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Livestock liquidation eyed, analysts say

01/13/2011 @ 2:27pm

With the USDA this week tightening U.Sand world grain supplies and lowering production, livestock producers can expect even higher input costs in 2011The question marketwatchers have is whether this latest step-up in corn prices will spark higher retail meat prices and U.Shog and cattle liquidation. 
David Hightower, The Hightower Report vice-president, says there isn't much more that can be done, the livestock numbers have already been culled a lot.
With escalating corn, soybean prices, rationing is becoming a buzz word in the grain tradeMost experts believe the first area that can be rationed is corn used for ethanolDan Basse, AgResource Incpresident, says if the corn price hits a range between $6.82-$7.20 per bushel, the amount of U.Scorn used for ethanol production would drop from 5.1 billion bushels to 4.5 billion. 

The second-tier of grain rationing could force even more liquidation in the livestock industry"It's believed that hog and cattle producers are already operating in negative margin territoryIf input cost relief doesn't arrive, you could see even more livestock operators exit," says Dustin Johnson, EHedger analyst.

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02/10/2011 @ 9:06am I am not up to speed on alot of the markets, but there has been some speculation as to if and when China enters the Corn market. Has China already entered and if not how do you think their buying power will impact livestock producers and their market.

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