Cattle continue to trend higher; hog markets 'yo-yo'
COLUMBIA -- The song remains the same for the cattle market: tight supplies and high prices.
"Supplies are going to remain tight for some time, and domestic and export demand for beef looks good," says Ron Plain, University of Missouri Extension agricultural economist. "So we expect 2015 cattle prices to average higher than what we saw last year."
Plain made his comments Jan. 21 during the MU Ag Marketing Outlook Conference.
He noted that the 19-year trend of fewer calves is going to end in the next couple of years. In recent months, heifer and cow slaughter has been down sharply. Female slaughter was 10 percent lower in 2014.
"We are saving more heifers and cows for breeding, but it's a slow process -- nine months from breeding to birth and another two years before those calve reach slaughter weight," Plain says. "So yes, more beef is coming in 2017 and 2018, but for the time being tight supplies and high prices will continue."
The hog market was up and down over the past year and Plain expects a repeat of that in 2015. The main reason is porcine epidemic diarrhea virus.
"We lost a lot of pigs to PED last winter," Plain says. "Since pigs go to slaughter at 6 months of age, those death losses meant a short supply of hogs and pork in the summer, which resulted in record prices."
Like many viruses, PED was less of a problem during the summer, so six months later hog slaughter is back to normal and prices have dropped off. Plain expects the same situation in 2015, with the market yo-yoing every six months with the death loss and the resulting price increases.
Plain also says that both cattle and hogs slaughter weights are higher.
"Whenever supplies get tight and there aren't many animals to slaughter and prices are high, farmers tend to feed them a little bit longer," Plain says. "So that adds to the supply and moderates a bit the price we see in grocery stores because of that extra meat from each animal."