As dry weather persists in the western corn belt, the agricultural industry faces significant consequences, particularly in the corn and livestock sectors. The lack of rainfall has resulted in a surge in new-crop corn futures prices and limited carry after the December 2023 contract.
With little storage-related timing, buying decisions now depend solely on general price levels. This has led to concerns about higher meat prices and downward pressure on feeder cattle futures.
The dry conditions have also taken a toll on corn crops and hay yields, with certain regions experiencing visible signs of stress due to heat and limited precipitation. These challenges have the potential to impact livestock feed supplies and affect the dairy and meat sectors.
Higher feed prices, including soybeans, alongside the prospect of tighter forage supplies, may lead to negative margins for swine production and put pressure on pork prices. Additionally, dairy margins may be adversely affected, potentially impacting milk prices and contributing to a contraction in cow numbers.
The ongoing drought underscores the need for careful monitoring of market dynamics and adaptive strategies within the agricultural industry to mitigate the potential impact on prices and ensure the sustainability of livestock production.
Photo Credit: gettyimages-zhuda
Categories: Ohio, Weather