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USDA Livestock, Dairy and Poultry Outlook

17 July 2015

USDA Livestock, Dairy and Poultry Outlook - 17 July 2015USDA Livestock, Dairy and Poultry Outlook - 17 July 2015

Livestock, Dairy and Poultry Outlook

Red Meat and Poultry Affected by Weather and Disease in 2015

Current estimates of second-quarter total red meat and poultry production are below earlier estimates because lower beef and turkey production will likely offset higher broiler and pork production. Dairy cow slaughter—slightly above year-earlier slaughter—has not offset reduced beef cow slaughter. Higher dairy cow slaughter has been in response to lower milk prices and milk-price forecasts, despite increased exports of U.S. dairy products. Decreased beef cow slaughter has been a result of both low cow inventories and improved pasture conditions over most of the United States. Improved pasture conditions have also supported feeder cattle prices. However, fed cattle slaughter has been lower, partially due to narrow beefpacker margins and the ongoing tug of war between narrow-to-negative beefpacker margins and negative cattle-feeding margins. At the same time, pork production has been higher and prices have been under pressure as litter size and overall hog inventories have rebounded. Turkey and egg production have been lower due to impacts from the U.S. outbreak of Highly Pathogenic Avian Influenza (HPAI). Broiler production has not been affected, as both numbers of birds slaughtered and weights have been higher. However, trade in all poultry products has declined significantly because of HPAI-induced bans on imports of U.S. poultry imposed by other countries. Higher production and lower exports have exerted downward price pressure on almost all broiler products. The decline in production of table eggs has pressured prices higher. Wholesale egg prices in May and June and into July were sharply higher than the previous year.

Beef/Cattle: Rainfall has been abundant in most areas of the United States, virtually eliminating drought from everywhere but the areas west of the Rocky Mountains and sufficient to support pasture use plans through the rest of 2015. Cow and heifer slaughter has continued to decline year over year, raising both the proportion of steers in the slaughter mix and dressed weights of all cattle. Feeder cattle prices remain strong, but fed cattle and wholesale beef prices are declining.

Pork/Hogs: Hog and pork prices for the remainder of 2015 are expected to reflect larger hog inventories and expanding pork production levels. Prices of live hogs (51-52 percent lean) are expected to average between $53-$55 per cwt for the third quarter, $45-$49 per cwt in the fourth quarter, and $50-$51 per cwt for the year. 

Poultry: Broiler production continues to expand, and the forecasts for the second through fourth quarter of 2015 and the 2016 forecast were all revised upward. The higher production is expected to push cold storage higher through the end of 2015 and into 2016. This has pressured broiler wholesale prices lower. Turkey production was down sharply in May and on a quarter-over-quarter basis is forecast to remain below the previous year through the first quarter of 2016. Even with lower production, falling exports are expected to place downward pressure on turkey prices. Lower table egg production has pressured prices higher. Wholesale egg prices at the end of June and into July were $1.89 per dozen, up over 50 percent from the previous year.

Poultry Trade: Broiler, turkey, and egg shipments in May were down from a year ago. Broiler shipments totaled 577 million pounds in May 2015, a decrease of 9 percent from a year earlier. Turkey shipments decreased 35 percent from a year ago, totaling 39 million pounds, while egg and egg product exports totaled 26 million dozen in May 2015, a 16-percent decrease from the previous May.

Dairy: Dairy export forecasts have been raised on a milk-equivalent skim-solids basis but lowered on a milkequivalent milk-fat basis. Dairy import forecasts have been raised on both a milk-fat basis and a skim-solids basis. Forecasts for milk production have been raised to 208.8 billion pounds for 2015 but lowered to 213.6 billion pounds for 2016. Annual forecasts for the all-milk price have been lowered to $17.05-$17.35 per hundredweight (cwt) for 2015 and $17.00-$18.00 per cwt for 2016.

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