Rise in prices of corn hurts cattle industry

US - Texas cattle ranchers and feedlots have dealt with high corn prices before.
calendar icon 26 January 2007
clock icon 2 minute read
But this time, fueled by ethanol demand, it's a different story. So different, they say, that managing the country's biggest cattle herd might never be the same.

In the past year, ethanol helped double the price of corn, a major component of livestock feed, from $2 for a 56-pound bushel to more than $4.

Compounded by beef cattle prices that have fallen 20 percent since September and a very cold, wet winter that hurt weight gain, many owners of feed yards that finish livestock to slaughter size say they will lose money on cattle they bought in the fall.

"Well, it's changed the industry and knocked the hell out of profits," Sanger rancher Pete Bonds said of expensive corn he had to buy for a Muleshoe feedlot in which he holds a stake.

"It caught everybody flatfooted," he said. "People expected corn would go up, but we didn't think it would so soon. And, as long as I can remember, I never saw corn go up during harvest before."

Bonds said some ranchers will likely keep cattle on pasture as long as they can, depending on conditions, instead of selling them to feed yards. Texas cattle numbers have already been thinned by years of drought and distress sales.

Bonds and Paul Hicks, who places cattle with feed yards, both predicted that high corn prices might even encourage some Texas Panhandle operations to head north.

Source: Star-Telegram
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