Stronger Economy Could Mean Better Meat Prices

April 13, 2010 07:00 PM
Linda H. Smith, Top Producer Business and Marketing Editor

Orders for semi-trucks is one harbinger of how the economy is doing as they indicate whether more or fewer products will be moving, says Ann Duignan of J.P. Morgan. The number ordered in 2009 was down 33% from a year earlier, and January 2010's total was down 18% from last year and the worst month for sales since January 1992.
February's total was up 21% and March, up 22% year over year. "The bottom may be in,” says Duignan. At the same time, February orders for trailers soared 168% in February, to their highest level in two years.
Another indicator, new orders for manufactured durable goods, was up 0.5 percent in February, the third consecutive monthly increase and excluding defense, were up a stronger 1.6%. Machinery had the largest increase, at 4.7%, according to the U.S. Census Bureau.
At the consumer level, personal income and disposable income both increased in February, though less than 0.1%, the Bureau of Economic Analysis reports.
"Although these are modest increases and it is too early to be sure, they could be indicators that the worst is over,” says Jerry Gulke of the Gulke Group. "If so, demand for meat could pick up a little—just when livestock producers finally reduced their herds. So we could see meat and livestock prices continue strong.”

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