Falling grain prices are expected to shift the agricultural profit spotlight from crops to cattle in 2014, according to Matt Diersen, professor of Ag Economics at South Dakota State University (pictured above).
Speaking at the National Agricultural Bankers Conference last week in Minneapolis, Minn., he said cheaper feed will increase operating margins for both beef and dairy herds, "Now that corn has started its tumble."
He told the bankers that the beef sector will likely be the biggest beneficiary of lower corn prices, which other economists at the meeting hinted could drop below $4 per bushel if the upcoming harvest in Brazil is large.
Diersen expects high hay prices to continue, however, which will be a drag on dairy profitability gains. But he also expects record high beef cattle prices to continue and perhaps rise a bit more during 2014, which will keep cull dairy cow prices high.
He pointed out that milk price volatility should be the lowest it has been in years, while the most significant feed volatility risk is the uncertainty about how much lower corn, soybean and wheat prices may go from their current levels.
There's a nice "problem" that livestock owners haven't had in a long time.
