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Factors affecting livestock and poultry.

Indicators released in late 1992 point to a rebounding economy. Gains were posted in employment, industrial production, retail sales, and consumer confidence. Meanwhile, inflation remains relatively low and short-term interest rates appear to be stable while long-term rates are slowly failing.

Real GDP is likely to grow nearly 3 percent in 1993, compared with 2 percent in 1992. Inflation in 1993, as measured by the GDP deflator, is expected to rise about the same as in 1992, between 2 and 3 percent. The bank prime rate is likely to average around 6.5 percent in 1993, compared with 6.3 percent in 1992.

Whether the recovery is sustained in 1993 depends primarily on two downside risks: consumer retrenchment and sluggish exports. Much of the increase in consumer spending has come at the expense of savings. If consumers attempt to rebuild savings, the economy is likely to sputter again. As for the second risk, even though exports rose in October, economic slowdowns in Germany and Japan are likely to slow export growth considerably this year. Growth is also expected to be relatively slow in Canada and the United Kingdom. If the slowdowns in those countries are worse than expected or their recessions spread to other countries, export growth will slide further, slowing the economic expansion.

Feed costs are projected lower in 1993 than in 1992, due to record large corn production and a buildup in stocks. Ending 1992/93 corn stocks are expected to be 2,247 million bushels, compared with 1,100 in 1991/92. Farm corn prices in 1992/93 are expected to average $1.90-$2.20 per bushel, compared with $2.37 in 1991/92. Soybean meal prices (48 percent, Decatur) are expected to average $170-$190 per short ton in 1992/93, compared with $189 in 1991/92.
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Title Annotation:Briefs; livestock and poultry industries
Publication:Frozen Food Digest
Date:Apr 1, 1993
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