20170119-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2017.01.19_21页_779kb

Summary of Livestock, Dairy, and Poultry Outlook (LDP-M-271, Jan. 19, 2017)

Core Content

This report provides an overview of the U.S. livestock, dairy, and poultry markets for 2017, analyzing production trends, price forecasts, and trade dynamics. It includes data on cattle, hogs, poultry, and dairy products, as well as international trade outlooks.

Main Views and Key Information

Cattle and Beef

• Production: Beef production in 2016 was 6% higher than 2015 due to increased slaughter rates and heavier carcass weights. The 2017 forecast indicates continued higher production, with prices expected to be lower than 2016.
• Prices: Fed cattle prices rebounded slightly in late 2016 but are forecast to weaken in 2017 due to large supplies. Prices for beef are expected to decline, with the Choice retail price forecasted to be in the mid-$5.70s per pound.
• Exports: U.S. beef exports were 11% higher in November 2016 compared to the same period in 2015, with significant increases to South Korea, Japan, Taiwan, and Vietnam. However, the strong U.S. dollar could dampen export opportunities in 2017.
• Imports: Beef imports were 12% lower in November 2016 compared to 2015, with declines from Australia and Uruguay. Imports from Canada and Mexico increased, and 2017 imports are expected to decrease further due to increased domestic production and tighter supplies from Oceania.
• Trade Dynamics: Exchange rate fluctuations, particularly the depreciation of the Mexican peso, could create headwinds for U.S. animal product exports in 2017. However, lower prices may help offset some of these effects.

Dairy

• Production and Prices: Milk production in November 2016 reached 17.1 billion pounds, up 2.4% from 2015. Domestic demand and strong exports contributed to higher prices in 2016, with the all-milk price forecasted at $17.60-$18.40 per cwt for 2017.
• Exports: November 2016 dairy exports were strong, with butter and cheese exports to Canada and Mexico leading the way. U.S. dairy exports are forecast to increase in 2017.
• Imports: Dairy imports in 2016 were expected to remain stable, with no significant changes from the previous month’s forecast.
• Stock Levels: Ending stocks for dairy products on a milk-fat basis were 13.7 billion pounds in November 2016, the largest 1-month fall since 1993. Stock levels are expected to decrease in 2017.
• International Outlook: The U.S. is expected to face strong competition from the EU in cheese exports. The U.S. dollar's strength relative to the euro could affect export competitiveness.

Pork and Hogs

• Production: Hog production in 2016 increased by 4%, with the highest hog inventory since 1943. The 2017 forecast predicts a 5.1% increase in pork production, reaching over 26.2 billion pounds.
• Prices: Hog prices are expected to fall 15% in 2017 due to increased supply. Prices for live equivalent 51-52% lean hogs are forecast to average $38-$41 per cwt.
• Exports: U.S. pork exports reached a record 510 million pounds in November 2016, with Mexico accounting for one-third of the total. Exports are expected to increase to 5.44 billion pounds in 2017.
• Imports and Stocks: Pork imports remained steady, and cold storage stocks increased, which could affect supply and demand dynamics in 2017.

Poultry

• Production: Broiler production was slightly reduced in the fourth quarter of 2016 but increased in the first quarter of 2017. Turkey production was also slightly reduced in December but is forecast to increase in 2017.
• Prices: Broiler prices remained above 2015 levels in late 2016, with the first-quarter forecast increased to 79-83 cents per pound. Turkey prices are expected to decline in 2017, averaging 105-113 cents per pound.
• Exports: Turkey exports in November 2016 were lower than expected, primarily due to reduced exports to Mexico. However, exports to some Asian and Caribbean markets increased. The 2017 forecast for turkey exports is slightly higher than 2016.
• Trade Uncertainty: Avian influenza outbreaks in several countries have created uncertainty in export demand, but the U.S. may benefit from increased demand in markets like South Africa and the Philippines.

Key Tables and Charts

• Exchange Rate Dynamics: The Mexican peso fell by nearly 20% in early 2017, potentially affecting U.S. exports to Mexico.
• Price Forecasts for 2017: Cattle prices are expected to fall by 10%, hogs by 15%, and poultry by 2% for broilers and 7% for turkey.
• Production Trends: Pork production is forecast to increase by over 5% in 2017, while turkey production is expected to rise.
• Export Volumes: November 2016 exports were record-high for pork, with significant growth in several markets, including Mexico, Hong Kong, and Japan.
• Stock Levels: Butter ending stocks in November 2016 fell by 67 million pounds, the largest decline since 1993. Dairy product stocks are expected to decrease in 2017.

Contacts and Links

• Authors: Mildred Haley, Keithly Jones, Jonathan Law, Jerry Cessna
• Emails: mhaley@ers.usda.gov, kjones@ers.usda.gov, jonathan.law@ers.usda.gov, jgcessna@ers.usda.gov
• Additional Resources: Dairy: World Markets and Trade for more information on U.S. dairy exports and competition from the EU.