Corn and soybean end-users facing pressure in 2021

There are a number of factors that are pushing projections for corn and soybean prices higher next year and that could impact the profitability of livestock and dairy producers. 

Tanner Ehmke, manager of CoBank’s Knowledge Exchange tells Brownfield that’s something producers will have to keep a close eye on in 2021.  “If you’re an end user and you have to pay a higher price for those commodities, that’s not such good news and it’s going to be squeezing the margins for animal protein, poultry, and dairy producers,” he says.  “This is also coming at the same time when China is reducing, or slowing, their purchases of animal proteins from the US as they rebuild their hog herd.”

He tells Brownfield that sets up a very narrow path to profitability for livestock and dairy producers… especially when considering exports.  “We think it will be a slower export pace of animal protein products over to China, that is going to put downward pressure on animal protein prices here in the US.”

Ehmke says increased restaurant activity post-COVID would improve demand for livestock and dairy prices and help offset an increase in inputs.

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