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In 60 seconds: 1/21/13

In 60 seconds: 1/21/13

USDA to let farmers opt out of ACRE: In remarks Jan. 14 to the American Farm Bureau Federation's annual meeting, Agriculture Secretary Tom Vilsack announced that the U.S. Department of Agriculture will allow producers to either leave or opt into the Average Crop Revenue Election program (ACRE) for the coming year. Originally authorized for five years, the ACRE program required participants to stay in the program through 2012. However, the farm bill extension passed earlier this month extended the program for an additional year. With the extension, USDA determined that farmers could either opt in or opt out for the coming year.

Animal disease zoning agreement: Canadian Agriculture Minister Gerry Ritz announced Jan. 16 that Canada and the U.S. intend to recognize each other's zoning measures during highly contagious foreign animal disease outbreaks. Although foreign animal disease outbreaks are rare in North America, this arrangement will help minimize trade disruptions while still preventing the spread of disease if an outbreak occurs, the announcement said. This initiative fulfills a commitment made in the December 2011 Joint Action Plan of the Canada-U.S. Regulatory Cooperation Council, which is aimed at better aligning the two countries' regulations. The main goal of the council is to enhance the economic competitiveness and well-being of Canada and the U.S. while maintaining high standards of animal health, public health and safety and environmental protection. Under the arrangement, each country intends to accept each other's decisions on establishing, maintaining and releasing a disease control and eradication zone if an outbreak of a foreign animal disease, such as foot and mouth disease or classical swine fever, occurs. A detailed guidance framework outlining exactly how the arrangement will work is under development. In practice, the arrangement means that if Canada were to establish a disease control and eradication zone anywhere in Canada, the U.S. Department of Agriculture would continue to allow imports of live animals, animal products and byproducts from disease-free areas of Canada. Once Canada released the zone, the U.S. would resume trade with that area, and vice versa.

FDA okays novel seasonal flu vaccine: The Food & Drug Administration announced Jan. 17 that it has approved Flublok, the first trivalent influenza vaccine made using an insect virus (baculovirus) expression system and recombinant DNA technology. Flublok is approved for the prevention of seasonal influenza in people 18-49 years of age. FDA said unlike current flu vaccines, Flublok does not use the influenza virus or eggs in its production, but its novel manufacturing technology allows for the production of large quantities of the influenza virus protein hemagglutinin (HA), the active ingredient in all inactivated influenza vaccines that is essential for entry of the virus into cells in the body. The majority of antibodies that prevent influenza virus infection are directed against HA. While the technology is new to flu vaccine production, FDA said it is used to make vaccines that are approved to prevent other infectious diseases. Flublok contains three full-length, recombinant HA proteins to help protect against the H1N1 and H3N2 influenza virus A strains and one influenza virus B strain. As it does with all influenza vaccines, FDA will evaluate Flublok annually prior to public use each flu season. FDA also will assess the recombinant HA proteins produced in the baculovirus expression system and included in Flublok.

New York soda ban grace period: Food outlets in New York City are being given a grace period before being fined for serving sugar-sweetened beverages in containers larger than 16 oz., which has been banned. The board of the city's health department passed the ban last year, prohibiting delis, restaurants, street vendors, movie theaters and sports stadiums from selling any drink that contains more than 25 calories per 8 oz. in cups larger than 16 oz. (Feedstuffs, Oct. 1, 2012). The ban goes into effect on March 13, but a department spokesperson announced last week that while notices will be issued for violations, fines will not be levied for the first three months. After the grace period, violators will be fined $200. A group representing the city's restaurants and theaters has filed a lawsuit seeking to overturn the ban on the basis that the health department lacked the authority to adopt such a measure and that the proposal should, instead, have gone through the city council for legislative action (Feedstuffs, Oct. 22, 2012). A hearing on the suit is scheduled for Jan. 23.

Global consortium: The International Feed Industry Federation (IFIF) and the European Union's Association of Specialty Feed Ingredients & Mixtures (FEFANA) announced the launch of a scientific council of experts who will serve as the expert advisory body of the IFIF/FEFANA Specialty Feed Ingredients Sustainability Project. The council includes experts on ISO methodology and animal nutrition and feed from the Asian Pacific, North America, Europe and South America. The project is designed to measure and establish the role of specialty feed ingredients in the environmental impact of livestock production, the announcement said, and the scientific council will provide independent expert advice on the project during the course of the work in order to ensure scientifically robust inputs in the analysis and to lay the ground for a future peer-reviewed publication of the project output once it is completed.

Intersystems sold: The Pritzker Group announced that it has acquired Omaha, Neb.-based Intersystems, a designer and manufacturer of specialized material handling equipment, including belt conveyors, bucket elevators, bulk weighers, truck probes, grain samplers, gravity screeners, distributors, micro ingredient systems and bolted bin systems. Intersystems sells to customers in more than 30 countries. The Intersystems management team will remain with the company, which was purchased from private investors for an undisclosed price. The Pritzker Group's middle-market investment team acquires North American-based companies with enterprise values between $75 million and $400 million. "We see great opportunities for Intersystems in the world grain and feed markets," said Tom Schroeder, Intersystems chief executive officer. "The resources of The Pritzker Group will ensure our continued growth by helping us add new products and services to better meet the needs of our customers."

Ethanol terminal: Last month, Green Plains Renewable Energy loaded the first unit train from its 96-car unit train terminal in Birmingham, Ala. The new terminal, served by BNSF Railway, features a throughput capacity of 300 million gal. of ethanol annually. Operated by Green Plains subsidiary BlendStar, the terminal has a storage capacity of 160,000 barrels and a four-lane covered truck rack. With construction completed and the first unit train loaded, the company said the new terminal is operational. Green Plains is the fourth-largest ethanol producer in North America, producing and marketing approximately 1 billion gal. per year.

Scoular sells: In late December, The Scoular Co. sold a portion of its ownership interest in a 55 million gal. ethanol plant in Pratt, Kan., to a biofuel investment firm. Scoular announced Jan. 14 that it remains a part owner of the plant alongside new partner Pratt Biofuel Investors (PBI), which has "related ownership to Calgren Renewable Fuels." Along with its ownership stake, Scoular will continue to operate the plant's grain facility, feedstock procurement and distillers grain marketing services. Scoular acquired the Pratt facility and an adjoining 1.8 million bu. shuttle-loading facility in 2011. Scoular senior vice president John Heck said PBI brings the "solid operating experience" necessary to get the plant up and running. Calgren successfully renovated a similar plant in Pixley, Cal., in 2009, and Calgren president Lyle Schlyer was named president of the now Scoular/PBI jointly owned Pratt Energy. Renovation of the Kansas plant, under PBI's leadership, should be completed by spring. Located on the Union Pacific Railroad, the facility is capable of loading 100-car trains.

Urea capacity: Completing a $7 million expansion project, Rentech Nitrogen Partners announced that its East Dubuque, Ill., facility is now operating at a 15% larger capacity. Rentech said the expansion added 21,900 tons of annual urea production to its capabilities. Rentech manufactures and sells nitrogen fertilizer products, including urea ammonium nitrate, ammonia and ammonium sulfate produced from natural gas. The additional tons of urea produced at the plant will actually be converted and sold as diesel exhaust fluid (DEF) to Yara North America as part of a long-term, exclusive purchase agreement. DEF is a high-purity urea solution used as an emissions-reducing engine technology that targets hazardous nitrous oxide emissions.

Volume:85 Issue:03

GMO critic changes stance

GMO critic changes stance

EDITOR'S NOTE: Much of the time, this column seeks to explain modern agriculture by citing sources who are involved in modern agriculture. For the next two weeks, however, this column will hear from another voice -- one that has been a critic of today's high-tech farming and food production but who has now acknowledged that much of his criticism was based on the wrong assumptions and conclusions.

Mark Lynas, a British activist and author who writes about environmental issues and who is recognized as one of the first opponents, since the mid-1990s, of genetically modified organisms (GMOs), spoke to the Oxford Farming Conference earlier this month and said he was wrong about GMOs.

He apologized for his role in the anti-GMO movement for "demonizing an important technology" that actually can benefit the environment. "I now regret it completely," he said.

 

First of two parts

 

Lynas recalled that when he first heard about GMOs being developed by companies like Monsanto Co., he pictured a giant, inwardly motivated American corporation mixing genes in species and "putting something experimental" into the food supply. "It was the stuff of nightmares," he said.

The fears he and other GMO opponents created spread across much of the world, from Europe to Africa, India and Asia, Lynas said, calling the anti-GMO criticism "the most successful" campaign in which he had ever been involved.

However, "the real Frankenstein monster was not GMO technology but our reaction to it," he said.

Lynas noted that as recently as four years ago, he still was writing letters to magazines and newspapers attacking GMOs, even though he had done little research on the matter and had limited personal understanding of the technology.

However, a couple of things happened. First, he realized that "the anti-science environment" surrounding the anti-GMO movement "was becoming increasingly inconsistent with the pro-science environment" to which he was committed for supporting the positions he took in his recent book on climate change.

Lynas said he found himself arguing constantly with those who deny the existence of climate change -- people he considered "incorrigibly anti-science" because they wouldn't listen to climatologists and other experts on the situation.

Then, he said, he was advised by one person responding to his magazine and newspaper letters that being opposed to GMO technology because it's connected with big corporations is like being opposed to automobile wheels because they are marketed by big car companies.

So, he said, he began researching the science behind GMOs and discovered that, "one by one, my cherished beliefs about GMOs were little more than 'green' urban myths."

Lynas said he assumed that:

* GMOs would increase chemical use, but GMO crops have needed fewer chemicals such as fertilizers and insecticides;

* GMOs would benefit only the big companies marketing them, but "billions of dollars of benefits" have accrued to farmers because they've needed fewer costly inputs;

* GMOs were being forced on producers who never really wanted them, but demand was so great that GMO seeds were pirated into some countries;

* GMOs were dangerous, but in reality, GMOs were more precise and safer than conventional breeding because GMO technology addresses just a few specific genes, whereas conventional breeding "mucks about the entire genome in a trial-and-error way."

* GMOs would transfer genes between unrelated species, but research shows that this happens all of the time in viruses, insects, plants and "even us."

 

Museum nostalgia

Lynas said he then began considering how the world's population is growing to an expected 9 billion or more people by 2050 who will need to be fed from food produced on about the same land base today using limited fertilizers, insecticides and water "in the context of a rapidly changing climate."

Furthermore, food production will need to be doubled.

What's important, he said, population growth is coming from the decline in infant mortality -- i.e., more of today's children are growing up to have children of their own rather than dying of childhood diseases.

Fertility rates actually are declining, he noted; it's not that there are "legions" of children being born, but children are living longer, more productive lives.

This trend is a result of economic growth around the world -- especially in developing countries -- which has led to better health and nutrition, he said.

Lynas turned the focus of his presentation to the late Dr. Norman Borlaug and his "Green Revolution" that was based on science and sought to decrease losses and improve yields through genetic technology.

He noted that Borlaug spoke out against those who, for ideological and/or political reasons, were opposed to innovation, saying if they were to successfully halt technology, they might actually precipitate the crises they predicted the technology would cause, including famine and loss of biodiversity.

However, opposition to biotechnology continued, creating government resistance throughout the world and making the development of agricultural biotechnology so expensive and time-consuming that only the largest, most well-financed corporations could afford to be involved, Lynas said.

It now costs $139 million and takes 5.5 years to move from discovery of a new biotech seed to commercialization -- "a depressing irony," he said, in that the anti-biotech, anti-GMO groups "did more than anyone else" to bring about this situation.

European resistance to biotechnology and GMOs and "nostalgia" for farming methods of the past are putting Europe "on the verge of becoming a food museum," Lynas said.

Because of this resistance in Europe and elsewhere, the improvement in yields of important crops is stalling, Lynas warned, and "if we don't get yield growth back on track, we are going to have problems keeping up with population growth."

Food demand and prices will rise, he said, and more and more land and other resources will need to be "converted from nature" to production.

The complete text and a video of Lynas' presentation are available at www.marklynas.org/2013/01/lecture-to-oxford-farming-conference-3-january-2013.

Additional information on GMOs is available at www.FeedstuffsFoodLink.com.

Volume:85 Issue:03

Animal feeding up

Animal feeding up

THE U.S. Department of Agriculture's final numbers for the current feeding season were strong ones for those with corn to sell and terrible ones for those with corn to buy and/or animals to feed.

In its report issued Jan. 11, USDA said there will be less corn in the current 2012-13 feeding year than it forecasted in its December report and more animals to feed -- or, stated otherwise, more pounds of meat to produce, requiring more feed -- than anticipated last month.

The report suggests that it will be costlier than expected to feed those animals and produce those pounds of meat.

First, USDA reported that 97.2 million acres were planted to corn in 2012, fractionally more than indicated in the December report, but the acres harvested were fractionally less than in last month's report, so that was a wash.

However, USDA said the actual 2012 corn crop yield was 123.4 bu. per acre, and this was sufficient to end up with more production and supply than in the December report.

So, what about this is bullish to corn and negative to feeders?

It's simple: Livestock and poultry producers are either feeding more animals or feeding animals to heavier weights or both, according to Feedstuffs sources.

USDA increased demand for corn for feed in 2012-13 by 7% -- enough to reduce ending stocks at the end of this August to 602 million bu. and stocks-to-use to 5.3%, which will be the lowest stocks and usage since 1995-96.

While by no means records, historically, the corn yield, production and supply numbers "are sizeable, but in the context of corn demand, they are uncomfortably small, as the market has been making clear for several months now," John Anderson, deputy chief economist at the American Farm Bureau Federation (AFBF), noted.

An already tight carryover became even tighter, he said, with 2012-13 corn now priced at $7.40/bu., a new record high and more than a dollar higher than 2011-12 corn.

The increase in corn demand for feed in the first quarter of 2012-13 (September-November 2012) suggests that livestock and poultry production -- rather than contracting in mid- to late summer due to high corn costs, as most observers thought was happening -- was stabilizing and even expanding, Anderson said.

Such a production scenario would be supported by the December hogs report, which showed a breeding herd that actually expanded in the first quarter, and by recent egg sets/chicks placed reports showing that chicken companies are increasing the commercial flock, he said.

USDA's January report confirmed this, according to University of Missouri agricultural economists Scott Brown and Ron Plain, who noted that USDA estimated 2013 beef production to be down 4.3% this year, whereas it previously pegged 2013 production to be 5.0% lower, indicating that cattle feeders are finishing their animals to heavier weights.

They said chicken production will be down just 0.4% this year rather than 1.3%, and pork and turkey production will be up rather than down, indicating that producers are feeding more animals and/or feeding to heavier weights.

So, livestock and poultry producers are driving corn demand and prices through expansion strategies (Table 1), sources said.

 

Higher prices

However, meat and poultry supplies still will be limited or scarce this year when considering the extent to which producers have reeled back production from 2008, when corn prices first spiked to new levels and producers reduced production to increase prices enough to cover corn costs.

Beef, pork, chicken and turkey production all will be lower this year than in 2008 -- beef, with cow/calf producers and cattle feeders wracked by drought and feed costs, will be down substantially -- and total meat and poultry production will be down almost 2% from 2008 (Table 1).

These decreases in production are amplified by per capita consumption, the amount of product available for each individual in the U.S. population after accounting for exports and imports, or the per capita supply (Table 2).

On this basis, the beef supply this year will be 11.6% lower than in 2008, the pork supply will be down 7.7%, the chicken supply will be down 4.0%, the turkey supply will be down 5.7% and the total meat and poultry supply will be down 7.3%.

In the meantime, the U.S. population has increased roughly 4-5%, which means that there will be considerably less protein for considerably more people.

(On the boneless equivalent series, the per capita beef supply this year will be the smallest since the 1940s, the pork supply will be the smallest since the 1930s, the chicken supply will be the smallest since the 1990s, the turkey supply will be the smallest since the 1980s and the total meat and poultry supply will be the smallest since the 1970s.)

This has to mean higher prices for livestock and poultry (Table 3) -- cattle and chicken prices will be record high this year -- and this has to mean higher consumer-level prices for beef, pork, chicken and turkey.

Indeed, meat and poultry prices will increase 3.5% this year after inflating 12.4% in the previous two years, according to USDA's most recent Consumer Price Index.

Egg and milk production this year will be steady with 2012, but eggs and dairy products still will inflate 3.5% and 4.0%, showing, even on a one-year basis, what happens when production does not keep pace with population growth, sources said.

 

Market roundup

In the livestock and poultry sectors last week, cattle traded down $3-5 to $123-125/cwt. in Nebraska and $125/cwt. in the Southwest last Wednesday, about even with year ago.

The Choice cutout dropped $1.61 to $192.20/cwt.

Analysts said they continue to expect the cattle markets to rally strongly on tight supplies.

Cattle and Choice product "are having a hard time making an assault on (price resistance) at $130 and $200," said Bob Price at North America Risk Management Services Inc., but decreased placements in late 2012 "almost assure" that those price targets will be taken out, with all-time highs set in the first half of this year.

However, Price said this bull market "has been widely telegraphed," and packers, wholesalers and retailers are prepared for tight and very expensive supplies. This preparedness could hold back how much prices will increase, he said.

Dennis Smith at Archer Financials said beef production will decrease this year and next year, and beef buyers will eventually realize that beef prices are currently a bargain and at a bottom. This will create "a mad scramble" for beef that will, in turn, create a scramble for cattle, he said, and cattle and Choice will price well above resistance.

At the same time, AFBF's Anderson cautioned that the higher-than-expected chicken and pork production will create "a competitive meat counter" at a time when drought, feed costs and dramatically lower production "are making it difficult for beef to be price competitive."

The hog markets increased $1.00-2.78 last week to $82.72-86.42/cwt. on a lean carcass basis across the Corn Belt last Thursday, equivalent to a $62-65 live cash hog market and 1.7% higher than year ago.

Sources attributed increased prices to tightening hog supplies and packers bidding to get hogs in ahead of the bitter cold forecasted for early this week, as well as increasing demand for competitively priced pork.

The chicken markets were steady, with demand slowing in all channels but with supplies moderate for needs, sources said. Chickens were 99 cents to $1.05/lb. and 89-99 cents/lb. in the eastern and midwestern regions last Thursday, unchanged to down 4 cents, and breast meat was $1.26-1.35/lb., 1.6% more than year ago.

The egg markets were up 9-10 cents last week to $1.24-1.28/doz. and $1.18-1.20/doz. for large-sized eggs delivered to eastern and midwestern store doors last Thursday, 22.3% more than year ago. Sources credited markets to good demand, moderating production due to culls and egg import interest from several countries, especially Mexico and the Pacific Rim.

The turkey markets were unchanged at 93-98 cents/lb. for hens and retail-sized toms last Thursday, 4.9% more than year ago. Sources said they believe turkey prices have found a floor but may not increase much or quickly given that some Thanksgiving packages are being put together at lower prices than for last Thanksgiving.

Fresh tom breast meat was unchanged at $2/lb., 17.7% less than year ago.

 

1. Dairy, meat and poultry production

 

 

 

Total

 

 

Total

Total meat/

 

 

 

Beef

Pork

meat

Chicken

Turkey

poultry

poultry

Milk

Eggs,

Year

-Billion lb.-

bil. doz.

2008

26.561

23.347

50.225

36.908

6.246

43.712

93.397

190.0

6.403

2011

26.195

22.758

49.232

37.201

5.791

43.513

92.745

196.2

6.590

2012

25.917

23.248

49.438

36.939

5.918

43.444

92.882

200.0

6.678

2013

24.805

23.285

48.357

36.800

6.000

43.315

91.672

199.9

6.630

2013 as % of 2012

95.7

100.2

97.8

99.6

101.4

99.7

98.7

100.0

99.2

2013 as % of 2008

93.4

99.7

96.3

99.7

96.1

99.1

98.2

105.2

103.5

Note: Eggs are table eggs as reported by the U.S. Economic Research Service.

 

2. Meat and poultry per capita consumption (supply)

 

 

 

Total

 

 

Total

Total meat/

 

 

Beef

Pork

meat

Chicken

Turkey

poultry

poultry

Eggs,

Year

-Lb.-

number

2008

62.7

49.4

113.5

83.4

17.6

101.0

215.9

248.3

2011

57.3

45.7

104.3

82.9

16.1

100.4

204.6

247.6

2012

57.4

45.6

104.2

80.3

16.1

97.9

202.1

248.0

2013

55.4

45.6

102.2

80.1

16.6

98.0

200.2

250.0

Note: Meat and poultry consumption is retail weight basis.

 

3. Meat, poultry, milk and eggs prices

 

Steers

Hogs

Chickens

Turkeys

Milk,

Eggs,

Year

-$/cwt.-

-Cents/lb.-

$/cwt.

$/doz.

2008

19.27

47.84

79.7

87.5

18.29

1.28

2011

114.73

66.11

79.9

102.0

20.14

1.15

2012

122.86

60.88

86.6

105.6

18.53

1.17

2013

129.50

63.00

93.0

103.5

19.20

1.15

Note: Steers are average of all grades. Hogs are liveweight basis. Prices for 2013 are at midpoint of ranges.

Source for Tables: USDA "World Agricultural Supply & Demand Estimates."

 

Volume:85 Issue:03

Livestock & poultry cash market comparisons, 1/21/13

Livestock & poultry cash market comparisons, 1/21/13

Livestock and meat ($)

Jan. 16

Jan. 9

6 months ago

Year ago

Steers, Choice, carcass, 550-700 lb., cwt., Omaha

193.83

193.55

182.16

198.00

Steers, Choice, 1,050-1,200 lb., cwt. Okla/Texas

125.00

128.00

113.00

123.00

Feeder Steers, 600-700 lb., cwt., Oklahoma City

156.00A

159.25A

141.25A

156.25A

Lean Hogs, Carcass, Iowa-Minn. 167-187 lb.*

82.98

81.54

92.68

82.46

Feeder Pigs, 40 lb. National Direct Delivered**1

72.61

70.87

35.72

72.21

SEW Pigs, 10 lb., National direct delivered**

57.28

59.82

16.42

60.21

Choice Beef, cutout, cwt.

192.20

193.08

180.58

181.54

Pork Loin, 185 lb. 51-52% lean, cutout, cwt.

88.74

86.41

102.96

97.34

Hog Corn Ratio

11.6

11.5

11.6

13.8

Steer Corn Ratio

16.6

17.5

13.9

20.2

Poultry and eggs (cents)

 

 

 

 

Chickens, Grade A, Fresh lb. Chicago

97.08a

103.14a

78.27a

72.62a

Hen Turkeys, Grade A, Frozen, lb., Chicago

95.50Aa

96.00Aa

106.50Aa

99.50Aa

Young Tom Turkeys, Grade A. Frozen lb. Chicago

95.00Aa

96.00Aa

107.00Aa

99.50Aa

Eggs, Grade A, Large, doz., Chicago

105.50

105.50

97.50

92.50

N/A: not available

A: average

 

 

 

*Replaces live hogs; live hogs are 0.74 of quote.
**Price quoted is per head.
**1Replaces Sioux Falls, 50-60 lbs.  2/26/07
Livestock, meat, poultry and egg prices from USDA.

 

Volume:85 Issue:03

Ingredient market prices, 1/21/13

Ingredient market prices, 1/21/13

The following prices, which include delivery, were obtained Jan. 16 from feed and grain vendors in the U.S. and Canada. The prices represent current trading values but are not guaranteed. Second column shows the amount of change since the previous week. Prices of certain products can vary depending on the processing method used. N-Nominal. N/A-Price not available.

OILSEED PRODUCTS

 

 

(dollars per ton)

 

 

Soybean meal

 

 

(high-protein)

 

 

Atlanta

478.00

-2.00

Boston

459.00

4.00

Buffalo

463.00

16.00

Chicago

439.00

9.00

Delmarva

N/A

-

Fayetteville NC

488.00

-2.00

Ft. Worth

445.00

-

Kansas City

425.00

6.00

Los Angeles

468.00

1.00

Memphis

440.00

15.00

Minneapolis

425.00

10.50

Okeechobee

508.00

-2.00

Portland

464.90

-2.85

San Francisco

468.00

1.00

Twin Falls

481.00

7.00

Soybean meal

 

 

(low-protein)

 

 

Atlanta

468.00

-2.00

Boston

454.00

4.00

Buffalo

459.00

16.00

Chicago

427.00

9.00

Delmarva

N/A

-

Fayetteville NC

478.00

-2.00

Ft. Worth

N/A

-

Kansas City

425.00

6.00

Los Angeles

441.00

1.00

Memphis

430.00

15.00

Minneapolis

N/A

-

Okeechobee

498.00

-2.00

Portland

N/A

-

San Francisco

441.00

1.00

Soybean hulls

 

 

Atlanta

237.00

-

Buffalo*

N/A

-

Chicago

240.00

5.00

Fayetteville, NC

232.00

-

Ft. Worth*

240.00

10.00

Los Angeles

248.00

-10.00

Minneapolis

200.00

-5.00

Okeechobee

242.00

-

San Francisco

248.00

-10.00

Twin Falls

N/A

-

* unpelleted

 

 

Whole cottonseed

 

 

Atlanta

240.00

-

Buffalo

310.00

-3.00

Chicago

310.00

-5.00

Delmarva

N/A

-

Fayetteville NC

240.00

-

Ft. Worth

340.00

-

Los Angeles

388.00

2.00

Lubbock

335.00

-5.00

Memphis

278.00

3.00

Okeechobee

277.00

-

Portland

382.50

1.00

San Francisco

388.00

2.00

Twin Falls

365.00

5.00

Cottonseed meal

 

 

Atlanta

370.00

-

Chicago

370.00

-5.00

Delmarva

370.00

-

Fayetteville NC

370.00

-

Ft. Worth

375.00

-10.00

Kansas City

370.00

-

Los Angeles

N/A

-

Lubbock

340.00

-15.00

Memphis

245.00

-80.00

Okeechobee

404.00

-

San Francisco

363.00

3.00

Cottonseed hulls

 

 

Atlanta

105.00

-

Chicago

145.00

-

Fayetteville NC

105.00

-

Ft. Worth

150.00

-5.00

Okeechobee

142.00

-

Los Angeles

N/A

-

Lubbock

160.00

-10.00

San Francisco

140.00

-

Canola meal

 

 

Buffalo

401.00

19.00

Minneapolis

323.80

-0.70

Los Angeles

375.00

10.00

Montreal

374.00

8.00

Portland

352.45

15.00

San Francisco

375.00

10.00

Twin Falls

364.00

9.00

Vancouver

310.00

-

Sunflower seed meal

 

 

Fargo

250.00

-

Minneapolis

250.00

-5.00

Linseed  meal

 

 

Atlanta

N/A

-

Chicago

315.00

-

Fargo

N

-

Fayetteville NC

N/A

-

Ft. Worth

N

-

Kansas City

290.00

-

Minneapolis

295.00

5.00

Safflower meal

 

 

Los Angeles

N/A

-

San Francisco

235.00

-

ANIMAL BYPRODUCTS

 

 

(dollars per ton)

 

 

Meat and bone meal

 

 

(ruminant)

 

 

Buffalo

360.00

-5.00

Chicago

370.00

10.00

Delmarva

415.00

10.00

Fayetteville NC

400.00

10.00

Ft. Worth

340.00

10.00

Kansas City

320.00

-

Los Angeles

360.00

-

Memphis

390.00

10.00

Minneapolis

340.00

5.00

Portland

385.00

5.50

San Francisco

365.00

-

Meat and bone meal

 

 

(porcine)

 

 

Fayetteville NC

455.00

10.00

Los Angeles

374.40

-

Memphis

435.00

10.00

Minneapolis

420.00

-

Flash-dried blood meal

 

 

(ruminant)

 

 

Fayetteville NC

1075.00

25.00

Los Angeles

1125.00

-

Memphis

1050.00

25.00

Minneapolis

1100.00

-

Flash-dried blood meal

 

 

(porcine)

 

 

Fayetteville NC

1150.00

25.00

Memphis

1125.00

25.00

Minneapolis

1225.00

25.00

Poultry byproduct meal

 

 

(feed grade)

 

 

Atlanta

455.00

20.00

Fayetteville NC

450.00

-50.00

Ft. Worth

430.00

25.00

Kansas City

320.00

3.00

Los Angeles

489.00

-

Memphis

450.00

-50.00

Poultry byproduct meal

 

 

(pet food grade)

 

 

Memphis

825.00

25.00

Fayetteville NC

825.00

25.00

Hydrolized feather meal

 

 

Atlanta

605.00

5.00

Delmarva

605.00

-5.00

Fayetteville NC

610.00

5.00

Ft. Worth

670.00

-

Kansas City

700.00

50.00

Los Angeles

N/A

-

Memphis

600.00

25.00

Minneapolis

685.00

-15.00

Menhaden fish meal

 

 

Atlanta

1595.00

-

Buffalo

1495.00

70.00

Chicago

1450.00

-

Fayetteville NC

1555.00

-

Ft. Worth

N/A

-

Kansas City

1455.00

-

Memphis

1500.00

25.00

Minneapolis

1575.00

-75.00

Twin Falls

N/A

-

Blended tuna meal

 

 

Los Angeles

N/A

-

San Francisco

N/A

-

Anchovy  meal

 

 

Los Angeles

N/A

-

San Francisco

N/A

-

ANIMAL FAT, GREASE

 

 

(cents per pound)

 

 

Prime Tallow

 

 

Chicago

36.00

-

Ft. Worth

N/A

-

Los Angeles

36.75

-

San Francisco

35.50

1.25

Yellow grease

 

 

Buffalo

35.50

3.00

Chicago

36.50

-

Delmarva

N/A

-

Fayetteville NC

40.00

1.00

Ft. Worth

37.00

-

Kansas City

36.50

-

Los Angeles

35.75

-

Memphis

40.00

1.00

Minneapolis

39.00

1.00

San Francisco

34.50

1.25

Choice white grease

 

 

Chicago

38.50

-

Minneapolis

43.00

1.00

Bleachable fancy tallow

 

 

Buffalo

40.00

3.00

Chicago

36.00

-

Ft. Worth

40.00

-

Los Angeles

N/A

-

Minneapolis

42.00

1.00

San Francisco

N/A

-

Vegetable-animal blend

 

 

Ft. Worth

39.00

-

Los Angeles

34.00

0.63

Minneapolis

39.50

1.00

San Francisco

34.00

0.63

Poultry grease

 

 

(feed grade)

 

 

Delmarva

39.00

1.00

Fayetteville NC

40.00

1.00

Memphis

39.00

1.00

Poultry grease

 

 

(pet food grade)

 

 

Memphis

45.00

1.00

Fayetteville NC

45.00

1.00

GLUTEN, HOMINY

 

 

(dollars per ton)

 

 

Corn gluten meal

 

 

Buffalo

700.00

-

Chicago

625.00

-

Kansas City

720.00

-30.00

Los Angeles

745.00

-15.00

Corn gluten feed

 

 

Buffalo

235.00

-

Chicago

200.00

2.00

Fayetteville NC

260.00

-

Kansas City

255.00

5.00

Okeechobee

280.00

-

Twin Falls

300.00

10.00

Wahpeton

N

-

Hominy feed

 

 

Atlanta

322.00

-

Boston

272.00

8.00

Buffalo

305.00

-7.00

Chicago

235.00

-

Fayetteville NC

322.00

-

Kansas City

245.00

-5.00

Los Angeles

N/A

-

Okeechobee

340.00

-

San Francisco

N/A

-

Twin Falls

310.00

-

BREWERS, DISTILLERS

 

 

(dollars per ton)

 

 

Brewers dried grains

 

 

Chicago

N/A

-

Kansas City

N/A

-

Malt Sprouts

 

 

Chicago

175.00

-

Milwaukee

N/A

-

Winona, Minn

N/A

-

Distillers dried grains

 

 

Atlanta

330.00

10.00

Boston

316.00

10.00

Buffalo

280.00

8.00

Chicago

265.00

15.00

Fayetteville NC

328.00

10.00

Kansas City

340.00

-

Los Angeles

323.00

12.00

Minneapolis

255.00

7.00

Okeechobee

340.00

10.00

Portland

317.50

12.50

San Francisco

323.00

12.00

Twin Falls

337.00

18.00

Brewers yeast

 

 

(dollars per pound, sacked)

 

 

Chicago

0.65

-

Milwaukee

0.65

-

Minneapolis

0.65

-

ALFALFA

 

 

(dollars per ton)

 

 

Dehydrated pellets

 

 

(17% protein)

 

 

Alfalfa Center

355.00

-

Buffalo

422.00

-

Chicago

390.00

-

Kansas City

365.00

-3.00

Los Angeles

N/A

-

Minneapolis

320.00

-

Toledo

390.00

-

San Francisco

N/A

-

Suncured pellets

 

 

(15% protein)

 

 

Atlanta

N/A

-

Ft. Worth

340.00

-10.00

Kansas City

335.00

-5.00

Los Angeles

N/A

-

Portland

319.00

-

San Francisco

N/A

-

WHEAT MILLFEEDS

 

 

Shorts

 

 

Chicago

245.00

-

Ft. Worth

N/A

-

Los Angeles

262.00

31.00

Millrun

 

 

Los Angeles

253.00

11.00

Portland

255.00

-

San Francisco

253.00

11.00

Twin Falls

230.00

-

Bran

 

 

Buffalo

205.00

-25.00

Chicago

245.00

-

Los Angeles

257.00

11.00

Minneapolis

260.00

-

Middlings

 

 

Buffalo

175.00

-25.00

Chicago

245.00

-

Fayetteville NC

N/A

-

Ft. Worth

N/A

-

Kansas City

195.00

5.00

Los Angeles

260.00

11.00

Memphis

235.00

-3.00

Minneapolis

215.00

5.00

Okeechobee

N/A

-

DAIRY BYPRODUCTS

 

 

(dollars per hundredweight)

 

 

Dried skim milk

 

 

Ft. Worth

156.50

-

Minneapolis

156.50

-

Dried buttermilk

 

 

Ft. Worth

151.50

-7.50

Minneapolis

151.50

-7.50

Whole whey

 

 

Chicago

63.00

-3.00

Ft. Worth

62.50

-0.50

Kansas City

66.00

-

Minneapolis

62.50

-0.50

Whey protein concentrate

 

 

Ft. Worth

126.25

-

Milwaukee

126.25

-

Lactose

 

 

Ft. Worth

73.00

-1.00

Minneapolis

73.00

-1.00

OATS, RICE PRODUCTS

 

 

(dollars per ton)

 

 

Rolled oats

 

 

Chicago

580.00

-

Kansas City

535.00

-5.00

Minneapolis

557.00

-

Crimped oats

 

 

Chicago

460.00

-

Kansas City

390.00

-

Minneapolis

461.00

-

Pulverized oats

 

 

Chicago

185.00

-

Minneapolis

187.00

-

Reground oat feed

 

 

Chicago

130.00

-

Kansas City

145.00

-5.00

Minneapolis

112.00

-

Oats

 

 

(dollars per bushel)

 

 

Buffalo

4.35

0.10

Minneapolis

3.94

-

Portland*

265.00

-

(*per ton)

 

 

Rice bran

 

 

Atlanta

N/A

-

Ft. Worth

272.00

-

Freeport

N/A

-

Kansas City

233.00

3.00

Memphis

N/A

-

San Francisco

235.00

4.00

Stuttgart, Ark.

N/A

-

Rice millfeeds

 

 

Atlanta

N/A

-

Ft. Worth

132.00

-

Freeport

N/A

-

Kansas City

93.00

-

Memphis

N/A

-

Stuttgart, Ark.

N/A

-

Rice hulls

 

 

Ft. Worth

73.00

-

Kansas City

43.00

-

DRIED PULP

 

 

(dollars per ton)

 

 

Citrus pulp pellets

 

 

Atlanta

240.00

3.00

Fayetteville NC

250.00

3.00

Okeechobee

195.00

3.00

Los Angeles*

N/A

-

*(sold wet)

 

 

Beet pulp pellets

 

 

Atlanta

N/A

-

Boise

N/A

-

Chicago

280.00

-

Fayetteville NC

N/A

-

Kansas City

535.00

-5.00

Minneapolis

230.00

-

Portland

280.00

-

Saginaw

250.00

-

Beet pulp shreds

 

 

Mpls (sacked)

395.00

-

Los Angeles*

N/A

-

San Francisco

N/A

-

Twin Falls

N/A

-

*bulk, wet

 

 

GRAINS

 

 

Barley feed

 

 

Kansas City

7.20

-0.40

Los Angeles (cwt)

15.00

0.10

Portland (ton)

288.50

3.50

San Francisco (cwt)

15.00

0.10

Feed wheat

 

 

Atlanta (bu.)

7.57

0.27

Fayetteville NC (bu.)

7.57

0.27

Kansas City (bu)

8.61

0.31

Los Angeles (cwt)

16.05

0.35

San Francisco (cwt)

16.05

0.35

Corn

 

 

(dollars per bushel)

 

 

Atlanta

8.89

0.29

Boston

7.91

0.40

Buffalo

7.87

0.16

Chicago

7.55

0.37

Delmarva

7.68

0.37

Fayetteville NC

8.69

0.29

Ft. Worth

N/A

-

Kansas City

7.69

0.37

Los Angeles*

16.26

0.75

San Fran (rail)*

16.26

0.75

San Fran (truck)*

N/A

-

Memphis

7.50

0.33

Minneapolis

6.91

-

Okeechobee

9.14

0.29

Portland (per ton)

304.25

15.13

(*per cwt)

 

 

Milo

 

 

(dollars per bushel)

 

 

Atlanta

N/A

-

Fayetteville NC

N/A

-

Ft. Worth

N/A

-

Kansas City

7.30

0.36

Los Angeles*

16.04

0.74

Memphis

6.68

0.33

*(per cwt.)

 

 

Ground grain screenings

 

 

(dollars per ton)

 

 

Ft.  Worth

258.00

8.00

Kansas City

150.00

-

OTHER

 

 

(dollars per ton)

 

 

Almond hulls

 

 

Los Angeles

183.00

-1.00

San Francisco

168.00

3.00

Bakery feed

 

 

Atlanta

335.00

-

Buffalo

295.00

13.00

Fayetteville NC

340.00

-

Memphis

330.00

-

Minneapolis

305.00

15.00

Feed urea

 

 

Buffalo

N/A

-

Ft. Worth

546.00

-

Los Angeles

N/A

-

Minneapolis

N/A

-

Salt

 

 

Kansas City

57.00

-

Los Angeles

50.00

-

Cane molasses

 

 

Ft. Worth

N/A

-

Houston

165.00

-

Kansas City

200.00

-

Los Angeles

N/A

-

Memphis

N/A

-

Minneapolis

220.00

-

New Orleans

165.00

-

San Francisco

N/A

-

 

Volume:85 Issue:03

Feedlot tool assesses handling practices

Feedlot tool assesses handling practices

*Krissa Welshans holds a bachelor's degree in animal science from Michigan State University and a master's degree in public policy from New England College. Welshans has long been involved in agriculture and has worked with numerous agricultural groups, including the Animal Agriculture Alliance.

A RECENT study by Kansas State University's Beef Cattle Institute indicated that most Kansas feedlots, after utilizing a new Feedlot Beef Quality Assessment tool, are handling cattle in a low-stress, humane manner and have protocols in place to ensure beef safety.

"Last year, the Beef Cattle Institute and the Kansas Beef Council partnered to host seven meetings across the state, which resulted in nearly 1,200 beef producers and veterinarians becoming Beef Quality Assurance certified," said Dan Thomson, a professor in the Kansas State College of Veterinary Medicine and director of the Beef Cattle Institute.

During the sessions, participants were trained in areas of low-stress cattle handling, antibiotic residue avoidance, cattle comfort, food safety, non-ambulatory animal care, preconditioning practices and other areas of feedlot, cow/calf and stocker cattle production. The participants also took part in a necropsy wet lab, which led to discussions on disease control and treatment programs for cattle.

After the training sessions, a team of scientists and graduate students from Kansas State's College of Veterinary Medicine and department of animal sciences and industry conducted a follow-up "on-farm" assessment of animal welfare and food safety practices on Kansas feedlots.

The goal of the study, which was funded by the Kansas Beef Council, was to use the new Feedlot Beef Quality Assessment tool developed by veterinarians, animal scientists and producers to assess activities related to cattle handling and comfort, antibiotic residue avoidance, employee training and other areas of cattle feeding with respect to food safety and animal welfare.

Kansas State experts visited farms to assess how they handled those activities, including the condition of feed bunks and water tanks, protocols for emergency preparedness and issues surrounding food safety such as accurate treatment records and drug residue avoidance programs.

In the study, the research team evaluated feedlots on 18 best management practices, including whether feedlots had protocols in place for such practices as drug residue avoidance, maintaining a veterinarian/client relationship, cattle welfare and handling during inclement weather, pen maintenance, personnel training documentation, individual animal health records and others.

The feedlots evaluated have the capacity to provide feed and care for a total of almost 2 million animals at one time, which represents about 85% of the entire one-time capacity of all feedlots in Kansas.

"Overwhelmingly, 98% of the assessments found that Kansas feedyards do a great job of low-stress cattle handling," said Thomson, who also serves as the animal welfare adviser to McDonald's and the Food Marketing Institute and has chaired the World Organization for Animal Health's Beef Cattle Production & Animal Welfare Committee. "The thing people should understand is that feedlot managers, pen riders, processing crews and other people in the feedyards are working hard day to day to assure the proper care of the cattle. Cattle care is critical to the health, the well-being and the performance of cattle, which is directly tied to the profitability of the feedyard."

Thomson said he was pleased to find that cattle handling practices were in line with what notable animal behavior specialists teach.

"We've spent a lot of time in the beef industry on low-stress cattle handling," he said, noting that through the observation of more than 5,000 head of cattle being worked through the chute in Kansas feedyards in the study, a usage rate of less than 4% of a "hot shot" driving aid on cattle was observed. "This is outstanding when up to a 10% usage rate is considered acceptable (in the industry)."

All feedlots in the study had a valid veterinarian/client/patient relationship, according to Thomson. This is important because the veterinarian works daily with feedlot operators in activities such as a clinical definition for sick or injured cattle, preventative medicine, proper drug handling, employee training on castration and dehorning procedures, low-stress cattle handling and other food safety and animal welfare practices.

One area in which feedyards can continue to improve, Thomson said, is documentation of their production practices at the level of the cattle operation.

"Situations vary somewhat from industry to industry, farm to farm, season to season," he explained. "Cattle feeders in Hawaii, for instance, face somewhat different challenges from those in Montana. Therefore, the (Beef Quality Assurance) assessment tool comes with formats for 18 best management practices for cattle feeding operations. These protocols can be taken by the farmer or rancher through consultation with their veterinarian, nutritionist or other animal production specialist to develop these protocols for the individual farm or cattle population.

"Cattle, farms, people, climates and resources for cattle raising are not cookie-cutter," he added. "Cattle are raised all around the world in many different systems. We cannot simply write best management practices once and expect them to fit all operations within the same county, let alone for operations nationally or globally. We're encouraging feedlot, stocker and cow/calf operations to set up protocols and systems for their specific needs, location and system."

Thomson gave the example of "an adverse weather event: Who will be in charge of identifying cattle at risk? Who will handle the activities that need to occur in such a situation?"

He noted that one producer had set up a best management practice protocol for heat stress and followed it; he estimated that following the plan not only saved lives of cattle but also saved the feedlot $350,000-400,000 in that one event.

"A couple of key reasons why these plans are important are, first, to have a checklist to make sure that we get the cattle care job done appropriately so we don't duplicate effort and we don't skip effort," Thomson said. "The second reason would be (that) if anyone made a claim of abuse or neglect against the feedlot, cow/calf or stocker operation, the farmer or rancher can go directly to his or her notebook or file to show the exact procedures that employees have been trained to follow by veterinarians, nutritionists and others. (Cattle producers) have excellent cattle care practices. We just need to document what we do."

Thomson believes that the kind of assessment the Kansas State team did will help reinforce best management practices in feedlots not only in the state but across the country.

 

False auction invoices

The U.S. Department of Agriculture's Grain Inspection, Packers & Stockyards Administration (GIPSA) is continuing an 18-month-long investigation into schemes to falsify the selling price of livestock at livestock auction markets across the country, which is in violation of the Packers & Stockyards Act (PSA).

PSA is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries.

Through Dec. 12, 2012, GIPSA found evidence of fraud in 12 separate cases, including seven livestock auctions and five dealers, and assessed more than $200,000 in civil penalties.

"Federal regulations require that livestock auction markets and individuals who buy on commission for someone else keep and provide true written accounts of the transaction to the sellers and buyers," GIPSA Administrator Larry Mitchell said. "We continue to investigate evidence of fraud and any allegations of anticompetitive behavior in the livestock, meat and poultry industries and aggressively enforce (PSA) when we find them."

GIPSA recently assessed a $75,000 civil penalty against New Holland Sales Stables Inc. in New Holland, Pa.

GIPSA filed a complaint on Aug. 24, 2012, alleging that New Holland manipulated the price of livestock it purchased for its customers by producing false market invoices showing inflated prices. In its complaint, GIPSA alleged that during a three-month period, New Holland issued 109 false invoices to approximately 21 different buyers.

On Nov. 8, 2012, United Producers Inc. (UPI), in a consent decision, agreed to pay a civil penalty of $110,000 to resolve a complaint GIPSA filed against UPI on Sept. 14, 2012.

GIPSA's complaint alleged that personnel at UPI's Marysville, Mo., facility created false invoices for livestock sold to two dealers. The dealers requested that UPI create invoices with inflated prices and, in turn, presented those false invoices to their customers, who purchased the livestock.

GIPSA is investigating additional cases.

 

Ear tag system

University of Kentucky researchers are close to completing a study that could significantly change herd health management systems for cattle and possibly other species.

According to BusinessLexington, by using a radio frequency ear tag transmitting system, researchers have identified the presence of illnesses through motion in cattle and have done it sooner than a handler could. Earlier detection of the illnesses means earlier treatment, which could result in lower veterinary or treatment costs and, thus, higher returns for producers.

The Animal Monitoring & Tracking System uses an accelerometer, temperature sensor and radio frequency transmitting antennae packaged into an ear tag that is not much larger than the ear tags currently used for visual identification of cattle.

Craig Carter, director of the University of Kentucky Veterinarian Diagnostic Laboratory and professor of epidemiology in the College of Agriculture, said the tag was used on groups of about 100 steers each, and the data could be detected from up to two miles away. During the study, the information transmitted from the ear tags was logged around the clock on a computer server.

Carter said the research showed a significant difference in the activity level depending upon the health of the animal. Additionally, he pointed out that the logged information could result in a lifetime of medical records for each animal. This could be used in a carcass value assessment or for traceability purposes.

The university has filed for patent protection and plans to test the product on larger-scale feedlots.

Volume:85 Issue:03

Grain & ingredient cash market comparisons, 1/21/13

Grain & ingredient cash market comparisons, 1/21/13

Major feed ingredients

Jan. 16

Jan. 9

6 months ago

Year ago

Corn No. 2, Chicago, bu.

 

 

 

 

Processor bid*

7.41A

7.15A

8.23A

6.11A

Terminal bid*

7.44A

7.16A

8.16A

5.88A

Milo, Kansas City, cwt.

13.03

12.39

12.03

10.62

Soybeans, Chicago, bu.

 

 

 

 

Processor Bid

14.68A

14.17A

17.47A

11.89A

Soybean Meal, 48% Decatur Bid

431.00A

422.60A

551.00A

310.20A

Cottonseed Meal, Memphis, ton

245.00

325.00

360.00

215.00

Linseed Meal, Solvent, Minneapolis

295.00

290.00

370.00

185.00

Meat and Bone Meal, Chicago, ton

370.00

360.00

460.00

330.00

Fish Meal, Menhaden, Atlanta, ton

1,595.00

1,595.00

1,250.00

1,125.00

Corn Gluten Meal, 60%, Chicago, ton

625.00

625.00

640.00

418.00

Distillers Dried Grains, Chicago, ton

265.00

250.00

265.00

188.00

17% Dehy. Alfalfa Pellets, KC, ton

365.00

368.00

330.00

330.00

Millfeeds, Midds, Minneapolis, ton

215.00

210.00

230.00

137.00

Molasses, Cane, Houston, ton

165.00

165.00

155.00

N/A

Dried Citrus Pulp, Atlanta, ton

240.00

237.00

290.00

190.00

Whey, Whole, Chicago, cwt.

63.00

66.00

49.00

70.75

Rolled Oats, Minneapolis, ton

557.00

557.00

512.00

477.00

Barley, Los Angeles , cwt.

15.00

14.90

14.75

12.70

Feeding Wheat, Kansas City, bu.

8.61

8.30

8.42

6.43

* Chicago corn and soybean prices for latest and previous week are the middle of the range of to-arrive bids; soybean meal prices are midrange of processor quotes. Chicago corn and soybean prices provided by USDA Market News. Six months, year ago comparisons are all spot cash. Based on prices reported by Feedstuffs' market reporters.

A: average

N/A: not available

 

Volume:85 Issue:03

Markets digest bullish data

Markets digest bullish data

WITH some minor episodes of profit-taking aside, the grain markets last week summarily deemed the U.S. Department of Agriculture's Jan. 11 crop reports a bullish affair.

With the year's first major crop data well in hand, the market now has a clearer view of the fundamentals of the grain and oilseed complex, and the big picture hasn't changed much.

Supplies of soybeans, corn and wheat are extremely tight (and roughly in that order of scarcity), demand continues more or less unabated and Brazil and China are still the two biggest players to watch for the foreseeable future.

Starting with the balance sheet, it is fairly clear that old-crop prices will remain relatively strong. While the U.S. corn crop was pegged to be 55 million bu. larger than the previous USDA forecast, the estimate of Dec. 1, 2012, stocks was much smaller than the average trader had estimated, hitting a nine-year low of 8.03 billion bu.

University of Illinois economist Darrel Good, in his analysis of the USDA data, said the stocks estimate "implies that feed and residual use of corn has not slowed as a result of the small crop and high prices that began in June of last year."

In fact, Good said feed usage of corn in the latter half of 2012 appeared to be 110 million bu. larger than usage in the second half of 2011, which was surprising given that wheat feeding was up roughly 125 million bu. during the same period.

"Unlike other years of small production and high corn prices, feed use of corn has remained large," Good wrote. "Such a high rate of use has been possible because corn used for ethanol production has declined about 10% year over year and because exports have been almost nonexistent."

For the first quarter of the marketing year, corn exports hit a 41-year low of 220 million bu., leading USDA to set its export projection at a 43-year low of 950 million bu.

Even so, U.S. corn ending stocks were projected to be even smaller than anticipated due to the unabated rate of domestic feeding. Projected ending stocks of 602 million bu. would be a 17-year low, and the marketing year average farm price of $6.80-8.00/bu. would be a record high.

For soybeans, USDA estimated crop production to be 44 million bu. more than its December forecast, but quarterly stocks of 1.966 billion bu. were still at a nine-year low.

Good noted that the stocks figure implied a larger-than-average residual disappearance during the first quarter of the marketing year, while an unchanged USDA export estimate indicated the expectation for a record South American soybean crop and the need for a larger domestic crush to meet growing demand for soybean meal and oil.

Crush demand has not slacked much at all, according to the latest data from the National Oilseed Processors Assn. (NOPA). In its monthly crush report, NOPA said December's soybean crush tallied 159.899 million bu., and while that was toward the lower end of traders' expectations, it still marked a significant jump from the 145.4 million bu. crushed in December 2011.

Exports have been an integral part of the success of U.S. crop production over the past decade or so, but prices over the past six months have put domestic feed and crush usage back in the driver's seat, to some extent.

Relative to exports, USDA's Economic Research Service (ERS) noted last month that one of the primary drivers of U.S. agricultural export growth over the past decade has been the stark depreciation in the value of the U.S. dollar. Since 2001, the dollar has experienced the most prolonged period of depreciation against the currencies of other agricultural trading partners since 1970.

ERS noted that while the dollar many not continue to depreciate, the real dollar exchange rate will likely remain relatively low, continuing to support potential export competitiveness. That competitiveness, however, has not been enough to keep Brazil from surpassing the U.S. as the world's leading exporter of soybeans and soybean products.

With its production climbing dramatically, Brazil accounted for roughly 32% of global trade in soybeans and products by 2011. Over the next decade, ERS estimated that Brazilian soybean acreage will increase, on average, by some 2% per year.

While attention paid to South American production may not be quite as "en vogue" as it was a decade ago, it is clear that Brazil's still-developing agriculture sector remains a critical X-factor to watch in the marketplace.

 

Market recap

With the January USDA reports out of the way, traders have returned to watching South American production prospects for a fundamental market direction.

Last week, Celeres, an analytical firm in Brazil, raised its forecast for Brazilian soybean production to a record 80.43 million metric tons based on plantings of 27.5 million hectares, a 9.5% expansion from last year.

Celeres' estimate is far more conservative than the Brazilian government's estimate of 82.7 mmt and USDA's Jan. 11 projection of 82.5 mmt. Celeres said farmers in Brazil are taking advantage of strong prices, with 56% of the soybean crop already sold, compared to just 48% at this point last season.

German analytical firm Oil World, meanwhile, upped its estimate for Brazil's beans to 81.0 mmt and said the crop potentially could be larger if favorable weather conditions prevail through the completion of harvest.

With U.S. stocks spandex tight, the market is counting on the South American crop to fulfill the needs of the market as current supplies dwindle.

For corn prices, USDA's January report sparked a surge higher.

"Corn prices rallied through the January report, with tightening supplies and an increase in feed use," Farm Futures analyst Paul Burgener noted. "With lower supplies (projected) in the report, there should still be opportunities to make old-crop sales in the $7.50/bu. range into the spring and early summer. Trouble in the South American crop could move prices even higher."

After a brief profit-taking respite last Thursday, corn prices started moving higher again Friday into mid-session.

As Good had noted, front-month contracts of both corn and soybeans were supported, although deferred issues could find some pressure in the coming weeks.

"However, soybean exports and crush remain ahead of the pace necessary to meet USDA projections, forcing the market to ration demand at some point this spring," Burgener argued. "Current prices will likely not do that, so higher prices are going to come in the spring."

He noted that prices could approach $15/bu. later in the year as soybean supplies get tighter and tighter.

China's soybean imports remain a focus of the markets, with the country buying an additional 360,000 metric tons of U.S. old-crop soybeans last week. Traders may be more concerned with corn exports, however, which have been pretty well dried up by high prices.

Over the past three years, China has become a major corn importer (Figure), increasing purchases from 60 million bu. in 2009-10 to 210.5 million bu. in 2011-12 -- an increase of 250% in three marketing years. China's official forecast suggests that corn imports will fall 54% this year; however, since a drought-driven price surge caused a halt in purchases from the U.S., China is expected to delay new purchases of corn until at least April based on the country's typical buying strategy.

 

Ingredient watch

Ingredient prices continued to firm last week as corn and soybean prices helped boost both substitutes and complements and as a seasonal lull in slaughter plumped animal-derived products on shorter supplies.

Renderers viewed 2-3% slower slaughter rates as an opportunity to move a backlog of meat and bone meal products.

Last week's announcement that Cargill would idle its Plainview, Texas, beef plant could also wipe out a significant supply of ruminant protein products from the Southwest, meaning that prices there could further appreciate following the Feb. 1 shutdown.

Export opportunities have continued to grow in recent weeks, with new buyers emerging in non-traditional countries such as Nepal, Turkey and Nigeria. Those new destinations have provided some support to prices in the eastern U.S.

Pet food-grade products continued to firm through mid-January, and the appreciation in fish meal prices helped firm up prices for both poultry and feather meals.

Volume:85 Issue:03

Circuit upholds ruling on meatballs sold to General Mills

Circuit upholds ruling on meatballs sold to General Mills

THE U.S. Eighth Circuit Court of Appeals has upheld a district court's ruling that Five Star Custom Foods Ltd. must pay General Mills Inc. $1.6 million for damages and attorneys' fees because Five Star procured beef from Westland/Hallmark Meat Co. and sold it to General Mills.

The circuit said the lower court was correct in agreeing with General Mills' position that the beef, in the form of meatballs, was non-food grade because it was associated with Westland.

The circuit said Five Star had breached its contract with General Mills that required the meatballs to be of food-grade quality.

Westland was the subject of an undercover video made by an "investigator" for The Humane Society of the United States that depicted egregious animal handling practices, including prodding or shocking non-ambulatory cows to get on their feet to pass inspection before slaughter (Feedstuffs, Feb. 4, 2008).

The U.S. Department of Agriculture said the actions meant that the meat was suspected of being "unfit for human consumption."

The meatballs were used in the manufacture of Progresso soups.

Volume:85 Issue:03

Building strategic alliances

Building strategic alliances

LAST week, assumptions were confirmed when President Barack Obama announced that he had asked Tom Vilsack to stay on as agriculture secretary for his second term.

Vilsack, who will be the first agriculture secretary in more than a generation to serve two consecutive terms, has come into his own over the past four years. He has forged many important alliances to dance the fine lines drawn in a diversified agriculture industry while helping to make sure agriculture is represented at the table in other key discussions, whether on the economy or upcoming regulations.

While speaking to the American Farm Bureau Federation, Vilsack challenged attendees to build on strategic alliances, extend the reach of key farm groups and participate in constructive engagement.

"It will be necessary for us to continue what we started over the last several years of constructively engaging those where we may have questions or difficulties," he said.

Vilsack highlighted several situations where he has told agriculture's story, ranging from engaging with Environmental Protection Agency Administrator Lisa Jackson or inviting top officials from the U.S. Chamber of Commerce for a symposium to help explain innovation in agriculture.

Vilsack will have his work cut out for him as he deals with a significant changeover in Cabinet and leading government officials in Obama's second term. At least he has a leg up on how things work as well as what has worked in the past.

Mary Kay Thatcher, senior director of congressional relations at the American Farm Bureau Federation, gave Vilsack "great marks for attempting to help agriculture, especially with EPA." She added that he wasn't always successful but at least gave other officials a better view of how things may affect agriculture.

Thatcher and many in agriculture fear that environmental regulations in the next two years could be very damaging to agriculture and small businesses, and if work on the laws doesn't succeed, the industry will be forced to spend an enormous amount of time and money in the court system on environmental issues.

Vilsack took issue with criticism directed at those practicing this constructive engagement and said egg producers shouldn't be criticized for working with The Humane Society of the United States (HSUS).

"Egg producers thought it was in their best interest to avoid 50 different referendums, 50 different sets of rules, so they sat down with folks, and they reached common ground. After all, isn't that what we're asking our Congress to do?"

Vilsack acknowledged that different producers will have different issues but said egg producers have the right idea.

"We need to be constructively engaged at all times in conversations. We may not find agreements, but I think we will substantially reduce those who oppose farming and substantially reduce the reach of those," he said.

He noted that HSUS may not have many friends among agriculture, but agriculture still needs to stay engaged in the conversation and build alliances in order to remain relative in a changing world.

Vilsack concluded that he gets frustrated when agriculture doesn't get its due, "but I've got a feeling that we're beginning to turn the corner. I've got a feeling that 2013 is going to be the year where people begin to pay a lot of attention to what takes place in rural America."

Volume:85 Issue:03