July 25, 2007
US 2007 livestock production seen flat, modest growth in 2008
US livestock and aquaculture may be unexciting as with the previous years due to soaring production costs, increasing competitions and weather aberrations, according to the report of the Economic Research Service of the United States Department of Agriculture.
For the second half of 2007, pork exports are expected to drop as exports in the first half was 3 percent lower than in the same period last year. Export data from the US Commerce Department show that lower exports to US' main markets Mexico and Russia is the main factor for the decline. Pork exports to Mexico are off 30 percent while Russia is down by 23 percent. Brazil's aggressive pursuit in the Russian market is also keeping US pork at bay as it has increased its pork shipments by more than 34 percent.
On the other hand, cattle and dairy cow production will be slower due to weather problems in the Southeast, Southwest and parts of the Corn Belt. This has increased cow slaughter and spurred price volatility due to erratic prices of soybean, corn and wheat. This situation has therefore affected the supply of beef and is certainly to affect exports, particularly in South Korea and Japan as these countries are pressuring Washington to lower down beef prices.
The forecast is in contrast with the dairy sector as the USDA projects milk production at 184.3 billion pounds due to sharply higher milk prices in the current quarter and continued high prices for the balance of the year. More favourable feed prices will likely lead to higher cow numbers but could only rise by 1.4 percent year-on-year. Tight global milk supplies and a weakening dollar could lift exports particularly for non-fat dry milk. Australia is seen to slowdown on exports until 2008 and the European Union will have its dairy products unavailable for the moment due to weather problems. This will have the US seize an opportunity to supply the international and domestic market its dairy requirements particularly on cheese.
US broiler production was down 2.4 percent at 14.6 billion pounds in the first five months of 2007 as against the same period last year. The decline slowed down US exports of chicken meat, however, the trend is seen to change in the second half of the year due to stronger prices of broiler anticipated in that period. Prices for whole birds averaged 78 cents per pound during the first-half of 2007, 26 percent higher than in the same period of 2006. Prices for broiler parts have also been higher in the first half as it averaged US$1.52 per pound, up 43 percent from the same period in 2006, and over the same period leg quarters were up by 79 percent. Strong export demand will have poultry ending stocks reduced by 25 million pounds until early 2008.
US aquaculture imports are expected to slow down due to stricter import regulations implemented by the US Food and Drug Administration. Its biggest supplier and the world's largest aquaculture producer China will see limited imports this year due to alleged contamination of its seafood exports. China is the US' biggest supplier of eels (3.1 million pounds, US$12.5 million) and the second exporter of shrimps in terms of quantity (150 million pounds) and the fourth in terms of value (US$331 million). Vietnam and other major exporting seafood countries will also endure US' stringent policies on seafood exports.
For more of the USDA report, please click here
