The 2016 forecast of total red meat and poultry production is raised from last month as higher forecast pork and broiler production more than offsets reduced forecasts for beef and turkey. USDA’s Cattle report, released January 29, estimated that the cattle inventory continued to increase and pointed to a higher level of cattle outside feedlots on January 1, 2016. However, with lower year-over placements in fourth-quarter of 2015 and only modest increases expected in first-half 2016 placements, marketings and fed cattle slaughter forecasts for 2016 are reduced. Partly offsetting the lower fed cattle slaughter is higher expected cow slaughter and an increase in cattle carcass weights as the pace of marketings is slowed. Pork production is raised as slaughter during January was above expectations. Broiler production is higher as recent hatchery data shows faster-than-expected growth in chicks placed and bird weights continue to increase. Turkey production is reduced on hatchery data. Egg production is raised on increased hatching egg production. Estimates of 2015 meat and egg production are adjusted to reflect December data.
Beef and pork import and export forecasts for 2016 are unchanged from last month. The broiler export forecast is lowered as South Korea reinstated its ban on imports of uncooked U.S. poultry following the discovery of HPAI in Indiana in mid-January. Turkey exports are unchanged. The egg export forecast is unchanged, but the import forecast is raised. Meat and egg trade estimates for 2015 are updated based on data for December.
Cattle prices for 2016 are raised from last month on higher expected prices in the first quarter. First quarter hog prices are lowered from last month as supplies are expected to support higher slaughter levels; however, the forecast of the annual price is unchanged. Broiler prices are lowered from last month on weaker prices to date. The turkey price is unchanged. Egg prices are raised in the first quarter, but lowered in the second with the annual average price lowered from last month.
Milk and cheese
The milk production forecast for 2016 is raised from last month as the cow herd is adjusted slightly to reflect the January 1 dairy cow inventory reported in USDA’s Cattle report and milk per cow is raised for the first quarter. Beginning stocks are raised from last month as cheese stocks at the end of 2015 were high. Both fat basis and skim-solids exports for 2016 are reduced from last month reflecting continued pressure on cheese, nonfat dry milk (NDM), whey, and lactose exports, due to large global supplies and a relatively strong dollar. Imports are unchanged from last month. For 2015, production, trade, and stock estimates are updated based on data through December.
Product price forecasts for NDM and whey are forecast lower as U.S. prices continue to reflect weakness in international markets. The butter price forecast is raised as domestic demand remains strong. The cheese price forecast is unchanged from last month, although the range is narrowed. The Class III price is lowered on lower whey prices. The Class IV price is down as a lower NDM price more than offsets a higher butter price. The all milk price is forecast at $15.30 to $16.00 per cwt.