2011 Forecast: Trade Higher on Broiler Meat and Beef Demand
US - Exports of broiler meat, beef and pork are all forecast to rise, according to the Livestock and Poultry: World Markets and Trade report from the USDA Foreign Agricultural Service.

 

Summary
Broiler Meat: Exports are forecast moderately higher. Both the United States and Brazil have ample supplies and market access to satisfy rising imports by Russia, the Middle East and a number of markets in Asia. The strongest import growth is expected in Russia where the United States, its leading supplier, is expected to fill the tariff rate quota.

Beef: Exports are forecast to rise, reversing the trend of recent years. Production expansion by South America and India is expected to more than offset declines in North America and Oceania. However, growth in world trade continues to be constrained by tight supplies and Sanitary/Phytosanitary (SPS) restrictions. Imports in a number of countries are forecast higher as domestic supplies are tight. Also, continued economic recovery is expected to bolster Asian imports.

Pork: Exports are forecast just short of the record set in 2008. More competitive US and Brazilian pork is expected to displace EU shipments, where rising costs of production result in lower exportable supplies. Global demand is expected to be slightly stronger with contracting Canadian production offset by larger imports and improving economic conditions stimulate Asian demand.


 
PORK AND SWINE: 2011 FORECAST OVERVIEW

Slight Growth in World Pork Production, Likely Tempered by Higher Feed Costs
World pork production is forecast to rise about two per cent to 103.4 million tons with China accounting for 80 per cent of the increase. Modest production gains are also expected in the United States and Brazil, as higher feed prices are expected to temper growth throughout the world.

 
China: Production is forecast to grow by thee per cent to a record 51.5 million tons. The vast majority of the growth is expected to come from large-scale operations, supported by government subsidies. Production in the first part of the year will likely be weaker than during the same period in 2010, as ongoing disease problems and the end of government sow subsidies are expected to result in lower sow stocks at the beginning of the year. Production is expected to pick up later in the year, but could be tempered by higher feed costs.

United States: Production is forecast up nearly two per cent to 10.2 million tons as high feed prices are expected to keep the growth in sow farrowing modest and dampen hog weights. However, strong demand for swine will likely result in a three per cent growth in imports from Canada.

Brazil: Production is forecast up three per cent to about 3.3 million tons, bolstered by strong domestic demand as pork prices are expected to remain competitive with beef. Although concerns remain about credit and the value of the Brazilian real, export optimism is helping support production plans.

EU: Production is virtually flat at 22.1 million tons as a result of rising feed and investment costs. Greater competition on the world pork market and easing domestic demand is forecast to pressure carcass and piglet prices. A large percentage of pig farms do not yet comply with the EU environmental and animal welfare requirements that will enter into force in 2013, likely raising sectoral costs.

Canada: Production is forecast two per cent lower at 1.7 million tons, as the downsizing of the Canadian industry continues. After a number of years of continued decline in swine inventories, pig production will remain at low levels. This will translate into lower meat production and a potentially tight market as domestic demand picks up. Nonetheless, given lower production, per capita consumption is expected to continue its five-year downward trend. However, producers are expected to have a difficult time taking advantage of higher pig prices and tight supplies due in part to limited financing for expansion and increasingly stringent environmental regulations. Additionally, higher feed costs could result in lower slaughter weights, potentially further reducing Canadian pork production.

World Pork Exports Flat as EU Loses Export Share to the United States and Brazil
The world export forecast is virtually flat, although significant shifts are expected to take place between major suppliers.

 
EU: Exports are forecast to drop nine per cent to 1.6 million tons as a result of increased competition, particularly from the United States and Brazil. In addition, domestic supplies are expected to fall due to shrinking margins from higher feed prices and EU legislation that requires additional investment.

United States: Exports are forecast five per cent higher at 2.1 million tons, with market share expanding in Asian markets (Japan, Hong Kong and South Korea) and greater Canadian imports. Mexico is expected to continue growing in importance, although at a slower rate than before.

China: Exports are forecast higher due to stronger demand from traditional markets, Hong Kong, Japan and Kyrgyzstan. Cooked pork products typically account for nearly half of the exports to those markets.

Brazil: Exports are expected to rebound slightly on stronger demand from Brazil’s major markets. While strategically focusing on new markets in Asia, such as China, the government has begun to advocate for access to the United States and Mexico.

Although the state of Santa Catarina, Brazil’s largest pork-producing state, has been recognised as free of Foot and Mouth Disease (FMD), pork processors have not yet been approved for export to the United States.

Modest Import Growth as Strong Global Demand Meets Limited Supplies
Imports are forecast higher based on significantly higher purchases by key North American and Asian markets, as well as modest growth in virtually all other markets.

Canada: Imports are forecast to rise 15 per cent to 230,000 tons on lower domestic production and greater consumer demand following the recession.

South Korea: Imports are forecast eight per cent higher to 410,000 tons in response to rising consumer demand. Improving economic conditions are expected to result in greater restaurant consumption, where imported pork is widely used. Greater imports paired with larger domestic production is expected to result in nearly one-third of a kilogram increase in per-capita pork consumption.

China: Imports are forecast up six per cent, yet will account for only one per cent of consumption and remain below the 2008 record.

United States: Imports are expected to be three per cent higher on tight supplies and stronger domestic demand.

Small Pig Producers Bring Home the Bacon
VIET NAM - In Viet Nam, small pig farmers raising 10 or fewer animals near their village households can remain competitive with larger pig producers if they continue to exploit their advantages over larger farmers.



These advantages include their low labour costs and their ability to supply buyers with freshly slaughtered meat, a form most Vietnamese continue to prefer to the chilled or frozen meat from bigger piggeries.

These are the conclusions of a three-year research project led by the Kenyan-based International Livestock Research Institute (ILRI) and funded by the Australian Centre for International Agricultural Research (ACIAR) and the Consultative Group on International Agricultural Research (CGIAR).

ACIAR's representative in Viet Nam, Geoff Morris, speaking at a final workshop of the project held in Hanoi on 5 October 2010, said that smallholder pig producers, who supply about 80 per cent of the pork marketed in Viet Nam, play a big role in the nation's economy. The research project identified policies that would help Viet Nam's many small pig farmers to raise their incomes and remain competitive in the face of growing imports of pork and official support for larger piggeries.

Another advantage small producers have over large ones is that the former spend less on feed for their animals. Lucy Lapar, an economist with ILRI, said that while feed accounts for two-thirds of the costs of raising pigs at small piggeries, this was much lower than at bigger farms because small operators tend to feed their pigs by-products from their own crops and to let their pigs forage. Bigger operators must buy relatively expensive, industrially processed, feed.

Household-based pig production generates gross margins ranging from 4,000–15,000 Vietnamese dong (US$0.21–0.78 based on current exchange rates) per kilogram liveweight of pig produced. These are good indicators of returns to household labour and comparable to the current daily minimum wage of about 22,000 VND ($1.15). Among those employed in small-scale pig production are women and many others who would otherwise remain jobless.

Conducting a consumer survey of 1,650 households to investigate the demand for pork, the researchers found that it accounts for 40 per cent of household expenditure on meat and that fresh pork remains preferable to chilled or processed meat.

'The good news is that smallholder pig producers are highly competitive in producing fresh pork,' said Lapar. The bad news, she says, is that, compared to large-scale pig producers, most small producers in the country have to deal with poor genetic stock, low-quality feed, animal illnesses, and insufficient market information and policy support.

Pham Van Duy, from the Agriculture and Rural Development Ministry's Livestock Department, said that it is likely to become increasingly difficult for the nation's four million pig-raising households to continue to meet the growing demand for pork in terms of both increasing their quantity and quality, both of which are being demanded by the country's consumers. According to Viet Nam's General Statistics Office, the country's pork sales have steadily increased, from 1.5 million tonnes in 2001 to 2.9 million in 2009, with 27.6 million pigs now being raised in the country.

This smallholder pig research project, Improving the competitiveness of pig producers in an adjusting Viet Nam market, was carried out in Ha Noi, Ho Chi Minh City and six of Viet Nam's provinces from 2007 to 2010. Partners in the project include the Centre for Agricultural Policy – Institute of Policy and Strategy for Agricultural and Rural Development, the International Food Policy Research Institute, Oxfam and the University of Queensland.

Belgian Pig Industry Shrinks
BELGIUM - The number of farms with pigs in Belgium has shrunk by 4.6 per cent compared with last year.

 

A provisional count showed the country has 5,879 farms, of which 5,125 were in Flanders, the northern part of the country – which mostly consists of flat countryside.

The total number of pigs, however, grew slightly by 1.2 per cent to almost 6.4 million animals. The majority of this number, more than six million, can also be found in Flanders. The greatest growth was seen in finishing pigs.

India has potential to be world’s No 1 food producer
[25 October 2010] The world’s second largest food producer after China, India has the potential to be the biggest within the food and agriculture sector. Total food production in India is likely to double in the next 10 years. With this in mind, the country is in the process of enhancing total food production to 20% within five years.

Asian Agribusiness sets dates for 2011 conferences
[25 October 2010] Asian Agribusiness Media has confirmed four conferences and a vocational training course for Asia’s livestock industries in 2011.The highly successful Poultry Feed Quality Conference will be held for the fourth time and return to Bangkok on 12-13 September 2011. The Pig Feed Quality Conference will move to Cebu on 9-10 May 2011 following its successful inauguration this year in Ho Chi Minh City. The Asian AgriFood Conference, last held at the Banyan Tree in Bangkok in 2009, will move to Singapore on 4-5 July 2011. A new two-day conference is planned for Asian Poultry Veterinarians on 7-8 November in Bangkok. The company also plans to launch a vocational training course on sausage manufacture in Bangkok in August 2011.



 
Asia leads in global economic recovery
[25 October 2010] The latest International Monetary Fund’s Economic Outlook (October 2010) has highlighted Asia as the leading region in the global economic recovery. The developing Asian countries (China, ASEAN and India) are projected to continue leading the region with an average growth of 9.4% and 8.4% in 2010 and 2011, respectively. China's economic growth is mainly driven by strong domestic demand while ASEAN countries have also experienced a broad-based export rebound. The strong economic rebound in developing Asian economies is expected to give consumers in these markets the buying power to lift red meat consumption in the future. 

US Sows and Market Pigs in Decline (October 2010)
By Chris Harris, Senior Editor, ThePigSite. Our snapshot of the ongoing global pig industry trends as reported in October 2010 Whole Hog Brief. To read the full detailed analysis including all the commentary and graphical data, subscribe to the publication.

 Published monthly, Whole Hog Brief provides 10 pages of detailed analysis of global pig industry trends, summarising key data from all the major markets. If you need to keep up with global pig industry trends Whole Hog Brief is an invaluable tool.
Check out this month's contents
at the foot of the page
The number of hogs and pigs in the US has fallen by 2.6 per cent over the year, Whole Hog reports.

The breeding herd has fallen by 1.8 per cent and the total number of pigs on the market has dropped by 4.2 per cent.

Whole Hog says that the September US Hogs and Pigs Inventory shows a herd of 65 million and a breeding herd of 5.77 million.

In the UK, Whole Hog says that it has had its forecast for a change in the trend of the pig herd proved correct. The latest figures from Defra show a fourth consecutive increase in the size of the breeding herd. The herd has risen from 410,000 in 2008, to 421,000 in June last year and to 427,000 in June this year.

Whole Hog says that the significant figure is the rise in the number of gilts to 52,000.

The Polish Statistical Office has shown a 1.5 per cent rise in the breeding herd to 1.431 million head. The total herd was 14.87 million according to the latest census figure recorded by Whole Hog.


Global Pig Price Cycle Heads for Five-Year Peak
Whole Hog says that its global pig price cycle has moved past its previous peak, reached in May and June 2009.

It is now heading towards the high set in 2005 and Whole Hog believes this will be reached at the beginning of 2011.

Whole Hog predicts that with the global economy recovering prices could rise higher.

In Europe, Irish pig prices have moved up, despite the problems being suffered by the Irish economy.

Danish farmers have also seen gains and prices have also risen sharply in France in recent months.

Whole Hog says that in Europe, the drivers of herd size and availability of market pigs are dominant in determining pig prices.

US Exports Stutter but Growth Finally Arrives
The US has shown a two per cent rise in exports in the first seven month of this year. However, Whole Hog reports that exports in July this year were down by 3.3 per cent on July last year.

The US has seen growth in all its traditional markets except for South Korea where they fell by nearly 17 per cent in the period from January to July 2010.

For the Canadian export industry, the first seven months of the year have shown solid gain. Sales are up by 4.6 per cent, Whole Hog says.

Australian Market Gets a Taste for US Pork
Whole Hog reports that for the third month in a row, Australian slaughter numbers and meat production is up.

However, imports of pig meat have increased by 11.1 per cent year on year from July 2009 and exports have fallen by 10.1 per cent in the same period.

In Japan, Canada has grown its share of the market, while the Danish and US exporters are standing still. Overall, imports to Japan rose by four per cent in the first half of the year.

In South Korea, Whole Hog reports a decline in imports of 1.4 per cent in the period to August. The US has shown a drop of 12.2 per cent over the period, Canada 2.1 per cent and Denmark 14.5 per cent. In the month, South Korea imported 1.6 per cent less than a year ago.

October 2010


Chris Harris, Senior Editor

Six New Outbreaks of Aujeszky's Disease in France
FRANCE - The French veterinary authorities have reported six new outbreaks of Aujeszky's disease in the country.



The World Ogranisation for Animal Health (OIE) received follow-up report no.4 yesterday, 20 October. According to the report, the outbreaks occured at several farms in the Pyrénées-Atlantiques region.

A total of 15 animals were affected. All affected animals were slaughtered.

The source of the outbreak has not been discovered.

Further Reading

Aujeszky's disease AD,
This is an important disease of pigs caused by a herpes virus. The virus can remain hidden in nerves of the pig in a carrier state for long periods of time and then be reactivated. Once introduced into a herd the virus usually remains there and it can continually affect reproductive performance at varying levels. The virus can survive for up to three weeks outside the pig. Acute outbreaks of disease occur when virulent strains of the virus first infect an unvaccinated susceptible herd. The virus crosses the uterus and placenta and infects the foetuses.
The pig is the main host. Dogs and cattle may become infected, show nervous signs and die.

Symptoms
Sows
Coughing.
Fever
Nervous signs
Reproductive failure.
Abortions.
Mummified piglets.
Stillbirths.
Birth weak litters.
Piglets
Nervous signs.
Incoordination.
Sneezing.
Coughing.
High mortality.
Low / poor viable piglets.
Weaners & Growers
Fever.
Sneezing.
Coughing.
Pneumonia.
Nervous signs including incoordination, fits and meningitis.
Some strains of the virus can cause severe respiratory disease and others severe rhinitis.
Usually low mortality.
All Other Species
Nervous signs.
Death.
Causes / Contributing factors
Movement of carrier pigs.
Virus airborne - at least 3km (2 miles).
Infection from feral (wild) pigs.
The role of mechanical spread by birds is questionable.
Contaminated carcasses may spread infection.
Mechanically on people.
Contaminated vehicles.
Through infected semen via AI or a carrier boar.
From infected slurry.
Within herds it may be spread by nose to nose contact, or by aerosol droplets.
Periods of stress may activate disease.
Continual production systems perpetuate disease.
Additionally:
The presence of other infections such as PRRS and leptospira may increase the severity of disease.
Diagnosis
When a susceptible breeding herd first breaks down with this disease the clinical signs described above strongly suggest aujeszky's disease and are almost diagnostic. Laboratory tests are required to confirm the diagnosis.

Agri department pushes for Philippine halal food standards
[22 October 2010] The Philippines is stepping up the development of halal standards for food commodities to enable the country to tap the multi-million dollar global market for halal products. Mr Sani Macabalang, Head of the Department of Agriculture (DA)-Halal Food Industry Development Committee (HFIDC) and DA halal coordinator stressed the need for these standards, warning that failure to have them in place will prevent the country from competing globally. To develop the local halal industry, the HFIDC recommended the harmonisation of halal protocols and procedures by various government agencies, development of halal certification and accreditation competencies and capability-building of certifying bodies and government halal food inspectors, auditors and the like in close coordination with the National Commission on Muslim Filipinos.

Agri department pushes for Philippine halal food standards
[22 October 2010] The Philippines is stepping up the development of halal standards for food commodities to enable the country to tap the multi-million dollar global market for halal products. Mr Sani Macabalang, Head of the Department of Agriculture (DA)-Halal Food Industry Development Committee (HFIDC) and DA halal coordinator stressed the need for these standards, warning that failure to have them in place will prevent the country from competing globally. To develop the local halal industry, the HFIDC recommended the harmonisation of halal protocols and procedures by various government agencies, development of halal certification and accreditation competencies and capability-building of certifying bodies and government halal food inspectors, auditors and the like in close coordination with the National Commission on Muslim Filipinos.


NOTE: I remember back around 2006/07 when I was aware of inquiries out of Malaysia for the export of 10,000 heads every month from the Philippines.There seemed to be no real willingness on anyones part to try and get this export off the ground.Then one day an announcement was made that the Philippines did not think 10,000 heads was possible and Malaysia went looking elsewhere.Lost markets are extremely complicated to try and regain.Lets hope there is a real willingness this time to get this idea lauched off the ground and get the state making money from its GNP.China is another hugh market.

What I post about world current trends,I do so to help others understand what is happening globally in their respected livestock business venture.What goes around,comes around.Worldwide,pressures on decline in many livestock sectors.Right now we are in a decline mode.So true these added pressures create extra hardships on local producers.The hog industry in the Philippines has traditionally relied on the holiday season for better than average prices.Nothing in life is a given.

Every country has its GNP (gross national products)exports.The Philippines is an agriculture culture and the country has opportunities to capilize on this.Agriculture products for exports brings in hard currency for the state.Or would the state rather rely on OFWS and their money remittences as the states GNP.If the Philippines does not act on its agriculture strenghts,other countries will.The RP Govt. needs to be willing to send fact finding trade missions to other Asian nations to see what and where Philippines agriculture products can be exported to.The spin off off jobs this will create on home soil from the production level all the way to the loading of Made In The Philippines labels.In turn lets hope the citizens of the Philippines will be able to stay and live in the Philippines instead of having to leave their birth place for foreign lands as cheap labor.Opportunties are there just needs some Govt. intervention.

personal opinion only???

Oats Production at Record Lows
Production of oats for 2010/11 is estimated at a record low 82 million bushels, down five million from last month and 11 million from 2009/10. The estimated yield was lowered 1.7 bushels per acre from last month to 64.6 bushels. Compared with last year, yields were down 2.9 bushels per acre. Area planted to oats is estimated at 3.1 million acres, down slightly from last month and down 266,000 acres from 2009/10. The largest decline occurred in North Dakota, where planted area decreased 70,000 acres from last year and is a record low for that state. Harvested area is estimated at 1.3 million acres, down slightly from last month and down 111,000 acres from last year, making it the smallest acreage harvested for grain on record.

Total supply is forecast at 242 million bushels, down six million from last month. Ending stocks were lowered by six million bushels this month to 48 million, down 32 million from 2009/10. Prices for 2010/11 are unchanged this month at $2.20 to $2.70 per bushel, compared with $2.02 last year.


 


 
Hay Production up in 2010/11
All-hay production in 2010 is forecast at 152.3 million tons, up from 147.4 million in 2009. This increase stems partly from a 3.2 per cent rise year-to-year in yield at 2.55 tons per acre. Total hay harvested area for 2010/11 decreased slightly to 59.7 million acres from 59.8 million last year. Roughage-consuming animal units (RCAU) in 2010/11 are projected to be 69.5 million units, down from 70.2 million in 2009/10. With hay production up and RCAUs down, hay supply per RCAU is 2.49 tons in 2010/11, compared with 2.41 tons in 2009/10.

Production of alfalfa hay and alfalfa mixtures is forecast at 71.3 million tons, down two per cent from the August forecast but up slightly from last year. Based on 1 October conditions, yields are expected to average 3.44 tons per acre, down 0.05 tons from August but up 0.09 ton from 2009. Harvested area is forecast at 20.7 million acres, unchanged from August but down two per cent from the previous year's acreage.

Other hay production is forecast at 81 million tons, down one per cent from the August forecast but up six per cent from 2009. If realised, this will be the third highest production level on record. Based on 1 October conditions, yields are expected to average 2.08 tons, down 0.01 tons from the August forecast but up 0.10 tons from last year. If realised, this will be a record-high yield, surpassing the 2.06 tons per acre in 2004. Harvested area, at 38.9 million acres, is unchanged from August but up one per cent from the previous year.

 
International Outlook

Foreign Coarse Grain Production Prospects Increased This Month
World coarse grain production in 2010/11 is projected down 8.9 million tons to 1,088.8 million because of the large US cut. However, foreign coarse grain production changes this month are partly offsetting, up 4.8 million tons to 753.2 million. Foreign corn production is up 6.2 million tons to 498.0 million boosted by increases for Argentina and Sub-Saharan Africa. Foreign barley production prospects continue to deteriorate, down 1.3 million tons to 120.6 million. Global barley production is projected to be the lowest since 1970/71. World oats production is down slightly this month to 21.5 million, the lowest in USDA’s history back to 1960. Generally, poorer returns than those for alternative crops have limited barley and oats area planted, and unfavorable weather across much of Europe limited yields.

Argentina’s corn production is forecast up 4.0 million tons this month to 25.0 million. In recent weeks, excellent rains across western corn areas such as Cordoba have complemented earlier good rains to the east. This has facilitated timely corn planting in contrast to previous years when dryness delayed seeding. Recent increases in corn prices have encouraged seeding, as have relatively ample export quotas for the previous crop. Moreover, many producers are feeling the negative effects of continuous soybeans on yield and soil productivity, and they are attracted to corn to provide a crop rotation. Projected harvested area is up 19 per cent this month to 3.2 million hectares. The forecast yield is nearly unchanged this month but is down six per cent from the previous year’s record.

 
Corn production in Sub-Saharan Africa is up 2.1 million tons this month to 54.2 million. Rainfall across most of the region has been favourable and crop reports support increases in many countries. The largest increase is for Zambia, up 0.8 million tons to 2.8 million with increased area and very good yields. Malawi and Mozambique are each increased 0.4 million tons, with good yields pushing the increase in Malawi and increased reported area the main factor in Mozambique. There are smaller increases this month for Angola, Rwanda, Madagascar, Congo, Uganda, Somalia, Lesotho, Botswana and Swaziland. These increases overwhelm reductions for Benin, Burkina-Faso and Sierra Leone.

Serbia’s corn prospects are increased 0.3 million tons to 6.8 million due to good reported yields. EU corn production is up 0.25 million tons to 55.00 million as increased prospects for Romania, Bulgaria and France more than offset reduced prospects for Hungary and Spain. Russia’s corn production prospects are cut 0.5 million tons to 3.0 million as harvest reports indicate hot dry temperatures during grain fill reduced yields more than previously anticipated.

EU barley production is forecast down 0.7 million tons this month to 53.6 million. Spain, with barley harvest completed months ago, reported lower area and yields, reducing production 0.4 million tons to 8.3 million. There are smaller reductions this month for Poland, the Czech Republic and Hungary. Russia’s barley production is reduced 0.5 million tons to 8.5 million as harvest reports confirm large yield losses due to drought. Statistics Canada reported slightly reduced area and yield for barley, trimming production prospects 0.25 million tons to 8.25 million. There is also a 0.1 million-ton increase in barley production for Algeria based on reported yields.

 
Oat production is reduced slightly this month for Canada, the United States and Spain, leaving global production at record-low levels. Foreign sorghum production is up slightly this month due to a 0.2-million-ton increase for Sub-Saharan Africa, but that is more than offset by reduced US prospects, leaving projected global production down 0.8 million tons this month to 63.3 million.

Increased beginning stocks, especially of US corn, are partly offsetting reduced production of world coarse grains in 2010/11. Global coarse grain beginning stocks of 198.8 million tons are the largest in eight years. Foreign coarse grain beginning stocks are up 1.0 million tons this month to 150.6 million. EU coarse grain beginning stocks are up 0.6 million tons to 23.8 million, mostly due to increased corn imports in late 2009/10 and reduced 2009/10 local marketing year barley exports. Iran’s beginning stocks are up 0.5 million tons this month due to strong corn imports at the end of 2009/10. Consumption revisions for 2009/10 for Canada and import revisions for Brazil, Colombia and Venezuela boosted 2010/11 corn beginning stocks 0.2 million tons each. There are smaller increases this month for Lebanon, Cameroon, Senegal, Kenya and Azerbaijan. These more than offset reduced stocks for Paraguay and Argentina, each down 0.3 million tons due to strong 2009/10 corn exports. There are also small reductions for several other countries.

Global Coarse Grain Consumption up, Ending Stocks Reduced
World coarse grain consumption in 2010/11 is forecast up 3.9 million tons this month to 1,124.2 million. Most of the increase is for the United States, with foreign consumption up 1.1 million tons to 820.0 million. With increased production, consumption in Sub-Saharan Africa is increased 0.9 million tons to 99.1 million. Declines in Burkina-Faso and Benin are more than offset by numerous increases in other countries. Increased supplies support increased feed use of 0.3 million tons each in Turkey and Venezuela; 0.2 million tons each in Colombia, Iran, Indonesia, Serbia and South Korea; and smaller amounts for Lebanon, Morocco and Azerbaijan.

EU coarse grain use is down 1.2 million tons this month to 151.9 million mostly due to reduced production and feed use of barley and reduced imports and feed use of corn. Russia’s coarse grain use is reduced 0.8 million tons this month to 21.7 million. Reduced corn and barley production is only partly offset by increased barley imports and despite policies to support meat production, coarse grain feed use is expected to decline more year-to-year than increases in wheat feeding. Canada’s coarse grain use is reduced 0.7 million tons this month to 22.5 million. Feed use is trimmed 0.2 million tons and corn food and industrial use is cut 0.4 million tons to 4.3 million. Coarse grain consumption for Argentina is lowered 0.5 million tons this month with lower expected corn feeding. There is also a small reduction in forecast use for Uruguay caused by increased corn export prospects.

World coarse grain ending stocks projected for 2010/11 are down this month due to the large drop in US corn stocks. Foreign coarse grain stocks are forecast up 2.1 million tons to 136.9 million, with increased corn stocks more than offsetting a small decline for barley. World corn ending stocks for 2010/11, projected at 132.4 million tons, are larger than in six of the previous 10 years.

Corn ending stocks in Sub-Saharan Africa are projected up 0.8 million tons this month to 9.8 million, boosted by increased production in many countries. Increased production is also supporting higher corn stocks prospects in Argentina, up 0.7 million tons, and in the EU, up 0.6 million. Strong imports in 2009/10 and increased beginning stocks for 2010/11 are supporting corn ending stocks prospects for Iran, up 0.3 million tons; and for Brazil, Canada and Colombia, each up 0.2 million. Serbia’s corn stocks are up slightly due to increased production. Increased corn export prospects are trimming corn ending stock prospects in Paraguay, Mexico and Uruguay; while strong demand is expected to reduce corn stocks in Venezuela.

US Corn Export Prospects Cut Due to Reduced Supplies
US corn export prospects for 20010/11 (October-September) are reduced 2.0 million tons to 51.5 million (the local marketing year is cut 100 million bushels to 2.0 billion bushels). This is still up three per cent from the 50.0 million estimated for 2009/10. As of 30 September 2010, outstanding export sales reached 13.8 million tons, up 23 per cent from a year earlier. However, increasing US prices and increased competition, especially from Argentina, is expected to limit future US corn sales.

Increased corn exports are expected from Argentina, up 1.5 million tons to 15.0 million based on sharply increased production prospects. Paraguay’s export prospects are up 0.3 million tons this month as strong export demand will limit their stocks’ increase. Zambia’s corn exports are up 0.2 million tons. A large crop is expected to encourage exports to nearby markets. Mexico’s 2010/11 corn exports are boosted 0.2 million tons based on the strong exports for 2009/10. Uruguay’s corn export prospects are nudged up for the same reason.

 
World corn trade for 2010/11 is increased slightly this month to 93.6 million tons. Turkey’s corn imports are up 0.3 million tons to 0.7 million to support poultry production. Meat production supports corn import increases of 0.2 million each for Colombia, Indonesia and South Korea. Lebanon’s corn import prospects are increased slightly. Mostly offsetting these corn import increases is a reduction of 0.5 million tons for the EU, where meat production is expected to decline in 2011; and a reduction of 0.4 million tons for Canada, with less industrial use expected.

Global barley trade is up slightly this month to 16.2 million tons with a 0.2-million ton increase in imports by Russia and exports by the EU. Despite tight grain supplies, the EU is expected to respond to strong foreign demand and boost exports. World sorghum trade for 2010/11 is unchanged this month. US sorghum exports are unchanged this month at 4.0 million tons as foreign customers are expected to bid sorghum away from the domestic market.

US Feed Outlook - October 2010
Corn planted and harvested area are both increased this month, but a 6.7-bushel-per-acre decrease in yield lowers forecast corn production 496 million bushels. Production also is decreased for sorghum, barley, and oats, according to the USDA's Economic Research Service (ERS).

 

Corn feed and residual use is raised because of a slight rise in grain-consuming animal units and earlier-than-usual harvesting before the start of the crop year. US corn exports are reduced mostly due to higher prices and competition from Argentina. World coarse grain production is reduced this month and use is increased, leaving global stocks slightly lower. Corn, sorghum and barley prices are increased this month but the projected range for oats is unchanged.

 
Domestic Outlook

Feed Grain Production Down Sharply in 2010/11
US feed grain production for 2010/11 is forecast at 335.4 million tons, down from 349.1 million last month. The month-to-month decrease reflects reduced forecast production for corn and sorghum and smaller production estimates for barley and oats from the Small Grains 2010 Summary report. Planted area for the four grains is decreased 400,000 acres this month, and acres harvested for grain were decreased 300,000 acres. Yields per harvested acre for the four grains combined are decreased to 3.74 metric tons per acre, compared with 3.88 metric tons last month. Beginning stocks in 2010/11 are raised to 48.1 million tons, based on the September 30 Grain Stocks report. Total 2010/11 feed grain supply is forecast at 385.5 million tons, down from 390.7 million last month and 398.3 million in 2009/10.

Total 2010/11 feed grain utilisation is projected at 359.0 million tons, up from 358.7 million last month and 350.2 million in 2009/10. The month-to-month increase is mostly from higher corn feed and residual use but is partly offset by lower corn exports and lower sorghum domestic use. Total projected feed grain ending stocks for 2010/11 are lowered 5.5 million tons to 26.5 million, mainly reflecting tight corn supplies.

Feed Use
On a September-August marketing year basis for 2010/11, feed and residual use for the four feed grains plus wheat is projected to total 147.26 million tons, up 5.29 million from the revised total of 141.97 million tons in 2009/10. Corn is estimated to account for 93 per cent of feed and residual use in 2010/11, up from 92 per cent in 2009/10.

 
The projected index of grain-consuming animal units (GCAU) in 2010/11 is 92.1 million units, up from the revised 91.5 million in 2009/10. Feed and residual per GCAU in 2010/11 is estimated at 1.60 tons, up from 1.55 in 2009/10. In the index components, GCAUs are increased for dairy, pork and poultry but decreased for beef.

With higher prices forecast for feed grains this month, most of the 2011 production forecasts for meat, milk and eggs are reduced. However, feed and residual use for 2010/11 is increased this month because it is calculated as the residual and about twice as much corn as usual was harvested before the 1 September start of the marketing year. September 1 corn stocks (2009/10 ending stocks) are reported for ‘old crop’ (harvested in 2009) stocks by respondents to the NASS survey. ‘New crop’ (harvested in 2010) corn harvested and used before the start of the marketing year is expected to show up as residual usage during the first quarter of the new marketing year. Early new-crop usage showed up as higher first quarter feed and residual use in the September-November quarter of 2007/08, the last time the corn harvest was early.

USDA’s September 17 Milk Production report indicated milk production in the 23 majors states during August totalled 15 billion pounds, up 2.8 per cent from August 2009. Production per cow averaged 1,796 pounds for August, 51 pounds above last year. However, the number of milk cows on farms declined by 10,000 head from August 2009 to 8.36 million. Milk production for 2010 is raised slightly from last month as higher milk per cow more than offsets lower cow numbers. The forecast for 2011 is reduced as higher feed prices are expected to slow the rate of growth in cow numbers and milk per cow compared with last month; with lower milk production, feed needs would be reduced.

US hog breeding inventory on the third quarter of 2010 was at 5.77 million head, down two per cent from last year and down slightly from the previous quarter according to USDA’s September 24 Quarterly Hogs and Pigs report. Market hogs inventory, at 59.2 million head, was also down three per cent from last year. As the result of lower market inventory, lower slaughter and slower growth in slaughter weights, 2010 pork production forecast is reduced. Intended farrowings from December 2010 to February 2011, at 2.89 million sows, are up slightly from the same period a year earlier but down four per cent from the period December 2008 to February 2009 based on the report. Pork production for 2011 is lowered from last month as relatively high feed prices are expected to keep the growth in sows farrowing modest and dampen hog weights requiring slightly less feed.

USDA’s Broiler Hatchery report on 6 October indicated that broiler-type eggs sets and chicks placed have been increasing. Cumulative placements of broiler flock are up from the same period a year earlier. For these reasons, the broiler production projection is increased for the last quarter of 2010 but reduced for 2011 as producers are expected to respond to rising feed prices, slowing the expansion and reducing feed use relative to last month’s forecast.

Egg-type chicks hatched and pullet chicks for future hatchery supply have been decreasing based on USDA’s September 21 Chickens and Eggs report. Rising feed prices are also expected to reduce egg production for 2011. If realised, lower production would weaken feed use by the egg industry.

USDA’s September 15 Turkey Hatchery report indicated that during August 2010, turkey poults hatched were down two per cent from a year earlier but net poults placed were 80,000 above August 2009. Turkey production projection for 2010 remains the same as that of last month but the turkey meat forecast for 2011 is lowered from last month as higher feed prices slow growth and weaken feed needs.

USDA’s September 17 Cattle on Feed report indicated placements and marketings of feed cattle during August both increased seven per cent above 2009. Beef production forecasts for 2010 are raised as second half production is higher than previously expected. The 2011 beef production forecast is also raised primarily in the first quarter as larger-than-expected third quarter 2010 placements are marketed. Thus, feed needs by the cattle feeding industry are expected to remain strong but will partly be met by plentiful supplies of spent distillers’ grains.

Minor Changes Made to 2009/10 Crop Year
The following changes are made to the 2009/10 balance sheets:

Corn: feed and residual use is lowered 358 million bushels to 5,167 million this month based on 1 September stocks; food, seed and industrial (FSI) use is raised 30 million bushels, reflecting an increase of 25 million bushels for corn used for ethanol and small increases in other FSI uses; exports are raised seven million bushels to 1,987 million bushels based on trade data; ending stocks are raised 322 million bushels, to 1,708 million bushels, based on the 1 September stocks estimate.

Sorghum: FSI use is lowered 10 million bushels to 90 million due to tighter supplies; exports are also lowered one million bushels to 166 million based on trade data; ending stocks are raised 10 million bushels to 41 million based on the 1 September stocks estimate; and the farm price per bushel was raised from $3.20 to $3.22.

Barley: feed and residual use was lowered slightly, which lowered total use one million bushels to 217 million.

Oats: no changes were made.

Corn Crop Down Sharply in 2010/11
Corn production is forecast at 12,664 million bushels for 2010/11, down 496 million from last month. The forecast was lowered because of lower expected yield, down 6.7 bushels per acre from last month to 155.8 per acre. As forecast, this year’s production would be the third highest on record behind 2009 and 2007. Based on administrative data, 2010/11 planted area is raised 350,000 acres to 88.2 million and area harvested is up 258,000 acres to 81.3 million. Beginning stocks are raised to 1,708 million bushels, up 322 million from last month. Larger-than-expected carryout of old-crop corn, combined with an unusually early start to this year’s harvesting, suggests heavy new crop corn use before the 1 September beginning of the 2010/11 marketing year. Individual state harvest progress reports suggest that 600 to 700 million bushels of corn were harvested across the South, Southern Plains and southern Corn Belt before 1 September. This is double the level of the last two years and similar to what happened between the 2006/07 and 2007/08 marketing years. New crop corn usage ahead of 1 September 2007 lowered feed and residual disappearance during the June-August quarter of 2006/07 and boosted feed and residual disappearance during the September-November quarter of 2007/08.

 


 
The 1 October corn objective yield data indicate the second highest number of ears per acre on record for the combined 10 objective yield States (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin), behind only the record year of 2009. Record high ear counts are forecast in Iowa, Ohio and Wisconsin.

Feed and residual use is raised 150 million bushels to 5,400 million, reflecting the expected impact of new crop corn usage before 1 September on indicated disappearance during the current marketing year. Exports are lowered 100 million bushels to 2,000 million as a result of smaller supplies, higher prices and increased export competition from Argentina. Corn used for ethanol production in 2010/11 was unchanged this month at 4,700 million bushels, even though ethanol production in July (latest numbers available) was 1,116 million gallons, a new record. Corn used for high-fructose corn syrup (HFCS) was decreased 10 million bushels this month due to weak domestic demand. Total utilization is projected at a record 13,480 million bushels, up 40 million from last month and 396 million from 2009/10.

Ending stocks are lowered sharply this month by 214 million bushels. At a projected 902 million bushels, 2010/11 ending stocks would be the lowest since 1996/97. Projected stocks drop to less than 24 days of expected use. Tight supplies and strong demand boost expected corn prices 60 cents on both ends of the range to $4.60 to $5.40 per bushel, compared with $3.55 per bushel for 2009/10.

Sorghum Production Cut
Production is forecast at 337 million bushels, down 39 million bushels from last month and 46 million from last year. Based on updated administrative information, acreage changes were made in several states. Planted area is estimated at 5.4 million acres, down 598,000 acres from the previous forecast and 1.2 million from 2009. Planted acreage for 2010 is the lowest on record. Harvested area is forecast at 4.7 million acres, down 518,000 acres from the previous forecast and 862,000 acres from last year. If realised, this will be the lowest harvested acreage on record since 1936. Based on 1 October conditions, yield is forecast at 72.4 bushels per acre, down 0.3 bushels from September but up 3.0 bushels from last year. Record high yields are forecast in Louisiana and Texas. With a 10-million bushel increase in beginning stocks, total supply for 2010/11 is projected at 378 million bushels, down 29 million from last month, reflecting decreased production.

Projected total utilisation is 340 million bushels, down 30 million bushels from last month and 56 million from 2009/10. Feed and residual use is expected to be 20 million bushels lower this month and FSI use is expected to be 10 million bushels lower than last month, as strong prices and export demand limit sorghum feeding and processing use. Exports remain unchanged this month and are expected to total 160 million bushels, down from 166 million in 2009/10. Ending stocks for 2010/11 were raised one million bushels this month to 38 million.

The expected sorghum season average price was increased $1.10 on the low end of the range and $1.20 on the high end of the range to $4.80 to $5.60 per bushel, compared with $3.22 per bushel for 2009/10. This sharp increase in expected price reflects the smaller corn and sorghum crops, while export demand remains strong.

 


 
Barley Crop Forecast at 182 Million Bushels
Barley production for 2010/11 is forecast at 182 million bushels, down 2 million from August and 45 million from 2009/10. Average yield per acre, at 73.6 bushels, is up 1.3 bushels from last month and 73 bushels from last year. Area harvested for grain is estimated at 2.5 million acres, unchanged from last month and down 642,000 from 2009/10. Total supply of barley is projected at 312 million bushels, down 2 million from last month and 21 million from 2009/10. Imports were unchanged from last month’s projection of 15 million bushels.

 


 
Projected barley use was unchanged from last month. Ending stocks for 2010/11 were lowered by two million bushels to 87 million and are down 28 million from last year. Barley prices were increased by 10 cents on both the high and low ends of the range to $3.80 to $4.40 per bushel, compared with $4.66 in 2009/10.

Pork Commentary: Nasty Week for Hog Prices
CANADA - This week's North American Pork Commentary from Jim Long.
 

Jim Long is President &
CEO of Genesus Genetics.
This past week lean hog prices took a pounding with Iowa – South Minnesota averaging 64.11 on Friday. With the double whammy of higher feed prices there are few if any producers that can turn a profit at these hog prices.

Other Observations
UDSA Pork cut outs were $81.07 per pound last Thursday, lean hogs were 64.11. That is a 15 cent per pound spread or about $30.00 per head. There is no doubt it is better to be a packer than a producer these days.


Last week’s US marketing’s of 2.263 million head was large – down only 30,000 from the same week last year. In the coming weeks expect weekly marketing’s over 2.2 million.


The chicken industry after showing restraint for several months is now ramping up production 4 – 5 per cent year over year (10 million more chickens per week). The last time corn went over $5.00 per bushel the largest chicken company Pilgrim’s Pride went broke. Now increasing chicken production in the face of raising feed prices? It makes you wonder the wisdom of this plan. Hopefully financial danger signs bring some sanity to the chicken cowboys.


We understand $5.00 plus corn does not work to produce corn ethanol when oil is around $80.00 per barrel. BOO HOO!! We can only hope lots of losses can shut down corn ethanol production. It is an industry that is wrong for society ethically, economically, socially, morally, and environmentally.


We are aware of producers who have decided to pull the plug on their sow units in the last ten days. The new high feed prices were the proverbial straw that broke the camel’s back. We are not sure the degree of total liquidation triggered but is sure is making a dent in any expansion plans.


The industries perception of next fall’s hog supply is indicated by next October lean hog futures hitting life of contract highs last Friday of 76.60 up from 70 cents lean on 4 October. It takes a real optimistic person to see $5.00 corn making more hogs domestically or globally.


The US dollar has depreciated compared to the Euro about 15 per cent since June (15 October - .71, 8 June - .837). The weaker US dollar is making US products more price competitive against European products. The lower US dollar will be positive for US pork exports in the coming months as Europe is the next largest global pork exporter. World Pork Exports: USA 35 per cent, Europe – 27 25 per cent, Canada 19.4 per cent, Brazil 10.5 per cent. USA – Canada account for 55 per cent of all of the world’s pork exports.


US pork exports in August were less than 1 per cent lower than last year. The total US pork production was lower in August by 6 per cent. A slight decrease in exports should not have been unsuspected. In August hog prices were up $60.00 a head from a year ago and lower pork supply, not only made exports more expensive but also lowered pork availability. Currently the lower US dollar, increased pork supply and lower hog prices will in our opinion trigger greater pork exports.
Summary
It was a nasty week for hog prices. Most producers will be below break even. We have to get through the heavy seasonal marketing’s of the next few weeks before we see much price recovery. $5.00 corn is going to make fewer hogs next summer and fall. Expect lean hog futures the summer of 2011 on to strengthen.


Author: Jim Long, President & CEO, Genesus Genetics 

CME: Will Hog Prices Follow the Five Year Pattern?
US - Hog futures edged lower on Monday, with the nearby December contract down 87.5 points to $68.025/cwt, write Steve Meyer and Len Steiner.



Most other hog contracts also lost ground on lack of any bullish news and lower cash hog prices. USDA reported the IA/MN hog carcass price at $62.99/cwt. (weighted average), almost a full $1/cwt. lower than the Friday price and the lowest cash market price since February. The bottom chart (see below) may be a bit too busy but we ask your indulgence. It basically shows a range between the highest and lowest prices since 1999 (the green shaded area) as well as the daily prices for the 2009, 2010 and the 2004-08 average. The point in all this is that lower prices in October and November are nothing new, they have happened in some of the best years (such as 2004) and also in the worst years (such as 2009).

At this point, futures indicate that the cash hog markets will likely follow the five year average pattern, with prices expected to bounce back a bit in December from current levels. This does not have to be the case, however. In 2004, hog prices dropped sharply from mid September to mid October, but then bounced back in November and early December. Will this year follow the five year pattern or will it be more like 2004?

Much will depend on what happens with ham prices in the next six weeks. So far packers have been unable to put enough money on hams and ham demand has only been adequate. Light hams usually do well at this time of year as retail features provide a boost to the market. Light hams also do well because their supply is limited. The industry is producing ever larger hogs, which means that getting a 17-20 pound or even a 20-23 pound ham is becoming increasingly difficult. Larger hams, which make up much of the volume in the ham market, are now trading at an 11 cent discount to lighter ones. This is not unusual at this time of year but it is on the high side of the range. We will need to see higher prices for heavy hams going into November in order to get a boost for the cutout.

Also negative for cash hog prices at this point is the surge in the number of hogs coming to market. A big reason for the high pork prices late July and August was the shortfall in hog supplies, which caught many buyers off guard. We have shown the top chart (see below) a few times in the past but it helps show the dynamic in the hog market at present. The red line shows a rolling seven day total of the daily hog slaughter. On Monday, hog slaughter was 422,000 head, about 7000 head larger than the previous Monday and only slightly lower than a year ago. The seven day total was 2.270 million head, only 0.7 per cent lower than a year ago. At the start of this month, the seven day total was running as much as 8 per cent below year ago levels, which helps explain the sudden break in the cash hog market. Why the surge in hog slaughter? Cash corn prices have jumped 16 per cent in the last two weeks and they are up 44 per cent since July. Producers seem anxious to accelerate sales as that additional pound suddenly became a lot more expensive.

NMIS seeks funds for slaughterhouse upgrade
[21 October 2010] The National Meat Inspection Service (NMIS) of the Philippine Department of Agriculture is seeking PHP 24 million (USD 522,677) to upgrade 12 slaugtherhouse facilities in the country. NMIS Executive Director Jane Bacayo said that the existing slaughterhouses to be rehabilitated  are yet to be identified, however, these would be those established by local government units. Also, these would have to be located in strategic areas where livetock population is high. He said there are more than 1,150 slaughterhouses in the country, many of which need to be upgraded. So far this year, the agency has upgraded four slaughterhouses in four provinces.
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RFM to raise PHP 1.5b from floating rate notes
[21 October 2010] Philippine food and beverage conglomerate RFM Corp will raise PHP 1.5 billion (USD 34.55 million) by issuing floating rate notes. In a disclosure to the Philippine Stock Exchange, the company said it has reached a Floating Rate Notes Facility Agreement with several local banks and financial institutions.  The proceeds will be used to refinance the company’s debt and fund its capital expenditure. Earlier, RFM said it will spend some PHP 1 billion (USD 23.03 million) for its expansion and capital expenditure next year to prepare for the expected increase in consumer demand.