SAN ANTONIO, Texas — Stable grain prices and falling crude oil prices mean lower input costs for livestock producers this year.
Tight corn supplies followed by record grain prices hit beef, pork and poultry sectors hard between 2010-12. Prices started to relax as supplies rebuilt and eased the burden of high feed costs.
“We are going to be in an environment where prices are going to be fairly stable from a price perspective due to this increased supply,” said Cattlefax market analyst Mike Murphy.
Grain and energy production projections were presented at the National Cattlemen’s Beef Association in San Antonio Feb. 3-7.
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U.S. hogs averaged $106.69 on a carcass basis July 11, down from $110.21 July 4.
U.S. corn-to-use ratios are expected to be 13 to 15 percent until April, and improved crops around the world will limit American exports to less than two billion bushels.
Murphy also calculated a shift in acreage planted to corn and soybeans this spring.
Corn acres are projected to fall by two million, but three million more acres of soybeans are anticipated.
Farmers are expected to plant 89 million acres to corn, 87.2 million acres to soybeans and 56.2 million to wheat, which would be the same as past years.
Cattlefax is already predicting that this year’s corn yields will be 164.5 bu. per acre, which would total 13.5 billion bu. This is not a record, but it is enough to keep supplies stable.
Corn price forecasts for this year call for an average of $3.60 per bushel with a range of $3.50 to $4.25, compared to average $4.16 last year and $5.80 in 2013.
Five million bushels of corn will be used for ethanol production, which averaged 925,000 barrels per day last year and will continue to trend with gasoline production.
Oil prices are expected to hover between $40 and $70 for the year, and gasoline will cost $1.80 to $2.80 per gallon.
Diesel prices will vary from $2.80 to $4 per gallon and continue to trade at a premium to gasoline.
barbara.duckworth@producer.com
