Cattle prices are expected to set new records in 2013 while hog prices are expected to have their second highest year ever. High feed costs have led to lower numbers of animals, which University of Missouri Extension agricultural economist Ron Plain says is why meat prices will be going up.
"The U.S. meat supply per capita has been steadily declining," Plain said during the 2013 MU Extension Winter AgMarketing Outlook Conference. "It’s expected that 2013 will be the seventh consecutive year with less meat per person, down 22 pounds from 2006 and the lowest per capita supply since 1991."
Slaughter steer, yearling and slaughter cow prices all reached record highs in 2012. It was the third straight year for steers to set record prices and the second consecutive year for both yearlings and slaughter cows.
"The expectation is that all three will set new price records again in 2013," Plain said. "We are not yet to the peak in cattle prices."
Hogs have also been hit by the high cost of feed. Plain says there is a high correlation between the price of corn and the break-even cost for hog production. Even so, surveys show some producers are looking to expand.
"If we look out ahead of us and anticipate good crops and lower feed prices, there is reason to think hog producers will want to expand despite the tough financial year last year," Plain said. "On average, the typical hog sold for a $12 loss in 2012, but it looks like if you give the hog industry more feed they’ll expand hog numbers."
The number of farrowing sows this spring is forecast to be down 1.9 percent, a modest reduction.
"It looks a bit down this year in the number of litters to be farrowed," Plain said. "But pigs per litter keep going up, so most likely any reduction in the number of sows being farrowed will be covered by more pigs per litter, so we’ll end up with the same to maybe a few more pigs born in 2013 than what we had last year."
The calf crop is expected to be smaller than last year. Plain says that 2012 was the 17th consecutive year with a smaller calf crop. With the shrinking herd and tightening supplies, Plain thinks 2014 prices will be even higher than 2013.
"The forecast for the coming year is 4.3 percent less beef than a year ago, 0.2 percent more pork, 0.4 percent less chicken, and 0.3 percent more turkey," Plain said. "Total meat production is forecast to be down 1.3 percent. The population will grow about 0.9 percent, so it’s about 2.2 percent less meat per person, unless we see a big jump in meat imports."
Handouts and audio recordings from the conference are available for free download at agebb.missouri.edu/mkt/teleconf.