WASDE: Red Meat and Poultry Production Virtually Unchanged

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2011 red meat and poultry production is virtually unchanged from last month as small increases in beef and pork production are largely offset by a slightly reduced forecast of broiler and turkey production. Beef production is forecast higher as higher cow and bull slaughter more than offsets slightly lower steer and heifer slaughter. Pork is forecast higher on slightly larger slaughter and higher-than-expected first quarter weights. Broiler and turkey production forecasts are reduced on moderating weight gains. The egg production forecast is reduced slightly as higher feed costs squeeze returns.
The forecast for beef exports for 2011 is raised from last month as the relatively weak dollar and economic growth in a number of countries support export growth. Conversely, the weakness in the U.S. dollar and economic growth in other major importing countries will limit U.S. beef imports. Thus, the forecast for beef imports is reduced from last month. The pork export forecast is unchanged from last month but imports are forecast slightly lower. Broiler exports are forecast lower on weaker expected demand.
Prices for livestock and poultry are raised from last month. Meat supplies remain tight and improving domestic demand and strength in red meat exports are supporting prices for livestock and poultry. Egg prices are forecast higher on the anticipated smaller production increase.
The milk production forecast for 2011 is reduced slightly from last month. Relatively high milk prices are being offset by high feed costs and only slight growth is expected in the herd for the remainder of the year. Fat-basis imports are lowered from last month but skim-solids imports are forecast higher. Both skim and fat-basis exports are raised largely on the strength of first-quarter butter, cheese, and nonfat dry milk (NDM) sales.
Butter and cheese prices are forecast lower this month, reflecting recent price declines but NDM and whey price forecasts are raised. The Class III price forecast is lowered as the weaker cheese price more than offsets higher whey prices. The Class IV price forecast is raised as higher NDM prices more than offset the lower forecast butter price. The all milk price is forecast to average $18.15 to $18.65 per cwt for 2011.