Consumers have taken higher priced meat in stride. Red meat production January-May exceeded a year ago by 1.9 percent or 368 million pounds. Broiler meat production through May was likely down 1.7 percent or 282 million pounds, as this industry adjusted to the higher cost of production. Turkey industry production surged 4.7 percent or 107 million pounds during these five months. Thus, per capita meat use fell thanks to production cuts by the broiler industry. For its efforts in the first half of 2007, wholesale 12-city, whole-bird prices have averaged 16 cents a ready-to-cook (RTC) pound greater than in the prior year. These are the highest whole-bird prices since 2004. Now that meat prices have adjusted to the higher production costs, the broiler industry is in a new growth mode. The poultry industry's basic cost structure (fuel and feed) has changed in the last three years, something which will remain volatile due to world weather and politics.

Combined per capita meat supply into March 2008 will likely exceed the prior year by small quantities, which bodes well for the meat industries. Growth in our economy is expected to continue along with those in most independent, democratic countries. This creates demand for food and energy, which during short periods of time become rather tight causing an up tick in prices of such goods. This tightness could continue right into the next presidential election.

If the unusually high feed grain values are based on the weather, then it could be short lived if normal weather appears and continues after Independence Day. In the past three times when grain prices surged due to weather concerns, the markets peaked before or during the week of July 4. Thus, our projected price on corn and soybean meal could be on the high side. Keys will be actual U.S. acreage planted and weather in the third quarter. On June 29, planted estimates by USDA were 92.9 million acres of corn and 64.1 million acres of soybeans. Average or better yields are expected. Under this scenario, our price projections could be a bit high.

Good solid economic growth in our economy should bolster further gains in use of food in the United States and world. It's great to live in a country with bountiful supplies of goods, services and the where-with-all and knowledge to trade worldwide. God Bless America.

Our August-January projection for corn prices is $3.75 versus $2.88 per bushel in the same period last year. Our estimate for soybean meal prices August-January is $225 per ton versus $178 per ton in the same period last year.n