USDA Livestock, Dairy, and Poultry Outlook 2018.04.16

Approved by USDA’s World Agricultural Outlook Board 1 Stocker cattle are weaned calves intended for sale as commercial feeder cattle, but that have not yet been placed in the feedlot.01,0002,0003,0004,0005,0006,00005001,0001,5002,0002,5002017Cattle2018*2017Hogs2018*TotalOtherSlaughterFeeder/FinisherLivestock, Dairy, and Poultry Outlook Canada and Mexico Supply the Vast Majority of Live Animal Imports to the United States Mildred Haley and Kim A. Ha A net importer of live animals, the United States imported 1.81 million head of cattle and 5.6 million head of hogs in 2017. In 2018, imports of live cattle are forecast at 1.91 million head and hog imports at 5.63 million head, increases of 6 percent and about 1 percent, respectively. While these animals vary by weight, they can be grouped into two main categories: young cattle and young hogs imported for further feeding and finishing before slaughter, i.e., “feeder cattle” and “finishing pigs,” and animals ready for slaughter, i.e., slaughter cattle and slaughter hogs. In 2017, 67 percent of live cattle imports were feeder/stocker1 cattle and 32 percent were slaughter cattle. For 2017 live hog imports, 85 percent were finishing pigs, while 13 percent were slaughter hogs. Import shares in 2018—between feeder cattle and slaughter cattle, and between finishing pigs and slaughter hogs—are expected to remain largely the same as in 2017. Regarding origin, all but a handful of live animal imports come from countries within North America due to proximity and ease of transport to the U.S. Feeder cattle come from Mexico and Canada, with Mexico supplying the large majority. Practically all cattle for slaughter come from Canada. For live hogs, almost all imports—both finishing and slaughter—originate from Canada. Between 2013 and 2017, live cattle imports averaged 6 percent o f U.S. commercial cattle slaughter. Over the same period, live hog imports averaged 5 percent of U.S. commercial hog slaughter. Live animal importsThousand head, cattleThousand head, hogs*ProjectedSource: U.S. Dept. of Agriculture, Economic Research ServiceEconomic Research Service | Situation and Outlook Report Next release is May 16, 2018 LDP-M-286 | April 16, 2018 2 Livestock, Dairy, and Poultry Outlook, LDP-M-286, April 16, 2018 USDA, Economic Research Service Cattle/Beef: The beef production forecast for first-half 2018 was reduced on an expected slower pace of fed cattle slaughter and lighter cattle weights. Although more fed cattle will be slaughtered and at heavier weights in second-half 2018, the annual beef production forecast for 2018 was pared back slightly to 27.6 billion pounds. U.S. beef trade forecasts are unchanged from last month. Cattle exports were revised downward by 40,000 to 160,000 head on lower North American demand. Dairy: Exports on a skim-solids milk-equivalent basis in February were 13.7 percent higher than January and 19.6 percent above February 2017. With higher expected exports of nonfat dry milk/skim milk powder (NDM/SMP) and lactose, the 2018 forecast for exports on a skim-solids basis has been raised to 43.4 billion pounds, 0.6 billion higher than last month’s forecast. The price forecast for dry whey has been lowered to $0.240-$0.270 per pound due to recent price data, high supplies, and lower expected demand. The 2018 all-milk price forecast is $15.60-$16.10 per hundredweight (cwt), a reduction from last month’s forecast of $15.75-$16.35. Pork/Hogs: Information published in the March Quarterly Hogs and Pigs report indicates that the U.S. hog industry continues to expand. Winter pig crop information and spring producer farrowing intentions imply that second-half commercial pork production is likely to be more than 5 percent above the same period last year. Chinese tariffs on U.S. pork may cause short-term dislocations and some reduction in U.S pork exports. Longer term, low U.S pork prices from increased production will more than likely be an important factor helping to support U.S. pork exports. U.S. pork exports in February were 9 percent above a year ago. Poultry: Broiler production was up again in February, while hatchery data suggested reduced production growth for the rest of the year. Recently strong broiler prices contributed to upward revision of price forecasts. March 1 table egg inventory and hatchery data confirmed expansion intentions. Recent egg prices surged before Easter, and though they have decline since, forecasts were raised for the remainder of the year. Turkey production was up slightly in February, but hatchery data and continued low wholesale prices indicate lower production totals in the coming months. 3 Livestock, Dairy, and Poultry Outlook, LDP-M-286, April 16, 2018 USDA, Economic Research Service Cattle / Beef Russell Knight and Lekhnath Chalise Beef Production Trimmed on Pace of Fed Cattle Slaughter and Lighter Weights Commercial beef producti