He suggested Live Cattle futures are overvalued, and cattlemen should consider hedging at $112 to $114 during the last quarter of 2020, and at $116 to $118 into the first part of 2021. “There is some risk in feed prices based on the lateseason dryness, Chinese demand and things of that nature, but also based on the broad commodity markets, which are starting to turn around here just a little bit,” Basse said. Following the Midwest derecho storm, AgResource predicted yields to slip from record highs, down to around 179 bushels/acre, which is still nearly “on trend.” Yet, he expects the lows to come later this fall. “Don’t get bullish and chase this market as a feed user today. Step back and allow the market to come to you in October and November,” he advised. Economic wild cards include political outcomes and continued stimulus measures.
OCTOBER 2020
“Never before did I think we’d see a U.S. debt level for government at $26.8 trillion and still growing,” Basse said. “These debt levels are something that I believe will
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be a drag on the U.S. in the world economy for many, many years to come.” Growth across the globe has slowed, too, but India and China are still expected to become the No. 1 and 2 largest economies, overtaking the U.S. by 2025 or 2026. Government support plays a big role in overall farm income, accounting for 40% to 45% of net farm revenue this year. “That is something I never thought I would see in my career,” said the 41-year veteran. Net farm income is down 47% from 2012, and has been flat for a number of years. Basse looks each morning for signs of everything from new export demand to product innovations. “We need to see a new demand driver for you to get this all changed around,” he said. Feeding Quality Forum sponsors include Diamond V, Feed-Lot Magazine, Micronutrients, Zoetis and AngusLink. For more information or to watch full presentations, visit www.FeedingQualityForum.com.
