Farm Progress

High feed costs dim livestock export expectations

• Some analysts remain skeptical of the livestock export predictions, as costs for feed and other inputs continue to cut into producer profit margins and suppress livestock and poultry expansions.

July 8, 2011

1 Min Read

Agriculture Department Chief Economist Joe Glauber has announced that a new USDA forecast predicts a rise in both U.S. beef and pork exports.

However, some analysts remain skeptical of the predictions, as costs for feed and other inputs continue to cut into producer profit margins and suppress livestock and poultry expansions.

“One of the bigger issues facing livestock producers has been the higher feed costs,” Glauber said in his testimony to the Senate Agriculture Committee. “For the 2011-2012 marketing year, global demand is expected to exceed global production.”

USDA currently forecasts beef exports for 2011 to be 2.59 billion pounds, marking the first time beef exports would exceed pre-BSE levels. USDA forecasts pork exports to be up 15 percent compared to last year.

However, a drop in U.S. broiler exports to 6.48 billion pounds compared to 6.77 billion in 2010 is also predicted. The decline in U.S. broiler numbers is largely because of lowered exports to Russia and China.

Tight supplies, coupled with lower corn supply stocks have prompted USDA to forecast corn at record prices of $6 to $7 per bushel. Glauber also testified that prices for other feedstuffs will “remain high as well,” predicting soybean prices would rise to $13 to $14 per bushel.

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