USDA export forecasts for 2018 for red meats, poultry, eggs and dairy all register increases compared with forecasts for 2017, according to the latest issue of Livestock, Dairy, and Outlook Report. Each animal protein—with the exception of lamb and mutton—year-over-year larger export forecasts accompany forecasts for increased production next year. For lamb and mutton, exports are expected to increase from 7 million pounds this year to 8 million pounds in 2018. Lamb and mutton production is expected to fall 1.5 percent, from 147 million pounds this year to 145 million in 2018.
Forecast broiler production was reduced for the second quarter, and the price forecast was increased due to a strong price trend in May. Forecast egg production was slightly increased, while the second-quarter price forecast was reduced marginally. Turkey production faltered slightly in April, totaling 436 million pounds, 10 percent below the same month in 2016. Overall, the 2017 forecast was reduced 30 million pounds to 6.092 billion pounds.
April broiler meat production was 3.2 billion pounds, approximately 2.2 percent above last year on a per day basis. This growth derived from more birds slaughtered, since average weights were slightly below a year earlier. The continuation of relatively slow growth in weights contributed to a second-quarter forecast reduction of 25 million pounds.
Slower growth in broiler weights has encouraged expansion of the broiler egg-laying flock in order to produce more birds for meat. On May 1, the laying flock was the largest it has been since 2011; however, the proportion of eggs set in incubators that are later placed as chicks in growing facilities has trended downward.1 This may reflect an older laying flock; among the quickest way for producers to expand their flock is holding older layers for longer, but that may reduce the proportion of eggs that actually hatch (as well as lay rates). If an older laying flock is constraining growth in the number of chicks available for placement, this challenge appears unlikely to persist for long, as the layer flock can be refreshed over time.
Broiler exports in April were 517 million pounds, down 4 percent from last year. Exports to Mexico were 19 million pounds less than last year and the lowest since 2012. Buying patterns again favored more exports to Angola, South Africa, Cuba, and Kazakhstan; in aggregate, these countries were shipped 77 million more pounds than last year. While April exports to South Africa were higher than last year, they slowed significantly compared to the 4 previous months. Cumulative exports of broiler meat to all destinations through April were still up 5 percent year-to-date, supporting the expected strength in aggregate exports for the year.
Weekly prices for whole broilers (national composite) trended stronger-than-expected in May, reaching $1.16 per pound for the week ending June 2, the highest level since 2014. Although prices will likely experience a normal seasonal decline in the near future, the recent price strength supported an increase in the third-quarter price forecast to $0.88-0.92 per pound, while the fourth-quarter forecast was raised to $0.84-$0.90 per pound. The 2017 price forecast was increased to $0.91-$0.94 and the 2018 forecast remained unchanged.
Boneless/skinless breast prices also trended strongly upwards in May, reaching $1.65 for the week ending June 2. Relatively strong breast prices may have resulted from a normal seasonal increase in demand and less availability of the larger birds that are preferred for cut-up parts. Year-to-date meat production from the largest class of birds was down 7 percent through June 3 according to preliminary slaughter data.
