Livestock, dairy, and poultry outlook: Drought and disease continue to influence market dynamics

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Farm Forum

Beef/Cattle: The continuing decline in feeder cattle supplies outside feedlots is reflected in record and near-record prices for all weights of feeder cattle. Relatively stronger feeder heifer prices suggest the possibility of the beginning of increases in cow inventories over the next few years. At the same time, current levels of cow slaughter reflect ongoing drought in the Plains, Southwestern, and Western United States, and drought could again interfere with any plans for expanding cow inventories.

Beef/Cattle Trade: U.S. beef exports were up 5 percent in the first quarter of 2014 while imports of beef were up only 1 percent. Cattle imports through March are up 2 percent from a year earlier due to higher shipments from Canada.

Pork/Hogs: Pork production is expected to increase 2.9 percent next year as pork producers gain facility in managing Porcine Epidemic Diarrhea (PEDv). Pork exports in 2015 are expected to increase about 3.8 percent. First quarter 2014 exports were 1.345 billion pounds, 10.4 percent greater than the same period a year ago. Exports to Mexico, Asia, and to South America were particularly strong in March.

Poultry: Broiler meat production is forecast at 39.3 billion pounds in 2015, 2.2 percent higher than in 2014. The expansion in production is expected due to lower feed costs and continued gains in domestic economic conditions. Lower beef production and higher prices will also help provide broiler integrators with an incentive to expand production. Turkey production in 2015 is expected to increase by 4 percent to 5.9 billion pounds after declining in 2014. Total egg production, is expected to reach 8.2 billion dozen in 2015, with both table egg and hatching egg production higher.

Poultry Trade: Turkey and egg and egg product shipments in March were up from a year ago, while Broiler exports were down. Broiler shipments totaled 628.7 million pounds in March 2014, a decrease of 3.4 percent from a year earlier. Egg shipments increased 7.3 percent from a year ago, totaling 28.0 million dozen, while turkey exports totaled 60.9 million pounds in March 2014, a 0.2-percent increase from the previous March.

Dairy: Milk production is expected to increase in 2015 compared with this year. Lower feed prices will improve the profit outlook for producers next year. Continued strong demand, both foreign and domestic, will moderate price declines in 2015.