Livestock Market Monitor

A Newsletter for Extension Staff
Livestock Marketing Information Center
State Extension Services in Cooperation with the USDA

Market Indicators . . .                                       February 21, 2020


Taking a broad view of the U.S. dairy sector exports and imports is useful. But there is much involved, and accounting for dairy products incorporated into many items is nearly impossible (butter in bakery products, cheese on frozen pizza, etc.). Seven categories were developed that are traded in bulk using the annual dollar value data compiled by USDA’s Foreign Agriculture Service. Those categories we aggregated to were: live dairy cattle; milk, cream, and powder; whey; natural milk products (which is yogurt), butter; cheese; and casein. We can sum across diverse categories using dollar values.

In terms of exports in 2019, all those categories, when added up, totaled $4.23 billion. That was above 2018’s (up by $314 million or 8.0%); still, it was below the record-high set in 2014 ($5.45 billion).

The biggest category of U.S. exports was milk, cream and powder at $1.92 billion, or about 45% of the overall value. Second was cheese ($1.55 billion).  Among the categories compiled, only two posted year-over-year increases in 2019 – milk, cream, and powder (rising 19.6%); and cheese (up 5.8%)

Turning to U.S. imports, the total value was $2.28 billion. By far, the largest category was cheese ($1.31 billion). In second was casein, which was followed by butter.

Netting-out exports versus imports in dollar terms showed two categories in 2019 were negative (imports were larger than exports), yogurt, and casein. Overall, the net value was positive in 2019 (exports exceeded imports in dollar terms), coming in at $1.95 billion. That made ten positive years in a row, and 12 increases out of the last 15 years.


Cattle feedlots provide efficiency for the entire beef sector, let alone a ready market for calves and yearlings. On a large commercial scale, those advantages have mostly been the bailiwick of North America, the U.S. and Canada, and more recently Mexico. There also have been modest but growing commercial feedlots in South America (mostly Brazil, Argentina, and Uruguay), and some former Soviet Republic countries. Since 2000, the most aggressive growth rate in commercial cattle feeding has occurred in Australia. Recently, the Australian feedlot headcount is about 5% of the U.S. number. Importantly, compared to the U.S., Australia exports a very high proportion of its beef production.

Australian feedlot capacity had been steadily increasing and accelerated during the recent drought years. As a percentage of beef production, the grain-fed beef from feedlots is forecast to continue setting new record levels. Feedlot inventories have been consistently reported quarterly by the Meat and Livestock Australia (MLA) since 1999. Three countries report regular on-feed statistics (U.S., Canada, and Australia).  Australia has the third-largest count but is closing in on Canada.

The long-term trends in Australia showed steady growth. Since December 2000, the annual growth rate was 4.7%. Late in a drought liquidation period and as recovery starts, it’s typical for Australian on-feed numbers to drop. For the first three quarters of 2019, the number of cattle on-feed was above 2018’s. After multiple years of severe drought, the count as of December 2019 had a year-over-year decline of 16.0%. Still, at 713,505 head the December 2019 inventory was the third-highest ever reported for that month. Note Australia also grain-finishes animals that are not in feedlots. Their estimates of “grainfed cattle turn-off” (sales) have increased to over 1 million head.

Increased cattle feeding has buffered beef production declines in Australia because grain feed animals have higher average carcass weights. Average Australian carcass weights declined in 2019, but without feedlots would have dropped even more.

Australia is more-and-more of a competitive concern in the high-quality grain-fed markets of Asia, and their focus on cattle feeding may grow. However, they have important constraints. Over the next couple of years, their feeders will be faced with compressed margins due to higher calf and yearling prices, especially if rainfall develops as expected during 2020. Bigger long-term issues may continue to be challenges compared to the U.S.; those are relatively expensive feedstuff costs due to the relatively small arable land base and a general lack of water availability.


Earlier this week, USDA announced its projections for the upcoming marketing year 2020/21 for corn and soybeans at the USDA Agricultural Outlook Forum.  USDA expects corn acres to increase about 5 million acres, up from 89 million acres last year to 94 million acres.  Soybean acres are expected to increase 9 million acres, rebounding from the 76 million acres in the prior year to 85 million acres.

One of the major concerns heading into planting season is if the soil, and infrastructure can handle this year’s snow melt.  From the Mississippi Delta through the upper Midwest and Missouri river basin hydrological conditions are currently showing heavy saturation levels. Additionally, unharvested acres in North Dakota and South Dakota could become problematic for spring planting.  Decent spring field work days will be required to get into those fields and prepare them for planting.  Crops with more flexible planting windows may be in favor. Anecdotally farmers in those states are uncertain about what this spring will bring and that has effected pre-buying of inputs.

There appears to be a mismatch between price on the futures market and the level of plantings USDA is suggesting.  Even though greater numbers of swine and poultry are expected in 2020, corn export demand has been dismal so far in the 2019/20 marketing year. The risk of recession and spread of corona virus all point to potentially shaky demand moving forward this year.  Already, the 2019/20 crop is approaching a 2 billion bushel carryout because of the lack of export demand.  That too could weigh on corn prices and will likely allow soybeans to bid acres away from corn.


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