For cattle and hog producers attending AgWest Commodities 2019 ag outlook meetings the past four weeks, the livestock market outlook news was slightly optimistic. Covering 22 locations in Nebraska, Iowa, Kansas and Colorado, AgWest staff outlined trends for both livestock and grains as the new year moved ahead.

Looking at the cattle market, AgWest President Paul Mussman noted, “We ended the year on a contract high, which took out the downtrend line that started in 2014. Odds favor this being the mid-decade cycle low.”

When looking at cattle on feed, Mussman said it seems the herd expansion is moderating.

“There still are a lot of cattle coming to town, but the good news going into year end was we weren’t creeping up,” Mussman said.

Feeder cattle also broke the downtrend from 2014, and Mussman pointed to slides indicating an uptrend since the end of 2016.

While the government shutdown impacted the release of the January Cattle on Feed report, the National Ag Statistics Service (NASS) noted on their last report in December that during November 2018, U.S. feedlots set a new record for cattle marketed from feedlots with a capacity of 1,000 head or more. Sales of fed cattle totaled 1.87 million head, the highest for the month since the series began recording in 1996. This was up 2 percent from the December 2017 report.

With placements 5 percent below December 2017 at two million head the cattle movement was expected to remain steady, according to the NASS.

Pointing to the hog and pig report as of late December, the AgWest president noted the market has been in a growth mode since 2014.

“There is good demand domestically and it will be interesting to see what will happen internationally with African Swine Fever (AFS),” he said.

According to USDA, the December market hog inventory stood at 68.2 million head, which was 2 percent higher than last year but 1 percent lower than the last quarter in 2018.

USDA reported the September to November 2018 pig crop, at 34 million head, was up 2 percent from 2017. Sows farrowing during this period totaled 3.16 million head, also up 2 percent from 2017. The sows farrowed during this quarter represented 50 percent of the breeding herd, USDA noted. The average pigs saved per litter were a record high of 10.76 for the September to November period, compared to 10.74 last year.

In terms of farrowing intentions, USDA reported that U.S. hog producers intend to farrow 3.11 million sows during the December 2018 through February 2019 quarter, a 2 percent increase from the actual farrowing during the same period in 2018 and a 4 percent increase from 2017. Intended farrowing for March to May 2019, at 3.15 million sows, are up 2 percent from 2018 and up 4 percent from 2017.

U.S. animal production continues to increase, said Mussman, with beef production up 2.7 percent, pork up 3.8 percent, egg sets up 1.5 percent, and broilers up .5 percent.

Despite the production increases in beef, the freezer inventory shows cold storage stocks are lower than last year, said Mussman.

“We are moving product we’re producing,” he continued. “In addition, demand is strong both domestically and export business is good, even with tariffs included.”

The wild card for pork producers will be what happens with AFS, he said.

“AFS is not going away,” Mussman said. “With one million head culled in China, hog prices have dropped 20 percent.”

Barb Bierman Batie can be reached at barb.batie@midwestmessenger.com.