Beef and pork exports added 85 cents/bu. to the price of soybeans and 39 cents/bu. to the price of corn in 2018, according to a new report by World Perspectives Inc. (WPI). Over the past three years, WPI has analyzed the impact of U.S. red meat exports on the value of domestic feed grains and oilseeds.
The latest report also includes statistics that point to the value of red meat exports to U.S. soybean producers. According to WPI, the market value of pork exports to the soybean industry in 2018 was $783 million. The U.S. Meat Export Federation (USMEF) reported that WPI’s updated study shows that without red meat exports, U.S. soybean farmers would have lost $3.9 billion last year, and U.S. corn growers would have lost $5.7 billion.
Further, the updated report includes a projection of domestic feed use impacts based on both the long-term 10-year baseline projections for meat exports and a special analysis of the critical importance of the proposed U.S.-Japan trade agreement. USMEF also prepared state-specific statistics on the value of red meat exports to the top 15 soybean states and the top 10 corn states.
USMEF president and chief executive officer Dan Halstrom the WPI report “has been a very useful tool in quantifying the importance of red meat exports to our corn and soybean member organizations. Results of the study and the subsequent updates demonstrate that maintaining global market access for U.S. beef and pork is critical to continued growth and to the continued value that meat exports bring to corn and soybeans.”
The updated study also looks ahead, projecting that U.S. pork exports will generate $8.68 billion in market value to soybeans from 2019 to 2028. Red meat exports are expected to generate $19.1 billion in market value to corn and $3.1 billion in market value to dried distillers grains with solubles in that same period.
“When the original study came out a few years ago, it gave us a good look at the value of U.S. beef, pork and lamb exports to corn and soybean farmers,” said Dean Meyer, a corn, soybean and livestock producer from Rock Rapids, Iowa. Meyer, a member of the USMEF Executive Committee, noted that the WPI study continues to support the fact that exporting red meat drives demand for livestock, in turn driving demand for livestock feed.
“The updated study offers a fresh look at corn and goes a little deeper into soybean meal and what red meat exports mean for soybean growers. As grain farmers, we are aware that meat exports add value by increasing the volume of soybean meal and corn used to feed cattle and hogs, but the numbers in this study provide a clear picture of just how important those exports really are,” Meyer said.
USMEF and the National Corn Growers Assn. initially commissioned WPI to quantify the impact of U.S. beef and pork exports on corn use and value in 2016, using 2015 data. Record-setting growth in red meat exports since 2016 – along with an uncertain global trade climate that has developed since the original study – led USMEF to request updates. Using final 2018 data and new U.S. Department of Agriculture baseline projections for 2019-28, WPI updated its analysis of the impact red meat exports had on corn in 2018 and expanded the analysis of the value of pork exports to soybeans.
The updated study showed that since 2015, meat exports represent the fastest-growing category of corn and soybean meal use. One in every 4 bu. of added feed demand for corn was due to beef and pork exports, and one in every 10 tons of added feed demand for soybean meal use was due to pork exports.
In 2018, exports accounted for:
- 14.6% of total U.S. beef production;
- 25.7% of U.S. total pork production;
- 459.7 million bu. of corn utilization – with a market value of $1.62 billion at the year-average market price;
- 2 million tons of soybean meal disappearance — the equivalent of 84.2 million bu. of soybeans with a market value of $783 million.
In addition, in 2018, beef and pork exports added an estimated 39 cents to the average annual corn price of $3.53/bu., and pork exports added 85 cents/bu. to the average annual soybean price of $9.30/bu.
Over the next 10 years, meat exports are projected to generate $30.8 billion in cumulative annual market value to corn and soybeans based on USDA’s long-term forecast for crop prices, USMEF noted.
October live cattle futures contracts were lower this week, although they found some support Thursday. Contracts closed Monday and Wednesday at $109.45/cwt. and $107.65/cwt., respectively, but higher Thursday at $108.725/cwt.
September feeder cattle futures were mostly lower, closing Monday and Thursday at $142.825/cwt. and $141.525/cwt., respectively.
The Choice cutout closed higher Thursday at $214.24/cwt. while Select closed lower $189.34/cwt., respectively.
October lean hog futures plunged this week on trade concerns, closing Monday and Thursday at $76.45/cwt. and $67.475/cwt., respectively.
The pork cutout was mostly higher this week, with the wholesale pork cutout closing higher at $87.79/cwt. Loins were lower at $75.37/cwt., but hams finished higher at $84.05/cwt. Bellies continued to rally higher, closing at $154.44/cwt.
Hogs delivered to the western Corn Belt were lower, closing Thursday at $79.18/cwt.
The U.S. Department of Agriculture reported the Eastern Region whole broiler/fryer weighted average price on July 19 at 87.88 cents/lb.
According to USDA, egg prices were steady, with a steady undertone. Offerings were generally light to moderate while demand was light to fairly good, mostly moderate.
Egg prices have been steady, with a steady to firm undertone. Large eggs delivered to the Northeast were unchanged at 48-52 cents/doz. Prices in the Southeast and Midwest were also unchanged at 48-51 cents/doz. and 40-43 cents/doz., respectively. Large eggs delivered to California were $1.00/doz.
For turkeys, USDA said the market was steady to firm, and demand was light to moderate. The price range for hens and toms was slightly higher, at 86-93 cents/lb.