News USDA Outlook
American livestock farming will continue to experience pressure in 2021
The unprecedented challenges that agriculture, among other things, had to endure last year are hopefully behind us, but this year too the livestock sector in the United States will be faced with pressure. Analysts from the US Department of Agriculture report this in a new 'Ag Outlook Forum'. According to them, higher feed costs should be considered.
In the coming year, American poultry, dairy and pig farmers can expect a more stable demand pattern and higher market prices, but at the same time they will experience additional pressure in the form of higher feed costs. Seth Meyer of the US Department of Agriculture reported this on Friday 19 February during the 'Ag Outlook Forum'. The fact that market prices are expected to be slightly higher is partly due to expected economic growth and higher exports.
Total beef, pork and poultry production this year is expected to be 1% higher than last year. For beef and pork, the increase is slightly higher than 1%. This is partly because it is anticipated that more pigs and cows will be slaughtered this year, with a higher slaughter weight. For poultry meat, the growth is slightly below 1%.
Uncertainties leading in dairy market
The corona crisis has caused economic uncertainty, limited demand and higher stocks in the dairy sector in the United States. The latter point is related to the growth in the dairy herd† It increased by nearly 100.000 animals last year. Milk production per cow also increased considerably: +1,4% per day. It is the highest growth rate since 2016. Combined with 1 extra milk day due to the leap year, US milk production increased by 2,1%.
At the end of the year, the stocks of various products were large. For example, butter stocks were at their highest level since 1992, cheese stocks were the highest since 1984 and stocks of skimmed milk powder rose to their highest level since 2004. This led to dairy processors and producers sometimes having to dump milk. As a result, milk prices did not have the opportunity to rise to greater heights.
More milk is expected for the coming year, which means that the stocks will also increase further. "The industry continues to face uncertainty about a return to normal," USDA analysts said. Milk production is estimated at 227,4 billion pounds (103,1 billion kilos), which is 1,9% more than last year. "With more milk and the large stocks, milk prices will remain under pressure this year."
In addition to the fact that American dairy farmers will have to deal with weaker milk prices, they will also encounter high feed prices in 2021. Feed costs are expected to rise to the highest level since 2014. "This will probably put an end to the expansion of the dairy herd. However, despite low producer margins, production per cow is expected to increase faster than in recent years."
More demand for pork
For pig farmers, the analysts assume that pork production will be 1% higher this year than last year. This is mainly due to a greater availability of pigs for slaughter and a return to more 'normal' slaughter levels. "While this increased supply is reflected in higher slaughter figures, average weights will reflect a return to more normal levels," Meyers said during the presentation.
However, the expected rising feed prices will also have an effect on business operations for pig and poultry farmers. In the meantime, quotations for soy ($13,77 per bushel), maize ($5,50 per bushel) and wheat ($6,50 per bushel) have been fluctuating around record levels for weeks and it is not expected that in a very short time. term will change.
The ongoing recovery of the sow herd in China and the expected continued easing of trade tensions will, however, mean a growth in pork exports from the United States. Meyers also notes that global consumption of beef, pork and poultry will increase by 2021%, 2030% and 8,9% respectively between 17,3 and 16,3. "China is responsible for the largest share of these growth figures. So exports to that country are expected to remain good."
Kimberly Baker
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