Livestock analyst Jim Wyckoff stories on protein information from across the globe
16 February 2024
16 minute learn
USDA annual Ag Outlook Discussion board projections on livestock
Cattle: U.S. beef manufacturing is projected at 26.19 billion lbs., down 3% from 2023. Exports are projected to 2.785 billion lbs., down 8.3% from final 12 months. Money value: $180.00, which might be a file and up $4.46 from final 12 months.
Hogs: U.S. pork manufacturing is projected at 27.88 billion lbs., up about 2% from final 12 months. Exports are anticipated to rise 3.8% to 7.080 billion kilos. Money value: $60.00, up $1.41 from final 12 months.
Broilers: U.S. manufacturing is projected to be a file 46.8 billion lbs., up slightly below 1% from final 12 months. Broiler meat exports projected at 7.22 billion lbs., down fractionally from 2023. Wholesale broiler value: $1.27 per lb., up 2.4% from final 12 months and a file.
Dairy: Milk cow numbers are seen decrease in 2024, with milk manufacturing projected at 228.2 billion lbs., up 0.7% as manufacturing per cow is seen rising 0.9%. Exports are projected to rise 10% with a 1% enhance in home use on a fats foundation whereas use on a skim-solids foundation is seen declining 1% however remaining above the five-year common. The all-milk value is projected to be $20.95 per cwt., up from $20.48 in 2023.
US CPI knowledge exhibits surging inflation, led by grocery costs
The most recent US Client Worth Index (CPI) knowledge within the U.S. revealed stronger-than-expected inflation, with grocery costs experiencing essentially the most vital rise in a 12 months.
Total costs elevated by 0.3% in January, surpassing expectations of a 0.2% enhance. Core CPI, excluding meals and power, rose by 0.4%, matching December’s stage. Though headline inflation fell to three.1% from 3.4% in December, it exceeded the anticipated fee of three% or much less. Core CPI remained at 3.9%, surpassing expectations of a slowdown to three.7%. Grocery costs elevated by 0.4%, the very best month-to-month rise since January 2023, with annualized grocery costs up by 1.2%.
Meals costs general rose by 2.6%, barely decrease than December’s 2.7%. Regardless of the decline within the fee of inflation, customers are nonetheless experiencing greater costs on the grocery retailer, indicating ongoing challenges regardless of the information exhibiting a lower within the inflation fee.
USDA’s newest US livestock report
Abstract
Beef/Cattle: The semiannual Cattle report confirms traditionally tight provides of cattle heading into 2024. Fewer calves can be found than final 12 months for placement in feedlots, though greater than beforehand anticipated. Because of this, anticipated fed cattle marketings have been raised for late 2024, however the marketings are offset by decrease anticipated cow slaughter. With extra steers and heifers within the slaughter combine, common carcass weights have been raised in second-half 2024. From final month, projected beef manufacturing in 2024 is raised 75 million kilos to 26.185 billion kilos. Cattle costs in 2023 are raised on agency demand and decrease feed prices. Based mostly on estimated weekly import knowledge, this 12 months’s import forecast is anticipated to set a file at 4.125 billion kilos. Export projections are unchanged at 2.785 billion kilos. Sheep/Lamb: The 2024 January 1 stock report for sheep and goats was launched on the finish of January. The entire lamb and sheep stock declined by -1.9 p.c from the earlier 12 months. December provide and use estimates for 2023 have been included into this report. Forecasts for 2024 lamb and mutton imports and exports are decrease than the January 2024 forecasts.
Dairy: The milk manufacturing estimate for 2024 is lowered from final month; decrease anticipated yield per cow greater than offsets greater anticipated milk cow numbers. Wholesale value forecasts for 2024 have been elevated for Cheddar cheese, dry whey, butter, and nonfat dry milk to $1.690, $0.480, $2.770, and $1.235 per pound, respectively, primarily based on current energy in costs, tight provides, and stronger anticipated home demand. With greater dairy product costs anticipated throughout the board, Class III and IV milk value forecasts for 2024 have been raised to $17.10 per hundredweight (cwt) and $20.20 per cwt, respectively. The 2024 all-milk value estimate is adjusted greater to $20.95 per cwt.
Pork/Hogs: Sturdy demand for pork bellies contributed to a year-over-year greater wholesale cutout worth in January, supporting processors’ gross spreads at above year-earlier ranges for the month. Improved demand for pork in contrast with 2023—from each home and overseas customers of U.S pork—is anticipated to help hog costs in 2024. Complete exports for 2024 are raised to 7.1 billion kilos, 3.8 p.c above exports in 2023, as U.S. pork turns into extra aggressive in contrast with pork sourced from the European Union.
Poultry/Eggs: Broiler manufacturing is adjusted up within the first quarter on sturdy common weights. Broiler costs are adjusted up within the first half of 2024, and projected broiler exports in 2024 are adjusted down on less-competitive costs and weak worldwide demand. Projected desk egg manufacturing in 2024 is adjusted down barely on current losses to Extremely Pathogenic Avian Influenza (HPAI). Projected egg costs are elevated on current knowledge. Projected imports and exports of eggs and egg merchandise are unchanged for 2024. Projected turkey manufacturing was lowered in 2024, reflecting current placement knowledge and losses to Extremely Pathogenic Avian Influenza (HPAI). Turkey costs have been adjusted down on current knowledge, whereas projected exports in 2024 have been adjusted up on favorable costs and robust demand.
Dairy
2023 Dairy Scenario
In 2023, the U.S. dairy trade skilled the reversal of the 2022 state of affairs: whereas feed, dairy merchandise, and farm-gate milk costs elevated 12 months over 12 months in 2022, these costs decreased 12 months over 12 months in 2023. The milk and feed value dynamics in 2023 resulted in among the poorest margins because the implementation of the Dairy Margin Protection Program (DMC). The nationwide milking herd in 2023 was decrease than 2022, however the milk per cow was barely greater. Consequently, complete milk manufacturing in 2023 was solely fractionally greater than 2022. Progress of home use of dairy merchandise was strong on each milk-fat and skim-solids milk-equivalent bases.
Conversely, U.S. dairy exports declined from the height ranges in 2022, pushed by lack of value competitiveness in addition to slowing demand for dairy merchandise at a worldwide stage. The all-milk value in 2023 averaged $20.48 per hundredweight (cwt), $4.86 decrease than 2022. Whereas the costs that dairy farmers obtained in 2023 have been typically decrease than in 2022, the lower in common all-milk value was bigger than the lower in common feed prices. Utilizing the proxy utilized by USDA, Nationwide Agricultural Statistics Service (NASS) to calculate the milk[1]feed ratio, the feed-price proxy decreased by 8 p.c from 2022 to 2023, whereas the all-milk value decreased by 19 p.c. Common costs paid by all farmers6 for labor and equipment elevated 12 months over 12 months by 5.5 and 1.7 p.c, respectively. In 2023, the farm milk margin above the feed prices reported by the DMC fell beneath the catastrophic protection margin ($ 4.00 per cwt) in June and July, triggering indemnity funds to all of the producers enrolled in this system, together with those that paid solely the $100 administration charge. Furthermore, for all months besides November, the margins reported by DMC have been beneath the $9.50 per cwt threshold that triggers funds for dairy producers who select the very best ranges of protection.
Milk manufacturing in 2023 totaled 226.6 billion kilos, solely marginally greater than in 2022 (+0.1 p.c). Milk cow numbers within the first quarter of 2023 elevated barely from the fourth quarter of 2022, peaking at 9.444 million head in March 2023. Thereafter, they trended downward, falling to 9.357 million head in December. Milk per cow averaged 24,115 kilos in 2023, 0.1 p.c greater than 2022. Milk per cow within the first half of 2023 was greater in comparison with the primary half of 2022. Nevertheless, scorching climate impacted milk per cow within the late summer time, contributing to a year-over-year decline within the second half of 2023. Home demand for dairy merchandise in 2023 was year-over-year greater for many of them. On a milk-fat milk-equivalent foundation, 2023 home use elevated by 1.8 p.c over the earlier 12 months, in distinction to the 1.1 p.c lower in 2022.
Home use on a skim-solids milk[1]equal foundation elevated by 2.8 p.c in 2023, in comparison with an 0.8 p.c lower of 2022. In 2023, there have been appreciable will increase in home use of whey protein focus, dry whey, butter, lactose, and American kind cheese relative to 2022. Nevertheless, home use for other-than American kind cheese and dry skim milk merchandise decreased.
Dairy Forecasts for 2024
The 2024 dairy herd measurement forecast has been revised upwards by 5,000 head, totaling 9,355 thousand for the 12 months, as a result of greater anticipated milk cow numbers within the second half of the 12 months. This small enhance within the variety of cows is attributed to greater anticipated milk costs early within the 12 months, as milk manufacturing often responds to modifications in milk and feed costs with a lag of a number of months. Even with the upper forecast for milk cow numbers, they’re nonetheless anticipated to be decrease than 2023. Latest slaughter traits, along with tight substitute heifer inventories and excessive reported costs for dairy heifers, recommend a year-over-year decline for the dairy herd in 2024 regardless of decrease anticipated feed prices, improved milk costs, and strong demand for dairy merchandise.
The forecast yield per cow is diminished by 20 kilos to 24,395 kilos primarily based on current knowledge. Because of this, the revised milk manufacturing forecast for 2024 is 228.2 billion kilos, a lower of 0.1 billion from the earlier month’s estimate. On a milk-fat foundation, dairy import forecasts in 2024 have been lowered to 7.4 billion kilos (-0.1 billion). Nevertheless, on a skim-milk foundation, imports remained unchanged at 6.4 billion kilos. Notable declines in import volumes of cheese, toddler system, canned milk, lactose, and yogurt are projected for 2024. Conversely, casein imports are anticipated to extend. The 2024 dairy export forecast on a milk-fat foundation has been raised 0.1 billion kilos to 11.7 billion as export costs for cheese and butter are anticipated to be aggressive within the worldwide markets. The export forecast on a skim-solids foundation is lowered to 51.9 billion kilos (-1.3 billion).
In comparison with 2023, in 2024, greater export shipments are forecast for cheese, butterfat merchandise, whey merchandise and lactose, whereas canned milk and yogurt are projected decrease. The 2024 forecast for home disappearance has been revised upward from final month’s projection following higher-than-expected home use within the final quarter of 2023. On a milk-fat foundation, home use elevated by 1.0 billion kilos, bringing the whole to 224.7 billion kilos. On a skim-solids foundation, home use is elevated by 1.7 billion kilos, totaling 182.0 billion kilos. Ending shares are anticipated to say no additional in 2024, following the downward pattern from 2023. On account of current value will increase, decrease inventories, and better anticipated home demand, the worth forecasts for the primary dairy merchandise have been revised upwards.
The adjusted forecasts, in {dollars} per pound, are as follows: Cheddar cheese at $1.690 (+7.0 cents), dry whey at $0.480 (+5.0 cents), butter at $2.770 (+10.5 cents), and NDM at $1.235 (+4.5 cents). With greater cheese and dry whey costs, the brand new forecast for Class III milk is $17.10 per cwt, $1.00 greater than the earlier forecast. With greater butter and NDM value forecasts, the Class IV value forecast has been raised to $20.20 per cwt, $0.85 greater than the earlier projection. The all-milk value for 2024 is now forecast at $20.95 per cwt, up $0.95 from final month’s forecast.
Pork/Hogs
Gross Processors’ Unfold Above a 12 months Earlier in January on Sturdy Stomach Costs Demand for pork bellies seems to have pushed the typical January 2024 estimated wholesale carcass cutout to a price above that of a 12 months earlier, one thing not seen since December 2022. The wholesale cutout worth of the pork carcass in January was $87.01 per cwt, 7.4 p.c greater than the January 2023 worth. With costs of stay equal 51-52 p.c lean hogs averaging $49.83 per cwt in January 2024—greater than 7.4 p.c beneath hog costs a 12 months in the past—processors’ gross unfold exceeded year-earlier ranges within the first month of 2024. Towards the tip of January, nevertheless, seasonally rising hog costs and slower rises of stomach primal values successfully reversed the course of processors’ spreads. By the tip of January, processors’ gross spreads, though nonetheless year-over-year greater than in late January 2023, had declined. Whereas demand for pork bellies might have elevated cutout values for just a few weeks, it’s uncertain {that a} single reduce can maintain sturdy spreads for the pork market general.
Bettering Pork Demand Anticipated To Help Hog Costs in 2024 Stronger demand for chosen pork cuts and a slower tempo of slaughter all through 2024 can be key elements in elevating hog costs past initially anticipated value ranges. Sturdy stomach costs within the first quarter ought to mix with the slower paced first-quarter hog slaughter to push common first-quarter costs of 51-52 p.c lean hogs to $55 per cwt, up $4 per cwt from final month’s first-quarter forecast. Second-quarter business pork manufacturing is anticipated to be unchanged from final month’s forecast at about 6.6 billion kilos, however enhancing demand is prone to push second-quarter hog costs to $62 per cwt, greater than 9 p.c greater than in the identical interval final 12 months. Greater manufacturing within the third quarter—nearly 6.8 billion kilos, greater than 4 p.c greater than manufacturing in the identical interval final 12 months—will probably offset continued enhancing home, and stable overseas demand, to decrease hog costs nearly 5 p.c from a 12 months earlier, to $66 per cwt. Fourth-quarter hog costs are raised $1 per cwt from final month’s forecast to $56 per cwt, nearly 5 p.c larger than final 12 months, on pork manufacturing of about 7.4 billion kilos, nearly 3 p.c larger than fourth-quarter manufacturing final 12 months. Improved home pork demand in comparison with 2023 and competitively priced U.S pork in overseas markets are prone to be a very powerful elements supporting hog costs within the fourth quarter of 2024.
Quarterly pork exports for 2024 are revised upward on sturdy December knowledge, as follows: For the primary quarter, exports are anticipated to be 1.765 billion kilos, 5.8 p.c greater than identical[1]interval exports in 2023. Second-quarter exports are forecast at 1.785, just about unchanged from the second quarter of 2023. Shipments of 1.645 billion kilos are anticipated within the third quarter, which might be about 6.6 p.c greater than exports in the identical interval of 2023. Fourth[1]quarter exports are anticipated to be 1.885 billion kilos, about 3.4 p.c larger than identical[1]interval shipments in 2023. Pork export forecasts for 2024 complete about 7.1 billion kilos, up about 3.8 p.c over the 2023 complete of 6.8 billion kilos. This suggests that 25.4 p.c U.S business pork manufacturing can be exported. Manufacturing and export forecasts, mixed with expectations for pork shares modifications, additionally indicate a retail per capita disappearance of fifty.7 kilos, up 1.02 p.c over 2023
WHO: Low danger in China’s human case of chook flu
China on Jan. 27 reported a case involving an individual contaminated with mixed H3N2 and H10N5 strains of avian influenza. The World Well being Group says “the chance of human-to-human unfold is taken into account low.”
Pork oversupply sparks financial considerations; trade seeks options
The Wall Avenue Journal reported on the challenges dealing with the U.S. pork trade, which has change into overly environment friendly, leading to an imbalance between provide and demand. Regardless of producing numerous pork merchandise like tenderloin, ham, sausage and bacon, there’s inadequate demand to soak up the excess.
Components contributing to this imbalance, the article notes, embrace the trade’s give attention to effectivity, the notion of pork as much less fascinating in comparison with hen and beef, and misconceptions about pork’s preparation and healthiness. The trade is exploring numerous methods to handle these challenges, resembling concentrating on new abroad markets, repositioning pork as an inexpensive various to beef and selling fattier, extra flavorful pork breeds. Nevertheless, there’s no consensus on one of the best method. Moreover, the article highlights the monetary pressure on pork producers, with farmers dropping cash on every pig as a result of shrinking revenue margins. If the trade fails to draw youthful customers, pork consumption is projected to say no additional. To stabilize earnings, the trade seeks to interact U.S. customers, spend money on advertising campaigns and innovate merchandise to fulfill altering client preferences and existence.
USDA to watch poultry trade compliance with new transparency rule
USDA has knowledgeable the poultry trade of its intention to intently observe compliance with a brand new remaining rule aimed toward enhancing transparency and disclosure in processing corporations’ contracts with poultry growers. Regardless of trade and lawmaker requests for a delay, the rule is about to come back into impact on Feb. 12.
Weekly USDA dairy report
BUTTER: Grade AA closed at $2.6900. The weekly common for Grade AA is $2.7440 (-0.0280). CHEESE: Barrels closed at $1.5775 and 40# blocks at $1.5700. The weekly common for barrels is $1.5770 (+0.0390) and blocks, $1.6105 (-0.0345). NONFAT DRY MILK: Grade A closed at $1.2000. The weekly common for Grade A is $1.2175 (-0.0105). DRY WHEY: Additional grade dry whey closed at $0.5200. The weekly common for dry whey is $0.5075 (+0.0310).
BUTTER HIGHLIGHTS: Total, retail demand is regular. That mentioned, some stronger demand is famous within the Western area. Stakeholders relay blended meals service demand all through the nation. Meals service demand is famous as sturdy within the Japanese area, regular within the Central area, and strengthening within the Western area. Cream volumes are plentiful, and spot masses are available throughout the nation. Nevertheless, stakeholders point out different cream demand. Butter producers are operating sturdy to regular manufacturing schedules. Butter makers are working to make sure enough inventories for early 2024 spring holidays. Unsalted bulk butter is tight. Bulk butter overages vary from 1 to eight cents above market, throughout all areas.
CHEESE HIGHLIGHTS: Contacts share cheese manufacturing schedules are regular within the East area. Cheese plant managers share overages for spot milk masses in addition to elevated condensed skim demand. Cheese inventories of each Italian and American-type cheeses are comfy. Within the Higher Midwest, contacts be aware cheddar demand is slower than anticipated. Some cheesemakers report rising inventories regardless of tighter milk availability than in current weeks. Some contacts shared that they’re anticipating to run at full capability by the spring vacation season to maintain up with vacation demand. Within the West, some cheesemakers be aware tighter milk volumes, whereas others share Class III spot masses can be found. Cheese processors be aware regular to stronger manufacturing schedules and reasonable foodservice demand.
FLUID MILK: Within the Japanese and Midwestern areas, milk manufacturing is regular. Within the Western area, milk manufacturing is regular to stronger. In California, handlers famous year-over-year comparisons for 2024 manufacturing ranges have been at-or-above 2023 manufacturing ranges. Nevertheless, some producers relayed restricted potential to take further spot masses. Within the Midwest, the overall sentiment amongst contacts is 2024 milk output won’t be consistent with that of 2023. Spot milk costs within the Midwest stay reported at Class III to $1-over Class. Class I, II, III, and IV calls for are sturdy to regular. Condensed skim milk demand is regular to stronger, and spot load availability is tighter, resulting in some above Class costs for masses. Cream multiples for all Courses are 1.00-1.27 East, 0.900-1.25 Midwest, and 0.75-1.18 West.
DRY PRODUCTS: Low/medium nonfat dry milk (NDM) costs moved greater within the west area and contracted within the central and east area. Contacts say some processing amenities should not at capability. Excessive warmth NDM costs moved greater in all areas. Processing pushes in direction of low/medium warmth NDM and different dairy powder commodities have saved excessive warmth shops comfortable. Apart from an upward motion to the underside finish of the central and east vary, dry buttermilk costs have been unchanged. Some producers be aware manufacturing schedules are forward of contractual obligations. Dry entire milk (DWM) costs moved greater on the underside finish of the vary. DWM inventories stay tight. Dry whey costs moved greater in all areas. Some producers and distributors point out inventories are tight. Whey protein focus (WPC) 34% costs moved greater on the underside finish of the worth vary. Stakeholders say WPC 34% stays an excellent worth in comparison with different dairy proteins. Lactose costs held regular. Stakeholders relay spot inventories proceed to change into tighter. Each ends of the rennet casein value vary, together with the highest finish of the acid casein value vary, have been unchanged. The underside finish of the acid casein value vary had a downward value motion. Contacts report constant home demand.
ORGANIC DAIRY MARKET NEWS: The USDA AMS Nationwide Natural Program (NOP)’s Natural Insider launch on Monday, this week included a reminder for producers starting to or within the strategy of transitioning to natural certification to use for the Natural Transition Initiative (OTI) at a neighborhood NRCS service middle as quickly as potential. The variety of adverts for natural dairy merchandise decreased over the last two retail surveys. Milk was essentially the most marketed natural dairy product this week, adopted by cheese, yogurt, cottage cheese, and bitter cream. The Overseas Agricultural Service (FAS)’s December 2023 month-to-month export knowledge confirmed a rise in export volumes for natural milk in the course of the month, in comparison with each a month and a 12 months earlier. Export volumes of natural milk have been up 12 months to this point in 2023 from 2022.
NATIONAL RETAIL REPORT: The variety of standard retail adverts elevated by 2 p.c throughout this week’s survey, whereas natural adverts decreased by 15 p.c. Probably the most marketed standard dairy merchandise discovered on this week’s survey was ice cream in 48-64-ounce containers. Cheese remained essentially the most marketed standard commodity this week. Standard yogurt advert numbers fell beneath these of ice cream this week, inflicting yogurt to change into the third most marketed standard commodity this week. The variety of adverts for standard and natural milk elevated this week.
