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USDA Says Rally Over For Cattle and Hogs

published: July 12th 2010
source: USDA

The U.S. Department of Agriculture is saying that the rally in cattle and hog prices that dominated the commodity markets the first half of this year is basically over, primarily because of weak demand.

In its latest supply and demand and price forecast, the USDA dropped its top price for feeder cattle, those ready for slaughter, from $96 per hundredweight to $95 per hundredweight forecast last month.

Hog prices are expected to peak at $56 per hundredweight against a June prediction of $57 per hundredweight.

Those prices are still better than a year ago, when live hogs were bringing barely $40 per hundredweight and live cattle brought barely $80 per hundredweight.

Both cattle and hog herds have been reduced this year but in the process slaughter is up. Beef production has risen 12 percent during the first half of the year, the USDA says. Pork production also is up.

Meanwhile, demand is only so-so. The USDA said market demand is “relatively weak” for better cuts of meat, even through the July 4 holiday. The USDA reports that retail beef and pork prices have risen between 3-4 percent since the beginning of this year.

Production has cooled since July 4. The USDA said cattle slaughter last week was down 12 percent from the week before and hog slaughter was down 5.6 percent.