Livestock Monitor – 2/14/2025

DAIRY MARKETS SHUFFLE INTO NEW YEAR ON SOLID GROUND

Milk production in 2024 declined by a fraction of a percent from the prior year, which was a big reason milk prices were able to bounce back last year (up +10%) after falling -20% in 2023. Meanwhile, feed costs were coming down in 2024 as farmgate alfalfa hay prices averaged $185 per ton compared to $246 per ton in 2023. Corn prices in 2024 averaged $5.95 per bushel at the farm in 2023 followed by a drop to $4.27 per bushel, according to the USDA-National Agriculture Statistical Service (NASS) in 2024.

USDA-NASS estimated the January 1 dairy cow inventory at 9.349 million cows, up 2,500 cows from a year earlier. Dairy heifers weighing more than 500 pounds for milk cow replacement on January 1 were 3.914 million head, down 37,000 head from a year earlier. There was momentum to expand the milk cow herd as 2024 ended (the October-December dairy herd was up 10,000 head from the same three months in 2023 versus a 36,000 head decline during the summer months). That momentum is expected to be maintained during the first three months of this year.

Milk production for the year is forecast to be up +1.4% from last year. The larger supply matches up well with generally favorable consumer demand metrics at the current time, leading to a forecast for milk (all milk at the farm) in 2025 of $23.42 per cwt. This compares with $22.60 per cwt last year, $20.41 in 2023, and $24.23 in the last quarter of 2024.

The bright spot in the dairy markets over the last few months has been the cheese markets: to be exact, the Italian cheese markets. Production of Non-American-type cheeses (mostly mozzarella and pizza-type cheeses) increased 23 million pounds during the last quarter of 2024. Production of American-type cheeses, such as cheddars, during the same interval were down 37 million pounds from a year earlier. Exports of Non-American type cheeses in the last quarter of 2024 were up 23 million pounds, essentially accounting for all of the increase in the change in domestic production of this cheese production type. Cold storage inventories of Non-American type cheese at the end of 2024 were the lowest since the year-end inventories in 2019. This increase in demand helped to support Class III milk prices during the last quarter of 2024 by about $4 per cwt above the price from a year earlier and have been the biggest support factor for milk prices so far this year.

Class III milk prices in January moved up $2 per cwt from December based on the fundamental described above. Block cheddar prices moved up from $1.79 per lb. in December to $1.88 in January. Weekly trends in February show a mostly steady market. Milk production is slated to be unchanged from a year ago this quarter, which should lead to some tightness in the cheese market in March that would support another move upward in prices, possibly as much as $2-$3 higher.

RETAIL MEAT PRICES

In January, retail meat prices continued right where they left off at the end of 2024 with prices tracking above year-ago levels. The Choice retail beef price was $8.53 per pound in January, a record and up +5.5% from the prior year. January’s all-fresh retail beef price was up +4.3% to $8.15 per pound, which ranks within the top five highest monthly prices reported by USDA Economic Research Service (ERS). In January, ground beef was $5.82 per pound, up +6.3% from last year. Roasts rose +6.2% from last year to $7.72 per pound in January while steaks were up +2.8% to $11.97 per pound.

The retail pork price of $4.95 per pound in January was an increase of +3.3% from last year. In January, bacon was $7.04 per pound, up +6.5% from the previous year. Chops increased marginally (+0.3%) from last year to $4.25 per pound, while hams were even with last year at $4.41 per pound.

At the retail level, whole bird prices rose +3.7% from last year to $2.06 per pound while the composite broiler retail price increased fractionally (+0.1%) to $2.43 per pound. This marginal gain was due partly to lower year-over-year prices for legs and breast meat, which each fell -1.9% and -2.9%, respectively, to $1.79 and $3.97 per pound in January. Egg prices jumped in January to $4.95 per dozen, a record and nearly double last year’s price of $2.52 per dozen.

January’s retail milk price was $4.03 per gallon, up +1.7% from last year. American cheese was $5.06 per pound in January while cheddar cheese fell less than one percent (-0.5%) to $5.70 per pound. Ice cream reached a record of $6.46 per carton (+9.4%) in January.

2024 ANNUAL TRADE STATISTICS

Beef imports surged +24.4% to 4.6 billion pounds in 2024 in response to tighter domestic cattle supplies. Australia and Brazil led the increase, rising +67.1% and +60.6%, respectively, to 1.1 billion and 691 million pounds. Cattle imports also grew during the year +3.1% to over 2 million head. The increase was largely driven by Canada (+8.1% to 793,000 head) but even despite trade disruptions from New World Screwworm, Mexican cattle imports managed to inch up +0.2% to 1.2 million head. Tighter cattle supplies also weighed on beef exports, which declined -1.1% to 3 billion pounds. Among reductions were significant losses to South Korea, China, and Canada, each down about -6%. Cattle exports in total for the year rose +2% to 359,000 head.

Pork imports remained steady with 2023 at 1.1 billion pounds (+0.4%). In this, Canadian imports fell -5.4% to 708 million pounds, while increases out of Denmark and the Netherlands each added roughly +7 million pounds. Pork exports performed well in 2024, climbing +4.3% (+291 million pounds) to 7.1 billion pounds. The result was despite declines to major partners like Canada (-5%), China (-8.8%), and Japan (-2.2%). However, strong demand out of South Korea (+12%), Mexico (+3.7%), and the broader global market (+22.3%) rallied to offset losses. The hog trade in 2024 saw overall growth, with imports flat at 6.8 million head and exports up +32.6% to 90,000 head.

On the poultry side, imports of broilers increased +14.1% to 150 million pounds, where gains came out of Chile, up +21.9% year over year. Broiler exports did not fare as well during the year, falling -7.4% (356 million pounds) to 6.7 billion pounds. Losses were largely due to declines from China (-63.9%) and the overall global market (-8.6%).

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