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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

The latest WASDE forecasts for US beef, pork and poultry supplies in 2012 showed little change from December.

Broad expectation that US meat protein supplies will be tighter in 2012, is underpinning firm protein prices, particularly given forecasts of strong exports for all three main species. The decline in meat protein supplies is due to smaller beef and broiler production.

Total beef production for 2012 is now forecast at25.075 billion pounds, slightly higher than the forecast put forward in December but still some 1.22 billion pounds or 4.6% lower than in 2011.

If this forecast for beef production materializes, it would represent the smaller output number since 2005. Grain prices have pulled back recently but this will do little to increase beef production this year. Indeed, it may have the effect of shortening supplies even more as lower grain prices make it more profitable to hold back heifers and expand. As producers bring fewer heifers to market, the supply of feeder cattle available to feedlots will decline, reducing total beef production. USDA will publish its results of the January cattle inventory survey on January 27 and the expectation is that beef cows held back for replacement will still be lower than in 2011 as producers in key areas struggled with drought conditions.

An improvement in weather conditions is still a big question mark; lower grain prices and record out front cattle futures should encourage beef cow retention in 2012.

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