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Summary of Livestock, Dairy, and Poultry Outlook: January 2022

Core Content

The January 2022 report from the U.S. Department of Labor's Bureau of Labor Statistics and USDA provides an overview of the U.S. livestock, dairy, and poultry markets, highlighting trends in production, prices, and trade during 2021 and early 2022.

Main Points

Consumer Price Indexes (CPIs) for Animal Products

• The overall CPI for all items in 2021 increased by 4.7% compared to 2020.
• The CPI for food increased by 3.9%, slightly below the general inflation rate.
• Beef and veal, pork, and poultry CPIs exceeded the general inflation rate.
• Eggs and dairy CPIs increased less than the general inflation rate.

Beef Production and Prices

• Production: 2021 beef production forecast was raised to 27.950 billion pounds, up 55 million pounds from the previous month.
• Slaughter and Weights: Increased cow and bull slaughter and heavier dressed weights contributed to the production increase.
• Export Trends: Beef exports in November were 298 million pounds, 8% above the previous year and 15% above the 5-year average. Cumulative exports from January to November 2021 reached 3.159 billion pounds, up 18% year-over-year.
• Import Trends: Beef imports in November totaled 297 million pounds, up 27% year-over-year. Annual 2021 import forecast was raised to 3.355 billion pounds, while 2022 forecast remained at 3.265 billion pounds.
• Prices: Fed and feeder steer prices rose in 2022, with the 2022 annual forecast increased to $136.75 per cwt. Feeder steer prices for 2022 were raised by $1.00 to $160.00 per cwt.

Poultry and Eggs

• Broiler production was adjusted upward in the fourth quarter of 2021 and first quarter of 2022.
• Ending stocks for 2021 were reduced.
• Broiler exports for 2022 were adjusted down to 7.45 billion pounds.
• Broiler prices were raised to an average of 112 cents per pound for 2022.
• Table egg production was revised down in the fourth quarter of 2021 due to recent data.
• Egg and egg products export forecasts were revised down for the first half of 2022.
• Turkey production remained unchanged, while ending stocks were adjusted down to 190 million pounds. Turkey exports were reduced to 550 million pounds in 2021.

Dairy Market Trends

• Wholesale Prices: All dairy product prices increased from the week ending December 11 to January 8, 2022. Prices for butter, nonfat dry milk, dry whey, and cheddar cheese rose significantly.
• Export Data: Dairy exports in November totaled 900 million pounds on a milk-fat basis, 259 million higher than November 2020. Dry skim milk product exports reached 168.5 million pounds.
• Import Data: Dairy imports in November totaled 576 million pounds on a milk-fat basis, 105 million higher than November 2020. Butter and cheese imports also increased.
• Domestic Use: Domestic use of dairy products in November was above the previous year, with a slight decrease in ending stocks compared to November 2020.
• Milk Production: November 2021 U.S. milk production was 18.035 billion pounds, down 0.4% from November 2020. Milk per cow increased by 3 pounds.
• Market Share: The U.S. market share for skim milk powder (SMP) is expected to grow in 2022, surpassing the EU's dominance.

International Outlook for Dairy

• Global milk production for 2022 is forecast to be 647.1 billion pounds, a 0.7% increase from 2021.
• The EU and New Zealand are expected to see small increases in production, while the U.S. production is projected to remain at 227.7 billion pounds.
• U.S. SMP exports are projected to increase in 2022, with a growing market share.

Dairy Margin Coverage (DMC) Program

• The DMC program signup period ran from December 13, 2021, to February 18, 2022.
• The program was expanded to include supplemental production and use of 100% premium alfalfa hay in the feed cost formula.

Feed Price Outlook

• Corn: Projected at $5.45 per bushel for 2021/22, unchanged from the previous month.
• Soybean Meal: Projected at $375 per short ton, up $45 from the previous forecast.
• Alfalfa Hay: November prices were $210 per short ton, up $46 from November 2020.

Key Information

• Inflation Trends: Animal product CPIs were mixed, with some categories (beef, pork, poultry) outperforming the general inflation rate.
• Beef Market: Production increased in 2021, supported by higher slaughter rates and heavier carcass weights. Exports to major markets like China, South Korea, and Japan were strong, while imports from Mexico and Hong Kong declined.
• Dairy Market: Prices for most dairy products rose significantly, with increased exports and robust domestic use. However, imports and export forecasts for 2022 were adjusted downward due to expected price changes and market dynamics.
• Poultry Market: Production and exports were adjusted based on recent data, with broiler prices and ending stocks showing notable changes.
• Feed Prices: Prices for corn, soybean meal, and alfalfa hay were forecast to remain stable or increase slightly, affecting dairy production costs.

Summary of Key Figures

Conclusion

The U.S. livestock, dairy, and poultry markets experienced mixed trends in 2021, with beef and poultry production rising, while dairy prices and exports showed significant increases. The report indicates that while demand for U.S. beef and dairy products remains strong, there are signs of market saturation and price adjustments in 2022. The DMC program and feed price forecasts further highlight the challenges and opportunities facing the sector.