Historically, a poultry producer could potentially risk a 20 percent increase in feed prices when corn was trading at $2.40/bushel, but a similar proportional increase can become far more threatening when corn is trading at $6.40/bushel. Such high-level feed grain prices require different tactical pricing strategies for prolonged survivability. There is nothing fun about lacking coverage and being forced to make hand-to-mouth purchase at current high prices, while a client demands a contract for extended pricing. That inability to offer fixed prices can ripple from one link in the chain to another. Alternatively, once one organization's costs are fixed, it is then rather easy for everyone else further up the chain to fix prices in some ma...
What You Need to Know Today: U.S. weather is getting more attention this week as conditions vary greatly across the western, central, and eastern corn belts, with the different regions battling dryness and too much rain simultaneously. The ProFarmer Crop Tour began today in Indiana and Nebrask...
Key Takeaways: Argentina is on pace for a record corn crop and record exports in the current marketing year, with abundant supplies likely to keep the country highly competitive in global export markets. Argentina’s record exportable surplus is allowing it to offer highly competitive pri...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.