Livestock, Dairy & Poultry Outlook (January)
Inflation for all items, food, and selected animal products
The U.S. Department of Labor’s Bureau of Labor Statistics released consumer price indexes, CPI, for 2022 on January 12, 2023. The chart uses annual average CPI to calculate inflation rates and compares the inflation rates in 2021 and 2022 for all products, food, beef, pork, poultry, eggs, and dairy products.
The CPI for beef and veal is the only item in the chart with a lower inflation in 2022 than in 2021. Beef and veal inflation was 9.3 percent in 2021 and 5.3 percent in 2022. All-items inflation was 4.7 percent in 2021 and 8.0 percent in 2022. Pork prices increased by 8.7 percent in 2022. The 2022 CPI for food increased by 9.9 percent. 2022 inflation for dairy, poultry, and eggs exceeded that for 2022 food in general. Eggs had the largest inflation rate, 32.2 percent.
Beef/Cattle: Based on slaughter data through December, a slower-than-expected pace of fed cattle slaughter and lighter carcass weights more than offset higher reported cow slaughter. As a result, expected fourth-quarter 2022 production has been lowered by 115 million pounds. A temporal shift in fed cattle marketings and an outlook for higher cow slaughter raised projected beef production in 2023 by 170 million to 26.3 billion pounds. Fed cattle and feeder steer prices in 2023 are raised on firm demand. Beef imports for 2022 are unchanged, but the import forecasts for 2023 are raised on early customs data. Export projections for 2022 are lowered on recent data but they are left unchanged in 2023.
Dairy: The all-milk price estimate for 2022 and the forecast for 2023 have been lowered based on recent downward trends in domestic and international prices and weaker-than-expected demand in the domestic market. The 2022 all-milk price estimate is lowered to $25.55 per hundredweight (cwt), down 10 cents from the previous month’s forecast, while the 2023 all-milk price forecast is lowered to $21.60 per cwt, down $1.10.The milk production estimate for 2022 is lowered from last month due to lower expected milk per cow. The 2023 milk production forecast is lowered due to smaller forecast dairy herd size as producers respond to lower prices. With competitive domestic prices expected for dairy products, export-volume estimates are higher in both 2022 and 2023.
Pork/Hogs: The information in the December Quarterly Hogs and Pigs report broadly implies that 2023 pork production is likely to increase 1.8 percent over production in 2022. Hog prices are expected to average about $68 per cwt, down almost 5 percent compared to prices last year. Pork export projections for 2023 are increased 70 million pounds to 6.35 billion pounds, 0.3 percent higher than last year, on lower 2023 U.S. pork prices and moderating increases of the exchange rate value of the U.S. dollar.
Poultry/Eggs: Broiler production, exports, and ending stocks are adjusted up for 2022 on strong November data. Forecast production for 2023 is adjusted down on recent hatchery numbers, and broiler exports are adjusted down in 2023 on weakened competitiveness. Broiler price forecasts are also lowered in 2023 reflecting strong supply, averaging 12 cents less than 2022. The forecast table-egg production is revised downward to account for December Highly Pathogenic Avian Influenza (HPAI) discoveries, as well as for over softness in upstream production indicators. The wholesale egg price forecast (New York, Grade A, large) for 2023 is increased due to record-high December prices that to some extent carried over into 2023. Trade expectations for 2022 and the forecast for 2023 are revised to reflect November data: the total egg export forecast is revised downward and the total egg import forecast is revised upward.Turkey production is adjusted up slightly in the fourth quarter of 2022 and in the first quarter of 202 ased on strong November production and placement data. Estimated 2022 turkey imports are adjusted down on weak shipments from Chile, while forecast exports are adjusted down on weak competitive strength in international markets.