DTN Market Matters Blog
Pat Hill DTN Markets Editor

Monday Nov 2, 2009

More Looking Ahead -- Feed Demand

2010 will be a "do-over year," according to economists at Feedstuffs Magazine.

In an Outlook 2010 piece, Rod Smith and Clayton Gill reminded readers of 2008 with its record-high corn and soybean prices and accompanying higher cost structure and record losses for cattle feeders, big losses for hogs, poultry and dairy sectors.

Smith and Clayton said 2009 brought the "Scarcity Strategy" as feed users worked to get dairy, meat and poultry supplies short enough to drive prices high enough to cover costs.

But the strategy was undermined by the economic pullback that brought on cuts in consumption and consumer spending, so the "scarcity thing didn't work."

But if at first you don't succeed... 2010 will be once again characterized by efforts to cut production (projections are down for everything but turkey production).

Whether the strategy will work this time depends on the economic outlook, and the Feedstuffs analysis says consumers are not very confident in the economy's recovery.

The remainder of the article is devoted to a review of the particulars in each market, from cattle to eggs.

Find the article at http://tinyurl.com/…

Posted at 01:59PM CST Nov 2, 2009
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