U.S. corn harvest signals savings for global livestock producers

As corn harvest winds down in the United States, global livestock producers are in the position of being able to take advantage of competitive feed grain prices and invest in the future growth of their businesses, the U.S. Grains Council recently said.

World livestock producers are once again set to benefit from the strength and ingenuity of U.S. farmers, who have produced four harvests exceeding 350 million metric tons per year. The 2016 crop is currently projected at 386 million metric tons.

The result has been a tremendous growth in global corn ending stocks and a dramatic decline in the price of corn that translates to savings for overseas companies.

For example, a poultry company importing 25,000 metric tons of corn per month in 2012 would have paid nearly $8 million each month for corn, which makes up 60 percent of its feed costs. In 2016, that same producer can receive the same quantity of corn for less than $3.5 million per month, saving the company more than $4.5 million per month or $54 million per year in feed costs.

This dramatic savings in the cost of the primary input for the global feed industry – combined with projections for a continued abundance of corn, as highlighted by record global ending stocks – results in a favorable buyer's market.