Tuesday, June 21, 2011

Beef Magazine June 2011

Harlan Hughes has an interesting article in this months Beef. He calculates feedlot gains (at $6.77 corn) to cost $.83 for the feed ALONE. I've talked before about how if you are a grass producer, you should love high corn prices. Well, if feedlot gains are costing $.83 just for the feed, than stocker operators should be getting close to $1.00 per pound to grow calves. Even at $.80 there's great money to be made in stockers. It makes Steve Kay's statement in his article in the back seem even more stupid. "The industry is seeing progress...on the industry's fight to end support for the ethanol industry." Hate to break it to you, but this is not good for those of us selling grass (through our production of beef). Let's see, we've had ethanol subsidies for the past several years while at the same time we've had some of the highest prices for beef we've ever seen. Hmmmm. Ethanol subsidies have increased the value (and price) of corn, which has increased the value of our grass....what's not to like about this? I can live with getting $.80 for the value of gain. As long as grass is a substitute for corn, why do we want corn prices to fall?

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