Following two years of tough economic times for livestock producers, 2010 is shaping up to be a much better year thanks to an improving economy and tighter supplies of beef, pork and poultry.
“Livestock producers have seen a return to profitability in the past two months after going through probably the worst economic situation anyone can remember in 2008 and 2009,” says John Anderson, livestock economist with the American Farm Bureau Federation. “This is certainly good news for livestock producers because it provides a good opportunity to rebuild equity.”
The Agriculture Department has released its initial assessment of the U.S. and world crop and livestock supply and demand estimates. USDA also released its first calendar-year 2011 projections of U.S. livestock, poultry and dairy products.
USDA expects total meat production to be down in 2010, compared to 2009. USDA forecasts a 2 percent increase in broiler production this year, but a 1 percent drop in beef production. USDA estimates a 3.5 percent drop in pork production this year.
“Cows and calves bring a lot of money into Montana’s economy, so it’s great to see that our producers can finally look forward to receiving a little extra money at the sale barn,” noted Montana Farm Bureau President Bob Hanson, a White Sulphur Springs cattle rancher. “With the extra income they can start paying down the debts they have accumulated.”
Total U.S. meat production for 2011 is projected to be slightly higher than 2010, as increased pork and poultry production more than offsets a decline in beef production, according to USDA. Beef production for 2011 is forecast to decline due to tighter supplies of cattle.
“Ranchers are looking forward to making decisions to increase their profitability over the next two years,” Hanson explains.
The forecasts for increased meat production in 2011 is a positive sign that shows livestock producers are optimistic enough to increase their herd sizes, following two years of reducing herd sizes.
An improving demand picture is welcome news for livestock producers.
As for USDA’s May crop report, the forecasts of larger U.S. and global grain stocks is the big news.
“Montana is one of the top producers in wheat, and our farmers will continue to grow wheat and other high-quality grains,” notes MFBF Vice President Bruce Wright, a Bozeman grain farmer. “I understand there are forecasts for good crop production in 2010 and strong world competition. Of course, we need to keep working on exporting more of our grain to the world markets.”
Posted by Kaci Switzer