August 20, 2009

US meat and dairy prices to rise in 2010

US hog and dairy prices are projected to rise next year from their current lows but the outlook depends on an overall economic recovery and continued supply cuts, according to the Food and Agricultural Policy Research Institute (FAPRI) in its mid-year update.

FAPRI lowered its forecasts for farm-gate prices of corn and wheat from estimates made in a March baseline report. For most major US crops, market prices have declined from last year's peaks but remain well above pre-2007 levels, the institute said.

FAPRI estimated that 2010 all-milk price will be US$15.16 per 100 pounds, up 90 cents from its earlier estimate, and up from US$12.47 per 100 pounds this year. These figures reflected a recent increase in dairy supports by the Agriculture Department and a farmer-funded programme to reduce the dairy herd.

Market hogs are forecast to average US$42.82 per 100 pounds this year and US$50.68 in 2010, said FAPRI. It said farrow-to-finish operators would lose US$7.77 per 100 pounds this year but make US$2.29 per 100 pounds next year.