Market Outlook

Market Outlook

Livestock, Dairy, and Poultry Outlook, December 2017 (summary)

First-Half 2018 Forecasts for Red Meat, Poultry, Eggs, and Milk Show Mostly Year-Over-Year Production Increases with Lower Prices

With the exception of lamb and eggs, larger year-over-year product supplies are accompanied by lower prices. For cattle, higher second-half 2017 cattle placements are expected to lead to higher first-half 2018 fed cattle marketings and seasonally higher (+5.1 percent) beef production. First-half 2018 cattle prices are expected to be 7. 3 percent below prices in the first-half of 2017. Higher first-half 2018 pork production (+4.3 percent) derives mostly from expected higher second-half 2017 pig crops. Consequently, hog prices are expected to fall 2.4 percent below those in the first half of 2017. For broilers, expected higher producer returns drive relatively small production increases. First-half broiler prices are forecast to decline by 6.8 percent. For turkeys, a modest recovery in domestic demand and exports drives small increases in production (+0.24 percent), but low prices continue to underscore the slow pace of demand recovery relative to supply levels.First-half 2018 turkey prices are expected to fall by 9.8 percent. Milk production in the first half of 2018 is forecast to increase over the first half of 2017 by 1.6 percent. Although milk prices are expected to decline from 2017 to 2018, relatively low feed prices are expected to encourage expansion of the milk cow herd and greater yield per cow, although at a slower rate than forecast last month. For eggs, expected first-half 2018 price increases (+17.7 percent) reflect the year-earlier low prices that prevailed due to record-level supplies. Production growth (+0.9 percent) in the first half of 2018 is expected to be moderate as producers continue to recover from margins that were relatively low until recently.

Dairy: With recent price declines in dairy products and continued high stock levels, the all-milk price for the fourth quarter of 2017 is $17.75-$17.95 per cwt, a reduction from last month’s forecast of $17.85-$18.15. The 2018 all-milk price forecast is $16.65-$17.45 per cwt, a reduction from last month’s forecast of $16.90-$17.80. The 2018 forecast for domestic use on a milk-fat milk-equivalent basis has been lowered to 215.9 billion pounds, 0.8 billion less than last month’s forecast. On a skim-solids milk-equivalent basis, the forecast for 2018 commercial use is 183.2 billion pounds, 1.9 billion less than last month’s forecast. With lower expected prices, the 2018 milk production forecast has been lowered to 219.3 billion pounds, a reduction from last month’s forecast of 219.7 billion pounds.

See the December LDP Outlook report and previous reports.

Last updated: Monday, December 18, 2017

For more information contact: Jerry Cessna and Jonathan Law

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