Livestock, Dairy & Poultry Outlook (June)

2022 Per Capita Red Meat and Poultry Disappearance Expected To Decrease

USDA red meat and poultry disappearance represents the amount of meat used in the domestic markets. It is a residual measure of the total supply (sum of production, beginning stocks, and imports) after subtracting its measured uses (ending stocks and exports). Per capita disappearance is determined by dividing disappearance into the total U.S. population. Historically, poultry (broilers, other chicken, and turkey) accounts for more than 50 percent of the disappearance, with most of the difference being split between beef (26 percent) and pork (23 percent), with lamb and veal accounting for a very small fraction.

In 2022, per capita disappearance on a retail basis is expected to be the equivalent of 223 pounds per person. This is 0.3-percent lower than the 2021 forecast. The main factor underlying this year-over-year change is a reduction in beef production (-2.0 percent) as pasture and range conditions are affected by drought and the industry faces the prospect of high feed costs. In 2022, increases are expected in the production of pork (+1.3 percent), broilers (+0.9 percent), and turkey (+0.6 percent) due to strong consumer demand, despite higher feed costs. However, these increases are not large enough to offset the decreases in beef production.

Beef/Cattle: While a cyberattack disrupted cattle slaughter for 2 days in June, the Memorial Day weekfinished above 2020 levels, though well below 2019. Cow slaughter was raised in the second- and third-quarter of 2021, but fed cattle slaughter was lowered in the second quarter. The 2021 beef production forecast was raised 5 million pounds from last month to 27.905 billion pounds, but next year’s forecast was unchanged. The second- and third-quarter 2021 forecasts for fed steer prices were raised on current price data and strong wholesale beef prices. The forecast for the feeder steer price was unchanged from a month earlier. Beef exports to China, the third-largest market for U.S. beef in 2021, lifted April to record levels. The beef export forecast is raised for 2021 and 2022 on expected firm demand from Asian markets. Imports for both years are raised on expected strength in demand for processing beef.

Dairy: The milk production forecasts for 2021 and 2022 have been raised due to higher expected milk cow numbers. Exports were relatively strong in April; cheese exports reached a record high, and butter exports were higher than in any month since June 2014. Export forecasts have been raised for 2021 on both the milk-fat and skim-solids milk-equivalent bases. For 2022, the export forecast has been raised on the skim-solids basis but is unchanged on the milk-fat basis. The all-milk price forecast for 2021 is $18.85 per hundredweight (cwt), $0.10 lower than last month’s forecast. For 2022, the all-milk price forecast is $18.75 per cwt, $0.25 higher than the previous forecast.

Pork/Hogs: Strong U.S. consumer demand supported hog prices and processor margins through May 2021. Prices for quarters 2 to 4 of live equivalent 51-52% lean hogs were increased to reflect assumptions of continuing strong processor demand for hogs as the U.S. economy recovers from the effects of the pandemic. The second-quarter 2021 pork export was increased on April data showing strong shipments to North America—Mexico and Canada—as well as to Central and South American countries. Total 2021 exports are forecast at almost 7.6 billion pounds, about 4 percent above yearearlier levels.

Poultry/Eggs: Broiler production in second-quarter 2021 was revised up to 11.3 billion pounds. The 2021 broiler export forecast was also raised on recent data and increased production expectations. The second-quarter broiler price forecast was adjusted down by 1 cent, while forecasts for all outlying quarters remain unchanged. The 2021 table egg production was revised up to 8,091 million dozen following expectations of a more productive layer flock in the second part of the year. Second-quarter 2021 wholesale table egg prices (New York, Grade A Large) have been revised down 1 cent to 94 cents per dozen due to current retail market conditions. Turkey production was adjusted up in the second and third quarters on heavier birds and increased placements. Turkey exports in 2021 were adjusted up on higher production expectations. The turkey price forecast was also adjusted up to 116 cents per pound for both 2021 and 2022.

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