Analyst Jim Wyckoff studies on the protein trade
24 February 2024
27 minute learn
USDA Sec. Vilsack: US ‘18 months or so’ away from discovering chook flu vaccine
US veterinarians are “18 months or so” away from figuring out a vaccine for the present pressure of extremely pathogenic avian influenza (HPAI) and USDA is growing a course of to distribute it, Ag Secretary Tom Vilsack advised a Home Ag Committee listening to. USDA plans to debate poultry vaccinations with buying and selling companions, amid issues that different nations might prohibit imports of vaccinated US poultry, Vilsack mentioned. The US doesn’t enable poultry imports from nations affected by HPAI or from flocks vaccinated in opposition to the illness. France’s determination final yr to vaccinate geese in opposition to HPAI prompted import restrictions.
USDA annual Ag Outlook Discussion board forecast highlights for US livestock and dairy
OUTLOOK FOR US DAIRY
The US dairy sector enters 2024 going through decrease feed costs, a smaller dairy herd, however broadly strengthening costs for each dairy merchandise and fluid milk manufacturing. The January 1 dairy cow inventories in 2024 had been 41,000 head decrease than the earlier yr, at 9.357 million head. Moreover, there have been about 14,000 fewer dairy alternative heifers within the herd. Cow numbers in milk manufacturing are anticipated to stabilize in 2024, ending the yr at about the identical degree as the start of the yr. The anticipated variety of cows mixed with milk per cow anticipated to proceed rising, however at a slower charge than historic averages, in addition to one extra milk day, end in milk manufacturing in 2024 rising at an annual charge of 0.7 %.
Exports are projected to develop at a quicker charge than imports, on each a fats and skim-solids foundation, as tight provides in international dairy markets make US costs comparatively extra aggressive for worldwide shoppers. Home use is projected to extend on a fats foundation, however decline barely on a skim-solids foundation as home customers compete for merchandise which have sturdy export worth. Shares are projected to tighten additional, each a fats and skim-solids foundation, as a result of continued tempo of utilization and milk manufacturing. Milk costs are anticipated to be greater in 2024, as modest will increase in manufacturing, coupled with sturdy demand for dairy merchandise from each home and international markets assist the values of most dairy merchandise. Tighter provides from main dairy exporters will assist international dairy costs and assist US costs, as properly. Robust charges of utilization and tighter shares of fats and skim-solids foundation are projected to underpin Class III and Class IV milk costs and, in flip, increase the all milk worth from 2023 ranges.
Milk Cow Inventories Decrease to Begin the 12 months, Projected to Stabilize in 2024
For 2024, US dairy producers are anticipated to face decrease feed prices and comparatively improved forage provides from the previous a number of years. Milk cow inventories have been steadily declining because the starting of 2023 and progress in milk output per cow continues to be decrease than historic developments. In 2024, projected costs for milk and dairy merchandise are decrease than the current peaks of 2022 and 2023, however they continue to be at greater ranges in contrast with the years previous to 2020. Moreover, resilient home demand for dairy merchandise and comparatively tighter international dairy product markets are anticipated to encourage US milk manufacturing ranges.
Milk manufacturing progress is projected to be constrained nonetheless, by the provision of cows and bred heifers to convey into the home milk herd. On January 1, 2024, the dairy herd was 0.4 % decrease than the earlier yr. Moreover, dairy heifer replacements had been additionally 0.4 decrease and the variety of heifers anticipated to calve in 2024 was down greater than 1 %. The dairy cow herd has been trending decrease since reaching a peak in 2021, as feed costs have risen and squeezed margins for milk producers. In 2023, common milk cow inventories steadily declined from 9.427 million cows within the first quarter to 9.360 million cows within the fourth quarter, largely pushed by decrease margins within the first half of the yr and robust cull cow costs resulting from tight US beef markets.
Improved margins in fourth-quarter 2023 are anticipated to be a stabilizing issue for the dairy cow herd in 2024. Slaughter charges of dairy cows fell within the second half of 2023, with the development persevering with into January 2024. Given the comparatively tight availability of dairy alternative heifers, the decrease slaughter charges recommend that the trade is prone to preserve close-to-current stock ranges for a lot of 2024. Consequently, the projection for variety of milk cows in 2024 is decrease than 2023, however the quarterly projections have inventories in the course of the fourth quarter on the similar degree they’re projected to be in the course of the first quarter.
Milk Per Cow Progress Continues To Be Slower However With Larger Part Charges
Milk manufacturing is projected to extend 0.7 % in 2024 to 228.2 billion kilos. The expansion in manufacturing is because of greater output per cow, projected to extend 0.9 % relative to the earlier yr, taking into consideration the additional milking day in 2024. In 2023, progress in milk per cow was simply 0.1 % greater than 2022. This was largely resulting from decrease milk manufacturing ranges within the second-half of the yr, a minimum of partially resulting from extraordinarily scorching summer time circumstances in a number of key milk-producing areas of the nation.
The 2024 progress charge is projected greater than 2023, however is decrease than the longer-term common, reflecting the current slowdown within the charge of progress seen lately. Whereas progress in milk output per cow has been slowing, this has been considerably offset by greater fats take a look at ranges seen over the past decade. This possible displays producers’ shifting productiveness focus from complete milk manufacturing to the manufacturing of elements contained inside milk. The upper fats and skim-solids contents would dampen the impression of slower progress on a milk-per-cow foundation for a lot of processed dairy product markets. This shift is in keeping with the long-term developments of milk manufacturing tilting extra closely towards the manufacturing of processed dairy merchandise—corresponding to cheese, butter, and whey-containing products- reasonably than fluid milk.
Tighter World Milk Manufacturing Anticipated to Assist US Exports
World dairy markets are anticipated to be an influential issue within the US dairy outlook for 2024. General, international dairy commerce is anticipated to be constrained by decrease milk manufacturing in a number of key exporters—notably the European Union and New Zealand. Decrease milk manufacturing in these markets is anticipated to translate into decrease exports of a number of dairy merchandise, specifically: butter and nonfat dry milk (NDM). That is anticipated to assist assist international dairy costs in 2023. The diminished manufacturing in Europe and Oceania would supply alternatives for different dairy exporters to satisfy international demand, with america properly positioned to ship product to key markets.
Robust Home Use of Dairy Merchandise in 2023 Tighten Inventories
The United States dairy market begins the yr with sharply decrease starting shares of dairy merchandise, each on a fats and skim-solids foundation. On the finish of 2023, fats foundation shares had been 4-percent decrease than the earlier yr, whereas skim-solids foundation shares had been 15-percent decrease. For skim[1]solids foundation merchandise, there was a very sturdy decline in dry whey merchandise and whey protein focus, which traditionally have been extra oriented towards export. In 2023, nonetheless, these merchandise noticed substantial will increase in home use, partially spurred by the comparatively low whey costs via a lot of the yr. On the fats foundation aspect, butter shares had been 9 % decrease on the finish of 2023 in contrast with the earlier yr, as progress in home use outpaced manufacturing in the course of the yr, serving to assist butter costs. American type cheese was a notable exception in 2023, as inventory ranges elevated relative to 2022. This can be partially as a result of elevated cheese manufacturing capability that has occurred over the previous decade which has resulted in manufacturing outpacing use. In 2023, uncompetitive cheese costs for a lot of the yr resulted in considerably decrease exports, and inventories constructed. General, home use elevated 2 % on a fats foundation and three % on a skim-solids foundation in 2023. For 2024, home use on a fats foundation is projected to extend 1 %. On a skim-solids foundation, home use is projected to say no about 1 %, as home use is anticipated to need to compete with overseas demand. Nonetheless, at 182.0 billion kilos, the skim-solids foundation use is greater than the 5-year common, indicating continued power in home demand for a lot of skim merchandise.
US Dairy Exports Projected Larger in 2024 for each Fats and Skim-Solids
US worth competitiveness was an necessary think about commerce in 2023. Excessive home costs for cheese and butter resulted in greater imports and decrease exports than in 2022 on a fat foundation. Likewise, weaker overseas demand for skim merchandise resulted in low worldwide costs. Skim[1]solids foundation exports in 2023 had been decrease than the report quantity shipped in 2022. For 2024, fats foundation exports are projected to develop at the next charge than imports; at 10 % and 1 %, respectively. This displays improved worth competitiveness for US merchandise given comparatively tight provides amongst competing exporters. Skim-solids exports in 2024 are additionally projected to be 4 % greater than 2023, though worldwide demand is anticipated to compete with US home use.
Robust Demand Projected to Assist US Dairy Costs in 2024
Robust home and worldwide demand is anticipated to be supportive for US milk and dairy product costs. The all milk worth is projected to be $20.95 per cwt in 2024, up from an estimated $20.48 in 2023. The 2024 Class IV milk worth is projected to be $20.20 per cwt, up from the 2023 estimate of $19.12 based mostly on greater butter and NDM costs. Butter costs in 2023 witnessed a powerful surge in pricing within the fall and winter, main as much as the height vacation demand interval. Whereas costs fell after vacation demand was fulfilled late within the yr, January 2024 costs are greater than they had been a yr in the past resulting from tighter shares. Moreover, sturdy worldwide costs in early 2024 have made US butter extra aggressive on the worldwide market, additional supporting the outlook for greater butter costs. US butter costs are projected to common $2.77 per pound in 2024, up from $2.62 in 2023—though not as excessive because the $2.87 reached in 2022. NDM costs in 2023 fell sharply, right down to $1.19 per pound from the report excessive costs of $1.69 in 2022. Decrease costs led to decrease manufacturing of NDM merchandise and finally sharply decrease shares on the finish of the yr.
For 2024, NDM costs are projected to be $1.24 per cwt resulting from improved home and worldwide demand. The 2024 Class III milk worth is projected to be $17.10 per cwt, up from the 2023 estimate of $17.02 per cwt. Class III costs aren’t anticipated to extend as a lot as Class IV resulting from a projected fall in cheese costs that can offset the projected enhance in whey. Cheese costs fell practically 17 % in 2023, to $1.76 per pound. America has seen a dramatic enhance in cheese manufacturing since 2018, as extra manufacturing capability has been added. American-style cheese exports fell in 2023, after a considerable enhance in 2022. Consequently, inventories of American-style cheeses had been bigger than the earlier yr heading into 2024. That is anticipated to place downward stress on home costs. For 2024, cheese costs are projected at $1.69 per pound, a 4 % decline from 2023.
Whey costs fell sharply in 2023, from $0.61 per pound in 2022 to $0.36 per pound. Weak export demand in the course of the second half of the yr resulted in sharply decrease costs. The decrease costs appeared to have spurred elevated home use for whey merchandise, nonetheless. For 2024, whey costs are projected to be $0.48 per pound—up strongly from the earlier yr, however nonetheless decrease than 2022. The projected worth enhance is because of improved international demand for whey, which has seen costs steadily enhance because the September 2023, in addition to continued agency demand from home customers
OUTLOOK FOR LIVESTOCK AND POULTRY IN 2024
USDA Whole crimson meat and poultry manufacturing in 2023 declined virtually one % to 106.9 billion kilos, the primary decline in combination meat manufacturing since 2014. The decline was pushed virtually solely by decrease beef and veal manufacturing with will increase in pork, broiler, and turkey manufacturing inadequate to offset the impacts of a multiyear drought on the cattle sector. Regardless of expectations of expanded manufacturing of pork and broiler meat in 2024, progress in provides of crimson meat and poultry are anticipated to be restricted by the impacts of the multiyear drought on provides of cattle and continued changes of the turkey sector to an prolonged interval of weak costs and the impression of Extremely Pathogenic Avian Influenza (HPAI) on turkey flocks in late 2023 and early 2024.
For 2024, crimson meat and poultry manufacturing is forecast to extend fractionally to 107.0 billion kilos. For 2024, tighter provides of cattle are anticipated to assist greater fed steer costs. Hog and broiler costs are anticipated to be greater regardless of greater manufacturing as stronger home and export demand take in elevated provides. Turkey costs are forecast decrease than 2023 as weak demand offsets anticipated reductions in manufacturing within the first a part of 2024. Nonetheless, transferring via 2024, costs are anticipated to steadily transfer greater in the course of the yr and surpass 2023 by late 2024.
Feed Costs Will Decline and Forage Provides Will Enhance Feed costs throughout 2024 are prone to be barely decrease than 2023. Corn costs within the first a part of 2024 are anticipated to be under a yr in the past reflecting a forecast 2023/24 crop yr common of $ 4.80 per bushel. Costs later within the yr are anticipated to be under 2023, reflecting a decline within the season common worth to $4.40 per bushel for 2024/25. Soybean meal costs within the first a part of 2024 will replicate a 2023/24 crop yr common of $380 per ton and costs within the fourth quarter are anticipated to replicate a market yr forecast of $320 for 2024/2025 as better crush capability will increase provides of soybean meal. Hay shares on December 1, 2023, had been 75.7 million tons, 7 % greater than 2022.
Though quite a lot of main cattle producing States corresponding to Texas, Oklahoma, Nebraska, North, and South Dakota had greater ranges of shares, these ranges had been under historic ranges and plenty of cow-calf producing areas within the Southeast reported decrease inventory ranges. Cattle and Beef The cattle stock marked its fifth yr of contraction in 2023. The Cattle report estimated the variety of cattle and calves on January 1, 2024, at 87.2 million head, down 2 % from a yr earlier 3 and the bottom stock degree since 1951. The variety of cows and heifers that calved was estimated at 37.6 million head, down 2 % from the earlier yr. The meat cow herd was estimated at 28.2 million head, 2 % smaller than 2023 and the bottom since 1961.
The 2023 calf crop was estimated at 33.6 million head, about 2 % smaller than the 2022 calf crop. The US cattle stock will possible decline additional in 2024. The Cattle report estimated that producers retained 1 % fewer alternative heifers for the meat cow herd this yr, and that fewer numbers of beef heifers anticipated to calve throughout 2024. The dairy cow herd was estimated fractionally under 2023, and producers indicated intentions to carry barely fewer heifers for addition to the dairy herd. Beef and dairy cow slaughter so far in 2024 has been under 2023 however could replicate the results of winter climate on mid-January slaughter schedules. Nonetheless, with a smaller cow base, cow slaughter is anticipated to say no in the course of the yr, however reductions may replicate improved forage circumstances and robust calf costs which might assist retention of cows as a precursor to any herd rebuilding.
The full variety of cattle on feed in US feedlots of all sizes on January 1 was 14.2 million head, 2 % greater than 2023 whereas the variety of cattle outdoors of feedlots on January 1 was about 4 % under a yr in the past. Whereas the rise in cattle on feed displays greater placements in 2023 resulting from dry circumstances, the tighter provides of cattle outdoors feedlots factors in the direction of decrease placements and declining feedlot numbers throughout 2024. Adjustments in producer choices regarding heifer retention over the course of the yr can have an effect on the degrees of heifers out there for placement, however present knowledge would level fewer heifers retained. With an anticipated smaller pool of cattle out there for placement, feeder cattle costs are forecast greater, and these could present incentives to extend imports of cattle.
Imports of cattle are forecast at 2.05 million head in 2024, up from 1.98 million head in 2023. Though the demand pull from the US will likely be sturdy, imports will possible be restricted by tighter provides of cattle in Mexico and Canada. Industrial beef manufacturing for 2024 is forecast to fall by 3 %, to 26.19 billion kilos. Within the first a part of the yr, steer and heifer slaughter will replicate greater ranges of cattle in feedlots originally of the yr however because the yr progresses, marketings will decline as feedlot numbers diminish. Moreover, cow slaughter is anticipated to say no resulting from decrease inventories and expectations that any response to enhancing returns or forage will possible be manifest in producers retaining cows later within the yr. Heavier cattle weights, reflecting elevated instances on feed and a reducing proportion of cows within the slaughter combine throughout 2024, will solely partly offset decrease slaughter numbers.
Beef exports declined 14 % in 2023. Among the many main markets of US beef, exports to Japan, South Korea, Canada, Taiwan, and China had been decrease, though exports to Mexico and Hong Kong elevated. Excessive US beef costs and elevated competitor provides restricted competitiveness whereas financial sluggishness in a number of key nations dampened beef demand. Whole beef exports are anticipated to say no to 2.79 billion kilos in 2024. US exports are prone to be pressured by tightening home beef provides with the resultant greater costs making US beef much less worth aggressive. Moreover, elevated beef manufacturing in export-oriented nations corresponding to Australia and Brazil will possible enhance competitors in a number of markets.
Beef imports had been 10 % greater in 2023 as tighter provides of home cow beef elevated demand for imported beef trimmings. Elevated provides in Australia following years of drought supported elevated imports as did greater slaughter in New Zealand. Amongst North American suppliers, imports 4 of beef from Canada had been greater however greater than offset by decrease imports from Mexico. Imports of beef from Brazil had been decrease because the tariff-rate quota was crammed early within the yr and elevated imports from different sources of provide helped fill US import calls for. Imports are forecast at report 4.13 billion kilos for 2024, virtually 11 % greater than 2023.
US cow slaughter is forecast decrease for a lot of the yr and tighter home provides of processing-type beef are anticipated to assist demand. Though imports from Brazil will likely be constrained by over-quota duties, sturdy US processing beef costs will proceed to make the US a lovely market. As well as, greater manufacturing in Australia is anticipated to end in bigger quantities of beef for export. The 5-Space steer worth for 2024 is forecast to common a report $180.0 per cwt, eclipsing 2023’s report $175.54. Cattle costs will possible be supported by tighter provides of steers and heifers in feedlots because the yr progresses and comparatively agency packer demand. Feeder cattle costs are additionally prone to eclipse 2023’s report costs as feedlots must bid for tighter cattle provides. Improved pasture circumstances could end in elevated competitors for lighter-weight cattle, growing prices for stocker operations. Feeder steer costs for 750–800 pound calves in 2024 are forecast to common $248.5 per cwt, in comparison with $218.69 in 2023.
Hogs and Pork
Regardless of poor returns for a lot of 2023, the hog sector is elevated manufacturing in 2024. The December 2023 Quarterly Hogs and Pigs report estimated that on December 1, 2023, the stock of all hogs and pigs was just below 75.0 million head, nearly unchanged from the prior yr. The breeding herd, nonetheless, possible mirrored weak producer margins, declining 3 % to six.0 million head. Producers indicated intentions to farrow about 1.5 % few hogs within the first half of 2024. Nonetheless, the sector is going through comparatively giant variety of hogs which must be slaughtered in the course of the first half of 2024 because the pig crop within the second half of 2023 was about unchanged from 2022.
Regardless of diminished farrowings in second-half 2023, the speed of progress in pigs per litter within the final 2 quarters of 2023 averaged about 4 % greater than the prior yr and greater than offset the discount in farrowings. Transferring into the second half of 2024, availability of hogs for slaughter will replicate decrease farrowing within the first half of the yr however possible a return to pre-COVID charges of progress in prigs per litter. Consequently, the primary half pig crop could also be about one % greater and these greater numbers will likely be mirrored in continued greater year-over-year ranges of slaughter.
US hog imports are forecast at just below 6.65 million head for 2024, down about 2 % from 2023. Imports in 2023 had been stimulated by structural modifications within the Canadian hog and pork sectors which resulted in elevated shipments to america. As Canadian hog manufacturing in 2024 is forecast to be decrease, fewer provides are anticipated to be out there for export. Moreover, comparatively giant provides of hogs within the US could restrict the demand for Canadian hogs. Pushed by bigger pig crops in second-half 2023 and first-half 2024, business pork manufacturing for 2024 is forecast at 27.88 billion kilos, about 2 % greater than 2023. Along with elevated provides of market-ready hogs in the course of the yr, carcass weights are anticipated to extend after declining in 2023. Pork exports in 2023 elevated simply over 7 % to six.82 billion kilos.
Exports to most nations in North and Central America nations had been greater. Shipments to Mexico elevated virtually 10 %, 5 exports to Canada had been 8 % greater and exports to Central America and the Caribbean had been about 16 % greater. On the opposite aspect of the world, the commerce scenario was extra of a combined bag with exports to Japan and China one % and 18 % decrease, respectively, however exports to South Korea 10 % greater and shipments to Australia up 90 %. Nonetheless, in each China and Japan, the place combination imports had been decrease, the US was capable of acquire or preserve market share, largely on the expense of the EU which had decrease manufacturing in 2023. With expectations of progress in U.S pork manufacturing, firming international demand and continued constraints on EU provides, US exports in 2024 are forecast to extend about 4 % to 7.08 billion kilos. Nonetheless, US exporters will possible discover themselves going through elevated competitors in quite a lot of key markets from expanded Brazilian provides.
Pork imports declined 15 % in 2023 to 1.14 billion kilos. Imports from three of the 4 main import sources (Canada, the EU, and Mexico) declined at double-digit charges, however imports from Brazil, the fourth largest supply of imports was greater. Regardless of greater home US manufacturing, elevated manufacturing in Mexico and Brazil will possible make the US a lovely vacation spot for pork. Nonetheless, continued tight provides within the EU could restrict imports from that area though demand could stay sturdy for sure specialty merchandise. US imports are anticipated to extend in 2024 to 1.20 billion kilos, 5 % greater than 2023. Nationwide base 51%-52% lean hog costs, stay equal, are forecast to common $60 per cwt for 2024, up from final yr’s $58.59. Regardless of elevated availability of hogs, anticipated will increase in each home and export demand are anticipated to supply assist for costs.
Broiler Meat
For 2024, broiler meat manufacturing is forecast just below one % greater to a report 46.8 billion kilos. After a contraction in manufacturing in second half of 2023, and indications of usually decrease eggs set and chicks positioned in early 2024, greater chook weights are serving to underpin expectations of steady-to-slowly growing manufacturing within the first a part of 2024. Broiler price-feed margins started enhancing in late 2023, and with expectations of upper broiler costs and moderating feed prices via a lot of 2024, there could also be incentives to increase manufacturing. Nonetheless, the growth is prone to stay modest.
Broiler-type layers on January 1, 2024, had been estimated at lower than one % greater and the variety of broiler kind pullets hatched in December was 4 % under 2023. Egg fertility (hatchability) though comparatively steady so far in 2024, stays under historic ranges. Thus, nearly all of the rise in manufacturing in 2024 will possible replicate greater chook weights. US broiler meat exports for 2024 are forecast to lower fractionally to 7.22 billion kilos. Regardless of greater anticipated US provides, home demand is anticipated to assist costs and dampen export competitiveness, notably in price-sensitive markets. Though quite a lot of key markets are anticipated to extend complete broiler imports in 2024, elevated manufacturing in Brazil, the biggest exporter of broiler meat, will possible compete for market share in a number of key US markets.
The Nationwide Composite wholesale broiler worth is forecast to common a report $1.27 per pound in 2024, in contrast with a mean of $1.24 in 2023. Regardless of modestly bigger broiler meat provides, decrease provides of beef will possible assist assist greater costs. Turkey Turkey manufacturing for 2024 is forecast to lower one % to five.40 billion kilos. Flock depopulations in late 2023 and early 2024 resulting from Extremely Pathogenic Avian Influenza (HPAI) are anticipated to constrain early-2024 manufacturing. Comparatively weak demand has stored costs at below-year[1]early ranges since June of 2023 limiting incentives to increase.
Eggs in incubators on the primary of January had been 9 % under 2023, persevering with a development of under year-earlier ranges since November 2023. Month-to-month poult placements in November and December of 2023 had been additionally under earlier yr ranges. Nonetheless, because the sector recovers from the depopulations induced by HPAI discoveries, chook numbers will possible enhance. Though turkey costs are prone to stay comparatively weak, moderating feed prices are anticipated to learn the sector. With elevated flocks and extra favorable manufacturing prices, the stage could also be set for expanded manufacturing in second half of the yr.
Turkey exports for 2024 are forecast to extend 5 % to 515 million kilos. Mexico stays the biggest vacation spot for turkey exports, however decrease US costs could make turkey extra enticing in worth[1]delicate markets. As turkey manufacturing recovered in 2023 from the 2022 HPAI discoveries, wholesale hen costs dropped from 2022’s report excessive worth. Though costs originally of 2023 adopted via on late-2022 costs (averaging a report for January of $1.72 per pound), excluding March, costs moved steadily decrease in the course of the yr. By December costs averaged $0.82 per pound, the bottom worth for that month since 2017.
Regardless of expectations of decrease manufacturing for a lot of the yr, costs are anticipated to 7 enhance solely progressively and never exceed 2023 earlier than the fourth quarter. For 2024, the typical Nationwide turkey hen worth is forecast to common just below $1.07 per pound, in comparison with a mean of $1.40 in 2023.
Eggs
Whole US egg manufacturing in 2024 is anticipated to be 9.31 billion dozen, simply over one % greater than 2023. At the beginning of 2024, the sector is recovering from HPAI-related culls in November, December, and early January, which resulted within the depopulation of 13.6 million desk egg layers. Nonetheless, originally of the yr, the desk egg flock was 311.8 million birds, 1.4 % above 2023. Positive aspects in late-2023 manufacturing had been additionally supported by greater ranges of eggs per chook. Progress in eggs per layer is anticipated to hold into 2024, however as new hens are added to laying flocks, among the effectivity acquire possibly misplaced. Thus, lay-rate features later in yr could also be considerably slower than these earlier within the yr and this can have a dampening impression on manufacturing progress.
Hatching egg manufacturing in 2024 is anticipated to extend solely modestly as broiler and desk egg producers solely progressively enhance their flocks. In 2023, egg and egg product exports elevated virtually 11 % from 2022’s extremely depressed ranges to 250 million dozen, shell egg equal. Though restrictions on imports from HPAI contaminated areas usually deal with zones reasonably than state or nationwide ranges, US costs had been excessive, particularly within the early a part of the yr, limiting gross sales. Nonetheless elevated demand by Canada and Mexico helped assist gross sales. For 2024, regardless of elevated manufacturing and decrease costs, exports are anticipated to be decrease as worldwide demand weakens. Exports are anticipated to say no 4 % in 2024 to 241 million dozen.
For 2024, New York wholesale egg costs are forecast to common $1.83 per dozen. Though that is down from the $1.92 common for 2023, the comparatively excessive worth displays early-year worth spikes as markets responded to issues concerning the availability of provides of desk eggs forward of the Easter. Nonetheless, with solely modest progress in manufacturing and comparatively sturdy demand, second- and third[1]quarter costs are anticipated to common greater than 2023.
Weekly USDA dairy report
CME GROUP CASH MARKETS (2/16) BUTTER: Grade AA closed at $2.7500. The weekly common for Grade AA is $2.7240 (-0.0200). CHEESE: Barrels closed at $1.6075 and 40# blocks at $1.4800. The weekly common for barrels is $1.5865 (+0.0095) and blocks, $1.5315 (-0.0790). NONFAT DRY MILK: Grade A closed at $1.1700. The weekly common for Grade A is $1.1835 (-0.0340). DRY WHEY: Additional grade dry whey closed at $0.5200 The weekly common for dry whey is $0.5220 (+0.0145).
BUTTER HIGHLIGHTS: Retail demand is regular all through the nation. Meals service demand is powerful within the East area and regular in all different areas. Cream hundreds are available for butter makers to make the most of all through a lot of the nation. Some butter plant contacts count on cream presents to be ample for the rest of the month. Butter producers are operating busy manufacturing schedules to construct for anticipated spring calls for. Stakeholders be aware unsalted butter availability is tight. Distributors relay inquiries from worldwide clients have been extra frequent just lately. Bulk butter overages vary from 4 to fifteen cents above market, throughout all areas.
CHEESE HIGHLIGHTS: Cheese plant managers relay seasonally regular manufacturing schedules within the East area. Contacts share block cheese inventories are rising. Cheese demand within the Central area is famous to be seasonally quiet. Contacts within the Midwest are specializing in constructing inventories for spring demand. Milk availability is tighter than predicted. Throughout week seven of final yr spot milk costs had been $10- to $2 -under Class III whereas below-Class costs for spot milk hundreds have but to be reported this month. Some finish customers report tight milk availability within the West, whereas others recommend Class III spot hundreds are usually out there when wanted. Plant managers share regular cheese manufacturing schedules. Spot cheese inventories are famous to be tighter than in current weeks within the West. A block/barrel inversion has been in place on the CME since final Friday.
FLUID MILK: All through the East, contacts relay usually regular farm milk output. Central area output can be famous as regular, however element ranges have receded in current weeks. Western milk output ranges are regular to stronger from one space to the following. Condensed skim demand has strengthened, and shops aren’t as out there as they had been within the early winter. Cream shops are extensively out there, as below-market multiples had been reported in each the Central and West areas. Butter vegetation are nonetheless taking over the majority share of cream provides within the nation, whereas ice cream manufacturing stays slower than some contacts anticipated this late within the winter season. F.O.B. cream multiples are 1.05- 1.27 within the East, .90-1.25 within the Midwest, and .90-1.20 within the West.
DRY PRODUCTS: Low/medium warmth nonfat dry milk (NDM) worth ranges moved greater within the Central/East, whereas contracting within the West. Condensed skim demand is famous as growing all through a lot of the nation. Dry buttermilk costs had been decrease within the Central/East, however combined within the West. Condensed buttermilk buying and selling is energetic, with ample cream transferring via churns. Dry entire milk costs had been unchanged on sluggish spot market exercise. Dry whey costs elevated throughout the nation this week. Agency whey protein focus (WPC) markets have shifted manufacturing of whey solids away from drying candy whey, which has stored availability considerably comfortable. WPC 34% costs had been regular to greater. WPC 34% availability has tightened up, and a few producers say their shops are anticipated to stay tighter via Q1 and Q2. Lactose costs had been combined, as export demand is famous as mushy. Casein costs had been unchanged.
INTERNATIONAL DAIRY MARKET NEWS
WESTERN EUROPEAN OVERVIEW: West European milk output has continued to rise seasonally, and a few dairy contacts say intakes aren’t as little as they anticipated to start out the yr. Nonetheless, milk manufacturing in lots of Western European nations continues to be trending under the degrees of the previous few years. Some dairy analysts anticipate stagnant dairy costs, excessive manufacturing prices, and regulatory constraints could hinder potential milk manufacturing progress for the approaching months.
EASTERN EUROPEAN OVERVIEW: A number of nations in Japanese Europe have posted month-to-month milk manufacturing features in each month of 2023. Apart from Belarus, Poland and the Czech Republic have had vital milk manufacturing progress this final yr. In keeping with CLAL knowledge made out there to USDA, December 2023 cows’ milk delivered to dairies in Poland was 1,070,000 MT, up 1.9 % from December 2022. Within the Czech Republic, December 2023 cows’ milk delivered to dairies was 268,000 MT, up 2.0 % from December 2022.
OCEANIA: AUSTRALIA: Contacts in Australia say milk output is declining however is doing higher than it was this time final yr. Contacts be aware milk manufacturing was under expectations in the course of the summer time of the 2022/2023 manufacturing season and say climate within the nation this yr has contributed to improved output. Trade sources point out rainfall in the course of the summer time months has contributed to favorable feed high quality and higher climate situation. Regardless of this, some contacts say they anticipate total manufacturing all through the 2023/2024 manufacturing season to stay even with the prior season.
NEW ZEALAND: In New Zealand, trade sources report farmers are rising extra optimistic about milk costs, following current worth will increase together with decrease inflation impacting farms. Farmers in some elements of the nation relay milk manufacturing is trending greater than anticipated for this time of yr. Some farmers are, reportedly, involved with dry climate and whether or not a drought will come within the coming months. Opinions are combined on if a beforehand forecasted drought will emerge within the coming months and prolong into autumn or if the time for the drought has handed.
SOUTH AMERICA: In New Zealand, trade sources report farmers are rising extra optimistic about milk costs, following current worth will increase together with decrease inflation impacting farms. Farmers in some elements of the nation relay milk manufacturing is trending greater than anticipated for this time of yr. Some farmers are, reportedly, involved with dry climate and whether or not a drought will come within the coming months.
US NATIONAL RETAIL REPORT: Retail commercial totals decreased on each the traditional and natural aisles this week, 17 and 19 %, respectively. Standard butter advert totals slipped 11 %, however one-pound standard butter maintains the title of being essentially the most marketed dairy merchandise throughout week seven. Standard yogurt advert totals, the one standard dairy commodity with advert numbers that moved greater, elevated 11 %. One-pound standard butter had a weighted common marketed worth of $4.66, $.13 greater than final week’s worth.
