This was the type of day on the grain markets that makes Minnesota corn and soybean farmers cheer, while state livestock producers cringe.
Grain prices moved sharply higher on a ‘limit up’ day on the markets. Corn and soybeans both rose the daily limit. That’s 30 cents a bushel for corn and 70 cents a bushel on soybeans, a rise of about seven percent for each.
The prices rose because of a U.S. Agriculture Department report that caught grain traders by surprise. In the report, the USDA reduced the estimated size of the fall harvest. Compared to last month’s outlook, the USDA shrank the U.S. corn crop 4 percent and soybeans 2 percent. That means fewer bushels of those crops are available for food and industrial use. The smaller supply is boosting demand and prices for the crops.
The market jump means Minnesota corn and soybean farmers will earn more money from their crops, possibly over a billion dollars more total. The U.S.D.A. is still predicting a record corn and soybean harvest in the state.
Livestock farmers will likely suffer though with the higher prices. That’s because they’ll have to pay more for corn and soybeans, a major feed component for hogs, cattle, turkeys, chickens and dairy cows. The higher feed costs raises the cost of producing these animals and could make it a struggle to earn a profit in livestock.
There was at least some temporary good news though for a part of the livestock business. Hog and cattle prices also moved higher, bringing in more income for farmers that raise those animals.