Fewer hogs, along with a recent rally in cattle prices, is likely to continue upward price pressure for both livestock and meat prices, reports the Des Moines Register. The comments were made after the release Friday of the USDA quarterly Hogs and Pigs Report.
The likelihood of the first profitable year for livestock producers since 2007 will help farm incomes rise by an average of 10 percent this year, the USDA said.
Consumers so far have seen only single-digit increases in meat prices, according to the USDA, despite price increases for live cattle and hogs and finished cuts of meat. Analysts said demand for beef, which lagged in 2009 under the weight of the poor economy, is picking up.
“People may not be taking expensive vacations, but they think now that they can spend money on steak,” said Gary Penner, a cattle trader at Commodity Services in Des Moines.
Iowa’s hog and cattle industries generate $8 billion or more in cash receipts annually. On Friday, the USDA reported the national hog inventory on June 1 was down from last year by 4 percent to 64.4 million head.
The numbers were up 1 percent from the most recent report, on March 1, suggesting that the thinning of U.S. hog herds in response to low prices and producer losses may be coming to an end. In Iowa, the inventory also dropped by 4 percent, from 19.5 million on June 1, 2009, to 18.8 million on the same date this year.
Source: Des Moines Register