11/14/06 Corn big factor in cattle market

American Rancher November 14, 2006 There has been a mild expansion of the U.S. beef herd which means more supplies but Cattle-Fax market analyst Kevin Good says it's the dollar plus rise in corn prices in the past month and a half that's been the driver on calf and yearling prices. Good: "Typically if you get a $1 change in corn it is going to devalue you calf prices by at least $12-$15 a hundredweight. It is going to devalue your eight-weight yearling price by a good $7-$8 per hundredweight." Good details what that has meant to northwest cow-calf producers. Good: "If we looked at it here in the northwest, a 550 pound steer calf you are probably looking at somewhere between $1.08-$1.10 as an average compared to what would have been a $1.25 just a month and a half ago. So a pretty big drop there. Can't really expect that price to be much stronger any time soon unless you get some relief on corn prices." Good says expected financial losses by cattle feeders will by itself cause softness in calf and yearling prices as well. It's the growing demand for corn for ethanol production that's driving that market. Good: "So what the market is trying to do is draw more acres into corn production as we go into 07 to meet the usage. That's why we have had this big run up." I'm Bob Hoff.