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USDA Livestock, Dairy and Poultry Outlook

16 December 2015

USDA Livestock, Dairy and Poultry Outlook - 16 December 2015USDA Livestock, Dairy and Poultry Outlook - 16 December 2015

Livestock, Dairy and Poultry Outlook

USDA is forecasting lower prices in 2016 for cattle, hogs, poultry, eggs, and milk. Cattle prices are forecast to decline almost 8 percent compared with 2015, due to larger supplies of heavy cattle, high cold-storage stock levels, and sluggish foreign demand. Hog prices are expected to be 4 percent lower next year, a consequence of larger hog supplies from recent industry expansion. Poultry and egg prices are also forecast lower—broilers (-5 percent), turkeys (-3 percent) and eggs (-11 percent)— as bird numbers and exports recover from Highly Pathogenic Avian Influenza outbreaks in 2015. Stock levels of some broiler parts are expected to be larger in 2016, which should also continue to pressure broiler prices. The 2016 all-milk price forecast is about 5 percent below prices in 2015, a result of increased milk supplies from industry productivity gains, high beginning stocks of dairy products, and weak global demand for certain products.

Beef/Cattle: Fed and feeder cattle prices fell sharply in October 2015, and the markets may remain volatile for the remainder of the year. Both fed- and feeder-steer prices are well below year-earlier prices. The recent downward pressure on fed cattle prices can be attributed to the current high volume of very heavy fed cattle leaving feedlots. In addition, recent high cold storage supplies, coupled with very high Australian imports of beef products, may be contributing to the pressure on cattle (and beef) prices.

Beef/Cattle Trade: U.S. beef exports continue to experience significant declines year over year. Total exports for the month of October were approximately 14 percent lower, despite increased exports to Mexico. The strong dollar and weak global demand for U.S. beef remain negative factors for exports. Beef imports slumped in October as a result of steep declines in processing beef from Australia. USDA is forecasting beef imports lower in 2016 as overall U.S. beef production is expected to be higher and Australian exports are expected to be lower.

Pork/Hogs: Fourth-quarter pork production is forecast at more than 6 billion pounds, with hog prices expected to be more than 30 percent below a year ago. October pork exports were lower than expected.

Poultry: USDA lowered its fourth-quarter production forecast of ready-to-cook (RTC) broiler meat to almost 10.1 billion pounds due to low hatchery data. The production forecast for 2016 has been reduced to 40.9 billion pounds as the industry responds to recent price weakness. Turkey meat production in October totaled 525 million pounds, down 6 percent from a year earlier. Turkey integrators are expected to increase production in 2016 and for production to be significantly higher in second-half 2016. Egg prices have fallen sharply in the first portion of December, and the average price for fourth-quarter 2015 is forecast at $1.83 to $1.86 per dozen. Wholesale egg prices are forecast to remain higher than the previous year through first-quarter 2016, but then to move lower.

Poultry Trade: Broiler, turkey, and egg shipments in October 2015 remained down from a year ago. Broiler shipments totaled 521 million pounds, a decrease of 20 percent from a year earlier. October turkey shipments decreased 48 percent from a year ago, totaling 44 million pounds, while egg and egg product exports totaled 23 million dozen, a 38-percent decrease from the previous October.

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