Market Update

USDA Livestock Outlook

The latest USDA livestock outlook report suggest that the US cattle herd is continuing to recover with cattle numbers up on this time last year, however the report suggests that this is likely to put pressure on cattle prices during the rest of 2015. Beef cow numbers are up by 2%, whilst heifers for beef cow replacements are up by 4%. The numbers of cattle placed on small grains pasture has gone up, and it is suggested that these are heifers and cows, which could later either be sold for slaughter, or for breeding depending on the prevailing economic conditions.

There is downward pressure on pig prices due to increased pig meat production as the sector recovers from disease,  fast growth in the poultry sector and increased competition, along with reduced exports, due to the strength of the dollar.

Favourable feed prices in 2014 encouraged diary producers to expand production, and this is now putting downward pressure on milk prices. US milk production in 2014  saw the highest rate of growth since 2006, with the average milk to feed price ration being the highest since 2007. As the report points out production is likely to continue to grow in 2015, with farmers now committed to herd expansion, putting further pressure on prices.