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Articles from 2017 In June


USDA shocks markets with low soybean, wheat acres

new plant seedling

Farmers shifted acres to soybeans from corn and wheat according to the planting data released Friday by the U.S. Department of Agriculture (USDA), but soybean prices surged after the numbers were released as the total area for that crop was less than what many in the trade expected.

Wheat futures also rose as USDA’s wheat acreage was shy of trade forecasts, with the spring wheat acreage under all forecasts in a Reuters’ survey.

Also on Friday was USDA quarterly grain stocks, which were up from a year ago for all three crops, as expected, but the soybean supply of 963 million as of June 1 was under average forecasts. Corn and wheat stocks of 5.23 billion and 1.18 billion, respectively, were on the high side of trade estimates.

“Today’s reports continue the recent history of surprises at the end of June,” said Bryce Knorr, Farm Futures senior grain analyst. “Soybeans got a boost on both acreage and stocks, but not enough to tighten the balance sheet if yields hold up. So far, the crop is looking in pretty good shape but July and August weather will be crucial.”

USDA said farmers planted 89.5 million acres of soybeans, while traders in the Reuters poll on average expected 89.75 million and Farm Futures expected 90.10 million. A year ago, they planted 83.433 million. 

The corn acreage of nearly 90.9 million was on the high side of trade forecasts and above the March estimate of 89.996 million. A year ago, farmers planted 94 million.

All-wheat acreage of 45.66 million was shy of nearly all trade forecasts including Farm Futures’ 46.15 million, with a larger-than-expected reduction in spring wheat. Spring wheat acreage of 10.9 million, compared with the 11.2 million average forecast and the 11.31 million USDA had in March. A year ago, farmers planted 11.6 million.

“USDA’s corn numbers were bearish on both acreage and stocks, suggesting lower than anticipated feed usage this spring,” said Knorr. “The combination could add 300 million bushels or more to supplies in the coming year, increasing the burden for weather as the only card left for bulls. Basis will weaken on any rallies now as growers get more desperate about liquidating inventory, especially if pollination goes well.”

In midday trading, CBOT soybean futures were trading nearly 30 cents higher for the day, winter wheat was up about 27 cents while Minneapolis spring wheat was up 35 to 43 cents. Corn futures were about 7 cents higher for the day.

Eight partners pool resources to bolster crop breeding toolbox

The Foundation for Food & Agriculture Research (FFAR), a nonprofit organization established through bipartisan congressional support in the 2014 farm bill, joined with Bayer, Biogemma, KWS, FAPESP, Precision PlantSciences, Rijk Zwaan and CIMMYT to launch the Crops of the Future Collaborative, a new consortium that will accelerate crop breeding to meet global food demand 20-50 years in the future. FFAR's initial $10 million commitment is expected to leverage significant additional investment from partners. 

With the world population projected to reach 9.8 billion people by 2050, the Crops of the Future Collaborative will accelerate crop breeding through an innovative, public/private model that pools proprietary knowledge, financial resources and technology to carry out crop-specific research initially focusing on maize, leafy greens, wheat and small grains. The consortium will hone in on how a crop's genetic information can yield traits needed to meet global nutritional demands in a changing environment. Participants will see their investments multiplied by a "one-to-many" matching model.

"The new Crops of the Future Collaborative brings together the resources of leading agriculture companies and research organizations to meet future food system challenges," said Dr. Sally Rockey, FFAR executive director. "We enthusiastically welcome the initial Crops of the Future Collaborative partners who share the foundation's vision for increasing public/private collaboration and global investment in food and agriculture sciences."

This collaboration will accelerate discoveries in ways not possible in the past by building on recent advances that have greatly enhanced scientists' ability to study and improve specific crop traits. Recent progress includes advances in gene editing, crop genome sequencing and phenomics, or the study of the relationship among a plant's genetic makeup, its environment and its performance.

"This collaborative research with public and private partners will build on investments already made in agriculture research so that farmers like me see the return on those investments through improved plants in our fields," said Pam Johnson, past president of the National Corn Growers Assn. and a member of the FFAR board.

The new consortium will increase capacity to breed crops with specific traits in order to produce plants that are adapted to different environments. Target crop characteristics might include enhanced nutritional qualities or the ability to withstand environmental challenges such as drought, heat or flooding. Ultimately, knowledge generated by the collaborative will be publicly available through scientific publications and informational platforms, benefiting public and private crop breeding efforts.

"Rijk Zwaan is keen to actively contribute to the world's food supply and stimulate vegetable consumption," said Dr. Kees Reinink, managing director of Rijk Zwaan. "Joining the Crops of the Future Collaborative, with leafy vegetables as one of the focus crops, can help us achieve this mission. Combining our strengths with partners in (research and development) is an important part of our strategy. Together, we can accelerate the further development of better vegetables."

"As a founding partner, Precision PlantSciences is particularly pleased to begin working with our fellow Crops of the Future Collaborative organizations," Precision PlantSciences president Dr. Fayaz Khazi said. "Together, we will solve problems like how to pair new ideas with the most relevant technologies, and this will help us all create products that are not just better but game changing -- even life changing. Through participation in the Crops of the Future Collaborative, Precision further solidifies its commitment to this community and to translating scientific knowledge into products that improve the health of our planet and all its inhabitants."

FAPESP scientific director Dr. Carlos Henrique de Brito Cruz noted, "At FAPESP, we are happy to be part of the Crops for the Future initiative to foster research in agricultural topics of great relevance for Brazil and the world. Working together with outstanding partners such as FFAR and other agencies, we expect to advance the pace of discovery."

"Joining the Crops of the Future Collaborative is a great opportunity to increase our collective knowledge of traits and genes function to greatly accelerate development of crops in a sustainable way," said Dr. Alain Toppan, chief executive officer of Biogemma. "Understanding traits is a major target in Biogemma and its shareholders' global strategy to develop efficient crop solutions."

"Solving the challenges farmers face worldwide in growing healthy, abundant crops in a sustainable manner will require commitment and collaboration from experts around the world," said Dr. Catherine Feuillet, senior vice president of Bayer's Crop Science division. "With the Crops of the Future Collaborative, the Foundation for Food & Agriculture Research provides a unique framework to develop public/private collaborations for accelerating innovation that can propel the next Green Revolution for major crops, and Bayer is proud to support it."

Organizations interested in joining the Crops of the Future Collaborative are encouraged to contact FFAR.

Beef seen as frontrunner of expanding China's market access

ceremonial cutting of US beef in China with Secretary Perdue
USMEF senior VP Joel Haggard, NCBA President Craig Uden, Secretary Perdue and Luan Richeng, vice president of COFCO Group, prepare for ceremonial carving of U.S. beef on June 30, 2017.

U.S. Secretary of Agriculture Sonny Perdue joined with U.S. Ambassador to China Terry Branstad on June 30 to slice a Nebraska prime rib in a Beijing ceremony, formally marking the return of U.S. beef to the Chinese market after a 13-year hiatus after shipments were halted at the end of 2003 following the case of BSE. 

The U.S. Meat Export Federation (USMEF) participated in a media reception marking the return of U.S. beef to China. Perdue and Branstad addressed attendees, along with National Cattlemen’s Beef Association (NCBA) President Craig Uden, a cattle feeder and rancher from Elwood, Neb. Other U.S. guests included Greg Ibach, director of the Nebraska Department of Agriculture, and NCBA president-elect Kevin Kester, a rancher from Parkfield, California. The reception was funded through support from the Nebraska Beef Council.

Joel Haggard, USMEF senior vice president for the Asia Pacific, emceed the event. He thanked Perdue and his USDA team for negotiating the final agreement that restored access for U.S. beef, which had been absent from the Chinese market since the December 2003 BSE case. The market officially reopened June 12.

Perdue said it was a great source of pride to be on hand for the official reintroduction of U.S. beef into China, and expressed his commitment to providing consumers with a high-quality product.

“On behalf of President Trump and the people of America, we want to say thank you to our great customers here in China,” Perdue said. “We want to respect your market and assure you that these products coming in are safe, wholesome and very delicious.”

Perdue also paid tribute to U.S. cattle producers, who are excited to finally be able to supply the Chinese market.

“To those men and women who go out in the cold and birth those calves, we want to thank you for what you do to make this day possible. I am convinced that when our Chinese friends taste this tasty, wholesome, healthy and safe U.S. beef, they’re going to want more of it. So you all better get some more cows,” he said.

The return of U.S. beef and beef products is a part of the U.S.-China 100-Day Action Plan announced by the Trump Administration on May 11, 2017, with the first shipment of U.S. beef arriving in China on June 19, 2017.

Perdue said, “This is also a good harbinger of the kind of relationship that can be developed. We hope there are other things we can cooperate on and we're going to use U.S. beef as the forerunner.”

Branstad, who was confirmed as U.S. ambassador to China on May 22, said the return of U.S. beef to China is an important step forward in expanding U.S. agricultural exports.

“This is an exciting day – we’ve been waiting nearly 14 years for this,” Branstad said. “I want to express my excitement that one of my first official duties as ambassador from the United States to the People’s Republic of China is to be here with my friend, Secretary of Agriculture Sonny Perdue, to welcome American beef back to China. I want to reiterate our commitment to expanding trade and increasing American exports, and we believe beef is a great beginning for this process.”

Uden echoed these sentiments, noting the excellent potential China holds for U.S. beef exports.

“I’m honored to be here today to celebrate this important milestone in the relationship between the United States and China,” Uden said. “This is a great day for U.S. beef producers, and we look forward to supplying U.S. beef to many Chinese consumers in the years to come.”

The appetite for American beef has grown tremendously in Asia in recent years, with Japan, South Korea, and Hong Kong rapidly becoming three of the world's top five importers of American-produced beef. NCBA said it will continue to fight for greater and fairer access to foreign markets for American producers.

"Regaining access to the world's largest market is a huge step in the right direction," Uden said. "But we still have a lot of work to do, like negotiating a bilateral trade agreement with Japan that puts us on even ground with our competitors, and ensuring that the renegotiation of NAFTA doesn't mess up the great deal we've had with our consumers in Canada and Mexico for years."

Perdue and Uden were joined by importer Luan Richeng, vice president of COFCO Group, for a ceremonial carving of U.S. prime rib – part of the first shipment of U.S. beef to arrive in China.

Also on Friday, Perdue held a series of meetings with Chinese government officials, including Vice Premier Wang Yang and Minister of Agriculture Han Changfu, to discuss expanding trade between the United States and China.

On July 1 in Shanghai, Perdue will help launch U.S. beef’s return to China’s commercial channels with a U.S. beef promotion at a City Super supermarket. He will be joined by USDA Foreign Agricultural Service representatives, Ibach (representing the state of Nebraska), USMEF staff and U.S. beef exporters. The group will distribute samples of U.S. steak cuts and chuck eye roll to City Super customers and speak to the unique attributes of U.S. beef. Funding support for this event was also provided by the Nebraska Beef Council.

“It has been a long road back for U.S. beef in China, and USMEF is extremely pleased to see such great enthusiasm for its return,” Haggard said. “Buyer interest is very strong, and we are excited about the opportunity to work with U.S. exporters and future customers in China to build a solid foundation for U.S. beef in this dynamic market.”

 

Collaboration set to spark breakthroughs in one health

Human and animal health research is receiving a shot of adrenaline thanks to a collaboration with Kansas State University's Olathe and Manhattan, Kan., campuses and the University of Missouri-Kansas City.

The project — 1Data — is designed to accelerate breakthroughs in human and animal health by establishing a new standard for analyzing cross-species health information.

Jim Riviere, distinguished professor emeritus in Kansas State University's College of Veterinary Medicine, and Gerald J. Wyckoff, professor of molecular biology and biochemistry at the University of Missouri-Kansas City, developed 1Data and are overseeing the project, which is housed at the Kansas State-Olathe campus.

1Data aggregates an array of pre-clinical human and animal health information into a cohesive, structured and open-source database called the "Structured Environment for Animal Data & Simulation." Once aggregated, data is evaluated and standardized to enable them to be mined for specific information.

Under this framework, researchers will develop a clearinghouse platform for the collection and integration of multiple databases to create the next generation of approaches to curing or mitigating human and animal diseases. 1Data will help scientists fully simulate the design of animal models and identify congruencies between human and animal diseases.

According to the Tufts Center for the Study of Drug Development, the average cost to develop a drug is about $2.56 billion — including nearly $1.4 billion in out-of-pocket expenses — with late-stage human trials being the most expensive phase of the testing process.

1Data will help reduce the cost of drug development with the ability to use computer simulations to replace, reduce and refine animal use in drug development studies, Riviere said. It also will provide data that will help identify the best animal models for studies to avoid genetic pitfalls and help companies know which drugs are more likely to fail during clinical testing and at what phase — saving both time and money.

Conversely, it will shorten the time frame for a successful drug to reach the market.

"Right now, research labs and human and animal health companies are all doing the exact same trials with the same animal patients, but they're not sharing the data and learning from it to help with future trials," Riviere said. "Redoing the same study or part of a study over and over wastes time, money and involves unnecessary animal models. We would like to change that."

Not only does 1Data create new benefits for drug development, animal modeling and human and animal health, it also advances and reinforces the science behind One Health — the concept of how human, animal and environmental health are related and affect one-another.

Cerner Corp. is permitting the use of an isolated computer network, called a sandbox, to develop the 1Data platform. Several human and animal health companies are providing data to input and test the platform. Once the platform is finalized, it will be thoroughly tested for functionality and security before being populated with large quantities of data. The platform will publicly launch as open-source so that partnering researchers and human and animal health companies around the world can freely access and contribute information to the database.

"A handful of for-profit databases exist, but we feel like this has to be done at a university so that the database can be open-source and free to all users," Wyckoff said. "We don't want someone to be unable to advance their research about a disease or explore a potential vaccine simply because they don't have enough funding to access information that is pertinent to their work."

Another important component of 1Data is to develop a comprehensive educational program to train the next generation of researchers. Kansas State University and the University of Missouri-Kansas City will work collaboratively to develop graduate programs for students and researchers in bioinformatics, modeling and analytical methods.

Both universities also are building human capital into the project. Two postdoctoral students and two graduate research assistants will join the project before the end of the summer. The postdocs will both be at K-State Olathe, while one graduate research assistant will be at Kansas State University's College of Veterinary Medicine and another at the University of Missouri-Kansas City.

Several Kansas State University researchers also are involved with 1Data, including Majid Jaberi-Douraki, assistant professor of mathematics and a researcher with the Institute of Computational & Comparative Medicine (ICCM); David Renter, professor of epidemiology and director of the Center for Outcomes Research & Epidemiology, and Hans Coetzee, professor and head of the anatomy and physiology department and interim director of the ICCM.

1Data has received funding from the Speas Foundation, the Hall Family Foundation, the Civic Council of Greater Kansas City and Elanco Animal Health. Collaborating partners also have been engaged with the development of 1Data, including the Kansas City Area Life Sciences Institute, UMKC Foundation, Children's Mercy, University of Kansas Medical Center, St. Luke's Health Systems, MRI Global and Aratana Therapeutics Inc.

More about 1Data is available at olathe.k-state.edu/1data.

FPRF funds rendering research

The Fats & Proteins Research Foundation (FPRF) has approved more than $250,000 for seven new research projects at the Clemson University Animal Co-Products Research & Education Center (ACREC), a collaboration between Clemson University and the foundation.

The projects funded are multi-disciplinary and include researchers from the departments of chemistry, environmental engineering and earth science, chemical engineering, and bioengineering.

“These investments help ensure an efficient profitable rendering industry in the future. Renderers play an important role in the sustainability of agriculture and pet food but continue to search for improvements” said Dr. David Meeker, FPRF vice president of scientific services.

The newly funded projects are mainly focused on increasing environmental sustainability and increasing product quality. The FPRF research committee is comprised of members from rendering companies of all sizes and from around the country. These committee members determine the value of projects to the rendering industry and make recommendations to the board for funding.

“Research is critically important to the rendering industry. Committee members spend hours assessing and critiquing research projects before making recommendations for funding. We are very grateful to the researchers and committee members for their dedication and hard work,” FPRF chairman Duane Anderson said.

More than $3 million of research has been funded through ACREC since its inception in 2005.

The new research grants include:

* Treatment of rendering wastewater in microbial fuel cells with nitrogen recovery and peroxide production;

* Rendering co-products as electron donors for subsurface remediation: a new market for rendered co-products;

* Modified natural materials for rendering applications;

* Renderable flocculants for wastewater treatment;

* Reactive conversion of oils extracted from DAF sludge;

* Biotransformation of meat and bone meal into high-value astaxanthin for animal feed, and

* Graduate student internship — Evaluation of commercialization and technology transfer potential of ACREC technologies.

FPRF considers grant applications in March and September each year. For more information, go to www.fprf.org.

N&H TOPLINE: Discovering early age immune response in foals

Medioimages/Photodisc Mare and foal

Researchers at the Cornell University College of Veterinary Medicine have discovered a new method to measure tiny amounts of antibodies in foals, a finding described in the journal PLOS ONE.

The methodology will help understand how fast a foal starts producing its own antibodies, which, in turn, will help optimize recommendations for young horse vaccination schedules, said Dr. Julia Felippe, associate professor of large animal medicine, and research associate Rebecca Tallmadge.

Newborn horses are initially protected against diseases by antibodies they receive after birth through the colostrum produced by their dam.

Vaccination is an important strategy to protect neonates against diseases. However, administrating vaccines too early in life may have negative effects. Vaccines work by presenting the immune system with a killed pathogen (or a protein from it) that will "train" the body to recognize it as an intruder.

If the immune system of the young animal is not ready, instead of recognizing the pathogen's protein in the vaccine as foreign, it may identify it as "self" and impair the production of an immune response against this particular pathogen.

Additionally, the mother's antibodies may interfere with the neonate's antibody production, making the vaccine ineffective. To develop a protective vaccination strategy, it is crucial to understand how young animals become immunocompetent.

Monitoring the development of the neonatal immune system using traditional methods, such as an antibody count in the foal's blood, is hampered by the abundance of maternal antibodies relative to the young's own. The maternal antibodies wear off progressively as the young animal ages, but this may take a few months depending on the half-life of the different antibodies. Current guidelines recommend vaccination of foals to start at three months or at six months of age if the dam was vaccinated in late gestation.

"We presume that if the mother is vaccinated in her last month of pregnancy, her antibodies will transfer to the foal, but in reality, we don't measure the efficiency of this process," Felippe said. Previous work led Felippe and Tallmadge to believe that the foal immune system could respond to vaccines very early in life, and the team decided to test this hypothesis. They vaccinated three-day-old foals, gave them boosters at 21 and 35 days, and followed the foals' immune response up to 42 days after birth.

To overcome the challenge of counting antibodies in such young foals, Felippe and Tallmadge examined the foals' B cells, the cells that create antibodies. This allowed them to examine the foal's immune response alone, independent of maternal circulating antibodies. Additionally, B cells take up to 10 days before releasing the antibodies they created.

"After they find a match for the antibody, B cells adjust and tweak their antibody to make a perfect fit for the pathogen," Felippe said. "They are amazing, they are like little factories."

The DNA changes that occur in the B cells' maturation process can thus be tracked through time by sequencing their DNA. As the researchers gave boosters to the foals, they observed an increase in the diversity of mutations in the B cell DNA as those immune cells kept looking for a better fit to the antigen.

"Testing antigen-specific B cells gave us beautiful responses," Tallmadge said. This suggests that foals start producing antibodies in the first days when vaccinated. Yet results were different depending on the type of vaccine.

"Our results suggested that some vaccines may induce higher production of antibodies than others," Felippe said. "However, our experiment was not designed to measure efficacy of certain vaccines."

Rather, its aim was to explore the neonate's immune response almost in real time, and with more sensitivity, without confounding circulating maternal antibodies.

"Our approach can be applied to any vaccine or pathogen in any host species," Tallmadge said. After showing that neonates are capable of an immune response, the researchers now want to see if there are neonate-specific mechanisms designed to prevent this response.

"The reason why such a mechanism would exist is, imagine you live in the womb, very protected, and now you are out in the environment with billions of pathogens poking you for an immune response. If you respond to every stimulus with the same intensity at the same time, something might happen with you," Felippe said. "So, there may be something out there that prevents you from damaging yourself in this process and prioritizes a response to a stimulus that is relevant."

Tropical Storm Cindy brings relief to dry areas

drought ground

All substantial precipitation over the past week fell over the eastern half and southern portion of the United States, largely due to Tropical Storm Cindy, according to the June 27 “National Drought Summary” report.

“The storm made landfall near the Louisiana-Texas border on June 22, bringing heavy rains and subsequent flooding to parts of the South and the Ohio Valley. Dry areas in the path of Cindy saw immediate improvements, as reflected on this week’s drought map,” the report stated.

NOAA

Despite some regions receiving some relief from the precipitation, author Jessica Blunden, climate scientist with the National Oceanic and Atmospheric Administration and National Centers for Environmental Information, said heat and lack of rain dominated from the West to the central and south central U.S, with temperatures rising into the 90s, 100s, and even into the 120s in some areas, with many temperature records broken. This led to some quickly deteriorating conditions across the heart of the country, she said.

“Although temperatures were well below normal in the Northern Plains from the 23rd through the 27th, this did not help conditions; unfortunately there was little to no accompanying rain.”

In the Southeast, the report said moisture from Cindy brought widespread heavy rains to alleviate lingering drought and dryness in several locations.

“The rain was enough to wash away all D1 and substantially shrink the remaining abnormally dry region in northwestern Alabama into northeastern Mississippi,” Blunden noted.

Moderate drought conditions were alleviated in several counties, where precipitation has been up to around 250% of average over the past month. The area of abnormal dryness that remains is related to long-term deficits, which more bouts of normal to above-normal rainfall will help improve, the report added.

According to Blunden, there was a mixed bag of precipitation totals across the South region over the past week due to Cindy. The amounts ranged from nothing or very little in most of Oklahoma and parts of south central and west Texas to around 4-6 inches in parts of Louisiana, Mississippi, and Arkansas. As expected, this led to improvements in some areas and rather widespread degradation in others.

“Unfortunately, this past week's rain was inadequate to ameliorate large deficits loom since the beginning of May in Oklahoma, with the prime rainy season (May through mid-June) disappointing for much of the state, especially central Oklahoma,” Blunden reported.

Due to the rapidly deteriorating conditions, abnormal dryness (D0) was introduced across large portions, with already existing moderate drought (D1) expanding in the central part of the state, where drier conditions were present. “Moderate drought was expanded to encompass more of Grady County, for example, reflecting reports of failed crops and inability to plan.”

The report said dry creek beds have been noted by locals in the western half of Roger Mills County.

“On-the-ground observations indicate that stock ponds are rapidly shrinking and grass is turning yellow,” Blunden noted.

The Midwest saw adequate rainfall across most of the region. Blunden said Southern Ohio received enough precipitation to remove the abnormal dryness (D0) from the southern region, although the report noted that it remains in the Toledo area to the north where deficits are as much as 3 inches over the past month. In Iowa, abnormal dryness (D0) was extended to the south in western Shelby, eastern Harrison, and northwestern Pottawattamie Counties where rainfall over the past month has been less than 50% of average.

The High Plains continues to suffer as much needed rainfall was unfortunately scarce over most of the region during the past week. Combined with a heat wave early in the period with temperatures reaching into the 100’s (°F) in some areas, Blunden reported that conditions worsened in many parts. North Platte, Neb., for example, tied a June record on the 21st, reaching 107°F.

“Abnormally dry conditions now encompass most of the state, save for the far west and parts of the far east. These conditions also extended southward into Kansas, which also saw abnormal dryness extended in the far southwest,” Blunden noted. “The most deterioration, however, occurred in the Dakotas, especially northwestern South Dakota and North Dakota, where the rapidly worsening conditions warranted expansion of moderate, severe, and extreme drought to many regions.”

Extreme drought (D3) was expanded across a large section of western North Dakota and extended into Montana. A county agent from McIntosh County reported that soil moisture is absent and crop and pasture losses are expected. Additionally, Blunden said some producers are now having to haul water, and hay is less than half of normal. Pastures also have zero regrowth, she added.

“The one bright spot for the week in this region was southeastern Kidder and southwestern Sherman Counties: moderate drought (D1) improved to abnormally dry (D0) conditions.”

In the southwest and west, conditions were hot and dry over the past week, but Blunden said this is the dry season in much of the area.

Pacific Coast States are still seeing surpluses given the heavy rains and large snowpacks earlier this year. While no changes were made to most of the area, dryland producers in eastern Montana, according to local experts, continue to feel the impact of drought, even with recent cooler-than-average temperatures.

Blunden said abnormally dry (D0), moderate drought (D1), and severe drought (D2) were all expanded to the south and to the west.

“Conditions here and in the Dakotas have deteriorated quickly over the past few weeks and this flash drought will continue to be monitored closely in the midst of the growing season.”

What’s ahead

According to Blunden, June 27 and 28 saw a pattern of below-average temperatures in the East and above-average temperatures in the West. Welcome precipitation fell across large parts of the Northern Plains and Midwest, notably in central to eastern North Dakota, parts of southern south Dakota, Nebraska, Minnesota, and Iowa. Rain also fell in the upper Northeast and in the far South from southern Texas to Florida.

During the next five days (June 29-July 4), Blunden said temperatures will be warm, mainly in the upper 80s and higher, across the southern tier of the U.S. but also extending northward to Nebraska, Wyoming, Montana and the Dakotas.

But, areas needing a lot of precipitation to alleviate drought conditions may not see much, Blunden reported.

“Half an inch of rain or less is forecast over Montana and most of North and South Dakota. However, northern Minnesota may see over an inch. It also appears that eastern Nebraska, Iowa, northeastern Kansas, eastern Oklahoma may get some much needed rainfall, as much as 9 inches in localized areas of Oklahoma,” she said.

Looking further ahead into the second week period, Blunden said above-average temperatures are favored across the entire contiguous U.S.

“Potential above-average rainfall is possible in the eastern half of the U.S. from South Carolina to southern New York, extending west through Missouri, while below-normal precipitation is favored across the north from Washington to Minnesota and south to northern Colorado and much of Nebraska. Below-average precipitation is also favored at this time for Texas, Louisiana, and southern mississippi and Alabama.”

LIVESTOCK MARKETS: U.S. hog inventory grows

rakijung/iStock/Thinkstock young pigs

Analysts' pre-report estimates were mostly in line with actual numbers released June 29 in the U.S. Department of Agriculture’s quarterly “Hogs & Pigs” report. The largest surprise of the report was the sows farrowed during the March-to-May period.

The U.S. inventory of all hogs and pigs on June 1, 2017, was 71.7 million head, up 3.4% from June 1, 2016, and up 1% from the March report. This is the second-largest inventory ever and the highest June 1 inventory of all hogs and pigs since estimates began in 1964. Analysts had expected the inventory to be 3.3% higher.

Breeding inventory, at 6.07 million head, was 1.5% higher than last year and up slightly from the previous quarter. Analysts had expected a 1.4% increase. Market hog inventory, at 65.6 million head, was up 3.6% from 2016 and up 1% from last quarter. Analysts had expected a 3.4% increase. USDA said this is also a record June 1 market hog inventory since the estimates began in 1964 and the second-largest market hog inventory.

The March-May 2017 pig crop, at 32.26 million head, was 3.8% higher than 2016 and the second-largest March-May pig crop since estimates began in 1970. Analysts had expected this number to be up 3%. Sows farrowed during this period totaled 3.06 million head, up 3.1% from 2016. Analysts had expected this to be up only 1.7%, so it was a significant deviation.

The sows farrowed during this quarter represented 50% of the breeding herd. Average pigs saved per litter were a record-high 10.55 for the March-May period, compared to 10.48 last year. Pigs saved per litter by size of operation ranged from 7.7 for operations with 1-99 hogs and pigs to 10.6 for operations with more than 5,000 hogs and pigs.

U.S. hog producers intend to have 3.06 million sows farrow during the June-to-August 2017 quarter, up slightly from the actual farrowings during the same period in 2016 and up 2% from 2015. Intended farrowings for September to November 2017, at 3.06 million sows, are up slightly from 2016 and up 4% from 2015. The total number of hogs under contract owned by operations with more than 5,000 head but raised by contractees accounted for 48% of the total U.S. hog inventory, up from 47% the previous year.

USDA made only slight revisions to past reports. The net revision made to the December 2016 all hogs and pigs inventory was 0.03%. A revision of 0.1% was also made to the September-November 2016 pig crop. A revision of 0.1% was made to the March 2017 all hogs and pigs inventory.

Analyst reactions

Dr. Scott Brown, assistant extension professor at the University of Missouri-Columbia, said much of the report came in very close to pre-report estimates, requiring a little harder look to find things to discuss.

Brown said looking at the past couple of reports, it’s amazing to see the amount of stability the U.S. appears to have in terms of sow inventories. The data seem to be suggesting that sow inventory has plateaued, although it's still growing relative to a year ago, he said.

While March-May farrowings came in higher than analysts had anticipated, he said a lower-than-anticipated March-May pigs per little number somewhat offset the larger farrowing number.

Dr. Lee Schulz, extension livestock economist at Iowa State University, said the larger-than-anticipate farrowings show the trend seen over the past several years. “The real implication is looking down the line. Given that trend, it’s likely the actual sow farrowings could be larger,” he said.

Schulz said his annual estimate for producer profitability is $15 per head for the rest of the year, which he said is very much driven by what has been experienced during the second quarter. He anticipates that profits will rise to $30 per head in the third quarter and will return to breakeven in the fourth quarter.

Joe Kerns, president of Kerns & Associates in Ames, Iowa, said, “We’re all kind of settled into this growth mode; it’s just simply a question of how fast.”

In fact, he said producers he works with are dead set on growing, especially those in the regions where the new packing plants will be. Hesitancy has nothing to do with the economics but, rather, the ability to execute. He said permitting is one issue, and a construction industry with finite resources is another issue. “We can’t just expand and contract,” Kerns added.

He said he believes a natural buffer/governor is occurring that is thwarting growth, and “if we could just unpin everything and let it loose, you’d see this thing really go.”

Kerns added that there still is some upward potential on the expansion opportunities. “I don’t see anything that is providing a breaking mechanism in order to slow the sow expansion,” he said.

He anticipates that sow expansion will continue at about 100,000 sows per year for the next couple of years.

Market recap

The June live cattle futures market was mixed this week ahead of the Fourth of July holiday. Nearby contracts closed higher Monday at $121.475/cwt. but lower Thursday at $120.20/cwt.

August feeder cattle futures were mostly higher this week. Nearby contracts closed higher Monday and Thursday at $149.45/cwt. and $147.175/cwt., respectively.

For the beef cutouts this week, Choice and Select were both sharply lower at $226.55/cwt. and $210.16/cwt., down from $242.88/cwt. and $216.92/cwt., respectively, last week.

July lean hog futures were also mostly higher. Nearby contracts closed Monday at $87.025/cwt. and Thursday at $89.475/cwt.

Pork cutout values were mostly lower Thursday. The wholesale pork cutout was lower at $102.32/cwt., but was still higher than the prior week. Loins and hams were also lower at $92.41/cwt. and $73.49/cwt., respectively. Bellies were higher at $194.78, up 10 cents from the week prior.

Hogs delivered to the western Corn Belt continued to climb this week, closing at $86.88 on Thursday.

The U.S. Department of Agriculture reported the Eastern Region whole broiler/fryer weighted average price at $1.0687/lb. on June 23.

According to USDA, egg prices were steady, with a mostly steady to higher undertone. Offerings were light to moderate, and supplies were occasionally tight to moderate for trade requirements. Demand was moderate to good. Large eggs delivered to the Northeast were higher at 68-72 cents/doz. Prices in the Southeast and Midwest were also slightly higher at 67-70 cents/doz. and 61-64 cents/doz., respectively. Large eggs delivered to California were higher at $1.15/doz.

For turkeys, USDA said the market was steady to barely steady. Offerings have been mixed but mostly moderate. Demand has been light. Prices for hens and toms were unchanged at 94 cents to $1.03/lb.

Value, convenience drive U.S. pork demand in South Korea

cargo at port

According to the U.S. Meat Export Federation (USMEF), one of this year’s top-performing international markets for U.S. pork has been South Korea, where exports through April are up 28% year over year in volume (to 65,743 metric tons) and up 37% in value (to $178 million).

Jihae Yang, USMEF director in Korea, said the country went through some political turmoil earlier this year with the impeachment of its former president, but consumer confidence and economic activity bounced back quickly.

“There is no impact in terms of pork demand or pork consumption, which is good,” Yang said, adding that demand is strong for high-protein meals.

Yang also noted that although Korea’s domestic pork production is steady, it is not keeping pace with growing consumer demand for pork.

Online shopping is extremely popular with Korean consumers, especially those looking for convenient foods and home meal replacement items, according to Yang. This bodes particularly well for U.S. processed pork as well as for U.S. raw materials exported to Korea for further processing.

“Korean people are using more and more online shopping malls, and Korea is a small country, so everything is delivered overnight; many stores are going toward e-commerce,” Yang said.

She said single households and the younger generation are looking for convenient food and whole meal replacements, which is benefitting sales of U.S. processed pork. “So, we do a lot of promotion with the key e-commerce platform,” Yang added.

Livestock & poultry cash market comparisons, 6/28/17

Livestock and meat ($)

June 28

June 21

6 mos. ago

Year ago

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

229.43

245.42

201.84

208.57

Steers, Choice, 1,050-1,200 lb., cwt. southern Plains

122.50A

129.50A

115.50A

116.00

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

164.37A

163.75A

N/A

150.75A

Lean hogs, carcass, Iowa-Minn. 167-187 lb.(1)

88.10

80.47

60.59

81.57

Feeder pigs, 40 lb. national direct delivered(2)

49.82

51.69

55.05

46.53

SEW pigs, 10 lb., national direct delivered (per head)

25.29

23.71

49.93

20.27

Choice beef, cutout, cwt.

226.55

N/A

203.47

208.44

Pork loin, 185 lb. 51-52% lean, cutout, cwt.(3)

92.41

N/A

77.85

84.79

Hog corn ratio

25.26

N/A

16.92

22.04

Steer corn ratio

34.59

N/A

37.91

33.33

Poultry and eggs (cents)

 

 

 

 

Chickens, Grade A, fresh lb. Chicago

103.25a

102.72

80.40a

88.90a

Hen turkeys, Grade A, frozen, lb., Chicago

98.50Aa

98.50A

N/A

117.00Aa

Young tom turkeys, Grade A. frozen lb. Chicago

98.50Aa

98.50A

N/A

126.50Aa

Eggs, Grade A, large, doz., Chicago

63.50

56.50A

132.50

67.50

N/A: not available.         A: average.

(1) Replaces live hogs; live hogs are 0.755 of quote.
(2) Replaces Sioux Falls, 50-60 lb. (2/26/07)
(3) National FOB plant, replaces national daily carlot.
Livestock, meat, poultry and egg prices from USDA.