Livestock report
By Glenn Grimes

Beef
The supply of fed cattle tightened up enough in mid-April to push some fed cattle prices above $100 per cwt. and live and choice wholesale beef prices to $170 per cwt. Fed cattle prices are expected to weaken some from the spring high as we move into summer, but the futures market is indicating prices in the $90s for the remainder of 2007 and the first half of 2008.

Even though corn prices continued high, the $90+ live cattle futures price contributed to some rally in feeder cattle prices this spring. For the week ending April 14, the median price of $136.50 per cwt. for 400 to 500 lb. steer calves at Oklahoma City was about $5 below a year ago. But the median price of $112.25 per cwt. for 700 to 800 lb. yearling feeder steers at Oklahoma City was $7 to $8 above a year ago.

Cow slaughter continues to run well above a year ago. For the 2007 calendar year through March 21, total cow slaughter was up 15.6 percent; dairy cow slaughter was up 14.1 percent; and beef cow slaughter was up 17 percent. The rate of cow culling and slaughter increased as we moved into spring. For the 4-week period ending March 31, cow slaughter was up 21.3 percent, dairy cow slaughter up 18.5 percent, and beef cow slaughter up a whopping 23.9 percent compared to these 4 weeks in 2006. The increase in cow slaughter was due mostly to the 2006 drought in a substantial part of beef cow-calf country, but higher corn prices are adding to herd reduction.

Beef imports were down 7.8 percent in January to February compared to a year ago. Net beef imports were 10.12 percent of U.S. beef production in January to February 2006 but declined to 7.7 percent in 2007. In other words, imports and exports of beef in January and February 2007 reduced the domestic supply of beef by 2.4 percent from the amount available during the first 2 months of 2006.

Feeder cattle imports from Mexico were down 51.5 percent in January and February but live cattle imports from Canada were up 12.9 percent compared to these months in 2006. Total imports of live cattle from Canada and Mexico were down 20.5 percent.

Swine
Farrowing intentions were for 0.5 percent fewer litters in the March to May quarter but 0.2 percent more litters in the June to August quarter than last year. With the potential for some growth in productivity and possibly less death loss from circovirus because of the increased supply of vaccine, we expect slaughter to be up about 2 percent in 2007 compared to 2006. If this occurs, it will be the seventh consecutive year of growth and the sixth consecutive year of record pork production in the United States.

The demand for pork at the consumer level was weak in December 2006 and January to February 2007 with a loss of about 2.9 percent in our demand index from this period last year. In fact, demand for all meats at the consumer level was weak. Our demand index showed beef was down 0.8 percent, broiler meat was down 8.3 percent and turkey was down 13.4 percent compared to a year ago.

The good news continues to be demand for live hogs. For December through February, it was up 1.2 percent from a year ago. If live hog demand can continue to increase at the 1 percent per month rate of the last 8 months, slaughter hog prices should average in the upper $40 per cwt. live weight in 2007. As of April, the futures market was offering producers with normal basis the opportunity to forward price hogs at about $50 per cwt. live for the remainder of 2007.

Feeder pig prices at United Tel-o-auction were near a year ago as of the week ending April 14, even though corn prices were well over $1 per bushel higher than a year ago. The 50

to 60 lb. pigs at United sold for $96 to $120.50 during the week ending April 14. For the rest of 2007, pig prices are likely to run somewhat below last year.

During the first 2 months of 2007 U.S., pork exports were 9 percent above a year ago. However, in February 2007 our pork exports were below a year earlier for the first time since July 2006.

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