Pork Commentary: Maple Leaf Foods Burlington Sold
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Last week Maple Leaf Foods of Canada announced the sale of their Burlington Ontario slaughter plant to Fearman Pork (used to be Pork brand and company in Ontario), an affiliate of Sun Capital Partners Inc for approximately $20 million.

Our Observations
Burlington has the capacity of 42,000 head per week. The other major players in Ontario are: Quality Meats approximately 35,000 head per week, and Conestoga Pork approximately 15,000 head per week. There are also smaller players and of course hogs are shipped to Quebec and the USA. The Burlington plant has recently been working at less than capacity. Hog numbers in Ontario are running at about 90,000 per week. There is plenty of slaughter capacity in Ontario.


With the sale of Burlington, Maple Leaf stays on their restructuring path. The Brandon, Manitoba plant (largest in Canada) is harvesting almost 90,000 per week. They also have a smaller export oriented plant in Alberta. The sale of Burlington puts Maple Leaf’s total slaughtering capacity in Western Canada. It was their announced plan to sell Burlington and they have executed their plan.


There had been concerns on the part of Ontario’s hog producers that if Maple Leaf did not find a buyer for Burlington it might be shut down. At that point Ontario would have been significantly short of slaughter capacity. Country of Origin Labeling in the US makes it difficult and price detrimental to send many hogs to the US.


The purchase of Burlington by Fearmans (Sun Capital) is a real positive for Ontario producers. No one would buy a slaughter plant without the intention of operating it for a profit. Sun Capital is a large organization with its affiliates combining for about $40 billion in sales. Companies that are food related in the Sun Capital Group include Can Agro, Creekstone Farms (Beef Processor), Hickory Farms (700 stores meat and food products), Marsh Supermarkets (grocery stores), Boston Markets, plus maybe 20 plus other companies in other industries.
Big Time Player
On the Sun Capital website their business description of Fearmans Pork the largest pork processing facility in Ontario serving primarily the Toronto area, Eastern United States, and select international markets. Fearmans Pork supplies product to other processors, retailers, and food service providers including chilled pork products, speciality, and counter ready products.

Summary
The purchase of the Burlington plant is good for all hog producers both in Canada and the USA. We have seen the last few weeks the wide spread between hog prices and pork cut – outs. Packers have been doing just fine in North America we could not afford to lose more packing capacity. Fearmans Pork is a new player and buyer for hogs. Having more buyers is always good for producers. Another plus, Sun Capital has chosen to be an investor in our industry. They must see a future.

Bullish Corn Report?
Last Tuesday the USDA came out with a so called bullish corn report. The morning after the report release, December corn went up to $6.05 a bushel. The close on Friday three days later was $5.34, a 69 cent a bushel decline. Goes to show that nobody knows what is happening. It is a crap shoot. My deceased friend Doug Maus used to call the Chicago Board of Trade ‘Las Vegas with no rules.’ Run them up, run them down. More trades, more money for the brokers.

Markets
We believe the seasonal low for early weans and feeder pigs has been reached. Last week cash for both USDA categories increased $1.00 per head. Cash early weans averaged $39.95, while 40 pound feeder pigs $49.12. The supply of small pigs is declining, the only way to ration them is higher prices.

A consortium of food retailers and processors last week brought legal action against the US Environmental Protection Agency (EPA) allegedly overstepping their legal right to mandate increases on ethanol use in fuel. Corn hitting $6.00 is motivating and helping food groups, AMI and oil companies to fight the lunacy of tariffs and subsidies for corn ethanols which are due to expire December 31. Expensive corn is not good politically for corn ethanol producers at this time. Now is the time to let your congressman and senator know what corn ethanol is doing for you?!

The USDA pork cut – outs at 76.68 while Iowa – Minnesota lean hogs closed at $63.65 last week. As hog numbers decrease from yearly highs, cut – outs will increase with lean hogs chasing them higher.

Summary
With hog supply declining we expect the demand scenario in the summer of 2011 will push some hogs to $1.00 lean. You just can’t keep cutting supply with a low US dollar not to have strong pork export demand to chase fewer and fewer hogs.

This week we are in Hannover Germany at Eurotier – possibly the world’s largest livestock industry exhibit. We can be found at the CSEA exhibit. Next week we will write our observations.


Author: Jim Long, President & CEO, Genesus Genetics 

China Sells Stockpiled Pork, Sugar to Cut Prices
CHINA - China's government is trying to cool double-digit food price rises by releasing stockpiled pork and sugar to boost supplies in markets, the Commerce Ministry said Tuesday.



The move comes after food prices jumped 10.1 per cent in October over a year earlier due to shortages of some goods, reports The Star. Overall inflation rose to a 25-month high of 4.4 per cent, prompting concern Beijing might tighten economic controls and further slow China's growth.

The government is releasing stored frozen pork and sugar into the market to help "stabilize prices," said Commerce Ministry spokesman Yao Jian at a regular briefing.

Inflation is especially sensitive in a society where poor families spend up to half their incomes on food. Rising incomes have helped to offset price hikes, but inflation erodes the value of savings and undercuts economic gains that help support the ruling Communist Party's claim to power.

Mr Yao said the government also is taking steps to increase vegetable production, though he gave no details of that or the pork sales. Pork is China's staple meat and prices are closely watched to ensure poor families can afford it.

The jump in food costs came as Beijing is trying to steer China's rapid growth to a more manageable level and restore normal economic conditions following its stimulus-fueled rebound from the global crisis.

Inflation so far is confined to food but analysts have warned that stimulus money and a flood of bank lending coursing through the economy might add to pressure for prices to rise in other sectors.

Some analysts say food price inflation has passed its peak and should decline but Chinese media say the cost of some basic goods is still rising strongly.

The price of sugar rose 1 per cent in the first week of November over a week earlier, meat and eggs by 0.8 per cent and cooking oil by 0.5 per cent, according to the official Xinhua News Agency.

A government spokesman said last week Beijing "needs to do more" to keep inflation under its 3 per cent target for the year.

The government maintains stockpiles of grain, frozen pork and some other staples in case of shortages. It released stockpiled pork in 2008 after shortages caused China's last spike in inflation.

Tuesday, November 16, 2010
Weekly Outlook: Uptrend in Crop Prices Stalls
US - Except for a brief retreat in early October, corn, soybean, and wheat prices were in a steady uptrend from 30 June through 9 November writes Darrel Good, Agricultural Economist, University of Illinois



December 2010 corn futures increased about 70 per cent, while January 2011 soybean futures and July 2011 wheat futures increased about 50 per cent.

The fundamental reasons for the large price increases have been well chronicled. The factors include smaller than expected corn acreage in the US, declining US corn yield prospects, a rapid pace of corn use for ethanol, a torrid pace of US soybean exports, rising world vegetable oil demand, a significant decline in wheat production in Russia and Kazakhstan, and a very poor start for the US winter wheat crop. LaNina weather conditions also raised some concern about southern hemisphere crops. In addition, overall demand prospects for US commodities were supported by the declining value of the US dollar and rising energy prices.

Corn prices experienced the sharpest rally due to the magnitude of the decline in US production prospects and expectations of a sharp drawdown in inventories of US corn by the end of the 2010-11 marketing year. The USDA currently projects those stocks at a 15 year low of 827 million bushels.

Soybean prices have been supported by the rapid pace of exports and export sales. The USDA now expects 2010-11 marketing year US soybean exports to reach 1.57 billion bushels, 4.6 per cent above the record exports of a year ago. Through the first 10 weeks of the marketing year, export inspections exceeded those of a year earlier by 25 per cent. Shipments to China were up 49 per cent and China accounts for 68 per cent of all US exports to date. Unshipped export sales as of November 4 were 12 per cent larger than sales of a year ago. China accounted for 58 per cent of those outstanding sales. Even with large exports, expectations were for generally adequate stocks of US soybeans at the end of the 2010-11 marketing year. The projection of those stocks dropped sharply early last week, however, as the USDA lowered the expected size of the 2010 US harvest and increased the forecast of exports.

Soybean oil prices have been supported by the projection of a second consecutive year of a 5 per cent increase in world vegetable oil consumption and a further decline in world vegetable oil stocks. Domestically, soybean oil consumption for food is expected to be near that of last year, while exports are expected to decline by 20 per cent. The USDA projects a 1.2 billion pound (72 per cent) increase in soybean oil use for the production of biodiesel. Use declined sharply last year due to the expiration of the blenders’ tax credit. To reach the USDA projection of 2.9 billion pounds, use will have to average 242 million pounds per month. Use during the last month of the 2009-10 marketing year (September 2010) totaled 98 million pounds.

Wheat prices have been supported by the nearly 6 per cent decline in world wheat production and the expected decline in US and world stocks. Those inventories, however, are expected to be at generally adequate levels. More recent concerns center on the poor condition of the US winter wheat crop and whether Russian wheat production will rebound in 2011.

Prices of all three commodities declined sharply last week. The turn to lower prices was attributed to China’s move to increase interest rates and presumably slow the rate of domestic economic growth. Such a slow down might reduce the rate of growth in Chinese demand for commodities of all types. Price weakness may have also reflected some moderation in supply concerns. The US hard red winter wheat crop received some beneficial precipitation and the USDA increased its projections of some crops outside the US Projections were increased for corn in China, soybeans in South America, and wheat in Argentina and Australia.

There may also be growing concern about the ethanol blender’s tax credit. If that credit is not extended, the pace of ethanol production could drop back to the mandated level. Finally, a private forecast that US corn producers will increase plantings by nearly 5 million acres in 2011 reminded the market that high crop prices will induce a worldwide supply response next year.

While the uptrend in prices stalled last week, there is still a lot of uncertainty about crop supply and demand conditions. Uncertainty about Chinese corn demand, ethanol policy, energy prices, weather, and acreage may result in large price swings, but should provide good support for prices into the end of the year.

Hog Production Moves from Profitable to Unprofitable
US - Hog production has gone from profitable to unprofitable in a big hurry, writes Ron Plain.

 
Ron Plain
Calculations by John Lawrence at Iowa State University estimate the typical Iowa slaughter hog was sold for a profit of $30.40 in September and for a loss of $3.67 in October. That is a drop of $34.07 per head, which is the largest month-to-month decline in the 46 years ISU economists have maintained this data series. Dr Lawrence estimates breakeven for barrows and gilts sold during October was $53.18/cwt live.

USDA is forecasting a new record for the average farm price of corn. Given futures market prices for corn and bean meal, the breakeven hog price is likely to reach $55/cwt on a live weight basis before the end of the year. USDA's latest forecast is that 2011 pork production will be up 1.5 per cent compared to this year, but down 1.9 per cent compared to 2009.

Hog slaughter totaled 2.32 million head this week, down 0.8 per cent from the week before, but up 1.1 per cent compared to the same week last year. Pork production is down 3.8 per cent for the year, but it has been above year-ago for each of the last five weeks.

The average carcass weight of barrows and gilts slaughtered the week ending October 30 was 205 pounds, up 1 pound from the week before, 5 pounds heavier than a year ago, and, for the second week in a row, the heaviest ever for this data series. Following three weeks of record highs, Iowa-Minnesota live weights for barrows and gilts last week averaged 275.9 pounds, up 4.6 pounds compared to a year earlier, but down 0.1 pound compared to the week before.

USDA's Thursday afternoon calculated pork cutout value was $76.17/cwt, down $1.03 from the previous Thursday. Loins and hams were lower; bellies and butts slightly higher.

Hog prices ended the week higher than last week. The national weighted average carcass price for negotiated hogs Friday morning was $61.83/cwt, up $2.68/cwt from the previous Friday. Regional average prices on Friday morning were: eastern corn belt $61.42, western corn belt $62.56 and Iowa-Minnesota $62.61/cwt. The top live hog price Friday at Sioux Falls was $49/cwt. The top at Zumbrota was $43 and Peoria's top was $41/cwt. The interior Missouri live top Friday was $43/cwt, down $1.25 from last Friday.

The December lean hog futures contract ended the week at $68.97/cwt, up $2.02 from the previous Friday. The February contract ended the week at $74.57/cwt and April settled at $77.95.

December corn futures ended the week at $5.34/bushel, down 54 cents from the previous Friday. March corn ended the week at $5.48 and July corn settled at $5.5525/bushel.

The December soybean meal contract ended the week at $339.70/ton, down $8.30 for the week.

British Production Still Lags Behind
UK - Despite improvements in daily liveweight gain and pigs finished per sow, Britain still lags behind its European competition in the production stakes.

 

The latest figures from the BPEX publication on international cost of production show Britain produced 1643kg pig meat per sow in 2009 – the lowest of all the EU countries.

Though this is two per cent better than 2008, it is still well below the target in the Two-Tonne Sow campaign aimed at bringing us into line with our major competitors by 2013.

The report, Cost of Production in Selected Countries, shows the cost of production for Britain’s pig producers fell by four per cent compared with a three per cent fall across Europe.

BPEX Director Mick Sloyan said: "The exchange rate has given us something of an advantage but the benefit of InterPig is it reveals strategic detail of our position relative to our competitors.

"We are narrowing the gap but our competitors are not standing still so we must continue to seek improvements.

"The report once again highlights not only that we need to continue to improve performance at farm level but also the precise areas on which we need to focus. It is those areas which are the key to the Two-Tonne Sow campaign.

"Trying to drive improvements at a time when feed costs are so volatile is obviously a challenge; but if we can improve our performance it will help to overcome the exposure to those volatile input costs."

The cost of pig meat production in Great Britain decreased by four per cent in 2009, to 131.4p/kg, while the EU average was 131.7p/kg dw, down three per cent.

BPEX Senior Analyst James Park said: "Feed prices decreased following high quotations during the previous year and, as a result, this helped member countries control costs of production.

"The cash costs of production, those which exclude finance costs, were 115.5p/kg in 2009, about five pence lower than in 2008."

"At the same time producer prices increased notably during 2009 which resulted in positive net margins for producers. However, recent increases in feed prices have turned these positive net margins back to negative."

In performance terms the overall average number of pigs weaned/sow/year in the European InterPIG countries increased from 23.98 in 2008 to 24.32 in 2009 while the number of pigs weaned/sow/year in Great Britain, increased to 22.25.

The average number of pigs finished/sow in Great Britain increased for the sixth consecutive year in 2009. At 21.0 pigs/sow, average performance was 0.15 pigs higher than in 2008 and 2.2 pigs higher, an 11 per cent improvement, compared with 2004.

Stable outlook for the price of rice
[16 November 2010] Traders expect rice prices to fluctuate between USD 500-600 a tonne next year as good harvests and decent reserve levels mitigate pressure from rising prices of other commodities. The Financial Times reported that with the price of other basic foodstuff such as wheat, corn and sugar soaring, the relatively benign outlook for rice is one of the few factors preventing a full-blown crisis.

Alternative Protein Source for Nursery Pigs
Researchers at North Carolina State University have found fermented soybean meal to have great potential in weaner pig feeds.



Formulation of diets for nursery pigs requires a trade-off between utilizing protein sources that are highly palatable and digestible and those that are low cost. While the major concern of the use of animal protein sources in nursery pig diets has been cost, recent concerns over animal health and food safety related to feeding animal products back to food animals have added greater complexity to this issue. These concerns have also spurred research towards improving the quality of plant protein sources for use in diets for newly weaned pigs.

Recent work in our Department by Drs Sung Woo Kim and Eric van Heugten along with their colleagues has examined a fermented soybean meal (FSBM) product for use in diets designed for newly weaned pigs. The FSBM tested was produced by Genebiotech Co. Ltd (Seoul, Korea) by fermenting soybean meal with a fungus (Aspergillus oryzae) that has been used for human food fermentations for centuries. In addition to partially digesting the proteins in the soybean meal, thereby improving their digestibility, the fermentation process also reduced the concentrations of several anti-nutritional compounds found in soybean meal (Table 1).

Drs Kim and van Heugten conducted four separate feeding trials to examine the potential for using FSBM instead of animal protein products such as dried skim milk and plasma protein. From the results of these studies, they concluded that the FSBM was superior to soybean meal for inclusion in weaning pig diets. They also demonstrated that this product has the potential to replace dried skim milk, particularly if lactose and synthetic amino acids are utilised. Overall, this work provides valuable information regarding the suitability of FSBM for use in newly weaned pig diets.

Table 1. Composition of soybean meal before and after fermentation with Aspergillus oryzae
Item Soybean meal Fermented soybean meal
DM 89.6 ± 2.4 91.2 ± 2.1
Crude protein, DM basis 50.3 ± 1.7 a 55.3 ± 1.9 b
Lysine, DM basis 3.35 ± 0.17 3.27 ± 0.20
Threonine, DM basis 2.02 ± 0.18 2.24 ± 0.19
Tryptophan, DM basis 0.88 ± 0.05 0.72 ± 0.06
Methionine, DM basis 0.77 ± 0.05 0.82 ± 0.07
Glycinin, CP basis 8.8 ± 0.8 a 5.3 ± 0.6 b
β-Conglycinin, CP basis 23.9 ± 1.8 a 14.4 ± 1.2 b
Phytic acid2, DM basis 2.77 ± 0.09 a 1.79 ± 0.01 b
a,b Least squares within lacking a common letter differ (p<0.05)
1 Values are means of five samples ± SE
2 Values include inositol hexakisphosphate, inositol tetrakisphosphate and inositol trikisphosphate

This research is reported in its entirety as Fermented soybean meal as a vegetable protein source for nursery pigs: I. Effects on growth performance of nursery pigs in the Journal of Animal Science, 2010, 88:214-224.

November 2010


Reproduced Courtesy

Costa Rica - Increase in Pork Consumption Encourages Producers' Sector
Pork consumption is increasing rapidly in Costa Rica, according to Illeana Ramirez in the latest GAIN report from USDA Foreign Agricultural Service.


Report Highlights
The growth in Costa Rica's pork consumption is partly due to producers' work to improve meat quality. However, there is an excellent market niche to export fine cuts such as pork legs during the second semester of the year.

General Information
Increase in pork consumption encourages the pork producers' sector in Costa Rica In 2009, the annual per-capita consumption of pork increased from 8.9kg in 2004 to 11.6kg – 33 per cent more – in Costa Rica. Last year was the best of the last five years although the market faced the influenza A H1N1 (also known as swine influenza).

The Chamber of Swine Producers invested significantly in publicity and the negative effects were curtailed to only one week. Moreover, the campaigns positively affected consumers and a rise in consumption was seen across the country.

The swine producers report that in 2009, in order to meet domestic demand, there were 45,000 pigs slaughtered per month. However, in 2010, this number increased to 55,000 pigs per month.

This growth in the Costa Rica's pork consumption is partly due to producers' work to improve meat quality. Years ago, the value of the animal was quantified by the quantity of fat. Over time, consumer preferences have changed and now consumers expect lean cuts of pork.

Another interesting aspect of the Costa Rican market is that traditionally consumers eat more pork ribs, pork chops and pork roast during the first six months of the year and from July to December, the demand is focused on the pork leg and fine cuts. As a result of the demand for very specific pork cuts, in the last semester of 2010 the Costa Rican pork industry preferred to import the particular cuts and not slaughtering pigs, which helps avoid the need to freeze cuts that are not currently in demand.

Domestic consumption in Costa Rica may be higher but price data is not monitored closely. The price to the producer has kept its value as 1,578 colon (CRC) per kilo (US$3.10/kg) and for the butcher, it is approximately CRC1,720 per kilo ($3.37) but the sales prices could reach up to 150 per cent. An excellent niche market exists in Costa Rica for fine pork cuts, particularly pork legs.

November 2010

Barley and Oats Prices Lowered
Barley yield is estimated at 73.1 bushels per acre, down 0.5 bushels per acre this month; barley production for 2010/11 is lowered 2 million this month to 180 million bushels. Total use remains unchanged this month at 225 million bushels for 2010/11. As a result, ending stocks are forecast at 86 million bushels, down one million. The projected price range is lowered five cents on the low end of the range and 15 cents on the high end of the range at $3.75 to $4.25 per bushel, compared to $4.66 per bushel last year.

Oats yield is estimated 0.3 bushels per acre lower to 64.3 bushels this month. Oats production for 2010/11 is lowered one million bushels to 81 million bushels. The projected price range is lowered to $2.15 to $2.55 per bushel, down five cents on the low end of the range and down 15 cents on the high end of the range, compared with $2.02 per bushel last year.

This month's reduction in the projected price ranges for barley and oats is made to reflect prices received to date by producers. Although cash prices are expected to remain supported by rising corn prices over the coming months, a large share of barley and oats crops have already been sold since the marketing year began on 1 June. Portions of both crops, particularly malting barley, are also contracted further limiting future gains in their season-average prices for 2010/11.

INTERNATIONAL OUTLOOK

World Coarse Grain Production: Mostly a US Reduction
Global coarse grain production for 2010/11 is projected down 3.6 million tons this month to 1,085.2 million. Foreign production is trimmed 0.4 million tons to 752.8 million, with increases nearly offsetting reductions. Foreign corn production is up 2.0 million tons to a record 500.0 million, mostly due to an increase for China. Foreign sorghum is up 0.25 million tons to a record 55.0 million, as good rains and soil moisture in eastern Australia provide for favorable sorghum prospects there. However, these increases are more than offset by reductions in oats, down 1.3 million tons; barley, reduced 0.8 million tons; rye, cut 0.3 million tons and millet and mixed grain, each trimmed 0.1 million tons.

China's corn production forecast for 2010/11 is increased 2.0 million tons to a record 168.0 million as recently published data for 2009/10 indicate higher-than-expected corn area. Growing conditions and harvest weather were mostly favourable, so the projected yield is nearly unchanged this month. Corn production estimated for 2009/10 was increased 3.0 million tons to 158.0 million based on the higher reported area. However, the yield reported by the National Bureau of Statistics is hard to reconcile with the unfavourable weather in key growing regions, and USDA is maintaining a lower estimated yield. The current 2009/10 estimate and 2010/11 forecast implies a year-to-year production increase of 10 million tons, and these yield levels reflect the improved weather.

This month's numbers reflect information lowering China's oats area back to 2005/06. There are also smaller reductions to barley and millet area. Barley yields for 2010/11 are also reduced, cutting production 0.7 million tons to 2.4 million. China's oats production projection is reduced 0.2 million tons to 0.4 million, and millet is trimmed 0.1 million, to 1.5 million. The reduction in other feed grains offsets about half the increase in corn.


Australia's coarse grain production for 2010/11 is forecast up 0.6 million tons to 11.5 million. Good yields in eastern Australia are expected to more than offset drought in the west, boosting barley production 0.3 million tons this month to 7.9 million. Good soil moisture boosts prospects for sorghum yields, increasing production 0.25 million tons to 1.95 million.

Moldova reported excellent corn yields for 2010/11, though area was nearly unchanged from the previous year, boosting production 0.2 million tons to 1.4 million.

Russia's coarse grain production is reduced 1.4 million tons this month to 17.3 million. Harvest reports indicate drought reduced yields for oats and rye, cutting oats production 1.0 million tons to 3.5 million and rye production 0.4 million to 2.1 million.

Based on small revisions to several member country harvest reports, EU coarse grain production is reduced 0.4 million tons this month to 138.8 million as 0.1- million-ton reductions each for barley, corn, mixed grain and oats more than offset a small increase for rye. Belarus barley yield was reported lower than expected, reducing production 0.2 million tons to 1.4 million. Chile reported coarse grain production down 0.1 million tons to 1.7 million, with small declines for corn, oats, and barley. Also, Ukraine reported a slight reduction in millet production based on lower area.

Foreign coarse grain beginning stocks for 2010/11 increased 0.3 million tons to 150.9 million, offsetting a small portion of the production decline. More complete trade data for 2009/10 boosted imports and ending stocks for several importing countries, and EU production for 2009/10 was revised up slightly. These increases more than offset a 0.8-million-ton decline for Argentina, where increased corn feed use is estimated for 2009/10, cutting expected stocks.

Changes in Global Coarse Grain Use Nearly Offsetting This Month
World coarse grain use projected for 2010/11 is down 0.2 million tons to 1,124.0 million, as changes for different countries mostly offset each other. The largest increase in projected use is for China, with coarse grain use up 1.5 million tons. Forecast corn feed use is boosted 2.0 million tons this month based on increased production, but reduced use of barley and oats is partly offsetting. Argentina's 2010/11 corn feed use is up 0.5 million tons to 5.5 million as high meat prices boost feed prospects for both 2009/10 and 2010/11. There are small increases this month in projected coarse grain use for Saudi Arabia, Malaysia, Australia, Moldova and Morocco.

Russia's projected 2010/11 coarse grain use is cut 1.3 million tons this month to 20.4 million. Oats feed use is reduced 0.75 million tons due to lower production, and food seed and industrial use is cut a combined 0.55 million for oats and rye. EU coarse grain feed use is projected 0.65 million tons lower this month mostly due to reduced prospects for corn as more is expected to be exported. Corn feed use in the Philippines is reduced 0.3 million tons to 5.0 million as meat imports limit the growth in corn feed use. Corn use in South Korea is reduced 0.3 million tons to 9.1 million as a 0.5-million-ton reduction in corn feed use due to increased feed-quality wheat imports is partly offset by an increase in expected food and industrial use. There are smaller declines in expected coarse grain use for Israel, Chile, Belarus and Ukraine.


World 2010/11 Coarse Grain Ending Stocks Prospects Reduced
Global coarse grain stocks are projected down 3.1 million tons to 160.2 million, the lowest since 2006/07. This sum of local marketing year ending stocks equals 14 per cent of projected 2010/11 use, down from 18 per cent a year earlier.

The largest reduction in projected coarse grain stocks is for Argentina, down 1.3 million tons to 1.6 million. Most of the decline, 1.2 million tons, is in corn, with increased domestic feed use. Serbia is projected to reduce corn stocks 0.5 million tons to 1.2 million as strong prices are expected to encourage exports and reverse the stock buildup that occurred in 2009/10. With reduced production, ending stocks of coarse grain in Russia and Belarus are lowered 0.2 million and 0.1 million tons, respectively. There are also small reductions this month in projected ending stocks for Chile, China and Jordan.

Increased coarse grain ending stocks for 2010/11 are projected this month for a number of countries, but the increases are small. Australia is up 0.4 million tons to 2.6 million because of increased sorghum and barley production. The EU is increased 0.2 million tons to 10.7 million as feed use is reduced more than exports are increased. Increased beginning stocks boost ending stocks 0.1 million tons for both Malaysia and South Korea. There are smaller increases this month for Moldova, Saudi Arabia, Israel, the Philippines, Ukraine, Switzerland and Tunisia.

US Corn Export Prospects Reduced
US corn exports for trade year 2010/11 (October-September) are reduced 1.5 million tons to 50.0 million, virtually the same as the previous year. (The September-August local marketing year is cut 50 million bushels to 1.95 billion bushels, down two per cent from the previous year.) Strong US prices are expected to limit importers' purchases and encourage some other countries to export.

US export shipments are starting 2010/11 at a modest pace, partly due to strong competition for logistics, especially through Pacific Northwest ports, caused by strong soybean exports. Corn exports during October at 3.4 million tons (Inspections) are well below the pace needed to reach the forecast. However, at the end of October, outstanding export sales were 12.8 million tons, up from 10.1 million a year ago.

Global corn trade is reduced 0.5 million tons to 93.2 million. Corn import prospects for South Korea and Philippines are each reduced 0.3 million tons this month. South Korea is importing more feed-quality wheat and less corn. Rains have damaged some wheat in Australia and Canada, and discounted feed-quality wheat provides an attractive substitute for relatively high priced corn. In the Philippines, meat imports are expected to tone down the rate of growth of meat production and corn feeding, limiting the need to import corn.


Strong corn prices are expected to increase some foreign exporters to boost shipments. EU corn exports are increased 0.5 million tons to 1.0 million as the large corn crops recently harvested in Romania and Bulgaria are in a good position to be shipped to non-EU destinations. Export licences reflect increasing corn export activity. Serbia's corn export prospects are boosted 0.5 million tons this month to 2.5 million as beginning stocks and good production provide ample supplies. Strong prices provide an incentive to overcome logistical problems.

As corn trade data for 2009/10 becomes more complete, estimated trade has increased, up 0.8 million tons this month to 92.5 million. World corn trade in 2009/10 is up 10 per cent from the previous year but down six per cent compared to the 2007/08 record. Recently released export data indicate stronger-than-expected corn exports from Brazil, up 0.4 million tons to 8.6 million, and for India, up 0.3 million to 1.3 million. Imports for Malaysia are boosted 0.3 million tons to 2.8 million, and Egypt is increased 0.2 million to 5.5 million.

Barley trade projected for 2010/11 (October-September) was little changed this month but 2009/10 revisions boosted Ukraine exports and imports for Saudi Arabia. Sorghum trade for 2010/11 was increased slightly this month with increased exports for Australia and imports by the EU.

Feed Outlook - November 2010
Lower yields have reduced the US corn crop but it is still predicted to be the third largest ever, according to Allen Baker, Edward Allen, Heather Lutman and Yonas Hamda in the latest report from the USDA Economic Research Service.

 

Lower forecast corn yields this month reduce US corn production 124 million bushels to 12.54 billion. Fractional changes are made in sorghum, barley, and oats because of late harvests. Corn used for ethanol production is raised. Corn used domestically for feed and residual and for export are both lowered. These supply and use changes reduce projected ending stocks 75 million bushels. As projected, 2010/11 ending stocks would be the lowest since 1995/96 and represent a carry-out of 6.2 per cent of projected usage. Price prospects for corn and sorghum are up this month. Foreign corn production is projected higher, with increased corn production in China. Rising foreign consumption combines with the smaller US crop to leave global corn stocks at a four-year low.


DOMESTIC OUTLOOK

Feed Grain Production Prospects Lowered in 2010/11
US feed grain production for 2010/11 is forecast at 332.2 million metric tons, down from 335.4 million last month and down from 349 million in 2009/10. The month-to-month decrease results mostly from lower forecast corn production. Downward revisions for barley and oats production and a small increase for sorghum are all very small. There are no changes in imports, therefore, total supply is decreased about the same amount as production.

Total 2010/11 feed grain utilization is projected at 357.7 million tons, down from 359.0 million last month but up from 350.2 million in 2009/10. Feed and residual use was lowered 2.5 million tons this month to 139.9 million tons. Food, seed and industrial (FSI) use increased 2.5 million tons this month to 164 million because of increased ethanol production. Exports are lowered this month to 53.9 million tons from 55.1 million last month and down from 54.8 million in 2009/10 as a result of lowered corn exports. Forecast feed grain ending stocks are decreased this month to 24.6 million tons, down from 26.5 million last month. Price prospects for corn and sorghum are up this month for 2010/11.

Minor changes were made for the 2009/10 marketing year for feed grains as a result of final ethanol production numbers and exports, which raised corn FSI use but lowered exports and resulted in lower corn feed and residual use. Total feed grain feed and residual use decreased 193,000 tons, to 137.6 million for 2009/10.

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 144.95 million tons, up 3.4 million from the adjusted total of 141.55 million tons in 2009/10. Corn is estimated to account for 93 per cent of feed and residual use in 2010/11, the same as in 2009/10.

The projected index of grain-consuming animal units (GCAU) in 2010/11 is 92.3 million units, up from the adjusted unit of 91.6 million in 2009/10. Feed and residual per GCAU in 2010/11 is estimated at 1.57 tons, up from 1.54 tons in 2009/10. In the index components, GCAUs are increased this month for cattle on feed and broilers.

Despite higher prices forecast for feed grains this month, total US meat production is raised for 2010 and 2011. Egg production was reduced slightly for 2010 and unchanged for 2011, and milk production was unchanged for 2010 and reduced slightly for 2011.

Beef production is raised largely due to a higher-than-expected number of cattle placed on feed lots during the third quarter of 2010. USDA's 22 October Cattle on Feed report indicated placement numbers up eight per cent in September from last month and three per cent above 2009. In addition, the total inventory of cattle and calves on feed for slaughter market in October was up six per cent from last month and three per cent from 2009. In the trade side, export of beef is raised in 2010 and 2011 on stronger growth to Asian markets. Continued strong demand for cattle in 2010 and 2011 is expected to result in higher demand of feed despite higher grain prices.

Pork production is raised largely due to exceptional gains in carcass weights. USDA's 22 October Livestock Slaughter report indicated federally inspected average dressed weight of hogs at 202 pounds in September, up one per cent from the month before but the same as last year. Pork production is forecast higher in early 2011, as some of the weight gains seen in late 2010 are expected to carry into 2011. Feed use demand is expected to remain strong for the remainder of 2010, but higher feed costs are anticipated to moderate the increase in carcass weights by mid-2011 and lower exports.

Forecast milk production for 2010 is unchanged from last month. However, 2011 production is lowered from last month as forecast cow numbers are reduced from last month. Milk per cow is adjusted slightly higher in early 2011. This forecast is supported as historical trends show a decline in the number of milk cows and an increase in productivity per cow. On the trade side, exports in 2010 and 2011 are forecast higher due to continued global economic recovery and favorable exchange rates. Nevertheless, higher feed prices and lower forecast milk prices are expected to limit the rate of growth and the amount of feed use, especially in 2011.

Broiler hatchery data from USDA's 3 November Broiler Hatchery report points toward continued gains in broiler production as the number of broiler-type eggs set is up eight per cent and broiler-type chicks placed is up five per cent from the comparable week a year earlier. Moreover, based on USDA's 25 October Poultry Slaughter report, broiler production is up one per cent from last month and up five per cent from last year, which led to higher production forecast in 2010 and 2011. Higher than expected feed costs are expected to slow the rate of expansion and feed use of the broiler sector later in 2011.

USDA's 22 October Chickens and Eggs report showed pullets added to the layers on hand flock in the month of August was down 11 per cent from last year but pullets on hand on 1 September were up one per cent from last year. As a result, the egg production forecast is lowered this month for 2010 but unchanged for 2011. Egg prices for 2010 are forecast higher as prices recovered from their late summer decline but the 2011 forecast is unchanged. With reduced egg production and rising feed costs, feed use is expected to be lower.

USDA's 15 October Turkey Hatchery report indicated that eggs in incubators on 1 October were down four per cent from a month ago. In addition, turkey poults hatched and net poults placed during September were down four per cent each from a month ago. The Poultry Slaughter report also showed a three-per-cent decline in total turkey live weight. The rate of decline in 2010 turkey production is slower than last month's forecast, while 2011 production forecast is unchanged. With declining eggs in incubators, poults hatched and placed, and rising feed costs, producers are expected to slow down feed use.

Minor Changes Made to 2009/10 Marketing Year
Corn FSI use is raised 8.2 million bushels this month, as corn used for ethanol is raised by the same amount. This change is based on ethanol production data from the US Energy Information Administration. Corn exports were also lowered based on trade data from the Bureau of Census for August. As a result of these adjustments, feed and residual use is lowered 7.5 million bushels to 5,159 million bushels for 2009/10.






2010/11 Corn Crop Forecast Lowered
US corn production is forecast at 12.540 billion bushels, down 124 million from last month but still the third largest on record. Based on conditions as of 1 November, yields are expected to average 154.3 bushels per acre, down 1.5 bushels from last month and 10.4 bushels below last year.

Despite the drop from October, this yield, if realized, would be the third highest on record. Beginning stocks and imports are unchanged this month, resulting in projected total supply of 14.257 billion bushels, down from last month's 14.382 billion. The 1 November corn objective yield data indicate the second highest number of ears per acre for the combined 10 objective yield states (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin), behind the record year of 2009. Record-high ear counts are forecast in Iowa, Ohio and Wisconsin.

Favourable weather conditions during the month of October led to the rapid harvesting of this year's corn crop. As of 31 October, 91 per cent of the corn acreage was harvested, 67 percentage points ahead of last year and 30 percentage points ahead of the five-year average. Harvest was ahead of the normal pace in all 18 major producing states, with Illinois, Indiana and Kansas all having less than five per cent of the crop remaining in the field. Harvest was complete in Kentucky, North Carolina and Tennessee by month's end.

Feed and residual use is projected 100 million bushels lower with the smaller forecast crop and higher prices expected to reduce feeding. Exports are lowered 50 million bushels as higher prices trim export demand. Corn use for ethanol is raised 100 million bushels with record October ethanol production indicated by weekly Energy Information Administration data and favorable ethanol producer margins. Ethanol prices continue to track higher with corn prices, supporting returns for ethanol producers. Although small relative to domestic usage, higher ethanol exports and lower imports are also expected to add to corn use for ethanol, with high sugar prices limiting the availability of ethanol from Brazil.

Corn ending stocks for 2010/11 are projected 75 million bushels lower. At 827 million bushels, ending stocks would be the lowest since 1995/96 and represent a carryout of 6.2 per cent of projected usage. In 1995/96, carry-out dropped to five per cent of estimated usage. Lower projected ending stocks and strength in futures prices raise prospects for 2010/11 prices received by farmers. The projected season-average price is raised 20 cents on both ends of the range to $4.80 to $5.60 per bushel, compared with $3.55 in 2009/10. Since many farmers likely forward priced some of their crop before prices rose sharply this fall, prices received by farmers are expected to remain below cash prices.

Sorghum Price Prospects Raised in 2010/11
Sorghum production increased slightly this month, raising total supply 390,000 bushels from last month to 378.9 million for 2010/11. This increase resulted in a corresponding increase in ending stocks to 38.9 million bushels. Reflecting a higher expected corn price and strong marketings to date, the projected price range for sorghum is raised to $4.90 to $5.70 per bushel, up 10 cents on both ends of the range, compared with $3.22 per bushel in 2009/10.

Philippines to apply for full FMD-free status
[15 November 2010] The Philippines plans to submit to the World Organisation for Animal Health (OIE) its application to have the remaining areas of Luzon certified “foot and mouth disease (FMD)-free without vaccination”. In May 2010, most areas in Luzon were granted this status, however Zone  2, which include the major pig producing regions of Southern Luzon and Central Luzon, were not included because of the continued use of the FMD vaccines in these areas. However, Dr Davinio Catbagan, Agriculture Assistant Secretary for Livestock said he expects that the whole country will finally be declared FMD-free during OIE's next general assembly in May 2011. The FMD-free status will help open doors for Philippine pork products into the international market.

World must act to boost rice supply
[15 November 2010] Urgent action is needed to reverse inefficient farming methods and boost the world’s supply of rice in order to prevent rising poverty and hunger, experts told the participants of the 3rd International Rice Congress 2010 in Vietnam. “Projected demand for rice will outstrip supply in the near to medium term unless something is done to reverse the current trends” of slow productivity growth and inefficient, unsustainable management of natural resources, said Robert Zeigler of the International Rice Research Institute. Rice is the staple food for about half the world’s population.

2010  is almost gone and 2011 is almost here.It has been another exciting year for the goat in the Philippines.There appears to be a high interest in goats and this will help the industry along with the first goat show at the agri link this year will push the industry to new levels.Congrads to all the winners in the goat show as this means the value of all the winners increases due to what is known as replacement value.Also this allows the breeders to ask for a higher breeders premium also known as the stud fee.In turn these breeders will produce even better foundation stocks for future breeders.Once the movement of breeding stocks from the north is allowed to other areas of the country this will help those of us who wish to introduce new bloodlines into our herd(s).

Reports are coming in from different areas of the country relating to the numbers of goat deaths which we are told is weather related.Many fine animals have been lost so far and this loss affects all of us who have lost animals so far.With no loss insurance we are out of pocket for our losses.But these things do happen from time to time as farming is not a perfect business operation.

Pl 480 still seems to be clouded in mystery and to who or whom will receive any of these animals.What is this a state secret??I think it was Alaminos who stated 99% of the goats are in the hands of the SILENT MAJORITY aka provincial farmers and in some cases like district 1 of Negros Oriental seems to get passed over time and time again.Seems to fall on deaf ears in Manila the Govt. to apply more help to the rural areas no matter where the region is in the country.A few quality bucks will go along ways to help the silent majority with rebuilding the national herd.In truth,its the Visayas and Mindannao that ship between 4-6000 live heads monthly of 99% native goats to a handful of goat meat vendors.In truth the silent majority is doing more than their part to help build up the goat meat industry not the Federation who seems happy that we supply while they build up their own herds,talk about a double standard.Just think if we stopped suppling those heads who will pick up the slack,the federation,I do not think so.The federation seems happy with the status quo.Those who need the help the most are the ones who get the least amount of help because the silent majority is unorganized meaning disorganized and having no one to speak on their behalf.Good people like Alaminos are few and far between who have come out in the support of the silent majority and the pearls they face trying to fit in with the goat industry.Lets see what happens with PL 480 and hope the politicians do what is just and right for the industry not for a few select.

We will begin 2011 with a smaller breeding herd and start rebuilding the herd again as we have carried line breeding to our limit and will select a new nubian buck for the future but our selection for the new buck is limited with the FMD ban still in place and the breeder on Cebu supplies most of the stocks in the Visayas so our search will take us further away.We continue with our snubian breeding and hope to breed some fine animals for the future.The heat wave of 2010 was hard on all of us and lets hope this is now behind us and lets look to the future.

The very best to all of those involved in the goat industry and keep up the good work all.Best wishes to all in the industry for 2011 and lets take this business to the next level.

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Mustang Sally

NFA Assures Rice Inventory Safe Despite Typhoon Juan

(October 19, 2010)

 


National Food Authority Administrator Angelito T. Banayo gave the assurance  that  the NFA has  enough food security stocks and there is no need to import rice to meet the rest of the year’s requirement.


According to Banayo, NFA’s rice inventory at present stands at 37.5 million bags sufficient for the country’s food security need for 52 days  or until the middle of December.


He noted that while it could be expected there may be a reduced palay procurement from the typhoon affected areas in Northern Luzon,  this could be compensated by intensive buying from other palay producing areas of the country to augment the agency’s grains inventory.


The NFA chief also allayed fears  that the damage  brought by typhoon Juan will require  the NFA to import  higher  volume  of rice  next year.


On the typhoon effect, Banayo cited that damage to standing palay crop in Isabela, Cagayan, Kalinga, Pangasinan and some towns in Nueva Ecija are still being estimated by the joint team of the Department of Agriculture (DA) and NFA personnel.


A report will consequently be issued through the DA after the final assessments have come in, he said.


The NFA will also continue to provide assistance to the affected farmers to mitigate the damage of the typhoon that include  allowing them to use at affordable cost the agency’s mechanical dryers and other post harvest facilities they may be needing.


This, Banayo said is in addition to buying their produce to the extent of the allowable grains moisture content and the storage capacity of warehouses in the area.


“We will do our best  even with limited resources  to assist our palay  farmers in Northern Luzon  and other areas   knowing that they were already  badly hit by typhoons Ondoy and Pepeng  last year,” Banayo added.

He also reiterated his appeal to traders not to take advantage of affected farmers by offering them a much lower price for their palay produce.  “This is the second straight year that farmers have been badly affected  by weather upheavals,”  he noted.



 
 
 
 
 
 
 
 

Its a big help to our industry when Alaminos helps all of us with their research data.

I would be the first to admit there are times I do not explain myself well enough and I only end up causing more confussion,forgive me for the confussion.

At times what I understand what the meaning means in english will confuse others.
In the beginning what I was experimenting with was grade standards for live goats.I should use the term grade selection over grade standard.Grade standard may mean to others goat meat cuts.Grade selection was the standard for live goats not goat meat cuts and I should not have added prime,choice,good and utility with selection#1,2,3,4.Selection #1 for a goat would be for goats like the boer with good muscle development and well managed,shinny coats and clear eyes and goats under a certain age.As I have stated, the people connected with the goat meat trade had no interest in a selection grade for live goats.Yes a grade standard would better be suited for processed goat meat cuts at the retail level.A goat of a certain breed well managed is of better quality over a native goat with a dull coat and a higher bone to meat ratio and the same can be said for a goat of a dairy breed with longer leaner muscles.In theory it would help any producer raising goats for meat if there was a national selection standard for live goats over what is in place now with a standard price placed on goats of any quality.

Hope this clears up any misunderstanding with terminology.

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