Agricultural Production and Prices
Markets for major agricultural commodities are typically analyzed by looking at supply-and-use conditions and implications for prices. From an economic perspective, these factors determine the market equilibrium. In the U.S. agricultural sector, many interactions and relationships exist between and among different commodities. For example, corn production and prices affect feed costs in the livestock sector.
With only a few exceptions, production of broilers (the most efficient converter of feed to meat) has outpaced growth in beef and pork production since 1990, and poultry meat has been the major meat produced and consumed in the United States since the mid-1990s. Total domestic per capita beef, pork, and poultry disappearance (a proxy for use) is beginning to increase again after several years of decline that reflected higher feed costs, higher retail prices, and effects of the 2007-09 economic recession. Exports of meats and products also continue to be an important source of demand.
Cattle, hog, and broiler prices have not kept pace with inflation over the past 30 years. Inflation-adjusted hog prices have been lower than 1990 prices from 1991 on. The highest inflation-adjusted cattle and broiler prices in the past 30 years were in 2014. (2014 inflation-adjusted hog prices were the highest they have been in the 21st century.) From 2000 to 2014, inflation-adjusted meat prices reflected slower production growth as meat output responded to lower producer profits due in part to rising feed costs. Cattle production costs, production, and prices also were affected by poor forage conditions due to lingering droughts over much of the past decade, particularly in the Southern Plains. As feed prices have softened, however, livestock production has risen since 2015, lowering U.S. livestock prices.