Market Watch

Hog producers were ready to expand this fall. That may have been appropriate when 2010 corn prices were expected to close at $3.50 in early July, but that is no longer an acceptable conclusion with expectations closer to $5.00, according to Purdue University Extension economist Chris Hurt. "Higher corn prices will cut margins over the coming 12 months, but hog producers can now avoid an expansion that would plunge margins deep into the red in late 2011 and 2012," he said. "The clear message for the industry is: Don't expand and margins will be okay. The other important message is: The next two years will not be a repeat of the large losses of 2008 and 2009," he added. Fortunately, the September USDA survey indicates there are no signs of expansion yet. Producers report they have 2 percent fewer animals in the breeding herd than a year ago, he said. The primary story is in North Carolina where breeding herd numbers were down 110,000 head over the past year. In fa...

The fed cattle market was steady to a little higher this past week. Trade took place mid week with decent volume. Prices were mostly $97 on a live weight basis and were $152-154 on a dressed basis. Choice boxed beef prices were down more than $2 this week. The Choice-Select spread decreased slightly and remains at the typical level. Feeder cattle prices were steady to lower this past week compared to last week’s prices. Montana prices were steady for 750 and for 550 pound steers. Nebraska prices were $1 lower for 750 and $4 lower for 550 pound steers. Oklahoma prices were $1.50 lower for 750 and $2.50 lower for 550 pound steers compared to last week. Corn prices were a $.21 higher per bushel than last week. Dried Distillers Grain prices were $7 per ton higher and wet distillers grains were priced a little higher in Nebraska for the week. Source: Livestock Marketing Information Center Farm Supply Beef Artwork: Cattle Feedlot

As Nebraska winter wheat growers head to the field, the markets continue to move in their favor and marketing the 2011 crop should be on their minds. The cash market for winter wheat to be delivered in July 2011 has remained above $5.50 per bushel for the past month. For those producers interested in forward contracting winter wheat and carrying proper crop revenue insurance coverage, this may be a good time to contact the local elevator. The 2010 UNL Crop Budgets show cash cost for wheat production to be near $2.25 per bushel for both irrigated and dryland production. Total costs for irrigated winter wheat are near $3.40 per bushel, and dryland costs are between $3.50 and $4.00 per bushel depending on the production system. Armed with this information, the $5.50 and higher prices that we see right now allow farmers to lock in a reasonable profit for the 2011 crop prior to putting it in the ground. Looking back over the past ten years, this will be the fifth year that the...