Livestock Marketing Information Center

Current Situation and Analysis
Last Updated: 12/14/2018
MILK PRODUCTION SUPPORTED BY REGIONAL SHIFTS

The dairy industry is making an effort to temper production in response to lower milk prices this year.  Milk prices at the farm, as reported by USDA-National Agricultural Statistical Service (NASS) during the July-September quarter were down 10% from a year earlier.  That was the fourth consecutive quarter that milk prices averaged less than the same quarter in the prior year.  In response to this price trend, the dairy cow herd during the summer quarter was reduced by 27,000 head compared to 2017’s, or down by 0.3%.


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LOOKING AHEAD TO THE JANUARY 1 BEEF COW INVENTORY

Heifer and beef cow slaughter levels have surged over the last year.  USDA-NASS Livestock Slaughter report places total heifer slaughter under federal inspection up 7.3% above last year in data through October 2018.  Beef cow slaughter under Federal Inspection (FI) in that same report is estimated to be up 10.7% above last year's.  Taking a cursory look those large slaughter figures, it may seem difficult to believe that the U.S. beef cow herd could show another year-over-year gain on January 1, 2019.  But, by our estimates, that is what we are expecting.


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LAMB PELT VALUE TURNS NEGATIVE

The average value of an unshorn lamb pelt has turned negative in recent weeks with the average on a weekly basis resulting in a 25 cent charge to producers per piece.  This has been one of the few times in history when the pelt value was so low that processors were charging producers to dispose of them. 


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