World Agricultural Supply And Demand Estimates – July 2011
Meat production in the US is expected to remain stable next year, according to the latest USDA World Agricultural Supply and Demand Estimates.

Livestock, Poultry and Dairy
The forecast for 2011 total meat production is lowered from last month as lower beef production more than offsets higher expected pork and turkey production. Beef production is lowered as steer and heifer slaughter in the second quarter was lower than expected although more cows were slaughtered. In addition, recent placements of lighter-weight cattle are expected to moderate carcass weight growth during the year. The 2011 pork production forecast is raised on larger fourth-quarter slaughter. Broiler production for 2011 is unchanged as higher second-quarter production is offset by lower forecast production in the fourth quarter. Turkey production is raised largely on higher second-quarter production. No change is made to table egg production but hatching egg production is lowered due to a stronger forecast decline in last-quarter broiler production.

For 2012, meat production forecasts are reduced as a sharper reduction in the broiler production forecast more than offsets higher pork and turkey production. Larger cut-backs in broiler production are expected to carry into 2012 before production increases gradually later in the year. The pork production forecast is raised slightly, driven primarily by gains in pigs per litter. Despite higher forecast hog prices, producers are expected to remain cautious in expanding farrowings. Egg production forecasts for 2012 are reduced on less demand for hatching eggs.

A small increase is made to the export forecast for beef in 2011 but no changes are made to pork or broiler exports. For 2012, pork exports are raised, but no changes are made to either beef or broilers. No changes are made to beef, pork, or broiler imports for either 2011 or 2012.

Cattle and hog prices are forecast higher for 2011 but forecast broiler prices are lowered as large supplies are pressuring prices. For 2012, cattle price forecasts are unchanged. Hog price forecasts are raised as demand strength carries into 2012, but price gains will be moderated by higher production. Broiler prices are raised slightly as 2012 supplies are forecast to be tighter.

Milk production forecasts for 2011 and 2012 are raised. Cow numbers are forecast higher as higher milk prices and lower forecast feed prices support further herd expansion, but milk per cow is unchanged from last month. Commercial exports on a fat basis are forecast higher for 2011. Ending stock forecasts are raised as cheese stocks are larger than expected.

Dairy product price forecasts for 2011 are raised from last month. The Class III and Class IV price forecasts are raised from last month in line with increased product prices. The all-milk price is forecast at $20.00 to $20.30 per cwt for 2011. For 2012, the butter price is forecast slightly higher than last month, but forecasts for other products are unchanged. Class price forecasts are unchanged. The all milk price forecast for 2012 is unchanged at $17.75 to $18.75 per cwt.

Wheat
US wheat supplies for 2011/12 are raised 90 million bushels as higher carry-in and production more than offset reductions in imports and higher use. Beginning stocks are raised 52 million bushels mostly reflecting higher estimated carryout for 2010/11 as reported in the 30 June Grain Stocks report. Production for 2011/12 is forecast at 2,106 million bushels, up 48 million from last month as higher winter wheat production and higher forecast yields for durum and other spring wheat more than offset lower area as estimated in the 30 June Acreage report. Partly offsetting is a 10-million-bushel reduction in projected imports with lower expected supplies in Canada.

US wheat usage for 2011/12 is raised with a shift in expected seed usage from 2010/11 and higher expected exports compared with last month. Seed use for 2011/12 is raised seven million bushels as late planting in the Northern Plains shifted seed usage for the 2011 crop into the 2011/12 marketing year which began on 1 June. Exports are raised 100 million bushels with larger domestic supplies and reduced competition expected from Canada. Ending stocks are projected 17 million bushels lower at 670 million. While ending stocks remain adequate for most classes of wheat, durum stocks are projected to be especially tight with sharply lower area and production this year. The 2011/12 season-average farm price for all wheat is lowered 40 cents on each end of the projected range to $6.60 to $8.00 per bushel, mostly reflecting the sharp drop in projected corn prices this month.

Global wheat supplies for 2011/12 are projected 0.9 million tons higher as larger beginning stocks more than offset lower expected world production. Larger carry-in in the United States and Russia accounts for most of the increase in 2011/12 world beginning stocks. Revisions to 2010/11 trade and usage for a number of other countries, based on the latest data, also affect world beginning stocks for 2011/12.

World wheat production for 2011/12 is projected down 1.9 million tons with reductions in Canada, Ukraine and Mexico more than offsetting increases for the United States, Turkey and EU-27. Canada production is lowered 3.5 million tons as persistent heavy rains and flooding well into the second half of June limited planting opportunities for spring wheat in southeast Saskatchewan and southwest Manitoba. Production is lowered 1.0 million tons for Ukraine as persistent spring dryness in north central areas of the country stressed developing plants and appears to have limited vegetative growth and tillering. Production is lowered 0.4 million tons for Mexico based on the latest official reports. Turkey production is raised 1.1 million tons as abundant spring moisture boosted yields across the country. EU-27 production is raised 0.6 million tons as higher yields for Spain and Romania more than offset a reduction for Hungary.

Global wheat exports for 2011/12 are projected 2.4 million tons higher, mostly with higher expected exports from the United States and Russia. Imports are raised for EU-27, Egypt, Mexico, Japan, Sri Lanka, Malaysia and Yemen. Partly offsetting are import reductions for the United States, South Korea and Viet Nam. Exports are raised for Russia as relatively low prices make Russian wheat competitive into North Africa and Middle East markets. Exports are also raised for Turkey with larger production. Exports are lowered for Ukraine reflecting the smaller expected crop. Lower exports from Canada are more than offset by higher exports from the United States.

Global 2011/12 wheat consumption is raised 3.0 million tons, mostly reflecting higher wheat feeding in EU-27, Russia and Turkey, higher food use in Egypt, Japan and Russia, and higher industrial use in Canada. Partly offsetting these increases are reductions in wheat feeding in Australia, Canada and South Korea. Global ending stocks are projected 2.1 million tons lower with most of the decline expected in the Russia, Canada and the United States.

Coarse Grains
US feed grain supplies for 2011/12 are projected higher this month mostly with higher expected beginning stocks and production for corn. Corn beginning stocks are raised 150 million bushels reflecting changes to 2010/11 usage projections. Corn production for 2011/12 is projected 270 million bushels higher based on planted and harvested area as reported in the Acreage report. Feed and residual use for 2011/12 is raised 50 million bushels with larger supplies and lower expected prices. Corn use for ethanol is raised 100 million bushels with larger supplies and an improved outlook for ethanol producer margins. Exports are raised 100 million bushels mostly reflecting increased demand from China. Ending stocks for 2011/12 are projected 175 million bushels higher at 870 million. The 2011/12 season-average farm price for corn is projected at a record $5.50 to $6.50 per bushel, down 50 cents on both ends of the range.

Lower production for the other US feed grains for 2011/12 mostly reflect lower estimated area from the Acreage report, which is partly offset by higher forecast yields for barley. Oats yields are lowered. Domestic use is projected lower for sorghum and oats, and sorghum exports are lowered. Projected farm prices are lowered for sorghum, barley and oats.

Total US corn use for 2010/11 is projected 145 million bushels lower mostly reflecting the larger-than-expected stocks estimate on 1 June. Feed and residual use is lowered 150 million bushels. Ethanol use is raised 50 million bushels with larger supplies and improved ethanol producer margins. Partly offsetting is a 20-million-bushel reduction in use for sweeteners reflecting slower demand from Mexico. Corn exports are lowered 25 million bushels based on the slower-than-expected pace of shipments in recent weeks. Imports are raised five million bushels with continued strong shipments from Canada. Ending stocks for 2010/11 are raised 150 million bushels to 880 million. The season-average farm price is projected at $5.15 to $5.35 per bushel compared with $5.20 to $5.50 last month.

Global coarse grain supplies for 2011/12 are projected 10.3 million tons higher mostly on higher corn beginning stocks and production in the United States. Foreign coarse grain beginning stocks changes are mostly offsetting with corn carry-in lowered 0.5 million tons for Canada and barley carry-in raised 0.2 million tons and 0.3 million tons, respectively, for Argentina and Australia. Foreign corn production is lowered 0.6 million tons. Corn production is lowered 0.5 million tons each for Mexico and Russia, and 0.2 million tons for Canada. Ukraine corn production is raised 0.5 million tons and production for Belarus is raised 0.2 million tons. World barley production is raised 1.3 million tons with production raised 1.0 million tons for Russia, 0.8 million tons for Turkey, 0.4 million tons for EU-27 and 0.2 million tons for Argentina. Partly offsetting is a 1.0-million-ton reduction for Ukraine barley. Canada oats production is lowered 0.4 million tons.

Global corn trade for 2011/12 is raised with higher imports for China. China corn imports are raised 1.5 million tons to 2.0 million tons, reflecting the recently announced sale to China and favourable pricing opportunities for US corn into southern China where growing demand is reducing stocks. Corn exports are lowered 0.5 million tons for Canada and 0.2 million tons each for Mexico and Russia, partly offsetting the US increase. Global corn consumption is raised 5.9 million tons with higher expected feeding in China, the United States and Ukraine, and higher industrial use expected in the United States and Canada. Global corn ending stocks are projected 3.8 million tons higher with the US increase only partly offset by reductions for Canada and Mexico.

Rice
US rice supplies in 2011/12 are lowered six per cent to 256.6 million cwt as beginning stocks and production are reduced 6.0 million and 12.5 million, respectively. These reductions are partially offset by a 1.0 million cwt increase in imports to 19.0 million. Ending stocks for 2010/11 (beginning stocks for 2011/12) are lowered 6.0 million cwt as 2010/11 domestic and residual use is raised based on the Rice Stocks report showing stocks as of 1 June, which indicated lower-than-expected stocks and implied higher 2010/11 annual usage than previously estimated. Rice production in 2011/12 is lowered six per cent to 187.0 million cwt, due entirely to a reduction in acreage. Harvested area for 2011/12 is lowered 185,000 acres to 2.65 million. The average all rice yield is raised slightly to 7,059 pounds per acre. Area in 2011/12 is the lowest since 1987/88, and the crop size would be the lowest since 1997/98.

Total use for 2011/12 is lowered 5.0 million cwt to 227.0 million as exports are lowered 6.0 million (all in long-grain rice) to 100.0 million, partially offset by a 1.0 million increase in domestic and residual use. Rough rice and combined milled and brown rice exports (rough-equivalent basis) are each reduced 3.0 million cwt to 36.0 million and 64 million, respectively. Tighter supplies in 2011/12 along with plentiful supplies among the major exporters will likely limit US exports. Ending stocks for 2011/12 are projected at 29.6 million cwt, down 12.5 million, or 30 per cent from a month ago, and 21.0 million or 42 per cent below 2010/11.

The 2011/12 long-grain rice US season-average farm price is projected at $12.00 to $13.00 per cwt, up 70 cents per cwt on each end of the range from last month compared to $11.10 per cwt for 2010/11. The combined medium- and short-grain price is projected at $16.00 to $17.00 per cwt, up $1.00 per cwt from a month ago compared to $17.00 per cwt for 2010/11. The 2011/12 all rice price is projected at $13.20 to $14.20 per cwt, up $1.00 per cwt on each end of the range.

Global 2011/12 rice production and trade are little changed from last month, while consumption is lowered and ending stocks are raised. Global production is projected at a record 456.3 million tons, down fractionally as the drop in the US crop is nearly offset by an increase for Egypt. Global exports in 2011/12 are lowered slightly due mostly to an expected decline in US exports. Global consumption in 2011/12 is lowered 1.7 million tons due mostly to a reduction for India. World ending stocks for 2011/12 are projected at 96.3 million tons, up 1.4 million from last month, and nearly the same as the previous year. The increase in ending stocks is due mostly to an increase for India.

Oilseeds
US oilseed production for 2011/12 is projected at 96.3 million tons, down 2.3 million tons from last month, with lower soybean production accounting for most of the change. Soybean production is projected at 3.225 billion bushels, down 60 million due to reduced harvested area. Harvested area, estimated at 74.3 million acres in the Acreage report on 30 June, is 1.4 million below the June projection. The soybean yield is projected at 43.4 bushels per acre, unchanged from last month. Soybean supplies are 40 million bushels below last month's forecast as higher beginning stocks partly offset lower production. Exports for 2011/12 are reduced 25 million bushels to 1.495 billion reflecting lower US supplies, increased supplies in South America this fall and reduced global imports. US soybean ending stocks are projected at 175 million bushels, down 15 million.

US soybean exports for 2010/11 are projected at 1.52 billion bushels, down 20 million from last month in part reflecting lower projected imports for China. Soybean ending stocks for 2010/11 are projected at 200 million bushels, up 20 million.

The 2011/12 US season-average soybean price is projected at a record $12.00 to $14.00 per bushel, down $1.00 on both ends of the range. Soybean meal prices are projected at $345 to $375 per short ton, down $30 on both ends of the range. Soybean oil prices are projected at 54 to 58 cents per pound, down 4 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 455.5 million tons, down 1.4 million from last month. Lower soybean, peanut and rapeseed production estimates are only partly offset by increases for sunflower seed. Global soybean production is projected at 261.5 million tons, down 1.3 million mostly due to lower production in the United States. Higher soybean production for Russia resulting from increased area partly offsets the US reduction. Rapeseed production is reduced for Canada due to lower harvested area. Despite a record planted area estimate reported by Statistics Canada based on producer surveys conducted in late May and early June, much of the intended area in southeast Saskatchewan and southwest Manitoba did not get planted due to excessive moisture through late June. As a result, the Canada rapeseed crop is projected at 12.6 million tons, down 0.4 million from last month. Other changes include increased rapeseed production for Russia, increased sunflower seed production for Russia and Ukraine, and reduced canola, cottonseed and peanut production for the United States.

Sugar
Projected US sugar supply for fiscal year 2011/12 is increased 218,000 short tons, raw value, from last month. Higher imports from Mexico more than offset lower beginning stocks. Total 2011/12 US sugar use is unchanged.

For Mexico, 2010/11 ending stocks are increased 102,000 metric tons, raw value, with lower production more than offset by reduced domestic use and exports. For 2011/12, the larger beginning stocks and decreases in domestic use and ending stocks result in higher exports of 258,000 tons. The decrease in 2011/12 domestic use is in line with weaker demand for total sweeteners in Mexico.

Pork Commentary: Corn Ethanol Suffers Setback
US - This week, Jim Long comments on the US market.

Jim Long is President &
CEO of Genesus Genetics.
Last week the US Senate voted to recall the Volumetric Ethanol Tax Credit at the current level of 45 cents per gallon and a 54 cent tariff on imported ethanol. The intention is for it to end on 31 July.

The Corn Ethanol apologizers appear to realize the ruse is up. They are painting a picture of a mature industry that no longer needs the subsidy or tariff protection.

Good Try Cowboys!! Corn Ethanol has been getting subsidized at $6 billion a year. That’s a big hole to fill.

The corn ethanol apologists complain about alleged subsidies for the oil and gas industry. Too bad as if hog producers have been getting subsidized to compete with $6 billion from the US treasury. Hog producers actually feed people. Oil doesn’t, natural gas doesn’t, solar doesn’t, and windmills don’t. Keep corn for food not SUVs!!

The next step as corn ethanol loses its aura will be eliminating the legal mandates forcing ethanol into fuel. It’s morally, socially, and economically wrong to burn our food. The insanity of corn ethanol has had a setback but the battle is far from over.

Pfizer to sell Animal Health Division
Pfizer, the world’s biggest drug maker and developer of the chemical castration vaccine – Improvac announced last week their intention to sell its animal health and baby food division.

One analyst put a value of $22 billion on the Pfizer two divisions. Probably a good idea for Pfizer to get out, with an animal health division that has invested heavily in the foolish Improvac vaccine for chemical castration. The top management must wonder where the leadership of the animal health division is going. Science with no common sense in regards to consumer acceptance is a gamble for any corporation. Pfizer Animal Health Management betting on the chemical castration vaccine demonstrates an ignorance of hog producers, packers, processers, retails, and consumers. Improvac does nothing for anyone including Pfizer shareholders.

Markets
The hog market played defense last week losing ground every day. Weekly marketing’s were 1.730 million. This past week’s holiday was not good for producers as fewer hours for slaughter plants take the edge off the pull for hogs. We expect a full week slaughter schedule will pull hogs higher. Last Friday Iowa – Minnesota was 92.66 lean per pound.

In the coming weeks we expect slaughter weights will continue their decline lowering pork supply. We see continued strength in US – Canada pork exports with global hog market prices in China, Russia, South Korea, Japan, Mexico, etc... at price points significantly stronger than USA – Canada. The US beef prices are $1.80 carcass per pound reflecting its supply – demand. Pork is half of beefs price which obviously keeps pork competitive for domestic and export markets. The US chicken industry has cut back egg sets and chick placements up to 6 per cent lower than a year ago.

Summary
Less beef, less chicken, no more pork and strong export demand will keep lean hog prices high. The downside high feed prices but fortunately the corn ethanol industry got a whack this past week.

Thank goodness we produce the most popular meat in the world and global demand is growing.


Author: Jim Long, President & CEO, Genesus Genetics

CME: Exports Grow as US Fills Demand
US - Beef, pork and broiler exports continued to climb in May as international buyers increasingly turn to the US to fill ever growing demand, write Steve Meyer and Len Steiner.


Below are the highlights (please note the data is in pounds, carcass weight basis):

Beef exports in May were pegged at 234.8 million pounds, 15.4 per cent higher than a year ago.

In the first five months of the year, US beef exports reached 1.1 billion pounds, 232.5 million pounds or 27 per cent higher than the comparable period a year ago.

The latest WASDE report raised the estimate for US beef exports in 2011 to 2.613 billion pounds (+314 mil lbs. more than in 2010) and we suspect that forecast will be raised again in the coming months on strong beef demand from Asian and North American markets.

While beef exports to Korea declined 10 per cent in May, US beef shipments to Japan remain very strong and at 43.9 million pounds they were 50.4 per cent higher than a year ago and the largest monthly volume to this market since December 2003.

Japanese demand has been very firm following the tsunami and nuclear disaster due to domestic supply disruptions, a reduction in seafood consumption as well as a weak US dollar vs. the Japanese yen. Currently the Japanese Yen is up 16 per cent in value compared to May 2010.

The growth in Japanese beef exports accounted for almost half of the overall increase in US beef exports in May.

Beef exports to Canada were up 23 per cent from a year ago while shipments to smaller markets rose 21 per cent.

Exports to Mexico remain steady while exports to S. Korea have been declining after a torrid pace earlier in the year as suppliers rushed to build inventories after the Foot and Mouth Disease (FMD) outbreak.

Pork exports in May were 408.8 million pounds, 12.7 per cent higher than a year ago.

This was the third consecutive month that pork exports have crossed the 400 million threshold, the last time that happened was during the summer of 2008.

At that time, the surge in pork exports was largely driven by big Chinese purchases while this time around growth appears to be more broad based.

Japan continues to buy more US pork, with exports to this market in May reaching 135.5 million pounds, or 16.4 per cent more than a year ago.

Exports to Mexico rose 26.9 per cent to 91.5 million pounds while exports to Canada increased 15.1 per cent to 43.2 million pounds.

As with beef, shipments to S. Korea have slowed down from around 87 million pounds a month in March to about 30 million pounds in May. Still, even at that volume, pork exports to S. Korea were up 33 per cent compared to May 2010.

Monday, July 11, 2011
Lower Feed Costs Improve Profitability Outlook
NORTH AMERICA - A US-based agricultural economist says a drop in feed costs resulting from the recent surprise increase in the USDA's planted area estimate for corn has dramatically improved the profit outlook for North American pork producers, writes Bruce Cochrane.




Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

FarmScape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
In its 30 June planted acreage report, released recently, the US Department of Agriculture increased its planted area estimate for corn to 92.2 million acres, a five per cent increase from 2010, lowered its acreage estimate for soybeans by three per cent to 75.2 million acres and raised its acreage estimate for wheat by five per cent to 56.4 million acres.

Dr Steve Meyer, the president of Paragon Economics, notes the estimates caught most analysts by surprise and have dramatically impacted feed costs.

Dr Steve Meyer – Paragon Economics
It's already provided what I think is a pretty good buying opportunity on corn and even soybean meal in the US.

We've had corn down about a dollar a bushel on the futures since then and so generally corn is priced on the futures market between five and six dollars a bushel right around six bucks.

It took cost of production down roughly five dollars a hundredweight or so just in one fell swoop and so certainly helped the profitability picture as we're looking forward through 2012.

I only project profits out through the middle of 2012 but, from June 9 until last week, that number got on average got about 14 dollars a head better than it was back in early June so it's a big change for U.S. producers and by extension Canadian producers from a profit outlook standpoint.

Dr Meyer stresses the name of the game is still managing margins so producers need to be watching lean hog futures prices, corn and soybean meal futures prices, Canadian barley prices and, in some cases, the wheat market.

He says this break in corn prices has given producers a chance to lock in some much better margins and suggests now might be the time to lock in margins on 25 to 30 per cent of the pigs that will be sold over the next six to 12 months.

Monday, July 11, 2011
Sows Slaughter Up Compared to 12 Months Ago
US - The US unemployment rate rose for the third consecutive month reaching 9.2 per cent in June. Non-farm payroll increased by only 18,000 during the month. This is obviously not good news for the economy, or for meat demand, writes Ron Plain.
 
Ron Plain
Based on preliminary data it looks like the number of sows slaughtered in the US was up nearly 8 per cent during June compared to 12 months earlier. The number of Canadian sows imported for slaughter during June was down 8 per cent, so slaughter of US sows was up roughly 11 per cent. Our gilt slaughter data indicates a higher percent of gilts in the slaughter mix during June, thus it appears the breeding herd ended the month smaller than at the start. Will this continue or will the drop in corn prices in recent days make producers more optimistic? I wish I knew.

Hog prices lost ground this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $91.98/cwt, down $2.83 from last Friday. The average for both Iowa-Minnesota and the western corn belt was $92.56/cwt. The eastern corn belt averaged $91.62/cwt on the morning report.

Friday's top live hog price at Peoria was $64/cwt. Zumbrota's top was $65/cwt. The top for interior Missouri hogs this morning was $70.50/cwt, the same as the previous Friday.

Pork cutout value rose slightly this week. USDA's Thursday afternoon calculated pork cutout value was $96.59/cwt, up 47 cents from the previous Thursday. Loins, hams, bellies, and butts were all higher. Packer margins continue to be tight. This morning's national average hog carcass price equaled 95 per cent of the pork cutout value.

This week began with a holiday so hog slaughter totaled only 1.730 million head this week, down 11.1 per cent from last week and up 0.5 per cent compared to the same week last year.

As usual, summer temperatures are bringing down slaughter weights. Barrow and gilt carcass weights for the week ending June 25 averaged 199 pounds, down 2 pounds from a week earlier, but the same as a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 267.6 pounds, down 0.6 pound from the week before and down 0.8 pounds compared to the same week last year.

The July lean hog futures contract ended the week at $95.87/cwt, up 37 cents from the previous Friday. The August contract settled Friday at $96.17/cwt, up $3.02 for the week. December hogs ended the week at $87.90/cwt.

It looks increasingly likely that the 45 cent per gallon ethanol blenders' tax credit will end before the current scheduled date of December 31; perhaps as early as July 31. The impact on corn prices should be modest if gasoline prices remain high. For the week, the July corn contract gained 32 cents to close Friday at $6.72 per bushel. December corn ended the week at $6.37 per bushel, up 40 cents from the previous Friday. Soybean meal futures were also higher this week.

Monday, July 11, 2011
Pork Prices Predicted to Stabilise as Inventory Rises
CHINA - A senior government official in charge of animal husbandry with the Ministry of Agriculture has predicted that pork prices will gradually stabilise in July or August as farmers increase their live pig stocks.


The public has been engaged in heated discussions online regarding pork prices recently with some saying that they are "crazily" high and cannot afford the meat.

Data from the National Bureau of Statistics showed pork prices in June surged 57.1 per cent year- on-year, contributing about 21 per cent to the nation's inflation as the Consumer Price Index (CPI) in the month jumped 6.4 per cent, the highest level in three years.

The price has also climbed by a whopping 11.4 per cent from May as the price growth accelerated by 8.8 per centage points. Pork in Beijing on Sunday rose to 36 yuan (5.5 US dollars) per kilo.

Wang Zhicai, director of animal husbandry under the ministry, said the high pork price was primarily due to the surging cost of raising pigs. "Feed-stuff and corn prices reached 2.18 yuan per kilo on average in the first half of the year, that's up 10.7 per cent from a year ago," Mr Wang said said.

"To raise a pig until it grows to 100 kilos, the cost is 1,350 yuan, and that's 23.3 per cent more than last year," Mr Wang said.

In the first six months, 4.8 per cent less live pigs were sold on the market, Mr Wang said.

"More farmers are choosing to work in cities, that means the number of individual breeders of live pigs is also going down, which has an effect on market supplies," Mr Wang said.

According to data collected from 420 trade markets, pork prices in June shot up 66.5 per cent year-on-year, while the price of live pigs grew 81.9 per cent to reach 17.54 yuan per kilo.

Mr Wang said prices of live pigs are now at a relatively high level and that price increases of live pigs will be limited in the coming months.

He predicated price growth of pigs will gradually ease, but as pig-raising costs are high, pig prices will remain at a high level.

In order to stabilize the meat market, local governments should implement the central government's guidelines in rewarding major pig-raising counties and stepping up support for the construction of standardized pig farms, Mr Wang said.

Mr Wang urged local governments to provide assistance in addressing the needs for finance and land use from the pig-raising industry. Wang said experts from Beijing will be sent to villages to give pig-raising training to farmers.

Mr Wang said his department will also strengthen the monitoring of pig output and market changes in order to prevent big fluctuations of pig prices.

Is there a future in meat goat production in the country??Depends on many factors.The native goat but far is easier to raise without expensive concentrates and expensive housing but due to its slow growth and meat to bone ratio is not so favored over the faster growing imported stocks.One of your greatest factors in this business is your production costs and knowing your break even point.Smart producers will do what it takes to lower their overhead while maintaining the health of their stocks.Just like with any livestock venture some will find the right key for success while others will find this business too difficult to maintain and lose interest.The marketplace for live heads will become one deciding factor.Those who are able to have a greater control over pricing and other outlets other than selling to the travelling traders will benefit over those who are forced to sell at their local livestock yard to the traders.The 5hec. allowance for land will also come into play,area needed for planting and housing while allowing your stocks some room to move and stretch.Should the Govt. start taking land from those who are outside of industrial use,fewer numbers of livestocks will be housed and the chances of some just leaving farming alltogether is possible,fewer numbers means less production and with the rising numbers of people to feed might mean more expensive imported protein to pick up the slack.
No one should enter any livestock venture just because they see someone else doing it.Do your homework first and make a plan,have a backup in case things go very wrong and having other income will be of a great help until your operation is off and running providing you and your family with the added income.Goat meat is still the fastest growing red meat consumed worldwide and this trend will continue for many,many years to come.The demand still exceeds supply but its only the producers who can operate the most efficent that are the ones who will succeed while those who take the most shortcuts are the ones who will fail.So far it seems tho its the private sector that is reporting any real benefits from the different forage/legumes that seem to have the best impact on maintaining growth and maintenace of our goats for production.

Thursday, July 07, 2011
FAO Food Price Index Up Slightly in June
GLOBAL - FAO's Food Price Index rose one percent to 234 points in June 2011 - 39 per cent higher than in June 2010 but four per cent below its all-time high of 238 points in February of this year.




FAO Food Price Index upA strong rise in international sugar prices was behind much of the increase, according to FAO.

The FAO Cereal Price index averaged 259 points in June, down one per cent from May but 71 per cent higher than in June 2010. Improved weather conditions in Europe and the announced lifting of the Russian Federation's export ban contributed to the price drop.

However the maize market remained tight because of low 2010 supplies and continued wet conditions in the United States. Prices of rice were mostly up in June, reflecting strong import demand and uncertainty over export prices in Thailand, the world's largest rice exporter.

Sugar rises on Brazil prospects
The FAO Sugar Price Index rose 14 per cent from May to June, reaching 359 points, 15 per cent below its January record. Production in Brazil, the world's biggest sugar producer, is forecast to fall below last year's level.

The FAO Dairy price Index averaged 232 points in June, virtually unchanged from 231 points in May. The FAO Meat Price Index averaged 180, marginally up from May with poultry meat rising three per cent and climbing to a new record, while pig meat prices declined somewhat.

New cereal forecast
Following two consecutive revisions to the US crops and planting prospects for 2011, FAO's latest forecast for world cereal production in 2011/2012 stands at nearly 2 313 million tonnes, 3.3 per cent higher than last year and 11 million tonnes above FAO's last forecast on 22 June.

World cereal utilization in 2011/2012 is forecast to grow 1.4 per cent from 2010/2011, reaching 2 307 million tonnes, just five million tonnes under forecast production.

World cereal stocks at the close of the crop season in 2012 are now expected to stand six million tonnes above their opening levels. While wheat and rice inventories are expected to become more comfortable, coarse grains stocks, especially maize, would remain tight.

Thursday, July 07, 2011
CME: US Pork Imports
US - Len Steiner and Steve Meyer discuss US pork imports in today's CME report.


“Why do you never mention pork imports?” That is a question we have heard from readers from time to time — especially when we write about beef imports.

It is true that pork imports contribute to total pork supplies just as beef imports contribute to total beef supplies but there are several reasons we (and, in general, most pork analysts) don’t pay a lot of attention to pork imports.

Pork imports are much smaller than beef imports and account for a relatively low percentage of total US pork supply. As can be seen in the figure, US pork imports peaked in 1985 (when the US was the world’s largest pork importer!) at just under 1.2 billion pounds, carcass weight.

Pork imports have remained in the range of 600 million to 1.2 billion pounds since then with the past 12 years seeing imports between 800 million and 1.2 billion pounds. For comparison, consider that US beef imports peaked in 2004 at 3.7 billion pounds and were 2.345 billion pounds last year.

Imports as a percentage of total pork supply also peaked back in 1985 and have generally trended downward since that time.

2008 imports as a percent of total supply (3.37 per cent) were the lowest since 1981. This measure of imports also peaked in 1985 but notice that the gap between imports as a percentage of total supply and imports in tonnage terms has been growing as US domestic production has continued to increase.

For comparison: US beef imports as a percentage of total US beef supply have ranged from 6.5 per cent to 12.8 per cent over this time period with the peak coming in 2004.

It should be noted that the US pork industry has grown dramatically since the mid-1980s. US pork production in 1985 amounted to 14.8 billion pounds, carcass weight.

Total US pork disappearance (usually called “consumption” even though we are not exactly sure where the product goes) in 1985 was 15.8 billion pounds. Those numbers for 2010 were 22.5 billion and 19.1 billion pounds, increases of 22 per cent and 21 per cent, respectively.

Imports of hogs from Canada have garnered far more attention over time than have pork imports. These imports peaked in 2007 at just under 10 million head. But note that the vast majority of the pigs imported from Canada, both then and now, weigh less than 110 lbs. (50 kg) and come to the US for feeding on US farms.

Roughly 60 per cent of these are, in fact, newly weaned pigs that come into the US weighing less than 15.4 lbs. (seven kg). Another 20 per cent weight between 15 and 50 pounds. The remainder fall in the range of 50 to 110 lbs. but are primarily at the bottom end of that range.

Imports of Canadian hogs for slaughter in the US (which includes both market hogs and cull breeding animals) also peaked in 2007 but that 3.28 million head represented only three per cent of total US slaughter.

These slaughter animals accounted for less than one per cent of US slaughter in 2010.

Why have imports declined? First and foremost, the US industry has become much more competitive with world suppliers (even in our own market!) since the mid-1980s. Development and adoption of enhanced genetics, better nutrition and efficient production systems utilising all in, all out pig flows and capturing all available economies of size and scale have driven on-farm costs lower.

Ultraefficient packers have added to that advantage. Second, world pork trade has been liberalised over time. Lower tariffs and the removal of export and production subsidies have allowed to most competitive suppliers, the US, Canada and Brazil, to thrive. Third, exchange rates have changed, improving the competitive position of the US and hurting the position of Canadian and European producers

Thursday, July 07, 2011
Spanish Hog Markets, June 2011
SPAIN - The Spanish pork market normally runs at its higher prices through spring and the summer seasons characterized for higher consumption pushed mainly by the tourism industry, writes Javier Santamartina, PhD, Genesus Representative in Spain, Italy and Portugal.
 

Pork Price Seasonality was broken this year (Thanks goodness!)
This condition is paired with a poorer hogs offer due to the warmer weather which impacts pigs growing. This scenario has been the standard way of fluctuation over the last 15 years. This trend has been broken this year with a flat price in May and June.

The performance of the price for this year compared to 2009 and 2010 shows us a completely different behavior for the price trend. 2010’s prices moved following the traditional pattern with higher prices occurring in May and in the summer months. The prices decreased around the weeks 32/33 as usual.

On the other hand in 2011 pork prices goes up earlier in the year and keep going through the spring showing no major increases around the week 20 as usual.

Some of the reasons supporting this new reality of the Spanish market as follow: - Lower price of meat in Europe. Spain exports at least 20% to the EU. – Dioxins crisis in Germany decreased pork consumption in this country and affected the continental pork price in Europe, and finally a good portion of frozen has been released into the European markets.From today until the week 33 are expected light increases in prices. After that week it seems like a question mark for the prices. It depends actually on how seasonal effect would impact the market. What I mean by that is if the pork offer will be lower we would have better prices than a year ago.

The packing industry is taken advantage of the decent hog prices today. As we wrote in the previous report the packing industry would be suffering, as usual, in the summer months, because the price is normally (and seasonally) higher. It will not be the case for this year so far. In a way is good for the producers because at the end of the day they are the buyers.

At this point in time the producers are working under breakeven basis and very few of them with light profit margins. The main cloud over their heads continues to be the cost of the grain and everyone is asking what would be the scenario in fall. Nobody wants to predict, simply because there is not crystal ball showing the future. The market has become almost unpredictable and totally volatile. Spain is getting a nice harvesting time right now with good yields for barley and wheat. Unfortunately it hasn’t been the same in Northern Europe; France, the UK and Germany have experienced not exactly a severe drought, but dryer season than average anyway.

The general comments are if the cost of production is going to keep these levels most of the protein production would be affected by liquidation. On the other hand there are people predicting a different picture. They say that today’s market is pretty much like 2008 when higher grain prices at the harvesting time were decreasing in the fall. There are also some measurements to control speculation implemented by the European Community. The new regulations have been directed by French Prime Minister Sarkozy.

Summary
The pork price seasonality was broken this year. May and June prices did not increase, as usual. The key point in swine production in the near future depends basically on the grain prices that highly affect cost of production. The big question is how the market will react after the summer months. Today is a big gap between the hog prices and the pork prices.



 

Monday, July 04, 2011
DA to Meet with Chicken and Pork Producers
PHILIPPINES - The Department of Agriculture will meet this week with chicken and pork producers to ensure sufficient supply of meat products.


DA Secretary Proceso Alcala said his department will seek inputs from the producers as it makes plans to ensure meat supply until at least January 2012.

He said that while chicken growers can grow chickens in as little as 35 days, hog growers need as many as "four to six months."

According to GMA News, Mr Alcala said the DA is making projections for at least December, to make sure prices of meat products are affordable to consumers.

The DA is also making plans to "ensure supply of meat products not only for Christmas but also up to one month after Christmas," Mr Alcala said.

Tuesday, June 28, 2011
Pork Commentary: US Hogs and Pigs Report
US - In this week's Pork Commentary, Jim Long writes about the latest Hogs and Pigs report released by the USDA on 24 June.


Jim Long is President &
CEO of Genesus Genetics.
US lean hogs reached over $1.00 lean last week. Some individual net lots exceeded $1.10 lean per pound. No matter how you figure it the average market hog is bringing over $200 per head. These are record prices. Since the World Pork Expo market hogs have jumped 15 cents a pound and corn has dropped over $1.00 a bushel. The cash price margin swing over $30.00 per head. This is an improvement we all need!

We wrote last week that we believe early weans and feeder pigs had hit the seasonal price floor. This week they were steady to $2.00 per head higher. Feeder pig brokers also told us this past week they believe the seasonal cash price floor had been hit.


July corn June 10 reached $7.99 a bushel; last week it closed at $6.70 a bushel. This is still too high but $1.30 lower in 2 weeks. The difference is $10 per head in cost of production. This has done wonders for psychology. When corn was $7.99 the idea was for it to go to $10.00, a terrible crisis for the swine industry. The $1.30 a bushel drop to $6.70 clearly shows that there is a down not just up to the corn market. It just needs to keep going down.


We believe that the cash hog market is going to remain strong in the $1.00 plus range over the coming weeks. Pork exports sales should be extra strong. China, Korea, Japan, Russia, Viet Nam, etc… all have cash hogs over $1.50 lean per pound. At that price it means supply is low and demand is high enough to sustain their market prices. There will be pull of North American pork to these markets.
We often hear the fable that US consumers will have price resistance with pork over $1.00 lean. Maybe it’s true but consider this: 2 per cent of the Chinese make over $15,000 US per year. Lean hog prices are over $1.50 lean a pound in China. It is not hard to figure US vs. China which consumer has more buying power. The US consumer also doesn’t want to buy $4.00 a gallon gasoline – but they do. It’s part of lifestyle just like eating meat is.

June Quarterly Hogs and Pigs Report

(Thousands)
  2010 2011 2011 as % of 2010
Kept for Breeding 5788 5760 100
Market 57808 58021 100
Sows Farrowing (March – May) 2929 2877 98
Pig Crop (March – May) 28730 28851 100
Pigs per Litter (March – May) 9.81 10.03 102

Treading water = record high hog prices would normally cause expansion, but real high feed prices and a hog to corn ratio of 12:1 has kept the breeding herd and pig numbers about the same. The good news is the market inventory is not expanding while global demand for pork is growing. Keep in mind a year ago 53 – 54 per cent lean hogs were 81.85 lean a pound. We are 20 higher currently or $40 per head. This is despite the same number of hogs going to market. Demand for the world’s most popular meat is being proven in this 25 per cent higher price year over year.

The productivity factor can be seen clearly in the report. Pigs per litter are up .22 year over year to 10.03 – a new record. We expect productivity to increase, at Genesus we see a genetic trend line of 25 per litter of pigs born per year improvement. Genesus now has customers weaning 13 pigs per litter consistently; 3 pigs better than the 10 per litter last quarter on the Pig Report. Productivity will continue to increase, with the most successful producers utilizing the best available technology.

Ontario Pork Congress
Last week we attended the annual Ontario Pork Congress in Stratford Ontario. Our observations:

Ontario is unique in that there are only two producers with over 10,000 sows in the sow population of approximately 330,000.


Most producers in Ontario are family farmers who work in the barns, grow their own feed, and put the manure back on the land. This is real integration. A model in these times of high hogs and high feed that works real well.


The psychology of producers at the Ontario Pork Congress was significantly more positive than the World Pork Expo. It is probably mostly due to the $30.00 plus gain in hog process and lower feed prices in the two week time period.


The Ontario industry we believe is treading water. Some finishers are being built but little sow herd expansion.


Ontario benefits from excess packer capacity and demand for hogs is strong.


The Ontario Pork Congress was well organized and well attended. The producers that came got full value for their participation.


Looking at the producers in the industry not only in Ontario but also the ones we met in the World Pork Expo and everywhere it is amazing the resiliency and determination there is in our business. The survivor’s are now benefiting from $1.00 hogs, it is needed.

Author: Jim Long, President & CEO, Genesus Genetics 

Monday, July 04, 2011
CME: Surprises in Acreage, Grain Stocks Reports
US - The fireworks were flying the latest USDA Acreage and Grain Stocks reports, write Steve Meyer and Len Steiner.


The latest USDA data contained surprises for both the nearby and deferred futures markets. 1 June corn stocks were reported to be 3.670 billion bushels, some 350 million bushels higher than pre-report estimates. In the last DLR, the stocks number was highlighted in that estimates were implying livestock feed use during Mar - May down about 9 per cent from the previous year. Better quality corn may have allowed farmers to produce more meat with lower corn use. The much higher USDA stocks estimate implies corn feed use during Mar - May which is as much as 40 per cent lower than a year ago and 29 per cent lower than two years ago. Higher use of alternative feeds, including DDGs is always a factor and comparisons to a year ago may be skewed by how poor feed quality was last year. Still, the magnitude of the decline is very significant (even compared to 2009 good quality crop) and we will have to wait until the fall for the USDA to reconcile the stocks numbers with total production estimates.


The second big surprise in the report was the number of acres planted with corn. The most recent USDA survey showed that US farmers planted 92.3 million acres with corn, 1.6 million acres more than the most recent USDA estimate and pre-report market estimates, and even slightly larger than planting intentions early this spring. This increase adds about 270 million bushels to the corn balance sheet for next year. So what happened with all the talk of flooded acres and delayed plantings? The results were a lesson in system dynamics.

Plenty of acres were flooded and planting was delayed or lost in a number of areas. But as futures advanced to record levels, this allowed farmers in areas that had favorable weather to plant more corn, either by shifting soybean acres or putting corn in acres intended for hay. The report showed that farmers in the Dakotas, Texas and Illinois planted 1.1 million fewer acres than they reported in the March survey. However, farmers in Nebraska, Iowa, Minnesota and Wisconsin planted 1.1 million more acres than they intended in March. Total planted acres of corn, wheat, soybeans, cotton and hay were 295.1 million acres compared to 298.1 million acres intended in March. USDA announced yesterday that it will re-survey farmers in four states where plantings were delayed and the results of that re-survey will be published in August. In the meantime, trade will debate the full impact of flooding as well as the possible implication that the shift in acres from one state to the next will have on final yields.

The bottom line is that taken at face value, the most recent USDA data significantly alters the supply/demand balance sheet for this year and for next. Early calculations indicate that ending stocks for next year could be as high as 1.2 billion bushels, not a bumper supply but significantly better than the razor thin stocks reported in the latest WASDE. The stocks to use ratio for next year could climb to 8.6 per cent. Tom Elam and Steve Meyer have done some work on the shift in the relationship between stocks/use ratios and corn (see chart and DLR 1/28) and an 8.6 per cent ratio could push farm cash prices below the $5 threshold.

Monday, July 04, 2011
Low Farrowing Forecast for Next Six Months
US - USDA's June Hogs and Pigs report forecast farrowings during the next six months to be down 1.9 per cent, writes Ron Plain.
 
Ron Plain
If pigs per litter continue the recent trend of increasing 2 per cent per year, then the pig crop should be close to a year-earlier and thus, hog slaughter during the coming winter and spring should also be close to the level of this past December-May. USDA's market hog inventory in the hogs and pigs report indicated June barrow and gilt slaughter would be down 0.5 per cent and July slaughter up 3 per cent or so. June slaughter was down roughly 1.5 per cent compared to a year earlier. Will July slaughter also come in under USDA's estimate?

The big farm news this week was Thursday's crop reports. USDA said 92.282 million acres are planted to corn, up 4.09 million from last year and 1.515 million acres above the average of pre-release trade estimates. They forecast harvested corn acres would be 3.44 million higher than last fall. USDA also said corn stocks on 1 June totaled 3.67 billion bushels, 370 million bushels above trade estimates. That combination forced corn futures down the limit on Thursday. For the week, the July corn contract lost 29 cents to close Friday at $6.41 per bushel. December corn ended the week at $5.9775 per bushel, down 34 cents from the previous Friday. Soybean meal futures were a bit higher this week.

Hog prices went downhill this week. Carcass prices exceeded a dollar per pound early in the week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $94.81/cwt, down $5.96 from last Friday. Most packers started today with their slaughter needs lined up ahead of the 3-day weekend as neither Iowa-Minnesota, nor the western corn belt, nor the eastern corn belt had enough early hog sales this morning for a market report. Friday's top live hog price at Peoria was $66/cwt. Zumbrota's top was $68/cwt. The top for interior Missouri hogs this morning was $70.50/cwt, 75 cents higher than the previous Friday.

The pork cutout value dropped following three up weeks. USDA's Thursday afternoon calculated pork cutout value was $96.12/cwt, down $3.15 from the previous Thursday. Loins, hams, and butts were all lower. Bellies were higher. Packer margins continue to be tight. This morning's national average hog carcass price equaled 98.6 per cent of the pork cutout value.

Hog slaughter totaled 1.945 million head this week, up 0.5 per cent from last week, but 1.0 per cent compared to the same week last year. Barrow and gilt carcass weights for the week ending 18 June averaged 201 pounds, down 1 pound from a week earlier, but 1 pound heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 268.2 pounds, down 0.1 pound from the week before and down 1.5 pounds compared to the same week last year.

The July lean hog futures contract ended the week at $95.50/cwt, down 50 cents from the previous Friday. The August contract settled Friday at $93.15/cwt, down $2.05 for the week.

Wednesday, June 29, 2011
End to Slaughter Without Stunning Welcomed
NETHERLANDS - Welfare campaigning organisation, Eurogroup for Animals, has welcomed the vote earlier this week by the Dutch Parliament which makes stunning prior to slaughter, including for religious slaughter obligatory in the Netherlands.


This is a step forward for animal welfare as it ends the exemption for religious slaughter where animals are killed fully conscious without stunning on religious grounds and this will alleviate the suffering of up to one million animals in the Netherlands, says Eurogroup for Animals.

The Bill, which received overwhelming support in the Parliament (116 out of 150 votes), is based on the strong scientific consensus that animals rendered unconscious prior to slaughter suffer less than animals bled while fully conscious.

Dr Michel Courat, Policy Officer for Farm Animals at Eurogroup for Animals, commented: "This is a major step forward for animal welfare and we urge all of the 26 other European Union member states to follow the example of the Dutch government. It will however be possible for religious groups to get an exemption, but only when they provide indisputably proof that their alternative method will not cause more harm to animal welfare than pre-slaughter stunning."

The ban is not directed against religious slaughter as such, it only states that religion is not a sufficient reason to let animals suffer unnecessarily, according to Eurogroup. As such it is an invitation to religious groups to explore the boundaries of what their faiths allows and to implement new, innovative animal welfare friendly methods.

Eurogroup has been monitoring the number of animals slaughtered without prior stunning in the EU and is very concerned that the amount of meat coming from animals slaughtered in this way is much higher than the amount required to meet the needs of the religious communities in the EU.

Dr Courat added: "It is a disgrace that consumers are buying meat from animals that have being slaughtered in this way without their knowledge and against their wishes. The Dutch have now sent a very clear signal and the European Commission must act to ensure that in future this is the standard across the European Union."