Livestock Outlook

Focus on Domestic Demand

Emily Unglesbee
By  Emily Unglesbee , DTN Staff Reporter
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Cattle production should continue to rebound in 2016. (DTN file photo by Gregg Hillyer)

ARLINGTON, Va. (DTN) -- Boosted by continued low feed prices and healthier pasture conditions, domestic demand for livestock should remain strong, USDA concluded its in Livestock and Poultry Outlook for 2016.

The beef herd continues to grow and pork production is forecast to hit record highs, while turkey, egg, and poultry producers look for a year of slow recovery.

Overall, exports may waver, due to a strong American dollar and middling economic growth in key international economies.

BEEF

Two years of record or near-record feeder calf prices combined with moisture-fed pastures will likely allow livestock producers to enter their third year of expansion. Cattle and calf numbers rose 3% to 92 million head in January 2016 estimates. Beef cattle numbers rose 4% to 30.3 million, with producers expecting heifer retention rates to grow by 3% this year.

Beef production is expected to rise by 4% to 24.6 billion pounds. Beef exports are pegged at 2.48 billion pounds, a 9% increase from 2015. Exports tumbled in 2015 by 12% as supplies tightened and a strong U.S. dollar also hurt exports.

Beef imports are pegged at 2.85 billion pounds, a 16% drop from 2015, thanks to increased U.S. cow slaughter and lower prices domestically. Imports from Australia are also expected to slip, with no other country likely to step into that gap, USDA reported.

Brazil now officially has approval to ship fresh, chilled and frozen beef to the U.S., but exports are unlikely to begin in 2016 until the plant approval process is concluded.

PORK

USDA estimated the U.S. hog and pork inventory at 68.3 million head in December 2015, a 1% increase from the previous year. As producers continue their recovery from the 2014-15 Porcine Epidemic Diarrhea virus (PEDv), the majority of pig crop increases will come from an increase in pigs per litter.

Pork production is expected to hit a record 25 billion pounds, up 2% from last year. Pork exports should hit 5.13 billion pounds, up from 4% from 2015, as economic growth in foreign economies support increased meat demand and U.S. hog prices fall.

U.S. hog imports are forecast at 6.2 million head for 2016, up 7% from 2015.

BROILERS, TURKEY, AND EGGS

Broiler meat production should rise 3% in 2016, to a record 41 billion pounds. Broiler exports are forecast to increase 7% to 6.77 billion pounds, as markets that closed due to avian influenza reopen. Likewise, turkey exports should increase a whopping 29%, to 690 million pounds, after a 34% plunge in 2015.

Turkey production is expected to grow 6% to 5.95 billion pounds. The turkey industry is still reeling from the loss of 7 million birds in 2015 from avian influenza last spring.

Total U.S. egg production is forecast at 8.18 billion dozen, a 4% recovery from massive losses in 2015 from HPAI. In 2015, egg layers dropped from 305 million birds to 270 million in a matter of months. Producers are gradually restocking, and egg hatching production is expected to rise 2% in 2016.

Exports for eggs and egg products should rise 4% in 2016, as HPAI-induced restrictions overseas ease.

Emily Unglesbee can be reached at emily.unglesbee@dtn.com

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Emily Unglesbee