Underlying Strength In Feed

VANCOUVER - May 18/07 - SNS -- International feed pea markets were little changed on the week, despite good strength in other primary agricultural commodity markets.

Rising values for soybean meal, corn and other key feed ingredients are not dissuading end users from buying, suggesting they are accepting the new feed complex price structure.

The livestock industry is a resolute supporter of supply-demand based economics. However, that support has been shaken by efforts by the U.S. policy makers to end the country's reliance on imported oil.

Direct subsidies to ethanol producers have largely replaced subsidies to grain farmers in the United States, who are enjoying unprecedented demand for what they grow. The improvement in grain values is welcome news to individuals who have suffered from a decades long downtrend in commodity values -- but not to those industries which have benefitted from that trend.

Complaints about the potential end to the "cheap food policy" era are growing louder even though rising values will do more to ignite a green revolution around the world than pant varietal development ever could.

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