USDA Livestock, Dairy, and Poultry Outlook 2017.12.18

First-Half 2018 Forecasts for Red Meat, Poultry, Eggs, and Milk Show Mostly Year-Over-Year Production Increases with Lower Prices The figure below shows percentage changes of USDA production and price forecasts for red meats, poultry, eggs and milk, for the first half of 2018 compared to the first half of 2017. With the exception of lamb and eggs, larger year-over-year product supplies are accompanied by lower prices. For cattle, higher second-half 2017 cattle placements are expected to lead to higher first-half 2018 fed cattle marketings and seasonally higher (+5.1 percent) beef production. First-half 2018 cattle prices are expected to be 7. 3 percent below prices in the first-half of 2017. Higher first-half 2018 pork production (+4.3 percent) derives mostly from expected higher second-half 2017 pig crops. Consequently, hog prices are expected to fall 2.4 percent below those in the first half of 2017. For broilers, expected higher producer returns drive relatively small production increases. First-half broiler prices are forecast to decline by 6.8 percent. For turkeys, a modest recovery in domestic demand and exports drives small increases in production (+0.24 percent), but low prices continue to underscore the slow pace of demand recovery relative to supply levels.First-half 2018 turkey prices are expected to fall by 9.8 percent. Milk production in the first half of 2018 is forecast to increase over the first half of 2017 by 1.6 percent. Although milk prices are expected to decline from 2017 to 2018, relatively low feed prices are expected to encourage expansion of the milk cow herd and greater yield per cow, although at a slower rate than forecast last month. First-half lamb production is forecast lower (-1.4 percent) due to lower expected slaughter volumes, stemming from a smaller 2017 sheep flock. At the same time, 7.7 percent lower lamb prices are the result of continued-large cold storage inventories, relatively high imports, and lower prices of competing meats across the livestock and poultry complex. For eggs, expected first-half 2018 price increases (+17.7 percent) reflect the year-earlier low prices that prevailed due to record-level supplies. Production growth (+0.9 percent) in the first half of 2018 is expected to be moderate as producers continue to recover from margins that were relatively low until recently. -15-10-505101520253035Percent change in production, first-half 2018, comparedwith first-half 2017Percent change in price, first-half 2018, compared withfirst-half 2017Cattle PriceHog PriceEgg Prod.Egg PriceBeefProd.Pork Prod.Broiler Prod.Broiler PriceTurkey Prod.TurkeyPriceMilk Prod.MilkPricePercent changes in first-half 2018 production and price forecasts, compared with first half 2017Percent changeSource: World Agricultural Outlook Board, USDALamb Prod.Lamb PriceLivestock, Dairy, and Poultry Outlook Mildred Haley, mhaley@ers.usda.gov Economic Research Service Situation and Outlook LDP-M-282 Dec. 18, 2017 Contents Cattle/Beef Dairy Pork/Hogs Sheep/Lamb Poultry Contacts and Links Tables Red Meat and Poultry Dairy Forecast Web Sites Animal Production and Marketing Issues Cattle Dairy Hogs Poultry and Eggs WASDE -----------------------------Tables will be released on December 28, 2017 The next Outlook Report release is January 18, 2018 ----------------------------- Approved by the World Agricultural Outlook Board. Cattle/Beef: Cattle on feed inventories remain above year-earlier levels and placements continue to reflect the larger cattle inventory. However, the pace of beef cow and heifer slaughter suggests that the rate of expansion may have slowed during 2017. Prices across the cattle complex appear to have peaked and are under pressure during the fourth quarter. Higher beef exports in each month in 2017 through October resulted in year-to-date export growth of 14.3 percent above the previous year. Beef export forecasts for 2017 and 2018 have been revised upward from the previous-month forecasts based on the current pace of growth and strong global demand. Dairy: With recent price declines in dairy products and continued high stock levels, the all-milk price for the fourth quarter of 2017 is $17.75-$17.95 per cwt, a reduction from last month’s forecast of $17.85-$18.15. The 2018 all-milk price forecast is $16.65-$17.45 per cwt, a reduction from last month’s forecast of $16.90-$17.80. The 2018 forecast for domestic use on a milk-fat milk-equivalent basis has been lowered to 215.9 billion pounds, 0.8 billion less than last month’s forecast. On a skim-solids milk-equivalent basis, the forecast for 2018 commercial use is 183.2 billion pounds, 1.9 billion less than last month’s forecast. With lower expected prices, the 2018 milk production forecast has been lowered to 219.3 billion pounds, a reduction from last month’s forecast of 219.7 billion pounds. Pork/Hogs: Packer margins recovered in November, largely due to strong pork product prices. Fourth- quarter