WASDE: 2016 Meat Production Raised, Milk Lowered from Last Month
LIVESTOCK, POULTRY, AND DAIRY: The estimate of 2015 total meat production is lowered from last month as lower pork, broiler, and turkey production more than offsets higher beef production. For 2016, the forecast is raised as higher pork, broiler, and turkey production more than offsets lower forecast beef production. Higher cattle slaughter in late 2015 resulted in a higher beef production estimate, but lower-than-expected cattle placements in late 2015 are expected to result in lower fed cattle marketings and slaughter in 2016 and the beef production forecast for 2016 is lowered. USDA will release its semi-annual Cattle report on January 29, providing estimates of heifers held for breeding and an insight into the number of cattle which might be available for placement during 2016. Pork production for 2015 is lowered as end of year slaughter was lower than expected. Pork production is increased slightly for 2016. The Quarterly Hogs and Pigs report, released on December 23, indicated that producers intend to farrow slightly fewer sows on average during the first half of 2016, which may limit growth in the pig crop despite growth in pigs per litter. However, higher carcass weights will support increased pork production. Broiler production is lowered for 2015 based on slaughter and hatchery data, but the forecast for 2016 is raised primarily on higher forecast broiler prices. Turkey production is raised for both the end of 2015 and early 2016 on slaughter and hatchery data. Egg production for 2015 and 2016 is unchanged.
Beef imports for 2015 and 2016 are reduced, reflecting the pace of trade to date and relatively weak prices for processing beef. Beef exports for the last quarter of 2015 and early 2016 are raised on gains in sales to a number of markets. Pork imports and exports are unchanged from last month. Broiler and turkey exports for 2015 and 2016 are reduced from last month as the export recovery has been slower than expected.
Livestock and poultry prices for 2015 are adjusted for December data. For 2016, no change is made to the cattle price forecast. The 2016 hog price forecast is reduced as large supplies of hogs and competition from other meats pressured prices in late 2015 and is expected to pressure prices in early 2016. Broiler prices improved in late 2015 and early 2016 and the price forecast for 2016 is raised. Egg prices are lowered for 2016 reflecting recent price movements.
Milk production for 2015 is raised on slightly stronger growth in milk per cow. Forecast 2016 milk production is reduced from last month. Cow numbers are lowered due to lower expected milk prices and the recent blizzard in Texas and New Mexico. Growth in milk per cow is reduced on lower milk prices. Exports are lowered on both a fat- and skim-solids basis as global supplies of dairy products remain large and demand remains relatively weak. Continued strength in domestic butter use will also limit the competitiveness of U.S. butter in world markets. Fat and skim solid-basis imports for 2015 are unchanged. For 2016 both fat and skim-solids imports are raised largely on higher cheese imports.
Dairy product prices for 2015 are adjusted for December data. For 2016, butter prices are raised from last month on relatively strong demand and lower expected production. Cheese, nonfat dry milk (NDM), and whey prices are reduced. Relatively large beginning stocks of cheese and weaker beginning year prices underlie the reduction in the cheese price forecast. NDM and whey prices are expected to be pressured by weakness in exports. The Class III price for 2016 is lowered on lower cheese and whey prices and the Class IV price is reduced as a lower NDM price more than offsets a higher butter price. The all milk price is lowered to $15.35 to $16.15 per cwt for 2016.
