Livestock Marketing Information Center

Current Situation and Analysis
Last Updated: 9/8/2014
Trends . . . A LOOK AT PACKER MARGINS: BEEF AND PORK

The prior issue of the Livestock Monitor included a brief discussion of estimated retailer margins in the beef and pork sectors. Today focuses on the packer portion of the marketing chain. Margin calculations help roughly gauge the economic status of those industry sectors. Packer margins use the dollar value difference between the purchase cost of a slaughter ready animal and the price of what the packer has historically sold, specifically: 1) wholesale meat value (cutout); and 2) byproducts (variety meats, tallow, hide, etc.).


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RUSSIA AND COMPETITION IN THE WORLD DAIRY MARKET

The Russian ban on agricultural imports from the European Union, Australia, Canada and Norway for one year has caused quite a stir among a variety of livestock groups, but seems of little worry to U.S. dairy exporters. Russian imports of U.S. dairy exports are slim to none, accounting only for $4.6 million (excludes casein) in 2013. Over the last few years, both quantity and value of product heading to Russia was not large enough to even register 1% in any of the major export categories. Buttermilk (one of the smallest U.S.


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U.S. RED MEAT PRODUCTION TRENDS

As the second half of the year unfolds, cattle supplies continue to be tight and PEDV hit pork producers hard. If heifer and cow retention is taking place on a large scale, which most experts believe is happening, domestic beef supply will continue to remain tight over the next couple years. The hog sector now has access to a PEDV vaccine through a conditional license Zoetis received, and the domestic pork supply will depend on the effectiveness of this vaccine as well as other preventative methods, and the severity of PEDV this winter. 


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