If you’re looking forward to warmer weather and cooking out on the grill, beware of being burned by what it’ll cost. Darin Newsom is a Senior Analyst at the ag and commodity reporting service D-T-N, who says the steaks on the grill and the gas to cook them may all be up. He sees a three to five-percent increaseright now, which sounds like more when you factor in the cost of the energy and also the food. He says it could be "quite an interesting summer."
Newsom says though beef remains costly, cattle producers are not raking in big money, because they’re under pressure to pay for feed, which is soaring in price. He says there’s been a substantial rally in the corn market, 2-dollars plus since last September. That’s raised feed costs and in turn he says that affects the cost of dairy products, for hogs and bee. He cites a simple formula: "High corn, high cattle."
The ethanol boom is a lot of the reason for high corn prices, and Newsom says livestock feeders are now competing for that corn with energy producers. He says a lot of prices may be volatile this year. There’s been what he calls an " explosion, basically commodity-wide," and says when we get into the summer, things are likely to really heat up. Weather will affect the market for grains, he’s seen predictions for an even higher cattle market, and with volatile energy markets looming out there, Newsom says there are a lot of questions.
Newsom says early estimates show that people will be paying roughly 25-cents more per pound for beef this year. Data Transmissions Network, which provides DTN commodity reports, weather and other data services worldwide, is based in Omaha.