20150818-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2015.8.18_19页_491kb

Summary of Livestock, Dairy, and Poultry Outlook (LDP-M-254, Aug. 18, 2015)

Core Content

This report provides an outlook for U.S. livestock, dairy, and poultry markets through the remainder of 2015 and into 2016. It highlights the impacts of weather, disease outbreaks, currency fluctuations, and trade restrictions on production, prices, and trade flows.

Main Points

Beef/Cattle

• Inventory Increase: U.S. cattle inventory rose by 2% to 98.4 million head as of July 1, 2015, the first increase since 2006.
• Pasture Conditions: Improved pasture conditions in most cattle regions allow producers to graze cattle to heavier weights.
• Cattle Prices: USDA lowered steer price forecasts for 2015 and 2016 due to weak demand and high prices.
• Production Forecast: Third-quarter 2015 commercial beef production is forecast 35 million pounds lower than expected, while fourth-quarter production remains stable.
• Export Challenges: A strong U.S. dollar has hurt beef exports, particularly to traditional markets like Japan, Mexico, and Hong Kong.
• Import Trends: Beef imports through June 2015 increased by 40% compared to the same period in 2014, with Australia leading the increase.
• Slaughter Trends: Producers are holding cattle for longer periods, which may delay the increase in slaughter numbers in 2016.

Pork/Hogs

• Hog Prices: USDA lowered second-half 2015 hog price forecasts due to lower-than-expected July prices.
• Production Recovery: Pork production is expected to rise significantly in the second half of 2015, driven by recovery from Porcine Epidemic Diarrhea.
• Export Performance: June 2015 pork exports reached 413 million pounds, with Mexico as the top destination, up 20.5% from 2014.
• Market Declines: Exports to Japan, Canada, and Hong Kong declined, while exports to Australia and Dominican Republic increased.
• Domestic Supply: Increased domestic supply and lower export volumes are expected to keep pork prices relatively stable.

Poultry

• Broiler Production: Broiler meat production rose by 4% in the second quarter of 2015, with a 6.4% increase in June.
• Production Forecast: Third- and fourth-quarter 2015 broiler production forecasts were lowered by 100 million pounds each due to falling prices and reduced chick placements.
• HPAI Impact: Highly pathogenic avian influenza (HPAI) has reduced turkey and egg production, leading to higher prices for these products.
• Cold Storage Levels: Broiler product stocks in cold storage increased significantly in June, contributing to lower prices.
• Wholesale Prices: Broiler product prices declined through the first half of 2015, with whole bird prices falling to the low $0.80s per pound.
• Turkey Production: Turkey production is forecast to decrease by 6% in the second half of 2015 due to reduced flock sizes and lower slaughter numbers, but prices are expected to rise due to limited supply.

Dairy

• Export Forecasts: Dairy export forecasts for 2015 and 2016 have been lowered due to weak international demand and competition.
• Milk Production: Milk production for 2016 is forecast at 213.0 billion pounds, down from previous years.
• Milk Prices: All-milk prices are expected to range between $16.40 and $17.40 per cwt in 2016, a decline from 2015 levels.
• Domestic Supply: Increased domestic supply is expected to put downward pressure on milk prices.

Key Information

• HPAI Impact: The outbreak of Highly Pathogenic Avian Influenza has significantly affected turkey and egg production, leading to higher prices for these products.
• Currency Effects: The strong U.S. dollar has reduced the competitiveness of U.S. beef exports.
• Trade Restrictions: Broiler and turkey exports have been impacted by trade bans due to HPAI, increasing domestic supply and lowering prices.
• Herd Rebuilding: Cattle and dairy herds are rebuilding, with a notable increase in beef cow replacements.
• Seasonal Trends: Seasonal demand changes, such as the decline in grilling-related demand after Labor Day, are expected to affect beef prices.
• Cold Storage: Cold storage levels for broiler products have increased, contributing to lower prices, while turkey and egg stocks have decreased.
• Forecast Adjustments: USDA has revised forecasts for beef, pork, broiler, and turkey production and prices due to changing market conditions.

Tables and Data Highlights

• Cattle Inventory by Class and Calf Crop:

  • Cattle and calves: 98.4 million head (up 2%)
  • Beef cows: 30.5 million head (up 3%)
  • Heifers 500 lbs and over: 15.9 million head (up 2%)
  • Calf crop: 34.3 million head (up 1%)

• Broiler Production and Cold Storage:

  • Second-quarter 2015 production: 10 billion pounds (up 4%)
  • Third-quarter 2015 production forecast: 10.3 billion pounds
  • Fourth-quarter 2015 production forecast: 10.2 billion pounds
  • Cold storage holdings: 688 million pounds in June 2015 (up 22% from 2014)

• Turkey Production and Prices:

  • Second-half 2015 production forecast: 2.82 billion pounds (down 6% from 2014)
  • Whole bird prices: Expected to rise to $1.22–$1.26 per pound in third-quarter 2015 (up 11% from 2014)
  • Frozen whole hens: Prices are forecast to continue rising into the fourth quarter

• Egg Production and Prices:

  • Table egg production in June 2015: 525 million dozen (down 11%)
  • HPAI caused a 11% drop in table egg flock size
  • Grade A large eggs in the New York market: Averaged $1.70 per dozen in Q2 2015 (up 26% from 2014)

• Beef Export and Import Trends:

  • Total beef imports through June 2015: Over 1.8 billion pounds (up 40%)
  • Beef exports to Mexico: Declined 24% in June 2015 due to high U.S. prices
  • Beef exports to South Korea: Increased by 74.7% in June 2015

Contacts and Links

• Contact: Kenneth Mathews (kmathews@ers.usda.gov), Mildred Haley (mhaley@ers.usda.gov)
• Tables: Red Meat and Poultry, Dairy Forecast
• Web Sites: Animal Production and Marketing Issues, Cattle, Dairy, Hogs, Poultry and Eggs, WASDE
• Next Newsletter Release: Sept. 17, 2015

Recent Special Articles

• Effect of the Trans-Pacific Partnership on U.S. Dairy Trade (Nov. 2013)
• Determinants of Japanese Demand for U.S. Pork Products (May 2013)
• U.S. Pork Production Rises on a Smaller Base of Breeding Animals (April 2013)
• Implications of the Trans-Pacific Partnership for Meat, Poultry, and Seafood Trade (April 2013)