Market Outlook

Livestock, Dairy, and Poultry Outlook, October 2018 (summary)

U.S. Exports of Animal Proteins: Broiler Exports Represent Largest Volume Share, While Beef Exports Comprise Greatest Value Share

All things equal, which animal protein commodities have the highest export unit values? Year-to-date (YTD) 2018 unit export values for major livestock, dairy, and poultry commodities are depicted in the chart below. As can be seen, beef and veal exports have the highest unit value, averaging $2.36 per pound, driven largely by high-value markets in Asia. Despite representing less than 0.1 percent of total 2018 U.S. animal protein export volumes, lamb and mutton shipments have the second highest unit value, with a YTD average of $2.28 per pound. Cheese exports have a unit value of $1.90 per pound. Since this is a weighted average for a wide variety of cheeses, it is usually higher than the price of basic wholesale commodity cheddar. Egg exports, which are more or less equally comprised of higher value shell eggs and lower value egg products, have a unit value of $1.08 per pound. The unit value for turkey, $1.02 per pound, closely approximates the unit value of turkey shipments to Mexico, which constitute more than 64 percent of the U.S. turkey export market. The unit value of pork, $0.99 per pound, is heavily influenced by markets in Japan (which are higher value), South Korea (mid-value markets), and Mexico (lower value markets). Finally, broiler exports—which are dominated by lower value dark meats—have the lowest unit value at $0.46 per pound.

Cattle/Beef: Fourth-quarter 2018 is likely to be characterized by feedlots feeding cattle longer than previously expected, lowering expected fourth-quarter fed cattle slaughter. This is largely responsible for reducing the 2018 commercial beef production forecast from the previous month. The beef production forecast for 2019 was raised on greater expected placements in second-half 2018 and first-half 2019. However, carcass weights were lowered for the early part of the year. The fed cattle price forecast for fourth-quarter 2018 was raised from last month, but the 2019 price forecast was left unchanged.

 

See the October LDP Outlook report and previous reports.