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Cull cow prices at record high, says economistNebraska "This year, we've had some record high cow prices and we expect them to go even higher next year, said Jim Robb, director of the Livestock Marketing Information Center. During a recent Open House at the University of Nebraska-Lincoln Gudmundsen Sandhills Laboratory, Robb said the demand for hamburger has increased dramatically as the U.S. economy has slowed. This is an area where cow-calf producers need to focus some of their management attention. Even though cow slaughter in the U.S. has been very high, mostly in the southeastern states and California, beef imports from Australia, New Zealand and South America have declined dramatically. So the domestic supply of cow beef is very tight. "The U.S. cow herd is shrinking, the North American cow herd is shrinking, the South American cow herd is shrinking and the Australian cow herd is shrinking, so we're looking at tight supplies ahead," Robb said. He predicted a new all-time high fed cattle prices. By 2010 calf and yearling prices might be on the trail of higher prices, but with high corn prices, they'll be held down somewhat. Although the fed cattle market is supportive of yearling prices, it's been a volatile time that will probably continue for a while. The overall ag sector is more volatile because of the ethanol/energy interaction, international trade, both imports and exports, an overall weak U.S. economy in terms of consumer spending. The exchange rate helps determine how much beef we import and export. It has a major influence on the price of oil and the cost of production. Consumers look into the grocery meat cases and see chicken and pork as well as beef, Robb said. Historically, there's been major competition for consumer dollars there. But, the pork and chicken industries are beginning to adjust rather quickly to the higher grain prices by cutting their numbers. In addition, exports of chicken and pork have been very robust, decreasing their availability domestically. So in contrast to most years, there's less competition for consumers' dollars. While beef imports have decreased, exports are increasing. South Korea is buying U.S. beef again. "We're exporting about half what we sold there before BSE, but we're making progress," Robb said. Despite market volatility, Robb said that prospects for the next couple of years will be brighter than they are today. 9/8/08 Date: 9/3/08
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