The U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS), in the the latest “World Agricultural Supply & Demand Estimates” (WASDE) report, once again raised the 2018 forecast for total red meat and poultry production, but only slightly. Broiler production numbers were increased, more than offsetting lower beef, pork and turkey production, USDA said.
The beef production forecast was reduced from the previous month's WASDE figure, as expectations for lower second-half beef production more than offset higher first-half beef production. USDA said the NASS “Cattle” report, released Jan. 31, estimated that the U.S. cattle inventory continued to increase for the fourth consecutive year, but the report also indicated that fewer cattle were being held outside feedlots. The number of cattle placed on feed in the first part of 2018 is expected to be lower, resulting in fewer marketings and smaller beef production in the second half of the year.
NASS said the January “Cattle on Feed” report showed year-over-year increases in placement numbers in December, implying that larger numbers of fed cattle will likely be marketed during the spring quarter. Cattle weights were raised for the first half of 2018 on current weight patterns.
Pork production was reduced on the pace of slaughter to date, while broiler production was raised largely on continued growth in bird weights. First-half turkey production was reduced based on hatchery data. USDA also reduced its first-quarter egg production estimated due to a slower laying rate.
Estimates of 2017 meat and egg production were adjusted to reflect December data.
For 2018, USDA raised the beef export forecast as demand from several key trading partners is expected to remain robust. No change was made to the beef import forecast.
Pork import and export forecasts were left unchanged from the prior month, but first-half broiler export forecasts were raised on expectations of strong demand. Turkey exports, on the other hand, were reduced due to the slow pace of recovery in exports in late-2017 and reduced production in 2018.
Fed cattle prices for the first half of 2018 were raised from last month to $116-123/cwt. on continued demand strength. USDA also raised first-quarter hog and broiler price forecasts from last month to $47-49/cwt. and 88-94 cents/lb., respectively, based on stronger prices to date. While USDA did raise the first-quarter turkey price to 88-94 cents/lb., it left the annual forecast unchanged. Egg price forecasts were raised to $1.14-1.21/doz. due to continued robust demand.
The milk production forecast for 2018 was lowered from last month based on expectations for slower growth in milk per cow. The 2018 fat basis export and import forecasts were unchanged from the previous month. On a skim-solids basis, the import forecast was raised slightly, and the export forecast was raised due to strong global demand for skim milk powder, lactose and whey products. The 2017 production, trade and stocks estimates were adjusted to reflect December data.
Annual product price forecasts for cheese and butter were lowered from the previous month due to relatively weak demand. No changes were made to the annual prices for nonfat dry milk and whey.
The Class III price was lowered due to the cheese price projection, while the Class IV price was down base on a lower butter price forecast. The all milk price was reduced to $15.70-16.40/cwt.