Soy, Corn Prices Need to Direct Consumption, Acreage
US - Over the next three months, the prices of corn and soybeans have two major objectives. Firstly, prices must allocate remaining old crop supplies to maintain at least pipeline stocks by the end of the current marketing year, and second, prices must direct spring planting decisions, writes Darrel Good, Agricultural Economist at the University of Illinois.


For soybeans, the USDA now projects that the combined total of domestic crush and exports during the current marketing year will reach 3.245 billion bushels. That is only eight million bushels, or 0.25 per cent, less than the total of last year. At the projected level of use, year ending stocks would total only 140 million bushels, or 4.2 per cent of total use that includes seed, feed, and residual uses. Year ending stocks cannot be reduced much below 140 million bushels and still maintain pipeline supplies so total use cannot exceed current projections by a substantial amount.

During the first quarter of the current marketing year, soybean crush and exports totalled 1.063 billion bushels, 82 million (8.4 per cent) more than during the first quarter last year. Use during the remainder of the year, then, will be limited to about 2.182 billion bushels, which is 90 million bushels (four per cent) less than use during the same period last year. The pace of consumption clearly needs to decline and that decline has been occurring. The National Oilseed Processor Association estimates the December 2010 crush by their members was 11.5 per cent below that of December 2009. If the national crush was down 10 per cent, the December 2010 crush was 17 million less than in December 2009.

Based on weekly export inspection figures, US soybean exports from 1 December 2010 through 6 January 2011 were 40 million less than that of a year ago. The total of crush and exports since December 1, 2011, was 57 million bushels, or nearly 14 per cent, less than the total of a year ago. Soybean consumption has slowed much more than the approximately four per cent needed to ration current supplies. Consumption for the rest of the year needs to be only 33 million less than that of a year ago.

For corn, the USDA now projects 2010-11 marketing year consumption at 13.43 billion bushels. That is 364 million bushels, or 2.8 per cent, more than consumed last year. At the projected level of consumption, year ending stocks will total only 745 million bushels, or 5.5 per cent of consumption. Stocks cannot be reduced much below that level and still maintain pipeline supplies so total consumption cannot substantially exceed the current projection.

During the first quarter of the marketing year, corn consumption totalled 4.117 billion bushels. That is 253 million bushels, or 6.5 per cent, more than consumed in the same quarter a year earlier. Use during the remainder of the year will be limited to about 9.313 billion bushels, which is only 111 million bushels, or 1.2 per cent, more than consumed during the same period last year. Corn exports from December 1 through January 6 were 21 million bushels (15.4 per cent) larger than during the same period last year. Ethanol use of corn was 55 million bushels (11.6 per cent) larger than during the same period a year ago. Total non-feed use of corn since 1 December was 76 million bushels (13.6 per cent) more than use of a year earlier. Depending on the rate of feed and residual use since 1 December, it appears that total corn consumption during the rest of the year can exceed that of a year earlier by only about 35 million bushels.

It appears that soybean prices have increased enough to ration current supplies but corn prices have not, although the demand for US corn and soybeans will still be influenced by the outcome of South American production. It appears that the Argentine corn crop, and perhaps the soybean crop, could be smaller than the current USDA forecast, further increasing the export demand for both crops.

The prospects for both very tight year-ending stocks of corn and soybeans and a continuation of strong demand implies that 2011 crops need to be large. More acreage of both crops in the US may be needed to meet projected consumption levels at reasonable prices and to start re-building domestic stocks to a more acceptable level.

Planted acreage of all crops in the US declined by 8.3 million acres from 2008 to 2010. At the same time, acreage enrolled in the Conservation Reserve Program declined by 3.4 million acres. These changes suggest that as much as 11.7 million acres of additional crop land (including double-cropped acres) may be available for planting in 2011. Of that total, 3.7 million has already been planted to winter wheat. Double-cropped acreage of soybeans following wheat harvest could increase by two million acres, following a similar decline last year. That leaves six million acres for additional acreage of spring planted crops in 2011. Soybeans may not require any of that acreage due to increased double cropping. Assuming that corn consumption remains near the 13.4 million bushel level next year, that year ending stocks need to expand by at least 500 million bushels next year, and that the 2011 average corn yield is near the trend of 159 bushels, most of that six million acres needs to be planted to corn.

Based on the need to reduce the pace of consumption and to aggressively expand acreage, corn prices likely need to remain high in absolute terms and relative to other crop prices for an extended period.

More Declines in US Market Pigs (January 2011)
By Chris Harris, Editor-in -Chief. Our snapshot of the ongoing global pig industry trends as reported in January 2011
The latest US census records a drop in hog and pig numbers in the US of 1.2 per cent compared to 2.6 per cent a year ago, according to the latest issue of Whole Hog.

The breeding herd was also down, by 0.9 per cent and the number of market pigs fell by 0.8 per cent but the Whole Hog reports that this is a vast improvement on the figures from the last census.

In Europe, the Whole Hog says that the German breeding herd and pig numbers are stable.

The total number of pigs in Germany is 26.87 million according to the latest census, just 0.1 per cent up on the census in November 2009.

The breeding herd is reported to be 2.23 million.


New Peak of 2011 Pig Price Cycle Looks in Reach
The Whole Hog says that the New Year has opened on a positive note for exporters.

The global pig price cycle has moved up and the Whole Hog says that if the momentum carries on, the price cycle could break through the 2005 peak.

Globally, pig meat production grew by just one per cent in 2010 to 107 million tonnes, the second poorest growth in a decade.

Production is down in both the EU and US and only China is showing any significant growth in Asia, the Whole Hog says.

In China, production is up by two per cent to 50 million tonnes.

The Whole Hog says that the FAO reports that weather conditions have affected grain stocks and it is posing the question of whether the world is heading for another food crisis.

The immediate effect of high feed prices has been to cut the expansion in pig production, which will firm up the market as supplies become tight, the Whole Hog says.

In Europe, there have been three consecutive months when pig prices have been up.

However, the Whole Hog warns that another month will show whether this is a trend and in the next month, Europe will also see what effect the dioxin scare in Germany has had on the market.

In the Euro-zone, the average price for pigs has risen by 5.5 per cent over the year to reach €139.25 per 100kg.

Canadian Trade Pattern Shifts
Canada's pork exporting companies have been shifting their focus.

While exports between January and October last year grew by 3.9 per cent, trade has been falling to markets such as Australia, Hong Kong, Taiwan and South Korea, but have been growing to the USA, Japan, Mexico, Russia, China and the Philippines.

For the US, however, exports are failing to show a solid recovery.

The October figures show a one per cent fall in exports compared to October 2009, but the year-to-date figure of 1.522 million tonnes is up by 1.9 per cent.

The Whole Hog says that US exporters will be lucky to show a two per cent rate of growth for the full year.

The Australian trade balance is continuing to improve – slightly – with imports declining and exports either level or starting to rise.

In October, Australia exported 3,001 tonnes of pig meat worth A$9 million, a rise of nine per cent on October 2009.

Japanese pig meat imports have grown in the first nine months of 2010, with Canada making the most significant gains.

Canadian pig meat imports increased by 11 per cent on 2009 and imports of US pig meat are up by 4.8 per cent.

However, the Whole Hog reports that pork imports to South Korea to October last year have fallen across the board by 2.4 per cent.

The US has seen the greatest decline – down by 14 per cent – but is still the number one exporter of pig meat to South Korea. Canadian imports are down by five per cent, Danish imports are down by nine per cent and Chilean imports down by 0.3 per cent


Chris Harris, Senior Editor

Tuesday, January 18, 2011
Pork Commentary: No Break in Grain Markets
CANADA - This week's North American Pork Commentary from Jim Long.
Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
The USDA released a revised 2010 crop production report last week. The corn crop was revised down to 12.45 billion bushels 600 million bushels lower from the crop a year ago. Soybean production was trimmed to 3.33 billion bushels. The USDA lowered US and world ending stocks in corn and soybeans.

When the dust cleared, March corn had gained 45 cents a bushel while March soybeans jumped 57 cents a bushel. Good for grain producers but it would take the optimism of a child seeing a pile of manure and figuring a pony is inside to see much upside for the hog market. The hog to corn ratio is now below 12 to 1. Six months ago, it was 24 to 1. There is never swine herd expansion at a 12 to 1 ratio. We expect history will repeat itself.

We can continue to thank our Government leaders who have sold out the poultry and livestock industry with the crazed idea that corn ethanol production is the panacea for fueling vehicles. Subsidising the heck out of corn ethanol while leaving meat producers on their own. We pay taxes too?!

Look no further than China. They do not subsidise corn ethanol production, it is illegal to produce corn ethanol in China.

Last week, we talked to a grain producer with several thousand acres. He said that in his opinion, corn ethanol has had little effect on grain prices due to the DDGS that can be feed. Our answer if corn ethanol can stand on its own, it doesn't need subsidies and tariff protection. Let's level the playing field and at the same time stop mandating ethanol use. Check the fuel mileage of E85 versus regular fuel. How is the lack of efficiency economic or environmentally sound?

Hog Markets
The Iowa–Southern Minnesota price last Friday was $73.42, while pork cut outs were 85.14. The $12 spread is about $25 per head margin for packers. Packers are making very good money. Time will tell as the supply of hogs decline seasonally if this spread can be maintained.

Of note: Many of the same packers are in the beef business where packer margins are low or next to non-existent.

The latest Iowa–Southern Minnesota market weights are 275.6 pounds live weight up 6.8 pounds from a year ago. To see a bounce in market hog prices we believe that we will have to see weights start coming down from this unprecedented level.

Lean hog futures continue strong reflecting the scenario of supply and demand. Friday close June LH 95.475, October 83,650. It is very fortunate that the lack of supply of pork with perceived demand strength is pushing future prices higher. With $6.00 corn the losses would be devastating if it were not for these potential higher prices.

The continued strength of the small pig market is a sign of bullish sentiment for high hog prices. Last week US cash early weans averaged $58.68(high $67.00), while 40 pound cash feeder pigs averaged $75.13(high $82.00).

Summary
We will be at the Banff seminar this week. We will give a report in next week's Commentary. If you are coming to the Banff seminar, join us Tuesday night at the Genesus reception St. James Gate – Olde Irish Pub, Banff – 9 pm.


Author: Jim Long, President & CEO, Genesus Genetics

CME: US Pork and Beef Exports Rising
High grain prices are not the only similarity between the fall of 2010 and the summer of 2008: pork exports soared in November and beef exports kept climbing, write Steve Meyer and Len Steiner.


 Both contributed to last fall’s strong wholesale level demands for beef and pork that we have chronicled on several occasions. Some highlights of the Department of Commerce’s and USDA’s export data, released last Friday, are:

Pork exports were 6.7 per cent higher on a carcass weight basis and five per cent higher on a product weight basis. The Commerce Department reports that pork export value in November was $443.4 million, 15 per cent higher than one year ago. The US Meat Export Federation reported that November’s performance means January-November 2010 exports have amounted to $43.61 for every hog slaughtered in the US November exports amounted to $44.80 per head slaughtered


Japan remains our largest market in terms of both pork tonnage and value. November shipments to Japan were 10.2 per cent higher than last year and bring the 2010 total to 1.173 billion pounds carcass weight, virtually even with the level of 2009.


Mexico once again challenged for that top spot in November, importing a record 105.93 million pounds of US pork. That figure is 30.4 per cent higher than one year ago and comes on the heels of three decidedly down months.
 China/Hong Kong reclaimed the number three spot in the list of US pork export markets. November shipments of 43 million pounds carcass weight were 23 per cent higher than last year and bring the year-to-date total to 314.3 million pounds, 1.5 per cent lower than in 2009. November also marks the second highest month for shipments to China/Hong Kong since the 2008 surge ended in August 2008.


US pork exports to Russia reached their highest level since September 2009. November shipments amounted to 27.9 million pounds carcass weight, 36 per cent larger than one year ago. Year-to-date exports to Russia are still 47 per cent smaller than last year due to trade restrictions early in the year.


Canada remains a steady number 4 customer for US pork, with year-to-date shipments up five per cent from 2009 at 389 million pounds.


November beef exports totaled 215.6 million pounds carcass weight. That figure is 25 per cent larger than last year and the second highest since the 2003 BSE-related export interruptions – second only to August 2008.


Mexico remains our largest beef customer and November shipments southward were 12 per cent larger than last year. 2010 will not be a red-letter year for Mexican exports though as shipments are still down 21.6 per cent through November.


Shipments to every other major US beef market except Vietnam (which transships product to China and is down 24 per cent) and Canada (+4.0 per cent) are sharply higher through November. Russia leads the way in percentage terms (+508 per cent) but Korea and ‘Other’ markets are the big gainers in tonnage terms at +128.4 million and +116.4 million pounds, respectively. Those increases amount oto 105.6 per cent and 65.1 per cent of 2009 shipments for those two markets.


November beef exports were valued at $389.5 million, nearly 50 per cent larger than one year earlier. Year-to-date value is up 30 per cent from 2009.

US Grain Exports Continue Despite Korea's FMD
US - US exports to Korea may be slightly affected by a recent bout of foot-and-mouth disease (FMD) but not to the point of great concern, the US Grains Council said.


On 29 November 2010, an outbreak of FMD was first detected in the Republic of Korea and has since spread throughout the country. With more than 100 confirmed cases, this outbreak marks the country’s worst battle with the disease since 2002, which resulted in the slaughtering of 160,000 head of livestock.

The Korean government, led by its Ministry of Agriculture, Forestry and Fisheries (MAFF), has been aggressively engaged, taking significant measures to halt the spread of FMD.

“The Korean government is taking this current outbreak very seriously,” said Byong Ryol Min, USGC director in Korea. “Last week, the government instructed all Korean feed millers and dealers to interrupt feed production and delivery for over 24 hours and implemented a full scale biosecurity measure to mitigate or stop further outbreak of FMD.”

“According to news reports, about 1.5 million animals have been slaughtered thus far, including 120,600 head of cattle or 3.6 per cent of the country’s total inventory. About 1,375,000 hogs have been culled and 4,400 goats and deer. MAFF also decided to vaccinate 210,000 hogs in the infected concentrated hog farming areas.”

While the numbers may seem alarming, Min projected that if no further outbreaks occur in Korea this year, the nation’s total mixed feed consumption will be decreased by 2-2.5 per cent compared to 2010. While this is certainly an unanticipated, short-term disruption in Korea’s demand for feed grains, longer term demand for US grain remains strong.

“Korea imported 5.9 million metric tons (232.3 million bushels) of corn for feed use during January – November 2010, 5.4 million tons (212.6 million bushels) or 92 per cent of which came from the United States. The country also imported 1.9 million tons (74.8 million bushels) of corn for food and industrial use during that same period, of which 1.2 million tons (47.2 million bushels) or 64 per cent is from the United States,” he said.

“Considering the fact that Korea imported nearly 2 million tons of feed wheat during the first 11 months of 2010 and the fact that feed wheat prices will be quite strong in 2011, the disease alone may not badly affect Korea’s feed corn imports from the United States.”

Two Million South Korean Livestock Culled
SOUTH KOREA - The authorities have ordered the culling of some two million livestock to fight foot and mouth disease (FMD).


South Korea has ordered the culling of close to two million livestock across the country in order to slow the spread of the highly contagious foot and mouth disease (FMD), the government said today (17 January), reports Yonhap.

The farm ministry said it has ordered a little over 1.98 million cattle, pigs, goats and deer destroyed on 4,155 farms since the first FMD case was confirmed on 29 November last year.

Pork Exports Achieved 2010 High in November
US - November exports of US pork and beef reached their highest monthly volumes in more than two years, according to results compiled by the US Meat Export Federation (USMEF).
 

Pork exports totalled 177,203 metric tons valued at $443.4 million – increases of five per cent in volume and 15 per cent in value over November 2009. For the period January to November, exports were up two per cent in volume (1.73 million metric tons) and 10 per cent in value ($4.34 billion). The cumulative value total is just four per cent below the all-time record pace set in the first 11 months of 2008. For the year, exports accounted for 23.6 per cent of production with a per-head value equivalent of $43.61 ($44.80 in November alone). For the same period in 2009, exports equated to 22.5 per cent of production with a per-head value of $38.42. In the record export year of 2008, the per-head value was $42.30.

Beef export value in November was $389.5 million, an increase of nearly 50 per cent over November 2009. By volume (101,323 metric tons), beef exports exceeded the year-ago level by 32 per cent. For the first 11 months of 2010, exports were 18 per cent above 2009 in terms of volume (964,369 metric tons) and 30 per cent higher by value ($3.67 billion). The value total is about one per cent ahead of the 2003 pace when beef exports went on to set a single-year record of $3.86 billion. Exports accounted for 11.6 per cent of production with a per-head value equivalent of $150.36 ($178. 20 in November) – up dramatically from the 2009 totals of 9.8 per cent and $117.80.

"November was clearly one of the best months on record for US meat exports," said USMEF President and CEO Philip Seng. "With economies improving throughout the world, US pork and beef are well-positioned for strong growth. We worked through some very difficult economic circumstances in 2009 but we're now seeing those persistent marketing efforts pay big dividends as exports are adding more and more value to every animal produced."

Mexico, Canada, ASEAN post big gains for pork, while Japan still shines in terms of value

January-November exports to Japan, the leading value destination for US pork, broke the $1.5 billion mark for the third consecutive year, exceeding the previous year's pace by six per cent. In terms of volume (397,528 metric tons), exports to Japan are up two per cent. Mexico is the leading volume destination at 491,314 metric tons – up nine per cent and just short of the single-year record. Export value to Mexico has already set a new record of $890.6 million.

Pork exports to Canada for the year are up seven per cent in volume (164,767 metric tons) and 18 per cent in value ($562.6 million). Despite a down year for Viet Nam, exports to the ASEAN region – led by strong results in the Philippines and Singapore – are up 19 per cent in volume (62,006 metric tons) and 32 per cent in value ($125.1 million).

Other market highlights include:

For the China/Hong Kong region, January-November exports were 11 per cent higher in volume (254,554 metric tons) and seven per cent higher in value ($405.8 million). Exports to China were up significantly over 2009 but US pork was absent for much of that year due to A-H1N1 influenza restrictions. Exports to Hong Kong were lower, offsetting some of the gains in China.


Exports to Russia were down for the year but US pork got off to a slow start in 2010 due to very limited market access. November export volume (11,214 metric tons) was still lower than in 2009 but value ($31.76 million) was actually higher. With nearly 59,000 metric tons of muscle cut exports, the US has filled its 2010 quota (57,500 metric tons).


Exports to Australia set a new single-year record in both volume (48,673 metric tons, up eight per cent) and value $136.9 million (up 27 per cent).


Latin American markets continue to perform very well, with exports to Central and South America up 32 per cent in volume (54,123 metric tons) and 41 per cent in value ($128.5 million). Free trade agreements have helped boost exports to the leading markets of Honduras and Guatemala and strong growth to Colombia could also be accelerated through approval of a pending FTA. Exports to the Caribbean were up seven per cent in volume (39,780 metric tons) and 20 per cent in value ($85.2 million).

900 More Farms Closed as Dioxin Bill Reaches €100M
GERMANY - The latest dioxin scare has re-emerged as Germany closes over 900 more farms following delayed information from another feed manufacturer about sales of contaminated feed.


Germany's dioxin scare spread as 934 farms in four states were closed after receiving dioxin-laced animal feed, according to Deutsche Welle. The closures will add to the €100-million price tag the farmers' union attributed to the scandal.

Authorities in the state of Lower Saxony discovered a producer suspected of selling dioxin-contaminated feed had hidden deliveries to 934 farms, German Agriculture Minister Ilse Aigner said on Saturday (15 January).

The farms have been temporarily shut, and Ms Aigner called for immediate consequences.

"This is a scandal," she said, adding that she expected a detailed report from Lower Saxony Premier, David McAllister, by the evening of 15 January.

Elevated levels of dioxin have been traced to one fats manufacturer. The numerous feed companies that buy its fat have faced testing all last week to prove their products met the European Union's dioxin standards of no more than one-trillionth part of food for human consumption.

Federal agriculture officials in Berlin said the latest feed-mixing company to be implicated had only just been spotted and that there was no indication it sold any tainted food.

Berlin officials said the Lower Saxony feed mixer had failed to inform authorities it had bought fat from Harles and Jentzsch, the company at the centre of the scare.

Prosecutors are now investigating whether the company's non-reporting was deliberate. It had supplied farms in Lower Saxony, as well as the states of North-Rhine Westphalia, Brandenburg and Bavaria, reports Deutsche Welle.

Hefty price tag for farmers
The discovery of the toxic chemical dioxin in animal feed has triggered a health alert and hit sales of German eggs and pork. Authorities are struggling to contain the scare, which began on 3 January, when German officials said feed tainted with dioxin had been fed to hens and pigs, contaminating eggs, poultry meat and some pork.

Damages from the ongoing scandal would be much greater than the immediate costs of testing, according to Gerd Sonnleitner, president of Germany's national farmers' union.

"The damage from the disruption in the market will be many times the direct damage," he said.

Deutsche Welle reports that Mr Sonnleitner put the price of sequestering farms, requiring laboratory clearance and destroying produce that failed dioxin tests would cost German farmers €100 million (US$130 million).

This will prove to be interesting.When the goats were in lock down in the US,for the most part they were housed together,males and females and the start of the breeding season.Now if housed together,different breeds,the strongest and biggest bucks will have the largest share of the does.This would mean there is a great chance the offspring that will be born in the RP will in fact be crossbreeds at the F1 level.We know that at the F1 level,offspring can take more after the sire side or can take after more on the dams side,unpredictable.What will become of these F1 males??Unless one is line-breeding at the F1 level,these bucks are rather uselss as genetic material.I hope these questionable bucks will not be pawned off on the rural provincial farmers (silent majority) as PL480 goats from the USA.I wonder what or if any safety net is in place, not to pawn these off on those with less experience in the business of goat genetics.The million dollar question.

Pig Feet and Ears Included in Import Ban
CHINA - Pork bi-products from Germany are atop the Chinese government's list of newly banned imports, a senior German agricultural ministry official said yesterday.


A pork vendor at a traditional market in Huaibei City, Anhui Province organizes animal bi-products in her stall in this 2009 file photo. China banned the import of German pork products including pig feet and ears Tuesday. [Photo:CFP]"Most of the pork imported into China was pork bi-products such as pig's ears and pig's feet," the spokesperson for Germany's Federal Ministry of Food, Agriculture and Consumer Protection told the Global Times by phone on Thursday.

The Berlin-based official, speaking on condition of anonymity, said agricultural officials there had met with staff from several embassies in the German capital to detail precautionary measures taken to prevent more dioxin from entering the food chain.

The poisonous chemical entered the German food chain via contaminated fats that are a key ingredient in animal feeds fed to pigs and chickens.

China's food-quality regulators, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), announced a ban on pork and egg products from Germany Tuesday.

As of press time Thursday, AQSIQ declined to disclose further details about what products will be banned specifically or whether consumers should refrain from eating German products already in circulation.

AQSIQ's request for a faxed list of interview questions also went unanswered Thursday.

China's ban was sparked by a worldwide food scare starting last week that later spread to South Korea. Wednesday, officials in Hong Kong said all German pork products would be held for inspection and released to the market only after food safety officials were satisfied they were safe for consumption.

A German embassy official in Beijing told the Global Times Thursday that short-term exposure to trace amounts of the chemical in pork is not a health risk.

German exports of pork to Chinese mainland in 2009 stood at some 7,000 tons, valued at 5.9 million euros ($7.75 million), while global German pork exports were 2.2 million tons worth 4.4b euros ($5.78 billion), according to the German agricultural ministry.

An official at imported food retailer Jenny Lou's told the Global Times the Beijing-based chain sells products from Germany - including pork sausages - but was not aware of any plan to remove the items from store shelves.

Officials from grocers Walmart and Carrefour declined to confirm whether any products on their store shelves would be included in the ban.

Shenzhen-based Nogogo Trading Company, an importer in China of German sausages, said it was business as usual Thursday.

"I don't know anything about a ban on pork products," Ren Ya, a sales manager with Shenzhen Nogogo Trading Company, told the Global Times Thursday.

Food Index and what may be coming in the next few months.Remember the food crisis worldwide back in 2008.All reports are showing a return for 2011.
One index is the rising price of oil worldwide.This usually means a rise in transportation followed by a rise in fertilizer which means a rise in livestock feeds and finally the consumer who is left scrambling to find the best affordable protein value to feed their families with the budgets that most have when it comes to food for the table.

The customer is king and when the consumer no longer supports one section of the livestock industry the demand drops while the producers costs of operation rise but cannot realize higher prices at the gate.Demand drops and more animals become surplus,slaughter numbers drop in one section but will rise in another as the consumer is shopping shopping around for the best value.

The food index for China and India is showing almost rising daily prices along with inflation.When prices become too expensive the consumer will start to voice their concerns and no Govt. wants to see civil unrest in the streets.The added pressure on the respected Govt. to subsidize foods becomes even greater adding to more borrowing.

Will be interesting to see what happens in 2011 with respect to expected rising food prices worldwide.Could be touch and go for producers once livestock feeds become too expensive and some will be forced to close shop and ride out the wave.

Contaminated Pork Sold in Poland, Czech Republic
POLAND & CZECH REPUBLIC - Pork from Germany suspected to be contaminated with dioxin was sold in early January in Poland and the Czech Republic, regional health authorities in eastern Germany said Thursday.


Meat from 35 pigs sold to a firm in Poland and to two firms in the Czech Republic was likely to have already been consumed, said the authorities in Saxony-Anhalt, where the abattoir that slaughtered the animals is located, according to Food Safety Net.

On Thursday Japan said it had ordered importers to report all shipments of pork, poultry and eggs from Germany amid growing concerns over its dioxin scare.

The scare began last week when it emerged that a German firm may have supplied some 3,000 tonnes of fatty acids only meant for industrial uses to makers of animal feed late last year. The feed was then widely distributed.

Russia Doubles Meat and Poultry Quota
RUSSIA - Russia’s Ministry of Economic Development (MED) has announced the initial distribution of 2011 tariff-rate quotas (TRQ) quantities to importers, which includes an increase US frozen beef quota allocation from 21,700 to 41,700 MT.


This increase in US quota will result in significant reductions for "other countries".

The poultry TRQ has been reduced to 350,000 MT and narrowed in product scope, and will not have country-specific allocations in 2011.

Fresh beef, pork, and pork trimming TRQ remain unchanged from 2010. MED will distribute the remaining TRQ quantities to importers by April 15, 2010.

“The American Meat Institute would like to thank Ambassador Siddiqui and the staff at the Office of the United States Representative (USTR) for their efforts in negotiating this increased allocation, which represents more than an estimated $75 million in additional 2011 frozen beef exports,” said AMI President and CEO J. Patrick Boyle.

World Agricultural Supply and Demand Estimates - January 2011
While US supplies of corn, wheat and soy are expected to be down this month, global supplies of wheat are up, although coarse grain supplies and soybean production globally are lower, according to the latest USDA World Agricultural Supply and Demand Estimates.

Livestock, Poultry and Dairy
The estimate of 2010 red meat and poultry production is raised from last month, reflecting higher production of beef, pork, broilers, and turkey. The forecast of production for 2011 is also raised for beef and broilers, but lowered for pork. The turkey production forecast is unchanged from last month. The increase in beef production reflects large placements of cattle during the fourth quarter of 2010 which will be ready for slaughter during mid-2011. USDA will release its Cattle report on January 28 providing an indication of producer intentions for heifer retention in 2011 and feeder cattle availability. Broiler production forecasts are adjusted to reflect relatively heavy bird weights. Pork production is reduced slightly for 2011. USDA’s Quarterly Hogs and Pigs report indicated that producers intend to farrow fewer sows in the first half of 2011 but continued strong growth in the number of pigs per litter implies relatively abundant supplies of hogs for slaughter will be available during 2011. Higher forecast hog weights will also partly offset the effects of lower farrowings on pork production, but recent increases in weights are not expected to be sustained during the year. The forecast of egg production is unchanged from last month.

The forecast for beef exports for both 2010 and 2011 is unchanged from last month but the forecast of beef imports is lowered as a weak US dollar and tight supplies in several exporting countries limit shipments. The pork export forecasts for 2010 and 2011 are reduced slightly from last month as higher pork prices are expected to more than offset weakness in the US dollar. The broiler export forecast is raised for 2010 but the 2011 forecast is unchanged from last month.

The cattle price forecast for 2011 is raised to reflect continued strong demand for cattle and tightening supplies of fed cattle. Hog prices for 2011 are forecast higher as demand for hogs remains strong. The broiler price forecast is lowered on larger supplies of broilers and competing meats. Egg prices are forecast higher.

The milk production estimate for 2010 and forecast for 2011 are unchanged from last month. Ending stocks for 2010 are reduced due to expected low stocks of butter and nonfat dry milk (NDM) at the end of the year. Imports for 2010 and 2011 are reduced due to low US prices relative to those internationally coupled with a weak US dollar. Skim-solids basis exports are raised as NDM exports are expected to be supported by tight world supplies into mid-2011. Fat basis exports for 2010 are lowered from last month on weaker-than-expected exports of butterfat.

Butter, NDM, and whey prices are forecast higher, but the cheese price forecast is lowered. Tighter beginning stocks support a higher butter price forecast while generally strong exports of NDM and whey will support higher prices. The cheese price forecast is reduced from last month on moderate demand. The Class III price forecast range is reduced as the lower forecast cheese price more than offsets the higher whey price forecast. The Class IV price forecast is raised as both the butter and NDM price forecasts are raised. The all milk price is forecast to average $16.10 to $16.90 per cwt for 2011.

Wheat
US wheat ending stocks for 2010/11 are projected 40 million bushels lower this month as a reduction in expected feed and residual use is more than offset by higher projected exports. Feed and residual use is projected 10 million bushels lower as December 1 stocks, reported in the January Grain Stocks, indicate lower-than-expected disappearance during September-November. Exports are projected 50 million bushels higher reflecting the pace of sales and shipments to date and reduced competition with lower foreign supplies of milling quality wheat. At the projected 1.3 billion bushels, exports would be the highest since 1992/93. Most of the increase is expected in Hard Red Winter and Soft Red Winter wheats, but exports are also raised slightly for Hard Red Spring and white wheats. The marketing-year average price received by producers is projected at $5.50 to $5.80 per bushel, up from $5.30 to $5.70 per bushel last month.

Global 2010/11 wheat supplies are raised slightly this month as increased beginning stocks are mostly offset by lower foreign production. Beginning stocks for Argentina are up 0.9 million tons with upward revisions to 2008/09 and 2009/10 production estimates. Argentina production is also raised 0.5 million tons for 2010/11 as harvest results indicate higher-than-expected yields. Production in Brazil is raised 0.4 million tons as favorably dry harvest weather boosted yields for the 2010/11 crop. EU-27 production is raised 0.3 million tons based on the latest official estimates for Poland. More than offsetting these increases are reductions for Kazakhstan and Australia. Kazakhstan production is lowered 1.3 million tons based on the latest government reports. Australia production is lowered 0.5 million tons as heavy late-December rains and flooding further increased crop losses in Queensland.

World wheat imports and exports for 2010/11 are both raised slightly. South Korea imports are raised 0.4 million tons, mostly offsetting an expected reduction in corn imports. Imports are also raised 0.2 million tons each for Thailand and Vietnam based on the pace of shipments to date and the increased availability of feed quality wheat in Australia. Imports are lowered 0.5 million tons for EU-27 based on the slow pace of import licenses to date. Major shifts among exporters are projected as importers focus on US supplies to meet their milling needs. Australia exports are reduced 1.5 million tons as quality problems limit export opportunities. Kazakhstan exports are reduced 1.0 million tons with lower supplies. While Argentina marketing-year (December-November) exports are raised 0.5 million tons, exports during the remainder of the July-June world trade year are expected to be lower based on the slow pace of government export licensing.

Global 2010/11 wheat consumption is projected 1.2 million tons lower, mostly reflecting reduced wheat feeding in EU-27, the United States, and Kazakhstan. Food use is also lowered for EU-27 and Pakistan. Partly offsetting are increases in feed use in South Korea, Thailand, and Vietnam, and higher expected residual loss in Australia with the rain-damaged crop. Global ending stocks are raised 1.3 million tons with increases for EU-27, Argentina, and Australia, more than offsetting the US reduction.

Coarse Grains
US feed grain supplies for 2010/11 are projected down reflecting lower corn production. US corn production is estimated 93 million bushels lower as a 1.5-bushel-per-acre reduction in the national average yield outweighs a 183,000-acre increase in harvested area. A 5-million-bushel increase in projected US corn imports slightly offsets the reduction in output. Corn feed and residual use is projected 100 million bushels lower based on September-November disappearance as indicated by the December 1 stocks. Corn used for ethanol is raised 100 million bushels offsetting the reduction in expected feed and residual use. Record December ethanol production, as indicated by weekly Energy Information Administration data, boosts corn use to date.

Ending corn stocks for 2010/11 are projected 87 million bushels lower at 745 million. This is down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5 percent, the lowest since 1995/96 when it dropped to 5.0 percent. The 2010/11 marketing-year average farm price projection is raised 10 cents on both ends of the range to $4.90 to $5.70 per bushel as cash and futures prices are expected to strengthen. Heavy early season marketings of corn priced well below current cash price levels are expected to limit the upside potential for the weighted average price received by producers.

Global 2010/11 coarse grain supplies are projected lower this month with reduced corn, sorghum, oats, and rye production only partly offset by higher projected barley production in Argentina and EU-27. Global corn production is lowered 4.7 million tons with the US reduction and a 1.5-million-ton decrease for Argentina as untimely, persistent dryness during late December and early January reduces yield prospects in key central growing areas. Smaller reductions in corn output are also projected for Indonesia and Turkey, each down 0.4 million tons. Global sorghum production is lowered with a 0.3-million-ton reduction for Brazil based on the latest government estimates. Brazil oats production is lowered slightly in line with government estimates. Russia oats and rye production are lowered 0.3 million tons and 0.4 million tons, respectively, based on the latest government indications.

Global 2010/11 coarse grain trade is lowered as higher expected prices and tighter supplies reduce corn imports and exports. Corn imports are lowered for South Korea, Turkey, and the Philippines, but raised for Indonesia. Corn exports are reduced for Argentina and Turkey, with a partly offsetting increase for Canada. Global corn consumption is lowered mostly reflecting reduced feeding in South Korea and Turkey. Global corn ending stocks are projected 3.0 million tons lower with more than two-thirds of the reduction in the United States.

Oilseeds
US oilseed production for 2010/11 is estimated at 100.5 million tons, down 1.2 million from last month. Lower crops for soybeans, sunflower seed, and canola are only partly offset by increases for peanuts and cottonseed. Soybean production is estimated at 3.329 billion bushels, down 46 million bushels based on reduced harvested area and lower yields. The soybean yield is estimated at 43.5 bushels per acre, down from last year’s record of 44 bushels per acre. Soybean crush is lowered 10 million bushels to 1.655 billion bushels. However, higher projected extraction rates for soybean meal and oil leaves production of both products nearly unchanged. Soybean exports are projected at a record 1.590 billion bushels, unchanged from last month. Soybean ending stocks are projected at 140 million bushels, down 25 million from last month.

The 2010/11 US season-average soybean price range is projected at $11.20 to $12.20, up 50 cents on the lower end of the range. However, early season marketings priced below current cash price levels are expected to limit the upside potential for the weighted average price received by producers. The soybean oil price is forecast at 48 to 52 cents per pound, up three cents on both ends of the range. The soybean meal price is projected at $320 to $360 per short ton, up 10 dollars on both ends of the range.

Global oilseed production for 2010/11 is projected at 440.4 million tons, down 2.3 million from last month. Global soybean production is projected at 255.5 million tons, down 2.3 million. The Argentina soybean crop is projected at 50.5 million tons, down 1.5 million from last month due to lower projected yields. Although recent rains will help producers complete planting, earlier periods of unfavourable dryness have compromised yield potential, especially in some of the major producing areas. Paraguay soybean production is raised 0.5 million tons to 7 million due to increased area and favourable yield prospects. Global oilseed ending stocks for 2010/11 are reduced 2 million tons to 68.3 million with Argentina and US soybean stocks accounting for most of the change

Dioxin Scandal Leads to Pig Cull as China Halts Imports
GERMANY - The dioxin scare continues to cause ripples around the world, with China taking the decision Wednesday to halt imports of German pork and egg products following the culling of hundreds of pigs in Germany.


DW-World.de reports that China joined South Korea on Wednesday in halting the import of German pork and egg products after high levels of the chemical compound dioxin were detected in German pigs and animal feed.

Chinese authorities said the ban would take immediate effect, and that all products shipped from Germany prior to Tuesday would now be screened before entering the Chinese market.

South Korea restricted pork and egg imports from Germany on Tuesday because of the affair, while Russia has said it may also take action.

The decision was taken after German authorities on Tuesday detected high levels of dioxin in pork from a farm banned from trading following the outbreak of the scare last week.

The dioxin find pushed authorities to order the cull of hundreds of pigs from the farm in the town of Verden in northern Germany, which was one of around 4,700 farms shut down while dioxin tests were being conducted. Most of the farms have since reopened, with only a few hundred still subject to restrictions.

The Verden farm was one of those supplied with animal feed containing ingredients made by a firm suspected of knowingly selling some 3,000 tons of fatty acids meant only for industrial use. Samples of the fat contained more than 70 times the approved amount of dioxin.

Dioxins are formed by burning waste and through other industrial processes and have been shown to contribute to increased cancer rates and affect pregnant women.

The scandal broke last week when German investigators found excessive levels of dioxin in batches of eggs and chickens, leading authorities to freeze sales of poultry, pork and eggs from thousands of farms.

The German government has said so far that there is no immediate risk to public health, and that the dioxin levels detected did not threaten humans if consumed in small amounts. Officials added, however, that the contamination must be stamped out to avert serious long-term risks.

"The damage that has been caused is immense, not only financially but also when it comes to consumer trust ... This is a scandal, as consumers who expect safe food were duped," German Agriculture Minister Ilse Aigner said on Monday. "This incident must and will have consequences."

German officials were due to brief their EU counterparts in Brussels on the latest developments on Tuesday, and were expected to face questions on the root cause of the incident and their response to it.

EU officials said Monday that some tainted animal feed had also been exported to France and Denmark.