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Corn Futures Prices Plummet to Three-Year Low

 

The anticipation that a government report this week will show a bumper crop of corn caused corn futures to slip to the lowest price in more than three years, according to a Blomberg report. Soybeans gained, wheat prices fell.

The corn crop may reach a record 14.03 billion bushels, or 1.3% more than the U.S. Department of Agriculture (USDA) predicted in September and 30% larger than in 2012, according to a Bloomberg survey of 36 analysts. Inventories before the 2014 harvest may more than double to 2.04 billion bushels from a year earlier, the survey showed. USDA will update its forecasts on Nov. 8.

“Prices are being more heavily influenced again by the prospect of a high global corn surplus,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report. “This is looking increasingly likely in view of positive U.S. harvest results.”

Corn futures for December delivery slipped 0.2% to close at $4.2625 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.2525, the lowest for a most-active contract since Aug. 26, 2010.

On Nov. 1, INTL FCStone Inc. and Informa Economics Inc. raised their estimates for U.S. production. A bigger U.S. crop will spur a rebound in world stockpiles to 155.19 million metric tons by the end of the 2013-2014 season, up from 122.59 million a year earlier, Bloomberg’s survey showed.

Soybeans

Soybeans rose on increasing demand for U.S. exports, Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. The USDA inspected 80.6 million bushels for shipment in the week ended Oct. 31, up 32% from a year earlier.

“The demand for U.S. soybeans is extraordinary,” Grow said.

Soybean futures for January delivery rose 0.4%% to $12.565 a bushel, after dropping 3.2% last week.

Wheat futures for December delivery fell 0.7% to $6.6275 a bushel, after touching $6.62, the lowest since Sept. 25.

 

 

 

 

 

 

 

Alltech Expands Mycotoxin Management Team

 

Dr. Alexandra Weaver recently joined the Alltech Mycotoxin Management Team as technical sales support for the Northeast United States and Eastern Canada.

As technical sales support, Weaver will focus on developing and implementing the Alltech Mycotoxin Management Program for the monogastric industry as well as interpreting and analyzing mycotoxin reports completed by the 37+TM Laboratory.

Weaver holds a bachelor of science degree in biology from Elon University,  and a masters in science from North Carolina State University (NCSU).  Weaver recently completed her doctorate in animal and poultry science with a co-major in nutrition from NCSU under the direction of Dr. Sung Woo Kim. Her research focused on the impact of mycotoxins on the growth and health of swine.  

 

 

 

Albion Swine Farm Exports 1,180 Pigs to China

Whiteshire Hamroc LLC, of rural Albion, IN, exported their largest international shipment of swine breeding stock to China on Oct. 14, 2013. This shipment consisted of 1,180 pigs representing three of the four major breeds of swine in the United States: Yorkshire, Landrace and Duroc. This is one of several shipments destined for China that are being coordinated by Clayton Agri-Marketing of Jefferson City, MO.

Whiteshire Hamroc is the largest U.S. recorder of Yorkshire, Landrace, Duroc and Hampshire combined, according to the National Swine Registry 2012 recordings. Whiteshire Hamroc has been exporting swine breeding stock for more than 20 years and to over 22 different countries.

“International interest in U.S. swine genetics continues to grow and represent a larger percentage of Whiteshire Hamroc’s business,” explains Dr. Mike Lemmon, CEO of Whiteshire Hamroc. “We are very active within the Chinese market, with Whiteshire Hamroc having an office and support staff in Beijing, China. Whiteshire Hamroc plans to export several shipments of swine breeding stock to China over the next several months,” adds Dr. Lemmon.

Contact:

Scott Lawrence

Whiteshire Hamroc LLC
4728 N 200 W

Albion, IN 46701

slawrence@whiteshirehamroc.com

800-825-2929 ext. 111

 

Farm Bill Conference Begins

The long-awaited House-Senate Farm Bill conference began last week with the hope of striking an agreement on a comprehensive farm bill by the end of the year.  The leadership of both the House and Senate Agriculture Committees emphasized the importance of getting the farm bill done this year.  Congressman Frank Lucas (R-OK), chairman of the House Agriculture Committee and chairman of the farm bill conference, said, “Let’s give certainty and sound policy to our agricultural producers; let’s deliver taxpayers billions of dollars in deficit reduction; let’s continue to provide consumers the affordable and reliable food supply they have grown accustomed to.  Let’s work together to get our work done.”

Congressman Collin Peterson (D-MN), ranking member of the House Agriculture Committee, reminded everyone that if left alone the committee could reach agreement when he said, “I believe that if the Conference Committee is left alone and allowed to do our work, we’ll be able to find some middle ground and finish the farm bill.” 

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Senator Debbie Stabenow (D-MI), chairwoman of the Senate Agriculture Committee, said, “There are 17 million men and women whose jobs rely on the strength of agriculture.  They are counting on us to work together in good faith and get this farm bill done.  And I am confident we won’t let them down.” 

Senator Thad Cochran (R-MS), ranking member of the Senate Agriculture Committee said, “The time to complete our work has come.  The farm bill expired on Sept. 30, so it is important that we reach a consensus and craft a conference report that will pass both the House and the Senate as soon as possible.”  Now the House and Senate Agriculture Committee leadership and staff will continue to work on an agreed bill.

Conferees Outline Farm Bill Priorities

The 41 members of the conference committee outlined their priorities and issues that need to be addressed during the opening session of the farm bill conference. 

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The main issue mentioned was the need to reach agreement on the level of cuts to the Supplemental Nutrition Assistance Program (SNAP).  This is the key to whether the farm bill can be completed this year.  The differences between the House and Senate bills are huge and there is great passion on this issue by many of the conferees.  Crop insurance reform is a high priority of the conferees.  Members mentioned the need for a balanced commodities program that one program does not fit all commodities.  A number of conferees mentioned the importance of conservation issues, including “Sodsaver,” EQIP, and Livestock Disaster Assistance.  Other items mentioned were trade promotion programs, specialty crops, agriculture research, and forestry.  

COOL Mentioned at Farm Bill Conference

The issue of mandatory country-of-origin labeling (COOL) was raised by a number of members during the farm bill conference.  Various conferees stated the need to either “kill” the program or make it WTO compliant. 

Members mentioned the program is not working, the potential retaliation from Canada and Mexico, and the concern of plants closing along the borders.  A letter signed by 69 companies and associations was sent to the farm bill conference committee asking that the conference “develop a WTO-compliant solution to the COOL law that will meet WTO guidelines while protecting thousands of American jobs from the impacts of retaliation.”  

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The letter reminded the conferees that if the WTO rules in favor of Canada and Mexico, those countries will be able to retaliate against U.S. products through retaliatory tariffs that will “stop exports and kill jobs.”  Besides a number of agricultural organizations signing the letter, there were a number of nonagricultural groups including the American Beverage Association, Emergency Committee for American Trade, Herbalife, Mars, Inc., National Association of Manufacturers, National Foreign Trade Council and U.S. Chamber of Commerce.  The National Farmers Union, Consumer Federation of America, American Sheep Industry, and U.S. Cattlemen’s Association said, “The agribusiness and packer-producer groups are merely trying to scare members of Congress into changing the law to benefit their bottom lines.”  

Crop Harvest Advances

 

 

Crop farmers scrambled to make headway in their quest to advance harvest this past week, passing the average for completion of the past five years (2008-2012), according to Crop Progress released today by the National Agricultural Statistics Service of the U.S. Department of Agriculture (USDA).

Corn harvest in the 18 top corn-producing states reached 73% completion as of Nov. 3, 2013, ahead of the previous five-year average of 71% and making notable gains over last week’s completion rate of 59%.

For the soybean harvest, farmers in the 18 top-producing states completed 86% of harvest, beating out the five-year average completion rate of 85% for 2008-2012 as of Nov. 3, 2013. Last week’s completion rate was at 77% of soybean fields, according to USDA data.

Corn harvest ranges from 98% completed in North Carolina and 97% completed in Texas to a low of 47% completed in North Dakota and 48% completed in Michigan.

Soybean harvest is 90% or better completed in most Midwestern states, but is only 19% completed in North Carolina and 46% completed in Tennessee.

To read more about harvest, go to www.usda.gov. and click on Agency Reports to access Crop Progress.

 

 

 

 

 

 

 

Over 250 Groups Want a Comprehensive Farm Bill

Over 250 national and state farm groups have told the farm bill conference committee they support a new five-year farm bill that maintains current permanent law and includes a nutrition title.  In a letter to the conferees, the groups said, “For decades, the threat of reinstatement of the long-outdated policies of the 1938 and 1949 acts have served as strong motivation for Congress to enact new farm bills.  Repealing those acts and making the 2013 farm bill commodity title permanent law could make it difficult to generate sufficient political pressure to adjust the commodity safety net provisions should conditions in production agriculture change.” 

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The letter also reminded the conferees that programs covering conservation, forestry, research, energy, rural development, horticulture, trade, etc. would face difficulty in the future without the current permanent law.  Those signing the letter included the American Farm Bureau Federation, National Farmers Union, American Farmland Trust, Ducks Unlimited, Farm Credit Council, National Association of Conservation Districts, Pheasants Forever, The Nature Conservancy, etc. 

 

Cuts in SNAP Implemented on November 1

The extra funding from the 2009 stimulus package given to the Supplemental Nutrition Assistance Program (SNAP) ended on November 1.  This will result in a cut of $5 billion in 2014 and approximately $11 billion in cuts from fiscal years 2014 to 2016.  These cuts take place as the farm bill conference committee is trying to reach an agreement on what the level of additional cuts should be made to SNAP.  This will be a very contentious issue in the conference.  Earlier a group of 39 Senators urged the farm bill conferees to not agree to any provisions that would cut eligibility for SNAP (food stamps).  

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PEDV May Thwart Pork’s Chance to Grab Beef Market Share

PEDV May Thwart Pork’s Chance to Grab Beef Market Share

A victim of the ongoing porcine epidemic diarrhea (PED) virus situation may well be the passing of a golden strategic opportunity for the pork industry to gain market share from beef. These kinds of opportunities do not come often. I can’t say the opportunity will be squandered because its loss will have nothing to do with poor, misguided or incompetent efforts. It may just happen. And that is frustrating and sad.

The opportunity has availed itself due to the long-standing adjustment of the beef industry to higher feed costs and then an epic battle against two years of drought. The result is the smallest beef cow herd and calf crops in memory with cattle numbers falling enough that production levels can no longer be maintained just by making them bigger at harvest. Add production difficulties to a rebound in U.S. beef exports and you get the smallest level of domestic beef availability-disappearance-consumption (25.536 billion pounds, carcass weight) since 1995. Factor in a larger U.S. population and per capita availability-disappearance-consumption will, at 56.5 pounds retail weight, this year be the lowest since 1959. I was 2 years old the last time Americans ate this little beef!!!!

And what’s more, the numbers will get SMALLER over the next two years as cows are retained instead of slaughtered and as heifers are pulled from market flows to add to the breeding herd. The Livestock Marketing Information Center in Denver predicts per capita availability-disappearance-consumption to be 53.3 and 51.9 pounds per person in 2014 and 2015, respectively. Those figures are 5.6% and 2.7% lower than the previous year.

Why is this important? Because Americans will still want to eat animal protein if they can afford it. Enter lower-cost pork and chicken. I believe Americans have proven over and over that they have a strong preference for beef because they have generally been willing to pay so much for it. As can be seen in Figure 1, beef prices have always been significantly higher than the prices of other animal proteins, and the gap has generally grown in recent years.

usda retail meat prices

But there is this small item of a budget constraint. We know that the concept is a fanciful as the Easter Bunny and Santa Claus to the federal government but it is very real indeed to most families. Spreading that budget over enough pounds of product to satisfy a family is more and more challenging – just as I predicted it would be when subsidized and mandated usage of corn for ethanol increased total corn demand faster than corn supply could be increased. The droughts of 2011 and 2012 have exacerbated the problem for the beef industry to the point that lower-cost pork and poultry have a great opportunity to take market share over the next two years. Whether they can defend that market share in the long run would still be a challenge but capturing it must come first.

Enter PEDV. Before October, it appeared that pig numbers would grow sharply in 2014. Profit forecasts and some pent-up expansion fever were in place. USDA’s September Hogs and Pigs report said that supplies were growing at a faster rate than anyone expected, and the PED virus was not having as big of an impact as I (and many others) had feared.

But supplies since Oct. 1 have remained well below expected levels. It seems that news comes daily of new sow units that are breaking with the disease that is costing roughly 2.5 pigs per sow in annual output. Most fear that the losses will get larger as temperatures fall

I wish I knew just how many pigs we are losing each week. My best guess is that we are taking a 2 to 4% hit on supplies for Q2 of 2014. That would put numbers near or just below those of 2013, meaning hog and pork prices will remain strong. Given low and falling feed costs, that is great news from a profit standpoint. But it also means that the pricing advantage we had expected next year in the meat case and on restaurant menus will be much smaller, and may not materialize at all.

Don’t get me wrong. Profits are nice and I know producers everywhere need a good year or two of healing up. But a once-in-a-generation opportunity to impact people’s buying habits is a large price to pay for a year or two of strong profits.

The incentive to stop PED virus is already strong. Producers, veterinarians and scientists are doing everything they can to accomplish that. They need no more reason to work hard but just in case, let’s remember this golden opportunity at our doorstep. It will not be gone quickly but neither will it tarry long.

north america pork industry data

competing meats