10-16 IAN NW Beef Outlook

Each quarter, we get together with an expert in agricultural commodities and provide you with a snapshot of those that are most important to those of us living and farming and ranching in the Northwest. According to the Northwest Farm Credit Services VP - Market Research and Development, Michael Stolp, expectations of a record U.S. corn crop are impacting the outlook for Northwest agriculture. Falling corn prices are lowering feed costs for cattle and dairy producers. Beef cattle prices rallied, while milk production is expected to increase. Wheat prices are being pressured lower, caught between weaker corn prices and a record-breaking world wheat crop. Hay prices are generally susceptible to the direction of corn markets, but shortage of high quality alfalfa is likely to keep a solid floor under hay prices.

Here's Michael with his quarterly snapshot: "Beef -- Cattle markets have strengthened. Expectations of record corn production have pulled corn prices down, resulting in lower feed costs and improved margins for cattle feeders. Cash market prices for cattle rallied in July and August after declining every month since the beginning of 2013. Tight supplies will continue to support cattle prices for the foreseeable future. Demand from feedlots is expected to remain strong as operators seek to secure inventory. Global and domestic beef demand is strong despite high prices."