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Serving: Central

Feed costs may check pork expansion

The recent upheavals in grain markets were threatening to drive feed costs sharply higher. At least that was what we thought the week before last when Russia’s wheat problems drove wheat and other grain markets sharply higher.

All of that has settled down a bit, but last week’s USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports did little to squelch concern. The reports’ key numbers were bearish, but the markets reacted by rising sharply — carrying corn prices to their highest level (except for the wheat-driven spike the week before), since January. Near-time August soybean meal set a contract life high as well.

So, what does this mean for pork producers? Higher feed costs, of course. Not the ridiculously high feed costs of 2008 or even the sharp run-up during 2009 planting season. But, still, the highest levels since mid-2009 and, according to futures prices, yet higher feed costs into next summer.

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TAGS: Corn
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