What Does the World Corn Report Mean for the Cattle Business?

The World Corn Report is out for 2021/2022 and it looks promising. The previous year had been rough for the corn industry. Between a global pandemic, supply chain issues, derechos in the Midwest, wildfires in the Western States and record hurricanes on the Gulf Coast and East Coast, 2020 was a challenging year for farms both large and small. This year and next year look brighter, but as the National Corn Growers Association says, “Don’t call it a comeback.” Yes, the previous year was challenging, but corn growers adapted to those challenges and came out stronger than before. But what does that mean for cattle?

According to Beef Market Central, large crop corn production is up globally and in the United States. “The projected season-average farm price for 2021/22 remains at $5.45 per bushel—an increase from the $4.53 per bushel reported for 2020/21.” 

Farm Doc Daily, a publication of the University of Illinois, has calculated that, “each $0.10 increase in corn price results in an increase in feeding cost of gain of $0.87 per cwt.” This means feed costs will go up, which makes our business a little more expensive. However, after the previous year with all the natural disasters and the global pandemic, it’s important to have perspective and realize how more devastating it could have been. We all owe a debt to the corn growers large and small for working hard amidst these challenges.

For more information on the symbiotic relationship between the corn and cattle businesses, it’s worth reading “Corn and Feeder Cattle Price Relationship” by Brenda Boetel, Professor Department of Agricultural Economics, University of Wisconsin-River Falls.