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Ag economist: Feed costs leading to pricier meat in 2011

It costs a lot more this year to feed meat animals corn and soybean meal than it did just a few years ago. By the end of 2011, meat eaters will be forking out more money, as well, a Purdue University agricultural economist says.

Rising grain prices are pushing feed costs higher for US livestock producers, said Chris Hurt. With feed making up as much as 60% of a livestock producer's costs, beef and pork producers are expected to reduce their herd sizes or leave them unchanged next year. Poultry farmers could increase production slightly.

Three primary factors are contributing to the rapid increase in corn prices, Hurt said. As incomes rise in developing countries, people are buying more food. Also, the biofuels industry continues expanding and using more corn. And the weak US dollar encourages larger corn purchases by foreign buyers who can afford to outbid domestic buyers for US grain.

Poultry producers - specifically those who raise broilers - could see their production up as much as 2% in the year ahead, Hurt said. The broiler industry is bumping up production to grab greater market share among the animal species. Hurt said that strategy demands more feed, which could pull grain prices even higher.

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Purdue Department of Agricultural Economics

Editor WorldPoultry

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