ERS Charts of Note
Tuesday, November 21, 2017
Typical Thanksgiving meals are filled with many iconic foods like pumpkin pie and stuffing, and turkey is usually the centerpiece. This year, wholesale turkey prices have been sharply lower than in years past. Do low wholesale prices indicate lower retail prices? Not always. While wholesale and retail price movements are strongly correlated on a yearly basis, seasonal factors can disrupt this correlation. During the Thanksgiving holiday season, retail turkey prices are commonly near annual low points. The percentage markup from wholesale to retail price also declines to a low point during that period. The average markup between January 2014 and September 2017 was 42 percent. The November average markup over the same period was just 13 percent. The data indicate that competition between retailers for Thanksgiving business may lead to lower costs for consumers even as wholesale prices rise. Because wholesale prices this year have remained low late into the year, retail prices may fall below previous years or the trend of low retail markups in November may be disrupted. This chart appears in the Amber Waves article "Low Wholesale Turkey Prices in 2017 Should Translate to Lower Costs for Consumers This Thanksgiving," released in November 2017.
Wednesday, October 11, 2017
Each August, as part of the its Farm Income data product, ERS produces estimates of the prior year’s cash receipts—the cash income the farm sector receives from agricultural commodity sales. This data product includes State-level estimates, which can help offer background information about States subject to unexpected changes that affect the agricultural sector, such as the recent hurricane that struck Texas. In 2016, U.S. cash receipts for all commodities totaled $352 billion. Texas contributed about 6 percent ($21 billion) of that total, behind only California and Iowa. Cattle and calves accounted for 40 percent ($8 billion) of cash receipts in Texas, compared to 13 percent nationwide. Only Nebraska had higher cash receipts for cattle and calves in 2016. Texas led the country in cash receipts from cotton at almost $3 billion (13 percent of the State’s receipts), accounting for 46 percent of the U.S. total for cotton. Milk and broilers each accounted for 9 percent of cash receipts in Texas. The State ranked sixth in both milk and broiler cash receipts nationwide. This chart uses data from the ERS U.S. and State-Level Farm Income and Wealth Statistics data product, updated August 2017.
Monday, August 28, 2017
The latest available U.S. trade data show that first-half of 2017 animal products exports are higher for all major commodities for 2016. An increase in global demand and a decline in the U.S. dollar likely contributed to favorable conditions for exports. According to the U.S. Federal Reserve’s Price-adjusted Broad Dollar Index, the value of the U.S. dollar fell 5.9 percent since December 2016. All of the products, except for eggs, are building on positive annual growth in 2016 relative to 2015. In the case of eggs, the 2015 U.S. highly pathogenic avian influenza (HPAI) outbreak resulted in a sustained egg-laying flock rebuilding process that limited production and trade. With the exception of U.S. beef and veal exports, the largest share of which went to Japan, Mexico accounted for the largest share of U.S. animal product exports. Mexico’s share so far in 2017 ranges from a low of 15 percent of U.S. beef and veal exports to a high of 64 percent of all U.S. turkey exports. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook newsletter, released in August 2017.
Wednesday, August 2, 2017
Whole turkey prices in 2017 fell relative to 2016 and have remained strikingly flat since January. Typically, wholesale turkey prices have a seasonal trend, with prices climbing from their bottom level in the beginning of the year to a peak near Thanksgiving. The average price for a whole frozen hen in June was actually slightly below January’s price. Between 2013 and 2015, June whole turkey prices averaged 8 percent higher than in January. Prices for breast meat are also below 2016 levels, indicating that demand may not be keeping up with current supply levels. Sustained low prices are often a signal to producers to slow the pace of growth, but production in 2017 has remained above 2016 levels through the first half of the year. It is unclear whether the declines in the wholesale market will translate to reduced retail prices leading up to Thanksgiving. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook newsletter released in July 2017.
Tuesday, July 11, 2017
Many Americans spend more of their time outdoors during the summer months, and some of that outdoor time is spent attending barbecues or grilling their meals at home. Beef is a popular grilling option for many, but not all grades of beef are equally suitable. USDA meat inspectors provide grades (Prime, Choice, and Select) for U.S. beef that denote quality and suitability for different cooking methods. Prime and Choice meats are most suitable for grilling because of the larger amount of marbling, or fat, that helps keep the meat juicy and tender when cooked. Consumers pay premium prices for Prime and Choice beef, as opposed to Select, which is less expensive. Because outdoor grilling is popular during the summer months, there typically is an increase in sales for Choice beef. The monthly price spread, or premium, for Choice beef relative to Select beef reached a record high of $30.38 per hundredweight for the week ending June 9th and averaged $28.35 for the full month. It is not uncommon for the Choice/Select spread to increase in late spring and early summer, as the share of cattle designated Choice this time of year typically declines at the same time that demand increases, driving up the price of Choice beef. But this year, supplies of Choice beef were ample, suggesting that it was strong domestic demand for Choice beef that helped to propel the spread to record levels in June, rather than limited supply. The data in this chart are drawn from the Livestock & Meat Domestic Data set updated in June 2017.
Thursday, June 15, 2017
Although prices for agricultural commodities frequently vary from year to year, they have generally moved higher in the past decade. In these aggregate measures, by 2014, price indices for crops were up more than 35 percent above their 2006 levels, while those for livestock rose over 75 percent from 2006 to 2014. Prices for both crops and livestock have fallen since 2015 (crop prices began falling earlier in 2013), as U.S. and global markets responded to higher prices by increasing production. While the aggregate prices received for all agricultural production fell 17 percent, livestock and its related products fell by 26 percent since 2014. The fall in prices for livestock coincides with declining input costs for feed commodities like corn and soybean. Additionally, this reflects the beginning of the recovery in the cattle and beef industry that had seen production declines since 2010. Crop prices also declined, but to a lesser extent at 10 percent since 2014. This chart appears in the ERS publication, "Selected charts from Ag and Food Statistics: Charting the Essentials, 2017," released April 28, 2017.
Friday, May 26, 2017
The May release of the USDA World Agricultural Supply and Demand Estimates (WASDE) contains the first forecasts for 2018 turkey supply and use. Turkey production is expected to continue expanding into 2018, driven by modest gains in exports and increasing domestic per capita use. The forecast for 2018 production is 6.255 billion pounds, a 2-percent increase over the current 2017 forecast of 6.122 billion pounds. The growth rate for 2018 would mirror the current growth expectations for 2017, also forecast to grow 2 percent compared with 2016. This would mark 3 consecutive years of production growth following the contraction in 2015 caused by highly pathogenic avian influenza (HPAI) losses and trade restrictions on U.S poultry products. Per capita domestic use is expected to increase by just under 2 percent in 2018, with the remaining production increases going to export markets. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook Newsletter released in May 2017.
Tuesday, May 23, 2017
Russia’s transition from a centrally planned economy to a market-based economy began in the early 1990s. In the Soviet planned economy, farms received specific allocations of inputs (e.g. seed, fertilizer) tied to mandated output (i.e. specified commodity production targets) from central planners. In Russia’s market economy, however, farms have not only the potential to earn profit but also the decision making freedom over the choice of output and stronger managerial control to improve labor incentives. The decline of State subsidies during the economic transition contributed to a severe drop in agricultural output for commodities like meat, which caused the country to rely on imports. By the late 1990s, meat production had bottomed out. However, growth in Russian meat output, including a boom in poultry production, began in 2000 and has steadily increased since. Imports were initially slow to fall with total meat imports peaking in 2008 at 3.6 million metric tons. Since then, however, meat imports have declined significantly as domestic production has grown. Russian State restrictions on meat imports, in particular a system of tariff rate quotas, have also contributed to the rise in output and drop in foreign purchases. This chart appears in the April 2017 ERS Amber Waves feature article, "Agricultural Recovery in Russia and the Rise of Its South."
Friday, March 17, 2017
The newly released USDA agricultural baseline projects strong demand for soybean meal and oil over the next decade. These gains reflect low expected feed prices, increasing livestock production, and steady demand by foreign importers. Strong global demand for soybeans—particularly in China—boosts U.S. soybean trade over the projection period. While soybean exports are projected to rise, competition from South America—primarily Brazil—will lead to a reduced U.S. share of global soybean trade. U.S. soybean meal use is projected to increase about 1 percent per year over the baseline period. Domestic soybean meal consumption, which accounts for roughly 75 percent of total disappearance, is projected to increase at just over 1 percent per year. U.S. soybean oil use is also projected to rise about 1 percent per year over the projection period. Soybean oil exports are projected to rise only modestly due to increased competition. This chart appears in the ERS Agricultural Projections to 2026 report released in February 2017.
Tuesday, February 28, 2017
To measure productivity gains, the hog industry commonly uses the average number of pigs produced by breeding sows per year. To meet demand, farmers needed a far larger number of breeding sows in 1970 than present day due to lower litter rates. The breeding inventory for that year was 65 percent higher than the current inventory, but the litter rate per sow was only 7.4 pigs. On average, this resulted in just over 10 pigs produced per sow. In 2016, an increased litter rate of 10.6 and more frequent farrowings led to an average of 20.95 pigs per sow. These efficiency gains are because of genetic improvements of breeding stock, advancements in survival rates, and more effective cycling of sows between breeding and recovery periods. This chart appears in the ERS Livestock Dairy and Poultry Outlook report released in January 2017.
Friday, February 24, 2017
Newly released USDA agricultural projections through 2026 suggest that demand for U.S. corn will grow steadily over the next decade. Rising yields will boost production and support the growing demand. With the exception of a drop in 2017, corn production is expected to increase through the forecast period. Lower corn prices and increasing corn production suggest that more corn will be used for feed and residual use, helping to fuel rising meat production. A slight increase in corn-based ethanol production is projected through the 2018/19 marketing year, after which it is expected to decline to levels just below those in 2015. Falling domestic demand reflects a declining trend in U.S. gasoline consumption due to fuel-efficient vehicles, reduced vehicle usage, infrastructure, and other constraints on growth in the ethanol fuel markets. The United States is expected to remain the world’s largest corn exporter over the projection period. Rising incomes, particularly in developing economies, translate to an increasing demand for meat, bolstering the market for U.S. corn as a feed grain. This chart appears in the USDA Agricultural Projections to 2026 report released in February 2017.
Monday, February 6, 2017
Federally inspected cattle dressed weights averaged 843 pounds in November. Average dressed weights increased annually for the last 5 years, and since 2011, have been up more than 9 percent. However, the rate of increase slowed in 2016, with all cattle dressed weights through November averaging about the same as year-earlier weights for the same period. Heifer weights increased during this period, but steer weights and cow weights were lower. In addition to genetic advancements and efficiency gains, cattle weights are influenced by feed prices and the price for fed cattle. Since 2014, low feed prices have helped drive more rapid weight gains in recent years. Additionally, tighter supplies of cattle in 2014 and 2015 put pressure on producers to increase weights. In 2016, cattle numbers rebounded slightly. This recovery potentially reduced the need for added weight per animal. This chart appears in the ERS Livestock Dairy and Poultry Outlook report released in January 2017.
Friday, February 3, 2017
Compared to 2015, preliminary data indicates that 2016 marked an improvement in export and import levels. The year 2015 was characterized by increased imports and reduced exports for the major meat commodities. The primary cause was a rapid appreciation of U.S. currency relative to competitors in late 2014 into 2015. A stronger U.S. currency can make exports appear more expensive and imports cheaper. Additionally, the U.S. poultry market was heavily impacted by a highly pathogenic avian influenza (HPAI) outbreak that led to sweeping trade restrictions. In 2016, U.S. exchange rates stabilized for much of the year, although they increased again in November and December. The majority of HPAI-related trade restrictions were also lifted by the start of 2016. As a result, beef, pork, and poultry exports increased compared to 2015 when beef and pork imports decreased (poultry imports historically are negligible). This chart is drawn from data discussed in the Livestock, Dairy, and Poultry Outlook report released in January 2017.
Tuesday, January 17, 2017
Retail and wholesale food prices often move closely together. When wholesale prices rise, retail prices typically follow. The price of choice beef in wholesale and retail markets moved upward in 2014 and most of 2015. Wholesale prices increased from roughly $3 per pound to nearly $4 per pound by mid-2015. As wholesale prices rose, retail prices followed, moving from just over $5 per pound in January 2014 to a peak of $6.41 in June 2015. Both prices decreased in 2016, with the wholesale price falling below $3 in late 2016. While retail prices dropped also, they fell at a slower rate. As a result, the ratio of retail to wholesale prices has increased to above 2 to 1, 20 percent higher than the ratio in June 2015 when both prices were highest. This highlights an aspect of the interplay between wholesale and retail prices, in which retail prices respond slower when wholesale prices decline compared to when prices increase. The data in this chart are drawn from the ERS Meat Price Spreads data product updated in December 2016.
Tuesday, November 22, 2016
Americans consume a lot of turkey every Thanksgiving. So much so that producers spend the whole year building up stocks to meet robust demand every November. Since 2010, turkey meat production has averaged just under 500 million pounds per month. While that’s enough turkey to meet the needs of consumers during an average month, it is not enough to cover Thanksgiving demand. In order to make up for this deficit, producers build up stocks in cold storage throughout the year in order to sell them when November comes around. Turkey stocks reach a low point each year after November and then begin building back up throughout the following year, reaching a high point around September just in time to begin the process all over again. The process also helps explain the gap in prices between fresh and frozen turkeys at the grocery store. Since demand is met, in part, by frozen product built up throughout the year, only a limited portion can be bought fresh leading to a premium at the checkout line. The data in this chart is drawn from the ERS Livestock and Meat Domestic Data tables updated in October 2016.
Thursday, November 10, 2016
USDA forecasts for net exports (exports minus imports) of U.S. red meat and poultry in 2016 and 2017 show successive increases, largely due to higher beef production and expectations of solid growth in poultry exports. U.S. beef exports are expected to increase by almost 9 percent in 2016 and by almost 7 percent in 2017, as the beef sector recovers from a multi-year drought in major beef-producing States and U.S. production increases. U.S. beef imports are forecast to decline by about 10 percent in 2016 and 11 percent in 2017, as supplies in Oceania tighten with herd rebuilding and larger supplies of U.S. beef become available at lower prices. U.S. net poultry exports (broiler meat and turkey) are forecast to increase in both 2016 and 2017 reflecting higher production, lower prices, and strong foreign demand for relatively low-priced meat protein. In total, U.S. net exports of red meat and poultry are expected to be 10.3 billion pounds in 2016 and 11.5 billion pounds in 2017. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook report released in October 2016.
Monday, September 26, 2016
USDA baseline projections provide a long-term view of the U.S. farm sector. These projections show that production of beef and pork will expand steadily between 2016 and 2025, driven by lower feed costs and strong meat demand domestically and abroad. As a result of this greater production, beef and pork prices are projected to drop 10.6 percent and 11.6 percent, respectively, over the same period. Cheaper prices will help reverse a multiyear decline in meat consumption in the United States. Per capita consumption of beef is also forecast to increase 2.7 percent by 2025, outpacing growth in consumption of broilers (2.3 percent) and pork (1.7 percent). USDA expects this will increase the total amount of meat consumed per person in the U.S. from 211 pounds in 2015 to nearly 219 pounds by 2025. This chart appears in the ERS Amber Waves finding U.S. Beef and Pork Consumption Projected to Rebound released September 2016.
Thursday, September 1, 2016
Agricultural businesses, particularly those specializing in crop production, are heavy users of energy and energy-intensive inputs. Ignoring the energy embodied in purchased machinery and services, energy-based purchases accounted for over 25 percent of farm operator expenses in 2012, on average. U.S. farm businesses are classified as industrial users of electricity; poultry production has the highest share of electricity expenses (5 percent) among all types of agricultural producers, while cotton and rice producers have the highest share of electricity expenses (3 percent) among crop producers, primarily for irrigation. While motor fuel accounts for about 6 percent of operator expenses, the farm sector is a heavy indirect consumer of natural gas. For example, up to 80 percent of the manufacturing cost of fertilizer can be for natural gas. Expenditures for fertilizer were over 11 percent of total operator expenses among farm businesses in 2012, with much higher expenditures for most crop farms. Natural gas as a source of electric power has been increasing in recent years, reaching 27 percent of electricity generation in 2013. As a result, the farm sector is particularly sensitive to fluctuations in the price of natural gas.?This chart is found in the September 2014 Amber Waves data feature, "Agricultural Energy Use and the Proposed Clean Power Plan."
Thursday, September 1, 2016
A strengthening U.S. dollar coupled with poultry trade restrictions related to highly pathogenic avian influenza (HPAI) led to a reduction in U.S. meat and poultry exports in 2015. However, U.S. red meat and poultry exports are expected to rise over the next decade as steady global economic growth supports demand for high-quality animal proteins.?Poultry is the largest U.S. meat export category, and broiler export growth is expected to resume over the next decade with strong near-term gains reflecting a rebound from HPAI-related import restrictions. China and Mexico are major US broiler export markets. U.S. pork exports are projected to continue rising, with Pacific Rim nations and Mexico among the key growth markets. U.S. beef exports are projected to grow as well, consisting mostly of high-quality, grain-fed beef shipped to Mexico, Canada, and Pacific Rim nations. This chart is from the interagency USDA report,?USDA Agricultural Projections to 2025.
Thursday, September 1, 2016
Memorial Day is the traditional start to the summer grilling season, and beef is one of the most popular grilling items. Conditions in the livestock markets have changed considerably over the past year and suggest lower beef prices through the summer months. Historically heavy slaughter weights coupled with larger-than-anticipated cattle slaughter volumes in late April and early May have driven beef supplies higher and pushed wholesale beef prices lower. At the same time, soft demand for ground beef products and the popular beef ?middle meat? grilling items?such as ribeye and sirloin steaks?ahead of the grilling season has kept prices under pressure. The Choice cutout value?a common indicator of wholesale prices for beef graded as Choice?for the week ending May 6 was $205.72 per hundredweight/cwt, down nearly $17 from the first week of April and almost $51 lower than the same time last year when supplies were much tighter. These lower wholesale prices should translate to lower foodstore prices, but the degree to which retailers feature beef in June and July will depend on demand as well as the market conditions for pork and chicken. This chart is based on the Livestock, Dairy and Poultry Outlook report, released May 16, 2016.