Feed Bites

Just Swallow the Frog

Written by: Lacie Dotterweich   |   March 31, 2022

PISC, Economies

“If I told you your world was going to change, is your immediate response dread or optimism?”

Joseph Kerns, president of Partners for Production Agriculture, prompted this question to attendees at the American Feed Industry Association’s recent Purchasing and Ingredient Suppliers Conference. He emphasized that change in global markets is inevitable and it’s important to be ready for it, naming examples such as the impact of renewable diesel on operations and what Russian President Vladimir Putin’s actions mean for global grain supplies.

Change is the name of the game in today’s climate and is something we are all too familiar with. Richard Brock, owner and president of Brock Associates, Inc., highlighted examples such as: inflation, national debt, labor force, consumer resistance to high-priced food, war and impact on oil prices, energy policies and dropped ethanol mandates.

Brock also prompted attendees to think about what is happening with the grain and cotton markets.

“Bull markets in grain and cotton are exciting, but the long-term consequences may not be,” said Brock. “Input prices, fertilizer, chemicals, equipment, labor, land rent and many other costs are at or near all-time highs. Be prepared for a margin squeeze when grain prices drop.” 

These are just a few examples of the various factors impacting the price of feed right now. Manufacturers are needing to make tough decisions. Brock equivocated the economic climate to swallowing a frog, “If you have to swallow a frog, don’t look at it too long.” There are some tough times that just have to be accepted and move on from.

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