What will be the biggest factors for livestock and meat markets in 2011? There are many, many candidates but we will take this opportunity to predict a few items that DLR readers should watch in the coming year. In no particular order, our top picks are:

-Fertilizer prices. That one might seem a bit odd given its removal by several degrees from livestock production but we think they will be a key in this spring’s battle for acres and, as they did in 2008, have some impact on the carrying capacity of southern pastures that are fertilized as a common practice. The big impact will be on “expected returns over cash costs” for corn, cotton and, to a lesser degree, wheat producers. Corn wins any race to generate revenues. 150 bushels (or 200+ in much of the major corn producing state) times $6 per bushel generates a LOT OF REVENUE. But achieving those yields also generates a lot of cost because of the need for more fertilizer, especially nitrogen.

How “expected returns over cash costs” play out for the major crops this spring will drive planting intentions and actual plantings and impact grain markets for 2011 and 2012.


Source: Steve Meyer and Len Steiner, Daily Livestock Report