11/29/07 A transitional time in the cattle industry

Washington Ag November 29, 2007 The growth of biofuels and the impact on feed costs, particularly corn, is one of the factors that will mean structural change in the cattle industry. Greg Doud, National Cattlemen's Beef Association economist, who was recently in Washington state, says its about managing the transition of where we were, to where we are going to go. Doud: "You know it is going to cause some turmoil, cause some change but we can do this. The fact of the matter is that we are going to feed cattle where we can grow the byproduct. They byproduct today is great cattle feed. It is causing a lot of consternation out here in the Northwest. It is causing a lot of consternation in the Texas panhandle. In fact I heard the other day that we have something like 40 feedlots for sale in the Texas panhandle and southwest Kansas. We are going to talk about structural change in the cattle industry, whether it relates to the exchange rate and what is going on in Canada or related to the corn situation and byproduct situation for a long time to come." Doud says another factor will be demand for soybeans, for oil for biodiesel. He says a good rule of thumb is that corn is about two and half times less than the price of soybeans. So with ten dollar beans you get $4 corn. I'm Bob Hoff.