Higher feed costs squeezing livestock profits

US - Rising corn prices are putting a squeeze on livestock producers across the nation.
calendar icon 8 December 2006
clock icon 1 minute read
Corn prices that have doubled in the Midwest over the last year are being blamed for a 3-lb. drop in average hog carcass weights, lighter Thanksgiving turkeys and fewer hens being set for egg production.
In the Magic Valley of Idaho, for example, higher costs have pushed the milk/feed ratio to 2.47, down from 3.26 a year ago. The milk/feed ratio indicates when feed costs are favorable for milk production. A ratio of 3 is considered the minimum for a favorable relationship of feed costs to milk price.

Wilson Gray, University of Idaho Extension economist, doesn't see that ratio improving anytime soon. The last price spike livestock producers faced was about 10 years ago when feed prices jumped up in ‘95-'96 and then dropped back down again after about three months. Livestock producers shouldn't count on that happening this time, he said.

Source: Farm & Ranch Guide
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