USDA raises beef production 3% | Weekly Livestock Market Update
On this episode of Weekly Livestock Market Update, Brownfield's Meghan Grebner talks with University of Kentucky ag economist Kenny Burdine about supply and demand, consumer prices, and some risk management.
Market highlights:
» The 5-market average fed steers price was down over $4 per cwt for the week at $202.73.
» February live cattle futures prices were also down by roughly $3, closing at $197.73 today.
» Choice boxed beef slid about $7 to $314.70 this week. Select boxed beef fell by about $5 to $307.14.
» March feeder cattle future prices were actually $2 higher this week at $267.08
» National base hog carcass price was 3% higher at $86.09 for the week
» February lean hog futures were $2 higher on the week, closing today at $89.48
» Pork cutout values were also higher, by about $5, trading at $102.21 for the week
Weekly Slaughter:
» Cattle slaughter was estimated down almost 4% for the week at 561,000 head. That is down over 8% year-to-date
» Hog slaughter was virtually flat with last week at 2.54 million head, but down over 6% YTD.
February WASDE:
» 2025 beef production was raised by 3% from January - mostly due to resumption of Mexican live cattle imports. This would be 1.6% lower than 2024. Additional key factors to watch will be female slaughter and harvest weights.
» 2025 pork production forecast was raised slightly from January and sits at an estimated 2.7% increase from 2024.
» Broiler production was unchanged from last month and is projected to increase by 1.4% in 2025.
» Estimated 2025 egg production was lowered by 2% from January, but wholesale egg price forecast was raised by $1.50.
Consumer Price Index for January:
» Consumer price index increased 0.5% in January, 3% increase over the last 12 months
» Energy, gasoline, and food were all higher
» Food index was up 0.4% for the month and 2.5% over the last year
Risk Management:
» Recent price declines were a good reminder that risk is always out there
» The market has been on tear the last couple of years, but we have seen several pullbacks along the way
» Basic strategies
» Forward contracts, internet sale with delayed delivery
» Futures contacts
» Options
» LRP insurance
» My general approach to risk management
» Know what tools are out there
» Know how price changes impact returns
» Don’t make decisions in real time
» Don’t try to manage risk looking backwards
Next Week’s Reports:
» Livestock Slaughter
» Cattle on Feed
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