WASDE: More Meat Production Coming in 2017

May 10, 2016 11:10 AM
WASDE: More Meat Production Coming in 2017

LIVESTOCK, POULTRY, AND DAIRY: Total U.S. red meat and poultry production in 2017 is projected to be above 2016. Beef production is forecast higher as larger 2015 and 2016 calf crops are expected to support year-over-year increases in cattle placements in late 2016 and early 2017. Marketings of fed cattle are forecast higher during 2017 while carcass weights are expected to increase with good forage conditions and lower feed costs. Pork production is expected to increase with larger hog supplies and heavier carcass weights. A modest expansion of farrowings is expected during the latter part of 2016 and early 2017, and continued growth in pigs per litter will support larger pig crops. Broiler production is forecast higher as the industry continues its current expansion path. Turkey production will continue to increase during 2017, but not at the rate of growth expected for 2016 when the sector is rebuilding following the outbreak of Highly Pathogenic Avian Influenza (HPAI) in 2015. Egg production for 2017 is forecast to expand as the egg sector continues to recover from the effects of HPAI.

The total red meat and poultry production forecast for 2016 is lowered from last month as production forecasts for beef, and poultry are reduced. Pork is raised on the pace of slaughter, but beef production is reduced on lowered first-half carcass weights. Broiler production is adjusted to reflect first quarter data. Turkey production is reduced on a slower expected pace of recovery from HPAI. Egg production for 2016 is raised on higher expected first-half production.

Red meat and poultry exports are expected to increase in 2017 with expanding production and moderating prices; conversely, imports of beef are expected to decline. For 2016, the beef trade forecast is adjusted to reflect March trade data; no change is made to the forecast. The pork export forecast is adjusted to reflect March data; imports are reduced on the slow pace of trade to date. Broiler exports are forecast weaker on a slower expected pace of recovery in the first half of the year. Turkey exports are adjusted for March data.

For 2017, prices of fed cattle, hogs, broilers, and turkeys are all forecast below 2016 as supplies of meat are forecast higher. Egg prices are forecast higher on firm demand. As for 2016, the fed cattle price forecast is lowered from last month as prices have weakened and cattle supplies remain relatively large. The annual average hog price is unchanged from last month. Broiler and turkey prices are forecast higher as prices remain strong with slower expected growth in production. Egg prices are lowered.

Milk production for 2017 is forecast higher as improved forage availability and continued favorable feed costs are expected to support gains in milk per cow. Cow numbers are expected to remain near 2016 levels. Commercial exports on both a fat and skim-solids basis are forecast higher as expected tighter world supplies and increasing demand lead to expanded export opportunities. Imports are forecast lower as domestic production increases. With stronger domestic and export demand, cheese, nonfat dry milk (NDM), and whey prices are forecast higher but butter prices are forecast lower. The Class III price is forecast higher on stronger cheese and whey prices, and the Class IV price is forecast higher as a weaker butter price is more than offset by the higher NDM price. The all milk price is forecast higher than 2016 at $15.25 to $16.25 per cwt. 

Milk production in 2016 is forecast higher than last month, as the cow inventory is expected to expand slightly and growth in milk per cow during the first half of the year is forecast higher. Imports are raised on both a fat and skim-solids basis; exports on a fat basis are raised but are unchanged on a skim-solids basis. Cheese, butter, and NDM prices are forecast lower on weaker demand and larger supplies, but whey prices are raised. Both Class III and Class IV prices are reduced. The milk price is forecast lower at $14.60 to $15.10 per cwt. 


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