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Economist predicts shift in agricultural landscape

One ag economist foresees a big shift in agriculture’s “financial landscape” in the coming months.

Dan Basse, president of Chicago-based AgResource Company, says we’re moving into a two- to three-year period of lower feed costs and higher cattle prices.

“We think we’re at a tipping point in terms of the grain farmer, who has had a very good run relative to biofuels for the last six or seven years,” Basse says. “Now we’ve kind of changed that environment as biofuels have become mature.  And the U.S. is going to have to fight to get export demand back in corn and wheat forthcoming—and that fight will probably produce lower prices and oversupplies, and a much different landscape for the grain farmer.”

And Basse says that should bode well for cattle producers.

“You know, this is kind of their day now in terms of grain prices declining for two to three years—and now, of course, meat prices increasing because of lower supplies,” he says.

“And when you put Zilmax into the equation, which will probably cut carcass weights 25 to 29 pounds per head, you end up with rather bullish landscape for the beef producer, for a least a couple of years.”

Basse made those comments in an interview with Brownfield at a recent cattle feeding forum in Omaha.

AUDIO: Dan Basse (6:11 MP3)

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