20150815-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook__April_.15.2015_21页_472kb

Summary of Livestock, Dairy, and Poultry Outlook (April 15, 2015)

Core Content Overview

This report provides an outlook for the U.S. livestock, dairy, and poultry sectors for the year 2015, with a focus on production, trade, and price trends. It highlights the impact of market conditions, including inventory levels, exchange rates, and disease outbreaks, on the industry's performance.

Key Sectors and Trends

Beef/Cattle

• Market Conditions:

  • Heavy feeder cattle placements into feedlots were lower than expected, but placements of 800-plus pound cattle were higher.
  • Cattle feeders have retained fed cattle at heavier weights due to low corn prices and historically low feedlot inventories.
  • Beef packers have paid higher prices than usual, leading to narrow-to-negative profit margins for cattle feeders.
  • Despite this, moderate corn prices and strong fed-cattle prices have improved potential for positive margins later in 2015.

• Trade:

  • Imports: U.S. cattle imports declined by 6.2% in February 2015, mainly due to a drop in fed cattle and slaughter cow imports from Canada.
  • Exports: U.S. beef exports fell by 2.6% in February 2015, with major declines in shipments to Hong Kong, Canada, and Mexico. However, exports to Japan increased by 9.3%.
  • Overall Forecast: U.S. beef imports are expected to decrease slightly in 2015, while exports are forecast to decline due to lower production, high prices, and a strong dollar.

• Prices:

  • Wholesale beef cutout values have increased, with both Choice and Select cutouts approaching record highs.
  • Retail beef prices reached record levels in February 2015, averaging $6.028 per pound, up 14% from the previous year.
  • Beef prices are expected to face resistance at the retail level due to competition from pork and poultry.

Pork/Hogs

• Production:

  • U.S. hog production is rebounding from the impact of PEDv, with March 1 inventory of market hogs at 60 million head, 7.7% higher than the previous year.
  • Breeding herd numbers have increased, indicating industry expansion.

• Litter Rates:

  • Litter rates rebounded to 10.17 pigs per litter in the December-February quarter, a 6.7% increase from the year-ago rate.
  • This is a record for the quarter and will support higher pork production in the summer of 2015.

• Production Forecast:

  • 2015 commercial pork production is forecast at 24.2 billion pounds, a 6.1% increase from 2014 and 4.5% above 2013.
  • Hog prices are expected to remain below 2014 and 2013 levels due to higher production and lower net exports.

• Trade:

  • Exports: U.S. pork exports in February 2015 totaled 377 million pounds, 10% below the previous year, due to a strong dollar and port delays.
  • Imports: U.S. pork imports rose by 32% in February 2015, mainly due to the weak U.S. dollar and increased supply from Canada and EU members.
  • Overall Forecast: U.S. pork imports are expected to increase to 1.2 billion pounds in 2015, 22% above 2014. Exports are forecast at 4.75 billion pounds, slightly lower than 2014.

Poultry

• Production:

  • Broiler meat production in the first 2 months of 2015 was 6.3 billion pounds, 2% higher than 2014.
  • First-quarter production is estimated at 9.7 billion pounds, a 5% increase from the previous year.
  • Turkey meat production in Q1 2015 is estimated at 1.4 billion pounds, 7% higher than 2014.

• Cold Storage:

  • Broiler cold storage holdings at the end of February totaled 696 million pounds, up 7% from the previous year.
  • Turkey cold storage holdings increased to 323 million pounds, up 4% from the previous year.

• Prices:

  • The wholesale price for whole birds in Q1 2015 averaged $0.97 per pound, down 1% from the previous year.
  • Prices for B/S breast meat increased by 5% in Q1 2015, while leg meat prices declined.
  • Egg prices in the New York region averaged $1.47 per dozen in Q1 2015, a 3% increase from Q1 2014.

• Trade:

  • Broiler Shipments: Broiler exports in February 2015 decreased by 17.0% compared to the previous year, mainly due to trade restrictions and a strong dollar.
  • Turkey Shipments: Turkey exports in February 2015 fell by 7.6%, primarily due to China's ban on U.S. poultry exports.
  • Egg Shipments: Egg exports in February 2015 increased by 12.0%, mainly driven by higher shipments to Mexico.

Dairy

• Production:

  • 2015 milk production is forecast at 210.0 billion pounds, a 1.9% increase from 2014.
  • The forecast was revised downward by 1.1 billion pounds from the previous month's estimate.

• Prices:

  • Class III milk price is forecast at $16.20-$16.70 per cwt, up from the previous month.
  • Class IV milk price is forecast at $14.45-$15.05 per cwt, down from the previous month.
  • All-milk price is forecast at $17.10-$17.60 per cwt, unchanged from the previous month.

• Trade:

  • Exports are forecast to increase, while imports are expected to rise on a milk-fat milk-equivalent basis.

Key Factors Influencing the Industry

• Exchange Rates: A strong U.S. dollar has reduced the competitiveness of U.S. beef and pork exports, increasing the demand for imported products.
• Disease Outbreaks: Avian Influenza (HPAI) and trade bans in China, South Korea, and Russia have impacted poultry exports.
• Inventory Levels: Low feedlot inventories and high cattle on feed have led to higher prices for fed cattle, despite lower production.
• Seasonal Demand: Spring grilling season is expected to support higher beef cutout values, while pork and poultry prices may face downward pressure.

Summary of Key Statistics

Conclusion

The livestock, dairy, and poultry sectors in 2015 are shaped by a mix of strong and weak factors. Beef prices are supported by low feedlot inventories and high demand, while pork and poultry face downward pressure due to increased production and trade restrictions. Exchange rates and disease outbreaks play a significant role in shaping export dynamics, particularly for poultry. The dairy sector shows modest growth in production and stable price forecasts, indicating a resilient market. Overall, the industry is expected to experience continued volatility in prices and trade volumes, with potential for recovery in the second half of the year.