April 1, 2008

 

US corn boom sets up corn farmers as winners, livestock as losers

 

 

The recent corn boom in the US has created some clear winners and losers, with corn farmers benefiting and livestock producers reeling from it, John Anderson, an economist at the Mississippi State University said.

 

Mixed reactions came Monday after the USDA reported that corn plantings will fall from record highs last year, as more farmers opt to grow soy.

 

Analysts believe that corn prices, currently trading at record US$5.67 a bushel, will rise as an 8-percent drop in planting will not meet demand.

 

Christian Mayer, a market adviser at Minneapolis-based trading firm Northstar Commodity, predicts corn prices to soon top US$6 a bushel, a price unheard other than in drought times.

 

Meanwhile, soy and wheat were also trading near record highs, a major reason why farmers have opted to plant more of these crops, shifting away from corn.

 

On the opposite end of the scenario are hog producers who would have to contend with skyrocketing corn-based feed.

 

Furthermore, the higher input costs for hog producers come at a time when a surplus of hogs has prevented companies from raising retail prices.

 

US industry experts said that the two key factors have pushed some smaller hog producers out of business.

 

Poultry and beef producers also see no relief in feed costs.

 

Observers said that it is just a matter of time before rising corn prices are pass on to consumers.