Home / Markets / Markets Analysis / Beef market / U.S. livestock industry faces further downsizing, economist says

U.S. livestock industry faces further downsizing, economist says

Agriculture.com Staff 12/02/2009 @ 11:03am

CHICAGO, Illinois (Agriculture Online)--Higher production costs and weaker demand, leaving consumers to absorb passed-on costs, could force the livestock industry to further downsize in 2010, says one livestock economist.

John Lawrence, Iowa State University livestock economist, says the harsh reality of cost-of-production remains a hurdle for many producers.

Lawrence addressed a Midwest agricultural conference Tuesday at the Federal Reserve Bank in Chicago.

Specifically, the U.S. recession has cut into beef consumption, a trend that is expected to make a slow recovery, Lawrence says. "Tight supplies, but at times larger than the year before should support prices in 2010," he says. "I see herd liquidation continuing into 2012. This could create turbulent times for the feedlots."

Meanwhile, as hog breeding herds continue to slow, combined with an estimated 0.6% drop in 2010 production vs. a year ago, hog prices are seen going higher in 2010.

However, with $4.00 corn prices, the U.S. hog producer needs a $68.00 per hundredweight, on a carcass basis, to break even.

"Unfortunately, I see hog prices trading around the low $60.00 level in 2010," Lawrence says.

CHICAGO, Illinois (Agriculture Online)--Higher production costs and weaker demand, leaving consumers to absorb passed-on costs, could force the livestock industry to further downsize in 2010, says one livestock economist.

CancelPost Comment
MORE FROM AGRICULTURE.COM STAFF more +

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Big Picture: CME Trading Weather