Livestock Marketing Information Center

Current Situation and Analysis
Last Updated: 9/28/2016
ESTIMATED COW-CALF RETURNS LOWEST SINCE 2009

The LMIC has consistently ratcheted-down estimated cow-calf returns this year as forecast calf prices for the fourth quarter were lowered.  As of early in the third quarter, fourth calf prices were estimated to be 15% below a year ago.  That fourth quarter forecast has been lowered to 25% below year ago prices.  Most U.S. operations sell their calves in the fall and prices at that time of the year heavily influence profitability.  Note that these calculated returns do not include all economic costs of production; they are used in market analysis and estimated cash costs plus pasture rent.


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A LOOK AHEAD TO JANUARY 1, 2017 CATTLE NUMBERS

At what level will we see year-over-year changes in national beef cattle herd inventory?  This is a very important question, as it drives our domestic beef supply into the next few years.  


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U.S. MILK PRODUCTION AND PRODUCT USE TRENDS

August milk production in the U.S. was up 1.9% from a year earlier, slightly more than the percentage gains in prior months.  Milk prices hit their lows for the year in mid-March and were surprisingly strong from May through August.  Class III milk prices averaged $12.76 per hundredweight in May and $16.91 in August, a 33% increase.  Meanwhile, milk production in other important dairy product exporting regions has been declining, with July milk output in the European Union down 1% and Australia down 10% from a year ago.


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