Cattle producers will fare better than grain farmers in the next two to three years, an agricultural economist told Brownfield Ag News.
Dan Basse, president of Chicago-based AgResource Co., said a combination of factors will make feed costs lower and cattle prices higher. “We think we’re at a tipping point in terms of the grain farmer, who has had a very good run relative to biofuels for the last six or seven years,” he told Brownfield. “Now we’ve kind of changed that environment as biofuels have become mature. And the U.S. is going to have to fight to get export demand back in corn and wheat forthcoming—and that fight will probably produce lower prices and oversupplies.”
That will help cattle producers, Basse said: “This is kind of their day now in terms of grain prices declining for two to three years—and now, of course, meat prices increasing because of lower supplies.” He said Merck & Co.'s withdrawal of the cattle supplement Zilmax “will probably cut carcass weights 25 to 29 pounds per head,” creating a “rather bullish landscape for the beef producer, for a least a couple of years.” For Brownfield's report and 6-minute interview with Basse, click here.
Dan Basse, president of Chicago-based AgResource Co., said a combination of factors will make feed costs lower and cattle prices higher. “We think we’re at a tipping point in terms of the grain farmer, who has had a very good run relative to biofuels for the last six or seven years,” he told Brownfield. “Now we’ve kind of changed that environment as biofuels have become mature. And the U.S. is going to have to fight to get export demand back in corn and wheat forthcoming—and that fight will probably produce lower prices and oversupplies.”
That will help cattle producers, Basse said: “This is kind of their day now in terms of grain prices declining for two to three years—and now, of course, meat prices increasing because of lower supplies.” He said Merck & Co.'s withdrawal of the cattle supplement Zilmax “will probably cut carcass weights 25 to 29 pounds per head,” creating a “rather bullish landscape for the beef producer, for a least a couple of years.” For Brownfield's report and 6-minute interview with Basse, click here.
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