0305ninemkMRpmjml-ncoew-.cfm
Just a scoop full
"Just a scoop full">
Just a scoop full
(March 5)--I talked to a man who not only feeds a lot of cattle, but also buys a lot of feeder cattle for feedlots. I asked him what his opinion was about the corn and cattle market. He said the funds are in our markets so strong that nothing makes any rhyme or reason right now.
With the government pushing these ethanol plants, forcing corn to be a lot higher, plus the fact of the drought overseas, it is going to be very interesting how all this plays out. Our government has always operated under a cheap food policy. With gas prices where they are, plus the high cost to produce food, will the government take another look or will they simply think we can push everything to a higher level?
The big news in the cattle industry is JBS's buying of National Beef Packing. JBS was already the biggest beef processor in the world. With this purchase, its U.S. competitors are reduced to Tyson Foods and Cargill Meat Solutions. Any time you take out another competitor, this cannot be positive for U.S. cattlemen. Then shortly after, JBS announced they were going to buy Smithfield Beef Group. This acquisition will include 100 percent of Five Rivers Cattle Feeding. Five Rivers is the largest cattle feeding operation in the U.S. with a one-time feeding capacity of 811,000 head of cattle.
Any time you get that much closer to a monopoly--it is negative.
JBS is a Brazilian-owned company that is now our largest packer. And with our dollar being so weak now they were able to acquire this at a very discounted rate--comparing what our dollar is worth compared to theirs. I've heard for several years the packers were in bed together. Now they won't need as big of a bed.
Editor's Note: Jerry Nine, Woodward, Okla., is a lifetime cattleman who grew up on his family's ranch near Laverne, Okla.
3/17/08
6 Star Midwest Ag\20-B
Date: 3/12/08
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