The USDA’s February 2025 WASDE report includes significant updates for the dairy, beef, and poultry industries, factoring in changes in milk pricing formulas, cattle imports from Mexico, and ongoing effects of Highly Pathogenic Avian Influenza (HPAI) on poultry production.
The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report, released on February 12, 2025, presents several key updates for livestock markets, with notable impacts on dairy and beef production, as well as ongoing effects from Highly Pathogenic Avian Influenza (HPAI) in the poultry sector.
The report, which provides critical projections for agricultural markets, includes the first adjustment for dairy product pricing under the new Federal Milk Marketing Order (FMMO) pricing formulas, which were recently amended. The changes will significantly affect milk and dairy product price forecasts moving forward into 2025.
Dairy Industry Impact:
For dairy, the WASDE report indicates that milk production is expected to decrease due to lower cow inventories, a result of tight supplies and decreased imports. USDA also lowered its forecast for domestic use of milk, projecting a reduction in demand due to these tighter supplies.
Exports of butter, nonfat dry milk (NDM), and whey have also been adjusted down, reflecting reduced global demand. On the other hand, cheese prices were increased following stronger pricing trends and limited inventory carryover from 2024. As a result, the USDA has lowered its 2025 all-milk price forecast to $22.60 per cwt, a decrease from January’s estimate of $23.05.
Beef Industry Outlook:
The report also highlights significant developments for the U.S. beef market, including the resumption of cattle imports from Mexico. Following USDA’s Animal and Plant Health Inspection Service (APHIS) announcement on February 1, 2025, cattle imports from Mexico will be allowed under new protocols aimed at mitigating the spread of the New World Screwworm.
In addition, the January Cattle report showed a larger-than-expected calf crop for 2024, which has led to higher projections for beef production in 2025. Beef exports were raised due to the increased production and strong global demand, while cattle prices are expected to rise by $5/cwt from January, reaching an estimated $201/cwt for the year.
Poultry Industry Adjustments:
The poultry sector continues to struggle with the impact of HPAI, which has led to significant culling in both broiler and turkey flocks. USDA has reduced its egg production forecast for 2025 due to HPAI-related culling through early February, though it expects the flock to rebuild in the second half of the year. Turkey production was also lowered due to the same issues.
Broiler prices for 2025 remain unchanged at $1.32 per pound, while turkey prices have been lowered to $0.99 per pound, reflecting weak demand and recent pricing trends. In contrast, egg prices are forecasted to rise dramatically in 2025, with a price of $4.44 per dozen, significantly higher than the January estimate of $2.94 per dozen.
As the USDA continues to monitor these industries closely, the full economic impact of HPAI and other factors will be updated throughout the year. This latest WASDE report signals ongoing challenges but also highlights areas where recovery and growth are anticipated in the coming months.
