In 2010, the economic conditions for livestock producers are expected to improve, while the economic conditions for crop producers are expected to deteriorate slightly or stabilize. Protein foods produced from animals and animal products are higher cost items, and subject to budgeting considerations. Amid a recession, consumers can reduce consumption of meat, milk, and eggs, or buy lower priced products.
In the unusually severe international recession of late 2008 and 2009, prices of agricultural commodities declined sharply as demand fell globally. Inventories of U.S. livestock breeding herds dropped sharply. For example, cattle numbers are at their lowest in decades.
Now that the U.S. economy has stabilized and is showing signs of improvement, consumers are expected to increase their consumption of animal products, thus firming up market prices and improving the earnings of livestock producers, led by dairy farmers and cattle producers.
Hog receipts are expected to increase as a slight decline (2.8 percent) in pork production is more than offset by a $3.77-per-cwt increase in the price of pork.