significantly impacted U.S. broiler exports. The report highlights that the U.S. maintains a strong position in broiler exports, accounting for 76% of the total poultry export value in 2014.
• Market Conditions: A strong U.S. dollar and weak global demand are key factors affecting export competitiveness.
• Price Trends: Prices for many products have declined, but strong domestic demand is expected to counteract some of the downward pressure.
• Production Forecasts: All sectors are projected to see some level of growth in production, with cattle and poultry showing the most promise.

Outlook Summary

• Cattle/Beef: Prices are expected to remain under pressure but may improve in the spring due to seasonal demand.
• Dairy: Prices may fall due to high stock levels and imports, but domestic demand is expected to stabilize prices.
• Pork/Hogs: Production is expected to remain stable, with potential for slight growth. Prices are projected to be lower than 2015.
• Sheep/Lamb: Prices are expected to stay below 2015 levels due to increased supply, though a seasonal rebound may occur.
• Poultry: Broiler production and prices are stable, while turkey production is forecast to increase. Egg production has declined slightly, but prices have risen.