In its latest agricultural baseline projections for the decade commencing 2003, the United States Department of Agriculture (USDA) paints a picture of a livestock industry currently undergoing a phase of recovery following the poor returns of 2002 brought about by increased production levels, higher grain prices and the continuing drought conditions.

Assuming a return to normal moisture conditions, total meat production is initially expected to fall in 2003 as farmers retain cows and heifers for expansion.    Combined with declining grain prices, this will see the emergence of more attractive margins.    

In the longer run, rising farm-level livestock prices for meat animals, efficiency gains which help contain production costs, and only moderate increases in feed prices are expected support producer returns and encourage growth in total meat production.  Consequently, cattle herds are expected to increase somewhat once a cyclical low of around 95 million head is been reached 2004-05 while meat exports are expected to benefit from a rebound in foreign economic growth. Rising slaughter weights meanwhile will compensate for slower herd expansion.  

For the full USDA report go to 'US Perspective' in the leatherbiz.com Market Intelligence section and click on ‘Actual Slaughter Under Federal Inspection for W/E 14/02/2003’, then scroll to end of section.

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