20160119-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2016.1.19_23页_858kb

Summary of Livestock, Dairy, and Poultry Outlook (LDP-M-259, Jan. 19, 2016)

Core Content

This report provides an overview of the supply, usage, and trade outlook for U.S. livestock, dairy, and poultry in 2016. It highlights the impact of weather conditions, disease outbreaks, and trade policies on production, prices, and exports. Key data points and forecasts are provided for beef, pork, poultry, and dairy sectors.

Main Views and Key Information

Red Meat and Poultry Outlook

• Per Capita Disappearance: Expected to increase by nearly 1% for red meat and 1% for poultry in 2016, compared to 2015.
• Red Meat:
  • 2016 per capita disappearance is projected at 105.7 pounds, up from 104.9 pounds in 2015.
  • Broiler disappearance is expected to be slower due to export recovery being limited.
• Poultry:
  • Production for broiler meat is forecast to increase, supported by strong chick placements.
  • Whole bird prices are expected to rise in 2016, with an average of 85–91 cents per pound.
  • Table egg production in November was 548 million dozen, down 11% from the previous year, but is expected to rise in 2016.
  • Egg prices fell in December due to increased supply, with the average Grade A large egg price in the New York market dropping to $1.15 per dozen.

Beef/Cattle Sector

• Weather Impact:
  • Severe winter weather in late December and early January affected cattle transportation and increased mortality.
  • Cold storage stocks increased due to production and trade restrictions.
• Prices:
  • Fed steer prices rose from $116.64 to $132.26 in early December.
  • However, the 2016 forecast for first-quarter prices is lower than 2015, at $128–134 per cwt.
• Supply and Demand:
  • Beef cow slaughter in 2015 was the lowest since 2005, with beef cows accounting for 43% of total commercial cow slaughter.
  • A strong rate of cow herd expansion is expected in 2016, which could impact prices negatively.
• Trade:
  • Beef exports are expected to improve in 2016 due to lower domestic prices and increased supplies.
  • Beef imports are forecast to decline by 16% in 2016, primarily due to reduced imports from Australia and New Zealand.
  • The U.S. dollar's strength may affect the competitiveness of U.S. beef in global markets.

Pork/Hogs Sector

• Production and Inventory:
  • December 2015 hogs and pigs inventory increased by 1% in all categories, with the breeding herd reaching its highest level since 2008.
  • Litter rates rebounded in 2015, reaching a record high of 10.53 pigs per litter in September–November.
• Production Forecast:
  • 2016 pork production is forecast at 24.95 billion pounds, a 2% increase from 2015.
  • Live hog prices are expected to average $46–$49 per cwt in 2016.
• Exports:
  • November 2015 pork exports reached 431 million pounds, up 19% from 2014 but down 5% from 2013.
  • Mexico became the largest export market for U.S. pork in 2015, surpassing Japan in volume.
  • Japan and Canada remain top markets in terms of unit value.
• Live Swine Imports:
  • The repeal of COOL laws in late December is expected to lead to a slow increase in live swine imports from Canada.
  • Canadian swine imports are forecast to rise by 9% to 6.2 million head in 2016.

Poultry Trade

• Broiler Shipments:
  • Broiler shipments in November 2015 dropped 14% compared to the previous year, totaling 494 million pounds.
  • Exports to Mexico increased by 2% from 2014 levels, while exports to other markets faced challenges due to trade bans.
• Turkey Shipments:
  • Turkey meat exports in November totaled 43 million pounds, a 41% decrease from the previous year.
  • The drop was largely due to reduced exports to Mexico, which saw a 39% decline.
• Egg Shipments:
  • Egg and egg product exports in November totaled 19 million dozen, a 47% decrease from the previous year.
  • The decline was concentrated in markets such as Mexico, Japan, Hong Kong, and Canada.

Key Trends

• Weather Impact:
  • Cold and wet conditions in the Southern Plains and early 2016 affected cattle transportation and slaughter schedules.
  • HPAI outbreaks in 2015 led to lower turkey and egg production, with recovery expected in 2016.
• Price Trends:
  • Beef prices rose in early 2016 but are expected to fall in the second half due to potential oversupply.
  • Poultry prices are expected to rise in 2016 due to lower stock levels.
  • Egg prices declined sharply in December 2015 and are forecast to remain lower in 2016 due to increased production.
• Export Outlook:
  • Beef exports are expected to recover in 2016, while imports are likely to decrease.
  • Pork exports are expected to increase, with Mexico as the largest market.
  • Turkey and egg exports remain under pressure due to trade restrictions and disease outbreaks.

Conclusion

The livestock, dairy, and poultry sectors in the U.S. are expected to experience mixed outcomes in 2016. While production of red meat and poultry is forecast to rise, prices may face downward pressure due to increased supply and trade dynamics. The repeal of COOL laws and favorable exchange rates are expected to increase live swine imports, while HPAI outbreaks in 2015 continue to affect turkey and egg production and trade. Overall, the outlook suggests a gradual recovery in some markets and continued challenges in others.