20220718-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2022.7.18_34页_1mb

Summary of the Livestock, Dairy, and Poultry Outlook: July 2022

Core Content

This report provides an outlook on the U.S. livestock, dairy, and poultry sectors for 2022 and 2023, highlighting trends in production, prices, and trade dynamics. It includes a special article on retail beef price inflation and its connection to rising input costs.

Key Trends and Forecasts

Beef/Cattle

• Feed Prices: Corn, soybean meal, and alfalfa hay prices have risen significantly over the past two years, with corn experiencing the largest increase.
• Production:
  • 2022 beef production is projected at 27.9 billion pounds, up 15 million pounds from the previous month.
  • 2023 production is forecast at 25.9 billion pounds, a slight decline due to lower carcass weights.
• Cattle Slaughter:
  • Increased slaughter in the second and third quarters of 2022 led to lower average carcass weights.
  • Feeder cattle prices are rising due to tighter supplies.
  • Fed steer prices are projected to increase in 2022 and 2023, with a new annual forecast of $141.30 per cwt for 2022 and $153.00 per cwt for 2023.
• Exports:
  • May 2022 exports reached a record 321 million pounds, driven by strong demand in Asia and smaller markets.
  • 2022 export forecasts for Q2, Q3, and Q4 are increased by 25 million pounds each.
  • Annual export forecast for 2022 is raised to 3.496 billion pounds, a 2% increase over 2021.
• Imports:
  • Imports in May 2022 increased by 9% year-over-year, with significant rises from Brazil, Mexico, and Australia.
  • Import forecasts for 2022 and 2023 remain unchanged, with annual forecasts at 3.515 billion pounds and 3.200 billion pounds, respectively.

Dairy

• Wholesale Prices:
  • Cheese and dry whey prices declined in June and July, while butter and nonfat dry milk prices rose.
  • On a milk-fat basis, May 2022 dairy exports totaled 1.177 billion pounds, setting a record.
  • May 2022 dairy imports totaled 653 million pounds on a milk-fat basis and 573 million pounds on a skim-solids basis.
• Production and Use:
  • Milk production in May 2022 was 19.7 billion pounds, down 0.7% from May 2021.
  • Milk cow numbers are projected to remain steady at 9.4 million head for 2022 and 2023.
  • Milk yield per cow is forecast at 24,040 pounds for 2022 and 24,290 pounds for 2023.
• Domestic Use:
  • Domestic use of dairy products is forecast to decline in 2022 due to higher prices and lower demand.
  • 2022 domestic use is projected at 221.2 billion pounds on a milk-fat basis and 180.5 billion pounds on a skim-solids basis.
• Price Forecasts:
  • 2022 cheese price forecast is $2.185 per pound, down 1 cent.
  • Butter price is projected at $2.780 per pound, up 1.5 cents.
  • NDM and dry whey prices remain unchanged at $1.755 and $0.640 per pound, respectively.
  • Class III milk price is forecast at $22.80 per cwt, down 10 cents.
  • Class IV milk price is projected at $24.70 per cwt, up 5 cents.
  • All-milk price for 2022 is $26.15 per cwt, down 5 cents from June.
  • 2023 all-milk price is forecast at $24.15 per cwt, up 35 cents from 2022.

Pork/Hogs

• Production:
  • Modest adjustments in pork production are expected for the second half of 2022 and the first half of 2023.
  • 2022 pork production is forecast at 6.6 billion pounds for Q3 and 7.1 billion pounds for Q4, with slight declines compared to 2021.
• Prices:
  • Average live hog prices for Q3 and Q4 2022 are unchanged at $76 and $66 per cwt, respectively.
  • 2023 production is expected to be about 7 billion pounds in Q1 and 6.5 billion pounds in Q2.
• Exports:
  • Pork export forecasts for the remainder of 2022 are reduced due to weak demand and declining competitiveness from the strong U.S. dollar.

Poultry/Eggs

• Production:
  • Broiler production forecast for 2022 is reduced by 25 million pounds.
  • Table-egg production is revised up based on recent indicators.
• Exports:
  • Broiler export expectations for 2022 are raised, while table-egg and turkey export forecasts are revised down.
  • Turkey production is forecast to increase slightly in 2022, with export forecasts raised by 15 million pounds.
• Prices:
  • Turkey prices are projected to rise in Q3 and Q4 of 2022 and for all quarters in 2023.
  • Broiler prices are forecast to decrease in 2022 to 152.9 cents per pound.

Special Article

• Retail Beef Price Inflation:
  • Beef retail prices are expected to continue rising alongside input price hikes.
  • The farm-to-retail price spread remains higher than the 12-month average before the pandemic.
  • 2022 retail beef and veal prices are projected to increase by 6-7%, following 9% annual inflation in 2020 and 2021.

Key Influencing Factors

• Feed Costs: Rising feed prices are a major cost driver for livestock and poultry producers.
• Supply Chain Issues: These have impacted beef and pork exports, particularly in the latter half of 2022.
• Currency Strength: A strong U.S. dollar has reduced the competitiveness of U.S. beef and pork in foreign markets.
• Demand Trends: Strong Asian demand and smaller markets have supported export growth, while domestic use has been affected by higher prices and lower consumption.

Conclusion

The livestock, dairy, and poultry sectors in the U.S. are experiencing mixed trends in 2022 and 2023. While beef production and prices are showing resilience, dairy and poultry face challenges due to higher input costs and shifting demand patterns. Pork production is expected to remain stable with minor adjustments, and the outlook for exports is cautiously optimistic but affected by global market conditions.