outlook for the u.s. livestock and poultry sectors in 2012 presented by shayle d. shagam world...
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Outlook for the U.S. Livestock and Poultry
Sectors in 2012
Presented By
Shayle D. Shagam
World Agricultural Outlook Board, USDA
USDA Outlook Forum
Washington, D.C.
February 24, 2012
Situation Facing Livestock and Poultry Producers in 2012
• Higher feed prices for most of year– Corn: $5.80-$6.60/bu in 2011/12
$5.18 in 2010/2011 – Soybean meal: $290-$320/ton in 2011/12
$345 in 2010/2011
• Feed prices should moderate moving into 2012/13 crop year
Early Year Feed Costs Eat into Gains in Livestock and Poultry Prices
0
10
20
30
40
50
60
2002 2004 2006 2008 2010 2012*
Rat
io
Cattle/Corn Hog/Corn Broiler/Feed
* Forecast
Highlights for Livestock & Poultry in 2012
• Offsetting meat production– Beef, lamb, and broilers lower– Pork and turkey higher
Red Meat and Poultry Production Will Decrease 1.8 Percent in 2012
* Forecast
Highlights for Livestock & Poultry in 2012
• Offsetting meat production
• Continued strength in exports but no aggregate growth
Factors Affecting Exports
• Rising incomes fuel increased demand for meat protein. – World GDP, at about 2-3 percent in
2012, slower than 2011.
• Weaker U.S. dollar will support meat exports.– Smaller decline than 2011.
• Production growth in some markets increases competition.
Total Per Capita Retail Basis Meat Disappearance in 2012 at 198 Pounds
40
50
60
70
80
90
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
*
Pou
nds
per
capi
ta
Beef Pork Broilers* Forecast
Pork Will Gain Pricing Advantage at Retail
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1998 2000 2002 2004 2006 2008 2010 2012*
Ret
ail
Pri
ce R
atio
s
Beef/Chicken Beef/Pork Pork/Chicken
* Forecast
Beef Production to Decline to 25.1 Billion Pounds in 2012
22
23
24
25
26
27
28
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Bil
lio
n P
ou
nd
s
* Forecast
Cattle Herd at 90.8 Million on Jan 1, 2012; Further Contraction Likely
80
85
90
95
100
105
110
115
120
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
*
Mil
lio
n H
ead
* Forecast
Beef Cows 3 Percent Lower Jan. 1, 2012. Lowest since 1962
05
101520253035404550
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012*
Beef Cows Dairy Cows Calf Crop
Mil
lio
n H
ead
* Calf Crop Forecast
10
15
20
25
30
35
40
45
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Outside Feedlots On-Feed
Cattle for Feeding Lower on January 1M
illi
on
Hea
d
-4.0%
+0.8%
-2.3%
Cattle Imports Decline to 2.05 Million Head In 2012
Cattle and Calves, Jan.1
0
5
10
15
20
25
2006 2008 2010 2012
Canada Mexico
* Forecast
Mil
lio
n H
ead
U.S. Cattle Imports
0.0
0.5
1.0
1.5
2.0
2.5
2006 2008 2010 2012*
Canada Mexico Total
Carcass Weight Growth Dampened by Light Placement Weights
650
670
690
710
730
750
770
790
2002 2004 2006 2008 2010 2012*
Placement Carcass
* Forecast
Po
un
ds
2011 Beef Exports at Record 2.79 Billion Pounds, 2012 Slightly Lower
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2003 2005 2006 2007 2008 2009 2010 2011 2012*
Bil
lio
n p
ou
nd
s
Mexico Canada Japan South Korea Vietnam Other
* Forecast
Top 4 Markets Equal 94% of exports
Top 4 Markets Equal 62% of exports
2012 Beef Imports Increase 2 Percent to 2.1 Billion Pounds
1.5
2.0
2.5
3.0
3.5
4.0
2002 2004 2006 2008 2010 2012*
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
Imports Cow Slaughter
* Forecast
Bil
lio
n P
ou
nd
s
Mil
lio
n H
ead
Change in U.S. Import Unit Value for Fresh, Chilled, and Frozen Beef
-20
-15
-10
-5
0
5
10
15
20
25
2009 2010 2011
Pe
rce
nt
US$ AU$ CA$ NZ$
US Share of Major Trader Exports
0
10
20
30
40
50
60
70
80
90
2008 2009 2010 2011
Australia Canada NZ
Weak Dollar Mutes Price Signals
Cattle Prices Rise in 2012, to Average$121 to $129 per cwt
5-Area Steer, All Grades
60
70
80
90
100
110
120
130
140
QI QII QIII QIV Annual
2010 2011 2012*
* Forecast
Do
llar
s p
er c
wt
Pork Production Will Increase to 23.2 Billion Pounds in 2012
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
* Forecast
Bil
lio
n P
ou
nd
s
Hog Inventory Increased to 65.9 Million Head on December 1, 2011
Inventory on December 1, Preceding Year
57
59
61
63
65
67
69
1999 2001 2003 2005 2007 2009 2011 2013*
Mil
lio
n H
ead
* Forecast
Only Modest Growth in Sows Farrowing
2.5
2.6
2.6
2.7
2.7
2.8
2.8
2.9
2.9
3.0
3.0
QI QII QIII QIV
2010 2011 2012*
* Quarters 1-2 NASS Reported , Quarters 3-4 Forecast
Mil
lio
n H
ead
+0.8%-0.9%
+0.9% +0.9%
8.99.09.19.29.39.49.59.69.79.89.9
10.010.110.210.3
2007 III 2008 III 2009 III 2010 III 2011 III 2012* III
Growth in Pigs per Litter Remains About Same
*Forecast
Hea
d
2.2 %
1.7 %
1.5 %
2.1 %
1.9 %
1.8 %
Slow Increase in Canada’s Hog Inventory, Weak Dollar Will Limit U.S. Hog Imports
0
2
4
6
8
10
12
14
16
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*20
21
21
22
22
23
23
Hog inventory U.S. Imports Canadian FI & Prov Slaughter
* Slaughter and Imports Forecast
Mil
lio
n H
ead
Mil
lio
n H
ead
2011 Pork Exports Were Record 5.19 Billion Pounds
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2005 2006 2007 2008 2009 2010 2011 2012*
Bil
lio
n l
bs
.
Japan Mexico Canada South Korea China/H.K. Other
* Forecast
2012 Pork Exports at 5.1 Billion Pounds, Pork Imports Decline
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2002 2004 2006 2008 2010 2012*
Exports Imports
* Forecast
Bil
lio
n P
ou
nd
s
Hog Prices to Average $63 to $67 per cwt
National Base, 51-52% Lean, Live Equivalent
20
30
40
50
60
70
QI QII QIII QIV Annual
2010 2011 2012*
* Forecast
Do
llar
s p
er c
wt
Broiler Meat Production Will Decline to 36.1 Billion Pounds in 2012
15
20
25
30
35
40
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Bil
lio
n l
bs.
* Forecast
Broiler Laying FlockMonthly Average
4748
4950
5152
5354
5556
57
Jan Mar May Jul Sep Nov
Mil
lio
n b
ird
s
2009 2010 2011
Chicks Placed For Grow Out19 Selected States
140
145
150
155
160
165
170
175
180
185
JanApr
JulOct
Mil
lio
n b
ird
s
2010 2011 2012
Live Bird Weights Moderating
5.0
5.2
5.4
5.6
5.8
6.0
Jan Mar May Jul Sep Nov
2009 2010 2011
Po
un
ds
2011 Broiler Exports Were Record 6.99 Bilion Pounds
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2005 2006 2007 2008 2009 2010 2011 2012
Bil
lio
n p
ou
nd
s
Russia China/HK Mexico Canada
Cuba Angola Other Forecast
“Other” equals 40% “Other” equals 57%
Broiler Whole Bird Prices to Average 82 to 87 Cents Per Pound
12-City Wholesale
60
65
70
75
80
85
90
QI QII QIII QIV Annual
2010 2011 2012*
* Forecast
Cen
ts p
er P
ou
nd
Turkey Production Forecast at 5.9 Billion Pounds in 2012
5.0
5.2
5.4
5.6
5.8
6.0
6.2
6.4
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Bil
lio
n p
ou
nd
s
* Forecast
Turkey Poult Placements AboveYear Earlier
20
21
22
23
24
25
26
27
Jan Mar May July Sept Nov
Mil
lio
n b
ird
s
2010
2011
2012
Turkey Exports Will Decline in 2012
0
100
200
300
400
500
600
700
800
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Mil
lio
n p
ou
nd
s
Mexico Russia China/HK Other Forecast
Turkey Prices to Average $1.00-$1.07 per Pound
National Hen Price
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
2007 2008 2009 2010 2011 2012*
Do
llar
s p
er p
ou
nd
* Forecast
Egg Production Growth Slow
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2002 2004 2006 2008 2010 2012*
Bil
lio
n d
oze
n
Hatching
Table
* Forecast
Table Egg Laying FlockMonthly Average
272
274
276
278
280
282
284
286
288
Jan Mar May Jul Sep Nov
Mil
lio
n b
ird
s
2009 2010 2011
Egg Prices Will Decline to $1.03-$1.09 per Dozen
N.Y. Wholesale Price - Large Eggs
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
2004 2005 2006 2007 2008 2009 2010 2011 2012*
Do
llar
s p
er d
oze
n
* Forecast
Additional information about the 2012 outlook is available at the following websites:
• World Agricultural Outlook Board (WAOB)World Agricultural Supply and Demand Estimates– www.usda.gov/oce/commodity/wasde/index.htm
• Economic Research Service (ERS)Livestock, Dairy, and Poultry Situation and Outlook– www.ers.usda.gov/publications/ldp/
• Foreign Agricultural Service (FAS)Livestock and Poultry: World Markets and Trade– www.fas.usda.gov/dlp/livestock_poultry.asp