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Livestock Profits Likely to Recover in 2013

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Dr. Chris Hurt

Indiana livestock producers did not have a good year in 2012, and many are ending the year with red ink on the bottom line.  However, next year could be one of recovery.  One of Indiana’s most popular economists is predicting 2013 may be a better year than 2012 for those who produce hogs, poultry, dairy, and beef products. Purdue Ag Economist Chris Hurt says, with $6 corn and $13 soybeans, livestock producers will begin to recover, “The livestock industry would be very happy with $6 corn and soybean meal made from $13 soybeans because that will bring them back to break even and possibly back into the black in 2013.” Hurt said, if crop yields get back closer to trend line yields, livestock producers should begin to recover by late summer or early fall.

 

 

This scenario will only be possible if the weather is good, yields improve, and the market move lower. Hurt told HAT if all three of these things do occur, there will be rebuilding in the livestock sector, “I expect pork producers to return to profitability by May of 2013.” He predicts that dairy producers will cut production and that milk prices will reach $21 CWT by mid 2013; that corn prices will move lower once the crop is made; and that beef producers will see black ink by later in the year.

 

Hurt said $6 corn and $13 soybeans would make grain farmers as well as livestock farmers happy. Consumers will also benefit from this scenario with lower retail meat prices. Poultry prices will be the first to come down, followed by pork, and finally beef prices will return to normal but not until sometime in 2014.

 

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