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Current Situation and Analysis – 2/23/2024

DAIRY HERD INVENTORY FALLS

U.S. dairy herd numbers fell to 9.325 million head in January which is 76 thousand head lower than last year and the lowest figure since August of 2019.  U.S. milk cow numbers have been steadily moving lower since May of 2023. Totals for the 24 highest milk producing states also came in lower than a year ago and the lowest since May 2021. The 24-state total was 8.873 million head, 21 thousand head lower than the previous month and 49 thousand head smaller than a year ago.

State data shows that the milking herd from most states saw very little change from last year with one big exception.  New Mexico lost 42 thousand head in the last year, posting several months of declines. New Mexico’s cow herd is now 240 thousand head after decades of being larger than 300 thousand head. Only two other states netted changes of greater than 10 thousand head. Texas is down 15 thousand head from a year ago, and South Dakota is up 21 thousand head from 2022.

Milk per cow has also been suffering in the dairy industry.  The last two quarters of 2023 posted negative year-over-year figures down 0.32% and 0.07%, respectively. January is off to a similar start. U.S. milk per cow figures are down 7 pounds from a year ago or about 0.34%.  February 2024 is a leap year and milk production will have the benefit of one extra day, which should be enough to overcome losses in cows and a small slip in milk per cow. Still, the dairy industry appears to be trying to right-size as milk prices ended 2023 in the low $20s and exports took a step back.       

MEAT DEMAND

Retail meat demand for pork and beef faltered in 2023, with both indices slipping below 2022 levels. LMIC calculates a meat demand index based on the Consumer Price Index level of 2000. Retail pork demand had been gaining ground for several years after seeing a low point around 2012. Quarters show a similar story.  First quarter pork demand, in particular, has seen increases every year for the previous six, until 2023, which dropped 10 points. Third quarter saw a general rise since 2010 but peaked in 2020 at a level of 124 before dropping more than 20 points in 2021, and another 17 points in 2023. Fourth quarter pork demand has been generally increasing since 2011 and also has peaked recently for the reference time period, reaching 129 in 2021. In the last two years, it fell to 100 and 103 respectively.

Retail beef demand has had the best four years since 2000, and although 2023 showed a minor slip, it still was ahead of 2000-2019 index levels. First quarter beef demand showed the largest decline falling from a very high index level of 134 down to 123. However, 2023 was still the second highest index level back to 2000. Other quarters also saw declines, but many remained at a high level relative to history.

ANNUAL TRADE UPDATE

Trade statistics for December 2023 were recently released by USDA, which finalized annual data for 2023. Beef exports for 2023 totaled over 3.0 billion pounds (carcass weight), down 14% (507 million pounds) from the prior year and the lowest in three years. In 2023, beef exports were down to South Korea (-17%), Japan (-22%), China (-20%), and Canada (-2%), while Mexico posted an increase (+12%). Total beef imports for 2023 were just over 3.7 billion pounds, up 9.9% (337 million pounds) from a year earlier. Beef imports increased from Canada (+5%), Australia (+66%), and New Zealand (+33%), while decreases were seen from Mexico (-12%) and Brazil (-8%). Cattle imports in 2023 totaled nearly 2.0 million head, up 14% from the previous year and the highest in three years. Cattle imports from Mexico were over 1.2 million head, up 43% (375,854 head) from the prior year. Cattle imports from Canada declined 3% from 2022.

Pork exports totaled 6.8 billion pounds in 2023, up 7.5% (473 million pounds) from 2022 and the highest in two years. Higher pork exports were seen to Mexico (+10%), South Korea (+10%), and Canada (+8%), while exports were lower to Japan (-1%) and China (-18%). Pork imports declined 15% (201 million pounds) to 1.1 billion pounds, the lowest in three years. The lower pork imports were largely due to an 11% decline in imports from Canada which accounted for 65% of total U.S. pork imports in 2023. Total hog imports were over 6.7 million head, an increase of 261,676 head (4%) from 2022, and the highest since 2008 (9.3 million head). Of the total hog imports, hogs weighing less than 7kg (15 lbs.) accounted for the largest proportion (60%) at nearly 4.1 million head, an increase of 8% from 2022. Hogs weighing 7-23kg (15-50 lbs.) and 23-50kg (50-110 lbs.) each accounted for 10% and 4%, respectively, of total hog imports in 2023 and were both down 19% and 21% from 2022. The remaining 25% of total hog imports weighed over 50kg (110 lbs.), which totaled over 1.7 million head, an increase of 13% and the highest since 2008.

Lamb imports totaled nearly 240 million pounds in 2023, down 14% (38 million pounds) from the prior year and the lowest in three years. Lamb imports from Australia declined 14% to 179 million pounds and imports from New Zealand were down 10% to 59 million pounds. Broiler exports declined marginally (-0.3%) from the prior year to nearly 7.3 billion pounds as higher broiler exports to Mexico (+9%) nearly offset lower exports to Angola (-42%) and the Caribbean (-2%). Turkey exports increased 20% to 489 million pounds in 2023 due largely to a 16% rise in exports to Mexico to 332 million pounds.

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