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Farmers, ag economists forecasting feed prices to be lower in 2024
By Doug Schmitz
Iowa Correspondent

BLOOMINGTON, Ill. – As 2023 draws to a close, farmers and agricultural economists are already forecasting feed prices to be lower in 2024.
“It appears that there will be some relief in feed prices in 2024,” Tasha Bunting, Illinois Farm Bureau director of commodity programs and farm systems, told Farm World. “Recent reports have indicated that feed costs could be approximately 20 percent lower in 2024.”
Mark Legan, a Coatesville, Ind., soybean, corn, and pork producer who operates Legan Livestock and Grain, Inc., and farms alongside his wife, Phyllis, and their daughter, Beth, told Farm World, “I feel like 2024 feed prices should be a little lower than the previous year.
“Here in central Indiana, we had a very good growing season again, with many row crop producers reporting best-ever yields – our farm included,” he said. “We saw a wide harvest basis, particularly on corn, with local elevators and processors in our area having to shorten dump hours because they were running out of room.”
He said feeders that had adequate storage space should have had opportunities to buy corn at lower prices, compared to the past several years.
“Corn basis levels have already moved off the harvest lows as the calendar rolled to December,” he said. “With that said, soybean meal basis and futures prices rallied significantly from early October through harvest, largely because of last year’s drought in Argentina. Argentina has for the past several years been the leading exporter of soybean meal to the world.”
He said, however, “With last year’s drought leading to a 50-percent reduction in their domestic supply, they basically ran out of beans to crush, and many of the world’s soybean importers turned to the U.S. this fall.
“Soybean crush capacity continues to increase in the U.S., and will do so for the next two to three years as new plants come on line to meet the demand for renewable diesel, and sustainable aviation fuel,” he said. “As this happens, I would think we would see an abundant supply of soymeal as processors crush for oil and meal becomes the byproduct. This should also push the U.S. into exporting more soymeal.
“In my opinion, what feed prices will be in the future will largely depend on weather in both North and South America,” he added. “Reports are some dry areas are affecting soybean and corn planting in Brazil, while Argentina seems to be catching good rains.”
He said in the last two years, parts of the U.S. Corn Belt have also faced drought conditions.
“This year, the increase in planted acres seems to have had as much to do with the 15-billion-bushel corn crop as the yield did,” he said. “While ethanol margins seem to have been good the last several months, I believe corn-for-feed demand and exports will be down, maybe significantly.
“We are looking at cycle lows in cattle-on-feed inventories, and not really any indication heifers are being held back to rebuild the cow herd yet,” he added. “Pork producers have faced significant monetary losses in the past year, and it’s only a matter of time before the sow herd and resulting pig crop will decline, lowering feed demand, not to mention what the effect of the highly pathogenic avian influenza could have on feed demand if it continues to spread.”
He said,” It also appears exports may face some headwinds with low Mississippi River and Panama Canal water levels. Also, reports are African swine fever is running hot again in the Chinese swine herd, resulting in lower feed grain and soy meal demand there.”
Kenny Burdine, University of Kentucky extension professor of agricultural economics, told Farm World, “There is an unlimited number of feeds and feed rations that can be fed by livestock producers, and there are not really public price series that can be utilized for these feeds.
“However, corn tends to be the driver in feed markets, so that is the best place to look for direction,” he said. “For perspective, feed rations for most cattle operations decreased in price throughout 2023 as the size of the corn crop became more apparent.
“Cheaper feed certainly led to lower costs for dairy-, hog- and feed-based cattle growing programs in Kentucky,” he added. “That should largely carry over into the start of 2024 as well.”
As for feed demand, he said cattle numbers are decreasing, and swine and poultry numbers are likely steady to increasing slightly.
“Again, thinking about corn-for-supply perspective, the 2023 crop was fairly large and what happens (next) spring in South America will also have implications as well,” he said. “As we think about the 2023 crop in the U.S., stock-to-use is tighter on beans than corn, which suggests some shift of acreage out of corn is very possible.
“I suspect that is also a reason why the December 2024 futures contract is trading at a premium to December 2023,” he added. “By spring, we will have a feel for the South American crop, and the focus of U.S. producers will be on planting and new crop price ratios.”
Grant Gardner, UK assistant extension professor of agricultural economics, told Farm World, “We are looking at lower corn prices in 2024 than in 2023. The cash price is down $1.78 per bushel from where we were 365 days ago (Barchart Cash Prices), and the stock-to-use ratio (indicates the level of carryover stock for any given commodity as a percentage of the total use of the commodity) is back to pre-COVID-19 levels, indicating prices are likely to stay low.
“Soybean prices are relatively high historically, but are still lower than last year,” he said. “Stock-to-use is tight, indicating higher but volatile prices, historically. Additionally, U.S. soybean crush capacity is in the middle of a large expansion.
“The expansion is largely driven by demand for soybean oil,” he added. “Still, soybean meal is a byproduct of soybean crushings, leading to record U.S. meal export projections in 2023/2024.”
He said current World Agricultural Supply and Demand Estimates projections indicate there will be around a million more metric tons of meal on the market in 2024, compared to 2023.
“Not a super large increase; however, meal prices should remain similar or slightly lower in 2024 after accounting for the still-high soybean price,” he said.