MARION, Ind. -- Rising feed prices and hot weather has made this season tough on livestock farmers, and experts predict the end result will be higher costs at the grocery store.
Kris Goff, a hog farmer and extension educator at Purdue University, says many livestock producers have cut back in recent years to deal with the rising cost of feed.
"We just paid the feed bill not too long ago and yes, it's quite high," she says. "We're a little bit smaller, 40 sows, compared to larger (farms). I'd hate to see their feed bills."
Wholesale prices for bushels of corn have been $6 to $7 this season. Purdue University agricultural economist Chris Hurt says the high prices are good for corn farmers but bad for most everyone else. He says hog and other livestock farmers have downsized and reduced production in reaction to overall high corn prices, which spiked in 2008.
"We're estimating that (hog farmers) could pay this year about $6.70 a bushel for corn and still break even," he says. "That's a pretty remarkable statement if you go back five years and they would be losing money with anything more than $4 a bushel."
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Production and prices
Recently, USDA estimated that the nation's corn harvest would be 4 percent less than previously expected because of damage from the hot and dry summer growing season. With 855 million bushels projected, Indiana is expected to grow nearly 40 million fewer bushels than last year.
The heat not only has damaged crops, it has made conditions difficult in livestock operations. Goff says the excessive heat makes it difficult for sows to produce milk.
Wayne Townsend, a Grant County, Ind., hog farmer, says the heat has slowed growth on hogs. He says though the heat has made the season difficult, rising prices rather than rising temperatures are of more concern to livestock producers.
"We are in a situation in the eastern part of the Corn Belt where we may not have enough corn to get to harvest," he says. "We have to buy about two-thirds of the corn we feed to hogs."
Townsend says the blame for rising corn prices lay in government subsidies for ethanol produced from corn. He says the federal mandate that a set amount of the corn crop must be used to produce ethanol has driven up prices to the point where livestock and poultry operations are suffering.
"When you go against those that are tax supported, it's hard," Townsend says. "We would hope for reasonable rules and regulations in regard to this sort of thing. The direction seems to be a bit out of the control at the moment."
Hurt recently co-authored a study that found the corn mandate created an "inelastic" market where constant demand for corn kept prices high. He says it could create a situation where corn has to be used for fuel instead of food.
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"That's the disadvantage to using corn for other products," Goff says.
Though livestock producers have downsized enough recently to keep operational, the costs ultimately may shift to the consumer. Hurt says grocery prices for pork, beef, chicken, eggs and milk are high and could go even higher if the current corn crop fails to produce.
