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US cattle herds lowest since 1958...here comes inflation

 
Mad Cow
User ID: 554503
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01/28/2010 12:03 PM
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US cattle herds lowest since 1958...here comes inflation
[link to www.bloomberg.com]

Jan. 27 (Bloomberg) -- The U.S. cattle herd may have shrunk to the smallest size since 1958, as mounting losses during the recession spurred beef and dairy producers to cull animals, analysts said.

Beef producers and dairy farmers held 93.181 million head of cattle as of Jan. 1, down 1.4 percent from a year earlier, according to the average estimate of seven analysts surveyed by Bloomberg News. That would be the smallest herd in 52 years, according to the Livestock Marketing Information Center. The U.S. Department of Agriculture releases its semiannual report on the cattle herd at 3 p.m. on Jan. 29 in Washington.

Wholesale choice-beef prices averaged $1.4071 a pound last year, the lowest level since at least 2004, as U.S. job losses climbed and meat demand waned. Corn, the main ingredient in livestock feed, jumped to a record $7.9925 a bushel in 2008 on the Chicago Board of Trade, and prices averaged about $3.79 last year, the third-highest annual average since at least 1959.

“There’s not much incentive to be building herds,” said John Nalivka, the president of Sterling Marketing Inc., a livestock-industry consulting company in Vale, Oregon. “Costs of production across the cow-calf sector and in dairy have gone up in the past two years, and prices have come down” for beef and milk, he said.

Futures prices for feeder cattle, the young animals that ranchers sell to feedlots to be fattened for slaughter, averaged 96.821 cents a pound last year on the Chicago Mercantile Exchange, the lowest level since 2003. Feeder-cattle futures for March settlement rose 0.2 percent yesterday to 98.975 cents a pound on the CME.

Slaughter-ready cattle futures for April delivery dropped 0.9 percent yesterday to 89.325 cents a pound.

Rancher Losses

Cattle ranchers in the southern Great Plains lost about $34 on every breeding cow they owned last year, following losses of about $18 a head in 2008, according to Jim Robb, the director of the Denver-based Livestock Marketing Information Center, an industry- and government-funded researcher.

U.S. beef production may total 25.45 billion pounds (11.54 million metric tons) in 2010, which would be the smallest amount since 2005, Robb said. The USDA forecasts output at 25.58 billion pounds.

“We’re forecasting that beef production in 2010 won’t be the smallest since 1958, because the average animal processed now weighs twice as much,” Robb said.

The number of young female beef cattle held back for breeding in the U.S. may have fallen to 5.45 million animals, down 1.4 percent from 5.526 million a year earlier, according to the average analyst estimate.

Dairy Cuts

Dairy farmers may be holding back 4.313 million young replacement cows for breeding, down 2.2 percent from 4.41 million at the same time last year, according to the average analyst estimate. The dairy herd is shrinking partly because of industry-funded cow culls last year aimed at supporting prices.

The so-called Cooperatives Working Together program removed about 252,000 dairy cows from production since December 2008, according to a statement on the group’s Web site.

“Last year was a terrible year for milk prices,” said Ron Plain, a livestock economist at the University of Missouri in Columbia. He said the industry-funded culling program is “one of the reasons why we’re down so much on milk-cow numbers from a year ago.”

The price of class III milk, used to make cheese, tumbled to a six-year low last year of $9.24 per 100 pounds, after global demand slowed. The price has rebounded 57 percent since then to $14.54 yesterday on the CME.

(Numbers are percent change from previous year)
Anonymous Coward (OP)
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01/28/2010 12:12 PM
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Re: US cattle herds lowest since 1958...here comes inflation
They're reducing the supply so they can jack up the demand.

If you've got the capability, stock up on beef and dairy now.
Futureteller
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01/28/2010 12:14 PM
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Re: US cattle herds lowest since 1958...here comes inflation
 
“These two summer 2009 herd retirements, combined with the USDA’s recent price support increases, should result in very positive movement in dairy farmers’ milk prices,” says Jerry Kozak, president and chief executive officer of the National Milk Producers Federation, which administers CWT.

[link to www.cattlenetwork.com]

herd 'retirements' = milk price up
Anonymous Coward
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01/28/2010 12:22 PM
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Re: US cattle herds lowest since 1958...here comes inflation
'retirements' cow
Anonymous Coward (OP)
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01/28/2010 12:25 PM
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Re: US cattle herds lowest since 1958...here comes inflation
'retirements' cow
 Quoting: Anonymous Coward 876347


Yeah, they got this community retirement community down in Mexico! Really nice!
Anonymous Coward
User ID: 875493
Canada
01/28/2010 12:26 PM
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Re: US cattle herds lowest since 1958...here comes inflation
Just means they can throw more genetically modified crap at us
Anonymous Coward
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01/28/2010 12:36 PM
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Re: US cattle herds lowest since 1958...here comes inflation
'retirements' cow


Yeah, they got this community retirement community down in Mexico! Really nice!
 Quoting: Anonymous Coward 554503

hlth care for cows dead2

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