- news, features, articles and disease information for the beef industry

USDA Agricultural Projections

14 February 2013

USDA Agricultural Projections to 2022 - February 2013USDA Agricultural Projections to 2022 - February 2013

This report provides projections for the agricultural sector to 2022. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.
USDA Agricultural Projections

US Livestock

High feed prices, the economic recession, and drought in the Southern Plains of the United States (which extended through much of the middle of the country in 2012) have combined to reduce producer returns and lower production incentives in the livestock sector over the past several years. As a result, total US red meat and poultry production is projected to continue to decline in 2013, with per capita consumption of red meat and poultry falling below 200 pounds for the first time since 1990. Over the rest of the projection period, higher net returns and improved forage supplies lead to expansion of meat and poultry production.

US red meat and poultry production

  • Despite improved returns for cow-calf operators in 2011 and 2012, drought over the past two years will prevent producers from expanding beef cow inventories until 2014. Lower beef cow inventories and expected heifer retention are expected to lead to declines in beef production through 2015. Production then rises in the remainder of the projection period as returns support herd expansion. Beef cow numbers rise from about 30 million head at the beginning of 2014 to 33 million in the last several years of the projection period. The total cattle inventory drops to 89 million head at the beginning of 2014 before expanding to about 94 million at the end of the projection period. Rising slaughter weights also contribute to the longer term increases in beef production.

  • As feed costs decline, pork producers are expected to increase farrowings, with pork production projected to rise over the next decade. Production increases will also be supported by productivity gains in the breeding herd and increased slaughter weights.

  • After declining in 2012 and 2013, poultry production rises through the end of the projection period, but at lower rates than in the 1980s and 1990s. Production of both broiler and turkey meats are projected to expand. Production growth is expected to come from both higher bird numbers and higher average weights at slaughter. Increased demand is expected to strengthen broiler prices, although poultry will face competition from increasing red meat production from 2015 forward.

US per capita meat consumption

In the near term, declines in overall meat production result in higher consumer prices and lower per capita consumption in the United States. Annual average consumption of red meats and poultry falls from over 221 pounds per capita in 2004-07 to less than 198 pounds in 2013, the first time per capita consumption will be below 200 pounds since 1990. As production increases over the remainder of the projection period, per capita consumption of red meats and poultry increases but reaches only about 209 pounds by 2022.

  • Per capita beef consumption declines through 2015, before rising moderately over much of the remainder of the projection period. The near-term decline reflects reductions in beef production through 2015. As beef production increases in subsequent years, per capita consumption generally grows.

  • Per capita pork consumption remained flat in 2012 reflecting a 2 percent rise in production and a large increase in US pork exports. A gradual increase in per capita pork consumption is projected after 2013 as production continues to rise and export gains moderate.

  • After declining in 2012, poultry production is projected to grow through the rest of the decade. Per capita consumption rises through the end of the projection period and, in contrast to red meats, surpasses levels of the past decade.

Nominal US livestock prices

During the initial years of the projection period, prices in the livestock sector reflect reductions in total meat and poultry production in recent years. After increasing through 2015, beef cattle prices decline for several years as production expands starting in 2016. Hog prices rise in the near term but then decline in 2015-16 as red meat production increases.

Over the remainder of the projection period, livestock prices rise, reflecting a moderate pace of production expansion combined with increasing domestic use and export demand.

US meat exports

The projected rise in US meat and poultry exports over the next decade reflects steady global economic growth, a further depreciation of the US dollar, and the continued foreign demand for selected meat cuts and parts from the large US market.

  • Most US beef exports are high-quality, grain-fed beef that typically go to Mexico, Canada, and Pacific Rim nations. A continuing recovery is assumed for US beef exports to Japan and South Korea, export markets that were closed to the United States for several years following the first US case of bovine spongiform encephalopathy (BSE) in December 2003. Beef exports by major beef exporting countries—Australia and Canada—increase as herds are rebuilt.

  • US imports of processing beef increase in the projection period as herd rebuilding and relatively low beef cow slaughter in the United States raise import demand. As more beef demand in East Asian markets is met by US grain-fed beef, exports of grass-fed beef to those markets from Australia and New Zealand are likely to decline, diverting more grass-fed product to the United States.

  • Production efficiency in the US pork sector enhances the sector’s international competitiveness. Longer term US pork export gains will be determined by costs of production in the United States relative to competitors’ costs. Production costs tend to be lower in countries such as Brazil that have established or are developing integrated pork industries. However, Brazilian pork producers’ ability to export to some markets is limited because some countries do not recognize Brazil as free of foot-and-mouth disease (FMD). Thus, Pacific Rim nations and Mexico remain key markets for long-term growth of US pork exports, while Brazil’s pork exports expand to other South American markets, China, and Hong Kong. Russia is assumed to continue using investment and trade policies to facilitate expansion of its domestic pork industry and limit reliance on imports, affecting pork exports from the United States and Brazil the most.

  • US broiler exports rise from 2013 through the rest of the projection period. Major US export markets include China and Mexico, but US broiler exports also have been increasing to a number of other countries. Longer term gains in these markets reflect their economic growth and increasing consumer demand. International demand for broilers also remains strong because of its lower cost relative to beef and pork. US poultry producers continue to face strong competition from other major exporters, particularly Brazil. Over the projection period, most exports from Thailand and China will continue to be fully cooked products, although Thai export gains also reflect the reopening of trade in uncooked chicken products to the EU. As noted for pork, Russia is assumed to also support its domestic poultry industry with investment and trade policies.

US dairy herd and milk production per cow

Milk production is projected to continue rising over the projection period. The long-term upward trend in output per cow continues, while milk cow numbers decrease after 2012.

  • Following increases in 2005-08 and again in 2011 and 2012, milk cow numbers are projected to resume a more typical long-term path of year-to-year declines in 2013-22.

  • US milk output per cow is projected to increase through the projection period, reflecting continued technological and genetic developments.

  • Domestic commercial use of dairy products increases somewhat faster than the growth in US population over the next decade. The demand for cheese is expected to rise due to greater consumption of prepared foods and increased away-from-home eating. The slow decline in per capita consumption of fluid milk products is expected to continue.

  • The United States is expected to be well positioned to expand exports of dairy products. Commercial US dairy exports are projected to increase steadily over the next decade, reaching record levels on both a fat and a skim-solids basis. Production increases in other the major dairy exporting countries are expected to lag growth in global import demand.

  • After declining in 2012-15, nominal farm-level milk prices are projected to gradually rise over the rest of the projection period, with increases less than the overall rate of inflation. Real price decreases largely reflect efficiency gains in production, which result from technological improvements and consolidation in the sector.







February 2013

DOWNLOAD REPORT:- Download this report here


Seasonal Picks

Managing Pig Health: A Reference for the Farm - 2nd Edition