Trends . . .  CATTLE  OUTLOOK  FOR  SECOND  HALF  OF 2013 

      In the first quarter of 2013, fed cattle prices barely set a new record high with the 5-market average (reported by USDA-AMS) at $125.51 per cwt., only 21 cents over the prior top for any quarter set during  last year’s first quarter. Yearling and calf prices could not keep pace with fed cattle due to high feedstuff costs devastating impact of cattle feeding margins, in the Southern Plains 700-to 800-pound steers averaged about 8% below a year earlier while 500-to 600-pound steers dropped 7%.

HOG  SITUATION  &  OUTLOOK

      So far this year, hog prices have been following their normal seasonal pattern. The early spring slaughter hog price rally happened right on schedule in early April this year in contrast to 2012 when the upswing was delayed by two months. So far in 2013, U.S. pork production has been in-line with expectations, but hog prices have been a bit disappointing. Slaughter hog prices have been capped by even more challenging than forecast pork export markets. Prices in the first quarter of this year prices averaged below a year ago (down about 4%), however, the second quarter will be above 2012’s in the range of 2% to 4%.

 

NONFAT  DRY  MILK  IS  KEY

Earlier in the year, there were indications that a New Zealand drought would bolster U.S. prices, especially in the 2nd half of 2013. Those hopes have been moderated with timely rains and warmer weather.  New Zealand pasture is back on the mend and restocking has even been mentioned in a number of industries such as cattle and sheep. Despite the drought in New Zealand dissipating, U.S. exports have had a bright spot.