Drought and Grain Price Volatility Makes Livestock Expansion Tenuous
Cattle: Drought continues to motivate sales of feeder cattle and cows, which will likely reduce feedlot placement in 2012 and calf crops this year and in 2012. As a result of declining corn prices, cattle feeders have gained some relief from high feeding costs.
Pork/Hogs: The Quarterly Hogs and Pigs report indicated the highest ever litter rate of 10.03 for the March-May pig crop. Expectations for continued strong exports and only slightly higher second-half pork production will likely support hog prices and retail pork prices at least until the end of the year. May exports continued a string of double-digit increases over 2010, with China now routinely one of the top-10 destinations for U.S. pork products.
Poultry: The number of broiler chicks being placed for growout continues sharply lower than the previous year, but some of this decline in bird numbers is being offset by higher average weights when the birds are sent to slaughter. Broiler meat production over the first 5 months of 2011 is 4.8 percent higher than the previous year. However, in thirdquarter 2011, broiler meat production is expected to fall below year-earlier levels.
Turkey meat production over the first 5 months of 2011 is 5.4 percent higher than during the same period in 2010. Even with the higher production, cold storage holdings of whole turkeys are lower and prices for frozen whole turkeys in June were up considerably from the previous year.
Dairy: Milk production continues to rise despite high feed prices. Climbing domestic commercial use and exports act to keep milk and dairy product prices high. Cow numbers are forecast to fall slightly in 2012, but production is expected to continue to climb. Higher milk production will likely lead to lower milk and product prices in 2012.
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