WASDE: Beef, Milk Production Both Lower

March 10, 2015 11:11 AM
 
WASDE: Beef, Milk Production Both Lower

LIVESTOCK, POULTRY, AND DAIRY:  The 2015 forecast of total red meat and poultry production is lowered from last month as lower beef production more than offsets increases in pork and broiler production.  Fed cattle slaughter is expected to be lower in the first-quarter, but cow slaughter remains higher than expected.  In addition, carcass weights are reduced slightly in the first quarter.  Pork production is increased on higher first quarter slaughter and slightly heavier carcass weights.  USDA will release the Quarterly Hogs and Pigs report on March 27 which will provide an indication of producers’ expectations to farrow sows through the third quarter.  Broiler production is higher as hatchery data shows continued growth in chicks placed.  Turkey and egg production is unchanged from last month.

The 2015 beef import forecast is higher than last month as demand for processing grade beef remains strong and strength of the dollar makes the United States an attractive market.  Beef exports for 2015 are reduced due to relatively high U.S. prices and the strong dollar.  Pork exports are lowered based on lower-than-expected shipments in January.  Pork imports are raised as the strong dollar makes the United States an attractive market despite large supplies of domestic pork.  The broiler export forecast is lowered as the strong dollar crimps demand.  Turkey exports are also reduced.  The egg export forecast is raised.

The 2015 cattle price is unchanged.  The hog price forecast is reduced as greater production and lower exports imply greater supplies for the domestic market.  Broiler prices are lowered on weaker demand and larger supplies of product.  Turkey prices are unchanged.  The egg price is raised on stronger first quarter demand.

The milk production forecast for 2015 is lowered from last month as slower growth in output per cow more than offsets faster herd expansion.  Both fat and skim-solids exports for 2015 are reduced as export demand is hampered by a strong dollar and increased competition from other exporters.  Fat basis imports are higher on expectations of greater butterfat imports.  However, robust domestic demand is expected to support increased product use.

Product price forecasts for butter and nonfat dry milk (NDM) are higher, supported by demand and price strength to date.  Cheese prices are unchanged at the midpoint but the range is narrowed.  Whey is lower on weaker demand.  The Class III price is lowered on reduced whey prices.  The Class IV price is higher due to higher NDM prices and butter prices.  The all milk price is forecast at $17.05 to $17.65 per cwt.

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