20210518-USDA-USDA_Livestock,_Dairy,_and_Poultry_Outlook_2021.05.18_32页_1mb

Summary of the "Livestock, Dairy, and Poultry Outlook" Report (May 18, 2021)

Core Content

This report provides an outlook for U.S. livestock, dairy, and poultry production and trade for 2021 and 2022, highlighting the impacts of drought, feed costs, and global demand on the sector.

2022 Production Forecasts

• Total Animal Proteins: Production is expected to increase by less than 1% in 2022 compared to 2021.
• Red Meat and Poultry: Overall production is forecast to rise slightly, with:
  • Beef: Production is expected to decline by 2% to 27.3 billion pounds, the first drop in 7 years.
  • Pork: Production is forecast to increase by 1% to 28.5 billion pounds.
  • Lamb and Mutton: Production is expected to fall by 3%, consistent with recent trends.
  • Broiler and Turkey: Both are projected to increase by 1% in 2022.
  • Eggs: Production is forecast to rise by 1.4%, while prices are expected to increase by 2%.
• Milk Production: Expected to increase by about 1% in 2022 due to higher yields per cow.

Key Drivers of Changes

• Drought Conditions:
  • 66% of the U.S. is in drought, with 23% in extreme to exceptional drought.
  • This has led to poor pasture conditions and increased feed costs.
  • Cattle supplies are expected to decline in 2022 due to accelerated slaughter in 2021.
• Feed Costs:
  • Higher feed costs are constraining production growth, especially for poultry and eggs.
  • Feed costs are expected to remain elevated in 2022, partially offsetting price increases.
• Demand Trends:
  • Strong consumer demand is expected to support prices for beef, lamb, and poultry.
  • Pork demand is expected to remain robust due to economic expansion.
  • China's growing demand for beef and challenges with African swine fever are boosting U.S. exports.

Price Forecasts

• Beef Prices:
  • 2021 fed steer prices are forecast at $116.30 per cwt.
  • 2022 fed steer prices are expected to rise to $122.00 per cwt, a 5% increase.
• Lamb and Mutton Prices:
  • 2021 lamb price forecast increased to $169 per cwt.
  • 2022 lamb price forecast is $169 per cwt.
• Poultry Prices:
  • Broiler and turkey prices are expected to remain stable at 93 cents per pound and 114-116 cents per pound, respectively.
• Egg Prices:
  • 2021 average egg price is forecast at 112.5 cents per dozen.
  • 2022 average egg price is expected to rise by 2% to 114.5 cents per dozen.
• Dairy Prices:
  • 2021 all-milk price forecast is $18.95 per cwt.
  • 2022 all-milk price is forecast at $18.50 per cwt.
  • Wholesale Prices: Cheese, butter, nonfat dry milk, and dry whey prices increased in early May 2021.

Imports and Exports

• Beef Imports:
  • 2021 total imports are forecast at 2.961 billion pounds, down 8.6% from 2020.
  • Australia's imports dropped significantly due to drought and reduced exports.
  • Mexico and Brazil are key sources, with Brazil seeing the largest year-over-year increase.
  • 2022 beef imports are forecast at 2.95 billion pounds, slightly lower than 2021.
• Beef Exports:
  • 2021 total exports are forecast at 3.227 billion pounds, up 12.4% from 2020.
  • China is the fastest-growing market, with exports increasing by over 2900% year-over-year.
  • Japan and South Korea remain the largest destinations, but their shares have decreased.
  • 2022 beef exports are forecast at 3.225 billion pounds, flat compared to 2021.

Cattle and Feedlot Dynamics

• Cattle on Feed: Increased by 11% in April 2021 compared to April 2020.
• Slaughter Rates:
  • Fed cattle slaughter in 2021 is expected to be higher than 2020 due to increased placements.
  • Weekly slaughter is still below pre-pandemic levels, but Saturday slaughter has increased significantly.
• Culling: Producers are expected to increase culling of breeding stock due to poor pasture conditions and higher feed costs.

Outlook for 2022

• Supply Constraints: Lower cattle supplies due to increased slaughter in 2021 will support higher beef prices.
• Production Trends:
  • Beef production is forecast to decline for the first time in 7 years.
  • Lamb and mutton production is expected to continue its downward trend.
• Feed Costs: Expected to remain a challenge for production growth and may partially offset price increases.
• Market Demand: Continued strong demand from international markets, especially China, is expected to support export volumes.

Summary of Major Trends

• Drought and Feed Costs: Major constraints on production and supply.
• Consumer Demand: Strong demand for beef and poultry is expected to support prices.
• Global Trade: China and Mexico are key markets, with China showing significant growth in beef imports.
• Poultry and Eggs: Expected to grow modestly in production and prices, but constrained by feed costs.
• Dairy Sector: Milk production is expected to increase slightly, with mixed trends in export volumes and prices.

Conclusion

The report indicates a mixed outlook for U.S. livestock, dairy, and poultry in 2022, with modest production increases across most categories but significant declines in beef production due to supply constraints. Prices are expected to remain high for beef, lamb, and dairy products, driven by strong demand and reduced supplies. Feed costs and drought conditions are major factors influencing production decisions and market dynamics.