Source: USDA-ERS Livestock, Dairy and Poultry Outlook
Beef/Cattle: The July 1, 2010 Cattle report indicates that feeder cattle prices and the current series of profitable months of feeding cattle have not been enough to motivate beef cow herd expansion. As a result, cow slaughter continues at a high rate, setting the stage for further declines in cow inventories.
Beef/Cattle Trade: In 2010, 2.19 billion lbs of U.S. beef are forecast to be exported, as exports to Japan and South Korea are providing the most momentum in the U.S. beef export market. The rate of exports to Vietnam seen earlier in the year may decrease in the second half of 2010. Regardless, U.S. beef exports should remain competitive in the global marketplace, particularly as the U.S. dollar remains relatively weak vis-à-vis the currencies of competing exporters, particularly the Australian dollar. Imports of beef to the United States this year are forecast at 2.6 billion lbs, nearly even with 2009 levels.
Cattle imports were strong through the first half of 2010, but weather and U.S. prices should determine the strength of cattle imports in the second half of the year.
Hogs/Pork: First-half pork exports were 7.9 % above the same period last year. Exports to Mexico are particularly strong this year, and account for an increasing share of U.S. pork exports. Lower expected live swine imports this year and a smaller increase next year are reflected in slightly lower commercial pork forecasts for 2010 and 2011. The average price of 51-52 % live equivalent hogs is expected to be $54-$55 /cwt. in 2010, almost 33 % above average prices in 2009. Strong hog prices are attributable to lower hog numbers and continued strong consumer demand for pork products.
Sheep/Lamb: The USDA-NASS Sheep and Goat report released on July 23, 2010 indicated a 2% decline in inventories. On July 1, 2010, U.S. sheep and lamb inventory totaled 6.90 million head, down 150,000 head from 2009. Inventory reductions were seen in all sheep categories. A slight uptick in death loss to predators and other causes may have exacerbated inventory declines. Tight supplies persist and prices remain strong.
Poultry: Broiler meat production increased modestly during the first 6 months of 2010 (up 2 %) and is expected to continue expanding at only a slightly faster pace in the second half of 2010 as higher feed costs and slow growth in the domestic economy combine to place restraints on expansion. Turkey meat production is also expected to slowly expand in the second half of 2010, but is still expected to remain slightly lower than the previous year. Pullet placements on a year-over-year basis have turned positive only in the last several months after
declining in almost all of 2009.
Poultry Trade: June broiler shipments rose from a year ago, but fell short of last year’s second-quarter total broiler volume. Broiler shipment totaled 609.4 million pounds, a 14.6% increase from a year ago. Turkey shipments fell by 3 % in June, while the total turkey shipments for the second quarter exceeded last year’s volume by 16 million pounds.
Dairy: Reduced cow numbers are being more than offset by increased output per cow, leading to rising milk production. Higher exports and rising domestic use will keep prices relatively firm. The immediate tightness in the butter market could be remedied by next year’s higher milk production.