Cattle-Fax held its annual market outlook seminar Thursday morning, predicting corn prices will squeeze cattle feeders even harder in 2008 and put even more pressure on calf prices. Indeed, the impact has already been reflected in the latest cattle inventory numbers from USDA, which saw a reduction in the size of the overall herd and the smallest calf crop in more than half a century. Dan Cerestes is Livestock Branch Chief for USDA's National Agricultural Statistics Service. He said those numbers are the result of high feed costs and drought in the southeastern U.S.

"What's happening is we have high prices to the farmer for his inputs, we have weather conditions out there - different economic things happening," Cerestes explained. "And so the farmer's a business man like anyone else and he has to do the right thing for him."

Outgoing National Cattlemen’s Beef Association President John Queen told Brownfield government subsidies for ethanol have given biofuels plants a competitive advantage over the cattle industry when bidding for corn. And he doesn’t see that problem going away.

Source: Brownfield