Outlook for the U.S. Livestock and Poultry Sectors in 2012 Presented By Shayle D. Shagam World Agricultural Outlook Board, USDA

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1 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

2 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

3 Ratio Early Year Feed Costs Eat into Gains in Livestock and Poultry Prices * Cattle/Corn Hog/Corn Broiler/Feed

4 Highlights for Livestock & Poultry in 2012 Offsetting meat production Beef, lamb, and broilers lower Pork and turkey higher

5 Red Meat and Poultry Production Will Decrease 1.8 Percent in 2012

6 Highlights for Livestock & Poultry in 2012 Offsetting meat production Continued strength in exports but no aggregate growth

7 Factors Affecting Exports Rising incomes fuel increased demand for meat protein. World GDP, at about 2-3 percent in 2012, slower than Weaker U.S. dollar will support meat exports. Smaller decline than Production growth in some markets increases competition.

8 Pounds per capita Total Per Capita Retail Basis Meat Disappearance in 2012 at 198 Pounds * Beef Pork Broilers

9 Retail Price Ratios Pork Will Gain Pricing Advantage at Retail * Beef/Chicken Beef/Pork Pork/Chicken

10 Billion Pounds Beef Production to Decline to 25.1 Billion Pounds in *

11 Million Head Cattle Herd at 90.8 Million on Jan 1, 2012; Further Contraction Likely *

12 Million Head Beef Cows 3 Percent Lower Jan. 1, Lowest since * Beef Cows Dairy Cows Calf Crop * Calf Crop Forecast

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15 Million Head Cattle for Feeding Lower on January % +0.8% -4.0% Outside Feedlots On-Feed

16 Million Head Cattle Imports Decline to 2.05 Million Head In 2012 U.S. Cattle Imports Cattle and Calves, Jan * Canada Mexico Total Canada Mexico

17 Pounds Carcass Weight Growth Dampened by Light Placement Weights * Placement Carcass

18 Billion pounds 2011 Beef Exports at Record 2.79 Billion Pounds, 2012 Slightly Lower Top 4 Markets Equal 94% of exports Top 4 Markets Equal 62% of exports * Mexico Canada Japan South Korea Vietnam Other

19 Billion Pounds Million Head 2012 Beef Imports Increase 2 Percent to 2.1 Billion Pounds * Imports Cow Slaughter

20 Percent Weak Dollar Mutes Price Signals Change in U.S. Import Unit Value for Fresh, Chilled, and Frozen Beef US Share of Major Trader Exports US$ AU$ CA$ NZ$ Australia Canada NZ

21 Dollars per cwt Cattle Prices Rise in 2012, to Average $121 to $129 per cwt Area Steer, All Grades QI QII QIII QIV Annual *

22 Billion Pounds Pork Production Will Increase to 23.2 Billion Pounds in *

23 Million Head Hog Inventory Increased to 65.9 Million Head on December 1, Inventory on December 1, Preceding Year *

24 Million Head Only Modest Growth in Sows Farrowing % -0.9% QI QII QIII QIV * +0.9% +0.9% * Quarters 1-2 NASS Reported, Quarters 3-4 Forecast

25 Head Growth in Pigs per Litter Remains About Same % 2.1 % 2.2 % 1.7 % 1.9 % 2007 III 2008 III 2009 III 2010 III 2011 III 2012* III 1.8 % *Forecast

26 Million Head Million Head Slow Increase in Canada s Hog Inventory, Weak Dollar Will Limit U.S. Hog Imports * Hog inventory U.S. Imports Canadian FI & Prov Slaughter 20 * Slaughter and Imports Forecast

27 Billion lbs Pork Exports Were Record 5.19 Billion Pounds * Japan Mexico Canada South Korea China/H.K. Other

28 Billion Pounds 2012 Pork Exports at 5.1 Billion Pounds, Pork Imports Decline * Exports Imports

29 Dollars per cwt Hog Prices to Average $63 to $67 per cwt National Base, 51-52% Lean, Live Equivalent QI QII QIII QIV Annual *

30 Billion lbs. Broiler Meat Production Will Decline to 36.1 Billion Pounds in *

31 Million birds Broiler Laying Flock Monthly Average Jan Mar May Jul Sep Nov

32 Million birds Chicks Placed For Grow Out 19 Selected States Jan Apr Jul Oct

33 Pounds Live Bird Weights Moderating Jan Mar May Jul Sep Nov

34 Billion pounds 2011 Broiler Exports Were Record 6.99 Bilion Pounds Other equals 40% Other equals 57% Russia China/HK Mexico Canada Cuba Angola Other Forecast

35 Cents per Pound Broiler Whole Bird Prices to Average 82 to 87 Cents Per Pound City Wholesale QI QII QIII QIV Annual *

36 Billion pounds Turkey Production Forecast at 5.9 Billion Pounds in *

37 Million birds Turkey Poult Placements Above Year Earlier Jan Mar May July Sept Nov

38 Million pounds Turkey Exports Will Decline in Mexico Russia China/HK Other Forecast

39 Dollars per pound Turkey Prices to Average $1.00-$1.07 per Pound National Hen Price *

40 Billion dozen Egg Production Growth Slow Hatching Table *

41 Million birds Table Egg Laying Flock Monthly Average Jan Mar May Jul Sep Nov

42 Dollars per dozen Egg Prices Will Decline to $1.03-$1.09 per Dozen N.Y. Wholesale Price - Large Eggs *

43 Additional information about the 2012 outlook is available at the following websites: World Agricultural Outlook Board (WAOB) World Agricultural Supply and Demand Estimates Economic Research Service (ERS) Livestock, Dairy, and Poultry Situation and Outlook Foreign Agricultural Service (FAS) Livestock and Poultry: World Markets and Trade