The No. 1 factor in cattle feeding profit or loss is not fed or feeder cattle price, beef demand or the nation’s shrinking cowherd.It’s the price of corn.
“U.S. cattlemen, I can’t say it strong enough,” said Dan Basse, president of AgResource Company of Chicago. “You’ve got to be focused on grain prices and your ingredient prices because it’s going to determine who stays in business, who makes money, who expands and who goes.”
Basse addressed crowds at the Feeding Quality Forum Nov. 9 in Grand Island, Neb., and Nov. 11 in Amarillo, Texas. The market analyst examined the interactions between corn and beef markets, starting with global factors that affect both.
“It used to be when I woke up in the morning, I would look at the weather forecast as one of the first drivers for grain markets,” Basse said. “Now I get up and the first thing I think about is, what are the Chinese markets doing?”
In general, that economy is bullish, its gross domestic product (GDP) expanding at 8% to 12% per year.