Big in Ag 2013: Livestock
Taking on 2013, we saw a new disease hitting the U.S. hog industry, cattle prices jetting to record highs, and beta agonists being put in the spotlight after Zilmax-fed cattle were causing welfare problems.
The hog world was in an uproar when porcine epidemic diarrhea virus (PEDV) was identified in a 2400-sow unit. Within three weeks, the National Pork Board approved $450,000 in checkoff funds to direct research on the new disease threatening the U.S. pork industry.
The weather had a big say in cattle prices this summer. "If we have drought like last year, cattle numbers will be forced down because the feed is not there. If we have a good summer, plenty of rain and lots of grass, then the economics kick in,” says University of Missouri Extension ag economist Ron Plain. We soon found reasons to be optimistic about the cattle market.
Continued strong demand, lower supplies, and a disease that's trimming productivity in the U.S. hog herd lined up to boost back to profit for pork producers, says Rabobank’s quarterly pork report. With PEDV increasing piglet mortality, the disease continued keeping a lid on U.S. hog inventories. This demand/supply relationship is spiking prices, specifically at the bacon counter.
Spring rains gave hopes of good crops and an even better season for hog expansion, especially after being hit by the PEDV. When the weather dried up late in the growing season, the bright outlook for profitability in 2014 was significantly dimmed. Chris Hurt, Purdue University Extension livestock economist, says, “This has not wiped out the profit potential, but should make hog producers more cautious about expansion.”
September held big news for the pork industry. Renukaradhya Gourapura, associate professor in the Food Animal Health Research Program, a division of the Ohio Agricultural Research and Development Center (OARDC), created a vaccine to battle porcine reproductive & respiratory syndrome (PRRS). Soon after, Pork Powerhouse 2013 was released, telling us that even though PEDV hit hard, growth continued.
After overcoming a recession, drought, and liquidation of many herds in the past two years, cash cattle prices finally moved higher this fall. Small cattle numbers, a favorable demand base, and lower feed prices sent feeder cattle futures to record highs. Early August gave way to the lowest finished cattle prices of the summer, lingering just under $120 per hundredweight, climbing toward $130 in October.
Beta-agonists became big talk. This issue was first brought to attention when Lilly Edwards-Calloway from JBS showed a video of lame, stiff-gaited cattle at the National Cattlemen’s Beef Association (NCBA) summer meeting in early August. On August 7, 2013, numerous incidents were reported of impaired cattle mobility leading to Merck suspending the sale of Zilmax.
With corn prices dropping through and through, economists were looking for answers to bump corn back up to higher levels. Purdue University Extension ag economist Chris Hurt asked, “Can feeding hogs feed $7 corn?” Hog industry looked to a bright future even after PEDV struck, but would it be enough to help the corn out?
See the highlights of the livestock industry from 2013.