by Agrimoney.com
Prices of cattle and milk are poised for double-digit increases, but dairy and livestock farmers face a tough year nonetheless, a top US official has forecast, noting grain prices were already taking their toll on chicken producers.
Joe Glauber, chief economist at the US Department of Agriculture, forecast that milk prices would average $17.70-18.40 a hundredweight this year, a rise of up to 13%.
The figure was also above a preliminary, so-called "baseline", forecast of $16.40 a hundredweight revealed by the USDA last week.
Cash prices for steers would set a record, reaching up to $109 a hundredweight, an increase of 15%, and above a baseline estimate of just under $100 a hundredweight.
"Livestock prices are expected to remain strong and further improvement in milk prices is likely," Mr Glauber told the USDA's Outlook Forum, noting firmer demand on both domestic and export markets.
'Financial pressure'
However, higher feed costs, as growers struggle to replenish grain stocks, meant would depress margins for livestock and dairy farmers at "low levels".
"While milk prices are forecast to be higher in 2011, increasing feed costs could continue to put financial pressure on dairy producers, especially those producers that purchase feed at current price levels," Mr Glauber said.
Poultry farmers were already suffering, to judge by a fall from 5.5% to 0.8% in less than two months in the growth rate in the numbers of chicks placed for feeding up.
"This abrupt slowdown is likely the result of sharp increases in feed prices, especially coming at a time when wholesale prices for many broiler products have been declining," he said.
Price drop?
Indeed, the USDA forecast a potential easing off in broiler prices from last year's average of 83 cents a pound, rather than the baseline forecast of an increase to 86 cents a pound.
The comments came as poultry giant Sanderson Farms revealed a return to first-quarter loss, and delayed plans for a processing factory in North Carolina.
On Chicago livestock markets, live cattle for April stood 0.2% higher at 113.85 cents a pound in late deals, with March feeder cattle up 0.2% at 129.425 cents a pound, and lean hogs for April up 0.3% at 89.775 cents a pound.
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