Sort & Cull

When beef and pork producers bow their heads in thanks Thursday, they won't have any struggle in counting their blessings. The history-making markets of 2014 dished out the largest feast of profits the livestock industry as a whole has ever seen.

Indeed, given this year's unique confluence of bullish factors (e.g., better pasture conditions, collapsing feed prices, death loss tied to PEDV, strong red meat demand), there will be some on New Year's Eve who predict livestock agriculture will never again see an equity surge of its like.

For example, my conservative cattle feeding model suggests that from January through late November, the average per-head profit total was right at $95. Such a money-printing rate implies an annual, cash-to-cash profit for the feeding sector alone of $2.01 billion. That's a ton of stove-top stuffing.

On the other hand, Dr. Chris Hurt at Purdue is estimating that market hogs in 2014 will end up averaging $55 per head, an incredible profit margin that extends to an annualized equity bump of no less than $5.7 billion. That's an avalanche of mashed potatoes and a tidal wave of cranberry sauce.

For more of John's commentary, visit http://feelofthemarket.com/…

(SK)

© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.