The U.S. animal protein sector is expected to face a 12% increase in feed costs in 2021, which will mark the highest year-over-year inflation since 2011. With corn futures above $4 per bushel and soybean meal futures around $350 per ton, cattle feeders, hog producers and chicken producers will pay higher prices for feed than they have in many years, according to a new report from CoBank’s Knowledge Exchange division.
The higher feed costs come at a challenging time, as meat and poultry industry margins have been pressured by weak prices in 2020 due to COVID-19. Average producer margins for cattle, hogs and broilers fell into negative territory this year after the pandemic disrupted foodservice demand and drove widespread meat plant slowdowns and shutdowns.