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DECLINE IN STEER PRICES LEADS DIP IN FARM INCOME

SHARE DECLINE IN STEER PRICES LEADS DIP IN FARM INCOME

The lowest prices in nearly six years for steers and heifers helped cause a 1.4 percent drop in the prices farmers got for their raw products in May, the Agriculture Department says.

Prices also dropped from April to May for milk, eggs and corn. Prices rose for tomatoes, broilers, celery and peaches.The May index held even with year-ago levels, however. Increases for corn, soybeans, oranges and cotton offset decreases for cattle, tomatoes, hogs and onions.

The monthly report said beef cattle prices averaged $67.70 per hundredweight, down $4.30 from April and $9.40 from a year ago. The report said the average price of $70.30 for steers and heifers, the chief slaughter animals, was the lowest monthly price since August 1988.

The decline follows a glut of cattle in feedlots, where the animals are fattened on grain for slaughter. Dry conditions in the Southeast and southern Plains led ranchers to sell their stock to the feedlots rather than graze them.

The feedlot pressure should ease this spring and summer because of better grazing conditions, the department said in a separate report.

That separate analysis also said retail beef prices should drop this summer, averaging $2.88 a pound, down from a record of $2.93 last year.

In the prices-to-farmers report, the department said milk dropped 30 cents a hundredweight to $13.20 in May but was still up from $12.90 a year ago.

Eggs dropped to 58.2 cents a dozen, from 61.7 cents a month earlier and 63.3 cents in May 1993.

Corn dropped to $2.60 a bushel in May, from $2.65 the previous month, but was still higher than $2.14 in May 1993. The department said the decrease from April to May was due to favorable growing and planting conditions in the major states and a projected rebound in 1994 production after last year's flood- and drought-shortened crop.

On the upside, producers received 37.1 cents a pound for broilers, up from 35.3 cents a pound the previous month and 35.2 cents in May 1993.

Tomatoes brought $25 a hundredweight, compared with $16.50 a month earlier and $57.80 in May 1993. Celery brought $13.80 a hundredweight, compared with $8.31 a month earlier and $14.50 in May 1993.