Animal Ag Feed Supply Not Keeping Up With Demand

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Crop prices are going higher, impacting the animal agriculture industries' feed costs. Also impacting feed costs is the price of oil. When oil is higher, the demand of corn for ethanol production increases, pushing up further the price of corn.

"Three weeks ago we assessed the rate of consumption of corn and soybeans and concluded that corn consumption was progressing too rapidly based on available supplies", writes Darrel Good, Agricultural Economist, University of Illinois.

Strong feed demand in the dairy and swine industries may cause supply problems as the year progresses. This may put some animal agriculture operations on the edge if there are any risks that come true and not hedged, mainly a bad planting season, poor weather, or further increases in commodity prices.