Bank predicts rising feed costs for livestock, poultry
meat and poultry supply growth to slow. The U.S. Department of Agriculture fore- cast 0.8%overall growth forU.S. beef, pork andchickenproduction in2021, the slow- est rate of supply growth since 2014. “Fortunately,” Sawyer said, “there are positive signs that producers and proces- sorsmaybenefit fromhigherbeef,porkand poultryprices tocushionhigher feedcosts.” Sawyer described the emergence of COVID-19 vaccines as a positive first step toward theeventual normalizationof food andanimal proteinconsumptionpatterns, including the return of food-service de-
mand. Additionally, he said, changes by meat and poultry processors greatly re- duce theprobabilityof a repeat experience seen inApril andMay 2020. CoBankestimatedU.S.meatandpoultry companies have investedmore than $2.5 billion this year in direct COVID-19 ex- penses, to ensure safeworking conditions andreducedriskof plant shutdowns.With plantsoperatingat amore typical level, ab- senteeism levels improving and far fewer workers falling ill, thebank said, the finan- cial impact ofCOVID-19 looks tobe far less in the coming year than in 2020.
Opportunities for profit in the livestock and poultry sectors will tighten in 2021, a bank analysis predicts, mainly due to an expected 12% increase in feed costs. The cooperative agricultural lender CoBank said the rise in feed costs would mark the highest year-over-year infla- tion since 2011. With corn futures above $4 per bushel andsoybeanmeal futuresaround$350per ton, cattle feeders, hog farmers and chick- enproducerswill payhigherprices for feed than theyhave inmanyyears, according to anewreport fromtheCoBankKnowledge Exchange division. Thehigher feedcostscomeatachalleng- ing time, the bank said, asmeat and poul- trymargins have been pressured by weak prices in 2020 due to COVID-19. Average producermargins forcattle,hogsandbroil- ers fell intonegative territory thisyear, after the pandemic disrupted food-service de- mand and drove widespread meat plant slowdowns and shutdowns. “Most producers lostmoney during the year, but that’s been in the midst of some of themost extremevolatility inglobal food demand anyone has ever seen,” saidWill Sawyer,CoBank leadanimal proteinecon- omist,whoaddedthatmargins“are farbet- ter today than theywere in the spring.” Thatcouldchangenextyear,hesaid,with much of the increase in feed prices being drivenbyChinesedemand for grain.China isrebuildingitshogherdandoverallanimal proteinsupplyafterAfricanswinefever rav- aged itsherd the last coupleof years. In2021,CoBankpredicted,U.S. hogpro- ducers will face the highest level of feed
cost inflation at 14%, followed by cattle feeders at 13% and chicken producers at 11%. The impact of feed costs varies by species for several reasons, suchas life cy- cle, feed ration and components of other feed costs, CoBank said. Though feedcostswill bemoreof abur- den for the animal protein sector than in previous years, the bank said it expects
The power to stop pests – whenever you need it. PyGanic® Crop Protection EC 1.4 II /5.0 II is a botanically derived, organic contact insecticide that delivers quick knockdown of a broad spectrum of hard-to-kill insect pests across a wide variety of crops. And with multiple applications per season, PyGanic provides protection throughout the growing cycle.
Discussion Continued from Page 6
dependent upon the farmer to constantly be looking through thousands of spread- sheetsandmaking thosedecisions that are sometimes very complicated.” Discussion Meet winner Meyer, who moved to Northern California from Michigan last spring to work in the dairy business, said she has competition experi- ence andwanted tobe involved in the con- test,adding, “I’vebeenlookingforasenseof communitysinceImovedhere; IthoughtI’d try it out so that I couldmeet some people andget toknowmoreaboutCalifornia.” Onebenefit of theDiscussionMeet, she said, is that it discusses “real issues.” “This isn’t justacontest for fun,”shesaid. Meyer will represent California at the American Farm Bureau Federation Open Discussion Meet, to be held vir- tually next month as part of the AFBF Annual Convention. As the winner of the Discussion Meet, Meyer earned$5,000 courtesyof sponsors FarmCredit and Kubota. First runner-up DuPont received $1,000. (Chr i s t ine Souza i s an ass i s tant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)
Contact your PCA or visit Valent.com/PyGanic for more information.
Products That Work, From People Who Care ® | valent.com | 800-6-VALENT (682-5368)
Always read and follow label instructions.
Products That Work, From People Who Care is a registered trademark of Valent U.S.A. LLC. PyGanic is a registered trademark of McLaughlin Gormley King Company. ©2020 Valent U.S.A. LLC. All rights reserved. 2020-PYG-6000
PyGanic is NOP compliant and OMRI listed for organic production.
December 16, 2020 Ag Alert 17
Powered by FlippingBook