THE BOTTOM LINE: TEXAS
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Your Illinois Corn delegation has returned from Texas, investing in relationships with end buyers of corn. After three days with various groups in Texas, ranging from the Texas Cattle Feeders Association to independent feedyards to grain elevators, we’ve learned some interesting things about this market.
- The drought has severely affected the state. Most indicated that the corn crop was only 50 percent of their average, leaving more corn to come from the Midwest to feed the cattle and the ethanol plants. Expectations are that corn availability will begin to tighten in June or July, with August and September months leaving cattle feeders to look for other feed stuffs. The drought has also affected the cattle, as pasture land is too dry to background cattle. Feedyard numbers are high as cattle enter the system at much lighter weights.
- The price of corn is not as much of a concern to cattle producers as the availability of corn. Of course, cattle farmers must feed their cattle and corn is the preferred feedstock. In fact, it is much harder for feedyards to move from corn to other feedstocks like wheat because changing rations is hard on the cattle. During the time a cow is in the feedyard until it is processed, the feedyard can only change the ration one time and still maximize feeding efficiency. Cattle farmers need our corn and corn farmers need to maintain this market.
- Cattle exists in Texas for three key reasons – the climate is perfect for producing cattle efficiently, the packing capacity exists in Texas, and the regulatory environment is less restrictive since population centers are few and further from cattle centers. The industry will continue in Texas for these reasons, so we must continue to invest in infrastructure to guarantee our corn reaches the market with maximum efficiency and minimum cost.
As this graph indicates, livestock is still the largest consumer of U.S. corn. Missions like these ensure that we can continue to better understand and accommodate the industry.
For more information on IL Corn’s mission to Texas, click here.