As the last quarter of 2015 begins, production data show that total red meat and poultry production, aggregated over the first three quarters of 2015, increased by less than 1 percent over the same period of 2014. In the first three quarters of 2015,
beef production is about 3 percent below production in the same period last year. Lower beef production is consistent with the early expansionary stage in the beef production cycle, during which females are retained for breeding rather than being slaughtered, thereby lowering beef production. Cattle prices so far in 2015 have averaged almost 3 percent above prices in the same period of 2014.
Production effects of disease outbreaks link the pork and poultry sectors, but in divergent directions: the pork sector continues to recover from the effects of porcine epidemic diarrhea (PEDv) outbreaks last year, with total production in the first three quarters of 2015 almost 8 percent ahead of the same period in 2014. The flip side of higher production is lower prices: 2015 hog prices have averaged more than 34 percent below prices of the first three quarters of 2014. The poultry sector is recovering from Highly Pathogenic Avian Influenza (HPAI), the effects of which has fallen so far on the turkey sector (2 percent lower production) and the egg sector (5 percent lower production). Turkey prices have averaged almost 6 percent above the same period last year; average egg prices are almost 36 percent above the same period of 2014. Broiler production is up in 2015 by 4 percent. Trade restrictions related to HPAI have generated large stocks, however, and domestic broiler prices have responded to the downside: whole bird composite prices are down more than 10 percent.
Beef/Cattle: Third-quarter 2015 fed cattle and feeder cattle prices declined sharply. Recent slaughter data indicates that cattle have been held back, allowing even further downward pressure on live cattle prices. Plunging prices have resulted in reductions in projected prices for 5-area direct, total all-grade steer prices to $129-$135/cwt.
Beef/Cattle Trade: U.S. beef exports continue to struggle, due primarily to a relatively strong dollar and decreased global demand for U.S. beef. However, exports are expected to have moderate growth in 2016 due to an expanding U.S. beef herd and slower growth in Australian beef exports to major trading partners. Strong beef imports for Australia and New Zealand continue to push U.S. beef imports higher. The January-August 2015 U.S. beef imports were approximately 32 percent higher than the same period last year.
Pork/Hogs: Subsequent to the release of the Quarterly Hogs and Pigs report on September 25, USDA raised 2016 pork production by 220 million pounds. The quarterly report detailed record-high inventories and litter rates. Pork exports in August were 6.5 percent greater than a year ago, based on strong shipments to Mexico and Asia.
Poultry: The combination of strong growth in U.S. broiler meat production and lower exports due to trade restrictions has continued to place downward pressure on broiler prices. August broiler meat production was up 7 percent from a year earlier to 3.4 billion pounds. U.S. turkey meat production in August 2015 was 451 million pounds, down 7 percent from a year earlier as turkey producers continue to deal with impacts of the Highly Pathogenic Avian Influenza (HPAI) outbreak earlier this year. Lower turkey meat production over the last several months has more than offset lower exports, lowering cold storage holdings. Table egg production in August was 545 million dozen, down 11 percent from a year earlier. The drop in production was due to decreases in both the size of the table egg flock (down 11 percent) and the average number of eggs per laying hen. Third-quarter egg prices averaged $2.36 per dozen, up 82 percent from the previous year.
Poultry Trade: Broiler, turkey, and egg shipments in August remained down from a year ago. Broiler shipments totaled 501 million pounds in August 2015, a decrease of 18 percent from a year earlier. Turkey shipments decreased 46 percent from a year ago, totaling 41 million pounds, while egg and egg product exports totaled 26 million dozen in August 2015, a 19-percent decrease from the previous August.
Sheep/Lamb: Choice slaughter lamb prices at San Angelo, Texas increased through the third quarter and are expected to show slight improvement through the fourth. Third-quarter 2015 commercial production of lamb and mutton is forecast at 37 million pounds, down nearly 3 percent from the same period in 2014. Imports of lamb and mutton remain strong, with the majority from Australia.
Dairy: The all-milk price forecast for the fourth quarter of 2015 is $17.00-$17.40 per cwt, an increase from $16.60- $17.10 forecast last month. The all-milk price for 2016 is $16.05-$16.95 per cwt, a reduction from $16.10-$17.10 forecast last month.
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Source: USDA