U.S. livestock producers should expect slightly higher feed costs in 2027, although ample corn and soybean supplies should help keep increases in check, according to Rabobank’s recent report, “Feeding the animal protein market in 2027.”
Rabobank expects feed costs to remain manageable, with transportation, energy and other operating expenses keeping delivered prices above 2026 averages. The report emphasizes that what producers pay to get feed to their operations may matter as much as commodity prices.
Larger U.S. corn inventories, record 2026 soybean production and expanding soybean processing capacity should provide some protection against production setbacks, Rabobank said. Additional soybean meal supplies could also limit price increases, even as domestic use and export demand remain strong.
For cattle producers, pasture, hay and silage conditions will help determine feed needs. Rabobank says El Niño could bring wetter conditions to the southeastern U.S. and greater dryness risk in the northern U.S. Poor forage quality could increase reliance on purchased feed. However, the report cautions that El Niño alone does not mean corn yields will fall below trend.
Rabobank projects U.S. beef production to be roughly steady to slightly lower in 2027. Milk production could increase 1-2%, largely through higher production per cow following herd expansion from 2024 through 2026. Dairy feed purchases will depend on milk margins, regional forage supplies and the relative costs of available ingredients.
Rabobank expects overall feed demand to remain relatively steady, with animal weights, production per head and feeding efficiency influencing consumption alongside herd and flock numbers.
Co-products offer another way to manage costs. Rabobank says ingredients such as dried distiller’s grains with solubles, other processing byproducts and recovered fats can reduce reliance on corn and other primary crops. Their value depends on quality, freight, storage and how much can be included in each species’ ration.
Those supplies have limits, the report notes. Slower ethanol, food processing or soybean crushing activity can reduce availability, while biofuel and industrial buyers compete for fats and other ingredients. A cheaper ingredient may offer little savings if transportation or handling costs are high.
Higher fertilizer, chemical and diesel costs pose another risk. The report says growers could reduce acreage or fertilizer applications, with corn more exposed than soybeans. Transportation disruptions could also leave individual regions facing expensive feed despite adequate national supplies.
Mexico should remain an important buyer of U.S. corn, soybean meal and other feed ingredients, helping support prices, according to Rabobank. However, exchange rates, border delays and freight costs will influence Mexican purchasing decisions.
Rabobank recommends spreading purchases over time, comparing delivered costs and preparing ration alternatives before supplies tighten. Producers should also consider how feed choices affect livestock performance and whether expected selling prices will cover production costs. — Charles Wallace, WLJ contributing editor
