1996 has left many people scratching their heads and
wondering, "Was ’96 a good
year for beef and pork prices? And what’s going to happen in
1997?"

It really depends on if you’re selling or buying and if it’s
beef or pork.

No matter which you are, "It was and it wasn’t,"
said John McKissick, a
livestock economist with the University of Georgia Extension
Service.

It was good in that prices did rise for both beef and pork
producers, but prices are
still relatively low.

In 1996, retail beef prices dropped 5 to 6 cents per pound
from a year earlier, he
said. Pork prices for grocery shoppers, though, are up almost 40
cents per pound from this
time last year.

McKissick said producer beef prices plunged to an 18-year low
in the spring of 1996.
"Midfall prices climbed some," he said. "But
prices for the year will still
average about $15 per hundredweight lower than 1995
prices."

Beef prices paid to farmers averaged about $55 per hundred
pounds in 1996, compared to
about $70 per hundred in ’95.

Farmer reaction to lower prices has varied, McKissick said.
Some farmers sold off their
herds and got out of the beef business. Others tightened up on
management and are toughing
it out.

"But things are getting better," he said. As
farmers cull their herds, beef
supply will get tighter. Lower supplies help push prices up.

McKissick expects retail beef prices will rise 3 to 4 cents
per pound in 1997.
"That’s still a good deal compared to the price levels
we’ve had over the past seven
years," he said.

The 1996 grain crop is helping farmers, too. "The feed
grain crop was good enough
this year to drop feed prices some," McKissick said. That
increases feeder calf
prices to farmers in Georgia.

"Farmers have to manage carefully and cut costs wherever
they can," he said.
"It looks like the lowest part of the beef price cycle is
behind us. But it’s going
to take another two to three years before we see good prices
again."

He said pork farmers fared a little better this year, but not
much.

"1996 was an excellent year for prices," McKissick
said. "In fact, we
had the best prices to farmers this year since 1990."

Farmers got almost $20 per hog more in 1996 than they did
in ’95. Expanding world
markets and tighter supplies helped nudge prices up.

The recent popularity of bacon products in fast food items
drove bacon prices to record
highs. And high bacon prices have propped up pork prices
overall. McKissick said 1997
retail pork prices could drop as much as 10 cents per pound.

But you have to look at the whole picture, he said.
"Farmer prices were high
through 1996, but they just barely paid for the increase in feed
costs," he said.

Dropping feed grain prices can help hog farmers, too.

With rising prices and falling feed costs, farmers often
decide to raise more hogs.
"We’ll probably see a production increase due to better
profitability,"
McKissick said.

But he adds that pork production in Georgia isn’t as
profitable as it could be with a
processor in the state. Farmers now must pay to ship their hogs
to an out-of-state
processor. That decreases their profit margin.

"It’s a generally up year," McKissick said.
"But we’re looking for the
beef and pork situation for farmers to get better through
1997."