Beef, pork production projected lower


Despite continuing challenges to both supply and demand throughout 2021, the livestock and poultry sectors reached record production for total red meat and poultry.


Seth Meyer, U.S. Department of Agriculture chief economist, reviewed 2021 and gave projections for this year during the annual Agricultural Outlook Forum Feb. 24.


“Lower pork, lamb and turkey production was offset by expanding beef and broiler production. Supported by an improved economy and recovering international demand, prices of livestock and poultry all averaged higher in 2021, reaching multi-year highs for cattle, hogs and broilers, while turkey was record high,” Meyer noted.


“In 2022, despite high commodity prices, the livestock and poultry sector will face continuing headwinds that affected production decisions in 2021 and will likely give pause to producers this year.


“While it is expected that many of the challenges will dissipate — supply chain issues are likely to ease, pasture conditions are expected to improve — they remain in producers’ memories and biological constraints and production decisions made in the previous year may limit the sector’s ability to nimbly expand and capitalize on improved marketing opportunities.


“As such, 2022 red meat and poultry production is forecast to decrease fractionally compared to 2021 production levels. Red meat production is forecast to fall slightly, the first decline since 2014. Red meat prices are a mixed bag, as tighter supplies of cattle are expected to support fed steer prices, while hog prices are forecast to be lower on softer demand. Poultry production, consumption and prices are all expected to increase.”


Beef


Beef production is forecast 2% lower than 2021, as cattle inventories tighten and supplies of cattle available for placement in feedlots is projected to shrink as the year progresses.


Exports in 2022 are projected to decline on tighter domestic supplies and higher relative prices, with key competitors in Australia and Brazil both projected to increase production. Imports are projected 1% higher, as well, on tight domestic supply and increased exportable supplies from Australia.


Steer prices in 2022 are forecast to average $137.50 per hundredweight compared to $122.40 in 2021.


Pork


Commercial pork production is 1% lower than 2021 with lower slaughter numbers partially offset by higher expected carcass weights.


For hogs, the December quarterly hogs and pigs report pointed toward an overall smaller pig crop which would feed into 2022 slaughter.


The estimated pig crop from second-half 2021 will result in lower first-half 2022 slaughter, but reported first-half 2022 farrowing intentions and expected growth in pigs per litter is expected to support a year-over-year increase in slaughter in the second part of the year.


Pork exports are expected to decline 3% as China’s import demand falls as its herds are rebuilt following African swine fever. Not only is this expected to affect U.S. exports to China, but those of competitors exports to China who in turn will be looking for alternative export destinations including the United States.


With lower domestic supplies in 2022, pork imports are projected sharply higher, up 11% from 2021.


Hog prices are forecast to average $65 per hundredweight in 2022 compared to $67.29 in 2021.


Poultry


Broiler meat production in 2022 is expected to reach a record, up 1% year over year.


While the broiler-type laying flock at the beginning of the year is about 1% above 2021, low-hatchability issues continue to hamper the sector and may limit the pace of expansion.


Broiler meat exports in 2022 are forecast virtually unchanged as higher prices may limit exports to price-sensitive destinations despite increased supplies.


The whole bird broiler price for 2022 is forecast to average $1.13 per pound compared to $1.01 in 2021.


Dairy


“Similarly, the dairy sector was able to grow despite continued challenges and uncertainty in 2021,” Meyer said.


Milk production grew 1.6% in 2021, reaching over 226.3 billion pounds of milk production in 2021.


Exports also grew, despite logistical challenges at the ports, increasing over 25% on a milk equivalent fat basis and 8% on a milk equivalent skim-solids basis.


In 2022, U.S. milk production is expected to grow slightly to 227.2 billion pounds.


The dairy cow inventory was below 2021 on Jan. 1, 2022, and is expected to show a modest decline during the year.


Offsetting the lower herd is a higher projected milk yield, especially in the second half although relatively high feed prices are likely to limit improvement in yield per cow during the first part of the year.


Slow growth in milk production and tightening stocks are projected to push milk prices higher in 2022 even in the face of slow growth in domestic demand and less competitive exports.


However, despite higher milk prices, lower replacement heifer numbers and relatively high input costs will likely remain constraints to herd expansion during the year.


Dairy product prices are projected in strengthen in 2022, with butter, nonfat dry milk, cheese and dry whey all expected to be higher priced. With strong product prices, Class III and Class IV prices are expected to average higher.


The all-milk price is forecast to average $23.55 per hundredweight, compared to $18.69 in 2021.


Par : Tom Doran (16/03/2022)

Source : agrinews-pubs.com

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