USDA Dairy Outlook: December 2023

Import Shares of Domestic Use for Red Meats and Dairy

The figure below represents the percentage of annual domestic use, or disappearance, that was imported for red meats and dairy in 2015 through 2022 and is forecast for 2023 and 2024. These shares are calculated by dividing annual imports by annual domestic disappearance, which USDA calculates as a residual measure of supply (the sum of production, beginning stocks, and imports minus the sum of exports and ending stocks)

that is used on the domestic market. Dairy disappearance is represented as domestic commercial use on a milk-fat milk-equivalent basis.

The red meat category is heavily influenced by the effects of beef imports, which in 2018–22 accounted for nearly 70 percent of total red meat imports, followed by pork (23 percent) and lamb (7 percent). The share of beef imports to domestic use has increased since 2019 on strong domestic demand and lower production and is projected to rise to a record level in 2024. In 2024, the share of imports to domestic use for beef will reach a record 13.7 percent, pork will be relatively flat at 5.5 percent, and the share of lamb imports is expected to rebound in 2024 to 71.9, its highest portion of domestic use since 2022. The dairy shares of imports on a milk-fat milk-equivalent basis are expected be about 3.4 percent in 2023 and 2024, which is higher than the 5-year average due to higher expected imports of products with relatively high milk-fat content.

Beef/Cattle: Based on slaughter data through early December, higher cow slaughter and heavier-than-assumed carcass weights are expected to offset lower fed cattle slaughter in the fourth quarter of 2023, leaving the beef production forecast for 2023 unchanged. Expected heavier carcasses are carried over into early 2024, along with higher cow slaughter. Greater expected placements in late 2023 are also expected to add to a higher rate of fed cattle marketings in the second and third quarters of 2024. This raised the outlook for beef production in 2024 to 25.990 billion pounds. Projections for cattle prices are lowered on higher forecast production and weaker expected demand. For fourth-quarter 2023, expectations for beef imports are raised but exports are lowered. In 2024, the import forecast is raised, but exports are left unchanged from last month.

Sheep/Lamb: Lamb and mutton import forecasts are lower in the December report compared to the previous month. Lamb and mutton import forecasts were lowered 5 million pounds in December; those for 2024 were lowered by 35 million pounds.

Dairy: The milk production forecasts for 2023 and 2024 are reduced from the last month on slower expected growth in milk yield per cow and a lower expected number of cows in 2024. The all-milk price forecast for 2023 is reduced from $20.70 per hundredweight (cwt) to $20.60 per cwt due to recent movements in the wholesale prices of cheese, butter, and nonfat dry milk. The 2024 wholesale price forecast for cheese is revised downward, while the wholesale price forecasts for the other dairy products are revised upward. The lower expected cheese price more than offsets the higher expected prices of the other products, leading to the 2024 all-milk price forecast being revised to $20.25 per cwt, down $0.55 per cwt from the previous forecast.

Pork/Hogs: Fourth-quarter pork production is raised 25 million pounds to 7.09 billion pounds, 2.4 percent higher than in the same period a year ago. Hog prices are expected to average $54 per hundredweight (cwt) for the quarter, 15 percent lower than in the fourth quarter of 2022. First-quarter hog prices are lowered $1 per cwt to $56 per cwt, as soft consumer pork demand is likely to persist, limiting hog price increases. October pork exports increased 5.7 percent year over year on the strength of shipments to Western Hemisphere Nations, led by Mexico. U.S. pork exports in 2024 are forecast at about 6.9 billion pounds, 1.5 percent higher than the 2023 exports forecast.

Poultry/Eggs: Projected broiler production is adjusted up for the fourth quarter of 2023 based on strong production in October, but adjusted down in the first quarter of 2024 based on recent hatchery data. Both broiler exports and imports were adjusted up slightly in 2023 on recent data. Broiler prices are adjusted down 1 cent in the fourth quarter of 2023 on recent prices but are unchanged for next year. Total table egg production in 2023 is unchanged, while 2024 production is decreased slightly. Wholesale prices for eggs are adjusted down for the fourth quarter of 2023 on recent data. Expectations for both imports and exports of eggs and egg products in 2023 are increased slightly on recent data. Turkey production projections are lowered from last month on recent production and placement data. Projected turkey imports are lowered in 2023 and 2024, while exports are increased in the fourth quarter of 2023 and first quarter of 2024 on recent data and favorable prices. Projected turkey prices are adjusted down in 2023 and 2024 on recent prices and lower expected demand.