LIVESTOCK, POULTRY, AND DAIRY: The estimate of 2010 red meat and poultry production is
raised from last month, reflecting higher production of beef, pork, broilers, and turkey. The forecast of production for 2011 is also raised for beef and broilers, but lowered for pork. The turkey production forecast is unchanged from last month. The increase in beef production reflects large placements of cattle during the fourth quarter of 2010 which will be ready for slaughter during mid-2011.
USDA will release its Cattle report on January 28 providing an indication of producer
intentions for heifer retention in 2011 and feeder cattle availability. Broiler production forecasts are adjusted to reflect relatively heavy bird weights. Pork production is reduced slightly for 2011.
USDA’s Quarterly Hogs and Pigs report indicated that producers intend to farrow fewer sows in the
first half of 2011 but continued strong growth in the number of pigs per litter implies relatively
abundant supplies of hogs for slaughter will be available during 2011. Higher forecast hog weights will also partly offset the effects of lower farrowings on pork production, but recent increases in weights are not expected to be sustained during the year. The forecast of egg production is unchanged from last month.
The forecast for beef exports for both 2010 and 2011 is unchanged from last month but the
forecast of beef imports is lowered as a weak U.S. dollar and tight supplies in several exporting
countries limit shipments. The pork export forecasts for 2010 and 2011 are reduced slightly from
last month as higher pork prices are expected to more than offset weakness in the U.S. dollar.
The broiler export forecast is raised for 2010 but the 2011 forecast is unchanged from last month.
The cattle price forecast for 2011 is raised to reflect continued strong demand for cattle and
tightening supplies of fed cattle. Hog prices for 2011 are forecast higher as demand for hogs
remains strong. The broiler price forecast is lowered on larger supplies of broilers and competing
meats. Egg prices are forecast higher.
The milk production estimate for 2010 and forecast for 2011 are unchanged from last month.
Ending stocks for 2010 are reduced due to expected low stocks of butter and nonfat dry milk
(NDM) at the end of the year. Imports for 2010 and 2011 are reduced due to low U.S. prices
relative to those internationally coupled with a weak U.S. dollar. Skim-solids basis exports are
raised as NDM exports are expected to be supported by tight world supplies into mid-2011. Fat
basis exports for 2010 are lowered from last month on weaker-than-expected exports of butterfat.
Butter, NDM, and whey prices are forecast higher, but the cheese price forecast is lowered.
Tighter beginning stocks support a higher butter price forecast while generally strong exports of
NDM and whey will support higher prices. The cheese price forecast is reduced from last month
on moderate demand. The Class III price forecast range is reduced as the lower forecast cheese
price more than offsets the higher whey price forecast. The Class IV price forecast is raised as
both the butter and NDM price forecasts are raised. The all milk price is forecast to average
$16.10 to $16.90 per cwt for 2011.