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USDA Livestock, Dairy and Poultry Outlook


19 August 2015

USDA Livestock, Dairy and Poultry Outlook - 19 August 2015USDA Livestock, Dairy and Poultry Outlook - 19 August 2015


Livestock, Dairy and Poultry Outlook

Commercial Beef Production Revised Lower for the Third Quarter

Markets will continue to offer consumers substitutes for high-priced beef through plentiful broiler supplies at attractive prices. Seasonal acceleration of pork production is also expected to create additional alternatives to beef. On the other hand, consumers of eggs and egg-products will have little choice other than to pay higher egg prices, through the second half of 2016. On the beef side, lackluster demand—largely due to high prices—is beginning to force cattle prices lower. USDA lowered quarterly steer price forecasts, through 2016. Lower exports of broiler meat, as a result of Avian Influenza (AI)-related restrictions abroad, are increasing the supply of broiler products in domestic U.S. markets, resulting in much-increased cold stocks and lower broiler product prices. USDA lowered its forecast for second-half 2015 broiler production, as USDA data suggest that producers are beginning to dial back in response to low prices. USDA also lowered second-half 2015 hog prices, which could eventually benefit pork consumers. The effects of AI-reduced laying hen supplies are resulting in very high egg prices. USDA’s increased wholesale egg price forecasts indicate record-high prices before prices begin to moderate in the second half of 2016. On the dairy side, with lower international prices for dairy products and weaker demand for U.S. dairy exports, forecasts of dairy exports for the remainder of 2015 and 2016 have been lowered. With higher domestic supplies, milk price forecasts have also been lowered.

Beef/Cattle: Pasture conditions have improved in most of cattle country, allowing producers to graze cattle to heavier weights. U.S. herd rebuilding is underway; the National Agricultural Statistics Service (NASS) July 1 Cattle reported a 2-percent increase in U.S. cattle inventory levels—the first increase since 2006. The strength of the U.S. dollar relative to other major currencies continues to hamper beef exports.

Pork/Hogs: USDA’s second-half hog prices were lowered, as prices in July were lower than anticipated. U.S. pork exports in June were slightly above those of a year ago, with shipments to Mexico the second highest ever.

Poultry: Falling prices for most broiler products have led to reductions in the numbers of chicks being placed for growout. With lower chick placements, the production forecasts for third- and fourth-quarter 2015 were both lowered by 100 million pounds. Due to losses from the highly pathogenic avian influenza (HPAI) outbreak, turkey production is forecast 6 percent lower in the second half of 2015 compared to a year earlier, and whole bird prices are expected to be significantly higher. Declines in table egg production, also due to HPAI, have led to sharp increases in wholesale egg prices.

Poultry Trade: Broiler, turkey, and egg shipments in June remained down from a year ago. Broiler shipments totaled 564 million pounds in June 2015, a decrease of 9 percent from a year earlier. Turkey shipments were decreased 40 percent from a year ago, totaling 42 million pounds, while egg and egg product exports totaled 22 million dozen in June 2015, a 26-percent decrease from the previous June.

Dairy: Dairy export forecasts have been lowered and import forecasts have been raised based upon higher expected competition in global markets. The milk production forecast has been lowered to 213.0 billion pounds for 2016. Forecasts for the all-milk price have been lowered to $16.75-$16.95 per hundredweight (cwt) for 2015 and $16.40- $17.40 per cwt for 2016.

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