Hurt says the current drought will have a dynamic impact on feed prices now and a dynamic impact on pork prices a year from now. He says those in the animal industry “need to articulate the extreme financial stress they are likely to experience in the coming 12 to 15 months.
The immediate view is that crop producers will bear the brunt of the financial losses, but losses in animal industries will be enormous over the next year, perhaps becoming considerably greater than for the crop sector. This articulation by the animal industries is important to alert consumers to higher retail food prices, but also to policymakers.” Hurt says policy makers have an immediate influence on the release of CRP for grazing and hay production, as well as any disaster payments that might benefit the livestock industry. And he added that includes any adjustment of the Renewable Fuels Standard in 2013.
While crop producers are suffering reduced production this year, it will result in reduced livestock production in the coming year as herds are trimmed due to high feed costs. Policy makers need to realize the impact on the meat and milk industry in an effort to make informed decisions on CRP release and the Renewable Fuels Standard.
Source: FarmGate blog