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Cattle Prices to "Ride the Recovery" Upward

Article-Cattle Prices to "Ride the Recovery" Upward

"Ride the recovery" may be the theme for the cattle industry in coming months.

"Ride the recovery" may be the theme for the cattle industry in coming months. That, of course, is the economic recovery that is thought to be underway. A host of economic indicators suggest that the recession has ended and the economy has more positive signs than negative. This is true for the U.S. and the world economy.

Unfortunately the beef industry also rode the recession downward. So far this year, through the month of September, beef production has been down by five percent but finished cattle prices have been almost $11 lower than in the same period last year. Nebraska finished steers averaged $93.60 per live hundredweight in the January to September period in 2008. This year those values dropped to $82.75. Steer calf values have also been about $11 per hundredweight lower and feeder cattle about $9 lower.

Beef and cattle prices move downward with recession and upward with recovery. They are generally more directly impacted by changes in economic prospects than pork or poultry markets. The indicators of recovery are beginning to become more numerous in such data as the rise in the average length of work week, rising building permits, falling numbers of new claims for unemployment, and of course the rising stock market. The recovery is expected to be slow by historic standards with unemployment remaining high into 2010. However, the unemployment rate is a lagging indicator and not the one to use as the measure of recovery.

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