WorldWatch:

[Mustang Sally Farm]

Thursday, January 26, 2012
Europe Dampens NZ Farmer Confidence
NEW ZEALAND - Federated Farmers mid-season Farm Confidence Survey, conducted in January 2012, reveals farmer confidence in the general economy has turned negative for the first time since July 2009. Europe and the global economy increasingly weigh upon farmer outlook.


“While farmers are confident in their own businesses, there’s been a big deterioration in the global economy since July, when the 2011/12 season began,” says Bruce Wills, Federated Farmers President and its economics and commerce spokesperson.

“Concerns about sovereign debt, volatility in global financial markets and weakened economic activity has potential to spread outwards from the Eurozone especially. New Zealand’s major trading partners in the Asia-Pacific region have experienced weaker export growth and the ramification of this isn’t lost on farmers.

“While the drop in farmer confidence we recorded is in line with other surveys, the good news is that farmers’ confidence in their own profitability remains strong, despite being down on what it was at the start of the season in July.

“One explanation is the mild weather in a majority of pastoral areas. This has seen good spring/early summer growing conditions and farmers expect to increase production in the next 12-months.

“The weather has helped offset commodity prices coming off recent peaks. Sentiment would have even more bullish, if not for the La Nina influenced dry conditions affecting Southland, Otago and North Otago, when our survey was in the field.

“Farmers’ expectations for spending and for debt both remain at similar levels to the start of the new season and this is encouraging. Farmers are taking advantage of current conditions, physically and economically, to strengthen farm balance sheets.

“In keeping with Federated Farmers stressing agriculture’s many employment opportunities, the labour market for skilled staff has tightened. There has been an increase in farmers reporting it harder to find staff.

“Overall, Federated mid-season Farm Confidence Survey literally shows that Kiwi farmers are making hay while the sun shines,” Mr Wills concluded.

The headline results from the January 2012 Farm Confidence Survey, compared to the new season survey undertaken in July 2011:

A net 4.4 per cent of respondents expect the general economy to worsen over the coming 12 months (down 20.8 points).

A net 31.6 per cent of respondents expect their profitability to improve over the coming 12 months (down 14.2 points).

A net 47.7 per cent of farmers expect to increase production over the coming 12 months (down 2.7 points).

A net 33.5 per cent of farmers expect to increase spending over the coming 12 months, (up 0.2 points).

A net 44.3 per cent of farmers expect to reduce debt over the coming 12 months (down 1.3 points).

A net 11.2 per cent of respondents reported it harder to find skilled and motivated staff over the past six months (up 5.5 points).

Regulation and compliance costs have become the biggest concern for farmers, with 17.1 per cent of respondents citing it has their biggest issue (up 5.1 points on July 2011).

Farmers continue to believe that the Government’s highest priority should be fiscal policy (i.e., reducing government spending and/or reducing government debt), with 24.7 per cent of respondents citing it as their highest priority (down 1.6 points on July).

[Mustang Sally Farm]

Friday, January 27, 2012
Govt Looks to Increase Food Exports
UK - A Government-backed drive to boost exports of British food and drink to high growth markets like India and China will be an engine for economic growth, Agriculture Minister Jim Paice said today.
 

With rapid world population growth and booming consumer demand for Western products in high growth economies, there are significant opportunities for British producers to increase profits.

UK food and drink exports grew by 12 per cent in 2010 to £16.1billion, but the UK still exports more food to Belgium than to Brazil, Russia, India, China and Mexico put together.

The Farming, Food and Drink Exports Action Plan, published today, sets out how Government and industry will work together to open up and take advantage of key markets.

It includes plans for a domestic drive to encourage and support manufacturers to succeed overseas, as well as an overseas campaign to champion British food abroad.

Launching the action plan, Mr Paice said: “British food is already known the world over for its quality, and with surging world population growth and demand for western products, there are huge opportunities for our producers to tap into emerging markets.

“I’m convinced the sector can become an engine for growth for our economic recovery. It’s crucial we get the right support to business at home as well as championing British products abroad.”

The exports plan was developed by Defra, UK Trade and Investment, industry trade associations, and top exporting companies. A forum was co-chaired by Mr Paice and Paul Grimwood, CEO and Chairman of Nestlé UK and Ireland.

Trade and Investment Minister Lord Green said: “This is the year of the Olympics – a once in a generation opportunity to showcase what makes Britain Great. The quality of our food and drink is famous around the world and we want to see many more SMEs exporting to high growth markets.

“Food and drink exports are already worth over £16bn a year. But, we can do much, much more. By working together, Government and industry can help British food producers unlock their potential and take on the world.”

Mr Grimwood said: “The UK food and drink industry has an ambitious vision to grow 20 per cent by 2020. The industry’s exports have grown in each of the last six years, and the Exports Action Plan will drive further export growth in the future.

“Thousands of UK food companies, large and small, can grow their business by exploring export opportunities. The Government-backed Export Plan will champion open markets and the removal of trade barriers, and provide SMEs with the support and confidence they need to sell the best of British food and drink around the world.”

The project steering group which developed the action plan along with the export forum included Defra, UKTI, Food and Drink Federation, Food and Drink Exports Association, Scotch Whisky Association, and the Agriculture and Horticulture Development Board.

Top British exports include whisky (£3,514m), beer (£536m), chocolate (£376m), breakfast cereals (£367m) and soft drinks (£327m).

The Exports Action Plan is available at http://www.defra.gov.uk/food-farm/food/exports/

[Mustang Sally Farm]

Friday, January 27, 2012
Farm Income Forecasts a Mixed Bag
UK - New government figures confirming a strong year for the farming industry are welcome, but the continued rise in input costs and the crisis in the eurozone means that there’s no room for complacency, said the National Farmeres Union (NFU).

Defra’s Farm Business Income forecasts for the year ending February 2012 predict incomes in several key sectors have strengthened over the last 12 months. Improvements in UK beef and milk prices, along with the relative strength of agricultural commodity prices have helped underpin the forecast.

According to the figures, dairy farmers are expected to see a 27 per cent increase in incomes. Grazing livestock farms should also see incomes improve, with a 30 per cent rise predicted for lowland grazing units and seven per cent for farms in less favoured areas, albeit to still modest areas. A marginal increase is also expected in cereal farm income. But the intensive livestock sectors have suffered, with incomes on pig farms forecast to be down by 20 per cent and on poultry farms by eight per cent.

NFU Chief Economist Phil Bicknell said: “These forecasts are in contrast to the performance of the wider economy. They follow on from the improved confidence that we’ve seen in some farming sectors and build on other recent indicators that have underlined agriculture’s contribution to the wider economy. This is undoubtedly positive news for parts of the industry.

“But not all farm types saw improvements to their bottom line. Pigs and poultry saw profitability decline, as rising input costs, most notably feed, made inroads into enterprise margins.

“Higher costs will not be unique to pigs and poultry either. All farmers have faced significantly higher operating costs over the last year, with the 18 per cent increase in fuel costs and the 20 per cent rise in fertiliser prices the most significant.

“It’s also reasonable to expect that these forecasts conceal much variation. Some parts of the country struggled with drought conditions in 2011. The impacts were relatively localised, but will have affected crop and fodder yields on individual farms.

“The farming industry remains susceptible to a range of factors. Even with some of the improvements indicated by these forecasts, we’re still talking about returns on assets in the range of three to six per cent across farm types.

“Amidst continuing Eurozone uncertainty, farmers will be conscious of the link between farm profitability and changes in currency. Nonetheless, these figures and the long term drivers for agricultural markets give cause for optimism, certainly when compared to other areas of the economy.”

[Mustang Sally Farm]

Monday, January 30, 2012
EFSA Guidance for Food & Feed from GM Animals
EU - The European Food Safety Authority (EFSA) has published guidance for the risk assessment of food and feed derived from GM animals and on related animal health and welfare aspects.


The document outlines specific data requirements and the methodology to be followed for risk assessment should applications for food and feed derived from GM animals be submitted for market authorisation in the European Union (EU). The risk assessment approach compares GM animals and derived food and feed with their respective conventional counterparts, integrating food and feed safety as well as animal health and welfare aspects. Prior to its finalisation, stakeholders and interested parties provided comments on a draft of the guidance document through an online public consultation that ran over the summer 2011.

At present, no applications for market approval of food and feed derived from GM animals have been submitted in the EU. The technology has advanced rapidly in recent years and in some countries outside the EU, regulators are already evaluating the safety of GM animal products developed for food and feed purposes. In this context and as a proactive measure in anticipation of potential future applications, the European Commission requested EFSA to develop comprehensive guidance for the risk assessment of food and feed derived from GM animals and on related aspects of animal health and welfare. A separate EFSA guidance document, due to be launched for public consultation in 2012, will address the environmental risk assessment of GM animals.

The current guidance document outlines a risk assessment approach to compare GM animals and derived food and feed with their respective conventional counterparts. The basic assumption of this type of comparative assessment, which is required under current EU legislation for all GMOs submitted for market authorisation, is that food and feed from conventionally-bred animals have a history of safe use and therefore can serve as a baseline for the risk assessment of food and feed derived from GM animals.

The document also outlines the methodology required for the comparative assessment of health and welfare aspects of GM animals. This assessment is applied in two ways: firstly, in relation to the GM animal itself; and secondly, in relation to the food and feed risk assessment, as the health and welfare status of animals is seen as an important indicator of the safety of animal-derived products.

In the final chapter, the document gives recommendations for the post-market monitoring and surveillance (PMM) of GM animals and derived food and feed. PMM seeks to identify any potential unintended effects related to the genetic modification which might arise after the product has been authorised for placement on the market.

As with all EFSA guidance documents on GMOs, the Authority engaged in consultation during its development allowing Member States and a broad range of stakeholders to comment on the work in progress. Feedback received during the online public consultation to the draft guidance document was assessed by the EFSA Panel on Genetically Modified Organisms and the EFSA Panel on Animal Health and Welfare and, where scientifically relevant, incorporated into the current final version of the guidance.

[Mustang Sally Farm]

Tuesday, January 31, 2012
CME: Is Drought Still a Problem?
US - How dry does it have to get for a major newspaper, even one with an agricultural heritage, to devote above-the-fold coverage using two-thirds of the front page of a Sunday edition to a drought that is really not causing any harm at the moment, write Steve Meyer and Len Steiner.


We think the answer is “Pretty dry!” because it just happened this weekend in Des Moines, Iowa when the venerable Des Moines Register devoted that space PLUS 1.5 pages inside the A Section PLUS another page in the Business/Agriculture section to very dry conditions in northwest Iowa. And the dry conditions do not stop at the state line.

As can be seen in the map below, a large area of northwest Iowa and southern Minnesota are classified as severe drought areas. USDA/NOAA (National Oceanic and Atmospheric Administration) still classify the area as “Short-term” drought but much of it will soon reach 6-months since the last significant precipitation fell and rivers, streams and wells in the area are showing signs of a severe hydrological shortage. As can be seen by comparing to top map to the bottom one from November 22, 2011, conditions have generally improved in the western Cornbelt over the winter months as dry areas in eastern Kansas, Missouri, southeast Nebraska and southern Iowa have received some much-needed rainfall. The eastern Cornbelt remains in good shape from a moisture standpoint.

But the situation in northwest Iowa and southern Minnesota, which encompasses some of the most productive corn and soybean land in the nation, is serious and, according to the National Weather Service in the Register story, likely to get worse by April . NOAA’s Seasonal Drought Outlook (go to http://www.cpc.ncep.noaa.gov/ index.php and click on Drought Outlook in the US Drought Assessment section) says that the western Cornbelt dryness will persist through that time period and will spread to eastern Nebraska. It also shows continuing (and spreading) areas of drought in the southwest and southeast—bad news for cattlemen.

The Iowa-Minnesota situation even has experts mentioning one very scary year from the past — 1988. The Register quotes Iowa State’s Dr. Elwyn Taylor pointing out that the weather conditions this year are nearly identical to those of 1988 when the last significant drought hit Iowa and other major corn producing areas. Taylor does point out that they are happening earlier this year so there is more time to get rainfall before critical summer periods arrive.

Even the mention of 1988 makes market watchers cringe, though. Iowa’s average corn yield in 1988 was 84 bushels per acre, down from 130 in 1987 and 135 in 1986 and 24% below the average of the prior 10 years. Minnesota’s was 74 bushels per acre, down from 127 in ‘87 and 122 in ‘86. The national yield in 1988 was 84.6 bushels per acre, over 25 bushels lower than the year before and 26% lower than the 1960-2010 trend yield for 1988 of 113.9 bushels per acre. The U.S. average farm price for corn went from $1.94/bu. in ‘87-’88 all the way to $2.54 in ‘88-’89 but we must remember that carryout stocks in the fall of 1987 were 4.259 billion bushels. This year they are projected to be 846 million, one-fifth as large.

Taylor believes the culprit is La Nina, the cooling of Pacific Ocean waters west of South America, that began in 2010. The early stages of LaNina drove wetter-than-normal conditions in ‘10 and ‘11 but the latter stages usually cause dry conditions in the Midwest. If LaNina remains through the spring, Taylor estimates that there is only a 1 in 20 chance of getting enough spring rainfall in Iowa.

So what does this mean? Maybe nothing. Spring rains could come and allay all of this concern and fear. The Cornbelt, though, has not seen significant drought in January since 2006 when conditions in a swath of southern Iowa and northern Illinois were classified as moderate to severe. We — and the markets — are accustomed to entering planting season with PLENTY of subsoil moisture and thus some ability for the crop to survive short dry spells. Not so this year for the areas noted here. We also know that today’s corn varieties are more drought tolerant and will not likely fall 26% short of trend yields even if 1988 conditions develop. But any degree of crop shortage is scary when one begins year with very tight corn stocks.

[Mustang Sally Farm]

Wednesday, February 01, 2012
Downward Trend in Slaughterings Forecast for 2012
GLOBAL - Pig slaughterings in the European Union grew two per cent year-on-year during the first three quarters of 2011.


The UK and Poland had the strongest growth rates of nearly 7 per cent, while production in Denmark rose by 5 per cent, according to a report prepared by QMS's Iain Macdonald and Stuart Ashworth. Expansion also took place in Spain and Germany where slaughterings increased by 3 and 2 per cent respectively. However, a downward trend is forecast to continue into 2012 as sow herds have contracted in a number of Member States.

Most French pig producers failed to make a profit in 2011. Losses were made as increased feed costs pushed production costs above €1.50/kg. Brazil too witnessed a decline in pork exports. In December three Brazilian processors were permitted to resume exporting pigmeat to Russia. Hence there is industry optimism that further access may be granted as 2012 progresses.

After the US recognised the Brazilian province of Saint Caterina as the only FMD-free state, it gave the latter's pig sector a boost. The FMD-free status was recognised 14 months ago, but due to worries, this was delayed.

According to USDA census, the US pig herd grew by two per cent in December 2011. However, the breeding herd expanded at a more modest pace, indicating a mere 4 per cent growth. On the one hand this indicates a substantial improvement in productivity, but on the other hand it suggests that producers are exhibiting caution. Abattoir throughputs rose 2 per cent during 2011 and a similar expansion is forecast for 2012.

[Mustang Sally Farm]

Wednesday, February 01, 2012
North America: Where's the Snow?
ANALYSIS - There has been virtually no snow up in Canada, no snow in the northern US Plains, and the Upper Midwest has seen only two snow events this winter and neither was hugely significant, so we wonder "Where's the snow?", writes Sarah Mikesell senior editor.

Drew Lerner, president and senior agricultural meteorologist of World Weather, answered that question as he presented his weather explanations, expectations and forecast for 2012 to US grain farmers and livestock producers at the Allendale Ag Leaders Outlook Conference held January 20-21 in Crystal Lake, Illinois, USA.



Drew Lerner, president and senior agricultural meteorologist of World Weather, presents his 2012 weather expectations to US farmers at the Allendale Ag Leaders Outlook Conference held January in Crystal Lake, Illinois, USA.At this time last year, growers in parts of the US feared flooding going into the spring because there had been so much snow, but this year it's the drought monitors for North America that are concerning, Lerner said. The way it looks now around the world, the most interesting weather for this growing season may be in the United States.

"It's the dryness in Texas that got so much publicity last year, but it was far more extensive than Texas," he said. "The dryness reached up into the central Plains, and down into Mexico. The degree of severity in Mexico right now is probably worse than it is in Texas. Texas did get a little bit of precipitation before the autumn season turned into winter."

La Niña's Influence
Lerner said it's important to pay close attention to the La Niña event that is playing out right now because it could have a huge impact on the summer season. La Niña started about a year ago and died out in April or May, and then regenerated itself later in the summer.

"We have dryness in Canada. We have dryness in the northern US Plains and dryness in the Upper Midwest, dryness in the southern Plains, dryness in Mexico, and dryness in the Southwest," he said. "It's the middle of winter, when normally we start seeing improvements in the moisture situation, but we're still drying out in the western part of North America right now. Canadian farmers are also worrying about the lack of snow, and there's lots of concern that they are in for a drought this year."

The storms the US have seen so far this season, outside of the lower eastern Midwest, have really had trouble generating moisture which is a symptom of La Niña, especially a La Niña that's in its second year of existence. La Niña takes moisture out of the atmosphere, which is why it's important to pay attention and monitor it over the next few months.

Warmer-than-Normal Temps
Temperature anomalies have occurred for the past six months in North America - not only in Canada, but in the northern US Plains and over a big portion of the US.

"Whenever Mother Nature persistently creates the same anomaly for multiple months - when you get down to a six-month level, she always goes the other way," he said. "So, at some point down the road, it's going to start turning cooler than normal."

The anomalies, going back to last August and September, are pretty phenomenal. Lerner said winter wheat came up in Canada that actually lost hardiness and started to try to green a bit. The same thing was happening in Europe due to warm weather and a lack of snow. He said the only place that's been cold so far this season on a persistent basis has been eastern Siberia and parts of northeastern China.

Soil Moisture
"A year ago, we were already so deep with snow that it was obvious that if it didn't start melting quickly, we were going to have a bad flood in the spring, which, of course, we did have," he said. "This year we don't have to worry about that. Because not only do we not have a snow to melt, we don't have much moisture in the ground either."

The drought monitor suggests there are a lot of areas in the US and Canada that are really low on soil moisture. Flooding should not be an issue this year, not for the upper parts of the Midwest or the northern Plains. However, there is quite a bit of moisture in the lower eastern Midwest and Southeast.

La Niña will tend to increase soil moisture in the Delta, the Tennessee River basin and the lower Ohio River basin. And higher moisture usually continues right through March and April.

Arctic Oscillation
"The typical response in the atmosphere for La Niña in the autumn is to dry out and warm up a bit, so having a warmer bias is not all that unusual. But usually later in autumn or early winter, La Niña will create a cold surge or period of colder than normal temperatures that will dominate a big part of the Canadian prairies and the US northern Plains, and the Pacific Northwest. But that has not occurred," Lerner said.

Arctic Oscillation is related to how much high pressure there is in the arctic. It's common and occurs year round, but in the autumn and winter it's a dominating force.

This high pressure lives in the Arctic above the North Pole. The stronger the high pressure system is, the more pushing down effect it has on the surface, because high pressure is a stronger amount of air pushing downward.

As more and more cold air heads to the surface, it spreads out and goes down our sphere to the lower latitudes - we call this the negative phase of Arctic Oscillation. As a result, we get colder air moving further south than normal.

"That is certainly not the case the last few months," Lerner said. "We were in the positive phase of Arctic Oscillation, which has the opposite effect. The high pressure system in the arctic was windy and very, very weak. It was not capable of pushing a lot of cold air to the surface. The jet stream was allowed to creep higher in the atmosphere and the latitudes. The storm tracks further north and the temperatures were warmer in many areas."

Artic Oscillation Weakens; La Niña Strengthens
This winter, Arctic Oscillation was strongly positive, while the La Niña event has been weak, nothing like it was a year ago, said Lerner. Because it was somewhat weak in September, October, and November, there was plenty of opportunity here for the Arctic Oscillation to overcome the biases of La Niña.

La Niña, up until two weeks ago, was insignificant relative to Arctic Oscillation. However, the Arctic Oscillator has shifted back to a more usual negative position, and at the same time La Niña has strengthened. So, we have fallen back to a more traditional La Niña influence on North American weather.

"We are shifting gears because Mother Nature tends to go from one extreme to another," he said. "The Arctic Oscillator will not go back to the strong positive phase; it does not work that way."

While La Niña could weaken over the summer, Lerner believes it will leave a footprint around in the atmosphere after it goes away, meaning the atmosphere will stay in that mode for a while.

"Even after the La Niña event passes on, it takes a while for natural processes in the atmosphere to change back to normal - whatever normal is," he said. "My forecast is built towards La Niña hanging on and giving the US and parts of Canada a little drier bias, making this year perhaps more interesting, as far as the number of areas in the US that could have some dryness issues."

Texas
No other year has Texas been drier than it was in this past season. Looking historically at the year following a significant drought, Texas weather usually rebounds by about 50 per cent.

"There was a tendency for hydrologic drought to linger behind," he said. "A hydrologic drought is a drought that is low water - reservoirs, rivers and streams running low. Sometimes in a hydrologic drought, you get enough moisture to support crops."

Lerner said Texas is not going to be fully recovered from the drought, no matter what happens over the next few months. Texas may see moisture come around and improve the crops at the surface level, but the long-term drought is not going to go away in the short-term.

Lerner's 2012 North American Forecast
Spring: Expect cool conditions to balance the warmer-than-normal winter. The precipitation anomaly for early spring is going to continue to be below average on precipitation in the Northern Plains. In early spring, expect to see a wet bias in the Ohio River basin and parts of the Delta, which could delay planting. Canadian prairies are also expected to be cooler than normal.

Early summer: Into May and June, the drier, warmer bias in the Northern Plains will continue to perpetuate itself, allowing crops in this area to be planted fairly quickly. The moisture abundance in the Midwest should diminish as we enter the May/June time period. The dryness in the Southeast could shift up into the Ohio River basin and change the moisture level. A drier bias in Canada is expected with cooler than normal temperatures expected for an extended period of time, likely another five or six months.

Mid-summer: There's the ridge in the middle of the country. The heat ridge carries a trough of low pressure over the eastern US. And that suggests that there will be more rain that will occur in the eastern part of the Midwest than last year. Any dryness that shows up in Indiana, Ohio, and Kentucky in the spring should go away moving into the summer. The southeastern US should see an abundance of precipitation as we move deeper into the summer season. Canada is expected to counterbalance herself a little bit with a little less heat throughout the summer.

Late summer: A drier bias is expected. Harvest should go extremely well. It'll be dry in the northern Plains, so they should be done with harvest early. The rest of the country should expect a normal harvest.


Sarah Mikesell, Senior Editor

[Mustang Sally Farm]

Friday, February 03, 2012
Expert Presents 2012 Global Weather Outlook
ANALYSIS - Drew Lerner, president and senior agricultural meteorologist of World Weather, recently presented global weather expectations for 2012 to US grain farmers and livestock producers at the Allendale Ag Leaders Outlook Conference held in Crystal Lake, Illinois, USA, writes Sarah Mikesell, senior editor.

South America
Impressive dryness occurred in Argentina during December. However, temperatures were not far above average which may have saved some crop stress from getting as bad as 2008 levels, Lerner said. But the crop was too dry, which has contributed to the early January production cuts despite anticipated rainfall.

Argentina's summer corn and soybean production region received about 50 per cent less than normal precipitation in December, he said.



Drew Lerner, president and senior agricultural meteorologist of World Weather, presents his 2012 weather expectations to US farmers at the Allendale Ag Leaders Outlook Conference held January in Crystal Lake, Illinois, USA."But rains provided some relief in January and now Argentina has recently had moisture," he said. "The topsoil is plenty moist and the crops are no longer suffering. So Argentina may be beyond the point of damaging losses. With that said, the damage already done prior to the rains in Argentina is rather significant."

Those watching South America know from a realistic point of view on rainfall, we're probably past the peak of damage. However, the unknown is how much damage it already did. Lerner said by looking at the data, it clearly suggests the damage has been significant.

Brazil rainfall was below average in the south during December, but the lack of excessive heat and the timeliness of what rain did fall left crops in better shape than those in Argentina. The next weeks will be critical for supporting the best yields but rain must continue to fall in a timely manner.

"There's not that much problem in Brazil today," he said. "The dryness early on was getting kind of bad, but they kept getting timely rains, and so it didn't push them over the edge."

In contrast, weather conditions have been too wet from parts of Sao Paulo and Minas Gerais into a part of Mato Grosso where there is a need for sunshine and warmer temperatures to induce the best crop conditions.

Lerner said the rain event that occurred in Argentina a few weeks ago managed to bring some moisture into Brazil. And more recent rains have significantly improved soil moisture.

"It doesn't mean Brazil won't have dryness later on, but it does suggest that the worst of the near-term damage has probably passed," he said. "So, again like Argentina, it may be beyond the peak of the worst conditions in that country."

China
China is a bright spot on the map - currently having absolutely perfect weather, said Lerner.

"I don't look for any problems with the rapeseed or wheat crops; those are looking really good," he said. "They've got plenty of soil moisture right now. The spring season will turn drier, but it will not impact their rapeseed or southern wheat. However, it might impact the northern wheat, but it's mostly irrigated so it should not be a big issue."

Dryness will begin in interior southern China late winter and will shift to east-central parts of the country during the heart of spring. The dryness will be a byproduct of delayed northward advancing rainfall.

Temperatures may be a little cooler than usual in the spring over northeastern parts of the country but should warm in the second half of the season. Eventually dryness in east-central China will shift to some northeastern crop areas later in the spring season. Southwestern China will trend wetter than usual.

India
India has not had much rain in recent weeks and hasn't had any rain at all in some places since planting. They plant wheat, rapeseed, mustard, lentils, sorghum, dry beans and peas, and are in their winter production season. Almost all of their crops are irrigated, but their best yields occur when it rains - on top of their irrigation.

Lerner said because they haven't had timely rains, it doesn't mean they're going to have a bad crop. Rather, it just means that it isn't going to be as good a crop as it would have been had it rained. However, any prolonged dryness and heat could possibly have a negative impact on production.

India's wheat crop is not expected to get any rain for the next few weeks, but should get a little more precipitation as we move forward into February and March.

Rainfall is expected to be near to above average in northern India during the reproductive season. Temperatures are not expected to be hot, although a warmer than usual bias will likely evolve in March.

"Soil moisture is pretty dry, but remember, India is a very arid place in the wintertime, and that's why all of the crops are irrigated," he said.



India's Monsoon Rain Outlook June - October 2012The monsoon forecast for 2012: If La Niña behaves as expected, the monsoon should be around early in the summer, and then dissipate later in the summer. Timeliness should continue in the precipitation pattern so that any negative impact on production should be minor. Eastern areas will be quite wet this summer.

India should do very well with rainfall until the latter part of the summer. In August and September, expect a little less precipitation. It may turn drier in some of the western parts of the country.

Europe
Overall, Europe's soil moisture is favorable for much of the continent, but there are two areas that need improved precipitation. First is Spain and second is the southeastern part Europe, including the Danube River Basin, Romania, Bulgaria and portions of Serbia.

"These areas were extremely dry through the autumn, and crops aren't doing well," he said. "It extends all the way back to the west into parts of southeastern Europe. They are expected to have very poor winter crop production this year, so a lot of pressure will be on the spring crops."

If La Niña does hang on through the spring and into summer, spring crops could see trouble with low moisture. But it could be a double-hit if winter crops and summer crops are stressed due to dry conditions.

Russia and Ukraine
Dryness remains from the drought of 2010 in Russia's lower-most Volgo River Basin and western Kazakhstan. The remainder of Russia and Ukraine have recovered favorably from Autumn 2011 dryness.

The Ukraine winter crops were very, very poorly established in the fall which will result in a very small winter rye and winter wheat crop, Lerner said. He expects they will plant a spring variety to try to make up the difference. It will be imperative that timely rains occur this spring to give winter crops a chance to recover and to ensure spring crops get planted and established favorably.

"If La Niña lasts through the summer season, Russia and La Niña do not get along well and sometimes Ukraine doesn't either," he said. "The two just don't mix well, and we should expect some kind of a problem over there with their crops as well."

Turkey
Turkey was really dry last autumn and the wheat crop is suffering from the stress. However, they've recently received some rain and conditions are improving.


Sarah Mikesell, Senior Editor

[Mustang Sally Farm]

Monday, February 06, 2012
CME: Job Growth Has Returned
US - Friday’s employment reports from the Bureau of Labour Statistics indicate that job growth has returned, write Steve Meyer and Len Steiner.


We believe the January numbers will be supportive to meat and poultry demand. Some of the key numbers from the reports are:

The unemployment rate fell to 8.3%, its lowest level since February 2009. That number compares to 8.5% last month and 9.1% one year ago. The kicker on this improvement, though, is that the rate of long-term (over 27 weeks) unemployment remains at 3.6%.

Total nonfarm employment rose to 132.409 million people in January, a gain of 243,000 jobs from the revised December level and 1.953 million since January 2011. The chart at right shows these data back to January 1989 and comes directly from the Federal Reserve Economic Data (FRED) system at the Federal Reserve Bank of St. Louis (http://research.stlouisfed.org/fred2/). We like their charts because they include the shaded areas that mark recessions as called by the Bureau of Economic Analysis. Dr. Robert Dieli of RDLB, Inc. and www.nospinforecast.com makes three very useful observations of this chart in his Employment Situation report that was released Friday afternoon. First, he points out that BEA sets the onset of recessions where this line crosses zero. Second, BEA looks for persistent and widespread DECLINES in total employment. Finally, he states “I don’t see those right now. Do you?” Our answer is “No”.

January’s employment level is back to the level of December 2004. As Dr. Dieli points out, this date keeps sliding forward with every improvement in employment, gaining 3 months in January. When employment was at its lowest level for the past recession back in February 2010, this “worst since” date was August 1999.

A boat load of revisions pushed the employment numbers for all of 2011 higher. They included 5 months in which BLS added over 200,000 jobs to the previously reported numbers. Perhaps the most important of these was a much smaller change to the August 2011 numbers. The first estimate for that month showed NO growth in employment and set off a wave of concern that the economy was slipping back into recession. The January revision for August shows a gain of 85,000 jobs for the month — nothing to write home about but a number that would not likely have set of “The sky is falling!” cries from many economists.

Private sector payrolls continued to lead the way on employment growth, gaining 257,000 in January. Comparing that number to total gains points out that government payrolls continued to shrink, primarily the victims of lower revenues and cuts at state and local levels.

Our discussion of relative beef cut prices on Friday engendered a lively e-mail discussion with some readers. We thought some were certainly noteworthy. Several readers pointed out he influence of exports on the values of the round and chuck (ie. “end meat” ) cuts. U.S. beef exports were once dominated by shipments to Japan, a market that generally demands higher-quality product and whose import policies require higher valued product. The growing importance of a number of more price-conscious markets (e.g. Mexico, South Korea, VietnamChina) have placed more importance on lower value cuts.

As for brisket, Jim Robb of the LMIC in Denver points out — “Barbecue is now EVERYWHERE!” He is correct and that factor is a contributor on the pork side as well. It seems that pulled pork sandwiches, once the territory of “barbecue joints” only, are available in about any kind or level of restaurant these days and that popularity— along with exports — have pushed butt prices higher relative to other pork cuts. Robb also pointed out that many of the value-added beef cuts developed over the pat few years have come from the chuck. Finally, there is the issue of cut size. Is our seeming inability to cut a rib eye or loin eye muscle in two or more parts reducing the unit value of beef and pork middle meats? Those steaks and chops are now HUGE and larger than most people can eat at one sitting.

[Mustang Sally Farm]

Wednesday, February 08, 2012
Farm Produce Prices Fall on Waning Demand
CHINA - Farm produce prices broke an eight-week rising trend last week and fell on sliding demand as the Spring Festival holiday ended, the Ministry of Commerce said on Wednesday.


Egg prices slid 0.4 per cent last week. The pace of decline was 0.3 percentage points faster than one week earlier.

Pork prices dropped 0.8 per cent, while prices of beef and mutton gained 0.6 per cent and 0.2 per cent, respectively.

The wholesale prices of eight aquatic products rose 0.2 per cent due to shrinking supply amid the freezing season, the statement said.

Food prices have a one-third weighting in the calculation of China's consumer price index (CPI), a major gauge of inflation. The country's CPI eased to 4.1 per cent in December, the slowest rise in 15 months.

[Mustang Sally Farm]

Thursday, February 16, 2012
Food Report Fails to Acknowledge Role of Farmers
AUSTRALIA - A report into the future food needs of Australia has failed to acknowledge the ongoing work by Australia's farmers in ensuring an environmentally sustainable supply of fresh and nutritious food, the National Farmers' Federation (NFF) has said.


NFF President Jock Laurie said that farmers had made enormous gains in both productivity and environmental management over the past few decades: producing high quality food in greater quantities, on less land, with less water and less impact on the environment that ever before.

“The report released yesterday by the Public Health Association of Australia appears to reflect the lack of understanding health professionals have about modern agriculture in Australia and how the industry operates,” Mr Laurie said.

“Rather than focus on the public health challenges associated with modern diets and lifestyles, they seem to have chosen to attack Australian farmers and attempted to weaken the confidence of Australian’s in the food farmers produce.

“Australian farmers have been working hard to improve their practices, and have led the way in reducing our carbon footprint, with greenhouse gas emissions down by a massive 40 percent in the last 20 years.

“The agricultural industry also invests heavily in research and development to continuously improve practices and performance, with $1.5 billion-a-year spent on agricultural related research in Australia.

“On the ground, farmers occupy and manage 61 per cent of Australia’s land, which means that we’re at the frontline in delivering environmental outcomes on behalf of the community and we are acutely aware of the need to deal with environmental impacts. Environmental sustainability has long been a critical factor for farmers – so much so that the NFF was a founding partner of the Landcare movement over 20 years ago.

“Perhaps most importantly, the report fails to acknowledge the role that Australian agriculture plays in feeding the world. Australian farmers produce enough food to feed 60 million people each year, so the statement in the report that ‘Australia produces more food than it needs’ is disingenuous. Of course we do – we export 60 per cent of what we grow, offsetting global food demand and providing vital export income for our economy.

“The report itself calls for an increase in ‘food literacy’ – perhaps this needs to be an increase in ‘farming and food literacy’.

“The report also calls for strategies to ensure Australian farmers can continue to produce fresh, nutritious foods at a fair and competitive price. We agree with this outcome, but suggest that the Public Health Association of Australia should first talk to farmers about how to achieve it,” Mr Laurie said.

[Mustang Sally Farm]

Monday, February 20, 2012
China and US Firms Sign Biofuel Deal
US & CHINA - China's biggest egg producer said Friday it will cooperate with a major US meat supplier to establish a biofuel company in the United States with a total investment of $1.8 billion.


Beijing DQY Agriculture Technology Co Ltd (DQY) and Virginia-based Smithfield Foods will set up a joint venture co-run by their subsidiaries, Beijing Helee Bio-Energy (HELEE) and Murphy-Brown, DQY said in a press release.

The joint venture will adopt core technologies from HELEE and launch a pig farm biogas project this year, the company said, citing an agreement it signed with the Smithfield Foods in Des Moines, capital of the US state of Iowa, on Thursday.

According to the agreement, the biogas project will produce 3.5 million cubic meters of methane annually and have a power generating capacity of 1 megawatt, DQY said.

It noted the project will be able to produce 7 million kWh of electricity each year and cut 42,000 tons of carbon dioxide emissions annually.

The two companies also plan to utilize wastes at more than 2,600 pig farms of the Smithfield Foods over the next 10 years, which will lead to the reduction of carbon dioxide emissions by 21 million tons annually, four times the current yearly emission of Chicago, according to DQY.

Smithfield Foods is the largest US meat supplier with a market share in the country of 22.5 per cent, while the DQY accounts for 45 per cent of the Chinese egg market and has a biogas power project in Beijing that generates 14 million kWh of electricity per year.

[Mustang Sally Farm]

Monday, February 20, 2012
Livestock Science to Benefit Sub-Sahara Africa
AFRICA - Africa will benefit greatly from advances in livestock science that will benefit the animals and the people they provide with high quality protein, said scientists in Vancouver, Canada.


Panelists addressed the hopes and challenges of modernizing livestock production in Sub-Saharan Africa during the American Association for the Advancement of Science annual meeting in Vancouver, British Columbia.

"We explored how implementing new technologies will benefit society," said University of Idaho animal scientist Rod Hill. He studies physiology in cattle, focusing on topics including feed use efficiency and muscle development.

"The issue is," Mr Hill said, "how do we get them to work best for mankind and benefit societies in Africa."

Mr Hill, an associate professor of animal science in the College of Agricultural and Life Sciences at the University of Idaho, organized the session with Albert Medvitz of McCormack Sheep and Grain in Rio Vista, California. The American Society of Animal Science sponsored the session.

Medvitz and his wife, Jeanne McCormack, operate a 3,700-acre ranch that has been in her family for 120 years. The couple, who met in the Peace Corps in Africa, produces wheat, and sheep and goats on pasture without importing grains or using antibiotics.

"We wanted to look at how new technologies are changing how we raise livestock," Mr Hill said, "And how do we get them to work to best advantage for the benefit of mankind and societies ranging from developing communities in Africa to highly developed ones in the United States."

As in many areas where science meets society, opinions differ, Mr Hill said.

"There are opposing views in every aspect of technology and technology development. We don't seek to support a particular perspective," he said, "except that implementation of new techs is going to have long term benefit to society.

"We're going to have 9 billion people to feed with limited agricultural resources over the next 25 to 30 years, so that's a huge challenge for agriculture," Mr Hill added.

Panelists included Charlotte G. Neumann of the UCLA School of Public Health, who spoke about how animal agriculture builds human capital by boosting nutrition. Neumann focused on studies that confirm foods from animals increased both the mental and physical development of children in sub-Saharan Africa.

The private sector is stepping up its efforts to bring science to traditional livestock keepers. Christie Peacock, chairman of Nairobi, Kenya-based Sidai Africa, Ltd., reviewed her organisation's efforts to establish a chain of stores that will provide reliable vaccines and other services.

The focus on high quality veterinary and other livestock services includes reliability testing of products and an emphasis on preventative care.

Panelist Appolinaire Djikeng of the International Livestock Research Institute based Nairobi, Kenya, explored the advanced agricultural biotechnology laboratories that have been established in Africa. Their goal is to focus on problems constraining Africa's development that once seemed intractable.

Jeannie Harvey of the US Department of Agriculture joined the panel to discuss the overall themes presented during the session. An expert in women's roles in agriculture, Harvey is former director of the University of Idaho Women's Center.

"One point we felt was important to make goes with the old saying that if you teach a man something, you affect one person," Mr Hill said, "but if you teach a woman something, you influence the entire family."

Mr Hill also has proven adept at organising discussions of animal science related topics on the largest stage in US science. The annual meeting of the American Association for the Advancement of Science typically draws some 6,000 scientists and an international media contingent or 700 or more.

Mr Hill serves as the American Society of Animal Science delegate to the AAAS. This marks the third symposium he has organised for the associations' annual meeting. Past sessions have focused on nanotechnology and food science.

[Mustang Sally Farm]

Tuesday, February 21, 2012
China & US Co-operate in Agriculture
US & CHINA - Agriculture Secretary Tom Vilsack and China's Minister of Agriculture Han Changfu have signed an historic Plan of Strategic Cooperation that will guide the two countries' agricultural relationship for the next 5 years.


The plan was signed as part of the US-China Agricultural Symposium held last week at the World Food Prize Hall of Laureates. The symposium focused on bilateral cooperation in the areas of food safety, food security and sustainable agriculture, as well as enhanced business relationships between the two countries.

"This symposium and plan are a product of a vision I share with my dear old friend Minister Han for the United States and China to work more collaboratively in the future to benefit our nations and agriculture around the world," Mr Vilsack said.

"This plan builds on the already strong relationship our nations enjoy around agricultural science, trade, and education. It looks to deepen our cooperation through technical exchange and to strengthen coordination in priority areas like animal and plant health and disease, food security, sustainable agriculture, genetic resources, agricultural markets and trade, and biotechnology and other emerging technologies," he added.

Xi Jinping, China's vice president, opened the symposium and stressed the importance China places on supporting farmers and rural development, as well as on food security.

"China attaches great importance to food security, and ensuring a sufficient food supply for 1.3 billion people," Mr Xi said.

In the 2011 fiscal year, China became the top market for US agricultural goods, purchasing $20 billion in US agricultural exports. The value of US farm exports to China supported more than 160,000 American jobs in 2011, on and off the farm across a variety of sectors.

[Mustang Sally Farm]

Wednesday, February 22, 2012
Farm Produce Prices Drop Last Week
CHINA - The Ministry of Commerce said Tuesday that China's farm produce prices continued to fall last week as supplies increased.


Egg prices dropped 1.8 per cent from one week earlier, marking the seventh consecutive week of decline. The prices were down 4.2 per cent cumulatively from early January, the ministry said in a statement on its website.

Pork, mutton and chicken prices retreated by 1.3 per cent, 0.3 per cent and 0.2 per cent last week, respectively, while the wholesale prices of eight types of aquatic products edged up by 0.1 per cent.

The fall in farm produce prices may help ease domestic inflationary pressures as food prices have a one-third weighting in the calculation of China's consumer price index (CPI).

The CPI rebounded to 4.5 per cent in January after easing to a 15-month low of 4.1 per cent in December.