High grain prices driving down demand
An ag economist says shrinking feed demand is weakening crop market support.
University of Missouri ag economist Ben Brown said high grain prices are driving down demand. He tells Brownfield livestock producers are cutting down on herd sizes and closely monitoring feed use.
“As I talk to cattle producers, they tell us the feed costs side of the equation is just burdensome and they’re struggling to turn a profit,” Brown said. “I think you’re seeing some cutbacks in terms of feed use; trying to extend that as far as they can.”
But he said acreage concerns for key feed grains could prop up feed costs in the short term.
“We’ve got some fundamentals in corn, in grain sorghum, in wheat that certainly would suggest lower prices,” he said. “But the market sentiment is maybe that we could see a little bit more of a rally before we tapper back down a little bit.”
Brown made his comments on Brownfield’s recent Weekly Commodity Market Update.