Outlook for the U.S.
Livestock and Poultry
Sectors in 2020
Presented By
Shayle D. Shagam
World Agricultural Outlook Board, USDA
USDA Agricultural Outlook Forum
Arlington, VA
February 21, 2020
Record Red Meat and Poultry Production in
2020
0
20
40
60
80
100
120
2011 2014 2017 2020*
Billio
n p
ou
nd
s
Poultry Beef Pork Other * Forecast
Total Meat Production Higher
Billion
pounds2018 2019 2020F
2019-20
% Change
Beef 26.872 27.151 27.480 1.2
Pork 26.315 27.637 28.885 4.5
Broiler
Meat42.601 43.877 45.775 4.3
Turkey 5.878 5.816 5.890 1.3
Total Red
Meat And
Poultry102.435 105.227 108.788 3.3
Billion
pounds2018 2019 2020F
2019-20
% Change
Exports
Beef 3.161 3.022 3.300 9.2
Pork 5.876 6.321 7.375 16.7
Broiler Meat 7.069 7.109 7.425 4.4
Imports
Beef 2.998 3.057 2.880 -5.8
Pork 1.042 0.945 0.835 -11.6
Large Meat Supplies, Strong Demand Will
Boost Exports
Red Meat Exports Important to Sector
0
10
20
30
Sh
are
of
Pro
du
cti
on
(p
erc
en
t)
Beef Pork Broilers
* Forecast
2018 2019 2020F2019-20
% Change
Cattle,
$/cwt117.12 116.78 117.0 0.2
Hogs, $/cwt
(live equiv.)45.93 47.95 49.0 2.2
National
Composite
Broiler, $/lb0.978 0.886 0.870 -1.8
Turkey, $/lb 0.802 0.892 1.005 12.7
Livestock & Poultry Prices Mixed
Per Capita Domestic Disappearance Record
High
0
50
100
150
200
250
2017 2018 2019 2020*
Po
un
ds
(reta
il w
eig
ht)
Broiler Beef Pork Turkey Other
226.5 lbs
* Forecast
Situation Facing Livestock and Poultry
Producers
Divergent Feed Prices • Corn: $3.85/bu in 2019/20
$3.60/bu in 2012/21
• Soybean meal: $305/ton in 2019/20
$310/ton in 2020/21
Forage Situation Uncertain• “Other” hay prices in second-half 2019 below 2018
• Dec 1 hay stocks 2 percent higher, but quality is variable
Situation Facing Livestock and Poultry
Producers
• Animal Disease Outbreaks Reshape Global Trade
• Currently reported in Europe, Africa, and Asia
African Swine Fever Reports During 2019
Source: FAO/OIE
Situation Facing Livestock and Poultry
Producers
• African Swine Fever Outbreaks Reshape Global Trade
• Currently reported in Europe, Africa, and Asia
• Level of impact uncertain in China
• Higher prices
• Increased imports
Meat Prices in China Have Risen Sharply
0
10
20
30
40
50
60
70
80
90
1/3
/201
8
2/3
/201
8
3/3
/201
8
4/3
/201
8
5/3
/201
8
6/3
/201
8
7/3
/201
8
8/3
/201
8
9/3
/201
8
10
/3/2
018
11
/3/2
018
12
/3/2
018
1/3
/201
9
2/3
/201
9
3/3
/201
9
4/3
/201
9
5/3
/201
9
6/3
/201
9
7/3
/201
9
8/3
/201
9
9/3
/201
9
10
/3/2
019
11
/3/2
019
12
/3/2
019
1/3
/202
0
2/3
/202
0
3/3
/202
0
Yu
an
/kg
Pork Beef Chicken
14 Percent
Source: China Ministry of Agriculture
China’s Meat Imports Will Increase in 2020
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Pork Beef Chicken*
Milli
on
me
tric
to
ns
Carc
as
s w
eig
ht
2018 2019 2020F
Source: Livestock and Poultry: World
Markets and Trade, January 10, 2020
USDA/FAS
*Excluding paws
Factors Driving the U.S. Forecasts:
• Cattle –Herd Beginning to Contract
• January 1 cattle inventory down 0.4 percent
• Beef cow number down 1 percent
• Heifers for beef cow replacement 2 percent lower
Cattle Herd at 94.4 Million on Jan 1, 2020
Further Decline Likely
80
85
90
95
100
105
Millio
n H
ead
Beef Cow Herd, Calf Crop Declining
0
5
10
15
20
25
30
35
40
45
2003 2005 2007 2009 2011 2013 2015 2017 2019
Beef Cows Dairy Cows Calf Crop*
Mil
lio
n H
ead
* 2020 Calf Crop Forecast
Cattle on Feed Higher, Available for
Placement Lower
15
20
25
30
35
40
45
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Outside Feedlots On-Feed
Mil
lio
n H
ead
-0.4%
2.1%
0.5%
Feeder Calf Prices Will Average Higher
in 2020
130
135
140
145
150
155
160
QI QII QIII QIV
$/c
wt
2010-19 2018 2019 2020*
Factors Driving the Forecasts:
• Hogs – Inventory Continues to Build
• Producers Cautiously Optimistic Despite Recent
Losses
Hog Inventory Increased to 77.3 Million Head
on December 1, 2019
60
62
64
66
68
70
72
74
76
78
80
2011 2013 2015 2017 2019 2021*
Inventory on December 1, Preceding Year
Millio
n H
ead
* Forecast
-30
-20
-10
0
10
20
30
40
50
2015 2016 2017 2018 2019 2020
$ p
er
hea
dAverage Returns to Farrow-Finish Operators
Source: Iowa State University
2019-20 Farrowing Growth May Reflect
Caution
2.5
2.6
2.7
2.8
2.9
3.0
3.1
3.2
3.3
QI QII QIII QIV
2018 2019 2020*
*QI & QII Reported Intentions
QIII & QIV Forecast
Mil
lio
n H
ea
d
1.0%0.4%
0.3% -1.2%
Factors Driving the Forecasts:
• Hogs – Inventory Continues to Build
• Producers Cautiously Optimistic Despite Recent Losses
• Pigs per Litter Continues to Set Records
Pigs per Litter Continues to Grow
8.9
9.1
9.3
9.5
9.7
9.9
10.1
10.3
10.5
10.7
10.9
11.1
11.3
11.5
11.7
2015 2016 2017 2018 2019 2020*
Trend: 2009-13
Trend: 2014.3-2019.4
He
ad
* Forecast
Hog Slaughter Capacity has Increased
Through New Plants
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jan
'16
Ap
r
Ju
l
Oc
t
Ja
n '1
7
Ap
r
Ju
l
Oc
t
Ja
n '1
8
Ap
r
Ju
l
Oc
t
Ja
n '1
9
Ap
r
Ju
l
Oc
t
Ja
n '2
0
Ap
r
Ju
l
Oc
t
Millio
n h
ea
d
Weekly Federally Inspected Hog Slaughter
Week Day Slaughter Saturday Slaughter
202,000 head
Average*
488,000 head
Average
454,000 head
Average
212,000 head
Average
131,000 head
Average
451,000 head
Average431,000 head
Average
201,000 head
Average
Factors Driving the Forecasts:
• Hogs – Lots of Hogs on the Way
• Producers Optimistic Despite Recent Losses
• Pigs Per Litter Continue to Set Records
• Trade Becomes Increasingly Important
2020 Pork Exports to Be Record 7.4 Billion
Pounds
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2013 2014 2015 2016 2017 2018 2019 2020F
Billio
n lb
s.
Japan Mexico Canada South Korea China/H.K. Other
24%23%20%
19%18%
20%18%
Percent Share
Other
Factors Driving the Forecasts:
• Broilers – Sector Expanding
• Hatchery Data Points to Continued Expansion
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
2016 2017 2018 2019
19
98
-2000=
1000
Indexed Broiler Returns:Whole Broiler Price Minus Feed Cost
Broiler Returns Weakening
Broiler Laying Flock Grew Most of 2019First of Month
55
56
57
58
59
60
61
Jan Apr Jul Oct
Millio
n b
ird
s
2018 2019 2020
Placements Remain Large
155
160
165
170
175
180
185
190
195
Jan Apr Jul Oct
Mil
lio
n b
ird
s
Placements in Growout Flocks, United States
2018 2019 2020
Factors Driving the Forecasts:
• Broilers – Sector Expanding
• Hatchery Data Points to Continued Expansion
• Bird Weights Continue to Increase
Bird Weight Growth is Above Trend
5.8
5.9
6.0
6.1
6.2
6.3
6.4
6.5
Jan'15
May Sep Jan'16
May Sep Jan'17
May Sep Jan'18
May Sep Jan'19
May Sep
Po
un
ds l
ivew
eig
ht
Proportion of Heavier-Weight Birds Above
Last Year
25.0%
35.0%
45.0%
55.0%
65.0%
75.0%
Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20
Under 6.26 lbs 6.26 lbs and Higher
Perc
en
t sla
ug
hte
red
Factors Driving the Forecasts:
• Turkey – Market is Closer in Balance
• Prices Are Stronger
Prices Increasing with Tighter Supplies
0.50
0.70
0.90
1.10
Jan Apr Jul Oct
Do
llars
per
po
un
d
Frozen Hen Price
2018 2019 2020
-
50.0
100.0
150.0
200.0
250.0
2016 2017 2018 2019
19
98
-2000=
1000
Indexed Turkey Returns:
Frozen Hen Price Minus Feed Cost
Factors Driving the Forecasts:
• Turkey – Market is Closer in Balance
• Prices Are Stronger
• Mixed Signals on Expansion
Sector Caution Returns in Early-2020
22
23
24
25
26
27
28
29
30
31
Jan Mar May July Sept Nov
Millio
n E
gg
s
Eggs in Incubators, First of Month
2018 2019 2020
Turkey Poult Placement Higher
19
20
21
22
23
24
25
26
Jan Mar May July Sept Nov
Mil
lio
n b
ird
s
2018 2019 2020
Factors Driving the Forecasts:
• Eggs – Growth Continues
• Laying Flock Expanding
Egg Laying Flock Growth ContinuesFirst of Month
300
305
310
315
320
325
330
335
340
Jan Mar May July Sept Nov
Mil
lio
n b
ird
s
2018 2019 2020
Egg Production Will Be Record Large
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2014 2016 2018 2020*
Billi
on
do
zen
Table Hatching
*Forecast
Factors Driving the Forecasts:
• Eggs – Growth Continues
• Flock Expanding
• Egg Prices Higher on Demand Strength
Egg Prices Will Average Over $0.99 per
Dozen in 2020
0.00
0.30
0.60
0.90
1.20
1.50
1.80
2.10
Do
lla
rs p
er
do
zen
N.Y. Wholesale Price - Large Eggs
* Forecast
Additional information about the USDA 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
• http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1350
• Foreign Agricultural Service (FAS)Livestock and Poultry: World Markets and Trade
• http://www.fas.usda.gov/data/livestock-and-poultry-world-markets-and-trade