The economic collapse translated into falling demand for ag products

BUSINESS: "America's faltering livestock industry: Animal welfare; As exports tumble, America's pig and cattle farmers are stumbling," The Economist, 25 July 2009.

All that rising New Core demand for higher caloric foods quickly evaporated with the crash, resulting in a flood of unwanted Old Core supply. And when that sort of destocking happens in the ag business, it's brutal.

Comments

[Steven J.]

As quoted in piece, 'America's pork producers lost money 19 of the past 21 months.' Not mentioned was, Dairy producers lost money in last 10 mo. and currently receive a pay price 50% off last years high. Cattle feeders are break even now only because last years high grain price spike distroyed cattle herd inventories.Price elasticity in farm commodities mean a 2% supply shortage gives high farm prices and a 2% supply surplus gives farm gate prices in the toilet.Every U.S. livestock farmer has been burning equity for the past year plus.This makes arguement why policy makers put in some safety nets and subsidies. More farmers equal cheap pleantiful food inventories.

As a result, U.S. consumer pays less for food (as % of income) than all developed and undeveloped nations. Always felt this has some national security implications for Americans.

The recession is sparing the Grain farmers due to demand from biofuels.

[large]

Lessee, add together a triad of facts and one can begin to understand why . .

We would rather burn the corn in our cars than feed it to livestock . .

We would rather use our water to develop cities than use it for agriculture . .

We would rather develop prime farmland and grazing acreage than grow food and livestock . .

Not to mention, those who live in the new "Country" developments don't like the smell associated with raising Cows and pigs . . and generally try to get them "Zoned Out", thus, even fewer willing farmers and ranchers to grow the food we need . .