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What goes around, comes around

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The livestock industry saw record profits in 2014 and is expecting another profitable year in 2015.  Mike Boehlje from Purdue’s Center for Food and Agriculture Business says they shouldn’t get too comfortable – as grain farmers were in a similar position just a few years ago. “The lessons are very clear,” he says.  “The lessons are what goes around, comes around.”

He tells Brownfield when grain prices were high – livestock producers were not doing very well and now, the situation has flipped.  “We already see dairy prices under pressure and dairy incomes are expected to be lower in 2015 than they were in 2014,” he says.  “Beef cow operators are going to be okay for a while.  But cattle feeders are probably going to be in more trouble than they’d like to because they paid too much for feeder cattle.”

Boehlje says the point is that profitable times in the livestock sector will be limited in length. Which he says, means farmers shouldn’t get too aggressive in expansion and become overextended and to make sure there is some reserve for when (not if) things turn around.

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