Monday, May 21, 2012

Markets Opening to EU and UK Beef Products

ANALYSIS - The UK market for both beef and lamb has been declining for several years, but now it appears to be stabilising and prices are rising, writes Chris Harris.
 



Domestic consumption for beef has been robust but the home consumption of lamb has been suffering, Dr Phil Hadley the southern senior regional manager for the English Beef and Lamb Executive told the EBLEX Northern Conference.
 
He said that the global supply is changing and the competition and demand for beef and lamb is increasing, while the price gaps are narrowing.
 




Dr Phil Hadley EBLEX southern senior regional manager
 
In this market, English beef and lamb has a solid export base and demand is growing and this is offering a great opportunity in new markets Dr Hadley said.
 
One of the major opportunities for the British and specifically the English beef and lamb sector is that adding value to fifth quarter products along the chain will be a key element in breaking into new markets and finding new consumers.
 
UK cattle slaughtering last year slid to 2.126 million and this year the slaughter figures are expected to fall slightly to 2.07 million this year and go down further next year to 2.052 million.
 
The dairy herd in the UK has seen numbers fall from 2.339 million in 2000 to 1.8 million last year. The beef herd has also fallen, but not as steeply from 1.783 million in 2000 to 1.642 million last year. The prediction is for the numbers to stabilise and to run flat over the next two years.
 
Lamb slaughtering are expected to remain flat at about 12.5 million from last year through to 2013.
 



UK Prime Cattle Slaughterings

Source: EBLEX

Dr Hadley said that there has been a major shift in global production. The US has reduced its herd numbers to such a degree that they bare at their lowest for 60 years, South America has ceased being a major exporter to the EU, because of concerns over disease and traceability and production difficulties. New Zealand has seen a drop in beef cattle numbers and the Australian market has been hit by both drought and floods.
 
All this has come together to allow the EU to once again become a net exporter. In 2011, the next surplus of exports reached 312,000 tonnes.
 
While this shift in the dynamics of the global beef market have been taking place, world beef prices have been rising and sharply since 2010. At the same time the US calf crop has been falling.
 
"Although there is a slight slowing down in the drop in the US herd, it is still going down," said Dr Hadley.
 
South American beef imports into the EU hit their highest point in 2005-2006, but they have slumped to have that number now largely because of strategic political changes in the Mercosur states.
 
Even in the lamb imports into the EU, New Zealand, once considered a threat to UK and Irish lamb exports has seen the amount coming into the EU down so that it is not always fulfilling its quota.
 


EU Becoming a Net Exporter
 
With the EU becoming a net exporter, the UK is seeking new markets and many of these are in the developing and emerging nations that have gross domestic product rising at about eight per cent.
 
The opportunities that are presenting themselves for new exports are because these developing countries have 40 per cent of the global population with increasing wealth. It is estimated that China and India will have a middle class increasing to 1.2 billion by 2035 and this increase in wealth consumers will produce a greater demand for meat.
 
Dr Hadley said that it has been estimated that a 10 per cent rising n income produces a five per cent rise in beef consumption.
 
However there is a limited increase in production compared to the rise in demand. There is also expected to be a narrowing of the price gaps between the meat producing nations around the world.
 
The main regions that are going to see an increase in consumption and consequently will become market targets for beef exporters will be Asia, in particular China, and the Middle East and North Africa (MENA).
 


China Seeing a Rise in Demand for Protein
 
China, which has an increasing population and increasing wealth, is already seeing a rise in demand for protein. Already the country has a total meat consumption twice that of the US - although consumption per capita is lower.
 
China consumes 25 per cent of the total meat production. The favoured meat in China is pork and the country has 50 per cent of the world's pigs and consumes 50 million tonnes a year.
 
However, China has also been seeing tight supplies of pig meat, resulting in rising prices. Pork prices have risen 25 per cent year on year producing protests from consumers.
 
The rise in the demand for protein opens the market for beef and lamb into China and in particular fifth quarter products. There is also demand for hides and skins with the UK exporting 11 million sheep skins and 800,000 hides.
 
Dr Hadley said that the OECD and FAO forecast that the real price of meat is expected to rise by 30 per cent between 2011 and 2020 and this is on the back of a 50 per cent rise between 2001 and 2010. Beef and sheep prices are expected to rise by between 18 and 20 per cent up to 2020.
 
"The narrowing of global prices will make the EU and the UK more competitive particularly in the new markets," Dr Hadley said.
 


UK Opening Up More Non-EU Markets
 
The UK has already opened up 40 new non EU markets since 2010 and it is looking to particularly sell fifth quarter products to the Asian region. The amount of fifth quarter material on each animal - 50 kg on a beef animal and between 3kg-4kg in sheep - makes this market potentially very lucrative to the UK industry.
 
Currently the fifth quarter products are worth between five and eight per cent of the carcase value for UK processors, but processors in the Netherlands are able to make up to £36.50 more per carcase on the fifth quarter than the in the UK.
 
"This amounts to a loss to the industry of £96.5 million a year," said Dr Hadley.
 
He said that part of the problem and the loss of income is a poor perception of the value of fifth quarter products and poor treatment of the products in the abattoir often by meat inspectors, who do not respect the products.
 
UK domestic offal consumption has risen by 67 per cent from 2003 to 2008 with a market value of £62 million according to market analysts Mintel. The Agricultural and Horticultural Development Board puts consumption stable at 16,500 tonnes a year worth about £40 million.
 
Liver consumption in the UK is up by eight per cent and worth approximately half of total marketplace.
 
Between 2008-2010 the UK managed to turn the £2.2 million that is cost to dispose of unwanted or unfit offal and fifth quarter products into an income of £13.3 million - a £15.5 million turnaround following a project by MLCSL Ltd.
 
This small turn around in profit has shown the UK industry the potential value the fifth quarter could hold and in seeking new markets in Asia as well as well-set markets in Continental Europe, the industry could exploit the full value of the carcase with products that are not generally sold on the domestic market.

 Chris Harris, Editor-in-Chief

Urgent Action Required on Falling Food Productivity
21 May 2012


US - In advance of the G8 summit, Elanco president Jeff Simmons warns global leaders that food productivity is not keeping pace with food demand now and in the immediate future.

Food inflation combined with inadequate gains in productivity are clear indicators that our ability to feed a rapidly growing population is at serious risk without swift action.
 
During a panel discussion with senior global leaders at the Chicago Council on Global Affairs Symposium "Advancing Food and Nutrition Security at the G8 Summit" in Washington, Mr Simmons urged leaders to take action now to address the challenge of developing more efficient food production systems and pressed for policy alternatives that provide long-term, sustainable solutions to hunger, food inflation and food availability.
 
"Currently, nearly 1 billion people cannot afford 1,880 calories a day and almost 3 billion live on less than $2 a day. These observations show that the time is now to make decisions that support the world's growing food needs," said Mr Simmons. "We're already facing significant challenges to our food system. They must be addressed today."
 
According to the 2011 World Livestock Report issued by the UN Food and Agriculture Organization (FAO), by the end of the decade, the world will need to produce 20 per cent more meat and poultry than we do today – with two-thirds of the need coming from developing countries. By 2050, demand is expected to grow by about 75 per cent. Simmons used new predictions for eggs and dairy to illustrate the impact such demands could have on our food system.
 
Egg Productivity Declining
 
Challenge: Eggs are one of the most basic, affordable protein sources that people around the world depend upon. But, in recent years, production has been declining by one egg per chicken per year. If continued, this trend will require three times more hens (17.7 billion) to deliver the estimated egg needs required by families in 2050.
 
Solution: Adopting new and existing technologies and practices that optimize animal welfare, health, and productivity can restore productivity to necessary growth levels – helping hens produce a modest 1.5 eggs more per year. Such a change in productivity would require just 10.4 billion hens to meet egg demand in 2050 – or approximately 7 billion fewer birds.
 
Per capita milk availability is declining despite 2X production growth
 
Challenge: Global milk production has almost doubled in the past 50 years. Yet, fewer people have access to milk today because populations are growing faster than production gains. In 1950, each person had access to 279g of milk per day. By 2010, milk per capita had dropped 14 per cent to 239g per day.
 
Solutions: The adoption of existing and emerging innovation to dairy production can help accelerate milk productivity to align population and demand growth. For example, China is targeting a near doubling of per capita milk availability to 156g per person per day by the end of the decade. Without significant improvements in productivity this will require 15 million additional cows, and a doubling of the feed and water resources currently used.
 
"Given the right policy environment and access to appropriate technologies, I believe global agriculture can meet these productivity challenges," Mr Simmons said. "If you take the United States for example, in the past 60 years agricultural output has increased 250 per cent while inputs have remained nearly stable."
 
Making Progress a Priority

Mr Simmons urged leaders to take action now and emphasized three clear priorities for overcoming barriers in inspiring progress and enabling people's access to safe, affordable food today:
1.Innovation: It is important to invest in innovative technologies that drive efficient food productivity to meet the growing needs of a rapidly expanding population. Innovation must start with consistent, science-based regulatory processes and public and private support is needed to assure that innovation has the ability to enter the market.


2.Choice: Every country, family and mother deserves the right to make their own choices about the food they feed their families and not live by the choices of others – particularly when those choices impact their children's food. Whether it's a Chinese citizen that wants to add more dairy to the diet as they grow in affluence, or the American consumer that prefers a luxury option, we must not make decisions that limit access to safe protein that meets consumers' needs.


3.Food Trade: As the demand for meat, milk and eggs grows, the challenge is recognizing the impact a global market has on developing counties. Barriers to trade impact availability, inflation, and the price of food. Leaders should consider the global impact of policies outside their borders.

The panel, "Agricultural Innovation: Getting to Scale" also included, Jack Sinclair, Walmart; Hugh Grant, Monsanto; Sam Dryden, Bill & Melinda Gates Foundation; Dyborn Chibonga, National Association of Smallholder Farmers of Malawi; and Janet Chigabatia, Savanna Farmers Market Company.
 
To join the dialogue about how to sustainably feed a growing global population, click here. A copy of Jeff Simmons' white paper, Making Safe, Affordable, Abundant Food a Global Reality is also available on the site.
 

Poultry

Broiler Production Higher in 2013

U.S. broiler meat production is expected to total 37.5 billion pounds in 2013, up 2.5 percent from 2012, with the growth spread over the year as processors expand production in response to generally better conditions. The increase in broiler meat production is expected to come from both a greater number of birds slaughtered and a small increase in average bird weights. There are two primary factors that will likely influence expanded broiler meat production in 2013. The first is the degree to which processors feel demand will reflect expansion in the general economy. The second factor is what integrators expect for changes to corn and soybean prices. At the present time corn prices for the marketing year are forecast to average $4.20- $5.00 per bushel in 2012/13, down from $5.95-$6.25 per bushel a year earlier. This decline will be mitigated by relatively high prices for soybean meal. Prices for 48 percent protein soybean meal are forecast at $350-$365 per ton in 2012/13, compared to $360 per ton the previous year.

Broiler meat production in first-quarter 2012 totaled 9.1 billion pounds, a 2.2 percent decline from the same period in 2011. The number of broilers slaughtered fell by 2.6 percent to 2.1 billion birds. Partially offsetting this decline in birds slaughtered was a small (0.6 percent) gain in the average weight of birds at slaughter to 5.83 pounds. With the number of chicks placed for growout down about 4 percent from the previous year, the number of broilers slaughtered would normally be expected to be down more, but due to the Leap Year first-quarter 2012 had an additional processing day compared with first-quarter 2011.
 
The broiler meat production forecast for second-quarter 2012 is 9.1 billion pounds, down 4.3 percent from a year earlier. Broiler production is expected to be below the previous year until fourth-quarter 2012 when processors are expected to respond to a gradually strengthening economy and lower grain prices.
 
Over the last 5 weeks, (April 7 through May 5), the number of chicks being placed for growout has averaged 3.9 percent lower than in the same period in 2011. In addition, the number of eggs placed in incubators has been down 4.4 percent. These estimates point toward continued declines in broiler meat production in second-quarter 2012 and into the third-quarter.
 
Broiler cold storage stocks totaled 549 million pounds at the end of first-quarter 2012, 17 percent below first-quarter 2011. The decline in cold storage holdings extended to most of the categories in the report. Most of the decrease is attributable to the lower broiler meat production in the first quarter. With broiler meat production forecast lower than the previous year through the first three quarters of 2012, cold storage of broiler products is also expected to be below the previous year through the same period. Cold storage is expected to rise in fourth-quarter 2012 as production rises. Much of the decline at the end of the first quarter is attributable to lower holdings of leg quarters and wings, down 27 percent and 52 percent from a year earlier. Some of the decline, especially for leg quarters, is the result of strong exports during first-quarter 2012.
 
The 12-city wholesale price for whole broilers is expected to average 86 to 89 cents per pound in 2012, up from 79 cents per pound the previous year as lower production through the first three quarters of 2012 is expected to place upward pressure on prices. Prices in 2013 are expected to fall slightly and are forecast at 82 to 89 cents per pound, as expected higher production in 2013 gradually placing downward pressure on prices.
 
Turkey Production To Post Small Increase in 2013

Turkey meat production is expected to increase in 2013 to 6 billion pounds, up almost 1 percent from the previous year and the third consecutive year with a production increase. The production increase is expected to come from both an increase in the number of birds slaughtered and slightly higher average live weights at slaughter. With higher prices throughout 2011 and expected in 2012, turkey producers should have an incentive to increase production in 2013, as long as the general economic indicators remain positive.

In first-quarter 2012, turkey meat production was 1.4 billion pounds, up 3.1 percent from the first quarter of 2011. After rising only slightly in third-quarter 2011 compared to a year earlier and falling in the fourth quarter, turkey processors have responded to the strong prices for whole birds that were present throughout 2011. The increase in turkey meat production was the result of a moderate increase in the number of birds slaughtered (up 1.7 percent) and higher average weights for the turkeys at slaughter (up 1.3 percent). With turkey prices higher throughout 2011, turkey producers have had an incentive to increase production, with total production for 2012 estimated at 6.1 billion pounds, 3.3 percent higher than the previous year.

Turkey Stocks Higher

With higher production expected throughout 2012, cold storage holdings of turkey products throughout the year are also expected to be higher than in 2011. At the end of first-quarter 2012, turkey stocks were 376 million pounds, 15 percent higher than in first-quarter 2011. The increase was from a combination of higher stocks of whole birds, up 6 percent, and increases in stocks of turkey parts and products (up 23 percent). Stocks of whole birds had been lower than the previous year through the first 10 months of 2011, and even though stocks are now higher than the previous year, they are still well below historical levels. For example, at the end of March in 2009, stocks of whole birds totaled 253 million pounds, 96 million pounds or 61 percent higher than at the end of March 2012. Stock levels were also higher for all the other categories of turkey products. While most of the gain in quantity was due to higher cold storage holdings in the unclassified category, stocks of turkey legs were also much higher than the previous year (up 73 percent).

Wholesale prices for whole hen turkeys are expected to average $1.07 to $1.11 per pound in 2012, up about 7 percent from a year earlier. Even with larger beginning stocks and increases in production expected in 2012, whole bird prices are expected to remain above the previous year throughout 2012, although the price gap on a year-over-year basis is expected to narrow considerably as the year progresses. In 2013, any upward pressure on prices from an improving domestic economy is expected to be offset by higher production.

Egg Production Down Slightly in 2013

Table egg production is expected to total 6.6 billion dozen in 2013, down fractionally from 2012. While 2013 is expected to have higher prices for many meat products and improving general economic conditions, egg producers are expected to face lower prices for the remainder of 2012. While the rate of lay is expected to very gradually increase, the decrease in production is expected to come from a cut in the size of the laying flock.

Hatching egg production is expected to total almost 1.1 billion dozen in 2013, a marginal increase after a decline in 2011 and 2012. The expansion in hatching egg production is based on the forecast for higher broiler production starting at the end of 2012 and carrying through 2013.

Egg Production Higher in First-Quarter 2012

Egg production totaled 1.91 billion dozen in first-quarter 2012, up slightly (1 percent) from the previous year. The increase was due to greater production of table eggs at 1.65 billion dozen, up 1.7 percent from the previous year. Production of hatching eggs totaled 258 million dozen, down 3 percent as the production of broiler-type eggs continue down significantly from a year earlier. The average number of birds in the table egg flock during first-quarter 2012 was slightly higher (up 0.7 percent) than in 2011 at 285 million birds. Table egg production for the rest of 2012 is expected to continue to be slightly higher than the previous year during the second and third quarters and about even with the previous year in the fourth quarter. Production of hatching eggs is expected to have the opposite pattern with lower production through the first three quarters of 2012 and higher production in the fourth quarter as broiler processors react to the incentives of a generally better economy, higher prices, and slightly lower grain prices.

Egg Prices Higher in 2013

Better overall economic conditions in 2013 are expected to generate greater domestic demand for shell eggs and egg products, especially from the food service sector. However, higher production is expected to offset the demand and leave overall wholesale egg prices in 2013 at $1.00-$1.08 per dozen, only slightly higher than in 2012.

During first-quarter 2012, the wholesale price in the New York market averaged $1.09 per dozen for Grade A large eggs. This is up almost 3 percent from a year earlier, in part due to the high prices at the beginning of the year carried over from strong fourth-quarter 2011 prices of $1.31 per dozen. Shell egg prices have fallen seasonally since the Easter holiday and second quarter prices in the New York market are expected to be average $0.91-$0.93 per dozen, down 14 percent from the previous year.
 
Egg Exports up to 266 Million Dozen in 2013

Exports of shell eggs and egg products are expected to expand to the equivalent of 266 million dozen in 2013, slightly higher than the forecast for 2012. Higher shipments in 2013 are expected to be generated primarily by stronger demand from a number of Asian countries, including Hong Kong, Japan, and Korea. Egg exports in 2012 are expected to contract, with smaller shipments to Mexico and Canada. One factor that could affect the impact the 2012 forecast is high demands for breaking eggs and egg products from EU countries facing lower production.
 
In the first quarter of 2012, egg and egg product exports totaled 63 million dozen, down 6 percent from the previous year. Much of the export decrease occurred in March, when shipments were down 13 percent from the previous year. The March decline is chiefly the result of sharp drops in shipments to both Korea and the United Arab Emirates. Shipments to Korea during first-quarter 2012 were only 1.1 million dozen, down 88 percent from the same period in 2011.
 
Poultry Trade

Broiler Shipments Rose in March 2012

Broiler shipments rose in March 2012 from a year earlier. March broiler shipments totaled 595 million pounds, a 7-percent increase from last March. U.S. broiler meat exports remain strong in spite of higher leg-quarter prices in the first-quarter of 2012 than in the same period of 2011. Cuba, one of the top seven U.S. broiler markets, imported almost 41 million pounds more of broiler meat from the U.S. in March 2012 than a year earlier. Broiler shipments to Russia, the second-largest U.S. broiler market, were up 96 percent from last year. Other foreign markets such as Georgia, Mexico, and Lithuania also made considerable contributions to March 2012 increase in broiler shipments.

For 2013, it is projected that the United States will ship 6.975 billion pounds of broiler meat to countries around the world. Next year’s projection is less than 1 percent below the 2012 projection for broiler shipments. Two reasons for this small drop include greater domestic demand and a continued decline in shipments to Russia.

Turkey Shipments Continue To Climb in March

March 2012 turkey shipments were up from a year ago. A total of 64.2 million pounds of turkey meat was shipped abroad, a 9-percent increase over March 2011. Turkey shipments to Mexico, Hong Kong, Canada, and the Philippines were all up from a year ago. The largest increase was exports to the Philippines, at 368 percent. Next after the Philippines, shipments to Canada increased 65 percent from last March. Volumes of turkey meat shipped to smaller markets, such as Jamaica and Gabon, were also up in March 2012 compared with a year ago.

Turkey shipments in 2013 are projected to reach an all-time high. It is projected that turkey exports will total 730 million pounds, 1 percent higher than the projections for 2012, which will be a record if it holds. The primary reason for the increase in turkey exports is the continuing increase in shipments to Mexico, the largest U.S. turkey market.
 

Beef/Cattle

Cattle and Beef Sectors Mostly Take Recent Events In Stride

Drought effects continue to diminish in the United States except for some areas in the Southeast and Southwest. However, most of the northern half of Mexico remains under drought conditions, resulting in a 22-percent year-over-year increase in year-to-date (weekly AMS data through May 5) imports of Mexican feeder cattle into the United States. Corn planting and emergence in the United States is well ahead of last year and the 5-year averages. Similarly, 88 percent of winter wheat is in fair-to-excellent condition leading to a decline in wheat prices. With wheat prices below corn prices, feeding with wheat could alleviate some of the pressure of high corn prices on cattle-feeding profit margins.
 
Federally inspected (FI) slaughter of beef cows has declined steadily since last fall when beef cows represented as much as 60 percent of total (weekly) FI cow slaughter. The cow-calf sector is enjoying high prices for both cull cows and feeder cattle and, despite record-high input costs, is one of two sectors of the cattle/beef industry experiencing positive profit margins—the other being beef packers, since early this month. Feeder cattle prices have dipped from their 2012 record levels of February and March due to declines in stocker calf spring/summer grazing demand and increasing cattle-feeding losses, but they are expected to increase later this year and in 2013.
 
Cattle feeders continue to experience negative feeding margins due to higher costs of feeder cattle and feed. Feed-grain prices are expected to moderate slightly through the spring and summer of 2012, but feeder cattle and soybean meal prices are expected to increase during the same period. Without a significant improvement in fed cattle prices and lower feed and/or feeder cattle prices, feeding margins will not improve.
 
The situation does not appear likely to improve until later in 2012 or early 2013 when new-crop corn prices decline. Weaker corn prices are likely to be accompanied by relatively high protein-meal prices because of an apparent shift from soybean acreage to corn acreage, leading to the expectation of higher supplies of new-crop corn and associated price declines. Another factor offsetting lower new-crop corn prices is anticipated increases in feeder cattle prices over the remainder of 2012 and throughout 2013 in response to the tightest feeder cattle supplies in decades.
 
In hindsight, cattle and beef prices appear to have reached a seasonal spring high early this year, consistent with recent and anticipated weather patterns and their effects on weight gains by cattle in feedlots through the past mild winter. While seasonal price patterns would typically be lower during the summer, the highest prices for 2012 are anticipated to occur during the second half of the year. Based on normal seasonal price patterns, wholesale beef markets appear to have weathered the bovine spongiform encephalopathy (BSE) and lean finely textured beef (LFTB) storms of March and April 2012 without serious price damage. An exception is the market for 50-percent lean trim. Although short-term impacts are negative, the future outcome for LFTB and 50-percent lean beef trim demand and prices is uncertain and will depend on how consumers respond to LFTB. Prices for 90- percent lean beef have increased steadily since reaching a low in September 2011.
 
Otherwise, price impacts as a result of the April 23 BSE event have been limited primarily to most live and feeder cattle futures price contracts declining by their daily allowable limit on April 24, 2012, followed by a quick recovery. In the meantime, packer margins have improved to show positive returns for the first time since last September. Retail beef prices continue near their highest levels, averaging $5.05 per pound for Choice beef and a record $4.70 per pound for allfresh beef in April.

Beef/Cattle Trade

First-Quarter U.S. Beef Exports 12 Percent Lower

Beef exports in the first quarter of this year have been sluggish compared with a year ago, perhaps due to a slightly strengthening U.S. dollar through first-quarter 2012. U.S. beef exports were lower year-over-year to Japan (-4 percent), Mexico (- 11 percent), South Korea (-41 percent), and Hong Kong (-19 percent). Exports to Egypt and Vietnam were higher, year-over-year, by 31 and 37 percent, respectively. Total U.S. beef exports are expected to decrease in the third and fourth quarters of 2012 compared with year-earlier levels as less beef is available for export. U.S. beef production is expected to be 5 and 8 percent lower in the third and fourth quarters of 2012, and exports are expected to be 9 percent and 6 percent lower in those quarters. Beef export levels in 2013 are expected to be only slightly (1 percent) below forecast 2012 levels, at 2.65 billion pounds.

First-Quarter U.S. Beef Imports 27 Percent Higher

U.S. beef imports for 2012 are forecast over 18 percent higher, year-over-year, at 2.4 billion pounds. First-quarter imports were 26 percent higher compared with a year earlier Imports were 91 and 4 percent higher, year-over-year, from Australia and New Zealand and 13 and 40 percent higher from Canada and Mexico, respectively. U.S. beef imports for the second, third, and fourth quarters of 2012 are forecast to be 12, 16, and 22 percent higher year-over-year. Increased imports are expected from Oceania, as improved pasture conditions in Australia and New Zealand have boosted carcass weights and production in those countries. Strong U.S. demand for processing beef, amid tightening U.S. production, is expected to at least partly offset the higher Australian dollar and to support higher imports of beef to the United States. U.S. beef imports from North American trading partners Canada and Mexico are also expected to remain strong compared with year-earlier levels. Growth of 8 percent in the U.S. beef import market is forecast for 2013, totaling 2.6 billion pounds.

Higher Mexican Cattle Imports Offsetting Lower Imports from Canada

U.S. cattle imports through the first quarter are fractionally higher compared with the same period a year ago. Lower imports from Canada have been offset by higher imports from Mexico through the first quarter of 2012. Cattle imports from Mexico were 24 percent higher than in 2011 through March. The continued increase of cattle imported to the United States from Mexico stems from the severe drought conditions that were—and in some cases, still are—present in the southern tier of the United States throughout last year and which extended into northern Mexico.

Present export rates of cattle from Mexico may be; however, it remains to be seen whether, and to what extent, Mexican cattle exports to the United States may drop off as the year progresses. This may be largely dependent on weather patterns and if pasture conditions improve.

In the first quarter cattle imports from Canada were 5 percent below a year ago. According to AMS weekly reports, imports of slaughter steers/heifers and cows through April are 11 and 18 percent below year-earlier levels compared to the same time period last year. The lower import levels are likely due to Canadian producers being in the midst of herd rebuilding and retaining females for breeding. Imports of Canadian feeder cattle, however, are 69 percent higher than a year ago, due to a sluggish spring Canadian feeder cattle market and a stronger price incentives in the United States. Total U.S. cattle imports for 2012 are forecast at 2.075 million head and at 1.95 million head in 2013, or 6 percent lower year-over-year.
 


Dairy

Milk Production Continues Robust Expansion While Prices Soften; in 2013, a Modest Production Increase Could Help Support Prices

Corn prices are moderating for both the current crop year and for 2012/13. The corn price is projected to be $5.95 to $6.25 a bushel in 2011/12, a decline from April’s projected price and to slip to $4.20 to $5.00 a bushel next year. Higher corn plantings and higher expected yield could lead to a record-high corn supply in 2012/13 despite tight carryin stocks. The recent Crop Progress report showed a crop well ahead of average development for this time of year. While this is no guarantee of above-average yields, it minimizes the risk of yield loss due to late planting. Soybean meal prices continue to inch upward; this month’s forecast calls for soybean meal prices to average $360 a ton for the current crop year, up from April’s forecast. For 2012/13, prices are forecast at $335 to $360 a ton. The April Agricultural Prices reported the preliminary estimate of alfalfa hay prices at $207 per ton. Hay prices could move downward with the 2012/13 crop. The benchmark 16-percent protein dairy ration was calculated at $11.20 per cwt for January-March 2012. Given crop price forecasts, the ration value will likely head down later this year and could fall further in 2013. For dairy producers, the welcome relief from high feed prices will likely be countered by lower milk prices for the balance of 2012, with some recovery likely in 2013. On balance, the milk-feed price ratio is not expected to signal expansion until later in 2013.
 
The total number of milk cows for 2012 was raised slightly from April to 9.23 million head. The Milk Production report indicated higher than expected cow numbers and, despite weakening returns, producers were not reducing herds as quickly as expected. May is the first month for 2013 forecasts. The dairy herd in 2013 is expected to decline to 9.17 million head, reflecting 2012’s high feed prices and lower milk prices. Milk per cow for 2012 was boosted to 21,880 pounds from the April projection. Production per cow is forecast at 22,100 pounds for 2013. The rise in milk per cow this year is due to nearly ideal production conditions in much of the United States. Next year’s projected increase in production per cow reflects the moderating feed price outlook. Production for 2012 was raised this month to 201.9 billion pounds. The initial forecast for 2013 is for production to reach 202.6 billion pounds, based on higher output per cow.
 
Milk-equivalent imports on a fats basis are forecast at 3.3 billion pounds for both 2012 and 2013 and 5.4 and 5.2 billion pounds for 2012 and 2013 respectively on a skims-solids basis. Milk-equivalent exports on a fats basis are projected at 8.5 billion pounds in 2012, rising to 8.7 billion pounds next year. Exports on a skimsolids basis are estimated at 31.5 billion pounds this year and 32.4 billion pounds in 2013.

Higher than expected milk production and weaker-than-expected demand led to lowering of the 2012 prices for the major dairy products in May, except for whey. The cheese price was lowered to $1.555 to $1.605 per pound, butter was reduced to $1.425 to $1.505 per pound, and the nonfat dry milk price was revised to $1.235 to $1.275 per pound. The whey price was increased to 56.0 to 59.0 cents per pound as it appears demand is stronger than expected earlier. Next year’s milk production increase is modest, keeping with the herd-size declines, in response to 2012’s high feed prices and lower milk prices. Higher forecast exports and continued firm domestic demand should strengthen 2013 prices. The 2013 cheese price is forecast at $1.600 to $1.700 per pound, butter at $1.465 to $1.595 per pound and NDM at $1.320 to $1.390 per pound. Whey prices are forecast at 55.5 to 58.5 cents per pound, very near 2012 prices.
 
Milk prices for 2012 were revised downward based on lowered product prices. The Class III price is projected at $15.80 to $16.30 per cwt, the Class IV price was lowered to $14.50 to $15.10 per cwt and all milk is projected at $16.90 to $17.40 per cwt. In 2013, milk prices should recover. The Class III price is forecast at $16.20 to $17.20 per cwt, the Class IV price is forecast to rebound to $15.40 to $16.50 per cwt and the all milk price is expected to climb to $17.25 to $18.25 per cwt.

USDA Livestock, Dairy, Poultry and Aquaculture Outlook

Reports» USDA Livestock, Dairy, Poultry and Aquaculture Outlook» USDA Livestock, Dairy, Poultry and Aquaculture Outlook - May 2012

17 May 2012
USDA Livestock, Dairy, Poultry and Aquaculture Outlook - May 2012
In 2013 small increases in farrowings and continued strong sow productivity gains, together with higher average dressed weights due to lower feed costs are expected to translate into a moderate increase in pork production. U.S. commercial pork production is forecast at 23.8 billion pounds, an increase of 2.3 percent over 2012. U.S. pork exports are also expected to grow moderately next year. 2013 pork exports are forecast at 5.4 billion pounds, an increase of close to 1.8 percent over this year’s level. Production and export forecasts point to 22.7 percent of production to be exported next year, compared with 22.8 percent in 2012.


 

Pork/Hogs

First-Quarter Wholesale-to-Retail Spread Record-Wide

The full set of data that is now available for the first quarter of 2012, is useful in explaining important hog and pork market dynamics of the quarter, as well as in indicating potential market direction as the markets move into summer. As a whole, the data suggest that of all the players in the pork market chain—hog producers, packer/processors, wholesalers, retailers, and consumers—the only ones left smiling by the price and demand/supply metrics of first quarter may be pork retailers. First-quarter retail pork prices finished at $3.49 per pound, 6 percent higher than a year ago and the highest first-quarter retail price on record. Record retail prices reflected, in part, robust first-quarter U.S. exports, which were 15.8 percent higher than a year ago. Strong exports—23 percent of first-quarter commercial pork production—left U.S. per capita disappearance almost 1 percent below the first quarter of 2011. Tighter first-quarter domestic supplies and higher prices for competing animal proteins likely supported record retail prices. At the wholesale level, the situation remains quite different. Wholesale pork prices have lagged year-earlier prices from late January to the present. First-quarter USDA wholesale primal cutout values were 5 percent below first-quarter 2011.
 
Strong retail prices combined with weak wholesale values to yield the widest firstquarter wholesale-retail spread ever: $2.03 per pound. While it is possible that soft wholesale prices reflect slower forward bookings for export, it is more likely that retailers are defending their spread by favoring strong returns over sales volumes. Higher first-quarter retail prices for beef (+9 percent) and for chicken (+5 percent) would accommodate a retail strategy that places less emphasis on maximizing pork sales volume. Such a strategy could lower wholesale pork demand.
 
Second-quarter 2012 commercial pork production is expected to be 5.5 billion pounds, 2.8 percent higher than a year ago. Increased April-June pork production derives from year-over-year larger fall and winter pig crops and heavier estimated dressed weights. Second-quarter prices for live equivalent 51-52 percent lean hogs are expected to average $62-$64 per cwt, 8.4 percent lower than a year ago. Prices for 2012 are expected to be about 6 percent lower than a year ago.

Commercial Pork Production and U.S. Pork Exports To Increase Moderately in 2013

In 2013, moderate increases in farrowings and continued strong productivity gains are expected to yield an annual pork production level that is about 2.3 percent above 2012. Commercial pork production is expected to be 23.8 billion pounds. Higher estimates for average dressed weights as a result of lower feed costs contribute to the higher production forecast. Hog prices next year are expected to be $57-$61 per cwt, about 2.7 percent below 2012.

Foreign demand for U.S. pork products will continue to be an important market focus in 2013. Lower U.S. pork prices next year, together with continued global economic growth will, in all likelihood, support continued strong exports. Next year USDA anticipates that 22.7 percent of commercial pork production will be exported, versus almost 23 percent this year. Total U.S. pork exports for 2013 are forecast at 5.4 billion pounds, about unchanged from this year. As is almost always the case, over two-thirds of U.S. exports in 2013 are expected to go to U.S. North American Free Trade Agreement (NAFTA) partners, Canada and Mexico, and to Japan. Japan is expected to remain—solidly—the no. 1foreign destination for U.S. pork exports in 2013.

U.S. pork imports next year are expected to be in line with 2012 estimates, or about 810 million pounds. In the past, the United States has imported about 4.3 percent of its annual pork disappearance; next year should be no different. U.S. imports of live swine next year are likely to be somewhat higher than forecasts for 2012: 5.87 million head in 2013, versus 5.78 million head expected this year, due mostly to expectations of higher Canadian production as indicated by stronger breeding inventories in Manitoba.

In 2013, per capita pork disappearance is expected to be year-over-year higher in each quarter. For the year, per capita pork disappearance is expected to be 47.2 pounds, 2.1 percent above 2012. For a demand inelastic commodity such as pork, small increases in per capita disappearance are often accompanied by disproportionately lower prices up and down the supply chain. Retail pork prices will likely average about $3.40 per pound, or about 3 percent below forecast retail prices for 2012.

First-Quarter Exports Up Sharply

First quarter U.S. pork exports were 1.4 billion pounds, 15.8 percent ahead of last year. The five strongest markets for U.S. pork are shown in the table below. Firstquarter exports to China likely represent the tail end of deliveries of large purchases made in 2011. The USDA’s Foreign Agricultural Service expects 2012 China’s pork imports from all sources to decline by 14 percent. See http://www.fas.usda.gov/dlp/circular/2012/livestock_0412.pdf. USDA also forecasts a 14-percent reduction in South Korea’s imports in 2012, from all sources, as the pork sector recovers steadily from 2010-11 outbreaks of foot and mouth disease. The Government of South Korea recently announced that it would limit the initial 70,000 metric tons (MT) duty free tariff rate quota (TRQ) for fresh/frozen pork bellies announced for the period April-June to 20,000 MT.

Special Article
 
U.S. Pork Industry Moving Toward Open Sow Housing as an Alternative to Gestation Crates

Introduction

In recent years, a growing number of major U.S. companies that demand and supply pork products have adopted strategies that explicitly move away from direct or indirect use of gestation crates in pork production. McDonald’s Corp.—a major buyer of pork products—and thus an indirect user of gestation crates—recently announced that it would require its pork suppliers to submit plans by May 2012 that transition suppliers’ production facilities from use of gestation crates, to group sow housing. McDonald’s thus joins other major U.S. buyers of pork products along with major U.S and Canadian pork-producing companies, in adopting business models that incorporate group sow housing in pork production. Pork users and pork producers appear to be making this move in response to a developing public perception that crating sows during gestation is detrimental to the welfare of the animal.

The Current U.S. Hog Production System: Gestation Crates

For the last 30 years, typical U.S. hog production has employed individual crates to house pregnant females during gestation. The typical gestation crate measures 7 feet by 2 feet, or 14 square feet, and was adopted by the industry to overcome innate hierarchical swine behavior. Female swine, in particular, tend toward aggressive behavior to establish dominance when they are housed in groups. This means that freely moving pregnant swine tend to fight until dominance is established. Such aggression can cause serious injury to less-dominant females and to unborn piglets. When the females are crated, aggression and threat of injury are minimized. Gestation crates also facilitate individualized animal care, feeding, and monitoring.

The downside of gestation crates is the severe constraint on movement that the 14- square-foot crate imposes. While the crate affords the pregnant female some limited side-to-side and back-and-forth movement, it totally prevents the animal from turning itself around. The animal welfare questions that are raised by the movement limitations of gestation crates have motivated the industry to adopt a different means of pork production that allows the pregnant animal freedom of movement.

Group Sow Housing as an Alternative to Gestation Crates

A production model based on group sow housing places pregnant swine in open pens that allow them free movement. An accurate description of a “typical” group sow housing barn is elusive because no single type has yet evolved in the United States. Consequently, there is wide variation in design characteristics of existing grouped housing units. For example, the number of animals grouped in one pen can vary anywhere from 5 animals to more than 100, depending on per-animal space allocations. The groups themselves can be “static,” meaning that all the animals in a pen enter it together when the group is formed, or “dynamic,” meaning that animals enter and exit the group. The size of the groups and the per-animal space allocations often determine the method employed to feed the animals.
 
Feeding the animals in a group setting presents serious challenges given the tendency of swine toward aggression, particularly at feeding time. There are various methods available to feed the animals in a group setting. Three of the most common are electronic sow feeders, where the animals are trained to line up to enter feeding stations from which individualized rations are dispensed, based on information read from chips implanted in the animal’s ear; trickle feeding, where feed is delivered over a period of 15 to 30 minutes to troughs or on the floor of the pen; and free-stall feeding, where the animal enters a stall, often with a door closing upon entry, allowing her protection from aggressive pen mates during feeding. Each feeding method has a different set of cost, space, and management requirements, which together interact with group size, per animal space allocations, and numerous other physical characteristics of the unit’s design to affect the animals’ wellbeing.
 
Gestation Crates and Group Sow Housing: What Do Comparative Studies Show?

There are now many comparative studies in the animal science literature that document differences in production performance, behavior, and welfare indications between animals housed in gestation crates and those housed in pens. One of the most often-cited studies was carried out by McGlone et al. (2004). This study aggregated research findings from 35 previous comparative studies to determine whether sow behavior, performance, or physiology differed between the two housing types. The study tested for statistical differences between farrowing rates; pigs born per litter; oral, nasal, and facial behaviors; and cortisol blood levels in gestating animals. The research results, which are summarized in the table below, indicate that the differences between the means of measured variables were not statistically significant. That is, none of measures were significantly (P < 0.05) influenced by sow housing type. The study concludes that “gestation stalls or wellmanaged pens generally … produced similar states of welfare for pregnant [females] in terms of physiology, behavior performance, and health.”
 
This study also addresses two issues important in comparing the different systems. The study indicates that sow productivity—as measured by farrowing rates and pigs per litter—is not affected by housing type. This is good news to for U.S. pork producers, some of whom equate group housing with lower female productivity and lower asset returns. More important perhaps, the study identifies the producer’s animal handling/management skills as the key to maintaining productivity of sows housed in pens.

With respect to concerns about the effects of gestation crate housing on animal welfare, neither McGlone et al., nor current animal science research generally provide clear, empirical evidence that switching to group housing improves the welfare of pregnant female swine. The literature is supportive of the contention that sow/gilt welfare is not determined by housing type. “In other words proper design of stalls and pens can result in equivalent animal performance and welfare outcomes, although the design features for achieving that objective will differ. Therefore, it’s not clear that simply switching to group housing will inherently improve or reduce sow performance or welfare.”

The Group Sow Housing Model Often Employs Gestation Crates To Assure Swine Safety

 As the sector continues to evaluate sow housing options, it will be important not to overlook two crucial safety features of the group sow housing model: First, the group sow housing model often does not exclude the usage of sow crates. In current practice in both the European Union and the United States, newly bred sows are crated for around 30 days to insure proper embryo implantation. Moreover, the pregnant females are typically crated for a 5-day period just prior to farrowing. Pregnant females are thus removed from group pens at periods in gestation when they are most vulnerable to aggression and injury. Second, both production models—gestation crate-based and group sow housing—move pregnant females into farrowing crates just prior to the birth of the litter.
 
The farrowing crate— different in dimension and design from the gestation crate—is designed to allow the female to position herself to nurse the litter. The sow’s movement is restricted to prevent injury to the litter, such as crushing or smothering . Crate use in the group sow housing model implies that the female spends about 35 percent of the year—4 months—in individual housing and the balance of the year in a group setting. Under a gestation crate system of production, the animal is crated 100 percent of the time.
 

Overview of This Week's Pig Industry News
21 May 2012



 
ANALYSIS – A few heavy rain showers on the first day of the British Pig & Poultry Fair last week were the only things to dampen seriously the mood at the event, held last week at the National Agricultural Centre, reports senior editor, Jackie Linden.
While feed ingredient prices remain high and the state of the wider economy is making business difficult for the sector, there was some good news over an upturn in pig prices and there is uptapped potential for the industry in food service.
Furthermore, the UK agriculture minister has reached agreement with the Chinese government for China to resume imports of pig meat and breeding pigs from the UK.

In a now-traditional press conference at the start of the Fair, British Pig Executive (BPEX) Director, Mick Sloyan, opened his presentation saying that the DAPP had been on the rise over the last few months – at last – and now stands at a little over 148p per kilo.
 
The EU pig welfare directive, due to come into force on 1 January 2013, will have less impact of the UK pig industry than most other member states as stalls and tethers were outlawed here in 1999, and Mr Sloyan highlighted recent clarification of the coming rules over slot width and space allowances – also included in the new Directive – as the result of lobbying by BPEX and other industry organisations.

British pig meat, chicken and eggs are enjoying growing demand from food service, and exploring the potential of this sector was the subject of the headline debate at the Fair.
 
While the British Pig & Poultry Fair was on came the news that British pork will soon be on menus in China, following a £50–million deal reached by Agriculture Minister, Jim Paice. He announced the landmark agreement with the Chinese Government while on a mission to China to boost trade for British food and farming businesses.
 
Turning to news from other countries, Chinese egg producer, Beijing DQY Agriculture Technology Co. Ltd, has teamed up with American meat supplier, Smithfield Foods Inc, to set up a $1.8– billion biofuel plant in the USA. The venture is expected to be operational by the end of 2012 and will use waste from a Smithfield pig farm, producing a power generation capacity of one megawatt.
 
China’ pork prices have continued to decrease, leading to widespread losses for the industry and prompting the government to take measures to prevent the prices from fluctuating greatly during the next few months.
 
Agricultural analysts said the low prices might prompt a reduction in the country’s pork imports from the US and put downward pressure on US hog futures, which hit their lowest price last week since September.
 
Finally, Australian pig meat production is on the rise, driven by strong local and international demand.

 Jackie Linden, Senior Editor

Is the EU Serious About Continuing to Produce Pigs?
18 May 2012


IRELAND - IFA National Pigs and Pig Committee Chairman Tim Cullinan called a high level meeting of Teagasc and UCD pig feed research and advisory specialists as well as the main nutritionists and input traders that supply compound feed and ingredients to the pig industry in Portlaoise.

Mr Cullinan said: “The unprecedented volatility in feed markets is causing serious financial losses on Irish pig farms. Pig prices should be increasing with input prices, but this is simply not happening fast enough. Everyone in the chain upstream and downstream from the pig farm appears to have a margin except the pig producer. All the while the EU is not making progress to help the industry by approving the novel feedstuffs that we so desperately need to reduce costs. New varieties are being planted around the world while we are at a standstill unable to import them due to political upheaval on the subject without any scientific basis.”

Professor John O'Doherty, UCD said that feed is the greatest single cost factor (70 per cent) in pig production. “In pig diets, energy accounts for the largest proportion of the cost (82 per cent) and it is critically important that the energy content of a diet is characterized in the best possible way. Net energy has been proposed as a superior system that describes the feed energy a pig actually uses. However, NE is much more difficult to determine and more complex than DE, which may be a reason why it is not as widely used as it should be. Currently, only France, The Netherlands and Germany have developed net energy systems to describe dietary net energy contents.”

“Ultimately the consequence for diet formulation is that rations formulated under the NE system will be lower in protein, because the cost/MJ energy prohibits the inclusion of a large amount of soya bean or rape seed meal, and favours the inclusion of free amino acids. At the same time, choosing ingredients with a low cost of energy will reduce the cost of a mixed diet by as much as 5 per cent during the grower and finisher phases,” Mr O'Doherty claimed.

It was also discussed at the meeting that a trend has developed in trading of cereals in the past few years where up to 30 per cent of cereals are traded by cereal farmers before the planting actually takes place. Thereafter this product can be traded up to seven times before reaching an end user.

Mr Cullinan said: “Currently it can be assumed that each transaction is creating a profit for traders while producers at the end of the chain are unable to buy feed at a cost that will covered by the price of pigs. Irish pig feed prices can be up to €30/tonne more expensive than that used on the continent. The feed industry must focus on where a reduction in the cost of feed can be achieved for Irish producers.”
 
Due to the downturn in the world economy and the increase in demand for food worldwide this serious volatility in commodities has become a factor that must be contended with by all in the industry. The advice coming from the feed industry was that pig farmers need to take longer positions in the market.

“However all elements of the pig production chain need to realise that this volatility will feed right through should more pig farmers go out of business with the result of meat becoming scarce and less need for feed,” Mr Cullinan concluded.
 

Thursday, May 17, 2012
Breed, Body Condition Impact Cow Fertility
AUSTRALIA - Breed and body condition have a critical impact on fertility, according to preliminary results from Cash Cow research presented at Beef Australia 2012.

An overview of the Cash Cow project presented at Beef Australia 2012 gave producers insights into the range of factors impacting on fertility rates of cows post calving.

Preliminary data from the MLA-funded Northern Australian Beef Fertility Project (Cash Cow) has demonstrated a substantial variation in reproductive performance in herds throughout Queensland, Northern Territory and the Kimberley.

Professor Mike McGowan, project leader from the University of Queensland, honed in on lifting breeding performance at the MLA producer seminar at Beef Australia. His colleague Dr Geoffry Fordyce from the University of Queensland looked at various ways of measuring the efficiency of breeding herds.

Prof McGowan’s presentation examined factors impacting on the percentage of cows pregnant four months after calving and factors impacting on the percentage loss between confirmed pregnancy and weaning.

His analysis showed two key factors stand out as making a difference:

Bos indicus females had a lower percentage pregnant by four months after calving and a higher risk of loss between pregnancy and weaning than composite or Bos Taurus females;
Body condition prior to calving had a significant effect on re-conception rates (see next week’s edition of fridayfeedback for more on this topic)
Cash Cow data was collected from two reproductive cycles during the project’s study of 60,000 cows from 78 commercial properties over 2009-10. It is being used to identify realistic benchmarks for major reproductive traits such as annual pregnancy rates based on the value achieved by the upper 25 per cent of herds in the study.

Food Outlook – Meat and Meat Products
Friday, May 11, 2012

Global meat markets in 2012 are expected to see a recovery of supplies in traditionally importing countries and strong competition for markets, according to the latest Food Outlook report from FAO. Near record prices are constraining consumption growth.

Meat Prices Hover at Near–Record Levels
 
Global meat markets are likely to face heightened trade competition in 2012, at the same time that recovering meat production in Asia is set to dampen growth in global import demand. Overall, meat trade is expected to expand by two per cent, to 29.2 million tonnes, much of which is anticipated to be taken up by developing country exporters, which could increase their share of the global trade to 44 per cent.
 
Disease outbreaks in 2011, drought–reduced cattle inventories and high feed costs sustained international meat prices to near record levels in the first quarter of 2012. In April, the FAO meat price index edged up to 182 points, surpassing the record 181 points registered in November 2011.


 

Variable feed prices influence pork and poultry price movements

 

World meat market at a glance
 
Indications of slowing import demand, especially for pig and poultry meats, portents a potential moderation of meat prices in the coming months, which, along with high feed costs, is raising concern about the profitability of the meat sector in 2012.


 

Beef prices strong while easing feed prices translate into lower pig meat and poultry prices
 
Pig Meat

As disease concerns in Asia abate, the pig meat sector is poised for a quick recovery
 
After last year’s drop, global pig meat production is expected to rebound by 2.6 per cent in 2012 to 111.7 million tonnes, underpinned by gains in Asia due to reduced incidence of disease. In the region, policy support, growing investments and favourable market returns, particularly in China, are behind an anticipated four per cent expansion in the region’s output to 62.8 million tonnes. The sector may also recover in Japan, following a rebuilding of sow inventories and a return to normal piglet births in provinces affected by the nuclear fallout in 2011. Investments in breeding and feed industries in Viet Nam will support output growth, while a rebuilding of FMD-depleted inventories in the Republic of Korea is stimulating a 20 per cent production recovery.
 
In South America, high beef prices are indirectly supporting the expansion of the pig meat sector in Brazil, Chile and Colombia while, in Argentina, sporadic restrictions on pig meat imports from Brazil are creating incentives for investment. The recognition of Mexico as free of classical swine fever has opened new market access opportunities which, combined with investment in new breeding lines, supports an increase of the country’s production and exports in 2012.
 
Anticipation of new EU environmental regulations that will become effective in 2013 has catalysed a restructuring and concentration of hog operations that may translate into fewer pigs and lower production in 2012.
 
Despite tight margins, a shift by consumers in North America from beef to lower priced meat products is expected to strengthen demand and translate into higher production. Investment–driven gains in the Russian Federation are foreseen to boost production by five per cent despite persistent occurrences of African swine fever.

Pig meat trade may decline in 2012 as Asian import demand falters
 
After witnessing double-digit increases in Asian import demand in 2011 due to its disease-reduced output, improved production in the region is forecast to result in global pig meat trade falling to 7.0 million tonnes in 2012.
 
Reduced purchases by China, the Republic of Korea and Japan, amid large supplies, underlie this expected contraction. This is despite the expected ratification by the Russian Federation of the WTO accession treaty later this year and the signing of a free trade agreement between the Republic of Korea and the United States. It is clear that the Russian Federation will only ease restrictions on pig meat imports when it officially joins the WTO in mid-2012. Until then, imports by the country will be negatively affected by a reduction of its tariff-rate import quota from 470,000 tonnes in 2011 to 400,000 tonnes this year, which may result in smaller pig meat purchases.
 
By contrast, imports by Chile, Colombia, Mexico and Uruguay look set to increase, while Argentina’s “off-and-on” restrictions on imports of Brazilian product may lower deliveries to the country.
 
Declining trade prospects in 2012 set the stage for considerable competition among the major exporters – the United States, the EU, Canada and Brazil – which together account for nearly 90 per cent of global trade. Lingering Russian restrictions on imports of Brazilian products may contribute to lower exports from Brazil in 2012, while benefiting smaller international suppliers, such as Chile and Mexico, but also the United States and Canada.

Brazil: Bread–basket of the World
17 May 2012

 

BRAZIL - For decades it has been predicted that Brazil would become the breadbasket of the world, writes Martin Riordan, Sales and Service at Genesus Brazil.
 
The Creator was generous when he made Brazil: a vast land area (slightly less than Canada and the USA), climates rangeing from tropical in the north to temperate in the south, total absence of natural disasters, such as volcanoes, earthquakes and tsunamis. Brazil has everything to be one of the best countries in the world for its inhabitants.
 
A well-worn joke in Brazil explains that, when St. Peter questioned God’s generosity with Brazil, He replied: “But wait till you see the people I am going to put there!”
 
Over the last five decades, agricultural production in Brazil has exploded. This is partly due to an increase in the area planted, as dynamic farmers from the south of the country migrated north into states with vast, unexploited agricultural resources. Thirty years ago, this migration opened up the Center West region of the country and more recently it is doing the same for the North East.
 
Even more important has been the increase in productivity. Modern Brazilian farmers are innovative and progressive, and rapidly adopt new technologies which increase productivity. They have been aided in this quest by Embrapa, a federal government agricultural research organization that has played a vital role in adapting crops to different climatic conditions, thus extending the geographical area where crops can be produced.
 
Looking at the two principal ingredients for producing pigs, with data taken from Wikipedia, we can see the following changes from 1960 to 2005:
 •Corn production increased from 8.67 million metric tons (mmt) to 35.13 mmt, an astounding increase of 305 per cent.
 •Soybean production grew from almost nothing (0.20 mmt) to 51.18 mmt.
 
This would lead one to the conclusion that Brazil is the ideal country for large-scale, low-cost production of pork. It has all the ingredients: land area, grain production and a kind climate.
 
So why does Brazil not dominate the world market for pork products, as it has with chicken and beef since 2004?
 
For a long time, pork exports were almost zero. This changed from around the year 2000, when exports started growing rapidly. By 2003, Brazil was exporting over 600,000 metric tons (mt) and exports peaked in 2005 at 761,000 mt. Since then, exports have stagnated, and by 2011 fell to 582,000 mt. This contrasts with exports of beef and especially chicken, which have been growing much more constantly as shown by this somewhat outdated USDA chart:
 




Genesus Global Market Report
Prices for the week of April 29, 2012



Country

Domestic price
(own currency)

US dollars
(Liveweight a lb)
 


USA (Iowa-Minnesota)

77.06¢ USD/lb carcass

57.02¢
 


Canada (Ontario)

1.43¢ CAD/kg carcass

52.01¢
 


Mexico (DF)

18.08 MXN/kg liveweight

59.61¢
 


Brazil (South Region)

2.02 BRL/kg liveweight

45.82¢
 


Russia

95 RUB/kg liveweight

$1.40
 


China

13.46 RMB/kg liveweight

96.18¢
 


Spain

1.29 EUR/kg liveweight

74.77¢
 

What is the problem? Here are some answers:

Trade barriers: many importing countries impose political barriers to imports, in order to protect domestic producers. These require political negotiation, and the Brazilian government has not demonstrated competence in this area. Many times exports to Russia, historically the most important importer of pork products, have been cut overnight, leading to slumps in exports. The current battle is with Argentina, Brazil’s commercial partner in Mercosur, which imposed a ban on pork imports.
 
Animal health: Brazil has animal health problems, and government agencies have been slow to address the problem. However, there is progress. Santa Catarina is now a state free of foot and mouth disease without vaccination. But many world markets, such as Japan, which demand that the whole country be free of F&M, are still beyond the pale for Brazilian exporters.
 
It is unlikely that either of these factors will change much in the short term. Brazil’s international competitors have little reason to worry.
 
The domestic situation for pig producers continues in dire straits. Soya meal prices are very high, over US$500 per metric tonne. Corn prices have dropped some 10-15 per cent with harvests coming in, and are around US$5.70 per bushel. But the price of live market hogs has remained low, well below cost, and more and more independent producers are being obliged to cease production, unable to sustain the debt load generated over the last 3-4 years.
 

Overview of This Week’s Pig Industry News
14 May 2012



 
ANALYSIS – The pig industry is unfortunately not immune from the problems in the economy generally, reports senior editor, Jackie Linden. That was the message from conferences held in the UK and the US recently.
A new report expects growth in global meat protein consumption to continue to lag behind income and population growth in important emerging markets.
In the EU, there has been last–minute clarification over slat dimensions and space allowances that will take pressure off some pig producers in the region ahead of the 2013 Directive.

The general state of the UK economy, how consumers are reacting to it and the resulting prospects for the UK red meat and dairy industries were discussed in the main session of the Outlook Conference held in London recently.
 
“2011 was the year it all went wrong for the UK economy,” said Head of Agriculture at HSBC, Allan Wilkinson in his presentation on the current economic climate and how it impacts agriculture. However, recent surveys point to a stabilisation in the economy as one indicator points to a greater willingness for businesses in the UK to invest, he said.
 
He presented data showing the consolidation of the buying power in the agricultural supply chain in the UK, which shows that consumers and farmers are squeezed by the supermarket buyers and suppliers to the industry (feed, equipment and agrochemicals), who hold the real market power.
 
The ‘Big Picture’ in terms of the red meat and dairy outlook was presented by Giles Quick, Director of Kantar Worldpanel in his presentation on consumer trends in the UK and the drivers of spending.
 
He stressed that red meat and dairy products are a cornerstone of UK food retailing, worth £15 billion a year. The grocery trade is using many more promotional deals on these items and there has been growth in both the budget and high-end parts of the market. Health is here to stay as an important driver of food purchases, and the concept of ‘British is best’ is important in consumers minds in the current uncertain times.
 
Finally, Mr Quick stressed that if retailers were to take more account of whole store value, rather than category value, it would help sales of red meat particularly, which would benefit producers and processors in that sector.
 
Longer term prospects for agriculture generally and on prices for red meat and dairy products in the light of the economic and consumers trends were addressed by Ken Boyns, Director of Market Intelligence at the Agriculture and Horticulture Development Board.
 
He said that demand for meat and dairy products will remain strong, while supply will be constrained and/or challenged. The rate of technological improvement, its level of adoption and hence, supply potential will drive world prices.
 
“The UK must focus on technology and global markets to remain competitive,” he told the Outlook Conference audience.
 
Turning to the US, the economic recovery is continuing but the rate is slowing. According to economist, Eric Trachtenberg, from McLarty Associates, speaking at the American Meat Institute Expo and conference in Dallas, consumption and residential investment have increased but falling non-residential investment could make the recovery stall.
 
Rabobank expects stable, slightly pressured pig prices globally in the second quarter of this year, with a modest recovery in the second half of 2012. Global pig prices have softened in recent weeks to the extent that the Chinese government announced in late April that it has initiated procurement for its frozen pork reserves, according to the report, Rabobank Pork Quarterly Q2 2011. However, pig prices are still high by historical standards in order to offset high feed costs.
 
In the longer term, Rabobank expects growth in global meat protein consumption to continue to lag behind income and population growth in important emerging markets, raising volume risks to processors and price risks to buyers, from processors to consumers.
 
Clarification has been provided – at last – on some of the vital details relating to flooring and space allowances acceptable under the forthcoming EU directive. With much of the focus on the partial ban on sow stalls, other aspects of pig housing also included in the new rules have been overlooked until now.
 
Finishers with concrete slats with a slot width of more than 18mm – but not more than 21mm – will not need to replace them after all. It has also been confirmed by the European Commission that producers may include the space occupied by free–access feeders when calculating 1.64 square metres of unobstructed floor area for gilts and 2.25 square metres for sows.
 
This news will be welcomed by many pig–keepers all over Europe. In the UK, Defra, NPA and BPEX say they have been working to prevent the rules, which come into force in January along with the partial stalls ban, from bringing the European pig industry to its knees.
 
Based on data collected from UK National Pig Association members and scaling that up across the EU, the organisations estimate the total cost of replacing concrete slats for the sake of two or three millimetres would have been more than £50 million (around €62 million).

 Jackie Linden, Senior Editor

UK Minister Opens up Food, Pig Exports to China
17 May 2012

 

UK & CHINA - From food and drink, to skills and technolgies, British businesses trying to break in to China are getting Government backing as Food and Farming Minister, Jim Paice, heads out to the country on a mission to open up trade, particularly for British breeding pigs.

As the world's biggest economy with the largest population, China offers huge opportunities for Britain’s farming, food and drink sector, which has a reputation for food quality and safety and for innovation and expertise in farming.

Food and Farming Minister Jim Paice said: “Food and farming already plays a vital role in the UK economy but I believe there are still huge opportunities for growth in emerging markets like China.

“We need to keep ahead of the game by developing strong trade relationships with the world’s second largest economy. That’s why I’ve made this trade mission a priority.

“China wants what Britain has to offer – outstanding food and drink, high quality animals for breeding and farming skills and expertise that are second to none.”

China’s growing middle class is increasingly buying foreign food and drink seeing it as aspirational and recognising its high quality. Whether it is Scotch whisky or frozen lobster, artisan crisps or malt drinks, an increasing number of British favourites are becoming supermarket staples and delighting Chinese consumers. That is why Jim Paice will look to build relationships with key retailers and importers to smooth the path for other British producers looking to make their mark on China.

He will also promote British businesses offering high quality breeding pigs to China. Pork is the fashionable, meat of choice, for the Chinese and with a growing population with more money in their pockets, the demand for pork is booming. And while the trade in breeding pigs is worth millions to the UK economy each year, the skills and technologies we sell to support breeding programmes has the potential to be even more lucrative.

In Beijing, the Minister will meet key Chinese officials to develop trade relationships and seek out further export opportunities.

Fish Oil Makes
Goat Cheese Healthier

By Alan Harman
 
Fish oil can be added to goat cheese to deliver high levels of heart-healthy omega-3 fatty acids without compromising taste or shelf life, University of Maine food scientists report.
 
A study in the Journal of Food Science, published by the Institute of Food Technologists, showed that fish oil delivers higher levels and more balanced proportions of omega-3 fatty acids compared to other sources such as flax and algal oil.
 
Fish oil oxidizes more quickly, making food fortification a challenge. Given the cost of purified fish oil, maximizing its incorporation efficiency is critical to the commercial viability of fortified cheese.
 
The Maine researchers said dairy has been shown to be a good matrix for fish oil fortification because it is commonly consumed and has unique properties that seem to protect fish oil.
 
Soft goat cheese has lower fat than other cheeses making it appealing for those looking for healthy flavorful food choices.
 
In the latest research, goat cheese was successfully fortified to deliver 127 mg omega-3 fatty acids per 28 g serving without affecting shelf life or consumer purchase intent.
 
There is a growing body of evidence that omega-3 fatty acids from fish, particularly eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA), are not only beneficial for general health and well-being, but also play a vital role in preventing chronic diseases.
 
EPA and DHA have been shown to improve insulin sensitivity in type II diabetics, lower blood pressure, and improve arterial elasticity in patients at risk for cardiovascular disease. Omega-3 fatty acids have also been shown to minimize the effects of stroke, improve cognition in the elderly, alleviate symptoms associated with rheumatoid arthritis, and reduce risk for osteoporosis.
 
Omega-3 fatty acid fortification is one of the fastest growing trends in the food industry with 42% of consumers making efforts to eat more omega-3 fatty acid rich foods.
 
The most common problem related to fish oil fortification is the "fishy" odor that accompanies lipid oxidation of unstable polyunsaturated fatty acids (PUFA) in the presence of light, oxygen, and heat.
 
Another challenge of fortifying foods with omega-3 PUFA is that the low levels of fish oil shown to maintain product acceptability require consumers to eat greater quantities of fortified foods to meet recommended levels of PUFA consumption.
 
Due to their natural emulsion state, dairy products, such as yogurt, butter, milk, and sour cream, have been shown to be an excellent matrix for fish oil fortification.
 
Although several studies have investigated cheese as a vehicle for fish oil fortification, fish oil fortified cheeses are not available in the U.S. market.
 
Fish oil fortified cheddar cheese was produced by researchers in 2009, but "fishy" odors were detected by a trained descriptive panel at the highest fortification level, limiting fortification to low levels.
 
Other researchers added fish oil to a variety of dairy products, including soft cheeses, but found the samples were unacceptable to a trained panel after four weeks of refrigerated storage.
 
These studies each incorporated the fish oil after the cheese curd had formed, which may have contributed to the early onset of "fishy" flavor detected by trained panels.
 
The Maine researchers incorporated different levels of purified, liquid fish oil to soft goat cheese prior to curd formation to maximize delivery of EPA and DHA per serving without negatively affecting oxidative stability or consumer acceptance.
 
Researchers Brianna Hughes, Brian Perkins, Beth Calder and Denise Skonberg fortified soft goat cheese with four levels of purified fish oil—0, 60, 80, and 100 g fish oil per 3,600 g goat milk—prior to curd formation to deliver high levels of eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) per serving.
 
The cheese was partially vacuum-packed and stored at 35.6°F for four weeks, then evaluated for composition, EPA and DHA content, oxidative stability, color, pH, and consumer acceptability.
 
The fat content was significantly higher in the fortified treatments compared to the control, but was not significantly different among fortified treatments.
 
EPA and DHA contents were not significantly different among fortified samples, averaging 127 mg EPA and DHA per 28 g serving.
 
No significant lipid oxidation was detected by thiobarbituric acid reactive substances (TBARS) or hexanal and propanal headspace analyses over the four-week refrigerated shelf-life study for any treatments.
 
The fortified cheeses were all liked "moderately" by consumers for overall acceptability, although the 60 g fortification level did rate significantly higher.
 
The control cheese and the 60 g fortification level had no significant differences in consumer purchase intent.
 
The researchers said the results show that fortification levels of up to 127 mg EPA and DHA per serving may be added to soft cheese without negatively affecting shelf life or consumer purchase intent.
 
Despite minor visible loss of fish oil to the whey fraction, which was not quantified, there were no significant differences in yield between the control and the fortified samples suggesting the addition of fish oil did not affect curd formation.
 
Moisture and fat content did not differ significantly among fortified treatments, but the fortified treatments differed significantly from the control.
 
Moisture content averaged 62.7% for fortified treatments and 66.2% for the control.
 
"The 3.5% (percentage point) lower moisture content of the fortified treatments was inversely proportional to the increase in fat due to the addition of the fish oil," the researchers reported.
 
Fat content ranged from 15% to 19.5% and was significantly higher in fortified samples than the control sample (15%) indicating that the fish oil was incorporated into the curd.
 
However, oil incorporation was limited above the 60 g fortification level. Fortified treatments, while not significantly different in fat content, did increase from 17.9% (lowest fortification level) to 19.5% (highest fortification level). Improving homogenization efficiency and/or reducing curd formation time may increase oil incorporation above 60 g.
 
In a study in 2009, Cheddar cheese was fortified with encapsulated fish oil after processing and no significant differences in moisture or fat content between control and fortified samples were found.
 
In contrast, this goat cheese study showed significant differences between control and fortified cheese for both moisture and fat content suggesting greater incorporation of fish oil into the cheese curd than was seen in other fortified cheese studies.
 
The researchers said that it can be concluded from the fat content and EPA and DHA levels that the lowest level of fortification, 60 g of added fish oil, was the only level efficiently incorporated into the cheese.
 
This is enough to provide a high level (about 127 mg) of omega-3 fatty acids per serving. The researchers say the delivery of higher fortification levels requires further investigation to maximize incorporation of the oil into the curd.
 
The processing and packaging methods used in this project were sufficient to limit the oxidation of both the goat cheese (seen by the control) and the fish oil (seen by the fortified treatments).
 
"The lack of oxidation during four-weeks of storage is encouraging, and longer shelf life tests are warranted to determine when and if oxidative changes occur in the highly fortified goat cheese," the researchers report.
 
They said no differences in cheese color were observed during cheese processing or throughout the shelf life study. Initial cheese color did not change appreciably as the level of fish oil increased.
 
Cheese for the consumer acceptability study was prepared in the same manner as the cheese prepared for the analytical study and at the same fortification levels.
 
Consumer testing was conducted at the University of Maine's Consumer Testing Center with 105 untrained participants from the community.
 
The four samples were coded and randomized before being presented to participants with 5 g cheese samples on plain wheat crackers and participants were given a cup of water to cleanse their palates between samples.
 
A questionnaire asked participants to indicate how often they ate goat cheese, as well as to rate the appearance, color, aroma, flavor, creaminess, and overall acceptability of each sample using the Hedonic Scale, the most widely used measure of food acceptability with a nine-point range from dislike extremely to like extremely.
 
The participants' purchase intent for each sample was rated with a five-point hedonic scale from definitely won't buy to definitely will buy.
 
The scores among treatments for appearance, color, and aroma did not show any significant differences, indicating consumers found the fish oil fortified samples to be as acceptable as the control sample for these three attributes.
 
Appearance and color scores averaged 7.5, while aroma scores were slightly lower with an average of 6.9, equal to "like moderately."
 
The control sample rated significantly higher for creaminess, taste, and overall acceptability when compared to the fortified samples, which may be attributed to the higher fat content of the fortified samples.
 
Scores for taste were similar to those for creaminess, with the control sample having significantly higher acceptability (7.5) than the fortified samples that had scores ranging from 6.7 to 7. Overall acceptability of the control averaged 7.6, followed by the 60 g fish oil treatment with a score of 7.2.
 
The higher fortification treatments, 80 g and 100 g added fish oil, averaged a score of 7.0 for overall acceptability but were significantly lower than the 60 g fish oil treatment for overall acceptance.
 
The majority of comments made by consumer panelists were about the tangy, sharp, acid flavor of the goat cheese and the pleasant smoothness of the texture, although a small number of panelists perceived oiliness in the fortified cheese. This may have been due to the greater amount of fat in the cheese, and not specifically the addition of fish oil.
 
The researchers say textural attributes could be easily modified with gums or by slight adjustments to cheese processing methods.
 
There were only five comments from the 105 participants that mentioned "fishy" or "seafood" aromas, flavors, or aftertastes even with the fortification levels of about 127 mg EPA and DHA per serving.
 
Despite the statistically significant differences in overall acceptability of the goat cheese treatments, the hedonic values among treatments were close with an average acceptability in the "like moderately" range (6.5 to 7.5).
 
This level of acceptance of the fortified cheese is seen as promising considering that 40% of participants "never or rarely" eat goat cheese, which may have slightly depressed some values.
 
Improved scores could be attained by using only panelists who commonly consume goat cheese or by adding flavor compounds to the cheese such as herbs and spices.
 
Of the 105 respondents, 74% indicated they "might" or "definitely" would purchase the cheese with the lowest level of fortification (60 g fish oil).
 
Similar purchase intent was observed for the control, which indicates that despite significant differences between the two for overall acceptability, 60 g of added fish oil may be a marketable level for fortification.
 
This conclusion is further supported by results that demonstrated no significant differences among fortified treatments for proximate composition, oxidative stability, or EPA and DHA content.
 
"Excellent Source" labeling has been proposed for foods containing at least 20% of the proposed RDI of 160 mg EPA and DHA, or 32 mg, per serving. If approved, the fortified goat cheese would qualify for the "Excellent Source" claim as it provides 79% of the proposed RDI for EPA and DHA.
 
The researchers said soft goat cheese was successfully fortified with fish oil yielding a product that contained about 127 mg EPA and DHA per 28 g serving—nearly four times the level required to meet the proposed "Excellent Source" guidelines.
 
Proximate composition, color, pH, and yield were not negatively affected by fish oil fortification of the cheese. In addition to partial vacuum packaging, the addition of fish oil to goat cheese prior to curd formation may have contributed to the enhanced oxidative stability of the fish oil observed in this study.
 
No change in oxidative stability was seen during four weeks of refrigerated storage and there was negligible difference in consumer purchase intent between fish oil fortified goat cheese and the control cheese.
 
"These results have positive implications for high-level fish oil fortification of dairy products," the researchers' report stated. "Important directions for future research include assessing fish oil fortification pre- and post-processing of dairy products, determining the upper threshold of fish oil incorporation into soft curd cheeses, and conducting longer shelf life studies to demonstrate commercial feasibility of fish oil fortified cheese."
 

U.S. Dairy Goat Inventory
Holds Steady

By Alan Harman

 
American milk goat numbers were unchanged last year as the national goat herd fell 4%.
 
The USDA's National Agricultural Statistics Service says the U.S. all goat inventory was 2.86 million head on January 1 while milk goat numbers held at 360,000.
 
The data shows the breeding goat inventory fell 4% year-on-year to 2.38 million head. Does one year old and older, at 1.78 million head, were down 3% while market goats and kids fell 5% to 487,000 head.
 
The kid crop fell 2% last year to 1.88 million head.
 
Meat and all other goats dropped 4% to 2.36 million head, while Angora goats fell 15% to 146,000 head.
 
Mohair production was 865,000 pounds from 149,000 goats and kids clipped for an average weight per clip of 5.8 pounds. Mohair price was $4.12 a pound with a value of $3.56 million.
 
NASS obtained the figures through a random sample of producers. Survey procedures ensured that all goat producers, regardless of size, had a chance to be included. Large producers were sampled more heavily than small operations.
 
About 23,000 operators were contacted during the first half of January by mail, telephone and face-to-face personal interviews to report their inventories as of January 1 and 77% of the reports were usable.
 



Milk goat inventory by state



State/Region

2011

2012

 2012 as
% of 2011

 

Alabama:

4000

3300

83

 

Arizona:

2000

3000

150

 

Arkansas:

4800

4700

98

 

California:

38000

41000

108

 

Colorado:

8200

11000

134

 

Florida:

5000

6000

120

 

Georgia:

3000

2900

97

 

Idaho:

3500

4000

114

 

Illinois:

4500

3900

87

 

Indiana:

12000

11500

96

 

Iowa:

31000

32500

105

 

Kansas:

4700

5300

113

 

Kentucky:

5500

7000

127

 

Louisiana:

1200

1300

108

 

Maryland:

1800

2300

128

 

Michigan:

10800

10000

93

 

Minnesota:

12000

11500

96

 

Mississippi:

3000

3100

103

 

Missouri:

11000

9000

82

 

Montana:

2600

2500

96

 

Nebraska:

2900

3100

107

 

New England1:

12700

11100

87

 

New Jersey:

2500

2000

80

 

New Mexico:

2800

2800

100

 

New York:

13000

12800

98

 

North Carolina:

7000

6300

90

 

Ohio:

8000

10000

125

 

Oklahoma:

6000

7000

117

 

Oregon:

9100

10700

118

 

Pennsylvania:

16000

15000

94

 

South Carolina:

2800

3000

107

 

South Dakota:

2300

2100

91

 

Tennessee:

7500

9000

120

 

Texas:

20000

20000

100

 

Utah:

2400

1800

75

 

Virginia:

5900

5200

88

 

Washington:

8500

6700

79

 

West Virginia:

2500

2500

100

 

Wisconsin:

50000

44000

88

 

Wyoming:

1400

1100

79

 

Other States2:

8100

8000

99

 

United States:

360000

360000

100

 

1 Includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
 2 Unpublished states.
Source: NASS

Friday, May 11, 2012
Weekly Australian Cattle Summary
AUSTRALIA - This report is a collection of weekly cattle price summaries from each Australian state by the Meat & Livestock Australia (MLA).

West Australia
Larger pastoral supplies

There was solid rainfall across the previous weekend and into the early parts of this week that has bought the break to the growing season. Falls of up to 45mm were recorded throughout much of the agricultural regions and with the temperatures currently remaining warm there has been a very solid germination in paddocks. Conditions in the north of the state continue to reasonable with the more moderate temperatures now allowing full access to mustering with this occupation now in full swing.

Saleyard numbers varied this week. Muchea’s numbers continued to rise due to larger volumes of cattle sourced from the northern pastoral regions. The southwest sales were small with only 200 head penned for sale, while the Great Southern sale at Mt Barker saw further constriction in it’s yarding. This constriction in cattle volumes sourced from the southern Agricultural regions will continue as further rainfall is received and feed levels increase as is usual at this time of year.

The supplies of heavy weight local steers and heifers remained very tight in physical markets. This was also the case in trade weight yearlings, both grass finished and grain assisted. Cow volumes, particularly local drafts were sold in considerably lower volumes this week with heavy weight bull numbers also more constricted. These lower supplies were however offset by the increased supplies of pastoral grades with these being of a solid quality. There were also very good supplies of reasonable quality local store yearlings available.

Processor demand increases

Vealers were again confined to calf weights. Demand from the local trade and retailers, which continued to be under pinned by restocker interest, saw very solid conditions remain in these categories.

The limited volumes of grain assisted trade weight local yearling steers and heifers recorded a stronger local trade competition. This created dearer values in both sexes and all weight categories. The supplies of grass finished trade weight yearlings were all but non-existent with quality generally only moderate. The majority of these were purchased by the feeder sector at slightly dearer price levels. The solid supplies of local store yearlings enjoyed an increased competition from both the feeder and restocker sectors. All grades and categories recorded dearer prices.

The prices for heavy weight steers, bullocks and heifers, both local and pastoral drafts received stronger demand. The smaller supplies of cows penned this week enjoyed a further increase in processor demand. This stronger demand saw prime heavy weight sales rise a further 2 to 3c/kg peaking at 161c/kg lwt. Heavy weight bull prices also increased due to a stronger processor demand with rates in the Great Southern up to 15¢/kg lwt dearer.

New South Wales
Supply lifts

Yardings increased 38% again as the majority of centres reported by MLA’s NLRS offered greater numbers. Gunnedah recorded the largest yarding since November last year while CTLX was one of the largest prime markets since the market commenced. The firm to dearer trend of recent weeks along with fine weather in some parts of the state as well as the approaching winter were factors behind supply increasing.

The trend of mixed quality was again evident. The better end of the slaughter cattle had generally had access to supplementary feeding or were crop finished. Competition was from the recent panel of buyers although at Wagga not all the usual feeder buyers were in attendance. Armidale late in the week was also missing a number of regular orders. Young cattle accounted for 68% of the states throughput with greater numbers of vealers penned. Cows accounted for almost 60% of the grown cattle.

Trade cattle were firm to dearer while later in the week a cheaper trend was evident. Even though some processors are booked a week or two in advance with direct cattle, those meeting specifications were firm to 8¢/kg dearer with the yearlings receiving the largest gains.

Solid demand has been evident across the eastern states as well. This was highlighted by the EYCI climbing 0.25¢ to 374.25¢/kg cwt at the completion of Thursday’s markets.

Most of the grown steers offered were heavy weights which improved 1¢ to 6¢/kg as the bullock portion were fully firm. The light and medium weight cows to processors were firm to dearer however the heavy weights sold to a mixed trend.

A dearer trend

Large numbers of medium weight vealer steers were purchased by restockers from 212¢ to 216¢ with sales to 244.2¢/kg. Medium and heavy weights to the trade range from 202¢ to 213¢/kg. Medium and heavy weight vealer heifers to the trade ranged from 198¢ to 202¢ with the heavy weights making to a top of 233¢/kg. Medium weight C3 yearling steers to the trade gained 8¢ to 207¢ as the heavy C3s improved 2¢ to 196¢/kg. Medium and heavy weights to feeders ranged mostly from 190¢ to 197¢ to be up to 5¢/kg dearer. Light and medium weight yearling heifers to feeders were firm to 10¢ dearer however some of the medium weights to restockers lost 5¢/kg. Medium and heavy weights to the trade were slightly dearer in making from 183¢ to 188¢/kg.

Heavy C3 grown steers gained 5¢ to average 188¢, while the C4s were fully firm at 194¢ after making to 200¢/kg. The few bullocks ranged from 176¢ to 187¢/kg. Medium weight D2 and D3 cows were firm to slightly dearer and averaged 123¢ and 132¢/kg respectively. A fair number of medium weights returned to the paddock around 126¢/kg. Heavy cows made to 150¢ as the D3 and D4s generally sold in the mid to late 130¢/kg range.

Queensland
Steady supply

Despite the absence of the Toowoomba sales due to the public holiday and a reduced yarding at Dalby, overall supply at physical markets covered by MLA’s NLRS hovered around last weeks level. This was due to increased numbers at both the Roma sales plus a few extra at Warwick.

The change in the season was reflected in overall quality, and as the first of the frosts appear young cattle made up 60% of total numbers yarded. With a few areas starting to dry off values for calves and vealer steers tended to ease around 4¢ to 8¢/kg. A fairly large sample of vealer heifers to slaughter varied in price from centre to centre and for the week averaged 5¢/kg cheaper. A large run of good quality lightweight yearling steers suitable for restockers were penned and the overall high standard managed to push prices up by 6¢/kg. Domestic medium weight yearling feeder steers struggled to maintain the previous week price averages and in places lost around 5¢/kg. However heavy feeders went against this trend and despite not all feeder operators being active in the market the remaining buyers were able to absorb the supply plus lift average prices by 2¢/kg.

Bullocks to export slaughter experienced a mixed trend and across all markets for the week averaged 2¢/kg cheaper against the solid gains of the previous week. Demand for cows also varied in places and gained ground at Warwick but lost value at late week sales nevertheless overall average prices for the week on good heavy cows experienced very little change.

Some cattle cheaper

Calves returning to the paddock averaged 8¢ cheaper at 210¢ and sold to 238.2¢ while slaughter descriptions averaged 197¢/kg. Vealer steers to restockers averaged 4¢ less at 213¢ with a few to 235.2¢/kg. Vealer heifers to slaughter lost 5¢ to average close to 184¢ while a small selection of top end quality lines sold to local butchers at 218.2¢/kg. A large supply of lightweight yearling steers to restockers made to the occasional 244.2¢ with most around 217¢/kg. The largest number of medium weight yearling steers to feed averaged 5¢ cheaper at 195¢ with sales to 211.2¢/kg. Heavy yearling steers to feed averaged around 188¢, the occasional well bred pen to 200.2¢/kg. Lightweight yearling heifers to the trade averaged 188¢ while a large sample sold to restockers at 203¢/kg. Good medium weight yearling heifers to feed averaged 171¢ and the D muscle lines made closer to 153¢/kg.

Heavy steers to export slaughter averaged 174¢ and sold to 183.2¢ while the bullock portion made to 178¢ to average 2¢ cheaper at 172¢/kg. Medium weight 2 score cows averaged 116¢ and 3 scores 130¢/kg. A fairly large sample of good heavy cows experienced no change in price at 142¢ with a few to 158.2¢/kg.

South Australia
Small yardings

The SA LE had a smaller yarding that featured mainly young cattle with supplementary fed yearlings attracting strong demand from the usual trade and export buyers.

Lines of well-bred vealers and store conditioned yearling steers attracted strong competition from feeder buyers who had their numbers boosted by an additional order. Small numbers of pastoral bred lightweight C1 and C2 yearling steers sold from 127¢ to 172¢/kg. Vealer steers were in limited numbers to the trade and feeder orders with all sales rising above 200¢/kg.

Lightweight and a few medium weight yearling steers sold to feeder activity at much dearer levels. The trade sourced C and B muscled medium and heavyweight yearling steers also at improved prices. Only a handful of grown and manufacturing steers and grown heifers were penned, with the small lines of beef cows selling from 110¢ to 154¢/kg.

After some more useful rainfall over the past week and following the dearer trend of past weeks Mt. Gambier’s numbers remained similar. Most of the usual SA and Victorian trade and export buyers were operating, albeit selectively at times. Feeder and restocker orders were also quite active on a mixture of young cattle, plain quality 1 score beef cows possibly in calf, and lightweight bulls.

Millicent’s much smaller yarding for its fortnightly sale contained young cattle, mainly manufacturing grown steers, beef and a few dairy cows in mixed quality runs that sold to limited trade and export competition due to the small numbers available. Feeder orders were also active on suitable well bred young cattle at mainly dearer levels.

Variable prices

The varying quality yarded combining with some limited trade and export competition led to erratic trends on most categories.

Limited sales of vealer steers to the trade sold from 203¢ to 238¢ with C3 sales 11¢ to 19¢/kg dearer. The C1 and C2 lightweight steers to feeder and restocker activity sold from 185¢ to 216¢/kg. Vealer heifers in small numbers to the trade sold between 180¢ and 214¢, with C muscled sales 2¢ to 27¢ cheaper and the D muscled 17¢/kg dearer. Yearling steer C3 medium and heavyweights sold from 180¢ to 210¢ with B-muscled sales to 224¢ at prices 5¢ to 6¢/kg more. Feeders sourced C2 medium weight steers from 182¢ to 207¢/kg at dearer levels. Yearling heifer C3 sales ranged from 163¢ to 200¢ with the medium weights 14¢ dearer, while the heavyweights were 9¢/kg cheaper.

Limited sales of C2 and C3 grown steers sold generally from 173¢ to195¢, or unchanged to 7¢ dearer and averaging 345¢/kg cwt. The beef cows sold from 110¢ to 154¢ at basically unchanged prices, and mainly 235¢ to 285¢/kg cwt. Friesian heavyweights sold from 122¢ to 135¢ to be unchnaged to 6¢/kg dearer.

Victoria
Supply climbs again

Following on from the larges yarding last week, supply increased a further 20% across all markets reported by MLA’s NLRS. Just over half the cattle offered were at Leongatha, Pakenham and Wodonga. When compared to the corresponding week last year, yardings are up 43%.

The extra supply though had an impact on quality at a number of centres as more plainer cattle were offered. This is to be expected at this time of year with the cooler weather impacting pastures and livestock. Pakenham early in the week though had some good supplementary fed yearlings and bullocks, while at Bairnsdale there were increased numbers of high yielding heavy vealer steers.

Young cattle accounted for just 33% of the total throughput with yearlings only just out numbering the vealers. Most of the young cattle offered were medium and heavy weights. Cows represented just over 31% of the states yarding with around 46% being dairy cows, while grown steers accounted for 22%. Similarly to the young cattle, the grown cattle were carrying plenty of weight.

Young cattle generally sold to a mixed trend as the vealers were mostly firm to cheaper. The yearling steers were firm to a couple of cents dearer while the heifer portion was generally cheaper. At the close of Thursdays markets the EYCI was 374.25¢ which was up 0.25¢/kg cwt on week ago levels.

Heavy grown steers were 3¢ either side of firm as the bullocks were mostly cheaper with the lean lines most affected. Medium and heavy beef cows were firm to cheaper as the dairy portion was cheaper.

Mixed prices

Heavy muscled and high yielding B muscle vealer steers to the trade made to 240¢ with most of the medium and heavy weights making from 218¢ to 221¢/kg. The C muscle medium and heavy weights ranged from 201¢ to 216¢//kg. Medium weight vealer heifers were 9¢ to 11¢ cheaper as the heavy B muscle lines lost around 8¢/kg. The heavy C3s slipped 3¢ to average 206¢/kg. Medium weight C3s to the trade improved 1¢ to 207¢ as the heavy weights were firm around 199¢/kg. Feeders mostly paid from 188¢ to 193¢/kg. Heavy yearling heifers to the trade averaged 186¢ to be 3¢/kg cheaper.

Heavy C3 steers eased 2¢ to 191¢ as the C4s improved 3¢ to average 192¢/kg. The bullocks offered generally made from 178¢ to 186¢/kg. Medium weight D3 beef cows lost 8¢ to 130¢ with sales to 145¢/kg. Heavy D4 cows reached 152¢ to average 141¢/kg to be fully firm. Medium weight D1 dairy cows eased 3¢ to 112¢ as the D2s lost 6¢ to average 119¢/kg. The heavy dairy cows were in large numbers as the D1s were slightly cheaper with most around 117¢ as the 2 and 3 scores ranged from 125¢ to 132¢/kg.