Source:  Lisa M. Keefe, MEATINGPLACE.COM, 9/20/10

Corn prices rose steadily over the past week — to their highest point in two years — as estimates of the size of this year’s crop have been cut. Protein stocks, in turn, have tumbled.

At the close of the market Friday, corn futures prices on contracts for delivery between December 2010 and July 2011 ranged in price from $5.12 to $5.32 a bushel, according to data collected by the Chicago Mercantile Exchange. That was up from $4.84 to $5.02 on Monday. Last Friday, the USDA dropped slightly its estimates of yield for the crop now in the ground.

Rising corn prices took the stock prices of protein companies down. Smithfield Foods closed down 2.52 percent on Friday, at $16.64, with Pilgrim’s Pride down 2.73 percent to $6.05 and Sanderson Farms down 1.87 percent to $42.40.

Hormel took hardly any hit at all, down just 0.27 percent, to $44.16. Tyson Foods had the biggest stock drop, though, down 6.87 percent to $15.85.

Higher corn prices raise the cost of feeding livestock and if that leads to fewer available animals it can raise livestock prices and reduce margins for meat processors.

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