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Protein markets well supported

Agriculture.com Staff 05/25/2007 @ 12:50pm

Over the past couple of years, prices in the protein markets (specifically hogs, cattle and milk) have all moved upward.

In hindsight, there are probably a number of variables that could have suggested this move, but the most likely cause in recent months is higher grain prices.

As the population continues to grow at approximately 1% both in the U.S. and the world, the continued need for increased food is being reflected by higher livestock and milk prices. More importantly, developing countries such as India and China continue to reflect strong economic growth, and in turn, the per capita consumption of protein foods continues to grow.

Although volatile, prices remain historically high. The meats have had no serious price setbacks the last two years. Milk prices have recently moved from near $12 per hundredweight to over $19, or a gain of nearly 60%. In general, cattle futures have moved from the mid $70s to the mid $90s over the last 2 to 4 years while hog prices have held well above the mid $30s with most months averaging in the $50 to $65 range.

Over the past decade, it appears consumers have decided that a balanced diet is healthier for them than to avoid meat. In addition to per capita consumption, an increase in disposable income, especially by Americans, has supported protein markets as well.

Cheese and cheese products have become a staple in many American diets. The recent surge in dairy prices has come, in part, from increased prices of non-fat dry milk and whey. These products, historically low valued, are now in numerous products and have become a more important pricing component for milk prices.

What does it all mean? It looks like the protein markets are well supported, and while setbacks will occur, limited supply and high input costs for feed will keep prices stable or improving.

If you have any questions or comments, please contact Top Farmer at 1-800-TOP-FARM, ext. 129.

Over the past couple of years, prices in the protein markets (specifically hogs, cattle and milk) have all moved upward.

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