86—Lancaster Farming, Saturday, May 17,1980
Moore takes hard look
at red meat market
UNIVERSITY PARK - H.
Louis Moore, livestock
marketing specialist at Penn
State, reports the financial
position of cattle feeders and
bog producers has
deteriorated sharply in
recent weeks.
Though beef production
was down about 5 percent in
the first quarter of 1960, pork
production increased 21
percent and poultry
production increased 9
percent.
Livestock prices have
decreased because of huge
total meat supplies and a
weakening general economy
which has reduced con
sumer purchases of many
items.
Pain for
Cattle Feeders
Fed cattle prices in recent
weeks have averaged $ll per
hundredweight less than a
year earlier.
Uncertain market con
ditions have made cattle
feeders reluctant to sell the
animals now finished and
hesitant to purchase new
feeder cattle. In mid-April,
beef carcasses averged 650
pounds, up 15 pounds from a
year earlier.
Markets have never been
more uncertain than at
present, and projecting for
the future is risky.
High interest rates and
increased input costs are
discouraging feeders from
putting cattle in feedlots,
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WHOLESALE DISTRIBUTORS
567 South Reading Road, Ephrata, Pennsylvania 17522
Phone (717) 733-7951
Exit 54 on Interstate 81, Raphme, Virginia 24472 Phone (804) 377-2628
and this has caused a
depressing of feeder-cattle
prices. Adding uncertainty is
the unknown influence of the
380,000 cattle in feed lots that
can’t be marketed for some
tune because of DES im
plants.
With a recession now upon
us, it will be difficult for
cattle pnces to recover
substantially in the weeks
ahead. Some price im
provement is expected, but
prices aren’t likely to move
beyond the high s6o’s until
after mid-year.
Inventory
Redaction Stops
The drop in cattle numbers
observed over the past four
years has stopped—but just
barely.
It is estimated that U.S.
cattle numbers on last
January 1 totaled 11 million
head, up just 100,000 head
from 1979. Rebuilding is
likely to continue only at a
slow pace in 1960, because
the high costs of financing a
major expansion program
will be beyond the resources
of most farmers.
As more cows and heifers
are held for breeding, the
culling rate will be reduced
and. total beef supplies will
be below year-earlier levels
through 1980.
It Finally Happened
Sheep numbers on farms
on January 1, 1980, totaled
12.5 million head, up 2
percent from the record low
(12.2 million head) of
January 1979. This was the
first increase in sheep
numbers since 1960.
During the 19 years of
decline, numbers fell by 63
percent. Due to sharply
reduced production, lamb
prices increased during
mostofthel97o’s.
Per-capita consumption of
lamb dropped to 1.6 pound in
1979, while the average retail
price of lamb was $2.46 per
pound.
With hogs selling at less
than $3O per hundredweight,
all producers are hurting.
Basically producers are
sending a $2O bill along with
each hog that goes to
market. That is about how
much cash costs are not
covered at current market
prices.
Prices have been low since
the year began, but they
really fell apart after the
release of the pig crop report
in late March.
While producers indicated
in December that they would
not increase farrowings in
the December-February
period, they did in fact in
crease farrowings by 3
percent. With the mild
winter, producers saved 7.17
pigs per sow. The result was
a pig crop 7.5 percent larger
than that of a year earlier.
This insures a very large
hog slaughter for the rest of
1980, but the magnitude of
increase over a year earlier
will drop as the year
progresses. Slaughter in the
first quarter was 21 percent
above the high levels of
January-March of 1979.
Slaughter in the second
quarter will probably in
crease 11 percent and third
quarter slaughter will in
crease about 6 percent when
compared with the same
periods in 1979.
The sluggish economy, /
large cold-storage holdings
of pork, and large supplies of
poultry will prevent prices
from increasing sub
stantially during 1980. Prices
may return to near $4O for
the seasonal peak in July,
but producers can expect
hog prices to average only in
the mid to upper s3o’s for the
second half of the year.
Meat Consumption
Ouch
Meat consumption on a
per-capita basis in 1980 will
be up about 4 pounds from
1979 and near the record of
1976 and 1977. Lower-pnced
pork and poultry are being
substituted for beef by
economy-minded con
sumers.
In 1979, the average per
pound retail price was $2.26
for beef and $1.44 for
The difference will be even
greater in 1960. In February
1980, the average retail price
of beef was $2.34 and $1.33
for pork.
A differential of $l.Ol per
pound can be a powerful
influence on buyer habits.
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