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Angus Productions Inc.
Copyright © 2009
Angus Productions Inc.

Cattle-Fax Addresses Feed Situation


PHOENIX, Ariz. (Jan. 29, 2009) — Corn was the big story of 2008. And according to Cattle-Fax’s Mike Murphy, the crop broke out of its old trading range of $1.50-$2.00 per bushel to a new, higher trading range, at least until the stocks-to-use ratio is pulled up to around 30%.


MikeMurphyMikeMurphyIn 2008, producers saw record-high prices in the spring and summer, with corn reaching upwards of $8 a bushel, Murphy told attendees of the Cattle-Fax Outlook session Thursday morning at the 2009 Cattle Industry Annual Convention. Prices have pulled back since then to $3.00-$3.50 per bushel due to reduced demand. Improved wheat supplies, declining livestock production and a slowing ethanol industry all contributed to reduced demand.



“We think in 2009 we will have another seasonal year, with corn prices ranging somewhere around $4.85 in the spring and pulling back for seasonal harvest lows around $3.25 in the fall,” Murphy said. He projected an average price in 2008-09 of $3.90. Corn stocks-to-use levels currently fall at 15%, the highest since November 2007.


World wheat stocks are expected to improve dramatically in 2009 due to increased production. Wheat stocks-to-use levels dropped to a record low in 2007-2008. Soybean stocks per usage are at somewhat comfortable levels, Murphy said.


In terms of 2009 acres planted, Murphy said he expects 85 million acres for corn; 77-78 million acres for soybeans, which is up two and a half million acres; and 59.8 million acres for wheat, which is down. Higher input costs favor increased soybean acreage planted.


Murphy’s hay outlook provided some good news for most in the audience.


“2009 will see some relief when it comes to hay prices,” Murphy said. Producers paid record-high hay prices in 2008. Murphy said he hopes the pull-back in hay prices will continue into 2010.


However, with every crop discussed, Murphy repeated the same warning: “We’re just one crop failure away from prices spiking.”


Absent major crop failure, corn should be down from 2008’s records, but still in the new, higher trading range Murphy said.

Editor’s Note: This article was written under contract or by staff of Angus Productions Inc. (API), which claims copyright to this article. It may not be published or distributed without the express permission of Angus Productions Inc. To request reprint permission and guidelines, contact Shauna Rose Hermel, editor, at (816) 383-5270.