Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (83543)	8/20/2008 6:10:00 PM
From: JimisJim	Read Replies (2) of 116555

mish: that's part of what I was trying to get at about food commodities self-correcting a bit more quickly. Yes, corn prices have dropped for reasons already posted many times. But the cattle and hogs being slaughtered NOW were fed the expensive stuff so the producers have to sell more animals than they would otherwise to maintain profit (since they had no choice but to feed the herds the expensive stuff this summer). It isn't to reduce feed price inputs now as much as to recoup what was already spent raising this year's/season's herds. But because corn (and other feed inputs) have already dropped, the situation will reverse next year. But it takes time to replace depleted livestock numbers. Thus, we see the recent selloff in cattle and hogs, but should see increased investment in both in the form of rebuilding herd sizes next year since the feed inputs have already fallen. It's a matter of lag time, if you see what I'm trying to express. Jim

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