Thursday, April 12, 2012
CME: Cutout Values Still High, Feeder Cattle Still Low
US - Amid the carnage wrought by the LFTB situation over the past few weeks, we think some basic fundamentals of the current beef situation are getting overlooked, write Steve Meyer and Len Steiner.


While this is a demand hit that no one saw coming, there are still some factors — especially on the supply side — that are going to cause some major changes in the beef situation. The short-term impact of 50% CL trim prices plummeting are negative for sure but let’s remember some basic facts of the current situation.

Cutout values are still high by historical standards. Yes, it now appears that the magic $200 level may not materialize this year when just a few weeks ago it appeared to be a lock. But the Choice cutout still averaged over $180 last week. Monday’s $1 gain has been erased by two more down days but the value was still $177.09 yesterday. That is still higher than any cutout value prior to 2011 except for those two weeks back in 2003. Yes, we know costs are different and we agree that this situation is unfair but the cutout value is still nearly $180!

The number of feeder cattle available in the country is still VERY LOW relative to history. The Livestock Marketing Information Center (LMIC) in Denver estimates, based on USDA’s January 1 cattle inventory data, that there were 25.8 million head of feeder cattle outside of feedlots on January 1 this year. That is 4% fewer than one year ago and nearly 7% fewer than on January 1, 2010. This year marks the first time EVER that beginning-year feeder cattle numbers have been below 26 million head. And the trend will almost certainly continue this year. The last time that a U.S. calf crop was larger than the preceding year was in 1995.

There is no big move toward expansion at present. Heifers being held for beef cow replacement numbered 5.212 million on January 1 — 1.4% higher than one year earlier. Moreover, this year marks the first year since 2006 that the year-onyear change has been positive. A big reason for this positive but small number is, of course, the fallout of last year’s drought in the southwestern states that hold so many beef cow. Heifer numbers in Texas, Oklahoma and Missouri — the top three cow-calf states — were down 60, 55 and 30 thousand head, respectively, from one year earlier. The percentage declines are 9.8, 15.5 and 10 for those three states. Heifer numbers in New Mexico were down 20,000 or 21%. Numbers are growing in states that have grass —Nebraska, South Dakota, Colorado, Wyoming—but until the big cow-calf states know they have enough forage, cow numbers will not increase much.

The stage is set for expansion. The factors cited above point to exceptional returns for cow-calf operations in 2012 and 2013 provided the U.S. corn crop is not a complete failure. The chart at right shows LMIC’s estimates of cow-calf returns over cash costs (including pasture rent) since 1984. The next two years should shatter previous record highs based on current expectations for calf prices. The cattle business differs from other livestock/meat businesses, though, in that what people WANT to do and what Mother Nature ALLOWS them to do are sometimes very different things. Pasture conditions are improving in those big cow-calf states but it is only spring. The moisture situation, including pond/stock tank levels, is still far from good in many areas and it is only April. The summer months will be the test of whether the drought is over. The beef cow herd usually lags profits by two years. The 2012 herd is a function of losses in 2008 and 2009 plus the drought. Profits in 2010-11 and improving grass conditions should spur heifer retention and cow herd growth. More heifer retention will tighten feeder cattle supplies even further over the next two years — a major reason for those $200-plus per cow forecasts.

Thursday, April 12, 2012

Record February Lamb Production

AUSTRALIA - Australian lamb production during February rose 23 per cent year-on-year, to 37,325 tonnes cwt, on the back of higher slaughter across the eastern states (Australian Bureau of Statistics).


Meat and Livestock Australia says that this was the highest national February total on record, with all-time highs in NSW (9,292 tonnes cwt) and SA (8,302 tonnes cwt).
 
WA production remained limited by the historically small state flock and the improvement in seasonal conditions, declining 16 per cent on last year, to 3,418 tonnes cwt. WA slaughter was down 18 per cent year-on-year, at 155,156 head.
 
Victorian slaughter, in particular, was higher than last year, up 34 per cent during February, to 700,934 head.
 
Dry conditions across much of the west of the state influenced turnoff rates, with a slight decline in average carcase weights resulting in production increasing 33 per cent to 15,150 tonnes cwt.

NSW, on the other hand, processed significantly heavier lambs, with predominantly good growing conditions resulting in delayed turn-off for many producers. NSW slaughter jumped 24 per cent year-on-year, to 395,975 head, while production lifted 34 per cent.

Thursday, April 12, 2012
Farm Produce Prices Fall for Third Week
CHINA - The prices of major farm produce monitored by MOFCOM fell in three consecutive weeks last week (2-8 April), while price of material for production was stable.


The prices of eight aquatic products dropped 0.3 per cent over the last week, of which small cutlass fish, carp and big cutlass fish saw a decrease of 1.7 per cent, 1.2 per cent and 0.6 per cent respectively.

The retail price of eggs dropped 0.2 per cent, 7.6 per cent lower than in the beginning of this year. The prices of eggs in Beijing, Guangzhou and Tianjin dropped 13.6 per cent, 13.4 per cent and 11.9 per cent.

The prices of meat fluctuated slightly, wherein pork dropped in ten consecutive weeks, 1.2 per cent lower than that of last week, 12.5 per cent lower than that of the end of January, while the prices of pork in Shanghai, Beijing and Chongqing dropped 26.1 per cent, 24 per cent and 15.8 per cent respectively. The price of chicken was down by 0.1 per cent while that of beef and mutton were up by 0.8 per cent and 0.5 per cent.

The retail prices of grains grew steadily, of which rice was stable while that of wheat flour was up by 0.2 per cent. Due to the increasing prices and increasing imported costs, the retail prices of edible oil rose, of which rapeseed oil, soybean oil and peanut oil were up by 0.3 per cent, 0.2 per cent and 0.1 per cent.

Thursday, April 12, 2012
Canada Invests in Toronto Processing Plant
CANADA - Producers in southern Ontario will benefit from upgrades to a local processing facility with the support of the Government of Canada.


Agriculture Minister Gerry Ritz has announced an investment of C$3 million to Quality Meat Packers Limited to upgrade its processing facilities.

"Our Government is creating the conditions for growth in the hog sector which will help hog producers and processors compete on the national and international scene," said Minister Ritz.

"Our plan is clear: this Government is making strategic investments to strengthen the competitiveness of Canada's livestock sector and opportunities for producers."

"This loan allows us to invest in the modernization of our Toronto plant that has been processing Ontario hogs for over 50 years," commented David Schwartz, president of Quality Meat Packers.

"We will enhance food safety and traceability, improve plant efficiency, and reduce operating costs through the purchase of value-added equipment."

Under Canada's Economic Action Plan, the $60-million Slaughter Improvement Program made federal repayable contributions available to support sound business plans aimed at reducing costs, increasing revenues, and improving the operations of meat packing and processing facilities in Canada.

Thursday, April 12, 2012
Weekly Roberts Market Report
US - Profit taking and a stronger US dollar weighed on soybean prices, writes Michael T. Roberts.

Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University

LEAN HOGS on the CME finished up on Monday with the exception of the two nearby contracts. The APR’12LH contract closed at $84.425/cwt; down $0.075/cwt and $0.300/cwt lower than last Monday. MAY’12LH futures closed at $94.000/cwt; off $0.225/cwt but $0.50/cwt higher than this time last week. AUG’12LH futures finished $0.350/cwt higher at $94.200/cwt and $1.200/cwt over last report. Lean hogs traded in choppy waters as early strength succumbed to long selling amid weakness in outside markets. Early strength gave into long exits tied to weakness in outside markets and overriding concerns about the strength of pork demand. Even though outside markets pressured hog prices late in the session short-covering pulled futures out on the positive side. Speculators with oil cash continue to watch for signs of consumer behavior change from beef to pork. That is the bet right now. USDA put the pork carcass cutout at $78.54/cwt, up $0.39/cwt but $1.41/cwt lower than a week ago. Cash hogs were $1/cwt higher with tops around $55-$58/cwt on a live basis. Negative packer margins remain a concern for traders. Processing for Monday, April 9 was placed at 274,000 vs. 416,000 last week and 402,000 a year ago. According to HedgersEdge.com, the average packer margin was lowered $9.85/hd to a negative $15.00/head based on the average buy of $61.66/cwt vs. the breakeven of $56.24/cwt. The latest CME lean hog index was estimated at 82.62; down 0.05; and 0.66 lower than this time last week.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The JULY’12 contract closed at $6.412/bu; off 11.0¢/bu and 9.75¢/bu lower than last Monday’s close. The DEC’12 contract closed at $5.502/bu; even with last Friday’s close but 5.25¢/bu higher than last report. Traders were squaring positions and taking profits ahead of the World Agriculture Supply Demand Estimate (WASDE) report due out tomorrow morning at 8:30 am. The March planting report showed farmers planting the largest US corn crop since 1937. Traders expect the report to show tight old-crop supplies, however, USDA report surprises in the past have made traders gun-shy on taking big chances ahead of the report. Exports were not supportive. USDA put corn-inspected-for-export at 23.364 mi bu vs. estimates for 28-34 mi bu. However, 17.2 mi bu were needed to stay on track with USDA’s 1.7 bi bu demand projection. Ukraine announced China bought corn and wheat from them. This is significant in that it is the first time China has imported corn from the Eastern European nation. US cash corn basis levels remain firm amid slow supply movements as farmers plant spring corn. Grain buyers say heavy selling in recent weeks ahead of planting has provided adequate inventories. Corn growers should again seriously consider selling all old crop supplies at these prices; pricing up to 50-60 per cent of the 2012 crop; and 10 per cent of the 2013 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed mixed on Monday with deferreds up and nearbys decreasing. The MAY’12 contract closed at $14.310/bu; down 3.0¢/bu but 10.0¢/bu over last report. NOV’12 futures closed at $13.200/bu; up 0.5¢/bu but 65.25¢/bu lower than a week ago. Traders evened positions ahead of tomorrow’s WASDE report pressuring nearby prices. Profit taking and a stronger US dollar weighed on prices but solid commercial buying tied to strong demand offset that pressure. Exports were strong with USDA putting soybeans-inspected-for-export at 26.396 mi bu vs. estimates for 23-28 mi bu. This was nearly double the amount needed to stay on pace with USDA’s 1.275 bi bu demand projection. Look for follow-through buying interest emerging in the near-term. Traders in the pits indicate they believe the soybean market is particularly vulnerable to a downward price correction. Producers should consider selling all old crop soybeans at this time while getting to 40 per cent sold in the 2012 crop and 20 per cent sold in the 2013.

WHEAT futures in Chicago (CBOT) closed up on Monday with the exception of the May 2013 contract. The MAy’12 contract closed at $6.430/bu; up 4.5¢/bu but 14.0¢/bu lower than this time last Monday. JULY’12 wheat futures finished at $6.490/bu; up 2.75¢/bu but 20.5¢/bu lower than a week ago. Concerns of the state of the US economy, mainly from the poor jobs report issued Friday didn’t slow down bullish trading today. Some short-covering ahead of the WASDE report was supportive. Wheat prices are not expected to lead a rally though as domestic and global supplies are still ample, even if USDA lowers US wheat ending stocks. Commercial buying was noted. Exports were steady-to-bullish with USDA putting wheat-inspected-for-export at 17.605 mi bu vs. estimates for 13-20 m bu. However, exports fell further behind the pace needed to meet USDA’s demand projections of 1.0 bi bu. More than 34 mi bu in exports was needed this week to meet that pace.

Thursday, April 12, 2012
Human Diarrhea Parasite Found Lurking in Piglets
GLOBAL - An intestinal parasite that causes diarrhea in humans has also found its way in pigs.


According to LiveScience, the researchers explain that the existence of the single-celled parasite, Dientamoeba fragilis, in pigs is important because it might mean pig feces are one way the parasite has been spreading to humans. More than a billion pigs are housed in farms across the world.

In developed countries, D. fragilis infection rates in people hover around 2 per cent to 4 per cent. But in developing countries where waste disposal is poor, infection rates of between 19 per cent and 69 per cent have been reported. Travelers to these countries also often fall prey to the parasite. Infection is sometimes asymptomatic, but it can also cause diarrhea and abdominal pain.

Few animal hosts, or "reservoirs," for D. fragilis had been discovered, researchers reported yesterday (11 April) in the journal Emerging Infectious Diseases published by the Centers for Disease Control and Prevention. Pigs in Italy, however, were reported as having high infection rates. So Italian scientists collected and analyzed 152 fecal samples from nine farms. They found that 52 of 74 piglets, 11 of 14 pigs at the "fattening" stage. and eight of 64 sows tested positive for D. fragilis. Young animals appeared to be most susceptible.

Furthermore, the analysis showed that the parasite found in pigs was the same one that infects humans. That means pigs could transmit the parasite to humans, likely through their waste.

The researchers noted that the discovery could be a boon to understanding D. fragilis. Little is known about the parasite's life cycle, and pigs could provide a useful model for understanding how transmission and infection occurs, the researchers said.

SA_LS320
San Angelo, TX    Tue Apr 10, 2012   USDA Market News

Producers Livestock Auction Co, San Angelo, Texas

Sheep and Goat Auction:
Close and Weekly:

Total Receipts:  2606    Last Week:  2495    Year Ago:  9414
Sheep Receipts:  1319    Last Week:  1336    Year Ago:  4519
Goat  Receipts:  1287    Last Week:  1159    Year Ago:  4895

  Compared to last week heavy slaughter lambs steady; light slaughter
lambs sharply higher.  Slaughter ewes weak to 10.00 lower.  Feeder lambs
not well tested.  Nannies weak to 2.00 lower; kids firm to 10.00 higher.
Trading and demand moderate.  Supply included 25 percent slaughter lambs,
20 percent slaughter ewes, 5 percent feeder lambs, balance goats.  All
slaughter lambs went to non-traditional markets.  All sheep and goats
sold per hundred weight (CWT) unless otherwise specified.

SLAUGHTER LAMBS:
   Choice 2-3 shorn and wooled 100-160 lbs 130.00-142.00, few 148.00-
156.00.

   Choice and Prime 1 40-60 lbs 216.00-244.00, few 250.00-256.00; 60-70
lbs 220.00-244.00, few 258.00; 70-80 lbs 194.00-204.00, few 218.00-
220.00; 80-90 lbs 191.00-200.00; 90-105 lbs 160.00-170.00.
Choice 1 70-80 lbs 176.00-188.00; 80-90 lbs 166.00-182.00; 90-105 lbs
148.00-160.00.
Good 1 60-85 lbs 140.00-150.00.

SLAUGHTER EWES:
   Good 2-3 (fleshy) 74.00-76.00; Utility and Good 1-3 (medium flesh)
86.00-96.00; Utility 1-2 (thin) 67.00-78.00; Cull and Utility 1-2 (very
thin) 60.00-67.00; Cull 1 (extremely thin) 52.00-58.00.

SLAUGHTER BUCKS:
   64.00-86.00, few 98.00.

FEEDER LAMBS:
   Medium and Large 1-2 54 lbs 238.00; 70 lbs 226.00; 90 lbs 180.00.
   Medium and Large 2 60-90 lbs 166.00-192.00; 94 lbs 171.00.

REPLACEMENT EWES:
   Medium and Large 1-2 no test.


GOATS:  Estimated 50 percent of receipts:
All sold per hundred weight (CWT) unless otherwise specified.

SLAUGHTER CLASSES:
   KIDS:  Selection 1 39 lbs 212.00; 40-60 lbs 220.00-246.00; 60-80 lbs
215.00-244.00; 84 lbs 200.00; shorn show goats 90-125 lbs 134.00-152.00.
Selection 1-2 25-40 lbs 184.00-200.00; 40-60 lbs 180.00-216.00; 60-80 lbs
180.00-208.00; 80-105 lbs 164.00-170.00.
Selection 2 25-40 lbs 144.00-178.00; 40-80 lbs 150.00-172.00.
   DOES/NANNIES:  Selection 1-2 80-130 lbs 104.00-114.00, few 118.00;
130-160 lbs 90.00-104.00; thin 70-115 lbs 88.00-102.00.
   BUCKS/BILLIES:  Selection 1-2 70-100 lbs 120.00-148.00; 100-150 lbs
108.00-128.00, yearlings 130.00-139.00; 150-250 lbs 104.00-126.00.

REPLACEMENT CLASSES:
   DOES/NANNIES: Selection 1 70-105 lbs 146.00-158.00, few 174.00.
Selection 1-2 60-110 lbs 120.00-140.00.


Source:  USDA Market News Service, San Angelo, Texas
         Rebecca Sauder 325-653-1778
         www.ams.usda.gov/mnreports/SA_LS320.txt
         www.ams.usda.gov/LSMarketNews

Overview of This Week’s Poultry Industry News
05 April 2012


ANALYSIS – With perhaps the possible timing in the days before Easter, Germany may be standing on the brink of another dioxin crisis as unacceptably high levels of the toxins have been found in eggs from one organic farm and two smallholdings in North Rhine–Westphalia, writes senior editor, Jackie Linden. With the recommendations for changes to poultry meat inspection in the EU expected in June this year, poultry processing plants in June this year, the industry fears it will be facing added pressure and costs. The EU is preparing to lift its ban on imports of fresh poultry meat from Thailand, which has been in place since bird flu first hit that country.

In the last few days, it has emerged that eggs in the German state of North Rhine–Westphalia (NRW) have been found to be contaminated with dioxins. The alarm was raised when high levels of polychlorinated biphenyls (PCBs) were found in eggs from one organic farm in the state. The levels were found to be very high in two of the houses on the farm, which has 25,000 hens and sells its eggs to supermarkets. Subsequently, routine analysis has revealed elevated dioxin levels in eggs from two smallholders who sold directly to the public.
 
The source of the contamination is under investigation but the supposition must be the feed, now that more than one farm is affected. The fact that these were small–scale and/or organic egg producers highlights that food safety issues can occur on any farming system.
 
Eggs from affected farms have been withdrawn from sale and the state authorities have made it clear that the health risks from consuming these eggs would be negligible.
 
German pig and poultry sectors were hit by a major dioxin crisis in late 2010 and 2011, which badly impacted the industries in other EU countries and led to the bankruptcy of the feed ingredient at the source of contamination and EU-wide measures aimed at preventing a recurrence.
 
Commentators say there are risks inherent in the forthcoming new meat inspection rules in the EU.
 
The European Food Safety Authority (EFSA) is expected to publish its recommendations for changes to meat inspection in poultry processing plants in June this year. This will be followed by changes to the meat inspection regulations for game animals in June 2013.

The recommendations will take a risk–based approach to inspection and will follow the review from the panel on Animal Health and Welfare (AHAW), the panel on Biological Hazards (BIOHAZ) and the panel on Contaminants in the Food Chain (CONTAM).

However, there will be concerns with in the different sectors that the new inspection criteria will put added pressure and costs on the industry.

The new recommendations for poultry, beef cattle and other farmed animals will follow the opinion issued in October last year for pig meat inspection.
 
EU Member States have supported the Commission‘s proposal to lift the restrictions on imports of fresh poultry meat from Thailand from 1 July 2012.
 
A prolonged drought has been identified as the main cause of a dramatic rise of feed prices in Spain, which have risen 12 per cent since January to €0.33 per kilo.

Research from the UK shows that exposure to stomach acid actually primes Campylobacter. New research at the Institute of Food Research shows that not only does Campylobacter have ways of surviving acid shock, it can also respond and adapt to the acidic environment making it better able to colonise the intestine and enter host cells there. These characteristics highlights how well Campylobacter is adapted to infect humans and help in the search for ways to control this foodborne pathogen, which is associated with the handling or consumption of undercooked poultry meat.
 
Turning to bird flu news, the H5N1 highly pathogenic form of the disease has hit a commercial poultry farm in Yunnan province in southern China, and new outbreaks of disease have been reported in Nepal and Bangladesh. The low-pathogenic form of the virus was found in game birds (pheasants) in Ireland and in native chickens in Taiwan.
 
Jackie Linden

Wednesday, April 11, 2012
Ontario Cow Breaks World Record Milk Yields
CANADA - A Canadian cow is laying claim to the world’s record for lifetime milk production.


Gillette Emperor Smurf has produced 216,893 kilograms (or 478,167 pounds) of milk over her lifetime, according to recent reports.

“She is the best producer of all the cows in the world,” Ontario owner Louis Patenaude said.

And she’s not done yet. Gillette E. Smurf, as she is officially known, is awaiting the birth of her 11th calf next month.

The previous record was set in 2006 by a Michigan cow, Tacoma Mark My-Word, that was credited with 471,900 pounds of milk.

In 2011, Gillette E. Smurf was recognized for becoming the first Canadian cow to produce more than 200,000 kilograms of milk and now it appears she has gone on to break the world record.

Fat Replacers Market Booming in US

Increasing health concerns, ageing population, mounting demand from end-use markets and alarming rise in obesity levels are triggering growth in thethe US fat replacers market.

A new report from Global Industry Analysts shows that the surge in popularity for low-calorie, low-fat, healthy and functional foods in developed markets such as the US is providing an added impetus steering the market towards a volume figure of 394,900 tonnes by 2017.
 
The report says that the US fat replacers market is highly mature and corners a reasonably stable niche in the global low-fat food trade.
 
Consumer trends continue to influence the industry, with low-fat and fat-free products being the current craze.
 
The fat replacers market is poised to exhibit healthy growth over the ensuing years, with majority of the sales to be sourced from mature markets for carbohydrate and protein-based fat replacers, GIA says.
 
In particular, functional fat replacers have been growing at a healthy pace over the years, triggered by increasing health concerns and demand for food ingredients with enhanced flavor and texture. Potential opportunities for fat substitutes exist based on hasty commercialisation of olestra, the largest selling fat-based fat replacer.
 
The market research report says that carbohydrate-based fat replacers continue to lead the market for fat replacers because of their status as US FDA recognized GRAS substances.
 
Fat replacer ingredients that offer dietary and processing advantages are likely to witness a healthy growth, with carbohydrate-based fat replacers poised to display a healthy CAGR of 5.7 per cent up to 2017.
 
Lately, the US market for hydrocolloid-based fat replacers have been growing robustly over the last few years, driven by the consumers increased awareness and quest to stay fit and healthy.
 
Burgeoning consumer and industry concerns over non-metabolized fat replacers have slowed down further improvements in the fat-based fat substitutes market.
 
Fat replacers are anticipated to log significant growth in the meat and dairy sector, as low calorie and reduced-fat foods such as low-fat ice creams, spreads and meat products are gaining huge popularity in these markets.
 
The declining demand for zero-fat food products is negatively influencing the overall demand for protein-based fat replacers, expected to grow over the years at a tepid pace.
 
Manufacturers of protein-based substances are more focused on dietary applications of protein ingredients such as dietary beverages and sports nutritional products instead of fat substitute applications, mainly due to the extremely profitable market for dietary and nutritional products.
 
The fat-free and low-fat foods market is facing stiff competition from alternative sweeteners and other products containing sugar alcohols.

The impact of rising competition is evident from the heightened levels of product development and burgeoning promotional expenditure.
 
Falling volumes was a major issue for manufacturers, despite surging values.
 
Fat replacer manufacturers are increasingly resorting to investments in improved process technologies and newer product developments to withstand the competition.

The manufacturers are all geared up to enhance the quality of functional fat replacers to provide improved taste in low-fat foods.
 
Major players profiled in the report include Advanced Food Systems Inc., Ashland Specialty Ingredients, CP Kelco, California Natural Products, Carrageenan Company, FMC BioPolymer, Grain Processing Corporation, Gum Technology Corporation, Kraft Food Ingredients Corporation, National Starch Food Innovation Group, P&G Food Ingredients, PGP International Inc, TIC Gums Inc., and Z-Trim Holdings Inc.
 
The research report “Fat Replacers: A US Market Report” reviews the fat replacers markets, the impact of recession, current market trends, key growth drivers, recent product introductions, recent industry activity, and profiles of major/niche global as well as regional market participants.

Oilseed Production Forecast is Up Eight Per Cent
11 April 2012



PAKISTAN - MY 2012/13 oilseed production is forecast at a record 5.8 MMT, up eight per cent from the estimated 5.7 MMT harvested in MY 2011/12.

Pakistan is a net importer of oilseeds and edible oils. Domestic production of edible oils is sufficient to meet only about 27 per cent of total demand. Domestic oilseed production includes cotton seed, sunflower seed and rapeseed.
 
MY 2012/13 oilseed production is forecast at 5.8 MMT, eight per cent higher than the revised estimate of 5.4 MMT harvested in MY 2011/12. Cottonseed regularly accounts for about 82 per cent of Pakistan’s total oilseeds production.
 
Imports of oilseeds are forecast at 1.0 MMT (80 per cent rapeseed/ canola and 19 per cent sunflower seed). Total supply of oilseed available for crushing in MY 2012/13 is forecasted at 6.2 MMT, eight per cent higher than the estimates of MY 2011/12.
 
MY 2012/13 domestic meal production is forecast at 3.0 MMT, up eight per cent from current year’s level of 2.7 MMT. MY 2012/13 imports of soybean meal are forecast at 350,000 tons, 17 per cent higher than MY 2011/12 imports.
 
Virtually all of Pakistan’s soy meal imports are sourced from India.

MY 2012/13 oil production is forecast at 1.5 MMT, eight per cent higher than current year’s estimate. Vegetable oil imports are forecast at a record 2.3 MMT, an increase of four per cent relative to MY2011/12. Palm oil accounts for 98 per cent of the total edible oil imports.

Wednesday, April 11, 2012
Food Costs Could Rise with Relocation & Reduction
US - Paying more for food may not be out of the question for consumers if regulations on the US poultry and livestock sectors increase. In fact, consumers could pay up to $16.8 billion more annually for meat, milk and eggs if regulations are imposed on US poultry and livestock farmers that raise input costs by 25 per cent.


According to United Soybean Board, the Consumer and Food Safety Costs of Offshoring Animal Agriculture, a soy-checkoff-funded study released last month, evaluated current US supply and demand for poultry and livestock products and the impact of regulations on retail price. The study indicates that potential regulations could raise consumer costs. For example, requiring cage-free housing for laying hens would increase the cost of eggs from $1.68 to $2.10 per dozen, a total cost of $2.66 billion per year to US consumers.

“This could have a big impact on everyone – it’s not just that dozen eggs you and I buy at the grocery store,” explains Vanessa Kummer, a soybean farmer from Colfax, North Dakota, and chair of the United Soybean Board (USB). “As Americans, we have abundant, nutritious and affordable food choices that rely heavily on protein from animals, and, as farmers, we continue to work hard on improvements because we share consumers’ concerns for our country’s land and resources, and the quality of America’s food.”

The United Soybean Board says that the report cites increased regulations that could drive up costs of production meat, milk and eggs by anywhere from 10 per cent to 25 per cent. It shows that a 25 per cent increase in costs to animal agriculture would reduce US exports by $1.1 billion and cause nearly 9,000 Americans to lose their jobs.

“US agriculture leads the world as a global producer and exporter of animal products, and we need that to continue,” adds Ms Kummer. “The poultry and livestock sectors not only support the US export market, but also make our economy stronger here at home by creating jobs and tax revenue.”

According to the United Soybean Board, the most recent statistics compiled by the soy checkoff show the poultry and livestock sectors support 1.8 million jobs and generate more than $283 billion for the US economy.

Wednesday, April 11, 2012
Sofina Buys Former Maple Leaf Pork Plant
CANADA - Investment company, Sun Capital Partners, is to sell the former Maple Leaf pork plant, Fearmans Pork, which operates the largest pork processing facility in Ontario, Canada, to Sofina Foods.


The terms of the deal were not disclosed, but the sale is expected to close once regulatory approvals are obtained.

Headquartered in Burlington, Ontario, Fearmans Pork was acquired by an affiliate of Sun Capital from Maple Leaf Foods in a corporate carve-out transaction which necessitated assembling a new management team and corporate infrastructure.

Fearmans Pork expanded production to meet demand, implemented new hog procurement programs to improve quality and delivery, and introduced products for niche markets. As a result of these improvements, 2011 sales increased by 16 per cent.

“Fearmans Pork has made great strides as a standalone business,” said Marc Leder, Co-CEO at Sun Capital Partners.

“Management has effectively created an infrastructure and stabilized hog procurement, which assures the region’s hog farmers that they have a committed and capable partner. Sofina Foods is a natural steward for the next stage of its growth.”

Sun Capital Partners has prior experience in the sector through its affiliated portfolio companies, including Contessa Premium Foods, a leading US processor and distributor of premium seafood and frozen convenience meals; Creekstone Farms, a processor of high-quality Black Angus beef and seller of branded fresh beef and value-added products; Harry’s Fresh Foods, a producer of premium home-style refrigerated foods for the retail and foodservice markets; and Sunrise Growers-Frozsun, a leading value-added U.S. supplier of frozen strawberry products and a distributor and marketer of fresh strawberries.

Tuesday, April 10, 2012
Pork Commentary: USDA March 1 Report was Bullish
US - Last week we wrote, after the USDA March Hogs and Pig Report, that "we are still of the opinion $1.00 lean hogs will be reached this summer." It’s interesting how one’s view can be so much different than others, writes Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
John Harrington, DTN AgDayta livestock analyst, called the March Report "Bearish." Look for futures to respond in terms of bear spreading when trade resumes on Monday, with traders pressuring summer contracts...

As usual opinions vary but when the dust settled at the end of last week, June lean hog futures had jumped $3.50 a lb since the report was released ($7.50 per head). All other months had similar increases. Bottom Line: The report was not bearish. The market saw supply at a manageable level with the main driven being demand vis a vis Pork Domestic and Export Demand (latest date has exports at historically high levels) chicken supply (down), beef supply (down). Less total meat coupled with increased demand will always be more bullish then bearish.

Breeding Herd – Hog to Corn Ratio
The USDA March 1 Hogs and Pigs Report indicated 17,000 more breeding animals in the three months from December. A sign of true expansion, this in the face of corn prices at $6.50 a bushel. Hog to corn ratios in March was 10 to 1, with the exception of the disastrous months between January 2008 and January 2009, where the average ratio was below 10, this is the lowest calculation since the debacle of 1998.

What we are seeing is two solitudes. One solitude; is those who grow corn and feed their pig’s $6.50 corn,$0.90 lean hogs, and increasing land value works for cash flow and the balance sheet despite the 10 to 1 corn ration. The second solitude; those who buy corn, raise hogs and own little land, (More than half of US production). A 10 to 1 hog to corn ratio doesn’t work for this group. Cash flow and balance sheets are not going in the right direction with a 10 to 1.

Historically a hog to corn ratio below 15 to 1, would usually lead to breeding herd liquidation. The numbers are different now especially when growers of corn have huge margin over cost of production. Not sure what this truly all means. We expect in some way, over the next few months, higher hog prices will improve the hog to corn ratio and will support the margins of hog producers who buy corn.

Corn
Next couple of weeks will be interesting. It appears that early spring and subsequent higher ground temperatures have most every corn farmer ready to unleash their corn planters. If we have rapid plantings this could pressure corn lower. The earlier corn is planted, the higher likelihood of more acres and higher yields. We all are survivors in the commodity business. We all know prices go up and down. Corn prices will fall, it’s inevitable. When? As it’s said, "is the billion dollar question."

Chickens
US egg sets and chick placements are running 5% lower than a year ago. Around 10 million less chickens a week. Less chickens supports hog prices.

Cattle
US cattle marketing year to date are 4.8 per cent lower than last year (-430,000). This lower trend is expected to continue for the balance of 2012. Less beef is bullish for hogs.

Seasonality
In the coming weeks, the seasonal drop in hog numbers will be upon us. Packers will continue to chase hogs to keep their lines full, maintain market share and shelf space while filling good margin export orders. Volatility will continue, not only the swine market but grains will probably swing like a teeter totter. Close your eyes keep driving and pray for rain.


Author: Jim Long, President & CEO, Genesus Genetics 

Wednesday, April 11, 2012
CRC Sees Healthy Role for Australian Pork
AUSTRALIA - Pork’s role in a balanced diet and lifestyle and how it might assist weight management and address critical health issues such as Type 2 diabetes, is the focus of the CRC For High Integrity Australian Pork Subprogram 3B, ‘Health benefits of fresh pork’.
 

The Pork CRC has allocated a set amount of its research funds for shorter term Innovation projects to be funded for 12 months and to a maximum of $50,000.

According to Pork CRC CEO, Dr Roger Campbell, these projects may fill gaps in existing knowledge, or investigate new science and theories able to develop system changing information/technologies.

The Pork CRC is calling for shorter term projects (closes 20 April) in Subprogram 3B that represent genuine innovation and the following priorities have been set:

Determine pork’s role of as part of a balanced diet and lifestyle on weight management and weight maintenance to address health issues, including Type 2 diabetes, obesity and cardiovascular disease in Australia.


Demonstrate use and form of pork in the diet of elderly Australians to preserve muscle mass and cognition.


Demonstrate inherent benefits of consuming pork in diets of Australian children, with particular focus on innovatively incorporating pork into children’s meals.


Use of animal and/or human models to determine if including fresh pork or enriched pork in the diet can deliver potential positive health outcomes to humans, including early stage bowel and prostate cancer development and gut health (e.g. microbiota).


The effect of pork on protein digestion and amino acid metabolism.
On a broader scale across all of the Pork CRC’s four programs, research projects demonstrating quality, system changing science that could successfully be adopted by Australia’s pork industry will shortly be considered and recommended for funding by the CRC’s Expert Scientific Groups before being put to the CRC’s R&D Committee and Board in June.

The CRC for High Integrity Australian Pork has four programs:

Confinement free sow and piglet management
Herd health management
Healthy pork consumption
Carbon-conscious nutrient inputs and outputs.
Dr Campbell said that although he had only briefly reviewed some of the research proposals, as the final lodgement date (31 March) had only just passed, he was pleased at the obvious effort researchers and proponents had put into addressing stated priorities.

“There certainly looks to be some exciting proposals to be considered,” he said.

“As the CRC for High Integrity Australian Pork gathers momentum, it’s critical that all stakeholders maintain focus on outcomes which reflect our objectives of profiling and producing a pork product that is uniquely Australian, characterised as high integrity, welfare optimal, premium quality, safe and nutritious,” Dr Campbell said.