High feed prices and negative profit margins are causing many livestock, dairy and poultry producers to reduce their herds and flocks.
Some are choosing to exit animal agriculture altogether.
The president of the American Soybean Association, Steve Wellman of Syracuse, Nebraska, says the long-term impact of what he calls “demand destruction” for soybeans and feed grains is a big concern.
“It takes a little time to build that back up when they do get to a situation where the feed supply is sufficient and they can get back into business—and be in a profitable business at that point in time,” Wellman says. “You can’t expect livestock producers—or anybody in this industry—to continue to operate when they’re not profitable.”
Wellman hopes for a big crop year in 2013 to get things back on track.
“We need to respond as well as we can from the grain and soybean sector next year—to increase our production,” he says. “I think we’re ready to do that—but we’re going to need help from Mother Nature to respond to that.”
Wellman made those comments in an interview with Brownfield at the recent drought meeting in Omaha.