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Cattle record near

Cattle record near

THE cattle markets were basically unchanged last week through Thursday, trading at $128/cwt. early in the week in Texas and at $204.50/cwt., carcass basis, late in the week in Nebraska, a carcass price that was equivalent to a $128 cash cattle market.

Prices were 4-6% higher than at this time last year.

Cattle feeders are current, the U.S. and global economies are improving and packers are experiencing good demand for beef both at home and abroad -- all of which are providing support for high prices for finished cattle, according to Feedstuffs sources.

Indeed, prices will be record high, sources said.

Cattle supplies are becoming increasingly tight, and beef production last year was the lowest since 2005 and is estimated to decrease sharply this year, by 5% or more, according to Ron Plain at the University of Missouri. The per capita supply this year will be the lowest since 1952, and beef production is forecasted to decline again next year, he said.

Accordingly, cattle prices will be record high for the next two years, Plain said, but how high depends on the demand factor.

Cattle prices hit their highest price ever at $130 last March, but live cattle futures closed last Thursday at an average of $132.85 for this year and $136.00 or higher early next year. Record territory is just over the hill, sources said.

This record territory has not yet factored in what will happen if and when -- the "when" is all but a given -- Japan raises age restrictions on U.S. beef cattle, according to, two Iowa cattle producers who just returned from a trade mission to Japan and South Korea. Japan currently accepts beef from cattle under 21 months of age but could soon up that to cattle under 30 months of age.

Dean Black, a cattle feeder from Somers, Iowa, and Scott Heater, a seedstock producer from Wapello, Iowa, noted that they visited with a number of Japanese beef importers who said they are developing marketing plans to expand sales of U.S. beef.

Black and Heater added that those importers said they expect to increase their imports of U.S. chilled and frozen beef by as much as 40%.

They said the U.S. Meat Export Federation (USMEF) has projected that Japan's relaxed cattle age limitation will add $19 per head to fed prices. The decision is anticipated this spring.

Black, a member of the national Cattlemen's Beef Board, and Heater, a member of the Iowa Beef Council, represented the state beef council on the mission, which also included Iowa agriculture secretary Bill Northey and representatives of the Iowa Department of Economic Authority, Iowa Corn Growers Assn., Iowa Pork Producers Assn. and USMEF.

Record-high prices for feds will also mean strong prices for calves, and this really should prompt cow/calf producers to finally begin expanding the country's cow herd from its 50-year low, sources said.

The cattle inventory report will show that the cow herd on Jan. 1 was down 1.0-1.5% from its year-ago level, down from year ago for the eighth straight year, according to Darrell Mark at South Dakota State University.

However, he said there will be "much discussion" about cattle prices pointing to herd rebuilding, although for producers, this will be "a complex, multi-year decision" affected by the availability and condition of pasture and range, land values, rental rates, high and volatile input prices such as for hay, herd productivity, expected cattle prices and returns for this year and beyond and lifestyle choices.

There are a number of ways for producers to expand herds, Mark said, including retaining heifers from the 2013 calf crop, breeding retained heifers and buying bred stock so there are calves to be sold this year.

The cattle supply scenario suggests strong prices and profitability for producers for several years, Mark said, and probably the single do-or-don't factor will be if and when the 2012 drought ends.

"If" is becoming questionable, sources said.

Last year was the warmest year on record in the continental 48 states, the National Oceanic & Atmospheric Administration (NOAA) officially reported last week. (Records go back to 1895.)

NOAA reported that the average temperature last year was 55.3 degrees F -- 1.5 degrees higher than in 2011, 1.0 degree higher than the previous warmest year in 1998 and 3.2 degrees higher than the 20th century average, which made last year's average temperature particularly stark.

NOAA also reported that last year's weather was the second most extreme on record because of the drought that, at one point, covered 61% of the country.

The drought remains unbroken, sources said, and the western Corn Belt continues its struggle with a moisture shortfall; it needs 6-9 in. of moisture to return the drought index reading to normal.

At this time, that's "a tall order" and reason to worry about pasture and range conditions for herd rebuilding, as well as field conditions going into spring planting, Steve Meyer and Len Steiner warned in an edition of their "Daily Livestock Report" last week.

Brazil is starting to talk tough about the bans certain countries have imposed on beef from Brazil and is threatening possible retaliation through the World Trade Organization in March if the bans aren't lifted.

Ten countries have now banned or partially banned beef imports from Brazil following the country's disclosure of a cow with bovine spongiform encephalopathy (BSE) last month, although the cow had been put down in 2010 (Feedstuffs, Dec. 10 and Dec. 17, 2012).

Government officials emphasized that the cow had atypical BSE, that Brazil's BSE status with the World Organization for Animal Health (OIE) is still "negligible" risk and that the delay in analyzing the cow's tissue and announcing the findings was due to "logistical problems" at the laboratory.

Nevertheless, Egypt has banned beef from the Parana region where the cow was from, and Saudi Arabia has banned all beef from Brazil. Egypt and Saudi Arabia are among Brazil's 10 largest beef customers.

Other countries that have banned Brazil's beef include neighboring Peru, as well as China, Taiwan, Japan, South Korea, Jordan, Lebanon and South Africa, which are all minor trade partners. The Chilean Federation of Beef Producers has asked the agriculture ministry to implement a ban.

Russia, another major beef export market for Brazil, has not yet taken a position, but a veterinary official said he sees no reason "to impose countrywide restrictions."

The impact on Brazilian cattle prices is readily apparent as prices fell $4/cwt. in the week following the announcement.

The head of OIE also is starting to talk tough, saying last week that bans on Brazilian beef aren't justified and urging countries to lift their bans.

"One case in a population of 200 million head of cattle does not justify" the restrictions, OIE director general Bernard Vallat said.

 

Market roundup

Elsewhere in the livestock and poultry sectors last week, the hog markets were up $1.03-2.12 to $81.72-83.64/cwt. on a lean carcass basis across the Corn Belt last Thursday, prices equivalent to a $62-63 live cash hog market and 2.3% higher than year ago.

Hog producers were current, and packers were in the market for hogs for pork export orders, sources said.

However, futures seemed unsure about their direction, trading down most of last week and closing on Thursday at levels that were reducing the length and strength of projected profitability this summer.

The chicken markets were mixed last week as chicken production, after two holiday-shortened weeks, was returning to normal, and supplies were more available, sources said.

Chickens were unchanged in the eastern markets at $1.01-1.05/lb. last Thursday and were down 4-7 cents in the Midwest at 93 cents to $1.00/lb., prices that were almost one-third higher than year ago.

Breast meat was unchanged to down 4 cents at $1.26-1.32/lb., 3.6% more than year ago, and full wings were $1.96-2.03/lb., 10.8% more than year ago. Sources said wings were "firm and climbing" on demand related to the football playoffs.

The egg markets were steady and unchanged at $1.15-1.19 and $1.08-1.10/doz. for large-sized eggs delivered to eastern and midwestern store doors last Thursday, 0.8% lower than year ago.

Sources noted that the country's flock has grown significantly, and "a lot of birds are laying a lot of eggs." However, sources also said producers have moved aggressively to cull and molt birds to better control production.

The turkey markets were unchanged to down 3 cents last week at 93-99 cents/lb. for hens and retail-sized toms last Thursday, 2.5% lower than year ago. Sources said activity was limited as buyers have not yet started to work on their contracts.

Fresh tom breast meat was $2.00/lb., 17.7% under year ago.

In the dairy markets, butter decreased 4.75 cents last week to $1.4475/lb. on Thursday, 9.8% less than year ago; barrel and block cheeses decreased 4.5 cents and 4.0 cents to $1.6850/lb. and $1.72/lb., 6.3% and 6.8% more than year ago.

Sources said they expect recent increases in milk production to slow, given record-high prices for corn, soybeans and hay that will retrace returns over feed costs in the first half to about the mid-$5 range. This portends less milk in the coming months, sources said.

Volume:85 Issue:02

Ingredient market prices, 1/14/13

Ingredient market prices, 1/14/13

The following prices, which include delivery, were obtained Jan. 9 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

480.00

21.00

Boston

455.00

7.00

Buffalo

447.00

5.00

Chicago

430.00

3.00

Delmarva

N/A

-

Fayetteville NC

490.00

21.00

Ft. Worth

445.00

5.00

Kansas City

419.00

3.00

Los Angeles

467.00

3.00

Memphis

425.00

5.00

Minneapolis

414.50

2.50

Okeechobee

510.00

21.00

Portland

467.75

4.15

San Francisco

467.00

3.00

Twin Falls

474.00

3.00

Soybean meal

 

 

(low-protein)

 

 

Atlanta

470.00

21.00

Boston

450.00

7.00

Buffalo

443.00

5.00

Chicago

418.00

3.00

Delmarva

N/A

-

Fayetteville NC

480.00

21.00

Ft. Worth

N/A

-

Kansas City

419.00

3.00

Los Angeles

440.00

3.00

Memphis

415.00

5.00

Minneapolis

N/A

-

Okeechobee

500.00

21.00

Portland

N/A

-

San Francisco

440.00

3.00

Soybean hulls

 

 

Atlanta

237.00

-

Buffalo*

N/A

-

Chicago

235.00

-10.00

Fayetteville, NC

232.00

-

Ft. Worth*

230.00

-10.00

Los Angeles

258.00

20.00

Minneapolis

205.00

-

Okeechobee

242.00

-

San Francisco

258.00

20.00

Twin Falls

N/A

-

* unpelleted

 

 

Whole cottonseed

 

 

Atlanta

240.00

5.00

Buffalo

313.00

-4.00

Chicago

315.00

-15.00

Delmarva

N/A

-

Fayetteville NC

240.00

5.00

Ft. Worth

340.00

-

Los Angeles

386.00

5.00

Lubbock

340.00

10.00

Memphis

275.00

-12.00

Okeechobee

277.00

5.00

Portland

381.50

-0.50

San Francisco

386.00

5.00

Twin Falls

360.00

-5.00

Cottonseed meal

 

 

Atlanta

370.00

10.00

Chicago

375.00

-5.00

Delmarva

370.00

10.00

Fayetteville NC

370.00

10.00

Ft. Worth

385.00

5.00

Kansas City

370.00

-

Los Angeles

N/A

-

Lubbock

355.00

-5.00

Memphis

325.00

-20.00

Okeechobee

404.00

10.00

San Francisco

360.00

2.00

Cottonseed hulls

 

 

Atlanta

105.00

-

Chicago

145.00

-

Fayetteville NC

105.00

-

Ft. Worth

155.00

-

Okeechobee

142.00

-

Los Angeles

N/A

-

Lubbock

170.00

5.00

San Francisco

140.00

-

Canola meal

 

 

Buffalo

382.00

-

Minneapolis

324.50

18.50

Los Angeles

365.00

-5.00

Montreal

366.00

20.00

Portland

337.45

0.90

San Francisco

365.00

-5.00

Twin Falls

355.00

15.00

Vancouver

310.00

10.00

Sunflower seed meal

 

 

Fargo

250.00

-

Minneapolis

255.00

-

Linseed  meal

 

 

Atlanta

N/A

-

Chicago

315.00

-5.00

Fargo

N

-

Fayetteville NC

N/A

-

Ft. Worth

N

-

Kansas City

290.00

-

Minneapolis

290.00

-

Safflower meal

 

 

Los Angeles

N/A

-

San Francisco

235.00

-

ANIMAL BYPRODUCTS

 

 

(dollars per ton)

 

 

Meat and bone meal

 

 

(ruminant)

 

 

Buffalo

365.00

-

Chicago

360.00

-3.00

Delmarva

405.00

-

Fayetteville NC

390.00

20.00

Ft. Worth

330.00

-

Kansas City

320.00

-5.00

Los Angeles

360.00

20.00

Memphis

380.00

20.00

Minneapolis

335.00

10.00

Portland

379.50

-13.00

San Francisco

365.00

25.00

Meat and bone meal

 

 

(porcine)

 

 

Fayetteville NC

445.00

-

Los Angeles

374.40

-9.20

Memphis

425.00

-

Minneapolis

420.00

-

Flash-dried blood meal

 

 

(ruminant)

 

 

Fayetteville NC

1050.00

25.00

Los Angeles

1125.00

-

Memphis

1025.00

25.00

Minneapolis

1100.00

25.00

Flash-dried blood meal

 

 

(porcine)

 

 

Fayetteville NC

1125.00

25.00

Memphis

1100.00

25.00

Minneapolis

1200.00

25.00

Poultry byproduct meal

 

 

(feed grade)

 

 

Atlanta

435.00

20.00

Fayetteville NC

500.00

-

Ft. Worth

405.00

-25.00

Kansas City

317.00

-3.00

Los Angeles

489.00

24.00

Memphis

500.00

-

Poultry byproduct meal

 

 

(pet food grade)

 

 

Memphis

800.00

-

Fayetteville NC

800.00

-

Hydrolized feather meal

 

 

Atlanta

600.00

10.00

Delmarva

610.00

10.00

Fayetteville NC

605.00

10.00

Ft. Worth

670.00

5.00

Kansas City

650.00

-

Los Angeles

N/A

-

Memphis

575.00

-

Minneapolis

700.00

-

Menhaden fish meal

 

 

Atlanta

1595.00

70.00

Buffalo

1425.00

-

Chicago

1450.00

-

Fayetteville NC

1555.00

70.00

Ft. Worth

N/A

-

Kansas City

1455.00

-

Memphis

1475.00

25.00

Minneapolis

1650.00

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

0.25

San Francisco

34.25

-1.00

Yellow grease

 

 

Buffalo

32.50

-

Chicago

36.50

-

Delmarva

N/A

-

Fayetteville NC

39.00

1.00

Ft. Worth

37.00

2.00

Kansas City

N/A

-

Los Angeles

35.75

0.25

Memphis

39.00

1.00

Minneapolis

38.00

0.50

San Francisco

33.25

-1.00

Choice white grease

 

 

Chicago

38.50

-

Minneapolis

42.00

0.75

Bleachable fancy tallow

 

 

Buffalo

37.00

-

Chicago

36.00

-

Ft. Worth

40.00

3.00

Los Angeles

N/A

-

Minneapolis

41.00

2.00

San Francisco

N/A

-

Vegetable-animal blend

 

 

Ft. Worth

39.00

3.50

Los Angeles

33.38

0.25

Minneapolis

38.50

0.50

San Francisco

33.38

0.25

Poultry grease

 

 

(feed grade)

 

 

Delmarva

38.00

1.00

Fayetteville NC

39.00

1.00

Memphis

38.00

1.00

Poultry grease

 

 

(pet food grade)

 

 

Memphis

44.00

1.00

Fayetteville NC

44.00

1.00

GLUTEN, HOMINY

 

 

(dollars per ton)

 

 

Corn gluten meal

 

 

Buffalo

700.00

-

Chicago

625.00

-25.00

Kansas City

750.00

-

Los Angeles

760.00

-25.00

Corn gluten feed

 

 

Buffalo

235.00

-

Chicago

198.00

-

Fayetteville NC

260.00

-5.00

Kansas City

250.00

-5.00

Okeechobee

280.00

-5.00

Twin Falls

290.00

-

Wahpeton

N

-

Hominy feed

 

 

Atlanta

322.00

-

Boston

264.00

-10.00

Buffalo

312.00

-

Chicago

235.00

-10.00

Fayetteville NC

322.00

-

Kansas City

250.00

-5.00

Los Angeles

295.00

-5.00

Okeechobee

340.00

-

San Francisco

295.00

-5.00

Twin Falls

310.00

3.00

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

320.00

-2.00

Boston

306.00

7.00

Buffalo

272.00

7.00

Chicago

250.00

-5.00

Fayetteville NC

318.00

-2.00

Kansas City

340.00

-5.00

Los Angeles

311.00

-1.00

Minneapolis

248.00

-2.00

Okeechobee

330.00

-2.00

Portland

305.00

-1.50

San Francisco

311.00

-1.00

Twin Falls

319.00

4.00

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

368.00

-2.00

Los Angeles

N/A

-

Minneapolis

320.00

-

Toledo

390.00

-

San Francisco

N/A

-

Suncured pellets

 

 

(15% protein)

 

 

Atlanta

N/A

-

Ft. Worth

350.00

10.00

Kansas City

340.00

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

231.00

-23.00

Millrun

 

 

Los Angeles

242.00

-3.00

Portland

255.00

-

San Francisco

242.00

-3.00

Twin Falls

230.00

-

Bran

 

 

Buffalo

230.00

-65.00

Chicago

245.00

-

Los Angeles

246.00

-3.00

Minneapolis

375.00

-

Middlings

 

 

Buffalo

200.00

-65.00

Chicago

245.00

-

Fayetteville NC

N/A

-

Ft. Worth

249.00

-12.00

Kansas City

190.00

-30.00

Los Angeles

249.00

-3.00

Memphis

238.00

-24.00

Minneapolis

210.00

-5.00

Okeechobee

N/A

-

DAIRY BYPRODUCTS

 

 

(dollars per hundredweight)

 

 

Dried skim milk

 

 

Ft. Worth

156.50

-2.00

Minneapolis

156.50

-2.00

Dried buttermilk

 

 

Ft. Worth

159.00

6.00

Minneapolis

159.00

6.00

Whole whey

 

 

Chicago

66.00

2.00

Ft. Worth

63.00

-3.00

Kansas City

66.00

1.00

Minneapolis

63.00

-3.00

Whey protein concentrate

 

 

Ft. Worth

126.25

-

Milwaukee

126.25

-

Lactose

 

 

Ft. Worth

74.00

1.00

Minneapolis

74.00

1.00

OATS, RICE PRODUCTS

 

 

(dollars per ton)

 

 

Rolled oats

 

 

Chicago

580.00

-

Kansas City

540.00

-10.00

Minneapolis

557.00

5.00

Crimped oats

 

 

Chicago

460.00

-

Kansas City

390.00

-5.00

Minneapolis

461.00

-

Pulverized oats

 

 

Chicago

185.00

-

Minneapolis

187.00

-

Reground oat feed

 

 

Chicago

130.00

-

Kansas City

150.00

-

Minneapolis

112.00

-

Oats

 

 

(dollars per bushel)

 

 

Buffalo

4.25

-0.10

Minneapolis

3.94

0.09

Portland*

265.00

-

(*per ton)

 

 

Rice bran

 

 

Atlanta

N/A

-

Ft. Worth

272.00

-

Freeport

N/A

-

Kansas City

230.00

7.00

Memphis

N/A

-

San Francisco

231.00

-9.00

Stuttgart, Ark.

N/A

-

Rice millfeeds

 

 

Atlanta

N/A

-

Ft. Worth

132.00

4.00

Freeport

N/A

-

Kansas City

93.00

-

Memphis

N/A

-

Stuttgart, Ark.

N/A

-

Rice hulls

 

 

Ft. Worth

73.00

3.00

Kansas City

43.00

5.00

DRIED PULP

 

 

(dollars per ton)

 

 

Citrus pulp pellets

 

 

Atlanta

237.00

-

Fayetteville NC

247.00

-

Okeechobee

192.00

-

Los Angeles*

N/A

-

*(sold wet)

 

 

Beet pulp pellets

 

 

Atlanta

N/A

-

Boise

N/A

-

Chicago

280.00

-

Fayetteville NC

N/A

-

Kansas City

540.00

-

Minneapolis

230.00

-

Portland

280.00

10.00

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

7.60

-0.15

Los Angeles (cwt)

14.90

0.15

Portland (ton)

285.00

-5.00

San Francisco (cwt)

14.90

0.15

Feed wheat

 

 

Atlanta (bu.)

7.30

-0.06

Fayetteville NC (bu.)

7.30

-0.06

Kansas City (bu)

8.30

0.18

Los Angeles (cwt)

15.70

-

San Francisco (cwt)

15.70

-

Corn

 

 

(dollars per bushel)

 

 

Atlanta

8.60

0.06

Boston

7.51

-

Buffalo

7.71

0.15

Chicago

7.18

0.20

Delmarva

7.31

0.03

Fayetteville NC

8.40

0.06

Ft. Worth

N/A

-

Kansas City

7.32

0.09

Los Angeles*

15.51

-0.05

San Fran (rail)*

15.51

-0.05

San Fran (truck)*

N/A

-

Memphis

7.17

-

Minneapolis

6.91

-0.18

Okeechobee

8.85

0.06

Portland (per ton)

289.13

1.25

(*per cwt)

 

 

Milo

 

 

(dollars per bushel)

 

 

Atlanta

N/A

-

Fayetteville NC

N/A

-

Ft. Worth

N/A

-

Kansas City

6.94

0.08

Los Angeles*

15.30

-0.04

Memphis

6.35

0.03

*(per cwt.)

 

 

Ground grain screenings

 

 

(dollars per ton)

 

 

Ft.  Worth

250.00

5.00

Kansas City

150.00

-

OTHER

 

 

(dollars per ton)

 

 

Almond hulls

 

 

Los Angeles

184.00

7.00

San Francisco

165.00

1.00

Bakery feed

 

 

Atlanta

335.00

-

Buffalo

282.00

-3.00

Fayetteville NC

340.00

-

Memphis

330.00

-

Minneapolis

290.00

-

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:02

Grain & ingredient cash market comparisons, 1/14/13

Grain & ingredient cash market comparisons, 1/14/13

Major feed ingredients

Jan. 9

Jan. 2

6 months ago

Year ago

Corn No. 2, Chicago, bu.

 

 

 

 

Processor bid*

7.15A

7.06A

7.67A

6.15A

Terminal bid*

7.16A

7.06A

7.39A

5.95A

Milo, Kansas City, cwt.

12.39

12.25

12.03

11.62

Soybeans, Chicago, bu.

 

 

 

 

Processor Bid

14.17A

14.18A

16.02A

11.77A

Soybean Meal, 48% Decatur Bid

422.60A

422.60A

473.70A

299.10A

Cottonseed Meal, Memphis, ton

325.00

345.00

330.00

215.00

Linseed Meal, Solvent, Minneapolis

290.00

290.00

340.00

190.00

Meat and Bone Meal, Chicago, ton

360.00

363.00

450.00

330.00

Fish Meal, Menhaden, Atlanta, ton

1,595.00

1,525.00

1,250.00

1,150.00

Corn Gluten Meal, 60%, Chicago, ton

625.00

650.00

635.00

433.00

Distillers Dried Grains, Chicago, ton

250.00

255.00

250.00

190.00

17% Dehy. Alfalfa Pellets, KC, ton

368.00

370.00

300.00

325.00

Millfeeds, Midds, Minneapolis, ton

210.00

215.00

195.00

137.00

Molasses, Cane, Houston, ton

165.00

165.00

170.00

170.00

Dried Citrus Pulp, Atlanta, ton

237.00

237.00

285.00

190.00

Whey, Whole, Chicago, cwt.

66.00

64.00

47.50

69.25

Rolled Oats, Minneapolis, ton

557.00

552.00

512.00

485.00

Barley, Los Angeles , cwt.

14.90

14.75

14.75

12.75

Feeding Wheat, Kansas City, bu.

8.30

8.12

8.39

6.19

* 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:02

Peterson seeks pledge from leadership

Peterson seeks pledge from leadership

TO say Rep. Collin Peterson (D., Minn.) is mad about how the farm bill was handled last year might be an understatement.

Peterson is one of the few remaining Blue Dog Democrats, or more moderate members, on Capitol Hill. He has been known to regularly work across party lines while still being a bulldog for agriculture.

Just when he wrapped up the 2008 farm bill, he began to go to work on ways to improve it, his staffers recalled, and it was his initial proposal for transforming dairy programs that became the basis for the Dairy Security Act that was approved in the Senate and the House Agriculture Committee last year.

He tells it like it is and leaves no question as to where he stands on an issue, but after how the farm bill was handled (or not handled) in 2012, he wants House leadership to ensure that the House Agriculture Committee won't "undertake the fool's errand to craft another long-term farm bill" if the leaders refuse to consider the bipartisan work.

In letters to both Speaker of the House John Boehner (R., Ohio) and majority leader Rep. Eric Cantor (R., Va.), Peterson pointed out that the leaders' words don't match their actions.

In the letter to Boehner, Peterson noted that prior to becoming speaker, Boehner said he had "nothing to fear from letting the House work its will -- nothing to fear from the battle of ideas. That starts with the committees," in reference to allowing committees, not the leadership, to set the agenda.

Peterson acknowledged that given the leaders' "long-standing opposition to farm programs and previous farm bills," it was no surprise that there were provisions in the bill that they wouldn't support.

However, he added, "instead of allowing those objections to be aired in an open debate and letting the House 'work its will,' the Republican leadership bottled up the committee's farm bill and drafted alternatives in the speaker's and majority leader's offices, bypassing both the chairman and members of the agriculture committee and making a mockery of regular order."

Peterson went on to ask the leaders to provide a written commitment for floor time if the committee marks up a new five-year farm bill. He said he expects that it should take no more than a month for leadership to determine the appropriate time for floor consideration and to announce that date publicly.

Peterson also challenged the notion that there weren't enough votes to pass the 2012 farm bill, saying the leaders never conducted a whip count asking members whether they would vote for or against the committee package.

"I brought together members from both parties to conduct a count, and we found enough votes to pass the bill," he wrote.

"Given the Republican leadership's objections to farm programs in general, I would not expect your team to bear responsibility for finding the votes to pass the committee's farm bill; that would fall upon the committee," Peterson noted.

Peterson pointed out in an interview last week that too many bills are being written in negotiations between the White House and congressional leaders, leaving out the rank-and-file members. The end result: policies written by people who don't fully understand the issues.

Peterson hasn't heard back from the House leaders yet on his request, nor did he expect a quick response, but Boehner has made comments that he intends to change the way he operates and go back to regular order.

Let's see if he can live up to that statement.

Volume:85 Issue:02

Stocks end up bullish for corn

Stocks end up bullish for corn

AS they had for the latter half of 2012, the markets girded for a bearish surprise when the U.S. Department of Agriculture released several crop reports last Friday.

The Jan. 11 reports were indeed a big event in that, for the first time, USDA released its major grain and oilseed reports at noon (EST) rather than the usual 8:30 a.m. that had been the schedule for several years.

Making the event even more noteworthy was the fact that the release involved four major reports of interest: "Crop Production," "World Agricultural Supply & Demand Estimates" (WASDE), quarterly "Grain Stocks" and "Winter Wheat Seedings."

With traders selling off soybeans for four sessions in a row heading into Jan. 11 and corn essentially trading sideways (though with a higher tone) through last Thursday, it was evident that the market was expecting -- or at least prepared for -- a bearish surprise.

It didn't happen.

In fact, USDA gave the market a corn stocks figure that market analyst Arlan Suderman described as "the most bullish number I've seen from USDA thus far."

The quarterly estimate of grain stocks revealed that USDA found 8.030 billion bu. of corn in storage as of Dec. 1, 2012. The market was expecting the agency to find 2.5 million bu. more corn. Soybean stocks, likewise, came in smaller than expected, but analysts had the wheat stocks figure pretty well pegged (Tables 1-4).

Similarly, the WASDE report projected 2012-13 corn ending stocks smaller than traders had expected and smaller than USDA's December estimate of 647 million bu., meaning that an already tight corn market is getting tighter by the day.

Season-ending stocks for soybeans, on the other hand, were slightly larger than the market had expected, although not by much, and they also came in slightly larger than the 130 million bu. USDA had estimated in December.

The market had clearly anticipated a much larger soybean number, with soybean prices shedding 15 cents last Friday prior to the noon report release.

With stocks still tight for both corn and soybeans, demand remains a critical concern.

While export data last week were disappointing, USDA, in fact, increased its estimate of total soybean use by more than 1% from the December estimate and, likewise, bumped up corn use by nearly 1%.

Perhaps the biggest shift in the corn balance sheet was an increase in domestic feed use that more than offset the slightly lower export projections.

For soybeans, the balance sheet for exports held steady, while crush and residual use increased slightly.

Where the markets were tempered, on the other hand, was in the production figures USDA released for the 2012 crop. In addition to reporting more harvested acres for both corn and soybeans than the market expected, USDA also raised production estimates for both crops.

For soybeans, this was the trigger to send the market lower after the reports' release and seemed to confirm the bearish pre-report sentiment despite the smaller quarterly stocks and unabated demand.

Given the additional 44 million bu. in the January soybean production estimate than USDA projected in December, traders assumed that without a major hiccup in South American production, the U.S. would have plenty of soybeans to meet the steady demand.

The potential exists, however, for both markets to turn higher in the coming days.

Before the reports were released, Rice Dairy analyst Jerry Gidel noted that the market had even already factored in the lower overseas demand due to higher prices, and with soybean ending stocks still hovering around 130 million bu., it's clear that the U.S. can't afford to have a poor production season in 2013.

 

1. U.S. crop production and harvested acreage

 

USDA

Avg.

Trade

USDA

Jan. est.

est.

range

Dec. est.

Corn

Production, billion bu.

10.780

10.665

10.325-10.800

10.725

Yield, bu./acre

123.40

122.57

121.33-124.00

122.30

Harvested acres, million

87.375

86.993

84.564-87.700

87.00

Soybeans

Production, billion bu.

3.015

2.988

2.935-3.040

2.971

Yield, bu./acre

39.60

39.55

38.90-40.10

39.30

Harvested acres, million

76.104

75.548

74.600-75.900

75.700

 

2. Dec. 1 quarterly stocks, billion bu.

 

USDA,

Avg.

Trade

USDA,

2012

est.

range

2011

Corn

8.030

8.283

8.045-9.500

9.647

Soybeans

1.966

1.980

1.915-2.056

2.370

Wheat

1.660

1.658

1.175-1.800

1.663

 

3. U.S. 2012-13 ending stocks, million bu.

 

USDA

Avg.

Trade

USDA

Jan. est.

est.

range

Dec. est.

Corn

602

667

489-764

647

Soybeans

135

133

107-150

130

Wheat

716

741

637-792

754

 

4. U.S. winter wheat seedings, million acres

 

USDA

Avg.

Trade

USDA,

Jan. est.

est.

range

2012

Hard red

29.100

30.185

29.000-31.000

29.863

Soft red

9.420

9.039

8.217-10.000

8.120

White

3.270

3.458

3.300-3.920

3.341

Total wheat

41.820

42.687

41.716-44.650

41.324

Source for Tables: U.S. Department of Agriculture.

 

Market recap

Heading into last Friday's reports, the markets had diverged, with corn heading higher for four sessions and soybeans trending lower.

With the realization that corn demand did not wane at the relatively high price levels of late 2012 and that stocks were even tighter than expected, futures trended higher after the reports. By 2 p.m. (EST), prices had gained 10-17 cents on the front three contracts, although the deferred issues were unchanged to slightly lower as traders continue to assume that farmers will plant even more acres of corn in 2013 than they did in 2012.

For soybeans, on the other hand, the market initially sold off up to 20 cents on the report of slightly larger ending stocks and a 2012 production figure topping 3 billion bu. Prices moderated in the nearby contracts toward the close, but the initial trade reaction to the data was slightly bearish.

Wheat prices, meanwhile, moved 12-20 cents higher on the session as USDA reported tighter-than-expected ending stocks and smaller-than-expected winter wheat acreage.

Export news was largely disappointing, though USDA's Foreign Agricultural Service reported sales of more than 100,000 metric tons of corn last Monday and reported soybean sales on three of five days last week.

The markets largely shrugged off those sales, however, preferring to square positions and short the market a bit ahead of Friday's reports.

Brazil's Ministry of Agriculture and government agency CONAB announced Jan. 10 that domestic grain production will likely be 8.6% higher than the previous year, with the soybean crop potentially 24.5% larger at 82.68 million metric tons. In the Jan. 11 WASDE, USDA projected Brazil's crop to be 82.5 mmt.

China, meanwhile, continued to exhibit an almost insatiable demand for soybeans, with official data reported last week showing that the country imported a record 58.38 mmt last year, up 11.2% year over year. In December, China imported 5.89 mmt, the second-largest monthly total on record.

Analysts expect soybean demand from China's livestock and crushing sectors to continue growing in 2013, perhaps to the tune of 61 mmt.

Meanwhile, the markets continued to watch developments on the Mississippi River as storms and water from melting snow abated fears that the U.S. Coast Guard would be forced to halt commercial barge traffic between St. Louis, Mo., and Cairo, Ill., sometime in early January.

Sen. Dick Durbin (D., Ill.) toured the area near Thebes, Ill., early in the week to inspect the progress that has been made on removing the rock pinnacle impediments there and noted that the Army Corps of Engineers was making "good progress" on the project.

Durbin said the Corps offered "a very positive briefing," and he is optimistic about the ability to continue transportation on the river.

The Coast Guard reported late last week that forecasts for additional rainwater were improving and that the river gauge readings near St. Louis and Thebes were both improving, likely averting a major river shutdown.

 

Ingredient watch

For the most part, 2013 came in like a lamb in the ingredient trade. Corn and soybeans essentially treaded water during the first two weeks of the new year, with soybean meal prices hovering near $400 per ton.

Similarly, animal proteins mostly were status quo last week.

Renderers still had more than adequate supplies of products coming from packers, and demand has held relatively steady, albeit lower than necessary to sop up available supplies.

Some poultry plants in the Southeast may be starting to increase their inclusion rates of some animal proteins, which helps the oversupply matter, but that appears to be a regional phenomenon at this point -- one that merchandisers hope will spread to other parts of the country sooner rather than later.

Protein companies continued to examine other export opportunities for U.S. meat and bone meal, with some buyers in Africa and the Pacific Rim showing an interest.

Prices for animal-derived products could trend higher in the coming weeks pending a seasonally slower slaughter pace.

Volume:85 Issue:02

Supervalu to sell five banners

Supervalu to sell five banners

SUPERVALU Inc. announced last week a definitive package in which it will sell five of its supermarket systems to AB Acquisition LLC, an affiliate of Cerebus Capital Management LP, in a transaction valued at $3.3 billion.

Supervalu chair, chief executive officer and president Wayne Sales said the agreement represents "the successful culmination" of an in-depth, strategic review that was commenced last summer (Feedstuffs, July 23, 2012).

The company has struggled with declining customer traffic due to a pricing structure that was higher than its competitors, including conventional supermarkets, dollar stores, warehouses and even restaurants. It also has struggled with a mountain of debt, much of which could be traced to its acquisition of Albertsons in 2006 and kept it from implementing price points that could match competitors.

In the announcement last week, Supervalu said it had restructured its Albertsons, Acme, Jewel-Osco, Shaw's and Star Market banners into an entity named New Albertsons Inc., housing 877 stores across the U.S.

In the transaction, AB Acquisition will acquire New Albertsons for $100 million in cash and will assume $3.2 billion of New Albertsons debt, according to the agreement. The debt pickup represents about half of Supervalu's total debt.

Additionally, the agreement calls for a Cerebus-led consortium of real estate and realty firms to conduct an offer for up to 30% of Supervalu's common stock for $4 per share, a 50% premium to Supervalu's 30-day average closing price as of Jan. 9, the day prior to the announcement.

The deal is subject to customary closing conditions but is scheduled to close in the current first quarter.

Supervalu will continue to operate its food wholesale distribution business, which is one of the largest in the U.S. and serves almost 2,000 supermarkets across the U.S., and also will continue to operate its Cub, Farm Fresh, Shoppers, Shop & Save and Hornbacher's banners, as well as its Save-A-Lot discount grocery stores.

As such, Supervalu will have sales totaling $17 billion.

The company also noted that grocery retail veteran Sam Duncan will succeed Sales as chair, CEO and president following the close of the transaction and that the board of directors will be restructured.

Duncan, 61, has more than 40 years of experience in retailing. He began his career at Albertsons as a clerk at the age of 15 and held numerous positions of increasing responsibility at Albertsons for 19 years. He subsequently became president of the Fred Meyer division of The Kroger Co., president of Ralph's Supermarkets and CEO and president of ShopKo Stores.

Supervalu, headquartered in Eden Prairie, Minn., was the fifth-largest supermarket system in the U.S. and had 2011 sales totaling 37.5 billion.

Cerebus, headquartered in New York, N.Y., has more than $20 billion invested in its core interests.

Volume:85 Issue:02

Dean to begin making payments to southeastern dairy farmers

Dean to begin making payments to southeastern dairy farmers

A FEDERAL judge filed proceedings last week that will allow Dean Foods Inc. to begin making payments to dairy farmers in the southeastern U.S. to settle a class-action lawsuit the farmers brought against Dean and other parties that charged them with forming a monopoly in the southeastern dairy market and price-fixing.

Dean will pay $145 million to approximately 6,000 farmers, and the Southern Marketing Agency will pay an additional $5 million. Payments will range from $200 to $20,000 per farmer, or an average of $13,000 per claimant, to be distributed over a five-year period.

The lawsuit was brought against Dean, Dairy Farmers of America (DFA) and other parties in 2007 alleging that the defendants had acquired and closed a number of bottling plants in the Southeast or had converted them to other uses to decrease competition and, therefore, prices for milk in the region.

Dean, headquartered in Dallas, Texas, is the largest bottler and dairy processor in the U.S. The company reached the settlement two years ago to avoid trial (Feedstuffs, July 18, 2011).

DFA, headquartered in Kansas City, Mo., is a cooperative of milk producers and is the largest milk pooler in the U.S. DFA did not participate in the settlement.

At the time, about 7,200 producers were involved, including members of DFA, who were suing their own cooperative, and independent producers.

However, Judge J. Ronnie Greer vacated the settlement on the grounds that the DFA producers would benefit twice: once from the settlement and once from profit-sharing from their membership in DFA (Feedstuffs, Oct. 17, 2011).

Dean argued successfully that the original settlement should be reinstated, which Greer did last year (Feedstuffs, March 19, 2012). In an order Jan. 8, he authorized Dean and the marketing agency to begin making the payments.

Dean previously reached a settlement with northeastern dairy farmers in a similar class-action lawsuit (Feedstuffs, Jan. 3, 2011).

Greer has scheduled the trial for DFA and co-defendants to begin Jan. 22.

Volume:85 Issue:02

Hunt stepping down from head of USPB

Hunt stepping down from head of USPB

STEVE Hunt is stepping down as chief executive officer and president of U.S. Premium Beef (USPB) at the end of January and will take an advisory role with the company, according to an announcement.

He will be succeeded by Stan Linville, the company's chief operating officer, the announcement said.

USPB chair Mark Gardiner, a cattle producer from Ashland, Kan., said Hunt's "visionary leadership" benefitted both USPB unit-holders and "the entire U.S. beef industry" in creating a marketing system that rewards cattle ranchers and feeders for focusing on quality.

Hunt has led USPB since it was established in 1996 as a cooperative of producers who bought shares, or units, in the organization.

USPB acquired a minority interest in Farmland National Beef Packing Co. (Feedstuffs, Aug. 3, 1997) and subsequently acquired Farmland National during the bankruptcy liquidation of Farmland Industries Inc. six years later (Feedstuffs, Aug. 11, 2003), reorganizing the company as National Beef Packing Co., which is the fourth-largest beef packer in the U.S.

USPB members sell cattle to National Beef on a grid-based marketing system that awards premiums for age and source verification and other quality measurements. A share of National Beef's profits also are returned to USPB members.

More than 1,400 feedlots in 14 states have marketed cattle to USPB since 1997, and in 2012, all USPB cattle averaged $55.66 per head in premiums over the cash market.

USPB sold a 78.95% share in National Beef to equity investor Leucadia National Corp. last year to allow unit-holders to unwind positions in and exit the cooperative (Feedstuffs, Jan. 30, 2012).

Volume:85 Issue:02

Minnesota poultry producers form new chicken, egg group

Minnesota poultry producers form new chicken, egg group

MINNESOTA chicken and egg producers last week announced a new name for their trade organization, along with a new logo and their first-ever presence on the internet.

The organization will be the Chicken & Egg Association of Minnesota (CEAM), replacing the Broiler & Egg Association of Minnesota, which was established in 1994 when it morphed from the Minnesota Poultry Industries Assn.

CEAM president Scott Waldner of New Ulm, Minn., explained that the new name "better reflects who we are to consumers."

He explained that most consumers "don't know what a 'broiler' is anymore, but everyone relates to chickens. The name change will help our farmers be more instantly recognizable to the public."

The new website, www.mnchicken.org, includes sections with information about Minnesota's chicken and egg producers, poultry nutrition and recipes, plus poultry facts and figures.

CEAM's executive director is Steve Olson, who also is chief executive officer of the Minnesota Turkey Growers Assn., Minnesota Turkey Research & Promotion Council and Midwest Poultry Federation.

Minnesota is a top-10 egg production state and a top-20 chicken production state.

Volume:85 Issue:02

Dean completes sale of Morningstar to Saputo

Dean completes sale of Morningstar to Saputo

DEAN Foods Co. has announced that it completed the sale of its Morningstar Foods division to Saputo Inc. for $1.45 billion.

Dean said it would assign proceeds to fully retiring senior secured debt, "significantly" decreasing its leverage and increasing its financial flexibility.

The two companies reported an agreement for the deal last month (Feedstuffs, Dec. 10, 2012).

Morningstar is a leading manufacturer of dairy and non-dairy cultured and extended-shelf life products, including cream and creamers, cottage cheese, sour cream, ice cream mixes, whipping cream, aerosol whipped toppings and iced coffees, that are sold under a broad line of private labels to foodservice, grocer and other customers across the U.S.

The company has 2,000 employees and 10 manufacturing facilities in nine states.

Morningstar had 2011 sales that totaled $1.3 billion.

Saputo, headquartered in Montreal, Que., is the largest dairy processor in Canada and produces and sells a major platform of dairy products, including fluid milk, cheese, dairy ingredients, yogurt and snack cakes in Canada, the U.S. and more than 50 other countries.

The company said Morningstar will complement and expand its operations in the U.S., which are organized as Saputo Dairy Products USA -- the third-largest cheese maker in the U.S.

The company has 10,000 employees and 47 manufacturing plants in five countries. It reported fiscal 2012 sales that totaled $6.9 billion (Canadian).

Dean, with headquarters in Dallas, Texas, is the largest dairy processor in the U.S. and produces and sells fluid milk under more than 50 regional brands and private labels, as well as cultured dairy products, ice cream, juice, tea and other products. The company reported 2011 sales that totaled $13.1 billion.

Volume:85 Issue:02