The forecast for total red meat and poultry production in 2016 and 2017 is lowered from last month, largely as higher feed prices dampen the rate of production growth. Beef production for 2016 is reduced mostly on lower carcass weights, but the pace of second-quarter slaughter is slightly slower than previously expected. Production in 2017 is reduced on slightly lower carcass weights as higher feed prices are expected to encourage cattle feeders to minimize the amount of time cattle are on feed. Pork production for 2016 and 2017 is lowered as higher feed prices are expected to impact weights through early 2017. USDA’s Quarterly Hogs and Pigs report will be released on June 24 and provide an indication of producer farrowing intentions for the remainder of 2016. Broiler and turkey production for late-2016 and early-2017 is lowered as higher feed prices slow the expected rate of expansion. Turkey production in the second quarter 2016 is reduced on the current pace of slaughter. Egg production for 2016 is also reduced on expected weaker returns.
Forecasts for 2016 and 2017 beef imports are unchanged from last month; the export forecast is reduced slightly on the pace of trade to date. No change is made to pork imports or exports for 2016 or 2017. Broiler and turkey export forecasts are unchanged as well.
Cattle prices for 2016 are raised from last month on prices to date, but the forecast for 2017 is unchanged. Likewise, hog prices are higher in 2016 but unchanged for 2017. Broiler prices are raised for both 2016 and 2017 as domestic demand has strengthened and the rate of production growth has slowed. Turkey prices are raised for 2016, but unchanged for 2017. Although the rate of production growth is slowed, the recovery in demand has been weaker than expected. Egg prices are reduced from last month on continued weakness in demand.
Milk and Cheese
Milk production forecasts for 2016 and 2017 are raised from last month as recently reported cow numbers indicate the herd continues to expand. No change is made to output per cow.
Fat and skim -solids basis export forecasts for 2016 and 2017 are lowered as international supplies of dairy products remain abundant and U.S. prices remain high relative to those of competitors. Fat and skim-solids basis stocks are forecast higher as stocks of butter and cheese are expected to remain relatively high. Fat basis imports are reduced for both 2016 and 2017 on expectations of slower imports of butterfat products, and to a lesser extent, cheese.
Cheese and butter prices for 2016 are forecast higher based on recent price data and lower forecast imports, despite relatively large stocks. The nonfat dry milk (NDM) price is raised based on recent price strength. The whey price forecast is unchanged at the midpoint. Cheese prices are forecast lower for 2017 as relatively high stocks pressure the market, but the prices of butter, NDM, and whey are unchanged from last month. Class III and Class IV price forecasts are raised for 2016 on component product prices. For 2017, the Class III price is lowered on lower cheese prices, but the Class IV price is unchanged. The all milk price is forecast higher at $14.95 to $15.35 per cwt for 2016, but is unchanged at $15.25 to $16.25 per cwt for 2017