20220315-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2022.3.15_26页_1mb

2022 Livestock, Dairy, and Poultry Outlook Summary

Core Content Overview

The Livestock, Dairy, and Poultry Outlook: 2022 report by the Economic Research Service provides an analysis of the U.S. meat and dairy markets for the year 2022, focusing on production, prices, and trade dynamics. It outlines trends in red meat, poultry, dairy, and feed sectors, highlighting the impact of global events and domestic market conditions on supply and demand.

Meat Disappearance

• Per Capita Meat Disappearance: Expected to increase slightly to 224.9 pounds per person in 2022, up 0.1 pound from 2021.
• Red Meat: Per capita disappearance is projected to decrease by 0.85%, due to lower livestock inventory.
• Poultry: Disappearance is expected to increase for broilers (0.30%) and turkey (1.40%), with turkey marking the first increase since 2016.
• Broiler Production: Sustained growth is expected, driven by production trends and constrained supply.
• Pork: Disappearance is expected to increase slightly, despite lower production, due to reduced exports and strong domestic demand.

Beef Sector Highlights

• Production: Forecast to increase by 195 million pounds to 27.570 billion pounds in 2022, due to higher slaughter numbers.
• Prices:
  • Fed Steer Prices: Raised to $139.25 per cwt for the year, with quarterly forecasts adjusted up.
  • Feeder Steer Prices: Lowered to $160.50 per cwt for the year, with a drop in the first quarter and an increase in the second.
• Exports:
  • Set a record of 288 million pounds in January, up 17% from the previous year.
  • Expected to moderate in the remaining quarters due to increased competition from Oceania and weaker demand from North America.
• Imports:
  • Increased to 352 million pounds in January, up 57% year-over-year.
  • Brazil accounted for two-thirds of the increase, with fresh beef imports rising sharply after the China embargo was lifted in December 2021.
  • Fresh beef imports are subject to a tariff-rate quota of 65,005 metric tons for 2022, with excess imports facing higher tariffs.

Dairy Sector Highlights

• Milk Production: Projected at 226.0 billion pounds for 2022, a 1.2 billion-pound decrease from the previous month and a 0.3 billion-pound decrease from 2021. This is the first year-over-year decline since 2009.
• Prices:
  • All-milk price is forecast to reach a record high of $25.05 per cwt, up $1.50 from last month.
  • Wholesale Prices: Cheddar cheese, butter, nonfat dry milk (NDM), and dry whey are all expected to rise due to strong demand and lower production.
• Exports:
  • Forecast to decrease by 4.3% from 2021, due to higher U.S. prices and weaker demand in key markets.
  • Whey products, dry skim milk, lactose, and dry whole milk are expected to see reduced exports.
• Imports:
  • Projected to increase slightly to 6.8 billion pounds on a milk-fat basis and 5.8 billion pounds on a skim-solids basis.
  • Cheese, butter, fluid milk, and cream imports are expected to decline, while milk protein products and other dairy items may see higher volumes.

Feed Prices and Global Uncertainties

• Feed Prices:
  • Corn: Projected at $5.65 per bushel, up $0.20 from last month.
  • Soybean Meal: Projected at $420 per short ton, up $10 from last month.
  • Alfalfa Hay: Increased in January to $211 per short ton, with a 5-State weighted average of $262 per short ton.
• Global Impact:
  • The Russian invasion of Ukraine has introduced uncertainty into the dairy market, affecting feed, fuel, and energy costs.
  • Higher input costs could lead to increased production costs and higher dairy product prices, which may reduce consumer demand.
  • Dairy export forecasts are adjusted downward due to higher U.S. prices and reduced demand.

Poultry and Eggs Sector Highlights

• Broiler Production: Lowered due to continued hatchability challenges and reduced slaughter.
• Broiler Exports: Reduced due to lower production expectations.
• Broiler Prices: Increased due to constrained supply and higher feed costs.
• Table Egg Production: Revised down for the first half of 2022 due to higher production costs and slow layer flock expansion.
• Wholesale Egg Prices: Raised for all quarters due to current price trends and lower production growth.
• Egg and Egg Products Exports: Revised down due to lower-than-expected shipments in December and January.
• Turkey Production: Adjusted down, but still expected to grow by 1% in 2022.
• Turkey Exports: Reduced due to decreased demand from key importers and the impact of highly pathogenic avian influenza (HPAI).

Key Influencing Factors

• Supply Constraints: Lower livestock inventory, PRRS outbreaks, and corn silage quality issues have impacted production and prices.
• Trade Dynamics:
  • Increased exports to China, South Korea, and Taiwan have offset reduced exports to Mexico, Canada, and Japan.
  • Brazil has become a major supplier of beef to the U.S., especially after the China embargo was lifted.
• Consumer Demand:
  • Domestic demand is expected to remain strong, supported by the recovery of foodservice and retail sectors post-pandemic.
  • Higher prices may reduce consumption, particularly in the context of inflation.

Conclusion

The 2022 outlook for the U.S. livestock, dairy, and poultry sectors reflects a mix of modest growth, price increases, and trade volatility. While beef and poultry disappearance are expected to rise slightly, dairy production is projected to decline for the first time since 2009. Feed price increases and global geopolitical events, particularly the Ukraine conflict, add uncertainty to the market outlook, influencing both supply and demand dynamics. The report underscores the importance of monitoring supply chain disruptions, animal health issues, and international trade trends for accurate market predictions.