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WASDE: Meat, Poultry and Milk Production All Forecast Higher

May 9, 2014
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LIVESTOCK, POULTRY, AND DAIRY: Total U.S. red meat and poultry production in 2015 is projected to be above 2014 as higher pork and poultry production more than offsets continued declines in beef production. Pork production is expected to increase as producers respond to the Porcine Epidemic Diarrhea virus (PEDv) by increasing farrowings and feeding hogs to heavier weights. However, a slow recovery in growth in pigs per litter is expected to constrain increases in availability of market hogs in 2015. Broiler and turkey production are forecast higher as lower forecast feed prices and record 2014 wholesale broiler and turkey prices encourage expansion. However beef production is forecast lower as a declining beef cattle inventory and potential heifer retention during late 2014 and into 2015 is expected to limit cattle placements in late 2014 and into 2015. Thus, despite expectations of heavier slaughter weights, tight supplies of fed cattle for slaughter and reduced cow slaughter will result in lower beef production.

Egg production for 2015 is forecast to expand as producers respond to lower feed costs and record 2014 egg prices. For 2014, the total red meat and poultry production forecast is lowered from last month on lower pork and broiler production. Pork supplies reflect limited availability of hogs due to the impacts of PEDv on pigs per litter. However, the decline in hog numbers may be partly offset by heavier carcass weights. Broiler production is lowered on the pace of slaughter and a slow increase in egg sets and chicks placed. Beef production is about unchanged from last month. Turkey production is increased slightly based on the current pace of slaughter. Egg production for 2014 is raised as higher table egg production more than offsets reduced hatching egg production.


Lower U.S. beef production is expected to push beef exports lower and imports higher in 2015. Pork exports are forecast higher in 2015 and imports are forecast lower as production increases. Broiler and turkey exports are forecast higher on expanded supplies and continued strength in foreign demand. The 2014 beef export forecast is lowered from last month on March export data. Imports are forecast higher on strong processing-grade beef demand and tight supplies of domestic processing beef. Pork exports are unchanged from last month as high March exports are expected to be followed by lower exports later in the year. Broiler and turkey exports are adjusted to reflect March trade data.

For 2015, fed cattle prices are forecast above 2014 as supplies continue to tighten and demand for beef remains strong. Hog prices are forecast lower than 2014 as hog supplies increase. However, broiler and turkey prices are forecast higher despite increased production as demand remains firm in the face of relatively tight red meat supplies. Egg prices are forecast lower on increased production. For 2014, the fed cattle price forecast is lowered from last month as prices for mid-2014 are reduced. Hog prices are up from last month on tight supplies. Broiler prices are higher as prices remain strong. Turkey prices are unchanged. Egg prices are forecast higher on strong to date prices.

Milk production for 2015 is forecast higher as lower feed costs and strong milk prices are expected to support both herd expansion and gains in milk per cow. Fat-basis exports are forecast lower on increased competition from traditional exporters, primarily in butterfat markets. Continued strength in nonfat dry milk (NDM) will help limit declines in skim-solids exports. Fat-basis import forecasts are expected to be about the same as 2014 but skim-solids imports will be lower. With higher domestic production, cheese, butter, NDM, and whey prices are forecast lower. Both Class III and Class IV prices are forecast lower. The all milk price is forecast at $19.70 to $20.70 per cwt for 2015.

Milk production for 2014 is unchanged from last month. Fat basis imports are forecast lower while skim-solids imports are higher. Exports are raised on stronger sales of NDM, butterfat and cheese. Butter and whey prices are raised from last month while NDM is lower. Cheese is unchanged but the range is narrowed. The Class III price is raised on higher whey prices. Class IV is up as higher prices for butter more than offset reduced prices for NDM. The all milk price is forecast to average $22.70 to $23.00 per cwt.

 

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