Melvin Brees
Farm Management Specialist
University of Missouri Extension




Decisive Marketing

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April 9, 1999

Outlook Review

The following is a brief summary of some of the information presented during this past week’s University of Missouri Telephone Outlook Conferences.

Beef: Cattle slaughter numbers are below last year (1998), but slightly above the 1993-97 average. While the lower numbers are encouraging, the problem for beef supply is weight. The average dressed carcass weight is 15 to 20 pounds above a year ago and nearly 40 pounds above the 1993-97 average. "Feedlots can’t continue to over finish cattle and expect higher prices!" Heifer slaughter is above last year and well above the five-year average, suggesting the beef cow herd isn’t growing. Look for fat cattle prices in the low to mid $60's. 650-850# steers in the low to mid $70's and 500-550# steers in the low to mid $80's.

Hogs: Pork production is still very high and the live to cutout pork price spread remains wide. Both of these measures, while improved from late 1998, are still above year ago levels. Sow slaughter is above year ago levels, suggesting herd reductions, and increasing exports are positive factors for the hog market. USDA’s Hogs and Pigs Report indicates smaller market hog numbers and reduced farrowings into the summer -- also positive numbers. In spite of these positive factors, look for the second highest pork production year ever and a price average in the mid $30's. "In 1999 the price peak may actually come in December instead of a seasonal summer peak."

Grains: Soft export demand and increasing ending stocks resulting in higher stocks/use ratios continue to plague grain prices. Of the three (corn, soybeans and wheat), fundamentals for corn look the most optimistic. If producers follow through with reduced planted acreage, ending stocks for the 1999-2000 corn crop may decrease. Wheat stocks could also drop some with the new crop, but soybeans appear headed for even more burdensome supplies. Expect soybean prices below loan price, but spring or summer weather scares may provide limited opportunities for pre-harvest sales.

Overall, not very encouraging prospects for the coming year. Maybe there is a "light at the end of the tunnel" for livestock, but we’re not there yet. Improved foreign economies and stronger export demand would help all farm commodities. Next year’s South American production may slow down or, at least, growth in production should slow down. Weather remains the major unknown factor. La Nina could result in somewhat drier conditions and possibly some reduction in production. Less production could tighten corn supplies. Soybeans need both lower production and stronger demand. Marketing will be a challenge. While they may not appear too attractive, some of the "best" marketing opportunities may occur when everyone is still busy with spring field work. -- Melvin

University of Missouri ExtensionDecisive Marketing - April 9, 1999 -- Revised: April 20, 2004