20210218-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2021.02.18_34页_1mb

Summary of the 2020 U.S. Livestock, Dairy, and Poultry Outlook

Core Content Overview

The Livestock, Dairy, and Poultry Outlook report provides an analysis of the performance and trends in U.S. animal product exports and production in 2020, with projections for 2021. It highlights the impact of the global pandemic and market dynamics, particularly in Mexico and China, on trade volumes and prices. It also outlines changes in cattle inventory, dairy prices, and poultry production.

Major Animal Product Export Trends in 2020

• Beef and Veal:

  • Export quantities decreased by 2.3%, and values by 5.4%, primarily due to reduced shipments to Mexico.
  • December beef exports increased by 13.2%, driven by strong sales to China and Mexico.
  • 2020 total beef imports rose by 9.3% to 3.34 billion pounds, with China and Mexico being key markets.

• Turkey:

  • Export volumes and values dropped by 10.5% and 13.7%, respectively, due to weaker demand in Mexico and smaller markets.

• Eggs and Egg Products:

  • Export volumes increased by 3.0%, supported by strong demand from Mexico.
  • The value of these exports decreased by 1.9%, reflecting issues in the U.S. egg-processing sector due to the pandemic.

• Pork:

  • Export volumes rose by 15.2%, and values by 12.2%, mainly due to China's strong demand.
  • However, 2021 pork exports are expected to be 1.5% lower than 2020 due to anticipated lower shipments to China.

• Dairy:

  • Export volumes and values increased by 13.7% and 8.9%, respectively, driven by China and Southeast Asian countries.
  • 2021 dairy export forecasts are raised on both milk-fat and skim-solids milk-equivalent bases due to increased butterfat and whey product exports.

2021 Production and Market Forecasts

• Beef Production:

  • 2021 production forecast is raised to a record 27.54 billion pounds, up 350 million pounds from the previous month.
  • Cattle slaughter increased by 3.7% in early 2021, with average carcass weights up by 18 pounds.
  • Second-half 2021 fed-cattle marketings are expected to rise due to higher placements in the first half.
  • Live steer prices for the first week of February were $113.63 per cwt, $8 below 2020 levels.
  • 2021 beef export forecast is 3.145 billion pounds, with a first-quarter increase of 25 million pounds due to strong demand in key markets.

• Cattle Inventory:

  • Cattle inventory on January 1, 2021, was 93.6 million head, down 200,000 head from 2020.
  • Heifer retention increased slightly, indicating a slowdown in inventory contraction.
  • Feeder steer prices in January 2021 were $133.94 per cwt, 7% below 2020 levels.

• Poultry and Eggs:

  • Broiler meat production increased by 3.8% in 2021, with 2020 production up due to an extra slaughter day and higher bird weights.
  • 2021 broiler export forecast is unchanged, but wholesale prices are expected to rise due to improved demand and tighter supplies.
  • Table egg production declined in 2020 due to layer flock reductions from the pandemic, and 2021 forecast is also reduced due to higher feed costs.
  • Turkey production for 2021 is unchanged at 5.725 billion pounds, but export forecast was reduced by 15 million pounds.

Dairy Market Volatility in 2020

• Wholesale dairy prices fluctuated significantly throughout the year, with Cheddar cheese prices ranging from $1.1349 to $2.7723 per pound.
• Class III price (cheese) exceeded Class I price (fluid milk) for several months, with the Class III-IV gap reaching a record high of $10.78 per cwt in July.
• All-milk price averaged $18.32 per cwt in 2020, down $0.31 from 2019.
• Domestic use of dairy products declined in 2020, while export demand remained strong, especially on the skim-solids basis (up 13.7%).

Impact of the Pandemic on Dairy and Livestock Markets

• The pandemic caused reduced domestic demand and logistical challenges, particularly in the spring.
• Milk in other uses (unprocessed milk) spiked in April to 350 million pounds, impacting supply and prices.
• Government interventions, such as purchases and subsidies, played a role in stabilizing the market.
• Dairy export growth was supported by China and Southeast Asian countries, with skim-solids exports up 13.7%.

Key Takeaways

• China and Mexico were pivotal in shaping U.S. animal product export trends in 2020.
• Cattle slaughter and carcass weights drove 2021 beef production to record levels.
• Dairy markets experienced high volatility, influenced by pandemic-related disruptions and global demand shifts.
• Poultry and egg production were affected by feed costs and pandemic-related flock reductions, with turkey exports showing minimal growth.
• Government support programs were crucial in mitigating the economic impact of the pandemic on the dairy sector.