20180618-USDA-Livestock,_Dairy,_and_Poultry_Outlook_26页_1mb

Livestock, Dairy, and Poultry Outlook Summary

Core Content Overview

The document provides an outlook for the supply and price trends of major U.S. livestock commodities in 2019, including red meats, poultry, eggs, and milk. It highlights the factors driving supply growth and price changes, with a focus on production, beginning stocks, and imports.

2019 Supply Growth Projections

• Beef: Forecast to grow by +2.3%.
• Pork: Forecast to grow by +3.3%.
• Lamb: Forecast to grow by +1.3%.
• Broilers: Forecast to grow by +1.9%.
• Turkey: Forecast to grow by +0.8%.
• Eggs: Forecast to grow by +2.1%.
• Milk: Forecast to grow by +0.9%.

The supply growth for 2019 is primarily driven by increased production for most commodities, with imports and beginning stocks also contributing, particularly for lamb and turkey.

Key Drivers for Each Commodity

Beef

• Production: Revised down slightly due to lighter dressed weights, but still expected to grow by +2.3%.
• Exports: Strong in April, with significant gains in South Korea, Mexico, and Taiwan.
• Imports: Reduced in April due to fewer shipments from Brazil, Mexico, and Australia, but increased in the second and third quarters.
• Prices: Fed steer prices reached a second-quarter peak, supporting strong packer margins. Cattle slaughter remains robust.

Dairy

• Production: Forecast to decrease slightly in 2018 due to lower milk production per cow and higher feed prices.
• Exports: Robust in April, reaching record levels, especially for butterfat products and cheese.
• Imports: Increased on a milk-fat basis, partly due to higher butterfat imports.
• Prices: All-milk price forecast for 2018 is $16.60–$17.00/cwt, and for 2019, it is $16.70–$17.70/cwt. Class III and IV milk prices also increased due to higher export demand and the California FMMO implementation.

Pork

• Production: Expected to grow by +4% in the April–June quarter and +4% in the third quarter.
• Prices: Hog prices are expected to fall by 19% in the third quarter and 17% in the fourth quarter due to soft domestic demand and price adjustments to Mexican tariffs.
• Exports: April exports reached a record high of 548 million pounds, driven by strong shipments to Mexico and South Korea.

Lamb

• Production: Expected to grow by +1.3%.
• Prices: Strengthened in May and June due to tight supplies, with Choice/Prime Slaughter lamb prices reaching $155.63/cwt.
• Imports: Increased due to strong U.S. demand for lean meat from Oceania and North/Central America.

Poultry and Eggs

• Broilers: Production forecast to increase slightly, with gains in hatchery data and bird weights.
• Table Eggs: Production forecast to increase by +2.1%, but egg stock projections were lowered due to recent trends.
• Turkey: Production slightly raised due to stronger-than-expected April output.
• Exports: Turkey exports to Mexico remain strong, contributing to the revised upward trade forecast.

Summary of Key Trends and Factors

• Production: A major driver of supply growth for most livestock commodities in 2019.
• Imports: Played a significant role in expanding lamb and beef supply, especially due to U.S. demand for lean meat.
• Beginning Stocks: Contributed to supply growth for lamb and turkey, while milk beginning stocks are expected to be lower in 2019.
• Feed Prices: Higher feed prices are expected to affect milk production and pricing, with potential impacts on cheese and whey production.
• Tariffs: Mexico's tariffs on U.S. cheese may negatively impact exports, but other dairy products and regions are expected to offset these losses.
• California FMMO: Implementation is expected to increase minimum milk prices, affecting production and prices of cheese, whey, and butterfat products.

Conclusion

The 2019 outlook for U.S. livestock, dairy, and poultry is characterized by moderate supply growth, driven largely by increased production and import trends. While tariffs and feed prices pose challenges, particularly for dairy and pork, strong export demand and seasonal adjustments are expected to support prices and supply. The California FMMO is anticipated to have a significant impact on dairy pricing and production dynamics.