LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2014 is raised from last month. Beef production is raised on higher steer and heifer and cow slaughter and slightly higher carcass weights. Pork production is lowered as USDA’s Quarterly Hogs and Pigs report indicated a slower-than-expected expansion in farrowings during the second quarter. This implies lower than previously forecast hog slaughter later in the year, but strong hog prices and lower feed costs are expected to provide incentives to feed hogs to heavier weights. No change was made to broiler production as the production expansion remains muted. Turkey production is raised on higher second- quarter production. Egg production is raised on strong table egg prices and lower feed costs. For 2015, beef and broiler production is forecast higher, but pork production is forecast lower. Cattle slaughter is forecast higher in early 2015 based on 2014 placements. Pork production is reduced as supplies of market hogs will remain relatively tight. Broiler production is forecast higher as lower expected feed costs support a more rapid increase in production.
Forecasts for 2014 and 2015 beef imports are raised as demand for processing grade beef remains strong. Exports for 2014 are raised on recent data. Pork imports for 2014 are reduced slightly. Despite high prices, pork exports remain robust and forecasts for both 2014 and 2015 are raised. Broiler and turkey exports are raised for 2014 based on May data, but forecasts for 2015 are unchanged from last month.
Cattle and hog price forecasts for 2014 are raised from last month on the strength of demand. Broiler price forecasts for both 2014 and 2015 are unchanged from last month. The turkey price forecast for 2014 is raised based on June price data, but the egg price is reduced. The hog price forecast is raised for 2015 on expectations of tighter supplies and continued strong demand. Prices for cattle, broilers, turkey, and eggs are unchanged at the midpoint for 2015.
The milk production forecast for 2014 is lowered from last month as slower growth in output per cow more than offsets a more rapid expansion in cow numbers. The forecast for 2015 is raised as higher milk prices and lower feed costs are expected to support more rapid growth in cow numbers and output per cow. Export forecasts for 2014 are lowered on a fat basis but raised on a skim-solids basis. High domestic butter prices are expected to limit export opportunities, but nonfat dry milk/skim milk powder (NDM/SMP) exports are expected to remain strong. For 2015, no change is forecast to fat-basis exports, but strength in NDM/SMP sales will help support higher skim-solids exports.
Product prices are forecast higher for 2014 with strength in butter prices expected to carry into 2015. Despite increased production, robust domestic demand and stronger NDM/SMP exports will support prices. Class III and Class IV prices for 2014 are raised on stronger component product prices and the Class IV price forecast for 2015 is raised reflecting strength in butter prices. The all milk price is forecast at $23.25 to $23.55 per cwt for 2014, and $19.75 to $20.75 per cwt for 2015.
Source: USDA WASDE