LIVESTOCK, DAIRY, AND POULTRY MONTHLY December 17, 1997 December 1997, LDP-M-48 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- LIVESTOCK, DAIRY, AND POULTRY MONTHLY is published monthly by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. Subscriptions to the printed version of this report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #LDP-M, $40/year. ERS-NASS accepts MasterCard and Visa. For information on our products and services, please call the ERS Information Service at (202) 694-5050. ----------------------------------------------------------------------------- NOTICE: Due to declining resources and the need to place more emphasis on longer term market relationships, the LIVESTOCK, DAIRY AND POULTRY SITUATION AND OUTLOOK will be published 6 times in 1998 and the release time has been changed to 4:00 p.m. Eastern Time. Issues are scheduled for release on January 16, February 19, May 19, July 16, August 17, and November 17. ------------------------------------------------------------------------------ For the dairy industry, 1998 is expected to be remarkably similar to the year just ending. Milk production probably will struggle to post any gains in the face of unchanged milk prices and still-high prices for concentrate feeds and alfalfa hay. Expected economic growth and retail dairy prices should favor growth in commercial use of dairy products, but demand pressures on prices may be mostly offset by the likely large stocks of skim solids at the start of the year. In 1997, milk production recovered from its 1996 forage-induced drop but managed only a tiny increase from 1995. Returns were insufficient to spur much expansion in the face of high feed costs and very tight supplies of acceptable forage. Although the 1997 increase in milkfat production was easily absorbed by commercial use, sluggish growth in use of skim solids (partly a delayed response to the high prices of 1996) could not keep pace with production, and milk prices fell about $1.50 per cwt. Milk Production Rises Smaller November milk production was about 1 percent larger than a year earlier, a far smaller increase than the more than 4-percent rises of June-August. However, year-to-year comparisons are badly misleading because of 1996's dramatic midyear collapse and subsequent recovery. Autumn milk production was basically as strong as at any time since 1995, with longer-term comparisons showing late 1997 milk per cow up at an annual rate of almost 2 percent and milk cow numbers declining at an annual rate of 1 percent. In 1998, moderate milk prices, continued high concentrate feed prices, and tight supplies and high prices for dairy-quality hay are expected to curb expansion pressures. Milk production is projected to be just barely larger than in 1997 and might slip below a year earlier during parts of the year. Returns to dairying in 1997 were moderate overall but conditions varied greatly among farms. Returns over concentrate costs fell 11 to 12 percent from the relatively high 1996 level but stayed about 4 percent above the 1991-95 average. For farms with good supplies of homegrown forage, 1997 incomes were not tight compared to most recent years, particularly if they also produced some of their own feed grains. On the other hand, farmers who had to purchase forages were hit hard by soaring prices of dairy-quality hay. Alfalfa hay prices in 1997 will average more than a fourth higher than just 2 years earlier. Returns in 1997 were not enough to significantly alter the position of those producers under longrun income stress, even after the strong 1996 returns. These operations continued to exit from dairying at a fairly steady clip. On the other hand, the 1997 returns probably provided modest incentive for some farms to continue growing. But, the lack of assured supplies of good forage increased the risks of rapid herd expansion. This situation kept milk cow declines close to 1 percent. The milk-feed price ratio will average about 1.55 in 1997, down slightly from 1996's 1.6. The 1997 ratio would normally be associated with below-trend growth in milk per cow as producers restrain increases in concentrate feeding. In line with such a ratio, milk per cow in 1997 will increase at an annual rate of 1.6 percent from 1995, even though it will be up 3 percent from the weak 1996 showing. Even though careful management of available forage avoided repetition of the severe problems of mid-1996, hay quality continued to hold down milk per cow in 1997. A wide variety of weather-related problems limited output of top quality hay in 1997 in most regions, and stocks of good hay probably were very tight at the start of the current hay year. Adjustments because of the extreme prices for the best hay pared away some of the potential growth in milk per cow. The impact could have been much worse if another good crop of corn silage had not been available in much of the country. Conditions for milk production in 1998 are not expected to be much different than in 1997. Milk-feed price relationships will stay lackluster as declines in concentrate feed and hay prices are projected to be small, even with normal 1998 crops. A bumper year for alfalfa quantity and quality would be needed to restore a real cushion of dairy-quality hay. Unless dairy demand is strong enough to pull milk prices much higher than currently expected, milk production may struggle most of the year to stay above 1997 levels. Dairy Prices Dropping Wholesale prices of cheese and butter are, or soon will be, dropping from their seasonal highs. Although winter prices will be substantially below recent levels (particularly for butter), they are expected to be supported by brisk commercial use and by milk production only slightly above a year earlier. Additional buttressing will come from shipments under the Dairy Export Incentive Program (DEIP), although price effects of DEIP probably will wane by spring. Winter cheese prices are projected to average slightly lower than a year earlier, while butter prices run somewhat higher. Prices of nonfat dry milk in the West have hovered around the support purchase price since May. Large production caused by high butter prices, weak demand for nonfat dry milk, and very large stocks kept nonfat dry milk prices from posting even small seasonal increases, despite substantial DEIP contracts and even some sales to the Government. The imbalance in powder markets is expected to correct itself as 1998 progresses, but first-half prices are expected to be fairly weak. The almost certain January 1 lowering of the support purchase price likely will cause winter prices to dip below both autumn and year-earlier levels. Through the flush season, the Basic Formula Price (BFP) for milk is expected to decline steadily from the late 1997 peak of about $13 per cwt. Large stocks of skim solids should enable the small expansion in milk output to meet the expected growth in commercial use, particularly since the impact of DEIP will be temporarily abated. The first-half average BFP is projected to be near a year earlier. Markets are expected to tighten significantly during the second half. With stocks reduced and the DEIP back in business, strength in demand is projected to raise milk prices. The seasonal rise in the BFP is currently projected to be similar to 1997, but the potential for larger increases is clear. Farmers received an average of about $14.35 per cwt of milk in 1997, down about $1.50 from a year earlier but up about $0.60 from the 1991-95 average. Growth in commercial use was trimmed by the high prices of much of 1996 and early 1997 (at retail) and could not absorb the recovery in milk production. Even so, 1997 provided evidence that long-run prices may now be trending slightly upward (at least in nominal terms), as supply shifts have apparently slowed and steady demand growth continues. Farm milk prices are projected to be about unchanged to slightly lower in 1998, assuming that the structure of Class I prices remains in place. Were it not for the large beginning stocks of skim solids, 1998 markets would be generally tight. The index of retail dairy prices edged lower, before an October jump in fluid prices pushed it up. Even so, the October index was still more than 2 percent below a year earlier. For the year, retail dairy prices will average about 2 percent higher than in 1996, compared with an increase of almost 7 percent in 1996. The farm-to-retail price spread has more than recovered, after being squeezed from the fourth quarter of 1995 through the third quarter of 1996. The spread is expected to rise an average of about 10 percent in 1997, even if there was little or no increase in the autumn spread. Retail dairy prices in 1998 are projected to be about the same as in 1997. Neither the farm price nor the farm-to-retail spread is expected to change much. However, the spread probably would be eroding faster if the price volatility of recent years had not made merchandisers reluctant to allow the spread to shrink. Product Output and Stocks Mixed Larger milk production and flat fluid product sales made more milk available for manufacturing in September-October. However, divergent price changes and marked differences in market factors led to much different patterns for various products. Increases from a year earlier in cheese output have been erratic, ranging from 6 percent in July to 1 percent in October. The value of milk used in cheese this year has been both above and below the value of milk for butter-powder, unlike the unbroken advantage held by cheese during the same part of 1996. Correspondingly, production of nonfat dry milk posted continuous increases in summer and early autumn. The proportional increases were very large during June-September. Butter production fell in August-October, despite strong prices. The lower fat content of this year's milk meant tighter supplies of milkfat than of skim solids. In addition, sales of cream-based products have been strong, limiting the cream available to churn. Lastly, midyear user stocks of milkfat for second-half use in foods apparently were much lower than last year, intensifying competition for available cream. Supplies of milk for manufacturing are expected to be about the same in 1998. Competition for milk may be brisk, as cheese plants attempt to pull milk away from butter-powder operations in order to meet growth in cheese demand. More augmentation of raw milk with nonfat dry milk is likely, at least during the first half of 1998. November 1 stocks of dairy products were generally comfortable, except for the heavy holdings of nonfat dry milk. On a milkfat basis, stocks were 5.0 billion pounds, milk equivalent, similar to most recent years in light of the improvements in coverage of the cold storage data. However the 6.3 billion pounds, milk equivalent, on a skim basis were somewhat larger than in most years. November 1 holdings of butter were slightly larger than a year earlier, but extra stocks were more than welcome in light of the tight late 1997 milkfat markets. Cheese stocks also were fairly comfortable, but somewhat mixed. Stocks of American cheese were slightly larger than in most recent years, while inventories of other varieties were the lowest since 1989 and the second smallest in almost two decades. Manufacturers' stocks of nonfat dry milk on November 1 were more than twice those of a year earlier and clearly excessive in light of soft commercial use and a constrained DEIP. Reportedly, significant quantities of these stocks were older product that may have to be discounted to sell. Despite fairly aggressive DEIP contracting since midyear, powder stocks probably will stay large well into 1998. Moderate Growth in Use To Continue Led by cheese, commercial use of dairy products in September-October jumped 4 percent from a year earlier on a milkfat basis. The rise on a skim solids basis was smaller but still substantial. Retail dairy prices were below a year earlier and economic growth continues to boost consumer incomes. Sales probably posted substantial increases through the end of 1997. Neither the 8-percent surge in September-October cheese sales nor the lack of significant growth during much of spring and summer represented the probable state of cheese demand in 1997. In 1996, pipeline stocks probably swelled greatly in late spring and summer and were then pulled down late in the year, inflating and later reducing apparent use. This year, pipeline holdings probably were held fairly moderate, possibly growing slightly in late summer- early autumn. In general, cheese use expansion appears to have been substantial but unremarkable. Among other products, commercial use of butter fell about 4 percent in September-October. High, volatile butter prices during the last year have eroded sales. Fluid product sales have held near a year earlier throughout 1997. September-October disappearance of nonfat dry milk was close to the weak levels of a year earlier. Use of powder in cheese production was not profitable and sales to other food processors may have slipped. Commercial use in 1998 is expected to grow 1 to 2 percent on a skim solids basis. Retail prices should be favorable and economic growth is expected to continue. Expansion in milkfat sales probably will be less than 1 percent, even though milkfat demand is expected to be fairly strong. Flat milk output will limit the amount of milkfat available and higher cream prices no longer provide much stimulus for expanded milk production. DEIP Contracts Forge On Modest tightness in international dairy markets, renewed purchases by Mexico and Algeria, and a domestic surplus of dry milk led to continued brisk export contracts under DEIP. Since the start of October, contracts covering more than 23,000 metric tons of nonfat dry milk have been accepted, along with about 5,000 tons of butter and butteroil and small amounts of dry whole milk and cheese. Much of this product will be shipped during 1998, as some of the recent contracts have delivery periods extending until next spring. By early December, more than three-fourths of the nonfat dry milk allocations for the July 1997-June 1998 year had been used. The allocation for the Americas was the only one to have substantial amounts remaining. Activity under DEIP may have to be suspended next spring because the WTO limits have been reached. The limits are less likely to be important for the other products because activity has been more moderate and supply commitments for milkfat may be somewhat difficult to obtain. Exports under DEIP in 1997 are expected to total more than 3 billion pounds, milk equivalent, on a skim solids basis and more than 1 billion pounds on a milkfat basis. The sharp jump from 1996 resulted mostly from greater availability of domestic supplies, although a more active international market contributed. In 1998, DEIP shipments probably will be somewhat smaller because of the WTO limits. Imports in 1997 have run below a year earlier because of smaller cheese imports. The European Union (EU) reduced or eliminated export subsidies on a number of cheeses shipped to the United States. In addition, lower U. S. cheese prices reduced the incentive to import. Imports in 1998 are expected to remain moderate because of relatively stable conditions in international and EU domestic markets. Late 1997 international dairy markets were dominated by reduced EU supplies for subsidized export, concern about the effects of El Nio on Oceanic output during the first half of 1998, and uneven import demand. New offerings out of the EU have been relatively restrained because of good domestic demand, seasonal factors, and previous export commitments. Milk production during the first part of the Southern Hemisphere season reportedly was relatively strong. However, both Australia and New Zealand have been cautious about export commitments because of the possibility of drought later in their season. Butter prices have risen steadily since midyear. With supplies a little tight, increased demand, particularly from Russia, generated a price increase of about $500 per metric ton. However, prices are likely to decline in early 1998 as seasonal forces wane, at least in the absence of severe weather impacts. For 1998, butter prices are projected to average about the same or slightly lower than in 1997. Prices of nonfat dry milk generally trended downward during 1997, with only minor seasonal strengthening recently. Although Mexico and Algeria have recently purchased powder, their imports have been somewhat restrained. Recent financial problems in a number of Asian countries have raised fears that import demand there might soften. Prices in 1998 are expected to run near recent levels but would average somewhat lower than in 1997. Turkey Production Forecast Lowered Supplies of turkey meat for the fourth quarter of 1997 will be slightly smaller than a year ago due to substantially lower production in November. Per capita supplies of turkey meat will also be slightly lower than a year ago. Stocks of whole birds were 7 percent higher and total turkey stocks were 12 percent higher than a year ago as of October 31. Fourth-quarter and annual production are forecast slightly below 1996. Fourth-quarter wholesale prices for whole hen turkeys did not show much seasonal strength this year and are expected to average below a year ago and below the third-quarter average. Higher stocks of turkey meat in the third quarter and increasing pork production appear to have pressured both turkey and ham wholesale prices in the second half of 1997. The lower prices indicate that the improved returns that were expected to lead to increased production in 1998 did not occur. Net returns were estimated to be slightly positive in November but negative for all other months of the year. This development and the 2 percent lower poult placements that have been reported for September and October indicate that turkey production in 1998 will not increase as strongly as expected. If poult placements are stronger in the first half of 1998, production could increase 2 percent. Broiler Prices Lower Wholesale prices for broilers have decreased as production increases have accelerated in the fourth quarter. The fourth quarter is also typically the weakest demand quarter for broiler meat as consumers concentrate on holiday meats such as turkey and ham. November whole bird prices averaged nearly 10 cents per pound lower than a year ago and that price relationship is continuing in early December. These substantially lower prices are pressuring net returns for broiler producers as returns are averaging about 3 cents per pound lower. Net returns for the fourth quarter will average about 2 cents per pound, the lowest since early in 1996. Low prices and net returns have reduced the incentives for the industry to increase production in 1998. About a 6-percent increase in production is projected for 1998 as many of the hatchery supply flock placements have already been made and the birds will probably be used. A slowdown in the expansion of the hatchery supply flock may have been indicated by the 1-percent increase in pullet hatch for the hatchery supply flock during September. The necessary hatchery supply flock numbers appear to be in place if broiler producers want to increase production more strongly in 1998. Broiler-type hatching egg production was 9 percent above a year ago in October, while the hatchery flock size was also 9 percent larger on November 1. Egg Production Increasing Egg production is slightly higher than a year ago as the table egg production flock is about 1 percent larger and productivity is moving above a year ago. Supplies of eggs for the fourth quarter are about 1 percent higher than last year with per capita supplies slightly above a year ago. Egg prices during December are expected to average about 5 cents per dozen below both December of last year and November 1997. Net returns to egg producer-marketers were nearly 30 cents per dozen in November. The returns were slightly below last year, but sufficient to encourage increases in flock size and egg production in 1998. Table egg production is expected to increase about 2 percent in 1998 compared to a nearly 1-percent increase in 1997. Asian Problems Cloud Broiler Exports Prospects The current economic instability in Southeast Asia and higher U.S. pork production are the two largest areas of uncertainty in the 1998 forecast. The unknown is how much the problems in Thailand, Indonesia, Korea, and other countries will affect the Chinese and Japanese markets and how much they will erode demand for U.S. broiler products. While the impact on broiler products may be less than for higher value products like beef or pork, any long term economic downturn would adversely affect most U.S. exports. The forecast large increase in domestic pork production for 1998 is expected to put downward pressure on broiler product prices in many export markets. Larger production of pork trimmings is expected to especially affect those markets importing low valued ground or mechanically deboned broiler meat for sausage production. Due to continued strong exports to Russia, the Baltic countries, South Africa and others, U.S. broiler exports for 1997 are now estimated at 4,683 million pounds, a 5.9 percent increase from the previous year. Exports in 1998 are projected at 4,850 million pounds. Continued export growth is expected to Russia and the FSU countries along with South Africa, Mexico, and Canada, but the growth in shipments to these countries is expected to be at a lower rate than in previous years. Other Poultry Meat Exports Rise Sharply Strong growth in shipments of other chicken and turkey to Hong Kong, South Africa, and other countries has been the driving force behind higher exports in 1997. Exports of other chicken in 1997 are projected to reach 398 million pounds (up 50 percent) and turkey exports are expected to total 599 million pounds (up 37 percent). The increase in other chicken exports and the large shipments of lower valued turkey products showed how strong a market there was in many parts of the world for low cost poultry protein. The 1998 forecast for other chicken exports is 430 million pounds, while turkey exports are forecast at 650 million pounds. The slower growth in exports projected for 1998 is the result of economic problems in a number of Asian countries and strong competition from comparable broiler and pork products. Egg Exports Down Sharply Due mostly to strong competition from China in the Hong Kong market, shell egg exports have fallen in 1997 and total shell and egg product exports in 1997 are estimated at 219 million dozen, down 14 percent. However, with lower domestic egg prices predicted for 1998, the export forecast is 235 million dozen, up 7 percent. This anticipates some rebound in shipments to Hong Kong and moderate growth in most of the other major markets. Rising Pork Production Dampens Prices Pork production likely rose about 6 percent from a year earlier in fourth-quarter 1997 due to a 5-percent increase in hog slaughter and heavier weights. The larger production and reduced export prospects dropped the quarterly average hog price to around $45 per cwt, about $10 lower than a year ago. Although production costs are below last year, the sharp price reduction puts producers' returns near break-even for the quarter, compared to about a $4 margin over cash costs a year ago. With pork production expected to increase about 7 percent above a year ago in first-quarter 1998, hog prices are likely to average in the low- to mid-$40's per cwt. The Hogs and Pigs report to be released on December 29 will provide additional information about prospective pork production in 1998. Pork exports are below earlier expectations due to weakening economic conditions in Asia, particularly the important export markets of Japan and Korea, and strong competition in those markets from Canada. The strength of the dollar against the yen and won are partially offsetting the sharp reduction in U.S. pork prices. The economic problems are expected to continue in 1998, dampening U.S. pork export prospects. Composite retail pork prices in November continued to drop as they have since reaching a record high $2.36 per pound in August. Although retail prices declined, the farm-retail spread continues to be near record wide as the farm value has dropped more than retail prices. Retail prices are expected to decline further in the coming months as the farm-retail spread narrows. With expectations of plentiful supplies of pork and competing meats through at least next year, pork features should increase and bring lower retail prices. Heifer Slaughter Continues Large Total female slaughter, heifers and cows, during 1997 has been the largest since the sharpest break in cattle numbers in history, the mid-1970's. Although cow slaughter is down from the very large 1996 levels, heifer slaughter has remained at nearly unprecedented levels. The large slaughter has occurred although the 1997 cattle inventory was only 101.2 million head, down sharply from the record 132 million head in 1975. Commercial cow slaughter, while down about 12 percent from a year earlier, remains among the largest since the mid-1980s, but still 3 to 5 million head below the record highs of the mid-1970's. Similarly beef cow slaughter, while down 14 percent from 1996, is the largest since the mid-1980's. Steer slaughter is already the lowest since 1993, as feeder cattle supplies decline. Heifer slaughter has been extremely large as replacement heifers were sold, swelling feedlot inventories. Heifer slaughter was record large in the second quarter and near record levels in the other three quarters. Total 1997 heifer slaughter will be around the 11.5 million head recorded in 1977 and 1978, and only slightly below the 1976 record of 12.16 million head. Heifer slaughter will remain relatively large in first-quarter 1998 as large numbers of heifers already in feedlots are marketed. This sharp increase in female slaughter will cause the break in cattle numbers to accelerate over the next several years. This scenario will begin to come into better focus in late January when the Cattle report is released, showing inventory numbers as of January 1, 1998. Feeder cattle supplies are already declining and feedlot placements are moving down. Although on-feed inventories are large, reduced placements and large fed cattle marketings through late winter will lead to falling inventories and higher fed cattle prices beginning this spring and continuing through much of 2000. As U.S. and international beef end users begin to realize they will have to compete for reduced fed beef supplies, they will begin to build up stocks even as supplies remain relatively adequate. Fed beef supplies beyond mid-1998 will be further reduced as larger numbers of heifers from the already declining 1997 calf crop are retained for the breeding herd. Hay and forage supplies to get through the winter of 1997-98 remain of great concern to most producers. This year's all hay crop was estimated to be nearly 2 percent larger than a year earlier due to the other hay production estimate being up nearly 6 percent, but the other hay estimate was lowered by 2 million tons in October and carryover hay stocks from last year were pulled down this past summer due to drought in many areas. Hay prices remain at record highs in November and $4 to $11 a ton above a year earlier. Hay stocks remain very tight. The early blizzard that went through much of the central plains in late October, increased concern of possible weather extremes this winter. Tight hay stocks and reduced financial bases on many farms and ranches after the poor returns of the last couple of years may well have led to additional female slaughter and more heifers placed on feed. While stocker-feeder cattle prices have strengthened this year, large discounts continue for heifers, strongly suggesting little interest in heifer retention. This scenario will change dramatically over the next couple of years. Premium quality heifers, particularly of the better grading breeds, will become extremely sought after, at rapidly rising prices. Improved forage supplies in 1998 will only add to price strength. Stocker operators will largely reach the stage of the cycle where they have to raise rather than purchase their own stocker cattle for growout, which will strengthen prices for female stock. Principal Contributors - (202) 694-5180 Leland Southard, (Coordinator), Milton Madison (Poultry), David Harvey (Poultry Trade), Ron Gustafson, (Cattle), Shayle Shagam (Beef Trade), Mildred Haley (Pork Trade), Jim Miller (Dairy), Laverne Williams (Statistics) U.S. dairy situation at a glance Unit 1994 1995 1996 Milk production: Production (20 States) Mil. lb. 129819 131780 131422 Milk cow (20 States) Thou. 7853 7862 7807 Milk per cow (20 States) Lb. 16531 16762 16833 Production (U.S. est.) Mil. lb. 153664 155424 154331 Milk prices: All milk Dol./cwt 12.97 12.74 14.88 Milk eligible for fluid use Dol./cwt 13.03 12.78 14.95 Manufacturing grade milk Dol./cwt 11.83 11.78 13.38 Minnesota-Wisconsin (3.5% fat) Dol./cwt 12.00 11.83 13.39 Slaughter Cow, Wisc: Dol./cwt 44.92 38.11 33.00 Wholesale prices: Grade A butter Ct/lb 67.37 75.59 100.35 American cheese, WI assembly pt. 40-pound blocks Ct/lb 131.45 132.77 149.14 Barrels Ct/lb NA NA 141.72 Nonfat dry milk, Central States Ct/lb 107.93 108.58 122.16 Retail prices (BLS): Consumer Price Index 1982-84=100 148.2 152.4 156.9 All food 1982-84=100 144.3 148.4 153.3 Dairy products 1982-84=100 131.7 132.8 142.1 Fluid milk and cream 1982-84=100 132.2 132.3 142.4 Manufactured products 1982-84=100 131.9 134.0 142.4 Dairy product output: Butter Mil. lb 1296 1264 1174 American cheese Mil. lb 2974 3131 3281 Other-than-American cheese Mil. lb 3760 3786 3937 Frozen products 1/ Mil. gal. 1243 1230 1241 All products (milkfat basis 2/) Mil. lb 95061 95633 95013 Nonfat dry milk Mil. lb 1231 1233 1062 Beginning stocks: Commercial butter Mil. lb 15 12 16 Commercial American cheese Mil. lb 357 309 307 Other cheese Mil. lb 107 127 105 Manufacturers' nonfat dry milk Mil. lb 80 103 71 All commercial (milkfat basis) Mil. lb 4550 4263 4099 All commercial (skim solids basis) Mil. lb 5656 5712 5037 All Government (milkfat basis) Mil. lb 5020 1497 69 All Government (skim solids basis) Mil. lb 161 341 172 Commercial disappearance: Butter Mil. lb 1097 1186 1180 American cheese Mil. lb 3031 3149 3230 Other-than-American cheese Mil. lb 4055 4126 4243 Nonfat dry milk Mil. lb 918 923 1009 All products (milkfat basis 2/) Mil. lb 150327 154843 155056 USDA net removals: Butter Mil. lb 204 78 0 Cheese Mil. lb 7 6 5 Nonfat dry milk Mil. lb 290 344 57 All products (milkfat basis 2/) Mil. lb 4804 2106 87 All products (skim solids basis 2/) Mil. lb 3724 4374 747 Imports (milkfat basis 2/) Mil. lb 2880 2936 2911 International market prices: Butter $/metric ton 1403.63 2250.54 1836.59 Nonfat dry milk $/metric ton 1660.22 2143.32 1979.36 1/ Hard ice cream, ice milk, and sherber 2/ Milk equivalent. NA = Not Available. Aug-96 Sep-96 Oct-96 Nov-96 Milk production: Production (22 States) 10786 10459 10831 10499 Milk cow (22 States) 7802 7795 7788 7775 Milk per cow (22 States) 1382 1342 1391 1350 Production (U.S. est.) 0 12239 12725 12325 Milk prices: All milk 15.90 16.50 16.40 15.20 Milk eligible for fluid use 16.00 16.60 16.40 15.30 Manufacturing grade milk 14.60 15.30 14.60 12.40 Minnesota-Wisconsin (3.5% fat) 14.94 15.37 14.13 11.61 Slaughter Cow, Wisc: 34.50 32.81 32.25 29.81 Wholesale prices: Grade A butter 145.50 145.50 128.64 74.12 American cheese, WI assembly pt. 40-pound blocks 167.56 173.90 162.26 133.93 Barrels 160.50 168.09 148.18 121.55 Nonfat dry milk, Central States 130.91 131.90 131.55 126.59 Retail prices (BLS): Consumer Price Index 157.3 157.8 158.3 158.6 All food 153.7 154.6 155.4 155.9 Dairy products 144.6 146.7 149.3 149.3 Fluid milk and cream 144.4 145.6 149.0 150.5 Manufactured products 145.5 148.5 150.2 148.8 Dairy product output: Butter 73 81 97 95 American cheese 262 254 266 262 Other-than-American cheese 327 330 346 333 Frozen products 1/ 119 101 93 77 All products (milkfat basis 2/) 7669 7440 7746 7371 Nonfat dry milk 61 56 66 77 Beginning stocks: Commercial butter 31 26 21 20 Commercial American cheese 398 381 372 379 Other cheese 139 126 123 115 Manufacturers' nonfat dry milk 77 66 50 47 All commercial (milkfat basis) 5543 5183 4936 4890 All commercial (skim solids basis) 6371 5940 5618 5535 All Government (milkfat basis) 21 24 17 11 All Government (skim solids basis) 9 11 10 9 Commercial disappearance: Butter 78 87 97 98 American cheese 282 266 263 275 Other-than-American cheese 370 363 387 373 Nonfat dry milk 69 71 66 70 All products (milkfat basis 2/) 13152 12654 12948 12737 USDA net removals: Butter 0 0 0 0 Cheese 0 0 0 0 Nonfat dry milk 4 1 3 5 All products (milkfat basis 2/) 7 4 4 5 All products (skim solids basis 2/) 53 18 40 63 Imports (milkfat basis 2/) 298 295 308 334 International market prices: Butter 1744 1713 1550 1545 Nonfat dry milk 1863 1850 1918 1930 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Dec-96 Jan-97 Feb-97 Mar-97 Milk production: Production (22 States) 11013 11163 10309 11611 Milk cow (22 States) 7765 7757 7743 7736 Milk per cow (22 States) 1418 1439 1331 1501 Production (U.S. est.) 12916 13138 12128 13655 Milk prices: All milk 14.30 13.40 13.50 13.50 Milk eligible for fluid use 14.40 13.40 13.50 13.60 Manufacturing grade milk 11.80 12.10 12.40 12.40 Minnesota-Wisconsin (3.5% fat) 11.34 11.94 12.46 12.49 Slaughter Cow, Wisc: 29.63 32.80 35.06 38.94 Wholesale prices: Grade A butter 71.85 81.89 98.38 106.25 American cheese, WI assembly pt. 40-pound blocks 125.98 127.90 132.25 133.95 Barrels 115.63 123.66 127.54 126.52 Nonfat dry milk, Central States 120.55 113.94 114.91 115.78 Retail prices (BLS): Consumer Price Index 158.6 159.1 159.6 160.0 All food 156.3 156.5 156.5 156.6 Dairy products 148.6 147.8 146.2 146.1 Fluid milk and cream 149.9 148.9 146.1 145.8 Manufactured products 147.9 147.4 147.0 147.0 Dairy product output: Butter 111 124 108 104 American cheese 280 279 267 285 Other-than-American cheese 344 317 308 353 Frozen products 1/ 78 85 90 108 All products (milkfat basis 2/) 7960 8099 7706 8342 Nonfat dry milk 102 97 92 109 Beginning stocks: Commercial butter 17 13 21 24 Commercial American cheese 370 380 381 378 Other cheese 111 107 117 115 Manufacturers' nonfat dry milk 49 71 75 72 All commercial (milkfat basis) 4684 4704 4975 4970 All commercial (skim solids basis) 5395 5753 5929 5815 All Government (milkfat basis) 9 10 8 13 All Government (skim solids basis) 9 7 8 8 Commercial disappearance: Butter 115 117 105 101 American cheese 274 278 271 273 Other-than-American cheese 385 322 327 368 Nonfat dry milk 74 85 81 82 All products (milkfat basis 2/) 13123 12893 12159 13461 USDA net removals: Butter 0 1 1 1 Cheese 0 1 1 1 Nonfat dry milk 6 9 14 17 All products (milkfat basis 2/) 10 29 37 33 All products (skim solids basis 2/) 75 117 185 213 Imports (milkfat basis 2/) 363 172 171 229 International market prices: Butter 1676 1643 1775 1725 Nonfat dry milk 1963 1897 1888 1824 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Apr-97 May-97 Jun-97 Jul-97 Milk production: Production (22 States) 11452 11847 11410 11443 Milk cow (22 States) 7731 7733 7738 7747 Milk per cow (22 States) 1481 1532 1475 1477 Production (U.S. est.) 13416 13874 13357 13355 Milk prices: All milk 13.40 13.00 12.40 12.20 Milk eligible for fluid use 13.40 13.10 12.40 12.30 Manufacturing grade milk 11.70 10.90 10.70 10.80 Minnesota-Wisconsin (3.5% fat) 11.44 10.70 10.74 10.86 Slaughter Cow, Wisc: 40.03 40.50 39.25 40.35 Wholesale prices: Grade A butter 95.58 86.11 105.50 102.71 American cheese, WI assembly pt. 40-pound blocks 125.61 116.48 117.89 123.32 Barrels 121.30 114.33 112.55 113.32 Nonfat dry milk, Central States 114.40 109.83 107.88 107.65 Retail prices (BLS): Consumer Price Index 160.2 160.1 160.3 160.5 All food 156.6 156.6 156.6 157.0 Dairy products 145.7 145.4 144.1 143.3 Fluid milk and cream 144.7 144.9 143.6 142.0 Manufactured products 147.2 146.6 145.2 145.4 Dairy product output: Butter 117 103 82 82 American cheese 279 295 286 284 Other-than-American cheese 323 346 341 331 Frozen products 1/ 110 117 126 127 All products (milkfat basis 2/) 8493 8664 8310 8298 Nonfat dry milk 127 133 120 112 Beginning stocks: Commercial butter 26 42 62 59 Commercial American cheese 392 430 445 463 Other cheese 125 127 139 140 Manufacturers' nonfat dry milk 81 121 151 173 All commercial (milkfat basis) 5243 5962 6650 6779 All commercial (skim solids basis) 6180 7037 7687 8146 All Government (milkfat basis) 17 43 54 21 All Government (skim solids basis) 12 13 12 8 Commercial disappearance: Butter 99 81 80 74 American cheese 242 281 269 278 Other-than-American cheese 339 354 361 359 Nonfat dry milk 67 82 66 102 All products (milkfat basis 2/) 12708 13173 13181 13231 USDA net removals: Butter 2 3 5 5 Cheese 1 1 2 2 Nonfat dry milk 20 22 33 23 All products (milkfat basis 2/) 55 91 139 134 All products (skim solids basis 2/) 240 271 408 289 Imports (milkfat basis 2/) 179 196 205 206 International market prices: Butter 1665 1725 1718 1715 Nonfat dry milk 1740 1725 1711 1649 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Aug-97 Sep-97 Oct-97 Nov-97 Milk production: Production (22 States) 11227 10686 10986 10638 Milk cow (22 States) 7744 7736 7731 7724 Milk per cow (22 States) 1450 1381 1421 1377 Production (U.S. est.) 13098 12462 12840 12427 Milk prices: All milk 12.70 13.20 14.00 14.30 Milk eligible for fluid use 12.70 13.20 14.00 14.40 Manufacturing grade milk 11.90 12.70 13.20 13.30 Minnesota-Wisconsin (3.5% fat) 12.07 12.79 12.83 12.96 Slaughter Cow, Wisc: 37.00 36.25 35.40 33.06 Wholesale prices: Grade A butter 102.50 101.58 135.29 148.75 American cheese, WI assembly pt. 40-pound blocks 137.64 141.40 142.40 143.83 Barrels 129.40 133.62 136.33 134.94 Nonfat dry milk, Central States 107.18 107.11 106.91 107.13 Retail prices (BLS): Consumer Price Index 160.8 161.2 161.6 161.5 All food 157.6 157.9 158.2 158.5 Dairy products 143.4 143.5 145.7 147.0 Fluid milk and cream 141.7 141.4 145.3 147.0 Manufactured products 145.8 146.4 146.8 147.6 Dairy product output: Butter 70 80 84 NA American cheese 259 261 261 NA Other-than-American cheese 342 345 358 NA Frozen products 1/ 113 100 98 NA All products (milkfat basis 2/) 7692 7687 7656 NA Nonfat dry milk 91 77 73 NA Beginning stocks: Commercial butter 62 48 43 26 Commercial American cheese 469 459 421 399 Other cheese 136 123 110 89 Manufacturers' nonfat dry milk 161 156 134 115 All commercial (milkfat basis) 6858 6361 5799 5049 All commercial (skim solids basis) 8004 7720 6948 6291 All Government (milkfat basis) 31 32 19 16 All Government (skim solids basis) 55 84 99 171 Commercial disappearance: Butter 80 79 NA NA American cheese 271 300 NA NA Other-than-American cheese 379 384 NA NA Nonfat dry milk 61 65 NA NA All products (milkfat basis 2/) 13583 13009 NA NA USDA net removals: Butter 5 5 5 7 Cheese 1 0 1 1 Nonfat dry milk 35 35 25 31 All products (milkfat basis 2/) 122 129 141 176 All products (skim solids basis 2/) 425 417 319 376 Imports (milkfat basis 2/) 228 228 NA NA International market prices: Butter 1844 2008 2165 2194 Nonfat dry milk 1620 1694 1728 1743 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Dairy products: Per capita consumption, United States, 1975-97 1/ Evaporated and Cheese condensed milk ---------------------------- ----------------------- Fluid American Other Cottage Bulk Year milk Canned, Bulk, and and Butter whole whole canned, cream 2/ skim Pounds 1975 261 4.7 8.4 6.1 4.7 3.9 1.4 3.6 1976 260 4.3 9 6.7 4.7 3.7 1.3 3.6 1977 258 4.3 9.3 6.8 4.7 3.2 1.1 3.9 1978 254 4.4 9.6 7.4 4.7 3.1 1 3.5 1979 251 4.5 9.6 7.6 4.5 3 1.1 3.3 1980 246 4.5 9.6 7.9 4.5 2.8 1 3.3 1981 242 4.2 10.2 8 4.3 2.9 1.2 3.2 1982 236 4.4 11.3 8.6 4.2 2.7 1.3 3 1983 236 4.9 11.6 8.9 4.1 2.7 1.1 3.2 1984 238 4.9 11.9 9.6 4.1 2.4 1.3 3.7 1985 241 4.9 12.2 10.4 4.1 2.2 1.4 3.8 1986 240 4.6 12.1 11 4.1 2.2 1.4 4.3 1987 239 4.7 12.4 11.7 3.9 2.2 1.5 4.2 1988 235 4.5 11.5 12.2 3.9 2.1 1.4 4.2 1989 236 4.4 11 12.8 3.6 2 1.1 4.7 1990 234 4.4 11.1 13.5 3.4 2.2 1 4.8 1991 233 4.4 11.1 13.9 3.3 2.1 1.1 5 1992 231 4.4 11.3 14.7 3.1 2.1 1.1 5.2 1993 226 4.7 11.4 14.8 2.9 1.9 1.1 5.2 1994 226 4.8 11.5 15.3 2.8 1.8 0.8 5.5 1995 223 4.5 11.8 15.4 2.7 1.5 0.8 4.5 1996 5/ 224 4.3 12 15.7 2.6 1.5 0.8 4.1 1997 6/ 222 4.1 12.2 16.1 2.6 1.6 0.8 4.2 ----------------------------------- ---------------------------------- Other frozen Dry Dry Ice Ice Sherbet dairy whole Nonfat butter Dry cream milk products milk dry milk milk whey 4/ Pounds 1975 18.5 7.7 1.5 1 0.1 3.3 0.2 2.2 1976 17.9 7.3 1.5 0.8 0.2 3.5 0.2 2.4 1977 17.5 7.7 1.5 0.7 0.2 3.3 0.3 2.4 1978 17.4 7.7 1.4 0.8 0.3 3.1 0.2 2.4 1979 17.1 7.3 1.3 0.6 0.3 3.3 0.2 2.7 1980 17.5 7.1 1.3 0.3 0.3 3 0.2 2.7 1981 17.4 7 1.3 0.6 0.4 2.1 0.2 2.7 1982 17.6 6.6 1.3 0.6 0.4 2.1 0.2 2.9 1983 18.1 6.9 1.3 0.6 0.4 2.2 0.2 3.1 1984 18.2 7 1.3 0.6 0.4 2.5 0.2 3.2 1985 18.1 6.9 1.3 1.3 0.4 2.3 0.2 3.5 1986 18.4 7.2 1.3 0.9 0.5 2.4 0.2 3.7 1987 18.4 7.4 1.3 1 0.5 2.5 0.2 3.6 1988 17.3 8 1.3 1 0.6 2.6 0.2 3.5 1989 16.1 8.4 1.3 2.8 0.5 2.1 0.2 3.5 1990 15.8 7.7 1.2 3.6 0.6 2.9 0.2 3.7 1991 16.3 7.4 1.1 4.3 0.4 2.6 0.2 3.6 1992 16.3 7.1 1.2 4.4 0.5 2.8 0.2 3.8 1993 16.1 6.9 1.3 5 0.4 2.5 0.2 3.8 1994 16.1 7.6 1.4 4.9 0.4 3.5 0.2 3.6 1995 15.7 7.5 1.3 4.9 0.4 3.5 0.2 3.4 1996 5/ 15.9 7.6 1.3 3.9 0.4 3.8 0.2 3.5 1997 6/ 15.9 7.3 1.3 3 0.4 3.4 0.2 3.5 1/ Domestic disappearance divided by total population including military overseas (resident population for fluid products). 2/ Product weight of beverage milks, fluid creams, egg nog, and yogurt sold or consumed on farms. 3/ Includes mellorine. May not be comparable across time. 4/ Includes modified whey products. 5/ Preliminary. 6/ Projected. Milk production and factors affecting supply, 1975-97 January 1 inventory Milk production Milk cows and Replacement Replacement Average Per cow heifers that heifers 500 per 100 cow cows Year have calved lbs. and over on farms -------------------Thousand-------------- Thousand Pounds Million pounds 1975 11220 4087 36.4 11139 10360 115398 1976 11071 3956 35.7 11032 10894 120180 1977 10998 3887 35.3 10945 11206 122654 1978 10896 3886 35.7 10803 11243 121461 1979 10790 3932 36.4 10734 11492 123350 1980 10758 4159 38.6 10799 11891 128406 1981 10849 4342 40 10898 12183 132770 1982 10986 4547 41.4 11011 12306 135505 1983 11047 4545 41.1 11059 12622 139588 1984 11059 4533 41 10793 12541 135351 1985 10777 4770 44.3 10981 13024 143012 1986 11116 4709 42.4 10773 13285 143124 1987 10466 4305 41.1 10327 13819 142709 1988 10311 4122 40 10224 14185 145034 1989 10137 4117 40.6 10046 14323 143893 1990 10015 4171 41.6 9993 14782 147721 1991 9965 4093 41.1 9826 15031 147697 1992 9728 4131 42.5 9688 15570 150847 1993 9658 4176 43.2 9589 15704 150582 1994 9528 4144 43.5 9500 16175 153664 1995 9487 4141 43.6 9458 16433 155425 1996 1/ 9416 4104 43.6 9351 16498 154268 1997 1/ 9281 4037 43.5 9250 16960 156850 Average milk prices received by farmers per cwt All Eligible Manufacturing for fluid grade Year market ------------------Dollars---------------- 1975 8.75 9.02 7.63 1976 9.66 9.93 8.56 1977 9.72 9.96 8.7 1978 10.6 10.8 9.65 1979 12.02 12.2 11.06 1980 13.05 13.23 12.01 1981 13.77 13.95 12.72 1982 13.61 13.8 12.6 1983 13.58 13.75 12.61 1984 13.46 13.61 12.49 1985 12.76 12.9 11.72 1986 12.51 12.62 11.46 1987 12.54 12.66 11.37 1988 12.26 12.36 11.15 1989 13.56 13.66 12.38 1990 13.74 13.89 12.34 1991 12.27 12.3 11.05 1992 13.15 13.19 11.91 1993 12.84 12.88 11.8 1994 13.01 13.02 11.85 1995 12.78 12.8 11.79 1996 1/ 14.74 14.8 13.4 1997 1/ 13.35 13.35 12.1 Dairy ration Milk cow cost Milk/feed Price Milk re- value price received quired to Year per cwt ratio 2/ per head buy a cow Dollars Pounds Dollars Cwt 1975 6.25 1.4 412 47 1976 6.3 1.53 477 49 1977 6.2 1.57 504 52 1978 6.08 1.74 675 64 1979 6.68 1.8 1040 87 1980 7.42 1.76 1190 91 1981 8.02 1.72 1200 87 1982 7.45 1.83 1110 82 1983 7.88 1.72 1030 76 1984 8.16 1.65 895 66 1985 7.35 1.73 860 67 1986 7 1.79 820 66 1987 6.81 1.84 920 73 1988 7.74 1.58 990 81 1989 8.2 1.65 1030 76 1990 7.98 1.71 1160 84 1991 7.73 1.58 1100 90 1992 7.68 1.69 1130 86 1993 7.73 1.64 1160 90 1994 7.98 1.62 1170 90 1995 7.88 1.63 1130 88 1996 1/ 9.3 1.58 1087 74 1997 1/ 8.65 1.55 1100 82 1/ Preliminary or projected. 2/ Pounds of average concentrate ration equal in value to 1 pound of milk. 3/ Utility grade, Omaha 1965-87, Wisconsin auctions 1988 and after. NA = Not Available Grain and other concentrates fed to milk cows Alfalfa hay prices Slaughter Total Per Per cwt received cow prices 3/ cow of milk by farmers per cwt Year produced per ton Dollars Thousand Pounds Pounds tons 1975 24274 4357 42.1 54.38 21.09 1976 25083 4545 41.7 60.81 25.31 1977 25518 4709 42.1 60.57 25.32 1978 26018 4803 42.8 52.25 36.79 1979 27207 5070 44.1 60.37 50.1 1980 28433 5260 44.2 72 45.73 1981 28513 5220 42.9 70.9 41.93 1982 29661 5380 43.7 72.73 39.96 1983 30162 5438 43.2 78.7 39.35 1984 28449 5253 42 79.48 39.81 1985 28891 5427 41.8 73.67 38.31 1986 29913 5534 41.8 64.85 37.18 1987 29607 5736 41.6 65.97 44.8 1988 29853 5820 41.2 82.51 47.91 1989 29602 5845 41 95.98 50.11 1990 32402 6397 43.7 92.56 53.32 1991 30934 6192 41.7 78.96 51.5 1992 31572 6417 41.6 75.45 49.69 1993 31952 6664 42.4 86.67 50.14 1994 32469 6840 42.3 93.97 45.03 1995 31997 6771 41.2 88.09 38.12 1996 1/ 31665 6777 41.1 94.12 32.91 1997 1/ 1/ Preliminary or projected. 2/ Pounds of average concentrate ration equal in value to 1 pound of milk. 3/ Utility grade, Omaha 1965-87, Wisconsin auctions 1988 and after. NA = Not Available. Commercial disappearance: Milkfat and skim solids, 1980-97 --------------------------------------------------------------- Jan Feb Mar Apr May Jun --------------------------------------------------------------- Million lbs. Milkfat 1980 356 353 388 336 341 341 1981 349 314 371 347 370 354 1982 1/ 357 338 375 NA NA NA 1983 347 319 375 359 380 363 1984 361 347 387 414 387 383 1985 368 345 391 383 493 282 1986 381 330 434 384 413 397 1987 383 380 424 407 422 399 1988 391 372 419 405 412 419 1989 389 360 438 398 389 394 1990 388 371 431 423 427 422 1991 378 369 439 395 421 411 1992 389 402 443 428 433 434 1993 416 391 446 449 431 418 1994 426 415 483 455 443 450 1995 460 449 493 466 484 463 1996 473 459 488 489 492 463 1997 485 454 498 464 474 466 --------------------------------------------------------------- Jul Aug Sep Oct Nov Dec Total --------------------------------------------------------------- Million lbs. Milkfat 1980 348 370 365 374 381 380 4333 1981 356 373 384 362 396 383 4359 1982 1/ NA NA NA NA NA NA 4445 1983 363 366 388 394 400 403 4457 1984 404 386 454 408 405 400 4736 1985 396 419 410 428 424 432 4771 1986 409 414 414 433 435 427 4871 1987 420 426 398 427 431 422 4939 1988 421 413 430 441 446 435 5004 1989 413 428 427 443 451 442 4972 1990 419 422 425 446 438 432 5043 1991 423 452 429 470 442 438 5068 1992 425 437 438 459 450 460 5197 1993 441 449 461 472 468 462 5304 1994 462 480 460 481 466 473 5492 1995 455 466 464 485 487 486 5703 1996 459 468 460 483 480 495 5844 1997 464 480 467 ------------------------------------------------------ Jan Feb Mar Apr May Jun ------------------------------------------------------ Skim solids 1980 848 817 900 833 836 809 1981 858 773 880 826 876 815 1982 1/ 867 798 867 NA NA NA 1983 849 756 876 862 901 850 1984 877 846 905 897 898 873 1985 879 825 906 893 944 887 1986 941 823 972 905 972 909 1987 928 876 980 941 999 962 1988 981 925 1023 971 1022 1023 1989 1006 950 1106 1058 1107 1064 1990 1030 970 1104 1088 1125 1058 1991 1009 970 1074 1048 1125 1067 1992 1064 1034 1134 1099 1123 1084 1993 1066 990 1091 1110 1104 1022 1994 1071 1016 1155 1076 1117 1085 1995 1092 1031 1130 1080 1169 1117 1996 1089 1060 1143 1125 1187 1119 1997 1124 1054 1149 1080 1138 1094 1998 1999 --------------------------------------------------------------- Jul Aug Sep Oct Nov Dec Total --------------------------------------------------------------- Skim solids 1980 801 862 875 893 872 838 10184 1981 856 854 883 872 878 858 10229 1982 1/ NA NA NA NA NA NA 10290 1983 827 846 897 910 879 875 10328 1984 887 908 917 922 910 886 10726 1985 916 938 927 972 945 934 10966 1986 935 954 946 1008 962 930 11257 1987 989 988 955 1015 975 961 11569 1988 1029 1043 1035 1043 1037 1040 12172 1989 1038 1033 1040 1067 1011 1029 12509 1990 1049 1047 1012 1053 1014 1005 12284 1991 1067 1056 1039 1106 1042 1036 12382 1992 1040 1058 1062 1088 1056 1067 12652 1993 1099 1054 1074 1124 1030 1049 12531 1994 1103 1133 1090 1103 1081 1089 12820 1995 1104 1131 1104 1109 1132 1090 13471 1996 1116 1128 1094 1132 1108 1108 13362 1997 1139 1119 1112 1998 1999 -- -- 1/ After March, only quarterly data available. Milkfat: Q2=1,098, Q3=1,116 Q4=1,116 Skim solids: Q2=2,536, Q3=2,536, Q4=2,624. NA=not available. U.S. milk production and related data Unit 1995 1996 Milk cows Thou. 9458 9351 Milk per cow Lb. 16433 16505 Milk production Mil. lb. 155425 154331 Concentrate ration Dol./cwt. 7.88 9.3 Milk-feed price ratio 1.63 1.6 1995 --------- Unit 4th Milk cows Thou. 9428 Milk per cow Lb. 4003 Milk production Mil. lb. 37740 Concentrate ration Dol./cwt. 8.24 Milk-feed price ratio 1.67 --------- 1996 ----------------------------------- Unit 1st 2nd 3rd 4th Milk cows Thou. 9397 9369 9338 9300 Milk per cow Lb. 4156 4231 4035 4083 Milk production Mil. lb. 39053 39638 37674 37966 Concentrate ration Dol./cwt. 8.83 9.51 9.7 9.16 Milk-feed price ratio 1.58 1.51 1.64 1.67 ----------------------------------- 1997 -------------------------- 1st 2nd 3rd Milk cows Thou. 9267 9254 9247 Milk per cow Lb. 4200 4393 4216 Milk production Mil. lb. 38892 40648 38989 Concentrate ration Dol./cwt. 8.79 8.76 8.62 Milk-feed price ratio Dol./cwt. 1.53 1.48 1.47 PRODUCTION INDICATORS Nov-96 Sep-97 Oct-97 Nov-97 Cattle: On feed - 7 States, 1,000+ Hd 8,534 7,850 8,558 9,390 Net placements 1,887 2,236 2,357 NA Marketings 1,418 1,528 1,525 NA Broilers: Eggs in incubators(000) /1 527,789 590,336 566,473 550,530 Chicks hatched (000)/2 631,142 683,249 683,061 650,000 Hatching egg layers/1 48,394 52,583 52,498 52,598 Pullets placed (000) 6,508 6,502 6,254 NA Hvy-type hen slaughter 3,856 5,384 5,672 5,000 Turkeys: Eggs in incubators(000) /1 31,668 30,883 31,878 30,964 Poults placed (000) 23,830 23,907 24,587 23,259 Eggs: Table egg prod. (mil. doz.)/2 456 446 468 460 Table egg layers, (000)/1 248,972 245,255 249,672 251,084 Table eggs/100 layers/1 72.2 72.2 71.7 72.6 Chicks hatched (000) 31,437 35,794 35,175 30,000 Lt.-type hen slaughter 5,871 7,093 8,654 6,500 ESTIMATED RETURNS Dec-96 Oct-97 Nov-97 Dec-97 /* Great Plains cattle feedlot Breakeven price /3 66.97 69.65 69.06 69.12 Selling price 66.30 66.93 67.66 65.85 Net margin -0.67 -2.72 -1.40 -3.27 N. Central hog farrow to finish Breakeven price /3 49.77 45.52 44.81 43.41 Selling price 54.83 46.62 44.54 41.25 Net margin 5.06 1.10 -0.27 -2.16 Broiler Wholesale cost 52.61 52.85 52.93 51.57 Wholesale price 63.50 55.39 54.62 52.00 Net margin 10.89 2.54 1.69 0.43 Turkey Wholesale cost 71.72 67.77 68.35 68.50 Wholesale price 66.38 65.29 68.64 63.00 Net margin -5.34 -2.48 0.29 -5.50 Egg Wholesale cost 71.16 71.81 70.45 71.16 Wholesale price 106.38 79.47 99.53 96.00 Net margin 35.22 7.66 29.08 24.84 /1 First of month. /2 Last month estimated. /3 Does not include capital replacement cost. /* estimate. LIVESTOCK PRICES Dec-96 Oct-97 Nov-97 Dec-97 /* Cattle prices $/cwt. Steers, Choice, 11-13 cwt. Texas Panhandle 66.30 66.93 67.66 65.85 Nebraska Direct 67.46 67.08 67.21 65.65 Cows - Sioux Falls Utility breaking 27.50 33.71 33.57 34.75 Utility boning 25.74 31.71 32.20 33.25 Feeder Cattle - Oklahoma City Steers: Med. #1 500-550 lb. 69.79 89.81 89.18 91.25 600-650 lb. 66.04 79.55 80.62 83.75 750-800 lb. 67.08 76.84 79.11 81.50 Heifers: Med. #1 450-500 lb. 58.67 77.55 78.24 80.00 700-750 lb. 61.21 71.49 73.12 75.00 Hog prices Barrows and gilts 6 Markets 55.31 46.17 46.17 41.00 Iowa/S. Minn No. 1-3 54.83 46.62 46.62 41.25 Sows 6 Markets 49.82 39.32 39.32 35.00 Feeder pigs - No. 1&2 So. Mo. 40-50 lb. (per hd.) NA NA NA NA Sheep & lamb prices San Angelo TX Slaughter lambs, Choice 88.88 82.75 80.33 85.00 Ewes, Good 46.31 45.44 49.67 47.00 Feeder lambs, Choice 106.25 96.31 94.00 101.00 GRAIN AND FEED PRICES Dec-96 Oct-97 Nov-97 Dec-97 /* $/bu Corn, #2 Yellow, Cen. Ill 2.62 2.66 2.70 2.62 Wheat, HRW Ord., K.C. 4.65 3.78 3.76 3.72 $/ton SBM, 48% Solvent, Decatur 250.64 229.28 245.34 235.00 Alfalfa Hay, U.S. Avg 102.00 109.00 108.00 108.00 Grass Hay, U.S. Avg 95.90 103.00 101.00 101.00 /* Estimates MEAT STATISTICS Jan. - Jan. - Dec-96 Dec-97 Oct-97 Nov-97 Dec-97 /* Commercial production Million pounds Beef 25,419 25,412 2,302 1,934 2,038 Veal 367 323 28 23 26 Pork 17,085 17,230 1,653 1,475 1,625 Lamb 264 256 22 20 22 Total red meat 43,135 43,221 4,005 3,452 3,711 Broilers 26,336 27,288 2,476 2,025 2,350 Other chicken 487 505 45 35 40 Turkeys 5,466 5,387 512 400 425 Total poultry 32,289 33,180 3,033 2,460 2,815 Total meat & poultry 75,424 76,401 7,038 5,912 6,526 Commercial slaughter Thousand head Cattle 36,583 36,390 3,228 2,770 2,915 Steers 17,824 17,542 1,456 1,263 1,320 Heifers 10,757 11,634 1,090 869 956 Beef Cows 4,165 3,577 352 333 321 Dairy Cows 3,109 2,989 278 252 268 Bulls and stags 728 697 64 53 50 Calves 1,768 1,565 141 122 139 Sheep 4,184 3,916 335 314 349 Hogs 92,394 91,814 8,780 7,748 8,460 Barrows & gilts 88,221 87,767 8,115 7,433 8,130 Sows 3,496 3,145 295 272 280 Broilers 7,546,250 7,701,871 695,290 565,000 650,000 Turkeys 293,291 284,923 27,391 20,500 22,500 Dec-96 Sep-97 Oct-97 Nov-97 Dec-97 /* F.I. dressed weight Pounds Cattle 685 723 721 706 708 Calves 207 204 205 191 190 Sheep 65 65 66 66 66 Hogs 189 187 189 192 191 Beginning cold storage stocks Million pounds Beef 288.0 324.7 349.0 351.7 NA Pork 316.4 371.7 347.4 361.4 NA Bellies 30.9 18.3 11.2 14.4 NA Hams 48.7 113.5 101.3 88.7 NA Total chicken 574.4 566.9 558.0 583.0 NA Turkey 347.8 742.0 771.5 737.5 NA Frozen eggs 10.4 11.1 10.9 11.0 NA /* Estimates WHOLESALE PRICES Dec-96 Oct-97 Nov-97 Dec-97 /* Beef, Central U.S. $/cwt Boxed beef cutout Choice 1-3 550-700# 108.03 103.72 104.63 102.60 Choice 1-3 700-850# 106.55 102.86 103.74 101.45 Select 1-3 700-850# 94.81 93.27 94.66 93.45 Cutter Cow 52.54 59.76 59.67 58.25 Bnls beef, 90% fresh 81.81 80.69 83.00 84.50 Imported Bnls beef, 90% frz 83.81 85.20 86.00 86.00 Hide & offal value 9.57 8.80 8.78 8.60 Vealers, Choice, 150-250# 152.13 177.75 167.45 163.00 Pork, Central U.S. Pork Cutout, #2 74.51 66.12 65.49 60.50 Loins, 14-18 lb. 120.45 99.68 85.99 81.25 Bellies, 12-14 lb. 70.07 57.97 54.50 53.15 Hams, 20-26 lb. 65.90 59.89 65.64 61.50 Trimmings, 72% fresh 63.75 55.78 50.78 48.25 Lamb, East Coast 55 lb. down, Choice 168.97 166.65 168.25 168.00 55-65 lb., Choice 168.97 166.25 166.25 166.00 Broilers 12 City Avg. 63.50 55.39 54.62 52.00 Georgia dock 64.29 58.23 56.70 55.00 Northeast Breast, boneless 156.40 170.12 155.32 143.00 Breast, Ribs on 75.58 76.85 77.30 69.00 Legs, whole 57.28 45.92 47.04 46.00 Leg quarters 37.74 30.26 31.33 29.00 Turkey Eastern Region Toms, 14-22 lb. 63.36 64.31 69.15 63.00 Hens, 8-16 lb. 70.05 67.33 70.07 61.00 Drumsticks 35.30 34.15 30.54 25.00 Wings, full cut 46.00 41.42 41.48 36.00 Eggs, grd A, lg, doz 12 City Metro 106.38 79.47 99.53 96.00 New York 100.90 77.04 97.44 93.00 /* Estimate RETAIL PRICES & SPREADS Nov-96 Sep-97 Oct-97 Nov-97 Retail prices Cents/lb. Beef - Choice 285.9 283.0 279.0 278.0 Beef - All Fresh 251.2 254.3 253.2 250.2 Ground Beef 140.3 142.0 140.6 140.9 Rib roast 522.2 531.3 523.2 519.0 T-bone steak 574.3 603.5 591.5 589.1 Pork 231.6 234.7 234.9 231.3 Bacon 265.6 275.0 273.0 266.5 Chops 342.1 352.5 348.7 347.7 Picnic 131.4 127.2 127.4 127.8 Chicken - Composite 151.5 152.7 148.8 151.7 Whole, fresh 100.3 99.2 98.4 101.8 Breast - bone in 204.9 209.4 198.2 203.5 Leg quarter 123.5 122.7 123.6 124.6 Turkey; whole frozen 98.1 108.9 106.2 97.6 Eggs, Grade A, Large 113.9 100.9 101.8 109.0 Price indexes 1982-84=100 CPI - All 158.6 161.2 161.6 161.5 All food 155.9 157.9 158.2 158.5 All meat 144.6 145.6 145.2 144.6 Beef & veal 137.3 137.2 137.1 137.0 Pork 156.0 158.9 157.4 155.5 Poultry 157.3 156.8 155.6 157.4 Dairy Products 149.3 143.5 145.7 147.0 Fluid milk & cream 150.5 141.4 145.3 147.0 Manufactured products 148.8 146.4 146.8 147.6 Price Spreads Cents/lb. Beef Farm to wholesale 28.9 21.6 20.5 20.7 Wholesale to retail 105.9 123.6 120.3 117.8 Farmers share (%) 53.0 49.0 50.0 50.0 Pork Farm to wholesale 37.1 39.1 37.3 38.0 Wholesale to retail 107.7 117.3 124.4 123.4 Farmers share (%) 37.0 33.0 31.0 30.0 Poultry and eggs Wholesale to retail Broilers 84.6 93.4 92.3 95.6 Retail to consumer Turkey 18.0 34.3 31.9 20.0 Eggs 12.4 16.9 23.3 10.5 U.S. LIVESTOCK & MEAT IMPORTS & EXPORTS Aug-97 Sep-97 Jan - Jan - Sep-96 Sep-97 Beef & Veal Imports Carcass wt.,thousand lb. Australia 70,247 63,361 404,087 508,178 New Zealand 44,385 27,339 429,911 496,997 Canada 54,741 59,755 430,526 512,168 Brazil 7,425 6,621 65,648 72,362 Argentina 11,558 8,382 119,459 101,873 Central America 8,364 11,650 80,902 70,890 Other 4,211 5,090 57,918 65,133 Total 200,930 182,197 1,588,450 1,827,600 Beef & Veal Exports Japan 93,797 94,633 806,548 784,385 Canada 27,703 21,781 222,514 213,433 Mexico 29,393 30,499 118,829 214,480 Korea, Rep. 28,472 25,413 152,151 198,196 Caribbean 811 790 8,625 9,081 Other 22,301 23,202 124,329 148,189 Total 202,476 196,318 1,432,995 1,567,764 Cattle Imports Mexico 23,149 26,681 234,110 364,251 Canada 99,663 145,505 1,230,189 1,054,258 Over 700 lbs. 91,782 126,593 1,124,007 925,703 500-700 lbs. 3,635 9,197 59,830 83,222 Total 122,823 172,186 1,464,340 1,418,527 Cattle Exports Mexico 25,874 22,130 76,123 170,761 Canada 3,224 3,244 26,270 27,494 Total 29,330 25,828 119,459 202,465 Lamb Imports Australia 1,860 2,075 19,059 24,450 New Zealand 1,899 1,536 19,129 20,955 Total 3,784 3,670 38,493 46,099 Mutton Imports 1,293 1,080 16,448 17,730 ------------------------------------------------------------------------ Customs Service YTD imports under WTO 12/15/96 12/07/97 % Chg Canada 479,255 541,491 12.9% TRQ Countries 854,018 938,332 9.8% Australia 386,077 434,405 12.5% New Zealand 351,805 398,218 13.2% ------------------------------------------------------------------------ Aug-97 Sep-97 Jan - Jan - Sep-96 Sep-97 Pork Imports Carcass wt., thousand lb. Canada 37,201 39,660 316,296 317,042 Denmark 9,021 9,764 94,196 95,275 Poland 740 1,050 7,563 9,901 Hungary 805 543 6,637 6,782 Netherlands 84 977 6,993 5,663 Other 2,281 3,288 21,884 29,812 Total 50,131 55,281 453,569 464,475 Pork Exports Japan 44,292 36,101 401,733 340,745 Canada 9,020 10,070 71,523 89,792 Mexico 6,983 7,761 35,559 55,269 Caribbean 920 1,107 7,344 8,191 Other 32,374 32,999 198,507 239,624 Total 93,589 88,038 714,667 733,621 Hog Imports Head Canada 227,802 248,186 2,024,491 2,247,107 Under 110 lb 71,152 87,849 584,885 740,694 Total 227,802 248,186 2,024,655 2,248,275 Hog Exports Total 1,777 3,313 43,451 35,906 Broiler Exports RTC, thousand lb. Japan 19,241 15,583 186,917 147,133 Mexico 21,800 21,638 158,345 181,314 Hong Kong 74,098 74,611 740,453 643,595 Singapore 3,185 3,685 38,504 26,292 Canada 11,782 11,031 55,080 89,561 Former USSR 176,683 159,068 1,321,729 1,505,405 Total 432,935 391,484 3,253,127 3,410,931 Turkey Exports Mexico 16,459 17,376 106,344 133,799 S. Korea 2,423 2,668 17,643 20,042 Hong Kong 11,249 14,818 17,707 94,626 Total 48,927 64,878 312,775 438,629 Shell thousand dz. Egg Exports 7,780 9,459 84,235 70,495 Annual Forecasts 1995 1996 1997 1998 Economic Indicators /1 Real GDP, Billions 6,743 6,928 7,166 7,343 CPI-U, Annual % Ch 2.7 3.2 2.0 2.6 Unemployment rate, 5.6 5.4 5.0 4.9 3-Month T Bill,% 5.5 5.0 5.1 5.2 10-Year Bond,% 6.6 6.4 6.4 6.2 Production, million lb. Beef 25,115 25,419 25,388 24,900 Pork 17,811 17,085 17,204 18,500 Broilers 25,021 26,336 27,336 29,000 Turkeys 5,129 5,466 5,450 5,575 Total Red Meat & 74,070 75,303 76,331 78,832 Eggs, mil doz. 5,269 5,393 5,431 5,525 Milk 155,425 154,331 156,887 157,100 Commercial use 154,857 15,063 156,990 158,300 Net removals (m 2,102 86 1,069 900 Per capita consumption, Retail Beef 67.5 67.7 66.6 66.2 Pork 52.5 49.1 48.6 51.7 Broilers 68.8 70.8 72.8 76.5 Turkeys 17.9 18.5 17.8 18.0 Total Red Meat & 210.3 209.2 208.3 214.7 Eggs, number 236 237 239 240 Market Prices Choice steers, Ne 66.24 65.21 64-6 70-75 Feeder steers,Ok 68.03 61.08 74-7 77-83 Bng Ut Cows,S. Fa 35.58 30.33 33-3 40-43 Barrows & gilts,I 42.35 53.39 50-5 43-45 Broilers, 12 City 56.38 61.24 57-6 55-59 Turkeys, Eastern, 66.35 66.50 63-6 61-65 Eggs, New York, c 72.85 88.18 79-8 72-78 Milk, all at plan 12.74 14.74 12.9-13.7 12.7-13.5 Milk, M-W, $/cwt. 11.83 13.39 11.6-12.4 11.6-12.4 U.S. Trade, million lb. Beef & veal expor 1,821 1,877 2,088 2,035 Beef & veal impor 2,103 2,073 2,360 2,680 Pork exports 771 951 1,033 1,100 Pork imports 664 618 627 615 Broiler exports 3,894 4,420 4,683 4,850 Turkey exports 348 438 599 650 /1 Macroeconomic forecasts: Survey of Professional Forecasters, Philadelphia Federal Reserve, November 1997. Quarterly 1996/98 Forecasts QI'96 QII'96 QIII'96 QIV'96 Economic Indicators /1 Real GDP, Bil. '87$ 6,814 6,885 6,930 7,009 CPI-U, Ann. % Chang 2.8 3.8 2.3 3.2 Unemployment rate, 5.6 5.4 5.2 5.3 3-Month T Bill,% 5.0 5.0 5.1 5.0 10-Year Bond,% 5.9 6.7 6.8 6.3 Production, million Beef 6,303 6,642 6,390 6,084 Pork 4,389 4,104 4,143 4,449 Broilers 6,610 6,571 6,628 6,527 Turkeys 1,270 1,378 1,415 1,403 Total Meat 18,847 18,931 18,807 18,717 Eggs, mil doz. 1,330 1,320 1,352 1,392 Milk (mf basis) 39,053 39,638 37,674 37,966 Commercial use 37,671 39,833 38,749 38,810 Net removals 19 29 19 19 Consumption, Retail Beef 17.0 17.5 17.0 16.2 Pork 12.6 11.6 12.0 12.9 Broilers 17.6 18.0 18.1 17.1 Turkeys 3.7 3.9 4.6 6.2 Total Meat 51.8 51.9 52.5 53.0 Eggs, number 58.8 58.0 59.1 61.2 Market Prices Ch. steers,Nebr. 63.06 60.26 67.13 70.39 Fdr steer,Ok Cty 58.11 56.87 63.20 66.15 Brk Cows,S. Falls 32.52 30.37 31.74 26.68 Bar/gilt, Ia/Mn. 46.23 54.82 57.75 54.75 Broiler,12 City 56.22 61.07 64.22 63.46 Turkeys, Eastern 64.80 65.40 64.90 70.90 Eggs, New York 89.60 80.50 85.90 96.70 Milk, all at plant 13.83 14.27 15.80 15.07 Milk, M-W 12.67 13.59 14.93 12.36 U.S. Trade, million Beef/veal exports 452 544 436 445 Beef/veal imports 508 526 555 484 Pork exports 221 313 180 237 Pork imports 144 155 154 165 Broiler exports 1,075 1,057 1,121 1,167 Turkey exports 96 93 124 125 /1 Macroeconomic forecast source: Survey of Professional Forecasters, Philadelphia Federal Reserve, November 1997. QI'97 QII'97 QIII'97 QIV'97 Economic Indicators /1 Real GDP, Bil. '87$ 7,089 7,140 7,222 7,269 CPI-U, Ann. % Chang 2.4 1.1 2.0 2.5 Unemployment rate, 5.3 4.9 4.9 4.8 3-Month T Bill,% 5.1 5.1 5.1 5.1 10-Year Bond,% 6.6 6.7 6.2 6.0 Production, million Beef 6,112 6,419 6,607 6,250 Pork 4,194 4,091 4,194 4,725 Broilers 6,628 6,948 6,861 6,900 Turkeys 1,235 1,404 1,411 1,400 Total Meat 18,426 19,100 19,290 19,514 Eggs, mil doz. 1,344 1,336 1,351 1,400 Milk (mf basis) 38,922 40,648 38,917 38,400 Commercial use 38,517 39,064 39,809 39,600 Net removals 99 285 385 300 Consumption, Retail Beef 16.2 17.1 17.0 16.3 Pork 11.8 11.6 12.0 13.2 Broilers 17.6 18.8 18.6 17.8 Turkeys 3.5 4.0 4.2 6.1 Total Meat 49.7 52.2 52.4 54.0 Eggs, number 58.8 59.0 59.4 61.4 Market Prices Ch. steers,Nebr. 66.40 66.63 65.65 65-70 Fdr steer,Ok Cty 69.42 75.88 80.44 76-83 Brk Cows,S. Falls 32.02 37.05 35.70 31-34 Bar/gilt, Ia/Mn. 51.06 56.41 54.45 44-47 Broiler,12 City 60.00 59.10 62.00 52-57 Turkeys, Eastern 58.90 66.10 68.20 65-70 Eggs, New York 84.90 72.10 79.70 85-92 Milk, all at plant 13.47 12.70 12.93 13.8-14.8 Milk, M-W 12.30 11.91 10.96 12.4-13.4 U.S. Trade, million Beef/veal exports 455 513 600 520 Beef/veal imports 536 716 576 532 Pork exports 192 271 270 300 Pork imports 158 150 157 162 Broiler exports 1,090 1,098 1,223 1,272 Turkey exports 128 149 162 160 /1 Macroeconomic forecast source: Survey of Professional Forecasters, Philadelphia Federal Reserve, November 1997 QI'98 QII'98 Economic Indicators /1 Real GDP, Bil. '87$ 7,314 7,358 CPI-U, Ann. % Chang 2.5 2.6 Unemployment rate, 4.8 4.9 3-Month T Bill,% 5.3 5.3 10-Year Bond,% 6.8 6.3 Production, million Beef 6,250 6,200 Pork 4,500 4,500 Broilers 7,050 7,350 Turkeys 1,250 1,425 Total Meat 19,283 19,684 Eggs, mil doz. 1,350 1,350 Milk (mf basis) 39,200 40,800 Commercial use 38,800 39,700 Net removals 300 300 Consumption, Retail Beef 16.9 16.8 Pork 12.7 12.5 Broilers 18.7 19.8 Turkeys 3.7 3.9 Total Meat 52.7 53.7 Eggs, number 58.5 58.6 Market Prices Ch. steers,Nebr. 67-69 69-75 Fdr steer,Ok Cty 78-82 78-84 Brk Cows,S. Falls 36-38 42-46 Bar/gilt, Ia/Mn. 42-44 43-47 Broiler,12 City 54-56 56-60 Turkeys, Eastern 58-60 59-63 Eggs, New York 74-77 68-72 Milk, all at plant 13.1-13.7 11.9-12.7 Milk, M-W 11.6-12.1 10.7-11.5 U.S. Trade, million Beef/veal exports 460 530 Beef/veal imports 680 725 Pork exports 240 270 Pork imports 150 150 Broiler exports 1,125 1,125 Turkey exports 150 168 /1 Macroeconomic forecast source: Survey of Professional Forecasters, Philadelphia Federal Reserve, November 1997. END_OF_FILE