Feed Prices Strong Despite Low US Cattle Herd Numbers

With the National cattle herd at historic lows and feed demand shifting, Rabobank Grains and Oilseeds Analyst Stephen Nicholson shares his outlook on how that could impact corn and soybean acreage.

“If you have the lowest beef herd on almost on record, I think, if not in the last century. You know, what does that mean for feed demand? Well, we've been pleasantly surprised that feed demand continues to be pretty, pretty good. But I also think we have to thank our brethren in the poultry and the swine industry for continuing to move numbers and to move product, and so that's helped as well”

Nicholson says that there are stronger signals in the markets that are starting to emerge.

“If you look, we had good demand in the first quarter of the crop year, and to get to that number that USDA has on the balance sheet, you're going to have to have record demand for the rest of the three quarters left in the crop year. And that may be a pretty high hurdle to get over, but when you have cheap grain, you know that does matter quite a bit. And so, as we know, feeders, I'm going to look at beef and swine in particular. They like to rather feed corn than anything else that they can because it's a better feed all the way around.”

Once again, Stephen Nicholson with Rabobank and USDA is set to release an updated set of quarterly stocks and prospective plantings reports tomorrow. With today's Line on Agriculture Report, I'm Lorrie Boyer.