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Summary of the Livestock, Dairy, and Poultry Outlook Report (LDP-M-272, Feb. 15, 2017)

Core Content

This report provides an overview of the U.S. livestock, dairy, and poultry sectors as of February 15, 2017, including production trends, export and import data, and price forecasts for 2017. It is prepared by the Economic Research Service (ERS) and approved by the World Agricultural Outlook Board.

Main Viewpoints

• Animal Product Exports: The U.S. animal product sector is a major exporter, with beef, pork, and poultry exports contributing significantly to production. Asia remains the largest market for U.S. beef and dairy exports, while Mexico is a key market for pork and poultry.
• Production Trends: Most sectors experienced growth in production in 2016, with some signs of slowing expansion in 2017.
• Price Forecasts: Prices for various products are expected to remain under pressure due to supply dynamics, while some products like dry whey and whey protein show increased demand and prices.
• Inventory Changes: Inventory levels in the cattle and sheep industries show mixed trends, with some states experiencing declines and others showing increases.

Key Information

Cattle/Beef

• Inventory: Total cattle and calf inventory increased by about 2% from 2016, with significant growth in several states like Texas, Missouri, Oklahoma, and Kansas.
• Production: Commercial beef production in 2016 was 6% higher than 2015, driven by increased slaughter and higher dressed weights.
• Exports: Beef exports in 2016 accounted for 10.1% of commercial production, with Asia (63%) being the largest market. Exports are expected to grow to 2.72 billion pounds in 2017.
• Imports: U.S. beef imports are projected to decline to 2.74 billion pounds in 2017 due to increased domestic supplies and more competitive prices.
• Prices: Fed steer prices are forecast to average $109-$116 per cwt in 2017, down from $120.86 in 2016. Feeder cattle prices are expected to average $131-$139 per cwt.
• Trends: The rate of expansion in the cattle industry is slowing, as indicated by the reduced growth in replacement heifers.

Dairy

• Production: U.S. milk production in 2016 reached a record 212.5 billion pounds, up 1.7% from 2015.
• Prices: All-milk prices for 2017 are forecast at $17.70-$18.40 per cwt, up 10 cents from the previous month. Cheese prices are forecast to be lower, while dry whey prices are expected to rise.
• Exports: Dairy exports in 2016 were 18.3% of production on a skim-solids milk equivalent basis, with Asia (55%) and Mexico (24%) as the top markets. The export forecast for 2017 is 8.3 billion pounds on a milk-fat basis.
• Imports: Dairy imports are expected to decrease in 2017 due to more competitive U.S. butter prices and increased domestic supply.
• Trends: The milk-fat basis import forecast for 2017 has been lowered to 6.6 billion pounds, while ending stocks are expected to rise.

Pork/Hogs

• Production: Pork production in 2016 was 1.5 billion pounds, with a significant increase in exports to China/Hong Kong (up 71.1% year-over-year).
• Prices: Hog prices in the first quarter of 2017 are expected to average $45-$48 per cwt, up 5% from a year earlier. Retail pork prices are forecast to average in the mid-$3.60s for the first half of 2017.
• Exports: U.S. pork exports in 2017 are expected to increase by 4% to 5.4 billion pounds.
• Imports: Pork imports in 2017 are expected to remain around 1.1 billion pounds, with Poland becoming the second-largest source of imports.
• Trends: The fourth-quarter 2016 exports were 14% higher than the same period in 2015, driven by strong demand and lower production costs in Europe.

Sheep/Lambs

• Inventory: On January 1, 2017, the U.S. sheep industry saw a 2% decline in inventory, reversing a two-year increasing trend.
• Production: Commercial lamb and mutton production in 2016 was 150 million pounds, slightly below 2015 levels. A 3% decline in production is expected for 2017.
• Exports: Lamb and mutton exports in 2016 totaled 5.38 million pounds, up 21% from 2015. Exports are expected to remain stable in 2017.
• Imports: Imports are forecast to decrease to 197 million pounds in 2017, down 9% from 2016, due to tight domestic supplies and a strong dollar.

Poultry

• Production: Broiler and table-egg production in 2016 were 2% and 6% higher than 2015, respectively. The table-egg flock reached a record level.
• Exports: Poultry exports improved in 2016, with a significant portion coming from "Other" markets. Broiler and egg price forecasts for 2017 have been increased.
• Prices: Whole frozen hen prices in January averaged just under $1 per pound, while 2017 prices are expected to average 104-110 cents per pound.
• Trends: The poultry sector is expected to maintain its production levels, with continued export demand and improved prices.

Tables and Figures

• Red Meat and Poultry: Table showing export shares to major foreign destinations.
• Dairy Forecast: Table and graph illustrating price trends and forecast data.
• Pork Exports: Table summarizing export volumes and shares for the top 10 destinations.
• Pork Imports: Table showing import volumes and shares for the top 10 source countries.
• Sheep and Goat Inventory: Table and graph indicating inventory changes in key states.
• Lamb and Mutton Production and Exports: Graphs showing production and export trends.

Contacts and Links

• Mildred Haley: mhaley@ers.usda.gov
• Keithly Jones: kjones@ers.usda.gov
• Russell Knight: Russell.H.Knight@ers.usda.gov
• Lekhnath Chalise: Lekhnath.Chalise@ers.usda.gov
• Jonathan Law: jonathan.law@ers.usda.gov
• Jerry Cessna: jgcessna@ers.usda.gov

Outlook

• The report highlights the importance of global demand and supply dynamics in shaping prices and trade volumes.
• There are indications of slowing growth in some sectors, particularly in cattle and sheep.
• Continued export growth is expected in the dairy and pork sectors due to favorable demand and competitive pricing.