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
Ratio Early Year Feed Costs Eat into Gains in Livestock and Poultry Prices 60 50 40 30 20 10 0 2002 2004 2006 2008 2010 2012* Cattle/Corn Hog/Corn Broiler/Feed
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
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.
Pounds per capita Total Per Capita Retail Basis Meat Disappearance in 2012 at 198 Pounds 90 80 70 60 50 40 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* Beef Pork Broilers
Retail Price Ratios Pork Will Gain Pricing Advantage at Retail 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1998 2000 2002 2004 2006 2008 2010 2012* Beef/Chicken Beef/Pork Pork/Chicken
Billion Pounds Beef Production to Decline to 25.1 Billion Pounds in 2012 28 27 26 25 24 23 22 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Million Head Cattle Herd at 90.8 Million on Jan 1, 2012; Further Contraction Likely 120 115 110 105 100 95 90 85 80 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013*
Million Head Beef Cows 3 Percent Lower Jan. 1, 2012. Lowest since 1962 50 45 40 35 30 25 20 15 10 5 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012* Beef Cows Dairy Cows Calf Crop * Calf Crop Forecast
Million Head Cattle for Feeding Lower on January 1 50 45 40 35 30 25 20 15 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012-2.3% +0.8% -4.0% Outside Feedlots On-Feed
Million Head Cattle Imports Decline to 2.05 Million Head In 2012 U.S. Cattle Imports Cattle and Calves, Jan.1 2.5 2.0 1.5 1.0 0.5 25 20 15 10 5 0.0 2006 2008 2010 2012* 0 2006 2008 2010 2012 Canada Mexico Total Canada Mexico
Pounds Carcass Weight Growth Dampened by Light Placement Weights 790 770 750 730 710 690 670 650 2002 2004 2006 2008 2010 2012* Placement Carcass
Billion pounds 2011 Beef Exports at Record 2.79 Billion Pounds, 2012 Slightly Lower 3.0 2.5 2.0 Top 4 Markets Equal 94% of exports Top 4 Markets Equal 62% of exports 1.5 1.0 0.5 0.0 2003 2005 2006 2007 2008 2009 2010 2011 2012* Mexico Canada Japan South Korea Vietnam Other
Billion Pounds Million Head 2012 Beef Imports Increase 2 Percent to 2.1 Billion Pounds 4.0 3.5 3.0 2.5 2.0 1.5 2002 2004 2006 2008 2010 2012* 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 Imports Cow Slaughter
Percent Weak Dollar Mutes Price Signals 25 20 15 10 Change in U.S. Import Unit Value for Fresh, Chilled, and Frozen Beef 90 80 70 60 US Share of Major Trader Exports 5 50 0 40-5 30-10 20-15 10-20 0 2009 2010 2011 2008 2009 2010 2011 US$ AU$ CA$ NZ$ Australia Canada NZ
Dollars per cwt Cattle Prices Rise in 2012, to Average $121 to $129 per cwt 140 130 120 110 100 90 80 70 60 5-Area Steer, All Grades QI QII QIII QIV Annual 2010 2011 2012*
Billion Pounds Pork Production Will Increase to 23.2 Billion Pounds in 2012 25 20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Million Head Hog Inventory Increased to 65.9 Million Head on December 1, 2011 69 Inventory on December 1, Preceding Year 67 65 63 61 59 57 1999 2001 2003 2005 2007 2009 2011 2013*
Million Head Only Modest Growth in Sows Farrowing 3.0 3.0 2.9 2.9 2.8 2.8 2.7 2.7 2.6 2.6 2.5 +0.8% -0.9% QI QII QIII QIV 2010 2011 2012* +0.9% +0.9% * Quarters 1-2 NASS Reported, Quarters 3-4 Forecast
Head Growth in Pigs per Litter Remains About Same 10.3 10.2 10.1 10.0 9.9 9.8 9.7 9.6 9.5 9.4 9.3 9.2 9.1 9.0 8.9 1.5 % 2.1 % 2.2 % 1.7 % 1.9 % 2007 III 2008 III 2009 III 2010 III 2011 III 2012* III 1.8 % *Forecast
Million Head Million Head Slow Increase in Canada s Hog Inventory, Weak Dollar Will Limit U.S. Hog Imports 16 23 14 12 10 23 22 8 22 6 4 2 21 21 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* Hog inventory U.S. Imports Canadian FI & Prov Slaughter 20 * Slaughter and Imports Forecast
Billion lbs. 2011 Pork Exports Were Record 5.19 Billion Pounds 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012* Japan Mexico Canada South Korea China/H.K. Other
Billion Pounds 2012 Pork Exports at 5.1 Billion Pounds, Pork Imports Decline 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2002 2004 2006 2008 2010 2012* Exports Imports
Dollars per cwt Hog Prices to Average $63 to $67 per cwt National Base, 51-52% Lean, Live Equivalent 70 60 50 40 30 20 QI QII QIII QIV Annual 2010 2011 2012*
Billion lbs. Broiler Meat Production Will Decline to 36.1 Billion Pounds in 2012 40 35 30 25 20 15 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Million birds Broiler Laying Flock Monthly Average 57 56 55 54 53 52 51 50 49 48 47 Jan Mar May Jul Sep Nov 2009 2010 2011
Million birds Chicks Placed For Grow Out 19 Selected States 185 180 175 170 165 160 155 150 145 140 Jan Apr Jul Oct 2010 2011 2012
Pounds Live Bird Weights Moderating 6.0 5.8 5.6 5.4 5.2 5.0 Jan Mar May Jul Sep Nov 2009 2010 2011
Billion pounds 2011 Broiler Exports Were Record 6.99 Bilion Pounds 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Other equals 40% Other equals 57% 2005 2006 2007 2008 2009 2010 2011 2012 Russia China/HK Mexico Canada Cuba Angola Other Forecast
Cents per Pound Broiler Whole Bird Prices to Average 82 to 87 Cents Per Pound 90 12-City Wholesale 85 80 75 70 65 60 QI QII QIII QIV Annual 2010 2011 2012*
Billion pounds Turkey Production Forecast at 5.9 Billion Pounds in 2012 6.4 6.2 6.0 5.8 5.6 5.4 5.2 5.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Million birds Turkey Poult Placements Above Year Earlier 27 26 25 24 23 22 21 2010 2011 2012 20 Jan Mar May July Sept Nov
Million pounds Turkey Exports Will Decline in 2012 800 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Mexico Russia China/HK Other Forecast
Dollars per pound Turkey Prices to Average $1.00-$1.07 per Pound National Hen Price 1.10 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 2007 2008 2009 2010 2011 2012*
Billion dozen Egg Production Growth Slow 9.0 8.0 7.0 6.0 5.0 4.0 3.0 Hatching Table 2.0 1.0 0.0 2002 2004 2006 2008 2010 2012*
Million birds Table Egg Laying Flock Monthly Average 288 286 284 282 280 278 276 274 272 Jan Mar May Jul Sep Nov 2009 2010 2011
Dollars per dozen Egg Prices Will Decline to $1.03-$1.09 per Dozen N.Y. Wholesale Price - Large Eggs 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012*
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