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Livestock, dairy, and poultry outlook
Story Date: 11/21/2012
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Source: USDA ERS, 11/16/12
Beef/Cattle: Beef packers have reduced slaughter in 2012, but because dressed weights
have been higher year-over-year, beef production is down by less than slaughter would
indicate. Cattle feeders’ and beef packers’ poor margins will likely continue until cattle
and beef prices reach levels that generate positive margins for both sectors, or until grain
prices decline to levels that make cattle feeding profitable enough for packers to achieve
positive margins. Currently, retail Choice beef prices continue to struggle to move above
$5 per pound.
Beef/Cattle Trade: U.S. beef imports through September were 10 percent above yearearlier
levels despite a lower third quarter. Beef exports were 13 percent lower through
the third quarter.
Pork/Hogs: Pork production forecasts were lowered slightly to reflect lighter expected
hog weights. Nonetheless, fourth-quarter 2012 pork production is forecast 1 percent
above the same period last year. Pork production in 2013 is expected to decline by 1.4
percent. Fourth-quarter 2012 hog prices are expected to average about 10 percent below
a year ago. In 2013, hog prices are expected to rebound, increasing about 6 percent
above average hog prices in 2012. Large 2012 accumulations of pork stocks are likely a
reflection of larger year-over-year production and modest increases in export growth.
Poultry: Broiler meat production in fourth-quarter 2012 is forecast at 9.05 billion
pounds, about 2 percent higher than a year earlier. Broiler meat production in 2013 is
forecast at 36.4 billion pounds, a decrease of 1 percent from 2012. Broiler integrators
are not expected to have any incentive to expand production due to the combination of
continued high prices for corn and soybean meal and expected relatively modest growth
in broiler prices. Turkey meat production in fourth-quarter 2012 is forecast at 1.55
billion pounds, which again would be almost a 4-percent increase from the same period a
year earlier. At the end of September, stocks of whole turkeys were estimated at 305
million pounds, up 9 percent from a year earlier. Higher whole bird stocks have placed
downward price pressure on their wholesale prices. Table egg production in third-quarter 2012 was 1.67 billion dozen, up 1 percent from the same period in 2011. In September, total egg exports were the equivalent of 33.7 million dozen eggs, an increase of 29 percent from 2011. Much of the growth in egg exports was due to a surge in shell egg shipments to Mexico.
Poultry Trade: September broiler shipments were down while turkey shipments were up from a year ago. Broiler shipments totaled 615.7 million pounds, a decrease of 3.3 percent from September 2011. Turkey shipments totaled 74.1 million pounds, a 26-percent increase from last year.
Sheep/Lamb: Third-quarter 2012 slaughter lamb prices at San Angelo, Texas dropped to their lowest levels since 2009. The rapid reduction in lamb prices is due to both supply and demand components. Production and imports have increased over the same period last year, but issues of overfinished animals appear to be affecting demand. Prices rebounded slightly in October and are expected to strengthen further in the fourth quarter.
Dairy: Feed prices are expected to moderate next year, easing profit pressure on producers, but not enough to engender an expansion in cow numbers. The moderate contraction in herd size is expected to continue in 2013. Export demand for powders remains strong, but export demand for butterfat is weaker. Prices for Class III, Class IV, and all milk will trail 2011 prices both this year and next.
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