Midway through 2009, livestock and poultry producers are still raising less than the industry saw a year ago, but market observers note that cuts in production have been levelling off - and remain above long-term trend lines.

Operating financial losses in both the beef and pork sectors, therefore, still point to further needed output cuts, if profits are to return, even with the lower grain prices.

This could be a troubling development, according to a report from the Chicago Mercantile Exchange (CME).

Through the week ending June 27, production has dropped by nearly 2pc drop from the same period in 2008.

US beef production remains down about 2.3pc for the year, while pork production is off by 1.7pc, according to CME.

However, weekly red meat totals are closer to year-ago levels since mid-May and red meat output has been significantly higher than the average for the period from 2003 through 2007.

Pork production is still pushing the numbers higher, with output 12pc higher than the '03-'07 average.

Beef production is 2.9pc larger than the long-term average.

The US rising pork number has been hit with fewer Canadian pigs in the US market and a smaller breeding herd. That shows the productivity increases the industry is hitting, but that could also put a lot of economic pressure on pork producers.

Poultry numbers show that output is about 6.1pc lower than last year's, but production there is also creeping back up.