Beef and Dairy Data

Beef and Dairy Data

David Sparks Ph.D.
David Sparks Ph.D.
Here in the Northwest we happen to be blessed with an agricultural genie named Michael Stolp from Northwest Farm Credit Services. It's Michael's job to look at agricultural trends and he does a fine job of all kinds of market analysis. Obviously, the idea behind his job is to take a look at where profits lie and there are dangers of losses because Northwest Farm credit services makes loans to people in agriculture. You might think of his job as a certain type of risk management. Anyway, here is a quarterly snapshot of the beef and dairy markets.

Beef -- Cattle and beef markets are strong entering spring 2014. Prices for all classes of cattle remain at record levels, and retail beef prices are increasing. Despite market signals for beef cattle producers to expand their herds, tight supplies will continue to support cattle prices for the foreseeable future. The number of cows and heifers to calve in 2014 is down from 2013, suggesting the U.S.' beef cow inventory will shrink for the nineteenth consecutive year. Global and domestic beef demand is strong, but continued beef price increases at the retail level may challenge consumer demand.

 

Dairy -- Dairy producers are benefitting from solid profit margins. Milk prices are at near-record levels, supported by historically high U.S. dairy product exports. Although feed prices are increasing, milk prices are rising faster than costs. Milk prices are expected to remain strong in 2014, but could be pressured lower by rising domestic milk production and increased competition in global export markets. Higher hay prices in the Northwest could also impact dairies' profitability. Regional hay prices will be pressured by demand from California where irrigation water shortages will limit forage production.

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