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Strong market outlook expected

Strong market outlook expected

The outlook remains strong for the cattle and the hog markets this spring, thanks to a variety of factors, according to a livestock marketing economist.

“Right now, we’re seeing record prices by a huge margin,” Ron Plain with University of Missouri Extension says of the cattle market. “It has been very good.”

He says there is little reason to expect that to change in the near future, although expecting prices to rise above today’s record levels may be a bit much to wish for.

Cattle sales remain light as producers hold back females for breeding, thus reducing the finished cattle supply in the short-term.

Calculations by the Livestock Marketing Information Center estimate cattle feeders turned a profit of $52.13 per head for steers slaughtered in March, Plain adds. Also, slaughter this past week totaled 583,000 head, down 0.3 of a percent from the previous week.

Prices are also high in the hog market. A major contributing factor there continues to be the porcine epidemic diarrhea virus (PEDV), which is reducing the herd size at a time when most producers would otherwise be expanding.

That has led to extra space in finishing units, Plain says. The extra space, combined with low feed costs, has led to better weight gains and to farmers holding animals a bit longer.

The end result of those trends has been higher market weights.

All of those trends have contributed to today’s bullish hog and cattle markets. Also, Plain says the outlook for pork and beef remains strong for the rest of 2014, although there are many uncertainties in the market.

The good news is the virus is slowing herd growth, which helps keep prices up, Plain says. Also, he says analysts hope the number of new outbreaks of PEDV will slow as the weather warms.

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