06-24-2008, 06:30 PM
Rob is correct, increased consumption world wide has had an impact on prices for meat. However feed stocks (corn) have a much larger impact. The farmer can take his corn and feed to livestock or if the price for corn is high, sell it and pocket his profit, without any additional risk.
With no feed, He sells his livestock, lowering the supply and further raising the price of meats. Takes a holiday, who can blame the guy.
Meat producers who do not grow their on feedstock, will sell off animals, because feed is too expensive to buy and feed to animals for profit. Because of life cycles, expect to see higher prices in chicken first, pork, then beef.
Not much will happen in the markets until June 30. That day the USDA issues a much anticipated crop report on projected harvest for the MidWest. Commodity markets put a lot of stock in these reports.
Some of you may remember a similar time in 1973, drought in Iowa, Indiana, and Illinois. And at the same time an oil embargo.
Resulting in high prices and some heavy duty inflation.
It is not a crisis. Being informed is good.
With no feed, He sells his livestock, lowering the supply and further raising the price of meats. Takes a holiday, who can blame the guy.
Meat producers who do not grow their on feedstock, will sell off animals, because feed is too expensive to buy and feed to animals for profit. Because of life cycles, expect to see higher prices in chicken first, pork, then beef.
Not much will happen in the markets until June 30. That day the USDA issues a much anticipated crop report on projected harvest for the MidWest. Commodity markets put a lot of stock in these reports.
Some of you may remember a similar time in 1973, drought in Iowa, Indiana, and Illinois. And at the same time an oil embargo.
Resulting in high prices and some heavy duty inflation.
It is not a crisis. Being informed is good.