New Video's 03/13/2014
Retail prices, exports support livestock markets
By Jennifer Carrico
Retail meat prices are currently keeping market prices for pork, beef and poultry at good levels, according to John Anderson, deputy chief economist for the American Farm Bureau Federation.
“With cost-cautious consumers, domestic demand is hard to assess. It’s not great, but it is supported by supplies,” said Anderson during the recent Iowa Farm Bureau Federation’s Economic Summit in Ames. “We have basically had flat production numbers since 2008.”
Anderson predicts that meat production numbers overall will be slightly higher in 2013 than they were in 2008.
Exports continue to be a bright spot for meat prices with pork and broiler prices having a constant support and beef getting an increase in exports as more free trade agreements are reached.
“Supplies have been constrained over the past few years, which supports better prices,” he said. “Right now, however, we are testing the limits for our consumers on prices. Consumers are looking at the lower valued cuts, which lowers the overall value of the carcass.”
Anderson said he doesn’t expect cattle prices to see as much of a seasonal low this year because of the lower supply numbers.
“The feeder cattle market continues to be strong. Given the losses we’ve seen in the feedlot sector in the past couple years, I’m surprised at how positive the market continues to stay,” he said.
The pork market continues to be near record levels as well, even with tight margins for cattle and hog feeders.
Anderson said the pork and poultry industries continue to have an increase in production, while the beef industry has a slight decline.
With higher beef prices, he said the beef industry will lose a little more of the domestic share and the USDA expect pork production to exceed beef production in the United States in 2013, which hasn’t happened since 1952.
“Beef production will continue to go down for a couple more years, since we have seen another 1 to 1.25 percent decrease in the cowherd as compared to a year ago,” he said.
With more cows being slaughtered, the supply may not show a large decrease initially, yet in the long term, supplies will decline even more.
Jennifer Carrico can be reached by phone at 515-833-2120, or by email at firstname.lastname@example.org.