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Livestock producers’ bottom line saved by lower commodity prices

A livestock economist says lower corn and soybean prices could be the saving grace for cattle and hog producers this year.

University of Missouri’s Scott Brown says it’s not something corn farmers like to hear.  “But it has made what would otherwise be a lot of red ink in cattle and hog sectors – frankly keep them in the black,” he says.

Brown says lower corn prices offer relief to livestock producers as hog prices have continued their move down.   “Feed prices have moved down along with those hog prices and have kept the bottom looking a lot better than we would have thought otherwise,” he says.

He tells Brownfield he doesn’t anticipate the volatility in the livestock market waning anytime soon.

Brown says as margins get tighter it’s important for producers to reexamine every aspect of the cost side of production.  “If you want to think about that risk management side locking in cattle prices or locking in hog prices without locking in feed costs – might be one we want to think twice about,” he says.  “I think you can find yourself, when you’re only locked in on one side of that equation you can get into trouble fairly quickly.  We’ve seen that in the past.”