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Summary of Livestock, Dairy, and Poultry Outlook Report (June 15, 2017)

Core Content

This report provides an outlook for the U.S. livestock, dairy, and poultry sectors for 2017 and 2018, including production forecasts, price trends, trade data, and supply-demand analysis.

Main Points

Red Meat and Poultry

• Export Forecast: USDA forecasts higher exports for 2018 for red meats, poultry, eggs, and dairy compared to 2017.
  • Lamb and mutton exports are expected to increase from 7 million to 8 million pounds.
  • For other red meats, increased production is expected to drive higher export forecasts.
• Beef Production:
  • Third-quarter commercial beef production is forecast at 6.8 billion pounds, up 5% from the same period in 2016.
  • 2017 total beef production is revised down slightly to 26.2 billion pounds, still 4% above 2016.
  • Beef prices for 1,100-1,300 pound Choice steers are expected to average $118-$124 per cwt in the third quarter and $122-$126 per cwt for the year.
• Cattle Slaughter and Weights:
  • April 2017 commercial beef production was slightly below 2016, but higher slaughter numbers (54,000 head more) offset this.
  • Dressed weights for steers and heifers declined by 25 and 22 pounds, respectively, year-over-year.
  • Slaughter weights are expected to increase seasonally but remain limited due to incentives to market cattle quickly.
• Feeder Cattle Supply:
  • Net placements increased by 12% in April to 1.78 million head, surpassing marketings.
  • Feeder cattle supply outside feedlots increased only slightly (0.42%) year-over-year, indicating tighter availability.
• Cattle Imports and Exports:
  • Cattle imports in April 2017 declined by 28% compared to the same month in 2016.
  • Exports increased to 44 thousand head for the first 4 months of 2017, up 60% from the same period in 2016.
  • Total 2017 imports are expected to be 6.0 billion pounds on a milk-fat basis, and exports 8.4 billion pounds.
  • Ending stocks for 2017 are forecast at 12.9 billion pounds on a milk-fat basis, and 9.9 billion pounds on a skim-solids basis.

Dairy

• Export and Import Trends:
  • April 2017 dairy exports on a milk-fat basis were 724 million pounds, up 64 million from April 2016.
  • Skim-solids exports increased to 3.467 billion pounds, up 348 million from April 2016.
  • Imports on a milk-fat basis were 478 million pounds, up 34 million from April 2016.
• Product Prices:
  • Butter prices increased by 23 cents per pound from the week ending April 29 to June 3.
  • The 2017 all-milk price forecast is $17.80-$18.20 per cwt, up from $17.35-$17.85.
  • 2018 all-milk price forecast is $18.10-$19.10 per cwt, an increase from last month.
• Milk Production:
  • April 2017 milk production was 18.3 billion pounds, 2.0% above April 2016.
  • Milk per cow increased slightly, but the growth rate slowed from 2.3% to 1.2%.
  • 2017 milk production is forecast at 216.7 billion pounds, down slightly from last month.
  • 2018 milk production is projected at 221.7 billion pounds, down 0.3 billion from last month.

Pork/Hogs

• Production and Prices:
  • Third-quarter pork production is expected to be 6.4 billion pounds, 4% above 2016.
  • Hog prices are forecast to remain in a range of $47-$49 per cwt for the third quarter, 3% below 2016.
• Export Trends:
  • U.S. pork exports in April were up 8% year-over-year, marking the 12th consecutive month of growth.
  • Mexico, Japan, and China/Hong Kong were the top three export markets, accounting for 62% of total exports.
  • Exports to China/Hong Kong declined by 23% compared to April 2016.
• Packer Margins:
  • Packer margins were strong in May, up over 69% compared to May 2016, due to robust domestic demand and lower input costs.

Poultry

• Broiler Production:
  • April 2017 broiler meat production was 3.2 billion pounds, 2.2% above 2016.
  • The second-quarter forecast was reduced by 25 million pounds due to slower weight growth.
  • Broiler prices increased in May, reaching $1.16 per pound, the highest since 2014.
• Egg Production:
  • April 2017 table egg production was 629 million dozen, up 4.7% from 2016.
  • Second-quarter egg production forecast was increased by 15 million dozen to 1,890 million dozen.
  • Egg exports increased by 15% in April, driven by shipments to South Korea, Italy, UAE, and Japan.
• Turkey Production:
  • April 2017 turkey production was 436 million pounds, 10% below April 2016.
  • 2017 turkey production forecast was reduced by 30 million pounds to 6.092 billion pounds.
  • Turkey exports in April fell 6% year-over-year to 44 million pounds, largely due to a sharp decline in exports to Hong Kong.
  • Turkey prices remained well below 2016 levels and have been flat since the start of 2017.

Key Information

• Export Growth: All major animal proteins (red meats, poultry, eggs, dairy) are expected to see increased exports in 2018.
• Price Trends: Prices for beef, pork, and dairy products are generally expected to remain strong in 2017 and 2018, with some exceptions like turkey and dry whey.
• Supply and Demand: Tighter supply conditions, especially for beef and dairy, are expected to support higher prices in the coming months.
• Market Dynamics: The U.S. dollar's weakness and strong domestic demand have contributed to export growth for beef and pork.
• Seasonal Variations: Prices and production are expected to follow seasonal patterns, with declines in late summer and increases in early spring.

Contacts and Links

• Livestock, Dairy, and Poultry Outlook Report: World Agricultural Outlook Board
• Tables and Reports: Released on June 28, 2017, and the next Outlook Report is scheduled for July 18, 2017.
• Authors:
  • Mildred Haley (mhaley@ers.usda.gov)
  • Keithly Jones (KJones@ers.usda.gov)
  • Russell Knight (Russell.H.Knight@ers.usda.gov)
  • Lekhnath Chalise (Lekhnath.Chalise@ers.usda.gov)
  • Jerry Cessna (jgcessna@ers.usda.gov)
  • Jonathan Law (jonathan.law@ers.usda.gov)
  • Sean Ramos (sean.ramos@ers.usda.gov)