World Cattle News:

[Mustang Sally Farm]

New Zealand Cattle and Beef Semi-Annual Report 2011
Beef production in New Zealand is forecast to fall by nine per cent in 2011, reflecting an expected decline in slaughter rates during the first half of the year, according to the USDA Foreign Agricultural Service.
 


Executive Summary
Dry weather and drought concerns during the fourth quarter of 2010 helped boost cattle slaughter. Total slaughter hit 3.991 million head, which is five per cent more than the previous forecast and up four per cent from the previous year. The spike in slaughter translated into an unexpected increase in both production and exports. At 643,000 tons carcass weight equivalent (CWE), production was four per cent higher than previously forecast and up three per cent over the previous year. Exports finished the year at 530,000 tons (CWE), four per cent ahead of the previous forecast and 3.1 per cent up from the previous year.

Beef production is forecast to be three per cent less than originally forecast in 2011, reflecting an expected decline in slaughter rates during the first half of the year. This puts forecast beef production at 8.75 per cent less than in 2010 and three per cent lower than the previous forecast. Likewise, exports are forecast at 478,000 tons (CWE) in CY 2011, which is four per cent less than the previous forecast and 10 per cent lower than 2010 export volumes. The decline is primarily driven by the on-going reduction in the size of the beef herd and the spike in slaughter during the last quarter of CY 2010.

While originally forecast to remain stable, exports to the US market fell 6 per cent to 222,000 tons (CWE) in 2010 and are forecast to fall further in 2011 to 205,000 tons (CWE), due partly to the sharp decline in cow beef production and the ongoing decline in bull beef production, which are the basic components of exports to the US market. While still the largest market for New Zealand beef, the US share of total New Zealand exports has been trending downward. It currently stands at approximately 42 per cent.

Indonesia became New Zealand’s second largest beef market, on a quantity basis, in 2010. Exports jumped 41 per cent to 36,940 tons (PWE). Exports to the Korean market reversed a downward trend in CY 2010 jumping seven per cent to 34,292 tons (PWE). Exporters report a spike in demand from the Korean market due in part to the Australian floods in Queensland and the FMD outbreak in Korea.

New Zealand is aggressively negotiating Free Trade Agreements (FTAs). While exporters report that FTAs do not necessarily drive business decisions, they do provide a framework to work out trade-related issues, especially SPS and non-tariff barriers, and, in some cases, significant market access gains. For instance, in the New Zealand – China FTA, tariffs, which ranged from 12 to 25 per cent when the agreement was signed, will be eliminated by 2016. New Zealand beef exports to China have increased from 5,300 tons (PWE) in 2008, the year the agreement went into force, to 8,022 tons in 2010, a 51 per cent increase.

[Mustang Sally Farm]

Live Cattle Export Ban in Australia
 
End the Live Cattle Export Ban in Australia!

As many will know the Australian Government recently reacted to a TV documentary on Indonesian slaughter of cattle. The action was arbitrary, misinformed and a gross over reaction to satisfy special interest groups and public opinion.
 
The ban has the potential to wreck many cattle farmers and consequentially Australia's lucrative live goat and sheep exports.
 
The following letter is reprinted courtesy of Chevredor.



My name is Rashida Khan and I am a cattle producer, animal nutritionist, and animal lover and have been raised with an insight to the true Muslim faith.
 
I have been fortunate enough to travel and have been to Asia. My family has a cattle property in the Northern Territory and I have many contacts right through the supply chain. We care deeply about our animals and have always designed our workload and facilities with the animals needs in mind. So far our only market for the cattle we raise and fatten has been live export, with 80% of these cattle going to Indonesia. Of course we have been calling for diversity in our marketing options for the past 20yrs but to no avail. Most of the NT abattoirs have been shut down by union pressure and government red tape, making it extremely difficult for people to reopen the slaughter houses.
 
These facilities would take the cattle we cannot send to Indonesia if they are the wrong colour or have a minor blemish. If the export industry is closed down completely in the next week, can we expect a flush of government support for local businesses and abattoirs? Do we have the skilled labour force to process these cattle starting next week? Will we have suitable facilities to deal with the 700,000 head standing in the yards waiting, by next week?
 


When I saw the footage aired on 4 Corners on Monday 30th May 2011, I was rendered speechless. The cruelty was horrific and so very unnecessary.
 


Initially I was angered and upset by the treatment of the cattle but I soon began to analyse what I had viewed. The whole video was played out to leave the viewer with only one conclusion. Stop Live Export. I began to make phone calls and despite asking friends, colleagues and family I couldn’t find a single person who had ever witnessed that level of abuse in an Indonesian abattoir. Still it pays to remember that there are around 770 in Indonesia and only 11 have participated in this carnage.
 


Nowhere on the footage was a mention of the Indonesian processors who do the job properly. They were neither interviewed nor given any exposure. I believe it is a terrible shame if the whole industry must pay for the actions of so few. With exception to those 11 slaughter houses, I think it would be timely to mention the work done by the rest of the industry. There have been substantial investments both personally and financially in the development of better cattle boats, better feedlots, better breeding environments and handling, nutrition for maximum health, improved bio-security and better abattoirs. Yet strangely all of this was glossed over.
 


Since there was no mention of this better side, it is easy to understand how the Australian public became so angry and began generalising about the Indonesian people. I think it should be understood publically that these are not uneducated people at all but very savvy business people, who are often highly educated and extremely wealthy. To lump all Indonesian people in the category of animal abusers who know no better was a dangerous and stupid move. This prompted comments of a racist and derogative nature on the forums provided by the Jakarta Post and Straits Times. The outrage in Australia was fuelled by half truths and graphic images that I for one shall never forget. It has led to hasty decision making with scant regard for the flow on effects.
 


The cruelty displayed in the footage was mistakenly called Halal. There have been some very nasty comments linked to this and directed at Indonesia which has the world’s largest Muslim population. Let me assure you that there was nothing Halal about those kills. They were messy, blood tainted the meat, the animals were damaged and abused and no prayer was said for their soul. Halal kills are quiet, with many people restraining the animal, out of sight of other animals, till it has died. The throat must be cut swiftly with a sharp blade. It is a tradition that has carried on and means that stun guns which were not available in the days of the Prophet could be employed today. This is however a cultural decision for the Indonesian people which has garnered support with many but may take time to implement. The Muslim community was on board until the negative slurs began which has put everyone offside. The fact that no clear information has been released regarding this is a great pity as many people would greatly benefit from the education.

We must remember in terms of asking Indonesia to adopt our ideas that we are a relatively new culture spanning just 200yrs, theirs is a culture reaching back 3000years. We live by different socio economic standards and enjoy many luxuries courtesy of our resources and significantly smaller population. Small things like personal refrigeration are still a long way off in Indonesia’s middle to lower class population making the sale of chilled meat unviable. Housewives will feel the meat for warmth to ensure the beast has been killed that day and the meat is fresh. This is a way of life and would require both individuals and cultural groups to make changes.
 


This is not to say we can’t offer advice and assistance to improve slaughter conditions, make working conditions safer by stunning the generally unhandled Australian cattle who are not used to being roped, improve meat quality by eliminating the abuse and stress and redesigning the slaughter boxes to have a lesser gradient and better grip. However our high and mighty approach taken and the continued abuse to their intelligence makes negotiations with people who genuinely wish to improve animal welfare conditions extremely difficult.
 


The call has been to Ban Live Exports. Now this is to be discussed in Parliament and may be written into the law books. While the main focus is currently on cattle and has previously been on sheep, I would like to point out that there have been no distinctions made in the general push to Ban Live Exports.
 
Australia exports a lot of animals of different types and should a motion go through parliament, extreme welfare groups will have an excellent opportunity to cripple other industries in Australia under this blanket ban. For example feral goats are exported, racehorses are regularly shipped overseas and not to mention the booming performance horse industries with endurance horses going to the UAE, Warmbloods to Europe and Quarter Horses to the USA. We also send cattle to 27 other countries excluding Indonesia. Should all these people suffer because of 11 slaughter houses in Indonesia? Once a law is made it is rarely toned down and we have seen time and again the impact of these sweeping bans and the repercussions.
 


Most of Australia’s geography is not suited to other forms of agriculture and the rangeland grazing of livestock has proven to be efficient and sustainable. While we may export large quantities of minerals they are an exhaustible resource and tourism is dependant of global finances and political stability. Carbon trading is not likely to be a sustainable income stream to support the many people actively involved in Agriculture and in my opinion cannot replace the live export trade. If producers and graziers go broke they will take with them regional communities and support services that they currently support. By the end of the week 13,000 Australians could be unemployed and more to follow, if the Industry collapses. This is not just the loss of a job; it’s the loss of hopes, dreams, blood sweat and tears. People will lose their way of life and support they need to live in the places they love.
 


What are producers expected to do with their stock in the interim of the export industry closing and alternate markets opening? Unfortunately we are not as wealthy as we are publicised to be and cannot afford to shut down and wait. Many producers have committed themselves to tailoring theirbusinesses at great cost to meet the specifications of Live Export. We breed grey cattle, we market them at 350kg even though we have the knowledge to grow them bigger and still only get paid by the kilogram. We have endeavoured to improve nutrition and handling techniques and yet we get 24hrs warning that the ports are closed.
 
In my years of training animals I know one thing clearly, that behaviour that is rewarded is always repeated! So could someone explain to me why we are doing everything right and yet being treated so poorly? This question covers the Indonesian processors who are also doing the right thing and the true Muslims who follow the holy procedure of the Halal kill.
 
How is this abuse of peoples efforts justified? As an Australian producer I am particularly upset to think producers have paid $5/animal to be treated like this and to see those animals treated that way. I am also disappointed in the sudden silence from animal welfare groups who only made a brief appearance when the footage was aired, with just enough encouragement to cause a stir and then they melted away. I ask them, What about the cattle? Don’t they matter now that you have your petitions sighed and donations stowed away? So you have succeeded in suspending the Live Export Industry but have you made any physical changes to the animal’s treatment in Indonesia? Have you consulted the appropriate Indonesian authorities? Are you funding any training for the slaughtermen? Or have you moved on to your next victim?
 


If Australia is going to become worried by the actions of others with animals, then we should also look into the treatment of the animals that provide the products we import. This is just as important and should be seriously considered. I am absolutely disgusted in the treatment of those cattle in the footage but if we are going to seriously make a difference we must explore our imports. Anything short of this would be hypocrisy.
 
The key issue has always been animal welfare. However due to ignorance and negligence it has escalated into a volatile argument between neighbours, which has left thousands of cattle stranded, thousands of people in a precarious position and must be diplomatically handled. The Indonesians are in my opinion unlikely to back down in their stance. While the phrase No Stun- No Cattle is catchy, to accept it would mean the Indonesians lose face - something the Asian community doesn’t take lightly. Australia has many trained diplomats and it’s time for them to act. We need to reengage the Muslim community, apologise for the childish insults and press for positive solutions that benefit all stakeholders. Focussing on improving meat quality would be a perfect inroad. We must continue to pressure the Australian Government for support in diversifying the markets in Northern Australia.
 


If we don’t act, what will become of the cattle? Will we have another international embarrassment to rival the Camel Cull and the BTEC program, which are widely seen internationally as wasteful and inhumane? In any negotiations regarding this Australians would do well to remember people in glass houses shouldn’t throw stones.
 


I am only one voice but together we can provide a solid stance and with common sense and empathy we can rectify this situation. We must spread the message and educate people to support our Australian producers and associated industries as well as those in Indonesia who are in the same situation. These people have done nothing wrong and like our other export clients should not be punished for the actions of a few. If we can collectively act to make real changes to the slaughter conditions in those 11 abattoirs, we will have made a tangible difference to international animal welfare. Banning Live Export and insulting our neighbours doesn’t help the beast that dies in Jakarta tonight!
 
Sincerely

Rashida Khan

Kita Lagoon, NT, Australia

[Mustang Sally Farm]

Dairying In Viet Nam
On a recent visit to Viet Nam, Stuart Lumb got the opportunity to visit three dairy units and a processing facility. He writes about them here for TheCattleSite.


Typical small unit
One of the fascinating things about working abroad is that you always have to expect the unexpected. I was staying in Hanoi and my guide was Hoang Thi Thuong, who is a dairy expert and is Northern Viet Nam manager for French additives company Olmix.

She told me we were to visit a dairy farm about an hour’s drive outside Hanoi. We duly drove into a small village and parked the car, although I could neither see nor smell any cows. We walked along and then entered a yard at the back of a modest house, where I was introduced to Mr Nguyen Van Duong and his wife. We had the customary cup of tea and I thought that we would shortly be going off outside the village to see Mr Duong’s dairy herd. No such thing!

We walk through the living room, go outside and there under a tiled roof stood his 2 Holstein cows! The cows are permanently housed indoors with sprinklers and roof fans cooling the cows in hot weather. All the feed is brought in by motorbike, the universal means of transport in Viet Nam. Different varities of grasses, King grass and Mulato II are grown in outlying fields, cut by hand and carted in.

A certain amount Mr Duong’s pride and are rent A 40 per cent concentrate (which costs £350/ton) is fed twice / day at the rate of 0.5kg/ kg of milk, with the cows producing 8500 kg milk / lactation.

Price is based on dry matter ,protein and fat, with Mr Duong receiving 22p/ litre for his milk. The government runs a local AI centre with vets carrying out the inseminations ( £2 per straw). Mr Duong takes his milk by motorbike to the village collection centre which has a 700kg bulk tank which is emptied daily, with the milk being transported by tanker 70km to the dairy.



Mr Duong with his two cows feeding on elephant grass
Medium sized dairy unit
Mrs Le has a medium sized dairy farm near to Ho Chi Minh City . She has 73 cows which are a combination of Holstein and local breeds and at the time of my visit there were 38 cows in milk producing 13kg of milk daily giving a daily production of 500kg. Cows are zero grazed, haltered and housed in a wide span open sided building, to allow maximum air circulation.

The cows are hand fed elephant grass which again was cut and carted from the field and put through a chopper. Concentrates are provided in the form of brewer’s grains and manioc along with a compound feed bought from Proconco, one of Viet Nam’s oldest feed millers. Concentrates are fed relative to yield at a rate of 0.4kg per kg of milk produced.

Cows are milked twice daily using a bucket system with the milk being stored in a 17,800litre refrigerated bulk tank, which could hold three day’s production. Mrs Le employs 10 staff and they are all kept busy as feeding and mucking out is all carried by hand plus bucket milking is very labour intensive as well. In the past manure has been spread as fertiliser but it is now used as feedstock for a biogas plant. Dairy farmers in Viet Nam have a choice of selling to one of six companies/ Coops and Mrs Le sells to the Dutch Lady dairy company.

Milk is paid for on the basis of protein, fat and somatic cell count and she is receiving 36p /litre, plus as in Mr Dong’s case the dairy company provides an insemination service. Healthwise mastitis and lameness are problems and using Mistral has proved to be beneficial as well as using traditional remedies. Cows are generally culled after five lactations.



Mrs Le
Large dairy unit
Dan Van Luong manages one of the largest dairy farms in Viet Nam, which has 840 cows (400 in milk) plus a further 200 heifers and other young cattle, with the dairy cows getting culled after eight to nine lactations. The farm also has an AI stud of 15 bulls.

The farm is actually a public company and it owns 700ha of land, 400 ha of which is used as grazing during the wet season. The company employs 212 staff which includes three vets, 10 inseminators (who inseminate cows on other farms as well ) plus admin and office staff.

The cows are of mixed breeding , namely Friesian, Brahman and the Australian Droughmaster. Cows are in milk for 300 days, produce 60-70kg / day with lactations averaging 4250kg, giving a herd output in the region of 2.8 tons of milk/day.

The zero grazed cows get fed chopped grass, manioc, brewers grains and concentrates twice / day. Extra concentrates are fed at the rate of 1kg./ 3kg of milk.Milking takes place three times / day through a 20 place herringbone which is fitted with Interpuls measuring equipment.

A plentiful and regular supply of water is essential and this is extracted from a bore and is tested annually for quality.

There is six months storage on the farm for manure and in the past the manure has been spread on the land, but recently a biogas plant has been built and hence the manure now goes to feed the digester. Incidentally there is no grant aid available for bioenergy plants in Viet Nam.



Mr Luong's dairy parlour
Vinamilk
Vinamilk is the biggest dairy company in Viet Nam.,with 500 employees. The company has its HQ in Ho Chi Minh City and markets 60 [er cent of the nation’s milk, plus butter and yoghurt which is processed through nine plants nationwide.

The average dairy farmer has five to six cows, although one of Vinamilk’s suppliers is a 1000 cow operation. Yields average out at 6000 kg/ year, with these being naturally affected by the high temperatures experienced in April, May and June.

Farmers are paid on total solids and somatic cell count and if this drops below 1 million it triggers a bonus. However, milk powder imports from Australia , New Zealand and the Netherlands have depressed the liquid milk price. Many small farmers have Sindhi(Zebu) x Friesian cows although Vinamilk are importing Holsteins from Australia and New Zealand.

AI is used extensively (95 per cent) to improve yields. Much of the semen is bought from Semex , sourced from 10,000kg/ year indexed bulls and imported from Canada. Semen costs USD 2 per straw although dairy farmers contracted with Vinamilk get their semen and inseminations free as part of their contract.

Vinamilk is improving yields in conjunction with Japanese dairy experts. Allied to good genetics is good nutrition. Viet Nam grows a lot of rice and so feeding rice by products would appear logical, but in fact rice is exported to China and swapped for maize and soyabean meal.

Locally also fast growing grasses such as Buffalo grass, Elephant grass and King grass provide much of the roughage. Attempts to grow alfalfa in the Vietnamese Highlands proved unsuccessful due to low yields and so this leguminous forage crop also has to be imported. Brucellosis is not a problem but as in many other countries sub clinical mastitis is.

Dairy In Viet Nam
Traditionally milk in Viet Nam was only fed to babies and sick people but this is changing as it government policy is promoting milk consumption by all ages of the population. One scheme provides milk to school children that live in rural areas and where family incomes are low.

In the south, the government has set up training centres. Small farmers can get help from government husbandry advisers plus finance to buy equipment. The Dutch government is also funding several training centres as well.

The Vietnamese dairy industry is obviously expanding given the government’s policy to increase the nation’s milk consumption and the quickest way to do this is by building large dairy units, however they will rely heavily on hired labour to produce good results – but “Big is not always Beautiful”.

Having said that it’s clear that small family owned dairy farms where the owner milks the cows and tends them have the incentive to get good yields. These small farms make a big contribution to the nation’s milk production and need to be nutured as a key part of the Vietnamese dairy industry.

December 2011

[Mustang Sally Farm]

Wednesday, December 07, 2011
Global Beef Trade on a High
ANALYSIS - Global beef trade for the major beef producing countries has been on a high this year, with the US, Europe and Australia all reporting strong trade, writes The Site Editor in Chris Chris Harris.

The only one of the main beef producers to be hit in volumes so far has been Brazil. However, even Brazil has seen the value of the beef it has been selling rise wile the volumes have been falling.

This week, Shane Ellis from Iowa State University said that the growth of US beef export volumes and the anticipation of substantial demand growth in coming years with new customers and growing appetites for beef is creating an exciting prospect for the beef industry.

In the first three quarters of this year US beef exports amounted to more than 2.1 billion pounds and were 27 per cent larger than export volumes during the same period a year ago.

Over 10 per cent of the beef produced in the US is now exported and the US is now a net exporter of beef. Year-to-date exports to Japan, South Korea and Canada so far this year have grown by 100 million pounds each.

The prospects for the EU beef market are also very positive, with the EU Commission forecasting beef prices to continue rising in 2012, driven by lower production and tighter supplies, increasing exports and lower imports.

The Commission is forecasting beef production for the EU to decline by 2.8 per cent to 7,122 million tonnes in 2012 and prices to increase by a further 1.7 per cent, on top of a 9.5 per cent price increase in 2011.

There has been a dramatic change in fortunes for the EU beef industry as in 2007 the region was a net importer of beef, shipping in 308,000 tonnes. Now the EU has become a net exporter shipping 237,000 tonnes.

The picture is similar in Australia where exports to South East Asia and China have risen by seven per cent between January and November this year and to South Korea, where Australia has nearly 50 per cent of the market, exports are up by 22 per cent.

The global change has been driven by a surge in world beef prices on the back of a drop in global production.

The outbreak of foot and mouth disease in South Korea has also helped raise exports in this region.

For Brazil this global rise in beef prices has come as a relief to its industry as it has managed to keep the value of the country's beef exports high - ahead of 2010 this year, while volumes have fallen.

Exports to traditional markets such as Russia, Iran and Egypt have seen drops in volumes of 26 per cent, 39 per cent and 35 per cent respectively, while values have risen by 24 per cent, 26 per cent and 18 per cent respectively.


Chris Harris, Editor-in-Chief

[Mustang Sally Farm]

Dairy: World Markets and Trade - December 2011
Global dairy markets in early 2011 experienced a surge in prices as strong global import demand for dairy products outpaced available supplies. As a result, major producing countries, responding to high returns, expanded milk production significantly which increased the supply of available exportable dairy products, according to the USDA's World Dairy Market Outlook.


Summary
Consequently, in the last half of 2011 as favourable weather conditions ushered in Oceania’s production season, dairy commodity prices started to slip. Further pressuring dairy markets was undoubtedly a growing caution by buyers as the increasingly volatile financial situation in the EU grew to dominate the financial outlook.

At present, global dairy prices appear to have settled although the forecast for Chinese imports of whole milk powder (WMP) in 2011 has been revised down significantly from July. In early 2011, China had absorbed a significant portion of the additional milk supplies on global markets through the substantial purchase of WMP thus underpinning international dairy prices.

For 2012, Chinese purchases of WMP are expected to pick-up but at a more modest pace. WMP prices on the Global Dairy Trade platform, which covers future deliveries, have been rising tentatively suggesting that there is a growing current of underlying demand.

From an economic standpoint, the outlook for 2012 is positive with global GDP slated to grow from a 2.7 per cent rate in 2011 to a 2.9 per cent rate in 2012. In the critical Asian and Oceania markets, GDP growth is expected to expand at a five per cent rate – up from the 4.2 per cent estimated for 2011. However, GDP growth in China is forecast to slow from 9.1 per cent to 8.5 per cent which could dampen growth in domestic demand and slow the rapid pace of increases in dairy product imports from the heady pace experienced in recent years.

For 2012, milk production in the major producing countries is forecast to moderate while import demand for dairy products will remain relatively stable as developing countries – particularly in the critical Asian markets – continue to grow economically. Expanding populations and rising disposable incomes will be the key drivers. Consequently, it appears that the price correction for dairy commodities may be over and that there will be some price stability in 2012. However, the lack of any surplus stocks, particularly in the form of Government stocks, makes the market susceptible to any supply shocks and prices are likely to react rapidly.


Milk Production: 2011 Forecast Summary

After an anticipated sharp rebound in milk production in 2011, largely as a result of excellent forage conditions and high prices, Argentina’s dairy industry is expected to continue to expand in 2012 albeit at a slower pace. Domestic inflationary pressures are expected to squeeze profit margins; consequently, milk production growth is forecast to grow modestly by four per cent.


Australian milk production is forecast to expand in 2012 by two per cent as pasture conditions and fodder availability are expected to be similar to 2011. The 2011 production season benefited greatly from the abundant rainfall in 2010 which set the stage for excellent growing conditions. Although drier conditions are expected to prevail for 2012 as rainfall patterns revert to the long-term average, the major constraining factors to additional output are expected to be the chronic shortage of replacement heifers and relatively high grain prices.

After an excellent forage season, New Zealand’s forecast milk production for 2011 was revised up four per cent to 18.68 million tons – up nine per cent over the 2010 season. For 2012, milk output is expected to slow down and register a modest two per cent gain assuming normal weather conditions persist. The herd is expected to grow by 110,000 cows and milk output per cow is forecast to rise due to improved productivity gains.

Milk output growth in the EU is forecast to slow down to 1 per cent in 2012 - down from the 2 per cent gain estimated gain for 2011 – as higher costs of production, lower consumption, and the clouded financial uncertainty are expected dampen expansion plans. In 2011, high farm gate prices as a result of higher domestic and international demand provided a strong incentive for dairy farmers to increase output.

US milk production for 2012 is forecast to expand by one per cent which will be below the two per cent rate of growth currently estimated for 2011; dairy farmers are expected to face lower milk prices and relatively higher feed costs which is expected to pressure returns. Producers are currently projected to receive an annual average all milk price of around $18.10-$18.90 per cwt down from the estimated average of $20.05-20.15 per cwt in 2011. Although the herd is projected to contract, expected milk per cow increases are expected to lead to higher milk production. Most of the additional milk is likely to be channeled into the production of cheese.
Cheese:
Cheese production in Oceania for 2011 is projected to decline by one per cent over 2010 primarily due to a four per cent drop in New Zealand’s output. New Zealand’s projected jump in milk production for 2011 is expected to be used primarily to support the production of whole milk powder for the booming export sector. For 2012, New Zealand cheese production is forecast to rebound by 9 per cent. Exports, however, are expected to decline slightly leading to a slight increase in stock levels. New Zealand exports primarily to Japan, Australia, and South Korea.

EU-27 cheese production is forecast to increase in 2011 and 2012 due to the expected increases in milk production and growing domestic consumption. Following an 18 per cent jump in cheese exports in 2010, EU exports for 2011 and 2012 are expected to continue to grow but at a more moderate pace – about three per cent annually. The major destinations for EU exports are Russia and the United States. EU shipments to Russia through September 2011 have declined by five per cent but have been offset by increased volumes- up 11 per cent – to the United States.

US cheese production is projected to expand by one per cent in 2011 to 4.8 million tons largely as a result of high cheese prices driven in part by strong export demand. For 2012, favourable prices for cheese relative to SMP/butter are expected to lead to a three per cent increase in cheese production to a record 4.9 million tons with most of the additional cheese expected to be absorbed by domestic consumption. Exports for 2012 are forecast to grow at a much slower pace than the 22 per cent rate expected 2011 as global markets are likely to be more competitive and economic concerns may limit demand. Mexico which accounts for nearly 30 per cent of US cheese exports, will no longer apply the punitive tariffs which were in effect for part of 2011 following resolution of the US-Mexico trucking dispute. This should provide some solid support for an expansion in US shipments and offset declines in other markets. Beginning stocks, which were historically high at the start of 2011, are expected to be drawn down during 2012.
Butter:
During 2011, Oceania butter prices (mid-point FOB) increased dramatically reaching nearly $5,000 per ton while European prices exceed $6,000 (mid-point FOB) per ton underscoring the tight global supply situation evident in the first half of the year. However, since July 1 through to end of November 2011, butter prices have dropped by nearly 20 per cent. Demand, nevertheless, appears to be holding as trade data indicates that imports this year for some key butterfat consuming countries through September 2011 remains strong. For example, Russian imports of butter (excluding Belarus) through September are up 16 per cent to 49,000 tons compared to 2010. This may explain why butter prices appear to have recently stabilised and may be an early indication of stronger prices particularly as the Oceania production season winds down.

Butterfat production among selected countries is forecast to expand by two per cent in 2012, however, India which trades minimal volumes will account for the large majority of the expected increase. In Oceania, butterfat production for 2012 is forecast to remain largely unchanged from the prior year as milk supplies are expected to flow primarily into the production of WMP. However, exports are expected to increase by six per cent which is expected to reduce stock levels.

EU-27 butterfat production is estimated to increase by two per cent in 2011 over the previous year due to the higher milk fat content in raw milk and strong export demand experienced in the first half of the year. However, total EU butter exports in the January-September 2011 period were down 24 per cent compared to the same period last year; consequently, total annual exports are currently pegged at well below 2010 levels. For 2012, production will grow less than 1 per cent and exports are forecast to grow modestly on the basis of export demand, particularly by Russia.

US butter production for 2011 increased sharply as early year returns from butter/powder production favored a shift away from cheese. For 2012, relative values are expected to favor cheese production and butter production is forecast to drop by one per cent. Exports, which are forecast to grow by 34 per cent in 2011, are expected to drop in 2012 as US exporters face growing competition in international markets. US trade data for September and October 2011 has shown a marked decline in butterfat exports which may mark the beginning of slower sales.

SMP:
Exports of SMP from selected countries are expected to experience a banner year as shipments for 2011 are pegged to expand by 16 per cent over 2010. This was reflected by the rapid climb in Oceania SMP prices which by mid-year had soared to over $4,000 per ton (mid-point FOB) as strong demand from Asia pressured markets. Oceania prices have since corrected sharply, falling to around $3,350 per ton (mid-point FOB) by late October 2011. However, SMP prices in November have started to rise slightly, suggesting that purchasers may be starting to place orders as inventories are replenished. For 2012, exports are expected to contract marginally as a drop in US and EU-27 exports will be nearly offset by increases in Oceania. Shipments of Oceania SMP are projected to increase by almost nine per cent in 2012 to reach 635,000 tons.

EU-27 exports of SMP are projected to expand by 19 per cent in 2011 driven by the increased availability of intervention stocks released to the market and strong export demand particularly from the North Africa and Far East import markets. For 2012, shipments of SMP are forecast to contract by seven per cent despite an expected rise in domestic production. Exports are expected to be constrained by domestic demand as stocks were largely drawn down during 2011.

The 2011 (July) forecast for US exports of SMP for 2011 has been revised up by 5 per cent and shipments expected to set a record at 435,000 tons – up 13 per cent from the previous year. Trade data through October 2011, indicates that 143,000 tons of SMP has been shipped to Mexico making it by far the most important market for US SMP. For 2012, exports of US SMP are slated to decline by 8 per cent due to increased competition in the key Asian markets and a decline in Mexico’s expected purchases.

On the import side, the 2012 outlook is mixed with some of the key Asian countries such as China, Indonesia, and the Philippines expected to register increased import volumes. China, which is rapidly becoming a key SMP import market, is forecast to grow by 19 per cent to reach 140,000 tons. In contrast, in other major markets such as Mexico and Algeria, imports for 2012 are projected to decline from 2011. However, these levels will still be historically high and well above import levels registered in 2010.

Whole Milk Powder (WMP):
Oceania WMP prices have followed a similar trajectory as SMP prices – peaking early in 2011 at around $4,600 per ton (mid-point FOB) and then dropping by 25 per cent to slightly over $3,425 per ton in October 2011. There are, however, signs that the market has stabilised and recent price increases, particularly during the peak production period in Oceania, point to resurgence in purchasing activity.

China’s 2011 (July) import forecast has been pared back significantly – 19 per cent to 350,000 tons - as the pace of monthly imports has been slowing since mid-year. The high price of WMP has been attributed as a major factor in the drop in import demand as smaller processors are now sourcing their WMP from domestic producers. Most of the imported WMP is used for the manufacture of infant formula and processed foods such as yogurt, ice cream, UHT milk, etc. For 2012, imports of WMP are forecast to grow by seven per cent driven by domestic demand for processed dairy products and lingering concerns over the safety of domestic dairy products.

New Zealand, which is projected to account for nearly 55 per cent of trade among selected exporters in 2011, is forecast to further increase its exports of WMP in 2012 by four per cent to 1.09 million tons. In contrast, EU-27 exports for 2012 are projected to remain stagnant relative to 2011 as stronger domestic competition for fluid milk supplies and a more competitive export market are expected to limit efforts to expand WMP production. The other major global supplier, Argentina, is forecast to increase 2012 WMP production by five per cent to 330,000 tons as milk production rises. Most of this will likely be destined to Venezuela, Algeria, and Brazil, which have been Argentina’s principal markets for WMP for the past five years (2006-2010).

December 2011

[Mustang Sally Farm]

Wednesday, December 21, 2011
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Ron Plain: Cattle On Feed

US - USDA's December cattle on feed report said both November placements and marketings were higher than expected, writes Ron Plain, University of Missouri.

 
Ron Plain
 
USDA said November placements of cattle into large feed yards (over 1,000 head capacity) were 4.1 per cent higher than in November 2010. The average of pre-release trade forecasts was for November placements to be down 0.4 per cent. November placements were the highest of any November since 2007. Thus far this year, placements have been above year-earlier levels in 7 of the 11 months.
 
USDA said marketings of fed cattle from large feed yards during November totaled 1.77 million head, down 0.2 per cent compared to November 2010. The trade forecast November marketings to be down 1.5 per cent.
 
The total number of cattle on feed at the start of December was up 4.0 per cent compared to December 2010. The pre-release survey of forecasts predicted an increase of 3.7 per cent. The number of cattle on feed has been above the year-earlier level for the last 19 months. The December inventory is the highest on-feed number for any December since 2007.
 
The number of cattle placed on feed weighing less than 600 pounds was up 20.8 per cent from last November. Placements of feeders weighing 600 to 700 pounds were down 15.4 per cent; placements weighing 700 to 800 pounds were up 0.3 per cent, and placements weighing more than 800 pounds were up 10.8 per cent compared to a year earlier. The calculated average weight of cattle placed on feed during November was 4.1% higher than in November 2010.
 
The average retail price for choice beef during November, $5.001 per pound, was up 6.8 cents from October, up 51.7 cents from November 2010, and record high for the fourth month in a row. Slaughter steer prices averaged $123.50/cwt in November, also a record.

[Mustang Sally Farm]

Friday, December 23, 2011
Market Access For Live Cattle To UAE
CANADA - The Government of Canada has reached a new agreement on an export certificate with the United Arab Emirates (UAE) which means that live cattle can be exported to the UAE.


Canadian exporters of live cattle will benefit from access to the UAE market. Industry estimates that the market could provide up to $40 million in sales.

"This announcement instantly provides new export opportunities for Canadian producers, and is a significant step toward regaining access to other key markets in the region," said Minister of Agriculture Jerry Ritz. "Our Government's top priority remains the economy, and this new market access is good news for our hard working farmers across the country."

"This is great news for Canadian cattle exporters, and yet another example of how our government's commitment to opening new markets for Canadian businesses and workers is getting results," said the Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway.

"The UAE's announcement advances our bilateral commercial relations, and will help our overall efforts to build on our economic and trade ties with the Gulf Cooperation Council region as a whole."

"We are pleased to have regained access to the UAE market," said Rick McRonald, Executive Director of the Canadian Livestock Genetics Association. "This is good news for exporters who have been waiting to pursue this opportunity."

The UAE is part of a regional trading block called the Gulf Cooperation Council (GCC), which includes Bahrain, Kuwait, Oman, Qatar and Saudi Arabia. The GCC is a priority market under Canada's Global Commerce Strategy.

The announcement is symbolic of Canada's efforts to regain access to the entire GCC, which represents the fifth largest export destination for Canadian agri-food products. Canadian agri-food exports to the GCC surpassed $835 million in 2010.

[Mustang Sally Farm]

How Did A Live Export Ban Affect Australia?
Live cattle exports to Indonesia fell by 30 per cent between July and September 2011. With 60 per cent of Australian cattle exported to Indonesia, Charlotte Johnston, TheCattleSite editor speaks to Lach McKinnon, CEO of Australian Livestock Exporters' Council about how the live export ban earlier this year affected Australian cattle exports.


Earlier this year, undercover footage of Indonesian slaughter houses caused a public outcry. The government suspended live exports at the end of May, and in early June suspended all live exports after pressure was applied from the public and animal welfare groups.

Although live cattle exports resumed to Indonesia in July 2011, the first shipment didn't leave until 11 August 2011. Between then and September 2011, 156,715 cattle were exported to Indonesia. This is a 30 per cent drop in cattle numbers, compared to the same period last year.

This drop in exports is entirely due to the ban, and a low uptake in the first month of trade resumption. The ban was also imposed on the industry during peak time for live cattle exports, following the northern wet season (March through to around September). However Mr McKinnon said that peak periods in the lead up to religious celebrations such as Ramadan also drive demand.

Following on from this, an number of reviews have been carried out. Mark 1 boxes were banned, as they did not comply with OIE regulations and cattle are now only exported to Australian approved abattoirs. Mr McKinnon says that independent auditors will review and assess each supply chain and that the industry is facilitating the rapid uptake of stunning in Indonesia.

Estimating the cost to exporters of the ban, Mr McKinnon says that it is hard to calculate a cost. Exporters incurred major demurrage bills and the costs of feeding thousands of cattle that were stuck in depots and in transit to the depots.

The Indonesian market is an important one for the Australian cattle industry. Mr McKinnon said that 521,002 head of cattle, or 60 per cent of all Australian cattle were exported to Indonesia.

With this is mind it is understandable that last week's announcement by Indonesia has caused unrest and uncertainty in the Australian industry. The Indonesia Ministry of Agriculture agreed to pull back on Australia's 2012 import permits from 500,000 head a year to just 280,000 head.

This news has not been received well in Queensland, which supplies 20 per cent of live cattle exports to Indonesia.

AgForce Cattle president Grant Maudsley said the Indonesian decision will shake the confidence of Queensland graziers who are still hurting from the imposed ban on live cattle.

Indonesia will now revise their import permits based on the domestic price of beef in Indonesia. If domestic prices rise sharply there is capacity for their Trade ministry to adjust import permits to allow more cattle and beef to enter their market from countries like Australia.

If Indonesia follows through with these quota levels Australian cattle producers will need sell more of their livestock through saleyards and to abattoirs or find alternative markets.

Concluding, Mr McKinnon said: "The future of the live trade is bright. We have huge expanding economies and populations immediately to our North that prefer fresh meat as opposed to frozen or fresh and Australia is best placed to provide this service in the most humane and efficient way."

December 2011

[Mustang Sally Farm]

Dairy: World Markets and Trade - December 2011
Global dairy markets in early 2011 experienced a surge in prices as strong global import demand for dairy products outpaced available supplies. As a result, major producing countries, responding to high returns, expanded milk production significantly which increased the supply of available exportable dairy products, according to the USDA's World Dairy Market Outlook.


Summary
Consequently, in the last half of 2011 as favourable weather conditions ushered in Oceania’s production season, dairy commodity prices started to slip. Further pressuring dairy markets was undoubtedly a growing caution by buyers as the increasingly volatile financial situation in the EU grew to dominate the financial outlook.

At present, global dairy prices appear to have settled although the forecast for Chinese imports of whole milk powder (WMP) in 2011 has been revised down significantly from July. In early 2011, China had absorbed a significant portion of the additional milk supplies on global markets through the substantial purchase of WMP thus underpinning international dairy prices.

For 2012, Chinese purchases of WMP are expected to pick-up but at a more modest pace. WMP prices on the Global Dairy Trade platform, which covers future deliveries, have been rising tentatively suggesting that there is a growing current of underlying demand.

From an economic standpoint, the outlook for 2012 is positive with global GDP slated to grow from a 2.7 per cent rate in 2011 to a 2.9 per cent rate in 2012. In the critical Asian and Oceania markets, GDP growth is expected to expand at a five per cent rate – up from the 4.2 per cent estimated for 2011. However, GDP growth in China is forecast to slow from 9.1 per cent to 8.5 per cent which could dampen growth in domestic demand and slow the rapid pace of increases in dairy product imports from the heady pace experienced in recent years.

For 2012, milk production in the major producing countries is forecast to moderate while import demand for dairy products will remain relatively stable as developing countries – particularly in the critical Asian markets – continue to grow economically. Expanding populations and rising disposable incomes will be the key drivers. Consequently, it appears that the price correction for dairy commodities may be over and that there will be some price stability in 2012. However, the lack of any surplus stocks, particularly in the form of Government stocks, makes the market susceptible to any supply shocks and prices are likely to react rapidly.


Milk Production: 2011 Forecast Summary

After an anticipated sharp rebound in milk production in 2011, largely as a result of excellent forage conditions and high prices, Argentina’s dairy industry is expected to continue to expand in 2012 albeit at a slower pace. Domestic inflationary pressures are expected to squeeze profit margins; consequently, milk production growth is forecast to grow modestly by four per cent.


Australian milk production is forecast to expand in 2012 by two per cent as pasture conditions and fodder availability are expected to be similar to 2011. The 2011 production season benefited greatly from the abundant rainfall in 2010 which set the stage for excellent growing conditions. Although drier conditions are expected to prevail for 2012 as rainfall patterns revert to the long-term average, the major constraining factors to additional output are expected to be the chronic shortage of replacement heifers and relatively high grain prices.

After an excellent forage season, New Zealand’s forecast milk production for 2011 was revised up four per cent to 18.68 million tons – up nine per cent over the 2010 season. For 2012, milk output is expected to slow down and register a modest two per cent gain assuming normal weather conditions persist. The herd is expected to grow by 110,000 cows and milk output per cow is forecast to rise due to improved productivity gains.

Milk output growth in the EU is forecast to slow down to 1 per cent in 2012 - down from the 2 per cent gain estimated gain for 2011 – as higher costs of production, lower consumption, and the clouded financial uncertainty are expected dampen expansion plans. In 2011, high farm gate prices as a result of higher domestic and international demand provided a strong incentive for dairy farmers to increase output.

US milk production for 2012 is forecast to expand by one per cent which will be below the two per cent rate of growth currently estimated for 2011; dairy farmers are expected to face lower milk prices and relatively higher feed costs which is expected to pressure returns. Producers are currently projected to receive an annual average all milk price of around $18.10-$18.90 per cwt down from the estimated average of $20.05-20.15 per cwt in 2011. Although the herd is projected to contract, expected milk per cow increases are expected to lead to higher milk production. Most of the additional milk is likely to be channeled into the production of cheese.
Cheese:
Cheese production in Oceania for 2011 is projected to decline by one per cent over 2010 primarily due to a four per cent drop in New Zealand’s output. New Zealand’s projected jump in milk production for 2011 is expected to be used primarily to support the production of whole milk powder for the booming export sector. For 2012, New Zealand cheese production is forecast to rebound by 9 per cent. Exports, however, are expected to decline slightly leading to a slight increase in stock levels. New Zealand exports primarily to Japan, Australia, and South Korea.

EU-27 cheese production is forecast to increase in 2011 and 2012 due to the expected increases in milk production and growing domestic consumption. Following an 18 per cent jump in cheese exports in 2010, EU exports for 2011 and 2012 are expected to continue to grow but at a more moderate pace – about three per cent annually. The major destinations for EU exports are Russia and the United States. EU shipments to Russia through September 2011 have declined by five per cent but have been offset by increased volumes- up 11 per cent – to the United States.

US cheese production is projected to expand by one per cent in 2011 to 4.8 million tons largely as a result of high cheese prices driven in part by strong export demand. For 2012, favourable prices for cheese relative to SMP/butter are expected to lead to a three per cent increase in cheese production to a record 4.9 million tons with most of the additional cheese expected to be absorbed by domestic consumption. Exports for 2012 are forecast to grow at a much slower pace than the 22 per cent rate expected 2011 as global markets are likely to be more competitive and economic concerns may limit demand. Mexico which accounts for nearly 30 per cent of US cheese exports, will no longer apply the punitive tariffs which were in effect for part of 2011 following resolution of the US-Mexico trucking dispute. This should provide some solid support for an expansion in US shipments and offset declines in other markets. Beginning stocks, which were historically high at the start of 2011, are expected to be drawn down during 2012.
Butter:
During 2011, Oceania butter prices (mid-point FOB) increased dramatically reaching nearly $5,000 per ton while European prices exceed $6,000 (mid-point FOB) per ton underscoring the tight global supply situation evident in the first half of the year. However, since July 1 through to end of November 2011, butter prices have dropped by nearly 20 per cent. Demand, nevertheless, appears to be holding as trade data indicates that imports this year for some key butterfat consuming countries through September 2011 remains strong. For example, Russian imports of butter (excluding Belarus) through September are up 16 per cent to 49,000 tons compared to 2010. This may explain why butter prices appear to have recently stabilised and may be an early indication of stronger prices particularly as the Oceania production season winds down.

Butterfat production among selected countries is forecast to expand by two per cent in 2012, however, India which trades minimal volumes will account for the large majority of the expected increase. In Oceania, butterfat production for 2012 is forecast to remain largely unchanged from the prior year as milk supplies are expected to flow primarily into the production of WMP. However, exports are expected to increase by six per cent which is expected to reduce stock levels.

EU-27 butterfat production is estimated to increase by two per cent in 2011 over the previous year due to the higher milk fat content in raw milk and strong export demand experienced in the first half of the year. However, total EU butter exports in the January-September 2011 period were down 24 per cent compared to the same period last year; consequently, total annual exports are currently pegged at well below 2010 levels. For 2012, production will grow less than 1 per cent and exports are forecast to grow modestly on the basis of export demand, particularly by Russia.

US butter production for 2011 increased sharply as early year returns from butter/powder production favored a shift away from cheese. For 2012, relative values are expected to favor cheese production and butter production is forecast to drop by one per cent. Exports, which are forecast to grow by 34 per cent in 2011, are expected to drop in 2012 as US exporters face growing competition in international markets. US trade data for September and October 2011 has shown a marked decline in butterfat exports which may mark the beginning of slower sales.

SMP:
Exports of SMP from selected countries are expected to experience a banner year as shipments for 2011 are pegged to expand by 16 per cent over 2010. This was reflected by the rapid climb in Oceania SMP prices which by mid-year had soared to over $4,000 per ton (mid-point FOB) as strong demand from Asia pressured markets. Oceania prices have since corrected sharply, falling to around $3,350 per ton (mid-point FOB) by late October 2011. However, SMP prices in November have started to rise slightly, suggesting that purchasers may be starting to place orders as inventories are replenished. For 2012, exports are expected to contract marginally as a drop in US and EU-27 exports will be nearly offset by increases in Oceania. Shipments of Oceania SMP are projected to increase by almost nine per cent in 2012 to reach 635,000 tons.

EU-27 exports of SMP are projected to expand by 19 per cent in 2011 driven by the increased availability of intervention stocks released to the market and strong export demand particularly from the North Africa and Far East import markets. For 2012, shipments of SMP are forecast to contract by seven per cent despite an expected rise in domestic production. Exports are expected to be constrained by domestic demand as stocks were largely drawn down during 2011.

The 2011 (July) forecast for US exports of SMP for 2011 has been revised up by 5 per cent and shipments expected to set a record at 435,000 tons – up 13 per cent from the previous year. Trade data through October 2011, indicates that 143,000 tons of SMP has been shipped to Mexico making it by far the most important market for US SMP. For 2012, exports of US SMP are slated to decline by 8 per cent due to increased competition in the key Asian markets and a decline in Mexico’s expected purchases.

On the import side, the 2012 outlook is mixed with some of the key Asian countries such as China, Indonesia, and the Philippines expected to register increased import volumes. China, which is rapidly becoming a key SMP import market, is forecast to grow by 19 per cent to reach 140,000 tons. In contrast, in other major markets such as Mexico and Algeria, imports for 2012 are projected to decline from 2011. However, these levels will still be historically high and well above import levels registered in 2010.

Whole Milk Powder (WMP):
Oceania WMP prices have followed a similar trajectory as SMP prices – peaking early in 2011 at around $4,600 per ton (mid-point FOB) and then dropping by 25 per cent to slightly over $3,425 per ton in October 2011. There are, however, signs that the market has stabilised and recent price increases, particularly during the peak production period in Oceania, point to resurgence in purchasing activity.

China’s 2011 (July) import forecast has been pared back significantly – 19 per cent to 350,000 tons - as the pace of monthly imports has been slowing since mid-year. The high price of WMP has been attributed as a major factor in the drop in import demand as smaller processors are now sourcing their WMP from domestic producers. Most of the imported WMP is used for the manufacture of infant formula and processed foods such as yogurt, ice cream, UHT milk, etc. For 2012, imports of WMP are forecast to grow by seven per cent driven by domestic demand for processed dairy products and lingering concerns over the safety of domestic dairy products.

New Zealand, which is projected to account for nearly 55 per cent of trade among selected exporters in 2011, is forecast to further increase its exports of WMP in 2012 by four per cent to 1.09 million tons. In contrast, EU-27 exports for 2012 are projected to remain stagnant relative to 2011 as stronger domestic competition for fluid milk supplies and a more competitive export market are expected to limit efforts to expand WMP production. The other major global supplier, Argentina, is forecast to increase 2012 WMP production by five per cent to 330,000 tons as milk production rises. Most of this will likely be destined to Venezuela, Algeria, and Brazil, which have been Argentina’s principal markets for WMP for the past five years (2006-2010).


December 2011

[Mustang Sally Farm]

Agricultural Commodities: Beef & Veal

The Australian weighted average saleyard price for beef cattle is forecast to remain relatively high in 2011–12 at an average of 326 cents a kilogram (dressed weight), according to the Australian Bureau of Agricultural and Resource Economics (ABARE) December Agricultural Commodities report.




Saleyard prices are expected to be supported by a combination of strong domestic restocker demand for young cattle, limited supplies because of low slaughter rates and increased demand from emerging markets, including the Russian Federation and those in the Middle East and South-East Asia.
 


Cattle numbers at 34-year high
 
The national cattle herd is forecast to increase by five per cent in 2011–12 to 30.2 million head. This growth in the herd is supported by assumed continuation of favourable seasonal conditions, which are expected to lead to good pasture growth and replenished water supplies. The forecast cattle herd at the end of 2011–12 takes into account the preliminary estimate of herd numbers at the end of 2010–11 released by the Australian Bureau of Statistics (ABS) on 2 December 2011. The ABS estimates that cattle numbers rose by nine per cent to 28.8 million head as at 30 June 2011. Herd sizes rose in all states except Western Australia and the Northern Territory.
 



Beef cattle slaughter is forecast to fall by two per cent in 2011–12 to around 7.9 million head, the lowest since 1995–96. While male cattle slaughter is forecast to rise, calf and female cattle slaughter are forecast to decline as producers seek to hold back stock to increase herd sizes. During the September quarter 2011, Australian male cattle slaughter was three per cent higher than for the same period last year. By comparison, female cattle slaughter fell by 13 per cent and calf slaughter fell by 11 per cent, year-on-year.
 
Higher carcase weights driving production
 
Despite the forecast reduction in total slaughter, Australian beef and veal production is forecast to remain largely unchanged in 2011–12 at 2.1 million tonnes. This is because widespread fodder availability throughout northern and eastern Australia and the greater proportion of adult males in total turn-off are expected to result in higher average carcase weights.

In the first three months of 2011–12, national average adult carcass weights were four per cent higher than for the same period last year. Gains were highest in Tasmania (5.4 per cent), Queensland (4.8 per cent) and New South Wales (4.5 per cent), which together accounted for three-quarters of national production.
 



Australian exports to remain steady
 
Australian beef and veal exports are forecast to remain largely unchanged in 2011–12 at 941,000 tonnes (shipped weight). However, the trade is becoming increasingly diversified, with the proportion of beef and veal exported to the United States, Japan and the Republic of Korea forecast to fall to 68 per cent. Over the past decade these three markets accounted for 82 per cent of Australian beef exports. Growth in export volumes to a number of emerging markets, including many ASEAN countries and the Middle East, is expected.
 
Exports to the United States
 
Over the first four months of 2011–12 Australian beef and veal exports to the United States were 11 per cent lower than for the same period in 2010–11. This decline was in response to several factors. First, US beef production remained historically high as drought-induced herd liquidation continued, particularly in the southern states of Texas, Oklahoma, Kansas and New Mexico. This resulted in higher domestic supplies and reduced demand for imported product during that period. Second, poor seasonal conditions resulted in reduced average slaughter weights. This led to relatively more beef being redirected into grinding, reducing demand for Australian manufacturing beef.

Over the remainder of 2011–12, total beef and veal exports to the United States are forecast to recover from the low shipments of the first four months. For 2011–12 as a whole, total export shipments to the United States are forecast to be unchanged from 2010–11 at 160 000 tonnes (shipped weight). In the southern states cattle slaughter is expected to remain high in the absence of any improvement in seasonal conditions, resulting in continued high production of manufacturing beef. For total beef production, the United States Department of Agriculture is still forecasting a two per cent decline in 2011–12, which ref lects the more favourable seasonal conditions in northern states where producers are expected to rebuild herds.

Lower domestic production and forecast higher US beef exports into the Pacific markets are expected to support demand for imported beef, including from Australia, over the remainder of 2011–12. However, the assumed strong Australian exchange rate against the US dollar and strong competition from Canadian and Mexican beef remain the risk factors to the outlook for Australian beef exports to the United States.
 
Increased competition from the United States in Japan
 
Australian beef exports to Japan are forecast to fall by four per cent in 2011–12 to 336,000 tonnes (shipped weight). This forecast decline ref lects the combined effect of expected stable beef consumption in Japan and increased competition from US beef in the Japanese market. Japanese consumers have a preference for higher marbled US beef, and recent exchange rate movements have increased the competitiveness of US beef against Australian beef




In Japan, consumption of imported frozen beef rose because of increasing demand in the food service sector, but this was offset by declining sales of premium fresh and chilled cuts. There has also been increased substitution of pork and chicken for beef. Over the past decade, Japanese pork and chicken consumption per person rose by 23 per cent and 21 per cent respectively, while per person beef consumption fell by 25 per cent.
 
Exports to the Republic of Korea to rise
 
Australian beef exports to the Republic of Korea are forecast to rise by four per cent in 2011–12 to 145,000 tonnes (shipped weight). The share of Australian imports in the Korean beef import market has been declining because of increasing competition from US beef. Consumer acceptance of US beef after its re-entry to the Korean market in 2007–08 accelerated as it has become more widely distributed, especially in the food service sector. Despite a declining cattle herd, US beef export volumes to the Republic of Korea rose by 47 per cent year-on-year during the first three months of 2011–12, compared with a 12 per cent rise for Australian beef exports.

Over the remainder of 2011–12, Australia is expected to be the primary supplier of imported chilled beef to the Republic of Korea. For the past five years, Australian chilled beef made up 78 per cent of the total chilled beef import market in the Republic of Korea. The recent growth in US beef exports to the Republic of Korea has primarily been for lower value frozen cuts.




Growth in exports to other markets
 
Australian beef exports to markets other than Japan, the United States and the Republic of Korea are forecast to grow by five per cent in 2011–12 to 300,000 tonnes (shipped weight). Entry of the Russian Federation to the World Trade Organisation from December 2011 is expected to result in Australia gaining improved access to that market. Beef exports to the Middle East are also forecast to increase, by around 15 per cent in 2011–12 to 34,000 tonnes. Exports to ASEAN countries (excluding Indonesia) are also forecast to grow by five per cent to a total of 48,000 tonnes in 2011–12.
 
Live cattle exports to fall
 
From 1 July to 6 December 2011, around 253,500 cattle for feeder and slaughter purposes were exported from Australia. Of these, around 65 per cent were exported to Indonesia. Among other markets, the largest were Israel (24,830 head), Turkey (16,530) and Egypt (14,600).

For 2011–12 as a whole, Australian exports of live cattle are forecast to fall by 31 per cent to 500 000 head. Since the resumption of trade with Indonesia, shipments to that country have averaged around 36,000 head per month, compared with a monthly average of 58,000 head at the height of the trade in 2008–09.

[Mustang Sally Farm]

Wednesday, December 28, 2011
Toxins Found In Tainted Milk Brand Product

CHINA - Cancer-causing toxins have been found in a batch of milk manufactured by the Chinese dairy giant Mengniu Group.



The General Administration of Quality Supervision, Inspection and Quarantine on Saturday published the result of a random check of 200 dairy products in 21 provinces, and two products, including one manufactured by Mengniu, were found to contain excessive aflatoxin.
 
 

Despite the company's declaration on Monday that the entire tainted batch was destroyed in its branch plant in Meishan, Sichuan province, before it could reach the market, people are still concerned over whether milk they have bought is safe to consume.
 
 

While the national standard allowed a maximum of 0.5 micrograms carcinogenic content in a kg of milk, the official test found 1.2 micrograms of the toxic substance in the Mengniu sample. The sample product was a 250 ml pack of pure milk produced on Dec 18, according to the test result published on the website of the general administration.
 
 

Aflatoxin is virulent in terms of toxicity and is classified as a first-class carcinogen by the World Health Organisation.
 
 

"Experiments on animals have demonstrated a strong carcinogenic effect of the substance, and studies about epidemic diseases indicate that the content of the substance in food is relevant to the incidence of liver cancer," said Fan Zhihong, associate professor with China Agricultural University's college of food science and nutrition engineering.
 
 

She also commented that the carcinogens can accumulate in the human body, and is resistant to heat. "It dissolves when the temperature reaches nearly 300C, which means high temperature disinfection or pasteurizing (a common disinfection method used in the dairy industry) cannot kill it at all."
 
 

Dairy experts said the source of the problem might be traced to cattle feed being contaminated by aflatoxin. "Cattle feed, such as corn, rice and soybean, will produce the poison after having been stored for a long time," said Wang Dingmian, chairman of the Guangzhou Dairy Association.
 
 

Mengniu apologized to consumers on its website on Sunday, without mentioning the cause of the incident.
 
 

[Mustang Sally Farm]

Wednesday, December 28, 2011

Commercial Red Meat Production Down in November

US - Commercial red meat production was down two per cent in November, according to the latest Livestock Slaughter report from the USDA's National Agricultural Statistics Service (NASS).
 

Commercial red meat production for the United States totaled 4.26 billion pounds in November, down 2 per cent from the 4.33 billion pounds produced in November 2010.

Pork production totaled 2.09 billion pounds, up 1 per cent from the previous year. Hog slaughter totaled 10.04 million head, up 1 per cent from November 2010. The average live weight was unchanged from the previous year, at 278 pounds.

Beef production, at 2.15 billion pounds, was 4 per cent below the previous year. Cattle slaughter totaled 2.79 million head, down 3 per cent from November 2010. The average live weight was down 6 pounds from the previous year, at 1,293 pounds.

Veal production totaled 10.8 million pounds, 5 per cent below November a year ago. Calf slaughter totaled 73,000 head, up slightly from November 2010. The average live weight was down 14 pounds from last year, at 255 pounds.

Lamb and mutton production, at 12.6 million pounds, was down 12 per cent from November 2010. Sheep slaughter totaled 186,700 head, 15 per cent below last year. The average live weight was 135 pounds, up 4 pounds from November a year ago.

January to November 2011 commercial red meat production was 45.0 billion pounds, up 1 per cent from 2010.

Accumulated beef production was up slightly from last year, veal was down 3 per cent, pork was up 2 per cent from last year, and lamb and mutton production was down 9 per cent.

November 2010 and November 2011 both contained 22 weekdays (including 2 holidays) and 4 Saturdays.

[Mustang Sally Farm]

Thursday, December 29, 2011
Cattle Outlook: Retail Beef Prices Still High
US - Retail beef prices rose in November for the fourth consecutive month and set a new record for the third consecutive month, writes Ron Plain, University of Missouri.
 
Ron PlainThe average price of choice beef in grocery store meat cases in November was $5.001 per pound. That was up 6.8 cents from the October record and up 51.7 cents from November 2010.

The average retail price of all fresh beef also was record high at $4.504 per pound in November. Since the per capita beef supply is expected to be four to five per cent lower in 2012, many more months of record retail beef prices are likely in the coming year.

Packer margins continue to be very tight. The October farm to wholesale price spread (23.2 cents) was the lowest since November 2004.

 The November spread was higher (30.5 cents) but still the second lowest since February 2010. The declining cattle herd (the 2011 US calf crop was smaller than the year before for the 16th consecutive year) has left us with surplus slaughter capacity. Since no turnaround in cattle numbers is likely soon, the closing of another cattle kill plant is likely.

The average live weight price of slaughter steers in November was a record $123.50/cwt, up $3.20 from the October record.

There was 438 million pounds of beef in cold storage at the end of November, up 0.5 per cent from a year earlier.

Fed cattle prices jumped this week to the second highest weekly average ever. The 5-area average price for slaughter steers sold through Thursday of this week on a live weight basis was $125.38/cwt, up $6.56 from last week and $22.91/cwt above the same week last year.

 Steers sold on a dressed weight basis averaged $201.42/cwt, $7.38 higher than the week before and $37.79 above a year ago.


Beef cutout value was also higher this week. On Friday morning, the choice boxed beef carcass cutout value was $192.28/cwt, up $1.96 from last week. The select carcase cutout was up $3.29 from the previous Friday to $176.42 per hundred pounds of carcase weight. The choice-select spread, $15.87, was down $1.31 from a week earlier. The cutout value of choice steers is $9.14/cwt below the dressed weight cattle price.

This week’s cattle slaughter totaled 598,000 head, down 6.9 per cent from the week before but up 9.7 per cent compared to a year ago. The average steer dressed weight for the week ending 10 December was 853 pounds, down two pounds from the week before and also down two pounds from a year ago.

Cash bids for feeder cattle around the country this week were mostly $4 lower to $4 higher than the week before. Prices this week at Oklahoma City were $2 lower to $2 higher with price ranges for medium and large frame #1 steers: 400-450# $192.50-$194, 450-500# $163-$166, 500-550# $155.50-$165, 550-600# $150.50-$161, 600-650# $144-$154, 650-700# $143.50-$153, 700-750# $141-$147, 750-800# $139-$148, 800-900# $131-$138 and one small group of 900-1000# at $131/cwt.

[Mustang Sally Farm]

..

South Korea takes "major step" to accepting Canada beef
Reuters – 7 hours ago.. .
.

(Reuters) - South Korea has taken a "major step" to ending an eight-year-old ban on imports of Canadian beef, Canada's agriculture and trade ministers said on Friday.
 
The South Korean Parliament ratified import health requirements for Canadian beef under 30 months of age on Friday, one of the final steps to ending the ban, the ministers said in a release.
 
South Korea is the last major beef-importing country to agree to lower its restrictions on Canadian beef, since a 2003 case of mad-cow disease (BSE) in Canada.
 
"This has been a long journey and today's announcement is a big step forward for our hard-working beef producers to once again bring their world class product to the South Korean marketplace," said Agriculture Minister Gerry Ritz.
 
Canada is the world's third-biggest beef shipper and in 2002, prior to the ban, South Korea was Canada's fourth biggest beef market.
 
South Korea also initially banned U.S. beef but later allowed in U.S. beef within the 30-month age limit.
 
Canada complained about South Korea's ban to the World Trade Organization, but suspended its case earlier this year after South Korea said it would resume trade by the end of 2011.
 
The WTO case remains suspended pending South Korea's final steps to reopening trade, which include issuing a list of approved Canadian beef exporters, Ritz and Canada Trade Minister Ed Fas t said. It expects South Korea to complete the final steps in early 2012.
 
Mad cow disease, formally known as bovine spongiform encephalopathy, is a human health concern as it is believed humans can get a similar fatal brain disease by eating infected parts from cattle with the disease.
 
(Reporting by Rod Nickel; Editing by David Gregorio)

[Mustang Sally Farm]

Friday, December 30, 2011
Developing New Forage Markets
CANADA - Canadian farmers will benefit from the continued expansion of international forage markets thanks to the support of the Government of Canada.


Maurice Vellacott, Member of Parliament for Saskatoon-Wanuskewin, announced on behalf of Agriculture Minister Gerry Ritz an investment of more than $85,000 to the Canadian Forage and Grassland Association (CFGA) to enhance the competitiveness of forage farmers internationally.

"Our Government’s top priority remains the economy, and Canada’s agriculture industry plays an important role in keeping our economy strong," said MP Vellacott. "This investment will help our farmers strengthen our economy and solidify their reputation as a premier supplier of forage to the world by expanding market access for their top-quality products."

This investment will enable the CFGA to develop promotion and information packages for international buyers, prepare market development display materials, and participate in international trade shows. These efforts will help the CFGA establish new business contacts and create new export opportunities to increase farmer profitability.

"Support from the AgriMarketing Program is key to helping the forage export sector of the Canadian Forage and Grassland Association not only identify the main export markets, but also to expand market access and promote the marketing of Canadian forage products into these markets," said CFGA Executive Director Wayne Digby. "This funding will help us focus on markets such as the US, China and the Middle East."

Canada's forages are internationally recognized due to Canada’s world class processing facilities, clean, natural growing environments, and leading edge infrastructure for transportation. In 2010, Canada exported more than $90 million worth of hay and forage products to over 20 different countries. Canada is the third largest exporter of forages in the world, and has approximately 10 per cent of the world market share.

The announcement is part of an $88 million investment provided through the AgriMarketing program under Growing Forward, which helps industry implement long-term international strategies including activities such as international market development, industry-to-industry trade advocacy, and consumer awareness and branding.