Economist highlights livestock, grain market split

A leading ag economist says farmers are seeing two very different markets. University of Missouri Food and Agricultural Policy Research Institute Director Pat Westhoff tells Brownfield several factors are boosting grain prices.

“China has bought a ton of corn and lot of soybeans as well,” Westhoff said. “Certainly, that’s gotten a lot of attention and appropriately so. We’re still trying to figure out just exactly how much of last year’s crop is out there and available.”

But he said the jump in corn price has caused drops in cattle prices which could continue.

“Feed lots can’t lose huge amounts of money forever and so if we had very high corn prices persisting for the next several months and beyond,” he said. “Eventually, it’s going to have to reflect in perhaps even lower prices than we’ve already seen on the feeder cattle side unless we have stronger demand that can push up fat cattle prices.”

Westhoff said beef producers have at least a couple of silver linings with far out grain futures well below nearby contracts and consumers possibly spending more money on higher quality beef cuts after receiving government stimulus.

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