As slowdown in the global economy eases, the pruchasing power of foreign buyers should recover and be supportive to meat exports With lower US dollar though imports such as oil cost more. The increase in dollar limited imports of feeder and slaughter animals from Canada. (currently US dollar about 16% lower than last year)
Pork production is up 1% or so this year as heavier hogs have compensated for larger decline in slaughter numbers. Slaughter is down
The international market drives the byproduct value. Last summer, high oil and feedstuff prices drove byproduct values to record highs, however as the economy collapsed so did the prices for those items. Byproduct values did improve this summer in response to tighter cattle supplies and gains in the domestic and global economies; however, those gains were short li Last year, as reported by USDA-AMS, the steer byproduct value skyrocketed to record highs reaching a near $12.00 per cwt. on a live steer basis in July 2008. Since then the byproduct value has generally declined, falling to a monthly low of $5.90 per cwt. in March of this year. During the second and third quarters, the byproduct value modestly strengthened averaging over $9.00 per cwt. in August and September. However, the byproduct value was still 22 percent or $2.00 to $3.00 per cwt. lower than the respective months last year. During the first nine months of 2009, the byproduct value averaged slightly over $7.19 per cwt., about $4.00 less than in 2008. In October, the byproduct value has continued to slip, falling to $8.00 per cwt. by mid-October vs. over $10.00 per cwt. for the corresponding week in 2008, with the monthly average estimated to be in the low $8.00 per cwt. range.ved as byproduct values have softened recently.
Supplies are at or near highs Price gains will be easier to achieve as supplies decrease
Spread will not widen to typical $10 - $12 range as the supply is too great. Slaughter weights typically decline through the end of the year and slaughter numbers also decline as the year progresses.
Brenda L. Boetel Extension Livestock Marketing Specialist University of Wisconsin-River Falls
Returns went negative in ‘08 and stayed negative for ‘09
Important to be a High Return Producer 2009 Cow-Calf Profits
Profitability Differences Years Top 1/3 Total Return $ per head Bottom 1/3 Total Return $ per head 1980-2000 $13.5 Bil $64 -$12.6 Bil -$55 2000-2007 $13.7 Bil $172 $4.3 Bil $54 2003-2007 $9.9 Bil $201 $4.1 Bil $82 1980-2007 $25.8 bil $92 -$8.5 Bil -$27
The five places Paterson believes are worthy to spend this year include:
1. Mineral supplementation, specifically phosphorus, copper, zinc and selenium, 2. Forage analysis 3. Preg testing 4. Implants/ionophores 5. Herd biosecurity
He concludes: It will be important for producers to balance rations, remember that health and nutrition go together, use straw in rations, price supplements based on both nutrient and non-nutrient costs, and know the weight of your cows