The beef cattle industry has the greatest ability to adjust feeding rates for changes in feed prices, followed by dairy with some flexibility between grain, roughage, and protein feeds. This year, however, drought in the southern plains has somewhat limited the cattle industry's feeding flexibility. Normal use of wheat pasturing to extend feed supplies has not been possible. Hogs traditionally have had less flexibility in grain feeding rates than cattle. However, it should be noted that we are in a major technological revolution in the pork industry, as well as in a major structural shift.
Poultry has less flexibility in grain feeding rates per animal unit than beef, dairy, and pork.
In response to high feed costs, nearly all major broiler producers have recently announced plans to cut production five to eight percent below last year, and there are reports of lighter average marketing weights on birds than last year. However, poultry analysts say the major reason is a cost-price squeeze, stemming from high feed costs. If they occur, cuts in broiler production will have much less impact on corn demand than similar cuts in pork production would generate. Impacts on soybean meal demand are likely to be more significant. Sparks Commodities' forecast of over 63 million acres to be planted to soybeans in the U.S. in 1996 has tempered price strength in new-crop soybeans.