20180816-USDA-Livestock,_Dairy,_and_Poultry_Outlook__U.S._Exports_of_Animal_Proteins_Increase_in_First-Half_2018_28页_2mb

Summary of Livestock, Dairy, and Poultry Outlook Report (August 16, 2018)

Core Content

This report provides an overview of the U.S. livestock, dairy, and poultry markets for the first half of 2018 and forecasts for 2018 and 2019. It highlights export trends, production changes, price movements, and the impact of external factors such as tariffs and global demand.

Main Points

U.S. Exports of Animal Proteins

• Dairy exports increased by nearly 20% YOY in the first half of 2018, driven by competitive pricing.
• Lamb and mutton exports rose by 16%, mainly due to increased sales to the UAE, Canada, Japan, and the Caribbean.
• Beef and veal exports grew by 15% YOY, supported by strong global demand, especially in Asian markets.
• Turkey exports to Mexico increased by almost 7% for the first half of 2018.
• Pork exports rose by more than 6% YOY, mainly due to increased shipments to Mexico, South Korea, Central/South America, and the Caribbean.
• Broiler meat exports were up 2% but fell short of expectations.
• Egg exports showed double-digit growth in major markets but were held back by declines in sales to Mexico, South Korea, and Jamaica, resulting in only 1% YOY growth.

Export Trends and Tariffs

• China's new tariffs on lactose and other dairy products are expected to reduce U.S. exports to China, especially lactose.
• Beef exports for 2018 were revised upward to 3.124 billion pounds, with further increases expected for 2019.
• Cattle exports to Canada offset declines to Mexico and other destinations, leading to a 35% increase in first-half 2018 exports compared to 2017.

Cattle and Beef Production

• The U.S. cattle herd increased by almost 1% to 103.2 million head by July 1, 2018.
• Heifer retention decreased by 12.3% in the first half of 2018, indicating a slowdown in herd expansion.
• Beef production for 2018 was revised down to 27.1 billion pounds due to slower third-quarter slaughter, partially offset by higher anticipated cow slaughter in the second half.
• 2019 beef production was raised to 27.7 billion pounds due to expected higher fed cattle weights.

Feeder Cattle Prices

• Feeder calf prices are following a historic seasonal pattern, with higher prices in summer months.
• Feeder steer prices for Q3 and Q4 2018 were revised upward to $147-$151 and $143-$151 per cwt, respectively.
• Fed steer prices for 2018 and 2019 remained unchanged at $115-$117 and $113-$122 per cwt.

Dairy Market Developments

• Dairy product prices were mixed in July and August 2018, with butter prices declining and NDM and dry whey prices rising.
• U.S. milk production in June 2018 was 18.270 billion pounds, up 1.2% from 2017.
• Dairy exports in June 2018 increased by 123 million pounds on a milk-fat basis, with butterfat products showing strong performance.
• China's new tariffs on lactose, whey protein isolate, and other dairy products are expected to impact U.S. export volumes.

Dairy Forecasts

• 2018 dairy production is forecast at 217.9 billion pounds, unchanged from the previous forecast.
• 2018 dairy exports are forecast at 10.4 billion pounds, up 0.2 billion pounds due to increased butterfat and whole milk powder exports.
• 2018 dairy imports are forecast at 6.0 billion pounds on a milk-fat basis and 5.6 billion pounds on a skim-solids basis.
• 2019 dairy production is forecast at 220.9 billion pounds, up 0.3 billion pounds due to lower feed costs and higher milk prices.
• 2019 dairy exports are forecast at 44.8 billion pounds, down 0.1 billion pounds due to Chinese tariffs.
• 2019 dairy prices are expected to rise, with all-milk prices forecast at $16.45-$17.45 per cwt and Class III and IV prices projected at $14.95-$15.95 and $13.75-$14.85 per cwt, respectively.

Pork and Hog Market Trends

• Pork production for Q3 2018 was revised to 6.515 billion pounds, up 4% from 2017.
• Pork production for 2018 is forecast at 26.7 billion pounds, up 4% from 2017.
• 2019 pork production is expected to be about 27.8 billion pounds, up 4% from 2018.
• Hog prices are projected to average $39-$42 per cwt in 2019, down 8% from 2018.

Key Information

• Export growth was notable across various animal protein categories, especially in Asia.
• Herd expansion is slowing, with reduced heifer retention and increased cow slaughter.
• Feed price forecasts suggest a potential for higher cattle weight gains in 2019.
• China's tariffs are expected to reduce U.S. dairy exports, particularly lactose and whey protein isolate.
• Domestic demand is supported by a strengthening economy, influencing both production and price forecasts.