U.S. cattle and hog producers will likely reduce herds now that it appears there will be even less corn and soybean meal for feed, analysts said.
Chicken producers, who have been rapidly expanding flocks, may slow that process now that higher-priced corn and soybean meal appear to be here to stay, analysts said.
“Feed costs will keep going up. That means profits will keep going down for cattle and hogs,” said Ron Plain, an agricultural economist at the University of Missouri.
The U.S. Agriculture Department on Nov. 9 cut its estimate of the U.S. corn crop for the third month in a row, this time by one per cent, due to smaller yields. It cut its U.S. soybean crop estimate one per cent from October to 3.375 billion bushels.
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“These grain prices are going to get far more expensive and evidently they are going to stay that way,” said Dennis Smith, a broker for Archer Financial Services. “This grain market is going to just create some real problems here for the feeding ratios.”
