Value of Livestock Production Forecast Up in 2013

The value of livestock, dairy, and poultry production is expected to increase 3.5 percent in 2013, with broilers, cattle/calves, and dairy leading the way. See table on U.S. farm sector livestock cash receipts and value of production . Almost all categories should benefit from expected increases in annual average prices. See table on  U.S. annual average price for selected crops and livestock . Declines in inventory during 2013 mean cash receipts in 2013 should be slightly higher than the value of production for cattle/calves and hogs. See table on quantity and value of annual inventory change for selected crops and livestock . Slight declines in the value of production are forecast for turkeys and chicken eggs, both of which are expected to experience small price declines.

Beef sales are forecast down in 2013, while the annual cattle price is forecast to increase from 2012. Several years of cattle herd liquidation, recently exacerbated by drought conditions, have reduced the supply of cattle. Herd expansion will eventually result in an expansion of beef production. However, due to biological lags in the beef production cycle, the initial stages of an expansion cause tighter supplies of feeder and finished cattle. Beef per capita disappearance is expected to decline as are exports of beef and veal. The annual price of hogs is expected to increase in 2013 and with an increase in pork sales, cash receipts and value of production are predicted to rise. Declining pork exports reflect lower shipments to China and Japan (as the yen depreciates).

Despite expectations of a slight decline in sales, per capita use, and exports in 2013, a higher expected farm price translates into anticipated higher (up 6.8 percent) broiler receipts. With higher stock levels going into 2013, lower broiler production expected for the first half of the year, and lower beef production, broiler prices are forecast to increase.

Fluid milk production is expected to decline as reduced dairy cattle numbers more than offset projected increases in milk per cow. For most of 2012 and especially the latter part of the year, dairy cow slaughter was unusually high, mostly due to high feed costs and other factors depressing profit margins. The 2013 average farm price of milk is forecast to rise 73 cents to $19.25/cwt. Feed prices are expected to be down from last year’s drought-induced high levels, which should improve margins for most milk producers.