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CoBank sees potential downside for animal ag exports to China

CoBank sees a potential downside of U.S. animal ag exports to China. Tanner Ehmke is CoBank’s Knowledge Exchange manager. He tells Brownfield Ag News, “As they continue to expand their pork supply and their hog herd what that means, then, is less reliance on imports. So that’s going to be less imports of all animal proteins, really, from the United States, is what we’re anticipating.”

Coupled with an increase in feedstuffs, U.S. pork producers could see more pressure on their bottom line. Ehmke says all end users of grain are seeing their feeding margins compressed,

“The feed outlook in 2021, wherever you are in the U.S. if you’re buying grain, whether you’re feeding cattle, pigs, chickens, or whether you’re making ethanol – the cost of doing that is going to be going up. So, those margins are going to be compressed.”

Ehmke says livestock producers will need to make cuts or find more revenue to navigate in 2021. And, he says there are still good profit margins in the futures market to manage price pressure, “And, so, while farmers, especially in the animal protein sector with hogs, if they have profitable margins right now that they can lock in their risk management tools – specifically with futures and options – they should be doing that.”

Ehmke says it’s going to be the nimble manager next year who is going to survive and thrive. Brownfield interviewed Ehmke during the National Association of Farm Broadcasting virtual convention.

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