Livestock, Dairy & Poultry Outlook (March)

Beef/Cattle: Beef production in 2020 was raised on a faster pace of fed cattle slaughter and heavier dressed weights. Cattle prices were reduced on price weakness and higher production. Prices for fed steers in the 5-Area marketing region are expected to average 6 percent below a year ago in the first quarter. The beef import forecast was raised on higher expected imports of processing-grade beef, while beef exports were reduced on weaker demand overseas.

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Dairy: Based on recent milk production data, the 2020 forecast has been raised. The dairy export forecast on a skim-solids milk-equivalent basis has been increased due to robust exports in January, improved access to China’s markets, and the impact of drought on New Zealand’s dairy sector. However, with potential effects of coronavirus (COVID-19), expectations for higher dairy export forecasts have been tempered. Based on recent weakening of dairy product prices, higher expected milk production, and lower expectations for global demand, the all-milk price forecast for 2020 has been lowered to $18.25 per cwt, 60 cents lower than last month’s forecast.

First-quarter pork production was raised to 7.4 billion pounds, 8 percent ahead of a year ago, anticipating that very strong slaughter hog numbers will continue through the end of the quarter. Increased hog demand is likely to push first-quarter average hog prices above year-ago averages. First-quarter live equivalent 51-52 percent lean hog prices are expected to average out to $40.56 per cwt, almost 4 percent above a year ago, but below most producers’ cost of production breakeven. 2020 pork exports kicked off with a bang in January, increasing almost 39 percent year over year, driven primarily by significant production deficits in China caused by African Swine Fever, but also by strong shipments to Mexico.

Poultry/Eggs: The 2020 broiler production forecast was revised up on production indicators, as well as expectations for continued growth in the broiler breeding flock, while the 2020 price forecast was decreased on the expectation that supply will continue to put downward pressure on prices. The first-quarter broiler export forecast was increased due to expectations for strong demand in Southeast Asia and Mexico. The 2020 table egg production forecast was increased based on lay rates, while the price forecast was increased on recent price movements and expectations for strengthening demand. The 2020 turkey production forecast was increased on heavier average weights and net poult placement data. Wholesale turkey prices remain above a year ago. Turkey exports for the first quarter of 2020 were revised down to 140 million pounds due to lower-than-expected exports in January.

Mexico Was the Most Important Destination for Several U.S. Meat Protein Exports in 2019

A significant proportion of major U.S. meat protein production was exported in 2019. The most important meat export volumes last year were all-chicken (broiler and other) meat, the largest at 7.2 billion pounds, followed by pork at 6.3 billion pounds, beef at 3 billion pounds, and turkey meat with 639 million pounds. In terms of share of production exported, pork was by far the largest last year: 22.9 percent of commercial pork production was exported in 2019. All-chicken came in second, with exports accounting for 16.2 percent of production. For both beef and turkey last year, about 11 percent of production was exported. In 2019 Mexico was the largest foreign destination for U.S-exported all-chicken, pork, and turkey, and the third-largest for beef. The top two U.S. beef export destinations in 2019 were Japan and South Korea.

Source:  Livestock, Dairy, and Poultry Outlook  (ERS/USDA)