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Corn Demand Question

Jun 15, 2009

   I always enjoy your shows on the weekends with the comments from the many different people in the grain marketing world. Today's (June 13-14, 2009) emphasis was on the possibility of dwindling corn demand because the livestock people were in such difficult times. My question: is it the current price that is between $4.00 and $5.00 that is the problem or is it the $7.00 corn that they locked last year that is killing them?  If it is the $7.00 corn, how are lower prices now going to help them? I, strictly a cash grain farmer, have had to chew through similar issues because I made the same mistake when I borrowed the money and paid for ammonia and DAP at over $1100.00 per ton. It appears to me that some of these large livestock producers have similar management problems as some of the other big conglomerates in our country. We don't seem to have any reserve, because every thing is actually run on some one else's money, i.e. the friendly banker.  I know that we need the feed use to use the corn supply, but let us get it correct which pricing situation is the culprit.
Jerry Williams
Carmi, Illinois


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COMMENTS (6 Comments)

Just for the record I feed livestock and cash grain farm. You like to blame ethanol blending credits but then you never talked about the grain farmer getting subsidized for years so that the livestock feeders could buy cheap feed. let me give an example. The grain farmer raises the corn, corn is low priced so the farmer gets his direct payment, prices are low enough so he gets his counter cyclical payment then the price is really low so he takes his loan deficiancy payment and sells the corn WAY under the cost of production to the livestock feeder and poof the grain farmer covers his cost and the livestock feeder has feed that he could never even produce for near what he bought it for and that is how the livestock industry got "subsidized" with cheap feed so long that now they complain for actually having to pay for it and competing with subsidized ethanol when actually they have been subsidized themselves for years.
10:59 PM Jun 16th
kg kimball
problem isn't pre-priced feed as not much was ever done after prices moved to the "new"plateau--mostly hand too mouth--on milk or hog side at current prices corn has to be under $2.50 and soy meal at less then 250 ton to make any profit....bigest livestock complaint is not when prices move due to weather or natural market conditions it is when demand is formed from gov't giving $1.58 (+ or -) a bu. in blending credits and supplying incentives to 1 segment of the demand chain....most hog , milk and I suspect independent cattle guys are done for this time and it will be like feather business with a handful of "big" guys...probably cash grains will follow in 1,2 dozen years when auto -mation allows mega--100,000 + acre farms to be run like a conglomerate--don't like it--won't like it--welcome to our kids future and hope everybody owns lots of grain land
12:56 PM Jun 16th
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