US dairy and livestock prices are forecast to rise from their current lows next year as the overall economy sees a degree of recovery, researchers at the University of Missouri have said.

According to the Food and Agricultural Policy Research Institute (FAPRI), the US dairy and livestock sectors are suffered from meat and dairy, which have left the industries in a “bleak financial situation”.

“Strong international demand moved world dairy prices to record levels in the past two years. But over the past six to eight months, world dairy prices have fallen dramatically because of weak global demand for dairy products. The weakening world prices cause wholesale dairy product prices to fall to near government support levels in 2009,” FAPRI observed.

Meanwhile, financially 2008 was the worst year for hog prices for a decade. “The hog industry is particularly dependent on corn as a production input, and corn has been the major driver in increased production costs for the sector,” the report said.

However, looking to the next year, the researchers saw cause for cautious optimism.

“This outlook shows 2010 price recovery but is dependent on general economic recovery and continued supply-side reductions,” FAPRI said.