Sumner GA, Located in southwest GA, | Not sure where I stand on this. Still money to be made in livestock, but the margins you must run, I dont think there are many that can stand these margins long, one hiccup and there is a world of hurt all written in red ink. Our intergrator has already stated at these prices it will cost the company an extra $200,000,000 in feed costs alone. Livestock producer is going to get squeezed hard, I really dont think the consumer has the purchasing power to stand much higher livestock prices. Only bright spot may be exports, but that is a fickle market and any government meddling may shut that down, remember Carter's grain embargo.
Really as far as feeding, Jim may be more right than some give credit for. There is still a good bit of land that isn't utilized or not utilized enough. Not saying you will see grassfed or pasture finished beef as a norm, we know better, but I think especially a backrounding stage, there is money to be made in a good managed grass scenario, especially land not really suitable for cultivation. Seen where people grazed cows between pine trees. There really is land that can be utilized, just depends on the effort put forth. Personally I think the guys talking about corn silage being cheap are fooling themselves. Even if you feed your own grain you are simply subsidizing yourself for all intensive purposes, only taking a profit in one area vs. buying feed where both parties are trying to make a profit in there respective area. I really wish corn would get to $4.25-$4.50 and find an equilibrum, even as a grain grower, high prices scare me, especially as you look at the history.
Really not sure what is held in the cards here, I just do not see where livestock can go, grain goes much higher I feel there will be producers exiting left and right, nobody out there has the finantial stamina to take these prices for an extend peorid with the margins so thin. One spike could wipe out several years of equity, how do you stand that? Answer that question, there will still be the potential there. |
6 dollar corn and livestock
