Livestock Marketing Information Center

Current Situation and Analysis
Last Updated: 8/11/2014
CATTLE FEEDING: A LOOK AT BREAKEVENS AND PROFITS

As of mid-year, cattle feeders have posted several consecutive months of strong profits and preliminary estimates show July’s closeouts had the largest per head profit for any month since October 2003. These profits have been driven by the increased prices in the fed cattle market. In turn, cattle feeders have become very aggressive bidders for feeder cattle and calves.


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MID-YEAR DAIRY TRADE REVIEW

By all accounts global demand for dairy products is insatiable. Every year the LMIC debates if this will be the year that dairy exports taper to mere single digit growth. Since the recession, values have followed a distinct pattern of extreme growth (2010, 2951%; 2011, 53%; 2012, -8%; and 2013, 80%) with the exception of one small year over year decline. There has been very little middle ground. This has mainly been due to both large increases in export quantities shipped and much higher dairy prices (All milk Price- up 56% 2009 to 2013). 


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SOME PERSPECTIVE ON RUSSIA’S RETALITORY BANS

Russia announced they are initiating bans on major agricultural exports in response to sanctions by the U.S., Canada, European Union (EU), and Australia because of the conflict in Ukraine. This has been a hot topic because Russia is a major food importer of meat products. Those sanctions will change trade flows, but the impacts felt by the U.S. may be less than recent fed cattle and live hog futures market price declines indicate.


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