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Is Grain Really Fuelling a Global Depression?

12 June 2008

US - The argument over just how much the price of grain is affecting world food prices has reached a new level. Some contend that it is really the high price of fuel that is driving food costs upward. One report said that it couldn't be the price of grain because "there is only about six cents worth of corn in an 18-ounce box of corn flakes".

We already knew that only a small percentage of the cost of food actually gets back to the farmer. However, some type of agricultural producers do have it better than others.


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"We must 'put the rumen back in ruminants' to be sustainable in this part of the country."
Dr Roy Burris, Beef Extension Specialist, University of Kentucky

Dr Roy Burris, Beef Extension Specialist, University of Kentucky says that corn prices have increased from $2.50 to around $6.00 a bushel with December futures now at $6.37. "I would never begrudge this farmer making a good living but I will say that his economic situation is better than most livestock operations." he says.

The fact is any operation that depends on feed grain is struggling unless they can pass on the costs to the consumer. According to the National Pork Producers Council (NPPC), U.S. pork producers lost more than $2.1 billion in just seven months. They are now losing about $50 on each hog marketed due to the doubling of feed costs.

According to Dr Burris, cattle operations that depend on feed grain are also feeling the pinch. Cattle producers, especially those in the southeastern United States, must lessen their dependence on feed grains. Fortunately, ruminants (like cattle) have the ability to consume large amounts of forage and to convert that feed to meat and milk. In fact, that is what they are naturally adapted for and that is what they do best. "We must 'put the rumen back in ruminants' to be sustainable in this part of the country." said Dr Burris. "Our ability to produce forages, and the cow's ability to convert them to meat, has always been our "ace-in-the-hole"."

The drought and ensuing feed shortage of last year should have taught us a couple of valuable lessons. One is that purchased feeds can be very expensive and the other is that improved pasture management systems can really pay off.

What can we do now?

According to Dr Burris the first thing we can do is to practice rotational grazing for more efficient forage utilization. Then, look at ways to extend the grazing season. Try to have something to graze during July and August. Fescue is pretty much dormant during that period of time. Summer grasses can be of benefit for both grazing or making hay. They will add some flexibility to your feeding program. You can also work on the end of the grazing season. Consider stockpiled/accumulated fescue pasture for December and January or beyond. Our goal should be to graze at least 10 months of the year. You won't likely have much pasture in February and March so you should have an adequate supply of hay available.

Backgrounding operations can work on a combination of forages and by-product feeds to lessen their dependence on feed grain. We need to get ourselves in a position where we don't have to compete with ethanol production and the world's food supply to obtain cattle feed. Forages and by-products can allow us to do that.

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