USDA Livestock, Dairy, & Poultry Outlook Report

Steers and lower corn prices boost cattle dressed weights

Beef/Cattle: Despite recent and current positive cattle feeding margins, increases in feeder cattle prices are offsetting declines in corn prices, signaling continuation of positive margins. Despite record retail beef prices, meatpackers are caught between high fed cattle prices and cutout values too low to generate positive packer margins.

Beef/Cattle Trade: U.S. cattle imports are up 13 percent this year as high U.S. cattle prices continue to draw animals across the border. U.S. beef imports continue to grow and were up 46 percent in August from a year earlier. Demand for U.S. beef exports slowed somewhat this summer but remain strong to Hong Kong and Mexico, both showing strong gains from last year.

Pork/Hogs: The September Quarterly Hogs and Pigs report showed continued effects of PEDv (Porcine Epidemic Diarrhea) in lower inventories of market hogs. At the same time, the report indicated nascent signs of recovery and expansion. Fourth-quarter hog prices are expected to average $72-$74 per cwt, almost 20 percent above a year ago. Prices next year are expected to average $63-$68 per cwt, more than 15 percent below 2014 but almost 3 percent greater than the average in 2013. August pork exports were more than 13 percent lower than a year ago, due largely to reduced shipments to several important Asian markets.

Poultry: U.S. broiler meat production in August totaled 3.2 billion pounds, 3 percent lower than the previous year. The decline was attributed to a fall in the number of birds slaughtered. The broiler meat production forecast for 2015 was increased by 60 million pounds to 39.6 billion pounds. U.S. turkey meat production in August 2014 was 484 million pounds, down only 0.2 percent from a year earlier. Given the higher than expected turkey meat production in August, the production estimate for third-quarter 2014 was increased by 5 million pounds to 1.47 billion, 2.1 percent higher than the previous year. Table egg production has had positive growth throughout the first 8 months of 2014. This trend is expected to continue through the remainder of the third quarter and into the fourth quarter, leading to a 40-million-dozen increase in the production forecast for the second half of 2014. The production forecast for 2015 was increased by 80 million dozen, raising the total to 7.3 billion dozen.

Poultry Trade: Turkey shipments in August were up from a year ago, while broiler and egg and egg product exports were down. Broiler shipments totaled 612.8 million pounds in August 2014, a decrease of 2.7 percent from a year earlier. Egg shipments decreased 4.6 percent from a year ago, totaling 31.2 million dozen, while turkey exports totaled 76.4 million pounds in August 2014, a 15-percent increase from the previous August.

Dairy: Although milk and dairy product prices are forecast to soften next year, lower feed prices this year and in 2015—along with continued strong demand, especially domestically—will maintain producer profitability into next year. Dairy herd numbers and milk production per cow are forecast to continue milk production expansion into 2015.

USDA “Livestock, Dairy, & Poultry Outlook” Report http://www.ers.usda.gov/media/1688226/ldpm-244.pdf