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Uncertainty Drives US Livestock Markets

26 August 2009

US - According to a mid-year baseline report from the University of Missouri Food and Agricultural Policy Research Institute (FAPRI), uncertainty in the general economy continues to drive the outlook on agricultural markets.

The baseline shows recovery in 2010 for meat and dairy prices, but it depends on general economic recovery and continued reduction of supplies, says MeatInternational.

According to MeatInternational, the mid-August FAPRI baseline is a limited updating of the 10-year baseline released in March 2009 and since then, the agricultural commodities outlook has changed markedly.

A worldwide recession led to weak domestic and international demand for many U.S. agricultural products. That weak demand occurred at the same time the farm sector faced production costs exceeding historical averages.

Price recovery for meat and milk requires continued growth in consumer demand. In response to low prices, both sectors are reducing what was record production.

FAPRI livestock economists say that in the beef cattle sector, the outlook depends on where you are in the supply chain. Unlike hogs, where production is often coordinated, the cow-calf, backgrounding and feedlot operations remain separate, with feedlots bleeding red ink for a long time.

TheCattleSite News Desk

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