Markets in 60 seconds: 5/19/14

Markets in 60 seconds: 5/19/14

Beef restrictions: After Brazil confirmed a case of bovine spongiform encephalopathy in the state of Mato Grasso, officials from Egypt and Peru announced temporary bans on Brazilian beef. Egypt instituted a partial ban of 180 days that prohibits any beef from Mato Grosso to be imported into the country. Similarly, Peru issued a temporary, 180-day ban on all Brazilian beef. Brazil is the world's largest exporter of beef, with Egypt being a key market destination. In addition, Mato Grosso produced the most beef in the country and accounts for 25% of Brazil's total exports.

China ag outlook: Xu Shiwei, AII director general, released the "China Agriculture Outlook Report (2014-2023)," the first of its kind in China. In general, it shows that production of major agricultural products will follow a steady and upward trend in the next decade. Output of rice, wheat, sugar and vegetables will increase steadily, while aquatic products, beef, mutton, feed, maize, oilseeds, poultry and eggs will grow rapidly. Meat consumption growth will slightly outpaceĀ  meat production growth, so imports are expected to rise. Dairy production will grow at an average annual rate of 3.5%, the fastest among the products covered in the report. Soybean import growth will slow substantially to reach an annual volume of about 73 million tons in 2023. Feed production is expected to grow at an annual rate of 2.3%, mainly due to growth in compound feed production; feed consumption will also grow steadily. Demand will grow more than 2% annually for aquatic products, milk, maize, sugar and fruits, with moderate growth for meat, wheat, rice, cotton and vegetables. Demand for poultry, eggs, vegetables and fruits for processing will grow rapidly, but the trade balance of these products will remain in surplus. Aquatic production will continue to increase due to aquaculture development.

Milk report change: The 2014 farm bill eliminated the Dairy Product Price Support Program and the Dairy Export Incentive Program and created a Dairy Product Donation Program that requires the U.S. Department of Agriculture to purchase dairy products for donation to food banks and other feeding programs during periods of low operating margins for dairy producers. The USDA U.S. Milk Supply & Use table has been reformatted because of these changes: The "CCC net removals" subcategories under fat basis use and skim-solid basis use have been changed to "CCC donations," and the category for "CCC product net removals" for butter, cheese, nonfat dry milk and whole milk powder has been eliminated.

Volume:86 Issue:20

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