“It will be another year of split margins in the cattle sector — positive for cow-calf and pressured for feedlots,” says a new forecast from Farm Credit Canada.
The report also predicts higher prices for pigs but that feed costs for farrow-to-finish operations in the West mean “some profitability challenges may be present.”
Not surprisingly, the lender expects China to again be a key factor in world markets, buying less pork (but still above long-term averages) and slightly increasing beef imports.
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The FCC report says feed barley will average $330 a tonne, down from last year but well above the five-year average. Cattle prices will improve but not enough to offset those higher feed costs, the report says.
