PINOYAGRIBUSINESS
LIVESTOCKS => AGRI-NEWS => Topic started by: mikey on April 15, 2008, 03:56:24 PM
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Publication: World Watch
Publication Date: 01-JUL-07
Delivery: Immediate Online Access
Author: Augustyn, Heather
Full Article:
Tour guide Asok Kesavan has brought his multinational group of tourists to see some of the oil palm plantations in the countryside in his homeland, Malaysia. He asks his driver to stop the bus and the tourists unload briefly for a walk through the rows of palm. There are many, many rows. "This is not a family business. These are big private companies and Malaysia is the largest explorer and producer of palm oil," Kesavan says, pointing out the grape-like clusters of ripening fruit that nestle between trunk and branches like an overflowing treasure chest. The oil is used for everything from margarine to cosmetics, and it is exported worldwide. "We are the only country to sell oil to the Middle East," he jokes.
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Palm oil is one of the world's leading agricultural commodities. The two biggest producers, Malaysia and Indonesia, account for 84 percent of the world's palm oil production and ring up sales of US$11 billion annually. But as Asok Kesavan knows, lucrative crops can bring trouble. He has seen the fires and the smog, just like his countrymen and millions of others in Indonesia, Singapore, and the rest of Southeast Asia. Plantation owners slash and burn existing vegetation to clear the way for more and more palm, rows and rows sown in place of once-lavish and ancient rainforests. The forests, obliterated by fire, are replaced by hectares of monoculture, and the ground beneath is kept clear of even shade-tolerant native species.
Bad as it already is, this situation may be set to worsen. The world can only use so much lipstick but its appetite for energy seems insatiable, and palm oil may be the Next Big Thing in energy. As biofuels take center stage and governments mandate their use--ironically for the environmental benefits--additional forest destruction, and the attendant loss of wildlife and proliferation of smoke-filled skies, are likely to ensue.
Hot Oil
The World Rainforest Movement (WRM) believes that plans for new plantations in Indonesia are already in the works. "Existing regional plans have already allotted a further 20 million hectares for oil palm plantations, mainly in Sumatra, Kalimantan, Sulawesi, and West Papua," WRM noted in a recent bulletin, "and new plans are currently under discussion to establish the world's largest palm oil plantation of 1.8 million hectares in the heart of Borneo."
Ellie Brown, lead author of the U.S. Center for Science in the Public Interest (CSPI) report Cruel Oil: How Palm Oil Harms Health, Rainforest & Wildlife, says the owners of these palm oil plantations will be largely either big business or government. "In Indonesia, half of the plantations are owned by private companies, which are often part of large conglomerates; the remainder are owned either by the state (17 percent) or by smallholders (33 percent), she writes. "Smallholders are farmers who own a few acres each in a section of a large company's plantation. Although they tend their own oil palm trees, they depend on the company for planting, pesticides, fertilizers, sale of the palm fruits (at a price set by the company), and initial processing in the company's on-site mill." And in countries where state-owned land is the norm, many of these plantations are affiliated with the state. "Especially in Malaysia and Indonesia, which have the lion's share of the global market, national governments have made mammoth tracts of land readily available for companies to establish oil palm plantations," writes Brown.
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The biofuel boom is spurring companies to turn more and more of these vast areas into oil palm plantations. John Buchanan, senior director of business practices with the U.S.-based NGO Conservation International, says that palm oil's energy efficiency as a biofuel makes it very attractive to investors. "One of the common measures used to look at the factor or efficiency of a biofuel crop is a ratio--the number of units of energy put in, to get how many units of energy out," he says. "It's a key factor because in some of these crops, for example corn and ethanol, it's not a whole lot of savings. It's about 1 unit of fossil fuel only getting about 1.4 units of ethanol on the back end. Palm oil, on the other hand, ranges from about 5.6 to 9.6. So if palm oil were traded freely, palm is going to be more profitable." WRM notes that demand for palm oil is expected to double worldwide by 2020, and the Indonesian government reportedly has announced that it will designate 40 percent of its oil palm crop for biofuel production.
U.S. companies have long been eyeing the palm oil market for biofuel. Last December, the Illinois-based agro-giant Archer Daniels Midland (ADM) acquired shares of Singapore-based Wilmar International, a palm oil plantation operator and oil producer. The move made ADM the second-largest shareholder in the company. "ADM is making a big push and they're very bullish on the biofuels," said Buchanan.
The market may well deliver a windfall for palm oil investors. "The barriers to entering the biodiesel market for palm oil are very low," says Harry Boyle of the London research firm New Energy Finance. "It's not difficult and it's not expensive. To build a plant to process palm oil into biodiesel is pretty easy." He notes that the only hindrance to unlimited market potential may be shipping costs.
Paying the Piper
There are other costs, however, that markets often ignore. The oil palm grows only in tropical climates, the same climate that harbors some of the most biodiverse and abundant rainforests in the world. "The impacts on biodiversity are huge," says Ricardo Carrere of the WRM international secretariat in Montevideo, Uruguay. "Many animal species particular to tropical forests need extensive areas of forest to survive and to be able to reproduce, so when all of these forests are burned and then planted to one single species, that provides the animal with no food. Then many species tend to disappear or their numbers decrease substantially. At the same time, all of the local flora disappear because the plantation owners don't want anything to grow underneath, and we're talking in terms of tens of thousands or hundreds of thousands of hectares. There are enormous areas of land where the diverse tropical rainforest is being replaced by a monoculture."
A century ago, according to CSPI, 80 to 90 percent of Indonesia was covered by tropical rainforest. In 1997, only half was. At this rate, CSPI estimates, "virtually all Indonesian lowland tropical forests--which are the richest in plant and animal species--will be gone by 2010." Between 1985 and 2000, the group says, 87 percent of all deforestation in Malaysia was due to oil palm plantations.
Among the animal species vanishing in the rainforest destruction are the Sumatran tiger and rhinoceros, Asian elephant, orangutans, wild ox, barding deer, giant flying squirrel, proboscis monkey, gibbons, langurs, and clouded leopard; "... a species extinction spasm of planetary proportions," writes Ellie Brown in her report. The rainforest destruction and species elimination is directly attributed to these plantation burns: "Borneo's orangutan population was reduced by one-third in just one year, 1997, when almost 8,000 orangutans were either burned to death or were massacred when they tried to escape fires."
Human beings are not exempt from the destruction either. During the hot months (July through October) the effect of the smoke and smog on Southeast Asia is easy to see, and smell. Pollutant Standards Index (PSI) readings reached as high as 150 last year in Singapore during the months before monsoon rains squelched the fires. (Asian newspapers advise readers not to go outside on days when the PSI crosses 100--which is frequently--due to risks of respiratory distress and disease, lung cancer, heart attack, and stroke.) In Indonesia and Malaysia, long-time business owners had to close shop for good due to health impacts, and airports were closed for days on end due to low visibility. The fires had a major impact on regional markets: the Asian Development Bank estimated regional business losses from the 1997-98 fires at over US$9 billion.
But Carrere says that the impact on human health and welfare extends beyond the effect of lost revenues. "This is not environmentally friendly at all. It's genocide of local populations," he says. "What happens in many tropical countries is the land and the forest belongs to the state. However, in those forests there are a number of communities that have always been there and had no land title because they existed before the state, even before the colonizers came, so those lands belong to these people. But the state says no, this belongs to the state, so they give concessions first to the logging companies and then to the plantation companies. People resist ... because they are protecting their land and their means of livelihood, so ... people are put in jail ... and are killed and tortured. Rights abuses are happening throughout the tropics, particularly with biofuel plantations."
And oil palm plantations make the land itself hazardous. "They drain the wetland areas because oil palm needs it [less] humid to be able to grow properly, so water trenches are made so water flows out of the plantation," says Carrere. "At the same time, they use a lot of pesticides, agrochemicals, so that's the same water that's leaving the area and flowing into the region's rivers." Rich organic peat is often set afire and burns for days deep below the surface of the land.
Finally, there is the cost of palm oil plantations to the climate itself--the very thing biofuels are supposed to help. Renyi Zhang of Texas A & M University and his colleagues conducted a three-year study of satellite imagery in the Pacific region. They compared images taken between 1984 and 1994 with images from 1994 to 2005 and determined that deep convective clouds had increased between 20 and 50 percent due to pollution from Asia. These high-altitude storm clouds, seeded by microscopic pollutant particles, are expected to result in more brutal thunderstorms and more severe rainfall, especially through the winter months, in areas already too familiar with extreme weather disasters. Zhang's team also projected that as more of the pollutants travel on these more energetic, large storms with warmer air currents from the tropics, the deposited soot could accelerate the melting of polar ice.
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Pointing the Finger
The obvious question is, exactly who is setting these fires, and why are they not being brought to justice? Andrew Ng, secretary-general of the Roundtable on Sustainable Palm Oil (RSPO), an organization of large oil palm companies, oil palm trade associations, retailers, manufacturers, environmental and conservation NGOs, and social and development NGOs, says that finding the fire starters is harder than it sounds. "Finding the source of the fires, the fact is that it's quite nebulous in a sense. It's all just smoke, isn't it? At the end of the day, that's all you see in the sky," Ng says. "For every fire that you find, the source of it is quite difficult to trace. Sometimes you can trace it back to [an] estate. Sometimes you trace it from outside of the estate coming from the adjacent communities of land where they prepare the annual crops. So trying to find many small little sources, the hot spots here and there that create the big fires, is hard."
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But Ricardo Carrere argues that the inability to find the fire starters may itself just be so much metaphorical smoke. "Even the companies have been identified by name. And nothing happens because these companies have very strong links with government," he says. "They want this plant and it doesn't matter if the company is punished or not. It's the returns." Corruption in the Malaysian and Indonesian governments is nothing new, and certainly the lure of a lucrative crop is cause for these governments to turn a blind eye. In 2004, the civil society NGO Transparency International ranked Indonesia as the 13th most corrupt country in the world--that the country's plantation and forestry sectors are in fact rife with corruption, collusion, and nepotism. Singapore's Straits Times newspaper last October reported that the logging firms are "believed to be owned by or linked to people with ties to the ruling elite and the military."
Government officials deny responsibility. Malaysian officials last October blamed not the large plantations, but instead poor farmers who use fire to clear their land. On the other hand, the Center for International Forestry Research studied satellite photos of the burns that took place in Indonesia in 1997-98 and compared these photos to Indonesian land-use maps. They found that 75 percent of the hot spots in Kalimantan were in oil palm plantation and logging concessions.
One government official, Malaysian Environment Minister Azmi Khalid, believes the culprits are the big companies, and says so. "Open burning for land-clearing is the cause of the haze. In Kalimantan alone, there are now one million hectares of palm oil plantations," he said, noting that 16 companies were under investigation in connection with the fires last October. Still, these companies have never been brought to justice. During the previous prolonged period of haze in Southeast Asia, in 1997 and 1998, 176 companies were publicly identified as violators. Only five were brought to court. One was found guilty.
Corruption is only one part of the reason. Ng says the other part of the equation is the difficulty of enforcement. "Indonesia and Malaysia both have an excellent system of laws and within those laws the punitive measures are very good. But the problem that you have is enforcement, because of the lack of resources available for ensuring that government agencies have enough manpower to go out there and educate the public in these areas, and to monitor these areas and ensure that control continues," he says. "Unless people are willing to put money into these things, you're going to see the fires crop up again this year. We're going to have a dry spell in a couple of months time [June, July] and they'll keep going on until there's nothing left to burn because fire is really the only practical, in a sense, and I put that in quotation marks, way to clear land."
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Ng's group has established a set of global guidelines for sustainable palm oil production, including compliance with all local, national, and international laws and regulations, and ensuring a flow of information from plantation owners to RSPO stakeholders for verification of methods. RSPO has also drawn up a zero-burn policy for plantation operators who are members. Ng says that zero burn is a win-win situation. "Ask anyone in the palm oil plantation industry and they'll tell you that it's actually far better for the land not to burn, not just from the point of view of carbon emissions, but zero burn actually gives you long-term benefits," he argues. "When you do zero burn, you recycle all of the planting material and reintroduce it back into the soil. That gives you long-term input into the soil for fertility."
The RSPO is not the only organization pressing to reduce and eliminate oil palm burns. Representatives from Singapore, Malaysia, Indonesia, Brunei, and Thailand met last November to set policy and budgets for dealing with burns and haze. During this summit they set aside funds to provide incentives to farmers to abandon slash-and-burn land clearing, and strengthened enforcement of burn laws against plantation companies and forest concessionaires caught violating them. For example, Indonesia says it will increase funding for law enforcement and train its police force, prosecutors, and judges to crack down on forest fire violations.
If these measures work, the evidence of success, or failure, will appear in the skies--literally as smoke signals. "I don't think we can solve this within a year. It will take a long-term solution," said Singapore Environment and Water Resources Minister Yaacob Ibrahim during the talks. "We will have to see if farmers are prepared to change habits, whether the Indonesian authorities are prepared to clamp down on errant plantation owners. By and large we are quite happy [with the talks' results], but obviously the devil is in the details." Ng agrees: "Depending on how bad the fires are, I guess we'll find out if the fires are an issue that will again be brought up as in the previous times," he said of this coming November's negotiations.
Many countries aren't waiting for the companies and governments in Southeast Asia to sort it all out and are instead taking matters into their own hands. This past April, scientists and policymakers from over 100 counties met in Brussels to discuss global warming, and palm oil as a biofuel figured into their equation. Dutch companies such as Biox and Essent have either scrutinized or completely halted palm oil production until they can verify that their suppliers did not burn forests in the growing process. "From the start, we knew we can't stay in business if we can't prove that production is sustainable," said Biox executive Arjen Brinkmann. Britain's largest electricity supplier, RWE npower [sic], announced that it too has decided against using palm oil for biofuel after a year of study due to the prevalence of unsustainable growing methods. In January the European Parliament considered a ban on imports of nonsustainable palm oil as well, even though it is anxious to reduce fossil fuel consumption.
This coming year's haze is predicted to be even worse than last year's. Ricardo Carrere suggests that the real culprits ultimately are energy consumers. "On one hand, all of the governments of the world are saying we need sustainable development, we need to conserve water, we need to conserve biodiversity and climate and all the rest. But on the other hand, all the economic policies go in the opposite direction," he says. "It's not that biofuels are wrong. It's the unsustainable consumption that is wrong. Too much energy is being used and there's no way that by producing biofuels it is going to be able to feed all of those cars in the [global] North. Consumers cannot keep using energy in an unsustainable manner."
Heather Augustyn is a freelance writer who spent five weeks in Singapore, Malaysia, and Indonesia during the fall 2006 burns. She has written for E! The Environmental Magazine, EarthTimes.org, Shore Magazine, The Village Voice, and In These Times.
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Publication: World Watch
Publication Date: 01-JUL-07
Delivery: Immediate Online Access
Author: Fujihara, Noboru ; Yoder, Peggy
Full Article:
The article "Food from Cloned Animals Receives Preliminary Approval" (March/April 2007, p. 8), gave me a great shock, since in Japan this kind of opinion perhaps has gone out of the discussion about food and the food market, though I am not sure. As one of the animal scientists who participated in research on genetic engineering by using chicken and cattle at the university in this country, I would like to say something about this news item, though five years have passed since my retirement from the college.
The technique for cloning is not so easy, and you may only be able to get a few successful results from animal cloning. In my students' case, 1 out of 600 to 700 treated chicken eggs (equal to chance mutation) was successful. Though I am not sure about recent advanced techniques for animal cloning, especially for cattle, pigs, or some other farm animals, even now it may take a lot of time to produce cloned animals with highly sophisticated methods.
In my laboratory at the university, we also found various interesting things about the genetically engineered chickens, such as short lifetimes, no breeding ability, and deformed legs that prevented normal walking, despite the fact that some of the exogenous genes were completely introduced into the host embryos.
As a result, I think, if something like mutation had occurred in the process of genetic engineering, these genes could be transferred into the next generation, but further generations might have some different characteristics owing to slightly changed altered genes which occurred in the process of genetic transmission.
In addition, the genetically modified birds also had a few different unknown characteristics in the body, but these features were completely excluded gradually during their living time, though the lifespan was not so long compared with normal birds. This also means that the extra or foreign genes may not be stored in the living cells for long, due probably to the reason that inherent genetic materials couldn't be replaced with ease by any other strange genes or foreign genes.
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These kinds of genetically engineered animals and plants should not be in the market, since nobody can say these are good and safe food materials at the present moment. As you know very well, we can survive without any kind of genetically modified foods all over the world.
In conclusion, as my own opinion, I would like to say the best way to obtain the animals carrying some characteristics of food is to make new breeds with the desired features by employing regular breeding systems. There is no royal road to getting much better animals and plants in succession on the Earth.
NOBORU FUJIHARA, PH.D.
Principal, Clark Memorial International High School
Professor Emeritus, Kyushu University, Japan
Worldwatch Institute promotes itself as "Independent research for an environmentally sustainable and socially just society." In the March/April issue of its magazine, there was a lengthy article titled "Our Biopolitical Future: Four Scenarios" (p. 10), written by Richard Hayes, executive director of the Center for Genetics and Society. In the article, four scenarios concerning genetic technologies were presented, ranging from the benign to a "Techno-Eugenic Arms Race," where genetic technologies are used by individuals, corporations, and countries in the struggle for superiority and dominance. Yet on the back cover of the magazine there is a picture of a transgenic fluorescent-green pig created by Taiwanese scientists by injecting the embryo with a jellyfish protein. The caption stated, "Soon, perhaps, romantic dinners will no longer require candlelight." Given the unsustainability of animal agriculture, the ethics of animal research, and the possible dire predictions of science run amok with genetic engineering, I was shocked and extremely disappointed by WWI's almost whimsical portrayal of such a technology that could drastically reshape our world in a negative way.
PEGGY YODER
Philomath, Oregon, U.S.A.
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Asia big market for Lallemand additives
// 16 apr 2008
Over the past few weeks, Lallemand Animal Nutrition has strengthened its visibility in Asia with its participation to Dairy Focus Asia 2008, Asia’s independent technical conference for progressive dairy farmers, nutritionists and veterinarians, that took place in Bangkok, Thailand.
Bruno Rochet, in charge of the Asian market for Lallemand Animal Nutrition, who was invited to speak at Dairy Focus Asia 2008, focused his intervention on the use of ruminant specific live yeast and selenium enriched yeast to manage heat stress in dairy cows and limit its impact on dairy production and cows health (control of sub-acute acidosis and reproductive health), a very common issue in areas of hot and humid climates.
Lallemand Animal Nutrition is present in Asia via its Chinese representative office, in Beijing, as well as through a growing network of well-established local distributors: Nuevotec in Thailand, Asia Stockwell Products Inc. (ASPI) in Taiwan, Agritech in Malaysia, B.V. feed supplements manufacturing co. ltd in India, and Nosan for probiotic yeast and Miwa for Selenium enriched yeast in Japan.
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Comparing organic and conventional crops
// 28 mar 2008
Can organic cropping systems be as productive as conventional systems? The answer is an unqualified, "Yes" for alfalfa or wheat and a qualified "Yes most of the time" for corn and soybeans according to research reported by scientists at the University of Wisconsin-Madison and agricultural consulting firm AGSTAT in the March-April 2008 issue of Agronomy Journal.
The researchers primarily based their answer on results from the Wisconsin Integrated Cropping Systems Trials, conducted for 13 years (1990-2002) at Arlington, WI and 8 years (1990-1997) at Elkhorn, WI. These trials compared six cropping systems (three cash grain and three forage based crops) ranging from diverse, organic systems to less diverse, conventional systems. The cash grain systems were 1) conventional continuous corn, 2) conventional corn-soybean, and 3) organic corn-soybean-wheat where the wheat included a leguminous cover crop. The three forage based systems were 1) conventional corn-alfalfa-alfalfa-alfalfa, 2) organic corn-oats-alfalfa-alfalfa, and 3) rotationally grazed pasture.
In this research they found that: organic forage crops yielded as much or more dry matter as their conventional counterparts with quality sufficient to produce as much milk as the conventional systems; and organic grain crops: corn, soybean, and winter wheat produced 90% as well as their conventionally managed counterparts. In spite of some climatic differences and a large difference in soil drainage between the two sites, the relatively small difference in the way the cropping systems performed suggested that these results are widely applicable across prairie-derived soils in the U.S. upper Midwest.
The researchers also compared their results to other data analysis done on this topic in the U.S. Midwest. Although researchers found that diverse, low-input/organic cropping systems were as productive as conventional systems most of the time, there is a need for further research, according to the study’s author Dr. Joshua L. Posner, University of Wisconsin.
"There continues to be improvements in weed control for organic systems that may close the gap in productivity of corn and soybeans in wet seasons," Posner says. "On the other hand, technological advances may accelerate productivity gains in conventional systems that would outstrip the gains in organic systems even in favorable years."
The true question of whether organic cropping systems are as productive as conventional systems is a dynamic question and one that requires continual reevaluation.
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Animal Feed & Animal Nutrition News Drastic rise for choline chloride demand
// 15 apr 2008
Choline chloride demand will reach 391.8 thousand tons by 2012, according to new report by Global Industry Analysts, Inc. Growth in poultry feed additives is one of the major drivers of this increasing demand. Swine feed additives and fish feed additives also offer significant growth opportunities.
Choline chloride, a derivative of methylamine, is predominantly used in animal feed additives as a principal dietary supplement in poultry, swine feed and fish farming. The fastest growing markets are Central and South Americas and the far Eastern countries, particularly China. As living standards in these countries are improving steadily, poultry consumption is being looked upon more favourably.
6% growth per year
Consumers are increasingly shifting from red meat to white meat. Choline chloride market is expected to grow at over 6% annually, as stated in a recent report published by Global Industry Analysts, Inc. Consumption of choline chloride in poultry feed additives in United States is estimated at 52.7 thousand tons for 2008. Asia-Pacific and Latin American regions offer the highest growth opportunity for choline chloride market.
Major players in the marketplace include Balchem Corporation, BCP Ingredients and DSM Nutritional Products
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'Livestock meltdown' threatens developing world
13:45 04 September 2007
NewScientist.com news service
Catherine Brahic
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Hardy breeds of livestock vital for world food supplies are dying out across developing countries, especially in Africa, farm scientists are warning. The researchers are calling for the creation of regional gene banks to save such breeds.
"There is a livestock meltdown under way across Africa, Asia and Latin America. Valuable breeds are disappearing at an alarming rate," Carlos Seré of the International Livestock Research Institute told a gathering convened by the UN Food and Agriculture Organization (FAO) in Interlaken, Switzerland. "In many cases we will not even know the true value of an existing breed until it has already gone."
Native breeds are increasingly being supplanted by high-yield Western farm animals, which may be less well able to adapt to their new environment in times of drought or disease, found a joint report by Seré's institute and the FAO on the diversity of farm animals in 169 countries.
For example, in northern Vietnam, local breeds made up 72% of the pig population in 1994, but eight years later the proportion had dropped to 26%. Of the 15 local pig breeds, 10 now face possible extinction.
Tougher cattle
The black and white Holstein-Friesian dairy cow has high milk yields, and is now found in 128 countries and all of the world's regions. Fast egg-laying white leghorn chickens and quick-growing large white pigs are other examples of high-yield stock.
These breeds offer high volumes of meat, milk and eggs. But the researchers warn that the growing reliance on a handful of farm animal species is causing the loss on average of one livestock breed every month in developing countries.
And over the longer term, the imported breeds may not cope with unpredictable environmental change or outbreaks of indigenous disease.
For example, many experts predict that Uganda's indigenous Ankole cattle, famous their graceful and gigantic horns, could be extinct within 20 years because they are being rapidly supplanted by Holstein-Friesians.
Yet, during a recent drought, farmers who had kept their Ankole were able to walk them long distances to water sources, while those who had switched to the imported breeds lost their entire herds, Seré told the meeting.
Gene banks
"For the foreseeable future," says Seré, "farm animals will continue to create means for hundreds of millions of people to escape absolute poverty."
He is calling for the creation of gene banks to store semen, eggs and embryos of farm animals. Seré says such gene banks have been set up in Europe, the US, China, India and parts of Latin America, but are absent from Africa.
But gene banks are just one step needed to better manage farm animals in developing countries, Seré says. The other steps he suggests are:
• Encouraging farmers to maintain a diversity of breeds
• Making it easier for farm animals to cross national borders with their owners
• Generate "landscape genomics", which help predict which breeds are best suited to different environments around the globe
Endangered species – Learn more about the conservation battle in our comprehensive special report.
Genetics – Keep up with the pace in our continually updated special report.
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Meat makes the rich ill and the poor hungry by Jeremy Rifkin
When representatives meet at the World Food Summit they supposedly focus on how to get food into the mouths of nearly one billion people who are currently undernourished. However, at all the dinners they attend you can expect to see the consumption of large quantities of meat. And herein lies the contradiction.
People go hungry because much of arable land is used to grow feed grain for animals rather than people. In the US, 157 million tons of cereals, legumes and vegetable protein – all suitable for human consumption – is fed to livestock to produce just 28 million tons of animal protein in the form of meat.
In developing countries, using land to create an artificial food chain has resulted in misery for hundreds of millions of people. An acre of cereal produces five times more protein than an acre used for meat production; legumes such as beans, peas and lentils can produce 10 times more protein and, in the case of soya, 30 times more.
Global corporations which supply the seeds, chemicals and cattle and which control the slaughterhouses, marketing and distribution of beef, eagerly promote grain-fed livestock. They equate it with a country’s prestige and climbing the “protein ladder” becomes the mark of success.
Enlarging their meat supply is the first step for all developing countries. They start with chicken and egg production and, as their economies grow, climb the protein ladder to pork, milk, and dairy products, then to grass-fed beef and finally to grain-fed beef. Encouraging this process advances the interests of agribusinesses and two-thirds of the grain exported from the USA goes to feed livestock. The process really got underway when “green revolution” technology produced grain surpluses in the 1970s. The UN’s Food and Agricultural Organisation encouraged it and the USA government linked its food aid programme to the producing of feed grain and gave low-interest loans to establish grain-fed poultry operations. Many nations have attempted to remain high on the protein ladder long after the grain surpluses disappeared.
Human consequences of the shift from food to feed were dramatically illustrated during the Ethiopian famine in 1984. While people starved, Ethiopia was growing linseed cake, cottonseed cake and rapeseed meal for European livestock. Millions of acres of land in the developing world are used for this purpose. Tragically, 80 per cent of the world’s hungry children live in countries with food surpluses which are fed to animals for consumption by the affluent.
The irony is that millions of consumers in the first world are dying from diseases of affluence such as heart attacks, strokes, diabetes and cancer, brought on by eating animal products, while the world’s poor are dying from diseases of poverty. We are long overdue for a global discussion on how to promote a diversified, high-protein, vegetarian diet for the human race.
Jeremy Rifkin is the author of Beyond Beef: The Rise and Fall of the Cattle Culture (Plume, 1992), and The Biotech Century (Victor Gollancz,1998). He is also the president of the Foundation on Economic Trends in Washington DC, USA.
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Despite the rich diversity of foods found all over the world, one third of its population does not have enough to eat. Today, hunger is a massive problem in many parts of Africa, Asia and South America and the future is not looking good. The global population is set to rise from 6.5 billion (2006) to 9.3 billion by 2050 (2) and Worldwatch reports (3) forecast severe global food shortages leading to famine on an unprecedented scale.
This misery is partly a direct result of our desire to eat meat. Children in the developing world starve next to fields of food destined for export as animal feed, to support the meat-hungry cultures of the rich world. While millions die, one third of the world's grain production is fed to farmed animals in rich countries (4).
If animal farming were to stop and we were to use the land to grow grain to feed ourselves, we could feed every single person on this planet. Consuming crops directly - rather than feeding them to animals and then eating animals - is a far more efficient way to feed the world. This Viva! Guide looks at why eating meat is a major cause of world hunger and how vegetarianism can provide a solution.
The roots of hunger
The developing world hasn't always been hungry. Early explorers of the 16th and 17th centuries often returned amazed at the huge amounts of food they saw there. In parts of Africa, for example, people always had three harvests in storage and no-one went hungry. The idea of buying and selling food was unheard of.
The Industrial Revolution changed all that. European countries needed cheap raw materials such as coal and iron ore that developing countries had plenty of. Through the process of invasion and colonisation, Western countries could not only take the raw materials but claim the land as their own and make the indigenous people pay taxes or rent. Poor peasants (many of whom had never dealt in money before) were forced to grow crops such as cotton to sell to their new masters. Wealthy countries owned the land, all the food that was produced, and decided the price. After paying taxes, peasants had little money left to buy this expensive food and often ended up borrowing money simply to live. This whole process of colonisation continued right up to the beginning of the last century.
The problem today
Drought and other 'natural' disasters are often wrongly blamed for causing famines. Local people have always planned for freak acts of nature and although they may be the trigger that starts a famine, the underlying cause is the system of modern day neo-colonialism.
The land in poor countries is still largely not owned by the people who work on it and rents are high. Huge areas are owned by large companies based in the West. It is common for people to be thrown off the land, often going to the towns where there is little other work. About 160,000 people move from rural areas to cities every day (5). Many migrants are forced to settle in shanty towns and squatter settlements.
Much of this land is used to grow “cash crops” for export - like coffee, tobacco and animal feed - rather than to grow food for indigenous people. Countries agree to grow cash crops in order to pay off their crippling debts. Fifty-two of the world’s poorest countries owe the rich world in the region of £213 billion. Annual repayments total £14 billion - the majority of this from countries where most people are living on less than one dollar a day (see p7: Why are countries in debt?). (6)
The sad irony is that the world produces more than enough plant food to meet the needs of all its six billion people. If people used land to grow crops to feed themselves, rather than feeding crops to animals, then there would be enough to provide everyone with the average of 2360 Kcal (calories) needed for good health (7).
If everyone were to take 25 per cent of their calories from animal protein then the planet could sustain only three billion people (8). In simple, brutal terms, if we were all to imitate the average North American diet, we would only be able to feed half the world’s population.
Breeding animals means starving people
Breeding animals is an incredibly inefficient way to try and feed the world's growing population. Yet after food rationing during the second world war, intensive animal farming was actively encouraged as a way of ensuring our future “food security”.
Most meat in Western Europe is now produced in factory farms which, as the name implies, are production lines for animals. To meet the large demand for meat, billions of animals are kept in cramped, filthy conditions, often unable to move properly and not allowed fresh air or even natural light. Unable to feed outdoors naturally, they are fed grain, oil seeds, soya feed, fish meal and sometimes the remains of other animals. High quality land is used to grow grains and soya beans - land that could be used to grow crops for humans.
The grain fed to animals does not convert directly into meat to feed people. The vast majority is either excreted or used as “fuel” to keep the animal alive and functioning. For every 10 kilograms of soya protein fed to America’s cattle only one kilogram is converted to meat. Almost the entire population of India and China, nearly two billion people, could be fed on the protein consumed and largely wasted by the United States’ beef herd (10).
Because of the demand for animal feed, a Western meat-based diet uses four and a half times more land than is necessary for a vegan diet and two and a quarter times more than for a vegetarian diet (11). The Worldwide Fund for Nature (WWF) recommend that people reduce their intake of dairy and meat products in order to reduce grazing pressure on land (12).
Where does the animal feed come from?
The amount of land used to grow animal feed in Western countries is not enough to meet their own needs and more is imported from developing countries. Land in some developing countries, like India, is also used to grow grain for animals who are reared and killed for export.
Currently farmed animals eat one-third of the world’s cereal production. In the industrialised world, two-thirds of the agricultural land produces cereals for animal feed. The EU imports 45 per cent of its oilseeds (soya) and, overall, imports 70 per cent of its protein for animal feed (1995-6). As the European Commission admits, ‘Europe’s agriculture is capable of feeding Europe’s people but not of feeding Europe’s animals’ (4). The EU also imports cattle feed such as peanuts or soya because it is cheaper than buying animal feed grown in Europe.
At the height of the Ethiopian famine in 1984-5, Britain imported £1.5 million worth of linseed cake, cottonseed cake and rape seed meal. Although none of this was fit for humans to eat, good quality farmland was still being used to grow animal feed for rich countries when it could have been used to grow food for Ethiopians.
In the United States, farmed animals, mostly cattle, consume almost twice as much grain as is eaten by the entire US population (13). 70 per cent of all the wheat, corn and other grain produced goes to feeding animals (14). Over 100 million acres of US agricultural land is used to grow grain for animals (13) and still more is imported.
In Central and South America, ever-increasing amounts of land are being used to grow soya beans and grain for export - to be used as animal feed. In Brazil, 23 per cent of the cultivated land is currently being used to produce soya beans, of which nearly half are for export (13). The Oxfam Poverty Report explains that the subsidised expansion of the EU’s dairy and livestock industry has created a huge demand for high protein animal feedstuffs and that the demand has in part been met through the expansion of large-scale, mechanised soya production in Brazil. Smallholder producers of beans and staple foods in the southern part of the country have been displaced to make way for giant soya estates. Soya has now become the country’s major agricultural export, “however, it is a trading arrangement which had proved considerably more efficient at feeding European cattle than with maintaining the livelihoods of poor Brazilians.” (16)
Twenty-five years ago, livestock consumed less than six per cent of Mexico’s grain. Today, at least one third of the grain produced in the country is being fed to animals. At the same time, millions of people living in the country are chronically undernourished (13).
It’s not surprising that the World Health Organisation has called for a shift away from meat production so that people can consume crops directly. It says:
“Farming policies that do not require intensive animal production systems would reduce the world demand for cereals. Use of land could be reappraised since cereal consumption for direct consumption by the population is much more efficient and cheaper than dedicating large areas to growing feed for meat production and dairying. Policies should be geared to the growing of plant foods and to limiting the promotion of meat and dairy.” (17)
Governments worldwide have ignored this advice. Instead of promoting the growing of plant foods for human consumption, they offer subsidy payments and financial incentives to livestock farmers, thereby actively encouraging meat production.
Who is hungry?
Around six billion people share the planet, one quarter in the rich north and three quarters in the poor south. While people in rich countries diet because they eat too much, many in the developing world do not have enough food simply to ensure their bodies work properly and stay alive.
826 million people around the world are seriously undernourished - 792 million people in developing countries and another 34 million in industrialised countries (18). Two billion people - one third of the global population - lack food security, defined by the Food and Agriculture Organisation (FAO) as a “state of affairs where all people at all times have access to safe and nutritious food to maintain a healthy and active life.” (5)
Today, some 12 million children die annually of nutrition-related diseases. The Food and Agriculture Organisation says, “Doubtless, far more are chronically ill.” (19)
There are more chronically hungry people in Asia and the Pacific, but the depth of hunger is greatest in sub-Saharan Africa. In 46 per cent of countries there, the undernourished have an average deficit of more than 300 kilocalories per day (19). In 1996-98, 28 per cent of the population on the African continent were chronically undernourished (192 million people) (20).
Access to food is a basic right, enshrined in a number of human rights instruments to which states around the world have committed themselves. At the 1996 World Food Summit, leaders from 185 countries and the European Community reaffirmed, in the Rome Declaration on Food Security, “the right of everyone to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger.” They pledged to cut the number of the world’s hungry people in half by 2015 (21) .
The FAO says that, “eradicating hunger is not merely a lofty ideal” (21). Yet it makes no sense for states to acknowledge the right of each individual to food whilst promoting diets based around animal protein. Starvation does not occur because of a world food shortage. If everyone ate a vegetarian, or better still, a vegan diet there would be enough food for everyone. The only sane way forward is to grow food for humans rather than to feed it to farmed animals.
World Trade
A report, The European Meat Industry in the 1990s, explains the obscene paradox of global food distribution: “World trade relations are dominated by low-priced animal feed and meat. Low prices on animal feeds affect farmers in poor countries producing cash crops [ie animal feed crops for export]. Partly due to the use of imported feed, the rich countries today have a large surplus of meat while more and more people in less developed countries tend to be undernourished” (22).
Current trade agreements, like the Agreement on Agriculture under the World Trade Organisation (WTO), permit Western farmers to sell subsidised grain and other commodity surpluses cheaply in developing nations. This undercuts local farmers and forces many off the land. The Worldwatch Institute states, “In most cases, any benefits of this cheap food to the urban poor are likely to be transitory, as the destablisation of the rural economy encourages migration to job-scarce cities, thereby increasing the ranks of impoverished city dwellers while harming urban agriculture programmes” (23).
Dependence on foreign markets for food also means that the importing countries are vulnerable to price fluctuations and currency devaluations that can increase the price of food substantially (23).
Why are countries in debt?
During the 1970s, developing countries were lent money by developed countries for a range of projects, including infrastructure development (e.g. dams and roads), industrialisation and technology. The World Development Movement (WDM) states, “Often the projects turned out to be unproductive.” The loans were either multilateral (i.e. the World Bank and the International Monetary Fund lending to one government) or bilateral (i.e. one government lending to another) (24).
Then in the 1980s, interest rates rocketed because of the oil crisis, while at the same time, industrialised countries put high prices on many agricultural imports so that developing world farmers were not able to sell their produce (24). Consequently, developing countries were unable to pay off their loans and they have become increasingly indebted. These countries are paying back billions of pounds to the West in interest payments each year.
Often, the loans had conditions attached. When Costa Rica borrowed money from the World Bank, one of the conditions set was that they had to cut down rainforest and clear land for cattle grazing to supply rich countries with cheap beef. The destruction of rainforests is a disaster not just for its people and wildlife but for the world's climate (see Viva! Guide 9, Planet on a Plate).
Between 1975 and 1985, thousands of km2 of forest were cleared in Thailand to grow tapioca to sell to the EU as feed for pigs and cattle. When beef and pork mountains meant that not as much meat was being produced, Europe no longer needed tapioca and stopped buying. This put Thai peasants into huge debt because they had borrowed money to spend on improving their farms to grow enough to meet demand. As a consequence, many people sold their children into child labour and prostitution.
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Jeremy Rifkin is the author of Beyond Beef: The Rise and Fall of the Cattle Culture (Plume, 1992), and The Biotech Century (Victor Gollancz,1998). He is also the president of the Foundation on Economic Trends in Washington DC, USA.
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Spotlight / 2006
The livestock sector is undergoing a complex process of technical and geographical change
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Livestock impacts on the environment
The challenge is to reconcile two conflicting demands: for animal food products and environmental services...
A new report from FAO says livestock production is one of the major causes of the world's most pressing environmental problems, including global warming, land degradation, air and water pollution, and loss of biodiversity. Using a methodology that considers the entire commodity chain, it estimates that livestock are responsible for 18 percent of greenhouse gas emissions, a bigger share than that of transport. However, the report says, the livestock sector's potential contribution to solving environmental problems is equally large, and major improvements could be achieved at reasonable cost.
Based on the most recent data available, Livestock's long shadow takes into account the livestock sector's direct impacts, plus the environmental effects of related land use changes and production of the feed crops animals consume. It finds that expanding population and incomes worldwide, along with changing food preferences, are stimulating a rapid increase in demand for meat, milk and eggs, while globalization is boosting trade in both inputs and outputs.
Livestock and the rural poor
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Despite its wide-ranging environmental impacts, livestock is not a major force in the global economy, generating just under 1.5 percent of total GDP. But the livestock sector is socially and politically very significant in developing countries: it provides food and income for one billion of the world's poor, especially in dry areas, where livestock are often the only source of livelihoods. "Since livestock production is an expression of the poverty of people who have no other options," FAO says, "the huge number of people involved in livestock for lack of alternatives, particularly in Africa and Asia, is a major consideration for policy makers."
In the process, the livestock sector is undergoing a complex process of technical and geographical change. Production is shifting from the countryside to urban and peri-urban areas, and towards sources of animal feed, whether feed crop areas or transport and trade hubs where feed is distributed. There is also a shift in species, with accelerating growth in production of pigs and poultry (mostly in industrial units) and a slow-down in that of cattle, sheep and goats, which are often raised extensively. Today, an estimated 80 percent of growth in the livestock sector comes from industrial production systems. Owing to those shifts, the report says, livestock are entering into direct competition for scarce land, water and other natural resources.
Deforestation, greenhouse gases. The livestock sector is by far the single largest anthropogenic user of land. Grazing occupies 26 percent of the Earth's terrestrial surface, while feed crop production requires about a third of all arable land. Expansion of grazing land for livestock is a key factor in deforestation, especially in Latin America: some 70 percent of previously forested land in the Amazon is used as pasture, and feed crops cover a large part of the reminder. About 70 percent of all grazing land in dry areas is considered degraded, mostly because of overgrazing, compaction and erosion attributable to livestock activity.
At the same time, the livestock sector has assumed an often unrecognized role in global warming. Using a methodology that considered the entire commodity chain (see box below), FAO estimated that livestock are responsible for 18 percent of greenhouse gas emissions, a bigger share than that of transport. It accounts for nine percent of anthropogenic carbon dioxide emissions, most of it due to expansion of pastures and arable land for feed crops. It generates even bigger shares of emissions of other gases with greater potential to warm the atmosphere: as much as 37 percent of anthropogenic methane, mostly from enteric fermentation by ruminants, and 65 percent of anthropogenic nitrous oxide, mostly from manure.
New measurement for greenhouse gases
Scientists usually tie their estimates of the greenhouse gas emissions responsible for global warming to sources such as land use changes, agriculture (including livestock) and transportation. The authors of Livestock’s long shadow took a different approach, aggregating emissions throughout the livestock commodity chain - from feed production (which includes chemical fertilizer production, deforestation for pasture and feed crops, and pasture degradation), through animal production (including enteric fermentation and nitrous oxide emissions from manure) to the carbon dioxide emitted during processing and transportation of animal products.
Livestock production also impacts heavily the world's water supply, accounting for more than 8 percent of global human water use, mainly for the irrigation of feed crops. Evidence suggests it is the largest sectoral source of water pollutants, principally animal wastes, antibiotics, hormones, chemicals from tanneries, fertilizers and pesticides used for feed crops, and sediments from eroded pastures. While global figures are unavailable, it is estimated that in the USA livestock and feed crop agriculture are responsible for 37 percent of pesticide use, 50 percent of antibiotic use, and a third of the nitrogen and phosphorus loads in freshwater resources. The sector also generates almost two-thirds of anthropogenic ammonia, which contributes significantly to acid rain and acidification of ecosystems.
The sheer quantity of animals being raised for human consumption also poses a threat of the Earth's biodiversity. Livestock account for about 20 percent of the total terrestrial animal biomass, and the land area they now occupy was once habitat for wildlife. In 306 of the 825 terrestrial eco-regions identified by the Worldwide Fund for Nature, livestock are identified as "a current threat", while 23 of Conservation International's 35 "global hotspots for biodiversity" - characterized by serious levels of habitat loss - are affected by livestock production.
Two demands. FAO says "the future of the livestock-environment interface will be shaped by how we resolve the balance of two demands: for animal food products on one side and for environmental services on the other". Since the natural resource base is finite, the huge expansion of the livestock sector required to meet expanding demand must be accomplished while substantially reducing its environmental impact.
Greater efficiency in use of resources will be "the key to retracting livestock's long shadow". Although a host of effective technical options - for resource management, crop and livestock production, and post harvest reduction of losses - are available (see box below), current prices of land, water and feed resources used for livestock production do not reflect true scarcities, creating distortions that provide no incentive for efficient resource use. "This leads to the overuse of the resources and to major inefficiencies in the production process," FAO says. "Future policies to protect the environment will therefore have to introduce adequate market pricing for the main inputs."
Action on many fronts
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The FAO report recommends a range of measures to mitigate livestock's threats to the environment:
Land degradation: Restore damaged land through soil conservation, silvopastoralism, better management of grazing systems and protection of sensitive areas.
Greenhouse gas emissions: Sustainable intensification of livestock and feed crop production to reduce carbon dioxide emissions from deforestation and pasture degradation, improved animal nutrition and manure management to cut methane and nitrogen emissions.
Water pollution: Better management of animal waste in industrial production units, better diets to improve nutrient absorption, improved manure management and better use of processed manure on croplands.
Biodiversity loss: As well as implementing the measures above, improve protection of wild areas, maintain connectivity among protected areas, and integrate livestock production and producers into landscape management.
In particular, water is grossly under-priced in most countries, and development of water markets and various types of cost recovery will be needed to correct the situation. In the case of land, suggested instruments include grazing fees, and better institutional arrangements for controlled and equitable access. The removal of livestock production subsidies is also likely to improve technical efficiency - in New Zealand, a drastic reduction in agricultural subsidies during the 1980s helped create one of the world's most efficient and environmentally friendly ruminant livestock industries.
Removal of price distortions at input and product level will enhance natural resource use, but may often not be sufficient. Livestock's long shadow says environmental externalities, both negative and positive, need to be explicitly factored into the policy framework. Livestock holders who provide environmental services need to be compensated, either by the immediate beneficiary (such as downstream users enjoying improved water quantity and quality) or by the general public. Services that could be rewarded include land management or land uses that restore biodiversity, and pasture management that provides for carbon sequestration. Compensation schemes also need to be developed between water and electricity providers and graziers who adopt grasslands management strategies that reduce sedimentation of water reservoirs.
Likewise, livestock holders who emit waste into waterways or release ammonia into the atmosphere should pay for the damage. Applying the "polluter pays" principle should not present insurmountable problems for offenders, given the burgeoning demand for livestock products.
Consumer pressure. Finally, FAO says, the livestock sector is usually driven by diverse policy objectives, and decision-makers find it difficult to address economic, social, health and environmental issues at the same time. The fact that so many people depend on livestock for their livelihoods limits the policy options available, and leads to difficult and politically sensitive trade-offs.
Information, communication and education will play critical roles in enhancing a "willingness to act". With their strong and growing influence, consumers are likely to be the main source of commercial and political pressure "to push the livestock sector into more sustainable forms", Livestock's long shadow says. Already, growing awareness of threats to the environment is translating into rising demand for environmental services: "This demand will broaden from immediate concerns - such as reducing the nuisance of flies and odours - to intermediate demands for clean air and water, then to the broader, longer-term environmental concerns, including climate change and loss of biodiversity".
Back to the countryside?
Intensive animal production systems produce high levels of nitrogen and phosphorus wastes and concentrated discharges of toxic materials. Yet those systems are often located in areas where effective waste management is more difficult. The regional distribution of intensive systems is usually determined not by environmental concerns but by ease of access to input and product markets, and relative costs of land and labour. In developing countries, industrial units are often concentrated in peri-urban environments because of infrastructure constraints.
"Environmental problems created by industrial production systems derive not from their large scale, nor their production intensity, but rather from their geographical location and concentration," FAO says. It recommends reintegration of crop and livestock activities, which calls for policies that drive industrial and intensive livestock to rural areas with nutrient demand.
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By MARK BITTMAN
Published: January 27, 2008
A SEA change in the consumption of a resource that Americans take for granted may be in store — something cheap, plentiful, widely enjoyed and a part of daily life. And it isn’t oil.
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Livestock’s High Energy Costs
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The Huge Flow of Animal Waste
Gary Kazanjian for The New York Times
Beef cattle raised for the Harris Ranch Beef Company, Coalinga, Calif.
It’s meat.
The two commodities share a great deal: Like oil, meat is subsidized by the federal government. Like oil, meat is subject to accelerating demand as nations become wealthier, and this, in turn, sends prices higher. Finally — like oil — meat is something people are encouraged to consume less of, as the toll exacted by industrial production increases, and becomes increasingly visible.
Global demand for meat has multiplied in recent years, encouraged by growing affluence and nourished by the proliferation of huge, confined animal feeding operations. These assembly-line meat factories consume enormous amounts of energy, pollute water supplies, generate significant greenhouse gases and require ever-increasing amounts of corn, soy and other grains, a dependency that has led to the destruction of vast swaths of the world’s tropical rain forests.
Just this week, the president of Brazil announced emergency measures to halt the burning and cutting of the country’s rain forests for crop and grazing land. In the last five months alone, the government says, 1,250 square miles were lost.
The world’s total meat supply was 71 million tons in 1961. In 2007, it was estimated to be 284 million tons. Per capita consumption has more than doubled over that period. (In the developing world, it rose twice as fast, doubling in the last 20 years.) World meat consumption is expected to double again by 2050, which one expert, Henning Steinfeld of the United Nations, says is resulting in a “relentless growth in livestock production.”
Americans eat about the same amount of meat as we have for some time, about eight ounces a day, roughly twice the global average. At about 5 percent of the world’s population, we “process” (that is, grow and kill) nearly 10 billion animals a year, more than 15 percent of the world’s total.
Growing meat (it’s hard to use the word “raising” when applied to animals in factory farms) uses so many resources that it’s a challenge to enumerate them all. But consider: an estimated 30 percent of the earth’s ice-free land is directly or indirectly involved in livestock production, according to the United Nation’s Food and Agriculture Organization, which also estimates that livestock production generates nearly a fifth of the world’s greenhouse gases — more than transportation.
To put the energy-using demand of meat production into easy-to-understand terms, Gidon Eshel, a geophysicist at the Bard Center, and Pamela A. Martin, an assistant professor of geophysics at the University of Chicago, calculated that if Americans were to reduce meat consumption by just 20 percent it would be as if we all switched from a standard sedan — a Camry, say — to the ultra-efficient Prius. Similarly, a study last year by the National Institute of Livestock and Grassland Science in Japan estimated that 2.2 pounds of beef is responsible for the equivalent amount of carbon dioxide emitted by the average European car every 155 miles, and burns enough energy to light a 100-watt bulb for nearly 20 days.
Grain, meat and even energy are roped together in a way that could have dire results. More meat means a corresponding increase in demand for feed, especially corn and soy, which some experts say will contribute to higher prices.
This will be inconvenient for citizens of wealthier nations, but it could have tragic consequences for those of poorer ones, especially if higher prices for feed divert production away from food crops. The demand for ethanol is already pushing up prices, and explains, in part, the 40 percent rise last year in the food price index calculated by the United Nations’ Food and Agricultural Organization.
Though some 800 million people on the planet now suffer from hunger or malnutrition, the majority of corn and soy grown in the world feeds cattle, pigs and chickens. This despite the inherent inefficiencies: about two to five times more grain is required to produce the same amount of calories through livestock as through direct grain consumption, according to Rosamond Naylor, an associate professor of economics at Stanford University. It is as much as 10 times more in the case of grain-fed beef in the United States.
The environmental impact of growing so much grain for animal feed is profound. Agriculture in the United States — much of which now serves the demand for meat — contributes to nearly three-quarters of all water-quality problems in the nation’s rivers and streams, according to the Environmental Protection Agency.
Because the stomachs of cattle are meant to digest grass, not grain, cattle raised industrially thrive only in the sense that they gain weight quickly. This diet made it possible to remove cattle from their natural environment and encourage the efficiency of mass confinement and slaughter. But it causes enough health problems that administration of antibiotics is routine, so much so that it can result in antibiotic-resistant bacteria that threaten the usefulness of medicines that treat people.
Those grain-fed animals, in turn, are contributing to health problems among the world’s wealthier citizens — heart disease, some types of cancer, diabetes. The argument that meat provides useful protein makes sense, if the quantities are small. But the “you gotta eat meat” claim collapses at American levels. Even if the amount of meat we eat weren’t harmful, it’s way more than enough.
Americans are downing close to 200 pounds of meat, poultry and fish per capita per year (dairy and eggs are separate, and hardly insignificant), an increase of 50 pounds per person from 50 years ago. We each consume something like 110 grams of protein a day, about twice the federal government’s recommended allowance; of that, about 75 grams come from animal protein. (The recommended level is itself considered by many dietary experts to be higher than it needs to be.) It’s likely that most of us would do just fine on around 30 grams of protein a day, virtually all of it from plant sources.
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World food stocks dwindling rapidly, UN warns
By Elisabeth Rosenthal Published: December 17, 2007
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ROME: In an "unforeseen and unprecedented" shift, the world food supply is dwindling rapidly and food prices are soaring to historic levels, the top food and agriculture official of the United Nations warned Monday.
The changes created "a very serious risk that fewer people will be able to get food," particularly in the developing world, said Jacques Diouf, head of the UN Food and Agriculture Organization.
The agency's food price index rose by more than 40 percent this year, compared with 9 percent the year before - a rate that was already unacceptable, he said. New figures show that the total cost of foodstuffs imported by the neediest countries rose 25 percent, to $107 million, in the last year.
At the same time, reserves of cereals are severely depleted, FAO records show. World wheat stores declined 11 percent this year, to the lowest level since 1980. That corresponds to 12 weeks of the world's total consumption - much less than the average of 18 weeks consumption in storage during the period 2000-2005. There are only 8 weeks of corn left, down from 11 weeks in the earlier period.
Prices of wheat and oilseeds are at record highs, Diouf said Monday. Wheat prices have risen by $130 per ton, or 52 percent, since a year ago. U.S. wheat futures broke $10 a bushel for the first time Monday, the agricultural equivalent of $100 a barrel oil. (Page 16)
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Diouf blamed a confluence of recent supply and demand factors for the crisis, and he predicted that those factors were here to stay. On the supply side, these include the early effects of global warming, which has decreased crop yields in some crucial places, and a shift away from farming for human consumption toward crops for biofuels and cattle feed. Demand for grain is increasing with the world population, and more is diverted to feed cattle as the population of upwardly mobile meat-eaters grows.
"We're concerned that we are facing the perfect storm for the world's hungry," said Josette Sheeran, executive director of the World Food Program, in a telephone interview. She said that her agency's food procurement costs had gone up 50 percent in the past 5 years and that some poor people are being "priced out of the food market."
To make matters worse, high oil prices have doubled shipping costs in the past year, putting enormous stress on poor nations that need to import food as well as the humanitarian agencies that provide it.
"You can debate why this is all happening, but what's most important to us is that it's a long-term trend, reversing decades of decreasing food prices," Sheeran said.
Climate specialists say that the vulnerability will only increase as further effects of climate change are felt. "If there's a significant change in climate in one of our high production areas, if there is a disease that effects a major crop, we are in a very risky situation," said Mark Howden of the Commonwealth Scientific and Industrial Research Organization in Canberra.
Already "unusual weather events," linked to climate change - such as droughts, floods and storms - have decreased production in important exporting countries like Australia and Ukraine, Diouf said.
In Southern Australia, a significant reduction in rainfall in the past few years led some farmers to sell their land and move to Tasmania, where water is more reliable, said Howden, one of the authors of a recent series of papers in the Procedings of the National Academy of Sciences on climate change and the world food supply.
"In the U.S., Australia, and Europe, there's a very substantial capacity to adapt to the effects on food - with money, technology, research and development," Howden said. "In the developing world, there isn't."
Sheeran said, that on a recent trip to Mali, she was told that food stocks were at an all time low. The World Food Program feeds millions of children in schools and people with HIV/AIDS. Poor nutrition in these groups increased the risk serious disease and death.
Diouf suggested that all countries and international agencies would have to "revisit" agricultural and aid policies they had adopted "in a different economic environment." For example, with food and oil prices approaching record, it may not make sense to send food aid to poorer countries, but instead to focus on helping farmers grow food locally.
FAO plans to start a new initiative that will offer farmers in poor countries vouchers that can be redeemed for seeds and fertilizer, and will try to help them adapt to climate change.
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Food crisis threatens security, says UN chief· Warning of instability and backlash for economies
· Progress on development goals could be wiped out
Alexandra Topping The Guardian, Monday April 21 2008 Article historyAbout this articleClose This article appeared in the Guardian on Monday April 21 2008 on p2 of the Top stories section. It was last updated at 00:59 on April 21 2008. The UN secretary general issued a gloomy warning yesterday that the deepening global food crisis, in which rapidly rising prices have triggered riots and threatened hunger in dozens of countries, could have grave implications for international security, economic growth and social progress.
Ban Ki-moon told a trade and development conference in Accra, Ghana, that the surge in prices of basic foodstuffs like cereals since last year could cancel out progress made towards meeting the UN's Millennium Development Goal of halving world poverty by 2015.
"If not handled properly, this crisis could result in a cascade of others ... and become a multidimensional problem affecting economic growth, social progress and even political security around the world," Ban told the conference.
The World Bank estimates food prices have risen by an average of 83% in the past three years, and warns that at least 100 million people could be tipped into poverty as a result. A range of factors has been blamed, including poor harvests, partly due to climate change, rising oil prices, steep growth in demand from China and India, and the dash to produce biofuels for motoring at the expense of food crops.
"One thing is certain," Ban said. "The world has consumed more than it has produced" over the last three years.
Last week Gordon Brown called for coordinated action by the US and Europe on rising food prices, after discussing the problem with Ban. In his speech yesterday, the UN chief said the ripple effect from food shortages and price hikes risked setting the UN's anti-poverty agenda back at square one. "The global food prices could mean seven lost years ... for the Millennium Development Goals," he said.
The threat of hunger and poverty in developing countries has also sharply increased, and has already resulted in food riots in parts of Asia and Africa.
Ban said several states had attempted to stave off food shortages by barring exports of rice and wheat, or introducing incentives for easier imports of foodstuffs. "This threatens to distort international trade and exacerbate shortages," he said.
The UN's special rapporteur on the right to food, Jean Ziegler, earlier blamed the crisis on biofuels, speculation on commodities markets, and EU export subsidies. "Hunger has not been down to fate for a long time - just as Marx thought," he told the Austrian newspaper Kurier am Sonntag. "This is silent mass murder."
Food riots have broken out in at least a dozen countries, most notably in Egypt, Ivory Coast, Senegal, Yemen and Mexico. Pakistan has reintroduced rationing, while Russia has frozen the price of milk, bread, eggs and cooking oil. Indonesia has increased public food subsidies, while India has banned the export of rice, except the high-quality basmati variety.
Earlier this month, Haiti's parliament dismissed the prime minister, and cut the price of rice, in an attempt to defuse widespread anger at food price hikes that led to days of protests and looting in the capital, Port-au-Prince.
Thousands of garment workers in the Bangladeshi capital, Dhaka, also went on strike this month over spiralling prices. The price of rice, the staple Bangladeshi food, has increased by a third since a devastating cyclone last year. Experts say 30 million of the country's 150 million people could go without daily meals.
The UN food agency has warned that it will need to make "heartbreaking" choices about which countries should receive its emergency aid, unless governments donate more money to buy increasingly expensive food.
In the 30 years to 2005, world food prices fell by around three-quarters in inflation-adjusted terms, according to the Economist food prices index. Since then they have risen by 75%, with much of the increase in the past year. Wheat prices have doubled, while maize, soya and oilseeds are at record highs.
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Pakistan: use wheat for food not feed
// 21 apr 2008
Use of wheat as ingredient of poultry feed could worsen the present crisis of flour in Pakistan according to the Ministry of Food Agriculture and Livestock.
At last year's wheat crisis, poultry feed manufacturers were only allowed to use maize as one of the ingredient rather than wheat but because the maize was more costly this rule did not work. Feed millers therefore stored wheat, which could not be used for the flour mills anymore.
However, according to agricultural experts the recent rain almost across the country will increase the production rate of the wheat crop.
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Thai feed makers lobby for price increase
// 21 apr 2008
With surging global feed prices, animal feed producers in Thailand are asking the Commerce Ministry to allow them to raise prices by 10-20% of maize, soybean meal, fishmeal, rice bran and broken milled rice that have now reached an all-time high worldwide.
According to Pornsilp Patcharintanakul, president of the Thai Feed Mill Association, domestic maize prices have risen 46% since 2003, while rice bran has shot up more than 90% since 2003.
Milled rice prices this year have risen by more than 118% and soybean meal became 79% more expensive.
Pornsil added that that the government had promised earlier to waive the 4% import tariff on soybean meal but has yet to do so.
Feed makers have also asked for tariff cuts on substitute raw materials – sunflower meal, coconut meal and soybean husks – that have been controlled by the government since 2004, and "are not compatible with the rising prices of raw materials and as a consequence are distorting the market mechanism."
"We don't want to see a monopoly which has been managed by the government through its price-control measures since 2004. The controls are against the market trend and will damage market mechanisms," Pornsilp said.
He emphasised that manufacturers insist on producing high-quality feed meal in spite of the increasing cost of major raw materials.
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Strong US farm economy faces crisis
// 21 apr 2008
Soaring land values, increasing debt and a reliance on government subsidies for ethanol production have prompted economists to warn that what some describe as a golden age of agriculture could come to a sudden end.
The potential problem, economists said, is that strong demand for corn and other grains has caused prices to reach historic highs.
That has led to record farmland values and steadily increasing debt as farmers borrow money to buy more land, finance the higher costs of fertilizer and seed and upgrade their equipment.
As long as the demand remains, good times for farmers should continue. But if demand falls, the agricultural economy could collapse.
Among factors that could affect demand would be:
A change in the federal government's policy on ethanol subsidies (now estimated at about $6 billion a year);
Revisions in the farm bill that would lower support payments or,
An increase in the dollar's value, which would hurt exports.
Farm economists question whether the federal backing for ethanol will continue in the face of complaints that soaring corn prices are increasing food costs. Corn is used in most animal feed and is a key ingredient in myriad other products.
Economists worry that farmers could be tempted to add debt due to the belief that high commodity prices would continue.
Those prices have been driven up by a strong demand for corn and soybeans from countries such as China and India, coupled with the needs of more than 50 corn-reliant ethanol plants built in the last few years.
As prices have climbed, so have farmland values. In Iowa, the nation's biggest corn producer, the average price of farmland has increased 67% in the past five years.
Farm debt increases
According to the US Department of Agriculture, farm business debt is expected to reach $228 billion by the end of this year, an $8 billion increase from last year and a new record for the fourth consecutive year.
Debt for land is expected to rise to nearly $121 billion this year, a 2.8% increase.
And the USDA said from the beginning of 2003 to the end of 2008, total farm debt will have increased by about $52.8 billion, or more than 30%.
Recent reports filed by agricultural lenders shows the government's expectations are playing out in reality.
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Dubai Group invests in Malaysian biodiesel
// 14 apr 2008
Dubai Group, owned by the Emirate, said it had paid US$49.5 million for a 30% stake in Malaysian biodiesel firm GBD Investment, as it seeks to tap booming global demand for alternative fuels.
GBD's plant in Sabah state on Borneo island has a capacity of 200,000 metric tonnes a year, which will increase to 500,000 tonnes when the second phase of its construction is completed, Dubai Group said in a statement.
The plant can use palm oil and jatropha as feedstock and would produce biodiesel and pharma-grade glycerine for global markets, it said. South Korea's ECO Solutions Co holds the remaining stake in GBD.
Dubai Group is the latest in a string of Gulf investors who have piled into Malaysian assets, lured by the Southeast Asian country's healthy economy, booming commodities sector and fast-growing Islamic finance industry. In March, Qatar-based Gulf Petroleum, whose shareholders include members of the Qatar royal family and the Qatar General Insurance and Reinsurance Company, said it would set up a US$5 billion oil and gas complex in Malaysia.
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Too much soy can damage cells
// 08 apr 2008
A diet with high concentrations of soy can have negative consequences for humans as well as animals, according to German researchers.
Certain hormonally active ingredients called isoflavones might give problems, said the Research Institute for the Biology of Farm Animals (FBN) in Dummerstorf near Rostock.
Trials with pigs muscle cells with a FBN developed procedure revealed that high doses of isoflavones can damage the cells, said FBN project leader Charlotte Rehfeldt.
However, low concentrations of isoflavones had positive growth effects. Because of similar metabolism systems similar effects can be expected in humans.
Other studies have shown that the isoflavones genistein and daidzein have positive hormonal effects, but also can damage intestinal cells. Rehfeldts said that to reduce the harmful properties of soy in specific therapies is to remove genistein and daidzein from the soy products.
According to the German Society for Nutrition infant food on soybean basis should only be given on medically justified indications, she said.
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Tuesday, April 22, 2008Print This Page
Food for Thought: Does Meat Cause Hunger?
WORLDWIDE - Not bio-fuel, but animals raised for meat are the main reason for the growing shortage of food in the world claims Pune Maharahtra. One-third of the annual global food production is used for feeding animals specially bred and fattened to be killed for their flesh. If the crops fed to them were to be consumed by humans, there would be no shortage.
Pune Maharahtra is a writer for Beauty Without Cruelty (BWC), she says the world is on the verge of a global food crisis. Economists are questioning how fair it is to use land to grow corn, etc., for the production of bio-fuel when people increasingly don't have enough to eat. Fuel is, but a lesser reason for this deep-rooted problem.
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"If the crops fed to them were to be consumed by humans, there would be no shortage of food."
Pune Maharahtra.
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"The main reason for the growing shortage of food needs to be tackled: animals specially bred and fattened to be killed for meat. If the crops fed to them were to be consumed by humans, there would be no shortage of food. As much as one-third of the approximately 2000 million tons of annual global food production is used for feeding these animals for their flesh." Claims Pune Maharahtra.
The feed-to-meat ratio varies depending upon species (poultry, pigs, cattle, sheep & goats) and whether produced in a developed or developing country, but on an average 4 kilograms of feed yields only 1 kilogram of meat.
Moreover, the FAO has stated that the world's livestock production is 18% more responsible for global warming than all transport emissions. It causes wide-scale land degradation, uses large quantities of the earth's increasingly scarce water resources, pollutes land, water and air, and is responsible for excessive use of energy, all of which are downright harmful to our environment.
Pune Maharahtra says the environmentalists are not the only ones who are showing deep concern. "Emerging markets' central banks and governments are no longer ignoring rising food prices coupled with low stocks of rice and wheat (inflation and hoarding) and protests of shortages resulting in social tensions. They know that converting land produce to meat is an expensive business, the direct effect of which is a steep rise in grain prices which hits the poor most."
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Thursday, April 24, 2008
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‘Pakistan will excel in livestock production’
LAHORE: Pakistan will be a prominent focal point in the world with regard to livestock production in the coming days, said Governor Lt Gen (r) Khalid Maqbool.
He was addressing at the concluding session of a two-day International Livestock and Poultry Congress on Wednesday. The governor said that America and Europe had set up heavy machinery industry instead of dairy farming, due to which prices of food items were increasing rapidly. “It is a golden opportunity for us to enhance our potential in agriculture and livestock and get the share of the international market,” he added.
Maqbool said that Pakistan could prosper through breeding of cattle on a commercial basis. He said that there was a lot of potential for the promotion of sheep, goats, fish and chickens in the country, and 14 billion eggs had been brought to the market from the existing hatcheries of Pakistan in a year. He said that government was paying special attention to the promotion of the livestock sector. staff report
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Landliebe to launch natural feed concept
// 25 apr 2008
Dairy producer Landliebe (Germany) will be launching a completely new yet wholly traditional cattle feed concept as a major extension of its quality and origin programme during the second half of this year.
From July onwards, all Landliebe’s fresh milk, long-life milk and school milk will come from cows fed exclusively on locally produced cattle feed.
Landliebe will be the first German dairy brand to introduce such a concept. The feed, which will come from Germany and its EU neighbours, will be made from crops that have always traditionally been grown by German farmers.
Preparations for the new concept are now well under way. Many of Landliebe’s dairy farmers in Nordrhein-Westfalen are keenly interested in the new scheme, as are compound feed manufacturers.
Incentive for farmers
Approximately 450 dairy farmers throughout the federal state are taking part in the new initiative. They will be paid an allowance to take part in the scheme. This will provide an incentive and help them to identify with the brand.
The Landliebe milk will be collected separately from regular milk at the selected farms. It will also be treated and processed separately at the production facility in Cologne.
Landliebe’s farmers live and work in rural areas such as the Bergische Land, Sauerland and neighbouring regions. The grass and other feed they give their cows, such as corn and grain, is all locally grown.
Only EU-produced materials
The concentrates that dairy farmers use as feed supplements may only contain inputs that come from Germany or the European Union. The basic ration for cows (meadow grass, feed crops, grass and corn-based silage) must also be home-grown.
The other feed components required by the cow will be produced either in the EU or in Germany, and will not be imported from overseas.
The specifications governing the new feed concept have been agreed with the dairy farmers in a supplementary contract to the milk supply system.
Inspection of the additional feed purchased and ensuring that it is separately stored will be a key part of this agreement.
Landliebe is one of the biggest-selling daily fresh milk brands in Germany. Landliebe stands for healthy enjoyment and for the highest quality milk with no artificial additives, preservatives or food gelatines.
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FDA tightens use of cattle parts in feed
// 25 apr 2008
The US Food and Drug Administration (FDA) has ruled out the use of high-risk materials from cattle 30 months of age or older for use in all animal feed. This will prevent any accidental cross-contamination between ruminant feed and non-ruminant feed or feed ingredients.
US makers of pet food and all other animal feed will be prevented from using certain materials from cattle at the greatest risk for spreading mad cow disease under a rule that regulators finalized on Wednesday.
Contamination could occur during manufacture, transport or through the accidental misfeeding of non-ruminant feed to ruminant animals.
Canada and the United States already banned the use of protein from cows and other ruminant animals such as goats and sheep in cattle feed in 1997, following a mad cow outbreak in Britain.
The final rule, to be published in today's edition of the federal register, bans cattle parts including:
The entire carcass of BSE-positive cattle
The brains and spinal cords from cattle 30 months of age and older
The entire carcass of cattle not inspected and passed for human consumption that are 30 months of age or older and from which brains and spinal cords were not removed
Tallow derived from BSE-positive cattle
Tallow derived from other materials prohibited by this rule that contains more than 0.15 percent insoluble impurities
Mechanically separated beef derived from the materials prohibited by this rule.
The revised rule, amending FDA's 1997 ruminant feed ban, is aimed at further enhancing safeguards against BSE and will go into effect April 27, 2009. It was proposed Oct. 6, 2005, and FDA said it received more than 840 comments.
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Potential for soybean meal in aquafeed
// 24 apr 2008
Aquaculture represents great potential for soybean meal, because aquaculture is the fastest-growing animal-food-producing sector, consuming soybean meal from over 250 million bushels of soybeans.
The United Soybean Board (USB) and the soybean checkoff continue developing new uses and new demand for soybeans in all lands of the world, and even the ocean holds great potential for soy.
Soybean meal has increasingly become a key ingredient in fish feeds as the aquaculture industry strives to meet global demand for its products thanks in part to checkoff research and marketing efforts.
"Fish meal is getting scarce and more costly, creating a market opportunity for more soybean meal to be used as a protein source in fish and shrimp diets," says Bill Coppess, USB director and a soybean farmer from Ansonia, OH. "Soy diets can also decrease the mercury levels in seafood, helping to alleviate some health concerns."
In the United States, each person eats about 16.5 pounds (7.5 kg) of fish and shellfish each year, including about 4.4 pounds (2 kg) of shrimp. The U.S. consumes about 1.4 billion pounds (634,000 tonnes) of shrimp annually.
"Crustaceans represent about 4 percent of aquaculture products worldwide, but represent about 20 percent of the value," says Karen Fear, USB director and a soybean farmer from Montpelier, IN.
"That's why the soybean checkoff is working with shrimp farmers around the world to find ways for more soy to be used in shrimp diets."
The soybean checkoff also works to incorporate soy into all species of farmed fish.
Ocean capture fisheries, which have long provided the majority of edible fish products for the world, have reached maximum sustainable yields.
This means that any expansion will have to come from aquaculture, and using soy as an aquafeed will be a big part of that expansion.
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Enough grain in Europe
// 24 apr 2008
The latest report from the European Commission on the prospects for agricultural markets and incomes suggests an increase in returns to growers in the medium term and rising production. In 2010 production is projected to reach 293.6 million tonnes, rising to 305 million tonnes by 2014.
Consumption will also grow, but at a more modest rate, and is expected to reach 272.9 million tonnes in 2010 and over 285 million tonnes in 2014.
On current trends the EU will actually have end stocks in 2014 of 56 million tonnes, compared with the 40.4 million tonnes last year.
There are two main reasons behind the prospects of rising production. The reforms of the Common Agricultural Policy made an ending of intervention buying for maize. And the ending of set-aside – the measure through which farmers were obliged to take land out of cultivation to avoid surpluses having to be placed in store at taxpayers' expense – has made more land available for cereal growing.
Production forecast
For 2008 Paris-based Strategie Grains is forecasting that wheat production in the EU will be in the region of 128 million tonnes, which is well up on the 111.6 million tonnes of last year.
Consumption of wheat is expected to be about 118 million tonnes, up on last year as livestock farmers switch from using maize.
Barley production is expected to show a modest increase of 900,000 tonnes to 61.54 million tonnes in the EU.
Last year cereal production in the EU reached 256 million tonnes, but consumption exceeded this production with ten million tonnes. The gap was filled by imports.
Of total consumption of 265.6 million tonnes some 165.2 million tonnes were used in animal feed.
Growth in the East
Production in the newer EU member states is expected to rise considerably as technical efficiency improves and farm sizes become larger. The land in parts of Hungary and Poland is ideally suited to growing crops and as newer varieties are adopted yields will rise.
High costs
Although more land will be available, the costs for farmers are rising. Fertilisers are expensive and the scarcity of phosphorous is really becoming a worldwide problem.
Some of the major fertiliser manufacturing countries, notably Russia and China, have placed restrictions on exports and this is having a major impact on the market.
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AgFeed buys several pig farms in China
// 17 apr 2008
China's AgFeed Industries, Inc. has signed agreements to acquire majority ownership of several commercial pig farms located in south China provinces. AgFeed anticipates these acquisitions will close by early May 2008.
AgFeed has agreed to pay, on average, less than 3 times projected 2008 net income for these businesses.
The new acquisitions are expected to generate approximately 390,000 in annual pig production for AgFeed. The Company anticipates that this additional production will add approximately 250,000 pig sales to its 2008 revenues.
AgFeed previously provided guidance indicating that it would achieve approximately 120,000 pig sales in 2008 from its currently existing pig farm operations.
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Meat and bone meal still present in UK
// 30 apr 2008
UK government officials have admitted that animal feed containing meat and bone meal has been distributed across the country twelve years after it was banned due to its risk of BSE contamination, Farmers Guardian reports.
The Government’s Animal Health agency has launched an investigation into the slip-up and is currently tracing the contaminated feed to farms and mills across the country. Animals that have been fed on contaminated feed could face compulsory slaughter in compliance with EU regulation.
"The materials involved are muscle fibre, animal bone and fish bone," read a statement on the Defra website. "This incident relates entirely to animal feed materials and a veterinary risk assessment is being conducted to determine if there is any risk to animal health. There is currently no evidence of any risk to public health."
The wheat feed, produced in Sweden, arrived into London’s Tilbury Docks in March before being distributed to merchants and feed mills throughout the country.
The Food Standards Agency alerted the feed industry last week after routine samples from a feed business operator revealed traces of meat and bone meal. Any contamination would put the Government in breach of the EU’s TSE and animal by-products legislation that was put in place to keep diseases such as BSE at bay.
Meat and bone meal was banned from cattle and sheep feed in 1988 and the ban was extended to all animal feed in 1996 after it was linked to the BSE outbreak. The epidemic reached its peak in 1992 when Britain confirmed 36,680 new BSE cases. Surveillance is ongoing and in the first four months of this year testing has revealed BSE in thirteen cattle and two sheep.
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On a global scale it is estimated that annual global feed production is around 614 million tonnes, but this is only the registered production and often integrated production is not calculated. Furthermore it is estimated that there are 3,800 feedmills worldwide, which appear to produce 80% of all the feed. This means an average production of 13,000 tonnes per mill per year.
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Feed prices boost demand for pellet binders
// 30 apr 2008
Rising prices are stimulating producers to consider different raw materials for their animal feed formulations. This can, in some situations, adversely affect pellet quality, and reduce throughput at the feed mill press according to agricultural specialists Kiotechagil.
With electricity at 0.16 USD per kilowatt-hour and rising, feed compounders are also paying increasing attention to energy usage. Double pelleting for example costs an extra 1.6USD per tonne compared to single pelleting comments Mark Meynell, Director of Lloyds Animal Feeds.
These two factors are increasing the demand for low inclusion pellet binders," says Kiotechagil’s chief technical officer Murray Hyden. "Part of the benefit comes through the chemical binding attributes which help lower the amount of energy consumed in pellet production. This is achieved by improved die lubrication and a reduction in fines losses."
Feed producers are also recognising the ability of binders (such as Mastercube), which improve pellet quality and allow greater inclusion of oils in high-energy diets, said Mr Hyden. "Farmers too are looking to protect their investment in quality feeds by seeking out improved pellet durability and the more consistent pellet quality they achieve when using low inclusion pellet binders."
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Salmon pigment authorised as feed additive
// 02 may 2008
The European Commission has authorised the use of astaxanthin dimethyldisuccinate – a carotenoid pigment – as a feed additive. This pigment is already used to make the flesh of farmed salmon and trout appear orangey-pink.
The official authorisation appeared in the Official Journal of the European Union today (1 May). The European Food Safety Authority last year concluded that use of the additive has no adverse effect on animal health, human health or the environment.
But the regulation stipulates that if it is mixed with canthaxanthin – another carotenoid – the total concentration of the mixture should not exceed 100 grams per kilo in fish-feed. In 2003 the EU limited permitted levels of canthaxantin following health fears linking use of the carotenoid pigment to eye defects.
In addition to be being used to colour the flesh of farmed salmon and trout canthaxantin is also used to make chicken skin and egg yolks appear more yellow. Authorisation takes effect 20 days after the publication of the regulation in the 1 May edition of the EU's Official Journal.
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Animal Feed & Animal Nutrition News Recycling chromium for poultry feed
// 05 may 2008
A research project has received funding for a pilot study on the removal of highly carcinogenic chromium from the leather wastes that are used in the manufacture of poultry feed.
The Tamil Nadu State Council for Science and Technology, Chennai, has awarded the Rs1.10-lakh research project to Dr P.N. Sudha, Professor of Chemistry, Dhanabagyam Krishnaswamy Mudaliar College for Women, Vellore. According to Dr. Sudha, the two-year project is aimed at the removal of chromium from leather wastes through a cost-effective method.
Leather shavings, owing to high protein content, are often used in the manufacture of poultry feed, along with corn flour. It was found, after an analysis of the poultry feed collected from different chicken shops, that the samples contained very high concentration of chromium. Chickens that ate the feed were often found to have high levels of chromium in different parts of the body.
Land filling of leather wastes caused pollution of the environment since leaching of the wastes resulted in polluting the land and the water resources in the vicinity. The use of the leather wastes as chicken feed was a good alternative, provided the chromium and other toxic substances were properly removed, she said.
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Animal Feed & Animal Nutrition News Novus joins trade mission to Vietnam
// 05 may 2008
Novus International Inc., participated in a recent trade mission to Vietnam with Missouri Department of Agriculture Director, Katie Smith. At the request of Missouri Governor Matt Blunt, Director Smith led the mission to assist Missouri based companies and suppliers in the expanding Vietnam feed industry.
With a population of 85 million people, Vietnam has the fastest growing economy in Asia. "The U.S. exported a record $624 million in agricultural, fish and forest products to the country last year. That was almost a ten-fold increase in exports since 2000. Missouri’s long-term vision and commitment to Vietnam has resulted in opening new markets and increased sales," said Director Smith.
The mission included tours of 5 new feed mills, the countries largest swine producer, and an aquaculture operation. The aquaculture and swine industries are considered pivotal to the success of the Vietnamese agricultural industry. In 2007, it is estimated that Vietnam produced 1.2 million tons of catfish surpassing the sectors forecast for 2010. The pig is considered the dominant livestock in Vietnam. It is estimated that pork contributes over 70% of the total meat production for the country.
"This mission, along with our recent decision to construct an Aqua Research Facility on the Nong Lam University campus, illustrate our commitment to the continued development of agriculture in Vietnam and other Asian countries," explained Thad Simons, President and Chief Executive Officer of Novus International, Inc.
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Animal Feed & Animal Nutrition News Dutch dairy coop to use sustainable soy
// 05 may 2008
Friesland Foods, one of the largest dairy coops in the Netherlands, has said that from 2009 on it will only allow soy to be fed to its cows that has been grown according to sustainability standards.
With this decision it refutes the arguments of the Dutch Nature and Environment Foundation, which said that Friesland Foods only talks about sustainable soy but does not act.
Friesland Foods will purchase its soy from areas that not have been deforested for creating arable land. Furthermore the dairy company not only said this, but also demands that the farmers and labourers in Brazil, Argentina and Paraguay are on standard.
This is also one of the reasons Friesland Foods participates in the Round Table for Sustainable Soy production.
The other main dairy producer in the Netherlands, Campina, already in 2006 committed itself to the use of sustainable soy for its dairy cows. The coop used 10,000 tonnes in 2006 and 33,000 tonnes of sustainable soy in 2007.
Campina wants to switch completely to the use of sustainable soy in 2011. This will require a volume of 150,000 tonnes.
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TUESDAY 29 APRIL 2008
Focus on sustainable agriculture
My previous blog "Going organic is a dead-end street" received a lot of comments, mostly telling me that I didn’t know what I was talking about. However, the FAO backs my conclusion.
In a statement it said: "FAO has no reason to believe that organic agriculture can substitute for conventional farming systems in ensuring the world’s food security." Or as its director-general Jaques Diouf puts it: "You cannot feed 6 billion people today and 9 billion in 2050 without judicious use of chemical fertilisers."
Should we continue on the same path as we did the last decades? Answering that question I would say, no. In April a 2,500 page report was presented in South Africa called International Assessment of Agricultural Science and Technology for Development [IAASTD] which advocates a new way of farming using modern technology without losing sight of improvements in small scale farming.
The report - the first significant attempt to involve governments, NGOs and industries from rich and poor countries - took 400 scientists four years to complete. The present system of food production and the way food is traded around the world has led to a highly unequal distribution of benefits and serious adverse ecological effects and was now contributing to climate change.
GM not the solution
The authors said GM technology was not a quick fix to feed the world’s poor and argued that growing biofuel crops for car threatened to increase worldwide malnutrition. This was also a reason for the US, UK, Australia and Canada not yet to endorse the report.
The use of GM crops, where the technology is not contained, is contentious, the UN says. The authors say science and technology should be targeted towards raising yields but also protecting soils, water and forests.
The scientists said they saw little role for GM, as it is currently practised, in feeding the poor on a large scale. "Assessment of the technology lags behind its development, information is anecdotal and contradictory, and uncertainty about possible benefits and damage is unavoidable," said the report. Data on some crops indicate highly variable yield gains in some places and declines in others. The GM industry, despite being a sponsor of the report, disagrees and abandoned talks last year on this subject.
Biofuel not sustainable
The report says biofuels compete for land and water with food crops and are inefficient. They can cause deforestation and damage soils and water. The authors also warned that the global rush to biofuels was not sustainable. "The diversion of crops to fuel can raise food prices and reduce our ability to alleviate hunger. The negative social effects risk being exacerbated in cases where small-scale farmers are marginalised or displaced form their land," they said.
Of course international environment and consumer groups, including Third World Network, Practical Action, Greenpeace and Friends of the Earth, found confirmation in the report in being on the right track with their opinions stating: "This is a sobering account of the failure of industrial farming. Small-scale farmers and ecological methods provide the way forward to avert the current food crisis and meet the needs of communities."
Short-sighted
This conclusion is in my view far too short-sighted. Industrialised countries cannot go back to small-scale farming, however, exploiting farming in developing countries needs to be put to a halt. Subsidies distort the use of resources and benefit industrialised nations at the expense of developing countries. I think both industrial farming and small-scale farming can survive next to each other, but then developing countries must exercise their right to stop the flood of cheap subsidised products to protect their own farming sector.
On the other hand industrialised countries need to stop sucking out resources in developing countries and be creative in growing alternatives.
This will better develop agriculture that is less dependent on fossil fuels, favours the use of locally available resources and explores the use of natural processes such as crop rotation and use of (organic) fertilisers.
Author: Dick Ziggers
Post a comment
Comments (2)I totally agree with you that small scale farming holds the future for arigultural development in developing countries. please tell your friends in the world bank to stop exploiting the greed of third world politicans who have been blindly following their recommendations in order to get loans under conditions that have added to the sufferings of millions of farmers in developing nations. If you leave us alone in Nigeria, we have the capacity to develop our agriculture to levels that we attain food self suffiency and even feed the entire West African subregion. Istifanus Dafwang, Professor, NAERLS, Ahmadu Bello University, Zaria, Nigeria.
Dafwang
// 02 may 2008
I fully agree. Only decentralized small organic farming integrated with animal husbandry is the sustainable solution. Use Hydroponics to manage diverse weather uncertainties. I would like to get a copy of this rport
subodh kumar
// 02 may 2008
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FRIDAY 04 JANUARY 2008
Only war, pandemics or chronic diseases can lower food prices
Do renewable fuels make our hamburger more expensive? Already since August 2006 public debate has intensified over the extent to which the expansion of the ethanol industry has resulted in higher agricultural commodity prices. Conventional wisdom and parrot-like communications have further clouded the debate.
There is limited conclusive data available on market movements due to the intensification of the ethanol business and most stories are based on anecdotal information.
Assessment on the effect of ethanol
Informa Economics conducted an assessment on the subject, and the results were released in December 2007.
Based on the American market, parts of the outcome could also be projected to other developed markets in the world; if not now, then in the near future.
Main conclusion of the report: there is no statistical proof that increases in corn prices have caused increases in food prices. Only 4% of the increase in consumer prices could be explained by an increase in corn prices. The market is far more complicated than that.
Lower harvests, stronger demands
There are a few market movements that have had a major impact on the price developments. Since 2004 the US corn crop harvest has been in decline. Since then the usage as corn for ethanol purposes has also increased considerably.
Yet, the ethanol industry was not the only source of additional demand for corn. US corn exports, rose to one of the highest levels of the previous decade. Thus, the combination of a reduction in supply and an increase in demand from both the ethanol industry and the export market led to corn prices moving higher starting at the end of 2006.
Farm value of commodities
In the US the "farm value" of commodity raw materials used in foods now accounts for 19% of total food costs, coming from 37% in 1973. Depending on the ingredients used the average of 19% can vary considerably. The US Department of Agriculture estimated that the farm value share of the retail food price is 6% for cereals and bakery items, 47% for beef, 30% for pork, 36% for dairy products and 17% for oils and fats.
Marketing bill determines price
What kills the food price is the so-called marketing bill, including the costs of labour, packaging, transportation, energy, profits, advertising, depreciation, rent, interest, repairs, business taxes and other costs not attributable to basic agricultural commodities.
Within the overall marketing bill, the costs of energy and transportation have increased considerably over the last several years, with crude oil prices surging from just under $60 per barrel in autumn 2006 to $100 per barrel at the end of 2007, the same period during which corn prices have increased.
Margins decline
Informa analysed the historical price relationships between corn prices and livestock, poultry, egg, and milk prices, and only found weak correlations. This implies that based on real data it is wrong to suggest that high and/or rising corn prices are the supposed reason behind high and rising retail meat, egg and milk product prices.
However an increase in corn prices will cause livestock and poultry feeding margins to be lower than they otherwise would have been. Cattle, pig and poultry prices were already on the rise in the late 1990s, well before the corn price began to increase significantly. Notably, dairy and egg prices have been driven higher mainly by strong export demand.
Food in income expenditure
The proportion of the average American’s disposable income that is spent on food has declined steadily over the last half-century, from 21% of disposable income in 1950 to below 10% in 2006.
Additionally, in 1950 around 83% of the food expenditure was for home consumption, but by 2006 this share had declined to 58%.
However prices for food consumed at home tend to be more volatile and are currently growing more rapidly than away-from-home food prices, which of course is logical. As a restaurant or take-away it is impossible to adapt your prices to market volatilities.
No relief
According to Bruce Scherr, CEO of Informa in an interview in Feedstuffs, there is no relief in sight. Because much of the increase in prices is a result of world growth, the only way to slow that significantly would be through war, pandemics or chronic health issues.
The report "Analysis of potential causes of consumer food price inflation" can be obtained from the Informa website
Author: Dick Ziggers
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Comments (1)The increase in the price of maize particularly is attributed to the mammoth increase in the consumption of the cereal, whether feed industry or the starch and ethanol production. I think a study on the other conventional stuffs like pearl millet, jowar etc and eventually more use of these products can reduce the dependency on maize and hence the prices may start to slide down.
Mohit Agarwal
// 11 jan 2008
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New source for biofuels discovered
// 01 may 2008
A newly created microbe produces cellulose that can be turned into ethanol and other biofuels, report scientists from The University of Texas at Austin who say the microbe could provide a significant portion of the nation’s transportation fuel if production can be scaled up.
Along with cellulose, the cyanobacteria developed by Professor R. Malcolm Brown Jr. and Dr. David Nobles Jr. secrete glucose and sucrose. These simple sugars are the major sources used to produce ethanol.
"The cyanobacterium is potentially a very inexpensive source for sugars to use for ethanol and designer fuels," says Nobles, a research associate in the Section of Microbiology and Molecular Genetics.
Decreased pressure on rainforest
Brown and Nobles say their cyanobacteria can be grown in production facilities on non-agricultural lands using salty water unsuitable for human consumption or crops.
Brown sees a major benefit in using cyanobacteria to produce ethanol is a reduction in the amount of arable land turned over to fuel production and decreased pressure on forests.
"The pressure is on all these corn farmers to produce corn for non-food sources," says Brown, the Johnson & Johnson Centennial Chair in Plant Cell Biology. "That same demand, for sucrose, is now being put on Brazil to open up more of the Amazon rainforest to produce more sugarcane for our growing energy needs. We don’t want to do that. You’ll never get the forests back."
Lot of work ahead
Brown and Nobles calculate that the approximate area needed to produce ethanol with corn to fuel all U.S. transportation needs is around 820,000 square miles, an area almost the size of the entire Midwest. They hypothesize they could produce an equal amount of ethanol using an area half that size with the cyanobacteria based on current levels of productivity in the lab, but they caution that there is a lot of work ahead before cyanobacteria can provide such fuel in the field.
Related folder:
Dossier AllAbout Bio Energy
Related website:
University of Texas
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Agricultural trade - Sen. Edgardo Angara
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OPINION By Sen. EDGARDO ANGARA
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Fair trade is a crucial component in agricultural development. And rural development is critical to poverty alleviation in developing countries. Farmers of the developing world should be given a level-playing field so that they can ramp up production, and allowed a certain leeway to make their products more competitive through preferential and special trade agreements, and elimination of trade-distorting subsidies.
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Global trade in agriculture is unfair, skewed in favor of rich countries and against the poor.
Huge domestic support and export subsidies provided by developed countries to their farmers render the farm products of developing countries uncompetitive.
The total subsidy to agriculture in 2005 in OECD countries (the rich countries’ club) amounted to $385 billion, more than double the Philippines’ gross national product (GNP) last year, and over $1 billion a day. Developing countries like the Philippines cannot afford to provide its farmers the same subsidies that developed countries grant theirs.
As a result of this unfair trade regime, developing countries are inherent losers. Since its launch, the World Trade Organization (WTO) turned many countries from net exporters to net importers. In Asia’s developing countries, agricultural imports started exceeding exports by an average of 4 percent since 1994.
The Philippines, now considered one of the countries most vulnerable to the global rice crisis, was a net exporter of agricultural products pre-WTO membership. It enjoyed a trade surplus averaging $157 million a year from 1985 to 1994. Upon accession to the WTO in 1995, the country registered its first trade deficit in agriculture in a decade, and has never gotten over that slump ever since. Its export earnings grew 0.18 percent a year on average, while imports ballooned by 8.01 percent a year, with the trade deficit reaching $1.53 billion by 2006.
A study by Sandra Polanski of the Carnegie Foundation revealed that with the so-called propoor development programs under negotiation in the Doha Development Round, developing countries as a group will be net losers in agricultural trade while most of the gains will go to developed countries.
In its model, the World Bank simulated that middle-income countries will have a one-time loss of $500 million in real income in agriculture, while high-income countries will gain $18.1 billion.
This net loss means scarcer food and fewer livelihoods for people in the countryside, where poverty is most rampant. Seventy-five percent of the world’s poor reside in the rural areas.
Agriculture and rural development and international trade are strongly intertwined. The current unfair terms in agricultural trade, while beneficial for urban consumers, are driving farmers of the developing world into subsistence living.
Fair trade is a crucial component in agricultural development. And rural development is critical to poverty alleviation in developing countries. Farmers of the developing world should be given a level-playing field so that they can ramp up production, and allowed a certain leeway to make their products more competitive through preferential and special trade agreements, and elimination of trade-distorting subsidies.
E-mail: edgardo_angara@hotmail.com. Web site: www.edangara.com.
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Vietnam PM warns of 'severe punishment' for rice hoarders
Agence France-Presse
HO CHI MINH CITY - Vietnam's government Monday said the country has sufficient rice stocks and threatened to punish speculators who hoard rice for profit after price surges triggered a run on the staple grain.
Many supermarkets and street stalls quickly ran out of rice in Ho Chi Minh City at the weekend as thousands of consumers, worried by rumours of looming shortages, queued to stock up on rice, further driving up retail prices.
Prime Minister Nguyen Tan Dung in an urgent message to all cities and provinces said that Vietnam, the world's number-two rice exporter, has enough stocks to meet domestic and export demand amid record global rice prices.
The premier, whose government has been battling double-digit inflation driven by food and energy prices for months, warned traders of "severe punishment" if they hoard rice and speculate on the commodity for profit.
The government "strictly forbids organizations and individuals without function to trade food from buying paddy and rice for speculation," said an official statement, following reports that investors had bought up rice stocks and refused to sell them while waiting for prices to climb even further.
The warnings came after sudden price increases from Saturday morning sent shoppers rushing to supermarkets, especially in the country's largest city, formerly called Saigon, amid what local media dubbed "rice fever."
Shoppers and restaurant owners were piling large stacks of 10-kilogramme (22-pound) rice bags onto their motorcycles, while at least one supermarket chain, Saigon Co-op, limited sales to one bag per customer.
The Thanh Nien daily reported that, within several hours Saturday, the price of one kilogramme of standard rice surged from 10,000 to 18,000 dong (63 US cents to 1.13 dollars) in many retail outlets, further fuelling the run.
In other southern towns, including the Mekong delta hub of Can Tho, prices also went up fast, while some distributors stockpiling rice and turning away customers who then went to buy up noodles instead, media reports said.
Dung assured officials and citizens that "rice production of your country in 2008 can completely meet domestic consumption, and part of it can be exported."
Vietnam's government last week reiterated it had stopped new rice export contracts until the end of June, despite a bumper harvest in the Mekong delta, the main rice basket, to ensure food security and fight inflation.
Dung earlier capped 2008 national rice exports at 3.5 million tonnes, down from a previous target of 4.5 million tonnes, while Vietnam has honoured export contracts, including shipments to rice-deficit country like the Philippines.
World grain prices have sky-rocketed, a trend blamed variously on higher energy and fertiliser costs, greater global demand, droughts, the loss of farmland to biofuel plantations, industry and cities, and on price speculation.
Vietnamese consumer prices have risen by more than 17 percent in the first four months of 2008 year-on-year, fuelling popular anger and labour unrest.
Jonathan Pincus, the UN Development Programme's (UNDP) chief economist in Vietnam, said the country's problem with rice was due to prices, not supplies.
"Vietnam is a food exporting country, where there is no problem of supplies," Pincus told AFP. "There are problems of prices, and higher prices hurt particularly people working for wages.
"It's very natural to see strikes and higher wage demands because people's money is not going as far as it used to."
Pincus said he did not foresee food riots but said Vietnam's government knows "that some of the gains made in poverty reduction over the past 10 years are in jeopardy if they are not able to bring food prices into line."
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Animal Feed & Animal Nutrition News Fish meal allowed in milkreplacers
// 06 may 2008
The Scientific Committee in Brussels has approved the motion to allow fishmeal back into milkreplacers for young ruminants.
The proposal was suggested by the European Commission. Allowing fishmeal is the first step into further diminishing the ban on feeding animal proteins to mammals.
The next – allowing meat meal into animal feed – depends on the speed of developing and availability of animal-specific tests, which can be used in practice.
These tests are necessary to be able to guarantee the non-cannibalism principle. It should be avoided that for example pigs receive feed containing meat meal of its own species.
For ruminants the ban on meat and bone meal stays in place due to the risk on BSE or mad cow disease, the reason for imposing the ban more than ten years ago.
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Animal Feed & Animal Nutrition News Mixed response for GM-crops in Asia
// 06 may 2008
The Philippine government has openly embraced the commercial growing of genetically modified (GM) corn, but neighbouring countries appear less than enthusiastic.
While Japan does not grow GM crops due to safety concerns among consumers it does import GM grains for use in making products such as cooking oil, animal feed and manufactured goods.
Japanese companies have been reluctant to test the market for consumer-ready GM food because of labelling requirements and public safety worries.
While Japan does not ban GM farming, strict regulation has discouraged corporate investment in the area.
But with rising food prices causing increasing concern in a country that imports more than half of what it eats, the government has said that GM crops may be a way to ease food security and environmental problems.
Strict rules in South Korea
In South Korea a law which came into effect on January 1 this year imposed strict rules on the import of GM seeds.
While there are domestic GM seed programs for experimental purposes none are for commercial use, an agriculture ministry official said on condition of anonymity.
In Bangkok the regional headquarters for the United Nation's Food and Agricultural Organization (FAO) said it had not seen any signs that governments in Asia were pushing for genetically-modified seeds.
GM for food not allowed in China
In China the State Council, or cabinet, issued detailed rules in 2001 covering safety, labelling, licensing for production and sales, and import safety policies of all GM products.
Genetically modified grain, including seeds, is not allowed for edible consumption in China. Genetically modified products are allowed for indirect uses, such as making edible oil, but it must be labelled clearly.
The Philippines is the first country in Southeast Asia, and possibly all Asia, to have a commercial GM food crop.
However critics argue that "the government would say it is because the Philippines should not be late in embracing a technology that promises to help increase the income of farmers and provide higher yields. But the fact is the Philippines is so close to the US that whatever policies the US have regarding GM crops the Philippines usually follow suit."
For regular updates on feed news
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Animal Feed & Animal Nutrition News Multiple plant extracts perform better
// 06 may 2008
Single plant extracts do not satisfy all variabilities in rumen digestion, but a combination of products show better effects.
Some five years ago Pancosma introduced its first plant extract product for ruminants, Xtract 6965, designed primarily for use in dairy cow feeding programmes.
Following further research into the application of plant extracts in ruminant nutrition, with an added focus on beef production, it became obvious that a single product could not satisfy all the variabilities of diet type, rumen interactions, behavioural patterns and production methods. This applies equally to dairy and to beef production.
Three plant extracts
A consequence of this research is the development of another unique product, Xtract 7065, which contains three different plant extracts: eugenol, cinnamaldehyde and capsicum.
This dual product approach provides the basis of a new concept, "Xtract Systems for Feeding Ruminants". This enables Xtract performance, enhancing supplements to be positioned more accurately in specific feeding programmes ranging from high forage to high concentrate in beef and dairy production systems.
In a farm trial with the new Xtract 7065 involving 153 beef cattle on barley straw and ad-lib concentrates, feed conversion was improved by 16%, feed use was 14% lower but weight gains similar with those animals fed the ration containing Xtract. These results produce potentially substantial economic benefits.
Controlled release
Another unique property of Xtract 7065 is its microencapsulated physical form using hydrogenated vegetable oil as the base carrier.
This allows for a controlled release of the active substances in the rumen over a long period of time enhancing their reactivity with rumen contents and, in specific cases, modifying feed intake patterns.
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Animal Feed & Animal Nutrition News Traceable accuracy for animal feed
// 06 may 2008
Nichols (Cowmills) Ltd in Bristol, UK is an animal feed producer that is now achieving 99% accuracy for 50 different animal feed recipes thanks to a throughput weighing system from Avery Weigh-Tronix.
The feed company specified the system to accurately formulate its recipes from ingredients held in 13 storage hoppers. Previously Nichols used a hand controlled auger system and a scale to weigh out the ingredients.
With the cost of ingredients such as barley and soybean rising, it has become more important to accurately control their use and improve efficiency. In addition, all animal feed has to meet strict traceability legislation.
Using the old system paper records were kept, but now all the formulations are recorded on a PC. This will record both the normal recipe and the actual formulation used, since if an ingredient is running low in a storage hopper the system can suggest substituting an alternative. The new system has also improved the repeatability of recipes.
"The new system gives us an accuracy to the nearest kilogram for each ingredient", said mill manager Graham Millard. "It is also faster and easier for the operative to use with no chance of error. Using the old system we could mix about three tonnes per hour, now we can mix up to six tonnes per hour."
The system uses a P911 throughput weigher. This uses high-resolution technology to provide accurate bulk weighing of free flowing solids.
An E1310 programmable indicator from Avery Weigh-Tronix controls the system. This stores the recipes and collects and records data and interfaces with a PC and software also supplied by Avery Weigh-Tronix.
In the mean time Nichols has already added a second system at their other mill.
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Animal Feed & Animal Nutrition News Outrage on European chickens eating pigs
// 07 may 2008
Many are outraged as the EU is preparing to allow the remains of pig carcasses to be used in poultry feed, which would save UK farmers millions of pounds as cereal prices soar.
The practice of using pig remains in chicken feed was banned in Europe after the BSE crisis 10 years ago. This proposal, according to the Observer, has outraged animal rights campaigners, and Muslim organisations among other groups, who claim the move would put families at risk, offend religious sensibilities and lead to a major consumer backlash.
"There are two million Muslims in Britain and 25 million in Europe and this move would be a disaster for every one of them," said Dr Abdel Majid-Katme of the Islamic Medical Association, adding that this is a sinful idea.
Offended consumers
The RSPCA voiced its concerns about the health risks involved. Additionally, agriculture experts believe many consumers would be offended by the idea of a return to the use of animal remains in farm feeds. "I think there will be such a backlash from consumers that the idea would have to be dropped," said Tom Acamovic, a nutrition expert based at the Scottish Agricultural College.
The Department for the Environment, Food and Rural Affairs (Defra) said it would back the move only if proper safety tests were introduced.
"We understand the European Commission will be submitting a proposal later this year," said a spokesman. "We would only support it if we were fully satisfied that appropriate and effective testing had taken place to control the use of such proteins in poultry feed."
The proposal, however, is backed by a former risk assessment adviser for the Food Standards Agency, Philip Comer of DNV Consulting. "The by-products of slaughter are a very valuable source of protein," he said. "We should not be wasting it."
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Animal Feed & Animal Nutrition News Biofuels halt may ease food prices
// 07 may 2008
A moratorium on global grain- and oilseed-based biofuels would help ease raging wheat and corn prices by up to 20% in the next few years, the International Food Policy Research Institute said.
"Our models analysis suggest that if a moratorium on biofuels would be issued in 2008, we could expect a price decline of maize by about 20% and for wheat by about 10% in 2009-10. So it's this significant," Joachim von Braun, who heads the International Food Policy Research Institute (IFPRI), said.
"There are biofuels and there are biofuels, good and bad ones ... Waste-based and sugarcane-based can be very good," von Braun said.
Biofuel supporters in the United States call the ethanol criticism wrong-headed and see the technologies as a needed alternative to America's dependence on foreign oil.
That is especially important, they say, with oil prices breaking new ground close to US$120 a barrel. US food prices are expected to jump by up to 5% this year. At the same time, about a quarter of the US corn crop will go toward ethanol.
Bush: Energy biggest price driver
Yet the Bush administration sees energy, not ethanol, as the biggest price driver, and describes a future for biofuels that leans heavily on alternate sources like switchgrass.
"The truth of the matter is, it's in our national interest that we - our farmers - grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us," President George W. Bush said.
However, some state governments are publicly reconsidering their ethanol policies, and a few big meat and poultry companies are asking for steps to cool the high cost of animal feed.
Von Braun argues that crops like sugar cane offer greater promise for biofuels. "The opportunities of agriculture being an energy producing sector should not in principle be discarded," he said.
Von Braun also said that changing supply-and-demand dynamics had been driving soaring crop prices through the end of last year, but that market speculation and government steps to curb prices - such as export bans - had taken on an increasingly influential role in 2008.
For regular updates on feed news
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Animal Feed & Animal Nutrition News Amino acids market to grow 6.8% per year
// 08 may 2008
Global amino acids market is projected to grow at 6.8% annually through 2013. China is the leading producer, but the US is to overtake this position within five years.
Research and Markets has added the The Amino Acids report to their offering. The report analyzes the market by type and application at global level and for each of the geographic regions - North America, Europe, China, Asia-Pacific, Latin America and Rest of World.
The Amino Acids market is segmented by type into Glutamate, Lysine, Methionine, Branched Chain Amino Acids and Phenylanine; and by application into feed additives, food ingredients, and nutraceuticals/pharmaceutical.
Business profiles of 11 major companies and 79 competitor companies are discussed in the report. The report serves as a guide to the Amino Acids industry, covering 405 companies that are engaged in Amino Acids R&D, processing, production, and distribution.
Information related to recent product releases, product developments, partnerships, collaborations, mergers and acquisitions, ethical issues, regulatory affairs, and other areas of concern is also covered in the report.
Projections and estimates are graphically illustrated by geographic region with exclusive graphical representations provided for 271 exhibits.
Chinese dominance
China, the leading market (25% of global market share in 2006) for amino acids presently is projected to manage the leading position during the analysis period with its share dropping to 23.4% by 2013.
North America is the fastest growing (almost 8% during 2000-2013) market for Amino Acids, and is projected to gain dominance over China by the end of the analysis period.
Increase in competition of prices of Amino Acids has resulted in the increase in prices of raw materials. Thus the collective work of different fields of science and technology is the cause for the successful and flourishing production of amino acids.
Mergers and aquisitions
Mergers and consolidations within the industry will drive the industry further. China, the largest producer of amino acids, has several production companies which are increasingly entering into alliances with producers of western countries. Such alliances are paving way to more production facilities and more production of amino acids at the global level.
Amino acids can be described as a group of organic molecules that comprise of an organic R group or a side chain, which presents a solitary characteristic to the amino acid, an acidic carboxyl group represented as -COOH and a basic amino group represented as -NH2. If two or more amino acids combine, the combination is known as a peptide.
Today amino acids can be taken as a supplement that is available commercially. Amino acid supplements are usually made from animal protein, vegetable protein, or yeast.
While almost all amino acids can be produced in two forms - the L and D form, it is not so in the case of glycine.
L and D basically refer to the manner in which the amino acid is wound up. L is the left winding amino acid and D is the right winding amino acid.
Human amino acids have been found to be the L type and this is usually the preferred supplement as well.
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China Ag ministry: more grain in 2008
// 09 may 2008
China's grain output in 2008 is expected to surpass the 500 billion kilograms recorded for 2007, the official China Securities Journal reported, citing the agriculture minister Sun Zhengcai.
Sun said the agricultural products market is currently in balance due to output growth in recent years and large reserves.
"Farm produce prices are reasonable and controllable," Sun added. Premier Wen Jiabao has said that barring natural disasters, China will have a steady supply of grain. "China's grain output grew four consecutive years to 500 billion kilograms in 2007, and we are confident the country can maintain a stable supply this year.
The central government promised to spend 562.5 billion yuan (€52 billion) this year to support farmers, 130.7 billion yuan (€12 billion) more than in 2007.
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Germany want relaxation MBM ban
// 08 may 2008
German Agriculture Minister Horst Seehofer wants to relax the ban of using meat and bone meal (MBM) in animal feed. Cutting animal feed costs would be a major component in moves to counter the rising trend in global food prices, he told a news conference.
The EU banned use of meat and bone meal in farm animal feed in 2001 largely as part of moves to stamp out mad cow disease BSE and associated illnesses.
The ban on meat meal compels the use of more expensive feed ingredients and needs fresh debate, Seehofer said. "I think there should be a relaxation," he said. But this would only be for certain types of feed for non-ruminating animals, he added.
Seehofer said the German government was working on proposals to relax the ban which could be ready in about three months.
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Animal Feed & Animal Nutrition News EU wants Russia to lift meat bans
// 12 may 2008
The EU's executive arm has stated that Russia's ban on imported meat from large companies in seven EU countries was disproportionate and should be removed.
"The (European) Commission maintains that EU meat does not pose a risk to the consumer and that the measures taken by Russia are disproportionate," said a spokeswoman for EU Health Commissioner Androulla Vassiliou said in a statement. "Therefore, the Commission has requested Russia to review its measures," the statement said.
Antibiotics levels too high
Reuters reports that Russia, which is a major consumer of western European meat, has recently introduced a series of company-specific bans on poultry, pork and beef imports after determining that antibiotic levels in meat shipments exceeded safe limits.
"On the basis of the initial information available to the Commission, the levels of antibiotic residues reported by Russia remain in most cases well below the maximum residue levels allowed in EU legislation and in the international standard," the spokeswoman said.
The ban has affected meat firms in France, Germany, Italy, Spain, Denmark, Belgium and Hungary, while imports from companies in the US, Canada, Brazil and Argentina have also been banned indefinitely.
Politically motivated
Some European diplomats in Moscow said the restrictions could be politically motivated and obstruct Russian accession to the World Trade Organisation, according to Reuters.
Moscow has been accused repeatedly in the last few years of using import bans on agricultural products for political ends, but this has always been denied by Russian officials.
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Tuesday, May 13, 2008Print This Page
Myanmar’s Food Bowl Devastated
MYANMAR - The UN Food and Agriculture Organization (FAO) today called for US$10 million to assist poor farming and fishing communities in Myanmar devastated by cyclone Nargis.
The five worst-affected areas - Ayeyarwady, Yangon and Bago Divisions, and Mon and Kayin States - are considered Myanmar’s food bowl, producing much of the country’s staple food of rice and fish, and the overall food security situation in Myanmar is seriously threatened, FAO said.
FAO’s call for funding is part of a UN flash appeal for the country that covers emergency relief and rehabilitation activities in the agricultural, fisheries and livestock sectors over the next weeks and months.
While the second crop of the 2007 rice season was fully harvested before the cyclone hit and no major crop losses are expected in the region, rice already harvested for household consumption was most likely damaged by the storm surge, adding to the precarious food security situation of poor coastal families, FAO said.
Inland and coastal fisheries, poultry and livestock were also either damaged or lost, according to FAO. An estimated 2 million households were affected, meaning that a significant number of farming and fishing families are in need of urgent assistance.
“The hardest hit villages lost all their farming assets, as well as the food stored for the rest of the year,” said Anne M. Bauer, Director, FAO Emergency Operations and Rehabilitation Division. “Add to this the burden of rebuilding their destroyed houses and it is safe to say that these poor farmers will not have sufficient resources to purchase seed, fertilizers and other inputs, protect surviving livestock and replace lost ones, and pay for on-farm labour during critical phases of the farm cycle. Funds are urgently needed to help them resume food production, restore food availability and reduce the need for high cost and unsustainable relief.”
Time running out
According to FAO’s Regional Representative for Asia and the Pacific, He Changchui, time is running out to prepare for the main rice planting season starting in early June with the onset of the monsoon rains.
“It is crucially important to mobilize the right type and volume of rice seeds, fertilizer and other production inputs quickly, in order to resume agricultural productivity in a timely manner,” he said.
In Myanmar, people consume on average 20 kg of rice per month compared with 16 kg in Viet Nam, 10 kg in Thailand and 7 kg in Asia as a whole.
As much fertile agricultural land was inundated with sea water, another FAO priority will be to analyse soil salinity and review damage to irrigation and capacity for draining agricultural lands to make them suitable again for farming.
Relief and rehabilitation activities
FAO’s proposed activities will help around 100 000 of the worst-affected farming and fishing households, particularly women and children, to rebuild their livelihoods through the provision of agricultural inputs such as rice and vegetable seed, fertilizer, fruit tree seedlings, farming tools, and technical know-how.
The cyclone-hit areas are key livestock producing regions - comprising roughly 50 percent of national poultry production and 40 percent of pig production. To rehabilitate the damaged livestock sector, FAO plans to distribute draught cattle, goats, pigs and poultry to replace lost, sold or consumed livestock and supply veterinary medicines and vaccines to improve animal health and protect surviving livestock.
FAO also plans to help the worst-affected fishing families resume fish production through the provision of fishing gear, nets, fish processing equipment, fish seed and fertilizers, and technical support.
Needs assessment under way
FAO is fielding its first damage and needs assessment mission this week. Two senior FAO staff, including a Regional Emergency and Rehabilitation Coordinator, are joining FAO’s resident team in Myanmar to lead the assessment mission.
Cyclone Nargis has affected the same areas in Ayeyarwady Division that were hit by the 2004 tsunami, but this time around, the impact is believed to be far more severe.
The area struck by the cyclone has some major fishing ports and landing sites. Early satellite pictures show significant damage to fishing vessels in harbours, and damage to infrastructure such as landing facilities and fish storage and preservation facilities is likely, FAO said.
The fate of the vessels at sea when the cyclone hit is currently unknown. Myanmar does not have an early warning system for cyclones. Although fishermen are generally aware of weather conditions and do not go out to sea if storms are expected, fishers on small vessels may not have received warning in time.
The coastline of Myanmar is over 3 000 km long and Ayeyarwady Division occupies the delta region of the Ayeyarwady River. The area has numerous rivers and channels and much of the transport in and around the area is by boat.
As transport and communications are extremely difficult, FAO expects to have a preliminary assessment within ten days, and a fuller picture of the situation within one month.
Short- and medium-term recovery plans will be prepared by FAO, and assistance will be provided to the Government to implement these emergency and rehabilitation plans. These plans will also take account of the need to address the food crisis in line with FAO’s Initiative on Soaring Food Prices (ISFP).
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Animal Feed & Animal Nutrition News Feed prices result in record pig prices
// 14 may 2008
Pig prices in Taiwan have reached a nine-year high. As a result of the high feed prices, the animals were sold yesterday for NT$7,010 per 100 kilograms (€146.7).
Prices of pigs have been going up at a rapid pace. Just in the bottom half of last year, pigs were sold for NT$4,700 per 100 kilograms (€98.3). In February, prices shot up to NT$6,000 (€125.5), before going up to an average of NT$6,491 (€135.8) for the month of April. Just over the first few days of May, prices went up to NT$6,886 (€144) and reached NT$7,012 over the weekend, breaking the NT$7,000 level.
Things did not improve much yesterday -- the first trading day of the week after the Monday close of traditional markets island-wide -- as pigs were sold at NT$7,010 per 100 kilograms.
The last time pig prices broke the NT$7,000 level was in the summer of 1999, due to a mass culling of pigs in the aftermath of the foot-and-mouth disease that broke out in 1997.
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Animal Feed & Animal Nutrition News Contaminated pig feed taken off shelves
// 14 may 2008
In imported feed supplement for pigs has been withdrawn from sale in Australia. The supplement, imported from China contained high levels of lead.
Testing revealed pigs in six Western Australian piggeries had high levels of the metal in their systems. Those piggeries have been put into quarantine and will remain so for at least another month. Another 60 piggeries which also use the same feedstock are being closely monitored to ensure the pigs have not been affected.
The Agriculture Department's Dr Ashley Mercy says the feed supplement has been recalled and will no longer be sold in WA, but says feed manufacturers need to check what is coming into Australia.
"To make sure their quality assurance programs that they've got in place include checking the analysis that they get, and even to go to the extent of maybe they want to analyse the ingredients to make sure that it matches what it says on the certification certificate," he said.
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Animal Feed & Animal Nutrition News Uproar in UK over pig remains for poultry
// 13 may 2008
Pig and poultry farmers are not sure if they want an opportunity to cut costs which could be coming their way, reports Yorkshire Post.
The EU is preparing to allow the remains of pig carcasses to be used in poultry feed, which would save UK farmers millions of pounds as cereal prices soar. This, however, has caused uproar. The practice of using pig remains in chicken feed was banned in Europe after the BSE crisis 10 years ago.
Enormous reaction
It has been reported that when the BBC's Farming Today programme reported on one of the possibilities which are now up for discussion again – feeding pig leftovers to hens – the reaction was enormous.
Reportedly, moderate vegetarians said they could not eat eggs from birds fed on meat. Additionally, a spokesperson for 2 mln Muslims in Britain (and 25 million in western Europe) said they could not eat the eggs or the flesh of any bird fed on animal protein of any kind – and it would only make it worse if it was pork.
Some halal butchers once had special sources for suitable chickens and eggs, up until BSE exposed modern farming practices, reports the Yorkshire Post. Now they are good customers for mainstream farm production. However, a change back to the old ways would put them on the spot. And they are not the only customers who might be lost. Most people were horrified to find out about the recycling of slaughterhouse waste to farms before BSE. And a lot of hostility to the practice remains.
More lost than gained
A Yorkshire pig farmer commented this week: "Pigs are omnivores. If you buy pig-meat from outside the EU, it has almost certainly been fed with meat. And it probably makes scientific and economic sense for us to do it. But the danger is that we would lose more than we gained, because of the public reaction." A poultry farmer said much the same about hens.
The jury is still out
According to the National Farmers Union, "We want a level playing field for our members to operate efficiently and competitively. However, the jury is still out. We definitely don't want to turn out products consumers don't want."
The BBC said new rules could apply by the end of this year but that looks unlikely. The EC's Standing Committee on the Food Chain & Animal Health will not consider the issue until it is satisfied that the feed industry has foolproof tests.
The RSPCA's food certification arm, Freedom Food, said it would not approve meat-fed meat. Additionally, the Soil Association said meat-fed meat would not be considered organic.
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Thursday, May 15, 2008Print This Page
Relief Estimates for Cyclone Hit Livestock
MYANMAR - In parallel to ongoing priority humanitarian aid assistance, Relief Web says that we need to start looking at the longer term, in particular as time is running out to secure planting in June of rice seeds for the main 2008 rice harvest.
If were are not able to do that in a timely fashion, then the food and nutrition problems in the medium term will not go away.
Each US$1 spent on agriculture between now and the end of the year, represents a saving of US$10 for food aid in 2009.
Progress achieved
Yesterday a first meeting was held in Yangon of the agricultural cluster chaired by FAO with the participation of senior government officers working in agriculture, livestock and fisheries, and forestry. Fifty participants attended. Also present was UNDP and local representative from donors (ECHO, DFID and JICA), international and local NGOs such as CARE, CESVI, WCM, German Agro Action, GRET, TRIANGLE, IDE, ICVA, AMURT.
The short and medium term needs in each of these sectors were provisionally estimated by the government as follows:
Agriculture estimated at $243 million – for rice seeds, fertilizers, rehabilitation of embankments and irrigation schemes, etc. The cyclone hit 5 states which are predominantly agricultural societies. The 5 states produce 65 percent of the countries rice, and have about 50 percent of all irrigated areas.
Livestock estimated at $20 million – restocking of dead animals, vaccines, feed, rehabilitation of animal shelters, etc. The 5 affected states are famous for livestock production - having roughly 50 percent of national poultry production and 40 percent of pig production.
Fisheries – no estimates yet, but in view of huge damages, the costs will be significant. Marine fishery in Myanmar employs approximately 26 000 small boats operating in coastal areas and some 1 900 offshore fishing vessels (2001 data). The marine fisheries sector produces 1.4 million mT, which represent over 55 percent of the country’s fish supply.
Forestry – no data on damages yet.
FAO in action
FAO has already sourced rice seeds for procurement from inside Myanmar, while for fertilizers procurement needs to be done outside Myanmar.
A team of three FAO international experts and one local staff member will visit Bogale - one of the worst hit coastal states - tomorrow on the invitation of the ministry of forestry.
One additional FAO international emergency expert will join FAO in Myanmar on Saturday 17 May.
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Chinese grain unaffected by earthquake
// 15 may 2008
China's deadly earthquake on Monday did not cause damage in the grain reserve stockpiles in quake-ravaged southwestern China.
The China Grain Reserves Corp. said no losses or casualties were reported at its sites in Sichuan and Gansu provinces or Chongqing, the state-run Xinhua news agency reported. An afternoon quake measuring 7.9 on the open-ended Richter scale struck in Wenchuan County, leaving upwards of 15,000 dead and tens of thousands injured, buried or missing.
China Grain said some of its warehouses suffered damage, including beam and wall cracks. Premier Wen Jiabao said earlier this year China had as much as 200 million tons of grain in its reserves. Beijing ordered reserves distributed in quake-hit areas and directed local governments to keep an eye out for price-gouging.
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Animal Feed & Animal Nutrition News Estonian farmers to pay for cow gases
// 16 may 2008
Estonian farmers will now have to pay for their cattle’s contribution to climate change. A new 'digestive gases tax' is introduced to compensate for the greenhouse gas that cows produce during their life, reports MIGnews.com.
An ordinary cow’s daily digestion results in an estimated 350 litres of methane and 1,500 litres of carbon oxide released into the atmosphere. Experts believe farms account for as much as a quarter of Estonia’s greenhouse gas emission. Opposition parties called the new tax 'unprecedented for the European Union'.
Source: Russia Today
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Animal Feed & Animal Nutrition News BPEX focuses on pig industry troubles
// 16 may 2008
Seeing wheat costs double has prompted many British producers to get out or at least scale down dramatically – as was shown by the cull sow figures running at some 40% above the level they were this time last year.
Speaking at this week's British Pig and Poultry Fair, British Pig Executive (BPEX) chief executive Mick Sloyan reminded his audience that since last August the average retail price of pork and pork products has risen by almost ₤1 (€1.26) a kg while at the same time, the price paid to producers has gone up by just ₤0.10 (€0.13) a kg. That is against a background of rocketing feed prices with the cost of wheat double what it was this time last year and soya going up dramatically.
Identical problems
Sloyan said that everywhere in North Western Europe, producers are facing the same problems, mainly caused by increasing demand to feed in India or China, poor harvests, drought and competition from biofuels.
Sloyan said: "All this work has helped to achieve a much-needed rise in retail prices. The basket price for pork, bacon and ham from the big four retailers (Tesco, Asda, Sainsbury's, Morrisons) which we monitor each week shows an increase of nearly ₤1 a kilo at a time when the price paid to producers has risen by just 10 pence. It makes you wonder where all the money has gone?"
Strategic view
He continued, "I believe that if retailers take a strategic view of their business and ensure sufficient money gets down the chain to pig producers to cover their costs, then everyone will benefit." "Consumers will not need to pay much more, retailers will continue to make a profit and most important of all, we will be able to meet continuing demand of British consumers for top quality, high welfare pork, bacon, ham, sausages and pies," Sloyan said.
At the Pig and Poultry Fair, the BPEX even received support from His Royal Highness Prince Charles, who sent his 'warmest good wishes' to all exhibitors, adding that he prayed that 'in due course the fortunes of our pig farmers will be transformed'.
Many initiatives
BPEX has been working hard on many fronts to tackle the crisis with technical help for producers and a major publicity campaign aimed at increasing the returns to producers. The BPEX launched a new feed price area in its website, for better help and information. In addition, there is a paper looking at alternative feeds and what effect they can have and finally practical day-to-day advice on improving efficiency.
Last year, a song was recorded by pig farmers and producers also rallied up to the Houses of Parliament in London.
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Animal Feed & Animal Nutrition News China earthquake damages pig production
// 19 may 2008
The earthquake in China which claimed thousands of human lives has also caused enormous damage to the agricultural sector – mainly related to poultry and pig production. The great fear now is the spread of disease, the Dutch agricultural newspaper Agrarisch Dagblad reports.
According to the Chinese ministry 12,5 million pieces of livestock have died as a result of the earthquake, mainly poultry. Also approximately 792,000 pigs in the province Sichuan have been killed by the earthquake. Sichuan’s pig herd totals 60 millions animals.
Warm season
The disaster occurred just before the beginning of the warm season, where diseases such as Classical Swine Fever (CSF) and blue-ear disease (PRRS) in Sichuan were in circulation. The structural damage, and bad accessibility caused by the earthquake along with hygiene standards have increased the chances of diseases spreading.
"Prevention of contagious diseases is one of our biggest priorities in the relief efforts," according to the Chinese government officials.
The horticultural sector has also been hit hard. According to official figures 15% of production and 50,000 greenhouses in the region are also damaged. The damage on irrigation systems will over time have huge effect. The fear is that large areas of rice production will dry up.
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Food and energy crop zoning proposed
// 20 may 2008
Closer monitoring of world demand is essential to defining areas for food and energy crops in order to ensure food export stability and also to promote food as a strategic product to swap for oil, says Thai Food Processors Association president Vilai Kiatsrichart.
She adds that without proper zoning, increased cultivation of energy crops can jeopardize raw material supplies for the food industry.
Thailand, she says, has about 130 million rai of farmland, of which 63 million rai are rice fields while 17.4 million rai are used for crops, mainly cassava, sugarcane and oil palm, with both energy and food applications, with the remaining land farmed for fruit and other products.
"Without proper farmland zoning, defining areas for food and energy crops to ensure food export stability and also promote food as a strategic product to swap for oil, may jeopardize raw material supplies for the food industry.
"We believe food exports for all of 2008, both in terms of value and volume will remain strong, given rising prices per unit following higher raw material and production costs. But what we are now most concerned about is the availability or raw materials supplied to the food industry, which has made it tough for exporters to forecast their sales in the longer term."
animal feed newsletter
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DSM to supply vitamin premixes in China
// 23 may 2008
DSM enters into a strategic partnership with Yunnan Shennong Agriculture Group to supply its Optimum Vitamin Nutrition (OVN®) Premix in Yunnan Province in South West China.
The new arrangement covers the production of pork in Yunnan Province, and a new manufacturing facility will come on line at Shennong Food Industry Park by August. The objective is to produce 500,000 tons of OVN® feed per annum within three years.
DSM already has a strategic agreement with Conti Chia Tai Group in Guangdong for the production on OVN® eggs. "The OVN approach allows closer control of vitamin and trace element nutrition and can be tailored for egg, poultry meat, pork, fish and milk production," commented Dr. J. Nathan Bird, VP Animal Nutrition & Health, China. In order to be able to implement this project the Yunnan Shennong Agriculture Group has been through an extensive HACCP qualification program for the whole pork production process.
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Australian winter crops boosted by rain
// 22 may 2008
Widespread rain across South Australia state in recent days has improved the prospects for the 2008 winter cereal and oilseed crop, barley exporter ABB Grain Ltd said. ABB Grain's managing director Michael Iwaniw said most regions in the state had received enough rain to begin planting, to capitalise on strong world prices.
"Now we are in a near-optimum sowing window, giving optimism for a large production season as growers have indicated their intention to sow all available acres this season," he said.
The Australian Bureau of Meteorology was forecasting at least average rainfall in South Australia for the next three months, he added. World wheat and barley supplies were still at significantly low levels, he said. ABB plans to expand into wheat exporting with de-regulation of the Australian industry on July 1.
South Australia produces around 15 percent of Australia's national wheat crop and 30 percent of the national barley crop. Australia is forecast to produce a record or near-record wheat crop of 26-27 million tonnes in 2008/09, although this has been thrown into doubt by dry weather in the main eastern growing state of New South Wales, which missed out on last weekend's rainfall. Last year, drought conditions limited the wheat crop to just 13 million tonnes. The forecast barley crop for 2008/09 is about 9 million tonnes, up from 5.9 million tonnes last season.
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MEAT AND MEAT PRODUCTS
PRICES
Sustained increases in production costs, notably feed, in major producing countries, suggests that meat prices could come under greater pressure in 2008
Preliminary estimates indicate that the FAO International Price Index of meat products reached its highest level of 136 points (1998-2000=100) in April 2008, continuing its recent upward trend that began in June 2006. The main reasons for this development are: higher feed costs, the depreciating US Dollar, and the rising demand for meat largely fuelled by economic growth in developing countries, particularly in Asia. Although, individual meat categories have exhibited different developmental paths in the past because of differences in feedstuffs used, feed conversion efficiencies, biological production cycles, as well as differences in contractual agreements, the trends for all since 2006 have been in the upward direction. Despite this, however, meat markets have not yet experienced price hikes of comparable magnitude to those observed in grains, oilseeds and dairy product markets. But sustained increases in production costs, notably of feed, in major producing countries, that are reducing the profit margins of meat producers, suggest that prices of meat products could come under greater pressure. The delay in the response of meat markets to developments that are taking place in the feed markets is partially due to typical livestock cycles, as well as recurring animal diseases.
Ovine prices climbed almost 17 percent over the first four months of 2008 compared with the same period a year ago, mostly reflecting the attempts of Australian sheep producers to rebuild their flocks through reducing slaughtering. During the same period, FAO's bovine price index rose by almost 7 percent, due to rising global import demand and limited export supplies from Argentina, Australia, Canada and New Zealand. International pigmeat prices experienced a similar increase, despite reaching the peak of the hog cycle in some of the large producing countries, such as Canada, European Union and Mexico. The largest increase in prices has, however, been observed for poultry products. The increase was slightly more than 28 percent over the same period as above, reflecting the increase in feed and energy that make up the largest portion of variable production costs. It is interesting to note that 54 percent of the increase in meat production for 2008 will come from poultry meat, as it continues to remain the most affordable meat.
Table 8. World meat markets at a glance
2006 2007 estim. 2008 f'cast Change: 2008 over 2007
million tonnes %
WORLD BALANCE
Production 271.5 274.7 280.9 2.3
Bovine meat 65.7 67.2 68.0 1.1
Poultry meat 85.4 89.5 92.9 3.8
Pigmeat 101.7 98.8 100.6 1.8
Ovine meat 13.3 13.7 14.0 2.0
Trade 21.4 22.5 23.1 3.0
Bovine meat 6.8 7.1 7.2 1.0
Poultry 8.5 9.2 9.6 4.3
Pigmeat 5.0 5.0 5.3 5.2
Ovine meat 0.8 0.9 0.8 -5.9
SUPPLY AND DEMAND INDICATORS
Per caput food consumption:
World kg/year 41.6 41.6 42.1 1.1
Developed kg/year 81.1 82.4 82.9 0.7
Developing kg/year 30.7 30.5 31.1 1.8
2006 2007 2008 Change:
Jan-Apr 2008
over Jan-Apr 2007
FAO Meat Price Index %
(1998-2000=100) 115 121 131* 10
* Jan-Apr 2008
BOVINE MEAT
Bovine markets are recovering from weather shocks and import bans
World production of bovine meat rose by 2.3 percent in 2007, and is projected to rise a further 1.1 percent in 2008 to 68 million tonnes. All of the increase in production will take place in developing countries, which now account for 56 percent of the global total.
In North America, bovine meat production is forecast to remain virtually unchanged. The increase in output in the United States will offset a 6 percent decline in Canada. The strong reduction expected in Canada is due mainly to the implementation of the Country of Origins Labelling (COOL) regulation by the United States, its major international market, the United States. The increase in the United States beef output is in part due to its depreciating currency, has increased its competitiveness. Moreover, high supplies of distiller-dried grains from the production of ethanol have helped to lessen the impact of higher feed costs.
In 2007 South American beef output increased by a healthy 5 percent, although the increase in 2008 is expected to be less than 2 percent. This reduction in the growth rate is due to developments in the two main producers in the region. In Brazil, the largest producer in the region, the 5 percent growth observed over 2007 is expected to be reduced to 2.5 percent in 2008, mainly as a result of the new restrictions imposed by the European Union on imports from the country due to product safety concerns related to animal diseases. In Argentina, on the other hand, production is expected to decline by 1 percent in 2008, reversing the 6 percent growth observed during the previous year, depressed by the imposition of higher export taxes and restrictions. These policies are changing the relative profitability of crop and livestock production, encouraging the producers to shift pasture areas into crop production and thus contributing to the decline in production of bovine meat. However, good pasture conditions in Chile, Columbia, Paraguay and Venezuela are expected to boost production by 5 percent. Shortages in replacement cattle have constrained the increase in Uruguay's production to less than 1 percent.
Bovine meat production in the European Union remains on a downward trend, as animals are being retained to increase the size of the dairy herd, following the increase in milk quotas. However, reduced imports from Brazil should stimulate the industry somewhat, limiting the decline in production to less than 1 percent.
Cattle slaughter in Australia is expected to contract by 3.3 percent in 2008, as its herd is in the rebuilding phase. Most of the production decline is expected in the grain-fed peak sector, following losses sustained by the feedlots due to higher feed costs in 2007. New Zealand's production numbers will increase slightly in 2008, stimulated by favourable product prices.
Steady herd expansion, improved genetics and feeding practices, as well as continued government support, are expected to sustain production increase of more than 3 percent in China. Bovine meat output is increasing also in India and Pakistan, in response to growing domestic demand. The increase also reflects the aging of their dairy herds, which has boosted the slaughter of older dairy cows.
International trade in bovine meat is forecast at 7.2 million tonnes in 2008, up 1 percent over 2007. The market continues to recover from consecutive droughts in Australia and from the Bovine Spongiform Encephalopathy (BSE) incidents in North America that had resulted in the imposition of bans by many importers. As these are being progressively lifted, trade in beef is resuming a more normal pattern.
Among the major importing countries, shipments to Japan are set to decline slightly, largely reflecting lower exportable supplies of grain-fed beef from Australia and continuing import restrictions on products from the United States. The foreseen increases in the consumption in the Republic of Korea will be partly met through increased imports, as BSE concerns dissipate. In the United States, increased domestic slaughter, coupled with a weaker US Dollar, may depress imports by 4 percent. Purchase of beef by the European Union will decline substantially, due to a partial ban on beef imports from Brazil and inability of other South American suppliers to fill the gap. Imports by the Russian Federation are likely to continue rising to compensate for a falling domestic production.
As far as bovine meat exports are concerned, those from New Zealand are expected to grow in 2008 despite a strong New Zealand Dollar. Shipments from Brazil will mirror production growth and be destined to non-traditional markets to offset import restrictions imposed by the European Union. While exports from Argentina are set to decline , shipments from Paraguay and Uruguay are expected to increase. Buffalo meat exports from India are likely to will rise in 2008, in response to strong import demand from Indonesia, Malaysia, the Philippines and countries in the Near East.
The strong Euro, high internal prices and decreased imports from Brazil, however, will discourage exports from the European Union. Canada's beef shipments are also expected to fall, negatively affected by the introduction of the Country of Origin Labelling legislation in the United States. Exports from the United States are anticipated to rise, sustained by a weak dollar and the progressive lifting of import bans by its traditional importing partners.
PIGMEAT
Pigmeat production to recover in 2008
Global pigmeat production is forecast to increase by almost 2 percent to 101 million tonnes after a 3 percent decline in 2007, which was largely the result of the impact of massive culling of nearly 1 million pigs following the outbreak of the Porcine Reproductive and Respiratory Disease in China, the world's largest pigmeat producer. This year, output in China is forseen to expand more than 1 percent, but recovery is being impeded by snow storms early in the year that destroyed 800 thousand pigs, particularly in back yard operations. In order to promote recovery, a number of subsidy, insurance and vaccination programmes have been implemented. In Canada and the European Union, where output last year was at cyclical highs, with low prices, production expected to decline in 2008. Viet Nam's production is also affected by PRSS and massive culling of all infected animals will reduce the growth in production for 2008.
In South America, an increase in pigmeat production is anticipated in virtually all producing countries for the fourth consecutive year. Argentina, Brazil and Chile, which have ample feed supplies, are the main contributors to the 4 percent output expansion projected for the region. In the Russian Federation, production is set to grow by more than 6 percent in 2008 as the pig population is continually increasing, aided by government support policies aimed at boosting quality and volume of domestic production and reducing dependency on imports. Pigmeat output in Australia remains stable as a result of a combination of drought-induced high grain prices and record imports driven by the strengthening of the AUD. In the United States, pigmeat production will increase as a result of favourable conditions in 2007, which were encouraged by the depreciation of the dollar. It's industry has also adopted a new vaccine that has lowered hog losses and increased productivity.
World trade of pigmeat is estimated to increase by 5.2 percent to 5.3 million tonnes in 2008. A continuing development for the sector in 2008 is the increased presence of China in the market as a buyer, as the country continues to be crippled by a lack of pork supplies following the outbreak of PRSS. China, this year is expected to import 150 000 tonnes of pork in an attempt to reduce the pressure on domestic prices. Purchases by Japan are expected to increase by 2 percent, in line with increased domestic demand and a reduction in domestic production brought by high feed costs. By contrast, shipments to the Republic of Korea are expected to increase, especially from Chile benefiting from lower import duties agreed to in the Korean-Chile Free Trade Agreement (FTA), sustained by rising domestic demand. Pigmeat deliveries to the Russian Federation, which continue to be subject to tariff rate quotas, are expected to remain stable, a reflection of large production gains consistent with prevailing government policy to stimulate output.
As for pigmeat exports, sales from Brazil and the United States are forecast to rise, partly a reflection of increased shipments to China and Japan. By contrast, reflecting strong currencies and higher feed costs, exports from Canada are now anticipated to decline while those from the European Union will remain stable in 2008. Imports of pigmeat by Mexico are to decrease substantially this year due to increasing consolidation of the industry, which helped raise production.
POULTRY MEAT
Poultry competitiveness in converting feed into meat is favoured when feed prices are high
Animal diseases, such as Avian Influenza (AI), continue to shape poultry trade patterns. Nevertheless, in developing countries, sustained high economic growth will continue to increase demand for meat, especially for low priced protein-rich meats such as poultry. The cost efficiency of poultry production can be largely attributed to the relatively high feed-to-meat conversion ratios that can be achieved when compared with the production of other types of meat. This implies that as the prices of animal protein rich products rise because of higher feed prices, as is currently happening, consumers tend to prefer relatively cheaper meat types and cuts. In line with these expectations, global poultry meat production in 2008 is projected at 93 million tonnes, almost 4 percent higher than last year. The growth is expected in all regions of the world. Poultry production in the United States is expected to increase by more then 2 percent. Canada's effort to contain its 2007 AI outbreak has been successful and the output is expected to increase slightly. Production may increase by 6 percent in South America. Argentina, Chile and Colombia will achieve 10 percent increases in production, while the growth rate in Brazil, the largest producer in the region, is expected to be about 5 percent. Adjusting to growing domestic consumption and export demand, Thailand broiler production is expected to increase by more then 6 percent in 2008. This year, despite recurring outbreaks of AI, China is anticipated to increase its poultry output through measures that improve feed conversion into meat. Most other major poultry producers, namely Australia, Indonesia, the Islamic Republic of Iran, the Philippines, the Russian Federation, South Africa and Turkey, are expected to increase their poultry production in 2008 in response to improved domestic demand. In Africa, poultry output is anticipated to increase by 1 percent, mostly reflecting higher production in North Africa. Despite the resurgence of AI in parts of the European Union, prospects for poultry production in 2008 remain relatively stable. Competitive prices, with respect to other meats, consumer preference for white meat and increased use in food preparations still favour poultry meat as in 2007. On the other hand, India and the Republic of Korea have increased poultry culling in order to stop the spread of the H5N1 bird influenza virus. This is expected to lower production in 2008 by 3 and 2 percent, respectively in these countries.
Trade in poultry meat is projected to rise by 4 percent to 9.6 million tonnes, due to increased import demand. Half of that growth is expected to originate in Asia, especially China where consumers are substituting broiler meat for pigmeat, the prices of which have been relatively higher. The Philippines and the United Arab Emirates are expected to increase poultry imports substantially to meet the domestic demand. Saudi Arabia, which is expected to decrease import tariffs for frozen poultry to help control food price inflation, will also increase poultry imports by 2.6 percent. The European Union is expected to become a net importer in 2008 with Brazil as the major supplier. In 2008, imports will increase by 1.4 percent paying full over quota duty because high domestic prices will still make it profitable. Imports by Turkey for 2008 are anticipated to recover from the 2006 contraction caused by AI reflecting consumer confidence returns. The Russian Federation is also increasing its imports of poultry meat as consumer demand continues to expand because of growing income and the shortage of supplies of other meat. Imports by Japan, on the other hand, are anticipated to decline by 1.6 percent.
As for poultry exports, larger sales of chicken meat by Brazil are expected to account for 38 percent of the global expansion in poultry trade. Exports from the country are now anticipated to grow by 4 percent, to almost 3.6 million tonnes, in response to strong import demand from countries in the European Union, the Near East countries, such as Saudi Arabia and the United Arab Emirates and Asia particularly Hong Kong and Japan. The Thailand broiler industry anticipates that exports of cooked chicken meat will continue to grow at least by 7 percent in 2008, in line with strong demand from the European Union and Japan despite recurrence of AI this year. Thailand has devised an approach, referred to as "compartmentalization", the goal of which is to convince major importing countries to import from those areas meeting stringent biosecurity measures, regardless of the country's overall AI status. The forecast for exports from the United States points to an expansion of 4 percent from last year. The United States accounts for one-third of the global expansion in poultry trade, despite the growing competition from Brazil on Asian markets. Its favourable exchange rate has kept the United States' exports competitive in Chinese and the Russian Federation import markets.
SHEEP AND GOAT MEAT
Global ovine output forecast to increase despite substantial production decline in Oceania
Global ovine production is forecast to rise by 2 percent to 14 million tonnes in 2008, particularly due to a higher output in China, the Islamic Republic of Iran and Pakistan. Output is also expected to rise in Africa, especially in Egypt, Morocco and the Sudan, accounting for almost two-thirds of the increase in production of the continent. North American output should increase, particularly in the United States, by more than 1.9 percent, as the income growth in the Hispanic community improves the demand for lamb. By contrast, production is anticipated to contract in most other developed countries. Despite improved weather conditions in Australia, lamb output should fall in 2008, mainly because of animal retention for flock rebuilding. Drought in the North Island of New Zealand and overall poorer climatic conditions may keep 2008 production even with that of 2007. Production in the European Union should continue to decline in 2008 by about 1.4 percent, reflecting the lingering effects of the decoupling of annual premiums for ewe numbers in major producing countries.
World exports of sheep and goat meat in 2008 are estimated to decline by 6 percent to 825 thousand tonnes. Overall sheep meat exports from Australia are now set to contract in 2008 by 9 percent, restricted by tighter supplies and a strong AUD. A similar situation is also expected for New Zealand. Among the major ovine meat importers, purchases by the United States are forecast to increase by 2 percent, driven largely by increased consumer demand. Lower domestic demand, partly caused by relatively high prices of sheep meat, should keep imports of the European Union at the same level of the previous year. It nevertheless remains by far the most important destination of trade in ovine meat.
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Timor's Ramos-Horta Says Farm Subsidies Will Help Food Security
By Jason Gale
May 26 (Bloomberg) -- East Timor President Jose Ramos-Horta said his country must use subsidies to bolster agriculture and protect its food security in the face of soaring import costs.
East Timor, Asia's youngest and least-developed nation, can be ``mostly'' self-sufficient within five years, Ramos-Horta, 58, said in an interview in Singapore today. About two-thirds of the rice consumed in the country is bought from Vietnam and Thailand.
Cheaper food from overseas can't be relied on because rising fuel prices are ratcheting up transport costs and major rice- producing countries, such as China and India, will need more to feed their own people, leaving less for export, Ramos-Horta said.
``Food security must be priority No. 1 for us,'' he said. ``For our own food security, our survival, our independence, we should spend more money -- including subsidizing our farmers -- to produce more.''
The Nobel laureate, who served as prime minister from 2006 until his inauguration as president last year, was shot and almost killed in a Feb. 11 rebel attack.
``At the time I was prime minister I said I am going to subsidize our agriculture sector,'' he said. ``We have to. That would make us independent, and eventually it will be cheaper.''
Ramos-Horta said that using subsidies to protect farmers and encourage domestic agricultural production may rankle multilateral finance agencies, such as the World Bank and International Monetary Fund, which advocate free trade as a mechanism for lowering food costs.
``If we do the opposite of what they say, I think that will be about right,'' he said.
Import Surge
The cost of importing rice has more than doubled this year as countries including Vietnam and China curbed overseas sales to protect domestic supplies. Governments worldwide may spend a record $1.035 trillion on imported foodstuffs in 2008 because of higher commodity prices and escalating transport costs, the Food and Agriculture Organization of the United Nations said in a report last week.
In East Timor, which derives about $100 million a month from its petroleum reserves, farmers are offered incentives to expand crop production, and new roads and bridges are being built to bring food to consumers faster.
The government is considering building warehouses to store food in strategic areas around the country for emergencies to assist ``vulnerable people,'' said Ramos-Horta. About 40 percent of the nation's 1 million people live on $1 or less a day.
`Matter of Decency'
Ensuring the availability of affordable food is ``a matter of decency and morality for the poor, but also a matter of stability and security,'' Ramos-Horta said. The poverty-inducing affects of food inflation ``will set back development efforts in developing countries at least 10 years,'' he said.
Food prices would have escalated more in East Timor had the government not stepped up imports of rice, corn and potatoes to bolster local supplies, the president said.
``With climate change, more industrialization and the development of countries like India and China, there will be less and less land available for agriculture,'' Ramos-Horta said. ``We have to quickly make ourselves completely independent in food.''
East Timor, formally known as Timor-Leste, was established in May 2002, ending 24 years of Indonesian control and three years of UN administration.
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U.S., Asia Express `Serious Concern' Over Oil Prices (Update2)
By Megumi Yamanaka and Yuji Okada
June 7 (Bloomberg) -- The U.S. and Asia expressed ``serious concern'' over record oil prices one day after the market posted its biggest dollar gain ever, and urged consumer-nations to shift to alternative sources of fuel as energy costs rise.
Oil prices have reached ``unprecedented'' levels, officials from Japan, China, India, South Korea and the U.S. said in a joint statement issued after a meeting in Aomori in northern Japan today. Crude oil climbed $10.75 in New York yesterday to settle at $138.54 a barrel, its biggest one-day increase.
``There are few things we can do for the short term,'' U.S. Energy Secretary Samuel Bodman told reporters in Aomori today. ``There are things we can do on increasing efficiency and we are working on them.''
Prices more than doubled over the past year, sparking concern oil will fuel inflation and retard economic growth. The U.S. and the four Asian nations, together accounting for half the world's energy consumption, said today wider use of alternative fuels such as clean coal, nuclear power, and renewables will help bolster energy security.
Investing more in oil and gas to boost output capacity and greater effort in accessing petroleum reserves will also expand supplies of conventional fuels, helping to tame energy prices, according to the joint statement.
Cutting Subsidies
The governments of China and India, which sell fuels to domestic users below cost, were in agreement with the U.S., Japan and South Korea that ``a gradual withdrawal of fuel subsidies is desirable,'' the statement said.
India, Malaysia, Indonesia and Taiwan over the past month raised fuel prices and cut subsidies, in a move that may reduce Asian demand and slow global oil-consumption growth.
``This is the first time that we can agree on the necessity of abolishing fuel subsidies by steps,'' Japan's Trade Minister Akira Amari told reporters today. ``Each country has different reasons and contexts, so they cannot do that immediately.''
Prime Minister Manmohan Singh said India's fuel-price increase was ``inevitable'' in helping to protect government finances and narrowing oil refiners' losses. ``There are limits to which we can keep consumer prices unaffected by rising import costs.''
Scaling back on subsidies is a step forward in boosting energy efficiency and accelerating a quest for alternative sources, amid rising oil prices. Energy ministers from the Group of Eight industrialized nations, together with government officials from China, India and South Korea, are expected to set energy-conservation targets tomorrow when they meet in Aomori.
Saving Energy
Japan's Amari urged China and India, the world's fastest growing major economies, to join the International Partnership for Energy Efficiency Cooperation, which the G-8 plans to create by the end of this year.
``A key in setting numerical targets would be how much developed nations can accommodate the demands of developing countries in transferring conservation technology,'' Kenichiro Yamaguchi, chief consultant with the Global Warming Research Group at Mitsubishi Research Institute Inc., said this week.
Energy Ministers from the G-8 -- the U.S., Japan, Canada, Germany, France, U.K., Italy, and Russia -- will discuss the possibility of sharing alternative-energy technologies with China, India and South Korea. The 11 countries account about for two-thirds of global energy demand.
``Energy efficiency provides one of the most cost-effective short-term responses'' to record oil, the joint statement said.
To contact the reporters on this story: Megumi Yamanaka in Tokyo
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MRSA superbug widespread in pigs
// 06 jun 2008
The antibiotic-resistant staph bacteria known as methicillin-resistant Staphylococcus aureus (MRSA) is widespread among both pigs and pig farmers in Canada, Natural news has reported.
A study published in the journal "Veterinary Microbiology," suggests that the livestock industry is a possible source of the disease.
Tests
Researchers examined 258 pigs on 20 farms in Ontario, and also tested the workers on those farms. They found that 45 percent of farms, 25 percent of pigs and 20 percent of farmers were infected with MRSA, which is substantially higher than the rate of infection in the general North American population.
Among the MRSA strains found on the pig farms was one that has commonly infected humans in Canada and one that has been associated with serious skin, breast and heart infections in Europe.
Antibiotic resistance
The study has added weight to claims that antibiotic use in livestock farming may have led to the development of antibiotic resistance in human diseases. Consumer health advocate Mike Adams said that commercial raising of livestock for food is fraught with the potential for microbiological disaster.
"When we raise pigs, cows, chickens or other animals in artificial, enclosed, indoor environments, we are practically begging to be threatened by out-of-control superbugs that breed in such conditions," Adams said.
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Monday, June 09, 2008Print This Page
Conclusion of the U.N. World Food Security Summit
WASHINGTON, D.C. - Bob Stallman (President, American Farm Bureau Federation) speaks regarding the U.N. World Food Security Summit held at Rome.
In a statement, Mr Stallman said:
“The American Farm Bureau Federation recognizes the challenges that faced this week’s United Nations’ High Level Conference in Rome. Now, continuing efforts are necessary to move forward and implement effective solutions for global food insecurities. We appreciate the active and effective role of the U.S. delegation in constructing a declaration that will hopefully help guide the international community in hunger-relief efforts.
“The current food security issues affecting countries around the world require comprehensive and specific actions aimed at feeding the hungry and support for measures to develop and enhance food security for all nations. Investments in physical infrastructure, research, production technology and trade facilitation will help countries overcome food insecurity.
“Renewable fuel production is a component of U.S. agricultural and energy policy and constitutes an important growing sector of agriculture domestically and globally. We believe that food security and alternative fuel production are both achievable goals.
“All nations must work together to help solve the continuing challenge to increase agricultural production, while providing necessary food aid for a growing world population. This is a time to move forward with solutions, not backpedal with excuses.”
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An Insatiable Global Hunger for Grain
GLOBAL - Wheat is by far the most traded grain as it is so adaptable to many uses, but production for the world market has so far been the privilege of a handful of countries.
But the economic growth of emerging nations, coupled with their urbanisation, has profoundly changed people’s eating habits. They are eating more, particularly meat. The Chinese, for example, consumed five times more meat in 2005 than in 1980. Three kilogrammes of grain are needed to produce 1kg of poultry; more than double that is needed for 1kg of beef. Feed and oil-producing grain are part of livestock’s daily diet.
With a growing world population and a better quality of life in emerging nations, the demand for grain is growing inexorably. International wheat exports tripled between 1960 and the beginning of the millennium. Egypt , which used to supply the wheat for ancient Rome , has become the product’s leading importer. Increased cheap imports during the times of plenty strangled local agriculture in the Mediterranean region and sub-Saharan Africa . The food bill for these countries has reached exorbitant levels.
In a report by the UN’s Food and Agriculture Organisation (FAO) in June 2007, the economist Adam Prakash concluded that food imports will cost 90% more on average than in 2000 for the least advanced countries (3). The UN experts drove the point home a few months later. At a press conference in Dakar on 9 November 2007 , Henri Josserand, head of the Global Information and Early Warning Service at the FAO, calculated that the food bill for African nations had grown by a third, or even 50% for the most dependent among them, between 2006 and 2007.
3rd World Human Hunger
African populations are suffering the consequences of rising grain prices, and there have been hunger riots and demonstrations against the cost of bread. Meanwhile, grain is breaking all records on the American markets.
Food security is once again causing concern, even in industrialised nations. Observers such as Jean Ziegler (until recently UN Special Rapporteur on the Right to Food) raise the spectre of famine in west Africa. Even in the United Kingdom , where agriculture was long ago sacrificed in favour of industrial revolution (1), the Department for Environment, Food and Rural Affairs (Defra) raised concerns about the dangers facing food security in a study published in December 2006 (2).
Just over a year later there is real anger on the streets about the high cost of living – in the UK but also, and especially, in the South where people depend on imports to feed themselves but with incomes that are unimaginable for the British. Prices (milk, oil, rice and wheat) have exploded and the surge has been most spectacular on the grain markets.
Prices doubled during the summer of 2007 when farmers in the North were harvesting. The price of wheat rose from $200 to $400 per ton between May and September at the Chicagoland Chamber of Commerce, the benchmark for the international grain trade. The same occurred in Paris where milling wheat peaked at €300 ($477) per ton at the beginning of September. Prices rose again in mid-March when the United States had almost exhausted its export capabilities. One bushel (27kg) passed the symbolic $13 mark – a record. In one year the price of wheat increased by 130% on the American futures market. Millers and manufacturers of pasta and livestock feed in developed countries were taken by surprise and protested loudly.
But for several years there has been a noticeable difference between supply and demand. The final reserves (what is left in the silos of producer countries before the start of the harvest) have been shrinking while demand has been growing. The market is no longer regulated by the growth of supply but by the use of the accumulated reserves of the large exporter countries.
In 2007 this precarious balance collapsed for two reasons: increased demand generated by the boom in biofuels, and poor harvests due to the vagaries of the weather. These two phenomena came to a head as tension grew, caused by the growing demand of emerging nations such as China .
Biofuels absorb 10% of world corn production, but this is only partially responsible for the spectacular surge in grain prices because US companies, its main manufacturers, increased their corn production to meet this new demand. However, according to the Washington-based International Food Policy Research Institute (IFPRI), the ethanol industry could increase the price of corn by at least a quarter, and possibly by as much as 72%, by 2020 (see “Ethanol: the new anti-depressant”).
Weather played a crucial role in 2007. Drought in Australia , lack of sun and too much rain in Europe , frost in Argentina ; all weakened production. No one is talking about a shortage at this point but, in the trading rooms where sales and purchasing decisions are based mainly on final reserves, such a substantial drop encouraged a surge in prices throughout the season.
First to benefit
The large exporter nations are the first to benefit from the situation. The leader of the pack, the US , registered record agricultural export revenue in 2007 – $85bn. According to estimates from the United States Department of Agriculture, the 2008 harvest looks even more promising. In France grain farmers have doubled their income. The large trading companies are also, discreetly, recording astronomical results.
Anger is brewing at the other end of the chain in the developing countries which are net importers. Riots have broken out in Mexico , Senegal , Morocco and Mauritania . Local agriculture cannot cover the population’s needs in these countries.
The increased cost of groceries may be bearable in developed economies where food represents only 14% of household expenses, but it becomes unmanageable in sub-Saharan African nations where 60% of income is taken up by food.
In the face of such food inflation, emerging nations which have traditionally been exporters have raised barriers to keep local prices at an affordable level. Argentina (4) and Russia have imposed taxes on exports as well as restricting the amount distributed. When these measures are reflected on the world market, the tension is pushed up a notch.
The most exposed countries, the net importers, have resorted to subsidies when their finances allow it. In Morocco last September the rise in bread prices set by the bakers union provoked violent demonstrations in several towns. Fearing that the anger in the streets would lead to riots, the government preferred to cancel the increase and suspend several taxes on importing wheat to support the millers. The Tunisian government even asked bakers to reduce the weight of bread to avoid increasing the price.
’Food aid vanishes’
According to the agronomist Marc Dufumier, an expert on comparative agriculture, famine can be triggered by the most insignificant climatic incident and will be even more difficult to deal with at a time when world food aid reserves are becoming dangerously low.
“Food aid vanishes when the price of wheat rises,” he says. “Countries in the northern hemisphere are generous when they have a surplus. Aid reduces reserves and contributes to supporting prices at home. But as soon as prices take off, they sell to anyone who has a solvent demand.”
Figures published by the International Grains Council (5) confirm this. During 2005-06 8.3m tons of grain were exported as food aid; only 7.4m tons were exported in 2006/2007. Aid is expected to fall to 6m tons for the season which is now coming to an end.
The hunger riots show no signs of burning themselves out. While supply does not satisfy demand, prices will continue to rise. To reverse this trend, governments could ask their populations to eat less couscous, bread and particularly meat, but this suggestion is hardly likely to be favourably received in countries where food standards are just starting to improve – not to mention those who have not even seen such improvement thus far.
In China , for example, the health minister is encouraging women to consume dairy products to absorb more calcium. Milk requires livestock, and grain to feed them. Demand will almost certainly grow in the years to come.
Investors seduced
There is the speculative trend too. In the autumn of 2007 Financeagri, a French firm specialising in raw agricultural materials, encouraged its subsidiaries in an email to “play a part in the volatility of agricultural markets. Don’t just be a spectator. Find out more.” Their commercial offer illustrates the current revolution taking place on the agricultural futures markets. Initially created to cover the risk of price variation, they have become a hunting ground for all kinds of speculators, be they regular (investors and negotiators) or occasional (farmers). The arrival of regular investors has had a sharp effect on listings by feeding price volatility.
Agricultural indexes, which reflect the current evolution, are popular with investment funds. According to Barcap (a Barclays subsidiary specialising in investment), between the end of the first and fourth quarters of 2007 – when the grain markets really took off – the volume of capital managed by listed investment funds (ETFs in finance jargon) on European agricultural products grew fivefold from $156m to $911m (6). The same source has indicated that the amount of capital placed on the American agricultural markets jumped even further, increasing sevenfold between the first and last quarters of 2007.
The convergence of the prices for energy products and grain for the biofuels industry has also seduced investors. An increasingly voracious (and carnivorous) population, and undervalued agricultural products compared to other raw materials, could create a long-term surge in agricultural products. The metal and energy markets have been bubbling away nicely for five years. Now it’s the turn of agricultural products.
In such a euphoric atmosphere producers are also seeking to maximise profits. According to an analyst with a large trading company, “high prices have strengthened the position of operators”. In France many contracts have not been honoured, particularly as regards the delivery of milling wheat and brewing barley. Producers believed that more profit could be generated from direct sales to manufacturers and have had to reimburse the injured cooperatives.
’Land is an investment in the future’
For Philippe Mangin, president of Coop de France, this attitude is entirely understandable. “Small farmers have never faced such volatility,” he says. “Prices have tripled in 15 months. It’s enough to make your head spin, especially after three lean years.”
However, he deplores this development. Faced with the concentration of industrial demand and the disengagement of the public sector, the solidarity of producers, underwritten by the cooperative movement, would be particularly helpful.
According to the International Grains Council’s assessments, farmers are starting to react. Wheat fields should increase by 4% in 2008, comparable to the progress observed the last time the grain market was so active in 1995-96.
But when all grains are taken together, few countries have the necessary technical means or, more importantly, the available land. “Land is an investment in the future,” maintains British investor Jim Slater. He made his fortune in the metal market and is now turning his attention to agriculture, focusing on investments in irrigation programmes.
Russia , particularly the vast steppes in East Siberia , and Ukraine , thanks to its famous black earth, could develop farming. But the continental climate makes this a risky enterprise as frost can cause returns to fall drastically from one year to the next. Argentina and Brazil , on the other hand, can convert pampas and forests into farmland.
According to Dufumier, “there are still unexpected productivity gains to be had”. Not in Europe , though, where the return per hectare is the highest in the world. The future of export agriculture is probably to be found in these new countries where production costs are low and returns still weak.
It will involve rolling out genetically modified organisms (GMOs) which are already omnipresent in Argentina , across the board – and will lead to a series of harmful consequences for the environment, such as deforestation in Brazil .
The countries most affected by the grain explosion will be saved by the renaissance of their own agricultural industry. Mali strengthened its own productivity and has therefore been relatively spared, thanks to investments made in rice cultivation in the Niger delta and the common sense of its cotton farmers.
Disappointed by the ever-lower prices offered by cotton companies for a kilo of seed cotton, they used the materials allocated for this crop for sorghum and corn seedbeds. In neighbouring Burkina Faso , soya fields have advantageously replaced the cotton trees.
Faced with a lack of generosity by the donor countries on which it depends, the World Food Programme is trying to support internal production by intensifying local purchases. In West Africa their share increased from 13% in 2005 to 30% in 2007.
The explosion in grain prices again raises the question of what role agriculture should play in development. It should be at the heart of Europe ’s Common Agricultural Policy and the Doha negotiations. The World Bank, which contributed to weakening agriculture in some countries by imposing economic liberalisation, has now put this sector at the heart of its efforts to fight poverty in its 2008 report on development.
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Clearwater": An eco-friendly feed barley
// 06 jun 2008
A new barley that benefits the environment as well as farm animals has been developed by Agricultural Research Service (ARS) scientists and their colleagues.
"Clearwater" hulless barley is rich in the kinds of phosphorus--an essential nutrient--that pigs, fish and other single-stomached, or "monogastric," animals can use. That's unlike grain from conventional barleys, which contains more of the phytate type of phosphorus, the kind that monogastric animals find difficult to digest. Indigestible phosphorus, leached from manure, can sometimes end up polluting groundwater or streams.
Clearwater builds upon decades of research by plant geneticists Victor Raboy, Phil Bregitzer and others at the ARS Small Grains and Potato Germplasm Research Unit at Aberdeen, Idaho.
Raboy uses conventional plant-breeding procedures to chemically tweak seeds' phosphorus makeup. The work has paved the way for low-phytate barleys, such as Clearwater and a hulled type called "Herald," as well as low-phytate rice, corn and soybeans.
Bregitzer, Raboy and ARS plant geneticist Don Obert collaborated in the Clearwater research with Idaho Agricultural Experiment Station co-researchers Juliet Windes and James Whitmore. A recent article in the Journal of Plant Registrations contains more details.
Clearwater yields are about the same as those of other niche-market barleys, according to Bregitzer. One such market--aquaculture feeds--is already being explored. Approximately 46,000 pounds of Clearwater were shipped to Vietnam earlier this year by the U.S. Grains Council of Washington, D.C., and the Idaho Barley Commission to test Clearwater as a feed ingredient for farm-raised fish. ARS researchers at Hagerman, Idaho, and Bozeman, Mont., will begin similar investigations with farm-raised rainbow trout this month.
The Idaho Agricultural Experiment Station's Foundation Seed Program at Kimberly has offered Clearwater seed for sale since late 2007. Researchers and plant breeders can contact Bregitzer to obtain, at no charge, small supplies of Clearwater or any of several other feed, food and malting barleys that have resulted from ARS and Experiment Station barley breeding research.
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Thursday, June 26, 2008Print This Page
GM Food Benefits? Consumers Wont Swallow it
UK - Food industry leaders, alongside politicians, have begun to lobby for GM acceptance in Europe, which may help dying livestock industries thrive once more. However, there is a long way to go yet in changing consumer perceptions.
According to the Dairy Reporter, Peter Brabeck, chairman for Nestle, has called loudly for Europe to reassess its GM policy to help combat the dwindling food supplies and soaring commodity prices.
And he is not the only food industry big-wig to take this stance. Ian Ferguson, chairman for Tate & Lyle and president of the UK's Food and Drink Federation has long been a GM advocate, hoping to foster fair debate on the rapidly progressing technology.
Last week it was the turn of the politicians, reported the Dairy Reporter. UK Prime Minister Gordon Brown said Britain should step up its GM acceptance, encouraging the end to the zero tolerance on feed shipments, which currently sees entire batches containing traces of GM material sent back.
On a European level, opinion is divided among member states, leading to inconsistencies and slow approval processes. While some hail GM as the answer, current decisions on certain GM materials are not upheld by some countries.
Since the first approval of GM maize 10 years ago, there are still countries refusing to grow it, and it remains the only crop cultivated in Europe.
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Thursday, June 26, 2008Print This Page
Report: Climate Changes, Farming Changes
AUSTRALIA - CSIRO today released a national overview of climate change impacts and adaptation options for Australian agriculture.
Bringing together the latest science from research groups around Australia, the report includes chapters on each of Australia’s major agricultural sectors, with a focus on steps that can be taken to adjust to the ongoing changes in our climate.
Speaking to the Farm Writers Association of NSW in Sydney today, co-editor of the report, CSIRO scientist Dr Mark Howden, said it was time for agriculture to start focussing on proactive solutions.
“Adapting to climate change will involve everything from changes in crop varieties, through to improved seasonal forecasting, up to revised national policies and programs,” he said.
“For many agricultural businesses incremental changes may be enough, but some regions and industries will need to be open to more transformative changes.”
The report uses agro-climatic zones to identify the different types of impacts and adaptation issues facing agriculture.
Graph courtesy of: Hutchinson & McIntyre 2005
Prepared for Land and Water Australia (LWA) the report - ‘An overview of climate change adaptation in the Australian agricultural sector – impacts, options and priorities’ - updates and expands the previous national synthesis done by CSIRO in 2003.
“We’ve applied the latest climate change projections to build a picture of the challenges that will affect all types of agriculture in all corners of the nation,” Dr Howden said.
The report also emphasises the importance of building adaptive capacity among farm managers, agri-businesses and industry groups.
“The past climate is no longer a good guide to the future climate, so having the skills and resources to respond flexibly will be essential,” Dr Howden said.
The report is being released as part of a series of talks being presented by the Australian Council of Agricultural Journalists and CSIRO’s Climate Adaptation Flagship in Brisbane, Sydney, Adelaide and Perth today and tomorrow, with support from the Agricultural Research WA, Climate Adaptation Program.
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Thursday, June 26, 2008Print This Page
Vicious Cycle of High Prices and Global Food Shortage
GLOBE - Soaring food prices could reverse the significant growth in agricultural production recorded by some of the poorest countries in Europe and Central Asia over the past 10 years, said FAO Director-General Jacques Diouf today at the opening of the 26th FAO Regional Conference for Europe.
Moreover, government response to higher prices has not always been supportive of the farm investment needed to raise production and productivity, favouring instead measures such as export restrictions, which have resulted in cancelled export contracts and lower prices received by farmers, he noted.
Positive trends
“As in most parts of the world affected by food insecurity, hunger in Europe and Central Asia derives from rural poverty and from natural and man-made disasters, rather than from a total lack of food at macroeconomic level,” Dr Diouf said.
“In the past ten years, some of the poorest countries have posted the largest gains in per capita national income, notably the countries of the Transcaucasus and Central Asia, while growth has been slower in the countries of Western and Eastern Europe,” he said, noting that per capita agricultural production had also grown fastest in those countries.
But this positive ten-year trend might be coming to a halt without bold policy steps to contain price increases, he said, echoing the conclusions of a conference organized in March 2008 by FAO and the European Bank for Reconstruction and Development (EBRD).
Untapped potential
Supportive policies and investment in infrastructure could boost production significantly.
Photo: CSIRO“There is strong agricultural potential in Kazakhstan, Russia and Ukraine,” the FAO Director-General said. “With a supportive policy environment and investment in infrastructure, at least 13 million hectares could be returned to production, without major cost to the environment.
”He noted that crop yields in those three countries are three times lower than in Central, Eastern and Western Europe, where modern inputs are employed and contract farming is used to reduce market risks.
“The Commonwealth of Independent States and the countries of Southeast Europe are far more rural and agricultural than those of Western Europe,” Dr Diouf said. ”Yet agriculture remains vulnerable and provides relatively low income because of insufficient crop yields.
”He said that FAO's main concern in this region is rural poverty which, in some countries and especially in Central Asia, is accompanied by food insecurity, despite the fact that there is no lack of qualified specialists in technical fields such as veterinary medicine, fisheries, forestry and agronomy in these countries.
“What is lacking for agricultural and rural growth are development policies that favour commercial agriculture and institutions of governance and support for the development of family farms and the private sector,” he said.
“New EU member countries have succeeded to reduce rural poverty, ensure sustainable agricultural growth and to become high-income countries by adapting their policies and institutions,” Dr Diouf said. “Those countries have invaluable information and expertise to facilitate the process of agricultural transition.
”Dr Diouf highlighted FAO’s efforts to raise awareness among policy-makers and the public about actions needed to address these issues, including FAO’s Initiative on Soaring Food Prices, and stressed that FAO was ready to provide its assistance in a number of areas to ensure food security for all.
Other constraints
Other constraints to agricultural production and food security in the region over the past two years have been pests, diseases and emergencies, the Director-General said.
He highlighted FAO projects to supply pesticides and regional consultations to address the transboundary migration of locusts and diseases, such as avian influenza, foot-and-mouth disease and African swine fever, which have affected the countries of the Transcaucasus.
In response to emergencies in the Russian Federation, Tajikistan and Moldova, FAO has helped poor rural households rebuild their livelihoods through livestock and with high-value agricultural products and has provided seed and animal feed to poor farmers affected by snowfall and drought.
Participants at the two-day conference, which include representatives of 44 Member Nations from the region, will discuss these activities, as well as progress in attaining the World Food Summit and Millennium Development Goals. Other items on the agenda are FAO and adaptation to climate change in the region, and the promotion of traditional regional agricultural products and food.
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Thanksgiving turkey becomes expensive
// 26 jun 2008
Thanksgiving turkeys and Christmas hams could become extremely expensive this year now floods have destroyed an estimated 2 million or more acres (800,000 ha) of corn and soybean fields in Iowa, Indiana, Illinois and other key growing states, sending world grain prices skyhigh on fears of a substantially smaller corn crop.
"We're in survival mode now," said Paul Hill, chairman of West Liberty Foods, a turkey processor based in West Liberty, Iowa. He estimated US turkey producers will reduce their flocks by 10 to 15% nationwide, a cutback that will send consumer prices dramatically higher.
Due to the high feed prices pig farmers have to cut back on the number of animals that they raise. "The cost of Thanksgiving and Christmas turkeys will go up this year, and maybe even more next year," said Hill, who is also the chairman of the National Turkey Federation.
If corn were to rise to $10 a bushel, Richard Lobb, spokesman for the National Chicken Council, said recouping costs through higher retail prices may not be possible.
"Can you possibly charge enough for the chicken to recoup that investment?" he said. "That's a question no one can answer yet because it's never been done." Rod Brenneman, president and chief executive of Seaboard Foods, a pork supplier in Sawnee Mission, Kansas, that produces 4 million pigs a year, said this will cause meat prices to rise later this year and into 2009.
Pig feed costs up $30
Brenneman's cost for feeding a single pig has shot up $30 in the past year because of record-high prices for corn and soybeans, the main ingredients in US pig diets. Passing that increase on to consumers would tack an extra 33 cents per kg onto a pork chop. In the beef sector it is the same story. US beef producers now spend 60-70% of their production costs on animal feed and are seeing that number rise daily as corn prices hover near an unprecedented $8 a bushel, up from about $4 a year ago.
Before the floods, corn farmers were enjoying record profits selling the grain to feed animals and for use in cereals and as a sweetener in soda and candy. But a sharply smaller corn crop could wipe out those gains.
In Iowa, the No. 1 US corn grower, floods inundated about 9% of corn crops, representing about 1.2 million acres (485,000 ha) — almost 1.5% of the country's anticipated harvest. In Indiana, another 9% of corn and soybean crops were flooded, potentially costing farmers up to $840 million in lost earnings, according to Indiana Agriculture.
Floodwaters also tossed farm equipment, sprayed cornfields with debris and silt and sucked away large chunks of topsoil. For livestock owners and meat producers, the damage may be felt long after the corn grows back.
Dairy prices will rise
Higher feed prices will eventually filter through to the cost of dairy products too, since 65 to 75% of a dairy farmers' production costs are for feed.
With the cost of animal feed only going higher, many poultry and dairy farmers are starting to look for cheaper alternatives. Farmers buy some of the byproducts of cereal or flour production, but they're not nearly as productive compared to corn.
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By Felicito C. Payumo
Philippine Daily Inquirer
First Posted 06:58pm (Mla time) 06/29/2008
DURING the last 50 years, thanks to research and advances in
technology, farmers and ranchers were able to increase the world
food supply faster than the growth of human population.
But in the next 50 years, Norman E. Borlaug, an agricultural
scientist and Nobel Peace Prize awardee, believes that future gains
in food production will be harder to come by than in the past.
Many of the cultivated lands, such as those in western countries,
are already producing close to their theoretical potential. Global
consumers are likely to require double the level of today's
agricultural production--from 5.5 billion to 11 billion gross metric
tons. And we will continue to rely on irrigated lands to contribute
a disproportionate share of world food supplies.
Zoom in on the Philippines, now referred to by some analysts as
ground zero of the global food crisis.
The country is, no doubt, in a worse fix. Domestic rice production
has been 12 percent below domestic consumption over the last 6
years, with importation at 1.2 million metric tons a year.
But this year, we are importing 2.1 million tons. The last time we
were self-sufficient was in 1971 under the Masagana 99 program. Our
farmers do not get price support--the National Food Authority (NFA)
could only buy less than 1 percent of production in the last few
years compared with 5 percent absorption rate in the 1980s and 10
percent in the 1970s. So the farmers are forced to sell to their
creditors who haul their produce straight from the field at very
disadvantageous prices. As for input subsidies to farmers ... well,
the Joc Joc Bolante tale tells the whole story.
The future is even bleaker. Not only is our population increasing,
per capita consumption of our 87 million people has been growing at
2.6 percent a year. And the price of imported rice at $1,100 per ton
is up three-fold since a year ago.
Since rice is thinly traded--only 27.5 million tons or 6.4 percent
was traded--a reduction in exports by the supplier countries to
assure supply to their citizens can lead to further spike in prices.
And certainly, their decision to form an Organization of Rice
Exporting Countries (Orec) does not bode well for us.
What to do?
It is time we abandon our dependence on trade over production for
self-sufficiency. I am afraid that a UNDP report that there would be
an uptick in production in the rice paddies of Asia next year might
lull us back to complacency.
Occasional blips do not alter a trend. Unless some big
technological, political and social breakthroughs happen, the future
shall be a mere extrapolation of the stark realities of the present.
The course of history, while not always linear, needs a radical
alteration to change its trajectory.
Irrigation: A vital need
Everyone knows our farmers have many needs--from access to credit to
input subsidies, post-harvest facilities, etc. But the most vital
has been the most neglected: Irrigation facilities. Borlaug states
that we would have to depend mainly on irrigated lands.
Former Secretary of Agriculture Sonny Escudero agrees, as he decries
the unfair comparison of Filipino farmers' abilities with their
Asian counterparts. Our farmers are just as productive, but are
lacking in government support, particularly in irrigation facilities
(Thailand, on the other hand, has a much larger area of irrigated
lands).
Hybrid seeds and fertilizer are ineffectual without proper
irrigation. Therefore, the need to rehabilitate non-functioning
systems and adding more irrigated areas is a no-brainer.
Agriculture Secretary Arthur Yap conceded to Senator Mar Roxas that
we need an additional 3 million tons to feed ourselves, but has to
count on 2.5 million hectares of land, including rain-fed areas that
give less than optimal yield.
I recall having co-authored a law (Republic Act No. 6978) that
mandated the National Irrigation Administration to undertake a 10-
year program to construct irrigation facilities in the remaining
1,500,000 hectares of unirrigated lands.
It was approved on Jan. 24, 1991, during the 8th Congress. That
means we should have irrigated these lands in 2001 if the government
had done its job. But some figures show that only 43 percent of
lands have functioning irrigation systems, with the balance either
completely unirrigated or with systems that are silted or in various
state of disrepair.
I can attest to this. The silted Tangilad River irrigation project
in Samal, Bataan, built at a cost of P100 million, has not been able
to irrigate its entire service area. Despite complaints from
farmers, the NIA has not done anything about it.
But what about the areas that cannot be irrigated, mainly those in
the uplands, those that depend solely on precipitation because they
are outside the service area or lie on elevation higher than
existing creek and river impounding systems?
Going by Yap's statement, we have at least an additional 1 to 2
million hectares of lands that cannot be irrigated. Shall we just
let talahib or cogon grass cover them?
Shovelling for their supper
I thought we could learn from the villagers of Ajit Pura in the arid
state of Rajasthan, India. The Economist published an account "of 42
women and men scraping earth into panniers, and hoisting them to
their heads, walk the contents up to a low embankment rising on the
edge of the work-site."
It is designed to slow run-off of monsoon flood-water, encouraging
more of the precious liquid to infiltrate Ajit Pura's dusty soil.
This helps irrigate a few peasant plots for a year or two, before
the embankment is washed away.
They call them micro-water catchments. We call them small water
impounding systems.
The program to build them under India's National Rural Employment
Guarantee (NREG) scheme provides 100 days of work to poor Indian
folk who are deemed to be self-selecting because only the genuinely
needy would agree to work under the sun for an equivalent of $1.50 a
day.
Should we not do the same by dotting our countryside with such
catchments or small water impounding projects (SWIP) using, mainly,
manual labor? After all, the precursor of India's NREG was the
Emergency Employment Administration (EEA) of President Diosdado
Macapagal.
We don't have the Mekongs, the Yangtzes, the Niles or the Ganges
that meander across continents over thousands of miles, irrigating
and fertilizing alluvial plains and deltas. Being an archipelago,
monsoon rains that pour on our island mountaintops cascade down
within hours through the plains and reach the sea.
But we can build hundreds of thousands of SWIPs, small catchments
that can reduce the volume and force of runoffs as they hold and
store water for irrigation during the dry season.
The other beneficial effects are manifold: As the aquifer is
replenished, ground water table rises; erosion and siltation are
minimized; flooding is controlled; and trees are easily propagated
when planted along embankments. The increase in farm income may
double after two years.
But the more lasting benefit is institutional strengthening, as the
community learn improved fertility and soil management.
We have few SWIPs in the Philippines, such as the project in
Talugtog, Nueva Ecija, prominently mentioned in Google. The
challenge is in replicating it into hundreds of thousands of SWIPs
distributed among 40,000 rural barangays to irrigate our otherwise
unirrigable lands.
At a minimum of three SWIPs per barangay, we would have 120,000
projects employing manual labor in the countryside. Since the
projects can be inspected for proper completion, ghost workers would
be prevented.
This beats the dole-outs that the government is doing; since money
is given away free, no one knows how much gets stuck in the hands of
the giver.
If the government has money to throw away at the rate of P500 per
poor family, plus P300 per child (up to a maximum of three) or
P1,400 to 300,000 up to 3 million poor households, or to distribute
food coupons to the poorest families in urban villages which the
DSWD is still finding hard to locate, why not make them shovel and
earn for their supper? That is teaching them how to fish!
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New product to prevent Salmonella
// 02 jul 2008
The Institute for Food and Agricultural Research and Technology (IRTA), in collaboration with the company Industrial Técnica Pecuaria, S.A. (ITPSA) developed an innovative product for the prevention of Salmonella. The product – Salmosan – can be added directly to the feed.
The product helps reducing the incidence of Salmonella in animals, which translates into an improvement of food safety for the products obtained from them (meats, eggs and milk) and, in short, in a reduction of Salmonellosis incidence in people.
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China may not have enough grain
// 03 jul 2008
China faces serious challenges in ensuring it will have enough grain to feed its population in the decades to come, according to Premier Wen Jiabao.
Industrialisation, urbanisation and a growing population are boosting grain demand while "shrinking arable land, water shortage and climate change is an increasing constraint on output," Wen told a cabinet meeting.
"The long-term demand and supply will be balanced but tight and ensuring grain security faces serious challenges," he said.
The meeting approved a mid- and long-term grain security plan that aims to keep the nation's annual grain output above 500 million tonnes by 2010 and increase production to more than 540 million tonnes a year by 2020.
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Aussie dairy cows switch to grain diets
// 03 jul 2008
A quarter of the dairy cows in Australia are fed on grain diets - and it's not just due to the drought.
Once dairy farmers fed grain to cows to get through dry times, but increasingly the change in diet is to boost milk supply and protein content.
Steve Little, from Dairy Australia, says just four per cent of dairy farmers rely solely on grass anymore. "Tasmania has the lowest level of grain feeding, they're at about 1.2 tonnes per cow per year and the highest regions are South Australia, northern New South Wales, south-east Queensland and other areas in New South Wales."
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Animal Feed & Animal Nutrition News Grazing US cattle year-round pays off
// 04 jul 2008
The good ol' days are coming back to the Northern Plains, USA with new twists based on recent research findings by Agricultural Research Service (ARS) scientists.
ARS researchers in Mandan, N.D., have shown that a newly designed program of "swath grazing" allows cattle to, once again, graze year-round, even in the middle of a North Dakota winter. The concept involves pushing harvested crop leftovers into row piles up to 16 inches high, to keep them within reach of cows in winter.
Winter grazing, from mid-November through mid-March in North Dakota, can save farmers as much as 24 cents per cow per day, compared to the costs of baling hay for winter corral feeding. With a herd of 200 cows, that would save a farmer more than $4,000 in feed costs a year.
Soil scientist Don Tanaka and colleagues at the ARS Northern Great Plains Research Laboratory in Mandan calculated those savings based on data from a four-year research project. In each year of the study, the scientists monitored 20 pregnant Hereford beef cows due to give birth in March. The nutritional needs of pregnant cows increases as pregnancy advances. This makes the winter feeding of late-pregnant cows one of the most expensive times in beef cattle production.
The researchers compared weight gains from swath-grazing cows on the residue of annual crops--oats/peas, triticale/sweet clover and corn--to gains with perennial western wheatgrass, and with bales of hay fed in winter corrals. Another benefit of swath grazing: The cows in this system also distributed their manure evenly over the landscape, eliminating the chore of removing manure from corrals. The manure also provides fertilizer for crops and improves the soil. Integrating crops and livestock benefits both enterprises.
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Animal Feed & Animal Nutrition News More Thai corn sales after India export ban
// 10 jul 2008
The estimated rise in Thailand’s 2008-09 corn crop of 3.7 million tons, up from the proceeding year’s 3.6 million tons, is expected to double Thai corn exports on surging foreign demand, following India’s recent corn export ban through October 15th.
The Indian ban has pushed Thai export corn prices to $350 per ton, up from $280 in late June and would probably rise further if demand continues to outpace supply, as exporters compete with feed producers to buy corn, primarily for the main buyers in Malaysia, Vietnam and Indonesia.
Thailand’s feed producers have requested permission from the Commerce Ministry to raise their selling price by 20% to help offset the higher cost of corn which should remain high for the rest of the year.
Urgent review of farmland size
Skyrocketing food prices, drastic changes in the use of farmland and increasing fears of foreign invasion into the farm sector, has prompted the Thai authorities to determine the exact size of Thailand’s farming area, - around 130-131 million rai, - based on the statistics of the Office of Agricultural Economics (OAE) statistics.
Farmland over the years, says Apichart Jongskul, OAE secretary-general, has been threatened by rapid urbanization, and more recently by "foreign invasions" of farming areas and it is important at this time, he says, to consider possible measures; including tax schemes, more support for farm owners, such as better marketing strategies and product-price support to encourage them to keep their land.
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Animal Feed & Animal Nutrition News Alleged price fixing at Cargill and Bunge
// 14 jul 2008
Cargill, the largest U.S. agriculture company, Bunge and grain traders in two countries were raided by European Union authorities in an antitrust investigation into alleged price-fixing.
European and Italian antitrust officials made surprise visits at Cargill offices in Italy, said Francis DeRosa, a spokesman for Cargill in Cobham, England.
The European Commission, the EU's antitrust regulator, carried out inspections in two countries, the agency said in a statement. "We have provided and will continue to provide full cooperation," DeRosa said last Thursday. Commodity prices have advanced for six consecutive years, with wheat, corn, rice and other foods reaching records this year. World food imports will cost a record $1.04 trillion this year, $215 billion more than last year, the United Nation's Food and Agriculture Organization has said.
Officials also inspected the Rome office of Bunge's Italian subsidiary, a spokesman, Stewart Lindsay, said in an e-mail. He said Bunge is committed to compliance with all European Union laws and will cooperate fully. Companies can be fined as much as 10 percent of annual sales for antitrust violations. Decisions may be appealed to European courts in Luxembourg.
"Surprise inspections are a preliminary step in investigations into suspected cartels," the commission said in the statement. The inspections were made at the premises of traders and distributors of products for human food and animal feed, it said. Archer Daniels Midland, the world's largest publicly traded grain processor, said in a statement Thursday that its offices were not raided.
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Animal Feed & Animal Nutrition News DFM reduces E. coli in feedlot cattle
// 14 jul 2008
Research conducted by a team from the College of Agriculture at North Dakota State University investigated the effect of Direct Fed Microbial (DFM) products on the control of E. coli in feedlot cattle.
Results of the trial showed a significant reduction (32%) in fecal shedding of E. coli O157:H7 among the steers treated with the Lactobacillus Acidophilus BT1386. Steers placed on the DFM supplement were almost three times less likely to shed E. coli in their feces as opposed to their control counterparts.
In addition, feeding the DFM significantly reduced the probability of new infections with Salmonella among DFM-treated cattle, compared to controls. This work was published in the March 2008 issue (with an erratum in the May 2008 issue) of the Journal of Food Protection.
The DFM strain used for the study is the same commercial product available as Micro°©-Cell LA and Micro-Cell GOLD from Lallemand Animal Nutrition, North America. Lallemand offers a range of DFMs for the beef feedlot industry: Micro-Cell GOLD for cattle on a diet of dried distiller grains solubles (DDGS), Micro-Cell LA for pathogen control and Micro-Cell PB for hot rations.
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Feed milling with turkey manure energy
// 23 jul 2008
Sietsema Farm Feeds in Michigan, USA will install equipment for converting turkey manure into energy in its feed mill that it will use to produce livestock feed.
Work on the new, $3 million biomass operation is expected to begin by late August or early September, said company owner Harley Sietsema.
The equipment will generate steam and electricity from the litter of 1.1 million turkeys being raised at eight of Sietsema’s farms, said Norma McDonald, operating manager with Phase 3 Renewables in Cincinnati, which is working with Sietsema Farms Feeds on the project.
"It's just a matter of getting the most out of all your products and byproducts," Sietsema told The Daily News of Greenville.
The turkey and feed mill operation is based in Allendale and has 38 associated farms within a 75-mile radius of the city.
The company raises around 1.3 million turkeys per year. Its pig operations finishes around 300,000 pigs per year.
Sietsema Farms Feeds, which he opened five years ago, at two feed mills (Howard City and Ravenna) annually 175,000 tonnes of feed is produced.
Sietsema started looking years ago for other uses for the turkey waste besides fertilizer. He discovered that large farm operations had started using a process called gasification to extract energy from animal waste.
In October, the US Department of Agriculture awarded Sietsema Farms Feeds a $500,000 grant and a $700,750 loan guarantee to construct the project.
Sietsema said he doesn't expect a profit from the new venture for three or four years but that should eventually change as energy costs continue to rise.
After meeting the mill's energy requirements, the excess electricity will be sold to a utility company
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Animal Feed & Animal Nutrition News Japanese pigs and poultry enjoy sukiyaki
// 24 jul 2008
Due to high feed costs, Japanese pigs and poultry eat more food scraps from restaurants and supermarkets instead of their normal diets.
Japan disposes around 20 million tonnes of food waste per year. The leftovers used to be dumped in landfills where they decomposed and produced methane, a greenhouse gas. However government legislation since 2001 has stimulated to turn food scraps into animal feed. Initially, farmers had been reluctant to feed the recycled food, but rising feed prices have made them more receptive to it. Feed from recycled food is about half the price of regular feed.
Food recycler
This trend has stimulated former garbage truck driver to set up Agri Gaia System, at the moment the largest food recycling company in Japan. His drivers now cart truckloads of rice balls, sandwiches and milk discarded by 1,200 7-Eleven stores to his factory on the outskirts of Tokyo, where the food scraps are turned into two types of dry feed after a final heating process - one rich in fat and protein, the other lower in fat and protein but with more carbohydrates - and a liquid type, from pasteurized drinks such as milk and chopped vegetables.
A blind test of pork shows respondents tell the difference immediately, according to a university research. The fat of the pigs fed recycled food is sweeter than usual. Another effect of tasty feed is that hens produce more eggs than usual.
The feed is not used for cattle or sheep because of strict health regulations that were imposed to prevent mad cow disease.
Rely on imports
Japan imports about 75% of its raw materials from abroad. It is the world's biggest importer of corn used for animal feed. The recent price increases of corn and soy meal have raised demand for recycled feed, but it still accounts for only 1% of raw material use in Japan, or about 150,000 metric tons in 2006, twice as much as in 2003.
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Vietnam: tax cut on animal feed
// 14 aug 2008
Deputy Minister of Finance, Do Hoang Anh Tuan, has signed an agreement to lower the import tax of some ingredients for animal food production.
According to reports, the import tax on whey and whey powder has been cut from 10% - 2%, while soybean has been lowered from 2% to zero.
Relieve difficulties for farmers
The Deputy Minister’s decision is in aid of solving some difficulties for farmers, following 20% - 50% increases in the price of animal feed ingredients in months recently. And also, the decision is aimed at strengthening the development of animal husbandry in Vietnam.
Imports – due to shortage
Vietnam is now being urged to import many ingredients for animal feed - this is due to a shortage of domestic supplies.
According to the Ministry of Agriculture and Rural Development’s Animal Husbandry Department, almost 40 domestic feedstock-production enterprises for cattle, pigs, poultry and even fish have temporarily close down.
Hoang Kim Giao, director of the department, said growth in animal husbandry was only a weak 0.03% in the first half of the year.
"To reach the annual growth rate of 4% -5 % in the second half of the year, the industry must grow by at least 8% -10%," he stated.
It is expected that demand for these products should rise to 8% in the next 10 years.
The Ministry of Agriculture and Rural Development has been urging the Government to place animal-food products and ingredients on the list of essential commodities and reduce import tax to zero per cent.
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Animal Feed & Animal Nutrition News Record soybean production expected in India
// 15 aug 2008
Soya bean output in India may reach a record next year after good monsoon showers and high prices spurred planting, a spokesman for the Soybean Processors Association of India said.
India is Asia’s biggest exporter of soya bean meal. Output for the harvest starting October will surpass the 9.99 million tonnes (mt), estimated by the government for the previous season, spokesman Rajesh Agrawal said.
Boost exports
India’s record harvest will boost exports to countries including Vietnam, Japan and South Korea and pose competition to suppliers in the US, Argentina and Brazil. Record prices of soya beans, wheat and corn have encouraged plantings, helping ease a food shortage.
"Exports will be robust and a bigger crop will ensure we have enough supplies to meet additional demand," Agrawal said. Shipments will be more than the 5 million tonnes estimated for this year, he added.
The area planted with soya beans rose to 9.26 million ha by 11 August, 6% more than a year earlier, the group said in its first crop survey this year.
Soya bean meal
India, which grows non-genetically modified soya beans, sells more than 70% of its animal feed output abroad. Soya bean meal, India’s largest meal export, is added to poultry feed as a form of protein to aid birds’ growth.
The area planted with soya bean rose 4.4% to 5.2 million ha in Madhya Pradesh, which accounts for more than half of the country’s production, according to the group’s survey. It fell to 2.7 million ha in Maharashtra, the second biggest grower, from 3.2 million ha last year.
"The crop is in good condition and if the weather remains favourable in September, we will have a bumper crop," Agrawal said. "Rains in the past few weeks have helped farmers sow the crop to the maximum area possible."
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Animal Feed & Animal Nutrition News Vietnam: feed costs impact meat industry
// 12 aug 2008
If the animal breeding and feed processing industry do not to solve its current situations soon, Vietnam may have to import pork, beef and poultry at the end of this year, Le Ba Lich, chairman of the Vietnam Animal Feed Association has warned.
Feed prices cause for concern
Lich stated that many pig farmers, especially in southern provinces, quit the business when feed prices sky rocketed.
Currently, the price of pig feed is VND8,500 (US$0.51) per kilogram. To produce one kilogramme of pork, 2.6 kilogrammes of feed are needed, which costs VND22,100 ($1.34).
A kilogramme of live pig goes for VND32,000 ($1.94) -34,000 ($2.06) in the south and VND28,000 ($1.70) - 30,000 ($1.82) in the north.
Breeders can no longer afford work
According to Lich, with capital used to buy breeding animals and animal feed which comes from loans with 20% interest, breeders cannot afford to continue work.
In addition, blue ear disease and bird flu have also played a role in the current meat shortage.
Pork accounts for 80% of the country’s meat consumption, chicken 11%-12%, and beef 3%-4%.
Investments to avoid shortages
To avoid meat shortages and encourage pig farming, Lich said, the association plans to invest in production and imports of raw materials for animal feed production.
The association requested that banks lower interest rates on loans, the Ministry of Finance to eliminate the value added tax (VAT) for raw produce, the Ministry of Industry and Trade to reorganise distribution systems.
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Animal Feed & Animal Nutrition News Jamaica sees high feed price increase
// 05 aug 2008
The cost of feeds produced by high-tech feed mills in Jamaica has been increasing dramatically over the last two years due to the sharp rise in cost of the raw materials.
Corn is a major ingredient in feed processing, and more recently ethanol production which is a source of biodegradable fuel. The current high price of oil, as well as its environmental implications, has driven the need for e production of a cheaper and more environmentally friendly source of energy. Ethanol production is seen as a possible solution to this fuel crisis.
These universal factors have inevitably and significantly affected the Jamaican economy with rising inflation. As a result, commercial farmers are complaining about the high price of animal feeds. Poultry producers, among others, have suffered loss of income. One solution could be that Government subsidises the cost of animal feeds for local farmers, thereby ensuring not only food security, but also food safety.
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Animal Feed & Animal Nutrition News Aussie aquaculture production must double
// 05 aug 2008
A peak aquaculture group predicts Australia's fish farms are going to have to double their output within seven years to keep up with demand.
Craig Foster from the National Aquaculture Council – speaking at the Australasian Aquaculture Conference in Brisbane this week - says fish farms can play an important role in easing the pressure on depleted wild fish stocks worldwide. He adds, and he says farming can be done year-round and provide jobs to regional areas.
Most of Australia's $793 million worth of current production comes from SA and Tasmania but Queensland, the Northern Territory and Western Australia are tipped to be central to the industry doubling production within the next decade. Species such as yellowtail, kingfish, barramundi and Tasmanian salmon will lead the charge.
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Monday, August 25, 2008Print This Page
Japan Looks to Broaden Food Recycling Network
TOKYO - Japanese convenience store chain operator Ministop Co. is partnering with Marubeni Corp. to broaden the scope of its food recycling network.
This network already includes pig farmers, who use animal feed derived from food waste recycled from Ministop convenience stores. It will now be expanded to rice farmers, who will use manure from the pig farms as fertilizer to grow their crops.
Both the pork from the pig farmers and the produce from the rice growers are to be used in the lunch boxes and other prepared foods sold at Ministop stores, completing the circle.
Marubeni will help recruit rice farmers to participate in the program. The expanded recycling network is already being tested with some farmers with the aim of shifting into high gear in 2009, using the network for 15 per cent of the roughly 13,000 tons of rice used annually by the Ministop chain.
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Tuesday, September 09, 2008Print This Page
WMC REPORT - Providing a Sustainable Industry
SOUTH AFRICA - The sustainability of the international meat industry and the need to meet the demands of a growing world population and growing consumption were the major themes to launch the 17th World Meat Congress in Cape Town, South Africa, writes, ThePigSite senior editor Chris Harris.
Pictured at the start of the World Meat Congress in Cape Town are (left to right) EU Agriculture Commissioner Mariann Fischler Boel, IMS President Paddy Moore and South African Agriculture Minister Lulu Xingwana.The president of the International Meat Secretariat Paddy Moore said the industry is battling against increases in fuel and feed costs and is now seeing companies grow in size and not just becoming large but international.
He said that international trade n meat and meat products is growing and is expected to grow from 22 million tonnes to 30 million tonnes by 2017.
He added that the demand for agricultural products is expected to increase by 50 per cent by 200 with food demand rising by between 10 and 15 per cent annually.
He warned of the threats from diminishing land resources to provide food and the new demands being placed on the industry through the political need to provide biofuels.
He said that to meet the new demands the industry had to improve farming methods, farming technology and genetics.
He added that the industry also had to take action on issues such as animal welfare and also meeting consumer demands.
"The consumer is becoming more and more discerning and the consumer is looking for value for money," he said.
The congress, which runs in Cape Town until Wednesday 10 September, has attracted more than 500 delegates from 38 countries from the meat industry around the world.
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Music helps raise quality chickens
// 25 aug 2008
Taiwan's government has introduced methods developed in Australia and New Zealand to allow chickens to listen to music throughout the day, which is said to help locals raise top-quality chickens.
A chicken farmer in Yunlin County, Taiwan, was struggling with the high cost of chicken feed. Earlier this year he received assistance from the government in the form of music piped in to serenade the 40,000 chickens in their coops for 3-4 hours during feeding time.
The farmer stated that he noticed the positive effect the music was having on the chickens in just a short period of time. In the past, he said, it took over 90 days to grow a chicken to a weight of 3 kg. The period shortened to 80 days after they introduced the music, which means savings of over NT$100,000 in feed costs for each batch of chickens.
Additionally, the owner said that not only do both the cocks and hens exhibit even temperaments, but the chickens even produce better meat. Moreover, they are sold out when they hit the market. The birds also received certification for the chickens' being raised with music and sold without pharmaceutical residues. Their popularity has even prompted Singaporean buyers to request them.
The farmer said that on the trip he made to New Zealand and Australia in 2007, he discovered that pigs and cows that had been treated to music there were larger than those that weren't. This is becoming so popular that Universal Music Group was reportedly hired to put together a compilation of tunes, and airing the music at the chicken farms here has been a complete success.
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Animal Feed & Animal Nutrition News Young horses fed sweets difficult to train
// 28 aug 2008
Young horses might be easier to train if they temporarily lay off the sweets, according to a Montana State University (MSU) study that tracked behaviour of 2-year-olds in training and compared it to their nutrition program.
The extra energy provided by sweet feed during the early stages of training made the horses in MSU's study more disobedient and fearful than horses that only ate hay, said Jan Bowman, an animal nutritionist at MSU.
The study involved 12 closely-related Quarter Horses that came from one Idaho ranch, Bowman said. Wade Black, instructor of the MSU Colt Starting class and one of Bowman's graduate students, trained the horses for three weeks, five days a week at MSU's Miller Livestock Pavilion.
Half the horses ate only hay, which was a mixture of grass and alfalfa. The other horses ate 2.5 kg of sweet grain a day in addition to the hay. Hay and water was supplied ad lib.
Pedometer
Each horse wore a pedometer a combination wristwatch-heart monitor hanging from their saddles. The watch displayed minimum, maximum, and mean heart rates detected by an electrode belt.
Black trained the animals for 30 or 40 minutes a day without knowing which animals had eaten grain and which ones hadn't, Bowman said.
She and Black also recorded heart rates and the number of steps the horses took during training. They assigned scores for behaviours displayed, including obedience, get-up-and-go, and separation anxiety.
"Results suggest that trainers under time constraints could increase their training effectiveness during the early stages of training by not feeding excess dietary energy," Black wrote.
He is still analyzing some of the data to see how the grain affected the horses' adrenaline during training.
The study doesn't mean that trainers should keep grain away from horses forever, Bowman said. They might consider withholding it just during the early weeks of training.
Bowman noted that all of the horses in MSU's study gained weight during the study. It didn't matter if they ate hay alone or hay with grain.
Their paper will be submitted to the Journal of Animal Science.
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Calamity, Food Security, Poverty
Let us look at the positive side of our present economic crisis.
These past weeks brought the worst sea tragedy. With the sinking of Princess of the Stars, a wake-up call to a wide sector of society suddenly looms in the horizon. Fare hikes, weekly increases of pump prices of oil and the corresponding effect on the cost of food and everything else continue to send nightmares. One can only pray for the best.
The unbelievable damage to agriculture whose estimates grow day by day continues to haunt us. The floods in Iloilo and the destruction of its water systems, the floods in Aklan especially Kalibo, the effect in Boracay which is just a stone’s throw away from San Fernando, Romblon where the MV Princess of the Stars lie with a part of its hull visible to all.
Amid all these trials, it is healthy to look at the other side of things. Let us look at the positive side of our present economic crisis. Price of rice is P35.00 to P45.00 Translated to palay prices, this means P17.50 to P22.50 per kilo. Our support price in the past is P70.00 per kilo of palay. We have always been saying our farmers plant rice not to make money. Because of high input costs, it is impossible to make money. But no, farmers producing 100 cavans of palay can easily make P83,500 gross income or P50,000 net in one hectare. At two harvests per year, this means P100,000.00. This means NFA does not have to subsidize farmers. The market will take care of it. Maybe our GNP will also rise and be at par or a little lower than other Asean countries.
The food crisis is a global phenomenon. An ordinary housewife buying her family needs usually spends P500.00 per day. Now it is P600.00.
Tighter budget. More poverty in the countryside. But no, with the bonanza for the palay farmer, the 3 million hectares can produce a purchasing power that can rev up industries. Actually our economy has always been consumer-oriented. It should actually be producer-oriented. Because our producers, our farmers produce the nation’s food. But they are always at the bottom beneficiary of government programs.
The dynamics of producing our rice requirements and imports will continue to dominate our work programs. The Department of Agriculture will play a more important role during these times. But at the rate the dollar is going up, we will be forced to rely on local food supply.
Maybe this wake up call can be the answer to our prayers. The other day, I heard that PAGASA’s radar which would have helped avoid the disaster last January 22 have been funded since 2005.
But due to the high standards set, no bidder qualified. It is now three years later that we wait in anguish about the fate of the 800 passengers of the ill-fated Sulpicio ship and the devastation in the Visayas. We now realize that we need flexibility and a sense of urgency in bidding procedures. It is no wonder that DBM used to say, the money is there but the absorptive capacity of government is not enough to use it.
We must have an NGO led with GO to study the kind of governance especially the bidding process taking the PAGASA experience as an example. And to think that lately, another P100 million has been allocated again. It really drives me crazy on the layers and layers of red tape that is going on and the indifference of officials who no longer use their common sense. Are we already hardened by the lack of our political will?
Are we afraid of making the right decisions? I can only commiserate with the President on what is going on.
We truly need a study of our culture and a realization that we can make things better.
As they used to say, “What lies before us and what lies behind us is nothing compared to what lies within us!”
Because of these tragedies, our people now start to economize on their gas for travel, stringent measures to make both ends meet. No more “payabangan” or living with the Joneses.
But it is in this exercise that we realize, we can stretch the value of our time, money and resources. Crisis truly creates opportunities for growth.
Zero waste comes to fore. Quality of life becomes a promise of living life to the fullest given the limited resources.
Environment concerns also make us realize the effects of illegal logging among other things.
Let this wake up call remind us that change, adopting to changing times, flexibility but most of all, developing the right attitude can save the day for all of us. Calamity, food security and poverty are challenges that will bring out the best in us. We cope with and live through these very challenging times.
With our Lord watching over us, we will survive!
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Opportunities Amidst The Chaos
Our agri-products are moving from its doldrum state to a vibrant vista.
The big leaps in the of price of commodities worldwide have opened new opportunities for Philippine agriculture. The old adage that new problems bring new opportunities can be seen in the supply and demand of commodities like rice, corn, sugar, coconut oil, among other food items that we abundantly produce locally.
Brought about by improving economic life styles, and the continuing multi-use of products away from basic food lines to new (and substantial) demand for bio-fuel affecting corn, sugar, and coconut, our agri-products are moving from its doldrum state to a vibrant vista.
Many other countries are cashing in on this worldwide phenomenon. Canada is no longer in a position to export corn today. Demand for domestic corn usage in America had surged that a dramatic increase in its export volume is doubtful. And demand for corn and other food commodities has steadily increased over the years, fuelled by demand from China and other countries, whose consumption of meat and other food items had more than doubled.
And we are in position to take advantage of this phenomenon as it is within our ability to produce more corn, be it yellow or white, or other commodities wherever we can be competitive. Our production limitation is self-imposed or self-inflicted via policy directions and haphazard plans and not by natural occurrence as in having winter or long periods of non-farm production.
The spike in the price of corn in the world market (greatly attributed for the increased demand and use of cornsourced bio fuel) is making our local corn production highly competitive. Conditions in the market are so unique at this time that one can come into an “economic shock” when comparing present markets of five or six years ago.
Whereas, local pundits before would dismiss our corn industry as “meager and uncompetitive” and not at par with those of the other countries, they are now taking a second look at where the corn industry is heading.
It is true that we have not achieved that level of, the so called “sophistication” of corn production as to the adoption of farm machineries, our farmers have shown their mettle by increasing their productivity given the right market motivation. Many tobacco areas were converted into corn fields in North Luzon and proved to be a profitable decision.
And while cost of production is still a major consideration farm operations, there is now a growing attention given to moving (transportation) cost, making farms that are closer to demand (consumption) centers at a great cost advantage.
The almost doubling of fossil fuel cost within so short a time has shown the relevance of the small farm make-up of the agri-sector. It is them that are saving the day for our rural and urban consumers by making agri-produce available within short distance from the farm. While our American trained bureaucrats bewail the smallness of our farms when compared with what is in the United States, our small farms are able to provide a variety of produce to be sold in the local public market.
An American economist computed that, on the average, it takes 1,600 miles for a food item to reach consumption table or place (thus total cost is increased). The presence of our small multi-product farms, would definitely incur much less transport cost.
There has been a major shift in cost and price definitions in our own domestic and the world market as well, and we should take it as an opportunity to meet new challenges. A redefinition of our competitiveness must be brought to fore in view of the new price and cost levels linked to emerging market demands.
And for all we know, we can be competitive in all corn- based food lines like poultry and livestock if we can hurdle self-imposed or self-inflicted limitations, by giving the proper motivation for our corn farmers to produce more.
The regime of low transport cost is gone, and whoever has the distance advantage would be in a better position to serve nearby markets.
And who is near to us but China with its billion people, now gaining momentum of economic progress, and our very own “near-to-farm” domestic market.
We can be very competitive compared to farmers of other countries given the correct policy support in terms of direction and investments coupled with our year-round capacity to produce, and small farm make-up.
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Visiting The World Vegetable Center
Taiwan houses the world’s largest repository of vegetable germplasm.
Did you know that all vegetable seeds in the world are in a safe place? A place where you can access them at anytime. In case the great flood of Noah’s fame happens again, we are secured. We still have the seeds in a gene bank at the Asian Vegetable Research and Development Center (AVRDC), now the World Vegetable Center in Tainan, Taiwan.
Recently, I had the chance to visit the facility. They have the world’s largest collection of vegetable germplasm.
“The Center conducts research for development on vegetables, from breeding and production, to their consumption and socio-economic impacts on communities. In addition to germplasm conservation and varietal development, other core activities includes genetic enhancement using molecular technologies, studies on nutritional security and human health, safe and sustainable production systems and crop protection, postharvest management, market opportunities and income-generation.”
Our Soroptimist group Lenn Berroya, Anna Lagman, Gladys Tiongco, Fe Amor Ilagan and myself took the bullet train from Taipei to Tainan. MECO, the Philipine post in Taiwan kindly sent Christie Tan to be our guide and interpreter. As you know, Taiwan is a Chinese-speaking country. It was an unusually comfortable ride which took only one hour and a half. We were met by Dr. George Luther, our IPM partner and host for the visit.
We were welcomed in their main office and ushered to their conference room where Oliver Hanschke, Information and Media Associate and Deputy Head, Communications, briefed us on what AVRDC is, its organization and functions.
We learned that the globally important crops are soy bean, pepper, tomato, mungbean, eggplant, brassica and allium (onions). They maintain as of June 30, 2008 56,136- vegetable germplasm, 42,826 are globally important crops and 13,310 are regionally important crops.
After the briefing we visited the gene bank where all vegetables germplasm are kept. Dr. Liwayway Engle of UPLB is head. She will soon retire after 17 years at AVRDC. It is an impressive laboratory under controlled temperature where seeds are kept in good condition.
They receive funding from many governments including Australia, France, Germany, Japan, Korea, Philippines, Switzerland, Taiwan, Thailand, United Kingdom and the United States. They also receive assistance from institutions, foundations and the private sector including the Asian Development Bank, Rockefeller Foundation, Bill and Melinda Gates Foundation, Asia and Pacific Seeds Association, Farm Africa and the Organic Center for Education and Promotion.
AVRDC research focuses on health (producing safe vegetables and promoting the nutritional value of vegetables) wealth (more jobs and higher incomes by improving crops yield and marketing opportunities) and diversity (building on genetic diversity to improve the production of high quality vegetables).
Their development activities are done through capacity building (providing long-term and short-term training in vegetable production), collaboration (actively contributing to development partnerships and networks) and communications (providing extensive on line and hard copy information resources).
Then on to the Indigenous Vegetables (IV) a 6,300 sq. meter garden established in 2001. It was an interesting exercise as we relate to our IC gardens in the Philippines. From the IV garden, we had a sumptuous dinner at the shrimp house.
If my memory serves me right, the “ulang” shrimp from the Philippines is the main fare. They were able to breed, improve the grow-out “ulang” through aerators. We do not even have an “ulang” house in the Philippines. It is sad to realize that our “ulang” industry (lid not prosper here where it came from.
During dinner we met all the Filipino scientists in AVRDC. Edwin L. Javier, International Variety Development Coordinator; Robert dela Pena, Head, Molecular Breeding and Biotechnology; Manuel Palada, Vegetable Production/ Ecosystem Specialist, Head, Crops and Ecosystem Management Unit, they are all doctors by the way. We also met Dr. Paul A. Gniffke, plant breeder (pepper/allium) with whom I discussed the onion export of NOGROCOMA to Japan. He told me Taiwan is still exporting alliums or onions to Japan. Again our dream of exporting onions to Japan comes to mind. We also met the beautiful wife of George Luther. It was a scientific meeting in an atmosphere of informality and good dinner. It was a very fruitful visit for us.
It made me realize how our Filipino scientists, all doctors and graduates of UP Los Banos, help in maintaining the world vegetable center.
It was a short visit of four hours to AVRDC. But we were all impressed by what it does and its contribution to food security of the world. We had many ideas on what projects we can do together. Already MECO is showing interest on some projects. But that is another time and place. Do you know that “a single improved tomato can provide all your daily Vitamin A needs?”
TASK FORCE WAAR
Due to the collapse of the WTO talks, work will be continued by the International Trade Committee of NAFC.
Going to bilateral agreements and others, it has been a hectic but fulfilling month because somehow the crisis produced new hopes for farmers. There is good price for palay and farmers are now allowed to import.
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An alternative to cow’s milk
By Joel Guinto
INQUIRER.net
First Posted 16:46:00 09/30/2008
MANILA, Philippines -- Amid the scare caused by melamine-laced milk from China, one of President Gloria Macapagal-Arroyo's aides is proposing a switch to goat's milk, which she said was the healthier alternative to cow's milk.
Citing studies by the Central Luzon State University (CLSU), deputy presidential spokesperson Lorelei Fajardo said goat's milk was next only to breast milk in terms of nutrition.
"Goat's milk is better than cow's milk. It's more pure. I am advocating that like brown rice," Fajardo, concurrent presidential assistant for Central Luzon, told reporters at the Palace Tuesday.
"This is a good opportunity for us. The crisis can be turned into an opportunity for these goat farmers," she added.
Fajardo acknowledged that the government would need to invest more to commercialize goat's milk. She said goats from other countries like
Australia, which produces more milk, could be imported to breed them with local goats.
She said goat's milk was initially more expensive compared to cow's milk, but once its industry was developed, goat's milk could be cheaper than cow's milk since goats required less maintenance compared to cows.
The government has banned milk products from China after hundreds of babies there fell ill while several others died after they consumed milk containing melamine, a toxic chemical that could cause kidney failure.
Also on Tuesday, Health Secretary Francisco Duque met an inter-agency group tasked to enforce the milk ban. The group includes representatives from the Department of Trade and Industry, the Department of Justice (DoJ), the Bureau of Customs, and the Presidential Anti-Smuggling Group (PASG).
"The instruction is to file charges against the violators immediately," Fajardo said.
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Poultry manure not good for animal feed
// 11 nov 2008
Farmers should not use poultry droppings as livestock feed according to Dr John Moseki of the Department of Animal Health in Botswana.
At a one-day workshop on the livestock feed system in Botswana at Sebele Dr Moseki said the use of chicken manure as part of the ingredients for animal feed is prohibited as it could spread costly infectious diseases. He said instead of using poultry manure as animal feed, it should be used as fertilizers in the horticultural industry.
Dr Moseki said the livestock industry in Botswana plays an important role in the agricultural and economic health of the country hence the need to safeguard it at all cost.
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Animal Feed & Animal Nutrition News Barack Obama’s plans for US farmers
// 07 nov 2008
Now that Barack Obama has been named the 44th President of the United States, things are about the change. But what changes in agriculture can be expected?
As stated on the website Cardy-Brown.com the biofuel policy was always a major point of difference between Obama and his republican rival John McCain. McCain supported lowering the US import tariff on ethanol which would potentially have led to an increase in Brazilian ethanol and a subsequent fall in demand for domestically produced corn-based ethanol. Brazilian ethanol is far more efficient, both economically in terms of production costs and environmentally in terms of the energy produced.
In contrast Barack Obama has repeatedly emphasised the importance of US energy independence as a driver of biofuels production in the US and is therefore likely to support domestically produced biofuels in favour of imports.
Subsidies
Dutch agricultural newspaper Agrarisch Dagblad reports that Obama is likely to increase the subsidies for agriculture (a typical Democratic approach). Obama also was pro the new farm bill, which was a major issue at the beginning of 2008. At the time, Obama said the new legislation was not perfect, but he supported the part where – mainly small – farmers get more subsidies from the government.
Environment
Regarding the environment, Obama recognises the problems of global warming and he mentioned in one of his speeches that he aims to reduce the greenhouse gas emissions with 80% in 2050 (compared to 1990). Obama was also the only candidate that addressed sustainable and ecological farming. His plans regarding this topic are not fully clear yet, but it is expected that more money will be reserved for conventional farmers who want to farm in an ecological way.
New Minister of Agriculture
Lastly, Obama wants more money for young people who want to pursue their career in agriculture. This is needed as the average farmer in the US is 55 years old. The next coming months, all this ideas has to become clearer. The first important step is to appoint a new Minister of Agriculture. Some people name Collin Peterson, a democrat from Minnesota for this position.
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World Agricultural Supply and Demand Estimates
US meat production seems to be down all round this month, falling slightly behind expectations, says the World Agricultural Supply and Demand Estimates (WASDE) from the USDA.
Production Forecasts
Total U.S. meat production forecasts for 2008 and 2009 are reduced from last month, primarily reflecting lower pork and broiler production for 2008 and lower forecast pork production for 2009. Beef production is reduced fractionally based on the third quarter production estimate.
Pork production for 2008 is lowered because of the slower-than expected pace of hog slaughter this quarter. The broiler production forecast for 2008 is reduced as a higher third quarter estimate is more than offset by expectations of lower production in the fourth quarter. Hatchery data point to declining eggs set and bird weights have recently begun to decline.
Turkey production is raised on higher projected fourth-quarter production. Pork production forecasts for 2009 are reduced from last month as hog slaughter is expected to be lower due to smaller imports of hogs from Canada. There are no changes to other meats for 2009.
Export Forecasts
Export forecasts for beef and pork in both 2008 and 2009 are reduced as softer international demand and a stronger U.S. dollar are expected to dampen sales. Beef import forecasts are reduced from last month but pork imports are raised.
Broiler exports are increased for 2008 as stronger-than-expected shipments in the third quarter more than offset weaker sales in the fourth quarter. Broiler export forecasts are unchanged for 2009. Turkey exports for 2009 are reduced due to weakening demand and a stronger U.S. dollar.
Cattle and hog price forecasts for both 2008 and 2009 are lowered as a result of weaker exports. Broiler price forecasts are unchanged. Turkey price forecasts for 2008 and 2009 are lowered slightly due to higher domestic supplies.
Milk production forecasts for 2008 and 2009 are increased slightly from last month. Cow number forecasts are unchanged from last month. Forecast 2008 milk per cow is raised from last month due to higher-than-expected August and September estimates. Lower expected feed prices in 2009 should support slightly higher growth in milk per cow although gains are expected to remain below historical rates of increase. Weaker international markets will boost domestic supplies.
Skim solids stocks for 2009 are reduced as domestic use of skims is forecast higher albeit at lower prices. Sales of nonfat dry milk (NDM) to the CCC are forecast for 2008 and 2009.
Class III and Class IV prices for 2008 and 2009 are reduced from last month as most product price forecasts are lowered. Weak international demand and relatively large supples of NDM are expected to result in sharply lower forecast NDM prices. Although relatively weak expected demand could pressure butter prices, relatively higher values of Class III products versus Class IV products may encourage milk to flow to cheese production, tightening butter supplies and supporting prices.
Cheese prices are lowered reflecting larger expected supplies of cheese. Whey prices are forecast lower than last month on weaker demand. The all milk price is forecast lower this month, averaging $18.30 to $18.40 in 2008 and $15.30 to $16.20 in 2009.
Wheat
U.S. wheat supply and use projections are mostly unchanged this month with only a minor adjustment to seed use and shifts among classes on imports and exports. Seed use is lowered 2 million bushels reflecting early indications that 2009 winter wheat seedings will be lower than previously expected. The lateness of this year’s fall row crop harvest has limited planting opportunities for both soft red and hard red winter wheat. By-class changes to wheat imports and exports are made to reflect the pace of shipments to date.
The all wheat season-average farm price is projected at $6.55 to $7.15 per bushel, down on both ends of the range from last month’s $6.60 to $7.40 per bushel. Price prospects for the remainder of the marketing year are dampened by rising world supplies and continued declines in futures and cash prices. Global 2008/09 wheat production is projected at a record 682.4 million tons, up 2.2 million from last month. Increases for EU-27 and Russia more than offset reductions for Argentina, Australia, and China. EU-27 production is raised 3.4 million tons. Production is raised 2.0 million tons for Russia as harvest results confirm higher.
Argentina production is lowered 1.0 million tons as persistent early season dryness limited crop development and reduced yield potential more than previously expected. Australia production is reduced 1.5 million tons as dryness continued through October in the southern growing areas reducing expected yields and harvested area. Partly offsetting were timely October rains in Western Australia that supported crop heading and grain fill. Production is lowered 1.0 million tons for China as 2008/09 area and yield adjustments are made in line with revisions to 2006/07 and 2007/08. Recently released estimates by China’s National Bureau of Statistics raised 2006/07 and 2007/08 area and lowered 2007/08 production, reducing yields in both years.
Afghanistan production estimates for 2006/07 and 2007/08 are also revised lower this month. World wheat imports and exports for 2008/09 are both raised this month. Imports are raised 0.5 million tons for Pakistan and increased 0.7 million tons for neighboring Afghanistan. Pakistan exports are raised 1.4 million tons reflecting higher expected border trade in wheat flour especially with Afghanistan as that country struggles to meet its food needs with this year’s drought-reduced crop.
Exports are increased 1.0 million tons for EU-27 with higher production and larger supplies. Partly offsetting are export reductions of 1.2 million tons for Argentina and 0.5 million tons for Australia on lower production and reduced supplies in both countries. World wheat consumption is raised 0.9 million tons for 2008/09 reflecting higher expected consumption for Afghanistan and Russia. Record production in Russia is expected to strainem storage and handling capacity, boosting product and quality losses and adding to domestic disappearance. Global ending stocks for 2008/09 are raised 0.8 million tons this month with increases for EU-27 and Russia mostly offset by reductions for Australia, China, and Pakistan.
Coarse Grains
U.S. feed grain supplies for 2008/09 are projected lower as compared with last month’s revised forecasts. The November Crop Production report lowers forecast U.S. corn production 13 million bushels. Corn exports are lowered 50 million bushels reflecting slower export sales and shipments and increased foreign competition. Ending stocks are raised 36 million bushels.
The season-average farm price is projected at $4.00 to $4.80 per bushel, down on each end of the range from the previous $4.25 to $5.25 per bushel. Declines in futures and cash prices continue to undermine prospects for the 2008/09 season-average price received by producers. Rising world coarse grain supplies and reduced prospects for global feeding are also expected to pressure U.S. feed grain prices.
Corn supply and use estimates for 2007/08 are revised this month. Imports are raised 2 million bushels and exports are raised 1 million bushels based on August trade data from the U.S. Bureau of Census. Ethanol corn use is raised 26 million bushels on higher-than-expected August ethanol production reported by the Energy Information Administration. Feed and residual use is lowered 25 million bushels.
U.S. sorghum production for 2008/09 is forecast 7 million bushels lower this month. Feed and residual use is lowered 5 million bushels with the reduction in supplies. Ending stocks are projected 2 million bushels lower than in the previous forecast. The season-average farm price is projected at $3.40 to $4.20 per bushel, down from $3.70 to $4.70 per bushel. Price projections are also lowered for barley and oats, but by lesser amounts.
Global coarse grain supplies are projected 5.6 million tons higher this month with beginning stocks raised 4.1 million tons and production raised 1.5 million tons. Much of the increase in beginning stocks reflects reduced 2007/08 corn feed use and exports for Brazil.
Most of the increase in production is from higher 2008/09 coarse grain production in EU-27 and FSU-12. Global corn production is raised 0.3 million tons with increases for EU-27, Russia, and Ukraine more than offsetting reductions for Argentina and the United States. EU-27 coarse grain production is raised 2.5 million tons with increases for barley, mixed grains, rye, corn, and oats.
Russia corn and barley production are raised 0.7 million tons and 0.5 million tons, respectively, based on harvest results. Argentina corn production is lowered 1.0 million tons on lower expected harvested area as lack of timely rainfall reduced plantings. Argentina barley production is lowered 0.4 million tons as drought, frost, and hail damage reduce expected harvested area and yields. Barley production is also lowered 1.0 million tons for Australia as dryness across southeastern growing areas reduce area and yield prospects.
World coarse grain imports and exports for 2008/09 are nearly unchanged this month. Global coarse grain feeding is projected lower with corn feeding reduced 2.6 million tons. Global barley feeding is also reduced 1.3 million tons this month. Global coarse grain stocks for 2008/09 are projected higher this month with corn ending stocks raised 4.6 million tons and barley ending stocks raised 1.1 million tons.
Oilseeds
Total U.S. oilseed production is projected at 88.2 million tons, down 0.5 million tons due to lower soybean and cottonseed production. Soybean production is forecast at 2.921 billion bushels, down 17 million bushels based on a lower soybean yield of 39.3 bushels per acre. Soybean crush is reduced 15 million to 1.745 billion bushels due to lower values for soybean oil and soybean meal. Soybean ending stocks are unchanged at 205 million bushels.
Soybean and product price forecasts are all reduced this month. The U.S. season-average soybean price for 2008/09 is projected at $9.10 to $10.60 per bushel, down 45 cents on both ends of the range reflecting lower cash and futures prices. Soybean meal prices are projected at $255 to $315 per short ton, down $5 on both ends of the range. Soybean oil prices are projected at 37.5 to 41.5 cents per pound, down 6.5 cents on both ends of the range.
Global oilseed production for 2008/09 is projected at 417.8 million tons, down 1.3 million tons from last month. Foreign production is reduced 0.7 million tons as lower soybean and cottonseed production is only partly offset by higher rapeseed and sunflowerseed production. Brazil soybean production is projected at 60 million tons, down 2.5 million tons from the previous forecast due to reduced area and yield. Despite a strengthening U.S. dollar that has mostly offset the effect of declining soybean prices, recent Brazilian government surveys indicate a lower area projection due to higher costs and reduced credit availability. Global rapeseed production is projected higher mainly due to an increase for China.
Recently released government statistics indicate higher rapeseed area, resulting in a 0.5 million ton increase in production to 11.5 million tons. Rapeseed production is projected 0.2 million tons lower for Australia due to lower yields related to excessively dry conditions in some growing areas. Sunflowerseed production is raised for both Ukraine and Russia due to higher-than-expected yields. Sunflowerseed production is also raised for EU-27.
Other changes include higher soybean production for China and EU-27, lower peanut production for China, and lower cottonseed production for Brazil.
Sugar
Projected 2008/09 U.S. sugar supply is increased 251,000 short tons, raw value, from last month. Carry-in stocks are the final ending stocks reported for 2007/08. Beet sugar production for 2008/09 is increased 25,000 tons based on the larger forecast sugarbeet crop. Tariff rate quota (TRQ) imports are increased 75,000 tons to reflect the re-allocation of Mexico’s share of the refined sugar quota announced on August 6.
Partially offsetting, the TRQ shortfall is increased 30,000 tons based on new information about sugar supply and demand in quota holding countries. Ending stocks are raised 251,000 tons from last month to 907,000 tons, down 783,000 tons from last year. For 2007/08, year-end data from processors published in Sweetener Market Data (SMD) raise ending stocks 181,000 tons from last month. With other final data adding marginal changes to 2007/08 supply and use, the increase in reported ending stocks results in a miscellaneous statistical discrepancy of -269,000 tons on the use side.
This amount comprises three miscellaneous uses in SMD (inventory adjustments, refining losses, and intra-industry transfers) and the difference between imports recorded in SMD and official imports (from U.S. Customs Service and the Census Bureau). The difference in import reporting accounts for 86 percent of the statistical discrepancy
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Friday, October 24, 2008Print This Page
Oceans Over-fished to Feed Livestock
AUSTRALIA - Fishing to produce fish meal as a feed ingredient for farmed fish, pigs and poultry is unsustainable, new research has found.
Factory-farmed fish, pigs and poultry are consuming 28 million tonnes of fish a year, or roughly six times the amount of seafood eaten by Americans, according to new research reported by Canberra Times.
A nine-year study by the University of British Columbia has found that 90 per cent of small fish caught in the world's oceans every year such as anchovies, sardines and mackerel are processed to make fish meal and fish oil.
They are used as a cheap feed for aquaculture (including farmed Atlantic salmon, prawns and trout), poultry, pigs and animals bred for the fur industry.
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"The study estimates that pigs and poultry around the world consume more than twice as much seafood as the Japanese eat."
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The study's findings, to be published next month, warn this use is not sustainable, given current rates of global overfishing and increasing threats to global food security.
University of Columbia senior researcher Jacqueline Alder said, "Society should demand that we stop wasting these fish on farmed fish, pigs, and poultry.
"Although feeds derived from soy and other land-based crops are available and are used, fish meal and fish oil have skyrocketed in popularity because forage fish are easy to catch in large numbers and, hence, relatively inexpensive."
Dr Alder, who was previously a researcher at James Cook University in Townsville, warns that the excessive harvesting of forage fish is "squandering a precious food resource for humans and disregarding the serious overfishing crisis in our oceans".
According to the study, small forage fish account for 37 per cent, or 31.5 million tonnes, of all fish taken from the world's oceans each year. Of this amount, 90 per cent is processed into fish meal and fish oil.
Current figures show 46 per cent of fish meal and fish oil is used as feed for aquaculture, 24 per cent for pig feed and 22 per cent for poultry.
The study estimates that pigs and poultry around the world consume more than twice as much seafood as the Japanese eat.
The farm animals eat more than six times the amount consumed in the United States.
Fisheries targeting forage fish are concentrated in four areas of the world the western coast of South America, northern Europe, the Atlantic seaboard of the US, and Alaska. Scientists have raised concerns that a 50 per cent increase in global aquaculture in the past 10 years will seriously affect marine ecosystems already under threat from acidification of the oceans caused by climate change. Species dependent on forage fish include penguins, gulls, cormorants, puffins, dolphins and right whales.
The study says little is known about the role of forage fish in marine ecosystems and few management plans exist for sustainable fishing of these key marine food-web species.
Neither are there plans to to deal with a growing global human demand for fish-oil supplements, thought to reduce the risk of dementia.
The US-based Pew Institute for Ocean Science Institute, which funded the research, plans to set up a global taskforce of leading scientists and fisheries policy experts to find new ways of making forage fisheries more sustainable.
The institute's executive director, Dr Ellen Pikitch, told Canberra Times, "It defies reason to drain the ocean of small, wild fishes that could be directly consumed by people in order to produce a lesser quantity of farmed fish."
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[18 November 2008] Asia’s growing economies has helped create an additional two million middle class consumers a month in the world’s developing countries, who represent potential first time consumers of animal protein. Commending Australia’s red meat industry for the resilience it has shown during a period of high input costs and economic uncertainty Meat and Livestock Australia (MLA) Chairman Don Heatley said Australian red meat exporters have captured a good share of the emerging markets, with beef exports to Russia, Indonesia, and the Philippines while sheepmeat exports to China are increasing significantly.He urged the industry to continue to make the most of the opportunities arising as a result of the growing Asian economies, as these markets are the answer to export growth.
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Record Harvest but Troubles Loom Ahead
GLOBAL - World cereal production is expected to hit a new record this year as high prices boosted plantings under generally favorable weather conditions, FAO said today in the latest issue of its Food Outlook, a bi-annual commodity publication.
World cereal production is forecast to be large enough to meet anticipated utilization in the short-run, and help replenish much depleted global stocks.
But the agency warned that the current financial crisis will affect agricultural sectors in many countries negatively, including those in the developing world.
Greater uncertainty
This year's record cereal harvest and the recent fall in food prices should, therefore, not create a false sense of security, said Concepcion Calpe, one of the report's main authors.
"For example, if the current price volatility and liquidity conditions prevail in 2008/09, plantings and output could be affected to such an extent that a new price surge might take place in 2009/10, unleashing even more severe food crises than those experienced recently," Calpe said.
"The financial crisis of the last few months has amplified downward price movements, contributed to tighten credit markets, and introduced greater uncertainty about next year's prospects, so that many producers are adopting very conservative planting decisions," Calpe said.
The report stresses that most of the recovery in cereal production took place in developed countries, where farmers were in a better position to respond to high prices. Developing countries, on the contrary, were largely limited in their capacity to respond to high prices by supply side constraints on their agricultural sectors.
Implications for the poor
The sharp 2007/2008 rise in food prices has increased the number of undernourished people in the world to an estimated 923 million. Lower international commodity prices have not yet translated into lower domestic food prices in most low income countries.
"There is a real risk that as a consequence of the current world economic problems people will have to reduce their food intake and the number of hungry could rise further," Calpe said.
Long-term challenges
The report says that world agriculture is facing serious long-term issues and challenges that need to be urgently addressed. These include land and water constraints, low investments in rural infrastructure and agricultural research, expensive agricultural inputs relative to farm-gate prices, and little adaptation to climate change.
To feed a world population of more than nine billion people by 2050 (around six billion today) global food production must nearly double.
Population growth will take place mostly in developing countries and for the greater part in urban areas. A shrinking rural work force will thus have to be much more productive. This will require more investments in agriculture, machinery, tractors, water pumps, combine harvesters etc., as well as more skilled, better-trained farmers and more efficient supply chain.
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Milk Crisis Spills Out on All Food Sectors
CHINA - The melamine milk scandal had devastated Chinese dairy exports, but now other food sectors are beginning to feel the aftershock.
The growth in agricultural and meat products' exported from Qingdao fell to 1.9 percent in October from a monthly average of 15 percent in the first nine months of the year.
The figure is important because Qingdao is a major port in the country's largest agricultural product exporting province of Shandong.
The export growth of agricultural products from Yantai, another big port in Shandong, dropped from 12 percent in September to 3.2 percent in October. Yantai's exports to the US grew by only 3.6 percent in October, compared with 27 percent in August.
Companies in Guangzhou exported only 38 tons of frozen fish in October, down 64 percent year-on-year. And poultry exports from the city dropped 63 percent to 106,550 pieces, local Customs figures showed.
"The tainted-milk scandal has dealt a heavy blow to the 'made-in-China' label, and the global financial crisis has worsened the situation," said Zhao Xinzhi, an official with the Yantai foreign trade and economics bureau.
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Philippine soybean meal imports rising
// 04 dec 2008
Philippine imports of soybean meal and wheat will likely increase next year (2009) on the back of an expected recovery in the livestock sector, a former official of Philippine Association of Feed Millers Inc. said.
"With lower feed prices, lower raw material prices [and] the expected rebound of the animal sector, we see more importation of soybean meal next year," said Ric Pinca, former association vice president. "I would conservatively place it at 1.6 million metric tons."
Soybean meal and wheat are used as ingredients for animal feeds.Pinca said soybean meal imports are expected to bounce back to 1.6 million metric tons from 1.3 million this year because of the low cost of soybean meal at this time.
In the market, soybean meal prices now stand at P22-P23 a kilo, from P28-P30 a kilo in August. "I would expect more wheat to come in because of the zero duty recently imposed," Pinca said. "Wheat would replace corn in the formulation of the feeds."
He, however, declined to cite specific figures since the importation of wheat would depend on the corn yield next year. In 2009, the government expects corn production to reach a hefty 7.8 million metric tons.
Through Executive Order No. 756, the government has temporarily removed a 7.0-percent tariff on feedwheat imports for the next six months. Corn farmers have since expressed their apprehension over the government’s decision, as feed millers and traders have begun placing orders totaling more than 200,000 metric tons of feedwheat to be delivered until early 2009.
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How Real is the Threat of Mycotoxins for Feed and Animal Producers in Asia? (Part 1)
A recent survey of mycotoxins in Asian grains shed some light on this dangerous compound on animal feeds.
Mycotoxins are now well established as dangerous compounds in animal feed, where they cause a multitude of confusing symptoms. These typically cause poor performance and can result in disease, with the added danger of being passed into the human food chain via meat, offal and milk.
As with any - natural toxic compound that is influenced by environment and climate, it is important to keep a regular check on the current situation.
This helps feed manufacturers to be prepared to control the potential problems in viva by applying a suitably efficacious binder, by blending to reduce levels of raw materials sourced from especially problematic regions or by avoiding purchasing particularly contaminated batches.
Mycotoxin survey results
Alltech has conducted a mycotoxin survey of Asian grains and complete feeds. The Alltech survey involved analysis of approximately 800 samples collected mainly from China and SouthEast Asia between January 2006 and December 2007, and included corn and its by-products, seed meals, other grain by-products and complete feeds. Samples were subjected to analysis for aflatoxin, T-2 toxin, zearalenone (ZEA), ochratoxin, fumonisin and Deoxynivalenol (DON, vomitoxin) using ELISA methods (Chen, 2007).
The result of the survey showed that the main problems in the Asian region were from ZEA, DON, fumonisin and aflatoxin. Corn is the main source of contamination of ZEA, fumonisin, DON, and aflatoxin. Corn by-products, such as DDGS, corn gluten meal, and corn germ meal, could contaminated with high level of ZEA, fumonisin, DON, and ochratoxin. Soybean meal is in general low in mycotoxins, except for ZEA. However, contamination of mycotoxins in soybean meal is highly dependent upon the level of soy hulls, because sov hulls are more concentrated with mycotoxins. Hence, the higher the level of soy hulls, the higher the level of mycotoxins in soybean meal. Usually corn, soybean meal, and corn byproducts account for more than 70% of a diet. As the result, complete feed is contaminated with mainly ZEA, fumonisin, DON, and aflatoxin. The analytical survey clearly demonstrated that the major threats were from ZEA, DON, fumonisins and aflatoxin, whereas T-2 occurrence was relatively lower. They also confirmed that many samples were contaminated with more than one toxin, which co-existed at high levels in some samples. By-products typically contained much higher levels of toxin contamination compared to whole raw materials.
Fusarium mycotoxins are the biggest challenge
Fusarium mycotoxins are economically the most significant mycotoxins in foods and feed on a global scale. They remain a key threat to animal health and performance, a threat that has been isolated in samples from all 2005, 2006 and 2007 harvests. The main Fusarium toxins of concern for animal feed compounders and producers include ZEA, fumonisins, and DON, with most of these experiencing an increase in average level and incidence of contamination from 2006 to 2007. Aflatoxin remains a concern, but is limited to certain countries, such as India and countries in South East Asia.
The surveys also confirmed the n continuing problem of contamination ot multiple mycotoxins in single samples, an extra complicating problem that r researchers have shown has a cumulative effect in terms ‘of severity and complexity of symptoms in affected animals. By-products show particularly high levels of toxins, which is not surprising as many of them are derived from either particularly vulnerable parts of the grain or the toxins become concentrated due to processing.
In order to control potential intoxication in animals given contaminated feed formulated, it is essential to use a proven broad spectrum adsorbent. The effectiveness of a mycotoxin binder can be verified based on a seven-point check-list:
1. Has the efficacy of the active component been verified by specialist researchers?
2. Does it have a low effective inclusion rate suitable for animal feed applications?
3. Is it stable over a wide pH range?
4. Does it demonstrate a good capacity to adsorb high concentrations of mycotoxins?
5. Is there a high affinity to adsorb low concentrations of mycotoxins?
6. Has the chemical interaction between mycotoxin and adsorbent been established?
7. Is there proven and published in-vivo data?
To be continued…
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10 December 2008] The local governments of Mandaue City in the Philippines and of three municipalities are revving up their respective slaughterhouse in tandem with the Department of Agriculture as part of the DA's Meat Establishment Improvement Program (MEIP) that aims to upgrade existing abattoirs to national standards and transform the country into a major producer of meat and meat products in Southeast Asia. Under the agreement, the National Meat Inspection Service will provide technical and financial assistance to these local government units to help them improve their slaughterhouses so that they can comply with Good Manufacturing Practices and Sanitation Standard Operation Procedure set by the DA.
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Philippine soybean meal imports rising
[9 December 2008] The Philippine is likely to import more soybean meal and wheat next year to support the expected recovery in the livestock sector. Soybean meal imports are expected to reach 1.6 million tonnes from 1.3 million this year. Wheat import are due to gain as a result of 7% import duty on the grain being temporarily abolished.
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Dioxins spread to Irish beef farms
// 09 dec 2008
Three Irish beef farms have been contaminated with the same toxic dioxins that have devastated the country's pig meat industry, food safety chiefs confirmed today (9 December).
The levels of dioxins found in the beef were two to three times above safe limits, compared to 200 times in some pig meat." This would make the samples technically non-compliant but not at a level that would pose any public health concern," said the Irish agriculture minister, Brendan Smith.
Tests were carried out on 11 herds in the Irish Republic, eight of which were given the all-clear. Earlier, the Food Standards Agency said contaminated pig feed from the republic had been fed to herds of cattle on eight farms in Northern Ireland.
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Friday, December 12, 2008Print This Page
MEPs Probe Reasons Behind World Food Crisis
EU - The world is facing "an acute food crisis". That was the verdict of a report adopted by MEPs in the Agriculture Committee on 8 December.
Tipping the scales: the value and price of food is a source of sharp debateAccording to the report, the price of wheat - a vital staple foodstuff - has rocketed 180 per cent in just two years.
Mr Capoulas Santos, 57, a former teacher and Socialist member of the Parliament since 2004, said that although the situation had improved, food markets are very "volatile". Speaking to us in his office in Brussels he said, "We cannot say if prices will remain at the same high level."
"Environmental legislation is driving down food production"
Mairead McGuinness was the first women to graduate from University College Dublin in Agricultural economics. The 49-year old is a member of the centre right EPP-ED group in the Parliament.
She said that trends across the continent tended to increase prices: "In the Europe Union we are a high priced market because we demand high standards of food producers and we have decided to produce agricultural and food products in a particular way."
On the issue of whether producing more food is the answer, the former journalist was sceptical: "I am not sure that any of the policies we have currently would allow more food to be produced in Europe because all the environmental legislation is driving down food production and we're trying to do less damage to the environment."
Her report says "EU legislation, (e.g. on plant protection products), may have a dramatic impact by reducing the tools available to farmers to maximise yields and may, in effect, lead to a dramatic reduction in EU farm output, particularly in the grain sector."
Europe and the developing world
As food prices rise, the extent to which Europe should use its wealth and large agriculture budget to help the developing world has been the subject of fierce debate.
Earlier in December, MEPs approved €1 billion in farm aid for practical things like seeds and fertilizers to help to poor farmers in the developing world.
The EU is the biggest aid giver in the world, with 60 per cent of all development aid coming from European countries in the Union, but farm aid has fallen and now accounts for only 3 per cent of development aid, down from 17 per cent in the 1980's.
Ms McGuinness said that if Europe had invested in more projects in the developing world 20 years ago, the €1 billion would not have been needed.
Food stockpiles too low
Another issue highlighted by the report and the two MEPs is the level of global stocks of food available for an emergency. Just over five years ago, the world could have fed itself for over four months if all food supplies were interrupted.
The present situation is that the world has just over one month of surplus food. Ms McGuinness thinks this situation is "extraordinary" and a "bad policy" due to the "sudden twists nature can take".
For Mr Capoulas Santos the CAP itself is not to blame for the falling food stocks, rather it is "market instability and unfavourable climatic conditions".
The real price of food and the relative interests of those who eat and grow the food has been a political issue for centuries. Ms McGuinness put it like this: "The balance has to be struck between a fair price to a producer of food to keep them in the business of growing and the consumer interest which is the access to good value food."
Ms McGuinness added a last point saying "We have to realise that there is a price to be paid for good food and quality and we are going to have to pay that price."
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Melamine misery extends into seafood
// 31 dec 2008
Some scientists and consumer advocates are raising concerns that fish from China might also be contaminated with melamine.
China is the world's largest producer of farm-raised seafood, exporting billions of dollars worth of shrimp, catfish, tilapia, salmon and other fish.
The US imported about $2 billion worth of seafood products from China in 2007, almost double the volume of four years earlier, according to the US Department of Agriculture.
But industry experts and businesspeople in China say melamine has been routinely added into fish and animal feed to artificially boost protein readings.
And new research suggests that, unlike in cows and pigs, the edible flesh in fish that have been fed melamine contains residue of the nitrogen-rich substance.
Some American fish importers are voluntarily testing for melamine, but the FDA, which is responsible for ensuring the safety of imported fish, currently doesn't require seafood products to be screened for melamine. Yet research from its own scientists has raised a warning flag.
High levels found
Laboratory studies in the U.S. of melamine-fed catfish, trout, tilapia and salmon by the FDA's Animal Drugs Research Center found that fish tissues had melamine concentrations of up to 200 parts per million.
That's 80 times the maximum "tolerable" amount set by the FDA for safe consumption.
Scientists said testing of melamine in farm-raised fish from China should be made mandatory for precisely that reason: a lack of information about melamine levels in Chinese feed and fish.
Fang Shijun, who has monitored the melamine problem in China for several years, says he believes the adulterated products are now being supplied only by small operators, which abound there.
Like those who added melamine to milk and diluted it with water to increase profits, feed businesses can sell more by substituting melamine for real protein sources, especially with raw material costs having soared in recent years
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Zhongpin's new facility starts operations
[7 January 2009] Zhongpin commenced production at its new chilled and frozen pork facility in Yongcheng City, eastern Henan Province on January 3. This has allowed the company to increase its annual production capacity for chilled and frozen pork to 498,760 tonnes. Zongpin invested approximately USD 17 million in this facility which has a total annual production capacity of 80,000 tonnes. Approximately 75% of the facility's production capacity is dedicated to the production of chilled pork and 25% to the production of frozen pork. Zhongpin expects the new facility to achieve an over 60% utilization rate by the second quarter of 2009.
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China's agriculture insurance sees triple-digit growth
[7 January 2009] China's agriculture insurance income soared 112% to CNY 10.54 billion (USD 1.54 billion) as of November last year, according to China Insurance Regulatory Commission (CIRC). CIRC Chairman Wu Dingfu said China will further develop agricultural insurance in 2009, which was extended to 16 provinces last year and the crop insurance will be exxtended to all major producing regions this year.
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Myanmar to export corn to China
[7 January 2009] Myanmar will export 200,000 tonnes of corn to China in the 2009/2010 financial year according to a deal made at a recent meeting of the Myanmar-China Border Trade Joint Committee. China-Myanmar bilateral trade rose 40% from USD 1.46 billion in 2006 to USD2.057 billion in 2007. The bilateral trade in the first 11 months of 2008 stood at USD 2.038 billion USD, up 30.3%.
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Grain output rises in Vietnam
[7 January 2009] Vietnam's total grain output rose 7.5% in 2008 to 43.16 million metric tonnes, said the government of Vietnam. Of the total, the country's unhusked rice output rose 7.5% to a record 38.6 million tonnes. Vietnam earned USD 6.2 billion from exporting agricultural products and seafood in the year, up 22.7% on year. Vietnam targets to export 4 million tons of foodgrains in 2009.
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Indonesia to achieve meat self-sufficiency in 2015
[6 January 2009] The Indonesian Farmers Association has predicted that Indonesia will only be able to achieve meat self-sufficiency in 2015, instead of 2010 as the government has targeted.Chairman of the association’s advisory council Siswono Yudhohusodo said from 2002-2006 the average increase in meat imports was recorded at 26.65% per annum while that of innards reached 111.8%. Mr Siswono said that in 2002 Indonesia’s beef imports were only 11,474 tonnes but in 2006 it reached 25,949 tonnes while that of innards were respectively recorded at 80.8 tonnes and 470.6 tonnes.
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Live bird price hike in India
[6 January 2009] The live bird price remained high in South India in the last week of December as producers cut back parent stock and broiler placements. The live bird price was quoted at INR 56-58/kg (USD 1.2-1.26), while the production cost ranged from INR 39-42/kg (USD 0.85-0.91). High production cost of broilers was also a result of soybean meal prices that went up to INR 16,000/tonne (USD 347.8). Corn price however, dropped by 15% from December's average to INR 7650-7700/tonne (USD 166.3-167.4) in the last week of the month.
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Vietnam needs better plan for agriculture
[6 January 2009] Vietnam’s Prime Minister Nguyen Tan Dung has instructed the country’s agriculture sector to improve forecasts and use statistics to boost production and exports of agricultural products in 2009. He said 2009 will be harsh for Vietnam’s agriculture sector. The premier praised the agriculture sector for its remarkable growth in 2008, despite difficulties brought on by rising input costs and bad weather conditions.
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Cheaper chicken for lunar new year
[6 January 2009] A glut in the market will ensure that Malaysian consumers are able to buy chicken at between MYR 6.50 - 7.50 (USD 1.80- 2.08) per kilo right up to the lunar New Year celebration. The 10-15% excess has been attributed to lower demand from restaurants, hawkers and consumers.
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Beijing Huadu’s cooked chicken exports grow
[5 January 2009] Despite the global financial crisis, cooked chicken meat exports from Beijing Huadu Group, one of China’s top broiler integrators, rose 40% for the fourth quarter last year to 5000 tonnes. Beijing Huadu General Manager Mr She Feng attributed the growth to the efforts in traceability and food safety. The actual slaughter capacity during the fourth quarter remained at 100,000 chickens with the operation of its newly established processing plant in Hebei province. The group exported about 10,000 tonnes of cooked chicken meat in 2007, mainly to Japan, Korea and Central Asia.
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CPI predicts good revenue for 2008
[5 January 2009] Charoen Pokphand Indonesia (CPI) predicts that its net profits will grow by more than two fold on the back of more sales and higher selling prices in 2008.The company was confident that it would book IDR 450 billion (USD 47.52 million) in net profits, up from IDR 187 billion (USD 16.8 million) last year.Another factor that is likely to boost net profits was the higher prices for animal feed and for day-old chicks this year, as well as cost efficiency.
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China exports rabbit meat to Korea
[5 January 2009] South Korea’s Ministry for Food, Agriculture, Forestry and Fisheries recently approved the Shandong-based Haida Foods as the first qualified rabbit meat exporter to Korea. Haida Foods has a total slaughter capacity of 18 million rabbits per year and used to export 40% of its whole rabbit meat to the EU and it now exports mainly boneless rabbit meat to South Korea.
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Kedah to venture into meat trade
[5 January 2009] Malaysia's Kedah Corporation hopes to venture into the meat trading business in Australia, starting with the export of Halal beef throughout Southeast Asia, with particular interest in Indonesia. The Corporation has a client in Indonesia, who needs 200 tonnes of fresh beef a day from Australia.Industry insiders say the sovereign funds of Asia are strong but the meat trade is a tough trade.
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Vietnam moves ducks into shed
[2 January 2009] Vietnam is supporting owners of free range ducks in the Mekong Delta to raise them in closed farms to improve biosecurity and prevent them from the bird flu. Livestock authorities in An Giang said the province has over 2.2 million ducks, 13% of which is farmed in sheds. An Giang aims to increase the number of farmed ducks to 50% by the end of 2008. The Ministry of Agriculture and Rural Development said the delta used to have 18-20 million ducks in its 10 provinces and most of them are raised in the open and feed on rice left-over from the paddy fields. But since the bird flu hit Vietnam in 2004, the ministry reported that over 10 million ducks in the Mekong Delta were killed by the disease or culled to contain the outbreak.
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Animal Feed & Animal Nutrition News Million-dollar farms in the new century
// 05 jan 2009
A new report from the Economic Research Service shows that small farms still represent the majority of farming in the US, but the number of million-dollar farms is increasing rapidly.
Small farms (those with annual sales less than $250,000) represent a large majority of US farms (92%), but account for a relatively small share of total farm production (23%).
The report from the Economic Research Service (ERS) of the USDA examines the other end of the size spectrum, where a large percentage of farm production occurs, specifically on "million-dollar farms" whose annual sales total $1 million or more.
The 35,100 million-dollar farms reported in 2006—2% of all US farms—accounted for 48% of the sales of US agricultural products.
Shift in farm sales distribution
Major shifts occurred in the distribution of gross farm sales between the 1982 and 2002 Censuses of Agriculture, with sales measured in constant 2002 dollars.
Farms with sales of $1 million or more doubled their share of total US farm sales from 23% in 1982 to 48% in 2002. Some of these million-dollar farms are relatively recent entrants to farming, while others existed as far back as 1978. The shift in production to million-dollar farms is likely to continue. Average operating profit margins increase with sales, reflecting economies of size in farming.
As a result, million-dollar farms—and farms growing to that size—have a competitive advantage relative to smaller farms. The shift in production may eventually slow, however, once million-dollar farms’ shares of the commodities most amenable to large-scale production reach their upper limits.
No market power
Million-dollar farms do not have market power. The shift in farm production to million-dollar farms reflects a long-term concentration of farm production on fewer farms that has been underway since the beginning of the 20th century.
However, there are still too many million-dollar farms—just over 35,000—for any single farm to dominate agriculture or the production of specific commodities.
Small share in subsidies
Million-dollar farms receive a small share of Government payments. Most Government payments are commodity-related or targeted at current or past production of specific commodities, largely feed and food grains, cotton, and oilseeds. Relatively few million-dollar farms—particularly those with sales of $5 million or more—specialize in crops covered by commodity programs.
As a result, million-dollar farms received only 16% of US Government payments in 2006, a small share compared with their 48% share of gross sales, although disproportionately large compared with their 2% share of all farms.
Implications drawn
Three significant implications regarding million-dollar farms can be drawn from the information presented:
1. The shift in production to million-dollar farms is likely to continue. As long as the operating profit margin is proportional to sales class, million-dollar farms will have a competitive advantage. The shift in production may eventually slow, however, once million-dollar farms’ shares of the commodities most amenable to large-scale production reach their upper limits.
2. There are still a sufficient number of million-dollar farms to prevent individual farms’ domination agriculture or individual commodities. Concentration of production, however, may be a more significant concern when the owners of commodities—which include production contractors—are considered, rather than just the farms producing them.
3. Most million-dollar farms are family operations, although the operator and spouse supply only a small fraction of the labour. Direct ownership of million-dollar farms by non-farm corporations is infrequent, but such corporations are frequently involved with million-dollar farms through contracting
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Animal Feed & Animal Nutrition News Aflatoxin kills hundreds of Taiwanese dogs
// 06 jan 2009
Agricultural authorities in Taiwan have ordered a local firm to destroy contaminated dog feed after it was suspected to have killed more than 300 stray dogs.
Ji-Tai Forage Company imported 1,500 tonnes of corn from Pakistan in November, of which 50 tonnes were used to make dog feed and 1,450 tonnes to make pig feed. The deaths of hundreds of stray dogs at two shelters in northern Taipei late last year prompted the Council of Agriculture to investigate.
Samples taken from the dog food showed it contained up to 150 ppb (parts per billion) of aflatoxin, a chemical produced by a fungus, which causes severe liver damage in animals. Dogs are very sensitive to aflatoxins. International allowable levels of aflatoxin for dogs stand at around 20 ppb.
Around 30 tonnes of the tainted dog feed were retrieved and destroyed but 20 tonnes, and 1,450 tonnes of pig feed, have been consumed. Pigs are less susceptible for the mycotoxin. Allowable levels of aflatoxin for pig feed are 200 ppb.
The council said it would step up its tests of corn imports from Pakistan to prevent any recurrence.
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Japan study group says cloned animals safe for food
Tue Jan 20, 2009 3:20am EST Email | Print | Share| Reprints | Single Page[-] Text
TOKYO (Reuters) - A study group for Japan's top safety watchdog said cloned animals are safe for food, the first step in a series of decisions needed before the watchdog makes recommendations to the government.
With several meetings pending by a higher-level committee of experts, it will take months before the Food Safety Commission reports its assessment on the safety of food in production using the controversial reproductive technology.
The United States in January last year opened the door to bringing meat and milk from cloned cattle, hogs and goats and their offspring into the food supply.
"The working group focused on the assessment of the health of cloned cattle and hogs. The assumption of their discussion was that if such animals are healthy, food made from them would be safe," said Kazuo Funasaka, a spokesman at the commission, said on Tuesday.
"Their conclusion is that based on the scientific knowledge and information available at present, such food is as safe as cattle and hogs bred conventionally," he said.
Cloning animals is considered a key technology to improve efficiency in livestock production.
Japan's health ministry asked the commission in April 2008 for its assessment on safety of such food.
Japan's government has had to face fierce criticism from consumers over its handling of tainted imported rice, and a series of food scandals last year have made consumers even more cautious about food from cloned animals.
But Japan was among the first countries to produce cloned animals. It bred cloned cattle in 1998 and the cumulative total of such cattle now totals more than 550. It also breeds cloned hogs and goats, all for research purposes.
(Reporting by Risa Maeda; Editing by Edwina Gibbs)
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Wednesday, January 21, 2009Print This Page
Sadia to Reduce Work Force
BRAZIL - Brazilian meat processing giant, Sadia, is cutting jobs.
Meatingplace reports that meat processor, Sadia S.A., based in Santa Catarina state, will cut 350 administrative jobs.
Company chairman, Luiz Furlan, gave the news to local financial newspaper, Valor Economico in an interview. The cuts will save about $18 million a year.
Sadia, one of Brazil's largest meat processors and an international player in beef, pork, chicken and turkey, suffered large losses on foreign exchange futures positions last year when the US dollar appreciated against the Brazilian real.
Analysts are expecting the company to report its first annual net loss in 2008, according to Dow Jones.
The company's strategic focus has moved increasingly towards internationalization and producing and distributing processed frozen and chilled foods. Its web site reports exports close to 1,000 items to more than 100 countries, according to Meatingplace.
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Thursday, January 22, 2009Print This Page
Chinese Urbanisation to Swallow up Global Grains
CHINA - Global grain markets are facing breaking point according to new research by the University of Leeds into the agricultural stability of China.
Experts predict that if China’s recent urbanisation trends continue, and the country imports just 5 per cent more of its grain, the entire world’s grain export would be swallowed whole.
The knock-on effect on the food supply - and on prices - to developing nations could be huge. This is the conclusion of the Quantifying and Understanding the Earth System (QUEST) project which has been funded by the Natural Environment Research Council (NERC). QUEST aims to look at global scale impacts of climate change across a range of areas including fisheries, agriculture, and epidemiology.
Sustainability researchers have conducted a major study into the vulnerability of Chinese cropland to drought over the past 40 years, which has highlighted the growing fragility of global grain supply, says the report. Increased urban development in previously rich farming areas is a likely cause.
“China is a country undergoing a massive transformation, which is having a profound effect on land use,” says Dr Elisabeth Simelton, research fellow at the Sustainability Research Institute at the University of Leeds, and lead author of the study. “Growing grain is a fundamentally low profit exercise, and is increasingly being carried out on low quality land with high vulnerability to drought.”
The study looked at China’s three main grain crops; rice, wheat and corn, to assess how socio-economic factors affect their vulnerability to drought. Researchers compared farming areas with a resilient crop yield with areas that have suffered large crop losses with only minor droughts.
They found that traditionally wealthy coastal areas are just as susceptible to drought as areas with poor topography in the east of the country.
“Quality land is increasingly being used for high profit crops, such as vegetables and flowers. The impact of this on local and global economies is an issue that the newly created Centre for Climate Change, Economics and Policy (CCCEP) will address,” explains Dr Simelton.
CCCEP is a partnership between the University of Leeds and the London School of Economics. Its main objectives include developing better climate change models and understanding how developing countries can adapt to climate change.
At the moment the Chinese government claims that China is 95 per cent self sufficient in terms of grain supply. If China were to start importing just 5 per cent of its grain (to make up a shortfall produced by low yields or change of land use to more profitable crops) the demand would hoover up the entire world’s grain export.
The pressure on grain availability for international grain markets could, in turn, have a huge knock-on effect. Poorer countries are particularly vulnerable, as demonstrated by the 2007-2008 food crisis.
Published in the journal Environmental Science and Policy, the study used provincial statistics of harvests and rainfall together with qualitative case studies to establish the differences between land that is sensitive to drought and land that is not.
“One aim of this research is better understanding of the socio-economic responses to difficult conditions so that we can improve models of climate change” says Dr Simelton.
“These trends of urbanisation are also happening in India, with the population predicted to keep on rising until at least 2050. Ultimately the limiting factor for grain production is land, and the quality of that land.”
The research is part of the Quantifying and Understanding the Earth System (QUEST) project and has been funded by the Natural Environment Research Council (NERC). QUEST aims to look at global scale impacts of climate change across a range of areas including fisheries, agriculture, and epidemiology.
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Death penalty in melamine scandal
// 22 jan 2009
Two men have been given the death penalty for their involvement in China's contaminated milk scandal. The former boss of the Sanlu dairy at the centre of the scandal was given life imprisonment. They are among 21 sentences being handed down by the court in northern China, where Sanlu is based.
One of the most eagerly-awaited sentences was that of Tian Wenhua, who was chairwoman of the Sanlu Group, the largest producer of baby milk powder. She had already pleaded guilty to charges of producing and selling fake or substandard produce, and was given a life sentence by the Intermediate People's Court in Shijiazhuang.
Earlier the court sentenced Zhang Yujun and Geng Jinping to death. Zhang Yujun was accused of running an illegal workshop in Shandong province in eastern China, producing 600 tonnes of the fake protein powder - the largest source of melamine in the country. He was sentenced along with Zhang Yanzhang - accused of selling on Zhang Yujun's protein powder - who was given a life sentence. Milk producer, Geng Jinping had been convicted of producing and selling toxic food to dairy companies.
The scandal, in which melamine was added to raw milk to make it appear higher in protein, led to the deaths of six babies and made some 300,000 ill. See below the timeline of the scandal.
10 Sept: 14 babies reported ill in Gansu province
15 Sept: Beijing confirms first deaths from the contamination
22 Sept: Toll of ill babies rises to tens of thousands - and eventually will rise to almost 300,000
23 Sept: Other countries start to test Chinese dairy products or remove them from shops
31 Oct: Chinese media suggest melamine is routinely added to animal feed
24 Dec: The main dairy firm involved, Sanlu, is declared bankrupt
31 Dec: Four senior Sanlu executives go on trial
2 Jan: Firms involved ask for forgiveness in a mass New Year text message
22 Jan: A court in China begins handing down sentences
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Zoonoses in the EU: Trends and Sources
Because zoonoses are infections and diseases that are transmissible from animals to humans, it makes it particularly important to keep these livestock diseases under surveillance and control, writes Adam Anson, reporting for ThePigSite.
In order to keep a track on the activity of these diseases within Europe, the European Food Safety Authority (EFSA) monitors the prevalence in each of the EU Member States (MS).
Infection via zoonoses can be acquired either by direct contact with infected animals, or by consuming contaminated food products. Consequently, to gain a true picture of how zoonoses affect the entire animal feed sector, EFSA have analysed data in human, animals and foodstuffs.
Once EFSA can adequately identify which animals and foods are the main sources of infections, it believes it will be will be better equipped to prevent them from occuring.
Most Common Zoonoses
The latest zoonoses analysis, released in January 2009, looks at data collected in the year 2007. According to the analysis, The Community Summary Report On Trends and Sources of Zoonoses and Zoontic Agents in the European Union in 2007, campylobacteriosis was again the most frequently reported zoonotic disease in humans in the European Union with 200,507 confirmed cases. Most of the Member States reported an increased number of cases of campylobacteriosis for that year.
The report says salmonellosis was still the second most commonly recorded zoonosis accounting for 151,995 confirmed human cases. However, the incidence of salmonellosis continues to decrease in the European Union with a statistically significant trend over the last four years.
In foods, the highest proportion of campylobacter-positive samples was once again reported for fresh poultry meat, where on average 26 per cent of samples were found positive. Campylobacter was also commonly detected from live poultry, pigs and cattle. The reported proportions of Campylobacter-positive samples remained at high levels and no overall decrease was apparent.
The reported notification zoonoses rates in confirmed human cases in the EU, 2007
Source: EFSA
Salmonella was most often found in fresh poultry and pig meat where proportions of positive samples, on average 5.5 per cent and 1.1 per cent, were detected respectively. Some Member States reported 0.8 per cent of table eggs positive for Salmonella, while dairy products, vegetables and fruit were rarely found to contain the bacterium. In animal populations, Salmonella were most frequently detected in poultry flocks.
2007 was the first year when EU Member States implemented the new Salmonella control programmes in poultry (Gallus gallus) breeding flocks on a mandatory basis and already 15 Member States reported prevalence below the Salmonella reduction target of one per cent laid down by Community legislation.
The number of listeriosis cases in humans remained at the same level as in 2006 with 1,554 confirmed cases recorded in 2007. A high fatality rate of 20 per cent was reported among the cases, especially affecting the elderly. Listeria bacteria were seldom detected above the legal safety limit from ready-to-eat foods but findings over this limit were most often found in smoked fish and other ready-to-eat fishery products followed by ready-to-eat meat products and cheeses.
At European Union level, the occurrence of bovine brucellosis remained largely unchanged compared to 2006, while that of bovine tuberculosis and sheep/goat brucellosis seemed to slightly decrease. In humans, 542 confirmed brucellosis cases were reported but the notification rate is decreasing.
A total of 2,905 confirmed verotoxigenic Escherichia coli (VTEC) infections were recorded in the European Union in 2007. Among animals and foods, VTEC was most often reported in cattle and bovine meat.
However, the importance of a zoonosis as a human infection is not dependent on incidence in the population alone. The severity of the disease and case fatality are also important factors affecting the relevance of the disease. For instance, despite the relatively low number of cases caused by VTEC, Listeria, Echinococcus, Trichinella and Lyssavirus (rabies), compared to the number of human campylobacteriosis and salmonellosis cases, these infections are considered important due to the severity of the illness and higher case fatality rate.
In 2007, the number of reported yersiniosis cases in humans was 8,792, and the bacterium was reported from pigs and pig meat. Two parasitic zoonoses, trichinellosis and echinococcosis, caused 779 and 834 human cases each in European Union Member States. In animals, these parasites were mainly detected in wildlife.
Salmonella
New salmonella control programmes in breeding flocks of chickens (Gallus gallus) were implemented on a mandatory basis for the first time in 2007. The aim of the programmes is to reduce the occurrence of S. Enteritidis, S. Hadar, S. Infantis, S. Typhimurium and S. Virchow to one per cent or less in adult breeding flocks comprising at least 250 birds by 31 December 2009.
The data showed that already 15 MSs reported in 2007 a prevalence of these five target serovars that was lower than the target, whereas eight MSs reported prevalence of the five serovars ranging from 1.1 per cent to 15.4 per cent
Few MSs reported data from routine monitoring on the prevalence of Salmonella in pig herds or slaughter pigs in 2007. However, an EU-wide Salmonella baseline survey was carried out in slaughter pigs in 2006 to 2007. In total, 19,071 ileo-caecal lymph node samples were collected from slaughtered pigs and the EU weighted mean prevalence in pigs was 10.3 per cent ranging between 0 per cent and 29.0 per cent in MSs. Few MSs have active monitoring of Salmonella in cattle but two MSs both reported slaughter prevalence of 0.1 per cent in cattle.
Campylobacter
In 2007, as in previous years, the majority of data on Campylobacter in animals was from investigations of broilers but data from pigs and cattle was also reported.
The recorded prevalence of Campylobacter-positive broiler flocks was generally high: 25.2 per cent at EU level ranging from 0 per cent to 82.8 per cent in MSs. Lower prevalence in broiler flocks was reported by some Nordic and Baltic countries.
High prevalence was also observed from the monitoring of pigs, 56.1 per cent at EU level (ranging from 0.9 per cent to 78.5 per cent).
In cattle, reported occurrences were somewhat lower: 5.9 per cent on average in the EU but prevalence up to 70.5 per cent was reported by some MSs. However, Campylobacter contamination rates in pig and bovine meat typically decrease sharply following slaughter and remain low at retail. This was also demonstrated by the results reported in 2007.
Tuberculosis due to Mycobacterium bovis
Eleven MSs, two non-MSs as well as 15 provinces and three regions in Italy were officially bovine tuberculosis-free (OTF) in 2007. As in 2006, only Belgium, France and Germany out of the OTF MSs, reported few positive cattle herds in 2007.
Overall, a decrease in the proportion of cattle herds infected/positive for M. bovis was observed in the non-OTF MSs compared to 2006: 0.44 per cent vs. 0.66 per cent, respectively. However, this decrease was due to the inclusion of data from Romania that has a low occurrence of bovine tuberculosis in its large cattle herd population. When excluding the Romanian data, the proportion of cattle herds infected/positive at EU level remained the same as in the previous year. Of the 15 reporting non-OTF MSs, Ireland and the United Kingdom reported the highest prevalence (4.4 per cent and 3.3 per cent, respectively) in their national herds.
Brucella
In 2007, 12 MSs were officially free of brucellosis in cattle (OBF) and 16 MSs were officially free of brucellosis in sheep and goats (ObmF). Furthermore, 20 provinces and seven regions in Italy as well as four Azores islands in Portugal and Great Britain in the United Kingdom were OBF, whereas 64 departments in France, five provinces and eight regions in Italy, all the Azores islands in Portugal and two islands in the Canaries in Spain were ObmF.
At EU level, a marked decrease was observed in the proportion of existing cattle herds positive for, or infected with bovine brucellosis from 2006 to 2007. However, this decrease is only caused by the inclusion of data from Romania (MS since 2007), which has a large cattle population with no positive herds. In the Community co-financed non-OBF MSs, the prevalence of bovine brucellosis increased compared to 2006. This was specifically observed for Ireland, Italy and the United Kingdom (Northern Ireland).
In the case of small ruminant brucellosis, the proportion of existing herds either positive or infected at EU level has decreased from 2004 to 2007 even though the trend is not statistically significant.
Listeria
In 2007, 18 MSs reported data on L. monocytogenes in animals and the bacterium was reported from various animal species. In some MSs the detected proportion of positive samples reached a moderate level in cattle and in small ruminants.
VTEC
In bovine animals, the average VTEC prevalence in reporting MSs was 3.6 per cent and the proportion of VTEC O157-positive animals was 2.9 per cent. The reported occurrence of VTEC ranged from 0 per cent to 22.1 per cent in MS investigations.
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When Will US, EU Accept Irradiated Food?
GLOBAL - Following a number of highly publicised outbreaks of food-borne infections in people in recent years, the prospects of food irradiation are looking better than ever. But just how near are the US and European Union to using the process widely for meat? Currently, meat may be irradiated in the US but rarely is, and new guidelines will be proposed in the EU later this year.
Before the recent revelation that tainted peanut butter could kill people, even before the spinach scare of three summers ago, the food industry in the United States made a proposal. It asked the government for permission to destroy germs in many processed foods by zapping them with radiation, according to International Herald Tribune.
That was about nine years ago, in the twilight of the Clinton administration. The government has taken limited action since.
After spinach tainted with a strain of E. coli killed three people and sickened more than 200 others in 2006, the US. Food and Drug Administration gave permission for irradiation of spinach and iceberg lettuce. The industry has yet to start using it. Meat irradiation is permitted but rarely used. Among common items on the grocery shelf, only spices and some imported products, like mangoes from India, are routinely treated with radiation.
The technology to irradiate food has been around for the better part of a century. The US government says it is safe, and many experts believe that it could reduce or even eliminate the food scares that periodically sweep through society.
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"Meat irradiation is permitted but rarely used [in the US]"
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It might even have killed the salmonella that reached grocery shelves in recent weeks after a factory in Georgia shipped tainted peanut butter and peanut paste, which wound up in products as diverse as cookies and dog treats. But irradiation has not been widely embraced in the United States.
In the European Union, irradiation is approved for bloc-wide use only for 'dried aromatic herbs, spices and vegetable seasonings', and such foods must be clearly labelled as having been so treated. But Haravgi-Nina Papadoulaki, a spokeswoman for the EU health commissioner, Androulla Vassiliou, said on 2 February that the European Food Safety Authority (EFSA) hopes to propose new guidelines by the end of 2009.
In December 2002, the European Parliament voted against expanding the list, citing tests on laboratory rats that suggested a possible cancer risk from a chemical called 2-ACB created when meat is irradiated.
But because of the common market, if a country approves irradiation for a particular food, the company making that product can still market it throughout the EU, which comprises 27 countries. Thus, for example, poultry can be irradiated in France or Belgium, where the process is allowed under national law, and sold in other countries, unless it is specifically banned.
Food manufacturers in the United States worry that the apparent benefits do not justify the cost or the potential consumer backlash. Some consumer groups complain that widespread irradiation of food after processing would simply cover up the food industry's hygiene problems. And some advocacy groups question the long-term safety of irradiation.
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"In the European Union, irradiation is approved for bloc-wide use only for 'dried aromatic herbs, spices and vegetable seasonings'"
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With all these doubts, one thing is certain - food poisoning continues. The cases that rise to public attention are only the tip of the iceberg. The Centers for Disease Control and Prevention estimates that there are 76 million cases of food-borne illness each year in the United States. The vast majority are mild, but the agency estimates there are 5,000 deaths from food-borne disease and 325,000 hospitalizations each year.
This situation upsets advocates of irradiation. "Our society is running around with our head in the sand because we have ways to prevent illness and death that aren't being used," said Christine Bruhn, director of the Center for Consumer Research at the University of California at Davis. "The rules are so tight on irradiation that you can't pull it out and use it when a new problem arises, and that's to the detriment of the American public."
Suresh Pillai, director of the National Center for Electron Beam Research at Texas A&M University, likened fears of irradiation to early phobias about the pasteurization of milk.
"It's unnecessary for people to be getting sick today with pathogens in spinach or pathogens in peanut butter," Dr Pillai told International Herald Tribune. "We have the technologies to prevent this kind of illness."
Food is irradiated by brief exposure to X-rays, gamma rays or an electron beam. The process is intended to reduce or eliminate harmful bacteria, insects and parasites, and it also can also extend the life of some products.
Advocates say it is particularly effective at killing pathogens in things like ground beef and lettuce, where they might be mixed into the middle of the product or hiding in a crevice that is hard to clean by traditional means.
Food and Water Watch, an advocacy group, has long maintained that irradiation would be too expensive, impractical and sometimes ineffective because it might hide filthy conditions at food processing plants. Patty Lovera, the group's assistant director, said irradiation not only killed bacteria but could also destroy nutrients in food.
She pointed out that irradiated beef was offered at many grocery stores across the United States at the beginning of the decade but it did not last long. Customers were turned off by the higher price and by the extended shelf life of irradiated beef. "People that did the shopping, they would look at the date and be freaked out at how long it would be good for," Ms Lovera said.
Food industry officials, meanwhile, remain wary of irradiation because of the up-front costs and the potential public reaction to any technique with the word 'radiation' in it.
One potential test of the American public's acceptance could come with the marketing of irradiated spinach and lettuce. After the E. coli outbreak in 2006, the spinach industry lost 30 per cent of its business. The food agency approved irradiation for spinach and iceberg lettuce in August.
"There's no shortage of people who are looking at it," said Hank Giclas, vice president for strategic planning, science and technology for the Western Growers Association. "I don't know of anyone who is moving forward with it at this time."
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"Irradiation typically does not work so well on products with high amounts of fat or oil ...because they can turn rancid during the process"
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It remains an open question if peanut butter or products with peanut paste would be likely candidates for the technique, according to the International Herald Tribune article. Irradiation typically does not work so well on products with high amounts of fat or oil like peanut butter because they can turn rancid during the process. A spokesman for the American Peanut Council said irradiation was tested but found unacceptable because it degraded the taste of the nut.
Nonetheless, Dr Pillai said a low dose of radiation might be effective in killing traces of salmonella in peanut butter – or manufactured products with peanut paste – without ruining the taste. But he said it would not work as a substitute for basic hygiene and food safety measures.
Similarly, a spokesman for the Grocery Manufacturers Association said food companies should make sure that plants were clean and follow good manufacturing and food safety practices. If problems remain afterward, then irradiation could be an option, provided it is permitted by the government.
Nine years ago, the association, then called Grocery Manufacturers of America, was among the sponsors of the application that was filed with the food agency seeking approval to irradiate ready-to-eat meat and poultry products and fruit and vegetable products.
Now that spinach and iceberg lettuce have been approved, it is focusing on persuading the FDA to permit irradiation of hot dogs and deli meats. An FDA spokesman declined to comment, saying the agency does not comment on open petitions, the International Herald Tribune report concludes.
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Friday, February 06, 2009Print This Page
Understanding Phosphorus in Soils is Vital
GLOBAL - A study has revealed no evidence of phytate-phosphorus accumulation in soils receiving animal manure. However, the scientists warned that this form of phosphorus may not be biologically and environmentally benign.
Phosphorus is one of the key nutrients that can cause algal blooms and related water quality problems in lakes, rivers and estuaries worldwide, according to a report in Science Daily. Phosphorus entering waters originates from a variety of sources.
Agricultural land receiving long-term applications of organic by-products such as animal manure is one of the major contributors. Such soils often become enriched with phosphorus, leading to elevated phosphorus, loss through erosion and run-off. Information on the chemical characteristics of phosphorus in these soils is essential to improving our understanding of how phosphorus behaves in soils and how it is transported in run-off to devise better management practices that protect water quality.
A group of scientists in the USA and Australia have identified the chemical forms of phosphorus, using 31P nuclear magnetic resonance (NMR) spectroscopy, in soils receiving organic by-products for at least eight years (treated) as compared with soils not receiving phosphorus application (untreated).
Regardless of the type of organic materials applied (dairy, swine, poultry or spent mushroom compost), orthophosphate (inorganic phosphorus) was the single dominant phosphorus form – more so in treated soils (79 to 93 per cent of total phosphorus) than in untreated soils (33 to 71 per cent).
Orthophosphate was also the only phosphorus form that differed dramatically between paired soils – three to five times greater in treated than untreated soils. Other phosphorus forms included condensed inorganic phosphorus and various organically bound phosphorus groups. However, their amounts were relatively small and differences between each paired soils were insignificant.
Surprisingly, the study revealed no evidence of phytate-phosphorus accumulation in any of the soils receiving organic wastes. Phytate is an organic storage form of phosphorus that is known to be present in animal manures, in particularly large proportion (up to 80 per cent of total phosphorus) in poultry manure. Phytate-phosphorus is generally considered to be recalcitrant in the agro-ecosystem because of its chemical structure. However, the lack of phytate-phosphorus accumulation in several soils receiving poultry manure in this study indicates that manure-derived phytate-phosphorus may not be biologically and environmentally benign.
Zhengxia Dou, the lead author, stated, "In terms of potential phosphorus loss in the long run, organic materials containing large amounts of phytate-phosphorus such as poultry manure may not differ from other material containing mainly inorganic phosphorus."
Andrew Sharpley, a collaborating scientist, further explained to Science Daily, "When the soils' phosphorus sorption capacity was nearly saturated after years of manure application, phytate or other organic phosphorus forms could be exposed to breakdown and potential loss. Therefore, it is important to strive towards balancing phosphorus inputs with outputs and to prevent phosphorus from building up in soils to which manure is applied."
Reference
Dou Z. et al., 2009. Phosphorus speciation and sorption-desorption characteristics in heavily manured soils. Soil Science Society of America Journal, 73 (1): 93 DOI: 10.2136/sssaj2007.0416.
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Tuesday, February 17, 2009Print This Page
Eat Less Meat to Go Green
US - Delegates at the prestigious meeting of the American Association for the Advancement of Science (AAAS) have heard that we could cut our carbon footprint by eating more poultry and pork, and less beef - or better still, reduce our intake of all meats.
The livestock sector is estimated to account for 18 per cent of global greenhouse gas (GHG) emissions. When it comes to global warming, hamburgers are the Hummers of food, scientists said at the meeting of the American Association for the Advancement of Science in Chicago, reports Straits Times.
Simply switching from steak to salad could cut as much carbon as leaving the car at home a couple days a week.
That is because beef is such an incredibly inefficient food to produce and cows release so much harmful methane into the atmosphere, said Nathan Pelletier of Dalhousie University in Canada.
Dr Pelletier is one of a growing number of scientists studying the environmental costs of food from field to plate.
By looking at everything from how much grain a cow eats before it is ready for slaughter to the emissions released by manure, they are getting a clearer idea of the true costs of food. The livestock sector is estimated to account for 18 per cent of global greenhouse gas emissions and beef is the biggest culprit.
Even though beef only accounts for 30 per cent of meat consumption in the developed world, it is responsible for 78 per cent of the emissions, Dr Pelletier said on 15 February at the AAAS meeting.
A single kilogram of beef produces 16 kg carbon dioxide equivalent emissions: four times higher than pork and more than ten times as much as a kilogram of poultry, Mr Pelletier said.
If people were to simply switch from beef to chicken, emissions would be cut by 70 per cent, Dr Pelletier added.
People eating more meat than they need
Another part of the problem is people are eating far more meat than they need to, according to Straits Times.
"Meat once was a luxury in our diet," Dr Pelletier said. "We used to eat it once a week. Now we eat it every day." If meat consumption in the developed world was cut from the current level of about 90 kg a year to the recommended level of 53 kg a year, livestock related emissions would fall by 44 per cent.
"Given the projected doubling of (global) meat production by 2050, we're going to have to cut our emissions by half just to maintain current levels," Dr Pelletier said.
"Technical improvements are not going to get us there." That is why changing the kinds of food people eat is so important, said Chris Weber, a professor of civil and environmental engineering at Carnegie Mellon University in Pennsylvania.
Food is the third largest contributor to the average US household's carbon footprint after driving and utilities, and in Europe - where people drive less and have smaller homes - it has an even greater impact.
"Food is of particular importance to a consumer's impact because it's a daily choice that is, at least in theory, easy to change," Professor Weber said.
"You make your choice every day about what to eat but once you have a house and a car, you're locked into that for a while." The average US household contributes about five tonnes of carbon dioxide a year by driving and about 3.5 tonnes of equivalent emissions with what they eat, he said.
"Switching to no red meat and no dairy products is the equivalent of (cutting out) 8,100 miles driven in a car that gets 25 miles to the gallon," Professor Weber said in an interview later.
Buying local meat and produce will not have nearly the same effect, he cautioned, because only five per cent of the emissions related to food come from transporting food to market.
"You can have a much bigger impact by shifting just one day a week from meat and dairy to anything else than going local every day of the year," Professor Weber told Straits Times.
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San Miguel to create 10,000 new jobs 19 Feb 2009
With investments equalling $208 million San Miguel Corp., the Philippines' largest food and beverage conglomerate, would create about 10,000 new jobs.
San Miguel President Ramon Ang said the company plans to invest PHP9.93 billion ($208 million) to expand production of poultry and pigs, animal feed, ice cream and others.
Ang said San Miguel's joint venture with the Kuok Group will kick off in September, aiming to create 500,000 direct and indirect jobs for every one million hectares devoted for food production.
He said 3.8 million hectares have already been identified for the project.
San Miguel Chairman Eduardo Cojuangco assured that the conglomerate doesn't have any plan to retrench its work force as other companies are doing.
Last year San Miguel announced it will spend up to $1 billion in a joint venture with Hong Kong's Kuok group to develop farm land.
The project, in collaboration with the Philippine government, entailed the development of 1.0 million hectares of land and that the two companies were willing to spend up to $1,000 per hectare.
The two companies will offer financial assistance, technical expertise and a guarantee to buy all agricultural produce. All land will remain in the ownership of the Philippine government.
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Tuesday, February 24, 2009Print This Page
A Lesson in Parasite Infections on Livestock
INDIA - Experts from Queen's University are in India today to advise the country on how it can reduce parasitic infections which destroy plants and animals.
The biotechonology experts from the Belfast-based University are at the forefront of research into the infections which cost the world economy around $200 billion in lost crop production and $5.3 billion in animal health each year.
A delegation led by Dr Gerry Brennan from the School of Biological Sciences at Queen’s has been invited to Alagappa University in Tamil Nadu in southern India to share its expertise at the International Colloquium on Emerging Biotechnologies in Agriculture, Animal Health and Productivity which runs from today until Friday.
Dr Brennan has collaborated with Indian universities, including Alagappa, on research and teaching for almost 30 years. He will address the conference on the management of drug resistance in livestock.
He said: “India is now a world-leading nation in terms of social, technological and economic development, so it urgently needs to modernise and expand agricultural productivity, particularly in the livestock sector, to maximise self-sufficiency in food supply and to raise gross domestic product for a rapidly expanding and increasingly urbanised population.
“In response to this need, corporate farming enterprises in poultry, cattle, sheep, goats, buffalo, dairy, meat and aquaculture production are developing rapidly and modern production methods are being used across India.
“The current field of research at Queen’s into veterinary and agricultural parasite control serves to showcase the application of biotechnology in modern agricultural practice.”
Alagappa University has recently established a Department of Animal Health Science and Management which aims to help India expand its agricultural development, especially in the livestock sector.
The conference aims to focus the attention of national policy-makers, academics and industry leaders in India on the new facility as well as providing a forum for Indian scientists to hear from overseas experts about biotechnology and livestock-based agriculture.
The Vice-Chancellor of Alagappa, Professor P Pamasamy, who was once a research fellow at Queen’s University, asked Dr Brennan to act as overseas organiser for the event.
Other Queen’s delegates addressing the conference include Professor Aaron Maule and Dr Ian Fairweather from the School of Biological Sciences and Professor Bob Hanna and Dr Colin Fleming from AFBI, the Agri-Food and Biosciences Institute.
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Protection of Animals at the Time of Killing
Every year nearly 360 million pigs, sheep, goats and cattle as well as more than four billion poultry are killed in EU slaughterhouses, writes TheMeatSite senior editor Chris Harris.
The European fur industry also kills 25 million animals, while hatcheries kill 330 million day-old-chicks.
At the same time, the control of contagious diseases may also require the killing of millions more animals.
However, the European Commission is concerned that the levels of animal welfare in abattoirs and slaughterhouses across the EU is not equal and it has now drawn up new regulations to ensure that welfare standards are raised and are consistent through all states.
These new proposals have recently been sent out for consultation before they are drawn up into new regulations to be approved by the European Parliament and the Commission.
"The present situation is not satisfactory in relation to the objectives pursued," the Commission says.
"The level of animal protection is unequally enforced in the Member States, with sometimes very unsatisfactory results.
"Discrepancies in requirements in the Member States for slaughterhouses and manufacturers of stunning equipment do not ensure a level playing field for them, although they compete on a global market.
"This situation does not encourage innovation either."
The Commission said that the present regulations for handling animals at slaughter - Directive 93/119/EC1 - have never been updated.
Since the directive was adopted, new technologies have been introduced making some standards obsolete.
In 2004 and 2006 two scientific opinions from the European Food Safety Authority suggested revising the Directive. At the same time, the World Organisation for Animal Health (OIE) in 2005 adopted two guidelines on the welfare of animals at slaughter and killing leading to similar conclusions.
Over recent years, animal welfare concerns have also grown in society and the legal environment has changed for slaughterhouses with the adoption of a series of EU acts on food safety, which emphasises the responsibilities of processing plant operators.
Mass killing during animal epidemics has also raised questions about the methods used to carry them out.
In 2006 the Commission adopted the first Community Action Plan on the Protection and Welfare of Animals, introducing new concepts such as the welfare indicators and centres of reference on animal welfare.
"Specific problems have been identified with the EU legislation such as the lack of harmonised methodology for new stunning methods, the lack of clear responsibilities for operators, the insufficient competence of personnel or insufficient conditions for the welfare of animals during killing for disease control purposes," the Commission says.
"In light of this, the proposal provides substantial added value compared to the status quo."
"In particular by changing the legal instrument from a directive to a regulation, the proposal provides for uniform and simultaneous application, avoiding the burden and inequalities due to national transpositions."
"The form of a regulation is also suitable for faster implementation of changes due to technical and scientific progress. It also provides for a single set of rules making them more visible and easier to apply both for EU operators and trading partners."
The Commission has identified problems such as the lack of harmonised methodology for stunning methods and a lack of clear responsibilities for slaughtermen.
The Commission has also identified problems with a lack of competence in the personnel and a need for training employees in welfare practices. They also identified a lack of confidence in the people employed to slaughter animals in disease situations.
The Commission says that the new proposals will help to speed up the implementation of future changes to keep pace with the changes in technology and progress in science.
They provide a single set of rules making them more visible and easier to apply both for EU operators and trading partners.
The proposal also contains greater flexibility for operators through the adoption of guidelines on detailed technical matters.
At the same time it requires operators to take real ownership of animal welfare through self-checks on stunning procedure and standard operating procedures and it contributes to a better enforcement of animal welfare at slaughter.
The proposal also aims to develop learning mechanisms based on sound science including a certificate of competence and a centre of reference, to make animal welfare better understood and integrated in the daily tasks of animals handlers, slaughtermen and official inspectors.
The proposal will make it compulsory for personnel handling and/or slaughtering animals to possess a certificate of competence.
The proposal will require each Member State to establish a national centre of reference that will provide technical assistance to officials on animal welfare at killing. The centre will provide scientific assessment for new stunning methods/equipment and newly built slaughterhouses, and will accredit bodies delivering certificates of competence concerning animal welfare.
The proposal will increase operators' responsibility for animal welfare. This is in line with the "hygiene package", a raft of food safety legislation adopted in 2004 obliging operators to integrate food safety into their operations and to demonstrate that they are implementing procedures for that purpose.
The main objectives of the proposal are aimed at:
Improving the protection of animals at the time of slaughter or killing.
Encouraging innovation in relation to stunning and killing techniques.
Providing a level playing field within the internal market for the operators concerned.
In addition, this proposal will aim to achieve the following specific objectives:
Develop a common methodological approach to encourage new stunning methods.
Ensure better integration of animal welfare concerns into the production process through the requirement of Standard Operating Procedures and the appointment of Animal Welfare Officers in slaughterhouses.
Upgrade the standards governing slaughterhouse construction and equipment.
Increase the level of competence of the operators and officials concerned.
Improve the protection of animals during mass killing operations.
LIST OF METHODS OF STUNNING AND KILLING AND RELATED SPECIFICATIONS
Mechanical Methods
No Name Description Category of animals Key parameters
1 Penetrative captive bolt pistol Severe and irreversible damage of the brain provoked by the shock and the penetration of a captive bolt. All species. Position and direction of the shot.
Appropriate velocity and diameter of bolt according to animal size and species.
2 Non-penetrative captive bolt pistol Severe damage of the brain by the shock of a captive bolt without penetration. Ruminants up to 10 kg, poultry and lagomorphs. Position and direction of the shot.
Appropriate velocity and diameter of bolt according to animal size and species.
3 Firearm with free projectile Severe and irreversible damage of the brain provoked by the shock and the penetration of one or more projectiles. All species. Position of the shot.
Power of the cartridge.
4 Maceration Immediate crushing of the entire animal. Chicks up to 72 hours and egg embryos. Maximum size of the batch to be introduced.
Measure to prevent overloading.
5 Cervical dislocation Manual stretching and twist of the neck provoking cerebral ischemia. Birds up to 3 kg. Not applicable.
LIST OF METHODS OF STUNNING AND KILLING AND RELATED SPECIFICATIONS
Electrical Methods
No Name Description Category of animals Key parameters
1 Head-only electrical stunning Exposure of the brain to a current generating a generalised epileptic form on the Electro-Encephalogram (EEG). All species. Minimum current (A or mA).
Minimum voltage (V).
Maximum frequency (Hz).
Minimum time of exposure.
Maximum stun-to-stick interval (s).
Frequency of calibration of the equipment.
Optimisation of the current flow.
Prevention of electrical shocks before stunning.
2 Head-to-Back electrical killing Exposure of the body to a current generating at the same time a generalised epileptic form on the EEG (stunning) and the fibrillation or the stopping of the heart (killing). All species except lambs or piglets of less than 5 kg live weight and cattle. Minimum current (A or mA).
Minimum voltage (V).
Maximum frequency (Hz).
Minimum time of exposure.
Frequency of calibration of the equipment.
Optimisation of the current flow.
Prevention of electrical shocks before stunning.
3 Electrical waterbath Exposure of the entire body through a waterbath to a current generating a generalised epileptic form on the EEG (stunning) and possibly the fibrillation or the stopping of the heart (killing). Poultry. Minimising pain at shackling.
Optimisation of current flow.
Maximum shackle duration before the waterbath.
Immersion of the birds up to the base of the wings.
Maximum stun-to-stick interval for frequency over 60 Hz.
LIST OF METHODS OF STUNNING AND KILLING AND RELATED SPECIFICATIONS
Gas methods
No Name Description Category of animals Key parameters
1 Carbon dioxide at high concentration Exposure of conscious animals to a gas mixture containing more than 30% carbon dioxide. Pigs, poultry and fur animals. Carbon dioxide concentration.
Duration of exposure.
Maximum stun-to-stick interval (pigs).
2 Carbon dioxide at low concentration Exposure of conscious animals to a gas mixture containing less than 30% of carbon dioxide. Pigs and poultry. Carbon dioxide concentration.
Duration of exposure.
Maximum stun-to-stick interval in case of stunning (pigs).
3 Inert gases Exposure of conscious animals to a inert gas mixture such Argon or Nitrogen containing less than 2% of oxygen. Pigs and poultry. Oxygen concentration.
Duration of exposure.
Maximum stun-to-stick interval in case of stunning (pigs).
4 Carbon monoxide (pure source) Exposure of conscious animals to a gas mixture containing more than 4 % of carbon monoxide. Fur animals and piglets. Quality of the source of the gas.
Carbon monoxide concentration.
Duration of exposure.
Temperature of the gas.
5 Carbon monoxide associated with other gases Exposure of conscious animals to a gas mixture containing more than 1 % of carbon monoxide associated with other toxic gases. Fur animals. Carbon monoxide concentration.
Duration of exposure.
Temperature of the gas.
Filtration of the gas produced from engine.
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"Global food and energy crisis by 2030" 20 Mar 2009
The growing world population will cause a "perfect storm" of food, energy and water shortages by 2030, the UK government chief scientist has warned.
By 2030 the demand for resources will create a crisis with dire consequences, Prof John Beddington said. Demand for food and energy will jump 50% by 2030 and for fresh water by 30%, as the population tops 8.3 billion, he told a conference in London. Climate change will exacerbate matters in unpredictable ways, he added.
Water shortages
The United Nations Environment Programme predicts widespread water shortages across Africa, Europe and Asia by 2025. The amount of fresh water available per head of the population is expected to decline sharply in that time.
Use GM crops
Prof Beddington said the concern now - when prices have dropped once again - was that the issues would slip back down the domestic and international agenda. Improving agricultural productivity globally was one way to tackle the problem, he added. At present, 30-40% of all crops are lost due to pest and disease before they are harvested. Professor Beddington said: "We have to address that. We need more disease-resistant and pest-resistant plants and better practices, better harvesting procedures. "Genetically-modified food could also be part of the solution. We need plants that are resistant to drought and salinity - a mixture of genetic modification and conventional plant breeding.
New EC science adviser
Prof Beddington said the problem could not be tackled in isolation. He wants policy-makers in the European Commission to receive the same high level of scientific advice as the new US president, Barack Obama. One solution would be to create a new post of chief science adviser to the European Commission, he suggested.
[source: BBC]
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Market Preview: Meat Demand is Risky Business
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.
I remain very concerned about meat demand, in general. I have believed for some time that this is far and away the largest risk factor for the US pork industry in 2009. So far, I have seen nothing that would change my mind.
The current data is rather mixed. This week’s production and price tables suggest that demand is indeed soft – especially for beef and chicken. Note the shaded cells in this week’s table (please see bottom of this page). The year-on-year percentage changes in slaughter and production are almost all negative. Lower output and constant demand would suggest that prices should be higher. But the vast majority of product prices are actually lower than last year. Lower output and lower wholesale prices can only mean lower wholesale meat demand.
Does that mean retail demand and hog demand are lower? No. These relationships do not always change at the same time and the hog slaughter (down from last year) and hog price (up from last year) suggest a roughly stable hog demand. Professor Glenn Grimes at the University of Missouri reports that retail pork demand was actually higher for the period from November through January, the most recent three months for which we have all of the necessary data. Preliminary calculations indicate that the year-on-year change for December through February will be positive as well. February cold storage stocks will not be available until this afternoon.
But wholesale markets are very important. Checkoff-funded research conducted in 2000 by Kansas State University indicated that the wholesale market was the primary point of price discovery for pork and hog prices. One reason is that all of the players – packers, retailers, foodservice operators, and exporters – are involved in that market and all of them bring information, needs, knowledge, etc. to the table. This is not to say that producers aren’t “players,” but producers take part in the wholesale market only through packers and both are only involved on the supply side of this process in the short run.
Exports a Bright Spot
We did get one piece of positive information this week when the Department of Commerce and USDA released January export data. Product-weight pork exports were 4 per cent lower than in January 2008, but were 2 per cent higher in total value at $295.8 million. Quantity is important, but value is what pays the bills, so this increase is very important.
Exports to Japan increased 18 per cent vs. last year, while shipments to Mexico were up 65 per cent from last year. The latter was inflated a bit by the fact that January 2008 was at the tail end of a period of very soft shipments to Mexico. Still, the size of January shipments was surprising given the near-50 per cent devaluation of the peso since 1 October 2008.
Shipments to Canada (-9 per cent) and Korea (-8 per cent) were marginally lower, while those to China/Hong Kong and Russia were sharply lower at -66 per cent and -70 per cent, respectively. A chart of carcass-weight equivalent exports, by destination, appears in Figure 1.
I have also included an updated version of the monthly pork export graph I used in the 5 March edition of North American Preview. Note that the January observation, though lower than one year ago, is above the 2004-2007 trend line. As I noted in the 5 March edition: If 2009 exports can stay near that longer-term trend, I think it will be a victory in spite of the fact that 2009 exports will be about 15 per cent lower than last year.
Be Ready for a Rally
Finally, Chicago Mercantile Exchange Lean Hogs (LH) futures are endorsing the idea of a spring rally. Every contract has gained $4 to $6 from the spike lows of 24 February, and has stayed consistently above the 10-day moving average. In addition, every contract for the remainder of 2009 has penetrated the 50-day moving average and every contract from June onward has closed above the 50-day moving average – normally a strong confirmation of a trend change.
Based on Iowa State University’s Estimated Costs and Returns parameters, this week’s corn and soybean meal futures prices put breakeven costs for the rest of 2009 in the $66 to $69/cwt., carcass, weight range. LH futures are offering profits from May through August at those cost levels, with October and December getting closer.
Selling into a rally is hardly ever a bad idea, especially if the prices are profitable. But, I still wouldn’t get in a hurry. Historical seasonal patterns suggest that this rally will continue into late April or early May. But be ready to pull the trigger when your return-on-investment goals are met or when the charts indicate that the rally has run out of steam.
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CPF eyes larger exports despite economic crisis
[8 April 2009] Charoen Pokphand Foods Plc (CPF) expects its exports to grow this year despite the global economic crisis but total sales will remain flat as domestic consumption is forecast to fall. Food exports would make up 18% of the company's sales revenue this year, an increase from 16% last year, with revenue from its foreign operations in 10 countries growing to 17-18%, up from 16% last year. Domestic sales, meanwhile, are expected to drop to 64% of total sales, from 68% in 2008, because of the poor economic outlook and lower consumption. CPF has set a conservative sales revenue target for this year at a flat from 2008 at THB 156.23 billion (USD 4.42 billion).
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CPF evaluates investment in the Philippines
[8 April 2009] Charoen Pokphand Foods Plc (CPF) is looking at investment potential in the Philippines after being invited by President Gloria Arroyo to invest in an integrated farming business there. A team of experts will be sent to study the feasibility of the project, which would be a fish and shrimp feed manufacturing plant, if the investment and political climate is favorable.
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10 April 2009] The Philippine Bureau of Customs (BOC) confiscated eight 40-foot container vans containing poultry, beef and onions smuggled into the country. The shipments came from three countries and were valued at PHP 32.6 million (USD 679,182). Two of the containers had 29 tonnes of frozen chicken worth PHP 5.88 million (USD 122,399) from the U.S. and another two containers had 50 tonnes of frozen boneless beef worth PHP 19.63 million (USD 408,793) from Australia.
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Ag Sector More Resilient to Global Crisis Than Others
GLOBAL - Because food is a basic necessity, the agriculture sector is showing more resilience to the global economic crisis than other industries. But the risks could increase if the economic downturn deepens, according to a new report by the OECD and FAO released yesterday.
Food prices are still high in many poor countries.Falls in agricultural prices and in the production and consumption of farm goods are likely to be moderate as long as the economic recovery begins within two to three years, says the OECD-FAO Agricultural Outlook 2009-2018. As the downturn lowers food prices, pressure is eased on recession-hit consumers who have less money to spend, it says.
Food prices have come down from the record peaks of early 2008 but they remain high in many poor countries. Over the coming decade prices for all farm commodities except beef and pigmeat - even when adjusted for inflation - are unlikely to fall back to their average levels before the 2007-08 peaks.
Average crop prices are projected to be 10-20 per cent higher in real terms (adjusted for inflation) for the next 10 years compared with the average for the period 1997-2006. Prices for vegetable oils are expected to be more than 30 per cent higher.
An expected economic recovery, renewed food demand growth from developing countries and the emerging biofuel markets are the key drivers underpinning agricultural commodity prices and markets over the medium term.
The report warns that episodes of extreme price volatility similar to the hike in 2008 cannot be ruled out in coming years, particularly as commodity prices have become increasingly linked to oil and energy costs and environmental experts warn of more erratic weather conditions.
Although agricultural production, consumption and trade are expected to increase in developing countries, food insecurity and hunger is a growing problem for the world's poor.
The report argues that the longer term problem is access to food rather than food availability, with poverty reduction and economic growth a big part of the solution. Agriculture growth is key for sustainable development and poverty reduction since 75 per cent of the poor in developing countries live in rural areas.
The report says that, in addition to more effective international aid, governments can best support domestic agricultural development through targeted policies such as infrastructure investment, establishing effective research and development systems and providing incentives for sustainable use of soil and water.
It also emphasises the need for greater opening of agricultural markets and broadening economic development beyond farming in poor rural regions.
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Actions have consequences; for individuals and for nations. Sometimes, the consequences are so severe that the person is changed forever. The same can happen with the world.
I am astounded that virtually all of our political leaders, even the smart ones, have not woken up to the fact that it will never be economically “business as usual” again. It scares me and it should scare you, too.
I receive e-mail constantly telling me that I am overly concerned or simply crazy in my belief that we are entering a new, uncharted world. Just wait, they say, and the crisis will be over; it is just a normal bump on the road. The “smarter” ones even point to the 1997 Asian crisis as an example. Oh, you think so, do you?
My Fil-Am mother-in-law and her husband will retire next year. They intend to sell their big house in Los Angeles and use the money to move to a rural, cheaper area of the USA. They will use the money from the house sale also to open a small business to supplement their income. She says they will now wait a couple of years for the economy to recover so their plans can progress. Just a bump on the economic road, she tells me. Not a chance. It is a new world out there, and this is why.
The 1997 Asian crisis was a forerunner to 2009. South Korea fell in 1997 doing exactly the same thing as is being done in the USA now; bailing out, public funding of bankrupt companies. As a result, Sokor’s budget deficit skyrocketed, forcing it to borrow unprecedented amounts from the International Monetary Fund. Their economy died as money was diverted from useful purposes to paying the debt caused by diverting public and private funds to bailouts. The Korean won fell from 867 to 1,695 to the dollar in one year, 1997-1998.
Thailand went on a massive borrowing frenzy in the early 1990s, borrowing dollars from foreign sources to fund its economic expansion. Remember Thailand’s “Tiger economy”? Eventually those loans had to be repaid. But all that dollar borrowing did not create dollar revenues. So the borrowers had to sell Thai baht to buy dollars to repay the loans, thus causing the baht to move from 26 to the dollar on January 1, 1997, to 52 to a dollar in January 1998.
Back to normal? The baht now trades at 34 and the won at 1,247. Further, note this important fact: The 1997 price of crude oil was $20; in 2009 the price is $71. In January 1998, the US dollar index was over 100; now it is at 80.
The exact same scenario is playing out in the USA with the current budget deficit rising from $162 billion in 2007 to $1.7 trillion in 2009. US government debt: from 54 percent of gross domestic product (GDP) then to over 100 percent of GDP now.
As we learned from the 1997 Asian crisis, it takes a long time for things to return to “normal” and they never go back they way they were, when the consequences of policy and action are severe enough as they are now.
The Obama stimulus plan is a total failure. All the budget deficit and all the government debt has not revived the economy even a little. In fact, the unemployment, consumer-spending and economic-activity numbers are growing more negative. But all that debt has to be paid back. Further, the stimulus money combined with a falling dollar is raising prices, inflation, in the USA.
The USA must either 1) raise taxes, which will hurt economic activity even more, or 2) “monetize” the debt by printing new dollars to pay the debt, which will cause dollar devaluation. There are no other choices available. Next comes inflation fueled by excess cash in the system and a devalued dollar, which will be met with a rise in interest rates, reducing economic growth even more.
It is a global meltdown even now. Japan’s manufacturing capacity is running at 50 percent and falling, and GDP is falling at a negative-15-percent annual rate. The world air-travel industry is forecast to lose $9 billion in 2009, revised from a $4.7-billion loss just two months ago. India’s credit growth is shrinking and credit is vitally necessary for their economic growth. China’s consumer spending, despite government pump-priming, is stalling, reducing the hope that their domestic market could offset problems in the export sector. International ocean cargo shipping is operating at below break-even.
The world’s investing cash will flee from the West to countries like the Philippines just as the opposite occurred in 1997. We will read more headlines like this; “‘Hot’ money inflows surged in May,” “Remittances hit record high in March” and “Philippine call centers ring up business.” And this headline yesterday tells the truth about the Philippine economy: “GMA 7 profit up by 22 percent in January-May.” Recession? Sure. Right. Whatever you say.
Why should you be afraid of the “experts” and ignorant leaders? Because any policy based on believing that there has not been a fundamental change in the world economy, a belief that things will soon return to “normal,” will be disastrous for this nation.
And I told my mother-in-law to sell the house now because any future increase in the price will be more than offset by dollar devaluation and a $100 oil price. Then come back to the Philippines, which is one of the few places left where wealth creation will be possible in the next five years.
PSE stock-market information and technical-analysis
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Meat Quality Prediction in Scotland
SCOTLAND, UK - Plans for a project that will see Scotland leading the rest of the world in predicting the eating quality of cuts of meat were announced today.
Meat processors in Scotland will be offered technology that for the first time will allow them to accurately measure the different factors, such as tenderness, colour and fat levels, that add up to overall quality, says the Scottish Government.
The project, run by Quality Meat Scotland, the Scottish red meat industry development body, and part-funded by the Scottish Government, will initially focus on beef but the aim is to extend it to lamb and pork.
At the Royal Highland Show today Rural Affairs Secretary Richard Lochhead said: "This unique project is good news for the red meat sector and even better news for consumers. We know the importance shoppers attach to quality and taste and that this, in turn, provides a boost for those responsible for Scotland's world-class produce.
"It is fitting that this research project is being launched at the Royal Highland Show, one of the best showcases for rural Scotland and our food and drink. It also comes on the eve of our announcement of the next steps in Scotland's first-ever National Food and Drink Policy, which will deliver further benefits throughout the food chain, from gate to plate."
QMS Chairman Donald Biggar said: "This is an extremely exciting initiative which puts Scotland at the very forefront of what is a global quest to offer guarantees to consumers about the eating quality of the beef they're buying.
"Our Scottish meat processors will be the first to have the technology to make a rapid assessment of the complex range of factors that together determine how well a piece of beef tastes. The data on the quality of individual carcases in meat plants can be fed back from the processor to the producer so that he or she can pinpoint the sort of farm level decisions that are delivering consistently high quality meat.
"Capturing this level of information and using it as a mechanism to further drive up the quality of beef produced across Scotland has the potential to revolutionise how we promote our Scotch Beef to consumers around the world."
Scotland's meat plants process around 8,500 prime beef carcases every week producing 2900 tonnes of meat each week. The turnover of the beef processing industry in Scotland is worth half a billion pounds annually.
Around 70 per cent of all Scotch Beef produced in Scotland is sold in England. The European export market, which suffered a setback following the 2007 Foot and Mouth outbreak, is now back on track with increasing volumes being delivered to key markets in France, Italy, Belgium and the Netherlands.
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25 June 2009] Despite the current economic crisis, meat consumption in Asia is projected to grow in the long term due to continued economic development and the large population base in the region. According to Oscar Tjakra, Assistant Manager at Rabobank International’s Food & Agribusiness Research and Advisory per capita meat consumption in Asia is projected to grow by 8-42% from 2006-2016 with pork being the main meat consumed in the region.Beef consumption in China is growing at a faster rate than poultry meat and pork and urban residents are switching to higher value meats such as imported grain-fed and marbled beef.
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[25 June 2009] A group of Philippine livestock and poultry farmers and feed millers are seeking the restoration of zero tariff on feed wheat for at least another six months to prevent increases in pork and poultry product prices. The Alyansa Agrikultura (Agricultural Alliance) said in statement that the Cabinet Tariff Reform Matters Committee's decision to recommend the scrapping of the duty-free feed wheat importation is unfortunate, as this will could push up corn prices, which in turn would push up prices of pork, poultry, and other meat products and perhaps even fish products.
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[2 July 2009] Philippine agricultural production is expected to post a slower growth in the second quarter of this year compared to the same period last year. Agriculture Secretary Arthur Yap is predicting a 1.5-2% growth for April-June this year, which would be down from the first quarter’s 2.02% growth and the 5.4% growth recorded in the 2nd quarter of 2008. Mr Yap did not specify the reason for the slowdown, however analysts have pointed to various possibilities, from weather and climate change to high costs to the economic downturn.
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RSPCA Speaks Out Against Live Export Trade
AUSTRALIA - The Live Export Shipboard Performance Report revealed that more than 36,000 sheep, cattle and goats died while being transported overseas for slaughter in 2008.
"It's not a quick or simple death - they died from such things as starvation, salmonellosis, injury and pneumonia," said The Royal Society for the Prevention of Cruelty to Animals (RSPCA) Australia.
"The sad reality is that Australia's live exporters measure their success by the number of animals still standing at the end of the sea voyage. The fact is that tens of thousands of animals that embark on these journeys out of Australia every year will not walk off at the other end."
The RSPCA warns consumers not to believe the live export lobby's claims that this is an entrenched Australian tradition. "It isn't," they say. "Live exports represent just another market opportunity."
"But it is a market opportunity that comes at a cost to animal welfare and to Australia's reputation. There are alternatives that have proven to be far more lucrative than the trade in live animals. Our meat exports are seven times more valuable to the economy and they keep jobs here in Australia."
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4 August 2009] Western Visayas topped 15 regions in the country outside the National Capital Region in the January 2009 livestock inventory, figures from the National Statistics Coordination Board (NSCB) show. The region,which include the provinces of Iloilo, Negros Occidental, Aklan, Antique, Guimaras, and Capiz reported a total of 2.6 million heads of livestock. This accounts for 11.2% of the total livestock produced in the country. Of the total livestock produced in Western Visayas, hogs account for 57.4%, goat (17.7%), carabao (14%) and cattle (10.8%). The region ranked first in goat production, with 606,039 heads; third in hog production with 1.5 million heads and carabao production with 325,532 heads and fifth in cattle production (212,634 heads).
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6 August 2009] Chinese authorities have de-listed three US pork and two US poultry plants because of 'multiple detections' of 'chemical drug residues and epidemic pathogens' said the USDA's Food Safety and Inspection Service. Smithfield Packing Co., Tar Heel, N.C;John Morrell & Co., Sioux City, Iowa;Seaboard Foods, Guymon, Okla.;Equity Group-Ky. Division, Albany, Ky. and Mountaire Farms-Delmarva, Selbyville, Del. have been banned from exporting products to China.
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Negros feared to lose billion-peso industry in GMO ban
ONE of the country’s largest suppliers of feeds may pull out its contract-growing operations in Negros Occidental if the Provincial Government decides to continue with the implementation of Ordinance 007, which bans entry of genetically-modified products into the province.
Joey Avila, Visayas area manager of B-MEG, a subsidiary of San Miguel Group of Companies, Friday said the company will have no choice but to suspend the contract growing and possibly transfer it to other provinces.
The company supplies 30,000 sacks of mixed feeds to contract growers of Magnolia and 100,000 sacks contracted by other poultry companies every month, he said. For Magnolia contract growers alone, B-MEG generates monthly sales of P50-70 million, Avila said.
The province is the second net exporter of poultry products in the country next to Bulacan.
The Negros Hograisers Association (NHA), Negros Occidental Poultry Raisers Association and the Association of Backyard Raisers in Negros Occidental have called on the Provincial Government to declare a moratorium on the ordinance’s implementation pending the review and possible amendments to the 2007 law.
They claimed that they incurred P.9-million in additional costs for animal feeds after the ban was enforced in April. Hogs and poultry raisers were forced to source their feed requirements from Panay which translated to an additional P2 per kilo of feeds. They consume 15 tons or 15,000 kilos of feeds daily.
NHA president Albert Lim also stressed that the indecision by the Provincial Government has caused the suspension of investments in the province, particularly in the establishment of feed mills which will not only provide livelihood opportunities but employment as well.
Meanwhile, a Department of Agriculture (DA) official claimed the implementation of the anti-GMO ordinance “will kill the strength” of the livestock and poultry industry in Negros Occidental.
DA director for Biotech Program Office Alicia Ilaga told provincial officials Friday to “weigh the consequences if they decide to fully implement the ordinance.”
Ilaga was one of the nine speakers in the five-day en banc committee hearing on the anti-GMO ordinance that culminated yesterday at the Provincial Board (PB) session hall.
She noted: “If we ban all GM products like feeds, vaccines, cotton and other products, are there organic counterparts readily available that can suffice the need of the livestock and poultry sector?”
The PB will deliberate on the pros and cons that were raised by the invited resource speakers to decide on whether or not the ordinance will be amended.
Dr. Saturnina Halos, another resource speaker, told the PB that “transition to organic is very hard and more expensive.”
Further, resource speaker Dr. Santiago Obien also said the Provincial Government will need a P3-billion budget to effectively implement the ordinance.
Halos, chairperson of the DA Biotech Advisory Team, also informed the PB that there is “no single detection kit for GM crops” thus, the use of “your kit right now could be a venue for corruption.”
Meanwhile, University of the Philippines College of Public Health dean Dr. Nina Gloriani said there are different views on the use of aspartame, a biotech product, and “anything used in over-dosage can kill.”
“GM and non-GM products can co-exist,” a fact that will be highlighted in the 4th International Conference on Biotechnology in Australia in November this year, she said.
Published in the Sun.Star Bacolod newspaper on 1, 2009.
Written By George M. De La Cruz
Source: Sun Star
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Next crises: Food and water
REGARDED as the country’s “Prophet of Boom,” Dr. Bernardo Villegas of the University of Asia and the Pacific (UA&P) on Thursday sounded a surprisingly ominous tone. He warned that the next crises the country will face in the next few years would be on food and water.
In a presentation at the Mapfre Insular and Insular Life CEO Forum and Economic Briefing, Villegas warned that the growing number of people, particularly in China, could pose a threat to food security and water
resources.
With this, the country and private businesses must adopt a proagricultural investment stance that will increase funds to help farmers drum up production, improve their access to farm implements and postharvest facilities, modernize their processes, improve irrigation facilities and create farm-to-market roads.
“The next crisis will be food and water. This is why we need to fix our farm-to-market roads and irrigation facilities. We can become an important source of food for China,” Villegas said in his presentation, titled “The Philippine Economy on the Road to Recovery,” delivered in Makati City.
“China will turn to its neighbors in Southeast Asia for food. We need to have a surplus of food to be able to [meet the demand],” he added.
Villegas said, however, that when the government, businesses or the next administration formulate programs and projects to help the agriculture sector, there is a need to focus on high-value commercial crops such as bananas, mangoes, pineapples and all kinds of vegetables.
He also said “large-scale” investments in agriculture are not necessary since some crops like rice “do very well” even in small tracts of land.
Villegas said this is also the argument against the common misconception that the Comprehensive Agrarian Reform Program (CARP) failed due to fragmentation.
He said CARP could have been more successful if the government only provided support or extension services
to farmers who were recipients of the program. He said the failure of the CARP was due to the government’s neglect in providing post-harvest facilities, irrigation and others to assist farmers.
“The failure of CARP is that we gave farmers a hectare of land and told him, ‘D’yan ka na, ikaw na bahala [It’s yours; fend for yourself],” Villegas stressed.
Villegas said the government’s neglect of agriculture has set back the country in agricultural development by 20 years. He said it was only during the time of President Estrada, through his agriculture secretary and now Sen. Edgardo Angara, that the government started to reinvest in agriculture.
He said under the term of President Aquino, the government was busy defending democracy through the seven coup d’états that rocked her administration, while the Ramos years focused on the government’s struggle to put “light” back to the streets of Metro Manila.
This is why, Villegas said, the government was only able to start reinvesting in agriculture during the brief term of President Estrada. He said in the two years that President Estrada was in office, the government embarked on developing or rehabilitating irrigation facilities and constructing farm-to-market roads.
This, Villegas said, was continued in the Arroyo administration but should not stop in 2010 when the President steps down. The next administration should continue these investments as well as increase investments in education.
Investing in education could allow the local business-process outsourcing (BPO) industry to move from just being call centers to being knowledge-based centers, according to Villegas. He said China is already preparing to invade the call-center industry by teaching English in schools.
When that time comes, Villegas said, there would be more Chinese who speak very good English than Filipinos. He thinks shifting to a knowledge-based BPO industry like higher-value services, such as animation and architecture, could be a more stable source of BPO growth.
It would also do well for the next administration to focus on allowing the peso to depreciate to around P52 to $1—in order, he explained, to drive domestic consumption through overseas Filipino workers’ (OFW) remittances, as well as provide some incentive to exporters who may be prejudiced by a strong peso.
This year, he expects OFW remittances to reach P17 billion, and projects that the peso-dollar exchange rate will be at P50 to $1. This will mean that OFW families will have enough to spend and boost domestic consumption toward the end of the year.
A depreciated peso, Villegas added, will also encourage food manufacturers to start looking for new markets, particularly in Indonesia where there are at least 220 million people.
He said companies like Nestlé have already started this trend and such can continue, especially if the next administration also boosts agriculture production.
Written by Cai U. Ordinario
Source: Business Mirror
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The Philippines is relaxing its restrictions on Japanese beef imports after the Office International des Epizooties (OIE) reported that Japan has controlled Bovine Spongiform Encelopathy (BSE) or mad-cow disease. Agriculture Secretary Arthur Yap said the Philippines will now allow beef products derived from all ages of cattle aslong as they are devoid of any nerves and other BSE-specified risk materials. Mr Yap also ordered the inclusion of the slaughter of the cattle of the production date in the packaging label.
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11 August 2009] Singapore's National Development Minister Mah Bow Tan wants Singaporeans to look at investing in overseas food zones to ensure that when food supplies are threatened, Singapore can depend on alternative sources. He said companies will be encouraged to work with farms overseas to ensure that Singapore has a ready and stable supply of produce. He added that the volatile food prices in recent years exposed the island state's vulnerability and this move should mitigate supply shortages and sharp price increases in the long term.
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World Agricultural Supply and Demand Estimates - August 2009
According to the World Agricultural Supply and Demand Estimates report from the World Agricultural Outlook Board, weak demand for cattle, hogs and broilers is pressuring prices.
LIVESTOCK, POULTRY, AND DAIRY: Total US red meat and poultry production for 2009 is reduced as lower beef and poultry output more than offset higher pork production. The 1 July Cattle report, which was released on 24 July indicated lower cow numbers, a smaller calf crop, fewer cattle on feed, and fewer cattle outside feedlots than last year, all implying smaller feedlot placements through the balance of 2009 and into 2010. This also implies lower feedlot marketings and cattle slaughter and hence lower beef production than forecast last month. Partly offsetting the lower beef production is higher forecast pork production due to larger expected slaughter and higher carcass weights in the third quarter of 2009. Poultry production is forecast slightly lower as fractionally higher second quarter broiler production is more than offset by weaker turkey production. Egg production for 2009 is reduced slightly. Changes in the meat production forecast for 2010 reflect tighter supplies of fed cattle due to smaller cattle feedlot placements and lower cow slaughter. There are no changes to forecast pork and poultry production for 2010 as lower feed prices provide some support to producers. Egg production forecasts are unchanged from last month.
Export forecasts for 2009 and 2010 are reduced largely because of lower expected beef shipments. Weak economic growth in 2009 and tighter beef supplies for both 2009 and 2010 are expected to result in lower exports. Broiler exports are raised slightly but turkey export forecasts are reduced. Pork forecasts are unchanged.
Price forecasts for cattle, hogs, and broilers are lowered for 2009. Weak demand is pressuring prices. Egg prices are forecast slightly higher. Prices for hogs and broilers are lowered for 2010, but cattle prices are raised as tighter fed cattle supplies support prices. Egg and turkey price forecasts are unchanged for 2010.
The milk production forecast is raised for 2009 and 2010 as the reduction in cow numbers is slower than expected and growth in output per cow is higher. Fat and skim-solids basis imports are raised as cheese imports have been stronger than expected; the commercial export forecast for 2009 is adjusted as higher exports in the first half are offset by lower second half exports. Exports for 2010 are lowered as higher domestic prices and larger exportable supplies in competitor countries limit export opportunities into 2010. CCC removals are adjusted to reflect changes in support prices for cheese and nonfat dry milk (NDM). Cheese and NDM price forecasts are raised for 2009 as higher support prices and increased net removals support domestic prices. Forecast cheese and NDM prices for 2010 are lowered as higher forecast production and weaker commercial exports increase domestic supplies. Butter and whey price forecasts are unchanged from last month. Both Class III and Class IV prices are forecast higher for 2009 reflecting higher forecast prices for cheese (Class III) and NDM (Class IV). Class price forecasts for 2010 are reduced as cheese and NDM prices are lowered. The all milk price is forecast at $12.10 to $12.30 per cwt for 2009 and $14.65 to $15.65 for 2010.
WHEAT: US wheat ending stocks for 2009/10 are projected 36 million bushels higher this month as higher forecast production more than offsets an increase in projected use and lower imports. Wheat production is forecast 71 million bushels higher with increases in all classes of wheat except soft red winter. The largest increases are for hard red spring wheat and durum reflecting sharply higher expected yields in the Northern Plains. Feed and residual use is raised 5 million bushels with the larger crop. Exports are projected 25 million bushels higher with reduced production prospects in Canada and Argentina, which are major competitors in the western hemisphere wheat market. The 2009/10 marketing-year average farm price is projected at $4.70 to $5.70 per bushel, down 10 cents on both ends of the range. Small revisions are also made this month to 2007/08 and 2008/09 imports, exports, and food use based on the latest trade and mill grind data from the US Bureau of Census.
Global wheat supplies for 2009/10 are projected 5.0 million tons higher with higher beginning stocks and increased prospects for global production. World wheat production is raised 2.8 million tons for 2009/10 with major increases for India, United States, EU-27, China and Ukraine partly offset by reductions for Russia, Argentina, Canada and Kazakhstan. India production is raised 3.0 million tons to a record 80.6 million based on the latest revision to the official government estimate. EU-27 production is raised 1.6 million tons mostly on higher reported yields for Germany but also on better-than-expected yields for France and rising prospects for harvested area and yields for Poland. Partly offsetting are cuts for Spain, Romania, Bulgaria and Austria where persistent dryness reduced yields. China production is raised 1.0 million tons reflecting the first official indications for the harvested summer crops. Ukraine production is raised 1.0 million tons on higher winter wheat area and harvest reports.
Production forecasts for 2009/10 are lowered for several major wheat exporting countries. Production for Russia is lowered 4.5 million tons as dryness and extended heat during July sharply reduced yields in the Southern and Volga Districts. Kazakhstan production is lowered 0.5 million tons as western growing areas suffered under weather conditions similar to those in Russia. Argentina production is lowered 1.0 million tons as continued dryness in the central and western growing areas limited plantings. Production is also lowered 1.0 million tons for Canada as July rains came too late in some areas of Alberta and Saskatchewan and crop development remains delayed raising the potential for late season frost damage.
Global wheat imports and exports for 2009/10 are projected slightly lower. Small import reductions are projected for Afghanistan, Brazil, Egypt, Japan and Azerbaijan. Partly offsetting is an increase for Sudan. Larger country changes are forecast for exports, but they are mostly offsetting, leaving global exports down just 0.6 million tons. Exports are lowered 2.0 million tons for Russia, 1.8 million tons for India, 1.0 million tons for Argentina, and 0.5 million for Kazakhstan. Exports are raised 2.0 million tons each for EU-27 and Ukraine and combine with higher expected US exports to limit the decline in global trade. Global consumption is raised 2.7 million tons as a 4.4-million-ton increase in India food use is only partly offset by reductions in food use by Ukraine and Canada, and lower wheat feeding in EU-27 and Canada. Global ending stocks for 2009/10 are projected 2.3 million tons higher boosted in part by the rise in 2008/09 carryout.
COARSE GRAINS: US feed grain supplies for 2009/10 are projected higher this month with sharply higher forecast corn production more than offsetting a reduction in carry-in as 2008/09 corn exports are raised 50 million bushels. Corn production for 2009/10 is projected at 12.8 billion bushels, up 471 million as higher forecast yields more than offset a small reduction in harvested area as updated from the June 30 Acreage report. US corn supplies are projected at a record 14.5 billion bushels, up 134 million from the previous record in 2007/08.
Corn use for 2009/10 is projected higher with rising supplies and lower expected prices. Despite reduced prospects for livestock production, feed and residual use is raised 100 million bushels with the higher yield and production expected to add to residual loss. Food, seed and industrial use is raised 100 million bushels with higher expected use for ethanol supported by favorable ethanol producer returns and strong incentives for ethanol blending. Exports are projected 150 million bushels higher reflecting reduced foreign production prospects and stronger expected import demand from Mexico and Taiwan. Ending stocks are projected up 71 million bushels with higher expected use partly offsetting the increase in production. The 2009/10 marketing-year average farm price is projected at $3.10 to $3.90 per bushel, down 25 cents on both ends of the range. The marketing-year average reflects higher prices for corn sold for forward delivery over the past several months ahead of the sharp downturn in futures and cash market prices since early June.
Other feed grain changes include slightly higher 2009/10 production forecasts for sorghum, barley, and oats, as well as minor revisions to 2007/08 and 2008/09 imports and exports based on the latest data from the US Bureau of Census. Oats imports are projected 15 million bushels lower with reduced crop prospects in Canada. As a result, projected feed and residual use for oats is lowered 10 million bushels.
Global coarse grain supplies for 2009/10 are projected 8.3 million tons higher this month. Rising production prospects for US corn, Ukraine barley, India sorghum and EU-27 rye and mixed grains are partly offset by reductions in expected coarse grain output elsewhere. Corn production prospects are reduced for Mexico, Russia, South Africa, Ukraine and EU-27. Barley production is lowered for Turkey, Canada and EU-27.
World coarse grain imports and exports are both projected higher for 2009/10 mostly reflecting higher expected corn exports, up 2.6 million tons this month. Corn imports are raised 1.5 million tons for Mexico and 0.3 million tons for Taiwan. The 3.8-million-ton increase for US corn exports is partly offset by a 0.5-million-ton reduction each for South Africa and Ukraine, and a 0.2-million-ton reduction for Russia. Barley exports are raised 0.4 million tons with a 1.5-million-ton increase for Ukraine, partly offset by smaller reductions for Australia, Canada, EU-27 and Kazakhstan. Oats exports are cut 0.2 million tons with a reduction in Canada. Global coarse grain feeding is raised 1.7 million tons as increased US corn feed and residual use and higher barley feeding in Australia is partly offset by reduced corn feeding in Russia and reduced barley and oats feeding in Canada. Global coarse grain ending stocks are projected higher, mostly reflecting a 2.3-million-ton increase in corn stocks.
OILSEEDS: US oilseed production for 2009/10 is projected at 94.5 million tons, down 1.8 million from last month as lower soybean and cottonseed production are only partly offset by higher peanut production. Soybean yields are forecast at 41.7 bushels per acre, 0.9 bushels below last month=s trend yield projection, but 2.1 bushels above last year's yield. The first survey-based forecast of US soybean production is 3.2 billion bushels, 61 million below the July projection, but 240 million bushels above last year's crop. Soybean stocks are projected at 210 million bushels, down 40 million from July as reduced supplies are only partly offset by reduced crush and exports. Soybean crush is reduced 10 million bushels to 1.67 billion due to lower soybean meal exports. Soybean exports are reduced 10 million bushels to 1.265 billion. Lower US soybean and soybean meal exports are offset by increased shipments from Argentina.
Soybean and product prices are all increased this month. The US season-average soybean price for 2009/10 is projected at $8.40 to $10.40, up 10 cents on both ends of the range. Soybean meal prices are projected at $260 to $320 per short ton, up $5.00 on both ends of the range. Soybean oil prices are projected at 32 to 36 cents per pound, up one cent on both ends of the range.
Global oilseed production for 2009/10 is projected at 422.6 million tons, down 0.9 million tons from last month but still record high. Soybean production for China is reduced 0.2 million tons to 15.4 million due to lower yield resulting from excessive moisture in the northeast. Offsetting increases are projected for soybean production in EU-27 and Ukraine. EU-27 rapeseed production is projected at a record 19.5 million tons, up 1.2 million due to better-than-expected yields reported during harvest, especially in Germany and Poland. Other changes include higher sunflowerseed production in EU-27, lower peanut production for India, and a small reduction in cottonseed production for Brazil.
US changes for 2008/09 include increased soybean crush and exports and an offsetting reduction in residual, leaving projected ending stocks unchanged at 110 million bushels. Crush is raised 5 million bushels to 1.66 billion reflecting a small increase in domestic soybean meal disappearance. Soybean exports are increased 5 million bushels to a record 1.265 billion.
SUGAR: Projected 2009/10 US sugar supply is increased 350,000 short tons, raw value, from last month. Sugar production is increased 200,000 tons and beginning stocks are increased 150,000 tons while imports are decreased 50,000 tons. The increase in sugar production is based on higher-than-expected forecast production of US sugarbeets and Florida sugarcane, which more than offsets lower Louisiana sugarcane. The reduction in 2009/10 imports is due to prospects for sharply higher world market prices increasing shortfall in filling the tariff rate quota.
Estimated 2008/09 US sugar supply is increased 250,000 tons, based on larger early harvest of 2009-crop sugarbeets and continued strong imports from Mexico. Sugar use is increased 100,000 tons to reflect the refined portion of the increase in imports from Mexico.
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[14 August 2009] A US agribusiness trade and investment mission will visit the Philippines in October to explore the possibility of using the latter as “a staging ground for exports to the region for food and biotechnology” a statement from the Philippine Department of Agriculture (DA) said. During a meeting with USDA Secretary Thomas Vilsack, DA Secretary Arthur Yap highlighted the Philippines strategic location as a regional production and distribution hub for biotechnology and food products for US companies that want to sell to Asian markets. Among the proposals of Mr Yap to Mr Vilsack include a USD 20-million Geographic Information System and Remote Sensing project for new technologies for crop and fisheries production.
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A UN report published this week states that Asia faces an unprecedented food crisis and huge social unrest unless hundreds of billions of dollars are invested in better irrigation systems to grow crops for its growing population. It said countries like India, China and Pakistan avoided famines in the 1970s and 1980s by building giant state-sponsored irrigation systems and introduced better seeds and fertilisers. But the extra 1.5 billion people expected to live on the continent by 2050 will double Asia’s demand for food. A combination of very little new land left for cultivation, an increasingly unpredictable climate and water supplies stretched to the limit means the only realistic option to feed people in the future will be better management of existing water supplies.
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Pork to Keep China's Inflation on the Back-burner
CHINA - Pork, a trigger of past inflationary bouts in China, is likely to be a suppressant of price pressures in coming months and give the government leeway to keep monetary policy loose until the economic recovery is on solid ground.
A record flood of bank lending in the first half has fueled concerns that Chinese consumer price inflation, in negative territory since February, could soon accelerate - and accelerate quickly.
Monetary conditions are unquestionably crucial in determining the course of inflation, but recent history has shown that China's single most important price is that of pork.
Food makes up a third of the Chinese consumer price index and pork is the key component of that. A sweeping pig cull because of disease in 2007 sent pork prices soaring and sparked the country's worst inflation in more than a decade.
At first glance, pig market trends are unsettling, says Reuters.
Retail pork prices have risen for 11 weeks straight and are up more than 10 per cent during that time, which would seem to augur for an aggressive rebound of inflation in China.
But industry analysts and farmers said price rises would slow because an official pork stockpiling program and a general reluctance to slaughter hogs will leave the country with a bigger pig population than fundamental demand can support.
"There is no possible way that we will see pork-led inflation again because of the general over-supply of pigs," said Feng Yonghui, chief analyst for Soozhu.com, a hog industry website.
China needs about 410 million live hogs, including 41 million sows, for the market to be in equilibrium, according to the National Development and Reform Commission (NDRC), a central planning agency. Official data showed that China had 447.2 million live hogs and 48.3 million sows at the end of June.
US hog futures have plunged 34 per cent in three months and could be dragged lower by swelling supplies after a slump in export demand. China's pork prices have historically had little relationship to world prices, because it satisfies nearly all of its demand domestically and exports next to nothing.
In China, fresh pork cost 11.69 yuan ($1.70) per 500 grams in the week ending August 21, the NDRC said. That was 11 per cent higher than two months earlier, though still 20 per cent below the 2008 peak.
"Maybe the short-term price rises can last until September, but we do not expect pork prices will continue like that afterwards," said Guo Huiyong, an analyst who follows animal husbandry at Beijing Orient Agri-Business Consultant.
Low prices earlier this year meant that breeders were barely breaking even after soymeal-based feed costs rose, which might have discouraged them from raising more hogs. It takes six months to raise a hog for slaughter, so the ebb in prices could theoretically crimp the pork supply by the end of this year.
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New Opportunity for US Feed in Viet Nam
US - Transportation is a key factor when it comes to US agricultural exports and now Vietnam has been afforded expanded access through a new shipping line.
Hanjin Shipping, South Korea’s largest shipping company, has announced the launch of a new direct service between Viet Nam and the United States this month. According to a Hanjin news release, the new service will improve transit time and provide higher quality service with easier access to its customers in Viet Nam.
As a country experiencing rapid growth and development, this new shipping route is welcomed by the Vietnamese and Americans alike. The opening of this line makes Hanjin the third major container line to offer this service to Viet Nam.
US Grains Council Regional Director in Southeast Asia Adel Yusupov said, “The launch of this line is certainly a favorable development for US exporters of distiller’s dried grains with solubles (DDGS), corn and corn gluten meal into the market.” The availability of direct service from the United States to Viet Nam will offer better risk management solutions for both US exporters and Vietnamese buyers.
The government of Viet Nam’s policies have created a favorable environment for the country’s commercial livestock sector, encouraging expansion of commercial livestock production. According to Mr Yusupov, 2009 projected feed grains demand is approximately 12 million metric tons.
“We estimate demand will reach 20 million tons by 2015, given the current rate of livestock and feed industry growth,” said Mr Yusupov. In this time of robust growth in the feedmilling industry, backed by escalating feed grains demand, the Council is optimistic this new shipping line will easily lend itself to increases in US feed grains exports to Viet Nam.
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[26 August 2009] Philippine food exporters are being encouraged to explore the USD 1.1 billion Indian market because it's relatively relaxed rules makes it an easier market to access. Currently, Philippine processed food manufacturers only have a negligible presence in the market, but Philippine commercial attaché in New Delhi, Vichael Angelo Roaring, said local manufacturers could partner “with big buyers and distributors in India” and that “the commercial offices of the Philippines are willing to point them to the major buyers, but they should also start the initiative.” Studies show that India's food market is projected to grow by 30% in the coming years. With the newly signed Asean-India free-trade agreement, tariffs on imported processed food will go down to 28% beginning in 2010 down to 0% in 10 years.
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Non-GM corn pushed in Negros Occidental
[25 August 2009] Even as local hog and poultry raisers call for the scrapping of the ban on the use of GM corn in Negros Occidental province, Rommel Ledesma, Executive Director of Negros Island Sustainable Agriculture and Rural Development said that with the operation of the Corn Post Harvest Processing and Trading Centre in the province, the number of farmers planting corn is on the rise. He said a group of corn farmers have already confirmed that it has access to 500 hectares ready for production of non-GM corn, which is 10% of the 5,000-6,000 hectares needed by the province, which currently meets only 40%-50% of its corn requirement, to become self sufficient.
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31 August 2009] Although the Chinese government has set up a compulsory vaccination system, requiring immunization of animals against diseases harmful to human health the possibility of disease outbreaks still exist, said lawmakers in a report presented at the 10th session of the Standing Committee of the 11th National People's Congress (NPC). An official source quoted the report as saying that there should be relevant authorities to standardize use of veterinary drugs, strengthen and improve monitoring of the production and distribution of livestock products. The lawmakers proposed nationwide inspections for excessive veterinary drug residues and banned food additives to be in place, they also suggested the government subsidize treatment of animal carcasses that had died from disease or unknown causes to contain animal epidemics.
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Asia a Valued Customer of US Feed Ingredients
GLOBAL - Asian importers can look forward to the increasing availability of a quality product this spring as US ethanol production makes advancements in output and the quality of its co-product, distiller’s dried grains with solubles (DDGS).
The US Grains Council’s Taiwanese and Japanese DDGS teams that traveled to the United States this week expressed their excitement about the quality of the product and how it has preformed in both feeding trials and real life production scenarios. "The quality of DDGS produced in the United States has improved and I am confident in using more DDGS from the United States," said Willis Wu-Yeh Cheng, chairman of Charoen Pokphand Enterprise (Taiwan) Co. Ltd., who participated in the study of US DDGS production facilities and suppliers across the Midwest.
Mr Cheng also noted his satisfaction with the current corn crop, saying, "The supply of US corn in 2009/2010 will be enough for meeting the demands from the United States and global customers." The Council arranges teams to the United States to expose key traders and buying groups to US grain and co-product quality and supply, while connecting importers with US suppliers.
Team members visited producer farms and ethanol plants and attended the Midwest Specialty Grains Conference and Trade Show in Sioux Falls, South Dakota, where discussions with US food and feed suppliers and DDGS dealers may lead to potential partnerships. USGC Associate Director in Japan Hiroko Sakashita said, "One of the team members said he found a potential supplier of specialty corn for the future. Another team member said US DDGS dealers were quick to offer additional detailed information and further individual discussions about DDGS use for aquaculture, a promising market in Japan."
During a private meeting with Council members South Dakota Corn Growers Association (SDCGA) and South Dakota Corn Utilization Council held Tuesday morning, USDA’s Foreign Agricultural Service (FAS) Administrator Michael Michener spoke to the participants about the policies and priorities of the new administration and its focus on the expansion of the US agricultural export market.
"Michener mentioned how important trade was between the United States and both Japan and Taiwan," said Gary Duffy, USGC Asia Advisory Team member and SDCGA board member. "Meeting with the FAS administrator underscored the point that trade with Japan and Taiwan is important to the United States and that US farmers are a reliable supplier of corn and DDGS. This was helpful in driving home the point that DDGS is a high-quality feed ingredient and research is showing how it can be utilized in higher percentages in feed rations."
Team participant Tony Yi-Cheun Shu, executive assistant of Formosa Oilseed Processing Company Ltd. (Taiwan), said the team members highly appreciated Michener taking the time from his busy schedule to meet with them. "We feel we are regarded as valuable customers of the United States," he said.
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[10 September 2009] McDonald’s Corporation has lost a eight-year long trademark infrigement battle against a Malaysian curry restaurant after Malaysia's Federal Court allowed the latter to use the prefix 'Mc'. McDonald’s first sued the curry restaurant in 2001 for trademark infringement and a High Court ruled in favor of the international fast food chain in 2006. But McCurry, short for ‘Malaysian Chicken Curry’, then took the matter up to the Court of Appeal, which ruled in favor of the Malaysian restaurant, stating that McCurry's signage and Indian food menu contrasted sufficiently with McDonald's logo and Western menu. The Federal Court said McDonald's had failed to properly frame its questions when applying to challenge the Appeals Court's earlier verdict.
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Statistics from China Islamic Association show that, China’s halal foods trade in 2006 exceeded USD 2.1 trillion. The sector maintained a 10% growth rate and industry experts estimated that it is expected to grow at a faster pace of more than 20% this year. China’s halal foods trade volume accounts for 0.1% of the global trade, leaving greater potential for its promising growth in the international market, according to Zhang Zhigang, Vice Director General, Department of Economic Development of the State Ethnic Affairs Commission.
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[22 September 2009] Thailand is laying more focus on the Muslim markets and aims to expand halal food exports by at least 10% annually between 2010 and 2014. The plan includes strengthening the potential of the halal industry to meet world standards and conforming to domestic demand; promoting the competitiveness of entrepreneurs and increasing Thailand's capability in certifying food to Muslim halal standards, expanding markets and upgrading research and development. The targeted products are livestock products. The strategy calls for five southern provinces - Pattani, Yala, Narathiwat, Satun and Songkhla - to become the production base for halal products.
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25 September 2009] Asia is expected to grow more strongly than expected both this year and in 2010 and is set to lead the world out of the global financial crisis according to the latest forecasts by the Asian Development Bank (ADB). The bank said developing Asia is proving to be more resilient to the global downturn than was initially thought. 'Nevertheless, there is no room for complacency, and the region's nascent recovery faces downside risks,' the ADB report said. ADB Chief Economist Jong-wha Lee called for a series of measures like encouraging more long-term foreign investments and strengthening demand for Asia to limit the region's reliance on exports.
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[22 September 2009] China has recently fine-tuned its subsidy for agricultural inputs in response to a price slump in chemical fertilizers and diesels in 2008. According to the new plan mooted by the Ministry of Finance, the subsidy will be more dynamic on the market price fluctuation for agricultural inputs and grains. The price change in chemical fertilizers and diesel as well as grain planting acreage will determine the subsidy for agricultural inputs for next year, said an official from MOF. China currently has four subsidies for its agricultural sector - agricultural inputs subsidy, direct grain subsidy, farm machinery subsidy and grain seed subsidy. Subsidies for these categories totaled CNY 102.86 billion (USD 15.1 billion) in 2008, with the agricultural inputs subsidy accounting for nearly 70%.
"15.1 billion US dollars for Chinas farm subsidies"
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China may face problems with meat exports
[1 October 2009] New market research has cast a shadow on the quality of Chinese meat and this could affect its exports in coming years. The country has emerged as the world’s largest meat producer, providing 29% of the global production, but its extremely low quality has already resulted in the restriction of its supply to most developed countries. The blame has been placed an ongoing vast disorder in the Chinese Veterinary System, excluding the possibility of exercising control over the quality of livestock products. Most of the bans were imposed because of contamination of certain dangerous diseases in Chinese meat imports, including foot-and-mouth disease, and Siberian plague.
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[8 October 2009] The Philippines and the Taiwanese governments have signed an agreement to foster technical cooperation and work together to prevent and control the spread of livestock diseases. Under the agreement, the Philippines and Taiwan agreed to cooperate in the fight against livestock diseases through the exchange of experts, sharing of diagnostic experiences and techniques, and participation in trainings and workshops. Taiwan particularly wants parallel efforts in the prevention and control of the classical swine fever which afflicts both the Philippine and Taiwanese pig industries. Philippine Agriculture Assistant Secretary Salvador Salacup said the joint effort is further proof of the deepening and expanding ties between the Philippines and Taiwan in the field of agriculture.
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9 October 2009] Following the devastation caused by Typhoon Ketsana, the Philippine Department of Trade and Industry (DTI) has set price ceilings on basic commodities to prevent unscrupulous traders from raising prices. The order covers both wet markets and supermarkets, and includes products like canned sardines, processed milk, rice, meat, poultry, sugar, and cooking oil. This means that sellers will not be allowed to raise prices for 60 days after the state of calamity was raised on 27 September in Metro Manila, Mountain Province, Ifugao, Benguet, Pangasinan, La Union, Ilocos Sur, Isabela, Quirino, Nueva Vizcaya, Aurora, Nueva Ecija, Zambales, Pampanga, Bulacan, Tarlac, Bataan, Cavite, Laguna, Batangas, Rizal, Quezon, Mindoro Oriental, Mindoro Occidental, Marinduque, Catanduanes, Camarines Norte and Camarines Sur.
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RFM to increase halal exports to Middle East
[16 October 2009] Philippine food conglomerate RFM Corporation plans to increase its shipment of halal meat products to the Middle East this year. Imelda J. Madarang, RFM vice-president and general manager for exports, said the firm is looking to ship some USD 2 million worth of halal meat products, particularly sausages, within the six-member countries of the Gulf Cooperation Council (GCC) composed of Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates, and Oman. She said that so far, the company has sent “close to 50 containers of halal sausages” to the region. Likewise RFM, which pioneered in the export of halal meat, expects to introduce two new frozen meat products within the year. Although export sales made up just a small percentage of RFM’s sales in 2008, Ms Mdarang said the company’s venture into the halal market would be the driver of the firm’s export division. In 2008, RFM sales topped PHP 7.55 billion (USD 163 million)
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US meat supplier meet with Asian buyers
[19 October 2009] Recognizing the growing value and potential in Southeast Asia's Asean region the U.S. Meat Export Federation brought U.S. and ASEAN business contacts together for a “Meet the Buyers” conference in Denver. Meat trade leaders from the Philippines, Singapore, Thailand and Vietnam met in face-to-face talks with suppliers to discuss their product needs and share information about their markets.
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Agriculture damage hits PHP 18 billion
[19 October 2009] Damage to agriculture from the successive typhoons that hit the Philippines is now pegged at an estimated PHP 18 billion (USD 388.6 million). The latest report of the Department of Agriculture Central Action Centre said that the two typhoons destroyed some 121,949 hectares of croplands causing the loss of 925,523 tonnes of rice, corn, and high-value commercial crops, as well as fishery products, livestock and poultry. Some 21,354 hectares of corn were damaged. This amounts to losses of about 41,948 tonnes of corn grains. Meanwhile, some PHP 13 million (USD 280,656) worth of livestock and poultry products were reported dead or lost.
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[27 October 2009] Food and beverage conglomerate RFM Corp is confident it will recover from losses brought about by the two typhoons that hit the Philippines in late September and early October. RFM President and CEO Jose Ma. Concepcion III said the company lost a significant amount of perishable products during the typhoons, especially in Metro Manila and Northern Luzon, which were the hardest hit. Nevertheless, Mr Concepcion is optimistic that the company will manage to sustain its first half growth into the third quarter. For the first six months, RFM returned to profitability with profits reaching PHP 134.5 million (USD 2.87 million), as sales grew more than 20% to reach PHP 3.85 billion (USD 82.16 million). The company hopes to duplicate its 23% revenue growth last year when it recorded sales of PHP 7.55 billion (USD 161.12 million) and a net income of PHP 234 million (USD 4.99 million).
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Livestock Asia 2009 opens today
[27 October 2009] A record number of national pavilions have been secured for the 5th edition of Livestock Asia Expo & Forum that opens today at the Kuala Lumpur Convention Centre. The show that goes on until October 29 is slated as one of the region's premier feed, livestock and meat processing industry shows. Organizer AMB Exhibitions said the event this time has a greater international focus with more international pavilions and more than 30% of the visitors coming from outside Malaysia. Show highlights will include the 5th Asian Livestock Industry Award as well as the 5th Malaysian Livestock Industry Awards.
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Bounty and Aftab win regional integrator award
[28 October 2009] Bounty Fresh Group of Companies from the Philippines and Aftab Bahumukhi Farms Ltd of Bangladesh were judged winners of the Asian Livestock Industry Award 2009. The awards were presented by Asian Agribusiness Media and AMB Exhibitions at the Livestock Asia Expo and Forum currently being held in Kuala Lumpur, Malaysia. This prestigious regional award is presented once in two years to an integrator that has shown great potential and growth domestically and in the region. They were judged by an independent panel on four broad categories namely industry leadership, use of technology in operations, health & safety and marketing & promotions.
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China moves forward on China-Asean FTA
[28 October 2009] The free trade area (FTA) between China and the Association of Southeast Asian Nations (Asean), which is scheduled to be established on January 1, 2010, reflects China’s willingness for larger foreign trade and deeper economic cooperation with other countries and regions and will pave the way for the FTA between China, Japan and South Korea in the future. This was the message from the 6th China-Asean Expo held in Nanning, capital of south China's Guangxi province last week. China has become Asean's third largest trading partner in 2009. Guangxi, China's south region bordering Vietnam, saw trade volume with Asean jumped from USD 630 million in 2002 when the FTA started, to USD 3.99 billion in 2008, official data showed
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Philippines continue to seek exemption from AFTA's zero tariff
[29 October 2009] The Philippines continue to seek deferment of the tariff reduction next year under the Asean Free Trade Agreement (AFTA) not only for rice and sugar, but also for livestock and poultry, said Ambassador Donald Dee, special envoy for international trade negotiations.Poultry and pork imports are currently slapped tariffs of 40% and 35% respectively, but local producers fear that they will not be able to compete when AFTA's full implementation bring the tariffs down to between 0-5% beginning January 2010. The United Broiler Raisers Association said that in August this year, farm price for live chicken was PHP 66 (USD 1.41)/kg compared to PHP 48 (USD 1.02)/kg in Thailand. Farm price for live hog was PHP 85 (USD 1.81)/kg compared to PHP 60 (USD 1.28) in Thailand.
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Progress made towards goal of FMD eradication by 2020
[29 October 2009] Satisfactory progress has been achieved by the South East Asia Foot and Mouth Disease Regional Coordination Unit in its goal to eradicate the disease from the region by 2020. Unit regional co-ordinator, Ronello Anila, told the 4th Congress of the Asian Pig Veterinary Society in Tsukuba, Japan, more epidemiological investigations of outbreaks are needed to better understand virus activity in the field. “Continued political commitment, coupled with proper allocation of needed resources from each member country, is the most important factor in achieving eradication by 2020,” he said.
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Progress made towards goal of FMD eradication by 2020
[29 October 2009] Satisfactory progress has been achieved by the South East Asia Foot and Mouth Disease Regional Coordination Unit in its goal to eradicate the disease from the region by 2020. Unit regional co-ordinator, Ronello Anila, told the 4th Congress of the Asian Pig Veterinary Society in Tsukuba, Japan, more epidemiological investigations of outbreaks are needed to better understand virus activity in the field. “Continued political commitment, coupled with proper allocation of needed resources from each member country, is the most important factor in achieving eradication by 2020,” he said.
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Philippines could be agribusiness hub for the US
[2 November 2009] The Philippines could become a regional agribusiness hub for the US because of its strategic location and untapped resources, Philippine Agriculture Secretary Arthur Yap said during a briefing on the four-day trade and investment mission led by his American counterpart, Thomas J. Vilsack. For his part, Mr Vilsack said that the US will continue to look for investment and export opportunities in the Philippines. The mission included aquaculture firm Verdant Ocean, Inc and feed miller Novick Industries Ltd. Novick President Luyi Ogbebor hinted at the possibility of his company investing USD 10-15 million for a feed and flour processing plant in the Philppines, while Verdant Ocean President Denzil Nicholson said they are exploring aquaculture and sustainable seafood production in the country. In 2008, US farm products sold to the Philippines reached a record USD 1.77 billion, while Philippine agricultural exports to the US reached USD 1.24 billion.
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16 November 2009] Ocean container carriers in the westbound trans-Pacific trade lanes announced early this month their intent to increase rates on December 1, and again on January 15, 2010. These rate increases are followed by previous rate increases that took place in July and September. The December increases will apply to dry cargo only and amount to between USD 80-120 per 20-foot container. The January increases will apply to refrigerated cargo and amount to between USD 200-250 per 20-foot container.
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IMF raises growth forecast for Asia
[16 November 2009] Asian economies, particularly China and India are expected to grow faster than expected through next year, far outpacing recoveries in the West, predicts the International Monetary Fund (IMF), although it will remain below the levels seen in the decade before the economic crisis. Growth in Asia is expected to accelerate to 5.8% next year from 2.8% this year.
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World Agricultural Supply and Demand Estimates - November 2009
According to the latest World Agricultural Supply and Demand Estimates from the USDA's World Agricultural Outlook Board (WOAB), red meat and poultry exports forecasts for 2009 and 2010 have been raised.
Livestock, Poultry and Dairy
Total US meat production for 2009 is raised as fourth-quarter pork and beef production is forecast higher on larger-than-expected October output. Broiler production is raised due to higher-than-expected third-quarter production; forecast fourth-quarter production is unchanged from last month. Turkey production is decreased on weaker third-quarter production, and forecast lower fourth-quarter slaughter. Egg production is little changed.
Meat production for 2010 is lowered from last month as higher forecast beef production due to larger feedlot placements in 2009 is more than offset by lower forecasts for broilers and turkey. Broiler and turkey hatchery data points to a smaller than previously forecast expansion in 2010.
Red meat and poultry export forecasts for 2009 and 2010 are raised. Beef exports are forecast higher for the last half of 2009 and for 2010 on a weak dollar outlook, and improved economic outlook next year. Poultry exports are raised for third-quarter 2009. Import forecasts for beef for both 2009 and 2010 are reduced reflecting lower expected beef supplies in Oceania.
Cattle price forecasts are unchanged for 2009 and 2010. The hog price forecast is raised for fourth quarter 2009, but is unchanged for 2010. Broiler prices are lowered for 2009 and 2010. The egg price forecast is increased slightly for 2009 as fourth-quarter prices have been higher than expected but the forecast is unchanged for 2010.
The milk production forecasts are raised for 2009 and 2010 as milk per cow is forecast higher and the rate of decline in cow inventories is slowed. Improved milk prices are expected to more than outweigh higher feed costs and slow the pace of liquidation. Improving global demand and concerns about world supplies of dairy products have pushed international dairy prices higher and are expected to result in higher US dairy exports during the remainder of this year and into 2010. Import forecasts are lowered for 2009. Fat-basis ending stocks are forecast higher for 2009, but 2010 stocks are forecast lower on both a fat and skim-solids basis as supplies tighten. Improving domestic and export demand and lower year-to-year milk production is expected to lead to higher prices for US cheese, butter, nonfat dry milk, and whey. Class III and IV price forecasts for 2009 and 2010 are raised from last month. The all milk price is forecast at $12.60 to $12.70 per cwt for 2009 and $16.05 to $16.95 for 2010.
Wheat
US wheat supplies for 2009/10 are reduced 4 million bushels this month with small downward revisions to hard red spring wheat and durum production. Exports are projected 25 million bushels lower based on the slow pace of export sales and shipments and increased competition from major Black Sea exporters. US ending stocks for 2009/10 are projected 21 million bushels higher. Ending stocks would be a 10-year high at the projected 885 million bushels. The projected marketing-year average farm price range is narrowed 10 cents on both ends of the range to $4.65 to $5.05 per bushel. Recent gains in futures prices have supported farm gate prices while limiting export opportunities for US wheat.
Global wheat supplies for 2009/10 are projected 1.7 million tons higher as increased production more than offsets a reduction in beginning stocks. Foreign production is raised 3.9 million tons with most of the increase in FSU-12 as an extended growing season and favorable harvest weather boosted yields. Production is raised 2.0 million tons each for Kazakhstan and Russia as harvest results indicate higher yields for spring wheat. Ukraine production is raised 0.5 million tons reflecting late season revisions to winter wheat yields. Production is raised 0.8 million tons for Syria as increased use of irrigation raised yields. Chile production is also raised 0.3 million tons on higher reported area. Production is lowered 1.1 million tons for EU-27 with reductions for France, the United Kingdom, Italy and Spain more than offsetting small increases elsewhere. Production is also lowered 0.5 million tons for Canada as above normal precipitation and below normal temperatures during October delayed harvesting and raised the potential for field losses, particularly in northern Saskatchewan.
Global wheat trade for 2009/10 is projected higher this month. Imports are raised for EU-27, Israel, South Korea, Syria, Turkey, Bangladesh and China more than offsetting reductions for Chile and Angola. Higher exports for Russia, up 1.5 million tons, and Kazakhstan and Ukraine, each up 0.5 million tons, are partly offset by reductions for EU-27 and Canada, down 1.0 and 0.5 million tons, respectively. Abundant supplies of low-priced Black Sea wheat are expected to limit export opportunities for the traditional exporting countries including Canada, EU-27, and the United States. Global consumption is raised with increased wheat feeding expected in Russia, Israel, South Korea, and Morocco. Global ending stocks are projected 1.5 million tons higher as the increase in world output more than offsets lower carryin and the relatively small increase in consumption.
Coarse Grains
US feed grain supplies for 2009/10 are projected lower this month reflecting lower forecast corn production. Corn production is forecast 97 million bushels lower with a 1.3-bushel-per-acre reduction in the forecast yield. US corn exports are projected 50 million bushels lower reflecting the slow pace of sales and shipments in recent weeks and prospects for increased competition from larger Black Sea corn and wheat supplies. US corn ending stocks are projected down 47 million bushels. The 2009/10 marketing-year average farm price projection is raised 20 cents on each end of the range to $3.25 to $3.85 per bushel. Barley ending stocks are raised 5 million bushels mostly reflecting a drop in projected exports based on the slow pace of sales and shipments to date. Reflecting the higher expected corn price, marketing-year average farm prices are projected higher for sorghum, barley, and oats.
Global coarse grain supplies for 2009/10 are projected 2.0 million tons lower, as reduced corn beginning stocks and production are only partly offset by higher EU-27 mixed grain, barley, and oat production, and higher Kazakhstan barley production. Global corn beginning stocks for 2009/10 are lowered 0.9 million tons mostly reflecting higher 2008/09 feed use for EU-27 and higher food, seed, and industrial use for South Africa. Global corn production for 2009/10 is lowered 2.8 million tons with reduced production for the United States, Brazil, EU-27, Russia, Venezuela and Canada only partly offset by increases for South Africa and Ukraine. Brazil production is reduced 1.0 million tons on lower expected area. Production is lowered 0.4 million tons for EU-27 and 0.3 million tons each for Russia and Venezuela. Production is raised 1.0 million tons for South Africa as producer intentions indicate higher planted area and abundant early season rains support timely planting. Ukraine production is raised 1.0 million tons on higher reported yields.
World coarse grain trade is projected slightly lower for 2009/10 mostly reflecting reduced prospects for US corn and barley exports. Barley exports are also reduced for the EU-27, down 0.2 million tons. Partly offsetting is a 1.0-million-ton increase in Ukraine corn exports. Corn imports are lowered 0.3 million tons for Israel with higher expected wheat feeding. Barley imports are lowered 0.2 million tons for Jordan with lower expected feeding. Global coarse grain ending stocks are lower this month with a 3.8-million-ton reduction in world corn stocks. Much of the decrease is based on this month’s US changes, however, other major reductions in 2009/10 corn ending stocks are projected for EU-27, down 1.7 million tons, and Brazil, down 0.8 million tons. Barley ending stocks are projected higher for EU-27 and Kazakhstan, up 1.1 million tons and 0.4 million tons, respectively.
Oilseeds
US oilseed ending stocks for 2009/10 are projected at 8.8 million tons, up 1.1 million from last month as larger supplies are only partly offset by increased exports. Oilseed crush is almost unchanged as a small increase for soybeans is offset by a reduction for cottonseed. Total US oilseed production is projected at 97.8 million tons, up 1.7 million from last month due to higher soybean production. Soybean production is forecast at a record 3.319 billion bushels, up 69 million from last month. The soybean yield is projected at a record 43.3 bushels per acre, up 0.9 bushels from the previous estimate. Soybean exports are raised 20 million bushels to 1.325 billion due to increased supplies and increased global import demand, mainly for China, EU-27, and Russia. Soybean ending stocks are projected at 270 million bushels, up 40 million from last month.
Prices for soybeans and products are projected higher for 2009/10, reflecting higher corn and soybean futures prices. The US season-average soybean price range is projected at $8.20 to $10.20 per bushel, up 20 cents on both ends of the range. The soybean meal price is projected at $250 to $310 per short ton, up 5 dollars on both ends of the range. The soybean oil price range is projected at 33 to 37 cents per pound, up 1 cent on both ends of the range.
Global oilseed production for 2009/10 is projected at 428.9 million tons, up 3.6 million from last month. Increased soybean and rapeseed production are only partly offset by lower sunflowerseed, cottonseed, and peanut production. Global soybean production is projected higher with increases for the United States, Brazil, Argentina, Paraguay, and Uruguay. Brazil soybean production is projected at a record 63 million tons, up 1 million from last month due to an expected increased harvested area. Argentina soybean production is raised 0.5 million tons to 53 million due to increased area as producers shift additional area to soybeans from sunflowerseed. Argentina sunflowerseed production is reduced due to lower planted area resulting from dry conditions during the planting season. Global rapeseed production is projected higher as increased production for EU-27 is only partly offset by a reduction for Canada. Other changes include higher sunflowerseed production for Ukraine and EU-27, and lower cottonseed production for China.
Global oilseed stocks for 2009/10 are raised 3.1 million tons to 69.0 million. Increased soybean stocks for Brazil, the United States, and China account for most of the change. Rapeseed stocks for Canada, EU-27, and India are also increased. China soybean imports are raised for 2008/09 and 2009/10 to 41.1 million and 40.5 million tons, respectively. Soybean exports for 2009/10 are raised for Brazil and Argentina. Global vegetable oil stocks are projected 1 million tons higher due to increases in soybean oil stocks for Brazil, China, and India, and increased palm oil stocks for China and Malaysia.
Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This report was prepared by the Interagency Commodity Estimates Committees.
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Warning: More Drug Resistance in Zoonoses
EU - Better surveillance needed to fight spread of antimicrobial resistance in zoonotic infections, particularly Salmonella and Campylobacter, according to a group of health agencies.
The European Centre for Disease Prevention and Control (ECDC), the European Food Safety Authority (EFSA), the European Medicines Agency (EMEA) and the European Commission’s Scientific Committee on Emerging and Newly Identified Health Risks (SCENIHR) have published a joint scientific opinion on antimicrobial resistance (AMR) focused on infections transmitted to humans from animals and food (zoonoses).
The joint opinion concludes that bacterial resistance to antimicrobials has increased in recent years worldwide, making it more difficult to treat some human and animal infections. It says surveillance activities should be strengthened and the development of new antimicrobials and new strategies to combat the spread of resistance encouraged. Research is needed on other strategies to control infectious diseases in animals, such as vaccination programmes.
The opinion says there is specific concern about bacterial resistance to antibiotics used in the treatment of Salmonella and Campylobacter infections – the two most reported zoonotic infections in Europe, and points out which antibiotics are considered of high concern for their treatment. It says that although the use of antibiotics is considered the main factor in the development of bacterial resistance, the use of biocides (including disinfectants, antiseptics and preservatives) may also contribute to bacterial resistance.
Dominique L. Monnet, Senior Expert and Coordinator of the Antimicrobial Resistance and Healthcare-Associated Infections at ECDC, said: "Antibiotic resistance is one of the biggest threats to public health in the European Union and a priority area of work at ECDC. The major cause of antibiotic resistance in humans remains the use of antibiotics in human medicine. If the misuse and overuse of antibiotics continue, we will lose the means to treat serious infectious diseases."
The opinion on antimicrobial resistance in zoonotic infections highlights that globalisation of food trade and frequent travel to countries outside the EU make it difficult to compare resistance data from surveillance programmes at EU level and to assess the impact of those strains coming from outside the EU. It also adds that the differences in levels of antimicrobial resistance in the various EU countries make it difficult to have a single strategy to fight against this threat.
Professor Dan Collins, Chair of EFSA's Biological Hazards (BIOHAZ) Panel, said: "Resistance is caused by the ability of bacteria to undergo changes, given their increasing exposure to antimicrobials used in human and veterinary medicine. Most antimicrobial-resistant strains of zoonotic bacteria are found in the gastrointestinal tract of healthy food animals, particularly poultry, pigs and cattle."
Food-borne infections caused by these bacteria very often originate from contamination during slaughter of animals or food processing. The opinion says that at present there are no data available to demonstrate that the use of antibiotics in human medicine may also have an impact on the resistance of zoonotic bacteria.
The three EU agencies and the SCENIHR have worked together on this issue, sharing their scientific expertise and advising EU decision-makers on risks and making recommendations for action.
David Mackay, Head of Unit Veterinary Medicines and Product Data Management at the European Medicines Agency, said: "This exercise has been an example of how different institutions within the EU can successfully work together to tackle the issue of antimicrobial resistance, which currently represents a significant threat to human health."
The opinion on antimicrobial resistance in zoonotic infections was published ahead of European Antibiotic Awareness Day on 18 November, which focuses on resistance to antibiotics. The opinion confirms previous recommendations that prudent use of antimicrobials in animals should be strongly promoted and that veterinarians and farmers should be educated on strategies to minimise antimicrobial resistance. Other previous recommendations said antibiotics such as fluoroquinolones and cephalosporins should be reserved for treating conditions which respond poorly to other antimicrobials.
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Two new feed plants get incentives in the Philippines
[19 November 2009] The Philippine Board of Investments have approved and granted incentives to two new feed manufacturing projects with a combined project cost of PHP 152 million (USD 3.25 million). Dan Way Processing Corp, a wholly-owned Filipino project, will put up a PHP 82.4 million (USD 1.76 million) feed manufacturing plant in Bulacan province with an annual production capacity of 30000 tonnes. The plant will be equipped with steel silos for storage, equipment for producing pellets and crumbles, and special feeds using local raw materials. The other project is by 557 Feather Meal Corp, a Filipino-American venture that will invest PHP 70.4 million (USD 1.76 million) for a rendering plant that will produce aqua feed using poultry waste like feathers, carcass trimmings, condemned carcasses and other internal organs. The plant, which will be operational in January 2010, will use raw materials supplied by San Miguel Foods Inc, which is also the sole buyer of the company’s feed produce, on a toll manufacturing basis.
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Owners of Danway feeds have come a long way. They used to be the distributor of B-meg feeds, 555 duck layer feeds in parts of bulacan. ANd i think it is late 2003 or 2004 they started producing their own feeds.
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SMC evaluating Purefoods purchase offers
[20 November 2009] San Miguel Corporation (SMC) is now evaluating offers for its 40% share in San Miguel Pure Foods Co Inc (SMPFCI), said SMPFCI President Francisco Alejo III, and a deal is likely to be finalised soon. Based on current prices, the 40% interest in Purefoods would cost over PHP 2 billion (USD 42.77 million). Mr Alejo said that in addition to Hormel Foods Corp, there are other parties interested in the stake, most of which are foreign companies. Even with the sale, however, SMC will continue to be the majority stakeholder in the company. SMC is also considering the sale of a significant stake in its liquor unit Ginebra San Miguel Inc. The asset sales will help fund SMC's diversification, which involves investment in other sectors like telecommunications, energy distribution and generation and toll roads.
Philippines lifts ban on US meat and bone meal
[20 November 2009] The Philippine Department of Agriculture (DA) has lifted its ban on meat and bone meal (MBM) imports from the US, after the Office International des Epizooties adopted a resolution in accordance with the US "controlled risk" status. DA Secretary said that the US has a lessened risk of Bovine Spongiform Encephalopathy and there has been no recent case of mad cow disease in the US. Mr Yap said that the US Food and Drug Administration regulates the use of meat and bone meal in animal feed and has tightened restrictions to further decrease the risk of mad cow disease in the the country, adding that the US currently exports MBM to Indonesia, Canada, Europe, South Africa, Malaysia, China, Mexico, Ecuador, Bangladesh, Thailand and Vietnam.
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23 November 2009] Adverse weather, including successive typhoons that hit the country in September and October, has brought down the growth of Philippine agriculture to only 1.55% in the first nine months of 2009. Figures from the Bureau of Agricultural Statistics (BAS) show that this is below the 4.16% growth the sector posted during the same period in 2008. From January-September 2009, the gross value of agricultural output amounted to PHP 849.3 billion (USD 18.16 billion), up slightly by 1.6% from the previous year. Livestock grossed PHP 138.4 billion (USD 2.96 billion), up 4.9% from the same period in 2008, while poultry grossed PHP 100.3 billion, (USD 2.14 billion) up by 11.4%. The fisheries sub-sector was valued at PHP 160.6 billion (USD 3.43 billion), 3.2%. Volumewise, the livestock sector grew 1.95%, the poultry industry rose 3.5%, as did the fisheries sector with a growth of 3.3%.
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Locals Make Banana Waste into Feed Ingredient
UGANDA - A local initiative has been set up to collect banana peel and dry it to make a nutritious feed ingredient for poultry and pigs.
Over 1,500 tonnes of garbage are generated in Kampala daily that Kampala City Council is overwhelmed by the waste output due to its lack of capacity to collect and dump it at its landfill, according to Daily Monitor of Uganda. Three-quarters of garbage rots uncollected on pavements, streets, sewerage outlets and water channels.
This unfortunate situation is witnessed especially in markets, blurring the city's image and posing a serious health danger. However, thanks to an innovation of Kasubi Parish Local Community Development Initiative and Kawaala Recycling and Manufacturing Development Group who have started turning banana peels into veterinary feeds.
Moses Nadiope, the coordinator of Kasubi Parish Local Community Development Initiative said turning banana peels into banana bran project was developed from the general observation that chicken, pigs and cows ate the raw peel.
"We wondered why the peels could not be dried and milled into feeds," he explained.
He said over 70 per cent of the garbage in Kasubi, Kawaala, Nakulabye and neighbouring areas are banana peels making the sourcing of the raw material for making the banana peel bran easy.
"Our project reduces the burden of garbage in our neighbourhood because we buy dried banana peels from residents at 120 shillings per kilogramme," Mr Nadiope said.
He added that the burden now is to popularise the message to residents not to throw the banana peels at garbage hips but to sell them to the group. The three-year Sustainable Neighbours in Focus project started in 2007 and is supported by Environmental Alert, an NGO working to ensure environmental protection, Makerere University, CIAT, Urban Harvest, Kampala City Council and the Ministry of Agriculture, Animal Husbandry and Fisheries.
Environmental Alert bought the mill they are now using to process the banana peel bran.
Mr Nadiope said every day, they produce one tonne of peel bran from six tonnes of dry banana peels.
Maria Kawesa, Environmental Alert's programme officer in charge of the project told Daily Monitor that the banana peel bran is a good substitute to maize bran, which is becoming very expensive for poultry farmers because it is highly nutritious.
She said microbiological tests were carried on banana peel bran were carried out at the Department of Animal Science in the Faculty of Veterinary Medicine and the Department of Soil Science in the Faculty of Agriculture. They showed that the banana peel bran has enough phosphorus, proteins and calcium, and it is free from heavy metals like chromium, cadmium, lead and mercury.
The Makerere University scientists observed that the bran is safe but they have to be properly dried on polythene sheets and kept in dry places to avoid dampness that creates conditions for bacterial multiplication.
She said what the farmers need is to add cotton seed, silver fish (mukene), sunflower and other ingredients to make complete feeds for poultry, pigs and other animals.
She said in terms of price, this banana bran is very cheap because a kilogramme costs 250 shillings (UGS) compared to a kilogramme of maize bran that costs UGS350 to 500.
Mr Nadiope said the innovation has attracted many clients who buy the bran.
"Most clients are our members because they are aware of the nutritional value of the bran to their animals and birds but even nonmembers are slowly realising the magic," he said.
Ms Kawesa said the milling machine that the group uses was given to them on credit but they will be able to clear the debt from the profits they make, according to Daily Monitor.
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India-Asean FTA to take effect in January
[27 November 2009] The trade in goods agreement endorsed between India and the Association of South East Asian Nations (Asean) in August, will come into force in January 2010. Reporting on this in Parliment this week, Union Minister of State for Trade and Commerce, Jyotiraditya Scindia said the Agreement will lead to growth in bilateral trade and investment resulting in economic welfare gains to India. Indian exporters of oilcake, wheat, buffalo meat, machinery and machine parts, steel and steel products, automobiles and auto components, chemicals, synthetic textiles, etc. would gain additional market access into Asean countries. Indian manufacturers would also be able to source intermediate products at competitive prices from the Asean markets for further reprocessing and export, Mr Scindia said.
Food prices may spike again
[27 November 2009] Food prices could spike once again fuelled by crop shortages in India and the Philippines combined with increased fund speculation in commodity markets. World Bank President Robert Zoellick said food prices are expected to remain high and volatile, and will continue to hit developing countries the hardest. Mr Zoellick added that the World Bank will start a trust fund to boost agriculture in poor countries with an initial USD 1.5 billion.
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Philippines lifts ban on meat from Belgium
[1 December 2009] The Philippine Department of Agriculture has lifted an eight-year ban on imports of meat and meat products from cattle from Belgium after the Office Internationale des Epizooties declared the country “as having a controlled Bovine Spongiform Encephalopathy (BSE) risk.” DA Secretary Arthur Yap said the meat items including boneless and bone-in beef can be sourced from cattle of all ages, devoid of any nerves. However, the meat should come only from healthy ambulatory and not downer cattle and the slaughter date of the cattle or the production date of the beef should be indicated on the packaging label. Data from the Bureau of Agricultural Statistics show that beef imports dropped 27% to 11,576 tonnes from January-March 2008 from 15,887 tonnes in the same period last year.
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Ongpin group buys 28% of San Miguel Corporation
[1 December 2009] Top Frontier Investment Holdings has bought a 28% share in the Philippines food and beverage conglomerate San Miguel Corporation (SMC), paving the way for a possible takeover. The stake acquired by Top Frontier from San Miguel Retirement Fund involves 857.12 million A and B shares, and it represented the fund’s entire stake in the food and beverage giant. Top Frontier, led by SMC Director Roberto Ongpin, said that its purchase may lead to an offer to stockholders to buy the rest of San Miguel. Businessmen Iñigo Zobel and Jose Campos co-own Top Frontier with Ongpin, a former trade minister. Zobel is also an SMC Director. Mr Ongpin, through Q-Tech Alliance Holdings Inc., already owns 20% of San Miguel that was acquired from Kirin of Japan. In a statement, Mr Ongpin said that “San Miguel is a sound investment, with a strong balance sheet to support the new business endeavours which are clearly the future engines of growth,” and that the company “has a strong management and highly competent people resources.”
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Jollibee to open more stores in Vietnam, eyes India
[2 December 2009] Philippine fastfood giant Jollibee Food Corporate (JFC) has set its sights on Vietnam and India for expansion. Business World reported that JFC Chairman Tony Tan Caktiong said the company wants to focus on Vietnam because of its growing economy, adding that the 10-12 Jollibee outlets in the country are currently doing well. He didn't say however how many additional branches the company plans to open in Vietnam. JFC's international operation currently has 327 stores scattered in countries like the United Arab Emirates, the US, Indonesia, Taiwan, and China. Mr Tan Caktiong said the group will continue to focus in China, Indonesia and the US where it recently opened its 27th branch in Las Vegas, Nevada. This is in line with the group’s ambitious plan to have 3,000 Jollibee stores outside the Philippines by 2020. Meanwhile, India remains in the company's radar and Mr Tan Caktiong has been exploring ways in which to enter the country. It is likely that instead of bringing in one of his brands in India, JFC might buy a food company in India and will use this as its stepping stone.
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Reference prices issued for pork, chicken and sugar
[2 December 2009] The Philippine government has announced reference prices for pork and chicken meat, as well as sugar, for the coming holiday season. The suggested retail prices (SRPs) are PHP 160-175 (USD 3.41-3.73)/kg for pork meat, PHP 135-145 (USD 2.88-3.09)/kg for chicken and PHP 43 (USD 0.92)/kg for sugar. The SRPs, which were agreed upon by the government and the private sector, are initially to be implemented in Metro Manila, but Agriculture Assistant Secretary Salvador Salacup said that the government might expand coverage to the entire country. The SRPs came on the heels of increasing prices.
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Tariff cuts will stay on schedule
[4 December 2009] Philippine trade officials have brushed aside calls to delay the implementation of the AFTA-CEPT. Philippine Tariff Commissioner Edgardo Abon said that the negotiation stage for the trade agreement is past and that local industries must instead focus on efforts to become more competitive and efficient players. Duties on certain farm goods, including corn, cassava, poultry and pork will go down to 0-5%, however the Philippines’ proposal to keep rice tariffs at 40% before lowering it to 35% in 2015 is still being negotiated. The local corn, feed, poultry and hog industries are among those that have been clamoring for the delay in AFTA, however Mr Abon said the Philippines will have to honour its commitments beginning January 2010.
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Bounty Fresh sees better sales in 2010
[3 December 2009] Bountry Fresh Food Inc (BFFI) and its sister company Bounty Agro Ventures Inc (BAVI) see election spending boosting sales to nearly PHP 8 billion (USD 172.04 million) in 2010. A report from Businessworld said Bounty Fresh President Tennyson Chen expects increase in sales “probably in the range of 5-10%.” Mr Chen said BFFI and BAVI posted sales of PHP 3 billion (USD 64.52 million) and PHP 4 billion (USD 86.02 million), respectively in 2008, respectively. In 2009, however, sales was flat because as the global economic crunch weakened purchasing power.
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World Agricultural Supply and Demand Estimates - February 2010
Pork production has gone down as slaughter has been lower than expected, according to the USDA World Agricultural Supply and Demand Estimates for February 2010.
LIVESTOCK, POULTRY, AND DAIRY: Total US meat production for 2010 is little changed as higher beef production is more than offset by lower forecast production of pork and turkey. The Cattle report estimated the cattle numbers on 1 January 2010, declined from the previous year, but implied the number of cattle outside feedlots remains close to last year. Thus, forecast placements and marketings are raised, resulting in higher forecast cattle slaughter. However, partly offsetting the increase in expected slaughter, cattle weights are reduced for early 2010 due to severe weather which has impacted weight gain. Pork production is reduced as slaughter has been lower than expected and weights slightly lighter. Turkey production for 2010 was reduced as the pace of growth implied by hatchery data has been less than expected. Broiler meat and egg production forecasts are unchanged from last month. Estimated meat production for 2009 is adjusted to reflect December slaughter data.
Only small changes are made to 2009 beef exports. There are no changes to red meat export forecasts for 2010 but the broiler export forecast is reduced from last month. Recently announced duties on US broilers by China and continued trade restrictions in several other countries will pressure broiler exports.
Cattle price forecasts are lowered for 2010 as larger numbers of fed cattle are expected to pressure prices. Hog prices are raised as tighter supplies may help support prices. Broiler prices are forecast higher in 2010 as domestic demand is expected to grow.
The milk production forecasts are raised for 2009 and 2010. The forecast for 2009 reflects recent USDA estimates of fourth-quarter production. Milk production is forecast higher for 2010 based on the higher-than-expected 1 January dairy replacement heifer estimate. Herds are not expected to decline as rapidly as forecast last month, boosting milk production. Dairy exports on a skim-solids basis for 2010 are raised, reflecting higher sales of cheese and nonfat dry milk. Import forecasts are lowered for 2010. Fat and skim-solids ending stocks are estimated higher for 2009 and stocks for 2010 are raised in the face of higher production. Cheese and butter price forecasts for 2010 are little changed from last month. The Class III price is raised from last month due to higher forecast whey prices, but the Class IV price forecast is lowered reflecting weaker nonfat dry milk prices. The all milk price is forecast at $16.20 to $16.90 for 2010.
WHEAT: US wheat ending stocks for 2009/10 are projected 5 million bushels higher this month reflecting an increase in expected imports. Imports are raised based on expected shipments of South American and European feed quality wheat into the southeastern US market. Exports of all wheat are unchanged, but by-class adjustments include a 10-million-bushel increase in hard red winter wheat and 5-million-bushel decreases in both hard red spring and durum wheat. The projected marketing-year average farm price is narrowed 5 cents on both ends of the range to $4.75 to $4.95 per bushel.
Global wheat supplies for 2009/10 are projected 1.4 million tons higher reflecting production increases for Argentina and Ukraine. Argentina production is raised 1.0 million tons as abundant, late-season rains raised harvested area and yields in key eastern growing areas. Ukraine production is increased 0.4 million tons as the latest revisions to state statistical committee estimates boost yields, more than offsetting a small reduction in harvested area.
Global wheat imports and exports for 2009/10 are both raised this month mostly reflecting higher expected shipments for Argentina and increased regional trade for Turkey. Exports are raised 1.0 million tons for Argentina with larger supplies and recently more favorable government policies toward exports. Exports for Turkey are raised 0.3 million tons reflecting stronger shipments to other countries in the region. Partly offsetting are reductions of 0.5 million tons and 0.2 million tons, respectively, for Pakistan and Uruguay exports. Imports are raised 0.7 million tons for Afghanistan and 0.5 million tons for Turkey. Imports are raised 0.4 million tons for Uzbekistan. Partly offsetting is a 0.5 million-ton import reduction for Pakistan. Global wheat consumption for 2009/10 is raised 1.1 million tons mostly on higher feeding in Canada and increased food use in Afghanistan. Higher consumption mostly offsets this month’s increase in world production with projected global ending stocks rising 0.3 million tons.
COARSE GRAINS: US feed grain ending stocks for 2009/10 are projected lower this month with higher expected corn use and sorghum exports. Corn used for ethanol is projected 100 million bushels higher reflecting the latest ethanol production data from the Energy Information Agency. November’s record ethanol production was up 3 per cent from the previous record in October as higher prices for ethanol and distillers grains boosted ethanol producer returns. November-December corn use for ethanol was up 16 per cent from the same period in 2008/09. Although returns have declined since November, recently lower corn prices continue to support profitability for ethanol producers. A five-million-bushel reduction in expected corn use for sweeteners partly offsets the increase for ethanol. Corn exports for 2009/10 are projected 50 million bushels lower on increased competition from Argentina. Ending stocks are projected 45 million bushels lower. The projected marketing-year average farm price for corn is narrowed five cents on both ends of the range to $3.45 to $3.95 per bushel.
Global coarse grain production for 2009/10 is projected 1.6 million tons higher this month with higher Argentina corn production only partly offset by lower EU-27 corn production and lower Ukraine barley and oats production. Argentina corn production is raised 2.2 million tons with higher expected yields and harvested area as growing conditions continue to improve with additional rainfall in the main corn areas. Late planting and short-term heat stress in the western growing areas temper prospects as a substantial portion of the growing season is still ahead. EU-27 corn production is lowered 0.4 million tons on downward revisions to area for Italy. Ukraine barley and oats production are each lowered 0.2 million tons reflecting the latest revisions to state statistical committee estimates. A number of small, offsetting revisions are made for Russia coarse grains production.
Global coarse grain imports and exports for 2009/10 are both raised slightly this month. The reduction in US corn exports is more than offset by a 1.5-million-ton increase for Argentina. Sorghum imports are raised for Japan and Mexico with the increase in US sorghum exports. Other major trade changes this month include a 0.5 million-ton reduction in EU-27 barley exports and a 0.5-million-ton increase in Turkey barley exports. Global coarse grain consumption is increased 3.4 million tons this month with higher corn and sorghum use more than offsetting a reduction for barley. Higher corn use for ethanol in the United States and higher corn feeding in Argentina account for most of the increase. Sorghum feeding is raised for Australia, Japan, and Mexico. Barley feeding is lowered for Australia, Iran, Turkey, and Ukraine. Global coarse grain ending stocks are projected 1.0 million tons lower with a 2.1-million-ton reduction for corn partly offset by a 1.1-million-ton increase for barley.
OILSEEDS: Projected US soybean ending stocks for 2009/10 are reduced to 210 million bushels, down 35 million from last month due to increased exports and crush. Soybean exports are raised 25 million bushels to 1.400 billion as export shipments continue to exceed earlier projections. Although a record South American harvest is expected to reach the market in coming weeks, tight old-crop South American supplies resulting from last year=s historic drought in Argentina continue to support US exports. Soybean crush is raised 10 million bushels to 1.720 billion reflecting a strong soybean meal exports and a lower soybean meal extraction rate. Soybean oil stocks are projected higher this month as the increased crush more than offsets a small reduction in the soybean oil extraction rate. Soybean oil used for methyl ester is unchanged this month despite reduced production due to the loss of the $1.00 per gallon blending credit at the end of December. The recent Environmental Protection Agency announcement of final rules for the 2009 and 2010 biodiesel mandates is expected to result in offsetting production gains through the end of the 2009/10 marketing year.
The US season-average soybean price range for 2008/09 is projected at $8.70 to $10.20 per bushel, down 20 cents on both ends of the range. The soybean meal price is projected at $270 to $320 per short ton, up 5 dollars on both ends. The soybean oil price is projected at 33.5 to 36.5 cents per pound, down 2.5 cents on both ends of the range.
Global oilseed production for 2009/10 is projected at 433.7 million tons, up 2.1 million from last month. Global soybean production is raised 1.6 million tons to 255 million tons. Improved production prospects for South America account for most of the change. Soybean production for Brazil is projected at 66 million tons, up 1 million from last month due to higher yields. Soybean production is also raised for Paraguay and Uruguay. Global sunflowerseed production is projected higher due to gains for Ukraine and Russia. Global rapeseed production is raised this month due to a larger projected crop for EU-27.
Global oilseed trade is raised 0.9 million tons to 96.3 million tons, mainly due to increased soybean imports for China and Egypt. Higher global oilseed crush mainly reflects increased rapeseed crush in Canada, China, and EU-27. Global oilseed stocks are mostly unchanged at 71.1 million tons.
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Philippine farm output barely up in 2009
The Philippine agricultural sector barely grew in 2009, no thanks to the devastating typhoons that hit the country in September and October last year. Data from the Bureau of Agricultural Statistics showed that farm output grew a measly 0.37% for the entire year after the sector performance contracted by 2.43% in the fourth quarter of 2009. The crops subsector, which accounts for a big chunk of total agricultural production, contracted by 1.42%. The livestock subsector which accounted for 12.47% of total agricultural production grew by 1.24%, with hog production inching up by 1.16%. Meanwhile, the poultry subsector, which contributed 14.33% of the total agricultural output grew by 1.82%, with chicken production growing by 1.53% and chicken egg production rising by 5.04%. Fisheries also posted a growth of 2.45% for the year.
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Thursday, February 18, 2010Print This Page
Towards a More Sustainable Livestock Sector
GLOBAL - Urgent investments, major agricultural research efforts and robust governance are required to ensure that the world's livestock sector responds to a growing demand for animal products and at the same time contributes to poverty reduction, food security, environmental sustainability and human health, FAO said today in a new edition of its flagship publication the State of Food and Agriculture (SOFA).
Around one billion poor people depend on livestock production.The report stresses that livestock is essential to the livelihoods of around one billion poor people. Livestock provides income, high-quality food, fuel, draught power, building material and fertilizer, thus contributing to food security and nutrition. For many small-scale farmers, livestock also provides an important safety net in times of need.
But the agency stressed the need for substantial investments and stronger institutions at global, regional, national and local levels, to ensure that continued growth of the livestock sector contributes to livelihoods, meets growing consumer demand and mitigates environmental and health concerns.
A supermarket in Swaziland.
A farmer collects milk in Bangladesh."The rapid transition of the livestock sector has been taking place in an institutional void," said FAO Director-General Jacques Diouf in the foreword of the report. "The issue of governance is central. Identifying and defining the appropriate role of government, in its broadest sense, is the cornerstone on which future development of the livestock sector must build."
Efforts are needed to ensure that this rapidly growing sector contributes fully to food security and poverty reduction, moving towards a ‘more responsible livestock sector', Mr Diouf said.
Driving force
The livestock sector is one of the fastest growing parts of the agricultural economy, the FAO report underlines. Livestock contributes 40 per cent of the global value of agricultural production and supports the livelihoods and food security of almost one billion people. Globally, livestock contributes 15 per cent of total food energy and 25 per cent of dietary protein. Products from livestock provide essential micronutrients that are not easily obtained from other plant food products.
Rising incomes, population growth and urbanization are the driving forces behind a growing demand for meat products in developing countries—and they will continue to be important. To meet rising demand, global annual meat production is expected to expand from 228 currently to 463 million tonnes by 2050 with the cattle population estimated to grow from 1.5 billion to 2.6 billion and that of goats and sheep from 1.7 billion to 2.7 billion, according to FAO estimates.
Livelihoods
Strong demand for animal food products offers significant opportunities for livestock to contribute to economic growth and poverty reduction. But many smallholders are facing several challenges in remaining competitive with larger, more intensive production systems. The report warns that "a widening gulf is emerging between those who can take advantage of growing demand for livestock products and those who cannot."
FAO recommends that smallholders should be supported in taking advantage of the opportunities provided by an expanding livestock sector and in managing the risks associated with increasing competition. Broader rural development strategies creating off-farm jobs should help those that may be unable to adapt and compete in a rapidly modernising sector. "Policy makers also need to recognize and protect livestock's safety-net function for the very poor," according to SOFA.
Environment
There is a need to enhance the efficiency of natural-resource use in the sector and to reduce the environmental footprint of livestock production, the report says. The goal is to ensure that continued growth in livestock production does not create undue pressure on ecosystems, biodiversity, land and forest resources and water quality and does not contribute to global warming. While some countries have made progress in reducing pollution and deforestation associated with livestock production, many more require appropriate policies and enforcement capacity. Market-based policies, such as taxes and fees for natural-resource use or payments for environmental services, would encourage producers to ensure that livestock production is carried out in a sustainable way.
Livestock can play an important role in both adapting to climate change and mitigating its effects on human welfare, FAO said. To realise the sector's potential to contribute to climate change mitigation and adaptation based on enhanced capacities to monitor, report and verify emissions from the livestock production new technologies will need to be developed.
Health
Animal diseases pose systemic risks that must be addressed, FAO said. Since new pathogenic agents will continue to emerge, investments in national animal-health and food safety infrastructure are required to reduce the risks of animal diseases to humans. Poor livestock keepers need to be more engaged in disease-control efforts.
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Towards a More Sustainable Livestock Sector
GLOBAL - Urgent investments, major agricultural research efforts and robust governance are required to ensure that the world's livestock sector responds to a growing demand for animal products and at the same time contributes to poverty reduction, food security, environmental sustainability and human health, FAO said today in a new edition of its flagship publication the State of Food and Agriculture (SOFA).
Around one billion poor people depend on livestock production.The report stresses that livestock is essential to the livelihoods of around one billion poor people. Livestock provides income, high-quality food, fuel, draught power, building material and fertilizer, thus contributing to food security and nutrition. For many small-scale farmers, livestock also provides an important safety net in times of need.
But the agency stressed the need for substantial investments and stronger institutions at global, regional, national and local levels, to ensure that continued growth of the livestock sector contributes to livelihoods, meets growing consumer demand and mitigates environmental and health concerns.
A farmer collects milk in Bangladesh."The rapid transition of the livestock sector has been taking place in an institutional void," said FAO Director-General Jacques Diouf in the foreword of the report. "The issue of governance is central. Identifying and defining the appropriate role of government, in its broadest sense, is the cornerstone on which future development of the livestock sector must build."
Efforts are needed to ensure that this rapidly growing sector contributes fully to food security and poverty reduction, moving towards a ‘more responsible livestock sector', Mr Diouf said.
Driving force
The livestock sector is one of the fastest growing parts of the agricultural economy, the FAO report underlines. Livestock contributes 40 per cent of the global value of agricultural production and supports the livelihoods and food security of almost one billion people. Globally, livestock contributes 15 per cent of total food energy and 25 per cent of dietary protein. Products from livestock provide essential micronutrients that are not easily obtained from other plant food products.
Rising incomes, population growth and urbanization are the driving forces behind a growing demand for meat products in developing countries—and they will continue to be important. To meet rising demand, global annual meat production is expected to expand from 228 currently to 463 million tonnes by 2050 with the cattle population estimated to grow from 1.5 billion to 2.6 billion and that of goats and sheep from 1.7 billion to 2.7 billion, according to FAO estimates.
Livelihoods
Strong demand for animal food products offers significant opportunities for livestock to contribute to economic growth and poverty reduction. But many smallholders are facing several challenges in remaining competitive with larger, more intensive production systems. The report warns that "a widening gulf is emerging between those who can take advantage of growing demand for livestock products and those who cannot."
FAO recommends that smallholders should be supported in taking advantage of the opportunities provided by an expanding livestock sector and in managing the risks associated with increasing competition. Broader rural development strategies creating off-farm jobs should help those that may be unable to adapt and compete in a rapidly modernising sector. "Policy makers also need to recognize and protect livestock's safety-net function for the very poor," according to SOFA.
Environment
There is a need to enhance the efficiency of natural-resource use in the sector and to reduce the environmental footprint of livestock production, the report says. The goal is to ensure that continued growth in livestock production does not create undue pressure on ecosystems, biodiversity, land and forest resources and water quality and does not contribute to global warming. While some countries have made progress in reducing pollution and deforestation associated with livestock production, many more require appropriate policies and enforcement capacity. Market-based policies, such as taxes and fees for natural-resource use or payments for environmental services, would encourage producers to ensure that livestock production is carried out in a sustainable way.
Livestock can play an important role in both adapting to climate change and mitigating its effects on human welfare, FAO said. To realise the sector's potential to contribute to climate change mitigation and adaptation based on enhanced capacities to monitor, report and verify emissions from the livestock production new technologies will need to be developed.
Health
Animal diseases pose systemic risks that must be addressed, FAO said. Since new pathogenic agents will continue to emerge, investments in national animal-health and food safety infrastructure are required to reduce the risks of animal diseases to humans. Poor livestock keepers need to be more engaged in disease-control efforts.
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Jollibee posts 14.6% income growth
[25 February 2010] Philippine fast food giant Jollibee Food Corp (JFC) has managed to post a 14.6% growth in profit for 2009, despite the economic crunch. In its disclosure to the Philippine Stock Exchange, JFC reported a net income of PHP 2.66 billion (USD 57.78 million), which was attributed to strong sales, lower raw material costs and income tax, and efficient marketing expenditure. System-wide sales from both company-owned and franchised stores rose by by 9.6% to reach PHP 63.73 billion (USD 1.38 billion). JFC Chairman and CEO Tony Tan Caktiong said that the company “grew almost 10%, achieved its profit target and exceeded its cash flow objective.” in 2009. With the better perfomance, the company is set to double its capital expenditure to PHP 4.8 billion (USD 103.92 million) this year.
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Nutritionists need to think laterally
[3 March 2010] Nutritionists should think laterally to improve the company's bottom line. This was the message delivered to participants attending the Asian Nutritionist Briefing in Bangkok, Thailand yesterday. Key speaker Oliver Ryan said focusing only on nutrition is not enough because there are a number of factors in relation to the feed that affect the bottom line. Besides understanding all those factors, Mr Ryan said nutritionists should "think outside the box" to find ways to improve business efficiency and hence the bottom line. The event organised by Asian Feed Magazine in cooperation with Phytobiotics, Feed Management Systems and Van Aarsen drew nearly 100 nutritionists and feed industry personnel from Asia.
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US consumers will pay for ‘ethical’ food
[5 March 2010] Asian suppliers to the US are likely to do well if they can assure customers that their products are produced in an ethical manner. A recent survey by San Francisco-based marketing communications firm Context Marketing revealed that 69% of consumers will pay more for 'ethically produced' foods. Bob Kenney, Context Marketing Principal said that when asked to identify what they meant by 'ethical food', more than 90% percent of respondents identified three main qualities: protects the environment, meets high quality and safety standards and treats farm animals humanely. The survey was conducted in January among 600 adults aged 20 - 64, equally representing men and women living in major US markets.
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Thailand to export more halal goods and services
[10 March 2010] Thailand is working to boost production and export of halal products and services to reach USD 50 billion in 2012, or a 5% share of world halal market, said Industry Minister Chanchai Chairungruang. A part of this attempt by the Thai government is the hosting of the World Halal Congress 2010 in Thailand from March 19-24 to project the country’s potential as a global center for halal trade. At the moment, halal products and services from Thailand account for only 1% of total global value, but ranking as the world’s seventh largest exporter of halal goods.
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San Miguel food unit posts PHP 2.7b profit
[16 March 2010] Despite the domestic economic slowdown and the sluggish markets, San Miguel Pure Foods Company (SMPFC), the food unit of San Miguel Corporation, posted a record breaking net profit of PHP 2.7 billion (USD 59.12 million) in 2009, up 17-fold from PHP 149 million (USD 3.26 million) in 2008. SMPFC President Francisco Alejo III attributed the strong performance to lower inputs and raw material costs, increased efficiency and distribution. Revenues topped PHP 75 billion (USD 1.64 billion) up 6% from the previous year, while income from operations reached PHP 4.6 billion (USD 100.72 million) or 152% higher than the 2008 level. The company's poultry, feeds and flour businesses, thanks to stable pricing and soft prices of raw materials, were the strong profit drivers, with the dairy and piggery business also exhibiting significant improvements in profits. Mr Alejo expressed optimism that the company will continue on its growth path this year, saying the first two months already indicated a good year. SMPFC has earmarked PHP 5.3 billion for investments in the next few years.
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Government to buy local yellow corn
[17 March 2010] The Philippine government targets to buy 200,000 tonnes of yellow corn from local farmers this year. Gregorio Tan, Chairman of the Agricultural Commodity Exchange System of the Department of Agriculture said the National Food Authority will pay farmers PHP 12.30 (USD 0.27)/kg plus an incentive of PHP 0.70 (USD 0.02)/kg. The incentives include PHP 0.20 for farmers to dry their corn, PHP 0.20 to deliver their corn to NFA warehouses and PHP 0.30 for cooperatives to sell their corn to the government.
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Korea to open organic fertiliser plant in the Philippines
[25 March 2010] South Korean firm Daepoong Fertiliser Co will spend USD 12 million to build an organic fertiliser plant in the Philippines. Located in Batangas, the plant is expected to be operational at the end of the year and it will produce 6000 tonnes of organic fertiliser a day, 70% of which will be exported to Japan, said CEO Jongmin M. Lee. The plant will use both biodegradable and non-biodegradable waste materials to make the fertiliser. It can process 12,000 tonnes/day of garbage and turn half of the material into organic fertiliser. The other half from from non-biodegradable materials will be broken down in the fermentation process.
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Jollibee opens fifth outlet in Saudi Arabia
[30 March 2010] Philippine fast food giant Jollibee Foods Corp (JFC) recently opened its fifth outlet in Saudi Arabia. JFC Vice President for International Operations said that the company is expanding its presence in the Middle East “not only to meet the strong demand for Jollibee stores in these areas, but also to let people enjoy the favorite Filipino treats they grew up with.” The new store is located in the Al Rahmaniyah Mall at Al-Khobar. JFC now has more than 50 stores outside of the Philippines.
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Good prospects for Phillipine livestock industry
[21 April 2010] The Department of Agriculture (DA) in the Philippines expects bright prospects for the livestock industry this year and beyond owing to its vast export potential, an increasing demand in the local market for its products and the entry of new players to further invigorate the domestic industry. DA Secretary Bernie Fondevilla said there is potential for the sale of hogs and pork products to other Asian economies and Halal goat, chevon meat and processed products to Middle East countries and other Islamic states. He noted that domestic demand is also growing for semi-processed and processed beef, pork and chicken because of the increasing population; rising number of local and foreign tourists in highly urbanized areas; and the growing number of hotels, restaurants and other commercial institutions in Metro Manila and other major cities in the country.
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Global Meat, Egg Sectors to Face More Challenges
GLOBAL - During the VIV Europe in Utrecht on 20 April, Rabobank analysts, Dirk Jan Kennes and Albert Vernooij, addressed the challenges which the global meat sector and the global egg sector face with the rapidly changing consumer attitude and behaviour towards food.
A dynamic meat market towards 2020
“Consumer demand for meat will become even more heterogeneous towards 2020,” senior industry analyst Dirk Jan Kennes said. “Next to intrinsic product quality parameters (e.g. taste, pathogen free), animal welfare and environmental parameters become more important in consumers’ buying behaviour, especially in developed countries.”
Sustainability determines opportunities in developed countries, especially in the European markets where competition is intensifying as consumption stagnates and production increases. Sustainability involves animal-friendly accommodation, low-emission sty systems that fit in with the surroundings, manure disposal and regionally closed cycles. In the short run opportunities lie mainly in Northern and Northwest Europe where the markets set strict requirements of sustainably produced meat.
Contrary, in emerging markets demand of meat is driven by changing diet patterns due to growing world population, rising standards of living and urbanisation. This will heighten competition as demand is outstripping production in many of these countries given the scarcity of raw materials. This makes availability of sufficient raw materials crucial for the development of the meat industry in these countries,
China in particular is facing the dilemma of importing more raw materials to produce meat locally or to import the meat directly. Driven by the growing food industry and the fact that pigs are less sensitive to diet compositions, pork production is likely to stay in China. Poultry relies heavily on straight quality grains and oilseeds. Therefore it can be expected that China accept poultry imports when negotiations ask for it.
Feed to meat
“In the short term (next two crop years) feedstock prices are expected to remain at their current highs and will be volatile while from 2010 onwards markets are likely to be more bearish due to new equilibrium and associated higher stocks levels”, Kennes said. This will certainly generate a production response from farmers.
Sustainable eggs
“The shift to more sustainable production of eggs is increasing as the consumer demand for these products is growing in Europe”, said Industry Analyst Albert Vernooij. Retail is increasingly banning cage eggs in favor of free range eggs driven by both pressure from animal welfare organizations and the European cage ban on 1 January 2012. Globally, egg demand will continue its steady growth. Due to its low price compared with other proteins, eggs are the first protein for consumers moving from a grain based to a protein based diet.
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World meat market to grow by 40%
[28 April 2010] The global meat market is expected to grow by 40% in the next 10-20 years as a result of population and income growth said Dirk Jan Kennes of Rabobank at VIV Europe in Utrecht, the Netherlands. Mr Kennes said the biggest growth can be expected in poultry meat, while pork is projected to stabilize and demand for beef will decline. Of the estimated 40% global growth in meat production around 70% will be in Asia.
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China's Growth Influences Global Meat Sector
The growth in the Chinese economy and its gross domestic product could have a major impact in the meat industry worldwide, writes ThePigSite senior editor, Chris Harris.
Director of market analysts GIRA, Richard Brown, told the recent Outlook 2010 Conference in London that while the world saw a slump of -1.1 per cent last year from a growth of 3.1 per cent in 2008 and an expected growth of 3.1 per cent this year, China had seen continual growth.
Chinese economic growth went from nine per cent in 2008 to slip by just half a percentage point in 2009 to 8.5 per cent and this year it is expected to grow again by nine per cent.
Countries such as Russia saw a slump of 7.5 per cent, Europe 4.2 per cent and the US 2.7 per cent.
However, Mr Brown said that the meat industry inn Europe at present has the luxury of relatively low feed prices, which he said he hoped would run through until the next harvest.
Global animal disease problems appear to be sorting themselves out with the only major threat coming from African Swine Fever in Russia, although the H1N1 virus did have a major impact on the pig meat industry in North America.
Mr Brown said that the virus outbreak had a significant effect on pig prices, but these have risen more quickly than expected this year.
Worldwide meat consumption fell very slightly last year by just 0.2 per cent, however, this year it is expected to grow by one per cent without taking the growth of the Chinese economy into account.
If the Chinese figures are taken into account, consumption last year grew worldwide by one per cent to 230 million tonnes and this year the rise is expected to go up to 234 million tonnes. Included in these figures is a two per cent rise in pig meat consumption to 97,042 million tonnes and a three per cent rise in poultry meat consumption this year to 76,130 million tonnes.
However, global beef consumption appears to be dropping slightly by one per cent after a stable year last year. Last year consumption was 2,478 million tonnes and it is forecast to drop to 52,049 million tonnes this year.
Source - GIRA
"Global meat demand suffered a sharp downturn in 2009, forcing price decreases to clear the volume," Mr Brown said.
Global trade in meat also suffered last year, with pig meat trade falling by 15 per cent to 5,617 million tones, poultry meat trade dropping by one per cent to 9,783 million tonnes and beef trade down by four per cent to 7,732 million tonnes.
However, this year trade is expected to pick up with a three per cent rise in pork trade and a two per cent rise in poultry meat trade. However, beef is still expected to see a fall of half a per cent.
Mr Brown said that one of the main influences on the trade was the recovery in China of the domestic market from the outbreak of PRRS that it had suffered the year before.
The drop in global meat trade of six per cent was felt by all the major meat exporting countries.
Source - GIRA
However, the Middle East and North Africa did see a rise in imports at the region bought more poultry meat from Brazil, but at the same time the Russian trade fell sharply, though it is expected to go up a little this year.
The drop in trade with Russia is to a large part down to the Russian Government's policy to increase domestic meat production and this has meant that prices in Russia are very high, Mr Brown told the conference.
The volume of imports to the US in 2010 is expected to be about the same as in 2009, but Mr Brown said that some people in the US lost a lot of money last year because of the integrated nature of the meat industry in the country.
Of all the countries in the world, China is emerging as the significant importer of certain commodity products.
However, Mr Brown said it was not quite clear what will happen next in China, because if the country becomes more self sufficient, this will depress imports.
For European traders, because the Euro has been strong throughout 2009, there has been a problem in exporting. For the UK on the other hand, the weakness of sterling has been good news for British farmers.
He said that while consumption in Europe has been down slightly, the main markets to be hit are the beef and sheep sector, which had been hit by both low demand and low supply. The limited supply, however, has mean that prices have remained strong.
"The EU's expenditure on meat has been down and it is not expected to rise," Mr Brown said.
He added that the EU exports of meat were down largely because of the situation in the pig meat market and EU beef production has been drifting down because of a drift in the dairy herd.
He warned that the global meat industry is in a period of uncertainty, but he issued a specific warning to the Brazilian sector, which he said was starting to lose its way because it was not responding to the demand of its export customers largely over sanitary and welfare issues.
Brazilians are the largest exporters, with 23 per cent of world beef trade, but they have been limited by reduced supply, weak global demand, and traceability compliance problems with the EU. They also have 11 per cent of the world pork trade with limited market access and they have 43 per cent of world poultry trade with further growth to a range of markets, but at low prices.
He said that last year was a difficult year for the Brazilians, with a Russian downturn in import demand, strengthening currency and more industry consolidation.
April 2010
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Pork, Beef Face Battle with Cheaper Chicken
US - Pork and beef producers face an intensifying battle at the supermarket meat case from cheaper, more plentiful chicken, analysts say.
US grocery stores probably will step up discounts and specials on fresh chicken in coming weeks after wholesale beef and pork prices soared near two-year highs, BB&T Capital Markets analyst Heather Jones said. Wholesale chicken prices have also risen, though not nearly as much as beef and pork.
As a result, price “spreads” – or the difference between what retailers pay for wholesale meat and what they charge in their stores – suggest grocer discounts will favor chicken breasts and legs more than steaks and chops.
“We believe this is bullish for chicken retail feature activity,” Dr Jones said in a report today.
Increased chicken competition could be troubling for pork and beef demand, which suffered in recent years from the recession and a slump in exports. Retailers have been reluctant to raise prices with the economy’s recovery still fragile. Some major chains, such as Wal-Mart Stores Inc., recently launched advertising campaigns touting lower prices for most goods.
For pork and beef, retail prices have yet to catch up with the run-up at the wholesale level, reports Pork Magazine.
Retail pork prices on average were about $1.61 a pound above wholesale values during March, compared with a spread of $1.83 a year earlier, Dr Jones said, citing USDA data. In beef, retail prices were about $1.91 above wholesale, compared with $2.21 a year earlier.
Chicken prices at retail during March were about 92.8 cents above wholesale, compared with 95.4 cents a year earlier.
Rising pork and beef prices reflect tighter supplies of slaughter-ready animals, after livestock producers cut herds in recent years.
On wholesale markets, choice beef cutout values yesterday averaged $1.7027 a pound, the highest since prices approached $1.74 in July 2008, according to USDA data. Pork carcass values averaged 89.83 cents a pound yesterday, up 33 per cent this year.
Beef and pork prices are “still robust,” Dr Jones wrote. Wholesale pork has been “exploding” higher, she said.
Many grocers have already been promoting discounted chicken, as well as specials on pork and beef cuts.
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Antimicrobial Resistance and Greasy Pig Disease
Because greasy pig disease is unlikely respond to injections of penicillin or beta-lactam antibiotics, alternative approaches such as topical treatments and vaccination need to be explored, according to Dr Bob Friendship and colleagues at the University of Guelph. His work is summarised by Wayne Du of the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA).
What is Greasy Pig Disease?
The disease is a skin infection caused by bacteria named Staphylococcus hyicus, which is commonly found on the skin of pigs. The oozing of serum from the damaged skin makes the surface greasy, hence the name. Outbreaks of the severe form of the disease cause high mortality and survivors are often poor doing pigs that have to be culled. Pigs with damaged skin due to fighting, mange, etc. are prone to getting the disease.
Why is Greasy Pig Disease on the Increase?
Producer surveys show that the number of cases of greasy pig disease in Ontario is increasing. This is possibly because:
More producers (30 per cent of those surveyed) moving away from routinely clipping needle teeth, which can result in more skin damage due to fighting.
S. hyicus has developed antimicrobial resistance, which results in ineffective treatment of the disease. Many producers surveyed expressed disappointment regarding response to treatment.
How is it Currently Treated
About 70 per cent of the respondents reported that they routinely use topical treatments to control the disease, with mineral oil alone or in combination with an antibiotic such as novobiocin, or they use an antiseptic such as iodine.
Over 50 per cent of the respondents reported they use an injectable antibiotic, either alone or in conjunction with a topical treatment. The popular antibiotic choice was penicillin.
Other Findings
Skin scrapings and skin swabs were collected from six pigs from each of seventeen farms.
60 per cent of the samples showed positive for S. hyicus and 40 per cent of the samples showed positive for S. aureus
All 66 isolates of S. hyicus cultured from skin swabs showed resistance to penicillin and ampicillin and about 70 per cent of the isolates showed resistance to ceftiofur (Excenel®). All three antibiotics belong to the same drug family, the beta-lactams. The resistance pattern was similar to S. aureus.
Take-Home Messages
Greasy pig disease is unlikely respond to injections of penicillin or any of the beta-lactam antibiotics due to antibiotic resistance.
Alternative approaches such as topical treatments and vaccination need to be explored.
Good sanitation, lowering humidity, minimising wounds, eradicating mange and minimising non-essential mixing of pigs are essential to prevent the disease.
Early application of antiseptics to wounds can also help prevent infection and reduce the chance of greasy pig disease.
April 2010
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Singapore invests more in halal products
[19 May 2010] The fast growing halal industry in Singapore has spurred local food manufacturers to venture into development of halal products and services said Muhammad Haifan Usalli, General Manager of Warees Investments Ptd Ltd, a subsidiary owned by the Islamic Religious Council of Singapore (Muis-Majlis Ugama Islam Singapura). He said the number of products certified as halal by Muis had increased from about 2,300 in 2000 to more than 11,500 last year. He said Singapore’s open economy as well as excellent physical and institutional infrastructure was the catalyst for the growth of its halal industry.
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JG Summit bids for Pure Foods
[26 May 2010] JG Summit Holdings Inc of the Gokongwei family is one of at least five companies vying for a majority stake in San Miguel Pure Foods Co Inc (SMPCI), the country’s biggest food company. SMPCI has an enterprise value of about USD 1.8 billion and currently, the company has the biggest market share in the Philippine poultry market at 40% and in the hotdog market (63%). It is a leader in several other businesses. Its business portfolio is seen to be a good complement to Universal Robina Corp, JG Summit’s consumer food unit which is also involved in a wide range of food-related businesses, including the manufacture and distribution of consumer foods, production of hogs and day-old chicks, manufacture of animal and fish feeds, glucose and veterinary compounds, flour milling, and sugar milling and refining.
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Jollibee to open 200 new stores in 2010
[26 May 2010] Philippine fast food giant Jollibee Foods Corp (JFC) plans to open 200 new stores across all its brands both in the Philippines and abroad in 2010. The openings are in line with the company’s capital expenditure program that amounts to over PHP 4 billion (USD 85.93 million) for the year. JFC fast food network include flagship brand Jollibee, Chowking, Greenwich Pizza, Red Ribbon bakeshop, Delifrance and the Manong Pepe’s chain of affordable Filipino meals. JFC Chairman Tony Tan Caktiong said the new stores will include the recently-acquired Café Ti-Amo, a Korean restaurant brand that offers gelato and coffee in a casual dining format. The pilot branch of Café Ti-Amo has been opened and nine more are expected to be constructed this year. The new retail outlets to be built this year will increase JFC’s total global network to 2,082 by end-2010.
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Pure Foods post PHP 872M profits for Q1
[27 May 2010] San Miguel Pure Foods Co Inc posted a six-fold growth in profits to PHP 872 million (USD 18.73 milion) during the first quarter of 2010 from PHP 143 million (USD 3.07 million) during the same period last year, thanks to higher sales and operating efficiency. Revenues across the firm’s businesses, which include poultry, animal feeds, flour, canned goods, and processed meat, went up 2% to PHP 18.2 billion (USD 390.98 million) from PHP 17.8 (USD 382.38 million) a year ago. Income from operations almost tripled to PHP 1.4 billion (USD 30.08 million) from PHP 503 million (USD 10.81 million) last year. For the rest of 2010, the company is projecting a 15% profit growth.
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Philippines to stop corn imports due to weak demand
[3 June 2010] Philippine feed millers are no longer keen on importing additional corn as demand from animal feeds users has gone down. Feed manufacturers imported over 80,000 tonnes of corn from Thailand between January to May this year to fill the shortage caused by the El Niño phenomenon, however the Philippine Association of Feed Millers Inc (PAFMI) said that despite the expected drop in local corn production, they are no longer keen on importing more corn. This year’s corn imports will likely amount to no more than 80,099 tonnes from 344,945 tonnes in 2009. Feed millers have also contracted 844,000 tonnes of feed wheat, of which 500,000 tonnes of it has already arrived. The remaining volume is expected to arrive in the country in or before October. PAFMI expects animal feed production to go down by 10% to only 4.9 million tonnes this year.
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Low demand pulls down feed production
[1 June 2010] Weak demand for poultry and livestock products could lead animal feed production in the Philippines to drop by 10% to around 4.9 million tonnes, a report by the BusinessMirror said. Industry sources say that the drop in demand has led poultry and livestock producers to cut back on production, which has pulled down demand for animal feeds. Feed producers are no longer likely to increase the importation of alternative ingredients like wheat, despite the expected drop in local corn production due to the drought currently being experienced in the country. For 2010, the Philippine Maize Federation estimates corn production to reach only 6.8 million tonnes, lower than the 7.3 million tonnes targeted by the government for the year.
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New aqua feedmill in the Philippines
[2 June 2010] The first aqua feedmill in the Philippines' eastern region of Visayas will boost mariculture there. To be built by the Bureau of Fisheries and Aquatic Resources (Bfar), the plant will have a capacity of 3 tonnes/hour and will be equipped with milling technology from Denmark, said Bfar's Regional Director Juan D. Albaladejo. He said the plant's construction will start in early 2010 and when completed it will supply aqua feed for the region that has over 500 fish cages worth over PHP 200 million (USD 4.3 million). Mr Albaladejo said the plant, which is is the first aqua feedmill in the region, will use root crops and by-catch fish that are abundant locally as raw materials.
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Philippine SBM imports to decline this year
[4 June 2010] Philippine imports of soybean meal (SBM) this year is expected to decline because of production problems in the local livestock and poultry industry, a report by BusinessWorld said. The US Department of Agriculture said disease-related problems as well as the dry spell brought about by the El Niño phenomenon have dampened feed demand by the local animal production industries. However, SBM imports are expected to rise in 2011 as feed demand picks up with the expected recovery of the livestock and poultry industry. Last year, SBM imports fell 15% to 1.1 million tonnes from 1.3 million tonnes in 2008. This is expected to go down further this year.
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Field Peas Offer Alternative to Corn and Soybeans in Swine Diets
The positive nutrient and palatability aspects of field peas for pigs are well documented, according to Dr Tom Miller, Iowa State University Extension swine programme specialist, but their use in feeds will depend on cost and availability.
Swine producers concerned about continuing high grain prices might want to consider using field peas as a partial substitute for soybean meal or corn in swine diets. Research coordinated by an Iowa State University (ISU) Extension swine program specialist showed this substitution is well tolerated by pigs and can be a more economical choice.
Tom Miller said the research started in 2005 after an inquiry from a southeast Iowa producer. The initial study, funded by the Leopold Center for Sustainable Agriculture at ISU and through the USDA's Sustainable Agriculture Research and Education program, included both raising field peas and using the field peas in swine diets.
Dr Miller said: "We looked at the growth of different field pea varieties in small field plots of 20 to 70 acres in southeast Iowa. We also tested the use of field peas in diets of a hog operation near Keota and at the ISU Swine Nutrition Farm. We hoped this would lead to developing an economical supply of these feedstuffs to use in pork production."
The feed trial results showed that it is possible for swine producers to increase their profits by using field peas because they provide nutrients comparable to corn and soybeans at a lower cost than those grains, according to Dr Miller.
He explained: "Field peas are a good source of lysine, and they're high in fibre with low levels of a trypsin inhibitor. Typically, they're fed raw and can be used for sows, weaned and finishing pigs."
Wider adoption of field pea use by Iowa producers hinges primarily on access to adequate quantities of the crop. The early field tests showed that field peas cannot withstand Iowa's summer heat and winter cold, Dr Miller said. And while double cropping is a possibility, planting one's own field pea crop currently does not necessarily offer an economical advantage to Iowa producers.
He added: "The next step is to find a profitable cropping system in order to be able to utilise the potential of the field pea, which includes research on modifying the peas to survive Iowa's climate."
Another option for producers who want to incorporate field peas in their swine diets is to buy the peas from locations with more conducive growing conditions such as North Dakota and Canada.
In a presentation, Dr Miller presented some early results from his work on field peas for pigs, he explained that peas are widely used in feed for pigs in Europe diets, and increasingly in Canada. Compared to soybean meal, field peas contain less fat, moderate levels of carbohydrates and protein and more fibre.
Chemical composition of two varieties of spring-planted field peas in Iowa (2005)
Nutrient profile of field peas compared to maize and soybean meal (44 per cent protein)
The amino acid profile of field peas worked extremely well with distillers dried grains with solubles (DDGS), according to Dr Miller. DDGS from an ethanol plant contains 0.76 per cent lysine, 0.85 per cent methionine plus cystine, 0.225 per cent tryptophan and 1.01 per cent threonine, he said.
Dr Miller concluded: "Ultimately, the cost of obtaining field peas, whether grown locally or imported from other locations, will be a determining factor in Iowa producer use. The positive nutrient and palatability aspects are well documented."
May 2010
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Philippine cassava output likely to rise in 2010
[11 June 2010] Cassava production in the Philippines increased 7% during the first quarter of 2010, leading the Department of Agriculture (DA) to project higher cassava production for the year. Data from the Bureau of Agricultural Statistics (BAS) showed that cassava production reached 434,320 tonnes from January-March from 405,930 tonnes in the same period last year, thanks to additional areas that were planted to the crop in Central Mindanao, and the provinces of Bohol, Negros Oriental, Bukidnon and Misamis Oriental. Cassava is one of the alternative ingredients for animal feed, but in the Philippines is used primarily for flour, cassava chips for snacks. It is also used for biofuel. In a report by BusinessWorld, Candido Damo, Cassava Project Leader of the DA’s Ginintuang Masaganang Ani Corn Program said demand for cassava this year is expected to reach five million tonnes, and will likely double to 10 million tonnes in 2014.
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Dairy Industry Performance Report
January-December 2009
The total dairy animal population as of January 1, 2010 was estimated at 32,007 head. This was 8.16 percent higher than last year’s inventory. In particular, there was a 12.44 percent increment in the number of dairy cattle.
In 2009, fresh milk production in the country stood at 14.3 million liters, 3.34 percent higher than last year’s level of 13.8 million liters. Of this total, 8.6 million liters or 60.6 percent were cow’s milk, 5.4 million liters or 38.1 percent were carabao’s milk and 0.19 million liters or 1.3 percent were goat’s milk.
In 2009, the volume of dairy imports was 1,789.7 thousand metric tons or 10.56 percent higher than the 2008 level of 1,618.7 thousand metric tons. However, there was a decrease of 34.5 percent in the value of dairy imports, from the 2008 level of US$ 712.0 million to US$ 466.7 million in 2009. This decrease was attributed to lower prices of dairy products in the world market.
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San Miguel enters commodities cargo business 11 Jun 2010
Philippine based conglomerate San Miguel corp. has entered the commodities cargo business by taking over a unit of Asian Terminals Inc. that operates the Mariveles Grain Terminal in Bataan—the Philippines’most modern grain handling facility.
San Miguel president Ramon Ang confirmed that the buyer was a unit of San Miguel, and that the purchase would be done in partnership with Japanese trading giant Toyota Tsusho Corp.
For over a year, the conglomerate had been in talks to acquire Mariveles Grain Corp. (MGC), which would set the company on track to become a distribution and logistics powerhouse.
San Miguel also wanted to take over MGC to expand the 500,000-ton annual capacity of its feed mill located near the grains terminal.
MGC holds a permit from the Philippine Ports Authority to operate the Mariveles Grain Terminal until February 2033. The terminal offers unloading, conveying, storage, outloading, weighing, bagging and sampling services. It handles bulk cargo of commodities like wheat, soybean meal, corn and soybeans.
The terminal can accommodate vessels of up to 70,000 deadweight tons, discharge cargo of up to 10,000 metric tons a day, and store 180,000 tonnes of soybean meal and grain.
It was earlier announced that San Miguel and Toyota would form a new company to acquire MGC—60% of which would be controlled by the diversifying conglomerate.
Apart from its traditional food and beverage businesses, San Miguel’s investment portfolio now includes interests in banking, energy, power, telecommunications, infrastructure and mining.
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Philippines close to total FMD-free status
[16 June 2010] The Philippines is nearer to its certification as an FMD-free country after the Office Internationale des Epizooties (OIE) issued in May a certification recognising two of the three zones in Luzon as FMD-free without vaccination. Only Zone 2, comprising the provinces of Cavite, Laguna, Batangas, Rizal, Quezon and Pangasinan, as well as the Metro Manila area, are still awaiting their certification, but the DA can apply for certification for this zone as early as August this year. In a statement, Agriculture Secretary said that OIE’s recognition of the FMD-free zones in Luzon is a welcome development and that the local hog industry is likely to expand now that export opportunities are likely to be opened for the country.
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Burger King to invest USD 12m for five year expansion
[18 June 2010] PERF Restaurant Inc, the Philippine master franchisee for fastfood chain Burger King Corp, plans to spend up to PHP 600 million (USD 12.98 million) to put up more outlets over the next five years. Company executive Wilson Young said that this would mean almost doubling the current 26 stores to 50. He said the new outlets will be stand-alone, which can be operated for 24 hours, unlike the mall-based stores which “are limited to a nine-to-nine operation.” Each new store will cost about PHP 25 million (USD 0.54 million) to put up. There are currently 10 stand-alone Burger King outlets in the Philippines, the remainder are based in malls and other commercial establishments.
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Too much grain is also worrisome 23 Jun 2010
Two years after the global food crisis peaked, grain shortages are turning into surpluses that could create their own problems.
Some traders and economists are speculating that if the US and world economies don't heat up soon, surpluses could turn into price-depressing gluts.
While cheap grain is good news for consumers and livestock producers, excessive supplies increase a government's cost for farm subsidies and tend to ignite trade fights between the big farming powers.
This tension is growing partly because many of the farmers in the US Midwest who were plagued by rainy growing seasons in recent years are having few problems so far this year.
Storage problems
Farmers in Iowa are preparing their storage bins for what's shaping up as a record-large crop. And in some northern Texas towns, the unfolding wheat harvest is so big that farmers delivering grain to local elevators in recent weeks have had to wait all day in long lines of trucks. Some elevators are so full that wheat is being stored in cotton warehouses.
Grain traders in Chicago expect US farmers to produce record-large corn and soybean crops for the second straight year.
Farmers in Brazil and Argentina are wrapping up record-large soybean harvests. Asian farmers are poised to produce a huge rice crop.
According to forecasts by the United Nations' Food and Agriculture Organization, this year's global cereal reserves -- the buffer against shortages -- will probably be 24% bigger than just two years ago, and the largest in eight years.
Two scenarios
With world grain production this year expected to exceed demand for a third consecutive year, many grain traders and farm economists are beginning to debate the prospects for two starkly different outlooks.
One scenario pictures a slow economic recovery where price-depressing grain gluts could materialize in a few years, dragging down farmers' profits and chilling farmers' demand for everything from tractors to genetically modified seed.
In a second scenario worries are expressed that the world's farmers won't be able to keep up with demand again once the economy does recover, which would increase costs for food manufacturers and create the environment for another food crisis. China's and India's appetites are expected to grow strongly.
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Earthquake pushes fishmeal prices to all-time high
The earthquake in Chile earlier this year destroyed Chilean processing plants tightening world supply of fishmeal and causing world market prices to hit an all-time high.
Related
Too much grain is also worrisome
Skretting brings tuna farming closer
Call for papers: Aquafeed Horizons 2011
Chile is the world’s second biggest exporter of fishmeal. Nature, through the El Niño weather phenomenon, also hits fish catches in Peru, the world's biggest fishmeal exporter, and further tightens global supply of the raw material.
The skyrocketing prices will likely affect fish and meat prices as the commodity is used as a feed raw material in aquafeed and feed for pigs and poultry.
On the animal production side demand is surging because of the fast growth of global aquaculture production due to rapid expansion of this industry in China.
Fishmeal prices rose to a record $1,937 a tonne last week, up 85% in the past year, because of strong demand coupled with supply disruptions. Prices in Rotterdam, The Netherlands were as low as $1,000 per tonne after the economic crisis of 2008.
The industry is now watching catches in Peru, the world's top fishmeal exporter, due to concerns about the impact of El Niño. Normally the deep, cold water Humboldt current off Peru's Pacific coast creates nutrient-rich waters that are ideal for anchovies, but an El Niño brings warm waters, reducing fish stocks.
Because the fishmeal industry's main production centre is Latin America, far from Chinese and European consumption centres, fishmeal is one of the world's most internationally traded commodities.
The International Fishmeal and Fish Oil Association, the trade body, estimates that each tonne of fishmeal travels an average of 5,000 kilometres to reach its end-user in the aquaculture industry.
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Agribusiness turning into an asset class
[25 June 2010] Globally agribusiness is emerging as an asset class and this is due to declining arable land per capita, increasing per capita incomes in emerging economies and rising demand for biofuels. Speaking at a briefing in Kuala Lumpur, Malaysia yesterday, John Baker Regional Head Asia, Food and Agribusiness Advisory of Rabobank International said despite the rising interest in agricultural commodities, short and long-term market volatility has declined in recent months and this is beginning to exert a greater influence on agricultural commodity prices.He also noted increased investor interest in agricultural land.
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Alliance Tuna to acquire Hiep Thanh Seafood in Vietnam
[6 July 2010] Philippine tuna processor Alliance Tuna International plans to acquire Vietnam fish processor Hiep Thanh Seafood in a move to extend its product range into Vietnamese catfish and market it globally through its worldwide sales networks. Alliance Tuna has signed a memorandum of agreement with Hiep Thanh for a 90-day due diligence as it is looking to buy a 51% stake for USD 13.1 million. It said Vietnamese catfish is gaining popularity due to its white flesh and affordable price. The company will use its existing marketing channels and direct access to supermarket chains around the world to distribute the Vietnamese catfish products.
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Jollibee forecasts higher Q2 sales
[7 July 2010] Jollibee Foods Corporation (JFC) said its sales will continue to grow in the second quarter, thanks to higher spending boosted by the Philippine national elections. JFC Chairman and CEO Tony Tan Caktiong also said that barring any unforeseen events, the company is expecting its systemwide sales to grow for the entire year. During the first quarter, JFC reported an 8.4% growth in systemwide retail sales, which is a measure of all sales to consumer to PHP 16.3 billion (USD 34.45 million). As part of its PHP 4 billion (USD 86.11 million) capital expenditure program, the company plans to open 200 stores across all its brands in both the domestic and overseas market. Last year, JFC opened 168 stores worldwide, 58 of which are overseas.
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Economic Aspect of Agriculture in 2010 and Beyond
The economic aspect of agriculture for 2010 shows more stability compared to the economic outlook for 2009, according to an annual joint report by the UN's Food and Agriculture Organisation (FAO) and the Organisation for Economic Co-operation and Development (OECD) entitled Agricultural Outlook 2010-19. Rachel Ralte, Junior Editor of ThePigSite, provides a brief outline of the Outlook.
The poverty-stricken, particularly in developing nations, are usually most affected by agricultural blows such as high oil prices, commodity price hikes, recession etc. The world’s hungry is now estimated at more than one billion people. However, 2010 has seen the return of a certain degree of normalcy in various world markets. Production is getting closer to historical levels and demand is slowly recovering.
However, the governments of several countries are still anxious about the repetition of these agricultural shocks. They are concerned that energy prices, exchange rates, and/or the macroeconomic performance of key countries and regions may be negatively affected.
According to the Outlook report, "The macroeconomic environment underlying the commodity projections is more positive than in the 2009 Outlook." The world began to recover in late 2009. A gradual transition towards improved sustainable growth has been observed. An increase in oil prices is likely to increase input and production costs. This is expected to affect crop supplies, prices and trade flows, and reinforce feedstock demand for biofuels.
Growth of global agricultural production is forecast to be slower within the next decade, but in the absence of unexpected blows, growth remains on track with estimated longer-term requirements.
Net Agricultural Production for selected countries (index 2004-06=100)
[Sources: OECD and FAO Secretariats]
In the current Outlook report, average crop prices are projected to be above the levels of the decade prior to the 2007/08 peaks. As for livestock products, average meat prices in real terms, other than pig meat, are expected to surpass the 1997-2006 average over the coming decade. Pig meat prices are expected to stay relatively subdued due to an anticipated increase in supply from Brazil and China.
Change in production of crop and livestock products
(per cent change 2019 compared to 2007-09)
[Sources: OECD and FAO Secretariats]
Biofuel markets are dependent on government incentives and mandates. However, prospects remain uncertain mainly because of unforeseeable factors such as future trends in crude oil prices, changes in policy interventions and developments in second-generation technologies. An additional demand for feedstocks such as wheat, coarse grains, vegetable oils and sugar is expected as a result of expansion of biofuel production.
According to the report, "Developing countries will provide the main source of growth for world agricultural production, consumption and trade." Also, food consumption in developing countries will become less responsive to price and income changes as a result of increasing affluence and an expanding middle class.
For an extended period after world primary commodity prices fell following the price surge of 2007-2008, food prices remained high in many places. Last year, inflation of food prices fell considerably, but it remains highly significant in certain developing and emerging countries.
There has also been a considerable increase in short-term price volatility since the 2006-2008 price hike. The extent to which world prices are transmitted to domestic markets depends largely on the country in question and also on the level of market integration.
The report states: "At the international level, the uncoordinated policy actions of governments during the 2006-08 price spikes exacerbated volatility and impeded access to markets." Governments need to assure countries that there will be an unhindered access to global supplies and improved confidence in market functions.
June 2010
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Philippines considering nuclear energy: Aquino
Agence France-Presse
Posted at 07/13/2010 9:30 AM | Updated as of 07/13/2010 9:30 AM
MANILA, Philippines - The Philippines may turn to nuclear energy to solve power shortages in the impoverished nation, President Benigno Aquino said Monday.
"We are studying the possibility of using nuclear energy as a source of power," Aquino, who took office on June 30, told reporters. "I'm awaiting the Department of Energy secretary's recommendations."
He said the technology could come from South Korea, without elaborating.
But he said he was reluctant to rebuild a plant completed a quarter of a century ago under the Marcos regime but never used.
Aquino's statement came four months after a cousin, House of Representatives member Mark Cojuangco, inspected a turbine generator and other nuclear equipment being auctioned by South Korea.
Cojuangco has also said the government should seriously consider reviving the Bataan nuclear power plant, which was completed in 1984 after eight years of construction by the government of the late dictator Ferdinand Marcos.
Built 60 miles (100 kilometers) north of Manila at a cost of 2.3 billion dollars, the plant was hounded by controversy and has never produced power.
International inspectors who visited the plant shortly after Marcos was ousted by a "people power" revolt in 1986 declared it substandard and unsafe because it was built near a volcano and earthquake fault lines.
Aquino said on Monday he was not keen on rebuilding the plant, citing safety concerns and saying it would be costly to the cash-strapped government.
"I am really bothered. I have a lot of apprehensions with regards to the Bataan nuclear power plant," he said.
The Philippines relies mostly on geothermal and hydroelectric dams to produce its power, but a lack of investment in recent years has contributed to energy shortfalls for the fast-growing population of 92 million people.
Drought plus frequent breakdowns of facilities exacerbated the problems this year, leading to rotating blackouts in parts of Manila and deeper energy shortfalls in the less developed south of the country.
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World Agricultural Supply and Demand Estimates - July 2010
Pork production is forecast higher for 2010 based on increased slaughter and heavier dressed weights; mainly during the second quarter, according to the USDA World Agricultural Supply and Demand Estimates for July 2010.
Livestock, Poultry and Dairy
Total US meat production forecasts for 2010 and 2011 are adjusted slightly. Cow slaughter remains relatively high boosting beef production in 2010. Higher forecast mid-year cattle placements are also expected to boost steer and heifer slaughter later in the year and into early 2011. Pork production is forecast higher for 2010 based on increased slaughter and heavier dressed weights; mainly during the second quarter. The June 1 Quarterly Hogs and Pigs report indicated that producers intend to have fewer sows farrow in the second half of 2010. Although largely offset by gains in pigs per litter, year-over growth in sows farrowing in 2011 is slower than previously forecast, and the 2011 pork production forecast is reduced slightly. Broiler production is forecast higher for 2010 and 2011. Hatchery data point toward continued growth in bird numbers and weights have been moving up. Turkey and egg production forecasts are unchanged from last month.
A slight increase is made to beef exports for 2010. Broiler exports for 2010 and 2011 are raised due to stronger shipments to a number of small markets and a resumption in exports to Russia.
Cattle and hog price forecasts for 2010 are reduced from last month as demand remains relatively weak in the face of higher production. The 2010 broiler price is adjusted to reflect second quarter prices. Prices for 2011 are unchanged. The turkey price forecasts for 2010 and 2011 are raised from last month in the face of continued tight supplies. The egg price forecasts are lowered for 2010 and 2011.
Forecast milk production for 2010 and 2011 is raised slightly from last month. Milk cow numbers have remained higher than expected and milk per cow is expected to increase more rapidly than previously forecast. Exports for 2010 are raised reflecting strong sales of dairy products but fat-basis exports for 2011 are unchanged from last month as production of fat-based products by competing exporters is expected to increase in 2011. However, the forecast of skim basis exports is raised for 2011 as nonfat dry milk (NDM) exports will likely reflect improving economic conditions. Fat-basis imports for 2010 and 2011 are forecast lower reflecting tight world supplies and growing international demand.
The Class III price forecast for 2010 is reduced on a lower cheese price forecast, but the Class IV price forecast is raised as the price forecast for butter is raised, more than offsetting a reduction in the NDM price. The 2011 forecast for butter is raised slightly but forecasts for other products are unchanged. The Class III and Class IV price forecasts are raised. The all milk price is forecast to average $15.80 to $16.10 per cwt for 2010 and $15.90 to $16.90 per cwt for 2011.
Wheat
US wheat supplies for 2010/11 are raised this month on higher area, yields, and carry-in. Beginning stocks are raised 43 million bushels based on the June 1 stocks estimate. Total wheat production is forecast 149 million bushels higher with higher forecast area and a forecast record yield of 45.9 bushels per acre. Winter wheat production is up 23 million bushels as higher Hard Red Winter wheat yields more than offset lower yields for Soft Red Winter wheat. Durum and other spring wheat production are forecast higher as abundant moisture and lack of heat stress in the Northern Plains support above trend yields. Feed and residual use is projected 20 million bushels lower as higher prices limit the competitiveness of wheat in livestock and poultry rations. Exports are projected 100 million bushels higher with lower expected production in several major exporting countries and strong early season export sales. Despite increased foreign demand for US wheat, ending stocks for 2010/11 are projected 102 million bushels higher and remain at an expected 23-year high. The season-average farm price for all wheat is projected at $4.20 to $5.00 per bushel, up 20 cents on each end of the range as tighter world supplies and higher corn prices support wheat values.
This month's 2009/10 changes reflect the latest export and seed use data and reported June 1 stocks. Projected exports are lowered 20 million bushels and estimated seed use is lowered three million bushels. Based on these changes, June 1 stocks indicate feed and residual use 21 million bushels lower. The 2009/10 wheat farm price is estimated at $4.87 per bushel, up two cents from last month's projection.
Global wheat supplies for 2010/11 are reduced with world production projected 7.5 million tons lower as smaller crops in FSU-12, Canada, EU-27, India and Turkey more than offset higher production in the United States and China. Production for Canada is lowered four million tons as persistent June rains limited seeding in the Western Prairies. Production is lowered 4.5 million tons and 3.0 million tons, respectively, for Russia and Kazakhstan as continued drought and high temperatures reduce yield prospects for spring wheat. EU-27 production is lowered 1.1 million tons reflecting early indications of lower-than-expected yields in northern Europe. India production is lowered 1.0 million tons on indications that heat during late grain fill reduced yields. Production is lowered 0.5 million tons for Turkey as early harvest results indicate disease has reduced expected yields. Production is raised 2.5 million tons for China where favorable June weather boosted harvested area and yields.
World wheat imports and exports are nearly unchanged for 2010/11, but substantial shifts are projected among the major exporting countries. Exports are reduced for Canada, Russia, Kazakhstan, and Turkey with lower production. Exports are raised for the United States, Australia, EU-27 and Ukraine. Global wheat consumption declines slightly with lower expected feeding in Canada, EU-27, Ukraine, and the United States mostly offset by increases for Russia and China. Global ending stocks are projected 6.9 million tons lower.
Coarse Grains
Projected US feed grain supplies for 2010/11 are lowered with reduced carry-in and lower projected production. Beginning stocks for corn are projected 125 million bushels lower reflecting higher use in 2009/10. With forecast harvested area down, corn production is lowered 125 million bushels, leaving supplies down 250 million bushels and 60 million below the 2009/10 record. Exports for 2010/11 are projected 50 million bushels lower as tighter domestic supplies, strong demand from ethanol production, and rising prices reduce the export competitiveness of US corn. Ending stocks for 2010/11 are projected down 200 million bushels at 1,373 million, 105 million below the 2009/10 projection. The season-average farm price for corn is projected 15 cents higher on both ends of the range to $3.45 to $4.05 per bushel.
Other 2010/11 feed grains changes mostly reflect lower forecast area, which is partly offset by higher expected yields. Barley and oats yields, as reported in the July 9 Crop Production, are forecast above trend. Sorghum yields are raised to reflect adequate to abundant soil moisture in the southern and central Plains. Production, however, declines slightly for all three crops. Barley and oats imports are lowered with reduced supplies expected in Canada. Projected ending stocks are lowered for all three crops and farm prices are projected higher.
US corn use for 2009/10 is projected 125 million bushels higher as increased feed and residual use more than offsets a reduction for ethanol. Feed and residual use is projected 175 million bushels higher as June 1 stocks indicated higher-than-expected disappearance during the March-May quarter. Corn use for ethanol is lowered 50 million bushels reflecting the latest ethanol production data from the Energy Information Administration (EIA). Although daily ethanol disappearance set another record in April, daily production slipped below March's record pace. EIA's new weekly ethanol production data series (first reported for the week ending June 4) suggests June production, while up from April, will not reach the March pace.
Global coarse grain supplies for 2010/11 are projected 14.9 million tons lower with nearly half of the decline driven by reductions in carry-in and production in the United States. Global coarse grain production is lowered 10.8 million tons with barley, corn and oats production lowered 6.9 million tons, 3.4 million tons, and 0.9 million tons, respectively. Partly offsetting, is a 0.6-million-ton increase in EU-27 mixed grain production. Outside the United States, the biggest reductions are for Russia, Canada, EU-27 and Kazakhstan. Russia barley production is lowered 2.5 million tons as continued drought and high temperatures reduce yield prospects. Russia corn and rye production are lowered 0.5 million tons and 0.3 million tons, respectively. Canada barley and oats production are lowered 1.1 million tons and 0.9 million tons, respectively, as persistent June rainfall limited plantings. Barley production is lowered 2.4 million tons for EU-27 mostly reflecting lower reported area. Kazakhstan barley production is lowered 0.8 million tons as extended drought and high temperatures sharply reduce expected yields.
Global coarse grain imports and exports are nearly unchanged for 2010/11. Corn imports are lowered for Mexico with exports increased for Ukraine, partly offsetting the US export reduction. World barley imports and exports are raised slightly with shifts expected among exporting countries. Barley exports are reduced for Russia, Canada, and Kazakhstan, but raised for EU-27 and Australia. Global coarse grain consumption is lowered for 2010/11 mostly reflecting reduced barley and corn use in Russia and EU-27. Global coarse grain ending stocks for 2010/11 are projected sharply lower with world corn ending stocks down 6.2 million tons and barley ending stocks down 5.7 million tons. At the projected 180.2 million tons, coarse grain stocks would be the lowest since 2007/08.
Oilseeds
US oilseed production for 2010/11 is projected at 100.8 million tons, up 1.7 million tons from last month, with increased soybean production accounting for most of the change. Soybean production is projected at 3.345 billion bushels, up 35 million due to increased harvested area. Harvested area is estimated at a record 78 million acres in the June 30 Acreage report, 0.9 million above the June projection. The soybean yield is projected at 42.9 bushels per acre, unchanged from last month. Increased exports and crush offset increased supplies, leaving projected 2010/11 ending stocks at 360 million bushels, unchanged from last month. Higher soybean exports reflect increased import projections for China for 2010/11.
The US season-average soybean price for 2010/11 is projected at $8.10 to $9.60 per bushel, up 10 cents on both ends of the range. Soybean meal prices are projected at $240 to $280 per short ton, up 10 dollars on both ends. Soybean oil prices are projected at 34 to 38 cents per pound, unchanged from last month.
Global oilseed production for 2010/11 is increased 0.5 million tons to a record 440.7 million tons. Foreign oilseed production is projected down 1.2 million tons to 340 million mostly due to lower rapeseed production. Global soybean production is projected at a record 251.3 million tons, up 1.4 million due mostly to higher production in the United States. Soybean production is also raised for Canada based on higher planted area reported by Statistics Canada. Rapeseed production is sharply 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, significant crop area in the provinces of Saskatchewan and Manitoba did not get planted due to excessive rainfall through late June. As a result, the Canada rapeseed crop is projected at 10.2 million tons, down 1.8 million from last month. Other changes include reduced rapeseed production for China and EU-27 and increased cottonseed production for the United States, Brazil and Uzbekistan.
US soybean exports for 2009/10 are projected at a record 1.46 billion bushels, up five million from last month in part reflecting additional sales to China. Crush is increased five million bushels to 1.745 billion due to stronger-than-expected domestic disappearance for soybean meal. Soybean ending stocks for 2009/10 are projected at 175 million bushels, down 10 million.
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Livestock Review: Viet Nam
VIET NAM - This weekly International Egg and Poultry Review report by the USDA's Agricultural Marketing Service (AMS), looks at international developments concerning the poultry industry. This week's report focuses on the Vietnamese poultry and livestock industries.
In Viet Nam, about 74 per cent of the population lives in rural areas and 65 per cent depend on agriculture for their livelihood. Small-scale household based production accounts for about 70 per cent of the total livestock production in Vietnam. Livestock plays an important role in generating rural income in Vietnam; an estimated 8.3 million households produce poultry and seven million households produce pigs. Increasing incomes have resulted in a higher demand for livestock products. The average annual meat consumption in Vietnam is about 40kg per capita and is projected to increase to 57kg per capita by 2020. Pork accounts for the majority of meat consumed (76 per cent) followed by poultry meat (13 per cent) and red meat (nine per cent).
According to the General Statistics Office of Vietnam, the husbandry survey results on 01/04/2010 noted that the country had 277.4 million fowls, up 8.1 per cent from the same period a year earlier, and 27.3 million pigs, up 3.1 per cent. The June 2010 report, Socio-economic statistics in the first half of 2010, stated that feeding products in six months increased considerably as epidemic diseases had been controlled in a timely manner; pork (live weight) gained 1.79 million tons, up 4.7 per cent; poultry meat (live weight) gained 330,700 tons, up 17 per cent; 3,278.8 million eggs, up 7.1 per cent.
In 2008, the Vietnamese government adopted a Development Strategy for the Livestock Industry in order to reorganise and industrialise livestock production and processing in Viet Nam. Under this Development Strategy, Viet Nam plans to increase livestock production from the current 30 per cent of total agricultural output to 38 per cent in 2015 and 42 per cent by 2020. The target for 2020 is production of 5.5 million tons of meat, 14 billion eggs and over one million tons of milk. At that time, the livestock population is expected to total 35 million pigs, 300 million chickens and 500,000 dairy cows.
Highly Pathogenic Avian Influenza (HPAI) was first reported in Vietnam in January 2004 and is currently considered endemic in the country. The World Animal Health Organization (OIE) reported five outbreaks that were still recorded as unresolved as of 29 April 2010.
(Source: UN Food and Agriculture Organization; General Statistics Office of Vietnam; World Bank; OIE; CIA World Factbook; FAPRI; news wires.)
*Jan-Apr
Source: Department Trade Statistics
Source: General Statistics Office of Vietnam
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Virginia Foods to expand operations
[16 July 2010] Virginia Foods Inc, a Cebu, Philippines based meat processor, plans to spend PHP 80 million (USD 1.73 million) this year to expand operations and improve product quality. Virginia Foods Vice-President Stanley Go said in a statement that his company is looking at further expanding its distribution network in the Visayas and Mindanao, where its different products have entered the market. Mr Go said the company “still foresee the need to extend our consumer base” in the region. The company manufactures the Virginia, El Rancho, Winner, Champion, and Australian brands of canned goods and frozen processed meat.
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Capture the genetic potential of today's modern poultry
[20 July 2010] The Poultry Feed Quality Conference has been designed to help Asian poultry nutritionists and feed mill managers learn how to buy the best corn & DDGS and use their milling capabilities to capture the genetic potential of today's modern poultry, says Program Director, Bob Swick. The conference is being held in Kuala Lumpur on August 2-3, 2010.
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San Miguel gets four bids for Pure Foods
[23 July 2010] San Miguel Corporation (SMC) received and is now studying four bids for its 49% stake in its subsidiary San Miguel Pure Foods Co Inc. Although SMC President Ramon Ang did not name the bidders, he admitted that they included three local firms and one international investor. Earlier reports said that they include Carlyle Group LLC and CVC Capital Partners, Universal Robina Corp, and Del Monte Pacific Ltd. Mr Ang also declined to reveal the value of the bids.
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Commission Authorises Six GM Maize Varieties
EU - The European Commission has authorised six genetically modified (GM) varieties of maize for food and feed uses.
The European Commission adopted today five Decisions authorising GM maize 1507×59122, 59122×1507×NK603, MON88017×MON810, MON89034×NK603 and Bt11×GA21 and one Decision renewing the authorisation of Bt11 maize.
These six decisions cover the authorisation for food and feed uses and import and processing but not for cultivation.
The six GM maize in question received (between February 2009 and September 2009) a positive safety assessment from the European Food Safety Authority (EFSA) and underwent the full authorisation procedure set out in the EU legislation.
As Member States did not succeed to return qualified majority decisions for or against these six authorisations/renewal in the Standing Committee on the Food Chain and Animal Health (SCoFCAH) of February 2010 and April 2010 and then in the Council meeting of 29 June 2010, the dossiers were sent back to the Commission for decision.
The authorisations are valid for 10 years, and any products produced from these GM maize will be subject to the EU's strict labelling and traceability rules.
The six adoptions of today are the result of a usual and standard procedure concerning the authorisation of GMOs to be used in food and feed and have no link with the recently adopted package on cultivation since they do not cover cultivation.
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Jollibee forms joint venture for commissary in China
[4 August 2010] Jollibee Foods Corp (JFC) has forged a joint venture with Singapore’s Hua Xia Harvest Holdings Pte Ltd to build its first commissary in China. The JV will set up Jollibee Foods Processing Pte Ltd, which will be 70% owned by JFC with the remainder held by Hua Xia. Both companies will invest USD 7.37 million for the new facility, which is expected to become operational within 2011. To be located in Shucheng County in Anhui Province it will initially supply Yonghe King stores in Beijing.
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Philippine feed production to drop 23%
[9 August 2010] Lack of demand from livestock, poultry and aqua producers will lead to a drop of about 23% in Philippine feed production, a local industry official said, adding that hog production has not picked up but declined as piglet production is also down. Earlier, industry stakeholders projected a 10% decline in production. If demand does not pick up, it is unlikely that local feedmillers will import more raw materials like feed wheat despite the expected drop in local corn production this year.
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Philippines lifts ban on MBM from Canada
[10 August 2010] The Philippine Department of Agriculture (DA) has lifted the ban on meat and bone meal (MBM) from Canada. In a memorandum, the agency said the World Organisation for Animal Health (OIE) has designated Canada as a Bovine Spongiform Encephalopathy (BSE or Mad Cow Disease) "controlled risk" area, which means the OIE deems the country’s mitigation measures sufficient to minimise the risk of transmission of the BSE agent. Canada can now export to the Philippines MBM and other processed animal protein. The Philippines banned the entry of MBM from Canada in May 2004, after a BSE-incident there that was verified and documented by the OIE.
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FAO forecasts void in lamb supply
[13 August 2010] The Food and Agricultural Organisation (FAO) has said that within five years there could be a 300,000-tonne void in lamb supply due to growth in demand of 1.6 million tonnes, mostly from China. Meat and Livestock Australia is looking to fill this gap, but Beef and Lamb NZ chairman Mike Petersen said demand was starting to slip as well in traditional lamb export markets such as Europe. He said two things were needed to capture younger consumers - hey had to be educated on the taste of lamb and how to cook it, and exporters had to supply the meat in consumer-ready packs. Sheep flocks around the world were shrinking, creating new opportunities and Mr Petersen said New Zealand should be able to capture some of that global demand by improving on farm productivity.
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Andok’s Manok approves new franchisees
[16 August 2010] Andok’s Litson Corp of the Philippines, which operates Andok’s Manok, one of the Philippines’ leading chicken rotisseries, is expanding further with the approval of seven new franchise deals. The new franchisees will add to 300 dine-in and take-out branches already operating all over the country. Andok’s Litson Corp’s President Leonardo Javier said that a new commissary is being planned to meet the requirements of the new franchisees. Currently the company has commissaries in Metro Manila and Iloilo province that can support only 100 franchised outlets.
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Philippine feed production to fall by 23%
[17 August 2010] Philippine feed production might fall by 23% for the rest of this year as lack of demand for animal feeds have led producers to cut back on production to minimise any losses. A source from the Philippine Association of Feed Millers Inc (PAFMI) said there has been weak demand from the livestock and poultry sector, particularly the hog industry whose output has not gone up and is likely to even fall as piglet production is also down. Only the poultry sector which has been showing good performance, said the source, has been helping keep the feed industry on its toes. If demand does not pick up, it is unlikely that local feedmillers will import more raw materials this year, even with the projected drop in local corn production for the year, which is expected to reach only 6.8 million tonnes.Corn imports are not expected to exceed more than 80,099 tonnes for 2010, much lower than the 344,945 tonnes brought in last year.
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San Miguel near to closing deal on Pure Foods
[18 August 2010] San Miguel Corporation (SMC) is close to reaching a deal for the sale of its 49% stake in San Miguel Pure Foods Co Inc (SMPFC) to the consortium made up of the Campos family and Century Pacific Group for more than USD 1 billion, a report by Bloomberg said. However, SMC President Ramon Ang declined to comment on the matter, saying only that negotiations are still under way. SMPFC holds SMC’s processed meats, poultry, livestock, feeds and dairy businesses, and is the current leader in the local market’s poultry and processed meat sectors.
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Jollibee to build plant in China
[17 August 2010] Philippines based Jollibee Foods Corporation (JFC) recently formed a joint venture with Singapore’s Hua Xia Harvest Holdings Pte Ltd to build its first commissary in China. The JV will set up Jollibee Foods Processing Pte Ltd, which will be 70% owned by JFC with the remainder held by Hua Xia. Both companies will invest USD 7.37 million for the new facility, which is expected to become operational within 2011. To be located in Shucheng County in Anhui Province it will initially supply Yonghe King stores in Beijing. JFC currently has 146 Yonghe King outlets in China. Earlier this year the company announced that it will spend PHP 600 million (USD 13.22 million) for 60 new stores in China.
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Jollibee 1st half income up 9.6%
[19 August 2010] Despite a slowing down in its profits for the 2nd quarter this year, leading Philippine fast food chain Jollibee Food Corporation (JFC) still reported a net income of PHP 1.43 billion (USD 31.73 million) for the first six months of 2010, up 9.6% year on year thanks to expansion and higher sales. Systemwide sales, which include sales from both company-owned and franchised stores, grew 9.5% to PHP 33.91 billion (USD 750.89 million) in the first half. JFC Chief Financial Officer Ysmael Baysa said the company’s sluggish showing in the 2nd quarter was due to foreign exchange losses.
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Pure Foods sale halted
[20 August 2010] San Miguel Corporation (SMC) has decided to halt the sale of its food unit, San Miguel Pure Foods Co Inc, after failing to agree with bidders on the amount of shares to be sold, various reports said. In a statement, SMC President Ramon Ang said that “the final bidders had sought 100 percent ownership,' however, the company is only interested in selling a minority stake (49%) of its shares in Pure Foods at this time. Several reports have named the bidders to be Universal Robina Corporation and the consortium of the Campos family and Century Pacific Group of Companies.
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Australian beef exports to Asia continue to climb
[23 August 2010] Australian beef exports to South East Asia and Greater China during July jumped 18% to total 13,231 tonnes swt, lifting shipments to the region over the calendar year to July by 3%, to 71,062 tonnes swt. Strong demand has maintained Australian beef exports to the region at historically high levels. Demand for high-valued beef in Southeast Asia and Greater China continued over the January to July period, as chilled shipments increased 7% and grainfed beef volume jumped 49% on a year ago, to total 7,742 tonnes swt and 5,455 tonnes swt, respectively. Dominating exports to Southeast Asia and Greater China during the calendar year to July were volumes of manufacturing beef (36% of total beef exports), shin shank (17%), blade (8%) and knuckle (7%) that were mainly sent to Indonesia, Taiwan and the Philippines. The higher volumes sent to Malaysia, Hong Kong and China also reflected growing demand for beef in these markets.
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Freight rates surge on demand
[25 August 2010] Freight rates have surged to a two-month high as traders scramble for grain imports and Chinese steelmakers increase demand. The Baltic Dry Index of shipping costs for dry bulk commodities – including grains, iron ore, coal and cement – has risen 67% in just over a month after it slid to its lowest since early 2009. The BDI’s sharp rally this month comes after Russia imposed a ban on grain exports, forcing consumers in the Middle East and north Africa to seek supplies from further afield and so increasing demand for freight. The rate for a transatlantic grain-carrying Panamax vessel is up 17.5% since the start of August at USD 26,800 a day. Traders expect a seasonal increase in demand for ore and grain shipments to boost freight rates into the fourth quarter. Russia’s export ban has put pressure on the US to supply food and feed grains.
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Meat prices set to rise
[27 August 2010] Fresh from the swine flu epidemic, meat prices are due for another shift. Rising wheat prices may make animals more expensive to rear. Experts are predicting meat shortages and prices to increase. The UN Food and Agriculture Organisation predicted that prices across the globe will rise faster than expected this year at 3%.
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San Miguel to fold Monterey Foods into animal feed and poultry unit
[2 September 2010] San Miguel Corporation is seeking to fold its meat retailing unit, Monterey Foods Corp, into its animal feeds and poultry unit, San Miguel Foods Inc. However the move is still to be approved by the Securities and Exchange Commission. In its filing, San Miguel said the merger would involve “the transfer of the assets and liabilities of Monterey Foods in favour of SMFI, in exchange for the net assets of Monterey Foods worth PHP 84.53 million (USD 1.87 million).” SMFI, which will be the surviving entity, will pay stockholders of Monterey Foods for the merger.
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Argentina Sees Vast Potential for Agriculture
ARGENTINA - Jorge Correa, Head of Rabobank’s Representative Office in Buenos Aires, is happy to talk about the Food & Agri opportunities for Rabobank in Argentina.
“Argentina is a vast country, rich in natural resources, blessed with good soil and excellent weather,” says Mr Correa. Twenty per cent of GDP is agriculture related, making the agricultural sector in Argentina important not just for Rabobank, but for the world economy. “As the land available for agricultural production around the world becomes increasingly scarce, yield will be key to maintaining food supplies in the future. And few agricultural economies can compete with the yields obtained by Argentinean farmers.”
Rabobank does not have a banking licence in Argentina, but does have a team of twenty-eight staff in its Representative Office in Buenos Aires. “Ninety per cent of our portfolio is Food and Agribusiness, providing trade and commodity finance services to large primary producers, processors and exporters involved in grains and oilseeds.” And when Jorge Correa says ’large’, he’s referring to farms ranging from 100,000 to 1 million hectares.
While Food and Agribusiness and Trade and Commodity finance account for the lion’s share of business, Rabobank is also increasing its participation in the growing renewable energy sector in Argentina, mainly in the biodiesel and bioethanol sectors.
Argentina, Brazil and the US account for 80 per cent of world soybean production. Jorge Correa: “As the world’s largest exporter of soy meals and soy oil Argentina plays a key role in supplying the increasing demand for soy proteins. Soy oil is the second most consumed vegetable oil in the world after palm oil. And soy meal is the best and the largest ingredient in protein contents used in the animal feed industry.”
In the August 2010 update on Agricultural Commodities Rabobank analysts state that soybean demand from China is almost insatiable, despite record soybean production this year in both the U.S and South America. Jorge Correa: “The total value of the soy industry was estimated at USD 110 billion in 2009, divided across soy oil (33 per cent) and soy meals (67 per cent). And there’s still plenty of room for growth.”
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China inflation accelerates, agri prices surge on speculation
[10 September 2010] Inflationary expectations in China are speeding up as agricultural product prices continue to rise driven by speculations as well as unfavorable weather this year. It is an arduous task keep inflation within the 3% target, said Fang Yan, deputy director of the rural economy division from the National Development and Reform Commission (NDRC). Prices of some agricultural products began to surge this year at record speed, with the garlic, mung bean, ginger prices spiking almost tenfold compared to the beginning of 2010. CPI rose 3.3% in July year-on-year boosted by soaring food prices. The rise in land costs,excess funds for agricultural, unfavorable weather as well as structural or regional shortage of certain products encouraged speculation. Farmers however, have not benefited from these hikes, Fang Yan said.
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World Agricultural Supply and Demand Estimate - September 2010
The forecast for 2011 has been reduced as higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler, and turkey production gains, according to the USDA World Agricultural Supply and Demand Estimates.
Livestock, Dairy and Poultry
Total US meat production forecasts for 2010 and 2011 are reduced slightly from last month. The forecast for 2010 is reduced as lower pork and broiler production more than offset an increase in beef production. The 2011 forecast is reduced as higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler, and turkey production gains. USDA’s Quarterly Hogs and Pigs report will be released on 24 September and will provide an indication of sow farrowing intentions into early 2011. Egg production forecasts for 2010 are adjusted to reflect a revision in second-quarter production but the 2011 forecast is unchanged.
Beef imports are reduced for 2010 and 2011 as imports have been lower than expected. Export forecasts for beef are raised on continuing strong sales to a number of markets. Pork and poultry trade forecasts are unchanged from last month.
Livestock and poultry prices for 2010 are raised but forecasts for 2011 cattle and hog prices are unchanged. The broiler and turkey price forecasts for 2011 are raised slightly on expected tightness in supplies. Egg prices for 2010 are forecast higher due to the recent spike in third-quarter prices, but the forecast for 2011 is unchanged.
Forecast milk production for 2010 and 2011 is raised from last month. Producers continue to add cows to the herd and inventories are forecast to increase into mid-2011. The rate of growth in milk per cow is also increased from last month. Fat basis export forecasts for 2010 are raised on strong sales of butterfat and cheese, but 2011 exports are lowered. Skim-solids exports for 2010 and 2011 are forecast higher than last month. Imports are reduced from last month due to higher US production and strong demand in other importing countries. Ending stocks for 2011 are increased as US production is forecast higher.
Strong demand for cheese and tight supplies of butter support higher forecast prices for 2010 and 2011. Stronger demand is forecast to absorb most of the increased production although prices are expected to be tempered during the latter part of 2011. Price forecasts for nonfat dry milk (NDM) are raised for 2010, but the 2011 forecast is unchanged from last month as increased supplies limit price gains. The whey price forecast is unchanged. Both Class III and Class IV price forecasts for 2010 and 2011 are raised due to the higher product prices. The all milk price is forecast to average $16.25 to $16.45 per cwt for 2010 and $15.85 to $16.85 per cwt for 2011.
Wheat
US wheat ending stocks for 2010/11 are projected lower this month with higher expected world demand for US wheat. Strong early season sales and reduced supplies in EU-27, particularly of higher quality wheat, support an improved outlook for US exports. Wheat exports are projected 50 million bushels higher with larger expected shipments of Hard Red Winter, Hard Red Spring, and White wheat. Projected ending stocks are lowered by the same amount to 902 million bushels. At the projected level, stocks would remain the second highest in more than a decade. The 2010/11 season-average farm price is projected at $4.95 to $5.65 per bushel, compared with $4.70 to $5.50 last month.
Global wheat supplies for 2010/11 are projected down 0.7 million tons as higher carryin mostly offsets a 2.7-million-ton reduction in world output. Much of the offset is explained by Canada, where beginning stocks are increased 1.5 million tons, as reported by Statistics Canada, and production is increased by 2.0 million tons. These changes mostly offset lower production in Russia and EU-27. Production for Russia is lowered 2.5 million tons based on the latest harvest results for the drought-affected central growing areas in the Volga and Urals Federal Districts. EU-27 production is lowered 2.4 million tons with the largest reductions for Hungary and Romania where heavy summer rains reduced yields. Smaller reductions in a number of other member countries also reduce EU-27 production. Although the reduction for Germany is small, persistent and heavy August rains have reduced supplies of high quality milling wheat. Other production changes include a 0.3-million-ton reduction for Belarus and a 0.4-million-ton increase for Morocco.
World wheat trade for 2010/11 is raised with global exports projected 1.4 million tons higher. Export shifts among countries largely reflect availability of supplies and increased competition from North America. Exports are raised 2.0 million tons for Canada and 1.4 million tons for the United States. Exports are also raised 0.5 million tons each for Iran and Kazakhstan. A 0.5-million-ton increase in Russia exports reflects larger-than-expected shipments during early August, before implementation of the export ban on August 15. These increases more than offset a 3.0-million-ton reduction for EU-27 and a 0.5-million-ton reduction for Australia. EU-27 exports are lowered with reduced supplies and increased competition from Canada. Logistical constraints are expected to limit exports from Australia.
World wheat imports for 2010/11 are raised with increases for Russia and Nigeria. Imports for Russia are raised 1.4 million tons as imports from regional suppliers support domestic usage, particularly for feeding. World wheat consumption is lowered 3.8 million tons with lower consumption in EU-27, Russia, and Kazakhstan outweighing increases for Pakistan, Canada, and Nigeria. Wheat feeding is lowered 2.0 million tons for EU-27 with imported coarse grains expected to partly replace wheat in livestock and poultry rations. Global ending stocks are projected 3.0 million tons higher with increases for EU-27, Canada, and Australia. Ending stocks are lowered for Pakistan and Russia.
Coarse Grains
Projected US feed grain supplies for 2010/11 are lower this month with lower carryin and reduced production for corn and sorghum. Beginning stocks for corn are projected 40 million bushels lower with higher 2009/10 corn use for ethanol and a small increase in exports. Corn production for 2010/11 is forecast at 13,160 million bushels, down 205 million, but still the largest crop on record. The national average yield is forecast at 162.5 bushels per acre, down 2.5 bushels. The largest reductions in forecast yields are for the eastern Corn Belt, which account for more than half of the reduction in total output.
Domestic corn use for 2010/11 is lowered 100 million bushels with lower expected feed and residual use as higher prices trim feeding demand and the smaller crop reduces residual disappearance. Projected exports are raised 50 million bushels with rising world demand for coarse grains, particularly corn. US corn ending stocks are expected to decline to 1.1 billion bushels, down 196 million bushels. At this level, 2010/11 carryout would be the lowest since 2003/04. Stocks as a per centage of total use would be the lowest since 1995/96. The season-average farm price is projected at $4.00 to $4.80 per bushel, compared with $3.50 to $4.10 last month.
Other 2010/11 feed grains changes include lower projected ending stocks for sorghum and oats. Sorghum production is forecast 7 million bushels lower. Sorghum exports are raised 10 million bushels with stronger world demand for coarse grains. Sorghum feed and residual use is lowered 10 million bushels. Oats imports are lowered 10 million bushels with lower expected production in Canada.
Global coarse grain supplies for 2010/11 are projected down 8.7 million tons with reduced foreign and US production. Most of the foreign reductions this month are in EU-27 and FSU-12 countries. A 10.3-million-ton reduction in world coarse grain production for 2010/11 is partly offset by larger corn beginning stocks for Brazil with a 1.8-million-ton increase in 2009/10 corn production. Lower US and EU-27 corn production account for more than half of the reduction in 2010/11 global coarse grain output. EU-27 corn production is reduced 1.2 million tons with lower reported area and yields for France and Germany and lower reported yields for Italy, Austria, and Spain. World barley production is lowered 2.0 million tons with reductions for Russia, EU-27, Belarus, and Morocco. World oats production is reduced 0.9 million tons with lower production for EU-27, Canada, and Belarus. Lower rye production in EU-27 and Belarus lowers world output 1.0 million tons.
Global coarse grain trade is increased this month with US corn exports raised 1.3 million tons. A 0.5-million-ton reduction for EU-27 corn exports is offset by a 0.5-million-ton increase for Ukraine. Corn imports are raised 2.0 million tons for EU-27 as corn partly replaces wheat in feeding. Russia corn imports are raised 0.7 million tons helping to offset reduced supplies of feed barley. Global corn consumption is lowered as reduced prospects for corn feeding in the United States and Ukraine more than offset higher expected corn feeding in EU-27, Russia, Mexico, and Canada. Global corn ending stocks are projected 3.6 million tons lower.
Oilseeds
US oilseed production for 2010/11 is projected at 104.8 million tons, up 1.5 million from last month. Soybean production is forecast at a record 3.483 billion bushels, up 50 million from last month based on an increase in the projected yield to a record 44.7 bushels per acre. Production of peanuts and cottonseed are also raised this month.
Soybean exports for 2010/11 are increased 50 million bushels to 1.485 billion reflecting strong early season sales and a projected increase in global import demand, especially for China. Soybean ending stocks are projected at 350 million bushels, down 10 million from last month as higher export demand more than offsets the increased supply.
Soybean exports for 2009/10 are projected at a record 1.495 billion bushels, up 25 million from last month reflecting strong shipments in the final weeks of the marketing year. The increase is partly offset with a lower residual, leaving ending stocks projected at 150 million bushels, down 10 million. Other changes for 2009/10 include reduced use of soybean oil for biodiesel and increased soybean oil exports. Season ending soybean oil stocks are projected record high at 3.21 billion pounds.
Prices for soybeans and products are all raised this month, supported by strong prices for corn and wheat. The US season-average soybean price range for 2010/11 is projected at $9.15 to $10.65 per bushel, up 65 cents on both ends of the range. The soybean meal price is projected at $270 to $310 per short ton, up $20 on both ends of the range. The soybean oil price range is projected at 37.5 to 41.5 cents per pound, up 1 cent on both ends of the range.
Global oilseed production for 2010/11 is projected at 440.6 million tons, up 0.9 million from last month. Global soybean production is projected at 254.9 million tons, up 1.2 million mainly due to a higher production forecast for the United States. China soybean production is reduced 0.2 million tons to 14.4 million based on lower yields. Global rapeseed production is projected higher as increased production for Canada more than offsets reduced crops for Russia and Ukraine. Other changes include reduced peanut and cottonseed production for China, reduced cottonseed production for Pakistan, increased cottonseed production for Australia, and reduced palm oil and palm kernel production for Indonesia.
Global oilseed trade for 2010/11 is raised 3.8 million tons to 108.7 million. China soybean imports are raised 3 million tons to 55 million, up from a revised 50 million in 2009/10. Imports are raised to reflect increased protein meal consumption and higher soybean stocks, now projected to reach 15.5 million tons. Global oilseed stocks are projected lower mainly due to reduced soybean stocks in the United States and South America.
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Friday, September 17, 2010Print This Page
Science - the Answer to Feeding the World?
The theme of this year's JSR Technical Conference was Science – the Key to Feeding the World, writes Jackie Linden, who attended the event at the University of Nottingham earlier this week.
"The theme for our 21st Conference is 'Science – the Key to Feeding the World'," said Tim Rymer, chairman of JSR Genetics, in his introduction to the event. "As a science-based business, it is obvious to us that scientific solutions have the potential to ensure we are able to feed a world population of nine billion by 2050. There are already another 200,000 mouths to feed since we awoke yesterday morning."
He explained that over 21 years, JSR's annual conference has become a key event in the UK pig industry calendar, evolving from a scientific and academic base to one that still keeps science at its core but is based on practical reality.
"We never want to be far away from the customer or consumer and the money," he added.
Also changing over time have been the 'hot' topics – from foot and mouth disease three years ago, high feed prices two years ago and H1N1 flu last year. Today, some producers are facing high feed prices again, which has more to do with speculation on the markets than supply and demand in the wheat market, Mr Rymer said.
"Animal feed efficiency is part of the solution. We all want animals that grow fast and lean and eat very little. We all know what effect 0.1 FCR will have on our pig business but if this was on a global scale, how much less land would be needed to feed the same population of animals?" he asked.
Animals that grow fast and efficiently produce less CO2 equivalents, which is good for the environment. Mr Rymer explained that JSR's investment in the Decoy finishing facility will not only be a good advertisement for the the company's sire lines but also increase the focus on feed efficiency. Manure produced by the facility will both reduce fertiliser costs and increase yields.
The previous evening, Richard Fuller gave the company a presentation on the Stabiliser Cattle project, which has many parallels to the pig side of the business, said Mr Rymer. The Stabiliser is a low-cost, easy calving suckler cow, with exceptional eating quality. The company has recently signed a memorandum of understanding with retailer, Morrisons, to set up a supply chain based around the breed.
"Building a brand that is consistent and trusted is hard work but it is a good example of putting science into practice and retaining the trust of the consumer as well," said Mr Rymer, adding that Mr Fuller's company also recognises that feed efficiency is crucial in staying ahead.
The work JSR is doing on eating quality with beef under the Givendale Prime brand and pork with our Crackling Farm Pork initiative will benefit from the Yorkshire Wolds Cookery School, which opens for business at the end of October, said Mr Rymer.
Emphasising the international scope of JSR's business, Mr Rymer welcomed a delegation from Cotswold Japan, which operates the JSR franchise there, as well as the first group of Chinese technicians who are starting a four-month training programme at JSR in preparation for the stocking of the company's China Nucleus in 2011. JSR is also currently stocking the Canadian Nucleus, added Mr Rymer.
Two other areas in which JSR has invested are Technical Support and Sales. The company operates a joint venture with Paul Wright in international markets as JSR Checkmate, and this organisation has recently agreed to manage all the Technical Support for JSR.
"We have also appointed two Sales Trainees Laura Russell and Mark Woodall," added Mr Rymer before introducing the Conference speakers.
'Benefits from breeding in the next decade' was the title taken by the first presenter, Frédéric Grimaud, president of Groupe Grimaud, who was followed by JSR Genetics' own director of Research & Genetics, Dr Grant Walling, who discussed 'The Science of Feeding the World'. Professor Gareth Edward Jones from Bangor University gave a new interpretation on carbon emissions in agriculture and how they can be reduced. In the final session, Steve Murrells, chief operating office of Tulip Ltd spoke on 'From farm to fork in a changing Britain' and Alastair Butler explained the marketing story behind Blythburgh Free Range Pork.
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Producers profit with rising price
[28 September 2010] Prices for food and other soft commodities have been climbing and analysts say that producers in Asia are poised to profit as demand from emerging markets continues to grow. A strategist at Nomura said: “We believe that soft commodities will outperform base and precious metals in the future.” Wheat and corn futures prices in Chicago recently jumped to multi-month highs, with wheat futures trading at a high of USD 8 per bushel and corn futures climbing past USD 5 per bushel, both for the first time since the second half of 2008. In this scenario producers will reap the benefit but food companies, those that sell to consumers, will have profits squeezed. Higher feed prices may also show increases in future meat and poultry prices.
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How Geneticists Will Help Feed Nine Billion People
The theme of the 21st JSR Genetics Technical Conference earlier this month was Science – the Key to Feeding the World. Jackie Linden, reports on some of the event highlights, focussing in this article on the contribution of genetics and breeders.
The focus of this year's JSR Genetics Technical Conference was on some of the ways in which science can feed the world. As the company's chairman, Tim Rymer, explained in his introduction: "As a science-based business, it is obvious to us that scientific solutions have the potential to ensure we are able to feed a world population of nine billion people by 2050. There are already another 200,000 mouths to feed since we awoke yesterday morning."
Benefits from Breeding in the Next Decade
Frédéric GrimaudFrédéric Grimaud, president of breeding company, Groupe Grimaud, opened his presentation by the organisation of his company. It is the second biggest multi-species animal genetics company in the world, he said and is 80 per cent owned by the Grimaud family and 20 per cent by a number of financial partners. Annual turnover is around €200 million and there are 1,450 employees worldwide.
The company has two main business branches. The Animal Genetic Selection division comprises four groups: ducks and geese, guinea fowl and pigeons (Grimaud Frèrer); broilers (Hubbard); layers (Novogen) and pigs (Newsham Choice Genetics). The Biopharmacy division is split into two main groups: Vivalis, which covers vaccines, proteins and pharma molecules, and Filavie for vaccines, bacterial flora and analysis. A further group, Hypharm, has links to both divisions and covers serum, pharma proteins, rabbits and SPF animal breeding.
Mr Grimaud said that feeding a growing world population will become increasingly challenging, and that population growth exerts strong pressure on the environment. "If we break the balance, we won't be able to produce sufficient food," he said.
He went on to outline 10 keys for a better understanding of the situation.
"A quick look in the mirror shows tremendous progress in the last decade, mainly thanks to genetics," he said, showing the improvements in the annual output of meat from parent stock in the last 20 years from pigs, rabbits and poultry, as well as the improvements in feed conversion ratio. Breeding is a fixed-cost, long term business, he emphasised, saying that the current genetics 'pipeline' will produce the commercial generation of animals in 2013-2014.
There are great opportunities for a multi-species approach, Mr Grimaud believes, seeing many synergies in his company is terms of breeding programmes for different species such as chickens, pigs and rabbits.
"Animal welfare is becoming a main challenge," he said. He sees great importance in breeding for commercial conditions, taking into account their natural and social behaviour to develop less aggressive and more robust animals.
The integration of the Marker Assisted Selection (MAS) in the BLUP is improving the accuracy of the selection, Mr Grimaud said, showing the spurt in estimated breeding value (EBV) since the introduction of MAS. Meat water-holding capacity and marbling/tenderness are traits that have been especially responsive to the technique, and it could prove to be the first effective technique for increased resistance to pathogens.
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"If we break the balance, we won't be able to produce sufficient food"
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On a related theme, he believes that biotech tools have the potential to permit the revolution of the Genetically Modified Organisms (GMOs). Work on an experimental scale has proved the concept and the technique may, in future, be used to improve disease resistance.
However, quantitative selection remains the basis of breeding programmes, said Mr Grimaud, showing the improvements in broiler 42-day weight and feed conversion over the last decade.
He stressed the need to maintain genetic diversity in order to satisfy different market segments.
At the breeding level, health status and risk mitigation are key factors to secure the industry in Mr Grimaud's opinion. His company has developed separate R&D centres, continuous monitoring of health status in internal labs and multiplication centres near to commercial zones to both secure local customers and offer multi-source supply in case of a ban resulting from a case of a major disease outbreak in one area.
Environmental friendly production is becoming another new challenge, said Mr Grimaud. Citing examples from the broiler sector, he explained that a better FCR and drier litter mean less manure, and new developments in nutrition both improve nutrient digestibility and offer protection against pathogens.
Mr Grimaud closed his presentation by saying that with so many risks and so many variables, the future is not yet written but these unknowns offer many opportunities for breeding companies to make a difference.
The Science of Feeding the World
Dr Grant WallingDr Grant Walling, director of Research and Genetics for JSR Genetics, outlined the challenges by saying, "Today's 6.5 billion people in the world today is forecast to rise to nine billion by 2050. And further, due to changing eating patterns, those nine billion people are likely to eat enough food for 11 billion people due to the increasing demands of the middle classes in more populous countries such as China and India."
One solution could be to farm more land, Dr Walling suggested. We currently farm 1.4 billion hectares; the FAO has identified more than 1.6 billion hectares that could be used for farming (mainly in Latin America and Africa). However, the Royal Society is concerned over the damage to ecosystems and biodiversity.
Another solution would be to eat less meat, he said. However, this fails to address the use of marginal land (especially for beef and lamb production), that farm animals eat large amounts of agricultural and food by-products as well as the need of wool and leather. And who should reduce their meat intake, asked Dr Walling? Should it be those in countries that already eat a lot of meat or those in developing countries where meat intake is increasing along with growing income?
The best solution, he proposed, is for agriculture to produce more with less resource (water, fertiliser, pesticides). This can only be achieved through improved science and technology and investment in agricultural research, which only currently makes up five per cent of world R&D spend, Dr Walling said.
Genetic technologies will be an important part of the improvement in efficiency and output, he predicted.
"Quantitative genetics works," he said, showing the continuing upward trend in oil content of maize selected over many generations, as well as the increasing gap between maize lines selected for low- or high protein content.
Going on to show the performance of today's pig compared to one of the 1960s, Dr Walling presented his estimate of the likely performance of pigs in 2050, when the human population is expected to reach the nine-billion mark, assuming linear improvements in each parameter.
However, the improvements take a great forward leap if molecular genetics is employed. Using marker chips in market assisted (MA) selection with BLUP, the progress is much faster (see table).
Quantitative selection success: performance of the modern pig compared to one in the 1960s and the potential of new techniques
1960s 2010 2050
(linear improvement) 2050
(with MA-BLUP)
Pigs weaned per sow 14 21 28 31.5
Lean % 40 55 70 70
FCR 3.0 2.2 1.4 1.28
Lean meat per tonne feed (kg) 85 170 255 268
Data for 1960s and modern pigs from Van der Steen et al., 2005
Progress in producing more with fewer resources could also be achieved by making changes, either to indices or to traits, said Dr Walling. He gave the example of dairy breeding, where three different traits are used: profitability, low-carbon and welfare, where the focus is on production traits, efficiency and longevity, respectively. For pigs, the focus generally remains mainly on profitability but JSR is increasingly paying attention to lifetime performance, which takes into account sow mortality and thus impacts replacement rate. Meanwhile, a greater emphasis on feed efficiency may detract somewhat from growth rate but it is more relevant with rising feed costs and reduces environmental benefits.
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"We need to take the public with us"
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Dr Walling also highlighted the potential benefits of other production changes, including the use of split-sex feeding. Work from Harper Adams University College sponsored by JSR shows that the best overall performance was achieved by boars on a much higher level of lysine (1.12g/kg) than gilts (0.89g/kg).
So far, the breeding index has not been influence by welfare because of insufficient financial reward and conflicts with climate change goals, he said.
New embryonic technologies would also help the industry to produce more with less, Dr Walling said, as he described semen freezing, and embryo transfer.
"These technologies will become more common by 2050 but we need to take the public with us," he said.
Summing up, Dr Walling said: "Genetic improvement will continue to deliver annual benefits. However difficult challenges need to be addressed with breeding goals for production, profitability, climate change and animal welfare.
"Other genetic technologies must be allowed to penetrate the market without excessive bureaucratic legislation (GM and cloning) but scientists must be realistic with the claims and allow the consumer to make informed choices."
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WMC REPORT - Sustainable Production for Global Meat Industry
ARGENTINA - Global meat demand is expected to grow by between one and two per cent during the remainder of this decade, writes TheMeatSite senior editor Chris Harris from the World Meat Congress in Buenos Aires.
Speaking at the opening of the congress, outgoing president of the International Meat Secretariat, Paddy Moore said that the prospects for the global industry are to see international trade in meat grow despite the occasional setbacks through animal diseases, food safety scares and issues surrounding market access.
He said that the industry had to prospect of feeding a growing global population with 80 million extra people to feed each year.
In the meat sectors Mr Moore said that the pig and poultry industries are expected to see the greatest growth outperforming lamb and beef.
He said the growth in trade and demand is going to present challenges to the industry in particular in gearing up in terms of greater efficiencies, higher productivity and innovation.
He said the industry is also going to face growing environmental and sustainability concerns.
"The raising of livestock and the ethical production of meat that is not harmful to the environment are issues that have reached international importance," said Mr Moore.
"Probably the greatest single challenge facing our industry it to reconcile the necessity of supplying high quality protein to an expanding world population with the imperative of ensuring that it is ethically produced, safe, wholesome and in harmony with the environment - the sustainable production of meat."
Mr Moore said the industry is also going to have to face the concerns about climate change and greenhouse gas emission produced inn the production of meat.
"The livestock industry has large potential to contribute to climate change mitigation and adaptation," he added.
He said that the industry needs to find more precise methods for calculating greenhouse gas emissions.
He said the IMS will be playing its part and has established a committee for sustainable meat.
The IMS is also building on its links with organisations such as the FAO, OECD and the OIE.
The concerns about the effect livestock production has on the environment were echoed by the Argentine vice minister for agriculture Lorenzo Basso
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Food prices to rise in Asia
[30 September 2010] Urbanisation and the growing wealth in Asia is likely to result in soaring food prices and a strengthening of the region's thirst for commodities. The commodities boom and the growing influence of China featured prominently on a wide-ranging first day at the Forbes Global CEO Conference in Sydney on Monday. Jing Ulrich, Managing Director of China equities and commodities at JP Morgan, said the GDP of the emerging BRIC countries - Brazil, Russia, India and China - were growing at an average of 6.9% compared to the world average of 3.6%. The US and Europe were growing at less than 2% on average. Ms Ulrich said this was an indication the emerging markets - led by China - had switched places with developed nations.
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NZ and Australia to emerge as food powerhouses
[5 October 2010] New Zealand and Australia will emerge as global agricultural powerhouses in the long-term with Asia fueling the industry. Sunny Verghese, group managing director and CEO of Olam International, said that New Zealand and Australia would play an important role in supplying food to Asian markets. “I don’t believe India and China, given their arable land and water constraints, will be able to produce all the food they need and could become significant importers of food,” he said this at the Rabobank Advisory Board meeting in Sydney. “The challenge for Australasian producers will be managing the supply side of the growth in Asia and strengthening their competitive position and building a comparative advantage.”
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Mexico - Livestock and Products Annual 2010
While Mexican cattle inventories for 2011 are expected to decline in 2011, swine production is expected to increase slightly, write Zaida San Juan and Daniel R. Williams II in the latest GAIN report from the USDA Foreign Agricultural Servces.
Report Highlights
Mexican red meat consumption is forecast to increase in 2011 as the economy and consumer purchasing power recover. A lower cattle export level will result in higher domestic meat supplies and stable domestic beef prices. US beef exports to Mexico will continue increasing, principally toward the end of 2010, supported by the elimination of duties on imported US beef. Removal of feet from carcasses and retaliatory duties on bone-in hams are two new challenges for US exporters; however, the United States will continue to be the principal source of imports.
Executive Summary
In 2011, total swine production is expected to increase slightly. The increase will occur due to higher hog prices and stronger pork demand. Ending inventories are expected to increase for both 2011 and 2010. Mexico’s imports of hogs are forecast to increase in 2011, reaching 12,000 head. Pork production for 2011 is forecast to recover (2.0 per cent) after no increase for 2010. Growth in pork consumption is forecast to increase 1.3 per cent in 2011 after a slight decrease (-0.2 per cent) in 2010 due to lower than expected demand recovery. Mexico’s pork exports are forecast to grow 6.3 per cent in 2011 compared to 2010.
Swine production for 2011 is forecast to increase one per cent, higher than 2010. Higher swine prices, stronger consumer purchasing power and a recovery of consumer confidence after the H1N1 influenza outbreak will stimulate production.
Furthermore, the Mexican swine sector could benefit from the efforts of the government of Mexico (GOM) to obtain market access in China. If obtained, the Mexican swine sector will need to increase production, continue with integration and reduce production costs and losses. Although only the most efficient firms will export, medium-sized farmers are aware that there could be more domestic opportunities to sell pork, but they also must improve their competitiveness.
Due to the past economic crisis and H1N1 outbreak, both of which negatively affected the pork sector, sow beginning inventories are currently limited and data previously reported for 2010 were revised down slightly; thus, the slaughter level for 2011 will be comparable to 2010.
Total beginning inventories are forecast to increase 4.4 per cent for 2011, mainly due to a lower-than-expected slaughter level for 2010. However, slaughter is forecast to increase one per cent in 2011 as a result of pork demand and consumption recovery after the H1N1 outbreak.
Pork production for 2011 is expected to increase two per cent over 2010. Furthermore, industry sources believe this 2011 production will be slightly higher than 2009’s. For 2010, a year in which a decrease of approximately one per cent (1.161 million metric tons; MMT) is now expected according to official data, the decrease is minimal thanks to a successful GOM and industry promotional campaign and lower pork prices.
Consumption
Pork consumption is forecast to increase more than one per cent in 2011. However, the increase is tied to price and will depend on retailers’ pricing strategies. Some retailers are selling pork at higher prices, claiming they are merely passing on higher domestic prices as well as the cost of retaliatory duties on imported US pork.
Even though the economy and gross family income have recovered somewhat, pork consumption will increase at a rate lower than that of beef, mostly due to higher prices and a substitution effect by consumers who see poultry as a cheaper and ‘healthier’ protein. In addition, growth in pork per-capita consumption is constrained due to consumers’ perception of pork as an unhealthy meat product.
Mexico’s meat processors will continue to use imported US pork variety meats as well as bone-in cuts because domestic production is not sufficient to meet their demands. Despite the retaliatory duties imposed on US bone-in pork, an analysis conducted by some meat processors has shown that the duties will only slightly affect the cost of production, and they do not expect a large amount of substitution for US boneless pork cuts.
Trade
In 2011, Mexico is forecast to increase imports of hogs by 20 per cent; however it will only reach 15 per cent of the 2008 level. For 2010, an increase is expected of 43 per cent, supported by the imports of purebred breeding animals for repopulating the Mexican herd. Hog exports will remain at zero.
Pork exports are expected to increase 6.5 per cent in 2011 but if Mexico signs a veterinary health protocol with China, the percentage could be considerably higher.
In 2010, pork exports are expected to recover 14.3 per cent following lifting of numerous foreign bans due to H1N1 outbreak; exports will be supported by value-added pork exports to Japan. However, the level will remain lower than in 2008.
Despite the retaliatory duties imposed on US bone-in pork cuts, imports are expected to continue but it is possible that more bone-in pork could be sourced from Canada.
In addition, according to NOM-030, pork carcasses with feet will no longer be permitted to enter Mexico. This is a new interpretation of NOM-030.
Policy
Beef import duties eliminated
As of August 11, 2010, Mexico canceled the compensatory duties imposed on US beef cuts as a result of an anti-dumping investigation in 2000. Even though the Mexican Government announced that these duties would terminate on April 29, 2010, the duties were not effectively canceled until 11 August 2010, according to the official notice published in the Diario Oficial (DOF) (Federal Register). Thus, duties paid between 29 April and 11 August 2010 will not be refunded.
Retaliatory duties on US pork exports
On 18 August 2010, the Secretariat of Economy published in the DOF a list of additional products facing retaliatory duties, which included swine products. This is due to the United States’ failure to comply with the trucking clause of the North American Free Trade Agreement (NAFTA).
The following swine products were added to the product list:
Section Description Import Tariff
0203.12.01 Hams (hocks), shoulders and cuts thereof, with bone. Chilled 5%
0203.22.01 Hams (hocks), shoulders and cuts thereof, with bone. Frozen 5%
1602.49.01 Cooked pork rind in pieces (pellets). 20%
According to industry sources, these duties will increase production costs for value-added products. Imports of US bone-in hams will continue because bone-in ham prices will not be as high as imported boneless pork legs. In addition, the duties could also slightly affect the Mexican rendering industry, because the Mexican rendering industry sources products from TIF establishments which debone imported bone-in hams.
Brazil Free Trade Agreement
The Mexican and Brazilian presidents have stated their intention to sign a free trade agreement. However, the Mexican livestock sector opposes a free trade agreement (FTA) between Mexico and Brazil that would include livestock products. The Mexican livestock sector’s leaders believe they will be unable to compete against Brazil due to dependence on imported feed grains and shortages of commercial credit in Mexico.
NOM-051
The Secretariat of Economy published on 5 April 2010, a new version of Mexican regulation NOM-051-SCFI/SSA1-2010, ‘General labeling and sanitary specifications for pre-packaged foods and non-alcoholic beverages’. (Spanish: Norma Oficial Mexicana NOM-051-SCFI-1994 Especificaciones generales de etiquetado para alimentos y bebidas no alcohólicas preenvasados) or NOM-051.
The new NOM-051 includes new requirements for labelling pre-packaged foods and non-alcoholic beverages. All pre-packaged food products and non-alcoholic beverages for sell directly to consumers are required to comply with NOM-051 (including imported pork and beef meat). Thus, it is important that all US companies exporting to Mexico be aware of these changes and make appropriate modifications to the labels of its products. The new regulation is effective on 1 January 2011.
The most important changes to NOM-051 can be found in GAIN Report MX0505 Mexico Revises Food Labeling Regulations.
Trusted Importer Program and inspection of combos
The Secretariat of Agriculture, Livestock, Rural Development, Fishery and Food (SAGARPA) continues developing a plan of modernizing import inspection procedures. As part of this plan, the trusted importer program (UCON) has been implemented. Via this program, import inspection will occur at the TIF establishment where the imported meat is to be processed. According to the National Service of Health, Food Safety, and Food Quality (SENASICA), the UCON program may reduce import inspections at the border by 48 per cent, since that is the volume of meat imported by TIF facilities (additional information about UCON can be found in GAIN Report MX0506 Mexico Announces Reliable Importer Program for Meat and Poultry).
The next step of the plan involves procedures for import inspections for meat shipped in combo bins. A combo bin is a bulk-palletised, octagonal cardboard container used to pack meat and meat products for shipping at a low cost. SENASICA officially advised the border inspection points that the combo import inspection procedures was postponed indefinitely pending publication in the DOF (Federal Register). This publication will contain a new sampling procedure for import inspections, which SENASICA is currently drafting, and may implement in 2011.
It is possible that these new procedures may be similar to the Canadian or US import inspections for combo bins. SENASICA has stated that the plan is part of an effort to harmonize import procedures with those of its NAFTA partners, and it will not seek to reduce the volume of meat trade in combo bins.
GOM reviewing regulations
As part of a transparent national plan, SENASICA is examining every interpretation of its regulations. For example, SENASICA has changed its interpretation of NOM-030-ZOO-1995 with respect to imported hog carcasses with feet. As of September 2010, SENASICA has informed trading partners that hog carcasses will only gain entry into Mexico when the feet have been removed.
Livestock Forward Contract Purchases
The Mexican Government (GOM) is promoting forward contracting between cow-calf operators and feeders, and is developing draft guidelines to be used with all forward contracts. This program will be coordinated by SAGARPA's paying agency, Support and Services for Agricultural Trading (ASERCA), and the National Confederation of Cattlemen Organizations (CNOG). The purpose of this program is to assist cow-calf operators and feeders with a tool to establish a forward price for calves.
Guidelines for the sale and distribution of food and drink at primary schools
On June 10, 2010, the Health Secretariat (SALUD) and Educational Secretariat (SEP) sent to the Federal Council for Regulatory Reform (COFEMER) draft proposed guidelines for the sale and distribution of food and drink at primary schools. The objective of the guidelines is to regulate the preparation, distribution and sale of healthy foods and drinks in primary schools and is aimed at reducing obesity and chronic diseases.
These guidelines sparked controversy within the food industry, including among meat and dairy processors. As of 22 July 2010, COFEMER had received 860 comments on the draft from industry sectors, government entities and the public. Some comments are against and others are supportive of the proposed guidelines. COFEMER published on 22 July 2010, its preliminary resolution and suggested SALUD and SEP consider comments submitted to COFEMER regarding these proposed guidelines.
The Mexican Meat Council (COMECARNE) and the Coordinator of the Industrial Council (CCE) are negotiating changes with representatives of the Presidency and the Secretariat of Economy (SE). COMECARNE believes working with these government offices will result in more success than directly negotiating changes with SALUD and SEP. The proposed guidelines, if implemented as proposed, could exert a profound economic impact on the meat sector.
COMECARNE’s members import US meat raw materials to produce sausages, hams and other ready-to-eat products, which are sold in schools or used to prepare sandwiches and other products eaten by children at schools. The meat industry has sought changes to the proposed guidelines to ensure meat products are not demonised, thereby resulting in a loss of consumer confidence in processed meat products. The lack of specifics in the guidelines has created uncertainty for the meat industry. For this reason, COMECARNE has created a working group of technical experts to develop a counter-proposal to be presented to SALUD and SEP.
The guidelines were to be implemented at the beginning of the current school year. However, implementation has been postponed until January 2011.
Movement of Animal certificates
As of 25 June 2010, SENASICA began issuing electronic certificates for the movement of animals within Mexico. The electronic certificate replaces the printed certificate which certifies an animal may move between areas within Mexico which have different disease status under Mexican regulations.
Marketing
Red meat, including pork and beef, continues to be purchased by consumers in traditional butcher shops. However, since more and more women are entering the workforce, consumers were increasing purchases of value-added products before the economic crisis, especially cuts and prepared dishes at supermarkets. For 2010, as the economy grows again, it is expected consumers will increase demand for value-added products.
The US Meat Export Federation (USMEF), a non-profit, industry-sponsored trade organization dedicated to increasing exports of US red meat and meat products in all foreign markets, is active in Mexico. USMEF’s Mexico office has promoted the increase of meat consumption in various large retailers and food service exhibitions.
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Russian Federation - Livestock and Products Semi-Annual Report 2010
Feed shortages resulting from this year's drought have accelerate the slaughter of cattle and pigs, according to Morgan Haas and Mikhail Maksimenko in the latest GAIN report from the USDA Foreign Agricultural Service.
Report Highlights
Slaughter rates have and will continue to increase in 2010 and 2011 as widespread drought throughout Russia sharply decreased current and future feed supplies. As a result, red meat supply will be larger than earlier expectations but adversely impact supply potential in 2011. Red meat imports to date are revised upward, reflecting year-to-date trade and have similar market access potential in 2011.
Summary
Changes in USDA Moscow's forecast for swine and pork reflect the shortage in feed supplies that will mostly impact 2010 and 2011 inventories, realised imports through the first six months of 2010, as well as revised expectations of live hog trade. Although kills increased in 2010, slaughter weights were adversely impacted as hogs were marketed earlier than expected and incurred reduced weight gain from the historically hot summer.
Swine Inventory
Total swine inventory increased 1.8 per cent to 16.6 million, while agricultural enterprises increased swine inventory 8.0 per cent. Private households account for 36.6 per cent of swine herd at the end of June 2010 (39.7 in June 2009).
Imports of live swine for slaughter are down sharply in 2010, as the tariff was raised from five per cent to 40 per cent but not <0.50 €/kg. The domestic pork industry continues to push for full closure of the market but slaughter houses will continue to require imported hogs until the domestic industry can fill capacity.
Russia imports pedigree swine to improve domestic breeding stock from the European Union and Canada.
Production
Russian livestock production represented 46 to 52 per cent total agricultural production value during 2000-2008.
Russia produced 4.4 million metric tons (MMT) of meat and poultry meat (live weight) in the first half of 2010, 8.3 per cent more than the first half of 2009. Agricultural enterprises increased meat and poultry production 14.7 per cent (live weight) in the first half of 2010 compared to 2009 (in 2009 – 10.1 per cent over 2008).
The Ministry of Agriculture plans that Russia will produce 82 per cent of total meat and poultry supply to the Russian market in 2012. According to Ministry figures, Russia currently supplies 69 per cent of its beef, 75 per cent of its pork and 75 per cent of its poultry.
Feed Supply
Russia will experience problems with feed supplies for the remaining part of 2010 and in 2011 due to the 2010 drought in the Central, Volga and Ural districts of Russia. In total, 27 regions were declared emergency drought situations in 2010. The grain harvest in 2010 will be lowest since 2003 when 67MMT of grain was harvested. The drought adversely impacts not only the 2010 feed supply but also the seeding of winter crops for next year's feed supply, as well as presents a new threat to Russia's developing pork and beef industries.
The government of Russia (GOR) has taken several measures to soften the drought's impact. The GOR postponed state grain purchases, instituted a grain export ban and decided instead to release 3MMT of grain from the state reserves for drought-stricken regions. Grain is being distributed on the basis of a quota system to enterprises in the processing and milling industry. The shares for each region are based on meat and milk production volume. The regions themselves will be responsible for distributing the grain internally. Furthermore, Prime Minister Vladimir Putin said the GOR will provide 35 billion rubles (RUB; US$1.2 billion) in financial aid to drought-stricken farmers, including RUB10 ($300 million) billion in direct payments and RUB25 billion ($830 million) for three-year discounted federal loans. The money is being disbursed in two stages, the first in August and the second in October-November.
Pork Production
Higher feed prices and therefore higher slaughter rates in the second half of 2010 will increase pork production 8.8 per cent in 2010 but only 4.9 per cent in 2011. The larger slaughter numbers will slow the pace of herd expansion from 3.4 per cent in January 2010 to 2.4 per cent in January 2011.
Pork producers
The major producers of pork are large agricultural enterprises. They increased pork production 14 per cent in 2008 and 21 per cent in 2009. Agricultural enterprises produced 24.4 per cent more pork in the first half of 2010 compared to the first half of 2009. Club-100 swine enterprises increased from 18.9 per cent to 59 per cent at the same time.
According to Rosstat, the 11 largest pork producers (>100,000 head) produced 23.9 per cent of Russia's pork in 2006-2008. These enterprises featured the lowest production costs while average daily weight gain was highest at enterprises between 50,000 to 60,000 head. According to the Intesco Research Group study, Pork Market: the Results of 2009 and Forecast for 2010 – 2011, the three largest Russian pork producers are Prodo, Agro-Belogorie and Miratorg. They account for 15 per cent of the Russian pork production (live weight). Cherkizovo, Siberian Agrarian Meat Processing Group, SV-Volga and Agrifarm Ariant represent the second tier at 10 per cent of the market. Krasnodar region produces 9.3 per cent of the Russian meat, Belgorod region – 8.5 per cent, Rostov region – 6.5 per cent, Omsk region – 4.3 per cent, the Republic of Tatarstan – 3.8 per cent.
The Ministry of Agriculture subsidised the modernisation of 422 pig farms during the last three years. These farms produced 200,000MT (live weight) in 2009 and will add 160,000MT after they are fully operational. The average feed conversion rate was 3.6 on renovated farms and 3.0 on newly built pig farms in 2009.
In particular, the Belgorod region continues to invest in pork production. The agro-industrial holding Miratorg, one of the largest meat producers and suppliers of the Russian market, is investing RUB13.5 billion ($450 million) into the construction of nine hog complexes. The first of the facilities will be started in 2011. Each complex will have an annual capacity of 112,000 hogs. The herd will be slaughtered at an establishment that processes three million animals annually, producing 165,000MT of meat.
The Russian Union of Pork Producers reports producers are experiencing problems with marketing. The Union underlines the reason is that only five per cent of pigs are subject to initial processing at the enterprise, while the rest are traded live. The Union expects this number to grow to 50 per cent by 2012. At this time, the Union believes 90 per cent of pork will be produced by large agricultural enterprises.
Policy
Supply Control (Import Substitution)
Government support for domestic meat production in Russia has and continues to be primarily provided through methods of supply control. In addition to the introduction of the TRQ regime in 2003, trade outside the quota is subject to largely prohibitively high tariffs. Furthermore, trade within the quota is hindered by highly prescriptive, non-science-based Russian technical and veterinary-sanitary requirements that can at times result in country-specific allocations not being accessible.
Agricultural Development Programs
Federal development programs have served as an additional tool of planned support for Russian poultry production. On 21 December 2005, ‘Development of the Agro-industrial Complex’ was issued as one of four priorities for national development, with a focus on revitalizing Russian livestock and poultry production. To further stimulate domestic agricultural production, the federal law ‘On Development of Agriculture’ was approved in 2006 and came into force on 11 January 2007. Later, the GOR approved the ‘Program for Development of Agriculture, Regulation of Agricultural Commodity Markets, and Rural Development for the period 2008-2012’ which called for RUB1.1 trillion ($37 billion) to be spent over five years, with funding being split between federal and provincial budgets.
In line with these programmes, subsidising interest rates for investment projects has been Russia's primary tool of direct support to the producer. However, these benefits are not universal to all producers, as they service only the largest investors and must be in line with the Ministry of Agriculture's vision of the development programme.
In an effort to maintain a positive rate of development in 2009 in the wake of the global financial and economic crisis, the Ministry of Agriculture allocated RUB165.1 billion ($5.5 billion) for the implementation of the State Agricultural Development programme 2009-2012. The Ministry spent RUB45.0 billion ($1.5 billion) from this sum to increase the authorised capital of JSC Russian Agricultural Bank and RUB17.0 billion ($570 million) to subsidize interest payments. Additionally, Russia extended short-term loans for six months, investment loans for three years, and maximum-term eight-year investment loans to 11 years. The subsidy level for investment loans also increased from two-thirds of the central bank rate to 100 per cent for dairy and beef cattle (and to 80 per cent for poultry). The Ministry of Agriculture also noted the single agricultural tax as well as fixed prices for fuel and fertiliser amounted to RUB30 billion ($1 billion) in indirect subsidies to the producer in 2009. These programs continued in 2010, and they will continue for the foreseeable future.
The Ministry of Agriculture reported that 2010 investments will not meet the State programme due to lower-than-expected profits in the industry.
Government Purchases
President Medvedev has tasked Minister Elena Skrynnik to investigate the state purchases of beef in Rosrezerv, as well as to clarify the feasibility of increasing the production of canned white chicken meat. As noted by the President of Cherkizovo, there is a need consider changes of the state reserve purchases since domestic beef supplies are shrinking while poultry is ‘oversupplied’.
Development of the Feed Industry
Also in the planning is a draft development project to improve this component of the supply chain through the construction and modernization of feed mills, with the aim of increasing the production of plant-origin protein feeds. Most recently, the GOR has taken action to support producers impacted by the short feed supplies.
Trade
Russia maintains a TRQ regime for raw pork (HS-0203) and beef (HS-0201, 0202) products with country specific allocation to the United States, European Union, and “other countries”. The pork and beef quotas for 2011 remain unchanged from 2010.
Pork
Russia imported 315,537 MT of pork during January – June 2010, 15 per cent above 2009. The major exporters of pork to Russia are the European Union, Brazil, United States, and Canada. The European Union is the dominant supplier of fresh/chilled and processed pork. The US share of the frozen pork market has fallen steeply for three main reasons: competitive prices in other markets, the virtual ban on US pork through the first five months of 2010, and a reduced quota (from 100,000 MT in 2009 to 57,000 MT in 2010). Russia's recent closure of several US pork facilities on the grounds of tetracycline-group antibiotics will continue to threaten the US's ability to fulfill its quota allocation for the remainder of the year.
There are mixed opinions on decreasing the pork TRQ quantity further before the end of 2012, but focus will remain on preventing growth of out-of-quota pork and live hog imports as well as using sanitary and technical barriers to further regulate in-quota and quota-exempt pork products.
Customs Union
Kazakhstan and Belarus, as well as other CIS countries, have duty-free, quota-free access to Russia for domestically produced meat.
Customs Union members recognise equivalency of each other's veterinary service. Kazakhstan?s Ministry of Agriculture has expressed its intent to utilise this advantage to export 4,000MT of meat (specifically, beef) to Russia in 2010, compared to 400MT in 2009.
Belarus increased meat and poultry exports to Russia by one-third to 72,000MT during January-June 2010. The Government of St Petersburg earlier reached an agreement with Belarus to import 41,100MT of beef, 11,100MT of pork and 8,200MT of poultry meat in 2010.
Consumption
Development of livestock primary processing for 2010-2012
The Ministry of Agriculture has developed a programme for livestock primary processing to support the modernisation of the Russian meat processing industry. The programme envisages the allocation of state subsidies for meat processors from the federal budget. Subsidies will be spent to compensate interest rates from loans taken for construction and modernisation of processing facilities and cold storages as well as for purchasing meat for primary and industrial processing. Planned implementation of the program will allow Russia to increase the collection and processing of the animal to 90 per cent of its live weight.
The Ministry believes that fulfillment of the programme will also increase per-capita consumption of meat and meat products to from 65.9kg in 2008 to 66.1kg in 2012.
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Philippine restaurant to go public, expand
[13 October 2010] Mang Inasal Philippines Inc, a fast growing barbecue restaurant chain in the Philippines, is planning an initial public offering early in 2011. Edgar Sia II, Mang Inasal's Chairman and CEO, said the IPO will help the company raise capital and share profits with employees and other investors. The company, which opened its first restaurant inm December 2003, also plans to expand further in the Luzon, particularly in Manila, next year. To date there are 300 Mang Inasal outlet in the country. The restaurant chain is popular for its chicken and pork barbecue. With the company's rapid expansion, the number of its employees have grown from 20 in 2003 to the current 10,200.
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World Agricultural Supply and Demand Estimates - October 2010
The forecast of total US meat production is raised for 2010 but lowered for 2011, according to the latest USDA World Agricultural Supply and Demand Estimates.
LIVESTOCK, POULTRY, AND DAIRY: Beef and broiler production forecasts for 2010 are raised as second half production is higher than previously expected, but the pork production forecast is reduced due to lower slaughter and slower growth in slaughter weights. The 2011 beef production forecast is raised primarily in the first quarter as larger-than-expected third quarter 2010 placements are marketed. Pork production for 2011 is lowered from last month as relatively high feed prices are expected to keep the growth in sows farrowing modest and dampen hog weights. Broiler and turkey production forecasts for 2011 are lowered from last month as higher feed prices slow growth. Likewise, egg production for 2011 is forecast lower.
Beef import forecasts are lowered for 2010 and 2011 as supplies in Oceania are expected to be relatively tight while foreign demand strengthens. Export forecasts for beef are raised on continuing strong sales to a number of markets. Pork and poultry trade forecasts are unchanged from last month.
The cattle price forecasts for 2010 and 2011 are virtually unchanged. Hog prices are forecast higher on tighter supplies for both 2010 and 2011. The broiler price for 2010 is forecast lower on increased production, but the price forecast is raised slightly for 2011 on reduced output. Egg prices for 2010 and 2011 are forecast lower.
Forecast milk production for 2010 is raised slightly from last month as higher milk per cow more than offsets lower cow numbers. The forecast for 2011 is reduced as higher feed prices are expected to slow the rate of growth in cow numbers and milk per cow compared with last month. Import and export forecasts are unchanged. Fat basis stocks are reduced for 2010 as stocks of butter are forecast to be tight. Skim solids stocks are unchanged.
Continued strength in demand for cheese and relatively tight supplies of butter support higher forecast prices for 2010 and 2011. Price forecasts for nonfat dry milk (NDM) are raised for 2010 and 2011 as supplies are tighter. The 2010 whey price forecast is increased slightly but is unchanged for 2011. Both Class III and Class IV price forecasts for 2010 and 2011 are raised due to the higher product prices. The all milk price is forecast to average $16.45 to $16.55 per cwt for 2010 and $16.00 to $16.90 per cwt for 2011.
WHEAT: US wheat ending stocks for 2010/11 are projected 49 million bushels lower this month with lower estimated production and higher expected feed and residual use. Production is lowered 41 million bushels based on the Small Grains 2010 Summary report. Feed and residual use is raised 10 million bushels on higher-than-expected disappearance during the June-August quarter as indicated by the September 1 stocks. Higher carryin with small upward revisions to estimated 2009/10 production and ending stocks are partly offsetting. The 2010/11 season-average farm price is projected at $5.20 to $5.80 per bushel compared with $4.95 to $5.65 per bushel last month.
Global wheat supplies for 2010/11 are projected 1.0 million tons lower mostly reflecting lower production in the United States. World production for 2010/11 is projected at 641.4 million tons, down 1.6 million tons from last month; however, beginning stocks are raised 0.6 million tons with upwardly revised 2009/10 production estimates for South America and Canada. For 2010/11, production is lowered 0.5 million tons for Mexico and 0.3 million tons each for Algeria and Canada. Production is raised 0.5 million tons for Europe and 0.3 million tons for Ethiopia.
World wheat trade for 2010/11 is nearly unchanged this month. Imports are raised for North Africa and Mexico, but lowered for EU-27 and Iran. Exports are raised for Uruguay, but lowered for Mexico. World exports for 2009/10 are raised 1.6 million tons on the latest available trade data. Large late-season shipments boost 2009/10 Argentina and EU-27 exports 1.0 million tons and 0.6 million tons, respectively.
Global consumption is raised 2.1 million tons for 2010/11 with higher expected feed use for EU-27, Canada, and the United States. Global ending stocks for 2010/11 are projected 3.1 million tons lower with the largest reductions for EU-27 and the United States. Other reductions include Canada, Uruguay, Syria, and Iran. Ending stocks are projected higher for Brazil and Egypt. At the projected 174.7 million tons, 2010/11 stocks remain 50.2 million tons above the recent low in 2007/08.
COARSE GRAINS: US feed grain production for 2010/11 is projected lower this month based on reduced forecasts for corn and sorghum and smaller production estimates for barley and oats from the Small Grains 2010 Summary report. Corn production is forecast 496 million bushels lower as a 258,000-acre increase in harvested area is more than offset by a 6.7-bushel-per-acre reduction in yield. As forecast, this year’s yield and production still would be the third highest on record.
Higher 2010/11 corn beginning stocks raise prospects for 2010/11 feed and residual disappearance, especially during the September-December quarter. Ending stocks for 2009/10 are raised 322 million bushels based on the September 1 stocks estimate. Larger-than-expected carryout of old-crop corn combined with an unusually early start to this year’s harvesting suggest heavy new-crop corn use before the September 1 beginning of the 2010/11 marketing year. Individual state harvest progress reports suggest that 600-700 million bushels of corn were harvested across the South, Southern Plains, and southern Corn Belt before September 1. This is about double the level of the preceding 2 years and similar to what happened between the 2006/07 and 2007/08 marketing years. New-crop corn usage ahead of September 1, 2007, lowered feed and residual disappearance during the June-August quarter of 2006/07 and boosted feed and residual disappearance during the September-December quarter of 2007/08.
Despite the increase in 2010/11 beginning stocks, lower forecast production and higher projected domestic disappearance leave ending stocks down sharply from last month. Feed and residual use for 2010/11 is projected 150 million bushels higher reflecting the expected impact of new-crop corn usage before September 1 on indicated disappearance during the current marketing year. Exports are lowered 100 million bushels with tighter available supplies, higher prices, and increased competition from Argentina. US ending stocks for 2010/11 are projected 214 million bushels lower at 902 million. The season-average farm price is projected at $4.60 to $5.40 per bushel, up 60 cents on both ends of the range.
A number of changes are made this month to 2009/10 corn usage with the biggest a 358-million bushel reduction in feed and residual use as indicated by the September 1 stocks and small upward revisions to exports and food, seed, and industrial (FSI) use based on the latest available data. Sorghum FSI use and exports for 2009/10 are also lowered slightly this month. Changes to 2009/10 feed and residual use for barley and oats reflect small revisions to June 1 stocks from the September 30 Grain Stocks report.
Global coarse grain supplies for 2010/11 are nearly unchanged with lower US supplies offset by increased foreign coarse grain production. World corn production is lowered 6.4 million tons with the lower US production and a 0.5-million-ton reduction for Russia only partly offset by increases for Argentina, Serbia, EU-27, and several Sub-Saharan Africa countries. Production for Argentina is raised 4.0 million tons on higher expected area as rising corn prices and favorable early season soil moisture support a rapid pace of early corn planting. Global barley production is lowered 1.4 million tons with reductions of 0.7 million tons for EU-27, 0.5 million tons for Russia, and 0.3 million tons for Canada.
Global coarse grain exports for 2010/11 are increased this month mostly reflecting higher expected corn exports from Argentina, which are raised 3.5 million tons, along with small increases for Paraguay, Mexico, and Zambia. Corn imports are increased for Turkey, Colombia, Indonesia, and South Korea supporting higher expected corn feeding in these countries. Global corn ending stocks for 2010/11 are projected 3.2 million tons lower this month despite increases for Argentina, EU-27, Zambia, and Iran. The reduction in US corn ending stocks outweighs these increases.
RICE: US rice production in 2010/11 is forecast at a record 242.3 million cwt, but down 13.1 million from last month due entirely to a decrease in yield. Average yield is estimated at 6,687 pounds per acre, down 360 pounds from last month, and the lowest yield since 2005/06. Harvested area is unchanged at 3.62 million acres. Long-grain production is forecast at a record 182.0 million cwt, 9.8 million below last month, and combined medium- and short-grain production is forecast at 60.3 million, down 3.25 million. The import and domestic- and residual-use forecasts are unchanged from a month ago. The total rice export projection at 119 million cwt is unchanged from a month ago; however, the rough rice export projection is raised 1.0 million, and the combined milled- and brown-export forecast (rough-equivalent basis) is lowered the same amount. Total rice ending stocks are projected at 52.5 million cwt, down 13.1 million from last month and the largest stocks since 1985/86.
The 2010/11 all rice season-average price is forecast at $12.10 to $13.10 per cwt, up $1.80 per cwt on both ends of the range compared to $14.00 per cwt for 2009/10. The long-grain season-average price range is projected at $10.50 to $11.50 per cwt, up $2.00 per cwt on each end of the range compared to $12.80 per cwt for last year. The combined medium- and short-grain price range is projected at $17.30 to $18.30 per cwt, up $1.30 per cwt on each end compared to $17.70 per cwt for 2009/10. The price increase is due to a smaller US crop, higher global prices, and a weaker dollar.
Projected global 2010/11 rice production and consumption are lowered from a month ago, and trade and stocks are little changed. World rice production is forecast at a record 452.5 million tons, down 2.1 million from a month ago mostly owing to decreases in the United States, Burma, and India. India’s 2010/11 rice crop is lowered 2.0 million tons to 97.0 million due mostly to below normal monsoon rains in the east. Global consumption is lowered 1.7 million tons owing to a reduction in India. Global 2010/11 ending stocks are projected at 94.3 million tons, down 0.3 million from last month, and nearly the same as 2009/10.
OILSEEDS: US oilseed production for 2010/11 is projected at 102.8 million tons, down 2 million from last month. Soybean production is forecast at 3.408 billion bushels, down 75 million based on both lower harvested area and yield. Harvested area is reduced 1.2 million acres to 76.8 million. The soybean yield is projected at 44.4 bushels per acre, down 0.3 bushels. Sunflowerseed and peanut production are also projected lower this month while canola and cottonseed production are projected higher.
US soybean exports are increased 35 million bushels to 1.520 billion reflecting strong export sales and reduced export prospects for Argentina resulting from lower beginning stocks. Soybean crush is raised 15 million bushels to 1.665 billion due to improved prospects for domestic soybean meal disappearance and to a small reduction in the projected soybean meal extraction rate. The September 1 soybean stocks estimate confirmed a third consecutive marketing year of relatively low residual use. For 2010/11 residual use is reduced to 32 million bushels, down 38 million from the previous estimate. Soybean ending stocks are projected at 265 million bushels, down 85 million from last month.
Prices for soybeans and products are all raised this month, supported by strong prices for corn. The US season-average soybean price range for 2010/11 is projected at $10.00 to $11.50 per bushel, up 85 cents on both ends of the range. The soybean meal price is projected at $290 to $330 per short ton, up $20 on both ends of the range. The soybean oil price range is projected at 39.5 to 43.5 cents per pound, up 2 cents on both ends.
Global oilseed production for 2010/11 is projected at 440.6 million tons, unchanged from last month. Global soybean production is projected at 255.3 million tons, up 0.4 million. Brazil soybean production is raised to 67 million tons, up 2 million due to increased area. India soybean production is raised 0.4 million tons to 9.2 million, also due to increased harvested area. Global sunflowerseed production is reduced this month as lower production for Russia is only partly offset by an increase for Ukraine. Other changes include increased cottonseed production for Australia and India. Global oilseed stocks for 2010/11 are reduced 1.7 million tons to 71.4 million. Soybeans account for most of the change, with a reduction for the United States partly offset by projected increases for Brazil and China.
SUGAR: Projected US sugar supply for fiscal year 2010/11 is increased 63,000 short tons, raw value, from last month, due to higher beginning stocks more than offsetting lower production. Florida cane sugar production is reduced 65,000 tons to match processor production projections, while Hawaii is increased 35,000 tons to be in line with the previous year=s estimate. Sugar use is increased 100,000 tons, in line with the increase for 2009/10.
For 2009/10, US supplies are increased 208,000 tons, due to higher production and imports. Production is increased 98,000 tons to account for larger-than-expected September output of US beet sugar and Hawaii cane sugar. Imports are increased 110,000 tons, mainly due to higher imports from Mexico. Total use is increased 115,000 tons to reflect the strong demand for imported sugar and minor changes in sugar exports and deliveries for re-export products. Ending stocks are increased 93,000 tons, to 1.6 million tons or 14.4 per cent of total use.
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Russian Federation - Livestock and Products Semi-Annual Report 2010
Feed shortages resulting from this year's drought have accelerate the slaughter of cattle and pigs, according to Morgan Haas and Mikhail Maksimenko in the latest GAIN report from the USDA Foreign Agricultural Service.
Report Highlights
Slaughter rates have and will continue to increase in 2010 and 2011 as widespread drought throughout Russia sharply decreased current and future feed supplies. As a result, red meat supply will be larger than earlier expectations but adversely impact supply potential in 2011. Red meat imports to date are revised upward, reflecting year-to-date trade and have similar market access potential in 2011.
Summary
Changes in USDA Moscow's forecast for swine and pork reflect the shortage in feed supplies that will mostly impact 2010 and 2011 inventories, realised imports through the first six months of 2010, as well as revised expectations of live hog trade. Although kills increased in 2010, slaughter weights were adversely impacted as hogs were marketed earlier than expected and incurred reduced weight gain from the historically hot summer.
Swine Inventory
Total swine inventory increased 1.8 per cent to 16.6 million, while agricultural enterprises increased swine inventory 8.0 per cent. Private households account for 36.6 per cent of swine herd at the end of June 2010 (39.7 in June 2009).
Imports of live swine for slaughter are down sharply in 2010, as the tariff was raised from five per cent to 40 per cent but not <0.50 €/kg. The domestic pork industry continues to push for full closure of the market but slaughter houses will continue to require imported hogs until the domestic industry can fill capacity.
Russia imports pedigree swine to improve domestic breeding stock from the European Union and Canada.
Production
Russian livestock production represented 46 to 52 per cent total agricultural production value during 2000-2008.
Russia produced 4.4 million metric tons (MMT) of meat and poultry meat (live weight) in the first half of 2010, 8.3 per cent more than the first half of 2009. Agricultural enterprises increased meat and poultry production 14.7 per cent (live weight) in the first half of 2010 compared to 2009 (in 2009 – 10.1 per cent over 2008).
The Ministry of Agriculture plans that Russia will produce 82 per cent of total meat and poultry supply to the Russian market in 2012. According to Ministry figures, Russia currently supplies 69 per cent of its beef, 75 per cent of its pork and 75 per cent of its poultry.
Feed Supply
Russia will experience problems with feed supplies for the remaining part of 2010 and in 2011 due to the 2010 drought in the Central, Volga and Ural districts of Russia. In total, 27 regions were declared emergency drought situations in 2010. The grain harvest in 2010 will be lowest since 2003 when 67MMT of grain was harvested. The drought adversely impacts not only the 2010 feed supply but also the seeding of winter crops for next year's feed supply, as well as presents a new threat to Russia's developing pork and beef industries.
The government of Russia (GOR) has taken several measures to soften the drought's impact. The GOR postponed state grain purchases, instituted a grain export ban and decided instead to release 3MMT of grain from the state reserves for drought-stricken regions. Grain is being distributed on the basis of a quota system to enterprises in the processing and milling industry. The shares for each region are based on meat and milk production volume. The regions themselves will be responsible for distributing the grain internally. Furthermore, Prime Minister Vladimir Putin said the GOR will provide 35 billion rubles (RUB; US$1.2 billion) in financial aid to drought-stricken farmers, including RUB10 ($300 million) billion in direct payments and RUB25 billion ($830 million) for three-year discounted federal loans. The money is being disbursed in two stages, the first in August and the second in October-November.
Pork Production
Higher feed prices and therefore higher slaughter rates in the second half of 2010 will increase pork production 8.8 per cent in 2010 but only 4.9 per cent in 2011. The larger slaughter numbers will slow the pace of herd expansion from 3.4 per cent in January 2010 to 2.4 per cent in January 2011.
Pork producers
The major producers of pork are large agricultural enterprises. They increased pork production 14 per cent in 2008 and 21 per cent in 2009. Agricultural enterprises produced 24.4 per cent more pork in the first half of 2010 compared to the first half of 2009. Club-100 swine enterprises increased from 18.9 per cent to 59 per cent at the same time.
According to Rosstat, the 11 largest pork producers (>100,000 head) produced 23.9 per cent of Russia's pork in 2006-2008. These enterprises featured the lowest production costs while average daily weight gain was highest at enterprises between 50,000 to 60,000 head. According to the Intesco Research Group study, Pork Market: the Results of 2009 and Forecast for 2010 – 2011, the three largest Russian pork producers are Prodo, Agro-Belogorie and Miratorg. They account for 15 per cent of the Russian pork production (live weight). Cherkizovo, Siberian Agrarian Meat Processing Group, SV-Volga and Agrifarm Ariant represent the second tier at 10 per cent of the market. Krasnodar region produces 9.3 per cent of the Russian meat, Belgorod region – 8.5 per cent, Rostov region – 6.5 per cent, Omsk region – 4.3 per cent, the Republic of Tatarstan – 3.8 per cent.
The Ministry of Agriculture subsidised the modernisation of 422 pig farms during the last three years. These farms produced 200,000MT (live weight) in 2009 and will add 160,000MT after they are fully operational. The average feed conversion rate was 3.6 on renovated farms and 3.0 on newly built pig farms in 2009.
In particular, the Belgorod region continues to invest in pork production. The agro-industrial holding Miratorg, one of the largest meat producers and suppliers of the Russian market, is investing RUB13.5 billion ($450 million) into the construction of nine hog complexes. The first of the facilities will be started in 2011. Each complex will have an annual capacity of 112,000 hogs. The herd will be slaughtered at an establishment that processes three million animals annually, producing 165,000MT of meat.
The Russian Union of Pork Producers reports producers are experiencing problems with marketing. The Union underlines the reason is that only five per cent of pigs are subject to initial processing at the enterprise, while the rest are traded live. The Union expects this number to grow to 50 per cent by 2012. At this time, the Union believes 90 per cent of pork will be produced by large agricultural enterprises.
Policy
Supply Control (Import Substitution)
Government support for domestic meat production in Russia has and continues to be primarily provided through methods of supply control. In addition to the introduction of the TRQ regime in 2003, trade outside the quota is subject to largely prohibitively high tariffs. Furthermore, trade within the quota is hindered by highly prescriptive, non-science-based Russian technical and veterinary-sanitary requirements that can at times result in country-specific allocations not being accessible.
Agricultural Development Programs
Federal development programs have served as an additional tool of planned support for Russian poultry production. On 21 December 2005, ‘Development of the Agro-industrial Complex’ was issued as one of four priorities for national development, with a focus on revitalizing Russian livestock and poultry production. To further stimulate domestic agricultural production, the federal law ‘On Development of Agriculture’ was approved in 2006 and came into force on 11 January 2007. Later, the GOR approved the ‘Program for Development of Agriculture, Regulation of Agricultural Commodity Markets, and Rural Development for the period 2008-2012’ which called for RUB1.1 trillion ($37 billion) to be spent over five years, with funding being split between federal and provincial budgets.
In line with these programmes, subsidising interest rates for investment projects has been Russia's primary tool of direct support to the producer. However, these benefits are not universal to all producers, as they service only the largest investors and must be in line with the Ministry of Agriculture's vision of the development programme.
In an effort to maintain a positive rate of development in 2009 in the wake of the global financial and economic crisis, the Ministry of Agriculture allocated RUB165.1 billion ($5.5 billion) for the implementation of the State Agricultural Development programme 2009-2012. The Ministry spent RUB45.0 billion ($1.5 billion) from this sum to increase the authorised capital of JSC Russian Agricultural Bank and RUB17.0 billion ($570 million) to subsidize interest payments. Additionally, Russia extended short-term loans for six months, investment loans for three years, and maximum-term eight-year investment loans to 11 years. The subsidy level for investment loans also increased from two-thirds of the central bank rate to 100 per cent for dairy and beef cattle (and to 80 per cent for poultry). The Ministry of Agriculture also noted the single agricultural tax as well as fixed prices for fuel and fertiliser amounted to RUB30 billion ($1 billion) in indirect subsidies to the producer in 2009. These programs continued in 2010, and they will continue for the foreseeable future.
The Ministry of Agriculture reported that 2010 investments will not meet the State programme due to lower-than-expected profits in the industry.
Government Purchases
President Medvedev has tasked Minister Elena Skrynnik to investigate the state purchases of beef in Rosrezerv, as well as to clarify the feasibility of increasing the production of canned white chicken meat. As noted by the President of Cherkizovo, there is a need consider changes of the state reserve purchases since domestic beef supplies are shrinking while poultry is ‘oversupplied’.
Development of the Feed Industry
Also in the planning is a draft development project to improve this component of the supply chain through the construction and modernization of feed mills, with the aim of increasing the production of plant-origin protein feeds. Most recently, the GOR has taken action to support producers impacted by the short feed supplies.
Trade
Russia maintains a TRQ regime for raw pork (HS-0203) and beef (HS-0201, 0202) products with country specific allocation to the United States, European Union, and “other countries”. The pork and beef quotas for 2011 remain unchanged from 2010.
Pork
Russia imported 315,537 MT of pork during January – June 2010, 15 per cent above 2009. The major exporters of pork to Russia are the European Union, Brazil, United States, and Canada. The European Union is the dominant supplier of fresh/chilled and processed pork. The US share of the frozen pork market has fallen steeply for three main reasons: competitive prices in other markets, the virtual ban on US pork through the first five months of 2010, and a reduced quota (from 100,000 MT in 2009 to 57,000 MT in 2010). Russia's recent closure of several US pork facilities on the grounds of tetracycline-group antibiotics will continue to threaten the US's ability to fulfill its quota allocation for the remainder of the year.
There are mixed opinions on decreasing the pork TRQ quantity further before the end of 2012, but focus will remain on preventing growth of out-of-quota pork and live hog imports as well as using sanitary and technical barriers to further regulate in-quota and quota-exempt pork products.
Customs Union
Kazakhstan and Belarus, as well as other CIS countries, have duty-free, quota-free access to Russia for domestically produced meat.
Customs Union members recognise equivalency of each other's veterinary service. Kazakhstan?s Ministry of Agriculture has expressed its intent to utilise this advantage to export 4,000MT of meat (specifically, beef) to Russia in 2010, compared to 400MT in 2009.
Belarus increased meat and poultry exports to Russia by one-third to 72,000MT during January-June 2010. The Government of St Petersburg earlier reached an agreement with Belarus to import 41,100MT of beef, 11,100MT of pork and 8,200MT of poultry meat in 2010.
Consumption
Development of livestock primary processing for 2010-2012
The Ministry of Agriculture has developed a programme for livestock primary processing to support the modernisation of the Russian meat processing industry. The programme envisages the allocation of state subsidies for meat processors from the federal budget. Subsidies will be spent to compensate interest rates from loans taken for construction and modernisation of processing facilities and cold storages as well as for purchasing meat for primary and industrial processing. Planned implementation of the program will allow Russia to increase the collection and processing of the animal to 90 per cent of its live weight.
The Ministry believes that fulfillment of the programme will also increase per-capita consumption of meat and meat products to from 65.9kg in 2008 to 66.1kg in 2012.
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Productivity growth must increase 25% by 2050
[18 October 2010] An agricultural productivity report said that for food productivity to double by 2050 in a sustainable way with the same amount of land, less water and reduced inputs, it will require an annual average growth of at least 1.75% in “total factor productivity”. This is defined as the increase in output per unit of total resources employed in production. Between 2000 and 2007, USDA’s Economic Research Service estimates global agricultural total factor productivity growth averaged at 1.4% per year. To close the gap without additional land and resources, we must increase the rate of productivity growth at an average of 25% per year over the next 40 years.
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Jollibee acquires 70% of Mang Inasal restaurant chain
[20 October 2010] Philippine fast food giant Jollibee has added another brand to its roster with the acquisition of Mang Inasal Philippines, which own Mang Inasal restaurant, for a reported PHP 3 billion (USD 69.12 million). In a disclosure to the Philippine Stock Exchange, Jollibee said that the company's offer to buy 70% of Mang Inasal Philippines has been “unconditionally and irrevocably accepted by Injap Investments, Inc, parent company of Mang Inasal Philippines.” The sale is expected to be finalised in 30 days following complete due diligence. The purchase will expand Jollibee's store network in the Philippines by 19% and on a worldwide basis by 16%. Mang Inasal, a barbeque fastfood chain anchored on its chicken product, was earlier reported to be eyeing an initial public offering.
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this is what you call "if you can't beat them, buy them...."
although jollibee is still the number one fastfood chain, mang inasal is eating up some customer especially those who loves chicken... to prevent future treat jollibee just bought it... ;D ;D ;D
Same principle that san miguel do and other big company....
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NMIS seeks funds for slaughterhouse upgrade
[21 October 2010] The National Meat Inspection Service (NMIS) of the Philippine Department of Agriculture is seeking PHP 24 million (USD 522,677) to upgrade 12 slaugtherhouse facilities in the country. NMIS Executive Director Jane Bacayo said that the existing slaughterhouses to be rehabilitated are yet to be identified, however, these would be those established by local government units. Also, these would have to be located in strategic areas where livetock population is high. He said there are more than 1,150 slaughterhouses in the country, many of which need to be upgraded. So far this year, the agency has upgraded four slaughterhouses in four provinces.
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RFM to raise PHP 1.5b from floating rate notes
[21 October 2010] Philippine food and beverage conglomerate RFM Corp will raise PHP 1.5 billion (USD 34.55 million) by issuing floating rate notes. In a disclosure to the Philippine Stock Exchange, the company said it has reached a Floating Rate Notes Facility Agreement with several local banks and financial institutions. The proceeds will be used to refinance the company’s debt and fund its capital expenditure. Earlier, RFM said it will spend some PHP 1 billion (USD 23.03 million) for its expansion and capital expenditure next year to prepare for the expected increase in consumer demand.
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Agri department pushes for Philippine halal food standards
[22 October 2010] The Philippines is stepping up the development of halal standards for food commodities to enable the country to tap the multi-million dollar global market for halal products. Mr Sani Macabalang, Head of the Department of Agriculture (DA)-Halal Food Industry Development Committee (HFIDC) and DA halal coordinator stressed the need for these standards, warning that failure to have them in place will prevent the country from competing globally. To develop the local halal industry, the HFIDC recommended the harmonisation of halal protocols and procedures by various government agencies, development of halal certification and accreditation competencies and capability-building of certifying bodies and government halal food inspectors, auditors and the like in close coordination with the National Commission on Muslim Filipinos.
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Asian Agribusiness sets dates for 2011 conferences
[25 October 2010] Asian Agribusiness Media has confirmed four conferences and a vocational training course for Asia’s livestock industries in 2011.The highly successful Poultry Feed Quality Conference will be held for the fourth time and return to Bangkok on 12-13 September 2011. The Pig Feed Quality Conference will move to Cebu on 9-10 May 2011 following its successful inauguration this year in Ho Chi Minh City. The Asian AgriFood Conference, last held at the Banyan Tree in Bangkok in 2009, will move to Singapore on 4-5 July 2011. A new two-day conference is planned for Asian Poultry Veterinarians on 7-8 November in Bangkok. The company also plans to launch a vocational training course on sausage manufacture in Bangkok in August 2011.
Asia leads in global economic recovery
[25 October 2010] The latest International Monetary Fund’s Economic Outlook (October 2010) has highlighted Asia as the leading region in the global economic recovery. The developing Asian countries (China, ASEAN and India) are projected to continue leading the region with an average growth of 9.4% and 8.4% in 2010 and 2011, respectively. China's economic growth is mainly driven by strong domestic demand while ASEAN countries have also experienced a broad-based export rebound. The strong economic rebound in developing Asian economies is expected to give consumers in these markets the buying power to lift red meat consumption in the future.
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India has potential to be world’s No 1 food producer
[25 October 2010] The world’s second largest food producer after China, India has the potential to be the biggest within the food and agriculture sector. Total food production in India is likely to double in the next 10 years. With this in mind, the country is in the process of enhancing total food production to 20% within five years.
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Philippine food, farm exports down
[2 November 2010] Earnings from Philippine food and farm exports declined nearly 3.8% during the first eight months of the year, registering only USD 1.35 billion, said Philippine Chamber of Commerce and Industry Vice President for Agriculture Roberto Amores, who said the drop is due to increasing production costs. Exports of fruits and vegetables during the period fell by almost 19.4% to USD 399.9 million, however, marine and seafood exports posted gains of 1.3% to USD 335.8 million. Mr Amores said however, that food production next year will likely be affected by Typhoon Megi, which has wrought almost USD 250 million in damage to the farm sector.
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Supply volatility to continue
[3 November 2010] Bunge, the world’s largest agricultural traders, said the shortfalls fueling the grain prices will continue into the next year as global food demand continues to rise. Chief executive officer Alberto Weisser said the slim cushion between supply and demand, and associated price volatility, was likely to continue. “There will be tightness in supply probably in the whole of next year.” He said this after releasing the company’s third quarter results. Bunge posted an increase of 40% in profits year-on-year to USD 2.26 per share.
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China increases estimate for soybean imports
[5 November 2010] China’s Ministry of Commerce recently increased the country’s estimated soybean imports for October from 4.15 million tonnes to 4.5 million tonnes, while the ministry expects the volume for November to reach 4.65 million tonnes. An announcement on its website said American soybean loaded for October shipments registered 3.6 million tonnes. The ministry also said the soy oil loaded for October imports, mostly from the US and Brazil amounted to 223,300 tonnes.
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Del Monte Pacific posts USD3.3m profits in Q3
[5 November 2010] Food company Del Monte Pacific announced a third quarter net profit of USD 3.3 million. Last year the company recorded a net loss of USD 1.7 million. Del Monte attributes its profit to increase of 16% in sales year-on-year to USD 88.4 million because of higher turnover in the Philippines and its export markets. The company also recorded better earnings for its processed and fresh business segments.
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Demand for food safety products to reach USD45.2b in 2014
[9 November 2010] Demand for food safety products in the Asia Pacific region -- including disinfection and diagnostic products, smart labels and tags, and software and tracking systems -- is projected to rise 10.3% per year to USD 45.2 billion in 2014. Advances will be stimulated by gains in food and beverage processing activity and increasingly strict food safety regulations, according to a new study from Freedonia Group Inc, a Cleveland-based industry market research firm. The new business in the regions will account for two-fifths of the world’s aggregate market value gains between 2009 and 2014. China will continue to see some of the fastest demand growth, due to mounting pressure on the part of consumers, producers and regulators to ensure the safety of the food supply.
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Philippine Halal workshop helps develop sector
[11 November 2010] The Philippines recently held an International Halal Poultry Standards Training Workshop to promote and grow its halal industry. Attended by speakers from Malaysia the workshop is expected to accelerate the development of halal standards for food commodities for the country in order to tap the multi-billion dollar global market for halal products. The industry is set to capture at least 2% of the demand for 770,000 metric tonnes per year of halal food products in Brunei, Indonesia, Malaysia and the Philippines under the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area’s proponent project.
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UN warns of food crisis
[11 November 2010] The United Nations (UN) has warned that the world may be on the verge of a major new food crisis caused by high food prices. The global food crisis brought on this threat but environmental disasters have further triggered food price inflation. The UN’s Food and Agriculture Organization believes that both rich and poor countries will be faced with a malnutrition problem.
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World Agricultural Supply and Demand Estimates - November 2010
The forecast of total US meat production is raised for 2010 and 2011, as is that for pork production, reflecting exceptional gains in carcass weights, according to the latest USDA World Agricultural Supply and Demand Estimates.
Livestock, Poultry and Dairy
The forecast of total US meat production is raised for 2010 and 2011. Production forecasts for all major meats are raised for 2010. Beef production is raised on higher steer and heifer slaughter and the pork production increase reflects exceptional gains in carcass weights. Broiler hatchery data points toward continued gains in broiler production as the number of eggs set and chicks placed are large. The rate of decline in 2010 turkey production is slower than previously forecast. For 2011, production forecasts for beef, pork and broilers are increased. The beef production increase largely reflects slaughter of the higher-than-expected number of cattle placed on feed during the third quarter of 2010. Pork production is forecast higher in early 2011 as some of the weight gains seen in late 2010 carry into 2011. However, the increase in weights is expected to be moderated by higher costs of feed during 2011. Broiler production is also forecast higher in early 2011 as the sector carries its current expansion into 2011. However, higher expected feed costs are expected to slow the rate of increase later in the year. The turkey production forecast for 2011 is unchanged from last month as is the egg production forecast.
The beef import forecast is lowered for 2010 as the pace of imports to date is relatively slow but the forecast for 2011 is unchanged. Beef exports in both 2010 and 2011 are raised on stronger growth to Asian markets. The forecast for pork imports is raised for both 2010 and 2011 on strong shipments from several markets. The pork export forecast is lowered for 2010 based on the pace of exports but the forecast for 2011 is unchanged. The poultry export forecast is reduced on weaker third-quarter data but the forecast for 2011 is unchanged from last month.
The cattle price forecasts for 2010 and 2011 are raised to reflect continued strong demand for cattle. Hog prices are forecast lower on larger forecast pork supplies. The broiler price forecast is unchanged. Egg prices for 2010 are forecast higher as prices recovered from their late summer decline but the 2011 forecast is unchanged.
Forecast milk production for 2010 is unchanged from last month. However, for 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 but higher feed prices and lower forecast milk prices limit the rate of growth in 2011. Exports in 2010 are forecast higher due to strong growth in butter, cheese and fluid milk/cream. For 2011, continued global economic recovery and a favorable exchange rate should support exports. Revisions have been made to historical export aggregations, resulting in higher estimated exports. Import forecasts are raised on the strong pace of imports.
Cheese and butter prices for both 2010 and 2011 are forecast lower. The 2010 forecast for nonfat dry milk is unchanged from last month but stronger expected exports support a higher forecast for 2011. The whey price forecast is unchanged. Both Class III and Class IV price forecasts for 2010 are lowered due to the lower cheese and butter price forecasts. The Class III price forecast is lowered for 2011 but the Class IV price forecast is raised as the higher nonfat price more than offsets the lower butter price forecast. The all milk price is forecast to average $16.30 to $16.40 per cwt for 2010 and $15.95 to $16.85 per cwt for 2011.
Wheat
US wheat ending stocks for 2010/11 are projected five million bushels lower this month as downward production revisions of 11 million bushels for Hard Red Spring (HRS) wheat and four million bushels for durum more than offset higher projected imports. Imports are raised 10 million bushels with increases for Soft Red Winter (SRW) wheat and durum. Exports are unchanged, but shifts among classes result in higher projected exports of Hard Red Winter and HRS wheat and reductions for SRW and durum. The projected season-average price received by producers is narrowed five cents on each end of the range to $5.25 to $5.75 per bushel. Heavy early season marketings and forward sales limit upside potential for the season-average farm price.
Global wheat supplies are projected slightly higher for 2010/11 as higher world production offsets lower carry-in, mostly reflecting higher 2009/10 wheat feeding in China. World production is raised 1.5 million tons for 2010/11 as increases for Argentina, Australia, EU-27 and Paraguay more than offset reductions for FSU-12 and the United States. Argentina production is raised 1.5 million tons as favourable returns and timely rains boost area and yield prospects. Australia production is raised 1.0 million tons as rising yield prospects in eastern growing areas more than offset reductions from extended dryness in Western Australia. Production is raised 0.6 million tons for EU-27 mostly based on higher reported area for Poland. Production for Russia is lowered 0.5 million tons as harvest results indicate lower-than-expected yields in Siberia. Production is also lowered 0.5 million tons each for Azerbaijan and Kazakhstan as the latest reports confirm higher-than-expected yield losses from the extended drought across the region.
World wheat trade for 2010/11 is raised this month with imports up 0.5 million tons each for China, Egypt and South Korea, mostly reflecting higher reported shipments so far for the marketing year. Imports are also raised for Azerbaijan and the United States. Turkey’s imports and exports both are reduced one million tons as short supplies of FSU-12 wheat limit Turkey’s wheat imports and flour exports. Kazakhstan exports are lowered 0.5 million tons with the smaller crop. Exports are raised 1.0 million tons each for Argentina and EU-27 with larger available supplies in Argentina and the strong pace of EU-27 export licensing. Russia exports are raised 0.5 million tons as flour exports will now be allowed after 31 December 2010.
Global wheat consumption for 2010/11 is raised 2.5 million tons with much of the increase reflecting a 2.0-million-ton increase in China wheat feeding. Wheat feeding is also raised 0.5 million tons for Korea based on the pace of feed quality wheat imports. Feeding is lowered 1.0 million tons for Russia but is offset by a 1.0-million-ton increase in food use. Global ending stocks for 2010/11 are projected 2.2 million tons lower with the largest reduction for China where stocks are lowered 3.4 million tons. Ending stocks are also lowered 1.0 million tons for Russia. Partly offsetting are higher projected ending stocks for Australia, Egypt, Argentina and Paraguay.
Coarse Grains
US feed grain supplies for 2010/11 are reduced this month with lower expected corn production. Corn production is forecast 124 million bushels lower as the national average yield is lowered to 154.3 bushels per acre, down 1.5 bushels from the previous forecast. 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 favourable 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 carry-out of 6.2 per cent of projected usage. In 1995/96, carry-out dropped to five per cent of estimated usage. The season-average farm price is projected at $4.80 to $5.60 per bushel, up 20 cents on both ends of the range and well above the previous record of $4.20 per bushel in 2007/08.
Global coarse grain supplies for 2010/11 are projected 3.3 million tons lower reflecting reduced corn production in the United States, reduced barley production in China, and reduced oats and rye production in Russia. Global corn production is reduced 1.1 million tons as the US decline is partly offset by a 2.0-million-ton increase for China on higher 2010/11 area. Corn production for China is also raised 2.0 million tons for 2009/10 based on an area increase of 800,000 hectares as indicated by official government statistics. Global 2010/11 barley production is lowered 0.8 million tons mostly on a 0.7-million-ton reduction for China on lower area and yields. Other barley changes include small reductions for Belarus and EU-27, and a 0.3-million-ton increase for Australia as abundant rainfall in eastern growing areas support higher yields. Global oats production is lowered 1.3 million tons mostly on a 1.0-million-ton reduction for Russia. Global rye production is lowered with a 0.4-million-ton reduction for Russia.
Global 2010/11 coarse grain trade is lowered slightly this month with lower corn imports for the Philippines and South Korea partly offset by small increases in corn imports for Saudi Arabia and sorghum imports by EU-27. Corn exports are raised 0.5 million tons each for EU-27 and Serbia mostly offsetting the 1.3-million-ton reduction for the United States. Global coarse grain consumption for 2010/11 is lowered slightly as higher corn feeding in China and Argentina are mostly offset by reduced corn feeding in EU-27, South Korea and the Philippines. Oats and barley consumption are also lowered with reduced oat feeding in Russia and China and reduced barley feeding in EU-27 and China. Global corn ending stocks are lowered 3.2 million tons. At 129.2 million tons, world corn stocks would be the lowest since 2006/07, the first year of the rapid expansion in US ethanol production and use.
Oilseeds
Total US oilseed production is projected at 101.8 million tons, down one million from last month as lower soybean and cottonseed production are only partly offset by higher peanut production. Soybean production is forecast at 3.375 billion bushels, down 33 million from last month. The soybean yield is projected at 43.9 bushels per acre, down 0.5 bushels from the previous estimate. Soybean exports are raised 50 million bushels to a record 1.57 billion due to increased global import demand and to a record sales pace, especially to China which accounts for over 70 per cent of known US soybean export sales through October. Soybean ending stocks are projected at 185 million bushels, down 80 million from last month.
Soybean oil ending stocks for 2010/11 are raised this month due to higher beginning stocks reported by the US Census Bureau and to reduced domestic disappearance reflecting lower projected food use of soybean oil.
Prices for soybeans and products are projected higher for 2010/11. The US season-average soybean price range is projected at $10.70 to $12.20 per bushel, up 70 cents on both ends. The soybean meal price is projected at $310 to $350 per short ton, up 20 dollars on both ends of the range. The soybean oil price range is projected at 42.5 to 46.5 cents per pound, up three cents on both ends of the range.
Global oilseed production for 2010/11 is projected at 440.7 million tons, up 0.1 million from last month. Increased soybean production is mostly offset by lower sunflower seed, rapeseed, peanut and cottonseed production. Global soybean production is projected higher with increases for Brazil, Argentina, India and South Africa only partly offset by a reduction for the United States. Argentina soybean production is raised two million tons to 52 million due to increased area as producers respond to relatively high soybean prices. Brazil soybean production is projected at 67.5 million tons, up 0.5 million from last month due to increased area. Global sunflower seed production is projected lower due to reduced estimates for Russia, Argentina, India and EU-27. Other changes include lower rapeseed production for Australia, lower peanut production for India and lower cottonseed production for China.
Oilseed trade is projected at 111.4 million tons, up 1.8 million. China soybean imports for 2010/11 are raised to 57 million tons, up two million from last month. EU-27 imports of soybeans and soybean meal are raised this month to offset lower sunflower seed and rapeseed availability.
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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.
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Jollibee post USD 16.31M proft in 3rd qtr
[18 November 2010] Philippine fast food giant Jollibee Food Corp (JFC) posted nearly USD 16.31 million in profits in the 3rd quarter of 2010, thanks to bigger sales in both the local and overseas operations. This boosted the company's net profit by 16.2% to USD 49.31 million from in the first nine months of the year. Sales from local and overseas operations rose to more than USD 1.16 billion by end-September 2010, or 9.7% from the same period last year. JFC has a total of 1,555 stores in the Philippines, made up of the flagship Jollibee outlets, Chowking, Greenwich Pizza Red Ribbon bakeries, and Manong Pepe restaurants. Recently, the company announced its decision to acquire a 70% stake in the Mang Inasal Philippines chain of restaurant that has 303 stores nationwide.
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CME: Effect of Growing Risks in Europe and Asia
US - Livestock and grain commodity markets were sharply lower on Tuesday as large traders sought to trim their long positions in light of growing risks in Europe and Asia, write Steve Meyer and Len Steiner.
Last spring, fears of a Greek debt default sowed panic in markets, not so much because of the size of the potential Greek default but rather the implications that it would have for the Euro Zone as a whole. The situation in Greece is far from resolved and it remains to be seen whether Euro members are willing to bankroll an ever expanding tab of Greek profligacy.
More recently, debt markets have been rattled by reports that the budget hole in Ireland, another country suffering from the post-bubble hangover, appears to be much deeper than previously thought. This has begun to tinge the credibility of other EU countries thought to have heavy debt burdens. Adding to the renewed panic about debt defaults in Europe, market participants responded to reports that China, a significant buyer of global raw materials, would impose price controls on a number of food staples and production materials. Based on overnight trading, it appears that the markets may open higher on Wednesday but volatility will remain high for the foreseeable future.
The panic selling of commodities on Tuesday overshadowed news that the US would lift the ban on imports of beef and pork products from the Brazilian state of Santa Catarina. The so called final rule was published in the Federal Register on November 16 and it comes into effect on 1 December. As we have discussed in the past, the rule is much more important with regard to the precedent that it sets rather than the actual impact on the supply of imported beef and pork in the US market.
We do not expect any beef imports of any appreciable quantity to come into the US anytime soon and Brazilian officials indicated that they expect only about 10,000 MT of pork to come into the US next year, less than 0.05 per cent of the 8.5 million MT of pork that will be consumed in the US in 2011. The precedent, however, is important as it does open the door to more beef and pork coming into the US from markets that are currently closed to US importers. APHIS, (USDA’s Animal and Plant Health Inspection Service) has worked in recent years to develop policies based on the concept of regionalization.
The basic premise is that political boundaries do not properly reflect disease risk and APHIS “will consider the importation of a commodity from a specific region of a country even though other parts of that country may be affected by an animal disease.” This is especially important for large countries, such as Brazil, with areas (e.g. the Amazon) where certain animal diseases will likely never be eradicated. Based on the concept of regionalization, we could see more Brazilian beef and pork coming into the US in the coming years, however, the process will likely be quite lengthy and deeply political. Finally, keep in mind that while most larger protein producing countries do want access to the US market, most of the growth in global protein consumption is not taking place in the US but rather Asia and developing economies. And the focus of US industry should be on expanding access for US exports, rather than erecting barriers to imports.
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World poultry and livestock growth up 2%
[29 November 2010] The US Department of Agriculture (USDA) reports that world pork production is forecast to rise about 2% to 103.4 million tonnes with China accounting for 80% of this increase. Broiler production is forecast up 2% to a record 76.2 million tonnes, thanks to record levels from all top producing countries. China and Thailand are expected to expand exports, particularly to other Asian markets. The USDA advises Asian producers to look into cost control to cope with rising feed costs and food safety in response to consumer demands, through better technology and business solutions.
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FAO calls for higher investment in agriculture
[24 November 2010] The global food import bill could pass the one trillion dollar mark in 2010, a level not seen since food prices peaked at record levels in 2008 said FAO Director-General Jacques Diouf. "The food price and economic crises have had a severe impact on millions of people in all parts of the world," he said. In recent months the international prices of most agricultural commodities have increased, many of them sharply. The key to long-term food security lies in boosting investment in agriculture, particularly in low-income food-deficit countries. He aded that structural changes can improve food security. In the short term, this means targeted safety nets and social protection programs as well as reliable and timely information on food commodity markets. In the medium and longer terms, however, investment in agriculture is the answer.
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Foreigners’ access to farmland must follow guidelines
[30 November 2010] UN Special Rapporteur on the Right to Food Olivier De Schutter recently warned of risks in unbridled foreigners’ access to farmlands. He said that efforts must be made to ensure that foreign access to local agricultural lands follow strict guidelines. Countries like China, India, South Korea, Saudi Arabia and Kuwait, as well as Wall Street banks like Goldman Sachs and Morgan Stanley have been in the forefront of acquiring large tracts of lands in Asia and Africa, which had become even more intense following the spike in food prices in 2008. Foreigners’ access to farmland must follow guidelines
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FAO Food Outlook - November 2010
The latest Global Market Outlook for animal products from the UN Food and Agriculture Organization (FAO).
Focus
International prices of most agricultural commodities have increased in recent months, some sharply. The FAO Food Price index has gained 34 points since the previous Food Outlook report in June, averaging 197 points in October, only 16 points short from its peak in June 2008. The upward movements of prices were connected with several factors, the most important of which were a worsening of the outlook for crops in key producing countries, which is likely to require large draw downs of stocks and result in tighter global supply and demand balances in 2010/11. Another leading factor has been the weakening of the United States Dollar (US Dollar) from mid-September, which continues to sustain the prices of nearly all agricultural and non-agricultural traded commodities. The increase in international prices of food commodities, all of which accruing in the second half of 2010, is boosting the overall food import bill in 2010 closer to the peak reached in 2008.
The pressure on prices to rise was first felt in the cereal market, most notably for wheat and barley, in August. This prompted FAO to call for an extraordinary meeting on 24 September 2010 to discuss the underlying causes and possible remedies. The meeting clearly identified the importance of reliable and upto- date information on crop supply and demand to cope with unexpected developments in world markets. More transparency and a better understanding of the role of commodity futures markets and government responses were also viewed as necessary to address price volatility. The full report of the meeting is included in the Special Feature section of this issue of Food Outlook.
FAO Food Price Indices
(October 2009 - October 2010)
Attention is now turning to plantings for the next (2011/12) marketing season. Given the expectation of falling global inventories, the size of next year’s crops will be critical in setting the tone for stability in international markets. For major cereals, production must expand substantially to meet utilization and to reconstitute world reserves and farmers are likely to respond to the prevailing strong prices by expanding plantings. Cereals, however, may not be the only crops farmers will be trying to produce more of, as rising prices have also made other commodities attractive to grow, from soybeans to sugar and cotton. This could limit individual crop production responses to levels that would be insufficient to alleviate market tightness. Against this backdrop, consumers may have little choice but to pay higher prices for their food. With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared.
Meat and meat products market summary
World meat trade is forecast to grow by 2.8 per cent in 2010, to 26.1 million tonnes, sustained by a brisk growth in pig meat, but also by gains in bovine and poultry meat. However, in the case of poultry, the most widely traded meat, the expansion of world exports is likely to be constrained by the imposition of sanitary restrictions by major importers. Increased purchases from Asian countries are expected to fuel much of the expected increase of meat trade, more than compensating for a 15 per cent reduction of imports by the Russian Federation, which had emerged as the second largest meat importer in 2009, after China.
World meat markets at a glance
According to the FAO Meat Price Index, world meat prices between January and October 2010 averaged 14 per cent higher than in the same period in 2009, and similar to the levels witnessed in 2008.
FAO international meat price indices
(2002-2004 = 100)
Dairy market summary
Strong import demand from Asian countries and the Russian Federation has driven dairy product trade to historically high levels in 2010, with the demand largely met by higher exports from New Zealand and the United States. Dairy product prices in international trade have remained firm, in particular butter, which in October reached an all-time high.
FAO international meat price indices
(2002-2004 = 100)
FAO’s latest forecast of world dairy production for 2010 stands at 710.7 million tonnes, 1.7 per cent more than last year. Production in developed countries is forecast to grow by around 1 per cent, while that of developing countries may increase by 2.4 per cent. On a per capita basis, consumption of milk and milk products in developing countries may increase by 1 kg per capita in 2010, from 66.4 to 67.5 kg, fuelled by strong economic growth in Asia.
FAO international dairy price index
(2002-2004=100)
Fish and fishery products market summary
On average, the latest trade information indicates that two years after the drastic fall at the end of 2008, prices in September 2010 were only 1 per cent below the peak of September 2008, with aquaculture prices 11.6 per cent higher whereas prices of wild species were 10 per cent lower. According to the FAO Fish Price Index, prices over January to September were, on average, 8.5 per cent higher year-on-year.
Aquaculture producers of many of the exported commodities responded to the economic crisis in late 2008 and throughout 2009 by reducing stocking levels, thus affecting future production. Since then, demand in many developing countries has rebounded, especially in Asia and South America. Developed country demand for farmed products is picking up, and prices for products such as shrimp, catfish, tilapia and salmon have risen significantly in 2010. For capture fisheries, the picture is more mixed with some prices negatively affected by large harvests, whereas others have strengthened as lower fishing quotas resulted in reduced supply.
World fish market at a glance
The price outlook for the rest of 2010 and early 2011 is positive, with demand firming in most markets and supply expected to remain stable.
The FAO fish price index (2005=100)
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Philippine buffalo meat imports down
[2 December 2010] Philippine imports of buffalo meat fell 3.72% in the first ten months of 2010, the Philippine Association of Meat Processors Inc (PAMPI) said. Data from the Bureau of Animal Industry shows that from January-October 2010, imports of buffalo meat was 35,680 tonnes, down from 37,060 tonnes year-on-year. PAMPI Executive Director Francisco Buencamino said that the Filipinos’ purchasing power remains low, which has led to lower demand for canned goods like corned beef and meat loaf. He added that the USD 2-3/kg increase in the price of buffalo meat may have discouraged importation. The meat processing industry is hoping that demand will pick up during the Christmas season, which traditionally is when demand for products like ham are at their peak.
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East Asean aims to be food basket in Asia
[3 December 2010] The Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area has committed to becoming the food basket of Asean and Asia by strengthening collaboration in agriculture and fisheries. “The four countries are ready to become Asean and Asia’s food basket because they really do have a big potential in agriculture and fisheries,” Indonesian Maritime Affairs and Fisheries Minister Fadel Muhammad said. The exports of agricultural and fishery products of the four countries’ combined stand as high as USD50 billion yearly.
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Meat importers assures safety of frozen meat
[6 December 2010] The Meat Importers and Traders Association (MITA) has disputed claims that all frozen meat sold in the local markets are unsafe. MITA President Jesus Cham said that all legally imported meat are sourced from HAACP-certified producers who export their products all over the world, and thus “it is unreasonable and unscientific to claim that the products that are deemed ‘safe’ in other countries are ‘unsafe’ in the Philippines.” He added that the sources of the meat, which come with international health certificates, have been accredited by the Bureau of Animal Industry (BAI) and the National Meat Inspection Service (NMIS). Once in the Philippines, the imported frozen meat is subject to BAI quarantine clearance and NMIS food safety inspection and stored in duly accredited cold storages under the supervision of NMIS.
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Two new hatcheries for Eastern Visayas
[7 December 2010] With demand for fingerlings in mariculture zones on the rise, the Philippine Bureau of Fisheries and Aquatic Resources (BFAR) will spend PHP 28 million (USD 642,939) to build to multi-species hatcheries to supply the requirements of mariculture areas in Eastern Visayas. In a report by BusinessWorld, BFAR Regional Director Juan Albaladejo said the facilities, estimated to cost PHP 14 million (USD 321,450) each, will begin construction in the first quarter of 2011. Both facilities are scheduled for construction in the first quarter of next year. Eastern Visayas has 14 mariculture parks with 346 cages, which need several tonnes of fingerlings of various species every setting.
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Global agricultural prices sky-rocketed during October 03 Dec 2010
Tightening fundamentals and exchange rate movements played a major role in the price gains across a range of agricultural commodities. Prices now need to ration demand and encourage increased production in 2011/12.
The Rabobank Agri Commodities Monthly for October looks at the effects of global fundamentals and prices, and gives an outlook for wheat, sugar, corn and soybeans.
Wheat
- Weaker US dollar makes exports cheaper
- High corn prices pushing wheat into backseat
- Ukraine imposes export quotas
The wheat market appears to be taking a backseat to the corn market and macroeconomic factors such as the dollar.
Recent currency recalibrations have made US wheat the cheapest available export wheat in the world.
In the Black Sea Region the Ukraine government imposed export quotas from 18 October. In Russia, rising grain prices are now rationing demand as millers are unable to pass on higher costs.
Corn
- US yield downgrades likely
- Need for prices to ration demand
- Risk of Chinese imports
The US Department of Agriculture (USDA) shocked the market on 8 October by slashing their expected US corn yield and production estimates.
Given the USDA’s historic tendency to make further downward revisions after reducing their yield estimates in October, corn prices will need to ration demand in coming months.
Uncertainty remains about official Chinese stock levels. But if China has to implement a corn import programme this would further impact the world and US corn balance sheets.
Soybeans
- Strong global export demand
- Need to maintain price relative to corn
- La Niña weather pattern still threatens South America
Global soybean demand remains extremely robust, especially from China. Even with prices at new highs, there is no real evidence of demand rationing, while soybean prices have lost ground relative to corn.
Supply prospects in South America will be key to prices going forward. Although production risks have declined over the last month, the La Niña weather system remains in a strong/moderate phase, and will be key in determining final South American production levels through to early 2011.
Source: Rabobank
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World Agricultural Supply and Demand Estimates - December 2010
Forecasts for 2010 and 2011 pork production have been raised, according to the latest USDA World Agricultural Supply and Demand Estimates.
Livestock, Poultry and Dairy
The forecast of total US meat production is raised for 2010 and 2011. Forecasts for 2010 beef, pork, broilers and turkeys are raised reflecting high slaughter levels during the fourth quarter and higher weights for hogs and broilers. For 2011, production forecasts for beef, pork, and broilers are increased. The beef production increase largely reflects higher forecast placements of cattle during the fourth quarter of 2010 and early 2011. Pork production is raised from last month on slightly higher slaughter. Broiler production is forecast higher as hatchery data indicate continued large egg sets and poultry placements during the fourth quarter of 2010. The turkey production forecast for 2011 is unchanged from last month. The egg production forecast is lowered slightly in 2010 but is unchanged for 2011.
Trade forecasts for 2010 are adjusted, largely reflecting third quarter data. However, beef imports are lowered for both late 2010 and early 2011 as exportable supplies of beef for several U.S suppliers are expected to be relatively tight. Beef exports are raised for 2011 as improved economic growth in major export markets is expected to stimulate sales. Pork exports for 2010 are reduced as relatively high pork prices are likely constraining growth in exports. Forecasts for pork exports for 2011 are unchanged. Poultry forecasts for 2011 are unchanged.
The cattle price forecasts for 2010 and 2011 are raised to reflect continued strong demand for cattle. Hog prices for 2010 and 2011 are forecast lower than last month as pork supplies are large. The broiler price forecast is lowered on larger supplies. Egg prices for 2010 and 2011 are forecast higher.
Forecast milk production for 2010 and 2011 is little changed last month. Fat-basis imports for 2010 are lowered primarily due to lower imports of cheese but skim-solids imports are unchanged due to higher imports of expected imports of other products. Fat basis exports for 2010 are raised as sales of cheese and fluid milk and cream are strong and skim-solids exports are boosted by strong sales of cheese and nonfat dry milk (NDM). Exports for 2011 are forecast higher due to expected growth in butter and nonfat dry milk sales. Ending stocks for 2010 are raised to reflect higher-than expected stocks of cheese.
For 2010, cheese and whey prices are unchanged from last month. NDM prices are forecast higher but the butter price forecast is reduced reflecting recent sharp declines in butter prices. With no change in either the cheese or whey price, the Class III price forecast is unchanged. However, the Class IV price forecast is reduced, due to a lower butter price forecast which more than offsets a higher expected NDM price. For 2011, the range of the cheese price forecast narrowed but whey is forecast higher. The butter price is reduced as current price weakness spills into early 2011. NDM prices are forecast higher. The ranges of the Class III and Class IV price forecasts are narrowed from last month. The all milk price is forecast to average $16.25 to $16.35 per cwt for 2010 and $15.90 to $16.70 per cwt for 2011.
Wheat
US wheat ending stocks for 2010/11 are projected 10 million bushels higher this month reflecting lower domestic use. Projected food use is lowered 10 million bushels on the latest mill-grind data from the US Census Bureau which indicate flour extraction rates that are higher than the long-term average for a third straight year. With historically high wheat prices, millers continue to get more flour out of each bushel of wheat. Total exports are unchanged, but small shifts among classes result in higher projected exports of Hard Red Spring and White wheat and lower projected exports of Hard Red Winter wheat and durum. The projected marketing-year average price received by producers is narrowed 5 cents on each end of the range to $5.30 to $5.70 per bushel.
Global 2010/11 wheat supplies are projected 4.9 million tons higher this month reflecting an increase in EU-27 beginnings stocks with lower 2009/10 feed use and higher 2010/11 production in Australia, Pakistan, Canada, Brazil, and Ukraine. Production for Australia is raised 1.5 million tons as higher reported yields in eastern Australia continue to boost production prospects. Recent, heavy rains in many of these same areas, however, have dampened production prospects and reduced wheat quality. Official government statistics for Pakistan and Canada boost production 1.3 million tons and 1.0 million tons, respectively. Brazil production is raised 0.4 million tons as favorably dry harvest weather in southern growing areas add to output. Ukraine production is raised 0.2 million tons on the latest government data. Partly offsetting these increases is a 0.5-million-ton reduction for Russia.
World wheat trade for 2010/11 is projected lower this month as tighter supplies of high quality wheat raise world prices and slow demand in several smaller markets. Wheat imports are also reduced 0.5 million tons each for Brazil and EU-27. Larger production reduces the need for imports in Brazil. In EU-27, lower expected wheat feeding reduces demand for imported wheat. World wheat exports are lowered 1.7 million tons with reductions for Australia, China, Canada, and Mexico. Export prospects for Australia and Canada are reduced reflecting the lower quality of wheat in both countries this year. Partly offsetting are increases for Iran, Serbia and Croatia.
Global 2010/11 wheat consumption is raised with higher expected wheat feeding in China and higher expected feed and residual disappearance in Australia and Canada. Reduced government incentives to export wheat from China make more wheat available for domestic feeding. Larger supplies of lower quality wheat in Australia and Canada are expected to boost feeding and increase residual losses in both countries. Partly offsetting are 0.5-million-ton reductions in feed use for both EU-17 and Russia, and small declines in food use in several countries due to high prices. Ending stocks are raised 4.2 million tons with the largest increases for Pakistan, EU-27, Australia and Canada.
Coarse Grains
US feed grain supplies for 2010/11 are virtually unchanged as a small increase in corn imports is offset by a reduction in barley imports both reflecting feed grain production changes for Canada this month. US corn imports are raised five million bushels with record production reported for Canada. US corn ending stocks are raised accordingly. Barley imports are lowered 5 million bushels with lower production in Canada and the slow pace of imports to date. US barley food, seed, and industrial use is lowered the same amount as domestic beer consumption remains weak slowing demand for malting barley. The projected marketing-year average price received by US corn producers is unchanged this month at $4.80 to $5.60 per bushel. Farm prices for barley and oats are both projected slightly lower based on prices received by producers to date.
Global coarse grain production for 2010/11 is increased 3.4 million tons with corn production up 2.2 million tons, barley production up 0.6 million tons, and oats production up 0.4 million tons. India corn production is raised 1.0 million tons as the extended monsoon increased late-season soil moisture for the summer corn crop. The same conditions boosted harvested area for millet, adding 0.3 million tons to India production. Australia barley and oats production are raised 1.9 million tons and 0.5 million tons, respectively, both on higher reported yields. The latest official statistics from Canada indicated mostly offsetting production changes for coarse grains. Canada corn production is raised 0.7 million tons as favorable weather boosted corn yields in Ontario and Quebec. Canada barley production is lowered 0.6 million tons with lower area and yields in the western prairies. Corn production is raised 0.5 million tons for Ukraine and 0.4 million tons for EU-27. Small offsetting reductions are made this month for Paraguay corn, Ukraine barley and oats, and Russia barley and rye.
Global 2010/11 coarse grain trade is lowered slightly mostly reflecting reduced corn imports by Mexico as feeding there is projected lower. Corn exports are lowered 0.8 million tons for Serbia, but raised 0.5 million tons and 0.2 million tons, respectively, for India and Canada. Barley exports are lowered 0.4 million tons for Canada, but raised 0.3 million tons for Australia. Reduced corn feeding for Mexico and Serbia is mostly offset by increases for India, South Africa, and Canada. Global corn ending stocks are projected 0.8 million tons higher with larger stocks in EU-27 and Serbia partly offset by smaller stocks in South Africa and Mexico.
Oilseeds
Total US oilseed production for 2010/11 is projected at 101.7 million tons, down slightly due to a small reduction in cottonseed. Soybean exports are increased 20 million bushels to 1.59 billion reflecting record export commitments (shipments plus outstanding sales) through November. With projected crush unchanged, soybean ending stocks for 2010/11 are projected at 165 million bushels, down 20 million from last month.
The US season-average soybean price range for 2010/11 is projected at $10.70 to $12.20 per bushel, unchanged from last month. The soybean meal price projection is also unchanged at $310 to $350 per short ton. Soybean oil prices are projected at 45 to 49 cents per pound, up 2.5 cents on both ends of the range.
Global oilseed production for 2010/11 is projected at 442.6 million tons, up 1.9 million tons from last month. Foreign oilseed production accounts for most of the change with increases for soybeans, rapeseed, sunflowerseed, and cottonseed. Global soybean production is projected at a 257.8 million tons, up 0.4 million mainly due to an increase for Canada. Global rapeseed production is projected at 58.4 million tons, up 1.2 million due to gains for Canada and EU-27. Canadian rapeseed production is raised 0.9 million tons to 11.9 million based on the latest survey results from Statistics Canada. Higher-than-expected yields account for the change. EU-27 rapeseed production is increased due to higher yield estimates for Germany, United Kingdom, and Romania. Other changes this month include increased sunflowerseed production for EU-27, increased cottonseed production for Brazil and Australia, and reduced cottonseed production for Pakistan.
Global oilseed trade is projected at 112.2 million tons, up 0.9 million from last month. Increased soybean exports from the United States and Canada account for most of the change. Global oilseed ending stocks are projected at 70.3 million tons, down 1 million, as lower soybean stocks in Brazil and the United States are only partly offset by higher rapeseed stocks in Canada.
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Philippine meat traders ask government to reconsider order
[16 December 2010] Philippine meat traders and importers have asked the Department of Agriculture to reconsider an order that requires traders and importers to put up cold-chain systems for storing frozen and chilled meat. The Meat Importers and Traders Association (MITA) questioned what it considered were “serious loopholes” in DA Administrative Order 22, which is yet to take effect. In a letter to Agriculture Secretary Proceso Alcala, MITA President Jesus Cham said that there was no consultation with the industry before the order was made and that should the order be put into effect in its original form it could mean a 30% reduction in pork supply in Metro Manila.
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Agribusiness to face market volatility next 3-5 years
[17 December 2010] Agribusiness companies are likely to face increased market volatility and higher prices over the next three to five years, findings of Rabobank Food and Agribusiness Research and Advisory said. This will present challenges as risk management and positioning become even more important yet it will also create opportunities for trading. Its Global Strategist David Nelson added that slow world economic growth and food demand shifting east will cause companies to rebalance their operating portfolios or bear the risk of having regional imbalances.
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Deal raises Nobel’s sugar cane capacity to 17.5 million tonnes
[22 December 2010] Noble Group, Asia’s biggest commodities trader, said it would pay USD950 million for two Brazilian cane mills, raising its crushing capacity by 84% in the world’s largest sugar exporter. The acquisition of Catanduva and Potirendaba, fully operational mills in Sao Paulo State, will propel Nobel into the top tier of sugar cane milling companies globally, taking the combined annual potential crushing sugar cane capacity that it will control to 17.5 million tonnes.
Brands get healthy in Asia
[22 December 2010] Nestlé and PepsiCo plan to capitalize on growing health concerns among Asian consumers by using herbs and traditional medicines to create a new range of products. Nestlé will invest USD 500 million over the coming decade on health foods while PepsiCo will pump in USD 2.5 billion in Asia over the next three years. Nestlé will consider wolfberry plants, chrysanthemum leaves and tremella, a fungus commonly thought to help improve the skin, strengthen bones and control weight, while PepsiCo has already launched wolfberry and tremella-flavoured Quaker Herbal Oatmeal, and a range of herbal teas
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Stricter rules on imported frozen meat stay in the Philippines
[23 December 2010] The Philippine Department of Agriculture is bent on implementing Administrative Order 22, which requires increased sanitary procedures on all frozen meat products, despite calls from meat importers and requests from the US and Canadian governments for its deferment. The order became effective December 12. Agriculture Secretary Proceso Alcala said the order would remain as it is beneficial to both consumers and producers. However, meat importers and traders have earlier said that the new order has deficiencies and was put in effect without consultation with stakeholders.
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Global food prices to reach record highs
[23 December 2010] Global food prices are expected to set new highs as by the year end, a UN official said. “The situation has deteriorated since September,” said Abdolreza Abbassian of the UN Food and Agriculture Organization. “In the last few weeks there have been signs we are heading the same way as in 2008.” The food crisis in 2008 left as much as 25 countries in riots. The Wall Street Journal reported that the UN’s food price index hit 205 in November, only seven points less than the highest level in June, 2008. Abbassian said the rise of food prices indicates the beginning of a long-term wave of increased prices after as long as a century of deflation.
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Indonesian government urged to provide incentives for agribusiness
[29 December 2010] To achieve self-sufficiency in food production, the Indonesian Chamber of Commerce and Industry urged the government to provide incentives to agribusiness firms willing to set up plantations in the country. This is to attract investors to enter agribusiness so Indonesia would no longer need to import sugar, corns or soybeans or even rice to meet the domestic demand in the future. Apart from incentives, the Government should also develop roads, ports and power plants in areas such as Sumatra, Kalimantan, Sulawesi and Papua to attract investors to do business in these areas.
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The coming hunger: Record food prices put world 'in danger', says UN
Perfect storm of climate and oil puts world into 'danger territory'
By Sean O'Grady, Economics Editor
Thursday, 6 January 2011
Record food prices put world 'in danger', says UN
Food riots, geopolitical tensions, global inflation and increasing hunger among the planet's poorest people are the likely effects of a new surge in world food prices, which have hit an all-time high according to the United Nations.
The UN's index of food prices – an international basket comprising wheat, corn, dairy produce, meat and sugar – stands at its highest since the index started in 1990, surpassing even the peaks seen during the 2008 food crisis, which prompted civil disturbances from Mexico to Indonesia.
"We are entering danger territory," said the UN Food and Agriculture Organisation's chief economist, Abdolreza Abbassian.
The trends have already affected the UK where the jump in food prices in November was the highest since 1976. Meat and poultry were up 1 per cent and fruit by 7.5 per cent in one month.
Food producers have been told to expect the wheat price to jump again this month, hitting bakers and the makers of everything from pasta to biscuits.
More is sure to follow and that in turn will add to pressure on the Bank of England to raise interest rates to control rising prices. Higher mortgage bills by the end of the year will add to the unpleasantness facing "middle England" from a year of tax hikes and below-inflation pay rises.
However, the biggest impact of the food price shock will be felt in countries in the developing world where staple items command a much larger share of household incomes.
Economists warn that "soft commodity" food prices show little sign of stabilising, and that cereals and sugar in particular may surge even higher in coming months. In addition, long-term trends associated with growth in population and climate change may mean higher food costs become a permanent feature of economic life, even though the current spike may end in due course. Speculation, too, may be part of the crisis, as investors climb on to the rising food-price bandwagon.
Mr Abbassian said the UN agency is concerned by the unpredictability of weather activity, which many experts link to climate change. He said: "There is still room for prices to go up much higher, if for example the dry conditions in Argentina tend to become a drought, and if we start having problems with winterkill in the northern hemisphere for the wheat crops."
One concern, especially in Ukraine and Russia, is that the cold winter, following disastrous droughts and summer fires, will have damaged the seeds for next year's crops, leading to an even more acute crisis than seen last year. Government policies, especially the export bans imposed by nervous Indian and Russian governments, have exacerbated such problems in world markets.
Meanwhile, burgeoning consumption in the booming economies of east Asia and the pressure exerted by the demand for crops for biofuels rather than food, especially in the US, is adding to the unprecedented squeeze on world food supplies.
The latest surge in crude oil prices adds to the risk of turmoil. Many experts say oil prices show few signs of abating, and the price of a barrel is set to breach the $100 barrier again soon. Opec officials yesterday said they were happy with such a level. Oil peaked at just under $150 a barrel in 2008; any sign of renewed tension in Iran would see the price exceed that. Higher oil prices add to food price inflation by increasing transportation costs.
The interplay of rising fuel prices, the growing use of biofuels, bad weather and soaring futures markets drove up the price of food dramatically in 2008, prompting violent protests in Mexico, Indonesia, Egypt, Cameroon and Haiti. Last year's spike was provoked mainly by the freakish weather conditions in Russia and Ukraine, but one of the underlying trends is the growing and changing appetites of east Asia.
As more Chinese enter the middle classes they tend to consume more poultry and meat, just as Westerners did at a similar stage in their economic progress. However, meat and poultry husbandry consumes at least three times the resources that grains do, while the drift towards the cities in China is reducing the yields of its farms. Similar trends are visible in the other fast-growing, populous nations such as Brazil, India and Indonesia.
Countries that are poor and produce relatively little of their own food are most vulnerable to the food price shock – Bangladesh, Morocco and Nigeria top the "at risk" list, according to research by Nomura economists, who also identify growing shortages of water as a critical factor restraining any growth in agricultural productivity.
Owen Job, strategist at Nomura, said: "The economists' model of increasing supply as demand grows may be breaking down. Supply cannot keep up with factors such as biofuels and the urbanisation of China. Some 30 per cent of all water used in agriculture comes from unsustainable sources."
* David Cameron has disclosed that the Treasury was considering introducing a "fuel stabiliser". Under the move, tax paid
by motorists would be cut when the cost of oil surged worldwide and rise when it dropped. He said: "We are looking at it. It's not simple but I would like to try and find some way of sharing the risk of higher fuel prices with the consumer."
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Philippines gets $4.97-M World Bank grant to help farmers weather climate change impact
The Philippines got a $4.97-million World Bank grant to help farmers cope with the effects of climate change, the multilateral lender said in a statement released on Friday.
The government and the World bank signed the agreement last Dec. 21, the statement said.
The grant, to come from the Global Environment facility of the World Bank-managed Special Climate Change Fund, will help finance the $55.42-million Philippines Climate Change Adaptation Project (PhilCCAP).
Data from the World Bank Web site showed PhilCCAP was approved on June 29 last year, with the Philippines shelling out $50.45 million in counterpart funding.
The project aims to develop and test adaptation strategies that will develop the resiliency of farms and natural resource management to the effects of climate change.
Measures to be funded include improving irrigation and other agricultural infrastructure, pilot-testing weather index-based crop insurance, as well as enhancing the management of watersheds and protected areas, the World Bank said in its statement.
It also aims to improve the capacity of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) in gathering and analyzing data on climate change trends and disseminating information to the government and the public.
World Bank said the project will be implemented by the Department of Agriculture, the Department of Environment and Natural Resources (DENR), PAGASA and the Climate Change Commission.
It said the project will help both the national and local governments, as well as rural communities "more effectively manage and protect critical ecosystems through a systematic consideration of climate risks."
"Poor communities are more vulnerable to climate change and have fewer options for coping with the impact, including decreased food and water supplies. This project, therefore, is very important because it helps reduce the poor’s vulnerability to these types of shocks," World Bank Country Director Bert Hofman said in the statement.
The same statement quoted Agriculture Secretary Proceso J. Alcala as saying "the project will benefit poor farmers, who often suffer the most from climate change-related losses, as well as other vulnerable groups that depend on agriculture and natural resources for their livelihoods."
Environment and Natural Resources Sec. Ramon Jesus P. Paje said in the statement that the project "will also strengthen the coordination of interventions addressing climate change by supporting capacity-building in oversight bodies like the Climate Change Commission."
The bank noted that the Philippines is among the top 10 countries at risk of natural disasters and other effects of climate change.
More state funding
In a related development, a bill now being scheduled for public hearing in the House of Representatives seeks to establish a fund for local government units (LGUs) that will adopt programs to help their communities weather the impact of climate change.
House Bill (HB) 3528, filed Deputy Speaker Lorenzo M. Tañada III (4th district, Quezon), seeks to put up the "People’s Survival Fund" (PSF), to be administered by the Climate Change Commission, which will serve as an incentive to LGUs that will develop and adopt such climate change adaptation strategies.
The PSF will become the central source of funding support for adaptation measures urgently needed by farming localities.
Examples include small water impounding projects in anticipation of drought and structures that can reduce damage from floods, Mr. Tañada said in a statement on Friday.
He added that "communities must be properly equipped and prepared to help themselves in order to respond to the disasters brought about by this phenomenon. They must also put forward a climate change adaptation strategy which must be properly funded."
The funds will come from domestic private and public, as well as foreign funds. These include, but will not be limited to, 10% of the cash dividends declared by all government-owned and controlled corporations and a portion of the Motor Vehicle User’s Charge.
The bill has been pending with the Committee on Ecology, chaired by Rep. Danilo Ramon S. Fernandez since October 2010. A counterpart measure, Senate Bill 2558, authored by Senate President Juan Ponce Enrile, was subjected to its first public hearing late last year. -- JJAC and NMG
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Russia Doubles Meat and Poultry Quota
RUSSIA - Russia’s Ministry of Economic Development (MED) has announced the initial distribution of 2011 tariff-rate quotas (TRQ) quantities to importers, which includes an increase US frozen beef quota allocation from 21,700 to 41,700 MT.
This increase in US quota will result in significant reductions for "other countries".
The poultry TRQ has been reduced to 350,000 MT and narrowed in product scope, and will not have country-specific allocations in 2011.
Fresh beef, pork, and pork trimming TRQ remain unchanged from 2010. MED will distribute the remaining TRQ quantities to importers by April 15, 2010.
“The American Meat Institute would like to thank Ambassador Siddiqui and the staff at the Office of the United States Representative (USTR) for their efforts in negotiating this increased allocation, which represents more than an estimated $75 million in additional 2011 frozen beef exports,” said AMI President and CEO J. Patrick Boyle.
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Agricultural Revolution Needed to Feed the World
UK - A report published today, highlights the decisions that policy makers must make today and in the near future, to ensure that a global population rising to nine billion or more can be fed sustainably and equitably.
The Foresight report makes a compelling case for urgent action to redesign the global food system to meet the challenge of feeding the world over the next 40 years.
Professor Sir John Beddington, the Government’s Chief Scientific Adviser and Head of the Foresight programme, said: “The Foresight study shows that the food system is already failing in at least two ways. Firstly, it is unsustainable, with resources being used faster than they can be naturally replenished. Secondly, a billion people are going hungry with another billion people suffering from ‘hidden hunger’, whilst a billion people are over-consuming.
“The project has helped to identify a wide range of possible actions that can meet the challenges facing food and farming, both now and in the future.”
UK Environment Secretary Caroline Spelman said: “We need a global, integrated approach to food security, one that looks beyond the food system to the inseparable goals of reducing poverty, tackling climate change and reducing biodiversity loss – and the UK Government is determined to show the international leadership needed to make that happen.”
“We can unlock an agricultural revolution in the developing world, which would benefit the poorest the most, simply by improving access to knowledge and technology, creating better access to markets and investing in infrastructure.
“To fuel this revolution, we must open up global markets, boost global trade and make reforms that help the poorest. Trade restrictions must be avoided, especially at times of scarcity. And we must manage price volatility by building trust and cooperation – and in particular by creating greater transparency around the true levels of food stocks.”
The report’s main findings are:
Threat of hunger could increase: Efforts to end hunger internationally are already stalling, and without decisive action food prices could rise substantially over the next 40 years making the situation worse. This will affect us all - as more of the world suffers from hunger social tensions will increase, as will the threat of conflict and migration. Wider economic growth will also be affected.
The global food system is living outside its means, consuming resources faster than are naturally replenished. It must be redesigned to bring sustainability centre stage: Substantial changes will be required throughout the food system and related areas, such as water use, energy use and addressing climate change, if food security is to be provided for a predicted nine billion or more people out to 2050.
There is no quick fix: The potential threats converging on the global food system are so great that action is needed across many fronts, from changing diets to eliminating food waste.
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China Farm Produce Prices Continue Rising
CHINA - Chinese farm produce prices rose for a fourth consecutive week, through 23 January, the Ministry of Commerce said Tuesday.
One reason for the price hike was that freezing weather in southern China had affected vegetable production and transportation, the ministry said in a statement on its website.
The wholesale prices of 18 staple vegetables grew 12.6 per cent week on week. Also, the prices of green peppers, cucumbers, chilli peppers and bean pods rose by at least 10 per cent.
As the Spring Festival draws near, the demand for meat and eggs increased, while enterprises have been stockpiling supplies and large purchases have expanded.
Egg prices climbed 1 per cent week on week and beef prices went up 0.8 per cent, while pork prices increased 0.7 per cent and chicken prices were up 0.2 per cent.
Last year, rising food prices pushed up China's consumer price index (CPI), the major gauge of inflation. China's CPI hit 3.3 per cent in 2010, compared with the government's target ceiling of 3 per cent, the National Bureau of Statistics said on 20 January.
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Jamaica in search of alternative feedstock 24 Jan 2011
Government is exploring alternative feedstock as part of a programme aimed at combating volatile food prices, says Agriculture Minister Dr Christopher Tufton.
Tufton made the revelation as Jamaicans brace for higher food prices due to soaring cost of grains on the international market which is expected to impact the cost of feeds used in the production of diary, poultry, meats and eggs.
"Where we have to go is, to take a look at alternative feedstock - cassava, for example, that can be pelletised to make poultry feed and pig feed; different types of grass that can be used for beef or production cattle rearing and small remnants rearing," Tufton told the Business Observer.
"That's where we have to focus our attention in order to say, instead of requiring 'x' amount of grain, we can cut back and substitute it with other things," he explained.
Not enough land
Tufton ruled out directly replacing the imported grains with local produce, noting that Jamaica does not possess the critical mass needed to grow corn and soybean.
"The mass acreages that would be required is just not available to grow for commercial use - further processing for feedstock for example," stated Tufton, adding that "We'd have to grow corn on (land) the size of Jamaica to compete with those countries that grow the product...The challenge now becomes therefore whether we need to depend on corn so much for the basis of our feedstock."
The agriculture minister said that Government has been doing a lot over the last couple of years in this regards and has seen declines in the food import bill in terms of volumes.
He noted that the administration in 2011 will focus on a number of crop areas where the country can have direct replacements both in terms of production and in terms of storage or value-added promotion.
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Meat Industry Faces a Squeezed Middle Market
The meat industry faces three separate challenges – increasing and maintaining margins, accommodating greater uncertainty in the business environment and responding to market segmentation, writes Chris Harris,Editor in Chief.
This was the message from Professor Phil Thomas, chairman of the Quality Meat Scotland R&D committee at the Quality Meat Scotland R&D Conference in Perth.
He said the global meat industry will have to face up to the needs of a growing global population – expected to reach nine billion by 2050 – as well as the problems of climate change.
The food industry also has to face up to the challenges of national and international food security, diet and health issues, land use and energy shortages as well as the diminishing mineral reserves and global economic problems.
Professor Thomas said that the future prospects for agriculture look challenging particularly in the red meat sector.
However he said that these challenges are also great opportunities for the meat sector.
"Individual businesses and the industry as a whole will therefore need to grasp the opportunities and address the challenges," he said.
He said the industry could not afford to hold on to the status quo.
The sector will find that it will have to find answers to many different questions using existing and new technologies, improved efficiency, reduction of waste and an ability to innovate.
He said among the challenges will be the cost and availability of energy in "all shapes and sizes".
"Bioenergy has its positives and its negatives," he said.
"You can grow for it but it takes land to grow for it and all along the way governments will intervene."
The main influences on a changing food and agricultural system will be both population growth and climate change and, Professor Thomas said, that while climate change is not going to be felt so dramatically in the northern hemisphere, its impact is going to be felt in regions from the equator outwards.
He also warned that food prices that saw a global peak in 2008 could see another peak this year as cereal and oil prices rise.
However, while cereal and oil prices could reach new high levels, the prices for meat will not peak to such a degree.
"This is because in underdeveloped countries the populations turn from meat to cereals in hard times," he said.
The scenario in the developed nations such as Europe will be different, because there is a small number of buyers in the middle between the large numbers of food producers and the large numbers of consumers.
This dynamic of the market will mean that there will be a growth in the low end products and a growth in the high-end products, but the middle markets will be squeezed.
Professor Thomas told the conference that with a squeezed middle market meat producers will have to find their area of sales either at the top end or the low commodity end as the market polarises.
January 2011
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Thursday, February 03, 2011Print This Page
World Meat Price Steady; Dairy Price Higher
GLOBAL - With a 3.4 per cent surge in January, world food prices have reached a new historic peak. However, the average meat price was steady and dairy prices, though six per cent higher than in December, are still a way off the historic peak.
World food prices surged to a new historic peak in January, for the seventh consecutive month, according to the updated FAO Food Price Index, a commodity basket that regularly tracks monthly changes in global food prices.
The Index averaged 231 points in January and was up 3.4 per cent from December 2010. This is the highest level (both in real and nominal terms) since FAO started measuring food prices in 1990. Prices of all monitored commodity groups registered strong gains in January, except for meat, which remained unchanged.
High prices
"The new figures clearly show that the upward pressure on world food prices is not abating," said FAO economist and grains expert, Abdolreza Abbassian. "These high prices are likely to persist in the months to come. High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food."
"The only encouraging factor so far stems from a number of countries, where –,- due to good harvests – domestic prices of some of the food staples remain low compared to world prices," Abbassian added.
FAO emphasised that the Food Price Index has been revised, largely reflecting adjustments to its meat price index. The revision, which is retroactive, has produced new figures for all the indices but the overall trends measured since 1990 remain unchanged.
The FAO Cereal Price Index averaged 245 points in January, up three per cent from December and the highest since July 2008, but still 11 per cent below its peak in April 2008. The increase in January mostly reflected continuing increases in international prices of wheat and maize, amid tightening supplies, while rice prices fell slightly, as the timing coincides with the harvesting of main crops in major exporting countries.
The Oils/Fats Price Index rose by 5.6 per cent to 278 points, nearing the June 2008 record level, reflecting an increasingly tight supply and demand balance across the oilseeds complex.
The Dairy Price Index averaged 221 points in January, up 6.2 per cent from December, but still 17 per cent below its peak in November 2007. A firm global demand for dairy products, against the backdrop of a normal seasonal decline of production in the southern hemisphere, continued to underpin dairy prices.
The Sugar Price Index averaged 420 points in January, up 5.4 per cent from December. International sugar prices remain high, driven by tight global supplies.
By contrast, the FAO Meat Price Index was steady at around 166 points, as declining meat prices in Europe, caused by a fall in consumer confidence following a feed contamination scandal, was compensated for by a slight increase in export prices from Brazil and the United States.
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Meat Industry Faces a Squeezed Middle Market
The meat industry faces three separate challenges – increasing and maintaining margins, accommodating greater uncertainty in the business environment and responding to market segmentation, writes Chris Harris, ThePigSite Editor in Chief.
This was the message from Professor Phil Thomas, chairman of the Quality Meat Scotland R&D committee at the Quality Meat Scotland R&D Conference in Perth.
He said the global meat industry will have to face up to the needs of a growing global population – expected to reach nine billion by 2050 – as well as the problems of climate change.
The food industry also has to face up to the challenges of national and international food security, diet and health issues, land use and energy shortages as well as the diminishing mineral reserves and global economic problems.
Professor Thomas said that the future prospects for agriculture look challenging particularly in the red meat sector.
However he said that these challenges are also great opportunities for the meat sector.
"Individual businesses and the industry as a whole will therefore need to grasp the opportunities and address the challenges," he said.
He said the industry could not afford to hold on to the status quo.
The sector will find that it will have to find answers to many different questions using existing and new technologies, improved efficiency, reduction of waste and an ability to innovate.
He said among the challenges will be the cost and availability of energy in "all shapes and sizes".
"Bioenergy has its positives and its negatives," he said.
"You can grow for it but it takes land to grow for it and all along the way governments will intervene."
The main influences on a changing food and agricultural system will be both population growth and climate change and, Professor Thomas said, that while climate change is not going to be felt so dramatically in the northern hemisphere, its impact is going to be felt in regions from the equator outwards.
He also warned that food prices that saw a global peak in 2008 could see another peak this year as cereal and oil prices rise.
However, while cereal and oil prices could reach new high levels, the prices for meat will not peak to such a degree.
"This is because in underdeveloped countries the populations turn from meat to cereals in hard times," he said.
The scenario in the developed nations such as Europe will be different, because there is a small number of buyers in the middle between the large numbers of food producers and the large numbers of consumers.
This dynamic of the market will mean that there will be a growth in the low end products and a growth in the high-end products, but the middle markets will be squeezed.
Professor Thomas told the conference that with a squeezed middle market meat producers will have to find their area of sales either at the top end or the low commodity end as the market polarises.
January 2011
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World Agricultural Supply and Demand Estimates - March 2011
The forecasts for red meat and poultry production and prices in 2011 have been raised from a month ago, according to the latest USDA World Agricultural Supply and Demand Estimates.
Livestock, Poultry and Dairy
The forecast for 2011 red meat and poultry production is raised from last month, reflecting increased production of beef, pork, broilers, and turkeys. Fed cattle slaughter will reflect expected strength in feedlot placements during early 2011 and relatively large dairy cow slaughter in the first part of 2011 will also contribute to higher beef production. However, the effects of increased cattle slaughter will be partly mitigated by lower expected carcass weights. Pork production is increased from last month as carcass weights thus far in the first quarter are well above last year. Broiler and turkey production is forecast higher in the first half of 2011. The broiler production increase largely reflects relatively heavy bird weights but the increase in turkey production forecast reflects higher increases in poult placements as well as increased bird weights. The egg production forecast is raised as the table egg type laying flock has been increasing. Estimates of 2010 poultry and egg production are adjusted to reflect data revisions.
The forecast for beef exports for 2011 is raised from last month on strength in exports to Asia. The beef import forecast is reduced as supplies in several exporting countries are expected to remain tight and a relatively weak US dollar is expected to constrain shipments. The pork and poultry export forecasts for 2011 are unchanged from last month. Trade estimates for 2010 reflect import and export data for December.
Despite the higher production forecasts, prices for livestock and poultry are raised from last month. Robust exports and improving domestic demand in the face of relatively tight meat supplies are expected to support higher price forecasts for cattle, hogs, broilers, and turkeys. Egg prices in the first quarter are forecast lower due to recent price declines.
The milk production forecast for 2011 is reduced from last month. Relatively high milk prices and increased supplies of replacement heifers are expected to encourage further increases in the cow herd through much of the year, but the rate of increase in milk per cow is forecast slower than last month. Exports are forecast higher as global nonfat dry milk and cheese demand remains strong with tight supplies in competitor markets expected through the first half of 2011. Estimates of 2010 milk production are adjusted to reflect data revisions.
Dairy product prices are forecast higher this month on strong early year prices. Strong international demand and improving domestic demand will support prices for most products. Currently tight butter stocks are also helping support butter prices. Class III and Class IV price forecasts are raised to reflect higher product prices. The all milk price is forecast to average $18.10 to $18.70 per cwt for 2011.
Wheat
US wheat ending stocks for 2010/11 are projected higher this month on reduced export prospects. Projected exports are lowered 25 million bushels with increased world supplies of high quality wheat, particularly in Australia, and a slower-than-expected pace of US shipments heading into the final quarter of the wheat marketing year. By-class changes include lower projected exports for Hard Red Spring, White, and durum wheat, partly offset by small increases for Hard Red Winter and Soft Red Winter wheat. The marketing-year average price received by producers is projected at $5.60 to $5.80 per bushel, unchanged from last month.
Global 2010/11 wheat supplies are projected 1.9 million tons higher reflecting higher production. Argentina production is raised 1.0 million tons based on higher reported yields. Australia production is raised 1.0 million tons with higher yields in Western Australia where wheat quality was not hurt by harvest rains as in the east. Other production changes include a 0.5-million-ton reduction for EU-27 with a smaller crop reported for Denmark and a 0.6-million-ton increase for Saudi Arabia on an upward revision to area.
Global 2010/11 wheat supplies are projected 1.9 million tons higher reflecting higher production. Argentina production is raised 1.0 million tons based on higher reported yields. Australia production is raised 1.0 million tons with higher yields in Western Australia where wheat quality was not hurt by harvest rains as in the east. Other production changes include a 0.5-million-ton reduction for EU-27 with a smaller crop reported for Denmark and a 0.6-million-ton increase for Saudi Arabia on an upward revision to area.
Global 2010/11 wheat consumption is projected lower with the biggest change being a 1.5-million-ton reduction in expected wheat feeding for Russia. With increased global production and reduced usage, world ending stocks for 2010/11 are projected 4.1 million tons higher.
Coarse Grains
The US feed grain balance sheet for 2010/11 is nearly unchanged this month. Projections for corn, sorghum, and oats supplies, usage, and ending stocks are all unchanged. Barley exports are lowered 2 million bushels reflecting the slow pace of shipments and sales to date. The projected marketing-year average farm price for corn is narrowed 10 cents on both ends of the range to $5.15 to $5.65 per bushel. Farm price projections for sorghum and barley are lowered slightly and the oats farm price projection is raised slightly, all reflecting reported prices to date.
Global coarse grain supplies for 2010/11 are projected 2.5 million tons lower this month with lower corn beginning stocks and reduced corn, barley, sorghum, and oats production. Global corn beginning stocks are lowered 0.6 million tons with upward revisions to Brazil exports and India feeding in 2009/10.
Global 2010/11 corn production is reduced 0.5 million tons as lower production in Mexico and India is partially offset by higher production in Brazil. Brazil corn production for 2010/11 is raised 2.0 million tons reflecting higher reported area and yields in the summer crop and expectations for increased area for the winter crop with government planting dates extended for crop insurance and loan programmes. Mexico corn production is reduced 2.0 million tons as the unusual early February freeze destroyed standing corn crops across much of the northwest winter corn region, which normally accounts for about one-fourth of the country’s total corn production. Replanting is expected to offset some of the loss, but seasonally high temperatures in the coming months limit the growing season window.
Global 2010/11 sorghum and barley production are each lowered 0.5 million tons and oats production is lowered 0.3 million tons. Lower sorghum output for India more than offsets an increase for Australia. Lower barley and oats output for Australia account for most of the reduction in world production for these coarse grains.
Global 2010/11 coarse grain imports are raised this month as increases for corn and sorghum more than offset a reduction for barley. Corn imports are raised 1.1 million tons for Mexico with the lower production outlook. Corn imports are raised 1.0 million tons for EU-27 on stronger expected feeding. A 0.5-million-ton reduction for Russia corn imports is partly offsetting. Sorghum imports are raised for EU-27 and barley imports are lowered for Russia, Saudi Arabia, and China. Increased corn feeding in EU-27 is more than offset by reductions in feeding in Russia and lower food, seed, and industrial use in India and Mexico. Projected global corn ending stocks are raised slightly.
Oilseeds
US soybean supply and use projections for 2010/11 are mostly unchanged from last month. A higher soybean meal extraction rate is offset by a small increase in soybean meal exports, leaving the projected soybean crush unchanged. Soybean oil production is increased due to a higher soybean oil extraction rate. Soybean oil used for biodiesel for 2010/11 is projected at 2.7 billion pounds, down 200 million from last month due to lower-than-expected production through January. Soybean oil exports are increased 200 million pounds to 3.0 billion reflecting continued strong export shipments and sales. Soybean oil stocks are projected at 2.4 billion pounds, down 165 million from last month. If realized, soybean oil ending stocks would be the lowest in 6 years.
The US season-average soybean price range for 2010/11 is projected at $11.10 to $12.10 per bushel, down 10 cents on both ends of the range. Soybean oil prices are forecast at 51.5 to 55.5 cents per pound, up 0.5 cents on both ends. Soybean meal prices are forecast at $340 to $370 per short ton, down 10 dollars on the high end.
Global oilseed production for 2010/11 is projected at 444.2 million tons, up 2.4 million tons from last month. Foreign production, projected at 343.7 million tons, accounts for all of the change. Brazil soybean production is forecast at a record 70.0 million tons, up 1.5 million tons from last month due to higher projected yields. Soybean production is also raised for China. Global sunflowerseed production is raised 0.3 million tons due to higher estimates for China and EU-27. Global cottonseed production is reduced with lower production in China, India, and Uzbekistan only partly offset by increases for Australia and Brazil.
Global oilseed supplies, crush, and ending stocks are projected higher this month. Soybean crush is projected higher for Brazil and India, and sunflowerseed crush is raised for China and EU-27. Higher soybean stocks for Brazil and Argentina are only partly offset by reductions for China, Canada, and India. Higher rapeseed stocks are projected for EU-27, Australia, and Turkey. Global protein meal production, consumption, and stocks are all projected higher this month.
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Feed Outlook - March 2011
World coarse grain production and beginning stocks forecast for 2010/11 are reduced this month, lowering supply 2.5 million tons, according to the latest report from the USDA Economic Research Service.
However, projected global use is 3.3 million tons lower this month, allowing for a 0.8-million-ton increase in ending stocks to 154.9 million tons. The global stocks-to-use ratio is projected at 13.8 per cent, slightly lower than in 2006/07 when stocks were 9 per cent lower but use was smaller. US 2010/11 supply and use forecasts for feed grains are unchanged this month except for a small reduction in barley exports and an offsetting increase in ending stocks. Price projections are adjusted, but the midpoint of the forecast corn farm price range is unchanged.
DOMESTIC OUTLOOK
2010/11 Feed Grain Supplies and Use Essentially Unchanged This Month
US feed grain supplies for 2010/11 remain at 380.3 million metric tons this month, unchanged from last month’s projection but down 4.4 per cent from last year. Total use of the four feed grains is nearly unchanged this month at 359.5 million metric tons. With demand exceeding supply, ending stocks are expected to be drawn down to 20.8 million metric tons, the lowest level since the end of the 1995/96 marketing year.The midpoint of the projected range for the 2010/11 corn price received by farmers remains at $5.40 a bushel this month, but both the lower and upper end of the range are reduced by 10 cents, to $5.15-$5.65 a bushel. With the exception of last month, corn prices at the farm gate have been below $5.00 a bushel so far this year. If the preliminary February price of $5.66 a bushel is confirmed, this will be the first time since September 2008 that prices at the farm gate have exceeded $5.00.
Feed and residual use for the four feed grains plus wheat on a September-August marketing year basis is unchanged this month, remaining at 142.7 million metric tons. Grain-consuming animal units (GCAU’s) are projected at 93.3 million this month, up slightly from last month's 93.1 million due to an increase in broiler production. The broiler production increase largely reflects relatively heavy bird weights, but the increase in forecast turkey production reflects higher poult placements as well as increased bird weights. Feed and residual use per animal unit is unchanged this month at 1.53 tons, which is down from 1.54 tons in 2009/10.
Minor Changes Made to Feed Grain Price Projections
The midpoint of the projected range for the 2010/11 corn price received by farmers remains at $5.40 a bushel this month, but both the lower and upper end of the range are reduced by 10 cents, to $5.15-$5.65 a bushel. With the exception of last month, corn prices at the farm gate have been below $5.00 a bushel so far this year. If the preliminary February price of $5.66 a bushel is confirmed, this will be the first time since September 2008 that prices at the farm gate have exceeded $5.00.
The farm price has been below prevailing cash market bids due to farmers forward contracting when prices were lower. Farm gate prices are expected to well exceed $6.00 per bushel in the coming months to reach the $5.40 midpoint of the projected season average price range.
The projected sorghum price received by farmers is lowered by 20 cents at the top end of the range, to $5.15-$5.65 a bushel. This lowered the midpoint by 10 cents to $5.40 per bushel, reflecting year-to-date price data. The barley and oat price estimates were also changed slightly this month, reflecting year-to-date data. The barley farm price projection is reduced by 10 cents and now stands at $3.70-$3.90 per bushel. The oat farm price projection is increased by 5 cents, to $2.35-$2.55 per bushel.
US barley exports for the 2010/11 crop year are lowered from 10 million bushels to 8 million bushels, reflecting shipments to date and minimal outstanding sales.
Ethanol Projection Unchanged
Corn used for fuel is unchanged. Recent lower weekly ethanol production and higher stock levels, according to Energy Information Administration data, are consistent with last month’s projection. Current ethanol production has returned to levels close to those prier to last December's increase. High petroleum and gasoline prices have reduced gasoline demand, lowering gasoline production. As ethanol blending nears practical limits, demand has deepened.
March Planting Intentions and Stocks Report are Keys to Price Prospects
Grain Stocks and Prospective Plantings are the key reports that will be released by the USDA’s National Agricultural Statistics Service on March 31, 2011. The stocks report will show grain stocks as of 1 March 2011. Stocks that are lower-thanexpected will imply greater feeding in the quarter ending 1 March and would be bullish for prices. A higher-than-expected stock level may moderate price increases somewhat.
At the 25 February 2011, USDA Outlook Conference, corn plantings this spring were projected at 92 million acres. Prices will likely respond if planted acreage is much different than this projection. In the past 20 years, the March projection was below the final acreage number 8 times and above it 12 times.
INTERNATIONAL OUTLOOK
World Coarse Grain Production Prospects for 2010/11 Reduced
Global coarse grain production for 2010/11 is projected down 1.8 million tons this month to 1,079.7 million. Reductions for Mexico, India, and Australia more than offset improved expectations for Brazil. World corn, barley, and sorghum production are each reduced 0.5 million tons, while global oats production is trimmed 0.3 million.
Mexico’s corn production for 2010/11 is cut 2.0 million tons to 22.0 million as an early February freeze devastated the crop in Sinaloa. The corn marketing year for Mexico is October-September, with about 75 per cent of the crop being produced in the main season (harvested in the fall). However, most of the winter-crop corn is grown in Sinaloa with irrigation. An exceptional freeze hit in the first week of February, with about 80 per cent of the corn planted. Satellite imagery verifies that much of the corn crop was killed. Some replanting will limit losses, but high temperatures later in the season will limit the window for replanting. Most of the Sinaloa corn is white corn destined for products for human consumption, such as tortillas.
India’s coarse grain production is cut 1.3 million tons to 40.4 million based on more complete harvest reports covering the last monsoon season. Sorghum area harvested came in 4 per cent below previous expectations, with average yields trimmed slightly more, cutting production 0.7 million tons to 6.8 million. Corn area was reported higher than expected, but yields were lower leaving production reduced 0.5 million tons to 20.5 million. Millet production is trimmed 0.1 million tons, but barley is increased 0.05 million.
Australia’s coarse grain production is reduced 0.5 million tons this month to 13.4 million. More complete harvest reports indicate lower barley yields, cutting production 0.5 million tons to 9.3 million. Oats area and yields are reduced, cutting production 0.25 million tons to 1.5 million, but excellent sorghum yield prospects boost projected production 0.25 million tons to 2.2 million. Ukraine oats production is trimmed as lower area more than offset good reported yields. Also, Moldova’s 2010/11 coarse grain production is reduced slightly with a decline in barley more than offsetting a small increase in corn.
Brazil’s corn production prospects are increased 2.0 million tons this month to 53.0 million. Brazil’s Ministry of Agriculture reported excellent yields for the mainseason corn crop now being harvested. While the second-crop corn planted following short-season soybeans has been delayed by slow soybean harvesting, especially in Mato Grosso, the Government has extended the permitted planting window, supporting area prospects. However, late planted second-crop corn in Mato Grosso is more susceptible to an early end of the wet season, potentially limiting production prospects.
World coarse grain beginning stocks for 2010/11 are reduced this month by 0.7 million tons to 195.1 million. The largest reduction is for Brazil, with corn beginning stocks cut 0.4 million tons to 10.1 million due to stronger-than-expected exports during the March-February 2009/10 local marketing year (just ending). India’s coarse grain beginning stocks are down 0.1 million tons, mostly because of strong corn feed use and exports in 2009/10, partly offset by increased millet stocks. Saudi Arabia’s beginning stocks for 2010/11 are down 0.1 million this month as 2009/10 trade data show barley imports fell short of previous expectations. There are also small reductions in corn beginning stocks this month for Kenya and Taiwan.
Global Use of Coarse Grains Reduced for 2010/11
Total world coarse grain use in 2010/11 is projected down 3.3 million tons this month to 1,119.9 million. Feed use is forecast up 0.3 million tons, but food, seed, and industrial use is down. Trade changes contribute heavily to the projected decline in global use.
Projected EU coarse grain total use is up 1.2 million tons this month with increases of 1.0 million tons for corn and 0.2 million for sorghum. Import licenses are up as prices in the EU encourage imports. Ukraine’s total coarse grain use is up 0.5 million tons, with feed use up 0.4 million as the slow pace of barley exports and uncertainty about export licenses is expected to encourage domestic use. Corn feed use prospects are increased slightly for Moldova.
Coarse grain feed use prospects are cut 0.9 million tons for Russia as the grain export ban has kept internal prices low, especially for low-quality wheat, discouraging imports and feeding of corn (down 0.5 million tons) and barley (down 0.4 million). Australia’s feed use is trimmed 0.4 million tons, with lower barley and oats production more than offsetting increased sorghum. There is also a small reduction in corn feed use prospects this month for Taiwan.
India’s coarse grain total use is down 1.3 million tons this month to 37.6 million. Lower production of sorghum, corn, and millet is expected to cut human consumption, with a reduction in projected sorghum feed use of 0.2 million tons. Food use is also cut this month for Mexican corn (down 0.3 million tons), Kenyan corn (down 0.1 million), and Chinese barley (trimmed 0.1 million).
Local marketing year trade changes can alter global use (see last month’s write up). With the sum of local marketing year coarse grain exports reduced 1.1 million tons this month, while the sum of imports are increased 0.9 million tons, the trade changes combine to reduce global coarse grain use by 2.0 million tons.
World Ending Stocks Projected Higher
Projected 2010/11 coarse grain use is cut more this month than supply, boosting forecast global ending stocks 0.8 million tons to 154.9 million. World corn ending stocks are up 0.6 million tons to 123.1 million. Global barley and millet stocks are up slightly while sorghum and oats prospects are trimmed.
The largest increase in projected 2010/11 ending stocks is a 1.6-million ton-increase for corn in Brazil to 8.8 million tons. Increased production is only partly offset by reduced beginning stocks, and forecast use (on a local marketing year) is unchanged. Brazil’s 2010/11 ending stocks are still projected lower than beginning stocks, but the tightening of stocks is not as great as projected a month ago. Other increases in projected ending stocks include a 0.3-million-ton increase in barley for both the EU and Ukraine, as well as small increases for US barley and Taiwan corn.
Partly offsetting the 2010/11 increased ending stocks expected for Brazil and others this month are several countries with reduced expected ending stocks. Mexico’s corn stocks are reduced 0.4 million tons to 1.5 million due to the cut in production. Australia’s coarse grain ending stocks are reduced 0.4 million tons this month, with reductions for barley and sorghum. Saudi Arabia’s coarse grain ending stock prospects are down 0.3 million tons with a decline for barley more than offsetting a small increase for corn. Ending stocks for corn in Kenya are down 0.2 million tons due to reduced imports. There are also small reductions this month for barley in China, corn in Moldova, and coarse grains in India, where a reduction for corn is almost offset by increases for millet, sorghum, and barley.
World Corn Trade Boosted Slightly, US Export Prospects Unchanged
Global corn trade for 2010/11 is forecast up 0.8 million tons this month to 92.1 million. Imports for Mexico are up 1.1 million tons to 9.0 million due to the production shortfall. EU imports are boosted 1.0 million tons to 6.5 million as import licenses are large and domestic prices encourage imports. Saudi Arabia’s corn import prospects are increased 0.1 million tons to 1.9 million, reflecting higher imports and feed use revealed by the latest estimates for 2009/10. However, corn imports for Russia are cut 0.5 million tons to 0.5 million as grain prices in Russia have not been high enough to encourage imports and no significant corn imports have occurred yet. Kenya’s corn imports are trimmed 0.25 million tons due to sufficient domestic supplies and lower estimated 2009/10 corn imports than previously forecast.
Brazil’s 2010/11 October-September corn exports are increased 1.0 million tons to a record 10.0 million. The shipment pace from October 2010 to February 2011 has been very rapid, at about 7.5 million tons, but is expected to slow dramatically as port capacity is switched to exporting soybeans, a more valuable crop. The availability or lack of government transport subsidies to move corn from the interior to the coast tends to accentuate the “lumpiness” of Brazilian corn exports.
Mexico, with reduced corn production, is expected to export 0.2 million tons less corn, leaving projected 2010/11 exports at only 0.1 million. Kenya’s corn exports are also reduced slightly.
US corn exports for 2010/11 are unchanged this month at 50.0 million tons (1.95 billion bushels for the September-August local marketing year). The forecast is nearly the same as the 49.9 million tons shipped the previous year. Census data for October-January indicate shipments of 14.0 million tons, virtually the same as a year earlier. However, grain inspections for February were 0.5 million tons less than those reported a year ago. The recent slow shipment pace is expected to increase as outstanding sales as of March 3, 2011, reached 12.8 million tons, up 2.3 million from a year earlier and the third highest for early March in the last 20 years.
World barley trade projected for 2010/11 is reduced 1.1 million tons this month to 16.0 million. Saudi Arabia’s barley imports are cut 0.6 million tons to 6.7 million on the slow pace of purchases and the Government’s goal of reducing subsidies.
Imports by Russia and China are also reduced due to the slower-than-expected pace of purchases. The slow pace of sales and shipments supports a reduction in barley exports of 0.8 million tons for Ukraine, and 0.3 million for the EU. US barley exports are reduced for the local June-May marketing year but unchanged for the October-September trade year.
Global sorghum trade for 2010/11 is increased slightly with 0.2-million-ton increases for Australia’s exports and EU imports. US sorghum export prospects are unchanged this month at 3.8 million tons. The pace of exports for the first 5 months of the trade year has been sluggish, but at the beginning of March 2011, outstanding export sales are up 21 per cent from a year ago.
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S Korea Says FMD Costs Near $2.7 Bln
SOUTH KOREA - South Korea, battling against its worst ever outbreak of foot-and-mouth disease said on Thursday that the crisis has cost nearly 3 trillion won (S$3.42 billion) so far.
Prime Minister Kim Hwang-sik also said in a statement that the government would lower its disease alert to "watch" from "seriousness", noting the cases were waning, while stepping up quarantines at borders including airports to block the potential entry of any virus.
In the past four months, Asia's fourth-largest economy has culled a third of its hog population and five per cent of cattle in a bid to stop the disease. It has also vaccinated animals.
"The government will make a routine to vaccinate cows and pigs to prevent foot-and-mouth disease outbreak," Prime Minister Kim said.
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Report Re-Examines Link between Meat Intake and Human Cancers
A major analysis of the sometimes contradictory scientific evidence by the World Cancer Research Fund (WCRF) concludes that high red meat consumption increases the risk of bowel cancer, while high white meat consumption does not, the Soil Association states in the appendix to a briefing on The Role of Livestock in Sustainable Food Systems.
A few individual studies have also found a link with prostate and pancreatic cancer.
The Soil Association says that widely-accepted concerns that the saturated fats found in red meat increase the risk of heart disease have found their way into the Government’s healthy eating guidelines.
There has also been research in Spain linking high red meat consumption to low male fertility.
However, it says that none of these negative effects has been established for chicken and other intensively produced white meat, so far.
One rather bizarre aspect of this issue, which has received little consideration, the Soil Association says, is that weekly consumption of beef in the UK fell from 244g per person in the early 1950s to 126g in the 1990s. In contrast, chicken consumption during the same period increased from 19 to 237 grams and has risen further since. Yet this is the very period during which cancer and heart disease has increased dramatically, the briefing note says.
This period equates to the major phase of agricultural intensification, when virtually all chickens and a significant proportion of cattle, even in the UK, were brought indoors and fed on a predominately cereal-based diet to increase productivity.
The organic food group points to research by scientists at the Institute of Brain Chemistry and Human Nutrition in London that has recently highlighted the fact that more than half the energy in a modern broiler chicken (as well as some organic chickens) comes from fat, whereas 60 years ago, the vast majority of the energy came from protein.
Even more significantly though, the Soil Association says, the proportion of the omega-3 fatty acid, DHA, found at significant levels in grass, has fallen dramatically in chicken meat, which today contains only one-fifth of the level found in wild birds.
In contrast, levels of the omega-6 fatty acids derived from grain have not fallen, giving a highly unhealthy balance of almost 10 times as much omega-6 as omega-3.
The scientists study associates this with the rise of brain dementia.
Professor Michael Crawford, one of the authors, says: "Essential fats for the brain are the priority. In biochemical terms, the limiting factor for the brain is the omega-3 [docosahexaenoic acid; DHA] to get the same amount of DHA from a modern broiler chicken you need to eat about three to five chickens at a cost of over £12 and with 5,000 calories of thrombogenic and atherogenic fats included." (Crawford, 2009, personal communication).
While a similar trend has occurred with intensively produced beef and pork, grass-fed beef has an omega-6 to omega-3 ration of just 1.65:1.
A very high proportion of beef in recent decades, however, has been produced intensively, in feedlots in the US and many other countries, and in the barley-beef systems pushed by MAFF for so many years.
The Soil Association asks if could this be an explanation for the studies that have found harmful trends associated with high red meat consumption.
"We have to remember too that the WCRF included pork in their definition of red meat and worldwide a high proportion of pork is produced in the most appallingly intensive conditions," the Soil Association says.
The beneficial effects of omega-3 fatty acids are, as yet, widely accepted only in relation to cardiovascular disease and it is for this reason that we are advised to eat two portions of oily fish a week, but recent research has shown that Western diets are typically as high as 16:1, omega-6 to omega-3, but that reducing this to:
2.5:1 reduced colo-rectal cancer cells and the risk of breast cancer in women, and
5:1 suppressed inflammation in patients with rheumatoid arthritis. (Simopoulos, 2008).
Even the WCRF, which has been at the forefront of the global campaign to reduce the consumption of red meat, has acknowledged that the meat of wild animals has a very different fat profile to that of most farmed animals and may therefore not be linked to increased cancer risk, the association's briefing says.
"However, it has failed to acknowledge that production systems much closer to the wild are likely to produce meat with similar characteristics to wild animals.
"This is a serious omission, because in the absence of such a recognition economics are driving extensive producers out of business at a much faster rate than intensive ones.
"Meat and milk from predominantly grass-fed animals have other advantages too: higher levels of beneficial conjugated linoleic acid and many other important micro-nutrients associated with increased well-being," the Soil Association concludes.
March 2011
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Foot and Mouth Disease – Asia's Fastest Growing Challenge?
"FMD control has been an enduring priority globally and today presents the fastest growing challenge facing Asia," stated Dr Sacha Seneque of Merial Australia, at the 5th Asian Pig Veterinary Society Congress, held last month in Pattaya, Thailand, writes Stuart Lumb.
Efforts in pursuit of FMD control have had enormous political, financial and emotional impact. Dr Seneque cited the recent outbreaks in Korea and Japan as examples, in terms of the impact these two outbreaks have had on the respective countries. The current type O outbreak in South Korea is the worst in the country's history and and the most significant in the world since the the UK outbreak in 2001.
Many will remember the unprecedented media coverage and the concerns about how that outbreak was handled. When animal suffering and destruction are measured in millions of head and where the financial impact is measured in millions of UK pounds and where the social and emotional costs are inordinately high the quest to improve control efforts and minimise FMD's destructive impacts are worthy priorities.
FMD's impact is growing in Asia due to several factors:
The disease has greater negative effects on growing populations of improved and more efficient production animals
There is greater virus risk of virus spread due to increased movement of humans and livestock products
There is an increasing gap between the developed and developing countries in Asia.
The result is that we are faced with a situation where increased populations of concentrated and highly susceptible animals are having greater risks of being exposed to FMD virus (FMDV).
FMDV has a discrete range of serotypes (seven are known to exist) and several sub-types each with an ability continually to evolve and mutate, contributing to wide genetic and antigenic variation, plus the disease can be spread in widely ranging ways.
The epidemiology of FMD in Asia is influenced by a combination of factors, said Dr Seneque. This includes: variation in the virus strain; the consistency of effective control measures and new strain introductions (originating from distant outbreaks that are transmitted via animal movement or other mechanisms) to susceptible populations. Seasonal and cyclical periods of increased disease prevalence are observed, suggesting that there are factors that favour periods of increased transmission or host susceptibility that predispose epizootic risk.
The current state of play in Asia is as follows, regarding the distribution of FMD viruses, Dr Seneque continued. Today, serotypes O, A and Asia 1 are considered endemic in one or more of the FMD-affected countries in Asia, with type C having last been reported in the Philippines in 1995. Type O strains have been responsible for the most severe epidemics experienced in Asia, e.g. Taiwan in 1997 and Korea in 2009/10.
Virus Spread
It is accepted that the most important endemic mechanism of virus spread in Asia is by live animal movement, both within disease-affected countries and and across borders. This is largely driven by the economics of trade, explained Dr Seneque. Cattle, buffalo or pig movements are the source (or implicated) in most cases, and well documented trading patterns that reflect local demand have a high correlation to outbreak risk factors and disease 'hotspots' in the Indochina region.
In the absence of other possible sources, the many biosecurity failures observed over recent years suggest that people have been responsible for transferring FMD between farms. This may prove to be an important and underestimated transmission risk within this region.
Country/Zone FMD status
Classification with Zone 1 is given to those countries or regions that are FMD-free, where routine vaccination is not practised.
In Zone 2 are countries or zones where FMD is endemic. This group is subdivided into Zone 2a, i.e. areas where commercial livestock enterprises are not well developed, veterinary services may be weak and FMD cases are not uncommon, and Zone 2b, i.e. those that have well developed commercial sectors with interests in securing and developing the considerable premium trade opportunities that present with increased market access. These countries generally have well developed veterinary services.
Vaccination
In FMD-endemic countries, vaccines are often regulated to aid vaccination compliance aims and to ensure appropriate quality vaccines are used. In Asia, available FMD vaccines are routinely used in the vast majority of commercial herds (usually at the producer's motivation and expense) and today, more than 95 per cent of pigs in commercial units are vaccinated.
In FMD-free countries, routine use of FMD vaccination is banned (in compliance with OIE disease-free status requirements).
FMD vaccination limitations exist: vaccination with one FMD serotype does not confer cross-protection against other serotypes, plus vaccine efficacy may vary between isolates of the same FMD serotype if antigenic diversity is great.
Experiences and Challenges
Recent years have seen several regional countries secure 'Disease-Free' recognition that have required validation of disease freedom after disease, e.g. South Korea and Japan, eradication from an established endemic or outbreak situations, e.g. Philippines and Indonesia). Others, although not disease-free, have reduced outbreak prevalence to sporadic outbreaks, e.g. Taiwan, Viet Nam and Thailand, after successful implementation of comprehensive disease control initiatives.
Dr Seneque concluded that Asia has unique diversity that is relevant to trans-boundary disease movement risks, e.g. animal movement pathways. Add to this the dynamic socio-economic and urbanisation changes that can influence disease epidemiology and it could be viewed as inevitable that there will be FMD movement from endemic hot-spots or outbreak areas to neighbouring geographies.
FMD in South Korea: an Update
Dr Seneque gave an update on the current situation in South Korea. The outbreak started on 23 November 2010 and, within six weeks, it had spread over 60 per cent of the country. By the end of December, it was realised that slaughtering was ineffective and so ring vaccination was implemented, followed by blanket vaccination. By early March 2011, huge numbers of animals had been slaughtered, including 2.2 million pigs. The army is now involved with movement controls, disinfection and vaccination now implemented.
Water and soil contamination has occurred and meat consumption has dropped due to consumers' food safety concerns. It is estimated that 40,000 jobs have been lost in the countryside as a consequence of FMD, the animal population has dropped by 30 per cent and the outbreak has had serious ramifications as far as the tourism industry is concerned.
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World Agricultural Supply and Demand Estimates - April 2011
The forecast for 2011 red meat and poultry production is virtually unchanged from last month, according to the latest USDA World Agricultural Supply and Demand Estimates.
Wheat
US wheat ending stocks for 2010/11 are projected slightly lower this month reflecting a small increase in seed use. Higher planted area as reported in the 31 March Prospective Plantings raises projected seed use four million bushels. Small by-class changes are made for imports with Soft Red Winter (SRW) wheat raised five million bushels and Hard Red Spring and durum wheat together lowered an offsetting amount. The marketing-year average price received by producers is projected 10 US cents lower on each end of the range at $5.50 to $5.70 per bushel. Farm prices continue to be reported well below prevailing cash market bids indicating that farmers priced a substantial portion of this year’s crop well ahead of delivery.
Global 2010/11 wheat supplies are nearly unchanged as higher beginning stocks are mostly offset by lower world production. Production is lowered 1.3 million tons for Egypt as the latest reports indicate a sharp year-to-year drop in yields as unusual, early season heat affected pollination and reduced grain size. Production is raised 1.1 million tons for Iran on higher area.
Global wheat trade is projected higher with imports raised for Turkey, Indonesia, Morocco, Yemen, Egypt and Peru. Lower expected imports for Syria and Afghanistan are partly offsetting. Global exports are raised 1.1 million tons with 1.0-million-ton increases for both Australia and EU-27, and a 0.6-million-ton increase for Brazil. Exports are lowered 0.5 million tons each for Canada and Ukraine, 0.4 million tons for Pakistan and 0.3 million tons for Mexico.
Global 2010/11 wheat consumption is lowered 0.8 million tons reflecting small reductions in food, seed, and industrial use in a number of countries. Changes in wheat feeding are mostly offsetting with China raised 1.0 million tons and Pakistan and Egypt lowered 0.6 million and 0.4 million tons, respectively. Global ending stocks are projected 0.9 million tons higher.
Coarse Grains
US corn ending stocks are unchanged this month as a projected increase in corn use for ethanol is offset by a reduction in expected feed and residual use. Corn used to produce ethanol is raised 50 million bushels as strong blender incentives and positive ethanol producer margins continue to encourage expansion in ethanol production and use. Rising gasoline prices have pulled ethanol prices higher helping to offset increases in corn feedstock costs for ethanol producers.
US corn feed and residual use is lowered 50 million bushels as increased prospects for 2011 SRW wheat production and higher year-to-year corn plantings in the South reduce expected corn feed and residual disappearance during the second half of the 2010/11 corn marketing year. SRW wheat plantings are up sharply year-to-year with the 31 March Prospective Plantings report further increasing acreage in the SRW wheat states. A weighted average of early April crop conditions in the SRW states shows the highest percent of the crop in good-to-excellent condition in five years. Winter wheat conditions are especially favourable in Arkansas and North Carolina where wheat feeding is an alternative for poultry and hog producers. Cash and futures prices for SRW wheat have recently dropped below those for corn on a pound-for-pound basis creating opportunities for wheat to replace higher priced corn in feeding rations. Prospects for early new-crop corn usage ahead of September 1 are also increased with the largest intended southern corn plantings since 2007 and high expected summer corn prices.
Other 2010/11 US feed grain changes this month include higher feed and residual use and higher food, seed and industrial use for sorghum which boost expected domestic usage 15 million bushels. Sorghum exports, however, are projected 10 million bushels lower. Oats imports are raised slightly and feed and residual use is projected lowered leaving ending stocks up 18 million bushels. Price ranges for all the feed grains are narrowed five cents per bushel on each end. The season-average corn price is projected at $5.20 to $5.60 per bushel.
Global coarse grain supplies for 2010/11 are projected 6.3 million tons higher this month with a 1.8-million-ton increase in beginning stocks and a 4.5-million-ton increase in production. Higher corn and barley beginning stocks in Iran account for most of the increase in carry-in. Nearly half of the increase in coarse grain production reflects upward revisions to sorghum production in a number of Sub-Saharan African countries. Increases in millet production for countries in this same region add 1.4 million tons to global coarse grain output.
Global corn production is raised 1.2 million tons with the biggest increases for Brazil, Uganda and Paraguay. Production for Brazil is raised two million tons with higher reported area and yields for their primary summer crop and an increase in reported plantings for their winter crop. A 0.5-million-ton increase for Uganda corn is part of a number of revisions for African countries this month. Production for Paraguay is raised 0.4 million tons as favourable growing season weather boosted yields. Production is lowered 1.3 million tons for Indonesia and 0.5 million tons each for Egypt and South Africa.
Global 2010/11 corn trade is up slightly this month with imports raised 0.9 million tons for Indonesia and 0.5 million tons for China. The increase in expected China imports reflects the short-term decline in world corn prices in mid-March that created a buying opportunity for Chinese importers. No official confirmation of such purchases has yet been made. Corn imports are lowered 0.4 million tons for Canada based on the slow pace of US shipments to date. Corn exports are raised 1.5 million tons for Brazil and 0.3 million tons for Paraguay with increased production and supplies in both countries. Exports are lowered 0.5 million tons each for South Africa and Thailand. Global corn consumption is increased 3.1 million tons with increases in feeding for China, Brazil, and Thailand, and increased food, seed, and industrial use for China and for several African countries where corn is a food staple. Projected global corn ending stocks are lowered 0.7 million tons.
Rice
No changes are made on the supply side of the US 2010/11 rice supply and use balance sheets. On the use side, all rice domestic use and residual is estimated at 127.0 million cwt, still a record, but down 2.0 million from last month, but 4.4 million above 2009/10. All of the reduction is in long-grain rice now estimated at a near-record 99.0 million cwt.
Combined medium- and short-grain domestic use is unchanged at 28.0 million cwt. The changes in the 2010/11 domestic use and residual estimates are based largely on the March 1 Rice Stocks report released by the National Agricultural Statistics Service (NASS) on 31 March. NASS reported all rice stocks on a rough-equivalent basis at nearly 130.0 million cwt, up 17 per cent from a year earlier, and above trade expectations.
The all-rice 2010/11 export projection is unchanged at 116.0 million cwt; however, the rough-rice export projection is lowered 3.0 million to 39.0 million because of slower-than-expected sales and shipments to markets primarily in Central America. Conversely, the combined milled and brown rice export projection is raised 3.0 million cwt to 77.0 million (on rough-rice basis) due mostly to recent, large food-aid announcements. The 2010/11 long-grain export projection is raised 1.0 million cwt to 79.0 million, while the combined medium- and short-grain export projection is lowered the same amount to 37.0 million. The increase in the long-grain export projection is due mostly to an increase in the non-commercial portion of exports (virtually all long-grain rice) and the reduction in the combined medium- and short-grain export forecast is due to lower-than-expected exports to Taiwan. All rice ending stocks are projected at 54.8 million cwt, 2.0 million above last month, 18.1 million above the previous year, and the largest stocks since 1985/86. Long-grain and combined medium- and short-grain rice stocks are each raised 1.0 million cwt to 43.9 million and 9.4 million, respectively.
The combined medium- and short-grain 2010/11 price range is projected at $16.75 to $17.25 per cwt, up 50 cents on each end of the range from a month ago. The NASS February full-month combined medium- and short-grain rice price is up 60 cents from the February preliminary price. In addition, an unexpectedly large jump in the preliminary March farm price reported by NASS in Agricultural Prices at $20.30 per cwt is up 15 percent from the February full-month price. These two factors are largely responsible for the upward revision. The long-grain price range is projected at $11.05 to $11.55 per cwt, unchanged from last month. The rice by-class prices indicate an all rice season-average farm price for 2010/11 at $12.35 to $12.85 per cwt, up 10 cents per cwt on both ends of the range from a month ago.
Global 2010/11 rice production, imports and ending stocks are lowered from last month, while consumption is raised slightly. World rice production is reduced 0.8 million tons to 450.7 million based mostly on decreases for Indonesia, Iran, Laos, North Korea and Sri Lanka, which is partially offset by increases for Brazil and Colombia. Global imports for 2010/11 are lowered 0.8 million tons to 29.2 million due mostly to reductions for Malaysia, Madagascar, the Philippines and Thailand, which is partially offset by increases for some Sub-Saharan Africa markets. Additionally, global exports are lowered from last month owing to expected declines in shipments from mostly South American markets including Argentina, Peru and Uruguay. Global consumption is increased slightly based mostly on increases to a number of Sub-Saharan Africa markets. Global ending stocks are projected at 97.1 million tons, down 1.7 million from last month, but an increase of 3.3 million from 2009/10, and the largest stocks since 2002/03. The largest reductions in ending stocks occurred in Indonesia, the Philippines, and Thailand, which are partially offset by an increase for Brazil.
Oilseeds
US soybean exports for 2010/11 are projected down 10 million bushels from last month. The slower-than-expected shipment pace through March combined with increased export competition resulting from larger crops for Brazil and Paraguay leave US exports projected at 1.58 billion bushels. Although there are no changes in the US soybean meal supply and demand projections, the soybean crush is reduced 5.0 million bushels to 1.65 billion due to an increase in the meal extraction rate. Seed use is reduced to reflect plantings for 2011 reported in the 31 March Prospective Plantings report. Residual use is raised based on indications from the 31 March Grain Stocks report. US soybean ending stocks remain unchanged at 140 million bushels.
The US season-average soybean price range is projected at $11.25 to $11.75 per bushel, up 15 cents on the bottom and down 35 cents on the top of the range. Soybean meal prices are forecast at $340 to $360 per short ton, down $10 on the top of the range. The soybean oil price is projected at 53 to 55 cents per pound, up 1.5 cents on the bottom and down 0.5 cents on the top of the range.
Global oilseed production for 2010/11 is projected at 447 million tons, up 2.8 million tons from last month. Higher soybean, sunflowerseed and rapeseed production more than offsets lower cottonseed production. Global soybean production is increased 2.6 million tons to 261 million. Soybean production for Brazil is projected at a record 72.0 million tons, up two million from last month as ample moisture and favourable late-season weather in the southern states improved yield prospects. Soybean production for Paraguay is projected at 8.1 million tons, up 0.6 million, also based on higher yields. Global rapeseed production is raised 0.2 million tons to 58.6 million due to increased output in Russia. Global sunflowerseed production is projected higher as increased production in Argentina and Turkey more than offset reductions for India and Russia. Other changes include reduced cottonseed production for Pakistan and Turkey, and higher cottonseed production for Brazil. Malaysia palm oil production is reduced 0.5 million tons to 17.5 million due to lower-than-expected yields.
Global oilseed supplies and ending stocks for 2010/11 are projected higher this month while crush is reduced. Lower soybean crush, led by Argentina and China, is only partly offset by increased rapeseed crush, with the largest gains in Mexico, Pakistan, and United Arab Emirates. Global oilseed stocks are raised 2.5 million tons, with the largest gains for soybeans in Brazil and Argentina.
Livestock, Poultry and Dairy
The forecast for 2011 red meat and poultry production is virtually unchanged from last month as small increases in beef and pork production are largely offset by a slightly reduced forecast of broiler and turkey production. Beef production is forecast higher as higher cow and bull slaughter more than offsets slightly lower steer and heifer slaughter. Pork is forecast higher on slightly larger slaughter and higher-than-expected first quarter weights. Broiler and turkey production forecasts are reduced on moderating weight gains. The egg production forecast is reduced slightly as higher feed costs squeeze returns.
The forecast for beef exports for 2011 is raised from last month as the relatively weak dollar and economic growth in a number of countries support export growth. Conversely, the weakness in the US dollar and economic growth in other major importing countries will limit US beef imports. Thus, the forecast for beef imports is reduced from last month. The pork export forecast is unchanged from last month but imports are forecast slightly lower. Broiler exports are forecast lower on weaker expected demand.
Prices for livestock and poultry are raised from last month. Meat supplies remain tight and improving domestic demand and strength in red meat exports are supporting prices for livestock and poultry. Egg prices are forecast higher on the anticipated smaller production increase.
The milk production forecast for 2011 is reduced slightly from last month. Relatively high milk prices are being offset by high feed costs and only slight growth is expected in the herd for the remainder of the year. Fat-basis imports are lowered from last month but skim-solids imports are forecast higher. Both skim and fat-basis exports are raised largely on the strength of first-quarter butter, cheese and non-fat dry milk (NDM) sales.
Butter and cheese prices are forecast lower this month, reflecting recent price declines but NDM and whey price forecasts are raised. The Class III price forecast is lowered as the weaker cheese price more than offsets higher whey prices. The Class IV price forecast is raised as higher NDM prices more than offset the lower forecast butter price. The all-milk price is forecast to average $18.15 to $18.65 per cwt for 2011.
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Wednesday, April 13, 2011
New Agreement Eases China–Brazil Beef, Poultry Trade
CHINA & BRAZIL - The Presidents of the two countries have hailed a new strategic partnership as key deals and agreements have been signed on products including chicken, beef and bovine embryos and semen.
China pledged to diversify its trade with Brazil and boost imports from South America's biggest economy, as Brazilian President Dilma Rousseff began her debut presidential trip outside Latin America yesterday (12 April), according to official sources.
President Hu Jintao and Rousseff signed a joint communique, which included China's pledge to diversify trade, after talks at the Great Hall of the People. Both President Hu and President Rousseff praised the strategic partnership of the two countries.
Both countries agreed to promote the registration of Brazil's poultry and beef companies and vowed to quicken procedures to add new products onto their import and export lists.
The products include gelatin, corn, tobacco leaf, bovine embryos and semen and fruit from Brazil as well as fruit from China.
The two countries also called for the Doha trade talks to produce comprehensive and balanced results that address the concerns of the world's least developed countries, Xinhua said.
The Doha talks have stalled repeatedly since their start. Some countries earlier identified 2011 as a 'window of opportunity' and a chance to secure an agreement.
China and Brazil agreed to work more closely on reforming international financial and monetary systems under the G20 framework, the communique said.
Under the communique, both countries called for increased supervision to avoid new crises while working toward global economic recovery.
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Monday, April 18, 2011
Japan’s Compound Feed and Livestock Production
JAPAN - Since the earthquake and subsequent tsunami struck Japan on 11 March, surrounding Japanese feed millers have stepped up to fulfill the demand in the affected area, the US Grains Council’s Tokyo office reports.
“With the flow of compound feed from outside areas, combined with feed produced in some of the mills in the Tohoku area which were capable of working, livestock farms in the Tohoku area could get roughly half of its normal demand during the month since the earthquake,” said Hiroko Sakashita, USGC associate director in Japan.
While livestock in the Tohoku area are on a significantly reduced feed ration, a livestock expert informed the Council that animals will survive but will experience some growth reductions. Once feed supplies recommence, producers will resume normal feed rations for production and shipment and animals will mature.
“We have not heard devastating reports in regards to animal losses at large cattle, swine and chicken farms,” reported Ms Sakashita. “The livestock population in the whole country was not significantly impacted. Therefore there will be no significant reductions in feed demand.”
This takes into consideration the livestock operations that were forced to evacuate due to their proximity of the Fukushima nuclear power plant.
“The animal population within a 20 kilometer (13 mile) radius of the power plant was not significant to the total Tohoku area,” she said.
Transportation costs and power outages remain a concern for feed millers in the mid to long term. Ports are recovering but it is not clear when a Panamax-size vessel will be accepted into the affected area.
Japanese feed manufacturers submitted a letter of request to the Ministry of Land, Infrastructure, Transport and Tourism, which administers the ports, in an effort to secure a stable supply of compound feed and feed ingredients. The appeal included radioactivity declaration of safety of those ports and early accessibility recovery for Panamax-size vessels.
For mills in Kashima, which account for 15 per cent of Japan’s total compound feed production, some have recovered in volume of production and shipment to the level of before the earthquake, with reduced variety of compound. As a whole, all feed mills in Kashima expect to resume full production in the latter part of April or beginning of May.
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Thursday, April 21, 2011
NDRC Expects Food Prices to Stabilise
CHINA - China's consumer prices are likely to remain high in the second quarter of this year, but food prices, the main driver of the country's inflation, are predicted to stabilize, a senior official from the National Development and Reform Commission (NDRC) said on Wednesday.
Soaring prices for commodities in the international markets, including crude oil, iron ore, and grains, may continue to fuel the nation's inflation in the second quarter, said Zhou Wangjun, deputy head of the pricing department of the NDRC, the country's top economic planner.
"Food prices tended to be stable and some even declined in March, signaling the government's measures to rein in prices have taken effect," Mr Zhou said.
The nation's consumer price index (CPI), the main gauge of inflation, climbed to a 32-month high of 5.4 per cent in March, according to data from the National Bureau of Statistics (NBS).
Food prices, which account for about 30 per cent of the CPI basket, increased by 11 per cent in March from a year earlier, the same amount as the year-on-year rise in the first two months of this year, indicating a stabilizing trend, the NBS said.
The Chinese government has made stabilizing prices a key task in the first year of the 12th Five-Year Plan (2011-2015). The authorities have stepped up efforts to postpone price rises of utilities, increased support for grain producers and took administrative measures to control prices.
In March, vegetable prices fell by 6.2 per cent, egg prices by 7 per cent, and the price of aquatic products by 2.3 per cent, compared with a year ago, according to Zhou.
He said that industrial products in China are oversupplied, and food supply can "completely" satisfy consumers' demand. "The Chinese government has the ability to curb inflation," Mr Zhou said.
Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology (MIIT), said on Wednesday that other than food prices, surging international raw-material prices are adding to the pressure of imported inflation in China, and this has been boosted by the quantitative easing policy in some major developed economies.
A report from the Chinese Academy of Social Sciences (CASS) said on Monday that the country's total grain output may increase to 550 million tons this year, from 546.41 million tons in 2010.
The output of oil seeds may increase by 2 per cent to more than 33 million tons in 2011 from a year earlier, and the output of meat is likely to grow by 3.5 per cent to at least 82 million tons, helping to counter food price increases this year, the CASS report said.
According to an NBS survey of more than 70,000 rural households, the planting area for grain was predicted to be 110.28 million hectares, 400,000 hectares more than that in 2010, the bureau said.
In the first three months of this year, the total output of pork, beef, mutton and poultry increased by 1.8 per cent year-on-year to 21.42 million tons, according to the data from the NBS released on 15 April.
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Friday, May 06, 2011Print This Page
Feed Additive Market Estimated at $19 Billion in 2016
GLOBAL - The worldwide animal feed additives market is estimated to reach US$18.7 billion in 2016, according to a new market report.
The report, Global Animal Feed Additives by Type, Livestock, Geography, Regulations Trends & Forecasts (2009-2016) from MarketsandMarkets (M&M) defines and segments the global animal feed additives market with analysis and forecasting of the global revenues for feed additives. It also identifies driving and restraining factors for the global feed additives market with analysis of trends, opportunities, and challenges.
The market is segmented and revenues are forecasted on the basis of major geographies such as North America, Europe, Asia, and Rest of the World (ROW).
Further market is segmented and revenues are forecasted on the basis of products such as antibiotics, amino acids, feed acidifiers, antioxidants.
The global feed additives industry has been in a higher growth trajectory from the last four years, according to the report. This growth is largely fuelled by the increasing meat consumption and rising concerns over meat quality and safety. Some of the major drivers of the global feed additives industry identified in this report are rise in global meat consumption, increasing awareness towards meat quality and safety, increasing mass production of meat, and recent livestock disease outbreaks. Major restraints identified in this report are regulatory structure and intervention, and rising raw material cost. Growth is particularly high in emerging countries such as China, India and Brazil due to increasing income levels and rising per capita meat consumption.
The report estimates the global feed additives market will reach $18.7 billion in 2016 with an expected CAGR of 3.8 per cent from 2011 to 2016. The Asian market is driving the sales and is expected to hold 28.5 per cent of the global market share in 2016. The Asian market is expected to have a high CAGR of 4.74 per cent due to increasing demand for meat products in the region, and rising domestic meat production. Europe is the leading market for feed additives, with 35 per cent share in 2011 resulting from higher regulatory concerns over meat quality and safety, and increasing per capita meat consumption. North America is the second largest market, with a share of 28.5 per cent in 2011; the US is the largest market with a share of more than 80 per cent.
Antibiotics is the leading demand generating product with a share of more than 27 per cent in 2011, followed by amino acid – 26.5 per cent share in the global feed additives market. The consumption of antibiotics is high due to increasing demand in Asian and Latin American regions to meet the high domestic and export demand for meat.
Scope of the report
This research report categorizes the global market for animal feed additives on the basis of product types, livestock, and geography; forecasting revenues, and analyzing trends in each of the following sub-markets:
on the basis of product types: antibiotics, feed acidifiers, amino acids, enzymes and vitamins
on the basis of materials: pork, sea food, cattle and poultry
on the basis of geography: North America (US and Canada), Europe (German, UK, France and Russia), Asia (China, India and Japan), and ROW (Brazil and Argentina)
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Wednesday, May 11, 2011
Agricultural Trade Reaches An All-Time High
GENERAL - Over the past year, agricultural trade has reached an all-time high, at least 12 per cent above the previous record set in 2008. The impact of the economic crisis led to a contraction of six per cent in 2009 but global agricultural exports rebounded by over 19 per cent last year.
The EU as well as the other top exporters all benefited from buoyant markets. Following the slump in 2009, the EU, the US and Brazil bounced back with over 20 per cent growth in exports, to reach record levels in 2010.
For the past three years, the EU and the US have been roughly neck and neck as the world's leading agri-food exporters.
In 2010 US exports reached an all-time high of €92 billion, just ahead of the EU's record €91 billion exports.
The EU remains by far the world's biggest importer with imports worth €83 billion in 2008-10, well ahead of the US. EU imports grew by nine per cent in 2010 though they remain five per cent below the peak of 2008.
US imports grew strongly by 17 per cent in 2010. China's meteoric growth in imports, surging by 47 per cent in 2010, means that it surpasses Japan as the third largest importer.
The EU's trade balance improved to the extent that it turned into a net exporter in 2010, for the first time since 2006. The €6 billion agricultural trade surplus is largely due to expansion in the value of exports, driven by stronger demand for final products, as the EU's trading partners came out of recession and higher prices for commodities and intermediate goods. Exchange rate fluctuations may also have contributed, given the weakening of the Euro against a number of major currencies in 2010.
The EU remains the biggest importer of agricultural products from developing countries, importing €59 billion worth of goods in 2008-10. This is far ahead of the US, Japan, Canada, Australia and New Zealand put together, whose combined imports from developing countries reached just €49 billion over this period.
The US reached a record agricultural trade surplus of €27 billion with the value of exports up by 24 per cent to an all time high. Brazil also saw record exports and growth of 23 per cent despite the strengthening of the Real against the US$, potentially damaging its competitiveness on global markets.
The recovery of the markets of some major importers is witnessed by the sharp growth in imports; Russia's imports rebounded by 26 per cent, despite continued market access restrictions for poultrymeat while China's imports surged by 47 per cent.
The prosperity of overseas markets is a key factor in determining opportunities for EU businesses. Trade growth now appears to be back on track after the exceptional decreases in 2009.
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World Agricultural Supply and Demand Estimates – June 2011
With many important crop-growing regions affected by flooding or drought, the projections are 'highly tentative', according to the latest USDA World Agricultural Supply and Demand Estimates.
Note: Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative. National Agricultural Statistics Service (NASS) forecasts are used for US winter wheat area, yield and production. For other US crops, methods used to project planted acreage, harvested acreage and yield are noted on each table.
Livestock, Poultry and Dairy
The forecast for 2011 total meat production is raised from last month, reflecting higher beef production. Large cattle placements and larger cow slaughter, due in part to drought in the Southern Plains, is reflected in an increase in the beef production forecast. However, forecasts for pork and poultry are reduced from last month as higher forecast grain prices are expected to trim hog weight gains and put additional pressure on broiler producers. USDA’s Quarterly Hogs and Pigs report to be released on 24 June will provide an indication of producer farrowing intentions for the remainder of the year. For 2012, meat production forecasts are reduced as higher forecast feed costs pressure hog weights and slow the expected recovery of the poultry sector. Higher feed prices are expected to slow feedlot placements as producers keep cattle on forage longer. The egg production forecast for 2011 is raised on stronger second half production but the forecast for 2012 is reduced on higher feed prices and less demand for hatching eggs.
Export forecasts for red meat and poultry are raised from last month. Beef exports for 2011 are forecast higher on strength in a number of markets and expected improvements in exports to Mexico. Pork, broiler, and turkey exports were larger than expected in the first quarter and the forecasts for the remainder of 2011 are raised. Beef and turkey exports are raised for 2012, but no changes are made to pork or broiler exports.
Cattle and broiler prices for 2011 are lowered from last month on weaker-than-expected demand but hog prices are unchanged. Broiler prices are lowered for 2012.
The milk production forecast for 2011 is raised. Producers are expected to continue to expand herds through the middle of the year and although herds may begin to decline toward the end of the year, cow numbers are expected to be above 2010. However, higher feed costs will impact profitability and the dairy cow inventory is expected to decline in 2012. Tighter feed supplies will also likely impact the rate of increase of milk per cow. As a result, the milk production forecast for 2012 is reduced from last month. Commercial exports are forecast higher for 2011 largely due to stronger expected cheese exports. However, imports of cheese and milk proteins have been stronger than expected and the import forecast for both 2011 and 2012 is raised.
Dairy product price forecasts are raised from last month. Butter supplies are tight and demand for cheese, non-fat dry milk (NDM) and whey are expected to support product prices. Class III and Class IV price forecasts are raised from last month in line with the increased product prices. The all milk price is forecast at $19.65 to $20.05 per cwt for 2011. Price forecasts for 2012 are also raised as the smaller production increase is expected to support higher product and Class prices. The all-milk price is forecast at $17.75 to $18.05 per cwt for 2012.
Wheat
US wheat supplies for 2011/12 are lowered this month as reduced carry-in more than offsets an increase in expected production. Beginning stocks are lowered 30 million bushels with a 10-million-bushel reduction in imports and a 20-million-bushel increase in exports for 2010/11, both based on the pace of shipments to date. All wheat production for 2011/12 is forecast at 2,058 million bushels, 15 million higher than last month. The winter wheat production forecast is raised 26 million bushels with higher forecast yields for Hard Red Winter, Soft Red Winter, and Soft White Winter wheat. Partly offsetting is a projected 11-million-bushel reduction for durum and other spring wheat production as seedings are projected 290,000 acres lower. Flooding and persistent wet soils have delayed planting in North Dakota and Montana well beyond the normal planting window.
US wheat usage for 2011/12 is unchanged. Ending stocks are projected 15 million bushels lower at 687 million bushels but remain above the 10-year average. The 2011/12 season-average farm price for all wheat is projected at a record $7.00 to $8.40 per bushel, up 20 cents on both ends of the range, reflecting both tighter domestic supplies and higher expected corn prices. The forecast 2010/11 wheat farm price is also raised this month, up five cents per bushel to $5.70 per bushel.
Global wheat supplies for 2011/12 are projected slightly lower this month as an increase in beginning stocks is more than offset by lower production. Global beginning stocks are projected 4.9 million tons higher mostly reflecting increased stocks in Russia as feeding is reduced 2.0 million tons and 3.0 million tons, respectively, for 2009/10 and 2010/11. Beginning stocks for 2011/12 are also raised 0.5 million tons each for Argentina and Canada with the same size reductions in 2010/11 exports for each country. Partly offsetting is a 1.5-million-ton decrease for 2011/12 beginning stocks for Australia with higher 2010/11 exports.
World wheat production is projected 5.2 million tons lower for 2011/12. At 664.3 million tons, production would be the third highest on record and up 16.1 million from 2010/11. This month’s reduction for 2011/12 mostly reflects a 7.1-million-ton decrease for EU-27 wheat output. Persistent dryness, particularly in France but also in Germany, the United Kingdom and western Poland, has reduced yield prospects for EU-27. Production is also reduced 1.0 million tons for Canada as flooding and excessive rainfall, particularly in southeastern Saskatchewan and adjoining areas of Manitoba, are expected to reduce spring wheat seeding. Production is increased 1.5 million tons for Argentina and 0.5 million tons for Australia, both reflecting favourable planting conditions and strong producer price incentives to expand area. Production is also raised 0.5 million tons for Pakistan as increased use of higher quality seed and adequate water supplies resulted in higher-than-expected yields.
Global wheat trade for 2011/12 is projected slightly higher reflecting a 0.5-million-ton increase in expected imports by EU-27. Exports are lowered 3.0 million tons for EU-27. Export increases of 2.0 million tons and 1.0 million tons, respectively, for Australia and Argentina offset the EU-27 reduction. Exports are raised 0.3 million tons for Pakistan with the larger crop. Global wheat consumption is projected down 3.3 million tons, mostly reflecting a 2.5-million-ton reduction in EU-27 domestic use. Wheat feeding is lowered 0.5 million tons for Canada. Global ending stocks for 2011/12 are projected 3.0 million tons higher as decreased wheat feeding in earlier years raise projected stocks in Russia, more than offsetting declines in Australia and EU-27.
Coarse Grains
Projected US feed grain supplies for 2011/12 are sharply lower with reduced prospects for corn acreage. Corn planted area for 2011/12 is lowered 1.5 million acres from March intentions to 90.7 million acres. Planting delays through early June in the eastern Corn Belt and northern Plains are expected to reduce planted area, more than offsetting likely gains in the western Corn Belt and central Plains where planting was ahead of normal by mid-May. Harvested area is lowered 1.9 million acres, to 83.2 million with the additional 400,000-acre reduction reflecting early information about May flooding in the lower Ohio and Mississippi River valleys and June flooding along the Missouri River valley. Production is projected at 13.2 billion bushels, down 305 million from last month, but still a record, and up 753 million from 2010/11.
US feed grain usage changes for 2011/12 include a 100-million-bushel projected decline in corn feed and residual use and a five-million-bushel increase in sorghum exports. Feed grain ending stocks are sharply lower with expected corn ending stocks down 205 million bushels to 695 million. Corn ending stocks are projected 35 million bushels lower than beginning stocks indicating a stocks-to-use ratio of 5.2 percent compared with the 2010/11 forecast ratio of 5.4 percent. The 2011/12 season-average farm price for corn is projected at a record $6.00 to $7.00 per bushel, up 50 cents on both ends of the range. Projected farm prices are also raised for the other feed grains.
Global coarse grain supplies for 2011/12 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced US corn production, lower EU-27 barley production and reduced corn beginning stocks in China, more than offset increases in China corn production. EU-27 barley production is lowered 2.2 million tons as prolonged dryness across western and northern Europe has sharply reduced yield prospects in the major producing countries. China corn area is raised for 2010/11 in line with the most recent official government area estimates with the year-to-year percentage increase for 2011/12 largely maintained.
China corn production increases 5.0 million and 6.0 million tons, respectively, for 2010/11 and 2011/12 with yields unchanged month-to-month. More than offsetting the higher production levels is higher estimated corn consumption for both feeding and industrial use. China corn consumption is raised 8.0 million tons and 13.0 million tons, respectively, for 2010/11 and 2011/12. Together these changes leave projected 2011/12 corn ending stocks down 12.0 million tons for China. At the projected 51.0 million tons, China’s stocks would be down 2.7 million tons from 2010/11 and just below the levels of the preceding two years, better reflecting the continuing rise in domestic corn prices as production struggles to keep pace with rising usage. Although China’s stocks represent 46 percent of the world total for 2011/12, China is not expected to be a significant exporter.
Global 2011/12 corn trade is raised slightly this month with higher imports for EU-27 and higher exports for Ukraine. Ukraine exports are raised 1.0 million tons with higher production and stronger expected demand from EU-27. Russia exports are lowered 0.5 million tons with lower production. Other important trade changes this month include a 0.2-million-ton increase in sorghum imports by Mexico, driving the US export increase, and a 1.5-million-ton reduction in EU-27 barley exports with lower production and tighter supplies. Barley imports are lowered for Saudi Arabia and China. Global corn ending stocks for 2011/12 are projected down sharply this month, falling 17.3 million tons mostly reflecting the usage revisions in China. The projected 5.2-million-ton drop in US ending stocks accounts for most of the rest of the decline. Global corn stocks are projected at 111.9 million tons, the lowest since 2006/07.
Oilseeds
This month’s US oilseed supply and use projections for 2011/12 include higher beginning and ending stocks and reduced exports. Although adverse weather has slowed soybean planting progress this year, area and production estimates are unchanged with several weeks remaining in the planting season. Higher beginning stocks reflect a lower export projection for 2010/11. Soybean exports for 2010/11 are reduced 10 million bushels to 1.54 billion bushels reflecting the export pace to date for the marketing year and reduced global import demand, led mainly by lower projected imports for China. Soybean ending stocks for 2010/11 are projected at 180 million bushels, up 10 million. US soybean exports for 2011/12 are reduced 20 million bushels to 1.52 billion, reflecting increased competition from South America resulting from an increase in the recently harvested Brazilian soybean crop. With larger supplies and reduced exports, ending stocks for 2011/12 are increased 30 million bushels to 190 million. Other changes for 2010/11 include reduced soybean oil used for biodiesel production, reduced projected food use of soybean oil, and lower soybean oil exports, all resulting in increased ending stocks for 2010/11 and 2011/12.
Soybean, meal and oil prices are all raised this month. Led by higher corn prices, the US season-average soybean price for 2011/12 is projected at $13.00 to $15.00 per bushel, up $1.00 on both ends of the range. Soybean meal prices for 2011/12 are projected at $375 to $405 per short ton, up $25 on both ends of the range. Soybean oil prices are projected at 58 to 62 cents per pound, up two cents on both ends of the range.
Global oilseed production for 2011/12 is projected at 456.9 million tons, down 2.3 million from last month, mainly due to lower rapeseed production. EU-27 rapeseed production is reduced 1.2 million tons to 18.8 million mainly due to lower yields resulting from dry conditions in April and May in major producing areas of France and Germany. Rapeseed production for Canada is lowered 0.5 million tons to 13.0 million due to reduced area planted resulting from excessive moisture this spring. China soybean production is reduced 0.5 million tons to 14.3 million reflecting lower area as producers shifted to corn. Other changes include increased sunflower seed production for Russia and reduced cottonseed production for Australia, Pakistan and the United States. Brazil’s 2010/11 soybean production is increased 1.5 million tons to a record 74.5 million, reflecting yield and production increases reported in the most recent government survey.
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World Agricultural Supply and Demand Estimates – June 2011
With many important crop-growing regions affected by flooding or drought, the projections are 'highly tentative', according to the latest USDA World Agricultural Supply and Demand Estimates.
Note: Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative. National Agricultural Statistics Service (NASS) forecasts are used for US winter wheat area, yield and production. For other US crops, methods used to project planted acreage, harvested acreage and yield are noted on each table.
Livestock, Poultry and Dairy
The forecast for 2011 total meat production is raised from last month, reflecting higher beef production. Large cattle placements and larger cow slaughter, due in part to drought in the Southern Plains, is reflected in an increase in the beef production forecast. However, forecasts for pork and poultry are reduced from last month as higher forecast grain prices are expected to trim hog weight gains and put additional pressure on broiler producers. USDA’s Quarterly Hogs and Pigs report to be released on 24 June will provide an indication of producer farrowing intentions for the remainder of the year. For 2012, meat production forecasts are reduced as higher forecast feed costs pressure hog weights and slow the expected recovery of the poultry sector. Higher feed prices are expected to slow feedlot placements as producers keep cattle on forage longer. The egg production forecast for 2011 is raised on stronger second half production but the forecast for 2012 is reduced on higher feed prices and less demand for hatching eggs.
Export forecasts for red meat and poultry are raised from last month. Beef exports for 2011 are forecast higher on strength in a number of markets and expected improvements in exports to Mexico. Pork, broiler, and turkey exports were larger than expected in the first quarter and the forecasts for the remainder of 2011 are raised. Beef and turkey exports are raised for 2012, but no changes are made to pork or broiler exports.
Cattle and broiler prices for 2011 are lowered from last month on weaker-than-expected demand but hog prices are unchanged. Broiler prices are lowered for 2012.
The milk production forecast for 2011 is raised. Producers are expected to continue to expand herds through the middle of the year and although herds may begin to decline toward the end of the year, cow numbers are expected to be above 2010. However, higher feed costs will impact profitability and the dairy cow inventory is expected to decline in 2012. Tighter feed supplies will also likely impact the rate of increase of milk per cow. As a result, the milk production forecast for 2012 is reduced from last month. Commercial exports are forecast higher for 2011 largely due to stronger expected cheese exports. However, imports of cheese and milk proteins have been stronger than expected and the import forecast for both 2011 and 2012 is raised.
Dairy product price forecasts are raised from last month. Butter supplies are tight and demand for cheese, non-fat dry milk (NDM) and whey are expected to support product prices. Class III and Class IV price forecasts are raised from last month in line with the increased product prices. The all milk price is forecast at $19.65 to $20.05 per cwt for 2011. Price forecasts for 2012 are also raised as the smaller production increase is expected to support higher product and Class prices. The all-milk price is forecast at $17.75 to $18.05 per cwt for 2012.
Wheat
US wheat supplies for 2011/12 are lowered this month as reduced carry-in more than offsets an increase in expected production. Beginning stocks are lowered 30 million bushels with a 10-million-bushel reduction in imports and a 20-million-bushel increase in exports for 2010/11, both based on the pace of shipments to date. All wheat production for 2011/12 is forecast at 2,058 million bushels, 15 million higher than last month. The winter wheat production forecast is raised 26 million bushels with higher forecast yields for Hard Red Winter, Soft Red Winter, and Soft White Winter wheat. Partly offsetting is a projected 11-million-bushel reduction for durum and other spring wheat production as seedings are projected 290,000 acres lower. Flooding and persistent wet soils have delayed planting in North Dakota and Montana well beyond the normal planting window.
US wheat usage for 2011/12 is unchanged. Ending stocks are projected 15 million bushels lower at 687 million bushels but remain above the 10-year average. The 2011/12 season-average farm price for all wheat is projected at a record $7.00 to $8.40 per bushel, up 20 cents on both ends of the range, reflecting both tighter domestic supplies and higher expected corn prices. The forecast 2010/11 wheat farm price is also raised this month, up five cents per bushel to $5.70 per bushel.
Global wheat supplies for 2011/12 are projected slightly lower this month as an increase in beginning stocks is more than offset by lower production. Global beginning stocks are projected 4.9 million tons higher mostly reflecting increased stocks in Russia as feeding is reduced 2.0 million tons and 3.0 million tons, respectively, for 2009/10 and 2010/11. Beginning stocks for 2011/12 are also raised 0.5 million tons each for Argentina and Canada with the same size reductions in 2010/11 exports for each country. Partly offsetting is a 1.5-million-ton decrease for 2011/12 beginning stocks for Australia with higher 2010/11 exports.
World wheat production is projected 5.2 million tons lower for 2011/12. At 664.3 million tons, production would be the third highest on record and up 16.1 million from 2010/11. This month’s reduction for 2011/12 mostly reflects a 7.1-million-ton decrease for EU-27 wheat output. Persistent dryness, particularly in France but also in Germany, the United Kingdom and western Poland, has reduced yield prospects for EU-27. Production is also reduced 1.0 million tons for Canada as flooding and excessive rainfall, particularly in southeastern Saskatchewan and adjoining areas of Manitoba, are expected to reduce spring wheat seeding. Production is increased 1.5 million tons for Argentina and 0.5 million tons for Australia, both reflecting favourable planting conditions and strong producer price incentives to expand area. Production is also raised 0.5 million tons for Pakistan as increased use of higher quality seed and adequate water supplies resulted in higher-than-expected yields.
Global wheat trade for 2011/12 is projected slightly higher reflecting a 0.5-million-ton increase in expected imports by EU-27. Exports are lowered 3.0 million tons for EU-27. Export increases of 2.0 million tons and 1.0 million tons, respectively, for Australia and Argentina offset the EU-27 reduction. Exports are raised 0.3 million tons for Pakistan with the larger crop. Global wheat consumption is projected down 3.3 million tons, mostly reflecting a 2.5-million-ton reduction in EU-27 domestic use. Wheat feeding is lowered 0.5 million tons for Canada. Global ending stocks for 2011/12 are projected 3.0 million tons higher as decreased wheat feeding in earlier years raise projected stocks in Russia, more than offsetting declines in Australia and EU-27.
Coarse Grains
Projected US feed grain supplies for 2011/12 are sharply lower with reduced prospects for corn acreage. Corn planted area for 2011/12 is lowered 1.5 million acres from March intentions to 90.7 million acres. Planting delays through early June in the eastern Corn Belt and northern Plains are expected to reduce planted area, more than offsetting likely gains in the western Corn Belt and central Plains where planting was ahead of normal by mid-May. Harvested area is lowered 1.9 million acres, to 83.2 million with the additional 400,000-acre reduction reflecting early information about May flooding in the lower Ohio and Mississippi River valleys and June flooding along the Missouri River valley. Production is projected at 13.2 billion bushels, down 305 million from last month, but still a record, and up 753 million from 2010/11.
US feed grain usage changes for 2011/12 include a 100-million-bushel projected decline in corn feed and residual use and a five-million-bushel increase in sorghum exports. Feed grain ending stocks are sharply lower with expected corn ending stocks down 205 million bushels to 695 million. Corn ending stocks are projected 35 million bushels lower than beginning stocks indicating a stocks-to-use ratio of 5.2 percent compared with the 2010/11 forecast ratio of 5.4 percent. The 2011/12 season-average farm price for corn is projected at a record $6.00 to $7.00 per bushel, up 50 cents on both ends of the range. Projected farm prices are also raised for the other feed grains.
Global coarse grain supplies for 2011/12 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced US corn production, lower EU-27 barley production and reduced corn beginning stocks in China, more than offset increases in China corn production. EU-27 barley production is lowered 2.2 million tons as prolonged dryness across western and northern Europe has sharply reduced yield prospects in the major producing countries. China corn area is raised for 2010/11 in line with the most recent official government area estimates with the year-to-year percentage increase for 2011/12 largely maintained.
China corn production increases 5.0 million and 6.0 million tons, respectively, for 2010/11 and 2011/12 with yields unchanged month-to-month. More than offsetting the higher production levels is higher estimated corn consumption for both feeding and industrial use. China corn consumption is raised 8.0 million tons and 13.0 million tons, respectively, for 2010/11 and 2011/12. Together these changes leave projected 2011/12 corn ending stocks down 12.0 million tons for China. At the projected 51.0 million tons, China’s stocks would be down 2.7 million tons from 2010/11 and just below the levels of the preceding two years, better reflecting the continuing rise in domestic corn prices as production struggles to keep pace with rising usage. Although China’s stocks represent 46 percent of the world total for 2011/12, China is not expected to be a significant exporter.
Global 2011/12 corn trade is raised slightly this month with higher imports for EU-27 and higher exports for Ukraine. Ukraine exports are raised 1.0 million tons with higher production and stronger expected demand from EU-27. Russia exports are lowered 0.5 million tons with lower production. Other important trade changes this month include a 0.2-million-ton increase in sorghum imports by Mexico, driving the US export increase, and a 1.5-million-ton reduction in EU-27 barley exports with lower production and tighter supplies. Barley imports are lowered for Saudi Arabia and China. Global corn ending stocks for 2011/12 are projected down sharply this month, falling 17.3 million tons mostly reflecting the usage revisions in China. The projected 5.2-million-ton drop in US ending stocks accounts for most of the rest of the decline. Global corn stocks are projected at 111.9 million tons, the lowest since 2006/07.
Oilseeds
This month’s US oilseed supply and use projections for 2011/12 include higher beginning and ending stocks and reduced exports. Although adverse weather has slowed soybean planting progress this year, area and production estimates are unchanged with several weeks remaining in the planting season. Higher beginning stocks reflect a lower export projection for 2010/11. Soybean exports for 2010/11 are reduced 10 million bushels to 1.54 billion bushels reflecting the export pace to date for the marketing year and reduced global import demand, led mainly by lower projected imports for China. Soybean ending stocks for 2010/11 are projected at 180 million bushels, up 10 million. US soybean exports for 2011/12 are reduced 20 million bushels to 1.52 billion, reflecting increased competition from South America resulting from an increase in the recently harvested Brazilian soybean crop. With larger supplies and reduced exports, ending stocks for 2011/12 are increased 30 million bushels to 190 million. Other changes for 2010/11 include reduced soybean oil used for biodiesel production, reduced projected food use of soybean oil, and lower soybean oil exports, all resulting in increased ending stocks for 2010/11 and 2011/12.
Soybean, meal and oil prices are all raised this month. Led by higher corn prices, the US season-average soybean price for 2011/12 is projected at $13.00 to $15.00 per bushel, up $1.00 on both ends of the range. Soybean meal prices for 2011/12 are projected at $375 to $405 per short ton, up $25 on both ends of the range. Soybean oil prices are projected at 58 to 62 cents per pound, up two cents on both ends of the range.
Global oilseed production for 2011/12 is projected at 456.9 million tons, down 2.3 million from last month, mainly due to lower rapeseed production. EU-27 rapeseed production is reduced 1.2 million tons to 18.8 million mainly due to lower yields resulting from dry conditions in April and May in major producing areas of France and Germany. Rapeseed production for Canada is lowered 0.5 million tons to 13.0 million due to reduced area planted resulting from excessive moisture this spring. China soybean production is reduced 0.5 million tons to 14.3 million reflecting lower area as producers shifted to corn. Other changes include increased sunflower seed production for Russia and reduced cottonseed production for Australia, Pakistan and the United States. Brazil’s 2010/11 soybean production is increased 1.5 million tons to a record 74.5 million, reflecting yield and production increases reported in the most recent government survey.
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Meat Can be Produced Without Animals
If we are to produce sustainable and healthy food for the global population of nine billion people that is projected in 2050, then we must think along completely new lines.
Imagine this: With a clear conscience you sink your teeth into a juicy and tasty hamburger. No animal has been slaughtered to deliver the meat, no new forest felled to make way for animal feed, no bovine methane burps have affected the climate and no slurry has been released into the environment. The hamburger also has a satisfyingly low fat content and the fat consists only of fatty acids that are good for you.
Does this sound like something from Utopia’s kitchen? It does not need to be the case, according to senior scientist Niels Oksbjerg from the Department of Food Science at Aarhus University. He and his colleagues have the expertise to create muscle (meat) cells in the laboratory and are itching to develop the technique to make it possible to produce meat with the ultimate sustainability for the world’s growing population.
- If you have one embryonic stem cell from, for example, a calf, then you can produce an infinite number of new cells. Theoretically, you can produce meat for the whole world from one stem cell, says Niels Oksbjerg.
From research to red meat
Theory is one thing while practice is another. Before farming moves into the laboratory a lot of research and development must be carried out – but the senior scientist is not starting from scratch.
- For years we have grown muscle cells in the laboratory to be used as a model for muscle in various studies so we know that it is possible to get them to grow. One of the challenges lies in getting the cells to grow in more than one cell layer so we can produce a three-dimensional mass, says Niels Oksbjerg.
- If the cells grow in one layer, then we need approximately one square metre to produce 2.5 g of meat. We need to develop edible scaffolds that the muscle cells can grow on, says Niels Oksbjerg.
Stem cells for lab meat can come from either farm animal embryos (embryonic stem cells) or from farm animals after birth (adult muscle stem cells). Until now, the scientists have worked with cells from pigs, calves and chicks. The cells divide, find each other and form muscle fibres.
Designed meat
Embryonic stem cells can become all types of cells whereas the adult stem cells in muscle fibres can become muscle, fat, bone or connective tissue, depending on which conditions they are offered. It is also possible to grow muscle cells in combination with fat cells. In this way scientists can design meat so it has a taste and nutritional content that satisfies consumer demands.
To begin with, the laboratory product will not be able to replace traditional meat but can act as a healthy and sustainable supplement in pizza fillings, meatballs and sausages.
- It is not the ultimate solution to the world’s food problems but all efforts that contribute to the food supply for the nine billion people that are expected to live on this earth in 2050 are welcome, says Niels Oksbjerg.
His colleague at Aarhus University, research professor Jørgen E. Olesen from the Department of Agroecolgy and Environment, agrees.
- There are definitely promising perspectives in a meat production system that does not involve animals. The perspectives are in regard to animal welfare, climate and the environment. With regard to climate, several more things must be developed, though. Even stem cell production requires a supply of carbohydrates, proteins and minerals. They have to come from somewhere. There will also be waste materials that need to be managed. So, even with meat production based on stem cells there will be environmental and climate challenges that must be dealt with, says Jørgen E. Olesen.
May 2011
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Food Outlook – Global Market Analysis – June 2011
High feed prices and disease outbreaks in Asia limit global pig meat production prospects, according to the latest Food Outlook report from the UN Food and Agriculture Organization (FAO).
Meat and Meat Products Market Summary
High feed prices, disease outbreaks and depleted animal inventories are forecast to limit the expansion of global meat production to only one per cent in 2011, to 294 million tonnes. The increase is anticipated to be driven by gains in the poultry and pig meat sectors, while world bovine and ovine meat outputs are expected to be constrained by a retention of animals for herd rebuilding.
Strong demand for imports, especially in Asia where a number of countries are facing tight supplies and high domestic prices, is expected to foster a 2.4 per cent growth in world meat trade, bringing it to 26.8 million tonnes. Much of the expansion would stem from increased flows of pig meat, and to a lower extent, poultry and bovine meats. On the other hand, trade in ovine meat may stagnate, limited by short availabilities in traditional exporting countries.
Relatively high retail prices are foreseen to keep per capita meat consumption in 2011 stalling around 41.9kg. In the developing countries, steady economic growth may foster a minimal increase to 32.0kg, while per capita consumption in the developed countries is expected to remain at 78.4kg.
International meat prices have maintained steady increases since January 2011, progressing by five per cent over the first quarter, mainly sustained by a 10 per cent increase in pig meat prices. In the near term, the combination of strong world import demand and limited export availabilities points toward a further firming of world meat prices in the next few months.
World meat markets at a glance
2009 2010
est. 2011
f'cast Change 2011
over 2010
million tonnes %
WORLD BALANCE
Production 283.2 290.6 294.0 1.1
Bovine meat 64.9 64.9 65.0 0.2
Poultry meat 93.6 98.0 100.2 2.3
Pig meat 106.3 109.2 110.0 0.7
Ovine meat 12.9 13.0 13.1 0.5
Trade 25.2 26.2 26.8 2.4
Bovine meat 7.2 7.5 7.7 1.9
Poultry 11.1 11.5 11.7 1.6
Pig meat 5.8 6.1 6.4 5.0
Ovine meat 0.9 0.8 0.8 0.8
SUPPLY AND DEMAND INDICATORS
Per capita food consumption (kg/year):
World 41.3 41.9 41.9 0.1
Developed 78.0 78.4 78.4 0.0
Developing 31.1 31.8 32.0 0.5
FAO MEAT PRICE INDEX
(2002-2004=100) 2009 2010 2011
Jan-May Change:
Jan-May 2011
over Jan-May 2010
(%)
133 152 175 19.9
FAO international meat price indices
(2002-2004 = 100)
Pig Meat
Pig meat output in 2011 is forecast at 110 million tonnes, less than one per cent more than last year. In China, which holds nearly 50 per cent of global pig inventories, an elimination of sow subsidies as well as outbreaks of foot and mouth disease (FMD) and swine blue ear disease (PRRS), are limiting output growth to two per cent.
Nearby in the region, the Republic of Korea, Asia's fourth largest economy is expected to witness a severe output contraction after FMD outbreaks in late 2010 and in April 2011 led to the slaughter of nearly one-third of the national pig herd at an estimated cost of US$2.7 billion.
High feed prices are limiting expansion of production in the Philippines. In Japan, the five north-east provinces that were affected by the 'triple disaster' hosted 40 per cent of the country's pig population. Animal deaths and the slaughtering at lower weights are expected to depress pig meat production by seven per cent this year. In Thailand, high and rising pig prices prompted the Government to freeze both farm-gate hog prices and retail prices, contributing to a seven per cent production fall.
Little change in pig meat output is currently forecast for the developed countries, as high feed prices continue eroding producer returns. In the United States, poor margins will limit production gains. In Canada, where a hog farm transition programme encourages producers to exit the industry, output is expected to decrease by 1.5 per cent.
In the EU-27, industry restructuring, prompted by high feed prices and the approaching 2013 implementation of new environmental and animal welfare requirements portends a one per cent drop in production. Meanwhile, sliding EU pig prices, due to a late 2010 dioxin crisis in Germany, led to the short-term opening of a private storage aid in early 2011. Despite investments made in the Russian Federation sector, high feed prices and continuing outbreaks of African swine fever in 2011 will limit production gains.
Evolution of pig meat/feed index prices (2002-2004=1)
Trade in pig meat is forecast to hover around 6.4 million tones in 2011, five per cent above last year. Much of the increase is expected to be spurred by double digit growth in imports into Asia, which account for more than half of world trade. In the Republic of Korea, FMD-depleted supplies and the issuance of a new tariff rate quota (TRQ), which allows import of 130,000 tonnes of duty-free product through mid-year, will push up imports to the country by close to 60 percent. Japan is also expected to step up its purchases to compensate for the anticipated production shortfall. In China, recent food scares, related to reported illegal use of chemicals in pig production, may also translate into higher imports.
Pork deliveries to the Russian Federation, the second largest market, are expected to remain in the order of 800,000 tonnes, reflecting sluggish domestic consumption growth and rising production.
In Mexico, pig meat imports for 2011 are forecast to grow moderately but the expansion could be stronger if a recent agreement to solve a long-standing dispute with the United States over the cross-border use of trucking services results in the lifting of import duties on certain pork cuts from NAFTA.
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"Reduced supplies in Asia to prompt record pig meat imports"
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Strong import demand and limited export availability in competing countries is forecast to propel exports by the United States to a record. Sales from Canada are expected to benefit from a trucking dispute between Mexico and the United States in 2010. Rising import demand in traditional markets, in particular Hong Kong and Japan, is also expected to boost deliveries from China.
With continuing high feed prices, pork exports by the European Union are forecast to increase only marginally from last year's record.
Likewise, increasing internal demand and high domestic prices are limiting to two per cent the recovery of exports in Brazil from last year's double-digit fall. However, the recent opening of the Chinese market to Brazilian pork will offer an opportunity for further expansion of trade between the two countries.
Pig meat statistics (thousand tonnes, carcass weight equivalent)
Production Imports Exports Utilisation
2010 est. 2011 f'cast 2010 est. 2011 f'cast 2010 est. 2011 f'cast 2010 est. 2011 f'cast
ASIA 61,926 62,572 2,665 2,993 504 563 64,131 65,000
China 52,019 53,061 769 817 436 489 52,352 53,390
- of which Hong Kong, SAR 122 124 513 532 150 150 485 506
India 485 490 1 1 2 2 484 489
Indonesia 670 680 3 2 1 – 672 682
Japan 1,291 1,200 1,141 1,200 2,429 2,402
Korea, D.P.R. 190 195 190 195
Korea, Rep. 1,110 760 358 562 1,515 1,322
Malaysia 205 208 12 10 5 55 212 213
Philippines 1,731 1,737 70 75 2 2 1,799 1,810
Thailand 700 650 1 17 18 684 633
Viet Nam 2,578 2,620 42 42 33 38 2,578 2,620
AFRICA 1,173 1,187 197 204 9 9 1,362 1,382
Madagascar 55 55 – – 55 55
Nigeria 225 227 225 227
South Africa 320 325 35 35 4 4 351 356
Uganda 110 115 110 115
CENTRAL AMERICA 1,671 1,709 721 739 97 105 2,295 2,344
Cuba 182 185 30 30 – – 212 215
Mexico 1,165 1,195 568 575 80 88 1,653 1,682
SOUTH AMERICA 5,023 5,143 93 101 747 769 4,370 4,476
Argentina 245 250 36 40 2 2 279 288
Brazil 3,226 3,307 1 1 625 636 2,602 2,672
Chile 518 522 10 10 120 130 408 402
Colombia 190 200 7 9 – – 197 209
Venezuela 174 178 15 16 – – 189 194
NORTH AMERICA 12,115 12,167 624 673 2,839 3,047 9,900 9,788
Canada 1,928 1,899 189 220 1,049 1,067 1,068 1,052
USA 10,187 10,268 430 448 1,790 1,980 8,827 8,731
EUROPE 26,832 26,739 1,185 1,185 1,852 1,855 26,165 26,069
Belarus 385 390 40 39 50 59 375 370
European Union 22,544 22,341 32 32 1,754 1,750 20,822 20,623
Russian Fed. 2,260 2,298 785 786 23 23 3,022 3,061
Serbia 500 480 42 44 6 6 536 518
Ukraine 650 730 122 126 772 856
OCEANIA 475 483 219 226 35 37 659 671
Australia 335 342 170 177 35 37 470 482
Papua New Guinea 68 68 4 4 72 72
WORLD 109,216 110,001 5,705 6,123 6,083 6,385 108,881 109,731
Developing
countries 67,983 68,886 2,420 2,718 1,352 1,441 69,099 70,159
Developed
countries 41,233 41,115 3,285 3,404 4,731 4,944 39,783 39,572
LIFDCs 55,767 56,841 635 676 347 409 56,055 57,108
LDCs 1,191 1,217 138 145 – – 1,329 1,363
LIFDCs = Low-Income, Food-Deficit Countries
LDCs = Less Developed Countries
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Monday, June 20, 2011
Higher Commodity Prices Here to Stay
GLOBAL - The latest OECD-FAO Agricultural Outlook 2011-2020 predicts the impact of high prices on the poor in developing countries can be devastating.
Higher food prices and volatility in commodity markets are here to stay, according to a new report by the OECD and FAO.
The OECD-FAO Agricultural Outlook 2011-2020 says that a good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year. However, the Outlook states that over the coming decade real prices for cereals could average as much as 20 per cent higher and those for meats as much as 30 per cent higher, compared to 2001-10. These projections are well below the peak price levels experienced in 2007-08 and again this year.
Higher prices for commodities are being passed through the food chain, leading to rising consumer price inflation in most countries. This raises concerns for economic stability and food security in some developing countries, with poor consumers most at risk of malnutrition, the report says.
OECD Secretary-General, Angel Gurría, said: "While higher prices are generally good news for farmers, the impact on the poor in developing countries who spend a high proportion of their income on food can be devastating.
"That is why we are calling on governments to improve information and transparency of both physical and financial markets, encourage investments that increase productivity in developing countries, remove production and trade distorting policies and assist the vulnerable to better manage risk and uncertainty."
FAO Director-General, Jacques Diouf, commented: "In the current market context, price volatility could remain a feature of agricultural markets, and coherent policies are required to both reduce volatility and limit its negative impacts", noting that "the key solution to the problem will be boosting investment in agriculture and reinforcing rural development in developing countries, where 98 percent of the hungry people live today and where population is expected to increase by 47 per cent over the next decades."
Action should focus in particular on smallholders in low-income food-deficit countries, he added.
G20
The Outlook reinforces the core messages for mitigating and managing price volatility in a recent inter-agency report to the G20, 'Price Volatility in Food and Agriculture Markets: Policy Responses', coordinated by FAO and OECD on behalf of 10 international organisations.
The report suggests, among other things, that G20 countries take steps to boost agricultural productivity in developing countries, reduce or eliminate trade-disorting policies and establish a new mechanism to improve information and transparency on agricultural production, consumption, stocks and trade.
Fisheries
The Outlook, which covers fisheries for the first time, sees global agricultural production growing more slowly over the next decade than in the past 10 years. Farm output is expected to rise by 1.7 per cent annually, compared to the 2.6 per cent growth rate of the past decade. Despite this slower growth, production per-capita is still projected to rise by 0.7 per cent annually.
Per-capita food consumption will expand most rapidly in Eastern Europe, Asia and Latin America, where incomes are rising and populations growth is slowing. Meat, dairy products, vegetable oils and sugar should experience the highest demand increases, according to the report.
Global production in the fisheries sector is projected to increase by 1.3 percent annually to 2020. This is slower than growth over the previous decade, due to reduced or stagnant capture of wild fish stocks and lower growth rates in aquaculture, which underwent a rapid expansion over the 2001-2010 period.
By 2015, aquaculture is projected to surpass capture fisheries as the most important source of fish for human consumption, and by 2020 should represent about 45 per cent of total fishery production, including non-food uses.
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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.
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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.
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World Agricultural Supply and Demand Estimates – August 2011
Meat and poultry supplies are expected to remain stable while corn, wheat and oilseed supplies this month are forecast to be down, according to the August World Agricultural Supply and Demand Estimates.
Livestock, Poultry and Dairy
Small changes are made to the 2011 forecast of total red meat and poultry production. Beef production is reduced slightly. Although fed cattle slaughter is raised to reflect the large number of cattle placed in feedlots during the second quarter due to drought in the Southern Plains, second-half carcass weights have been reduced. The pork production forecast is lowered due to the expected short-term effect of recent hot, humid weather on third-quarter hog weights. For the year, broiler production is unchanged from last month. Production in June was higher than expected which offsets a sharper expected decline in second-half production. Turkey production is raised as higher forecast turkey prices are expected to moderate the expected decline in second-half production. The egg production forecast is reduced slightly from last month.
For 2012, beef production is reduced due to slower carcass weight growth and slightly lower later year slaughter. Higher feed prices are expected to slow the pace of later year marketings as cattle are kept on forage longer. Pork production is lowered as tight feed supplies pressure hog weights. Broiler production is forecast lower as the stronger second-half production declines carry into the first part of 2012. Turkey production is expected to grow more slowly as higher feed prices partly offset higher turkey prices. Egg production is reduced from last month on higher feed prices.
Beef imports are forecast higher in 2011 as demand for processing meat remains relatively strong. Beef exports are raised for both 2011 and 2012. A favourable exchange rate is expected to support exports to a number of countries. Likewise, pork export forecasts are raised for both 2011 and 2012. A favourable exchange rate and relatively strong demand for pork in Asia are expected to boost exports. US pork imports are reduced slightly in both years. No change is made to broiler exports for either 2011 or 2012 but turkey exports in 2011 are expected to be slightly stronger.
Cattle prices are forecast slightly lower for the third quarter but subsequent forecasts are unchanged. Hog prices are forecast higher for both 2011 and 2012 as stronger export demand in both years support prices. Broiler prices are lowered in both 2011 and in the first part of 2012 as supplies remain relatively large.
The milk production forecast for 2011 is reduced. Although the July Cattle report indicated that producers are holding relatively large numbers of dairy replacement heifers which supports a higher forecast dairy herd, recent hot, humid weather and relatively high priced feed may constrain the growth in milk per cow. Milk production is forecast higher for 2012, reflecting a larger herd in the first part of 2012 but slightly slower growth in milk per cow. Commercial exports for 2011 are forecast higher on the strength of butterfat exports. Imports are lowered reflecting lower imports of cheese and milk proteins. Trade forecasts for 2012 are unchanged.
Cheese, butter, and whey prices are forecast higher for 2011, but non-fat dry milk (NDM) is forecast lower. Tighter milk supplies are expected to support higher product prices but softening international prices will likely weigh on US NDM markets. The Class III price is raised, based on higher forecast cheese and whey prices, but lower forecast NDM prices will outweigh higher butter prices and the Class IV price forecast is reduced. For 2012, NDM prices are forecast lower on expected weaker early-year demand but cheese prices are forecast slightly higher. Forecast butter and whey prices are unchanged from last month. The Class III price is raised reflecting higher forecast cheese prices but lower NDM prices result in a reduced forecast for the Class IV price. The all milk price forecast is raised to $20.30 to $20.50 per cwt for 2011 and $17.80 to $18.80 per cwt for 2012.
Wheat
US wheat supplies for 2011/12 are lowered 30 million bushels this month as higher forecast winter wheat production is more than offset by lower area and production for durum and other spring wheat. Total use for 2011/12 is lowered 30 million bushels with a reduced outlook for exports more than offsetting an increase in expected feed and residual use. Exports are projected down 50 million bushels with increased competition, particularly from FSU-12 countries, where production prospects are raised. Projected feed and residual use is raised 20 million bushels, reflecting a continuation of competitive prices for feed-quality wheat and lower projected corn supplies. Ending stocks are nearly unchanged. The 2011/12 season-average farm price for all wheat is projected at $7.00 to $8.20 per bushel, up from last month’s range of $6.60 to $8.00 per bushel supported by higher projected prices for corn.
Small changes are made to 2009/10 and 2010/11 supplies and usage reflecting the latest revisions to trade estimates from the US Bureau of Census. These revisions result in adjustments to feed and residual use in both years.
Global wheat supplies for 2011/12 are projected 11.4 million tons higher with higher beginning stocks and a sharp increase in production. World wheat production for 2011/12 is raised 9.7 million tons with increases in FSU-12, India, China and EU-27 more than offsetting a reduction for Argentina. Russia production for 2011/12 is raised 3.0 million tons on harvest reports for winter wheat and continued favourable weather in most of the country’s spring wheat areas. Ukraine production is increased 3.0 million tons on higher-than-expected yields; however, heavy rains during harvest have reduced this year’s crop quality. Kazakhstan production is increased 1.0 million tons on abundant spring and early summer rainfall. India wheat production is up 1.9 million tons based on the latest official government estimates. China production is raised 1.5 million tons based on the latest official government indications. Production is increased 1.4 million tons for EU-27 with increases for France, Romania and Bulgaria. Harvest results from France indicate yields were hurt less by prolonged spring dryness than early reports had suggested. Partly offsetting is a 1.5-million-ton reduction in expected production for Argentina as the latest planting progress reports suggest less acreage increase this year.
The 2011/12 outlook for world wheat trade and consumption this month is shaped by growing supplies of wheat, especially in FSU-12 and EU-27, and tighter supplies of corn in the United States. Imports are raised 3.0 million tons with increases for South Korea, Algeria, Indonesia, Syria and Kenya. World wheat feeding is increased 4.9 million tons with higher expected feeding in EU-27, China, Canada, South Korea and the United States. Exports are raised 4.0 million tons for Russia and 1.5 million tons for Ukraine, more than offsetting reductions of 1.5 million tons for Argentina, 1.4 million tons for the United States and 1.0 million tons for Canada. World wheat ending stocks for 2011/12 are projected 6.7 million tons higher at 188.9 million tons. Stocks are expected to decline slightly from 2010/11 with higher usage but remain 62.9 million tons above their recent low in 2007/08.
Coarse Grains
US feed grain supplies for 2011/12 are projected lower this month with sharp drops in forecast corn and sorghum production. Corn production for 2011/12 is forecast 556 million bushels lower with a reduction in harvested area and lower expected yields. The national average yield is forecast at 153.0 bushels per acre, down 5.7 bushels from last month’s projection as unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects.
Total projected corn use for 2011/12 is reduced 340 million bushels. Feed and residual use is projected 150 million bushels lower reflecting the smaller crop and higher expected prices. Corn use for ethanol is projected 50 million bushels lower with tighter supplies and lower forecast gasoline consumption for 2011 and 2012. Projected corn exports for 2011/12 are reduced 150 million bushels with wheat feeding expected to increase. Ending stocks are projected 156 million bushels lower at 714 million. The stocks-to-use ratio is projected at 5.4 per cent, compared with last month’s projection of 6.4 per cent. The season-average farm price is projected at $6.20 to $7.20 per bushel, up 70 cents on each end of the range.
Other significant 2011/12 feed grain changes include a sharp reduction in the forecast sorghum yield and production with prolonged drought and excessive heat in the central and southern Plains. Sorghum exports are projected 20 million bushels lower. Domestic use is also projected lower with a 10-million bushel reduction in food, seed and industrial use and a 25-million bushel reduction in feed and residual use.
Small changes are made to 2009/10 feed grain supplies and usage reflecting the latest revisions to trade estimates from the US Bureau of Census and revisions for 2010 calendar year ethanol production from the Energy Information Administration. Estimated feed and residual use for 2009/10 is adjusted based on these revisions.
Global coarse grain supplies for 2011/12 are projected lower with a 3.6-million ton increase in beginning stocks more than offset by a 14.0-million ton reduction in output. The decline in global production is driven by reduced corn and sorghum production in the United States with foreign corn, barley and oats production all expected higher. Corn production is raised for Brazil, Ukraine and EU-27 but lowered for Egypt. Barley production is raised for Ukraine and Argentina but lowered for EU-27. World oats production is raised slightly with an increase for EU-27. World rye production is reduced with a smaller expected crop for EU-27.
Global coarse grain exports for 2011/12 are lowered slightly as reduced US corn and sorghum exports are mostly offset by higher expected foreign corn and barley shipments. Corn exports are increased 1.0 million tons for Ukraine, 0.5 million tons for Argentina and 0.5 million tons for Canada making up more than half of the reduction in US exports. Barley exports are increased 0.7 million tons for Ukraine, 0.5 million tons for EU-27 and 0.4 million tons for Argentina with the bulk of those increases to Saudi Arabia.
Global coarse grain consumption is projected down 8.4 million tons with most of this resulting from lower world corn feed and residual use. More than half of the reduction is from lower corn and sorghum feed and residual use in the United States. Corn feeding in lowered for EU-27, Canada and South Korea as rising supplies of competitively priced feed quality wheat displace corn usage. World corn ending stocks are projected down 1.1 million tons with increases for Brazil and EU-27 mostly offsetting the US reduction.
Oilseeds
US oilseed production for 2011/12 is projected at 91.7 million tons, down 4.7 million from last month. Soybean, canola and sunflower seed production are all projected lower. Soybean supplies for 2011/12 are reduced as lower forecast production is only partly offset by higher beginning stocks. Soybean production for 2011/12 is projected at 3.056 billion bushels, down 169 million due to lower harvested area and yields. Harvested area is projected at 73.8 million acres, down 0.5 million (using rounded data) mainly reflecting reductions for South Dakota. The first survey-based yield forecast of 41.4 bushels per acre is 2.0 bushels below last month's trend yield projection and 2.1 bushels below last year's yield. Soybean ending stocks are projected at 155 million bushels, down 20 million from July as reduced supplies are only partly offset by reduced exports and crush. Soybean exports are reduced 95 million bushels to 1.4 billion mainly due to the lower crop and increased projected supplies in South America this fall. Soybean crush is reduced 20 million bushels on lower domestic soybean meal use.
US changes for 2010/11 include reduced soybean crush and exports and increased ending stocks. Crush is reduced five million bushels to 1.645 billion reflecting reduced soybean meal exports. Soybean exports are reduced 25 million bushels to 1.495 billion reflecting lower-than-expected shipments in recent weeks. Soybean ending stocks are projected at 230 million bushels, up 30 million from last month.
Soybean and product prices for 2011/12 are all higher this month. The US season-average soybean price is projected at $12.50 to $14.50 per bushel, up 50 cents on both ends of the range. Soybean meal prices are projected at $355 to $385 per short ton, up $10.00 on both ends of the range. Soybean oil prices are projected at 54.5 to 58.5 cents per pound, up 0.5 cents on both ends of the range.
Global oilseed production for 2011/12 is projected at 451.4 million tons, down 4.1 million tons from last month mostly due to a reduction in the US soybean crop. Reductions for soybeans, rapeseed and cottonseed are only partly offset by increased sunflower seed and peanut production. Lower soybean production is projected for the United States, China and Ukraine. China’s production is projected at 14 million tons, down 0.3 million due to reduced harvested area. Brazil's soybean production is projected at 73.5 million tons, up one million tons due to higher expected yield. Production for Brazil’s 2010/11 crop is also raised this month to a record 75.5 million tons based on record yields. Rapeseed production is reduced for Ukraine and Belarus, reflecting lower yield prospects for both countries. Other changes include higher sunflower seed production for EU-27, higher rapeseed production for Australia, higher peanut production for China and lower cottonseed production for Brazil.
Rice
US total rice supplies for 2011/12 are projected at 257.2 million cwt, up 0.6 million from last month. Increases in both forecast beginning stocks and production more than offset a reduction in imports. USDA's first survey-based forecast of the 2011/12 US rice crop is 188.1 million cwt, up 1.1 million from last month's projection but down 23 per cent from the record 2010/11 crop. Average yield is forecast at 7,114 pounds per acre, up 55 pounds per acre from last month’s projection, and up six per cent from last year. Area harvested, at 2.64 million acres, is reduced slightly from a month ago. Long-grain production is forecast at 124.2 million cwt, up 0.7 million from last month, while combined medium- and short-grain production is forecast at 63.9 million, up 0.4 million from a month ago. The all rice import projection is lowered 1.0 million cwt to 18.0 million due in part to an expected slower pace of long-grain imports from South Asia.
US total rice use for 2011/12 is projected at 224.0 million cwt, down 3.0 million cwt from last month. Although all rice domestic and residual use is unchanged from last month at 127.0 million cwt, the long-grain projection is lowered 2.0 million to 94.0 million and the combined medium- and short-grain forecast is raised the same amount to 33.0 million. The export projection is lowered 3.0 million cwt from a month ago to 97.0 million based entirely on a decrease in combined medium- and short-grain exports. An increase in competition from both Australia and Egypt is expected in medium-grain markets in North Africa, the Middle East and Oceania. The long-grain export projection is unchanged from a month ago at 66.0 million cwt, and the combined medium- and short-grain estimate is lowered to 31 million. US all-rice ending stocks for 2011/12 are projected at 33.2 million cwt, up 3.6 million from last month, but down 35 per cent from the previous year.
The 2011/12 long-grain US season-average farm price is projected at $12.70 to $13.70 per cwt, up 70 cents per cwt on each end of the range. The combined medium- and short-grain price is projected at $14.50 to $15.50 per cwt, down $1.50 per cwt on each end of the range. The 2011/12 all rice price is projected at $13.20 to $14.20 per cwt, unchanged from a month ago. Higher prices are expected in Thailand due to a government intervention programme, which will provide support to global long-grain prices. Larger exportable supplies of medium-grain rice in both Australia and Egypt are expected to pressure global medium-grain rice prices.
Lower projected global 2011/12 total use more than offsets a slight increase in total supplies resulting in an expected increase in ending stocks. The increase in beginning stocks of nearly 0.7 million tons is primarily due to increases for India and Indonesia, which is partially offset by a reduction for Pakistan. Global production is lowered slightly due primarily to forecast reductions for Indonesia as well as North and South Korea, which is partially offset by an increase for Egypt and the United States. On the use side, global consumption is lowered 1.1 million tons, leading to an increase in projected global ending stocks. Domestic consumption is lowered for Pakistan and North Korea. Global exports are up from a month ago due to increases for Brazil, Egypt, India and Pakistan that are partially offset by reductions for Thailand and the United States. Global imports are up for Indonesia and China. Global ending stocks for 2011/12 are projected at 97.9 million tons, up 1.7 million from last month, largely the result of an upward revision for Thailand.
August 2011
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Seasonality in Pigs
A summary of the findings to date from a research project carried out by the Faculty of Biological Sciences at the University of Leeds, published by BPEX in its series, Research into Action, number 10.
The research involved analysing a large data set as well as the weather, topography and staffing parameters to see what has an effect on production over summer and autumn.
For outdoor sows in the UK, several days of warm weather (average daily temperature above 18°C) during lactation and around weaning results in reduced and more variable farrowing rates in comparison to when temperatures are below 18°C.
Farrowing rate in relation to five consecutive days of weather conditions for five weeks prior to service date
Sow heat production increases as lactation progresses in line with increasing milk production; hence heat production, and so susceptibility to developing heat stress, is greatest just before weaning.
If environmental temperatures are warm then the sow may reduce her feed intake such that it fails to meet the metabolic demands of lactation; she will then mobilise her own body reserves to meet the ongoing requirements of lactation resulting in reduced body condition and possible adverse effects on developing ovarian follicles. Nutritional deficits are associated with reduced luteinising hormone (LH) production, resulting in delayed returns to oestrus and reduced conception and farrowing rates.
In this study, gilts were found to be the least affected by warmer temperatures, probably because they do not have the increased metabolic demand of lactation prior to service.
In order to cool down in warmer weather, sows redirect their blood flow to their skin and mammary tissues, away from the ovaries. The quality of their eggs and the readiness of their uterus for pregnancy may therefore be negatively affected.
The findings from this research suggest that cooling facilities should be provided to outdoor sows in the UK when daily average temperature rises above 18°C.
Management Guidelines
Monitor sow feed intake in warm weather. If sows are not eating, take steps to cool them down or provide more energy-dense feed
Provide wallows early on in the year as well as throughout summer, or sprinklers for sows to cool down in. In individual paddocks you could create a spray of water from the sow drinkers, providing an area of mud in which the sow can stand or wallow
Paint farrowing arcs white to reflect sunlight and reduce the temperature inside; painting huts white can reduce internal arc temperatures by around 7°C
Use insulated arcs, fully insulated where possible; combining this with painting arcs white will have an additive temperature reducing effect
Use an adjustable ventilation opening at the rear and re-align arcs to assist with air flow
Feed sows twice a day if not on an ad-lib system.
August 2011
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World Agricultural Supply and Demand Estimates – August 2011
Meat and poultry supplies are expected to remain stable while corn, wheat and oilseed supplies this month are forecast to be down, according to the August World Agricultural Supply and Demand Estimates.
Livestock, Poultry and Dairy
Small changes are made to the 2011 forecast of total red meat and poultry production. Beef production is reduced slightly. Although fed cattle slaughter is raised to reflect the large number of cattle placed in feedlots during the second quarter due to drought in the Southern Plains, second-half carcass weights have been reduced. The pork production forecast is lowered due to the expected short-term effect of recent hot, humid weather on third-quarter hog weights. For the year, broiler production is unchanged from last month. Production in June was higher than expected which offsets a sharper expected decline in second-half production. Turkey production is raised as higher forecast turkey prices are expected to moderate the expected decline in second-half production. The egg production forecast is reduced slightly from last month.
For 2012, beef production is reduced due to slower carcass weight growth and slightly lower later year slaughter. Higher feed prices are expected to slow the pace of later year marketings as cattle are kept on forage longer. Pork production is lowered as tight feed supplies pressure hog weights. Broiler production is forecast lower as the stronger second-half production declines carry into the first part of 2012. Turkey production is expected to grow more slowly as higher feed prices partly offset higher turkey prices. Egg production is reduced from last month on higher feed prices.
Beef imports are forecast higher in 2011 as demand for processing meat remains relatively strong. Beef exports are raised for both 2011 and 2012. A favourable exchange rate is expected to support exports to a number of countries. Likewise, pork export forecasts are raised for both 2011 and 2012. A favourable exchange rate and relatively strong demand for pork in Asia are expected to boost exports. US pork imports are reduced slightly in both years. No change is made to broiler exports for either 2011 or 2012 but turkey exports in 2011 are expected to be slightly stronger.
Cattle prices are forecast slightly lower for the third quarter but subsequent forecasts are unchanged. Hog prices are forecast higher for both 2011 and 2012 as stronger export demand in both years support prices. Broiler prices are lowered in both 2011 and in the first part of 2012 as supplies remain relatively large.
The milk production forecast for 2011 is reduced. Although the July Cattle report indicated that producers are holding relatively large numbers of dairy replacement heifers which supports a higher forecast dairy herd, recent hot, humid weather and relatively high priced feed may constrain the growth in milk per cow. Milk production is forecast higher for 2012, reflecting a larger herd in the first part of 2012 but slightly slower growth in milk per cow. Commercial exports for 2011 are forecast higher on the strength of butterfat exports. Imports are lowered reflecting lower imports of cheese and milk proteins. Trade forecasts for 2012 are unchanged.
Cheese, butter, and whey prices are forecast higher for 2011, but non-fat dry milk (NDM) is forecast lower. Tighter milk supplies are expected to support higher product prices but softening international prices will likely weigh on US NDM markets. The Class III price is raised, based on higher forecast cheese and whey prices, but lower forecast NDM prices will outweigh higher butter prices and the Class IV price forecast is reduced. For 2012, NDM prices are forecast lower on expected weaker early-year demand but cheese prices are forecast slightly higher. Forecast butter and whey prices are unchanged from last month. The Class III price is raised reflecting higher forecast cheese prices but lower NDM prices result in a reduced forecast for the Class IV price. The all milk price forecast is raised to $20.30 to $20.50 per cwt for 2011 and $17.80 to $18.80 per cwt for 2012.
Wheat
US wheat supplies for 2011/12 are lowered 30 million bushels this month as higher forecast winter wheat production is more than offset by lower area and production for durum and other spring wheat. Total use for 2011/12 is lowered 30 million bushels with a reduced outlook for exports more than offsetting an increase in expected feed and residual use. Exports are projected down 50 million bushels with increased competition, particularly from FSU-12 countries, where production prospects are raised. Projected feed and residual use is raised 20 million bushels, reflecting a continuation of competitive prices for feed-quality wheat and lower projected corn supplies. Ending stocks are nearly unchanged. The 2011/12 season-average farm price for all wheat is projected at $7.00 to $8.20 per bushel, up from last month’s range of $6.60 to $8.00 per bushel supported by higher projected prices for corn.
Small changes are made to 2009/10 and 2010/11 supplies and usage reflecting the latest revisions to trade estimates from the US Bureau of Census. These revisions result in adjustments to feed and residual use in both years.
Global wheat supplies for 2011/12 are projected 11.4 million tons higher with higher beginning stocks and a sharp increase in production. World wheat production for 2011/12 is raised 9.7 million tons with increases in FSU-12, India, China and EU-27 more than offsetting a reduction for Argentina. Russia production for 2011/12 is raised 3.0 million tons on harvest reports for winter wheat and continued favourable weather in most of the country’s spring wheat areas. Ukraine production is increased 3.0 million tons on higher-than-expected yields; however, heavy rains during harvest have reduced this year’s crop quality. Kazakhstan production is increased 1.0 million tons on abundant spring and early summer rainfall. India wheat production is up 1.9 million tons based on the latest official government estimates. China production is raised 1.5 million tons based on the latest official government indications. Production is increased 1.4 million tons for EU-27 with increases for France, Romania and Bulgaria. Harvest results from France indicate yields were hurt less by prolonged spring dryness than early reports had suggested. Partly offsetting is a 1.5-million-ton reduction in expected production for Argentina as the latest planting progress reports suggest less acreage increase this year.
The 2011/12 outlook for world wheat trade and consumption this month is shaped by growing supplies of wheat, especially in FSU-12 and EU-27, and tighter supplies of corn in the United States. Imports are raised 3.0 million tons with increases for South Korea, Algeria, Indonesia, Syria and Kenya. World wheat feeding is increased 4.9 million tons with higher expected feeding in EU-27, China, Canada, South Korea and the United States. Exports are raised 4.0 million tons for Russia and 1.5 million tons for Ukraine, more than offsetting reductions of 1.5 million tons for Argentina, 1.4 million tons for the United States and 1.0 million tons for Canada. World wheat ending stocks for 2011/12 are projected 6.7 million tons higher at 188.9 million tons. Stocks are expected to decline slightly from 2010/11 with higher usage but remain 62.9 million tons above their recent low in 2007/08.
Coarse Grains
US feed grain supplies for 2011/12 are projected lower this month with sharp drops in forecast corn and sorghum production. Corn production for 2011/12 is forecast 556 million bushels lower with a reduction in harvested area and lower expected yields. The national average yield is forecast at 153.0 bushels per acre, down 5.7 bushels from last month’s projection as unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects.
Total projected corn use for 2011/12 is reduced 340 million bushels. Feed and residual use is projected 150 million bushels lower reflecting the smaller crop and higher expected prices. Corn use for ethanol is projected 50 million bushels lower with tighter supplies and lower forecast gasoline consumption for 2011 and 2012. Projected corn exports for 2011/12 are reduced 150 million bushels with wheat feeding expected to increase. Ending stocks are projected 156 million bushels lower at 714 million. The stocks-to-use ratio is projected at 5.4 per cent, compared with last month’s projection of 6.4 per cent. The season-average farm price is projected at $6.20 to $7.20 per bushel, up 70 cents on each end of the range.
Other significant 2011/12 feed grain changes include a sharp reduction in the forecast sorghum yield and production with prolonged drought and excessive heat in the central and southern Plains. Sorghum exports are projected 20 million bushels lower. Domestic use is also projected lower with a 10-million bushel reduction in food, seed and industrial use and a 25-million bushel reduction in feed and residual use.
Small changes are made to 2009/10 feed grain supplies and usage reflecting the latest revisions to trade estimates from the US Bureau of Census and revisions for 2010 calendar year ethanol production from the Energy Information Administration. Estimated feed and residual use for 2009/10 is adjusted based on these revisions.
Global coarse grain supplies for 2011/12 are projected lower with a 3.6-million ton increase in beginning stocks more than offset by a 14.0-million ton reduction in output. The decline in global production is driven by reduced corn and sorghum production in the United States with foreign corn, barley and oats production all expected higher. Corn production is raised for Brazil, Ukraine and EU-27 but lowered for Egypt. Barley production is raised for Ukraine and Argentina but lowered for EU-27. World oats production is raised slightly with an increase for EU-27. World rye production is reduced with a smaller expected crop for EU-27.
Global coarse grain exports for 2011/12 are lowered slightly as reduced US corn and sorghum exports are mostly offset by higher expected foreign corn and barley shipments. Corn exports are increased 1.0 million tons for Ukraine, 0.5 million tons for Argentina and 0.5 million tons for Canada making up more than half of the reduction in US exports. Barley exports are increased 0.7 million tons for Ukraine, 0.5 million tons for EU-27 and 0.4 million tons for Argentina with the bulk of those increases to Saudi Arabia.
Global coarse grain consumption is projected down 8.4 million tons with most of this resulting from lower world corn feed and residual use. More than half of the reduction is from lower corn and sorghum feed and residual use in the United States. Corn feeding in lowered for EU-27, Canada and South Korea as rising supplies of competitively priced feed quality wheat displace corn usage. World corn ending stocks are projected down 1.1 million tons with increases for Brazil and EU-27 mostly offsetting the US reduction.
Oilseeds
US oilseed production for 2011/12 is projected at 91.7 million tons, down 4.7 million from last month. Soybean, canola and sunflower seed production are all projected lower. Soybean supplies for 2011/12 are reduced as lower forecast production is only partly offset by higher beginning stocks. Soybean production for 2011/12 is projected at 3.056 billion bushels, down 169 million due to lower harvested area and yields. Harvested area is projected at 73.8 million acres, down 0.5 million (using rounded data) mainly reflecting reductions for South Dakota. The first survey-based yield forecast of 41.4 bushels per acre is 2.0 bushels below last month's trend yield projection and 2.1 bushels below last year's yield. Soybean ending stocks are projected at 155 million bushels, down 20 million from July as reduced supplies are only partly offset by reduced exports and crush. Soybean exports are reduced 95 million bushels to 1.4 billion mainly due to the lower crop and increased projected supplies in South America this fall. Soybean crush is reduced 20 million bushels on lower domestic soybean meal use.
US changes for 2010/11 include reduced soybean crush and exports and increased ending stocks. Crush is reduced five million bushels to 1.645 billion reflecting reduced soybean meal exports. Soybean exports are reduced 25 million bushels to 1.495 billion reflecting lower-than-expected shipments in recent weeks. Soybean ending stocks are projected at 230 million bushels, up 30 million from last month.
Soybean and product prices for 2011/12 are all higher this month. The US season-average soybean price is projected at $12.50 to $14.50 per bushel, up 50 cents on both ends of the range. Soybean meal prices are projected at $355 to $385 per short ton, up $10.00 on both ends of the range. Soybean oil prices are projected at 54.5 to 58.5 cents per pound, up 0.5 cents on both ends of the range.
Global oilseed production for 2011/12 is projected at 451.4 million tons, down 4.1 million tons from last month mostly due to a reduction in the US soybean crop. Reductions for soybeans, rapeseed and cottonseed are only partly offset by increased sunflower seed and peanut production. Lower soybean production is projected for the United States, China and Ukraine. China’s production is projected at 14 million tons, down 0.3 million due to reduced harvested area. Brazil's soybean production is projected at 73.5 million tons, up one million tons due to higher expected yield. Production for Brazil’s 2010/11 crop is also raised this month to a record 75.5 million tons based on record yields. Rapeseed production is reduced for Ukraine and Belarus, reflecting lower yield prospects for both countries. Other changes include higher sunflower seed production for EU-27, higher rapeseed production for Australia, higher peanut production for China and lower cottonseed production for Brazil.
Rice
US total rice supplies for 2011/12 are projected at 257.2 million cwt, up 0.6 million from last month. Increases in both forecast beginning stocks and production more than offset a reduction in imports. USDA's first survey-based forecast of the 2011/12 US rice crop is 188.1 million cwt, up 1.1 million from last month's projection but down 23 per cent from the record 2010/11 crop. Average yield is forecast at 7,114 pounds per acre, up 55 pounds per acre from last month’s projection, and up six per cent from last year. Area harvested, at 2.64 million acres, is reduced slightly from a month ago. Long-grain production is forecast at 124.2 million cwt, up 0.7 million from last month, while combined medium- and short-grain production is forecast at 63.9 million, up 0.4 million from a month ago. The all rice import projection is lowered 1.0 million cwt to 18.0 million due in part to an expected slower pace of long-grain imports from South Asia.
US total rice use for 2011/12 is projected at 224.0 million cwt, down 3.0 million cwt from last month. Although all rice domestic and residual use is unchanged from last month at 127.0 million cwt, the long-grain projection is lowered 2.0 million to 94.0 million and the combined medium- and short-grain forecast is raised the same amount to 33.0 million. The export projection is lowered 3.0 million cwt from a month ago to 97.0 million based entirely on a decrease in combined medium- and short-grain exports. An increase in competition from both Australia and Egypt is expected in medium-grain markets in North Africa, the Middle East and Oceania. The long-grain export projection is unchanged from a month ago at 66.0 million cwt, and the combined medium- and short-grain estimate is lowered to 31 million. US all-rice ending stocks for 2011/12 are projected at 33.2 million cwt, up 3.6 million from last month, but down 35 per cent from the previous year.
The 2011/12 long-grain US season-average farm price is projected at $12.70 to $13.70 per cwt, up 70 cents per cwt on each end of the range. The combined medium- and short-grain price is projected at $14.50 to $15.50 per cwt, down $1.50 per cwt on each end of the range. The 2011/12 all rice price is projected at $13.20 to $14.20 per cwt, unchanged from a month ago. Higher prices are expected in Thailand due to a government intervention programme, which will provide support to global long-grain prices. Larger exportable supplies of medium-grain rice in both Australia and Egypt are expected to pressure global medium-grain rice prices.
Lower projected global 2011/12 total use more than offsets a slight increase in total supplies resulting in an expected increase in ending stocks. The increase in beginning stocks of nearly 0.7 million tons is primarily due to increases for India and Indonesia, which is partially offset by a reduction for Pakistan. Global production is lowered slightly due primarily to forecast reductions for Indonesia as well as North and South Korea, which is partially offset by an increase for Egypt and the United States. On the use side, global consumption is lowered 1.1 million tons, leading to an increase in projected global ending stocks. Domestic consumption is lowered for Pakistan and North Korea. Global exports are up from a month ago due to increases for Brazil, Egypt, India and Pakistan that are partially offset by reductions for Thailand and the United States. Global imports are up for Indonesia and China. Global ending stocks for 2011/12 are projected at 97.9 million tons, up 1.7 million from last month, largely the result of an upward revision for Thailand.
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Sorghum has potential in Southeast Asia
//06 Sep 2011
Sorghum is exceptionally well-suited for the tropical conditions in Southeast Asia because of its low vulnerability to moulds and mycotoxins and physical characteristics that allow it to be stored longer.
Two factors contribute to its current low use levels in the region, according to Adel Yusupov, US Grains Council regional director in Southeast Asia, who recently completed a ten-day sorghum promotion “road show” in Vietnam, Malaysia and Indonesia.
“Competitive pricing and consistent supply is a barrier,” he said, noting that prices for Argentine sorghum with less than 1.5% tannin were recently $45 per metric ton below Argentine corn and $54 per metric ton cheaper than US sorghum in containers.
Major competition in the region comes from “combo” shipments of Argentine corn and sorghum, which enjoy an additional advantage from feed millers’ preference for Argentine corn over US corn.
Yellow colour
A second barrier, according to Yusupov, is regional consumers’ preference for very yellow yolks, fat, and skin in swine and poultry products.
“It would be difficult to convince poultry or pig producers to switch to sorghum (which produces whiter fat in pigs and paler poultry),” he said. “In contrast, there is not the same preference in fish fillets, and the Council believes this is a ready niche market opportunity for sorghum in Southeast Asia.”
He believes progress on sorghum use in the region can be achieved by promoting sorghum to aquaculture feed producers and nutritionists.
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FAO Food Price Index Almost Unchanged
GLOBAL - World food prices remained virtually unchanged between July and August 2011 according to the FAO Food Price Index published today.
The Index averaged 231 points last month compared to 232 points in July. It was 26 per cent higher than in August 2010 but seven points below its all-time high of 238 points in February 2011.
Within the index, cereals prices rose, reflecting the fact that although cereal production is expected to increase, it will not do so by enough to offset the additional demand, so that stocks continue to be low and prices continue to be high and volatile.
The FAO Cereal Price Index averaged 253 points in August, up 2.2 per cent, or 5 points, from July and 36 per cent higher than in August 2010. However, the firmer cereal prices were largely offset by declines in international prices of most other commodities included in the Food Price Index, oils and dairy products in particular.
Production rebound
Cereal price rises stem from a supply and demand balance that remains tight despite the anticipated increase in production. World cereal production in 2011 is now forecast to reach 2 307 million tonnes, 3 per cent higher than in 2010. But this latest forecast is nearly 6 million tonnes lower than the previous forecast published in July.
Among the major cereals, the maize supply situation is a cause for concern following downward revisions to maize crop prospects in the United States, the world's largest maize producer, because of continued hot weather in July and August.
Average wheat prices were also up 9 per cent in August given the strong demand for feed wheat and shrinking supplies of high quality wheat. Nonetheless, world wheat production is forecast to increase by 4.3 per cent (or 28 million tonnes), only 4 million tonnes below the 2009 record.
World coarse grain production is still heading for a record level of 1 147.5 million tonnes, up 2.4 per cent (or 27 million tonnes) from 2010, in spite of lowered maize production prospects in the United States, the world's largest maize producer.
Rice price gains
Rice prices also gained with the benchmark Thai rice price up 5 per cent from July, driven by a policy change in Thailand, the world's largest rice exporter, where paddy rice will be purchased from farmers at above market prices.
Global rice production prospects remain favourable, however, with output set to reach a new high of 479 million tonnes, up 2.5 per cent from 2010.
Low inventories
Total cereal utilization in 2011/12 is forecast to increase by 1.4 per cent, almost matching anticipated 2011 production. As a result, global cereal inventories by the close of seasons in 2012 are likely to remain close to their already low opening levels. Only rice stocks are expected to increase significantly, supported by record production.
Wheat inventories are likely to decline to their lowest level since 2009 and world stocks of coarse grains are also forecast to plunge, with maize inventories falling to 124 million tonnes, their lowest level since 2007. Given the tight global supply and demand balance for coarse grains, its stocks-to-use ratio is forecast to fall to a historical low of 13.4 per cent.
The FAO Oils/Fats Price Index averaged 244 points in August, following a declining trend since March but still remaining high in historical terms.
The FAO Dairy Price Index averaged 221 points in August, significantly down from 228 points in July and 232 points in June, but still 14 per cent higher than the same period last year.
The FAO Meat Price Index averaged 181 points in August, up 1 per cent from July.
The FAO Sugar Price Index averaged 394 points in August, down 2 per cent from July, but still 50 per cent higher than in August 2010.
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World Agricultural Supply and Demand Estimates – September 2011
While coarse grain stocks are expected to be lower this month, wheat stocks are projected to be up, according to the latest USDA World Agricultural Supply and Demand Estimates.
Livestock, Poultry and Dairy
The 2011 forecast of total red meat and poultry production is raised reflecting higher beef production but lower pork production. Continued large cow slaughter is expected to boost beef production. A slower pace of slaughter in the third quarter and slightly lower weights due to heat stress are expected to result in lower pork production compared to last month. USDA will release its Quarterly Hogs and Pigs report on 28 September, providing an estimate of sow farrowings in June-August and an indication of producer intentions for farrowings into early 2012. Broiler production is about unchanged as an increased forecast of third-quarter production is offset by lower expected production in the fourth quarter. No change is made to turkey production and only a slight revision is made to egg production.
For 2012, the beef production forecast is raised but pork and poultry production forecasts are reduced from last month. Larger forecast early year beef production reflects marketing of the large number of calves which are being placed as a result of drought in the Southern Plains. However, production in subsequent quarters will reflect tighter supplies of cattle and lighter expected carcass weights due to the placement of lighter cattle and relatively high feed prices. Pork forecasts are reduced as tight feed supplies dampen hog weights. Poultry production forecasts are reduced as relatively high feed costs limit the sector’s expansion. The egg production forecast is lowered due to lower hatching egg production.
Beef import forecasts are lowered in 2011 and 2012 as US cow slaughter remains relatively high. The beef export forecast for 2011 is little changed from last month as lower-than-expected second-quarter exports are largely offset by higher forecast exports in the second half of the year. The pork export forecast for 2011 is lowered as second-quarter exports were smaller than expected. The broiler export forecast is also reduced on lower-than-expected shipments in the second quarter. No change is made to red meat or poultry exports for 2012.
The cattle price for 2011 is about unchanged as a higher third-quarter price is offset by a lower fourth-quarter price. Cattle prices for 2012 are forecast slightly lower as larger marketings pressure cattle prices early in the year. Hog prices are raised slightly from last month for 2011 but are unchanged for 2012. Broiler prices are lowered for 2011 as supplies remain relatively large and demand relatively weak. Prices for 2012 are raised from last month on lower production.
The milk production forecast for 2011 is raised as the dairy herd has been expanding at a more rapid rate than expected. However, the forecast for 2012 is reduced as higher forecast feed prices reduce the rate of growth in milk per cow. Commercial exports for 2011 are raised on the strength of current product exports. For 2012, fat-basis exports are lowered, largely on slightly weaker butter exports. Skim solids imports are raised for both 2011 and 2012.
Cheese prices for 2011 are forecast lower but non-fat dry milk (NDM) and whey prices are forecast higher on the strength of relatively strong exports. Butter prices remain unchanged. The Class III price is lowered, based on the lower forecast cheese price, but the Class IV price forecast is unchanged from last month. For 2012, butter and cheese prices are unchanged but NDM and whey prices are forecast higher. The Class III price is unchanged, but the Class IV price forecast is raised. The all milk price forecast is lowered to $20.15 to $20.35 per cwt for 2011, but is unchanged at $17.80 to $18.80 per cwt for 2012.
Wheat
Projected US wheat ending stocks for 2011/12 are raised 990 million bushels this month with higher expected imports and lower expected food use and exports. Imports are raised 1 0 million bushels with larger supplies in Canada. Food use is projected five million bushels lower in line with revisions to 2010/11 based on the latest and final US Bureau of Census mill grind estimates and reflecting reduced prospects for per-capita flour consumption during calendar year 2011. Exports for 22011/12 are projected 775 million bushels lower with larger supplies and exports expected for Canada and the EU-27. The season-average farm price for all wheat is projected at $7.355 to $8.35 per bushel, up from last month’s range of $7.00 to $$8.20 per bushel, supported by higher corn prices.
Global wheat supplies for 2011/12 are projected 7.6 million tons higher mostly on larger beginning stocks in Canada and increased production for Canada, EU-27 and Ukraine. Beginning stocks for Canada are raised 1.3 million tons and production is raised 2.5 million tons, both reflecting the latest estimates from Statistics Canada. EU-27 production is raised 2.3 million tons with increases for Germany, Romania, France, Spain and Bulgaria as harvest reports and revisions to official estimates continue to indicate higher yields. Production for Ukraine is raised 1.0 million tons based on the latest harvest reports. Other smaller production changes include 0.2-million-ton increases for both Brazil and Morocco, and a 0.2-million-ton reduction for Uzbekistan.
World wheat trade is raised slightly for 2011/12 with increased imports projected for the United States and Uzbekistan. Global exports are also raised as higher expected shipments from Canada and EU–27 more than offset reductions for the United States and Turkey. Global wheat consumption is increased 1.9 million tons with higher expected wheat feeding in Canada, China, Morocco and Turkey more than offsetting a reduction for Russia. World wheat ending stocks for 2011/12 are projected 5.77 million tons higher at 194.6 million. At this level, global stocks would be up from 2010/11 and the second largest in the past decade.
Coarse Grains
US feed grain supplies for 2011/12 are projected lower this month with reduced corn production as summer heat and dryness continue to be reflected in survey-based yield forecasts. Corn production for 20111/12 is forecast 417 million bushels lower with expected yields down from last month across most of the Corn Belt. The national average corn yield is forecast at 148.1 bushels per acre, down 4.9 bushels from August and 16.6 bushels below the 2009/10 record. As forecast, this year’s yield would be the lowest since 20005/06. Despite the lower yield, production is forecast to be the third highest ever with the second highest planted area since 1944.
Total corn supplies for 2011/12 are lowered 4422 million bushels with a 20-million-bushel reduction in carrying and a five-million-bushel reduction in expected imports. Beginning stocks for 2011/12 drop with small increases in 2010/11 exports and use for sweeteners reflecting the latest available data. Imports for 22011/12 are reduced with the smaller forecast corn crop in Canada. Supplies for 2011/12 are projected to be the lowest since 2006/07.
Total corn use for 2011/12 is projected 400 million bushels lower with tighter supplies. Projected feed and residual use is reduced 20 million bushels, mostly reflecting lower expected residual disappearance with the smaller forecast crop. Corn use for ethanol is projected 100 million bushels lower with higher expected corn prices and continued weakening in the outlook for US gasoline consumption as forecast by the Energy Information Administration. Corn exports for 2011/12 are projected 100 million bushels lower with increased supplies and exports expected from Ukraine, Argentina and Brazil. US ending stocks are projected 42 million bushels lower at 672 million. The stocks-to-use ratio is projected at 5.3 per cent, compared with last month’s projection of 5.4 per cent. The season-average farm price is projected 30 cents per bushel higher on both ends of the range to a record $6.50 to $7.50 per bushel.
Global coarse grain supplies for 2011/12 are projected 3.1 million tons lower with larger barley, sorghum, millet and oats supplies only partly offsetting the reduction for corn driven by the US changes. Global corn supplies are reduced 4.5 million tons as increases in foreign beginning stocks and production partly offset the reduction in US supplies. Projected global corn production for 2011/12 is lowered 5.9 million tons as a 4.8-million-ton increase in expected foreign output is outweighed by the 10.6-million-ton US reduction. Brazil and Argentina production for 2011/12 are raised 4.0 million tons and 1.5 million tons, respectively, on higher expected area with rising returns for corn in both countries. Ukraine corn production is raised 1.5 million tons based on indications for higher yields. Production is raised 1.0 million tons for EU-27 with higher expected yields in France and several countries in Eastern Europe. Production is lowered 1.0 million tons for Canada based on the latest Statistics Canada estimates. Production is also lowered 2.1 million tons for Egypt as lack of government restrictions on planting resulted in a sharp shift in acreage away from corn and into rice.
Global coarse grain trade for 2011/12 is raised slightly with increased foreign trade in barley and corn more than offsetting the reduction in US corn shipments. Barley imports are raised for Saudi Arabia and Syria with larger shipments expected from Ukraine and Russia. Corn exports are raised for Ukraine, Argentina, Brazil and EU-27. Corn exports are lowered for Canada and Paraguay. Global corn consumption for 2011/12 is lowered 7.3 million tons, mostly reflecting lower expected use in the United States. Foreign corn feeding and consumption are nearly unchanged. World corn ending stocks are projected up 2.9 million tons with increases in South America, Ukraine and EU-27 more than offsetting the reduction projected for the United States.
Oilseeds
US oilseed production for 2011/12 is projected at 92.4 million tons, up 0.7 million from last month. Soybean production is projected higher, partly offset by declines for peanuts and cottonseed. Soybean production for 2011/12 is projected at 3.085 billion bushels, up 29 million due to higher yields. Soybean ending stocks are projected at 165 million bushels, up 10 million as higher supplies are only partly offset by increased exports. Other changes for 2011/12 include reduced food use of soybean oil reflecting increased use of canola and palm oil, increased use of soybean oil for biodiesel and reduced food use for 2010/11.
Soybean crush for 2010/11 is increased five million bushels to 1.65 billion reflecting higher-than-expected crush reported for July. With soybean exports unchanged, ending stocks are projected at 225 million bushels, down five million from last month. Other changes for 2010/11 include increased use of soybean oil for biodiesel and reduced food use. Soybean oil used for production of methyl ester was reported record high for July by the US Census Bureau. Soybean oil stocks are projected at 2.84 billion pounds, up slightly from last month.
Soybean and product prices are all projected higher for 2011/12. The US season-average soybean price is projected at $12.65 to $14.65 per bushel, up 15 cents on both ends of the range as higher corn prices provide support. Soybean meal prices are projected at $360 to $390 per short ton, up $5.00 on both ends of the range. Soybean oil prices are projected at 55.5 to 59.0 cents per pound, up 0.5 cents on both ends of the range.
Global oilseed production for 2011/12 is projected at 453.0 million tons, up 1.5 million tons from last month. Production increases for soybeans, rapeseed, sunflower seed and cottonseed are only partly offset by lower peanut production. Soybean production is projected higher for the United States and India. India’s soybean production is raised 0.7 million tons to a record 10.5 million due to higher planted area. Canola production for Canada is increased 0.6 million tons to a record 13.2 million based on higher area and yield reported in the most recent report from Statistics Canada. Harvested area is projected record high despite excessive rainfall and flooding in parts of Saskatchewan and Manitoba that prevented some area from being planted. Canada’s canola production is also raised for both the 2009 and 2010 crops based on the same report. Other changes include higher sunflower seed production for EU-27, higher cottonseed production for China, lower cottonseed production for Pakistan and lower peanut production for India.
Rice
US rice production in 2011/12 is forecast at 190.9 million cwt, up 2.8 million from last month due entirely to an increase in yield. Harvested area is estimated at 2.62 million acres, down 20,000 acres. The average yield is estimated at a record 7,273 pounds per acre, up 159 pounds per acre from last month. Long-grain production is estimated at 119.2 million cwt, down 4.9 million from last month, and the smallest crop since 1996/97. Combined medium- and short-grain production is estimated at a record 71.6 million, an increase of 7.7 million from last month.
All rice beginning stocks for 2011/12 are lowered 2.7 million cwt from last month to 48.4 million (rough-equivalent basis) based on USDA’s Rice Stocks report released on 26 August. The import projection is raised 1.0 million cwt to 19.0 million as it is expected that more long-grain rice will be imported due to tighter domestic supplies.
Exports for 2011/12 are projected at 93.0 million cwt, down 4.0 million cwt from last month, and down 18.6 million from the revised 2010/11 estimate. Long-grain exports are lowered 5.0 million cwt from last month to 61.0 million, and combined medium- and short-grain exports are raised 1.0 million to 32.0 million. The decrease in the export projection is due mostly to a much tighter supply situation but additionally to an expected increase in competition from South American exporters in Western Hemisphere long-grain markets. Long-grain exports to Iraq are also expected to be lower. Increased competition principally from Egypt is expected to reduce medium-grain exports to Libya. All rice ending stocks for 2011/12 are projected at 38.3 million cwt, up 5.1 million from last month but down 10.1 million from the revised 2010/11 stocks.
The long-grain season-average farm price range is projected at $13.50 to $14.50 per cwt, up 80 cents per cwt on both ends of the range from last month compared to $11.10 per cwt for 2010/11. The combined medium- and short-grain farm price range is projected at $15.00 to $16.00 per cwt, up 50 cents per cwt on each end of the range from last month compared to a revised $18.40 per cwt for 2010/11. The 2010/11 all rice season-average farm price is forecast at $14.00 to $15.00 per cwt, up 80 cents per cwt on each end of the range from last month compared to a revised $12.70 per cwt for 2010/11. The increase in prices is due to both expected tighter domestic supplies, for long-grain, and higher global prices as a result of government policies in Thailand aimed at supporting domestic rice prices. Additionally, higher commodity prices in general will help to support rice prices.
Projected global 2011/12 rice supply and use are increased from last month. Global rice production is projected at a record 458.4 million tons, up 2.1 million tons from last month, primarily due to larger expected crops in Brazil, China, the Philippines and the United States. China’s 2011/12 rice crop is increased 1.0 million tons to 139.0 million, due mainly to an increase in the early rice crop. Brazil’s rice crop is raised nearly one million tons due to both an increase in area and expected yield. The recent surge in global prices accounts for the increase in planted area in Brazil from last month’s forecast. Global 2011/12 trade is nearly unchanged from last month. Global consumption is raised 0.7 million tons from a month ago due mostly to China. Global ending stocks for 2011/12 are projected at 98.7 million tons, up 0.7 million from last month, and the largest stocks since 2002/03. Stocks are raised for Brazil, China, the Philippines and the United States.
Sugar
Projected US sugar supply for fiscal year 2011/12 is decreased 215,000 short tons, raw value, from last month, due to lower beginning stocks and production. Beet sugar production is lowered 175,000 tons based on lower forecast sugar beet production. Sugar use is unchanged.
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CAP Reforms Fail Europe's Farm Animals, Says CIWF
UK - Compassion in World Farming (CIWF) says it is horrified by the European Commission's failure to improve animal welfare in the proposals for CAP reform.
The Common Agricultural Policy (CAP) proposals that were officially revealed by the European Commission yesterday, fail to support farmers who want to introduce higher welfare systems on their farms.
Despite strong scientific evidence that industrial livestock production harms animal health and welfare and notwithstanding taxpayers’ belief that the CAP should help improve the well-being of farm animals, the Commission's proposals almost completely fail to address animal welfare.
Indeed the proposals seriously weaken the existing CAP measures that enable payments to be made to farmers who wish to attain high standards of animal welfare. One such measure (Article 68 of Pillar 1) has been disposed of altogether. The other measure (the Animal Welfare Payments in Pillar 2) has been diluted to the point where it may be of little value in practice. At present Animal Welfare Payments can be made for five to seven years, whereas under the proposal they can only be made for 'a renewable period of one year'. Farmers will be reluctant to incur the expense of moving to a new, higher welfare system if they may receive support for just one year.
Peter Stevenson, Compassion's Chief Policy Advisor says: "We are deeply disappointed that current provisions have been very substantially weakened. Under the Commission proposals for the CAP, after 2013 almost none of the €55 billion of CAP funds handed out each year will be used to help farmers move away from industrialised farming to more humane, higher welfare farming."
The Commission's proposals will now be considered by the European Parliament and the 27 Member States. Compassion in World Farming is calling on the Parliament and the Member States to strengthen the proposals so that a significant part of the CAP funds are used to help Europe's farmers move away from the inhumane, resource-hungry factory farms that blight so much of the EU livestock sector and instead to adopt high welfare extensive farming practices. These would benefit both animal welfare and other key CAP objectives including reduced pollution and use of water, enhanced soil quality, regeneration of biodiversity and improved human health.
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Feed Outlook – October 2011
World coarse grain production in 2011/12 is projected to reach 1,136.3 million tons, up 5.1 million this month as increases in other countries swamp the decline in the US, according to the latest report from the USDA Economic Research Service.
Increased Corn Supplies Reduce Price Prospects
The 30 September Grain Stocks report issued by USDA’s National Agricultural Statistics Service (NASS) showed sharply higher-than-expected 1 September stocks for corn. Despite a 64-million-bushel reduction to 2011/12 forecast corn production this month with lower reported area, the 209-million-bushel gain in carry-in over the previous forecast boosts 2011/12 corn supplies, resulting in a 30-cent-per-bushel decline in the projected farm price. Increased US beginning stocks and increased foreign production combine to boost world coarse grain supplies 10 million tons this month. Global coarse grain ending stocks for 2011/12 are increased six million tons this month to 156 million, mostly on higher expected corn ending stocks in the United States. US corn ending stocks are still projected to be the lowest since 1995/96, and world corn stocks remain projected at a five-year low.
DOMESTIC OUTLOOK
Corn Carry-out Stocks for 2010/11 Higher Than Expected
The 30 September NASS Grain Stocks report indicated 1 September US corn stocks of 1,128 million bushels, an increase of 209 million bushels from the September WASDE forecast. Still, ending stocks for 2010/11 are 580 million bushels lower than the previous year. The stocks data and nearly final data for other domestic use and trade imply a fourth quarter feed and residual use of only 448 million bushels, the lowest quarterly corn feed use going back as far as comparable data are available (1975/76). However, annual feed and residual for 2010/11, at 4.80 billion bushels, is neither unusually large nor unusually small, coming in as the 17th largest in the last 35 years even as the use of distillers’ dried grains has slowed the direct use of corn for feed.
Because the feed and residual category includes residual use, statistical errors in other supply and demand measures show up in the residual usage. A number of factors could contribute to the exceptionally low fourth quarter feed and residual estimate, however, all such factors are speculative and not necessarily supportable by available data. Among possible factors that could explain the lower-than-expected fourth quarter feed and residual use would be (1) the impact of higher prices on usage, (2) early usage of new-crop 2011/12 corn, (3) tighter pipeline (in transit) supplies and (4) higher quality of 2010-crop corn compared with 2009-crop.
Although none of these potential explanations are definitive and even together may not fully explain all of the reduction year-to-year in feed and residual disappearance during the last half of the 2010/11 marketing year, these factors do merit some discussion.
High corn prices encourage less use and more efficient use. Cash bid prices for corn in Central Illinois were above $6 per bushel from mid-March through August, topping $7 per bushel several times over those months.
Some new-crop corn is harvested before 1 September each year and the increase in southern corn production in recent years has allowed for more harvesting ahead of the new crop year. Still, State-level harvest progress reports do not indicate as much early new-crop availability as last year or as in summer 2007, and only somewhat higher than during late-summer 2008 and 2009. New-crop corn use ahead of 1 September boosts 1 September stocks, not by their inclusion in reported stocks, which are for old-crop corn but by replacing old-crop corn in usage and allowing that old-crop corn to be counted in stocks.
Pipeline supplies, including corn in transit, may be difficult to measure and vary with levels of usage, including exports. The slow pace of September corn exports – down about 50 million bushels from the previous year – suggests that less corn than usual was in transit, leaving more corn in more visible storage positions.
Higher corn test-weights or other quality factors for 2010 crop corn could reduce the amount of corn needed to produce a unit of meat or gallon of ethanol. Available data to support year-to-year variations in corn quality are limited with test-weight data only available for inspected grain and no reliable data series available on actual corn-to-ethanol conversion rates. Also, higher feeding or ethanol conversion rates for 2010-crop corn would fail to fully explain the 2010/11 quarterly pattern of feed and residual use with higher usages year-to-year in the first and second quarters.
Acreage Reduction Reduces Feed Grain Production, Yields Steady
US feed grain production for 2011/12 is forecast at 326.2 million tons, down from 328.1 million predicted last month. The month-to-month decrease reflects reduced forecast production for corn and sorghum and smaller production estimates for barley and oats from the Small Grains 2011 Summary report. Planted area for the four grains is decreased 520,000 acres, and harvested for grain acres were decreased 553,000 acres this month. Yields per harvested acre for the four grains combined are unchanged at 3.56 metric tons. Beginning stocks in 2011/12 are raised to 32.3 million tons, based on the 30 September Grain Stocks report. Total 2011/12 feed grain supply is forecast at 360.6 million tons, up from 357.3 million last month and down from 380.5 million in 2010/11.
Total 2011/12 feed grain utilisation is projected at 336.1 million tons, down from 337.6 million projected last month and down from 348.2 million in 2010/11. The month-to month decline is entirely from lower corn exports. Lower sorghum exports were offset by an increase in feed and residual, leaving total sorghum use unchanged. Total projected feed grain ending stocks for 2011/12 are raised 4.9 million tons to 24.5 million, mainly reflecting higher carry-in from the 2010/11 crop.
Feed Use
On a September-August marketing year basis for 2011/12, US feed and residual use for the four feed grains plus wheat is projected to total 128.3 million tons, down 1.5 million from the revised total of 129.8 million tons in 2010/11. Corn is estimated to account for 93 per cent of feed and residual use in 2011/12, down from 94 per cent in 2010/11.
The projected index of grain-consuming animal units (GCAU) in 2011/12 is 94.2 million units, up from 92.9 million in 2010/11. Feed and residual per GCAU in 2011/12 is estimated at 1.36 tons, down from 1.40 in 2010/11. In the index components, GCAUs are increased for beef, dairy, pork and poultry.
USDA’s 19 September Milk Production report indicated milk production in the 23 major producing States during August totalled 15.3 billion pounds, up 2.2 per cent from August 2010. Production per cow averaged 1,810 pounds for August, 18 pounds above last year. However, the number of milk cows on farms increased by 102,000 head from August 2009 to 8.47 million. The milk production forecast for 2011 is raised as the dairy herd has been expanding at a more rapid rate and milk per cow during the summer increased more rapidly than expected. However, the forecast for 2012 is reduced as forecast lower milk prices and weakening milk-feed ratios increase the pace of later-year declines in cow numbers.
US hog breeding inventory in the third quarter of 2011 was at 5.81 million head, up one per cent from last year and up slightly from the previous quarter according to USDA’s 28 September Quarterly Hogs and Pigs report. Market hogs inventory, at 66.6 million head, was up one per cent from last year. As the result of lower market inventory, lower slaughter and slower growth in slaughter weights, the 2011 pork production forecast is reduced. Intended farrowings from December 2011 to February 2012, at 2.87 million sows, are down slightly from the same period a year earlier but up slightly from December 2009-February 2010 based on the report. Pork production for 2012 is raised from last month as increased pigs per litter support a larger pig crop and increased supplies of slaughter hogs into 2012 despite steady numbers of sows farrowing.
USDA’s Broiler Hatchery report on 7 October indicated that broiler-type egg sets and chicks placed have been decreasing. Cumulative placements of broiler flock are down seven per cent from the same period a year earlier. Broiler production is reduced as lower egg sets point to a sharp reduction in later-year bird slaughter. However, continued relatively heavy bird weights result in an increase in expected third-quarter production. Table egg production is increased but is partly offset by lower expected broiler hatching egg production.
Egg-type chicks hatched and pullet chicks for future hatchery supply have been increasing based on USDA’s 22 September Chickens and Eggs report. Table egg production is increased.
USDA’s 15 September Turkey Hatchery report indicated that during August 2011, turkey poults hatched were up four per cent from the year earlier but net poults placed were 100,000 below August 2010. The 2011 turkey production projection is 15 million pounds higher than last month’s but the turkey meat forecast for 2012 is unchanged from last month as lower feed prices stabilise turkey production.
USDA’s 23 September Cattle on Feed report indicated that placements and marketings of feed cattle during August both increased five per cent above a year earlier. The increase in beef production is largely due to higher expected cow slaughter as drought conditions in much of the Southern Plains and high hay prices will likely keep slaughter high.
Minor Changes Made to 2010/11 Crop Year
The following changes are made to the 2010/11 balance sheets:
Corn: feed and residual use is lowered 197 million bushels to 4,803 million this month based on 1 September stocks; food, seed and industrial (FSI) use is lowered 15 million bushels to 6,415 million, reflecting lower-than-expected 4th quarter HFCS consumption due to reduced demand for soft drinks and small decreases in some other FSI uses; corn exports are unchanged from September at 1,835 million bushels; ending stocks are raised 208 million bushels to 1,128 million bushels, based on the 1 September stocks estimate. The farm price per bushel was lowered $0.02 per bushel to $5.18.
Sorghum: feed and residual is lowered 0.8 million bushels to 124.2 million due to reduced ending stocks of 27.5 million, based on the 1 September stocks estimate; and the farm price per bushel was lowered $0.13 to $5.02.
Barley: feed and residual use was raised slightly to 49.8 million bushels due to lower ending stocks.
Oats: feed and residual use was lowered slightly to 102.2 million bushels on a 24,000-bushel increase in ending stocks.
2011/12 Corn Crop Slips on Lower Harvested Acreage and Yields Steady
US corn production is forecast at 12,433 million bushels for 2011/12, down 64 million bushels from last month. Yields are unchanged and forecast harvested acreage was reduced 452,000 acres to 83.9 million. As forecast, this year’s production would be the fourth highest on record behind 2009, 2007, and 2010. Beginning stocks are raised to 1,128 million bushels, up 208 million from last month based on reported 1 September stocks.
The 1 October corn objective yield data indicate the second highest number of ears per acre on record for the combined 10 objective yield States (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin), only behind the record year of 2009. Record-high ear counts are forecast in Iowa, Illinois, Ohio and Wisconsin.
Feed and residual use is unchanged at 4,700 million bushels, reflecting the effects of relatively high corn prices. Exports are lowered 50 million bushels to 1,600 million as a result of increased export competition, especially from the Ukraine. Corn used for ethanol production in 2011/12 was unchanged this month at 5,000 million bushels, based on anticipated fuel demand. Total utilisation is projected at 12,710 million bushels, down 50 million from last month and 343 million below 2010/11.
Ending stocks are raised sharply this month by 194 million bushels. Nevertheless, at a projected 866 million bushels, 2011/12 ending stocks would be the lowest since 1995/96 (426 million bushels). Projected stocks drop to less than 25 days of expected use. Increased supplies due to higher carry-in result in lower expected corn prices, with the 2011/12 forecast price reduced 30 cents on both ends of the range to $6.20 to $7.20 per bushel. These price forecasts are still far above the record 2010/11 actual price of $5.18 per bushel.
Sorghum Production Cut
US production is forecast at 244 million bushels, down 294,000 bushels from last month and 101 million below last year. Based on updated administrative information, acreage changes were made in several States. Planted area is estimated at 5.5 million acres, up 122,000 acres from the previous forecast and up 63,000 from 2010/11. Harvested area is forecast at 4.4 million acres, down 44,000 acres from the previous forecast and 376,000 acres below last year. If realised, this will be the lowest harvested acreage on record since 1936. Based on 1 October conditions, yield is forecast at 55.0 bushels per acre, down 0.6 bushels from September and down 16.8 bushels from last year. Sustained hot weather and drought has affected major producing regions. With a one-million-bushel increase in beginning stocks, total supply for 2011/12 is projected at 271 million bushels, down 491,000 from last month, reflecting increased carry-in partly offset by lower production.
Projected total utilisation is 245 million bushels, unchanged from last month and down 114 million from 2010/11. Feed and residual use is expected to be 10 million bushels higher this month and forecast export demand slips 10 million bushes as the pace of export sales has been slow. Exports are expected to total 100 million bushels, down from 150 million in 2011/12. Ending stocks for 2011/12 were raised 0.5 million bushels this month to 26 million.
The expected sorghum season-average price was lowered $0.30 on both ends of the range to $6.00-$7.00 per bushel, compared to the revised $5.02 per bushel for 2010/11. This sharp year-to-year increase in expected price reflects the smaller corn and sorghum crops and tighter feed grain supplies.
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Barley Crop Lowered
US barley production for 2011/12 is forecast at 155 million bushels, down 13 million from August and down 25 million from 2010/11. Average yield per acre, at 69.2 bushels, is down 1.2 from last month and 3.9 bushels from last year. Area harvested for grain is estimated at 2.2 million acres, 151,000 below last month and 226,000 below 2010/11. Total supply of barley is projected at 254 million bushels, down 13 million from last month and down 51 million from 2010/11. Imports were unchanged from last month’s projection of 10 million bushels.
Projected barley use is lowered 10 million bushels from last month due to reduced feed and residual. Ending stocks for 2011/12 are lowered by three million bushels to 54 million and are down 35 million from last year. Barley prices were reduced by 15 cents on the low end or the range and 25 cents on the high end of the range to $5.30-$6.30 per bushel, compared with $3.86 in 2010/11. Higher expected prices year-to-year reflect stronger feed grain prices generally and steady malting barley demand.
Oats Production Continues to Set Record Lows
US production of oats for 2011/12 is estimated at a record low 54 million bushels, down three million bushels from last month and down 27 million from 2010/11. The estimated yield was lowered 4.1 bushels per acre from last month to 57.5 bushels. Compared with last year, yields were down 6.8 bushels per acre. Area planted to oats is estimated at 2.5 million acres, down slightly from last month and 642,000 acres lower than for 2010/11. The largest declines occurred in North Dakota, Wisconsin, Minnesota, South Dakota and Iowa, where planted areas decreased 110,000, 100,000, 80,000, 70,000 and 60,000 acres, respectively. Harvested area, estimated at 940,000 acres, is up slightly from last month but down 323,000 acres from last year, making it the smallest acreage harvested for grain on record.
Total oats supply is forecast at 212 million bushels, down three million bushels from last month and 35 million below 2010/11. Projected ending stocks were lowered by three million bushels this month to 43 million bushels, down 25 million from the slightly revised 2010/11 carry-out of 68 million. Prices for 2011/12 are lowered 30 cents on both ends of the range to $3.10 to $3.70 per bushel compared with $2.52 last year.
Hay Production Falls in 2011/12
US all-hay production in 2011/12 is forecast at 131.7 million tons, down from 145.6 million tons in 2010/11. Both area harvested and yields are reduced. Total hay harvested area for 2011/12 decreased to 57.6 million acres from 59.9 million last year. Roughage-consuming animal units (RCAU) in 2011/12 are projected to be 68.0 million units, down from 69.2 million in 2010/11. With hay production and RCAUs down, hay supply per RCAU is 1.94 tons in 2011/12, compared with 2.10 tons in 2010/11.
Production of alfalfa hay and alfalfa mixtures is forecast at 64.7 million tons, down slightly from the August forecast and down 3.2 million tons from last year. Based on 1 October conditions, yields are expected to average 3.35 tons per acre, down 0.01 tons from August and down 0.05 tons from 2010. Harvested area is forecast at 19.3 million acres, unchanged from August but down 3 per cent from the previous year's acreage.
Other hay production is forecast at 67.0 million tons, down slightly from the August forecast but 14 per cent below 2010/11. Based on 1 October conditions, yields are expected to average 1.75 tons per acre, unchanged from the August forecast and down 0.20 tons from last year. Harvested area, at 38.3 million acres, is unchanged from August but down 4 per cent from the previous year.
INTERNATIONAL OUTLOOK
Global Coarse Grain Production Increased This Month
World coarse grain production in 2011/12 is projected to reach 1,136.3 million tons, up 5.1 million this month as foreign increases swamped the US decline. Foreign coarse grain production is forecast up 7.1 million tons to 810.0 million, with almost all the change in corn. Foreign barley production is up 0.3 million tons but sorghum and oats together are down by a like amount.
Corn production for China in 2011/12 is increased 4.0 million tons to 182 million as yields are increased. Rains and temperatures throughout the growing season were exceptionally favourable in the main surplus producing region, the North-East. In the North China Plain, another major growing area, rains were irregular but the wide availability of irrigation helped limit loses. With most of the harvest finished, yields are reported better than the previous year, and almost as good as the banner year of 2008/09. After a detailed review of provincial yield data, USDA has decided that the official Chinese Government statistics for yields for 2009/10 and 2010/11 are the best available and has adopted those numbers. This increases 2009/10 corn production from 158.0 million tons to 164.0 million, and 2010/11 production from 173.0 million tons, to 177.2 million.
Ukraine’s corn production for 2011/12 is increased 3.0 million tons this month to a record 21.0 million. With harvest more than one-third complete, record yields appear to be a foregone conclusion as the early-harvested areas tend to be lower yielding than the late-harvested areas. The growing season was quite favourable, with some dryness at planting, followed by good rains during the growth cycle, a break in the heat during tasseling (reproduction), and mostly dry conditions for harvest. Corn planted area in Ukraine is the highest since 1963.
Russia’s corn crop is increased 0.5 million tons to 6.0 million based on improved yields. In the key Southern District, rainfall and temperatures were mostly favourable throughout the growing season. Preliminary harvest reports confirm the higher yield prospects.
Partly offsetting are declines in corn production for Serbia, down 0.3 million tons to 6.7 million tons as dryness during the filling stage reduced yield prospects; for the Philippines, down 0.1 million to 7.0 million, on early indications of crop damage from recent storms; and the EU, down slightly with a reduction for Hungary mostly offset by an increase for Germany.
While world barley production only increased a small amount, several offsetting changes were significant. Russia’s barley production increased 1.0 million tons to 16.5 million as harvest reports indicate better-than-expected yields. Good yields are also reported in Kazakhstan, boosting production 0.2 million tons to 2.3 million. In Argentina, increased area is reported planted to barley as producers seek an alternative to wheat, where government policies interfere with exports. Argentine production is increased 0.2 million tons to 3.3 million. However, in Australia, prospects for barley yields are reduced, cutting projected production 0.8 million tons to 8.2 million. Also, government surveys in Canada revealed slightly lower area and yield for barley, cutting production 0.4 million tons to 7.9 million.
Global coarse grain beginning stocks for 2011/12 are up 5.3 million tons this month, with almost the entire change in the United States. Foreign changes were small and mostly offsetting. Increased US beginning stocks and increased foreign production combine to boost world coarse grain supplies 10.4 million tons this month.
Increased Use Forecast Mostly in China
Global coarse grain use is up 4.3 million tons this month to 1,148.5 million. Most of the increase, 4.0 million tons, is for corn used as feed in China. The increases in China’s corn production for 2009/10, 2010/11 and 2011/12 were balanced by increases in feed and residual use, leaving ending stocks nearly unchanged. South Korea’s corn feed use is up 0.5 million tons this month as pork production is recovering from disease related problems. Ukraine, with a record crop, has corn use up 0.35 million tons, with 0.30 million of the increase in feed and residual use. Peru had a small increase in corn use but Taiwan and Serbia had declines. For Egypt, total corn use is unchanged, but 0.2 million tons are shifted from feed and residual to food and industrial use as more corn is being mixed into wheat flour to make bread.
World barley use forecast for 2011/12 is down 0.9 million tons this month to 136.2 million. All the reductions are in feed and residual use. EU use is down as favourable prices for exports are expected to move barley away from the domestic feed market. With reduced production, feed use in the United States and Canada is cut 0.2 million tons each. Reduced EU barley feed use supports a partly offsetting 0.3-million-ton increase in oats feed use, the only significant change in global oats use this month. Tighter supplies of sorghum are expected to reduce feed use 0.2 million tons each for Mexico and Argentina, partly offset by a similar sized increase in US consumption.
World Coarse Grain Ending Stocks Boosted
Global coarse grain ending stocks for 2011/12 are increased 6.0 million tons this month to 156.0 million. While most of the increase is in US corn stocks, foreign coarse grain stocks are up 1.2 million tons to 131.5 million. Most of the increase in foreign stocks is for corn, up 0.9 million tons to 101.2 million.
Corn stocks prospects for Ukraine are up 0.7 million tons to 2.3 million due to record production. Increased production boosts Russia’s corn ending stocks 0.3 million tons. Adjustments to Canada’s corn trade for 2010/11 boost 2011/12 beginning and ending stocks 0.1 million tons. These increases are partly offset by reductions in ending stocks prospects for Serbia, down 0.1 million tons due to reduced production, with smaller reductions for China, the EU, and Peru.
World barley ending stocks are up 0.9 million tons this month to 22.5 million. Russia and Kazakhstan, with increased production, are raised 0.8 million tons and 0.2 million tons, respectively. However, Australia, with reduced production, has barley ending stocks prospects trimmed 0.1 million tons. Australia, with reduced sorghum production, has ending stocks prospects reduced 0.2 million tons, accounting for most of the change in projected global sorghum stocks. EU oats stocks are reduced 0.3 million tons this month, accounting for most of the change in global oats stocks. EU rye stocks are projected down 0.1 million tons.
World Corn Trade Increased, US Export Prospects Reduced
Global corn trade for 2011/12 (October-September) is projected up 1.2 million tons this month to 93.3 million. Increased exportable supplies and some moderation in prices are encouraging trade prospects. South Korea’s corn imports are increased 0.5 million tons to 7.7 million based on strong recent purchases and the recovery of the pork sector from disease problems. Corn import for Peru and the Philippines for 2011/12 are each boosted 0.1 million tons this month. Slightly reduced production prospects (2010/11 for Peru and 2011/12 for Philippines) support import prospects. However, Taiwan’s corn imports have lagged, and prospects for 2011/12 are reduced 0.2 million this month.
Ukraine, with a record corn crop, is projected to export 12.0 million tons of corn in 2011/12, up 2.0 million this month and more than double the 5.0 million estimated for 2010/11. Of all export competitors, Ukraine has responded to increased corn prices with the largest increase in corn production and exports. Russia, with increased production, is expected to export 0.6 million tons, double last month’s forecast, but still less than half the corn exported in 2008/09. Serbia’s corn export prospects are trimmed 0.1 million tons to 2.1 million due to reduced production prospects.
US export prospects for 2011/12 are reduced 1.0 million tons to 41.0 million – down 50 million bushels to 1.6 billion for the September-August local marketing year. Reduced production, high prices, and increased competition are putting a damper on US corn export prospects. However, as of 29 September 2011, outstanding sales of corn reached 14.3 million tons, up from 13.8 million a year earlier.
The slow pace of US corn exports in September 2011 – inspections of 2.9 million tons, compared to 4.3 million a year earlier – caused a reduction of 0.5 million tons to 45.5 million for the 2010/11 trade year export estimate.
US sorghum export prospects for 2011/12 are reduced 0.2 million tons to 2.7 million (down 10 million bushels for the local marketing year to 100 million). Tight sorghum supplies and competition from domestic demand are expected to limit exports. Mexico’s sorghum imports are reduced 0.2 million tons to 2.1 million due to tight US supplies.
World barley trade in 2011/12 is projected at 15.4 million tons, unchanged this month. While projections for importers did not change, a number of offsetting changes were made in export prospects. With reduced production, Australia’s exports are reduced 0.7 million tons to 4.0 million and Canada’s export prospects are trimmed 0.2 million tons to 0.7 million. However, EU exports are raised 0.5 million tons to 2.0 million and exports by Argentina and Russia are each boosted 0.2 million.
October 2011
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World Agricultural Supply and Demand Estimates – November 2011
While beef and broiler production forecasts for 2011 are lowered, pork and turkey production are increased, according to the latest World Agricultural Supply and Demand Estimates (WASDE) report for November.
Livestock, Poultry and Dairy
The 2012 forecast of total red meat and poultry production is reduced from last month. Beef production is reduced due to slightly lower cattle slaughter during the year and slower growth in carcass weights. Broiler production is forecast lower as sharper declines are expected in bird numbers during late 2011 and into 2012. Turkey production is raised as prices are expected to favour expansion during 2012. Pork production is unchanged. For 2011, beef and broiler production forecasts are reduced, but pork and turkey production is increased. Egg production is forecast higher in the last quarter of 2011 and for 2012.
The beef import forecast is raised slightly for 2011. Beef export forecasts for 2011 and 2012 are raised slightly as strong global beef demand supports continued gains in US exports to a number of Asian markets. Small changes are made to US pork imports for 2011 and 2012 and pork exports for 2011. Broiler exports are raised for 2011 and 2012 on strong demand in a number of countries and a relatively weak dollar.
Cattle prices are forecast higher for the remainder of 2011 and through 2012. Strong demand is expected to carry into next year along with tight cattle supplies. Hog prices are raised for 2011 and 2012 on demand strength and support from lower beef and broiler production. Broiler prices are lowered for the last quarter of 2011 and the first quarter of 2012 as weakness in domestic demand and current overhanging supplies pressure prices.
Milk production forecasts for 2011 and 2012 are unchanged from last month. Commercial exports are forecast higher for 2011. Fat and skim-solids ending stocks for 2011 are lowered.
Cheese, butter and whey prices are forecast higher for both 2011 and 2012, but the non-fat dry milk (NDM) price forecast is reduced for 2011 and unchanged for 2012. Class III prices are raised for 2011 and 2012 on the increased price forecast for cheese and whey. The Class IV price is unchanged for 2011 as the higher butter price is mostly offset by a lower NDM price forecast. However, for 2012 with an unchanged NDM price forecast, the Class IV price forecast is raised due to higher butter prices. The all milk price is forecast at $20.10 to $20.20 per cwt for 2011, and $18.05 to $18.95 per cwt for 2012.
Wheat
US wheat supplies for 2011/12 are lowered nine million bushels based on updated production estimates for the states resurveyed following the 30 September Small Grains report. Adjustments to production in these states, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring (HRS) wheat and durum. An increase in white wheat production is partly offsetting. Projected use for 2011/12 is unchanged for all wheat; however, domestic food use is projected higher for Hard Red Winter (HRW) wheat and lower for HRS wheat. Projected exports are raised for HRS and lowered for HRW. All wheat ending stocks are lowered nine million bushels in line with the production change. The season average farm price is projected lower at $7.05 to $7.75 per bushel compared with $7.10 to $7.90 last month, reflecting the latest reported prices.
Global wheat supplies for 2011/12 are projected 2.6 million tons higher mostly reflecting higher production in Kazakhstan and EU-27. Kazakhstan production is raised 2.0 million tons as an extended harvest period capped off a nearly ideal growing season, confirmed by the latest government reports. EU-27 production is raised 1.2 million tons with further upward revisions for France and Spain and higher reported production in the United Kingdom and Czech Republic. Partly offsetting these increases is a 0.5-million-ton reduction for Argentina and 0.3-million-ton reductions for both Algeria and Ethiopia.
World wheat trade is raised for 2011/12 with higher expected imports for China, a number of African countries, including Morocco and Algeria, as well as for Brazil and several FSU-12 countries neighboring Kazakhstan. Partly offsetting is a reduction in projected imports for South Korea where more corn feeding is expected. Exports are raised 1.0 million tons each for EU-27 and Russia reflecting larger supplies in EU-27 and the continued heavy pace of shipments from Russia.
Global wheat consumption for 2011/12 is raised 2.4 million tons with increased feeding expected for Kazakhstan, Brazil and Serbia. Larger crops in Kazakhstan and Serbia support more wheat feeding. Recent rains in southern Brazil have reduced wheat quality in some areas, raising the potential for more feeding. Higher consumption is also expected for EU-27, Ethiopia, Kenya and several smaller FSU-12 countries. Global ending stocks are projected 0.2 million tons higher. Rising stocks in Kazakhstan, China, and Morocco are partly offset by reductions in major exporting countries including Russia, Argentina and EU-27.
Coarse Grains
US feed grain supplies for 2011/12 are projected lower with reduced corn and oats production more than offsetting small increases for sorghum and barley. Corn production for 2011/12 is forecast 123 million bushels lower with the national average yield forecast 1.4 bushels per acre below last month. At 146.7 bushels per acre, this year’s yield would be the lowest since 2003/04. Feed and residual use is lowered 100 million bushels with the smaller crop and further reductions in the outlook for broiler production. Projected US ending stocks are lowered 23 million bushels. The season-average farm price is unchanged at $6.20 to $7.20 per bushel.
Other 2011/12 changes include small adjustments to projected ending stocks for sorghum, barley and oats, reflecting this month’s production changes. Projected sorghum exports are reduced 10 million bushels as sales and shipments continue to lag earlier expectations. A 10-million-bushel increase in expected sorghum food, seed and industrial use is offsetting. Projected farm prices for sorghum are unchanged, but projected ranges are narrowed for barley and oats, and the barley farm price is projected lower based on reported malting barley prices.
Changes for 2010/11 corn mostly reflect a 13-million-bushel increase in food, seed, and industrial use with usage raised for sweeteners, starch and ethanol, all based on the latest available data. In addition, there are small adjustments to imports and exports based on August trade data from the US Census Bureau. These changes reduce 2010/11 feed and residual use 11 million bushels.
Global coarse grain supplies for 2011/12 are projected slightly lower with reduced US corn production and lower EU-27 rye production more than offsetting higher Argentina sorghum production, higher EU-27 corn, barley, oats production and higher Kazakhstan barley production. Corn production is lowered for a number of countries with the biggest reduction for Mexico where production is lowered 3.5 million tons. A late start to the summer rainy season and an early September freeze in parts of the southern plateau corn belt reduced yields for Mexico’s summer crop. Lower expected area for the winter crop, which will be planted in November and December, also reduces 2011/12 corn production prospects. Reservoir levels are well below those necessary to sustain a normal seasonal draw down in the northwestern corn areas which normally account for 70 to 80 per cent of Mexico’s winter corn crop.
Increases in 2011/12 corn production for a number of countries partly offset reductions in Mexico, the United States and Serbia. Corn production is raised 2.5 million tons for China with increases in both area and yields in line with the latest indications from the China National Grain and Oils Information Center. EU-27 corn production is raised 1.9 million tons mostly reflecting higher reported output in France, Romania and Austria. Argentina production is raised 1.5 million tons with higher expected area. FSU-12 production is raised 0.7 million tons with higher reported yields in Belarus and Russia. There are also a number of production changes this month to corn and sorghum production in Sub-Saharan Africa which reduce coarse grain production for the region.
World coarse grain trade for 2011/12 is raised with increased global imports and exports of barley and corn. Barley imports are raised for Algeria, Saudi Arabia and Jordan with exports increased for EU-27 and Russia. Corn imports are increased for China, Mexico and South Korea. Higher expected corn exports from Argentina and EU-27 support these increases. Higher sorghum exports from Argentina offset the reduction in expected US sorghum shipments. Global corn consumption is mostly unchanged with higher industrial use and feeding in China and higher corn feeding in EU-27 and South Korea offsetting reductions in Mexico and the United States. Global corn ending stocks are projected 1.6 million tons lower with reductions in EU-27, Mexico, Brazil and the United States outweighing increases for China and Argentina.
Rice
US all rice production in 2011/12 is forecast at 188.1 million cwt, 1.2 million above last month due to an increase in yield. Average all rice yield is estimated at 7,167 pounds per acre, up 44 pounds from last month, and the second highest yield on record. Harvested area is unchanged at 2.62 million acres. Long-grain rice production is raised 0.7 million cwt to 117.5 million, while combined medium- and short-grain production is increased 0.4 million to 70.6 million. No changes are made to rice use for either all rice or the rice by-class forecasts. All rice domestic and residual use is forecast at 127.0 million cwt, and all rice exports are forecast at 91.0 million, both down from a year ago. All rice ending stocks are forecast at 37.5 million cwt, up 1.2 million from a month ago, and a decrease of 10.9 million from the previous year.
The long-grain, combined medium- and short-grain, and all rice 2011/12 season-average farm price forecasts are unchanged from last month at $13.50 to $14.50 per cwt, $15.50 to $16.50 per cwt, and $14.00 to $15.00 per cwt, respectively.
Global 2011/12 rice supply and use are lowered from a month ago. World 2011/12 production is forecast at a record 461.0 million tons, down 0.4 million from last month due mainly to decreases for Burma, Cambodia, Laos and Thailand, which are partially offset by an increase for China. Thailand’s 2011/12 rice crop is lowered nearly one million tons as losses in the main-season crop from recent flooding are partially offset by an expected re-planting of some of the main season crop in the Northern Region along with an expected record dry-season crop. Flooding also lowered crop prospects in Burma, Cambodia and Laos. China’s 2011/12 crop is raised 2.0 million tons to a record 141.0 million, due to an increase in harvested area. Harvested area is increased based on recent indications from the government of China. The increase in global consumption is due mostly to an increase for China. Global exports are lowered slightly due to reductions for Burma and Cambodia, which are partially offset by increases for Argentina and Brazil. Global ending stocks for 2011/12 are projected at 100.6 million tons, down 0.8 million from last month, but an increase of 2.6 million from the previous year.
Oilseeds
Total US oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. Soybean production is forecast at 3.046 billion bushels, down 14 million from last month. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month. Soybean exports are reduced 50 million bushels to 1.325 billion mainly due to a slow export sales pace through October. Soybean ending stocks are projected at 195 million bushels, up 35 million from last month.
Soybean oil ending stocks and exports for 2011/12 are reduced this month due to lower beginning stocks resulting from changes in the 2010/11 soybean oil balance sheet. Changes for 2010/11 include reduced soybean oil production and ending stocks. These changes are based on industry indications of soybean crush and soybean oil stocks. Soybean meal production and domestic use for 2010/11 are also reduced due to lower October-September year crush. Soybean meal changes for 2011/12 include reduced domestic use and higher exports.
The US season-average soybean price range is projected at $11.60 to $13.60 per bushel, down 55 cents on both ends of the range. The soybean meal price is projected at $310 to $340 per short ton, down $25.00 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, unchanged from last month.
Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month. Global soybean production accounts for a quarter of the increase with larger crops projected for Brazil, Paraguay and Mexico. Brazil soybean production is increased 1.5 million tons to 75 million with improved yield prospects related to rapid planting progress and good early season moisture throughout the country. These gains are partly offset by lower production projected for Argentina, which is reduced 1.0 million tons to 52 million due to reduced area as producers shift to corn. Global sunflower seed production is raised due to larger crops in Ukraine, EU-27 and Argentina. Increased yields are projected for Ukraine as harvest nears completion. Other changes include increased rapeseed production for EU-27, increased cottonseed production for Turkey and increased palm oil production for Malaysia.
Global oilseed trade is projected at 113.3 million tons, down 0.8 million. Reduced soybean exports for the United States and Argentina are only partly offset by increases for Brazil and Paraguay. Soybean imports are reduced for Japan and Russia. Global oilseed crush is reduced 0.2 million tons to 389.1 million with reduced soybean crush in Argentina partly offset by increased sunflower seed crush in Ukraine. Global oilseed ending stocks for 2011/12 are raised 0.9 million tons to 73.9 million. Soybeans account for most of the change with increased stocks for the United States and China more than offsetting lower stocks in Argentina and Japan.
Sugar
Projected US sugar supply for fiscal year 2011/12 is increased from last month, as higher beginning stocks and imports more than offset lower production. Sugar production is decreased 50,000 tons, based on lower forecast US sugarbeet production. Imports from Mexico are increased based on increased supplies – higher beginning stocks and increased tariff rate quota imports – and reduced consumption and ending stocks in Mexico
This month's 2010/11 US sugar supply and demand reflect final estimates of stocks, production, and use in Farm Service Agency’s Sweetener Market Data report and final import data from the Foreign Agricultural Service. Ending stocks are modestly higher than estimated last month. Mexico's government data for fiscal-year 2010/11 are the basis for decreasing imports and domestic use and increasing ending stocks.
Note: Beginning this month, sugar supply and use data in the WASDE report will be shown in ‘actual weight’. The WASDE report will continue to show US sugar supply and use, including imports from Mexico, in raw value. Raw value for Mexico sugar converts from actual weight by multiplying by 1.06. The Foreign Agricultural Service will continue to report world sugar supply and use, including for Mexico, in raw value.
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Wednesday, November 16, 2011
Pork Surplus Likely to Soon Turn to Shortage
THAILAND - Pork could be harder to find starting in January, as pig producers are now rushing to sell their live animals for short-term profit in order to avoid risking greater loss from the floods.
Prawit Asanatham, president of the Pork Traders Association, said the present oversupply has seen the price of live swine drop to 53 baht a kilogramme on average and as low as 40 baht in some areas.
Wholesale pork price is priced at 100 baht a kilo and retail pork at 120-130 baht, reports Bangkok Post.
Last month, live swine went for 57 baht a kilo, while pork was sold for 110 baht wholesale and 130-140 baht retail.
Mr Asanatham said the severity of any shortage will depend on government policy, especially that involving the control of live swine exports.
"If the government can keep these exports at an appropriate level, then there may be a shortage in flooded areas, but it won't be too severe overall," he said.
Regarding the distribution of goods, Santichai Santawanpas, a deputy director-general of the Internal Trade Department, said modern-trade operators are in the process of recovering their distribution centres now that the water has started to recede in Ayutthaya's Wang Noi district.
Private operators have also rented space in several areas to serve as distribution centres, so the department expects improved goods distribution in the coming days.
The department found no shortage of goods in traditional grocery stores and family-run shops, as they source products directly from suppliers, but consumer behaviour has changed more to buying from modern-trade operators, said Mr Asanatham.
So far, 40 consumers have called the department's 1569 hotline to complain about high prices, especially for eggs and drinking water.
Mr Santawanpas said the department has coordinated with drinking-water producers upcountry to supply more products in Bangkok.
The Layer Farmers Association will supply more eggs to modern retail chains, which require a million eggs a day. Suchat Sinrat, director of the department's monitoring and operations division, said supplies and prices of construction materials and cleaning equipment will be watched closely, as these will be in high demand for renovations once the floodwater subsides.
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Sustaining Feed, Fuel and Food in the Future
Consumer spending on food is expected to double over the next decade, writes editor in chief, Chris Harris.
In the developed world, there will be 1.6 billion people spending more on food and there is a direct link with the demand for corn in countries such as the US and China that are driving the global markets and the increase in production of biofuels around the world.
However, Jeroen Leffelaar, the Global Head of Animal Protein at Rabobank International, told the recent World Pork Conference in Bonn Germany, that in general biofuels are commercially not viable and the sector will necessarily remain dependent on government subsidies for the next 10 years.
At present, biofuel policies around the world are being sharpened and are moving away from tax support to mandatory requirements combined with tangible sustainable targets.
This move in policy will affect the production of crops that are not only used for biofuels but also for feed.
Mr Leffelaar said that the crops used for the production of biodiesel – rapeseed, soybeans and palm oil – and those for ethanol production – corn in the US and sugar cane and beet – will all have an affect on animal feed production.
While the use of soybeans for biodiesel will produce feed through the soybean scrap and corn will see the production of dried distillers' grains for feed, increased land usage, particularly in the case of corn, will place them in competition with feed.
"Only sugar cane production in Brazil will not affect the production of feed," said Mr Leffelaar.
Consumer Spending on Food 2010-2020
Demand for Agri-Commodities
He said there is a disparity in the production of corn around the world because in China and Brazil, it is grown to produce animal protein whereas in the US the focus is on growing corn for ethanol. In all, 40 per cent of the corn grown in the US goes to ethanol production.
When a significant amount of the corn crop goes to produce ethanol, there are tight corn stocks and this drives feed prices up.
However, Mr Leffelaar said that the demand for agri-commodities is expected to continue to rise but the way the commodities are used will vary around the world. The use of crops for feed is more related to regions with large populations, where the demand for fuel is largely in the developed markets.
This variation, together with social changes that will see more wealth in the developing world, will mean that feed costs are likely to remain high and volatile.
At present, just 36 per cent of the global land surface is suitable agricultural land and less than one-third of this is suitable arable land. Most of the global agricultural land is suitable as pasture land.
At the same time, the amount of agricultural land per capita is declining and improvements in yield are not meeting consumption demand. The gap between food consumption and yield of arable land is growing.
Against this background of high and volatile corn and fed prices, Mr Leffelaar said that pork prices this year have been rising because of a drop in production in the US and EU and also because of the growth in imports into South Korea and China.
However, he said that unlike the situation in 2008 when prices were high and there was a fall in the market in 2009, prices are not expected to fall next year after their rise this year.
He said that the market is going to see China still importing large volumes of corn and soy for feed to increase their domestic pig production but the high feed prices in the US will continue to hinder production.
In the EU, production will continue to decline and a drop in the sow herd numbers is expected.
Growth in the Brazilian pork industry will be hampered by the strength of the currency (the Real) and by the ban on imports by Russia.
"A two per cent production rise is expected in Brazil, but this growth could be quicker if the Russians raise their ban," said Mr Leffelaar.
In all, global production is expected to see a 0.2 per cent rise in production next year.
But Mr Leffelaar issued a warning note: "Higher prices and increased volatility are the new standard and the agricultural industry including pork farmers and meat processors must adapt to this new reality.
"Rabobank expects strong pork prices in 2012, assuming stagnation in Europe and the US and continuous economic growth in emerging countries," he said.
November 2011
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World Agricultural Supply and Demand Estimates – November 2011
While beef and broiler production forecasts for 2011 are lowered, pork and turkey production are increased, according to the latest World Agricultural Supply and Demand Estimates (WASDE) report for November.
Livestock, Poultry and Dairy
The 2012 forecast of total red meat and poultry production is reduced from last month. Beef production is reduced due to slightly lower cattle slaughter during the year and slower growth in carcass weights. Broiler production is forecast lower as sharper declines are expected in bird numbers during late 2011 and into 2012. Turkey production is raised as prices are expected to favour expansion during 2012. Pork production is unchanged. For 2011, beef and broiler production forecasts are reduced, but pork and turkey production is increased. Egg production is forecast higher in the last quarter of 2011 and for 2012.
The beef import forecast is raised slightly for 2011. Beef export forecasts for 2011 and 2012 are raised slightly as strong global beef demand supports continued gains in US exports to a number of Asian markets. Small changes are made to US pork imports for 2011 and 2012 and pork exports for 2011. Broiler exports are raised for 2011 and 2012 on strong demand in a number of countries and a relatively weak dollar.
Cattle prices are forecast higher for the remainder of 2011 and through 2012. Strong demand is expected to carry into next year along with tight cattle supplies. Hog prices are raised for 2011 and 2012 on demand strength and support from lower beef and broiler production. Broiler prices are lowered for the last quarter of 2011 and the first quarter of 2012 as weakness in domestic demand and current overhanging supplies pressure prices.
Milk production forecasts for 2011 and 2012 are unchanged from last month. Commercial exports are forecast higher for 2011. Fat and skim-solids ending stocks for 2011 are lowered.
Cheese, butter and whey prices are forecast higher for both 2011 and 2012, but the non-fat dry milk (NDM) price forecast is reduced for 2011 and unchanged for 2012. Class III prices are raised for 2011 and 2012 on the increased price forecast for cheese and whey. The Class IV price is unchanged for 2011 as the higher butter price is mostly offset by a lower NDM price forecast. However, for 2012 with an unchanged NDM price forecast, the Class IV price forecast is raised due to higher butter prices. The all milk price is forecast at $20.10 to $20.20 per cwt for 2011, and $18.05 to $18.95 per cwt for 2012.
Wheat
US wheat supplies for 2011/12 are lowered nine million bushels based on updated production estimates for the states resurveyed following the 30 September Small Grains report. Adjustments to production in these states, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring (HRS) wheat and durum. An increase in white wheat production is partly offsetting. Projected use for 2011/12 is unchanged for all wheat; however, domestic food use is projected higher for Hard Red Winter (HRW) wheat and lower for HRS wheat. Projected exports are raised for HRS and lowered for HRW. All wheat ending stocks are lowered nine million bushels in line with the production change. The season average farm price is projected lower at $7.05 to $7.75 per bushel compared with $7.10 to $7.90 last month, reflecting the latest reported prices.
Global wheat supplies for 2011/12 are projected 2.6 million tons higher mostly reflecting higher production in Kazakhstan and EU-27. Kazakhstan production is raised 2.0 million tons as an extended harvest period capped off a nearly ideal growing season, confirmed by the latest government reports. EU-27 production is raised 1.2 million tons with further upward revisions for France and Spain and higher reported production in the United Kingdom and Czech Republic. Partly offsetting these increases is a 0.5-million-ton reduction for Argentina and 0.3-million-ton reductions for both Algeria and Ethiopia.
World wheat trade is raised for 2011/12 with higher expected imports for China, a number of African countries, including Morocco and Algeria, as well as for Brazil and several FSU-12 countries neighboring Kazakhstan. Partly offsetting is a reduction in projected imports for South Korea where more corn feeding is expected. Exports are raised 1.0 million tons each for EU-27 and Russia reflecting larger supplies in EU-27 and the continued heavy pace of shipments from Russia.
Global wheat consumption for 2011/12 is raised 2.4 million tons with increased feeding expected for Kazakhstan, Brazil and Serbia. Larger crops in Kazakhstan and Serbia support more wheat feeding. Recent rains in southern Brazil have reduced wheat quality in some areas, raising the potential for more feeding. Higher consumption is also expected for EU-27, Ethiopia, Kenya and several smaller FSU-12 countries. Global ending stocks are projected 0.2 million tons higher. Rising stocks in Kazakhstan, China, and Morocco are partly offset by reductions in major exporting countries including Russia, Argentina and EU-27.
Coarse Grains
US feed grain supplies for 2011/12 are projected lower with reduced corn and oats production more than offsetting small increases for sorghum and barley. Corn production for 2011/12 is forecast 123 million bushels lower with the national average yield forecast 1.4 bushels per acre below last month. At 146.7 bushels per acre, this year’s yield would be the lowest since 2003/04. Feed and residual use is lowered 100 million bushels with the smaller crop and further reductions in the outlook for broiler production. Projected US ending stocks are lowered 23 million bushels. The season-average farm price is unchanged at $6.20 to $7.20 per bushel.
Other 2011/12 changes include small adjustments to projected ending stocks for sorghum, barley and oats, reflecting this month’s production changes. Projected sorghum exports are reduced 10 million bushels as sales and shipments continue to lag earlier expectations. A 10-million-bushel increase in expected sorghum food, seed and industrial use is offsetting. Projected farm prices for sorghum are unchanged, but projected ranges are narrowed for barley and oats, and the barley farm price is projected lower based on reported malting barley prices.
Changes for 2010/11 corn mostly reflect a 13-million-bushel increase in food, seed, and industrial use with usage raised for sweeteners, starch and ethanol, all based on the latest available data. In addition, there are small adjustments to imports and exports based on August trade data from the US Census Bureau. These changes reduce 2010/11 feed and residual use 11 million bushels.
Global coarse grain supplies for 2011/12 are projected slightly lower with reduced US corn production and lower EU-27 rye production more than offsetting higher Argentina sorghum production, higher EU-27 corn, barley, oats production and higher Kazakhstan barley production. Corn production is lowered for a number of countries with the biggest reduction for Mexico where production is lowered 3.5 million tons. A late start to the summer rainy season and an early September freeze in parts of the southern plateau corn belt reduced yields for Mexico’s summer crop. Lower expected area for the winter crop, which will be planted in November and December, also reduces 2011/12 corn production prospects. Reservoir levels are well below those necessary to sustain a normal seasonal draw down in the northwestern corn areas which normally account for 70 to 80 per cent of Mexico’s winter corn crop.
Increases in 2011/12 corn production for a number of countries partly offset reductions in Mexico, the United States and Serbia. Corn production is raised 2.5 million tons for China with increases in both area and yields in line with the latest indications from the China National Grain and Oils Information Center. EU-27 corn production is raised 1.9 million tons mostly reflecting higher reported output in France, Romania and Austria. Argentina production is raised 1.5 million tons with higher expected area. FSU-12 production is raised 0.7 million tons with higher reported yields in Belarus and Russia. There are also a number of production changes this month to corn and sorghum production in Sub-Saharan Africa which reduce coarse grain production for the region.
World coarse grain trade for 2011/12 is raised with increased global imports and exports of barley and corn. Barley imports are raised for Algeria, Saudi Arabia and Jordan with exports increased for EU-27 and Russia. Corn imports are increased for China, Mexico and South Korea. Higher expected corn exports from Argentina and EU-27 support these increases. Higher sorghum exports from Argentina offset the reduction in expected US sorghum shipments. Global corn consumption is mostly unchanged with higher industrial use and feeding in China and higher corn feeding in EU-27 and South Korea offsetting reductions in Mexico and the United States. Global corn ending stocks are projected 1.6 million tons lower with reductions in EU-27, Mexico, Brazil and the United States outweighing increases for China and Argentina.
Rice
US all rice production in 2011/12 is forecast at 188.1 million cwt, 1.2 million above last month due to an increase in yield. Average all rice yield is estimated at 7,167 pounds per acre, up 44 pounds from last month, and the second highest yield on record. Harvested area is unchanged at 2.62 million acres. Long-grain rice production is raised 0.7 million cwt to 117.5 million, while combined medium- and short-grain production is increased 0.4 million to 70.6 million. No changes are made to rice use for either all rice or the rice by-class forecasts. All rice domestic and residual use is forecast at 127.0 million cwt, and all rice exports are forecast at 91.0 million, both down from a year ago. All rice ending stocks are forecast at 37.5 million cwt, up 1.2 million from a month ago, and a decrease of 10.9 million from the previous year.
The long-grain, combined medium- and short-grain, and all rice 2011/12 season-average farm price forecasts are unchanged from last month at $13.50 to $14.50 per cwt, $15.50 to $16.50 per cwt, and $14.00 to $15.00 per cwt, respectively.
Global 2011/12 rice supply and use are lowered from a month ago. World 2011/12 production is forecast at a record 461.0 million tons, down 0.4 million from last month due mainly to decreases for Burma, Cambodia, Laos and Thailand, which are partially offset by an increase for China. Thailand’s 2011/12 rice crop is lowered nearly one million tons as losses in the main-season crop from recent flooding are partially offset by an expected re-planting of some of the main season crop in the Northern Region along with an expected record dry-season crop. Flooding also lowered crop prospects in Burma, Cambodia and Laos. China’s 2011/12 crop is raised 2.0 million tons to a record 141.0 million, due to an increase in harvested area. Harvested area is increased based on recent indications from the government of China. The increase in global consumption is due mostly to an increase for China. Global exports are lowered slightly due to reductions for Burma and Cambodia, which are partially offset by increases for Argentina and Brazil. Global ending stocks for 2011/12 are projected at 100.6 million tons, down 0.8 million from last month, but an increase of 2.6 million from the previous year.
Oilseeds
Total US oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. Soybean production is forecast at 3.046 billion bushels, down 14 million from last month. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month. Soybean exports are reduced 50 million bushels to 1.325 billion mainly due to a slow export sales pace through October. Soybean ending stocks are projected at 195 million bushels, up 35 million from last month.
Soybean oil ending stocks and exports for 2011/12 are reduced this month due to lower beginning stocks resulting from changes in the 2010/11 soybean oil balance sheet. Changes for 2010/11 include reduced soybean oil production and ending stocks. These changes are based on industry indications of soybean crush and soybean oil stocks. Soybean meal production and domestic use for 2010/11 are also reduced due to lower October-September year crush. Soybean meal changes for 2011/12 include reduced domestic use and higher exports.
The US season-average soybean price range is projected at $11.60 to $13.60 per bushel, down 55 cents on both ends of the range. The soybean meal price is projected at $310 to $340 per short ton, down $25.00 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, unchanged from last month.
Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month. Global soybean production accounts for a quarter of the increase with larger crops projected for Brazil, Paraguay and Mexico. Brazil soybean production is increased 1.5 million tons to 75 million with improved yield prospects related to rapid planting progress and good early season moisture throughout the country. These gains are partly offset by lower production projected for Argentina, which is reduced 1.0 million tons to 52 million due to reduced area as producers shift to corn. Global sunflower seed production is raised due to larger crops in Ukraine, EU-27 and Argentina. Increased yields are projected for Ukraine as harvest nears completion. Other changes include increased rapeseed production for EU-27, increased cottonseed production for Turkey and increased palm oil production for Malaysia.
Global oilseed trade is projected at 113.3 million tons, down 0.8 million. Reduced soybean exports for the United States and Argentina are only partly offset by increases for Brazil and Paraguay. Soybean imports are reduced for Japan and Russia. Global oilseed crush is reduced 0.2 million tons to 389.1 million with reduced soybean crush in Argentina partly offset by increased sunflower seed crush in Ukraine. Global oilseed ending stocks for 2011/12 are raised 0.9 million tons to 73.9 million. Soybeans account for most of the change with increased stocks for the United States and China more than offsetting lower stocks in Argentina and Japan.
Sugar
Projected US sugar supply for fiscal year 2011/12 is increased from last month, as higher beginning stocks and imports more than offset lower production. Sugar production is decreased 50,000 tons, based on lower forecast US sugarbeet production. Imports from Mexico are increased based on increased supplies – higher beginning stocks and increased tariff rate quota imports – and reduced consumption and ending stocks in Mexico
This month's 2010/11 US sugar supply and demand reflect final estimates of stocks, production, and use in Farm Service Agency’s Sweetener Market Data report and final import data from the Foreign Agricultural Service. Ending stocks are modestly higher than estimated last month. Mexico's government data for fiscal-year 2010/11 are the basis for decreasing imports and domestic use and increasing ending stocks.
Note: Beginning this month, sugar supply and use data in the WASDE report will be shown in ‘actual weight’. The WASDE report will continue to show US sugar supply and use, including imports from Mexico, in raw value. Raw value for Mexico sugar converts from actual weight by multiplying by 1.06. The Foreign Agricultural Service will continue to report world sugar supply and use, including for Mexico, in raw value.
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Monday, November 21, 2011
Chinese Meat Production to Increase
CHINA - The United State Department of Agriculture has forecast China’s 2012 total meat production to increase three per cent year-on-year, to 81.4 million tonnes.
Pork production is expected to continue to account for the predominant share, at 63 per cent of total meat output, followed by poultry (23 per cent), beef (seven per cent) and sheep meat (six per cent).
Meat and Livestock Australia market analysts say that China’s beef production has been forecast to continue its downward trend into 2012, falling one per cent on 2011, to 5.5 million tonnes, as the cattle herd is anticipated to decline one per cent year-on-year, to 46.2 million head.
Contributing to the decreased beef production has been the comparatively poor returns to beef cattle farming relative to swine and poultry farming.
The longer production time for beef cattle, combined with continuing high feed prices have created significant disincentives for small producers, who account for the vast majority of China’s cattle operations.
High labour costs, rising utility bills, transportation, and water expenses have also limited beef production growth potential, MLA says.
Following the slow domestic beef production, China was expected to increase beef imports by seven per cent to 45,000 tonnes cwt in 2012. Beef exports were also forecast to increase four per cent to 57,000 cwt, fuelled by strong demand in China’s traditional markets in Asia.
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Monday, November 28, 2011
Asian Meat Consumption Performing Strongly
ANALYSIS - Animal protein has become increasingly important in Asian diets over the past decade, according to Peter Duggan from the Strategic Information Services of Bord Bia-Irish Food Board.
This surge in demand is being helped by strong GDP growth, increasing tourism and existing retailers gradually shifting their focus to secondary and tertiary towns and cities.
However, while there appears to be a surge in meat consumption in the Asian countries, they still lag some distance behind the more developed countries with the greatest density of consumption in the US and Australia. The big meat producing countries of South America and Europe also have high meat consumption per head of population, writes ThePigSite Editor in Chief, Chris Harris.
According to Dr Henning Steinfeld from the Food and Agriculture Organisation of the UN, by 2050 the world will need 50 per cent more food and between 70 and 80 per cent more meat to feed a population that is expected to grow by 30 per cent.
Pork and poultry consumption accounts for the vast proportion of animal protein in a typical Asian diet, and this is down to the fact that these meats are produced more quickly and less expensively than beef.
The recent World Agricultural Supply and Demand Estimates gave some cheer to beef producers as it predicted that while beef and broiler production forecasts for 2011 have been lowered and pork and turkey production increased, beef export forecasts for 2011 and 2012 are raised slightly as strong global beef demand supports continued gains in US exports to a number of Asian markets.
But in the long term, global meat consumption is expected to grow by 40 million tonnes in the decade from 2010 to 2020.
In China alone, pork consumption equates to over half of total meat consumption of SE Asian countries that also include the Philippines, Viet Nam, Indonesia, Taiwan, Thailand, Malaysia and Hong Kong.
Consumption now stands at 38kg per head, an increase of 19 per cent on 2001 levels. Asian meat consumption for the SE Asia countries and China is expected to show a 30 per cent increase on 2001 levels.
At the recent World Pork Conference in Germany, Richard Brown from market analysts Gira said that a third of the growth in meat consumption, which will favour cheaper meat cuts and products at present because of the global economic situation, will come in China and 60 per cent of that growth will be in poultry meat. Peter Duggan says that there are some promising trends that have appeared for beef consumption in countries like Viet Nam, Hong Kong and Malaysia according to a recent report by Meat and Livestock Australia.
The strongest growth has been evident in Viet Nam, where consumption over the last six years has risen by 114 per cent to 541,000 tonnes.
Some further strengthening in Vietnamese consumption looks likely as beef import tariffs are set to fall over the coming years.
Strong demand is also evident on the Hong Kong market, but some doubts surround these figures due to an unknown volume of meat imports being re-exported.
In most of the selected countries, the retail grocery sector is expected to boom over the coming years reflecting a growing middle class community combined with an expending retail reach.
Most of these countries with the exception of Singapore and to a lesser extent Hong Kong are expected to post extremely strong double digit in this area over the next five years.
This development is likely to help boost meat consumption levels and allow further opportunities for meat exporters to develop their business to these regions even further.
Asian Meat Consumption (millions of tonnes)
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Tuesday, November 29, 2011
Prices Stay High in Difficult Times
ANALYSIS - There have been some unusual movements in the global agricultural and livestock markets recently, writes TheMeatSite editor in chief Chris Harris.
It seems that the pig and beef sectors around the world are seeing fewer slaughter numbers and higher prices.
And these trends look likely to continue for some time, particularly as they have been affected by reductions in the pig and cattle herds.
In the US, market analysts Steve Meyer and Len Steiner reported that the CME live prices are nearing record highs at $124.90/cwt and the cut out prices for Choice beef has hit $196.64/cwt.
While in the past, spikes in prices have been followed by swift fall, it is felt that the strong prices are likely to continue for the next two years.
Much of the reasoning behind the forecast is not only a drop in slaughter numbers in the US, but also slaughter weights and beef production in general, which is 3.8 per cent lower than a year ago.
There is a similar picture north of the border in Canada, where there is a continued drop in the Canadian beef herd combined with the reduced supply from the US.
The Alberta government reports that the rise in cattle prices that started in 2010 has continued throughout this year, bringing a smile back onto the faces of the Canadian beef producers.
Prices for prime feeder cattle have now reached around C$161/cwt - levels not reached since 2003.
Across the Atlantic, the European cattle trade is strong and over the last year it has achieved what a few years ago in the face of falling cattle numbers would have been thought to be impossible - a beef surplus.
For the first eight months of the year, the EU exported around 200,000 tonnes of beef more than it imported.
One of the main reasons has been the change around in the global financial situation, particularly the rising values of the South American currencies compared to the EU and even the US.
This has led to the major beef producing countries in South and North America and Australia seeing prices around the EU level of between €3.50 and €3.80 a kilo.
While this has levelled out prices, the South American market has still been hit by concerns over sanitary controls from the EU market and imports of Brazilian beef have dropped to just 80,000 tonnes. In 2007 they were 363,000. Similarly Argentina, that has also seen domestic government restriction son it beef exports, has seen exports to the EU drop by two thirds to 42,000 tonnes from 122,000 tonnes.
The pig sector in North America - both the US and Canada - has already seen a sharp reduction in the breeding herd, and this has brought about a reduction in sow slaughter.
Steve Meyer believes that when the USDA produce figures in December on the latest state of play for the pig sector, the breeding herd will appear reasonably stable.
While some producers have reduced their sow numbers, particularly if they wanted to concentrate on the presumed profits from corn and soybeans, others have retained gilts. However, with a stable breeding her, the US has seen output grow and the increased output is expected to be carried over into 2012.
Going forward, prices in the US are still going to be affected not only by numbers, but also feed prices, fuel prices and currency fluctuations. The present economic situation will have a far reaching impact well into next year and beyond and this situation will also be reflected in Europe.
For instance at present, in Europe, pig prices have remained high and processing companies are starting to gear up for the Christmas boom in the pig trade.
Coming into 2012 they too will be affected by what happens to the global economic picture and in turn domestic economies are also going to be affected by agri-commodity market speculation and fluctuations.
In the UK on Tuesday (29 November) in the Chancellor of the Exchequer's autumn statement, George Osborne, warned that much of the future success for the UK's recovery depended on what happens on both fuel and agriculture and food prices.
This is not only a concern for the UK economy but every economy trying to reduce its deficit and balance the books.
Chris Harris, Editor-in-Chief
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Wednesday, December 07, 2011
Food & Agriculture Exports Jump to New High
SOUTH KOREA - South Korea's exports of food and other agricultural products surged to a new monthly high for the year last month, largely on growing demands from Japan and China, the government commented.
The country shipped US$654.9 million worth of food and agricultural products in November, up 15.1 per cent from the same month last year, according to the Ministry of Food, Agriculture, Forestry and Fisheries.
In the first 11 months of the year, South Korea exported $6.6 billion worth of food and agricultural products, already surpassing the $5.88 billion for the whole of 2010.
"Exports to newly emerging countries continued to grow throughout the year with exports to China growing 43.8 per cent (on-year) and the Association of Southeast Asian Nations (ASEAN) surging 38 per cent," the ministry said in a press release.
As of the end of November, the number of countries that have purchased over $100 million worth of products from South Korea this year came to 11, the largest ever in history, it added.
Exports to Japan have also grown 24 per cent so far compared to all of 2010, exceeding $2 billion for the first time since 1999, according to the ministry.
"At the current pace, the country's exports to Japan will likely reach an all-time high this year," it said.
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Tuesday, December 13, 2011
China's Economic Trends Drive Change to Modern, Efficient Agriculture
ANALYSIS - With a growing population but a shrinking rural population, China's farmers are changing from man-power to iron horse-power as they move to a more contemporary approach to agriculture, writes Sarah Mikesell, senior editor of ThePigSite.
China's Economic and Agricultural Trends
China is clearly experiencing a rise in their standard of living which is resulting in a change in their consumer habits, said Alexander Haus with VDMA at the Sino-European Conference "The Rising Professional Approach in China's Agriculture" held during Agritechnica in Hannover, Germany.
"We see China's households moving toward higher quality food and their everyday food mix is changing to include more meat, milk, wheat noodles and potatoes," Haus said. "Self-sufficiency for basic food products one of the main targets for China's central government."
Larger state-owned and private farms are already dominating the leading areas for field crops. China's made no secret of the fact that state-owned and private companies are investing in agriculture outside of China in an effort to ensure food security.
The average farm size in China is increasing rapidly. And with fewer farmers living in rural areas, China has compensated with increasing their accessibility and use of agricultural equipment. The average agricultural mechanization use in 2000 was only 20 per cent, but annual growth of the last 10 years was about three per cent. However, Haus said the use of farm equipment varies dramatically depending on the area, noting that it's as high as 90 per cent in Heilongjiang.
China is also seeing a growing demand for contracted services with small and medium-sized farmers contracting for different types of field work in the arable sector. Contractors are very well equipped with agricultural machinery, and the general decision about which machinery to invest in is based on return of investment.
Agricultural Machinery Market in China
China's agricultural machinery market is the second largest global market after the US. Over 95 per cent of agriculture machinery is locally-made. The main scope for the last five years has been on the basics - tractors and harvesting machinery. However, the core scope for the next five years will be on more modern implements, including soil-working, seeding and plant protection machinery as well as livestock equipment.
Various international brands are successfully operating in China and European suppliers are playing an important role in the agricultural machinery sector. China is already among the top five countries exporting tractors and agricultural equipment and continues to see growth, said Haus.
Expectations and Perspectives
"The structural changes in agriculture and growth of mechanization will continue to move forward, increasing demand for efficient machinery," Haus said. "The main customers for high-tech machinery will be larger state-owned and private farms as well as contractors and cooperatives."
Haus believes China's central government will continue to strongly support the farming sector. And machinery investment decisions will depend not solely on price, but more on the price-performance ratio, return on investment, product quality and service provided.
Sarah Mikesell, Senior Editor
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US Cattle Outlook – December 2011
Beef exports will continue to grow, whilst dairy exports are expected to fall next year, according to the latest Livestock, Dairy, and Poultry Outlook from the USDA's Economic Research Service.
Pork/Hogs: October pork exports were more than 42 per cent greater than a year ago, propelled primarily by very strong Asian demand (ie, Japan, China, and South Korea). Strong export growth is expected to continue through the fourth quarter, before tailing off in 2012. Total US pork exports are expected to be 5.1 billion pounds, both this year, and in 2012.
Beef/Cattle: Disproportionally large cow slaughter has kept average dressed weights lower during most of 2011 than if steers had constituted half or more of beef slaughter, as they typically do. Packer margins and high feed and feeder cattle prices are exerting downward pressure on fed cattle prices.
Beef/Cattle Trade: US beef exports are expected to increase by 21 per cent in 2011. Although US domestic beef supplies will be 5 per cent lower in 2012, exports should remain strong and stay about even with levels exported this year. As tight global beef supplies will continue into next year, US beef imports are expected to increase only moderately into 2012.
Poultry: Sharply lower broiler chick placements and slower growth in bird weights have lowered the fourth-quarter 2011 broiler meat production estimate by 25 million pounds to 9.0 billion pounds and resulted in decreased estimates for the first and second quarters of 2012. The lower production is expected to gradually lo'wer stocks. Turkey production was basically unchanged in October as slightly higher bird numbers were offset by lower bird weights. Cold storage holdings for whole turkeys continued below those of a year earlier, putting upward pressure on prices.
Poultry Trade: Broiler and turkey shipments rose in October. Broiler exports totaled 689.7 million pounds, a 2.5- per cent increase from a year ago. Turkey exports totaled 59.2 million pounds, an increase of 20.7- per cent from October 2010.
Sheep/Lamb: The sheep industry, buoyed by strong prices and an industry policy to grow the inventory, may be poised to see its first inventory increase since 2006. Consistently high Choice Slaughter lamb prices at San Angelo coupled with reductions in production and live trade may be signaling increased retention.
Dairy: An improved feed price outlook is balanced by lower milk prices in 2012. Production in 2012 is forecast to rise slightly based on higher milk output per cow. Exports are likely to decline next year compared with 2011, contributing further to the lower milk price outlook.
Beef/Cattle
Large Cow Slaughter Holding Average Dressed Weights Lower
Thus far in 2011, federally inspected cow slaughter has been large relative to the January 1, 2011 cow inventory, surpassing last year’s cow slaughter for the same period, which was also atypically large for its January 1 inventory. Year-to-date (through November 26, 2011), cumulative weekly federally inspected cow slaughter in 2011 was 4.3 per cent greater than for the same period in 2010. For beef cows, year-to-date slaughter in 2011 was 14 per cent above the same period in 2009, while dairy cow slaughter was only 2 per cent above 2009 slaughter. Because cows generally have lower dressed weights than steers, heifers, or bulls, these atypically large proportions of cow slaughter have resulted in lower average dressed weights for all cattle than trend lines and typical steer and heifer dressed weights and proportions of total slaughter would indicate.
Beginning with December 2009 prices for 750-800 pound Medium and Large No. 1 Oklahoma City feeder cattle prices that were 4 per cent above 2008 prices, feeder cattle prices have exhibited year-over-year increases every month. Increasingly scarce supplies of feeder cattle, especially heavier, older yearlings, make it likely that feeder cattle prices will continue high for the next 2 or 3 years until calf crops begin increasing year-over-year. Additional longer term support for feeder cattle prices will come as the expected lower corn and feed prices materialize in 2012-13.
March was the only month in 2011 that did not have higher year-over-year placements of feeder cattle under 600 pounds. This has resulted in an atypical inversion of price premiums between Central and Southern Plains fed cattle prices (See Cattle Sector Production Practices and Regional Price Differences, http://www.ers.usda.gov/Publications/LDP/2011/04Apr/LDPM2021/). January, July, and September are the only months in 2011 (through November) in which Texas-Oklahoma fed steer prices (35-65 per cent Choice) were higher than Nebraska fed steer prices (65-80 per cent Choice)..
Despite the high fed cattle prices, profit margins have stayed at breakeven levels or lower, in some cases much lower. In addition, cattle feeders continue to place expensive feeder cattle in anticipation of higher fed cattle prices in 2012, when supplies of fed cattle are expected to become scarce. However, fed cattle supplies will likely continue at or near current levels until sometime during the first half of 2012 because of the large numbers of lightweight feeder cattle that were placed on feed during the last half of 2011. These fed cattle will likely be marketed during the first half of 2012.
Packer margins are negative at a time when they typically recover. Negative margins have driven packers to reduce slaughter numbers somewhat and have dampened their willingness to continue to pay the record and near-record-high prices for fed cattle.
Beef/Cattle Trade
Foreign Demand for US Beef To Remain Strong into 2012
US beef exports for 2011 continue to remain robust. Twenty-one-per cent growth is expected this year as beef exports are forecast at 2.78 billion pounds. Key factors supporting the strong export market in 2011 are: (1) increased demand for US beef as disposable incomes of foreign consumers increase, (2) a worldwide multi-year decline in total cattle inventories and beef production, (3) an increased number of foreign countries purchasing US beef, and (4) a favorable exchange rate (with a relatively weaker US dollar making US product more attractively priced in global markets).
Through October, the largest increases in US beef exports have come from South Korea (+45 per cent), Japan (+31 per cent), and Canada (+33 per cent). Along with Mexico (+1 per cent), these countries are the largest importers of US beef, totaling almost two-thirds of the total US beef exported through October 2011. Notably, export totals to Hong Kong (+41 per cent), Egypt (+23 per cent), and Russia (+85 per cent) have also posted strong growth increases. Through October, the seven countries listed above imported just over 80 per cent of total US beef exports. In 2012, with US beef production expected to be down 5 per cent, total exportable supplies will be squeezed. The strength seen in the export market, however, is expected to continue into next year, including growth in Asian markets. Although there will be a tighter US supply, beef exports are expected to be about even with this year’s levels.
2012 Beef Imports to the United States Expected To Show Only Modest Recovery
US beef imports for 2011 are expected to be 11 per cent below year-earlier levels, at 2.05 billion pounds. Through October, imports from traditional major suppliers are down. Imports from Australia and Canada are down 25 and 22 per cent through October. These two countries have historically been beef suppliers to the United States, and, combined in the last 10 years, have averaged over 60 per cent of total US beef imports in the last 10 years. Imports from New Zealand (-3 per cent), Brazil (-53 per cent), and Uruguay (-11 per cent) are also lower year-over-year, while imports from Mexico (+49 per cent) and Central America (+29 per cent) through October are higher. The increase in federally-inspected plants in that country, as well as increased grain-fed beef production, are increasing the supply of higherquality, exportable beef. Tight global beef supplies, however, will continue into 2012 when US beef imports are expected to increase by 2 per cent to 2.09 billion pounds.
Dairy
Higher Domestic Milk Production and Stronger Competition in Export Markets Will Lower Milk Prices in 2012
The December corn price forecast for 2011/12 is $5.90 to $6.90 a bushel. This adjustment represents a lowering of 30 cents a bushel on each end of the price range from last month. Although the 2011/12 use numbers were changed only slightly, prices received by farmers are reported to be below cash market bids, reflecting deliveries of grain that were forward-priced earlier in 2011. Also, declines in futures prices since November have tempered the price outlook for the coming months. Soybean meal prices have also been lowered, the December forecast being $280 to $310 a ton in 2011/12. Lower forecast production is balanced by lower expected domestic use. The preliminary November price for alfalfa hay was reported in the Agricultural Prices report at $198 a ton, a slight decline from October’s reported $206 a ton but still well above year-earlier prices. With a return to more normal weather conditions next year, alfalfa hay prices should moderate in 2012. The preliminary milk-feed price ratio for November was estimated at 1.80, virtually unchanged from October but well below the 2.23 a year earlier.
Cow numbers were virtually unchanged from the November forecast at 9,200 thousand head for 2011 and remain at 9,190 thousand head in 2012. Dairy cow slaughter for the January to October 2011 period is about 4 per cent above slaughter for the corresponding period of 2010 according to the November Livestock Slaughter report, and replacement heifer prices are steady. This suggests no major liquidation is in the offing, but cow numbers are expected to decline slightly next year. Output per cow continues to rise, and lower expected feed prices are the basis for the increase in the December projected output per cow to 21,315 pounds this year and 21,610 pounds next year. Slightly more milk is forecast in December than in November, both this year and next. Production is forecast at 196.1 billion pounds this year, rising to 198.5 billion pounds in 2012.
Fat-basis milk equivalent dairy import forecasts in 2011 were raised this month to 3.3 billion pounds, based on slightly higher imports of butterfat and food preparations. In 2012, fat-basis imports are forecast at 3.2 billion pounds, unchanged from the November forecast but down from 2011. Skim-solid basis import forecasts were left unchanged from last month at 5.3 billion pounds. In 2012, skim-solid basis imports are forecast to fall slightly to 5.2 billion pounds.
Milk equivalent fat-basis exports were raised slightly this month to 9.3 billion pounds. The export total was raised due to higher than expected milk and cream shipments. Next year, fat basis exports are forecast at 8.6 billion pounds, unchanged from last month. This year’s skim-solid basis exports are forecast at 33.6 billion pounds, up from November due to stronger skim milk powder exports. Next year, the forecast is unchanged from last month at 31.9 billion pounds. Increased global production will likely present stronger competition for US exporters of skim powder products.
Commercial domestic use is projected at 188.8 billion pounds fat basis for 2011 and 191.9 billion pounds in 2012. Commercial domestic use on a skim-solid basis is forecast to reach 166.9 billion pounds this year, a decline from November’s forecast, but an increase from 2010. Next year, skim-solid domestic use is forecast to rise from 2011 to 171 billion pounds, an increase from November expectations and a 2.5 per cent rise above 2011 expected totals.
Cheese prices are forecast to average $1.820 to $1.830 a pound in 2011, unchanged from November’s forecast, but are projected lower in 2012 at $1.675 to $1.755 a pound. Domestic use of cheese was lower in the third quarter of 2011 compared with 2010, and both domestic and Oceania prices have recently declined sharply, supporting the lowered price forecast. Recent weakness in butter prices has led to a lowering of 2011 butter prices from November projections to $1.935 to $1.965 a pound in the December forecast. Stronger global competition in 2012 is expected to moderate butter prices even further in 2012. Butter prices are forecast at $1.605 to $1.715 a pound next year. Higher global production will similarly affect NDM prices. NDM prices are projected at $1.495 to $1.515 a pound this year, a slight downward revision from last month. Next year, prices are expected to drop more significantly to $1.360 to $1.420. The outlier is whey. Exports have been brisk in 2011 and are likely to continue strong in 2012. Whey prices are forecast at 52.5 to 53.5 cents a pound in 2011, unchanged from last month. Next year, prices are expected to rise from 2011 to 53.5 to 56.5 cents a pound, a substantial upward revision from November.
Milk prices will be lower next year based on lower product prices. Class III prices are expected to be $16.90 to $17.70 per cwt next year, down from an expected $18.30 to $18.40 per cwt in 2011. Lower cheese prices will probably overcome the relative strength in whey prices, lowering the Class III price. The Class IV price is also expected to be lower in 2012 at $16.35 to $17.25 per cwt, a decline from $18.95 to $19.15 per cwt in 2011. The 2012 all milk price is forecast at $18.10 to $18.90 per cwt, down from $20.05 to 20.15 per cwt in 2011.
Pork/Hogs
Fourth-Quarter Pork Export Forecast Increased On Strong Asian Demand
The US pork industry is expected to ship 1.4 billion pounds of pork products to foreign destinations in the fourth quarter of this year, an increase of more than 22 per cent over the same period in 2010. Sales are expected to be strong to Asia, where demand for US pork is expected to increase year-over-year due to a combination of factors, including continued low-exchange values of the US dollar and government efforts to moderate consumer pork price increases brought about, in part, by recent outbreaks of various swine diseases. With larger fourth-quarter exports, total exports for 2011 are expected to reach slightly more than 5.1 billion pounds, an increase of 21 per cent over exports in 2010.
Export growth next year is expected to tail-off as Asian pork production increases, and consumer food price inflation abates. Total US pork exports in 2012 are expected to be about the same as this year, 5.1 billion pounds.
Pork products available to the domestic US market, evaluated in terms of retail weight per capita quantities, are likely to be year-over-year larger next year for the first time since 2009. With higher domestic availability, the average 2012 price of live-equivalent 51-52 per cent lean hogs should decline about 1.6 per cent, averaging $63-$68 per cwt, compared with $66.32 in 2011. Further declines in hog prices are likely to be checked by expected lower 2012 poultry production (-1.8 per cent, yearover- year) and sharply lower 2012 beef production (-4.6 per cent, year-over-year). Substitution effects from higher retail prices for poultry and beef prices should keep 2012 retail pork prices in the high $3.40s per pound.
Shipments to Asia Continue To Lift US Pork Export
US pork exports in October were over 482 million pounds, more than 42 per cent above October 2010 shipments. Similar to patterns set early in 2011, 80 per cent of October exports went to five countries: Japan (+37.8 per cent year-over-year), China (almost 4 times greater than a year ago), Mexico (+.3 per cent year-over-year), Canada (+27.4 per cent year-over-year), and South Korea (+64.5 per cent yearover- year).
US pork imports in October were 69 million pounds, 11 per cent less than a year earlier. As has become the norm, almost 12 per cent of October imports were of Danish origin, and 77 per cent came from Canada. Imports from Denmark were almost 15 per cent ahead of a year ago, while shipments from Canada were off by more than 14 per cent. Live swine imports from Canada in October were almost 498,000 head, 9 per cent above a year ago. All categories of finishing animals (segregated early-weaned pigs and feeder pigs) were up strongly, while slaughter hog imports declined 9 per cent compared with October 2010.
USDA will release the Quarterly Hogs and Pigs Report on December 23. The report will contain December 1 hog and pig inventories, as well as fourth-quarter (September-November) farrrowing, pig crop, and litter rate information. Additionally, the report will detail producers’ second set of farrowing intentions for the first quarter of the new year (December-February (2012)), and the first set of producers’ farrowing intentions for the second quarter (March-May) of 2012.
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Poultry
Broiler Meat Production in October Falls by 3 per cent
Broiler meat production, which has fallen in 3 of the last 4 months, totaled 3.1 billion pounds in October, down 3 per cent from the previous year. Total broiler meat production during the first 10 months of 2011 was 31.4 billion pounds, 2.6 per cent higher than in the same period a year earlier. In October, the number of birds slaughtered fell to 700 million, down 3.2 per cent from the previous year, as integrators have been reducing the number of chicks placed for growout over the last several months. The lower number of birds slaughtered was partially offset by an increase in the average live weight of birds at slaughter, up fractionally to 5.94 pounds. Average broiler weights at slaughter are expected to continue higher in November and December, but the rate of growth is expected to be much slower than it was over the first three- quarters of 2011. With these expected changes, the estimate for fourth-quarter 2011 broiler meat production was decreased 25 million pounds to 8.98 billion pounds, 5.4 per cent below the previous year. This lowers the annual forecast for broiler meat production in 2011 to 37.3 billion pounds, an increase of 1 per cent from 2010. The broiler meat production projections for firstand- second-quarter 2012 were each reduced by 100 three quarters of 2012. The revised forecasts in the first two quarters are down 5.3 and 4.2 per cent on a yearover- year basis, and the revised total broiler meat production for 2012 is now 36.5 billion pounds, down 2.1 per cent from 2011.
With relatively high corn prices forecast for the remainder of 2011 and into 2012, and with relatively weak prices for most breast meat products, broiler integrators are expected to scale back production through much of 2012. The number of chicks being placed for growout continues to be well below that of the previous year. Over the last 5 weeks, (November 5 to December 3), chick placements have averaged 154 million, down 6.6 per cent from the same period in 2010. Chick placements are expected to remain below year-earlier levels through the first half of 2012 and gradually pull even with and then exceed year-earlier levels in the second half of 2012.
Cold storage holdings of broiler products at the end of third-quarter 2011 were revised downward slightly to 639 million pounds, down 6 per cent from the previous year. With strong declines in broiler meat production expected in fourth-quarter 2011 and the first two quarters of 2012, ending stocks are expected to remain below year-earlier level through third-quarter 2012.
Broiler stocks at the end of October totaled 667 million pounds. This is an increase of around 28 million pounds from September, but still about 5 per cent lower than the previous year. Stocks for most broiler products continue to be well below their year- earlier levels, with the exception of breast meat products. With lower yearover- year production expected and resulting lower stocks levels, broiler product prices are expected to get some upward pressure.
Prices for almost all broiler products were higher in November than the previous year. The lone exception was whole broilers, which are still considerably lower (down 6 per cent). Strong exports continue to place upward pressure on leg quarter prices (up 31 per cent) and other leg meat products such as boneless/skinless thighs (up 27 per cent) and whole thighs (up 44 per cent).
The forecast lower boiler production levels through the first half of 2012 are expected to gradually place upward price pressure on almost all broiler products. Whole bird prices are expected to be at $0.77-$0.78 per pound in fourth-quarter 2011, down 3 per cent from the previous year. However, prices in 2012 are expected to increase and be above year-earlier levels throughout the year.
October Turkey Production Even with Year Earlier Output
Turkey meat production in October totaled 525 million pounds, almost identical to production a year earlier. Although the total meat production was unchanged, the number of turkeys slaughtered rose by 0.5 per cent to 23.3 million. The increase in the number of birds slaughtered was offset by a slight decline in the average weight at slaughter from a year earlier to 28.3 pounds.
The fractional growth in turkey meat production in October contrasts to the strong expansion in production over the first half of 2011, when production was up 5.5 per cent compared with the same period in 2010. Over the first 10 months of 2011, turkey meat production has been 3.4 per cent higher. The second half of 2011 is expected to be a sharp contrast as production was only 0.5 per cent higher in the third quarter, and the fourth-quarter production forecast is 1.5 billion, only 0.3 per cent above the previous year.
With little growth in production and turkeys being taken out of storage in preparation for the Thanksgiving holiday, stocks of all turkey products fell by over 100 million pounds between the end of September and the end of October. Total turkey stocks were 407 million pounds at the end of October, down almost 1 per cent (0.7) from the previous year. This is a significant change from stocks at the end of September that were 7.6 per cent higher than the previous year.
Declines in stocks of whole birds accounted for 69 per cent of the decline in total turkey product stocks from September to October. Whole turkey stock levels always decline at this point in the year, but stocks of whole birds fell by almost 71 million pounds, dropping the level for whole birds to 209 million pounds, almost 14 per cent lower than the previous year. Whole bird stocks at the end of September were only 2.6 per cent lower than the previous year. The decline in stocks of turkey products was much less (down 32 million pounds), and stocks of turkey products at the end of October were 199 million pounds, 18 per cent higher than in October 2010.
With the steep October decline, the estimate of ending stocks for 2011 was lowered to 205 million pounds, down 10 million pounds from the previous estimate but still 7 per cent higher than a year earlier. The stock estimate for first-quarter 2012 was lowered by 15 million pounds to 325 million. However, the estimates for the second and third quarters were both increased to 500 million pounds. Anticipating a strong drawdown in stocks during in the holiday period in 2012, ending stocks for 2012 were reduced by 10 million pounds to 200 million.
During the first 11 months of 2011, the national price for whole hens has been higher than the previous year on a year-over-year basis. Prices for November were $1.14 per pound, up 7 per cent from a year earlier and 38 per cent higher than the 2009 price. Prices are expected to decline seasonally in December but remain well above a year earlier, and the average for fourth-quarter 2011 is forecast at $1.10- $1.11 per pound, an increase of over 6 per cent from fourth-quarter 2010. Lower stocks of whole birds during most of 2011 have placed upward pressure on prices. Even with higher production, low stock levels at the start of 2012 are expected to pressure prices higher and whole hen turkey prices are expected to average $0.90- $0.94 per pound in first-quarter 2012, an increase of approximately 2 per cent from the previous year. However, production gains in 2012 are expected to gradually reduce prices, with hen prices in the second and third-quarters lower than the previous year.
Over the first 10 months of 2011, turkey poults placed for growout totaled 232 million, an increase of 0.9 per cent from the same period last year. The small increase would indicate that turkey production in the first half of 2012 is likely to be close to or slightly higher than in 2011. Given the strong wholesale prices for whole birds and most turkey products in the second half of 2011, turkey producers would normally be more heavily expanding production, but forecasts for continued high feed prices and a weak domestic economy through 2012 are likely contributing to producer resistance to expand.
Table Egg Production Continues Higher
The table egg laying flock in October was estimated at 282 million hens, 0.9 per cent above the previous year. Changes in the table egg flock numbers on a year-overyear basis have generally been lower in 2011. The flock size was higher in only 3 of the first 10 months, although table egg production has been higher throughout the year. The table egg flock is expected to remain higher than the previous year through the remainder of 2011, but only slightly. At the beginning of November the estimate of the number of birds in the table egg flock was down, but the decrease was less than 1 per cent. With expected higher feed prices and continuing economic uncertainties, egg producers are not expected to have much of an incentive to expand production in 2012.
Even with table egg production higher throughout the first 10 months of 2011, total production has been 5.5 billion dozen, only marginally higher (0.8 per cent) than the same period in 2010. In October, production was 562 million dozen, an increase of 1.9 per cent from the previous year. Fourth-quarter 2011 table egg production is estimated at 1.69 billion dozen, or about 1.1 per cent higher than the previous year. Even with the higher forecast, table egg prices are expected to remain strong through the end of the year. The fourth-quarter 2011 wholesale price for one dozen Grade A eggs in the New York market is forecast to average $1.27 to $1.28, up about 10 cents per dozen from third-quarter 2011 and about 4 per cent higher than a year earlier.
Hatching egg production has been lower than the previous year through the first 10 months of 2011. Over the first half of 2011, hatching egg production was down by relatively small amounts per month, but since July the declines have been much sharper, averaging around 3 per cent per month. Although there have been some declines in the number of egg-type eggs produced, the majority of the decline has come from a lower number of broiler-type eggs. The decrease in the production of broiler-type eggs is expected to continue through the first half of 2012 or until broiler integrators begin to expand production.
Total Egg Exports Fall in October
Monthly exports of eggs and egg products had been mostly higher in 2011 on a year-over-year basis through September, but fell in October to the equivalent of 22.4 million dozen eggs, 13.3 per cent below a year earlier. The exports were down to Canada, Hong Kong, and Germany and a number of smaller markets, but were partially offset by higher shipments to Japan and Mexico. Exports of both shell eggs and egg products declined in October, with shipments of shell eggs at 11.5 million (down 12 per cent) and shipments of egg products at the equivalent of 10.9 million dozen (down 12 per cent). The October shipments were likely impacted by strengthening US prices. Domestic shell egg prices have continued to strengthen in November and into December. Over the first 10 months of 2011, total egg shipments were 232 million dozen, up 6.7 per cent from the same period in 2010.
Poultry Trade
Broiler Shipments Remain Strong in October
October broiler shipments were up from a year ago. Broiler meat shipped in October 2011 totaled 689.7 million pounds, a 2.5- per cent increase from the same period in 2010, although last October shipments in 2010 were at the highest monthly volume recorded that year. There are several notable differences in trade flows between 2011 and 2010. Shipments to Russia in October 2010 totaled 211 million pounds, which accounted for 31.5- per cent of the US broiler exports for that month. In October 2011, Russia imported only 64.4 million pounds, a 69.5- per cent reduction. One reason for this big change is that imports were high in 2010 as the US re-entered the Russia’s market following resolution of trade restrictions.
Another market that made a considerable difference in 2011 October broiler shipments was Hong Kong. Broiler shipments to Hong Kong totaled 55.7 million pounds in October 2011, a 45-per cent increase from last October. In October 2010, shipments to Angola totaled only 14.4 million pounds. However, 12 months later these shipments rose to 60.5 million pounds, a 320-per cent increase from a year ago. Secondary markets also imported more broiler meat in October 2011, offsetting lower shipments to Russia.
Turkey Shipments Rose in October
Turkey shipments totaled 59.2 million pounds in October, up 20.7- per cent from a year ago. Shipments to the largest US market, Mexico, totaled 31.4 million pounds, accounting for 53 per cent of total turkey exports. Exports to China, the second largest US turkey market, rose considerably in October, from 3.2 million pounds in October 2010 to 5.2 million pounds in October 2011. Sizable turkey shipments also went to the Philippines, for an increase of over 1 million pounds from a year earlier. Through October, turkey exports are up 23- per cent in 2011.
Sheep/Lamb
Sheep Industry Buoyed by Strong Prices and Industry Policy
The sheep industry, with strong prices and an industry policy to grow the inventory, may be poised in 2012 to see its first inventory increase since 2006. A number of factors points to this. The 2011 live auction slaughter lamb prices at San Angelo, Texas have consistently remained above 2010 levels. Choice Slaughter lamb prices at San Angelo have remained in a fairly narrow range, between $155-$175 per cwt for the entire year. Though fourth-quarter Choice prices are forecast at the bottom of that range at $155-$156 per cwt, continued high prices could trigger a higher than normal rate of lamb retention as producers engage in herd rebuilding in anticipation of even higher prices.
At the beginning of the year the industry launched a “let’s grow program” designed to encourage producers to increase their flocks. Indications are that this policy may be working, as producers appear to be holding on to their animals for longer periods. For the first three quarters of 2011, less than 54,000 head of live sheep (mainly older ewes) were exported, a decline of 58 per cent from the same period last year. In 2010, the number of live sheep exports exceeded 150,000 head. Live exports for 2011 are expected to be significantly lower than in previous years.
Signs of increased retention can also be seen in the sharp drop in production. Although sheep inventory was about 2 per cent lower on January 1, 2011, compared with the previous year, with similar per centage declines in both the breeding inventory and market lambs, lamb and mutton production has been down 8 per cent in the first three quarters of 2011 compared with the previous year and is forecast to be down around 9 per cent for 2011. Through October 2011, the number of sheep slaughtered was 11 per cent lower than in the same period last year. Fourth-quarter 2011 commercial production of lamb and mutton is forecast at 37 million pounds. This is about 13 per cent below the fourth quarter of 2010. Typically, distinct seasonal increases begin in the fourth quarter, but in November less than 12 million pounds of lamb and mutton were produced and December is expected to be below 2010. It is likely that high prices and increased retention could be contributing to the low production levels in 2010.
Lamb and Mutton Trade Still Vibrant
Despite fairly strong Australian and New Zealand currencies relative to the US dollar and a slow economic recovery during 2011, imports have been relatively strong, continuing to offset tight domestic supplies. For the first 10 months of 2011, lamb and mutton imports were 140 million pounds, up 6 per cent from the same period last year. Imports for October 2011, though typically lower than most other months, were 16 per cent above the same period last year. Fourth-quarter 2011 imports are forecast at 43 million pounds, 2 per cent above the same period last year. Import increases are expected for the rest of 2011, as continued tight domestic supplies are expected to persist.
Lamb and mutton exports have shown strength and are forecast at 18 million pounds for 2011, up 12 per cent from 2010. October exports were 1.6 million pounds, 80 per cent higher than last year. Fourth-quarter 2011 exports are forecast at 4 million pounds, up 33 per cent above the same period in 2010.
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Monday, December 19, 2011
This Week's Pig News Round-Up
ANALYSIS - Russia and Ukraine have stepped up controls against African swine fever (ASF), writes Jackie Linden, senior editor. ASF is also in the news in Uganda, while FMD has been found in a pig as a Taiwan slaughterhouse. Pig producers in the north of the UK have been warned to look out for signs of swine dysentery and to step up biosecurity.
The Russian food safety and veterinary authority, Rosselkhoznador, has stepped up it measures to counter the outbreak of African Swine Fever (ASF) in the Kursk and Oryol regions.
The authorities are concerned that the disease could run rampant in the region which is close to the borders with Ukraine and Belarus.
In a bid to get a grip on the outbreak, Rosselkhoznador has enhanced its monitoring measures and introduced steps to eliminate ASF in the Kursk and Oryol regions. However, despite strict controls being implemented, the authorities appear to be fighting a battle to get on top of the disease.
Ukraine and the European Commission have reached agreement on taking joint measures to counter the spreading of ASF into the territory of Ukraine and the European Union member states, according to a statement made by the State Veterinary and Phytosanitary Service.
"We, jointly with the European Commission, have commenced work on creation of a control zone to avoid and suppress spreading of the virus onto the Ukrainian and, of course, the European territory," said Agrarian Policy and Food Supplies Minister, Mykola Prysiazhniuk.
He added that, during a meeting with EU Commissioner for Agriculture and Rural Development, Dacian Ciolos, agreement was reached on stepping up control over movements of animal products, grain from the Russian territory affected by ASF, and also control over migration of wild animals.
In Uganda, residents of Adjumani District have ignored health warnings about the risks associated with eating pork from pigs killed by ASF. Although the veterinary department placed a quarantine on pigs, the number of pigs killed by swine fever has risen from 60 to 120, in just two weeks, curity operatives and officials from the production department have arrested two residents of Patua Village for exhuming pig carcasses for consumption.
Pig farmers in the UK, particularly in Yorkshire, are being encouraged to raise their level of biosecurity, to join a producer group and to to be on the alert for signs of disease, following several confirmed outbreaks of swine dysentery in the UK recently. Our report covers what stockmen and farmers should be looking out for and what to do. In a more detailed report on control measures, eradication is a feasible solution in the medium term, according to a veterinarian based in the region. If the disease strikes, she recommended transparency with suppliers, neighbouring pig farmers and abattoirs to minimise the risk of spreading the infection.
With a growing population but a shrinking rural population, China's farmers are changing from man-power to iron horse-power as they move to a more contemporary approach to agriculture.
China is clearly experiencing a rise in their standard of living which is resulting in a change in their consumer habits, said Alexander Haus with VDMA at the Sino-European Conference held during Agritechnica in Hannover, Germany, recently.
Mr Haus said: "We see China's households moving toward higher quality food and their everyday food mix is changing to include more meat, milk, wheat noodles and potatoes. Self-sufficiency for basic food products is one of the main targets for China's central government."
Returning to disease issues, a pig with symptoms of foot and mouth disease (FMD) has been found in a Taiwan slaughterhouse.
Jackie Linden, Senior Editor
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Wednesday, December 21, 2011
CME: Drop In Domestic Meat Consumption Expected
US - USDA’s December forecasts indicate another sharp drop in US domestic meat and poultry consumption is coming in 2012, writes Steve Meyer and Len Steiner.
That should come as no surprise to industry observers but the cumulative reductions of the past few years are rather shocking in historical context. The top chart at right shows total US meat and poultry per capita consumption on a boneless equivalent (BE) basis from 1960 through 2011 with the 2012 observation representing the boneless equivalent of USDA’s December WASDE forecasts of retail weight consumption.
We use boneless equivalent here because it best represents the amount actually consumed by people after allowing for pet food usage (a major contributor to the difference between carcase and retail weight) and wastage such as bones and skin, the latter being an important factor for chicken.
These data indicate that the average American will consume 12.2 per cent less meat and poultry in 2012 that they did in 2007. Note that the high for BE consumption was in 1999 at just over 190 pounds per person. After a seven pound decline through 2001 due to reductions in domestic consumption of all three major species — primarily driven by growing exports –- total consumption stabilised from 2002 through 2007 at very near 189 pounds. Then came 2008 and the beginning of this precipitous drop.
The bottom chart shows the same data for each of the four major species with the vertical black line marking 2007. Note that that year marks the beginning of downtrends for all species, including chicken whose steady growth, before that point, had been practically bullet-proof. Even pork consumption, which had been quite steady since the early 1980s began to fall in 2008 and the downtrend for beef consumption accelerated. There are a number of reasons for the change. Among them are:
Growing exports. This is especially true for pork which saw exports jump by more then 40 per cent in 2008 and will set another record this year. Beef exports also grew as they recovered from the 2003 BSE discovery. Larger exports meant lower domestic “availability” and thus lower consumption. This began to be a real factor when production increases were limited by the next factor.
Higher costs. It is no coincidence that the rapid growth of cornbased ethanol production coincides with the downtrend in U.S. meat and poultry consumption. The first major diversions of corn to ethanol drove feed costs higher and producers of all species saw floods of red ink. Some reduced output. Others were forced out of business thus further reducing market supplies. Domestic availability was reduced in order to push prices high enough to cover the new level of costs. It was a classic economic response to a heretofore outside shock. Exploding oil prices added fuel to the fire (pun fully intended) by making ethanol, and thus corn as a fuel feedstock, even more valuable.
The fruition of 30-40 years of government policy. This doesn’t get a lot of talk but, to us, it is the elephant in the room. If the federal government and its agencies decide to wage war on a product and continue that war for long enough, it will eventually have an impact. And the feds have indeed waged war on meat protein consumption for many years. Add in the efforts of a large number of non-governmental agencies that oppose meat consumption for reasons ranging from the environment to animal rights to social justice and one could conclude that it was amazing that consumption held up as long as it did.
Will meat and poultry consumption turn around? We concur with USDA that they will not, at least in the short run. The drop to 165.5 pounds in 2012 will be driven by lower beef and chicken supplies. The latter of those may level off in 2013 but beef output will almost certainly decline again with the total very likely falling below the 162.9 of 1973 and quite possibly reaching the 161 of ‘66
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Friday, December 23, 2011
Agricultural Incomes - Not as Bright as They First Appear
ANALYSIS - The figures released by Eurostat this week on farm workers incomes and farm production in the EU on the surface appear to make happy reading, writes ThePigSite Editor in Chief, Chris Harris
Farm workers are largely earning more and both crop and livestock production is up, the Eurostat estimates say.
However, the picture might not be as rosy as it appears.
For while agricultural producer prices rose by 7.5 per cent with crop production up by 5.4 per cent and livestock production up by 6.7 per cent in value and 1.1 per cent in volume, the cost of production is expected to rise by 9.7 per cent.
The reasons for this steep rise in input costs is down to an increase in feed costs of 16.8 per cent, fertilisers and improvers by b14.6 per cent, energy and fuels by 11.8 per cent.
The rise in input costs is only kept down because the costs of seeds and planting stocks which rose by 4.3 per cent and maintenance of building which rose by 3.8 per cent were below the average.
Feed fertilisers and energy are expected to keep on rising and this is going to put an increasingly heavy strain on production costs.
If the costs of labour, which on average rose by 6.7 per cent, are then added to these costs, the cost of production is going to go up even more and more sharply.
This in turn can only lead to one thing, higher food inflation and a rise in prices for meat and cereals in the EU.
The rise in farm worker incomes is also patchy and not even across the EU.
Some of the largest rises can be found in the new member states - Romania, Hungary, Slovakia, Poland, Estonia and Latvia - where rises of more than 40 per cent are seen in some cases.
This is because the farm incomes are starting from a low base and are rising rapidly to match incomes in the older member states.
However, Germany with a 14.7 per cent increase in incomes, Denmark with 20.2 per cent and Austria with 12.2 per cent, are leading the way for the countries not only with a developed agricultural sector but also with a reasonably stable economy.
How some of the countries will sustain large rises in incomes with production prices rising more slowly than production costs is going to be one of the great challenges for the agricultural sector in Europe in 2012.
This challenge is going to be made even more acute by what happens to the Euro zone economies and the survival or otherwise of the Euro itself.
How sustainable the Irish agricultural sector will find its 30.1 per cent rise in agricultural wages has yet to be seen, particularly as the country is entering into a period of severe belt-tightening with large rises in taxes and cuts in expenditure.
While the Irish rise in wages brought the average wage back over 2005 levels, Italy, which faces similar challenges, saw an agricultural wage rise of 11.4 per cent but this has still kept the farm workers well below 2005 levels.
Greece, Portugal and Spain - all countries that have been the subject of either bail-outs or deep concern over their economic survival - all saw cuts in their agricultural wages and each of them has wages that are on average below 2005 levels.
In these countries as the Euro austerity measures start to bite, the agricultural sector could be hit hardest.
France, which has agricultural wages 10 points above the 2005 levels saw cuts in wages of 2.6 per cent this year. With an election around the corner in 2012, President Sarkozy can be expected to throw out some enticing financial bones to the vociferous rural electorate along with endeavouring to gain some concessions in CAP negotiations.
Chris Harris, Editor-in-Chief
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Friday, December 23, 2011
Groups Warn Poultry & Dairy Sectors 'Face Disaster'
INDIA - Advocacy groups in India say the proposed deal between India and the EU at the World Trade Organization (WTO) would violate the right to food of a vast segment of the Indian population, particularly those who rely on the poultry and dairy sectors.
As the Eighth Ministerial meeting of the World Trade Organization (WTO) kicked off in Geneva last week, a group of non-government organisations exposed the devastating potential of a free trade agreement currently being negotiated between the European Union and India, reports Asia Times. If passed, they say the deal would make a mockery of all WTO rules and regulations.
A recent impact assessment on the right to food of the EU-India FTA, researched and compiled by leading advocacy groups including the Delhi-based Third World Network (TWN), the Indian non-governmental organisation (NGO) Anthra and Germany charities Misereor, Glopolis and the Heinrich Boll Foundation, concluded that the proposed deal would violate the right to food of a vast segment of the Indian population, particularly those who rely on the poultry and dairy sectors.
Additionally, the zero-tariffs clause of the free trade agreement (FTA) could lacerate the retail sector by stripping small retailers of any protection against corporate giants.
Having sat on the table since 2007, the agreement could be sealed as early as next year, an outcome that many experts see as "disastrous" for the local economy.
"The EU is asking India to cut its tariffs to zero on at least 92 per cent of all imports, including industrial and agricultural goods," Ranja Sengupta, senior researcher at TWN told Inter Press Service (IPS). "Considering that trade with EU represents 60% of India's total international trade, this would be a disaster, particularly in hitherto protected sectors, like agriculture."
"Our [impact statement] focuses on the dairy and poultry sectors because they employ a large number of very small farmers, many of them operating in their backyards in order to subsist," Sengupta said.
Given that the dairy sector provides 90 millions jobs, slashing tariffs will likely result in a repeat performance of the 1999 milk crisis in India, when EU imports of skimmed milk powder rose from 600 tonnes to 25,000 tonnes, effectively destroying the country's "white revolution" for milk self-sufficiency. Similarly, the pending FTA will flood the market with imports, depress producer prices, reduce incomes and eventually increase debt.
The poultry sector, which consists of 96 million small, landless agricultural households that manage 85% of the poultry stock, is currently guarded by a 100 per cent tariff that actually prohibits imports.
But the FTA could kill these protections, according to Asia Times. According to Sengupta, Indians consume more poultry legs than breasts and vice versa in Europe. If the EU dumped its poultry legs on the local market, India would not be able to retaliate by exporting poultry breasts to European markets because of the latter's strict health and safety standards.
The WTO advocates lowering tariffs, not removing them altogether. Additionally, the agenda for the ministerial meeting this week includes the question of industrialized countries eliminating government subsidies.
"In sharp contrast, FTAs like the one being negotiated between India and the EU insist on the complete elimination of tariffs but contain no binding clauses about eliminating subsidies," Sengupta said.
Experts are also concerned about the FTA's impact on the retail sector, the second-largest employer in India after agriculture. In the WTO, services trade liberalization is a relatively flexible mechanism because it allows countries themselves to decide which sectors to open up to foreign competition.
"This is a very sensitive issue in the country but unfortunately the public is unaware of the serious impact of the FTA because negotiations are often conducted in secret. Contrary to the WTO, the FTA does not need to be ratified by the national parliament and state governments are not even consulted," Sengupta told IPS, according to Asia Times.
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Agricultural Incomes - Not as Bright as They First Appear
ANALYSIS - The figures released by Eurostat this week on farm workers incomes and farm production in the EU on the surface appear to make happy reading, writes Editor in Chief, Chris Harris
Farm workers are largely earning more and both crop and livestock production is up, the Eurostat estimates say.
However, the picture might not be as rosy as it appears.
For while agricultural producer prices rose by 7.5 per cent with crop production up by 5.4 per cent and livestock production up by 6.7 per cent in value and 1.1 per cent in volume, the cost of production is expected to rise by 9.7 per cent.
The reasons for this steep rise in input costs is down to an increase in feed costs of 16.8 per cent, fertilisers and improvers by b14.6 per cent, energy and fuels by 11.8 per cent.
The rise in input costs is only kept down because the costs of seeds and planting stocks which rose by 4.3 per cent and maintenance of building which rose by 3.8 per cent were below the average.
Feed fertilisers and energy are expected to keep on rising and this is going to put an increasingly heavy strain on production costs.
If the costs of labour, which on average rose by 6.7 per cent, are then added to these costs, the cost of production is going to go up even more and more sharply.
This in turn can only lead to one thing, higher food inflation and a rise in prices for meat and cereals in the EU.
The rise in farm worker incomes is also patchy and not even across the EU.
Some of the largest rises can be found in the new member states - Romania, Hungary, Slovakia, Poland, Estonia and Latvia - where rises of more than 40 per cent are seen in some cases.
This is because the farm incomes are starting from a low base and are rising rapidly to match incomes in the older member states.
However, Germany with a 14.7 per cent increase in incomes, Denmark with 20.2 per cent and Austria with 12.2 per cent, are leading the way for the countries not only with a developed agricultural sector but also with a reasonably stable economy.
How some of the countries will sustain large rises in incomes with production prices rising more slowly than production costs is going to be one of the great challenges for the agricultural sector in Europe in 2012.
This challenge is going to be made even more acute by what happens to the Euro zone economies and the survival or otherwise of the Euro itself.
How sustainable the Irish agricultural sector will find its 30.1 per cent rise in agricultural wages has yet to be seen, particularly as the country is entering into a period of severe belt-tightening with large rises in taxes and cuts in expenditure.
While the Irish rise in wages brought the average wage back over 2005 levels, Italy, which faces similar challenges, saw an agricultural wage rise of 11.4 per cent but this has still kept the farm workers well below 2005 levels.
Greece, Portugal and Spain - all countries that have been the subject of either bail-outs or deep concern over their economic survival - all saw cuts in their agricultural wages and each of them has wages that are on average below 2005 levels.
In these countries as the Euro austerity measures start to bite, the agricultural sector could be hit hardest.
France, which has agricultural wages 10 points above the 2005 levels saw cuts in wages of 2.6 per cent this year. With an election around the corner in 2012, President Sarkozy can be expected to throw out some enticing financial bones to the vociferous rural electorate along with endeavouring to gain some concessions in CAP negotiations.
Chris Harris, Editor-in-Chief
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NAB Rural Commodities Wrap – December 2011
Agricultural commodities are weakening as the result of the Euro sovereign debt crisis and rising production prospects, according to Michael Creed, Agribusiness Economist at the National Australia Bank in the Economic Report for December 2011.
Source: NAB Group Economics
These forecasts represent year-on-year average changes in A$ price and production between 2010-11 and 2011-12 financial yearsPrices across the broad commodities complex have fluctuated sharply over the past month and are generally lower than levels seen a month ago. Escalating concerns over European sovereign debt and a more uncertain global economic outlook have overshadowed slightly more positive economic data out of the United States. Market volatility has been rising following a reprieve over the first half of November. Coordinated central bank action and prospects for a new European compact may have helped to restore a degree of calm in financial markets, by way of providing renewed hope for the resolution of sovereign debt problems. However, significant political hurdles remain along with continuing financial instability and fears of a European credit crunch.
As the global growth outlook has become increasingly uncertain, a broad range of commodity prices has generally declined over the past month, although there is considerable variation within the commodities complex. Commodities perceived to have safe haven properties, such as gold, should continue to benefit from market fragility and the prevailing risk-off attitude. In contrast, commodities reliant on industrial production and global trade, such as bulk commodities and base metals, are likely to continue to come under pressure, although the scale of recent falls may provide some upside risk. Oil prices are being pressured by competing drivers, although worries around the global economy appear to be winning out. Nonetheless, geo-political tensions surrounding Iran and a still tight stocks situation in Europe have provided some support to prices.
Agricultural commodities have not been immune from the sell-offs, with prices for almost everything grown having weakened since mid-November. While a weakening global economy is having an impact, there is also a very strong production response hitting agricultural commodity markets. Australia is on track for a massive winter crop while sugar and cotton production has generally responded to high prices seen earlier in the year. In contrast, livestock prices have held up reasonably well, as the structural lags between prices and production are generally longer than for broad-acre crops.
Market volatility will continue to set the tone for commodity prices entering 2012. Markets will remain focussed on European sovereign debt issues, although attention has also been shifting towards emerging economies as scepticism grows over their capacity to weather the global headwinds. This will pose considerable risk for agricultural commodities, where any sign of weakness in the emerging economies will have considerable impacts on demand. This has already been evident in some commodities, where upward revisions to forecasts of stocks levels have come at the expense of weakening demand. With prices already responding to improved production prospects, any weakness in the emerging economies is likely to expose prices to considerable downside risk.
While global prices for agricultural commodities are weaker, conditions within the Australian farm sector remain very strong overall. According to recent ABARES forecasts, the volume of Australian farm production in 2011-12 is forecast to increase four per cent, while export earnings from farm commodities are expected to rise to $34.5 billion in 2011-12, up from $32.4 billion in 2010-11. With record winter and summer crops on the cards, good pasture conditions and ample feed boosting livestock production, the sector remains on the right side of the multi-speed economy. However, some risk is posed by recent rainfall across southern Queensland and New South Wales, which has frustrated the harvest and is raising concerns around crop quality.
Currency Movements
The A$/US$ pulled back below parity again due to the global risk-off attitude brought about by the Euro sovereign debt crisis as well as the impact on weakening commodities prices. Looking into 2012, however, NAB expects the A$/US$ to return to parity after a brief fall to around the mid-90-cents level. It expects to see a trading range of around US¢15 through 2012, roughly similar to 2011, with the extremes being between 0.90 and 1.05. Our strongest view is that the A$/US$ peaked at 1.10 in August this year. The forecast for the A$/US$ is for parity in the second half of 2012 but NAB now forecasts a decline to around 0.95 over the next quarter as global growth slows and the RBA cuts rates again. The Euro-zone muddling through, a soft landing in China and no slashing of official interest rates by the RBA suggests a modest rebound in the A$/US$ from around mid-2012 as worst fears are not realised.
NAB Rural Commodity Index
Prices for rural commodities continued to ease back in November, with the NAB Rural Commodity Index falling 1.3 per cent in A$ terms in November while the US$ index was up 1.1 per cent in the month. Driving the monthly result were price falls in sugar, wheat, cotton, lamb, dairy and barley. Beef prices, on the other hand, were up in the month. Looking ahead, agricultural commodity markets are facing considerable headwinds over the near term. The run up in commodity prices in 2010-11 has well and truly passed as the balance sheets of most commodities are reverting to more comfortable positions. This is taking place against a back-drop of a weakening outlook for the global economy and heightened volatility in financial markets. As such, agricultural commodity prices are exposed to significant downside risk over the near term. Offsetting this to some degree, will be continued strength in livestock prices over the coming months, still buoyed by dwindling global flock and herd numbers.
NAB Farm Input Indices
Fertiliser prices weakened in November, with the NAB Weighted Fertiliser Index falling 4.7 per cent in month average terms. Driving the fall in November were price falls across the board, with diammonium phosphate leading the charge (down 5.5 per cent) while natural gas prices were down 4.3 per cent. A strengthening month average A$ saw urea prices rise to a more modest extent. Given the extent of price falls for a number of key agricultural commodities in recent weeks, we anticipate continued weakness in fertiliser prices. A degree of caution is likely to persist in fertiliser markets while prices for agricultural commodities are weakening and the Euro zone debt crisis continues to throw up financial market volatility. Reflecting the decline in fertiliser prices, the fuel price index also declined in November, down 2.8 per cent.
NAB Weighted Feed Grains Price
Feed grain prices pulled back sharply for a second consecutive month in November, with the NAB Weighted Feed Grains Price falling 4.1 per cent on October levels. Driving the monthly movement were falls across the board, with prices of sorghum (down 9.1 per cent) and barley (down 6.4 per cent) feeling the brunt of the price falls. Price falls for maize (down 2.3 per cent), feed wheat (down 2.2 per cent) and triticale (down 0.9 per cent) were modest while oats prices remained unchanged. At $217.40 per tonne, the NAB Weighted Feed Grains Price now sits at its lowest level since June 2010, prior to the run up in global grains prices. With a massive winter crop being harvested, huge carry-over stocks of feed grains from last season and the supply squeeze in the global coarse grains being eased, prices for feed grains are likely to continue to fall. This is likely to be exacerbated by recent rainfall frustrating the east coast harvest and potentially adding to already abundant stocks of feed grains.
Key Commodity Prices
NAB Rural Commodities Wrap – December 2011
Agricultural commodities are weakening as the result of the Euro sovereign debt crisis and rising production prospects, according to Michael Creed, Agribusiness Economist at the National Australia Bank in the Economic Report for December 2011.
Source: NAB Group Economics
These forecasts represent year-on-year average changes in A$ price and production between 2010-11 and 2011-12 financial yearsPrices across the broad commodities complex have fluctuated sharply over the past month and are generally lower than levels seen a month ago. Escalating concerns over European sovereign debt and a more uncertain global economic outlook have overshadowed slightly more positive economic data out of the United States. Market volatility has been rising following a reprieve over the first half of November. Coordinated central bank action and prospects for a new European compact may have helped to restore a degree of calm in financial markets, by way of providing renewed hope for the resolution of sovereign debt problems. However, significant political hurdles remain along with continuing financial instability and fears of a European credit crunch.
As the global growth outlook has become increasingly uncertain, a broad range of commodity prices has generally declined over the past month, although there is considerable variation within the commodities complex. Commodities perceived to have safe haven properties, such as gold, should continue to benefit from market fragility and the prevailing risk-off attitude. In contrast, commodities reliant on industrial production and global trade, such as bulk commodities and base metals, are likely to continue to come under pressure, although the scale of recent falls may provide some upside risk. Oil prices are being pressured by competing drivers, although worries around the global economy appear to be winning out. Nonetheless, geo-political tensions surrounding Iran and a still tight stocks situation in Europe have provided some support to prices.
Agricultural commodities have not been immune from the sell-offs, with prices for almost everything grown having weakened since mid-November. While a weakening global economy is having an impact, there is also a very strong production response hitting agricultural commodity markets. Australia is on track for a massive winter crop while sugar and cotton production has generally responded to high prices seen earlier in the year. In contrast, livestock prices have held up reasonably well, as the structural lags between prices and production are generally longer than for broad-acre crops.
Market volatility will continue to set the tone for commodity prices entering 2012. Markets will remain focussed on European sovereign debt issues, although attention has also been shifting towards emerging economies as scepticism grows over their capacity to weather the global headwinds. This will pose considerable risk for agricultural commodities, where any sign of weakness in the emerging economies will have considerable impacts on demand. This has already been evident in some commodities, where upward revisions to forecasts of stocks levels have come at the expense of weakening demand. With prices already responding to improved production prospects, any weakness in the emerging economies is likely to expose prices to considerable downside risk.
While global prices for agricultural commodities are weaker, conditions within the Australian farm sector remain very strong overall. According to recent ABARES forecasts, the volume of Australian farm production in 2011-12 is forecast to increase four per cent, while export earnings from farm commodities are expected to rise to $34.5 billion in 2011-12, up from $32.4 billion in 2010-11. With record winter and summer crops on the cards, good pasture conditions and ample feed boosting livestock production, the sector remains on the right side of the multi-speed economy. However, some risk is posed by recent rainfall across southern Queensland and New South Wales, which has frustrated the harvest and is raising concerns around crop quality.
Currency Movements
The A$/US$ pulled back below parity again due to the global risk-off attitude brought about by the Euro sovereign debt crisis as well as the impact on weakening commodities prices. Looking into 2012, however, NAB expects the A$/US$ to return to parity after a brief fall to around the mid-90-cents level. It expects to see a trading range of around US¢15 through 2012, roughly similar to 2011, with the extremes being between 0.90 and 1.05. Our strongest view is that the A$/US$ peaked at 1.10 in August this year. The forecast for the A$/US$ is for parity in the second half of 2012 but NAB now forecasts a decline to around 0.95 over the next quarter as global growth slows and the RBA cuts rates again. The Euro-zone muddling through, a soft landing in China and no slashing of official interest rates by the RBA suggests a modest rebound in the A$/US$ from around mid-2012 as worst fears are not realised.
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Tuesday, January 10, 2012
CME Economist Upgrades 2012 US Outlook
ANALYSIS - According to the CME Group's Chief Economist, Blu Putnam, US economic improvements in 2012 will start with real GDP forecast to grow around 3.5 per cent to 4.0 per cent, writes Sarah Mikesell, ThePigSite senior editor.
Mr Putnam also estimates the unemployment rate will decline below eight per cent by the end of 2012 and core inflation, excluding food and energy, will creep higher to 3.5 per cent by December 2012.
This is a substantial upgrade from Mr Putnam's previous 1.5 per cent to 2.0 per cent forecast for 2012, in terms of real GDP. He and the CME Group are not, however, revising their expectation that the US will average around two per cent annual real GDP growth for the decade but rather that 2012 will be considerably above average.
Looking a few years out, Mr Putnam expects 2013-2014 will be troubled with fiscal and monetary policy risks that may bring the economic growth rate back down toward the expected average for the decade.
He and the CME Group offer this optimistic perspective on 2012 real GDP growth for the US despite expectations for a recession in Europe and a significant growth deceleration in China.
If the forecast for the US goes as predicted, there are important implications. Mr Putnam said the US long-term bond yields could come under considerable upward pressure as the year develops, and a debate over Federal Reserve policy in the second half of the year could destabilize shorter maturities, such as the two-year Treasury note.
While this economic growth forecast might appear to be good news for US equity markets, S&P 500 companies get half their cash flow from outside the US on average. According to Mr Putnam, the forecast for China and other emerging markets is for slower growth and for Europe the estimate is for a decline in real GDP.
Regardless, strong US growth could offer a calming influence on world equity markets, resulting in lower risk premiums and higher price-to-earnings ratios, which might also mean reduced equity market volatility as the year progresses.
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Tuesday, January 10, 2012
Chicken and Flour Subsidies End in Argentina
ANALYSIS – On 31 December 2011, the government of Argentina stopped paying subsidies to the poultry and flour milling industries – subsidies intended to keep prices at an acceptable level – writes Chris Wright, senior editor.
The subsidies to the Argentine agribusiness sector started in 2007, with the justification that they were trying to break internal food prices away from the rising international costs of feedstuffs.
The government created the National Office of Commercial Agribusiness Control (ONCCA) to run the subsidy programme.
The government subsidized wheat for the flour mills in order to contain bread prices; corn for chicken and pig producers as well as feedlots; and sunflower for the oilseed crushers. Small grain and pig producers also received subsidies.
Between 2007 and February 2011, when ONCCA was dissolved, the state gave out 10.5 billion pesos in compensation, half of which went to the poultry industry and the flour millers, reported Nosis.
The broiler and flour sectors were the only two sectors that kept receiving subsidies in 2011, even though the payments got very far behind, partially because the management of this program changed hands between government departments.
'Chicken for Everyone'
While the impact on the price of chicken has yet to be determined, some estimates say that it will rise by 14 per cent. Producers feel they have no choice but to raise prices.
The government worked out a deal with broiler and flour producers to maintain lower prices of these foods delivered to certain strategic places, such as the Buenos Aires Central Market. In exchange, these sectors will be able to raise their prices elsewhere.
The government was also working on a new plan called 'Chicken for Everyone' where 10 trucks will sell chicken at low prices in certain under-served neighborhoods in Buenos Aires, the Central Market and certain parts of the rest of the country. This strategy has been used before successfully with other products in Argentina.
Chris Wright, Senior Editor
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Thursday, January,13,2012
China's Food Safety Suffers 'Feeble Foundation'
CHINA - A senior Chinese official admitted Tuesday that the nation's food safety still suffered from a "feeble foundation."
Despite achievements made in 2011, the nation will continue to have a hard time ensuring food safety for a quite long time, said Zhang Yong, director of the executive office of the food safety commission under the State Council, the Cabinet.
He said problems remained at deep administrative levels, as a large number of food producers and catering operators are running small-scale businesses and some consumers lack knowledge and safety awareness.
New risks emerged with the use of new technology and materials in food production, and environmental pollution in producing areas also posed new challenges to traditional safety standards and tests, he said.
The director said remarkable progress had been made in improving the nation's food safety supervision network but the current system still does not fit in with actual demand, noting that supervision at grassroots levels is extremely weak and that more efforts are needed to improve supervision and emergency handling capabilities.
Food safety scandals erupted in great number in 2011. Authorities busted farmers for adding clenbuterol, a known carcinogen, to pig feed in order to grow leaner pigs, for example.
In late December, milk products made by the nation's leading dairy company, Mengniu, were found to contain high levels of aflation, a cancer-causing toxin.
To make the nation's food supplies safer in 2012, the authorities will carry out campaigns targeting six sectors: the rural food market, dairy products, edible oil, liquor, seasonal and festive food as well as food additive management, according to a statement released after Tuesday's national work conference on food safety supervision.
By latest official count, a total of 62,000 cases concerning substandard food were spotted in the first 11 months of 2011, underscoring the severity of China's food safety problem.
The authorities ordered 43,000 businesses found illegally operating without licenses to cease production, while revoking the business licenses of 576 operators during the period, according to the State Administration for Industry and Commerce.
A total of 251 cases were handed over to judicial organs during the period.
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Friday, January 13, 2012
Food Safety Check Ahead of Spring Festival
CHINA - China will make "all-out efforts" to step up safety overhauls of food necessities in the production and logistics chains to prevent mishaps during the upcoming Spring Festival shopping season.
Authorities of agriculture, quality inspection, commerce and public security will enhance joint patrols and secret inspections of the food market.
Rice, cooking oil, meat, egg, dairy products and frozen food will be put on the target list, the State Council Food Safety Commission said in a circular on Thursday.
Efforts will be made to prevent any fake farm produce or harmful pesticide residue affecting the health of consumers, the circular said.
Several food safety scandals rattled the nation in 2011, including meat processors adding cancer-causing clenbuterol to pig feed to produce lean meat and restaurants serving food cooked with recycled oil known as "gutter oil."
China's Spring Festival, or Lunar New Year, falls on 23 January.
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Friday, January 13, 2012
FAO Food Price Index Ends Year with Sharp Decline
GLOBAL - Food prices fell in December 2011 with the FAO Food Price Index dropping 2.4 per cent, or five points from November, FAO said yesterday.
At its new level of 211 points, the Index was 11.3 per cent (27 points) below its peak in February 2011.
The decline was driven by sharp falls in international prices of cereals, sugar and oils due to bumper 2011 crops coupled with slowing demand and a stronger US dollar. Most commodities were affected.
However, although prices dropped steadily in the second half of 2011, the Index averaged 228 points in 2011 — the highest average since FAO started measuring international food prices in 1990. The previous high was in 2008 at 200 points.
A period of uncertainty
Commenting on the new figures, FAO Senior Grains Economist Abdolreza Abbassian said that it was difficult to make any firm prediction on price trends for the coming months.
"International prices of many food commodities have declined in recent months, but given the uncertainties over the global economy, currency and energy markets, unpredictable prospects lie ahead," Dr Abbassian said.
Among the principal commodities, cereal prices registered the biggest fall, with the FAO Cereal Price Index dropping 4.8 per cent to 218 points in December. Record crops and an improved supply outlook sent prices of major cereals declining significantly. Maize prices fell 6 per cent, wheat 4 per cent and rice 3 per cent. In 2011, the FAO cereal price index averaged 247 points, up some 35 per cent from 2010 and the highest since the 1970s.
Oils and fats down
The FAO Oils and Fats Price Index stood at 227 points in December, down 3 per cent from November and well below the level of 264 points one year ago. Larger than expected overall supplies of vegetable oil led to a rise in stocks (notably palm and sunflower oil), which, together with poor global demand for soybeans, deflated prices.
The FAO Meat Price Index averaged 179 points, slightly down compared with November. The decline was mainly driven by pig meat, whose price dropped by 2.2 per cent, with sheep meat also receding somewhat. By contrast, poultry and bovine meat prices recorded mild gains. On an annual basis, meat prices in 2011 were 16 per cent higher than in 2010.
Dairy products mostly up
The FAO Dairy Price Index averaged 202 points, almost unchanged from November. All dairy products were up slightly with the exception of butter, which dropped by 1 per cent. Over the whole year, dairy products were on average 10 per cent dearer than in 2010, with particularly strong gains witnessed for skim milk powder and casein, which gained 17 per cent each. More modest increases were seen for butter and whole milk powder prices, which progressed by 11 per cent, and cheese, by 8 per cent.
The FAO Sugar Price Index declined for the fifth consecutive month to 327 points in December, down 4 per cent from November and 18 per cent from its July 2011 peak. The Index’s weakness in recent months mostly reflects expectations of a large world production surplus over the new season, on the back of good harvests in India, the European Union, Thailand and the Russian Federation.
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Tuesday, January 17, 2012
Record 2011 Farm Profits Could Spill into 2012
US - Against a backdrop of economic uncertainty, US agriculture last year stood as a shining example of growth.
2011 set records, with net farm income topping $100 billion for the first time ever.
“Prices are up across the board for all the major crops, and while we’ve seen cost of production increases overall, they haven’t increased as rapidly as the prices of crops people are selling,” said Pat Westhoff, director of the University of Missouri Food and Agricultural Policy Research Institute (FAPRI). “Even corrected for inflation, farm profits are at or near the highest levels since the 1970s. That is indeed a very good outcome overall.”
US farm income rose 28 per cent in 2011 compared to the previous year, according to USDA reports. Record agricultural exports topped $137 billion, while crop receipts rose 16 per cent and livestock sales receipts averaged 17 percent more than in 2010.
For livestock producers, this year offers welcome relief from some tough times. When the economic recession hit, prices dropped sharply as demand for meat slumped, and high feed prices meant many livestock producers lost money. In response, some producers stopped raising livestock and others scaled back expansion plans. Mr Westhoff said we’re seeing a turnaround.
“We’ve seen higher prices for both hogs and cattle this year in a pretty sharp way after really tough years in 2008-2009,” he said. “Now we’re seeing a bit stronger demand for our meat overseas and at the same time we’ve got less supply.
“Events like the drought in Texas have reduced cattle numbers, so there will be less beef to be sold in 2012. That will help keep cattle prices high ahead of us for the next several years.”
Going into 2012, chicken producers won’t be as lucky. Demand for chicken has not kept pace with the appetite for red meat, and there is an expectation that chicken production will consolidate soon.
“That’s causing talk of lower chicken production in 2012, and that’s something that doesn’t happen very often,” Mr Westhoff said.
Crop exports likely will fall short of last year. With less droughts and floods affecting foreign yields, competition will ramp up once again.
“Less soybeans, less corn, less wheat almost certainly will be exported in the current marketing year than last year,” Mr Westhoff said. “It’s not that demand is necessarily weak, it’s just lots of other countries are supplying those foreign markets.”
It’s hard to guess whether 2012 will bring another round of high prices, but higher yields, weaker exports and even the European debt crisis could hinder a repeat.
“There are lots of things that could go wrong in front of us, and instead of $5-$6 corn, $3-$4 corn could return,” Mr Westhoff said. “We’re very much in a volatile situation, and what people think about the markets today will be different than six months or a year from now.”
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Thursday, January 19, 2012
Minister Urges Greater Efforts to Boost Farm Exports
SOUTH KOREA - South Korea's agriculture minister on Thursday urged increased efforts to boost the country's food and agricultural exports, stating the country's free trade agreement (FTA) with the United States will offer new opportunities.
Yonhap News Agency reports that the call came as South Korea is striving to increase its agriculture exports by 30 per cent to over US$10 billion for the first time in its history this year. The country's food and agricultural exports surged 30.8 per cent on-year to a record high of $7.7 billion in 2011, according to the Ministry of Food, Agriculture, Forestry and Fisheries.
Minister Suh Kyu-yong said conditions for the country's agricultural exports were worsening this year while the growth of Seoul's total exports, including industrial products, is expected to slow down from 19.6 per cent last year to about 6.7 per cent.
"Food and agriculture exports will also face great difficulties as the global economic downturn deepens this year, but the growing presence of hallyu (Korean wave) and the country's new FTAs could provide new opportunities that will foster rapid growth in the local food industry," Minister Kyu-yong was quoted as saying in a meeting with officials from local governments and exporting companies.
South Korea is soon expected to implement its FTA with the United States following its ratification by the South Korean and US legislatures last year.
The minister also pledged additional support for exports to developing countries in Southeast Asia and China, which, he said, will likely continue high levels of economic growth this year.
"The $10 billion in foodÌ, agricultural exports may be an aggressive goal, but it is attainable if the government and private companies work together," he said.
To help increase exports, the government plans to provide a total of 576 billion won ($507 million) in loans and subsidies to private companies in 2012 alone.
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Friday, January 20, 2012
Meat, Milk, Eggs, Fish Not on Deflation Diet
INDIA - Food inflation has remained in negative territory for a third week, though the rate of decline has slowed quite a bit in the first week of 2012. Though prices of most articles continued to fall, there was pressure from protein-based goods.
Food inflation was a negative 0.42 per cent for the week ended 7 January, up from minus 2.9 per cent in the last week of December.
Headline inflation was down for the first time in a year to below nine per cent, at 7.47 per cent in December, mainly on the back of the sharp decline in food inflation.
The decline in the rate of fall in food prices for the first week of January can be partly credited to the base effect, as food inflation eased to 16.18 per cent in the corresponding week of last year from 19.09 per cent the previous week.
Protein-based items such as eggs, meat and fish continued to put pressure on inflation, mainly due to seasonal factors. Their rate of price rise was 4.42 per cent up, to 19.64 per cent. Milk, too, saw inflation rising to 11.48 per cent from 10.79 per cent last week.
Finance minister Pranab Mukherjee said last week that the moderation in food prices would help bring down headline inflation to six to seven per cent by March 2012.
Food products have a 14 per cent weight in the wholesale price index, the movement of which determines the inflation rate.
"Inflation will stabilise at the current level before taking an upward move in the second quarter of the current calendar year," said Siddharth Shankar, director, KASSA.
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McDonald's Works to Mainstream Sustainability
GLOBAL - McDonald's Corporation has released its 2011 Sustainability Scorecard and says it has reinforced its commitment to mainstreaming sustainability for customers through the company's actions and collaboration with suppliers, experts and the food industry as a whole.
The 2011 Scorecard highlights the company's progress in five priority areas, including significant advancements related to menu evolution and sustainable sourcing. For example:
•By the end of March 2012, fruit will automatically be included in every Happy Meal served in U.S. and Latin America restaurants. Additional changes, including a new smaller size of French Fries only available in Happy Meals, will result in reductions in calories and fat for the most popular Happy Meals
•More than 95 per cent of McDonald's restaurants around the world offer Happy Meals with sides of fruit, vegetables, or low-fat dairy as an option
•As part of the Sustainable Land Management Commitment, which outlines the company's commitment to sourcing all of its food and packaging from sustainable sources over time, McDonald's has made measurable progress in its five initial focus areas of beef, poultry, coffee, palm oil and fiber
•All fish for McDonald's Filet-O-Fish sandwich is wild caught, and currently 99 per cent is sourced from Marine Stewardship Council (MSC)-certified fisheries
These actions are aligned with the company's focus on leveraging its brand recognition and core competencies as a food company to influence wide-reaching and sustainable change.
"We will continue to use our size, scope, and talent to make a positive difference for children, families and communities around the world," said Jim Skinner, McDonald's CEO. "Doing so creates value for both our company and our stakeholders."
In addition to food and food sourcing, McDonald's continues to focus on, and achieve measurable progress in, three other areas central to its sustainability strategy - Environmental Responsibility, Employee Experience and Community.
Environmental Responsibility
In 2011, McDonald's developed stronger energy-related metrics, with a focus on company-owned restaurants. McDonald's top nine major markets made significant improvements in energy data gathering and reporting capabilities.
The company made available for purchase more than 90 pieces of more energy-efficient equipment to the McDonald's system, as well as introduced "energy bundles" - packages of recommended restaurant improvements that combine simple changes like energy-efficient lighting with newer tools such as occupancy sensors.
Across all markets, these reduction efforts are enabling our restaurant energy use to remain steady, despite increases in restaurant hours, equipment and menu items.
Employment Experience
McDonald's continues to focus on developing its people through a wide array of education, job training and life skills opportunities. For example, in the US, the average restaurant manager completes the equivalent of approximately 21 credit hours - one semester of college - that can be transferred to many public and private schools and applied toward a two- or four-year degree. Similarly, 96 per cent of company-operated restaurants have a restaurant manager who has trained at the company's world-class learning center, Hamburger University.
The company's long-standing leadership stance in the area of diversity and inclusion continues to be a competitive strength. For example, more than 50 percent of company-operated restaurant managers and nearly 30 percent of the worldwide top management team are women.
Community
For almost 40 years, Ronald McDonald House Charities (RMHC) has been the charity of choice for McDonald's. Since 2002, countries around the world have raised nearly $170 million during McHappy Day/Give a Hand events, which benefit RMHC and other children's causes.
In 2010, participating restaurants in the U.S. began making a contribution from the sale of each Happy Meal and Mighty Kids Meal. In 2011, RMHC Donation Boxes in the US are projected to reach more than $27 million in customer contributions.
Looking toward 2012, McDonald's will continue to advance goals and targets for mainstreaming sustainability in all five focus areas and reporting progress along the global journey.
"We will continue to mainstream sustainability into our day-to-day business, bring value to the communities we serve, and value to our company through efficiencies, innovations and consumer relevance," said Bob Langert, McDonald's global vice president of Sustainability.
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Scientists to Pause Research on Deadly Strain of Bird Flu
By DENISE GRADY
Published: January 20, 2012
The scientists who altered a deadly flu virus to make it more contagious have agreed to suspend their research for 60 days to give other international experts time to discuss the work and determine how it can proceed without putting the world at risk of a potentially catastrophic pandemic.
Suspensions of biomedical research are almost unheard of; the only other one in the United States was a moratorium from 1974 to 1976 on some types of recombinant DNA research, because of safety concerns.
A letter explaining the flu decision is being published in two scientific journals, Science and Nature, which also plan to publish reports on the research, but in a redacted form, omitting details that would let other researchers copy the experiments. The letter is signed by the scientists who produced the new, more contagious form of the flu virus, as well as by more than 30 other leading flu researchers.
“We recognize that we and the rest of the scientific community need to clearly explain the benefits of this important research and the measures taken to minimize its possible risks,” the letter states. At an international meeting next month in Geneva, participants selected by the World Health Organization will consider what to do next. Dr. Anthony Fauci, head of the National Institutes of Health, said the gathering would “address some of these difficult issues on an international scale instead of something restricted to the United States government.”
The scientists say their work has important public health benefits, but they acknowledge that it has sparked intense public fears that the deadly virus could accidentally leak out of a laboratory, or be stolen by terrorists, and result in a devastating pandemic. A national biosecurity panel in the United States has already taken the unusual step of asking the scientists to keep part of their data secret to prevent others from reproducing their work.
Scientists are split regarding the research, with some praising it as important and urging that it be published, and others saying the experiments are so dangerous that they should never have been done.
The experiments involve a type of bird flu virus known as H5N1, which rarely infects people but is highly deadly when it does. The work, paid for by the National Institutes of Health, was done by two separate research teams, at Erasmus Medical Center in Rotterdam, the Netherlands, and at the University of Wisconsin, Madison.
Ron Fouchier, a virologist who conducted the research at Erasmus Medical Center, explained why he and his colleagues decided to pause the research. “It is unfortunate that we need to take this step to help stop the controversy in the United States,” he said. “I think if this were communicated better in the United States it might not have been needed to do this. In the Netherlands we have been very proactive in communicating to the press, politicians and public, and here we do not have such a heated debate.”
Dr. Fauci said that he had never seen the scientific world so polarized, and that led him to urge the researchers to show good faith and flexibility by declaring the moratorium themselves. A concern “looming in the background,” he said, was that biosecurity experts might overreact and impose excessive restrictions on the research.
“I think it’s important research that needs to go forward,” Dr. Fauci said. “I think we need to get greater input on the conditions in which it goes forward.”
Dr. Fauci and others who support the research say it may help explain how flu viruses that start out in animals adapt to humans and become transmissible, and therefore able to cause pandemics. That information, the researchers say, could help them recognize viruses on the way to developing pandemic potential.
Richard H. Ebright, a molecular biologist at Rutgers, is among those who oppose the research because of its risks, and doubts that it could be used to predict pandemics. He said that a moratorium was a good idea, but that this one did not go far enough. He said that the letter did not acknowledge the need for improved “biosafety, biosecurity and oversight,” and that in any case, 60 days would not be enough time to put the needed safeguards in place. The letter noted a “perceived fear” among the public, Dr. Ebright said, and seemed to suggest that the debate would cool down if people would just let the researchers explain that they had done the experiments safely.
Dr. Ebright said experiments with this virus should be done only in laboratories with the highest biosafety rating, BSL4, not in the “enhanced BSL3” in which the work was actually done.
Dr. Fouchier disagreed. He also said that his center did not have BSL4 labs.
Dr. Fauci said various expert groups, including the Centers for Disease Control and Prevention, had determined that enhanced BSL3 was good enough for bird flu research.
Since 1997, when the H5N1 virus was first identified, about 600 people have been infected, and more than half died — an extraordinarily high death rate. The saving grace of H5N1 is that when people do become infected — nearly always from contact with birds — they almost never transmit the disease to other people. But the virus has persisted in the environment, infecting millions of birds, and scientists have warned that if it mutates to become more contagious in people, disaster could ensue.
But what mutations would make the virus more easily transmissible? And how hard, or easy, would it be for those mutations to occur? Hoping to answer those questions, some researchers began experimenting with bird flu, working with ferrets, which are considered the best model for studying flu, because they contract it and get sick in much the same way that people do. Recently, the teams in Rotterdam and Madison announced that they had produced a form of H5N1 with mutations that allowed it to “go airborne,” meaning that it spread through the air from one ferret to another. Presumably, though not certainly, the virus could spread in the same way among people.
Dr. Fouchier said he was surprised by how easy it was to change the virus into the very form that the world has been dreading. Now, scientists around the world will have to grapple with what to do with Dr. Fouchier’s creation.
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Monday, January 23, 2012
Drought and Floods Hitting Agricultural Production
GLOBAL - A strange mixture of drought and foods appears to be affecting agricultural and livestock production across the Americas - both North and South.
In the US, crop lands in the Mississippi were devastated earlier this year when they were flooded - deliberately flooded by breeching the levees to avert potential disaster.
It appears that while it may have stopped uncontrolled damage, the destruction to farm land, washing away fertile soil, was far higher than at first was expected.
The details of the destruction and the impacts of the induced levee breeches have been outlined in a report on agricultural lands of Mississippi River Valley can be seen in a research published in the January - February 2012 issue of the Journal of Soil and Water Conservation.
However, while these floods caused destruction to crop lands with a knock-on effect to corn and cereal production, lately areas of the southern states have been struck by drought.
In Texas rainfall this winter has varied from five inches in some East Texas counties to one to three inches in Central and North Texas.
Official statistics show that as of 10 January, about 62 per cent of the state was rated as being under severe to extreme drought.
This is an improvement from a week earlier when more than 70 per cent of the state was under drought conditions and a vast improvement from October when 97 per cent of the state was experiencing severe to extreme drought.
Scott Strawn, AgriLife Extension agent for Ochiltree County in the north eastern Panhandle said that wheat was in better condition thanks to moisture received in December, but while fields are up to a good standard, subsoil moisture below six inches is very dry.
The drought has meant that cattle farmers are having to supplement feed in some areas and in others as calving is starting, herds are being reduced because of lack of pasture.
The Livestock, Dairy, and Poultry Outlook report from the USDA published last week showed how the drought is now hitting beef production in the southern states of the US.
It says that while pastures and ranges have improved with recent rain and if it continues it could alleviate the [present drought situation, the La Niña effect is expected to continue at least into spring of 2012 and could affect precipitation patterns in 2012 as it did in 2011.
These conditions have led to an increased cow slaughter - largely beef cows - almost five per cent up on last year and 14 per cent up on 2009.
"Total annual commercial cow slaughter has been observed at current levels only one time since 1987-in 1996, also a drought year," the report says.
Further details of the drought impact are expected at the end of the month in the USDA's National Agricultural Statistics Service (NASS) semi-annual Cattle inventory report, however, the atypically large cow slaughter has fuelled speculation that there will be a year-on-year decline in beef cow inventories, especially in Southern States, and a decline in heifer inventories as well.
Despite this, high feed prices have held prices up for beef farmers in the US.
While in the US, the Livestock, Dairy, and Poultry Outlook report shows a slight rise in pig meat production and a drop in poultry production, South American farmers are being hit similarly to those in Texas by drought.
The drought in Argentina, Brazil and Paraguay is forcing grain prices up and having almost crippling effects on the poultry industry in particular.
A report in El Pais in Argentina shows that high temperatures are not only affecting grain and milk production but also poultry farmers who have seen a 15 per cent loss of boilers in their shed because of the heat.
The poultry market in South America has closely followed the rise in grain prices in the international market.
The USDA has forecast that there are going to be new lows in corn and soybean production in South America and this will eventually drive up prices as shortages bite.
Chris Harris, Editor-in-Chief
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Wednesday, January 25, 2012
Findings on Safety of Genetically Modified Food
GLOBAL - A three year feeding study has shown no adverse health effects in pigs fed genetically modified (GM) maize. The maize, which is a Bt-maize bred for its insect resistant properties, was sourced from Spain.
The results were one of the key findings of trials conducted as part of the GMSAFOOD consortium undertaking post market monitoring: long term, generational and food chain studies to test food safety.
The research team conducted short-term (31 days), medium-term (110 days) and generational pig feeding studies where the health of piglets of sows fed Bt-maize is measured. No adverse effects were observed, suggesting that feeding Bt-maize to pigs of different ages is safe. "These findings can offer some assurance to consumers as to the safety of consuming Bt-maize," Peadar Lawlor, senior researcher at Teagasc, Animal and Grassland Research and Innovation Centre, Moorepark, Ireland, said: "The pig is considered to be an excellent model for humans due to similarities in gastrointestinal anatomy and physiology. Similar responses to Bt-maize consumption could be expected in humans."
In addition to testing for any unforeseen adverse effects, the researchers were also looking for biomarkers (fragments of DNA) associated with immune responses which could be used for predicting immune response to future genetically modified organisms (GMOs). The GMSAFOOD consortium, funded by the European Commission, brings together researchers from Austria, Ireland, Norway, Hungry, Turkey and Australia.
These results and findings from other GMSAFOOD research teams will be presented at the GMSAFOOD conference at the Medical University of Vienna, Austria 6-8 March 2012. These include:
Salmon feeding trials (Norway)
Investigation of protracted allergenic response in mice feeding trials (Austria)
Food chain trials where rats were fed pork and fish which had been raised on Bt-maize (Norway and Hungary)
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Thursday, January 26, 2012
Europe Dampens NZ Farmer Confidence
NEW ZEALAND - Federated Farmers mid-season Farm Confidence Survey, conducted in January 2012, reveals farmer confidence in the general economy has turned negative for the first time since July 2009. Europe and the global economy increasingly weigh upon farmer outlook.
“While farmers are confident in their own businesses, there’s been a big deterioration in the global economy since July, when the 2011/12 season began,” says Bruce Wills, Federated Farmers President and its economics and commerce spokesperson.
“Concerns about sovereign debt, volatility in global financial markets and weakened economic activity has potential to spread outwards from the Eurozone especially. New Zealand’s major trading partners in the Asia-Pacific region have experienced weaker export growth and the ramification of this isn’t lost on farmers.
“While the drop in farmer confidence we recorded is in line with other surveys, the good news is that farmers’ confidence in their own profitability remains strong, despite being down on what it was at the start of the season in July.
“One explanation is the mild weather in a majority of pastoral areas. This has seen good spring/early summer growing conditions and farmers expect to increase production in the next 12-months.
“The weather has helped offset commodity prices coming off recent peaks. Sentiment would have even more bullish, if not for the La Nina influenced dry conditions affecting Southland, Otago and North Otago, when our survey was in the field.
“Farmers’ expectations for spending and for debt both remain at similar levels to the start of the new season and this is encouraging. Farmers are taking advantage of current conditions, physically and economically, to strengthen farm balance sheets.
“In keeping with Federated Farmers stressing agriculture’s many employment opportunities, the labour market for skilled staff has tightened. There has been an increase in farmers reporting it harder to find staff.
“Overall, Federated mid-season Farm Confidence Survey literally shows that Kiwi farmers are making hay while the sun shines,” Mr Wills concluded.
The headline results from the January 2012 Farm Confidence Survey, compared to the new season survey undertaken in July 2011:
A net 4.4 per cent of respondents expect the general economy to worsen over the coming 12 months (down 20.8 points).
A net 31.6 per cent of respondents expect their profitability to improve over the coming 12 months (down 14.2 points).
A net 47.7 per cent of farmers expect to increase production over the coming 12 months (down 2.7 points).
A net 33.5 per cent of farmers expect to increase spending over the coming 12 months, (up 0.2 points).
A net 44.3 per cent of farmers expect to reduce debt over the coming 12 months (down 1.3 points).
A net 11.2 per cent of respondents reported it harder to find skilled and motivated staff over the past six months (up 5.5 points).
Regulation and compliance costs have become the biggest concern for farmers, with 17.1 per cent of respondents citing it has their biggest issue (up 5.1 points on July 2011).
Farmers continue to believe that the Government’s highest priority should be fiscal policy (i.e., reducing government spending and/or reducing government debt), with 24.7 per cent of respondents citing it as their highest priority (down 1.6 points on July).
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Friday, January 27, 2012
Govt Looks to Increase Food Exports
UK - A Government-backed drive to boost exports of British food and drink to high growth markets like India and China will be an engine for economic growth, Agriculture Minister Jim Paice said today.
With rapid world population growth and booming consumer demand for Western products in high growth economies, there are significant opportunities for British producers to increase profits.
UK food and drink exports grew by 12 per cent in 2010 to £16.1billion, but the UK still exports more food to Belgium than to Brazil, Russia, India, China and Mexico put together.
The Farming, Food and Drink Exports Action Plan, published today, sets out how Government and industry will work together to open up and take advantage of key markets.
It includes plans for a domestic drive to encourage and support manufacturers to succeed overseas, as well as an overseas campaign to champion British food abroad.
Launching the action plan, Mr Paice said: “British food is already known the world over for its quality, and with surging world population growth and demand for western products, there are huge opportunities for our producers to tap into emerging markets.
“I’m convinced the sector can become an engine for growth for our economic recovery. It’s crucial we get the right support to business at home as well as championing British products abroad.”
The exports plan was developed by Defra, UK Trade and Investment, industry trade associations, and top exporting companies. A forum was co-chaired by Mr Paice and Paul Grimwood, CEO and Chairman of Nestlé UK and Ireland.
Trade and Investment Minister Lord Green said: “This is the year of the Olympics – a once in a generation opportunity to showcase what makes Britain Great. The quality of our food and drink is famous around the world and we want to see many more SMEs exporting to high growth markets.
“Food and drink exports are already worth over £16bn a year. But, we can do much, much more. By working together, Government and industry can help British food producers unlock their potential and take on the world.”
Mr Grimwood said: “The UK food and drink industry has an ambitious vision to grow 20 per cent by 2020. The industry’s exports have grown in each of the last six years, and the Exports Action Plan will drive further export growth in the future.
“Thousands of UK food companies, large and small, can grow their business by exploring export opportunities. The Government-backed Export Plan will champion open markets and the removal of trade barriers, and provide SMEs with the support and confidence they need to sell the best of British food and drink around the world.”
The project steering group which developed the action plan along with the export forum included Defra, UKTI, Food and Drink Federation, Food and Drink Exports Association, Scotch Whisky Association, and the Agriculture and Horticulture Development Board.
Top British exports include whisky (£3,514m), beer (£536m), chocolate (£376m), breakfast cereals (£367m) and soft drinks (£327m).
The Exports Action Plan is available at http://www.defra.gov.uk/food-farm/food/exports/
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Friday, January 27, 2012
Farm Income Forecasts a Mixed Bag
UK - New government figures confirming a strong year for the farming industry are welcome, but the continued rise in input costs and the crisis in the eurozone means that there’s no room for complacency, said the National Farmeres Union (NFU).
Defra’s Farm Business Income forecasts for the year ending February 2012 predict incomes in several key sectors have strengthened over the last 12 months. Improvements in UK beef and milk prices, along with the relative strength of agricultural commodity prices have helped underpin the forecast.
According to the figures, dairy farmers are expected to see a 27 per cent increase in incomes. Grazing livestock farms should also see incomes improve, with a 30 per cent rise predicted for lowland grazing units and seven per cent for farms in less favoured areas, albeit to still modest areas. A marginal increase is also expected in cereal farm income. But the intensive livestock sectors have suffered, with incomes on pig farms forecast to be down by 20 per cent and on poultry farms by eight per cent.
NFU Chief Economist Phil Bicknell said: “These forecasts are in contrast to the performance of the wider economy. They follow on from the improved confidence that we’ve seen in some farming sectors and build on other recent indicators that have underlined agriculture’s contribution to the wider economy. This is undoubtedly positive news for parts of the industry.
“But not all farm types saw improvements to their bottom line. Pigs and poultry saw profitability decline, as rising input costs, most notably feed, made inroads into enterprise margins.
“Higher costs will not be unique to pigs and poultry either. All farmers have faced significantly higher operating costs over the last year, with the 18 per cent increase in fuel costs and the 20 per cent rise in fertiliser prices the most significant.
“It’s also reasonable to expect that these forecasts conceal much variation. Some parts of the country struggled with drought conditions in 2011. The impacts were relatively localised, but will have affected crop and fodder yields on individual farms.
“The farming industry remains susceptible to a range of factors. Even with some of the improvements indicated by these forecasts, we’re still talking about returns on assets in the range of three to six per cent across farm types.
“Amidst continuing Eurozone uncertainty, farmers will be conscious of the link between farm profitability and changes in currency. Nonetheless, these figures and the long term drivers for agricultural markets give cause for optimism, certainly when compared to other areas of the economy.”
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Monday, January 30, 2012
EFSA Guidance for Food & Feed from GM Animals
EU - The European Food Safety Authority (EFSA) has published guidance for the risk assessment of food and feed derived from GM animals and on related animal health and welfare aspects.
The document outlines specific data requirements and the methodology to be followed for risk assessment should applications for food and feed derived from GM animals be submitted for market authorisation in the European Union (EU). The risk assessment approach compares GM animals and derived food and feed with their respective conventional counterparts, integrating food and feed safety as well as animal health and welfare aspects. Prior to its finalisation, stakeholders and interested parties provided comments on a draft of the guidance document through an online public consultation that ran over the summer 2011.
At present, no applications for market approval of food and feed derived from GM animals have been submitted in the EU. The technology has advanced rapidly in recent years and in some countries outside the EU, regulators are already evaluating the safety of GM animal products developed for food and feed purposes. In this context and as a proactive measure in anticipation of potential future applications, the European Commission requested EFSA to develop comprehensive guidance for the risk assessment of food and feed derived from GM animals and on related aspects of animal health and welfare. A separate EFSA guidance document, due to be launched for public consultation in 2012, will address the environmental risk assessment of GM animals.
The current guidance document outlines a risk assessment approach to compare GM animals and derived food and feed with their respective conventional counterparts. The basic assumption of this type of comparative assessment, which is required under current EU legislation for all GMOs submitted for market authorisation, is that food and feed from conventionally-bred animals have a history of safe use and therefore can serve as a baseline for the risk assessment of food and feed derived from GM animals.
The document also outlines the methodology required for the comparative assessment of health and welfare aspects of GM animals. This assessment is applied in two ways: firstly, in relation to the GM animal itself; and secondly, in relation to the food and feed risk assessment, as the health and welfare status of animals is seen as an important indicator of the safety of animal-derived products.
In the final chapter, the document gives recommendations for the post-market monitoring and surveillance (PMM) of GM animals and derived food and feed. PMM seeks to identify any potential unintended effects related to the genetic modification which might arise after the product has been authorised for placement on the market.
As with all EFSA guidance documents on GMOs, the Authority engaged in consultation during its development allowing Member States and a broad range of stakeholders to comment on the work in progress. Feedback received during the online public consultation to the draft guidance document was assessed by the EFSA Panel on Genetically Modified Organisms and the EFSA Panel on Animal Health and Welfare and, where scientifically relevant, incorporated into the current final version of the guidance.
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Tuesday, January 31, 2012
CME: Is Drought Still a Problem?
US - How dry does it have to get for a major newspaper, even one with an agricultural heritage, to devote above-the-fold coverage using two-thirds of the front page of a Sunday edition to a drought that is really not causing any harm at the moment, write Steve Meyer and Len Steiner.
We think the answer is “Pretty dry!” because it just happened this weekend in Des Moines, Iowa when the venerable Des Moines Register devoted that space PLUS 1.5 pages inside the A Section PLUS another page in the Business/Agriculture section to very dry conditions in northwest Iowa. And the dry conditions do not stop at the state line.
As can be seen in the map below, a large area of northwest Iowa and southern Minnesota are classified as severe drought areas. USDA/NOAA (National Oceanic and Atmospheric Administration) still classify the area as “Short-term” drought but much of it will soon reach 6-months since the last significant precipitation fell and rivers, streams and wells in the area are showing signs of a severe hydrological shortage. As can be seen by comparing to top map to the bottom one from November 22, 2011, conditions have generally improved in the western Cornbelt over the winter months as dry areas in eastern Kansas, Missouri, southeast Nebraska and southern Iowa have received some much-needed rainfall. The eastern Cornbelt remains in good shape from a moisture standpoint.
But the situation in northwest Iowa and southern Minnesota, which encompasses some of the most productive corn and soybean land in the nation, is serious and, according to the National Weather Service in the Register story, likely to get worse by April . NOAA’s Seasonal Drought Outlook (go to http://www.cpc.ncep.noaa.gov/ index.php and click on Drought Outlook in the US Drought Assessment section) says that the western Cornbelt dryness will persist through that time period and will spread to eastern Nebraska. It also shows continuing (and spreading) areas of drought in the southwest and southeast—bad news for cattlemen.
The Iowa-Minnesota situation even has experts mentioning one very scary year from the past — 1988. The Register quotes Iowa State’s Dr. Elwyn Taylor pointing out that the weather conditions this year are nearly identical to those of 1988 when the last significant drought hit Iowa and other major corn producing areas. Taylor does point out that they are happening earlier this year so there is more time to get rainfall before critical summer periods arrive.
Even the mention of 1988 makes market watchers cringe, though. Iowa’s average corn yield in 1988 was 84 bushels per acre, down from 130 in 1987 and 135 in 1986 and 24% below the average of the prior 10 years. Minnesota’s was 74 bushels per acre, down from 127 in ‘87 and 122 in ‘86. The national yield in 1988 was 84.6 bushels per acre, over 25 bushels lower than the year before and 26% lower than the 1960-2010 trend yield for 1988 of 113.9 bushels per acre. The U.S. average farm price for corn went from $1.94/bu. in ‘87-’88 all the way to $2.54 in ‘88-’89 but we must remember that carryout stocks in the fall of 1987 were 4.259 billion bushels. This year they are projected to be 846 million, one-fifth as large.
Taylor believes the culprit is La Nina, the cooling of Pacific Ocean waters west of South America, that began in 2010. The early stages of LaNina drove wetter-than-normal conditions in ‘10 and ‘11 but the latter stages usually cause dry conditions in the Midwest. If LaNina remains through the spring, Taylor estimates that there is only a 1 in 20 chance of getting enough spring rainfall in Iowa.
So what does this mean? Maybe nothing. Spring rains could come and allay all of this concern and fear. The Cornbelt, though, has not seen significant drought in January since 2006 when conditions in a swath of southern Iowa and northern Illinois were classified as moderate to severe. We — and the markets — are accustomed to entering planting season with PLENTY of subsoil moisture and thus some ability for the crop to survive short dry spells. Not so this year for the areas noted here. We also know that today’s corn varieties are more drought tolerant and will not likely fall 26% short of trend yields even if 1988 conditions develop. But any degree of crop shortage is scary when one begins year with very tight corn stocks.
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Wednesday, February 01, 2012
Downward Trend in Slaughterings Forecast for 2012
GLOBAL - Pig slaughterings in the European Union grew two per cent year-on-year during the first three quarters of 2011.
The UK and Poland had the strongest growth rates of nearly 7 per cent, while production in Denmark rose by 5 per cent, according to a report prepared by QMS's Iain Macdonald and Stuart Ashworth. Expansion also took place in Spain and Germany where slaughterings increased by 3 and 2 per cent respectively. However, a downward trend is forecast to continue into 2012 as sow herds have contracted in a number of Member States.
Most French pig producers failed to make a profit in 2011. Losses were made as increased feed costs pushed production costs above €1.50/kg. Brazil too witnessed a decline in pork exports. In December three Brazilian processors were permitted to resume exporting pigmeat to Russia. Hence there is industry optimism that further access may be granted as 2012 progresses.
After the US recognised the Brazilian province of Saint Caterina as the only FMD-free state, it gave the latter's pig sector a boost. The FMD-free status was recognised 14 months ago, but due to worries, this was delayed.
According to USDA census, the US pig herd grew by two per cent in December 2011. However, the breeding herd expanded at a more modest pace, indicating a mere 4 per cent growth. On the one hand this indicates a substantial improvement in productivity, but on the other hand it suggests that producers are exhibiting caution. Abattoir throughputs rose 2 per cent during 2011 and a similar expansion is forecast for 2012.
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Wednesday, February 01, 2012
North America: Where's the Snow?
ANALYSIS - There has been virtually no snow up in Canada, no snow in the northern US Plains, and the Upper Midwest has seen only two snow events this winter and neither was hugely significant, so we wonder "Where's the snow?", writes Sarah Mikesell senior editor.
Drew Lerner, president and senior agricultural meteorologist of World Weather, answered that question as he presented his weather explanations, expectations and forecast for 2012 to US grain farmers and livestock producers at the Allendale Ag Leaders Outlook Conference held January 20-21 in Crystal Lake, Illinois, USA.
Drew Lerner, president and senior agricultural meteorologist of World Weather, presents his 2012 weather expectations to US farmers at the Allendale Ag Leaders Outlook Conference held January in Crystal Lake, Illinois, USA.At this time last year, growers in parts of the US feared flooding going into the spring because there had been so much snow, but this year it's the drought monitors for North America that are concerning, Lerner said. The way it looks now around the world, the most interesting weather for this growing season may be in the United States.
"It's the dryness in Texas that got so much publicity last year, but it was far more extensive than Texas," he said. "The dryness reached up into the central Plains, and down into Mexico. The degree of severity in Mexico right now is probably worse than it is in Texas. Texas did get a little bit of precipitation before the autumn season turned into winter."
La Niña's Influence
Lerner said it's important to pay close attention to the La Niña event that is playing out right now because it could have a huge impact on the summer season. La Niña started about a year ago and died out in April or May, and then regenerated itself later in the summer.
"We have dryness in Canada. We have dryness in the northern US Plains and dryness in the Upper Midwest, dryness in the southern Plains, dryness in Mexico, and dryness in the Southwest," he said. "It's the middle of winter, when normally we start seeing improvements in the moisture situation, but we're still drying out in the western part of North America right now. Canadian farmers are also worrying about the lack of snow, and there's lots of concern that they are in for a drought this year."
The storms the US have seen so far this season, outside of the lower eastern Midwest, have really had trouble generating moisture which is a symptom of La Niña, especially a La Niña that's in its second year of existence. La Niña takes moisture out of the atmosphere, which is why it's important to pay attention and monitor it over the next few months.
Warmer-than-Normal Temps
Temperature anomalies have occurred for the past six months in North America - not only in Canada, but in the northern US Plains and over a big portion of the US.
"Whenever Mother Nature persistently creates the same anomaly for multiple months - when you get down to a six-month level, she always goes the other way," he said. "So, at some point down the road, it's going to start turning cooler than normal."
The anomalies, going back to last August and September, are pretty phenomenal. Lerner said winter wheat came up in Canada that actually lost hardiness and started to try to green a bit. The same thing was happening in Europe due to warm weather and a lack of snow. He said the only place that's been cold so far this season on a persistent basis has been eastern Siberia and parts of northeastern China.
Soil Moisture
"A year ago, we were already so deep with snow that it was obvious that if it didn't start melting quickly, we were going to have a bad flood in the spring, which, of course, we did have," he said. "This year we don't have to worry about that. Because not only do we not have a snow to melt, we don't have much moisture in the ground either."
The drought monitor suggests there are a lot of areas in the US and Canada that are really low on soil moisture. Flooding should not be an issue this year, not for the upper parts of the Midwest or the northern Plains. However, there is quite a bit of moisture in the lower eastern Midwest and Southeast.
La Niña will tend to increase soil moisture in the Delta, the Tennessee River basin and the lower Ohio River basin. And higher moisture usually continues right through March and April.
Arctic Oscillation
"The typical response in the atmosphere for La Niña in the autumn is to dry out and warm up a bit, so having a warmer bias is not all that unusual. But usually later in autumn or early winter, La Niña will create a cold surge or period of colder than normal temperatures that will dominate a big part of the Canadian prairies and the US northern Plains, and the Pacific Northwest. But that has not occurred," Lerner said.
Arctic Oscillation is related to how much high pressure there is in the arctic. It's common and occurs year round, but in the autumn and winter it's a dominating force.
This high pressure lives in the Arctic above the North Pole. The stronger the high pressure system is, the more pushing down effect it has on the surface, because high pressure is a stronger amount of air pushing downward.
As more and more cold air heads to the surface, it spreads out and goes down our sphere to the lower latitudes - we call this the negative phase of Arctic Oscillation. As a result, we get colder air moving further south than normal.
"That is certainly not the case the last few months," Lerner said. "We were in the positive phase of Arctic Oscillation, which has the opposite effect. The high pressure system in the arctic was windy and very, very weak. It was not capable of pushing a lot of cold air to the surface. The jet stream was allowed to creep higher in the atmosphere and the latitudes. The storm tracks further north and the temperatures were warmer in many areas."
Artic Oscillation Weakens; La Niña Strengthens
This winter, Arctic Oscillation was strongly positive, while the La Niña event has been weak, nothing like it was a year ago, said Lerner. Because it was somewhat weak in September, October, and November, there was plenty of opportunity here for the Arctic Oscillation to overcome the biases of La Niña.
La Niña, up until two weeks ago, was insignificant relative to Arctic Oscillation. However, the Arctic Oscillator has shifted back to a more usual negative position, and at the same time La Niña has strengthened. So, we have fallen back to a more traditional La Niña influence on North American weather.
"We are shifting gears because Mother Nature tends to go from one extreme to another," he said. "The Arctic Oscillator will not go back to the strong positive phase; it does not work that way."
While La Niña could weaken over the summer, Lerner believes it will leave a footprint around in the atmosphere after it goes away, meaning the atmosphere will stay in that mode for a while.
"Even after the La Niña event passes on, it takes a while for natural processes in the atmosphere to change back to normal - whatever normal is," he said. "My forecast is built towards La Niña hanging on and giving the US and parts of Canada a little drier bias, making this year perhaps more interesting, as far as the number of areas in the US that could have some dryness issues."
Texas
No other year has Texas been drier than it was in this past season. Looking historically at the year following a significant drought, Texas weather usually rebounds by about 50 per cent.
"There was a tendency for hydrologic drought to linger behind," he said. "A hydrologic drought is a drought that is low water - reservoirs, rivers and streams running low. Sometimes in a hydrologic drought, you get enough moisture to support crops."
Lerner said Texas is not going to be fully recovered from the drought, no matter what happens over the next few months. Texas may see moisture come around and improve the crops at the surface level, but the long-term drought is not going to go away in the short-term.
Lerner's 2012 North American Forecast
Spring: Expect cool conditions to balance the warmer-than-normal winter. The precipitation anomaly for early spring is going to continue to be below average on precipitation in the Northern Plains. In early spring, expect to see a wet bias in the Ohio River basin and parts of the Delta, which could delay planting. Canadian prairies are also expected to be cooler than normal.
Early summer: Into May and June, the drier, warmer bias in the Northern Plains will continue to perpetuate itself, allowing crops in this area to be planted fairly quickly. The moisture abundance in the Midwest should diminish as we enter the May/June time period. The dryness in the Southeast could shift up into the Ohio River basin and change the moisture level. A drier bias in Canada is expected with cooler than normal temperatures expected for an extended period of time, likely another five or six months.
Mid-summer: There's the ridge in the middle of the country. The heat ridge carries a trough of low pressure over the eastern US. And that suggests that there will be more rain that will occur in the eastern part of the Midwest than last year. Any dryness that shows up in Indiana, Ohio, and Kentucky in the spring should go away moving into the summer. The southeastern US should see an abundance of precipitation as we move deeper into the summer season. Canada is expected to counterbalance herself a little bit with a little less heat throughout the summer.
Late summer: A drier bias is expected. Harvest should go extremely well. It'll be dry in the northern Plains, so they should be done with harvest early. The rest of the country should expect a normal harvest.
Sarah Mikesell, Senior Editor
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Friday, February 03, 2012
Expert Presents 2012 Global Weather Outlook
ANALYSIS - Drew Lerner, president and senior agricultural meteorologist of World Weather, recently presented global weather expectations for 2012 to US grain farmers and livestock producers at the Allendale Ag Leaders Outlook Conference held in Crystal Lake, Illinois, USA, writes Sarah Mikesell, senior editor.
South America
Impressive dryness occurred in Argentina during December. However, temperatures were not far above average which may have saved some crop stress from getting as bad as 2008 levels, Lerner said. But the crop was too dry, which has contributed to the early January production cuts despite anticipated rainfall.
Argentina's summer corn and soybean production region received about 50 per cent less than normal precipitation in December, he said.
Drew Lerner, president and senior agricultural meteorologist of World Weather, presents his 2012 weather expectations to US farmers at the Allendale Ag Leaders Outlook Conference held January in Crystal Lake, Illinois, USA."But rains provided some relief in January and now Argentina has recently had moisture," he said. "The topsoil is plenty moist and the crops are no longer suffering. So Argentina may be beyond the point of damaging losses. With that said, the damage already done prior to the rains in Argentina is rather significant."
Those watching South America know from a realistic point of view on rainfall, we're probably past the peak of damage. However, the unknown is how much damage it already did. Lerner said by looking at the data, it clearly suggests the damage has been significant.
Brazil rainfall was below average in the south during December, but the lack of excessive heat and the timeliness of what rain did fall left crops in better shape than those in Argentina. The next weeks will be critical for supporting the best yields but rain must continue to fall in a timely manner.
"There's not that much problem in Brazil today," he said. "The dryness early on was getting kind of bad, but they kept getting timely rains, and so it didn't push them over the edge."
In contrast, weather conditions have been too wet from parts of Sao Paulo and Minas Gerais into a part of Mato Grosso where there is a need for sunshine and warmer temperatures to induce the best crop conditions.
Lerner said the rain event that occurred in Argentina a few weeks ago managed to bring some moisture into Brazil. And more recent rains have significantly improved soil moisture.
"It doesn't mean Brazil won't have dryness later on, but it does suggest that the worst of the near-term damage has probably passed," he said. "So, again like Argentina, it may be beyond the peak of the worst conditions in that country."
China
China is a bright spot on the map - currently having absolutely perfect weather, said Lerner.
"I don't look for any problems with the rapeseed or wheat crops; those are looking really good," he said. "They've got plenty of soil moisture right now. The spring season will turn drier, but it will not impact their rapeseed or southern wheat. However, it might impact the northern wheat, but it's mostly irrigated so it should not be a big issue."
Dryness will begin in interior southern China late winter and will shift to east-central parts of the country during the heart of spring. The dryness will be a byproduct of delayed northward advancing rainfall.
Temperatures may be a little cooler than usual in the spring over northeastern parts of the country but should warm in the second half of the season. Eventually dryness in east-central China will shift to some northeastern crop areas later in the spring season. Southwestern China will trend wetter than usual.
India
India has not had much rain in recent weeks and hasn't had any rain at all in some places since planting. They plant wheat, rapeseed, mustard, lentils, sorghum, dry beans and peas, and are in their winter production season. Almost all of their crops are irrigated, but their best yields occur when it rains - on top of their irrigation.
Lerner said because they haven't had timely rains, it doesn't mean they're going to have a bad crop. Rather, it just means that it isn't going to be as good a crop as it would have been had it rained. However, any prolonged dryness and heat could possibly have a negative impact on production.
India's wheat crop is not expected to get any rain for the next few weeks, but should get a little more precipitation as we move forward into February and March.
Rainfall is expected to be near to above average in northern India during the reproductive season. Temperatures are not expected to be hot, although a warmer than usual bias will likely evolve in March.
"Soil moisture is pretty dry, but remember, India is a very arid place in the wintertime, and that's why all of the crops are irrigated," he said.
India's Monsoon Rain Outlook June - October 2012The monsoon forecast for 2012: If La Niña behaves as expected, the monsoon should be around early in the summer, and then dissipate later in the summer. Timeliness should continue in the precipitation pattern so that any negative impact on production should be minor. Eastern areas will be quite wet this summer.
India should do very well with rainfall until the latter part of the summer. In August and September, expect a little less precipitation. It may turn drier in some of the western parts of the country.
Europe
Overall, Europe's soil moisture is favorable for much of the continent, but there are two areas that need improved precipitation. First is Spain and second is the southeastern part Europe, including the Danube River Basin, Romania, Bulgaria and portions of Serbia.
"These areas were extremely dry through the autumn, and crops aren't doing well," he said. "It extends all the way back to the west into parts of southeastern Europe. They are expected to have very poor winter crop production this year, so a lot of pressure will be on the spring crops."
If La Niña does hang on through the spring and into summer, spring crops could see trouble with low moisture. But it could be a double-hit if winter crops and summer crops are stressed due to dry conditions.
Russia and Ukraine
Dryness remains from the drought of 2010 in Russia's lower-most Volgo River Basin and western Kazakhstan. The remainder of Russia and Ukraine have recovered favorably from Autumn 2011 dryness.
The Ukraine winter crops were very, very poorly established in the fall which will result in a very small winter rye and winter wheat crop, Lerner said. He expects they will plant a spring variety to try to make up the difference. It will be imperative that timely rains occur this spring to give winter crops a chance to recover and to ensure spring crops get planted and established favorably.
"If La Niña lasts through the summer season, Russia and La Niña do not get along well and sometimes Ukraine doesn't either," he said. "The two just don't mix well, and we should expect some kind of a problem over there with their crops as well."
Turkey
Turkey was really dry last autumn and the wheat crop is suffering from the stress. However, they've recently received some rain and conditions are improving.
Sarah Mikesell, Senior Editor
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Monday, February 06, 2012
CME: Job Growth Has Returned
US - Friday’s employment reports from the Bureau of Labour Statistics indicate that job growth has returned, write Steve Meyer and Len Steiner.
We believe the January numbers will be supportive to meat and poultry demand. Some of the key numbers from the reports are:
The unemployment rate fell to 8.3%, its lowest level since February 2009. That number compares to 8.5% last month and 9.1% one year ago. The kicker on this improvement, though, is that the rate of long-term (over 27 weeks) unemployment remains at 3.6%.
Total nonfarm employment rose to 132.409 million people in January, a gain of 243,000 jobs from the revised December level and 1.953 million since January 2011. The chart at right shows these data back to January 1989 and comes directly from the Federal Reserve Economic Data (FRED) system at the Federal Reserve Bank of St. Louis (http://research.stlouisfed.org/fred2/). We like their charts because they include the shaded areas that mark recessions as called by the Bureau of Economic Analysis. Dr. Robert Dieli of RDLB, Inc. and www.nospinforecast.com makes three very useful observations of this chart in his Employment Situation report that was released Friday afternoon. First, he points out that BEA sets the onset of recessions where this line crosses zero. Second, BEA looks for persistent and widespread DECLINES in total employment. Finally, he states “I don’t see those right now. Do you?” Our answer is “No”.
January’s employment level is back to the level of December 2004. As Dr. Dieli points out, this date keeps sliding forward with every improvement in employment, gaining 3 months in January. When employment was at its lowest level for the past recession back in February 2010, this “worst since” date was August 1999.
A boat load of revisions pushed the employment numbers for all of 2011 higher. They included 5 months in which BLS added over 200,000 jobs to the previously reported numbers. Perhaps the most important of these was a much smaller change to the August 2011 numbers. The first estimate for that month showed NO growth in employment and set off a wave of concern that the economy was slipping back into recession. The January revision for August shows a gain of 85,000 jobs for the month — nothing to write home about but a number that would not likely have set of “The sky is falling!” cries from many economists.
Private sector payrolls continued to lead the way on employment growth, gaining 257,000 in January. Comparing that number to total gains points out that government payrolls continued to shrink, primarily the victims of lower revenues and cuts at state and local levels.
Our discussion of relative beef cut prices on Friday engendered a lively e-mail discussion with some readers. We thought some were certainly noteworthy. Several readers pointed out he influence of exports on the values of the round and chuck (ie. “end meat” ) cuts. U.S. beef exports were once dominated by shipments to Japan, a market that generally demands higher-quality product and whose import policies require higher valued product. The growing importance of a number of more price-conscious markets (e.g. Mexico, South Korea, VietnamChina) have placed more importance on lower value cuts.
As for brisket, Jim Robb of the LMIC in Denver points out — “Barbecue is now EVERYWHERE!” He is correct and that factor is a contributor on the pork side as well. It seems that pulled pork sandwiches, once the territory of “barbecue joints” only, are available in about any kind or level of restaurant these days and that popularity— along with exports — have pushed butt prices higher relative to other pork cuts. Robb also pointed out that many of the value-added beef cuts developed over the pat few years have come from the chuck. Finally, there is the issue of cut size. Is our seeming inability to cut a rib eye or loin eye muscle in two or more parts reducing the unit value of beef and pork middle meats? Those steaks and chops are now HUGE and larger than most people can eat at one sitting.
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Wednesday, February 08, 2012
Farm Produce Prices Fall on Waning Demand
CHINA - Farm produce prices broke an eight-week rising trend last week and fell on sliding demand as the Spring Festival holiday ended, the Ministry of Commerce said on Wednesday.
Egg prices slid 0.4 per cent last week. The pace of decline was 0.3 percentage points faster than one week earlier.
Pork prices dropped 0.8 per cent, while prices of beef and mutton gained 0.6 per cent and 0.2 per cent, respectively.
The wholesale prices of eight aquatic products rose 0.2 per cent due to shrinking supply amid the freezing season, the statement said.
Food prices have a one-third weighting in the calculation of China's consumer price index (CPI), a major gauge of inflation. The country's CPI eased to 4.1 per cent in December, the slowest rise in 15 months.
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Thursday, February 16, 2012
Food Report Fails to Acknowledge Role of Farmers
AUSTRALIA - A report into the future food needs of Australia has failed to acknowledge the ongoing work by Australia's farmers in ensuring an environmentally sustainable supply of fresh and nutritious food, the National Farmers' Federation (NFF) has said.
NFF President Jock Laurie said that farmers had made enormous gains in both productivity and environmental management over the past few decades: producing high quality food in greater quantities, on less land, with less water and less impact on the environment that ever before.
“The report released yesterday by the Public Health Association of Australia appears to reflect the lack of understanding health professionals have about modern agriculture in Australia and how the industry operates,” Mr Laurie said.
“Rather than focus on the public health challenges associated with modern diets and lifestyles, they seem to have chosen to attack Australian farmers and attempted to weaken the confidence of Australian’s in the food farmers produce.
“Australian farmers have been working hard to improve their practices, and have led the way in reducing our carbon footprint, with greenhouse gas emissions down by a massive 40 percent in the last 20 years.
“The agricultural industry also invests heavily in research and development to continuously improve practices and performance, with $1.5 billion-a-year spent on agricultural related research in Australia.
“On the ground, farmers occupy and manage 61 per cent of Australia’s land, which means that we’re at the frontline in delivering environmental outcomes on behalf of the community and we are acutely aware of the need to deal with environmental impacts. Environmental sustainability has long been a critical factor for farmers – so much so that the NFF was a founding partner of the Landcare movement over 20 years ago.
“Perhaps most importantly, the report fails to acknowledge the role that Australian agriculture plays in feeding the world. Australian farmers produce enough food to feed 60 million people each year, so the statement in the report that ‘Australia produces more food than it needs’ is disingenuous. Of course we do – we export 60 per cent of what we grow, offsetting global food demand and providing vital export income for our economy.
“The report itself calls for an increase in ‘food literacy’ – perhaps this needs to be an increase in ‘farming and food literacy’.
“The report also calls for strategies to ensure Australian farmers can continue to produce fresh, nutritious foods at a fair and competitive price. We agree with this outcome, but suggest that the Public Health Association of Australia should first talk to farmers about how to achieve it,” Mr Laurie said.
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Monday, February 20, 2012
China and US Firms Sign Biofuel Deal
US & CHINA - China's biggest egg producer said Friday it will cooperate with a major US meat supplier to establish a biofuel company in the United States with a total investment of $1.8 billion.
Beijing DQY Agriculture Technology Co Ltd (DQY) and Virginia-based Smithfield Foods will set up a joint venture co-run by their subsidiaries, Beijing Helee Bio-Energy (HELEE) and Murphy-Brown, DQY said in a press release.
The joint venture will adopt core technologies from HELEE and launch a pig farm biogas project this year, the company said, citing an agreement it signed with the Smithfield Foods in Des Moines, capital of the US state of Iowa, on Thursday.
According to the agreement, the biogas project will produce 3.5 million cubic meters of methane annually and have a power generating capacity of 1 megawatt, DQY said.
It noted the project will be able to produce 7 million kWh of electricity each year and cut 42,000 tons of carbon dioxide emissions annually.
The two companies also plan to utilize wastes at more than 2,600 pig farms of the Smithfield Foods over the next 10 years, which will lead to the reduction of carbon dioxide emissions by 21 million tons annually, four times the current yearly emission of Chicago, according to DQY.
Smithfield Foods is the largest US meat supplier with a market share in the country of 22.5 per cent, while the DQY accounts for 45 per cent of the Chinese egg market and has a biogas power project in Beijing that generates 14 million kWh of electricity per year.
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Monday, February 20, 2012
Livestock Science to Benefit Sub-Sahara Africa
AFRICA - Africa will benefit greatly from advances in livestock science that will benefit the animals and the people they provide with high quality protein, said scientists in Vancouver, Canada.
Panelists addressed the hopes and challenges of modernizing livestock production in Sub-Saharan Africa during the American Association for the Advancement of Science annual meeting in Vancouver, British Columbia.
"We explored how implementing new technologies will benefit society," said University of Idaho animal scientist Rod Hill. He studies physiology in cattle, focusing on topics including feed use efficiency and muscle development.
"The issue is," Mr Hill said, "how do we get them to work best for mankind and benefit societies in Africa."
Mr Hill, an associate professor of animal science in the College of Agricultural and Life Sciences at the University of Idaho, organized the session with Albert Medvitz of McCormack Sheep and Grain in Rio Vista, California. The American Society of Animal Science sponsored the session.
Medvitz and his wife, Jeanne McCormack, operate a 3,700-acre ranch that has been in her family for 120 years. The couple, who met in the Peace Corps in Africa, produces wheat, and sheep and goats on pasture without importing grains or using antibiotics.
"We wanted to look at how new technologies are changing how we raise livestock," Mr Hill said, "And how do we get them to work to best advantage for the benefit of mankind and societies ranging from developing communities in Africa to highly developed ones in the United States."
As in many areas where science meets society, opinions differ, Mr Hill said.
"There are opposing views in every aspect of technology and technology development. We don't seek to support a particular perspective," he said, "except that implementation of new techs is going to have long term benefit to society.
"We're going to have 9 billion people to feed with limited agricultural resources over the next 25 to 30 years, so that's a huge challenge for agriculture," Mr Hill added.
Panelists included Charlotte G. Neumann of the UCLA School of Public Health, who spoke about how animal agriculture builds human capital by boosting nutrition. Neumann focused on studies that confirm foods from animals increased both the mental and physical development of children in sub-Saharan Africa.
The private sector is stepping up its efforts to bring science to traditional livestock keepers. Christie Peacock, chairman of Nairobi, Kenya-based Sidai Africa, Ltd., reviewed her organisation's efforts to establish a chain of stores that will provide reliable vaccines and other services.
The focus on high quality veterinary and other livestock services includes reliability testing of products and an emphasis on preventative care.
Panelist Appolinaire Djikeng of the International Livestock Research Institute based Nairobi, Kenya, explored the advanced agricultural biotechnology laboratories that have been established in Africa. Their goal is to focus on problems constraining Africa's development that once seemed intractable.
Jeannie Harvey of the US Department of Agriculture joined the panel to discuss the overall themes presented during the session. An expert in women's roles in agriculture, Harvey is former director of the University of Idaho Women's Center.
"One point we felt was important to make goes with the old saying that if you teach a man something, you affect one person," Mr Hill said, "but if you teach a woman something, you influence the entire family."
Mr Hill also has proven adept at organising discussions of animal science related topics on the largest stage in US science. The annual meeting of the American Association for the Advancement of Science typically draws some 6,000 scientists and an international media contingent or 700 or more.
Mr Hill serves as the American Society of Animal Science delegate to the AAAS. This marks the third symposium he has organised for the associations' annual meeting. Past sessions have focused on nanotechnology and food science.
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Tuesday, February 21, 2012
China & US Co-operate in Agriculture
US & CHINA - Agriculture Secretary Tom Vilsack and China's Minister of Agriculture Han Changfu have signed an historic Plan of Strategic Cooperation that will guide the two countries' agricultural relationship for the next 5 years.
The plan was signed as part of the US-China Agricultural Symposium held last week at the World Food Prize Hall of Laureates. The symposium focused on bilateral cooperation in the areas of food safety, food security and sustainable agriculture, as well as enhanced business relationships between the two countries.
"This symposium and plan are a product of a vision I share with my dear old friend Minister Han for the United States and China to work more collaboratively in the future to benefit our nations and agriculture around the world," Mr Vilsack said.
"This plan builds on the already strong relationship our nations enjoy around agricultural science, trade, and education. It looks to deepen our cooperation through technical exchange and to strengthen coordination in priority areas like animal and plant health and disease, food security, sustainable agriculture, genetic resources, agricultural markets and trade, and biotechnology and other emerging technologies," he added.
Xi Jinping, China's vice president, opened the symposium and stressed the importance China places on supporting farmers and rural development, as well as on food security.
"China attaches great importance to food security, and ensuring a sufficient food supply for 1.3 billion people," Mr Xi said.
In the 2011 fiscal year, China became the top market for US agricultural goods, purchasing $20 billion in US agricultural exports. The value of US farm exports to China supported more than 160,000 American jobs in 2011, on and off the farm across a variety of sectors.
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Wednesday, February 22, 2012
Farm Produce Prices Drop Last Week
CHINA - The Ministry of Commerce said Tuesday that China's farm produce prices continued to fall last week as supplies increased.
Egg prices dropped 1.8 per cent from one week earlier, marking the seventh consecutive week of decline. The prices were down 4.2 per cent cumulatively from early January, the ministry said in a statement on its website.
Pork, mutton and chicken prices retreated by 1.3 per cent, 0.3 per cent and 0.2 per cent last week, respectively, while the wholesale prices of eight types of aquatic products edged up by 0.1 per cent.
The fall in farm produce prices may help ease domestic inflationary pressures as food prices have a one-third weighting in the calculation of China's consumer price index (CPI).
The CPI rebounded to 4.5 per cent in January after easing to a 15-month low of 4.1 per cent in December.
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Friday, February 24, 2012
Bill Gates Donates $51 Million to Combat Disease
GLOBAL - Edinburgh-based charity the Global Alliance for Livestock Veterinary Medicines (GALVmed) is to receive funding of over £31.2million ($51.5million) from the Bill & Melinda Gates Foundation and the UK Government's Department for International Development (DFID).
GALVmed's Interim CEO, Professor Peter Wells commented: "We are delighted that this funding from the Bill & Melinda Gates Foundation and DFID will enable the GALVmed alliance to work with partners to scale-up access to livestock vaccines, medicines and diagnostics for resource-poor people.
"Across the developing world, livestock are an essential means of funding the most basic needs including food, education and healthcare. We are working to protect livestock and save human lives and livelihoods by making livestock vaccines, diagnostics and medicines accessible and affordable to the millions in developing countries for whom livestock is a lifeline. This announcement will take us much further in achieving our goal."
The funding announcement was made by Mr Bill Gates at the 35th session of the International Fund for Agricultural Development (IFAD)'s Governing Council in Rome, Italy.
"If you care about the poorest, you care about agriculture," said Bill Gates, co-chair of the Bill & Melinda Gates Foundation. "Investments in agriculture are the best weapons against hunger and poverty, and they have made life better for billions of people. The international agriculture community needs to be more innovative, coordinated and focused to really be effective in helping poor farmers grow more. If we can do that, we can dramatically reduce suffering, and build self-sufficiency."
International Development Secretary Andrew Mitchell MP said, "For millions of people across the developing world, the wellbeing of their livestock is quite simply a matter of life and death. To a poor farmer, their livestock may be the equivalent of the local supermarket, weekly pay cheque, emergency savings account and medical insurance all rolled in to one. For many, the death of a single animal can be devastating, while to lose an entire herd is to lose everything.
Livestock provides a critical path for millions in the developing world to escape absolute poverty. For nearly 700 million of the world's poorest people survival and prosperity are almost entirely dependent on the health of their livestock.
Smallholder farmers in the developing world lose at least 25 per cent of their livestock every year to disease that could have been controlled through vaccines and medicines. Access to affordable and genuine animal health medicines has been limited for more than 40 years and poor livestock keepers have limited access to vaccines, diagnostics and medicines because they are often expensive and difficult to access and administer.
This funding allowed GALVmed to undertake its first major project, Protecting Livestock Saving Human Life 1 (PLSHL1). This project focused on the following main diseases:
East Coast fever: An African ruminant disease, with estimated costs of US$186 million a year.
Rift Valley Fever: A disease confirmed in 19 countries across Africa, with Kenya's last outbreak costing an estimated £32million and 350 human deaths.
Newcastle Disease: A world-wide, contagious viral disease affecting chickens. There are an estimated 1.38 billion chickens in Africa, and approx 70 per cent are in villages, many at risk from Newcastle disease.
Porcine Cysticercosis: A disease spread from pigs to humans which causes up to 50,000 deaths a year across Africa, India and China
The planned work focuses on facilitating access to much needed animal health products through:
Removing barriers in vaccine registration through consolidating facilitation of the vaccine regulatory framework.
Providing availability and access to quality animal health medicines, vaccines, and diagnostic tools relating to specific livestock diseases.
Increasing capability and capacity to deliver and access animal health tools and services to rural areas through gaining a better understanding of the markets to help incorporate poor livestock keepers into the mainstream veterinary product supply chain, and through developing the producing the vaccines, medicines and diagnostics needed.
Inspiring sustained public and private financial commitments to create a better environment for investment for product development and delivery.
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Tuesday, February 28, 2012
Sustainable Intensification to Meet Growing Demand
ANALYSIS - Growth in the global population of 35 per cent by 2050, with 70 per cent of this population living in urban areas will produce greater and greater demand for food, writes Chris Harris.
However, this increase in food production has to be confronted in the face of climate change while at the same time reducing the carbon cost of farming without taking more land.
This will mean that food production will need the same area of land to be farmed, while increasing yields and consequently an intensification of production.
The concept of sustainable intensification - growing or even maintaining production while minimising inputs and enhancing ecosystem services - was addressed on both sides of the Atlantic last week.
Prof Tim Benton at the NFU conferenceIn the UK, during the National Farmers' Union annual conference, Prof Tim Benton, professor of ecology at the University of Leeds and UK Champion of Global Food Security said that a cost benefit analysis highlight that the environmental costs of all nitrogen losses in Europe (estimated at between €70 and €320 billion a year), outweighs the direct economic benefits of nitrogen in agriculture.
He said that the goods people rely upon come from an arrangement of service.
"Production of crops is underpinned by a whole range of services," Prof Benton said.
He said that management of ecology is important to agricultural production and conservation of water, climate change and carbon storage are all important to society.
"We have to think more in the round - about the environmental aspects of sustainable intensification."
He said that the message for sustainable intensification is doing more with less - managing soils for production, managing their fertility and controlling erosion and soil health.
Doing more with less also includes managing non-cropped areas for beneficial organisms, reducing wasteful inputs through innovation and recycling and genetic improvements.
However, he added that genetic improvements do not necessarily mean genetic modification, but the development of plants and animals using standard genetic techniques.
He said that sustainable agriculture is more than field management, it is a property of the whole systems.
Prof Benton added that looking at extensive or organic systems may not be the sole solution to sustainability and it might not be just looking at food miles. Balancing carbon footprints is part of the solution, as importing product grown in tropical regions could has a smaller footprint compared to growing crops in heated greenhouses.
Neil ConklinAt the same time in the US, Neil Conklin the president of Farm Foundation told the USDA Agricultural Outlook Forum that scientific advances have the potential to bring forward technologies that boost productivity and take into account both resources scarcities and environmental problems.
He said the vision for sustainable intensification included the two scenarios of large farms driven by technology connected to consumers through global supply chains and small sustainable farms connected to consumers through local food networks.
He said that a truly sustainable agriculture will need to meet growing demand while incorporating the external environmental and social costs of agricultural production.
He said that changes in behaviour and productivity are going to be required.
Increases in agricultural output - the Total Factor Productivity (TFP) - can come either from growth in resource use (natural land and water) or from increases in yield, he said.
He said this can be achieved through intensification of inputs or the result of technological change and institutional innovations.
"Viewed strictly from a productivity point of view it doesn't matter whether increased TFP results from agro-ecological methods or improved varieties that result from biotechnology," he said.
"The environmental and social effects of new technologies must still be evaluated in the context of the imperatives for increasing productivity."
He added: "Clearly limiting agriculture's impact on the environment means limiting our reliance on increased area and increases in the intensity of input use.
"While reduction in waste and changes in our food tastes and preferences will help to meet the challenges of a growing world, we will be heavily reliant on increases in productivity.
"Science is at the heart of increased productivity and we can ill afford to reject out of hand the tools that it has to offer.
"However, that does nor absolve us from the responsibility to evaluate not only the benefits of increased productivity resulting from technological innovation but also the social and environmental consequences, both positive and negative.
"Even more importantly many of today's innovations, whether they are coming from agro-ecology or from modern biotechnology are heavily dependent on management skills and ever higher levels of human capital."
Chris Harris, Editor-in-Chief
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Monday, March 05, 2012
Chinese Olympians Banned from Eating Meat
CHINA - Chinese athletes preparing for the London Olympics have been banned from eating meat over fears they may consume clenbuterol - the prohibited performance-enhancing substance that led to Chinese Olympic judo champion Tong Wen's two-year ban.
The meat ban forbidding national team athletes from eating meat products when dining out was issued by China's General Administration of Sport in an urgent notice recently due to fears that banned clenbuterol substances in meat would cause athletes to fail the drug tests in the run-up to the 2012 London Games.
Huang Wenyi, a gold medal winner at the 2010 Guangzhou Asian Games and currently training for the 2012 London Olympics, revealed on her Sina Weibo that clenbuterol, or "lean meat power," which is administered to livestock to bulk them up and produce leaner meat, was even found in pork products raised and prepared exclusively for athletes.
"The Administration issued an urgent order banning athletes from eating pork, beef or lamb outside. When dining out, we are only allowed to eat fish and chicken," Ms Wenyi said. "Is there any food safe to eat in China?" she added. But Ms Wenyi later deleted the post.
The move to guarantee Chinese Olympians are free from performance-enhancing drugs has been strictly carried out as another Olympian revealed that anyone violating the ban would be expelled from the national team.
"Now the only place that we could eat safely turns out to be our cafeteria." Lu Yong, Beijing Olympics men's 85kg weightlifting champion twitted on his Sina Weibo. "It's a disaster for athletes as the prohibited substance in over 52 per cent of the meat products in Beijing has exceeded the drug test standard."
Top athletes brought down by eating meat containing clenbuterol
Alberto Contador, cycling
Earlier this week, three-time Tour de France champion Alberto Contador was banned from competing for two years from professional cycling and stripped of his 2010 title after testing positive for clenbuterol.
The Court of Arbitration for Sport rejected his claim that the positive result was caused by eating contaminated meat during a 2010 Tour rest day rather than taking clenbuterol as a performance-enhancing drug.
Tong Wen, judo
China's Olympic judo champion Tong Wen was banned for two years by the International Judo Federation on 10 May 2010 and was required to give back her gold medal from the World Championships of 2009.
Mr Wen blamed pork chops for the positive clenbuterol test and subsequently contested the ban and took her case to the Court of Arbitration for Sport who ruled that a doping violation could not be proved and found in her favor ordering that she be reinstated immediately with all rights. She returned to international competition in May 2011 winning gold at the Moscow Grand Slam.
Jessica Hardy, swimming
American swimmer Jessica Hardy tested positive at the US trials in July 2008. She served a one-year suspension, having claimed she unknowingly took the drug in a contaminated food supplement.
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Wednesday, March 07, 2012
2012 Prospects Look Strong
AUSTRALIA - The National Farmers' Federation (NFF) has welcomed the release of the ABARES forecast for the country's agricultural commodities showing the agricultural sector will continue to grow over the short and medium term.
Despite floods continuing to ravage south eastern Australia, causing what is expected to be millions of dollars damage to crops, infrastructure and stock in Queensland, New South Wales and Victoria, the NFF has welcomed the release of the ABARES forecast for Australia's agricultural commodities, which shows that the agricultural sector will continue to grow over the short and medium term.
NFF President, Jock Laurie, said the ABARES report, which shows that for the first time in three decades, agricultural profits are expected to rise across all Australian states and territories in 2012, supports the NFF prediction that 2012 will be a good year to be an Australian farmer.
“2012 is proving to be a very positive year. The ABARES report shows that for the first time in 30 years, farm business profit and the rate of return will be positive for all states and for all of the broadacre industries, including cropping and livestock,” Mr Laurie said.
“This is a very positive picture for Australian farmers, compared to the drought conditions we have faced over the previous decade.
“Obviously, many farmers and rural communities across eastern Australia are currently facing flood conditions, which have already caused millions, if not billions, of dollars damage to crops, livestock and vital infrastructure like roads, railways and fences.
“This is a very difficult time for affected farmers – and we can only hope that in the long-term, these floods will return moisture to the soil and help set up those farmers for good future seasons. After all, farmers are very resilient,” Mr Laurie said.
The ABARES report follows the release of the NFF Farm Facts for 2012 last week, which showed that farm export earnings for 2010-11 equalled $32.5 billion. The ABARES report predicts that farm export earnings will rise by 9.4 percent in this financial year to $35.5 billion.
“Australian agriculture continues to be a solid performer and makes important contributions to Australia’s society, economy and environment,” Mr Laurie said.
“After a very challenging period, these predictions show that the agricultural sector and our farmers are back on their feet. The focus now must be on planning ahead, ensuring a strong and sustainable future for the agricultural sector, and the NFF’s Blueprint for Australian Agriculture will play a vital role in this,” Mr Laurie said.
The NFF’s General Manager, Policy, Charlie McElhone will speak on the future of Australian farming at ABARES Outlook Conference in Canberra tomorrow, while Mr Laurie will host a Blueprint for Australian Agriculture forum in Toowoomba.
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Friday, March 09, 2012
Animal Feed Production Down 3.2% in January 2012
UK - In January 2012 the total GB retail production of animal feed was down 3.2 per cent compared with January 2011, according to the latest GB Animal Feed Statistics report for January 2012.
In January 2012 the total GB raw material usage in the retail production of animal feed was down 2.8 per cent compared with January 2011.
The total GB integrated feed production was also down 17.5 per cent compared with January 2011.
For the period October to December 2011 quarterly average prices of animal feedingstuffs were as follows:
Cattle and calf feed - £222 per Tonne
Pig feed - £247 per Tonne
Poultry feed - £257 per Tonne
Sheep feed - £215 per Tonne
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Friday, March 09, 2012
Over–Regulation – Is it Limiting Food Production?
ANALYSIS – Cutting red-tape and reducing regulatory burdens are common themes that producers are eager to see put into practice. However, in reality, the industry in the majority of cases is seeing itself tied down more and more by the law, writes editor, Charlotte Johnston.
This week, a report has emerged that suggests that over-regulation is a threat to US livestock production.
Laws and regulations imposed by federal, state and local governments can make domestic farmers and ranchers uncompetitive with competitors overseas and drive them out of business, says the report prepared for the United Soybean Board.
"Just as manufacturing and service jobs have been ‘offshored’ to Mexico, China, South Korea, India and other countries, excessive regulation could eventually cause animal agriculture to move offshore. This could lead to higher consumer prices," according to the report.
The five regulatory areas most likely to generate increased costs for US producers in the near term are animal housing, environmental regulations, the use of antimicrobials and other drugs, livestock trading and labour regulations.
The European Commission is looking to drive forward an integrated approach to animal welfare. Objectives of a new animal welfare strategy include enhancing consumer empowerment and strengthening the enforcement of existing rules.
The idea of such a strategy comes from the belief that consumers are increasingly factoring in welfare considerations into their purchases. EU Health and Consumer Policy Commissioner, John Dalli, said that giving consumers access to the right information so that they can make informed choices will help drive animal welfare policies forward.
However, farming group, Copa–Cogeca, warned against this strategy which it said would increase costs of production for producers.
Copa–Cogeca Secretary-General, Pekka Pesonen, said: "It is essential for farmers to be able to recover their additional costs from the market. EU farmers knowledge and efforts to ensure a high level of animal welfare must be recognised."
Also in the EU, European farmers' organisations have said that the proposals for the Common Agricultural Policy (CAP) fail to grasp any opportunity and will in fact undermine the ability of EU farmers to be competitive, efficient and achieve sustainable growth.
Charlotte Johnston, Editor
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Friday, March 09, 2012
Organic Sales Bucking the Trend
ANALYSIS - Despite the tough economic times, the organic market around the world is growing and going against the trend of generally falling sales, cuts and reduced expenditure, writes Chris Harris.
The latest figures issued by the Soil Association in the UK and Organic Monitor show that in 2010 sales of organic products rose by eight per cent and by 228 per cent since 2000.
Worldwide sales were valued at $59 billion or around €44.5 billion in 2010 and were showing strong growth in all the major European markets as well as the US.
The total amount of land around the world devoted to organic farming is 37 million hectares.
In Europe, organics hold about two per cent market share with Germany and France leading the way. However, despite the value of $28 billion, around €22 billion, the growth rates are slowing, whereas the US that has an organic market worth $29 billion and about three per cent market share is seeing healthy growth and rising prices.
The Soil Association says the market for this current year for both Europe and the US is positive.
Away from the main markets, China has seen its organic sector quadruple in size over the last five years and Organics Brasil is showing a 40 per cent growth rate in the Brazilian market.
The Soil Association says that organic sales in Asia are expected to grow by 20 per cent over the next three years.
With Europe and the US making up more than 90 per cent of the organic market around the world, the recent equivalency agreement between the two blocs is expected to boots sales on both sides of the Atlantic.
The trade arrangement recognises the integrity of organic systems in both regions. It allows organic products meeting USDA NOP standards to be marketed and labelled as organic in EU countries, while EU certified organic products are also recognised as organic in the US. The USDA Organic seal and EU Organic logo can be placed on these products, although labelling requirements in the destination country must be met.
By opening up the two largest markets for organic products to each other, the arrangement will facilitate trade of organic foods between the US and EU.
As trade between Europe and the US represents less than five per cent of the global organic food sales.
Although the largest consumers, Europe and North America are also not the main producers of organic crops. The two regions have just 30 per cent share of international organic farmland. Organic farming is practiced in 160 countries, with most production in Asia, Latin America and Africa and sent to the US and Europe.
The Soil Association Organic Market Report for 2012 shows that the UK market for organic produce is going against the global rising trend as the market fell by 3.7 per cent last year, largely because of the economic situation that has seen a five per cent drop in retail sales.
Because of the drop in sales retailers are also giving up less shelf space to organic products and there has been a lack of investment in own-label organic ranges.
The main cause of the market's overall decline was a five per cent drop in multiple retail sales, which account for 71.4 per cent of organic food sales.
Despite the tough environment, sales of organic lamb rose by 16 per cent and organic poultry by 5.8 per cent.
Dairy products and fresh fruit and vegetables continue to be the most popular organic categories accounting for 29 per cent and 23 per cent of sales respectively.
However, the amount of land being devoted to organic production fell by 2.8 per cent representing 4.2 per cent of the farmland in the UK.
Chris Harris, Editor-in-Chief
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09 March 2012
World Agricultural Supply and Demand Estimates - March 2012
Released this week and approved by the World Agricultural Outlook Board, projected US red meat and poultry production is raised. Milk production is rasied and egg projections are lowered slightly. Projected US wheat stocks are lower and corn production is unchanged.
LIVESTOCK, POULTRY, AND DAIRY: The 2012 forecast of total red meat and poultry production is raised from last month as higher broiler and turkey production is expected to more than offset lower forecast beef production. The pork production forecast is unchanged. The broiler production forecast is raised for the first half of the year based on January production data and stronger forecast prices. Beef production is lowered from last month. Steer and heifer slaughter is forecast lower, but is partly offset by higher expected cow slaughter. Early year carcass weights are raised due to mild weather in much of the country.
Turkey production is forecast higher as higher prices are expected to encourage a more rapid expansion. Egg production is lowered slightly for 2012 as prices are forecast lower. Poultry and egg production for 2011 is adjusted to reflect revisions in production data. The beef export forecast for 2012 is unchanged but imports are raised. Pork exports are raised from last month based on the strength of December export data. The broiler export forecast is unchanged from last month. Changes in estimates for 2011 trade reflect December data.
Cattle prices for 2012 are raised from last month, reflecting tightening supplies of fed cattle. Hog price forecasts are unchanged from last month. Broiler and turkey price forecasts are raised as current prices have strengthened. Egg price forecasts are reduced on lower-thanexpected early year prices.
The milk production forecast for 2012 is raised. Milk cow numbers are raised as herds are increasing more rapidly than expected. Although herds are expected to decline from 2011 in the second half of the year, the rate will be less than previously expected. Mild weather in the early part of the year is also supporting higher levels of milk production. Import and export forecasts are unchanged. Changes in 2011 estimates of supply and use reflect revised annual stocks data and December trade data.
With higher forecast 2012 milk production, prices for cheese, butter, nonfat dry milk, and whey are lowered. As a result, both Class III and Class IV price forecasts are reduced from last month. The all milk price for 2012 is lowered to $17.60-$18.20 per cwt.
WHEAT: U.S. wheat ending stocks for 2011/12 are projected 20 million bushels lower this month as lower food use is more than offset by higher exports. Projected food use is lowered 5 million bushels reflecting the latest flour production data reported by the North American Millers’ Association. Exports are projected 25 million bushels higher based on shipments and sales to date. Projected exports of Hard Red Spring and White wheat are each raised 10 million bushels. Projected Durum exports are raised 5 million bushels. Prices received by producers for the 2011/12 marketing year are projected at $7.15 to $7.45 per bushel, unchanged from last month.
Global wheat supplies for 2011/12 are nearly unchanged with lower China and Bangladesh beginning stocks offsetting higher production for Australia. Beginning stocks are lowered 1.0 million tons for China with an increase in food, seed, and industrial use for 2010/11. Australia production for 2011/12 is raised 1.2 million tons in line with the latest official estimate by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
Global wheat trade is raised for 2011/12 with higher imports for a number of countries. The biggest increase is for Iran, up 0.8 million tons, reflecting recent purchases and expected deliveries before the end of the local April-March marketing year. Imports are raised 0.3 million tons each for Algeria, South Korea, and Uzbekistan. Smaller increases are made for Azerbaijan, Chile, Georgia, and Angola. Imports are lowered 0.2 million tons for Syria. The largest export increase is for the United States. Exports are also increased for Australia, Brazil, and Kazakhstan, each up 0.5 million tons. Smaller increases are made for Turkey and Serbia. At the projected 142.9 million tons, global exports are just 0.6 million tons short of the 2008/09 record.
Global wheat consumption for 2011/12 is raised 3.5 million tons mostly on higher food, seed, and industrial use in China and higher wheat feeding in Australia, Iran, and South Korea. Partly offsetting are reductions in EU-27 wheat feeding and food, seed, and industrial use. Global ending stocks for 2011/12 are projected 3.5 million tons lower, mostly reflecting a similar sized reduction for China. EU-27 ending stocks are projected 1.5 million tons higher, but changes in a number of other countries, including the United States, offset the EU-27 increase.
COARSE GRAINS: U.S. corn, sorghum, and barley balance sheets for 2011/12 are unchanged this month. Oats imports for 2011/12 are projected 5 million bushels higher with larger expected shipments from Canada. Projected U.S. oats ending stocks are increased by the same amount. The projected ranges for the season-average corn and sorghum farm prices are both narrowed 10 cents on each end to $5.90 to $6.50 per bushel and $5.80 to $6.40 per bushel, respectively. The barley farm price range is lowered 10 cents on the top end WASDE-504-2 of the range to $5.20 to $5.50 per bushel. The oats farm price range is raised 10 cents on the bottom end of the range to $3.35 to $3.55 per bushel.
Global coarse grain supplies for 2011/12 are projected 1.6 million tons higher with production increases for Brazil corn and India corn and millet. Partly offsetting are reductions in sorghum output for India and Argentina and corn output for South Africa and Ecuador. Brazil corn production is raised 1 million tons on higher expected area for the second crop, which is planted following soybeans. India corn and millet production are raised 0.5 million tons and 1.5 million tons, respectively, in line with the latest government crop assessments. India sorghum production is lowered 0.7 million tons mostly reflecting lower expected area as the crop faces significant competition from cotton, soybeans, and pulses. Argentina sorghum production is lowered 0.2 million tons with lower expected yields. South Africa corn production is lowered 0.5 million tons as higher reported area is more than offset by reduced yield prospects. Below-normal rainfall and above-normal temperatures throughout South Africa’s maize triangle adversely affected pollination and early grain fill during February. Corn production for Ecuador is lowered 0.3 million tons as excess rains lower area and yields.
Global coarse grain trade for 2011/12 is raised with increases for corn and barley. Corn imports are raised for EU-27, Ecuador, and Peru, but lowered for Malaysia. Corn exports are raised for Brazil and India. Barley imports are raised for Iran and China. Barley exports are raised for Australia. Lower sorghum exports for Argentina are offset by higher expected shipments from Australia.
Global coarse grain consumption for 2011/12 is raised 2.2 million tons mostly on higher corn feeding in EU-27 and India, and higher millet use in India. EU-27 corn feeding is raised 1.0 million tons as corn is expected to replace higher priced wheat in animal rations. India corn and millet feeding are raised a combined 1.0 million tons. Millet food use is also raised 0.6 million tons for India. Partly offsetting these increases are reductions in sorghum food use in India, barley feeding in Australia, and corn feeding in Malaysia. Global coarse grain ending stocks for 2011/12 are lowered slightly, with 0.8-million-ton reduction in projected world corn stocks.
RICE: Small changes are made to the U.S. 2011/12 rice supply and use balances. The 2011/12 all rice import forecast is raised 1.0 million cwt to 20.0 million, based largely on the pace of imports reflected in the U.S. Bureau of the Census import data through December—all in long-grain rice. The increase in rice imports is largely due to a noticeable increase in fragrant rice imported from Thailand and India. Although the all rice export forecast is unchanged at 89.0 million cwt, combined medium- and short-grain rice is increased 1.0 million cwt to 32.0 million, and conversely, the long-grain projection is lowered the same amount to 57.0 million. The rough rice export forecast is lowered 1.0 million cwt to 31.0 million, which is offset by an increase in the combined milled and brown export forecast to 58.0 million (rough equivalent basis). All rice ending stocks are projected at 40.5 million cwt, up 1.0 million from a month ago. Long-grain rice ending stocks are projected at 23.6 million cwt, up 2.0 million from last month, and combined medium- and short-grain rice stocks are forecast at 14.2 million, down 1.0 million from a month ago.
The 2011/12 long-grain season-average price is projected at $13.20 to $13.80 per cwt, down 20 cents on each end of the range from last month. The combined medium- and short-grain price is projected at $15.40 to $16.00 per cwt, up 20 cents on each end of the range. The all WASDE-504-3 rice season-average price is forecast at $13.90 to $14.50 per cwt, unchanged from a month ago. Global rice prices from most sources have been trending down during the past month due largely to lackluster import demand and aggressive pricing by India.
USDA’s rice Interagency Commodity Estimates Committee recently reviewed foreign rice milling rates in the USDA global supply and use database for the period 2006/07 through 2011/12. The Foreign Agricultural Service staff of USDA at U.S. embassies around the world provided actual milling yields, milling practices, and milling technology in an effort to better calibrate the average milling yield for a given country. Some countries indicated significant increases in the milling yields: Burma increased from 58 percent to 64 percent, Nigeria increased 60 percent to 63 percent, and Turkey increased 60 percent to 67 percent. The average milling yields used for India and China are unchanged at 66.7 percent, and 70.0 percent, respectively. Most of the changes are small. Average milling yields were changed for about 40 countries.
Global 2011/12 rice production and consumption are up more than 2.5 million tons from a month ago, while trade and ending stocks changes are less than 0.3 million. A large portion of the changes in global production and consumption can be attributed to the changes made to global milling rates as described in the preceding paragraph. The change in Burma’s milling rate led to a 10 percent increase in forecast milled production for 2011/12–up 1.1 million tons.
India’s rice crop is raised 0.75 million tons to a record 102.75 million based on official data from the government of India. Conversely, Brazil’s crop is lowered 0.14 million tons due to the effects of drought in Rio Grande do Sul, an important rice-growing State. The increase in global consumption is due primarily to increases for Burma, Egypt, and India. The changes in global trade are small. Global 2011/12 ending stocks are raised 0.2 million tons to 100.3 million, up 2.5 million from the previous year, and the largest since 2002/03.
OILSEEDS: U.S. soybean supply and use projections for 2011/12 are mostly unchanged this month. U.S. soybean exports are unchanged at 1.275 billion bushels as reduced supplies in South America raise prices, reducing global imports. Although soybean meal exports and domestic use are raised this month, soybean crush remains unchanged due to a higher soybean meal extraction rate. Food use of soybean oil is reduced reflecting increased imports of canola oil and palm oil. Soybean oil stocks are projected at 2.4 billion pounds, up 100 million from last month.
The U.S. season-average soybean price range for 2011/12 is projected at $11.40 to $12.60 per bushel, up 30 cents on both ends of the range. Soybean meal prices are forecast at $310 to $340 per short ton, up 20 dollars on both ends of the range. Soybean oil prices are forecast at 50.5 to 54.5 cents per pound, unchanged from last month.
Global oilseed production for 2011/12 is projected at 445.7 million tons, down 6.7 million from last month. Foreign production, projected at 354.5 million, accounts for all of the change. Brazil soybean production is forecast at 68.5 million tons, down 3.5 million tons from last month due to lower projected yields resulting from hot, dry conditions in the southern states. Argentina soybean production is reduced 1.5 million tons to 46.5 million. Despite improved weather in recent weeks in much of the country, lower yields are projected due to continued warm, dry weather through February in northeastern growing areas. Paraguay soybean production is also reduced this month due to the effects of drought. With precipitation for November through February at the lowest level in over 25 years, soybean production is WASDE-504-4 projected at 5 million tons, down 1.4 million from last month and 34 percent below early season expectations. Other changes include lower rapeseed, peanut, and sunflowerseed production for India, increased cottonseed production for Brazil, and increased sunflowerseed production for Argentina.
Global oilseed trade for 2011/12 is projected at 108.4 million tons, down 2.1 million mainly reflecting reduced soybean trade. Lower soybean exports are forecast for Brazil and Paraguay. Soybean imports are reduced for China, EU-27, Indonesia, Japan, South Korea, and Taiwan. China soybean imports are reduced 0.5 million tons to 55 million. Global oilseed ending stocks are projected at 67.8 million tons, down 3.4 million from last month. Reduced soybean stocks in Brazil and Argentina account for most of the change.
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Friday, March 09, 2012
Organic Sales Bucking the Trend
ANALYSIS - Despite the tough economic times, the organic market around the world is growing and going against the trend of generally falling sales, cuts and reduced expenditure, writes Chris Harris.
The latest figures issued by the Soil Association in the UK and Organic Monitor show that in 2010 sales of organic products rose by eight per cent and by 228 per cent since 2000.
Worldwide sales were valued at $59 billion or around €44.5 billion in 2010 and were showing strong growth in all the major European markets as well as the US.
The total amount of land around the world devoted to organic farming is 37 million hectares.
In Europe, organics hold about two per cent market share with Germany and France leading the way. However, despite the value of $28 billion, around €22 billion, the growth rates are slowing, whereas the US that has an organic market worth $29 billion and about three per cent market share is seeing healthy growth and rising prices.
The Soil Association says the market for this current year for both Europe and the US is positive.
Away from the main markets, China has seen its organic sector quadruple in size over the last five years and Organics Brasil is showing a 40 per cent growth rate in the Brazilian market.
The Soil Association says that organic sales in Asia are expected to grow by 20 per cent over the next three years.
With Europe and the US making up more than 90 per cent of the organic market around the world, the recent equivalency agreement between the two blocs is expected to boots sales on both sides of the Atlantic.
The trade arrangement recognises the integrity of organic systems in both regions. It allows organic products meeting USDA NOP standards to be marketed and labelled as organic in EU countries, while EU certified organic products are also recognised as organic in the US. The USDA Organic seal and EU Organic logo can be placed on these products, although labelling requirements in the destination country must be met.
By opening up the two largest markets for organic products to each other, the arrangement will facilitate trade of organic foods between the US and EU.
As trade between Europe and the US represents less than five per cent of the global organic food sales.
Although the largest consumers, Europe and North America are also not the main producers of organic crops. The two regions have just 30 per cent share of international organic farmland. Organic farming is practiced in 160 countries, with most production in Asia, Latin America and Africa and sent to the US and Europe.
The Soil Association Organic Market Report for 2012 shows that the UK market for organic produce is going against the global rising trend as the market fell by 3.7 per cent last year, largely because of the economic situation that has seen a five per cent drop in retail sales.
Because of the drop in sales retailers are also giving up less shelf space to organic products and there has been a lack of investment in own-label organic ranges.
The main cause of the market's overall decline was a five per cent drop in multiple retail sales, which account for 71.4 per cent of organic food sales.
Despite the tough environment, sales of organic lamb rose by 16 per cent and organic poultry by 5.8 per cent.
Dairy products and fresh fruit and vegetables continue to be the most popular organic categories accounting for 29 per cent and 23 per cent of sales respectively.
However, the amount of land being devoted to organic production fell by 2.8 per cent representing 4.2 per cent of the farmland in the UK.
Chris Harris, Editor-in-Chief
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Tuesday, March 13, 2012
Agriculture Issues Intensify Food Shortages
WEST AFRICA - Several countries in the Sahel region of western Africa need urgent support to prevent a full-blown food and nutrition security crisis and to protect and restore livelihoods of communities dependent on livestock and crops, according to the Food and Agriculture Organization of the United Nations (FAO).
The agency is calling for at least $69.8 million in additional funding to provide assistance to 790,000 vulnerable farming and herding households, who have been caught in a cycle of recurring food crises.
At least 15 million people are estimated to be at risk of food insecurity in the Sahel, in part due to localised, but significant, declines in agropastoral production. This includes 5.4 million people in the Niger (35 per cent of the population), 3 million in Mali (20 per cent), around 1.7 million in Burkina Faso (10 per cent), around 3.6 million in Chad (28 per cent), 850,000 in Senegal (6 per cent), 713,500 in the Gambia (37 per cent) and 700,000 in Mauritania (22 per cent).
The looming crisis is due to a combination of factors, including drought; sharp declines in cereal production and high grain prices; a shortage of fodder for livestock; a reduction in remittances from migrant workers in several countries; environmental degradation; displacement; and chronic poverty deepened by chronic crisis.
Total 2011 cereal production in the Sahel was on average 25 per cent lower than in 2010, but as much as 50 percent lower in Chad and Mauritania. There were also localized, huge food production deficits in other countries (up to 80 per cent), according to the Food Crisis Prevention Network (RPCA), a forum which includes governments, donors and others involved in food security issues in West Africa.
There were also reported increases in the number of displaced persons in the region. This includes a total of 63,000 internally displaced persons in Mali who have fled conflict in the northern section of that country, and more than 60,000 Malian refugees in neighbouring countries.
“We need to act to prevent further deterioration of the food security situation and to avoid a full-scale food and nutrition crisis,” FAO Director-General José Graziano da Silva said.
“Part of the solution is to improve the access of farmers and herders to local markets, encourage the use of local products, and apply risk-reduction good practices to reinforce their resilience”, said Graziano da Silva.
FAO is working with its partners to “stop jumping from crisis to crisis,” by getting life-saving and livelihood-saving cash, food, agricultural inputs and training to the people who need them most, in addition to planning longer-term interventions to protect and restore the livelihoods of farmers, agropastoralists and pastoralists, the Director-General said.
Immediately planned FAO support will include:
helping farmers with the delivery of food crops and vegetable seeds in time for the main planting season, which begins in May increases in off-season irrigated crop production;
drought-related assistance to herders, including the distribution of animal feed, use of cash vouchers to rehabilitate natural pastures and water points;
production of animal fodder; livestock destocking, and veterinary inputs;
provision of integrated nutrition practices through agriculture, livestock rearing, school gardens, and nutrition education for women with children support for reinforcement of food security-information, early-warning systems and coordination.
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Wednesday, March 14, 2012
Ag Implications of US, European Market Volatility
ANALYSIS - If you think corn and soybeans have been volatile, you haven't seen anything yet was the opening message from Jim Wiesemeyer, senior vice president of Informa Economics, at a Commodity Classic education seminar in early March, writes Sarah Mikesell, senior editor.
"After the November 6th elections, Washington better have a leader from both the House and Senate, and definitely the White House," he said. "Because if we don't, we're going to be on a rocky road. What's happening in Europe will happen here, and that will translate into a Farm Bill. If they don't get the Farm Bill done this year, it's not going to get any better short term."
Debt, Debt and More Debt
Mr. Wiesemeyer explained there is no confidence in the US or in Europe that our leaders are getting their act together which is causing the uncertainty in the world. The US is all deficits and debt, he said noting that all debt is the annual accumulations of deficits. Both political parties have overspent, and it's getting worse, not better.
But what does all that mean to policy, including foreign policy?
"The debt is now much like war - it takes, it sucks the oxygen out of every other issue, and it's going to continue to do that," Mr. Wiesemeyer said.
Many in the US question why it's so important to watch the sovereign debt problems in Europe.
"Europe is China's biggest customer. Soybeans - about 65 per cent of US soybean exports go to China," he said. "So you have to watch China's Gross Domestic Product (GDP). If it were to go under 8 per cent, it would be the first solid signal that the world is going into a downturn."
US Agriculture in Golden Era
Mr. Wiesemeyer believes that US agriculture is in the throes of the Golden Era.
"I said that a few years ago, and we're still in it but the last two bull markets were dethroned," he said. "Not because of any fundamentals in agriculture, it was a result of a major financial crisis. And now what the Chinese are calling, "The Western Financial Crisis" - it could happen again."
US consumers' attitudes change when that average price for retail gasoline gets to $4.00/gallon, and Wiesemeyer expects it's going to go to $4.50/gallon this summer.
"Consumers have a behavioral change for every tick higher on $4.00 gasoline, but it won't on a farmer's bottom line on input cost," he said. "Consumers pull back which will affect the lifestyle industry - the restaurant industry - it just goes through the whole cycle."
Geopolitical Challenges & Energy
The geo-political challenges in energy in the Middle East are an area of high anxiety. One being Prime Minister Netanyahu of Israel's next move. That uncertainty is expected to push oil prices higher. It could shoot up $15 to $20/barrel, probably more on Brent crude oil, he said. Farmers should watch the Brent crude oil price, because that's what is traded in the world, Mr. Wiesemeyer reminded.
The Middle East turmoil is expected to keep oil markets unsettled well into 2012. With the energy price sensitivity, Iran and Israel conflicts are potential, he said. If a conflict arose, shipping rates would rise significantly which would impact the export market.
US Infrastructure Investment Needed
His biggest concern for agribusiness right now is the lack of investment in infrastructure.
"I think the big companies - the Pioneers and Monsantos - are going to develop yields for this growing population," he said. "My biggest concern is with their structure - the lack of investment going on in our forage systems, in our lock and dams, in our throughput capacity. What we're going to need to export - our ports, huge vessels - the investments have not been made. So that's a concern I have for the future."
Mr. Wiesemeyer said that part of what has made US agriculture so competitive over the decades has been the infrastructure system - roads, river and port systems.
"The whole complex is in need of a $2 trillion expenditure. Both political parties' leaders and the President have poked around for a jobs bill, and its staring them right in the eye," he said.
Sarah Mikesell, Senior Editor
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Thursday, March 15, 2012
Dry Spell Takes Toll on Crops and Livestock
SPAIN - The Spanish grain crop outlook for 2012-13 is at a very critical situation due to the driest winter ever recorded. While April and May rainfalls usually determine the size of the crop, this year’s dry conditions might have already taken a toll on final yields on winter grains.
Similar rain patterns have occurred in previous years. However, initial soil moisture, which is critical for the development stage of the first crop, is particularly low this year.
According to the USDA report, Still no Rain in Spain, Spain’s total dam water reservoirs are at 62.5 percent of capacity, which means that there are 34,764 hm3 of dam water available. While in Andalusia dams are at good levels of storage capacity, the Ebro basin, which covers the grain growing regions of Aragon, Navarra and Catalonia, is reportedly at 59.0 of its water storage capacity.
Until mid-February, cold temperatures had kept the grain crops dormant. This helped in the prevention of drought damage.
Crops in Andalucía, Castile-La Mancha and Aragón (Graph 5) already show signs of lowered vegetation health. While the same signs apply to Castile y Leon, based on previous years’ crop behavior, the situation could still be reversed if weather conditions improve.
The weather conditions in Spain are also affecting livestock production, putting livestock at risk. Pasture land has been affected by dry conditions and less pasture availability is forcing extensive livestock farmers to increase input costs by supplementing their animals in quantities over normal levels.
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Wednesday, March 21, 2012
Livestock Prices Up - Feed Prices Rising
ANALYSIS - EU feed wheat and corn prices are showing a slight upward trend, although they are still below last year's figures, according to the Agriview EU Market Prices for Representative Products report, writes Chris Harris.
From January to February this year, feed wheat prices rose from €180.26 per tonne to €190.69. However for the same months last year the prices were €218.38 rising to a peak of €232.06.
Over the last year the prices slid gradually to reach a low of €171.73 in November last year since when they have been on a gradual increase.
Feed corn prices slipped in August last year but have now started to show a small recovery.
In February they stood at €195.53 per tonne, but this is compared to prices in the same month last year of nearly €230.
Flour wheat prices are also down on last year by about €13, standing at €280.13 in February compared to €293.52 in the same month last year.
Feed oat, feed barley and malting barley prices are similar to last year at €188.60, €199.65 and €237.70 respectively.
In the livestock sector, beef prices have been consistently above last year's prices with the January and February prices this year reaching €381.99 and €371.79 per 100kg carcase weight compared to €348.68 and €351 for the same time last year. Dairy cow prices and veal calf prices have also remained consistently higher than last year.
In the dairy sector, intervention quality milk powder prices that reached a peak in January this year at €251.41 per 100kg fell back to €230.42, below the prices for the same month last year when they stood at €243.34.
Similar to the cattle prices, pig prices are up on last year and have remained consistently higher than the previous year's prices over the whole of the last year.
While they slipped slightly in January to €151.41 from €159.34 in December last year, they rose again in February to €157.83 per 100kg. In February last year the prices stood at €144.04.
In the poultry sector, poultry meat prices are coming back toward last year's prices having reached a high of €193.51 per 100kg in August last year.
In January and February they were €184.27 and €185.27compared to €176.44 and €179.33 for the same period a year ago.
Egg prices have soared in the latter half of 2011 and appear to be continuing to rise. Shell egg prices hit €150.72 per 100kg in February having risen from €137.49 in January. The prices in January and February 2011 were €105.93 and €111.37.
The higher prices for the livestock and poultry sector can largely be attributed to high feed prices over the last year although the rapid rise in egg prices could also be the result of the changes to the regulations and the ban on battery cages and the insistence on enriched cages for laying hens, reducing the amount of product on the market. The change in regulations has also been seen by the EU Commission poultry forecasting group as a major reason for rising egg prices.
The EU is also predicting a drop in consumption, which is also likely to have aknock on effect on egg prices. Germany, France and Hungary are predicting an increase this year, but the big egg producers in Spain, the UK, Italy and the Netherlands are forecasting decreases.
With most feed prices now under those of last year, there could be repercussions for the livestock and poultry sectors stabilising prices, but this could take some time to come through.
The full range of changes in market prices can be found at Agriview EU Market Prices.
Chris Harris, Editor-in-Chief
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Thursday, March 22, 2012
Charting a New Course for Animal Nutrition & Safety
CHINA - Over the years, the feed industry made a great contribution to safeguard the healthy development of the husbandry industry and the quality and safety of the animal products. However, occasional scandals like drug abuse, clenbuterol-contaminated pork, and pig milk adulterated with melamine are just like dark clouds hovering above the industry and the whole society.
The degradation of industry moral is directly impacting the quality of life of millions of communities and billions of women and men. Businesses, trade unions, scientists, political leaders, schools and universities, indigenous peoples, local government authorities, community groups, consumer associations, health workers and farming groups are all concerned about these grave issues. In conjunction with the ninth China Animal Husbandry Expo (CAHE) 2011, the “First National Animal Nutrition & Security Forum” organized by CAAA in Nanjing is well received. All presenters and participants in the forum are encouraged to become involved with the forum theme –"Complete honest begins with Self-discipline and Safety awareness ends in Enduring success."
Building on CAAA's successful history of bring together diverse stakeholders and providing scientific leadership in the first Animal Nutrition & Safety Forum, the second forum will bring these different sectors together to network, share knowledge and experience, develop creative solutions and partnerships and make practical and moral commitments to help take us forward on a truly sustainable path. "To find a pragmatic, sustainable solution to the Animal Nutrition and Safety" is the theme of the second forum, which will be held in Nanjing from 16 to 17 May.
What is special of the Second National Animal Nutrition and Safety Forum?
The forum in Nanjing will be a touchstone for the animal nutrition and safety movement and provides a unique opportunity to showcase how the husbandry industry underpins all economic, social and cultural development.The Animal Nutrition and Safety 2012 arrangements are announced below (please see link), please use the following event outline to plan your visit.
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Friday, March 23, 2012
Major FMD OutbreakThreatens Egypt
EGYPT - Urgent action is required to control a major outbreak of foot-and-mouth disease and prevent its spread throughout North Africa and the Middle East, which could have serious implications for food security in the region, FAO warned yesterday. With vaccines urgently needed, international and regional organizations are at the ready to assist in developing a regional prevention, preparedness and action plan.
In Egypt 40,222 cases of the disease are suspected, according to official estimates, and 4,658 animals, mostly calves, have already died.
According to FAO's livestock census data, 6.3 million buffalo and cattle and 7.5 million sheep and goats are at risk in Egypt. Although foot-and-mouth disease has circulated in the country for some years, this is an entirely new introduction of a virus strain known as SAT2, and livestock have no immune protection against it.
Urgent action
Further to a request by the Egyptian Government, an FAO emergency team was in the country last week assessing the situation with veterinary authorities. They jointly set up a first line of containment measures and the roll out of a national FMD control strategy. The strategy is focused on limiting the disease's spread by implementing biosecurity measures and by use of vaccination when available.
"We are working closely to support the government to bring the outbreak under control. The area around the Lower Nile Delta appears to be severely affected, while other areas in Upper Egypt and the west appear less so," said Juan Lubroth, FAO's Chief Veterinary Officer, calling for strong action to prevent the disease from spreading further.
In order to help prevent the spread of the virus, livestock attendants are urged to take a series of measures including: limiting animal movements and avoiding contact with animals from other farms; avoiding purchasing animals in the immediate term since they could have come from contaminated sources; and properly disposing of carcasses preferably by incineration or, failing that, by burying them.
Vaccines in short supply
Vaccines are in limited supply for the FMD virus now present in Egypt. The country has some reserves of its own vaccines, but these do not protect against the SAT2 strain, and Egypt could need regional support in mobilizing effective ones. Even if they become available quickly, vaccines sometimes take up to two weeks to confer immunity, so FAO is urging coordination at all levels of government to implement biosecurity measures to limit the spread of the disease.
Foot-and-mouth disease affects all cloven-hoofed animals, including sheep, goats, cattle, buffalo and pigs. It causes serious production losses and can be lethal, particularly to younger animals.
Meat and milk from sick animals are unsafe for consumption, not because FMD affects humans, but because foodstuffs entering the food chain should only come from animals that are known to be healthy.
The virus that causes FMD passes rapidly between animals through airborne droplets and normal contact, but humans in close contact with animals can transport it too via the soles of shoes, or on their hands or clothing. Foot-and-mouth disease is not a direct threat to humans.
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Monday, March 26, 2012
Expanding the Footprint of US Red Meat in Russia
RUSSIA - American beef and pork took centre stage across western Russia this month with high–profile participation in an international culinary competition; the leading hospitality industry trade show, ExpoHoreca, and master classes for Russian chefs.
The Baltic Culinary Star Cup drew top young chefs from Finland, Latvia, Lithuania, Poland and Russia to compete against one another and develop creative dishes using US beef top blade and sirloin as well as US pork loin. The Lithuanian team won the Cup this year with a dish featuring top blade.
The Baltic Culinary Star Cup was won by the team from Lithuania
A competitive field included chefs from Russia
Two Russian chefs cooking with US beefAmerican beef was well-represented by Marr Russia and GrandFoods, two leading importers of US beef, at ExpoHoreca, the 10th International Specialized Exhibition of Hospitality Industry, which drew food industry professionals from the Baltic region’s hospitality sector and abroad.
“The large attendance this year – estimated at 10,000 – could signal a positive change in the HRI (hotel, restaurant, institutional) sector, which was heavily affected by the financial crisis,” said Yuri Barutkin, St. Petersburg representative for the US Meat Export Federation (USMEF).
Mr Barutkin noted that the financial downturn created a good opportunity for USMEF to successfully promote alternative cuts of US beef, creating new interest among HRI distributors to invest in flank and skirt steaks as well as top sirloin. USMEF also is working to develop interest among Russian chefs in pork loins.
Both US beef and pork received added visibility at ExpoHoreca through USMEF master classes that ran through all three days of the show. American beef striploin and beef ribs as well as pork loins were featured in dishes prepared by leading chefs from top hotels and top restaurants in St. Petersburg who demonstrated different preparation techniques for the participants.
“The master classes featuring US pork and beef enabled us to reach a wide range of professionals and consumers with information about the quality attributes of US red meat, which is so different from our competition,” said Mr Barutkin. “And, as always, tasting the product spoke louder than a thousand words for consumers.”
Mr Barutkin also noted that USMEF’s participation in this type of culinary competition is an investment in the future.
“Most of the participants are very young chefs,” Mr Barutkin said. “They are right out of culinary school, so they are developing their skills and reputations, and this is the perfect time to educate them about working with the highest quality ingredients, such as US beef and pork.”
Support for USMEF’s participation in ExpoHoreca, the Baltic Culinary Cup and the master classes was provided through the USDA Market Access Program, the Beef Checkoff program and the Pork Checkoff program.
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Monday, March 26, 2012
Dairy Consumption in the Philippines Growing
PHILIPPINES - Dairy consumption in the Philippines is growing, writes Michael Hussey, Food and Beverage Division, Bord Bia – Irish Food Board.
The Philippines is one of the fastest growing economies in Asia and has a population of over 93 million. The country is almost completely dependent on imports of all dairy commodities. Domestic milk is used only for ready-to-drink milk. Traditional Philippine cuisine does not have any place for dairy products. Despite this, dairy consumption has grown, encouraged by Government policies. Milk powders are largely used for reconstitution as ready-to-drink milk (either fresh or UHT). The major players in the market are Fonterra Philippines, Alaska Milk Corporation (USA), Nestle and Snow Mountain Corporation.
The country has an import requirement of around 180,000 tonnes of milk powders. SMP accounts for around 110,000 tonnes while WMP imports and whey combined make up around 70,000 tonnes. Milk Powders (SMP, WMP, Whey and Buttermilk powder) constitute about 79 per cent of total imports.
New Zealand is the largest supplier to the market, accounting for 36 per cent of imports. This is followed by the United States at 25 per cent, Australia at 11 per cent and Malaysia at six per cent.
Australia and New Zealand have tariff free access due to a free trade agreement. The most recent Philippine trade agreement entered into by the country is the AANZFTA (ASEAN-Australia-New Zealand Free Trade Agreement), which was signed in February 2009.
Parties to the AANZFTA are Australia, New Zealand and the ten ASEAN members. As of 2010, milk powder, cheese, whey and buttermilk from Australia and NZ enter the Philippines duty free, while milk powder and whey from the United States have an MFN duty of one per cent; cheese three to seven per cent and buttermilk three per cent.
Imports of milk powders have been growing at around one per cent per year while butter and cheese have been growing at 18 per cent annually. While these sectors are dominated by New Zealand and US suppliers there may be opportunities for Irish dairy producers as the demand grows further.
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Tuesday, March 27, 2012
Canada & Japan Launch Economic Agreement
CANADA & JAPAN - Agriculture Minister Gerry Ritz joined Prime Minister Stephen Harper in Japan to launch negotiations of an Economic Partnership Agreement with Japan that will benefit both countries' agricultural industries.
Minister Ritz led a diverse delegation of Canadian agriculture industry to Japan and met with Japanese beef, pork, grain and oilseed buyers in an effort to grow market opportunities for Canada's safe, high-quality products.
"Free trade between Japan and Canada will help ensure agriculture and food products are available in both countries for the mutual benefit of farmers and consumers," said Minister Ritz. "Canada's agriculture producers and processors are a key part of Canada's economy which is why our Government continues to make international trade a priority."
Canada is committed to deepening its economic ties with Japan by ensuring that trade flows freely between the countries. Japan is the third largest economy in the world and is Canada's second largest agriculture market. Japan's market is worth almost $4 billion for Canadian farmers and food processors. Japan is the second largest market for Canadian exporters with total pork and pork products worth almost $900 million in 2011. Canada's "heart smart" canola oil also holds 40 per cent of Japan's edible oil market and is worth approximately $1.4 billion to Canada.
Minister Ritz met with his Japanese counterpart, Minister Michihiko Kano, and thanked Japan for its recent decision to review its domestic and import regulations for beef, which Canada hopes will lead to expanded access beyond under 21 months. The Canadian Cattlemen's Association estimates that this move will more than double Canadian beef sales to Japan for a total of $160 million in the first year of full access.
By partnering with the Canadian Wheat Board, the Canadian Grain Commission and the Grain Growers of Canada, Minister Ritz was able to guarantee the Japanese grain industry of continued supply of Canada's world-class wheat and barley. Japan is Canada's third largest market for wheat with exports in 2011 totalling $471 million. Canada is Japan's largest malt supplier and is responsible for 40 per cent of malt imports.
After Japan, Minister Ritz travelled to South Korea to reiterate Canada's support for increased agriculture trade between the two countries. Canadian agriculture and food exports to South Korea totalled more than $1 billion in 2011. Minister Ritz expressed support for South Korea's recent science-based decision to allow the import of Canadian beef under 30 months of age. Canada's beef industry estimates that this restored market access could mean more than $30 million for Canadian producers by 2015. South Korea was Canada's fourth-largest market before the 2003 bovine spongiform encephalopathy (BSE) outbreak.
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Wednesday, March 28, 2012
Epigenetics: The Next Frontier in Livestock Genetics
GLOBAL - While controversial, epigenetics does appear to offer potentially significant value to livestock genetic programmes, say the Alberta Livestock and Meat Agency (ALMA) and GenomeAlberta.
Epigenetics is the study of heritable changes in gene expression and other genomic functions without altering the underlying DNA sequence.
Epigenetic studies show that not all genetic information is in the DNA sequence as a significant portion is found in modifications on the epigenome, particularly in DNA methylation (DNAm).
It makes sense that manipulating both DNA and methylation of the epigenomes could add significant value to overall livestock genetics efforts. What doesn’t make sense is that such has yet to be explored on any appreciable scale.
In the scientific article “Epigenetics: A New Challenge in the Post-Genomic Era of Livestock,” author Oscar Gonzalez- Recio, of the Departamento de Mejora Genética Animal, Instituto Nacional de Investigación y Tecnología Agraria y Alimentaria in Madrid, Spain, explains the significance in variations in methylation patterns between individuals, even, if not especially, between those that are genotypically identical and what that can mean to breeders and farmers.
The article explains the impact: “…the environment may affect the methylation pattern of up to three generations cohabiting under the same specific circumstances at a given time during pregnancy: the productive female, the fetus, and the fetus’ germ cells. Hence, what happens to an animal during its lifetime may have consequences in future generations.”
While epigenetics is increasingly popular in genetic studies of cancer and other human diseases, it has yet to gain much attention in livestock genetic studies although the potential benefits in veterinary medicine alone are enticing.
Mr Gonzalez- Recio explains in the article that: “Farms could use epigenetic information to reduce disease incidence and the use of antibiotics in animal production. Personalised medicine using methylation on DNA is currently carried out on cancer research in humans (Peedicayil, 2008; Gomez and Ingelman-Sundberg, 2009), and seems to be a promising strategy for veterinary medicine as well.”
While some farming operations may be unsettled at the thought that they may need to change the environment not only for the current animals' welfare but for future offspring three generations deep, they can likely see profits exceed the costs of doing so, according to Mr Gonzalez- Recio.
“For instance, animals with concentrate and uni-feed diet systems are expected to be differently methylated than animals in a less intensive system based on a pasture feeding systems. It will be important to detect what practices are associated to favourable methylation patterns that affect disease resistance and other economically important traits. Finding this missing causality would assist in rising animals under favourable circumstances and reduce unfavorable methylation patterns.”
Among those “other economically important traits” are likely to be higher profits for epigenetically "certified" livestock and genetic material sales and improved public relations that can lead to better acceptance of meat products and fewer incidents of animal activist protests.
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Monday, April 02, 2012
EU Agricultural Policy Reform Delay
EU - The European Parliament has stated it will delay on deciding its final position on the Common Agricultural Policy (CAP) reform until the EU Budget Multiannual Financial Framework (MFF) has been decided (scheduled for late December 2012).
The MEPs claim they must know the total amount of ‘budgetary resources’ available in order to decide how policy should be reformed. It had been expected that the Parliament and Council of Ministers would publish their positions in the autumn; even then their two positions will need to be reconciled before policy can be agreed.
This delay might push the subsequent procedures into panic mode, especially if the implementation is to remain as January 2014, says UK farm business consultants, Andersons.
UK Agriculture Minister Jim Paice has started stating publically that implementation might be 2015, something Andersons has been saying for several months. Some commentators have been suggesting that the EU Budget negotiations will not be completed at the Summit in late December this year when it is planned to be signed. This could raise the chance of a second year of postponements before implementation, making a new CAP start date of 1st January 2016 possible.
Commissioner Ciolos has confirmed that the Commission will be publishing a series of ‘nonpapers’ (informal explanatory notes) by the end of June. These are designed to provide more detail on the very broad polices set out in the October 2011 draft legislative proposals. They are primarily for the benefit of the Council of Ministers and European Parliament, to allow more informed discussions of the proposals.
One area where more detail has been called for is on the ‘greening’ proposals, but further detail may also be forthcoming on areas such as ‘capping’ and‘active farmer’. Whilst it may be nice to have a better of idea of what is being proposed, it still does not really help planning very much, says Andersons. Until the final CAP deal is agreed, any policy is subject to change.
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Tuesday, April 03, 2012
Drought Pushes Feed Prices up 12 Per Cent
SPAIN - Feed prices have seen a dramatic rise in prices since January, up 12 per cent to 0.33 euro per kilo.
The Agri-Food Cooperatives has said that due to a lack of grass caused by the drought feed prices have rocketed, reports Besana.
Increasing production costs and a lack of profitability are making livestock production unsustainble, the Cooperative said.
For the dairy industry feed costs account for 70 per cent of total costs, and have increased 50 per cent since 2010.
The opposite is happening to milk prices though, with the price paid to producers and sold to consumers dropping.
"This demonstrates a serious imbalance of the value chain," said the Cooperative. It is supporting a true rebalancing of the sector, with increased power for producers in the market.
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Wednesday, April 04, 2012
China Becomes Biggest Grocery Market
CHINA - China has overtaken the United States (US) as the world’s biggest food and grocery retail market, according to the latest research published today (Wednesday) by IGD.
According to the findings the Chinese grocery sector was worth £607bn at the end of 2011, while the US market came in at £572bn over the same period – the second largest in the world.
By 2015, the Chinese market is forecast to be worth £918bn compared to a US value of £675bn.
Between 2011 and 2015, the US grocery retail market should see growth accelerating to reach a compound annual growth rate (CAGR) of 4.2 per cent, but China’s rate will be double this at 10.9 per cent over the same period.
All the BRIC (Brazil, Russia, India, China) nations will be in the top five grocery markets by 2015, with India displacing Japan as the world’s third largest grocery market by value.
Joanne Denney-Finch, chief executive, IGD, said: “China’s grocery growth story is phenomenal. Between 2006 and 2015, the Chinese grocery market is forecast to triple in value and to be worth nearly a trillion pounds. This rapid expansion has been fuelled by three main factors: rapid economic growth, population and rising food inflation.
“Despite its various logistical and bureaucratic challenges, China is a crucial growth market for many of the world’s largest grocery retailers. Even beyond the major cities there are huge opportunities: forecasts suggest there will be over 200 Chinese cities with a population over a million people by 2025. But given China’s size and diversity, it’s essential not to treat the country as one homogenous market.
“All the BRIC nations have been steadily increasing in value and by 2015 they are tipped to dominate the top five grocery slots, and many UK food and grocery companies are already pursuing this opportunity."
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Tuesday, April 10, 2012
Food Prices Remain Nearly Unchanged in March
GLOBAL - World food prices in March remained virtually unchanged from their February levels, according to the latest FAO Food Price Index, published last week. The Index averaged 216 points in March, compared to 215 in February.
According to FAO, among the various commodity groups, only oils prices showed strength, whereas dairy prices fell.
The FAO Cereal Price Index averaged 227 points in March, up 1 point from February. Maize prices registered some gain, supported by low inventories and a strong soybean market, but wheat changed little as supplies remained ample. After several months of declines, prices of rice recovered somewhat in March, underpinned by large purchases by China and Nigeria.
The FAO Oils/Fats Price index rose in March to 245 points, up 6 points or 2.5 per cent from February, as markets reacted to the prospect of growing tightness in the 2011/12. Weak growth in world palm oil production and limited global soy oil export availabilities combined with declining rapeseed production contributed to the rise in oils prices.
The FAO Meat Price Index averaged 178 points in March, up marginally from the previous month, sustained by a slight rise of bovine meat price but still reaching an all time high. Prices of pig meat and sheep meat changed little, while they weakened in the case of poultry amid slowing import demand and generally ample export availabilities. On average, meat prices in the first quarter were 3.5 per cent higher than last year.
The FAO Dairy Price Index averaged 197 points in March, down 5 points or 2.5 per cent from February and registered the lowest level since August 2010. All the dairy products showed weakness last month, in particular butter, as well as skim milk powder and casein. Since reaching record levels in March 2011, dairy prices have followed a downward trend, as supplies rose in Oceania, Europe and North America. As a result, prices in the first quarter were 12 per cent lower in 2012 than last year.
The FAO Sugar Price Index averaged 342 points in March, and remained unchanged from February but was 30 points or 8 per cent lower than in March 2011. Overall, sugar prices were volatile, as the market looked for direction ahead of the beginning of the new season in Brazil, the world's largest sugar producer and exporter. India, the EU and Thailand, have all reported increased output, which contributed to keeping prices below their high levels of last season.
Cereal stocks expected to rise
The forecast for world cereal carryover stocks in 2012 has been raised by 1 million tonnes over the previous month to 519 million tonnes. Much of the upward revision relates to expectations of higher rice inventories.
At the current forecast level, the world cereal stocks-to-use ratio in 2011/12 reaches 22.1 per cent, up slightly from 21.7 per cent in 2010/11. Among the major cereals, rice inventories are forecast to increase the most - by 11 million tonnes to 152 million tonnes, the highest level since 2000. Wheat stocks are also expected to rise sharply by 7 million tonnes to 196 million tonnes, the second highest level since 2003; however, coarse grains stocks could decline by nearly 3 million tonnes to 171 million tonnes, the lowest level since 2008.
Early outlook for 2012/12
The FAO's production forecast for wheat in 2012 remains at 690 million tonnes, 1.4 per cent below the record in 2011 and unchanged from last month. In spite of this decline, world wheat supplies in 2012/13 would still exceed projected need because of large inventories, according to this month's report. Rice markets also appear to be well supplied in 2012/13 given consecutive years of record production which have helped boost inventories. However, coarse grain supplies will be particularly tight in the coming months, especially for maize in the United States, the world's largest producer and exporter.
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Wednesday, April 11, 2012
Food Costs Could Rise with Relocation & Reduction
US - Paying more for food may not be out of the question for consumers if regulations on the US poultry and livestock sectors increase. In fact, consumers could pay up to $16.8 billion more annually for meat, milk and eggs if regulations are imposed on US poultry and livestock farmers that raise input costs by 25 per cent.
According to United Soybean Board, the Consumer and Food Safety Costs of Offshoring Animal Agriculture, a soy-checkoff-funded study released last month, evaluated current US supply and demand for poultry and livestock products and the impact of regulations on retail price. The study indicates that potential regulations could raise consumer costs. For example, requiring cage-free housing for laying hens would increase the cost of eggs from $1.68 to $2.10 per dozen, a total cost of $2.66 billion per year to US consumers.
“This could have a big impact on everyone – it’s not just that dozen eggs you and I buy at the grocery store,” explains Vanessa Kummer, a soybean farmer from Colfax, North Dakota, and chair of the United Soybean Board (USB). “As Americans, we have abundant, nutritious and affordable food choices that rely heavily on protein from animals, and, as farmers, we continue to work hard on improvements because we share consumers’ concerns for our country’s land and resources, and the quality of America’s food.”
The United Soybean Board says that the report cites increased regulations that could drive up costs of production meat, milk and eggs by anywhere from 10 per cent to 25 per cent. It shows that a 25 per cent increase in costs to animal agriculture would reduce US exports by $1.1 billion and cause nearly 9,000 Americans to lose their jobs.
“US agriculture leads the world as a global producer and exporter of animal products, and we need that to continue,” adds Ms Kummer. “The poultry and livestock sectors not only support the US export market, but also make our economy stronger here at home by creating jobs and tax revenue.”
According to the United Soybean Board, the most recent statistics compiled by the soy checkoff show the poultry and livestock sectors support 1.8 million jobs and generate more than $283 billion for the US economy.
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Thursday, April 12, 2012
Farm Produce Prices Fall for Third Week
CHINA - The prices of major farm produce monitored by MOFCOM fell in three consecutive weeks last week (2-8 April), while price of material for production was stable.
The prices of eight aquatic products dropped 0.3 per cent over the last week, of which small cutlass fish, carp and big cutlass fish saw a decrease of 1.7 per cent, 1.2 per cent and 0.6 per cent respectively.
The retail price of eggs dropped 0.2 per cent, 7.6 per cent lower than in the beginning of this year. The prices of eggs in Beijing, Guangzhou and Tianjin dropped 13.6 per cent, 13.4 per cent and 11.9 per cent.
The prices of meat fluctuated slightly, wherein pork dropped in ten consecutive weeks, 1.2 per cent lower than that of last week, 12.5 per cent lower than that of the end of January, while the prices of pork in Shanghai, Beijing and Chongqing dropped 26.1 per cent, 24 per cent and 15.8 per cent respectively. The price of chicken was down by 0.1 per cent while that of beef and mutton were up by 0.8 per cent and 0.5 per cent.
The retail prices of grains grew steadily, of which rice was stable while that of wheat flour was up by 0.2 per cent. Due to the increasing prices and increasing imported costs, the retail prices of edible oil rose, of which rapeseed oil, soybean oil and peanut oil were up by 0.3 per cent, 0.2 per cent and 0.1 per cent.
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Wednesday, April 18, 2012
China Expects Slowing Farm Produce Price Growth
CHINA - China's farm produce prices are likely to fall back to 10-percent growth this year as supplies of most agricultural products are becoming more plentiful, a think tank forecast on Wednesday.
As the Chinese Academy of Social Sciences (CASS) released a new green paper on the issue, it predicted that grain prices are likely to grow 7 per cent and livestock prices may jump 12 per cent year on year in 2012.
It is estimated that fishery products will see a 5-per cent rise in price, according to the paper, which analyzes the development of China's rural regions in 2011 and predicts their development in 2012.
China's food prices, which account for roughly a third of the weighting in calculating the consumer price index (CPI), the main gauge of inflation in China, surged 11.8 per cent year on year in 2011, pushing the index to grow 5.4 per cent, well above the government's control target of 4 per cent.
Prices of pork, China's favorite meat, saw great rises in the middle of last year, stirring public concerns of stubbornly high inflation in the country. However, the CPI has shown signs of easing in the first quarter of 2012.
It rose 4.5 per cent in January and narrowed to a 3.2-per cent increase in February before rebounding to 3.6 per cent in March. The government aims to keep the CPI increase at around 4 per cent this year.
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Thursday, April 19, 2012
Joint Efforts to Address Animal Welfare
GLOBAL - FAO recently convened the First Global Multi-stakeholder Forum on Animal Welfare, with participants representing the food industry, farmers, the civil society, inter-governmental organizations, governmental authorities and the academia, reflecting the growing conviction that animal welfare is an issue of widespread interest.
According to FAO, the Forum was organized with the support of the European Economic and Social Committee and the European Commission. The meeting was a stocktaking experience convened to share and scale-up best ideas, practices and innovative solutions to the complex animal welfare challenges. It provided a comprehensive overview on activities addressing animal welfare and on the variety of stakeholders providing them.
The Forum was attended by over 250 participants from 35 countries (including Canada, USA, Brazil, Chile, Uruguay, Suriname, almost all EU ones, Norway, Switzerland, Turkey, Israel, South Africa, Kenya, the Gambia, China, Mongolia, Malaysia, India, Australia and New Zealand). It included a wide range of speakers, representing governmental institutions (e.g. Norwegian, Australian, Israelian, and Surinamese authorities); private sector representatives like the USA National Milk Producers Federation (NMPF), the Animal Transport Association (ATA), the International Wool and Textile Organization (IWTO) and GLOBALG.A.P.; civil society organizations like the World Society for the Protection of Animals (WSPA), the Royal Society for the Prevention of Cruelty Against Animals (RSPCA), Animals' Angels, the Africa Network for Animal Welfare (ANAW), the Pan African Animal Welfare Alliance (PAAW), etc.; academic, research training centres; professional organizations and inter-governmental agencies.
The meeting gathered a plethora of interesting experiences and modalities of partnership to enhance animal welfare, but also showed the constraints faced by all stakeholders. There was a clear commitment of all stakeholders to participate in the process to enhance animal welfare in the context of a responsible and sustainable development of the livestock sector.
FAO, as an honest broker, will continue to facilitate the joint, multi-stakeholder approach through specific activities to enhance partnerships that will take into account similar existing initiatives and scale up successful experiences to provide a platform to develop a global, common, road-map for animal welfare.
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Monday, April 23, 2012
Olympic Athletes Could Get Branded as Cheats
CHINA - An official from the General Administration of Sport of China (GASC) denied reports that athletes were banned in January from eating untested pork, beef and lamb in an attempt to avoid doping scandals in the run-up to the London Olympics.
Still, extreme caution is in order.
"The administration has never banned athletes from eating meat. It just reminded them to be on alert," said Chen Zhiyu, head of the general office of GASC's science and education department.
Chinese media reported earlier this month that Olympic champion hurdler Liu Xiang hasn't eaten pork for years due to fears he could accidentally consume clenbuterol - known in China as "lean meat powder" - the banned performance-enhancing substance that led to Olympic judo champion Tong Wen's two-year suspension in 2010.
"I specifically checked with the 110m hurdles team's leader, Yang Jimin," Chen said. "He felt pretty angry (when he heard the report). He emphasized Liu has never stopped eating pork."
With the Games approaching though, athletes are being kept within the system.
The athletes assembled at the national training center in Beijing are not allowed to have meals in restaurants outside the base.
"The food is totally reliable here at the base," said Ye Zhennan, manager of the national gymnastics team, during a media session last Friday. "But no one knows whether it is safe or not in other places. So we don't allow them to eat out.
"We can't afford to take any risks at the crucial moment now. All our athletes have to eat only in the center's canteen, even when they have a day off."
Mr Zhennan's concern comes as a handful of star athletes claim to have failed drug tests due to dinning out.
Earlier this year, three-time Tour de France champion Alberto Contador from Spain was banned two years from cycling and stripped of his 2010 title after testing positive for clenbuterol, claiming he unwittingly ate contaminated beef.
There were similar stories from Tong, female former world No 1 shuttler Zhou Mi and budding German table-tennis star Dimitrij Ovtcharov.
The World Anti-Doping Agency issued a warning last November to athletes traveling to China and Mexico, urging them to exercise extreme caution when eating meat.
To guarantee a drug-free environments leading up to London, experts from the national anti-doping center closely examined every link of the catering service, routinely tested food ingredients from their sources and provided education to athletes.
The center has started to conducts doping tests more frequently, examining more than 10,000 samples annually, according to deputy director Zhao Jian.
Still, the athletes' own vigilance is key, Mr Zhennan said.
"The food security standard for athletes is much higher than the one that applies to ordinary people," Ye said. "Players have to make it a priority, just like preventing injuries in their daily training."
he The athletes don't seem to mind eating all their meals in the cafeteria.
"It actually doesn't bother us at all," said Guo Ailun, a guard on the men's national basketball team, which is practicing at the center. "I didn't hear of any meat ban. We still have all kinds of meat dishes here on the menu. Beef and pork steaks, they are safe and yummy."
Mr Ailun said the players are required to consult with the team doctor if they ingest any new food, medicine or other nutrition.
If there's a reason athletes must eat out, the team will ask for a note that lists the exact date, restaurant and dish, just in case a test is later needed.
"This is a way to be able to defend yourself and appeal your innocence in case you unexpectedly fail a test," said Zhang Xiong, manager of the men's basketball team.
"It can at least prove that it happened because of food, not drugs."
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Thursday, April 26, 2012
Experts Challenge Sustainability of Food System
CANADA - A report released by the World Society for the Protection of Animals (WSPA) has criticised intensive livestock operations for their use of antibiotics, effect on the environment and rural communities, poor welfare and cost to the taxpayer.
What's On Your Plate? The Hidden Costs of Industrial Animal Agriculture exposes the destructive impacts of intensive livestock operations (ILOs) on our health, the environment, animal welfare and rural Canada, said WSPA.
"Intensive livestock operations or ILOs are producing drug resistant super bugs, destroying our planet's life support system and transforming the social fabric of our rural communities" says Melissa Matlow, WSPA Campaigns Manager, Humane and Sustainable Agriculture.
"Food-borne illnesses are costing our healthcare system between $12 and $14 billion annually," says report contributor Dr Eva Pip. "Animal agriculture uses more land and water than any other human activity."
"The running of ILOs also involves significant energy consumption and greenhouse gas emissions", notes Dr Tony Weis.
Darrin Qualman says that ILOs are costing Canadian taxpayers directly.
"Government of Canada data shows that hog ILOs couldn't exist without huge tax-funded subsidies". Farm animals are paying a high price too. They suffer painful mutilations, bred to grow faster and crammed into small cages, all to make ILOs possible. "There is solid evidence that our industrial farming practices are causing acute suffering for animals," concludes Dr Ian Duncan.
Key findings of the WSPA report include:
The huge amounts of manure from ILOs contain antibiotic residues, heavy metals and pathogens (like E. coli). When applied on to fields or illegally dumped in ditches, these toxins end up in our drinking water and on crops. It also flows into lakes and rivers, killing fish.
Non-therapeutic use of antibiotics is causing drug resistant super bugs to be found on ILOs in manure and in groundwater near fields — risking the effectiveness of live-saving medicines.
ILOs are causing species loss, soil erosion and lake and river pollution.
Tax-payers are subsidising the largest industrial farms. Hog farms with annual revenues over $1million collected 72 per cent of the subsidies in 2009. Since 1996, Canadians have given nearly $4 billion to subsidise the hog industry.
ILOs have caused the hollowing out of rural communities as increasing debt, diminished quality of life and soaring unemployment mean businesses, people and infrastructure are abandoning these areas.
Painful mutilations done to farm animals (beak severing, hot branding, teeth breaking, etc) without anesthetic would be illegal if performed on a cat or dog and are purely surgical solution to human-made problems.
WSPA is calling for changes by all levels of government to policies and practices that will safe-guard the health of Canadians, protect our environment, revitalise rural communities and improve the lives of farm animal across the country, said a press release.
One of the recommendations of the report is to improve labelling requirementsm so that Canadian producers could identify production methods such as free-range, local and antibiotic free meat, milk and eggs.
WSPA also recommends that practices such as de-beaking and castration be done with anaesthetic or be phased out. It supports the Canadian Medical Association’s call to require veterinary prescriptions for all agriculture antibiotic use
The group has said it will work with industry and farmers to end the worst confinement systems, which they believe are battery cages, sow stall and veal crates.
Finally, WSPA believes that industrial livestock operations should be regulated like other major polluting industries.
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Thursday, April 26, 2012
Viet Nam's Middle Class Lifts Food, Feed Demand
ANALYSIS - The growth in China has garnered a lot of attention lately, but China's neighbour - Viet Nam - is another emerging market that is building our global middle class and increasing grain demand, writes Sarah Mikesell, senior editor.
By 2020, 600 million households, primarily in the developing world, are going to join in the global middle class, said Thomas Dorr, US Grains Council president and CEO, at the Commodity Classic in early March. These new markets, in terms of sheer size and dollar value, will exceed existing middle class markets in the US, Europe and Japan within the next decade.
Viet Nam Emerges in a New Way
Viet Nam is one of the emerging new markets. With a population of nearly 90 million, it is larger than any European country. Mr Dorr said it is an excellent example of a country that is 20 years behind China on the development curve at this point but it will not take the same 20 years for them to catch up because Viet Nam is learning from China by example.
Thomas Dorr, US Grains Council president and CEO, speaks to US farmers at the Commodity Classic in early March."The ability to communicate and inform people is speeding up Viet Nam's development process," he said. "It is going to be replicated throughout the world as these two emerging economies grow. It's also clearly defining significant new growth opportunities for US agriculture producers, as well as agribusinesses."
Viet Nam and other emerging markets will be unable, due to land, water and other resource constraints, to build out their food systems on a US-style commodity production system, he said.
While developing a strong middle class and a corresponding food demand, Viet Nam is going to meet that demand by creating new systems for production and marketing that are likely to be very different from the legacy systems that the US and developed countries have now.
Meat Consumption Drives Demand
Grain demand is being driven by meat consumption increases in Viet Nam. For the last five years, their domestic production has fallen short of domestic consumption and domestic feed consumption. Imports for US corn in 2011 dropped from 1.7 million tons down to one million tons. Mr Dorr said the drop was due to Viet Nam replacing US imports with feed imports from Argentina.
Looking at corn-for-feed demand projections through 2015, Viet Nam is growing at about a 30 per cent rate, and the corn growth from local production is growing at about a 30 per cent rate, Mr Dorr said. However, local production is starting from a much smaller base, which means there will be a continuous increase in demand for corn.
As for total US agricultural product exports to Viet Nam, in 2006 it equalled $215 million and in five years that has grown to $1.3 billion, suggesting that the investments of time, effort and capacity and working on the political policy side of the programs was quite effective, Mr Dorr said.
Dried Distiller Grains (DDGs)
(Photo courtesy of the US Grains Council)Feed Opportunity
Overall, Viet Nam is the fastest growth market for US feedstuffs, with the majority being soybean meal. Today, Viet Nam is the eighth largest market for US feedstuffs. They are the fastest growing market in the ASEAN community - that excludes Japan, Korea and Taiwan.
Viet Nam is the number one market for US Dried Distiller Grains (DDGs) in Southeast Asia, and it's the fourth largest in the world behind China, Mexico and Canada. Last year, Viet Nam imported close to a half million tons of DDGs.
Mr Dorr said the USGC is seeing a mix of intensive, large-scale commercial livestock operations moving into countries like China and Viet Nam. These operations provide a huge opportunity for feed products.
Currently, a dairy operation is being built in Viet Nam that will result in 130,000 cows under one management structure. There are 10,000 cows currently in production, and the project is being implemented by a team of 20 Israeli animal scientists and technologists.
"They will build a very sophisticated dairy processing facility, and I can assure you that this particular project is designed to provide more than just dairy products for Viet Nam," he said.
Building a Standardized System
The US Grains Council (USGC) became active in Viet Nam immediately after the US and Viet Nam normalized relations. Mr Dorr said the USGC immediately began to develop policy recommendations for Viet Nam's Ministry of Agriculture, creating their first five-year development plan.
"Building on those opportunities and policy changes and the ability of the USGC and its partners to develop credibility, we were able to access the government," he said. "We have been effective collaboratively to build up capacity in Viet Nam's meat, milk and poultry industries to ensure consumers can have a higher level of confidence and a larger level of variety in their domestic food systems."
The USGC, the United Soybean Export Council and the US Meat Export Federation have developed a relationship with the Ministry of Agriculture in Viet Nam. This relationship resulted in the teams assisting with writing the Viet Nam Animal Health Law, their plant laws and other laws relative to Viet Nam's food systems, as well as developing the regulatory implementation needed to make the laws effective.
"The team of US collaborators developed an international standardized system that was not inherently designed to detract from the development of trade," he said. "As a result, we now have a platform which all of our industries collectively can trade in a WTO-compliant, regulatory-compliant manner throughout Viet Nam, and it's been built on a well-defined scientific base. And that is going to facilitate growth in this economy."
Sarah Mikesell, Senior Editor
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Wednesday, April 25, 2012
Pork Commentary: USDA Livestock & Poultry
GLOBAL - Last week the USDA released its projected expectations for the world’s production of beef, pork, and poultry, exports and US market share, writes Jim Long.
Jim Long is President &
CEO of Genesus Genetics. 1,000 Metric Tons
Production 2007 2011 2012 Per Cent Change 2011 to 2012
Beef & veal 58,438 56,888 57,001 0.2%
Pork 94,103 101,662 104,357 2.7%
Broiler & turkey 74,646 85,732 87,497 2.1%
Total 227,187 244,282 248,855 1.9%
Observations:
Global pork production has increased 10,000 (1,000 metric tons) or 10 per cent since 2007. Global pork production in 2012 is about 42 per cent of total livestock and poultry output. This is a slightly higher percentage of total market shares while increasing production. This is a real sign of a strong industry and growing demand.
Beef has lost not only global market share but also a decline in output; since 2007 to 2012 a decline of 1.4 (1,000 metric tons). Beef global market share was 25.7 per cent in 2007 and 2012 22.9 per cent, losing production and market share is not a very positive scenario for the global beef industry.
Since 2007 the world’s total livestock and poultry production has increased almost 20,000(1,000 metric tons) or over 8 per cent. This is not exactly a sign of a giant swing to vegetarianism - more poultry and more pork than ever eaten, as the world population and disposable income increase so does pork and poultry consumption. We have huge opportunities. It’s great to be in the pork industry that has a proven opportunity to grow which you can’t say the same for beef!
Global Exports (1000 metric tons)
2007 2011 2012 Per Cent Change 2011 to 2012
Beef & veal 7679 8155 8728 7.0%
Pork 5186 6982 6985 0.0%
Broiler & turkey 7952 9978 10242 2.9%
Total 20817 25115 25955 2.1%
World exports have increased 20 per cent since 2007; this is a real sign of global interdependence for food. Approximately 10 per cent of total production is expected to be exported n 2012.
The USDA is projecting US pork exports in 2012 will be 2404(1000 metric tons) the highest level ever (2007: 1425). This is up 65 per cent plus from 2007. The US projects in 2012 that the US market share ( per cent) of pork exports among major pork trading countries to be 34 per cent (up from 27 per cent in 2007). The US is the global major pork exporter – it’s a big dog!!
The US advantages include a national swine health that meets or exceeds standards of importing nations, price competitive volumes of pork that allows for major supply availability, a packer industry well capitalized, efficient large plants with an aggressive competitive ownership group. You don’t want to do battle with the shareholders and management of Smithfield Foods, Tyson, Swift, Hormel, Seaboard, Mitsubishi, etc... Couple this with a battle hardened group of technically advanced swine producers. It’s a formidable competitive group and the major reason the US dominates global pork exports.
The flip side of US global pork export dominance is the US industries vulnerability to global trade issues, health risk (remember swine flu) we can never forget Larry Pope CEO of Smithfield Foods (world’s largest hog and pork producer) saying ‘five – six years ago (we paraphrase) US pork exports are an opiate for the US swine industry.’ True then, and even more now without exports a train wreck.
Major Pork Importers
The USDA projects major pork importers to be Russia 900,000 tons, China 650,000 tons, South Korea 550,000 tons, and Japan 1.3 million tons.
Markets
Global pork demand is increasing the US has a major market share in global pork trade. All sounds good, unfortunately the cash hog market and lean hog futures are not reflecting a profitable now or near future. $6.00 a bushel for corn and hog prices in mid to high 80s means next to no profit for producers buying their feed. While those producing and feeding their own hogs are cash flowing just fine.
Maybe we are like the boy who sees the manure pile and believes there must be a pony there but we can’t help it. We still firmly believe that as the seasonal supply of hogs decline over the next few weeks coupled with continued strong pork exports and less domestic chicken and beef. Cash hog prices are going to have a major surge.
Author: Jim Long, President & CEO, Genesus Genetics
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Monday, April 30, 2012
Food Security Project Enhances Pig Industries
PAPUA NEW GUINEA - The South Australian Research and Development Institute (SARDI) is helping to provide security of food production through its participation in Australian Centre for International Agricultural Research (ACIAR) food security projects in Papua New Guinea.
SARDI is the lead organisation facilitating the adoption of mini feed mills in the monogastric (single stomach) livestock industry in Papua New Guinea to improve smallholder and semi commercial enterprise profitability.
The four year ACIAR project, currently in its first year, involves a diverse collaborative group. Australian partners include SARDI, Primary Industries Industry and Investment NSW, value chain, nutrition and economic consultants. The PNG partners include the Highlands Aquaculture Development Centre, National Agriculture Research Institute, National Fisheries Authority, PNG University of Technology, Christian Leaders Training College, Ok Tedi Development Foundation and Lutheran Development Service.
SARDI Senior Research Scientist Dr Phil Glatz said options included feeding systems for pigs and poultry and information for the intensive commercial industry on suitable higher fibre and lower energy diets that ameliorate the effects of conventional diets.
“Development of user briefs for small scale feed mills will allow the niche pig and poultry sector and game bird industry the option of investing in their own feed manufacturing and produced diets that are cheaper than commercial diets,” Dr Glatz said.
The project is planned to result in a 25% increase in profitability of the monogastric sector in PNG and increase production by 5% per annum, equating to $A47 million per annum.
Dr Glatz said smallholder and semi-commercial aquaculture, pig and poultry farming was making an important contribution to the livelihoods of rural households in PNG.
“Currently the monogastric sector in PNG has a market value of $A190.5 million per annum comprising about 600 000 small farmers,” Dr Glatz said.
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Thursday, May 03, 2012
Brasil Foods Sees Strong Domestic Sales Growth
BRAZIL - Brasil Foods (BRF) has announced its first quarter results, which include a 5.3 per cent increase in revenue and net income of 153 million reals (BRR). While some key export markets were challenging, domestic sales were up 11 per cent.
The Company has now been assigned an investment grade rating by all three leading rating agencies.
BRF ended the first quarter 2012 reporting net sales of BRR6.3 billion, a year–on–year increase of 5.3 per cent.
Quarterly gross profits were BRR1.3 billion, a decline of 13 per cent, primarily reflecting the challenges of the overseas market which saw a significant decline in prices. Net income in the quarter was BRR153.2 million while EBITDA reached BRR532 million, corresponding to a margin of 8.4 per cent, compared with BRR816 million in the preceding year, same quarter, and a margin of 13.6 per cent.
The Company’s results reflected the challenging scenario in the export market, as had already been observed in the fourth quarter of 2011. Some key markets such as Japan and the Middle East continued to suffer from a process of adjustment and running down of levels of inventory and merchandise flows. Export revenues in the quarter were BRR2.4 billion, practically unchanged as compared with the same quarter last year.
Conversely, the Company reported a good performance in sales to the domestic/retail market amounting to BRR3 billion, a growth of 11 per cent, in spite of below–forecast consumption in the Brazilian retail sector overall.
Similarly, the food service segment reported a good performance posting an increase in net sales of 10.4 per cent. During the period, the Company launched 11 products between ‘in natura’ and processed lines for the major global networks, a savoury snacks platform, a grill line and rotisserie products.
The Company also achieved an investment grade risk rating classification from all three principal world rating agencies. In their assessment, the agencies emphasized competitive advantages such as brand, distribution, corporate governance and financial soundness, among others. Between the months of March and April, Standard & Poor’s and Moody’s assigned an investment grade rating to the Company while Fitch Ratings reiterated its rating first issued a year ago.
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Monday, May 07, 2012
Food Prices Ease But Stay High
GLOBAL - Global food prices measured by the FAO Food Price Index fell three points or 1.4 percent from March to April 2012 but seem to have stabilized at a relatively high level of 214 points, FAO said last week.
The fall was the first after three consecutive months of increases and although the index is significantly down from its record level of 235 points in April 2011, it is still well above the figures of under 200 which preceded the 2008 food crisis.
The index was published in the latest FAO Food Outlook, a global market analysis which comes out twice a year. It noted that the prospects for the second half of this year and into the next indicate generally improved supplies and continuing strong demand.
Consequently the global food import bill in 2012 could decline to $1.24 trillion, down slightly from last year’s record of $1.29 trillion Food Outlook said.
Record cereals production
The forecast for cereals production was for a modest expansion in 2012 to a new record of 2,371 million tonnes compared to 2 344 million tonnes in 2011.
However, within the cereals sector, wheat production in 2012 is anticipated to fall by 3.6 per cent compared to 2011, to 675 million tonnes, with the largest declines forecast for Ukraine, followed by Kazakhstan, China, Morocco and the EU. The expected decrease coincides with prospects of a slight reduction in total wheat utilization in the 2012/13 marketing season.
Lower wheat output is offset by a record coarse grains production of 1,207 million tonnes anticipated in 2012, compared to 1,164 million tonnes in 2011 – itself a record year. But the increase, expected to follow a sharp rise in plantings in the United States, is unlikely to be sufficient to ease current market tightness because of the very low level of opening stocks, with consequent, continuing pressure on prices.
Rice production is expected to grow 1.7 per cent in 2012 to 488 million tonnes, but slackening import demand and the return of India as a major exporter are keeping prices down. World rice production this year is expected to exceed demand for the eighth consecutive year.
Oilseeds not meeting growing demand
After two seasons of relatively ample supplies, in 2011/12 the market for oilseeds and derived products is set to tighten again. Global oilcrop production will not be sufficient to satisfy growing demand for oils and meals. Global soybean production is estimated to decrease by almost 10 per cent, one of the steepest year-on-year falls on record. With oilcrops other than soybeans only partly compensating for the shortfall, total oilcrop production should drop to a three-year low, down 4 per cent from last season. International prices for oilcrops and derived products, which have risen sharply since January, are therefore likely to stay firm.
World sugar output in 2011/12 is set to increase by close to 8 million tonnes, or 4.6 per cent over 2010/11, reaching nearly 173 million tonnes. For the second consecutive year, production is anticipated to surpass consumption, with a surplus expected of some 5.4 million tonnes helping to rebuild relatively low stock levels.
The growth in sugar output is attributed to significant expansion in area and input use, prompted by strong international sugar prices and better weather. A fall in production in Brazil, the world’s largest producer, is expected to be offset by increased production in other major producing countries, including Thailand and India.
Expansion seen for meat, dairy and fish
Driven exclusively by gains in poultry and pigmeat production, global meat output is set to expand by nearly 2 per cent to 302 million tonnes in 2012. Most of the sector growth is likely to originate in developing countries. An ongoing struggle for markets is expected to intensify in 2012 as increased production in key importing countries slows down global meat trade expansion. This, combined with limited supplies in developed exporting countries, is shifting international market shares towards developing countries, in particular Brazil and India.
World milk production in 2012 is forecast to grow by 2.7 per cent to 750 million tonnes. Asia is expected to account for most of the increase, but higher output is anticipated in most regions. World trade in dairy products is expected to continue expanding in 2012. Demand remains firm, with imports anticipated to reach 52.7 million tonnes of milk equivalent. Asia will continue to be the main market, followed by North Africa, the Middle East, and Latin America and the Caribbean.
Sustained demand for fish and fishery products is boosting aquaculture production worldwide and pushing prices higher, despite some consumer resistance in the more traditional markets in southern Europe. Overall production for the year is expected to grow by 2.1 per cent to 157.3 million tonnes, thanks to a 5.8 per cent increase in aquaculture output that more than offset a small decline in capture fisheries following limitations on catches of small pelagic species in the Pacific.
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Food Outlook – Meat and Meat Products
Global meat markets in 2012 are expected to see a recovery of supplies in traditionally importing countries and strong competition for markets, according to the latest Food Outlook report from FAO. Near record prices are constraining consumption growth.
Meat Prices Hover at Near–Record Levels
Global meat markets are likely to face heightened trade competition in 2012, at the same time that recovering meat production in Asia is set to dampen growth in global import demand. Overall, meat trade is expected to expand by two per cent, to 29.2 million tonnes, much of which is anticipated to be taken up by developing country exporters, which could increase their share of the global trade to 44 per cent.
Disease outbreaks in 2011, drought–reduced cattle inventories and high feed costs sustained international meat prices to near record levels in the first quarter of 2012. In April, the FAO meat price index edged up to 182 points, surpassing the record 181 points registered in November 2011.
Variable feed prices influence pork and poultry price movements
World meat market at a glance
Indications of slowing import demand, especially for pig and poultry meats, portents a potential moderation of meat prices in the coming months, which, along with high feed costs, is raising concern about the profitability of the meat sector in 2012.
Beef prices strong while easing feed prices translate into lower pig meat and poultry prices
Pig Meat
As disease concerns in Asia abate, the pig meat sector is poised for a quick recovery
After last year’s drop, global pig meat production is expected to rebound by 2.6 per cent in 2012 to 111.7 million tonnes, underpinned by gains in Asia due to reduced incidence of disease. In the region, policy support, growing investments and favourable market returns, particularly in China, are behind an anticipated four per cent expansion in the region’s output to 62.8 million tonnes. The sector may also recover in Japan, following a rebuilding of sow inventories and a return to normal piglet births in provinces affected by the nuclear fallout in 2011. Investments in breeding and feed industries in Viet Nam will support output growth, while a rebuilding of FMD-depleted inventories in the Republic of Korea is stimulating a 20 per cent production recovery.
In South America, high beef prices are indirectly supporting the expansion of the pig meat sector in Brazil, Chile and Colombia while, in Argentina, sporadic restrictions on pig meat imports from Brazil are creating incentives for investment. The recognition of Mexico as free of classical swine fever has opened new market access opportunities which, combined with investment in new breeding lines, supports an increase of the country’s production and exports in 2012.
Anticipation of new EU environmental regulations that will become effective in 2013 has catalysed a restructuring and concentration of hog operations that may translate into fewer pigs and lower production in 2012.
Despite tight margins, a shift by consumers in North America from beef to lower priced meat products is expected to strengthen demand and translate into higher production. Investment–driven gains in the Russian Federation are foreseen to boost production by five per cent despite persistent occurrences of African swine fever.
Pig meat trade may decline in 2012 as Asian import demand falters
After witnessing double-digit increases in Asian import demand in 2011 due to its disease-reduced output, improved production in the region is forecast to result in global pig meat trade falling to 7.0 million tonnes in 2012.
Reduced purchases by China, the Republic of Korea and Japan, amid large supplies, underlie this expected contraction. This is despite the expected ratification by the Russian Federation of the WTO accession treaty later this year and the signing of a free trade agreement between the Republic of Korea and the United States. It is clear that the Russian Federation will only ease restrictions on pig meat imports when it officially joins the WTO in mid-2012. Until then, imports by the country will be negatively affected by a reduction of its tariff-rate import quota from 470,000 tonnes in 2011 to 400,000 tonnes this year, which may result in smaller pig meat purchases.
By contrast, imports by Chile, Colombia, Mexico and Uruguay look set to increase, while Argentina’s “off-and-on” restrictions on imports of Brazilian product may lower deliveries to the country.
Declining trade prospects in 2012 set the stage for considerable competition among the major exporters – the United States, the EU, Canada and Brazil – which together account for nearly 90 per cent of global trade. Lingering Russian restrictions on imports of Brazilian products may contribute to lower exports from Brazil in 2012, while benefiting smaller international suppliers, such as Chile and Mexico, but also the United States and Canada.
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Friday, May 11, 2012
Slight Drop in Chinese Farm Produce Prices
CHINA - The prices of major farm produce monitored by MOFCOM saw a slight drop last week (30 April - 6 May) and that of materials for production fell in three consecutive weeks.
The retail price of egg dropped 0.5 per cent over the previous week, 9.3 per cent percentage lower than that of the beginning of this year. The retail prices of egg in Beijing, Xiamen and Tianjin saw a decrease of 15.1 per cent, 14.4 per cent and 14.4 per cent than that of the beginning of this year.
The wholesale prices of meat fell, of which pork continued to fell, 0.8 per cent lower than that of the previous week, and 14.7 per cent lower than that of the end of January.
The price of pork was 18 yuan per kilo in Beijing, Shanghai and Chongqing, 24.1 per cent, 23 per cent and 19.9 per cent lower than that of the end of January. The prices of chicken dropped 0.1 per cent while that of beef and mutton rose 0.3 per cent and 0.1 per cent respectively.
The prices of grains and oil maintained a steady growth, of which peanut oil, soybean oil, wheat flour and rapeseed oil rose 0.3 per cent, 0.3 per cent, 0.2 per cent and 0.1 per cent respectively, while that of rice remained unchanged.
The wholesale prices of eight aquatic productions rose 0.9 per cent over the previous week, with an accumulative increase of 2 per cent in three weeks, of which carp, grass carp and silver carp rose 2.4 per cent, 2.3 per cent and 1.1 per cent over the previous week.
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Brazil: Bread–basket of the World
17 May 2012
BRAZIL - For decades it has been predicted that Brazil would become the breadbasket of the world, writes Martin Riordan, Sales and Service at Genesus Brazil.
The Creator was generous when he made Brazil: a vast land area (slightly less than Canada and the USA), climates rangeing from tropical in the north to temperate in the south, total absence of natural disasters, such as volcanoes, earthquakes and tsunamis. Brazil has everything to be one of the best countries in the world for its inhabitants.
A well-worn joke in Brazil explains that, when St. Peter questioned God’s generosity with Brazil, He replied: “But wait till you see the people I am going to put there!”
Over the last five decades, agricultural production in Brazil has exploded. This is partly due to an increase in the area planted, as dynamic farmers from the south of the country migrated north into states with vast, unexploited agricultural resources. Thirty years ago, this migration opened up the Center West region of the country and more recently it is doing the same for the North East.
Even more important has been the increase in productivity. Modern Brazilian farmers are innovative and progressive, and rapidly adopt new technologies which increase productivity. They have been aided in this quest by Embrapa, a federal government agricultural research organization that has played a vital role in adapting crops to different climatic conditions, thus extending the geographical area where crops can be produced.
Looking at the two principal ingredients for producing pigs, with data taken from Wikipedia, we can see the following changes from 1960 to 2005:
•Corn production increased from 8.67 million metric tons (mmt) to 35.13 mmt, an astounding increase of 305 per cent.
•Soybean production grew from almost nothing (0.20 mmt) to 51.18 mmt.
This would lead one to the conclusion that Brazil is the ideal country for large-scale, low-cost production of pork. It has all the ingredients: land area, grain production and a kind climate.
So why does Brazil not dominate the world market for pork products, as it has with chicken and beef since 2004?
For a long time, pork exports were almost zero. This changed from around the year 2000, when exports started growing rapidly. By 2003, Brazil was exporting over 600,000 metric tons (mt) and exports peaked in 2005 at 761,000 mt. Since then, exports have stagnated, and by 2011 fell to 582,000 mt. This contrasts with exports of beef and especially chicken, which have been growing much more constantly as shown by this somewhat outdated USDA chart:
Genesus Global Market Report
Prices for the week of April 29, 2012
Country
Domestic price
(own currency)
US dollars
(Liveweight a lb)
USA (Iowa-Minnesota)
77.06¢ USD/lb carcass
57.02¢
Canada (Ontario)
1.43¢ CAD/kg carcass
52.01¢
Mexico (DF)
18.08 MXN/kg liveweight
59.61¢
Brazil (South Region)
2.02 BRL/kg liveweight
45.82¢
Russia
95 RUB/kg liveweight
$1.40
China
13.46 RMB/kg liveweight
96.18¢
Spain
1.29 EUR/kg liveweight
74.77¢
What is the problem? Here are some answers:
Trade barriers: many importing countries impose political barriers to imports, in order to protect domestic producers. These require political negotiation, and the Brazilian government has not demonstrated competence in this area. Many times exports to Russia, historically the most important importer of pork products, have been cut overnight, leading to slumps in exports. The current battle is with Argentina, Brazil’s commercial partner in Mercosur, which imposed a ban on pork imports.
Animal health: Brazil has animal health problems, and government agencies have been slow to address the problem. However, there is progress. Santa Catarina is now a state free of foot and mouth disease without vaccination. But many world markets, such as Japan, which demand that the whole country be free of F&M, are still beyond the pale for Brazilian exporters.
It is unlikely that either of these factors will change much in the short term. Brazil’s international competitors have little reason to worry.
The domestic situation for pig producers continues in dire straits. Soya meal prices are very high, over US$500 per metric tonne. Corn prices have dropped some 10-15 per cent with harvests coming in, and are around US$5.70 per bushel. But the price of live market hogs has remained low, well below cost, and more and more independent producers are being obliged to cease production, unable to sustain the debt load generated over the last 3-4 years.
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Urgent Action Required on Falling Food Productivity
21 May 2012
US - In advance of the G8 summit, Elanco president Jeff Simmons warns global leaders that food productivity is not keeping pace with food demand now and in the immediate future.
Food inflation combined with inadequate gains in productivity are clear indicators that our ability to feed a rapidly growing population is at serious risk without swift action.
During a panel discussion with senior global leaders at the Chicago Council on Global Affairs Symposium "Advancing Food and Nutrition Security at the G8 Summit" in Washington, Mr Simmons urged leaders to take action now to address the challenge of developing more efficient food production systems and pressed for policy alternatives that provide long-term, sustainable solutions to hunger, food inflation and food availability.
"Currently, nearly 1 billion people cannot afford 1,880 calories a day and almost 3 billion live on less than $2 a day. These observations show that the time is now to make decisions that support the world's growing food needs," said Mr Simmons. "We're already facing significant challenges to our food system. They must be addressed today."
According to the 2011 World Livestock Report issued by the UN Food and Agriculture Organization (FAO), by the end of the decade, the world will need to produce 20 per cent more meat and poultry than we do today – with two-thirds of the need coming from developing countries. By 2050, demand is expected to grow by about 75 per cent. Simmons used new predictions for eggs and dairy to illustrate the impact such demands could have on our food system.
Egg Productivity Declining
Challenge: Eggs are one of the most basic, affordable protein sources that people around the world depend upon. But, in recent years, production has been declining by one egg per chicken per year. If continued, this trend will require three times more hens (17.7 billion) to deliver the estimated egg needs required by families in 2050.
Solution: Adopting new and existing technologies and practices that optimize animal welfare, health, and productivity can restore productivity to necessary growth levels – helping hens produce a modest 1.5 eggs more per year. Such a change in productivity would require just 10.4 billion hens to meet egg demand in 2050 – or approximately 7 billion fewer birds.
Per capita milk availability is declining despite 2X production growth
Challenge: Global milk production has almost doubled in the past 50 years. Yet, fewer people have access to milk today because populations are growing faster than production gains. In 1950, each person had access to 279g of milk per day. By 2010, milk per capita had dropped 14 per cent to 239g per day.
Solutions: The adoption of existing and emerging innovation to dairy production can help accelerate milk productivity to align population and demand growth. For example, China is targeting a near doubling of per capita milk availability to 156g per person per day by the end of the decade. Without significant improvements in productivity this will require 15 million additional cows, and a doubling of the feed and water resources currently used.
"Given the right policy environment and access to appropriate technologies, I believe global agriculture can meet these productivity challenges," Mr Simmons said. "If you take the United States for example, in the past 60 years agricultural output has increased 250 per cent while inputs have remained nearly stable."
Making Progress a Priority
Mr Simmons urged leaders to take action now and emphasized three clear priorities for overcoming barriers in inspiring progress and enabling people's access to safe, affordable food today:
1.Innovation: It is important to invest in innovative technologies that drive efficient food productivity to meet the growing needs of a rapidly expanding population. Innovation must start with consistent, science-based regulatory processes and public and private support is needed to assure that innovation has the ability to enter the market.
2.Choice: Every country, family and mother deserves the right to make their own choices about the food they feed their families and not live by the choices of others – particularly when those choices impact their children's food. Whether it's a Chinese citizen that wants to add more dairy to the diet as they grow in affluence, or the American consumer that prefers a luxury option, we must not make decisions that limit access to safe protein that meets consumers' needs.
3.Food Trade: As the demand for meat, milk and eggs grows, the challenge is recognizing the impact a global market has on developing counties. Barriers to trade impact availability, inflation, and the price of food. Leaders should consider the global impact of policies outside their borders.
The panel, "Agricultural Innovation: Getting to Scale" also included, Jack Sinclair, Walmart; Hugh Grant, Monsanto; Sam Dryden, Bill & Melinda Gates Foundation; Dyborn Chibonga, National Association of Smallholder Farmers of Malawi; and Janet Chigabatia, Savanna Farmers Market Company.
To join the dialogue about how to sustainably feed a growing global population, click here. A copy of Jeff Simmons' white paper, Making Safe, Affordable, Abundant Food a Global Reality is also available on the site.
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24 May 2012
Agricultural Price Indices - March 2012
The agricultural output price index was down 0.5% in March 2012.
The agricultural output price index decreased by 0.5% in March 2012 compared with February 2012. The agricultural input price index increased by 0.7% over the same period. Thus, the resulting terms of trade index decreased by 1.2% in March 2012. See Tables 1a, 2a and graph. [For tables, please download the document]
The seasonally adjusted output price index in March 2012 was 0.8% higher than in February 2012. See Table 3. [For Table 3, please download the document]
On an annual comparison, the agricultural output price index in March 2012 was 11.0% higher than in March 2011. The agricultural input price index was up 1.2% in March 2012 compared with March 2011.
A further comparison of the March 2012 sub-indices with March 2011 shows that:
•Cattle, poultry and pig prices increased by 23.1%, 20.5% and 7.5% respectively, while potatoes (incl. seeds) decreased by 19.5%. See Tables 1a and 1b.
•Seeds, energy, and fertiliser prices increased by 7.7%, 7.6% and 3.1% respectively, while feeding stuffs decreased by 0.6%. See Tables 2a and 2b.
Annual EU output and input price index changes (base year 2005 = 100) for selected items are shown at the back of this release.
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Brazil Feed Forecast Up 2.8 Per Cent in 2012
29 May 2012
BRAZIL - Brazilian feed production is projected to grow 2.8 per cent in 2012 compared to the previous year, with production of 66.2 million MT of feed and 2.58 million MT of mineral supplements, according to the Brazilian Feed Industry Association (Sindirações).
In 2011, the sector saw growth of 5.2 per cent as well as turnover of $25 billion in feedstuffs and additives while producing 64.5 million MT of feed and 2.35 million MT of mineral supplements.
"The modest increase expected along 2012 will be gauged by livestock producers' performance that have suffered a lot because of higher costs of agricultural commodities and low domestics prices as well as exports slowdown for chicken, pork and beef," explains Ariovaldo Zani, CEO of Sindirações.
According to Mr Zani, the Brazilian livestock production chain has seen successful cycles of expansion, thanks to the continuous mobilization of technology and fostered by the global voluptuous appetite for animal protein. It already represents 6.5 per cent of GDP, has generated millions of jobs and is responsible for 18 per cent of the overall agribusiness exports.
Swine Feed
The amount of pork exported in 2011 dropped more than 4 per cent due to local currency overvaluation during the first half and because of trade embargoes imposed by usual customers. The domestic market absorbed more than 180,000 tons of pork and per capita consumption exceed 15 kg.
The increase in production cost pulled by higher feedstuff prices set a fast pace in the slaughter of breeders and particularly lighter animals. These factors pushed the swine live price and discouraged increasing the herd.
Following the stability trend, the feed industry produced 15.4 million MT in 2011, and it has projected to deliver the same amount in 2012, although the increased shipments to China and recent open markets in Japan and South Korea are expected to move pork production higher.
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Chinese Farm Produce Prices Down Last Week
07 June 2012
CHINA - China's farm produce prices generally maintained a downward trend last week, as data from the Ministry of Commerce (MOC) showed that prices dropped during the week of 28 May - 3 June from the previous week, marking the fifth week of decline.
The MOC data released Wednesday showed that 18 kinds of major vegetables saw a 7.5-per cent drop in wholesale prices from the previous week as supplies increased.
According to the data, the price of pork also fell 0.9 per cent while prices of beef and mutton rose 0.5 per cent and 0.3 per cent, respectively. The price of chicken edged up 0.1 per cent.
Prices of staple foods, including rice and flour, remained unchanged, while the prices of different kinds of cooking oils saw moderate increases. Eight kinds of sea products saw an average price rise of 0.3 per cent, data showed.
Prices of eggs and garlic saw significant increases.
The report said egg prices ended the downshifting trend seen since the start of the year, rising 2.6 per cent last week. The cities of Beijing and Wuhan saw egg prices surge 11.4 per cent and 10.2 per cent, respectively.
The recent price surges on eggs and garlic have reignited concerns of inflation, even though analysts expect it to further moderate in May. Data show that the nation's consumer price index, the main gauge of inflation, eased to 3.4 per cent in April from 3.6 per cent in March.
An official with the National Development and Reform Commission also said Tuesday the price increases of eggs and garlic were "a reasonable recovery" from low bases.
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Friday, June 08, 2012
FAO Food Price Index Drops Sharply
GLOBAL - Global food prices have dropped sharply in May due to generally favourable supplies, growing global economic uncertainties and a strengthening of the US dollar, FAO said.
According to FAO, the Food Price Index, measuring the monthly change in international prices of a basket of food commodities, fell by four per cent in May. It averaged 204 points and was 9 points down from April. This was the lowest level since September 2011 and about 14 per cent below its peak in February 2011.
"Crop prices have come down sharply from their peak level but they remain still high and vulnerable due to risks related to weather conditions in the critical growing months ahead," said FAO's grain analyst Abdolreza Abbassian.
FAO at the same time raised the forecast for world cereal production by 48.5 million tonnes since May, mainly on the expectation of a bumper maize crop in the United States.
FAO's latest forecast for world cereal production in 2012 stands at a record level of 2 419 million tonnes, 3.2 per cent up from the 2011 record.
The bulk of the increase is expected to originate mainly from maize in the United States amid an early start of the planting season and prevailing favourable growing conditions. As a result, the global coarse grain production is forecast at 1,248 million tonnes, a huge 85 million tonnes increase from the previous year.
However, with planting still to be completed and much of the crop at very early stages of development, the final outcome will depend greatly on weather conditions in the coming months.
With the main northern hemisphere rice crops now in the ground in several countries, the forecast of global rice production in 2012 is firmer and points to a 2.2 per cent increase from 2011, to some 490 million tonnes, mostly reflecting larger plantings in Asia.
For wheat, latest indications point to a contraction of about 3 per cent in production in 2012, to 680 million tonnes, still well above the average of the past five years.
The global cereal utilization is forecast to expand by at least 2 per cent in 2012/13, to 2 376 million tonnes, with feed utilization growing by 3.8 per cent, while food consumption is expected to increase by just over 1 per cent, largely keeping pace with world population growth.
At the current forecast level, world cereal production would exceed the anticipated utilization in 2012/13 (which has been revised up since last month by 19 million tonnes or 1 per cent) and lead to a significant replenishment of world cereal stocks, up 36 million tonnes, or 7 per cent, from the previous season.
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Global Protein Market in State of Structural Change
12 June 2012
FRANCE - The world is no longer one of structural surpluses, it is a world of structural scarcity David Nelson, a global strategist with Rabobank's Food and Agribusiness Research and Advisory Group told the World Meat Congress in Paris last week, writes Chris Harris.
He said the basics of the world agricultural market have remained the same with populations rising and land use falling.
However, crop prices are also rising and the high grain prices are being driven by higher gross domestic product growth, largely in developing countries.
This growth in GDP is driving the demand for meat and hence the demand for grain, Mr Nelson told the congress.
He said that in the developed world meat consumption in going down, but the demand growth is coming from the developing markets while the developed markets are flat.
This is the scenario that he said analysts forecast will continue for the next 10 years.
He said that while world GDP growth was on an upward swing two years ago, this growth is now on the decline.
In 2010 world GDP growth was 4.05 per cent. Last year it was 2.87 per cent and this year it is expected to fall to 2.26 per cent although, rise again in 2013 to 2.89 per cent.
By contrast, China that has seen the most dramatic growth in its GDP over recent years is also facing a slowdown. In 2010, China's GDP growth was 10.4 per cent, but it fell to 9.2 per cent last year and is forecast to go down to 8.3 per cent this year with a slight rise in 2013 to 8.5 per cent.
While the global GDP grew, Mr Nelson said, it outpaced the growth in protein prices although they have now stayed quite high.
The growth in agricultural industrialisation in China has been the main reason for the growth in protein consumption and also prices. The country has changed from back yard production of livestock feeding scraps to a more industrialised production with larger herds and flocks that call for more grain to be used as feed.
However, there have also been other demands placed on the demand for this grain, including the demand from ethanol and biodiesel production.
"£The demand growth for protein is rising, but the growth of crop production is declining," said Mr Nelson.
"There are structural shortfalls in corn production."
Mr Nelson added that he believed the USDA is also overestimating the potential yields for corn which they have set at 166 bushels per acre whereas, he said, in reality they could be nearer to 155 bushels.
He also told the congress that the global problems with meeting demand for grain were because of infrastructure problems in Russia and Brazil and the fact that Russia and Ukraine produce about 25 per cent of the world's grain meant that relying on these countries' production put the world in a precarious position.
China is also structurally incapable of producing its own crops, but the country will keep driving the market for pork, corn and soy.
He said that even assuming that there will be a rebound in the US production of corn this year and that Brazil will be producing more soy, this will only be a small rise in production and the effect on world supplies and the ability to meet demand will be slight.
"There is not a comfortable level of stocks," Mr Nelson said.
Mr Nelson warned that the grain markets are also in the hands of speculators. In recent times fund managers have moved out of the markets but they have the ability to change things around quickly just by moving back in again.
Mr Nelson said that production of protein is also changing with a move to more dairy production in northern Europe. This rise in dairy production has seen a drop in beef production in Europe as more pasture is turned over to dairy. Beef production in Europe is starting to move to the southern countries.
European beef production will also be affected by the imminent changes to the Common Agricultural Policy.
In the pig meat sector, Mr Nelson said that he US has costs that are a third less than those in Europe, but an exchange rate change and a reduction in the value of the Euro has made the EU more competitive in recent times.
Similarly, a devaluation of the Brazilian real has made Brazil more competitive.
However, he warned that with continuing rising costs, Europe might not be a net pork exporter in four or five years' time.
"Europe has been doing a bit better recently with exports of beef and pork up, but feed prices and new regulations will make Europe a challenge," Mr Nelson said.
He warned that the global animal protein industry is becoming globalised as labour rates in China rise along with those in Brazil as their economies grow. However, in developed countries, such as the US, labour rates are predominantly flat - another factor impinging on the global cost of protein.
Livestock costs are also becoming comparatively high in some developing countries, which will have another levelling effect on global prices, while currency swings will affect both production and competitiveness.
Mr Nelson concluded that the major issue affecting world protein markets is the price of pork in China and that although protein production in China is high, producers have been losing money. However, there will still be continuing growth in developing markets that will have a dominant effect on world protein production.
Chris Harris, Editor-in-Chief
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Is Agriculture Leading the Way Out of the Recession?
ANALYSIS - Against what appears to be all the economic trends, the global agriculture sector seems to be showing a strength and even punching above its weight during the current global financial problems, writes, Chris Harris.
According to a new report from the USDA, The 2008-09 Recession and Recovery, US agriculture was better positioned than most US industries entering the recession, was less affected by the recession than most other US industries, and is well positioned to continue to do well in the years ahead.
And it is not only in the US that agriculture appears to be doing better than other industries.
In the UK, a recent report from the National Farmers Union showed that agriculture contributed £85 billion to the UK economy last year, while helping to keep some 3.5 million people in work.
The NFU report, Farming Delivers, says that because of its role as the driving force behind so much economic activity, farming offers huge potential to the economy as a whole.
The agricultural sector around the world is finding itself in a strong position largely because of international trade. With developing nations growing in strength, populations growing and wealth in these countries growing, there is an ever-growing demand for food.
In this respect, countries in the developed world that have been hit by the recession will be able to use food and agriculture as a major means of escaping from the straightened times.
The outlook report from the Food and Agriculture Organisation of the UN and the OECD said: "A stronger than expected agriculture commodity supply response last year, particularly in developed countries and much lower oil prices has resulted in significantly lower commodity prices from 2007-8 highs".
It continues: "Despite the significant impact of the global financial crisis and economic downturn on all sectors of the economy, agriculture is expected to be relatively better off, as a result of the recent period of relatively high incomes and a relatively income-inelastic demand for food."
The report focuses on the resilience of agriculture to economic recession and says that as the recovery begins, a reduction in agricultural prices and a fall in production and consumption are unlikely.
This resilience of the agricultural sector is reflected in the USDA report that shows that the growing importance of developing countries as markets for US agricultural exports, strong balance sheets in US agriculture going into and coming out of the recession, healthy financial institutions supporting agriculture, and prospects for a continued low real trade-weighted dollar exchange rate are supporting relatively strong growth in the farm sector.
US agricultural exports, especially those to developing countries, benefited from stronger world growth, the report says.
Approximately 22 per cent of US agricultural production is exported, accounting for almost 10 per cent of total US merchandise exports.
These economic and financial factors, along with underlying gains in agricultural research and productivity and in expanding and improving access to markets for farm products, suggest a strong outlook for US agriculture as US and global economies continue their recovery, the USDA says.
The USDA said that the latest recession has been longer and deeper than anything the US has seen since the 1930s.
While both developed and developing countries showed declines in 2008 and 2009, developed countries went into a severe recession whereas the developing countries only had a growth slowdown.
Real world trade fell by 11 per cent in 2009, and developed country exports declined nearly 13 per cent.
Those countries reliant on exporting expensive durable consumer and business goods, such as Western Europe and Japan, were hit especially hard.
US agricultural exports, while not affected as greatly as non-agricultural exports, were not immune to the impact of global recession. Real US agricultural exports fell by two per cent in 2009 after increasing by 5.3 per cent in 2008.
Exports of high value products, such as fresh beef and dairy, fell six and 39 per cent, respectively.
However, in 2011, US agricultural exports exceeded $136 billion. The growth in post-recession exports was about twice the historical average between 1998 and 2007, the decade preceding the recession and developing countries' share of US agricultural exports rose to more than 60 per cent in 2011.
The world economic recovery was underway in 2011 and is likely to continue in 2012 and beyond, with developing countries, including those in Asia, Latin America, and Africa, leading the way, while developed countries will recover at a much slower pace.
The crisis in the Eurozone continues and is likely to continue for some time, further dampening growth prospects in developed countries.
However, the global agricultural sector is leading the way and if it can continue to find and build on new export markets it will help to strengthen the economies that have been hit hardest.
However, financial institutions will also have to lend their support to the growing global trade in agricultural products and agriculture could be the key to unlocking much of the finance that has been held back from the markets.
Chris Harris, Editor-in-Chief
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Good Week for Green Agriculture and Welfare
20 June 2012
EU - The EU agriculture Ministers have decided to work for better animal welfare in the future and have endorsed both a proposal for the combating antimicrobial resistance and the progress report on the reform of the Common Agricultural Policy .
“This is a good week. Not only because we have achieved the aims of the Presidency but first and foremost because we have decided to ensure better animal welfare for animals in Europe and because we have taken important steps towards a greener agriculture – a greener Europe,” says the Danish chair, Minister Mette Gjerskov.
The Danish Presidency has worked intensively to reach agreement on the strategy on animal welfare 2012 – 2015 and with regard to the Commission’s report on transport of animals. These decisions are a strong signal that animal welfare is high on the EU agenda and that the EU will strive to strengthen animal welfare.
Combating antimicrobial resistance
At the meeting the Danish chair presented a proposal for council conclusions on combating antimicrobial resistance:
“Fighting antimicrobial resistance is a major priority of the Danish Presidency. Each year 25,000 European citizens die due to antimicrobial resistance and the problem is increasing. This calls for action. Therefore I am content in having full support for the conclusions that are expected to be adopted at the EPSCO Council 22 June,” states Mette Gjerskov.
The reform of the Common Agricultural Policy
Council has also endorsed the Presidency’s progress report on the reform of the Common Agricultural Policy. Most of the major elements have already been discussed at Council meetings during the Danish Presidency, and at the most recent meeting, before the endorsement of the progress report, the Council discussed the proposal on the Rural Development Policy.
“I am convinced that green transition and growth are two sides of the same coin. Therefore I am content that there is a broad understanding that the Rural Development Policy should contribute to the protection of nature aswell. And I am glad that the Council has endorsed a progress report on the reform with focus on both simplification and green solutions,“ says Mette Gjerskov.
Report on organic farming
The Commission presented its evaluations report on the existing organic legislation.
“Organic farming is a powerful tool for green transition, and it is important that we now have the Commission’s report which, in turn, means that we can begin discussions on the future regulation of organic farming,” says Mette Gjerskov.
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Adapting to a Changing Climate
22 June 2012
UK - Most scientists agree the UK environment of the future will be different from today - temperature and rainfall (both occurrence and intensity), as well as levels of carbon dioxide and ozone in the atmosphere, will change over the coming years and decades.
So while day-length duration will remain constant, we have to anticipate entirely new combinations of conditions. These will not have previously been experienced anywhere in the world by the crops on which we and our farm animals depend. If the levels of food production we'll require in the future are to be secured, steps to adapt to these changes need to be taken now.
That's the clear assessment from experts at the Agriculture and Horticulture Development Board (AHDB) in response to the government's recently proposed National Adaptation Programme on climate change, focused on the next 20 years. The response also confirms AHDB's commitment to give farmers and growers practical support on adaptation.
In welcoming the chance to join the Defra-led consultation, the levy board identifies water availability and management as the most immediate concern for UK agriculture in adapting to climate change, since it impacts on arable crops, horticulture and livestock production. Investment will be needed in new infrastructure for water capture and storage, as well as research to discover new ways of increasing water use efficiency in agricultural production systems.
Chief Scientist at AHDB, Professor Ian Crute, said: "We're going to need to start developing crop and livestock types and production systems that are well adapted and resilient to the changing combinations of environmental conditions we experience in the future.
"Increased and well-targeted investment in the application of crop and livestock genomics is going to be absolutely essential. Soils and the semi-natural ecosystems that impact on agricultural production are also going to be affected by climate change and we need to better understand what these impacts will be and adapt accordingly," he added.
"Farmers and growers continuously adapt and innovate in response to change but, certainly, effective new knowledge acquisition and exchange will be essential if the agriculture industry is to adapt to changes in our climate at the appropriate pace. AHDB is committed to helping farmers and growers to adopt practical adaptation measures, making sure that industry advice is consistent and always based on sound evidence.
"Our own applied research, such as the evaluation of new crop varieties, will continue and evolve over time to meet these challenges.
"I can also see that changes to the way agriculture operates in adapting to new weather conditions will require careful communication with the public, to explain why we need to build more on-farm reservoirs, for example.
The AHDB view of adapting to climate change also focuses on soil quality and on new potential challenges to crop and animal health.
Insect pests and insect-transmitted plant and animal diseases are a concern. As AHDB sees it, effective surveillance and pre-emptive research will be needed to reduce the risk of exotic diseases and pest outbreaks.
With the vital need to up the pace on restoring levels of organic matter content in soils, more thought will need to be given to how such restoration and maintenance will be affected by changes in agricultural practices or temperature-induced increases in the rate of breakdown of organic matter.
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China Farm Produce Prices Still Rising
27 June 2012
CHINA - Pork prices rebounded recently, up 0.7 per cent last week, after falling for several months, as the country's pork stockpiling policy helped boost market demand, Shen said at a regular briefing.
China started stockpiling frozen pork in April to help stabilize prices and stem losses by pig producers.
Due to booming demand, shrinking supplies and climbing production costs, prices of edible oil and aquatic products rose slightly last week. Retail prices of peanut oil increased 0.3 per cent week-on-week, while the wholesale prices of aquatic products gained 0.7 per cent.
Shen Danyang, spokesman for the Ministry of Commerce, said prices of garlic and eggs have begun falling. "The ministry has always attached great importance to the dramatic fluctuations of farm produce prices, and will try to solve the boom-bust problem in agriculture as soon as possible," he added.
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28 June 2012
USDA Agricultural Prices - June 2012
The preliminary All Farm Products Index of Prices Received by Farmers in June, at 181 percent, based on 1990-1992=100, increased 3 points (1.7 percent) from May. The Crop Index is up 2 points (1.0 percent) and the Livestock Index increased 1 point (0.7 percent).
June Farm Prices Received Index Increased 3 Points
Producers received higher prices for hogs, oranges, eggs, and broccoli and lower prices for hay, corn, soybeans, and broilers. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly movement of wheat and hay offset the decreased marketing of oranges, corn, cattle, and strawberries.
The preliminary All Farm Products Index is up 1 point (0.6 percent) from June 2011. The Food Commodities Index, at 170, increased 4 points (2.4 percent) from last month but decreased 1 point (0.6 percent) from June 2011.
Prices Paid Index Unchanged
The June Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 215 percent of the 1990-1992 average. The index is unchanged from May but 12 points (5.9 percent) above June 2011. Higher prices in June for complete feeds, concentrates, nitrogen, and supplements offset lower prices for diesel, hay & forages, LP gas, and gasoline.
Prices Received by Farmers
The June All Farm Products Index is 181 percent of its 1990-1992 base, up 1.7 percent from the May index and 0.6 percent above the June 2011 index.
All crops: The June index, at 210, increased 1.0 percent from May and 0.5 percent from June 2011. Index increases for fruits & nuts and commercial vegetables more than offset the index decreases for feed grains & hay, oilseeds, food grains, and potatoes & dry beans.
Food grains: The June index, at 213, is 2.3 percent below the previous month and down 12 percent from a year ago. The June price for all wheat, at $6.37 per bushel, is down 30 cents from May and $1.04 below June 2011.
Feed grains & hay: The June index, at 265, is down 2.9 percent from last month but 1.1 percent above a year ago. The corn price, at $6.25 per bushel, is down 8 cents from last month and 13 cents below June 2011. The all hay price, at $183 per ton, is down $16.00 from May but $20.00 higher than last June. Sorghum grain, at $9.95 per cwt, is 45 cents below May and 55 cents below June last year.
Cotton, Upland: The June index, at 137, is down 2.1 percent from May but unchanged from last year. The June price, at 83.1 cents per pound, is down 1.5 cents from the previous month and 0.2 cent below last June.
Oilseeds: The June index, at 245, is down 2.0 percent from May but 3.4 percent higher than June 2011. The soybean price, at $13.70 per bushel, decreased 30 cents from May but is 50 cents above June 2011.
Fruits & nuts: The June index, at 179, is up 5.3 percent from May and 13 percent higher than a year ago. Price increases for apples and oranges more than offset price decreases for peaches, strawberries, and lemons.
Commercial vegetables: The June index, at 166, is up 5.1 percent from last month but unchanged from June 2011. Price increases during June for broccoli and lettuce more than offset price declines for onions, snap beans, and cucumbers.
Potatoes & dry beans: The June index, at 180, is down 3.2 percent from last month and 8.2 percent below June 2011. The all potato price, at $9.89 per cwt, is down 55 cents from May and $1.70 below last June. The all dry bean price, at $43.90 per cwt, is up 60 cents from the previous month and $10.10 above June 2011.
Livestock and products: The June index, at 152, is 0.7 percent above last month but down 0.7 percent from June 2011. Compared with a year ago, prices are higher for cattle, broilers, calves, turkeys, and eggs. Prices for milk and hogs are down from last year.
Meat animals: The June index, at 161, is up 1.3 percent from last month and 10 percent higher than last year. The June hog price, at $66.90 per cwt, is up $4.10 from May but $2.80 lower than a year ago. The June beef cattle price of $122 per cwt is unchanged from last month but $15.00 higher than June 2011.
Dairy products: The June index, at 123, is down 0.8 percent from a month ago and 24 percent lower than June last year. The June all milk price of $16.10 per cwt is 10 cents less than last month and $5.00 lower than June 2011.
Poultry & eggs: The June index, at 164, is up 0.6 percent from May and 5.8 percent above a year ago. The June market egg price, at 68.8 cents per dozen, increased 9.4 cents from May and is 0.1 cent above June 2011. The June broiler price, at 52.0 cents per pound, is down 1.0 cent from May but 3.0 cents above a year ago. The June turkey price, at 73.9 cents per pound, is up 1.3 cents from the previous month and 4.4 cents above a year earlier.
June 2012
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FAO Food Price Index Falls Again
05 July 2012
GLOBAL - The FAO Food Price Index fell for the third consecutive month in June 2012, dipping 1.8 percent from May to its lowest level since September 2010. The four-point drop in June brought the index to 201 points from a revised level of 205 points in May 2012.
According to FAO, the index now stands at 15.4 per cent below its peak in February 2011. The average prices of all commodity groups in the Index were below May levels, with the largest drop registered for oils and fats.
Continued economic uncertainties and generally adequate food supply prospects kept the index down although growing concerns over dry weather sent prices of some crops higher toward the end of the month.
Food commodity prices have started rising again recently, mostly because of adverse weather and this may result in a rebound of the Food Price Index in July.
FAO also lowered its forecast for 2012 world cereal production by more than 23 million tonnes from May, which is likely to result in a smaller build-up of global stocks by the end of seasons in 2013.
FAO’s new forecast for world cereal production in 2012 stands at 2 396 million tonnes, still a record level and 2 per cent up from the previous high registered last year.
Supply and demand situation adequate
According to FAO’s latest assessment, the overall supply and demand situation in 2012/13 remains adequate thanks to abundant supplies of rice, a leading food staple, and sufficient exportable supplies of wheat and coarse grains.
But grain prices were very volatile in June due to continuing dryness and above-average temperatures in most of the major maize growing regions of the United States. Adverse weather is diminishing prospects of an improvement in the maize supply situation and FAO is monitoring the development closely.
High-level event on volatility and speculation
The issue of swinging food prices will be discussed by a high-level event on “Food Price Volatility and Price Speculation” to be held at FAO on Friday, 6 July. Speakers will include Leonel Fernández, President of the Dominican Republic who will give a keynote address, and FAO Director-General José Graziano da Silva.
“FAO has been actively involved in studying food price volatility and identifying appropriate policy responses,” said Mr Graziano da Silva. “Our analytical work is helping to deepen the understanding of the nature, causes and impacts of volatility and of what governments and other stakeholders can do about it.”
The FAO Food Price Index is a measure of the monthly change in average international prices of a basket of 55 food commodities.
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11 July 2012
USDA World Agricultural Supply and Demand Estimates (WASDE) July 2012
LIVESTOCK, POULTRY, AND DAIRY:
The forecast for total meat production in 2012 is raised from last month as higher pork and poultry production more than offsets lower beef production. Although remaining below last year, hatchery data are pointing towards smaller declines in eggs set and heavier bird weights are adding to production. Turkey production is also forecast slightly higher, based on recent production data. Pork production is raised on heavier expected carcass weights. USDA’s Quarterly Hogs and Pigs report will be released on June 29 and provide an indication of producer farrowing intentions for the remainder of the year. Beef production is reduced slightly as lower steer and heifer slaughter more than offsets higher dressed weights and higher cow slaughter. Small changes are made to 2013 beef and pork forecasts, largely reflecting higher expected carcass weights. Broiler and turkey production forecasts for 2013 are unchanged. Offsetting changes are made to 2012 quarterly egg production forecasts but the annual forecasts for 2012 and 2013 are unchanged from last month.
Forecasts for 2012 beef, broiler, and turkey trade are adjusted to reflect first-quarter data. Forecasts for 2013 are unchanged from last month. Pork exports for 2012 are raised from last month on the strength of trade data to date with a slight increase in forecast exports for 2013. The cattle and turkey price forecasts for 2012 are unchanged from last month, but hog and broiler prices are reduced, reflecting larger production. Egg prices for 2012 are raised as recent prices have been stronger than expected. Prices for 2013 are unchanged.
The milk production forecast for 2012 is raised as cow numbers are expected to decline more slowly. The production forecast for 2013 is unchanged. Export forecasts are raised for both 2012 WASDE-507-5 and 2013 on expected strength in cheese and nonfat dry milk (NDM) sales. Imports on a skimsolids basis are reduced slightly on lower expected imports of several dairy products.
NDM and whey prices for 2012 are forecast lower than last month on higher production and weaker demand. However, the cheese price is raised at the low end of the range on stronger demand and the butter price range is narrowed. The Class III price forecast is lowered from last month as the weaker whey price more than offsets the slightly higher forecast cheese price and the Class IV price is lowered on the weaker NDM price. The all milk price forecast for 2012 is lowered to $16.85 to $17.25 per cwt. The all milk price for 2013 remains unchanged from last month at $17.25 to $18.25 per cwt.
WHEAT:
Projected U.S. wheat supplies for 2012/13 are lowered 51 million bushels with reduced carryin and lower forecast winter wheat production. Beginning stocks are lowered 40 million bushels with a 10-million-bushel increase in food use and a 30-million-bushel increase in exports for 2011/12. The increase in 2011/12 food use reflects higher-thanexpected flour milling during the January-March quarter as reported by the North American Millers’ Association. Exports are increased based on the strong pace of U.S. shipments during the final weeks of the old-crop marketing year.
U.S. all wheat production for 2012/13 is projected at 2,234 million bushels, down 11 million, with lower forecast winter wheat production and small reductions in forecast durum wheat production for Arizona and California. Winter wheat production is forecast 10 million bushels lower with reductions for Hard Red Winter (HRW) and Soft White Winter wheat. The largest production declines are in the HRW states of Nebraska and Colorado, but higher production for Oklahoma is partly offsetting. With reduced supplies and higher expected prices, feed and residual use is lowered 10 million bushels. Ending stocks for 2012/13 are projected 41 million bushels lower. The projected range for the 2012/13 season average farm price is raised 10 cents on both ends to $5.60 to $6.80 per bushel. This remains well below the record $7.25 per bushel projected for 2011/12.
Global wheat supplies for 2012/13 are lowered 7.0 million tons with beginning stocks lowered 1.5 million tons and world production expected down 5.5 million tons. Higher 2011/12 global consumption, fueled by increased global trade, reduces carryin for 2012/13. World production for 2012/13 is lowered reflecting reduced crop prospects in several exporting countries including Russia, EU-27, Turkey, and the United States. Russia production is reduced 3.0 million tons due to a continuation of spring dryness in key winter wheat producing areas and indications of crop development problems resulting from winter freeze damage. EU-27 production is reduced 1.0 million tons with reduced acreage in Germany, Poland, and Spain, only partly offset by higher expected yields in France and Bulgaria. Production is also lowered 1.0 million tons for Turkey as winter frost damage and disease problems reduce yields across the central growing areas on the Anatolia Plateau. Output is reduced 0.2 million tons for Syria as yield prospects decline for non-irrigated wheat in the country’s northeast.
Global wheat consumption for 2012/13 is lowered 4.6 million tons with reduced prospects for wheat feeding and food use. Wheat feeding is lowered for EU-27, Russia, and Turkey. Larger corn supplies and increased corn feeding more than offset the reduction for EU-27. Wheat food use is lowered for India, Bangladesh, and Indonesia. Increases in food use for Morocco and Turkey are partly offsetting. Global wheat exports are reduced 1.6 million tons WASDE-507-2 with a 2.0-million-ton reduction for Russia and 0.3-million-ton reductions for both Argentina and Turkey. India exports are raised 1.0 million tons as market conditions improve the competitiveness of private exports. World ending stocks for 2012/13 are projected at 185.8 million tons, down 2.4 million from last month.
COARSE GRAINS:
U.S. feed grain supplies for 2012/13 are virtually unchanged as adjustments to 2011/12 balance sheets are largely offsetting and projected 2012/13 production and use are unchanged on the month. Projected 2012/13 season average price ranges for corn, sorghum, barley, and oats are all unchanged.
Adjustments to corn usage for 2011/12 reflect the latest ethanol production and trade data. Corn used to produce ethanol in 2011/12 is projected 50 million bushels higher. Weekly ethanol production has increased since mid-April after gradually declining from the record levels of late December. The higher corn use projection assumes slightly lower ethanol production during the June-August quarter as compared with the same period last year. Corn exports are projected 50 million bushels lower as shipments and sales continue to fall off of the pace needed to reach last month’s projection. Tight domestic supplies and increased competition, especially from Brazil, are also expected to reduce U.S. export prospects during the summer months. Projected corn ending stocks for 2011/12 are unchanged, as is the 2011/12 season average farm price which remains at $5.95 to $6.25 per bushel.
Changes to the 2011/12 balance sheets for sorghum, barley, and oats are driven by the latest trade data and also mostly offsetting. Sorghum exports for 2011/12 are projected 10 million bushels lower, but offset by a 10-million-bushel increase in expected feed and residual use. Projected barley imports are raised 4 million bushels and exports are lowered 3 million bushels boosting ending stocks 7 million bushels. Oats ending stocks are projected 10 million bushels lower with projected imports lowered 15 million bushels and feed and residual use reduced 5 million bushels. Projected 2011/12 farm prices for all three feed grains are unchanged.
Global coarse grain supplies for 2012/13 are projected 4.8 million tons higher with increases in corn beginning stocks and production. Global corn beginning stocks are increased 1.6 million tons mostly reflecting higher 2011/12 production for Brazil and China. Brazil corn production is raised 2 million bushels for 2011/12. Despite lower reported area for the main season crop, the rapid expansion in area and nearly ideal weather for the second season (safrinha) crop is boosting Brazil’s corn production prospects to a record 69 million tons. Much of the expansion in safrinha corn has been in the Central West region, where corn is planted in January and a pronounced dry season typically begins by early May. This year’s rainy season extended through early June providing an additional 4 to 6 inches of beneficial rainfall for filling corn. China’s 2011/12 corn production is raised 1.0 million tons in line with recent revisions to official government estimates.
World corn production for 2012/13 is increased 4.2 million tons this month with increases in China, EU-27, and FSU-12. China production for 2012/13 is raised 2.0 million tons based on higher reported corn area as land planted to soybeans declines. EU-27 corn production is increased 1.1 million tons mostly on higher area and yields for Hungary. Production is up 0.8 million tons for Russia and 0.3 million tons for Belarus both on higher reported area. World barley production is lowered, however, with a 0.5-million-ton reduction for Turkey and 0.2- million-ton reduction for Syria.
Global 2012/13 coarse grain trade is projected higher this month on increased imports and exports of corn. Corn imports are raised for EU-27 and Indonesia. Corn exports are WASDE-507-3 increased for Russia and Belarus, both reflecting higher expected production and supplies. Higher imports and production support increased corn feeding in EU-27. Higher beginning stocks and production in China boost prospects for feeding, but a partly offsetting reduction in industrial use limits the increase in corn consumption. Russia corn feeding is lowered 0.3 million tons reflecting slower expected year-to-year growth in feed grain consumption with rising feeding efficiencies in pork and poultry production. Global corn consumption is increased 2.4 million tons. Global corn ending stocks are projected 3.4 million tons higher. Of the increase, 2.0 million tons are for China and 1.0 million tons are for Brazil.
RICE:
A reduced 2011/12 U.S. rice ending stocks forecast results in a tighter supply outlook for 2012/13. Beginning stocks for 2012/13 are reduced 4.5 million cwt to 29.5 million—down 39 percent from the previous year, and the lowest beginning stocks since 2004/05.
Production and imports for 2012/13 are unchanged at 183.0 million cwt and 22.0 million, respectively. On the 2012/13 use side, domestic and residual use is lowered 1.0 million cwt to 122.0 million because of an expected decline in rice used in the brewing of beer—a trend observed in recent years. Monthly data recently released by the U.S. Department of the Treasury confirm the downward trend in 2011/12. Rice used in the brewing of beer through March is down 11 percent in 2011/12. The 2012/13 export forecast is lowered 2.0 million cwt to 87.0 million because of reduced exportable supplies—all in long-grain rice. U.S. 2012/13 ending stocks are projected at 25.5 million cwt, down 1.5 million from last month.
Smaller projected 2011/12 U.S. imports along with larger exports reduce 2011/12 ending stocks by 4.5 million cwt. U.S. rice imports for 2011/12 are projected at 20.0 million cwt, down 0.5 million from a month ago based on U.S. Bureau of the Census data through March. The pace of imports has slowed in recent months. Rice exports for 2011/12 are raised 4.0 million cwt to 101.0 million because of a significant pickup in sales and shipments in April and early May, and an increase in food-aid. Rough rice exports for 2011/12 are reduced 4.0 million cwt to 31.0 million based on Bureau of the Census data through April and export sales data through the end of May. Conversely, milled rice exports are raised 8 million cwt (roughequivalent basis) to 70 million with large shipments to Asia.
Rough rice price forecasts for 2012/13 are unchanged from last month. The 2012/13 longgrain U.S. season average farm price is projected at $14.50 to $15.50 per cwt, combined medium- and short-grain rice price is $17.25 to $18.25 per cwt, and the all rice price is $15.30 to $16.30 per cwt. The midpoint of the 2011/12 all rice, long-grain, and combined medium- and short-grain prices are unchanged from a month ago, however, the price range is narrowed 10 cents on each end of the range for each.
Global 2012/13 rice supply and use is little changed from a month ago. Global rice production is projected at a record 466.5 million tons, up less than 100,000 tons from last month. Global 2012/13 exports are raised nearly 1.0 million tons mainly due to an increase for India, now forecast at 7.0 million, up 1.0 million from last month, but down 1.0 million from revised 2011/12. India’s 2011/12 exports are raised to a record 8.0 million tons. Import 2012/13 forecasts are raised for Iran and several African countries. Global consumption for 2012/13 is raised 1.0 million tons, primarily due to larger consumption for Iran, Vietnam, and several African countries. Global ending stocks for 2012/13 are projected at 104.2 million tons, down 0.7 million from last month, due primarily to a reduction for India.
OILSEEDS:
This month’s U.S. soybean supply and use projections for 2012/13 include lower beginning and ending stocks and reduced use. Lower beginning stocks reflect increased export and crush projections for 2011/12. Soybean exports for 2011/12 are raised 20 million bushels to 1.335 billion bushels reflecting increased global import demand, led mainly by WASDE-507-4 higher projected imports for China. Soybean crush is raised 15 million bushels mostly due to stronger domestic soybean meal use. Soybean ending stocks for 2011/12 are projected at 175 million bushels, down 35 million. With reduced supplies for 2012/13, soybean exports are projected at 1.485 billion bushels, down 20 million. Soybean crush is also projected lower due to reduced domestic soybean meal use. Ending stocks for 2012/13 are projected at 140 million bushels, down 5 million from last month.
Soybean, meal, and oil price projections for 2012/13 are unchanged this month. The U.S. season average soybean price is projected at $12.00 to $14.00 per bushel. Soybean meal and oil prices are projected at $335 to $365 per ton and 52.5 to 56.5 cents per pound, respectively.
Global oilseed production for 2012/13 is projected at 470.8 million tons, down 0.7 million from last month, mainly due to lower soybean and cottonseed production. China’s soybean production is reduced 0.5 million tons due to lower area as producers shift planting decisions toward corn. Brazil’s cottonseed production is also reduced due to lower area planted to cotton as world prices have declined in recent weeks. Other changes include reduced rapeseed production for EU-27, increased rapeseed production for Russia, increased sunflowerseed production for EU-27, and reduced cottonseed production for Australia and Egypt. Brazil’s 2011/12 soybean production is increased 0.5 million tons to 65.5 million while Argentina soybean production is reduced 1 million tons to 41.5 million.
SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is increased 341,000 short tons, raw value, compared with last month. The increase is due to higher beginning stocks and imports from Mexico. Mexico’s exports of sugar estimated for 2011/12 and projected for 2012/13 are increased due to higher production for both years. Production data for Mexico’s 2011/12 season are nearly complete, while the increase for 2012/13 is based on a favorable growing season since February.
COTTON:
This month’s U.S. cotton estimates for 2011/12 and 2012/13 show small revisions in trade, which leave 2012/13 ending stocks unchanged from last month. The 2012/13 production estimate of 17.0 million bales also is unchanged, pending further information about planted area and weather developments. Exports for 2011/12 are raised by 200,000 bales, reflecting recent strong sales and shipments, while exports for 2012/13 are reduced by 200,000 bales, due to lower expected foreign import demand. Domestic mill use is unchanged. The projected range for the 2012/13 season average price received by producers is 60 to 80 cents per pound, 5 cents below last month on each end. The world 2012/13 cotton projections include lower production, consumption, and trade relative to last month, with beginning and ending stocks projected slightly higher. World production is down 1.4 million bales, as the southern hemisphere producers of Brazil, Australia, and Argentina are expected to make further cuts in area in response to the recent sharp drop in cotton prices. World consumption is reduced about 1.0 million bales, as decreases for China and Thailand are partially offset by an increase for India. With world prices falling, China’s reserve floor price will make it increasingly difficult for mills there to be competitive producers of yarn. China’s 2012/13 imports also are reduced due mainly to larger estimated beginning stocks, accounting for most of the almost 700,000-bale reduction in world trade. World ending stocks projected at a record 74.5 million bales are raised 1 percent from last month, with China expected to hold 42 percent of the total.
The most significant revisions to the world 2011/12 cotton estimates include an increase of nearly 1.8 million bales in China’s imports, reflecting the continued strong pace of deliveries, and corresponding increases in exports for India, Brazil, Australia, the United States, and Malaysia. India’s balance sheet also is revised to reflect recent indications of higher consumption; a residual has been added for each year beginning in 2006/07 to offset a deficit in stocks that would otherwise result from the available statistics for production, consumption, and trade.
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Global Feed Industry Voices Alarm at Rising Feed Costs
26 July 2012
GLOBAL - The International Feed Industry Federation (IFIF) has voiced an urgent concern that the rise in feed and food costs will continue unabated for the foreseeable future, in large part due to the diversion of feed and food grains and oilseeds into biofuels. This will result in critical pressure on feed manufacturers worldwide and higher prices for consumers.
“The dramatic drought in the US has highlighted once again the rising prices of feed and food and it is clear that the production of biofuels is in direct competition with food supplies by using land and water that would otherwise be used to grow crops for human or animal consumption”, said Alexandra de Athayde, IFIF Executive Director.
Mrs de Athayde added: “If no virgin food or feed crops were used to produce fuel, we believe prices would come down again. Current policies aimed at subsidizing the production of grains and oilseeds based biofuels harm the consumer and threaten the sustainability of the feed and food chain globally.”
“The global challenge we face is to feed 9 billion people by 2050 and to do so sustainably. IFIF calls upon governments to reconsider subsidizing grains based biofuels in order to ensure we can use all of our feed and food production for human and animal consumption so that we meet current and future demands of 60 per cent more food by 2050.”
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3M Syrians Need Food, Crops and Livestock Assistance
02 August 2012
SYRIA - Close to three million people are in need of food, crops and livestock assistance, according to a recent assessment carried out by the United Nations and the Syrian government.
According to the FAO, of this number, around 1.5 million people need urgent and immediate food assistance over the next 3 to 6 months, especially in areas that have seen the greatest conflict and population displacement. Close to a million people need crop and livestock assistance such as seeds, food for animals, fuel and repair of irrigation pumps. Further scaling up of food and livelihoods assistance will be required over the next 12 months as the people needing nutritional support are expected to reach 3 million.
The findings are based on a Joint Rapid Food Security Needs Assessment mission conducted in June 2012 by the UN Food and Agriculture Organization (FAO), the UN World Food Programme (WFP) and Syria's Ministry of Agriculture and Agrarian Reform.
The joint mission's final report says the Syrian agricultural sector has lost a total of $1.8 billion this year as a result of the on-going crisis. This includes losses and damages to crops, livestock and irrigation systems. Strategic crops, such as wheat and barley, have been badly affected as well as cherry and olive trees, and vegetable production.
"While the economic implications of these losses are quite grave, the humanitarian implications are far more pressing," said WFP Representative in Syria Muhannad Hadi. "The effects of these major losses are first, and most viciously, felt by the poorest in the country. Most of the vulnerable families the mission visited reported less income and more expenditure - their lives becoming more difficult by the day," he said.
The assessment reports that as many as three million people are in need of assistance over the next 12 months. Large numbers of rural people of the central, coastal, eastern, northeastern and southern governorates were found to have totally or partially lost their farming assets and livestock-based livelihoods and businesses due to the on-going political crisis and insecurity, coupled with a prolonged drought.
Among those farmers needing immediate assistance, around one third of the rural population, 5 to 10 per cent are reported to be female-headed households.
"The most vulnerable families in Syria depend entirely or partly on agriculture and farm animals for food and income. They need emergency support, like seeds, repairs to irrigation systems, animal feed and healthcare," said Abdulla BinYehia, FAO Representative in Syria. "If timely assistance is not provided, the livelihood system of these vulnerable people could simply collapse in a few months' time. Winter is fast approaching and urgent action is needed before then."
Farmers have been forced to either abandon farming or leave standing crops unattended due to the unavailability of labour, the lack of fuel and the rise in fuel costs, and insecurity, as well as power cuts affecting water supply. Harvesting of wheat has been delayed in the Governorates of Daar'a, Rural Damascus, Homs and Hama. There is, thus, a great risk of losing part of the crop if there is further delay in providing assistance to these farmers.
The assessment mission also found that deforestation was on the rise with farmers turning back to the forest for fire wood due to unavailability of cooking gas and fuel. Some irrigation channels have also been clogged and damaged due to lack of labour and inaccessibility.
Far-reaching effects
Particular attention needs to be given to female-headed households and migrant workers, small farmers, Bedouins and herders. The livelihood of the migrant labourers in their places of origin is at serious threat due to lack of employment opportunities and fast depletion of their income. The sharp drop in remittances to rural households was also another blow to an already vulnerable population, especially in the northeastern and northern governorates.
Daar'a Governorate counted on remittances of nearly 200,000 migrant workers, reported the return of nearly 70 per cent of its labour force. A few families said they still have their men in Lebanon but were unable to send any remittance due to unemployment there.
With less or no income and very little savings, high recurring expenses, many mouths to feed, and fast depleting resources, these families are cutting the size and number of meals, eating cheaper lower quality food, buying food on credit, taking children out of school and sending them for work, selling livestock and other assets, and cutting back medical and education expenses.
Mr Hadi said that during the mission visit to Al Hassakeh "even the richest family in a village reported having food stock for only one more month."
WFP launched an emergency operation that started in October 2011 to cover the food needs of vulnerable people affected by the events in Syria. The operation progressively scaled up, reaching 540,000 people in July and aims to reach 850,000 people this month. WFP plans to further expand the operation as access to the affected areas allows. WFP's Syria operation is facing a funding shortfall of around $62 million on an overall budget of $103 million.
FAO has provided support since December 2011 to 9,052 small herders and farmers' households, representing some 82,000 people. FAO estimates that now around $38 million are required immediately for the next six months to help 112,500 rural households, or about 900,000 people, to ensure the autumn planting for cereals and keep livestock alive or replace lost ones.
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USDA Agricultural Prices
Reports» USDA Agricultural Prices» USDA Agricultural Prices - 31 July 2012
02 August 2012
USDA Agricultural Prices - 31 July 2012
The preliminary All Farm Products Index of Prices Received by Farmers in July, at 193 percent, based on 1990-1992=100, increased 11 points (6.0 percent) from June. The Crop Index is up 20 points (9.4 percent) but the Livestock Index decreased 1 point (0.7 percent).
July Farm Prices Received Index Advanced 11 Points
Producers received higher prices for corn, wheat, soybeans, and hogs and lower prices for cattle, grapes, broilers, and broccoli. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly movement of wheat, grapes, grain sorghum, and hay offset the decreased marketing of milk, potatoes, cantaloupes, and corn.
The preliminary All Farm Products Index is up 10 points (5.5 percent) from July 2011. The Food Commodities Index, at 178, increased 7 points (4.1 percent) from last month and increased 3 points (1.7 percent) from July 2011.
Prices Paid Index Up 1 Point
The July Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 215 percent of the 1990-1992 average. The index is up 1 point (0.5 percent) from June and 11 points (5.4 percent) above July 2011. Higher prices in July for feed grains, concentrates, nitrogen, and LP gas offset lower prices for feeder cattle, feeder pigs, diesel, and potash & phosphate.
Prices Received by Farmers
The July All Farm Products Index is 193 percent of its 1990-1992 base, up 6.0 percent from the June index and 5.5 percent above the July 2011 index.
All crops: The July index, at 233, increased 9.4 percent from June and is 10 percent above July 2011. Index increases for feed grains & hay, food grains, and oilseeds more than offset the index decreases for fruits & nuts, commercial vegetables, and potatoes & dry beans.
Food grains: The July index, at 275, is 23 percent above the previous month and 17 percent above a year ago. The July price for all wheat, at $8.31 per bushel, is up $1.61 from June and $1.21 above July 2011.
Feed grains & hay: The July index, at 302, is up 12 percent from last month and 15 percent above a year ago. The corn price, at $7.36 per bushel, is up 99 cents from last month and is $1.03 above July 2011. The all hay price, at $184 per ton, is up $1.00 from June and up $14.00 from last July. Sorghum grain, at $12.00 per cwt, is $2.44 above June and up $1.60 from July last year.
Cotton, Upland: The July index, at 126, is down 1.6 percent from June and 7.4 percent below last year. The July price, at 76.6 cents per pound, is down 0.7 cent from the previous month and 5.9 cents below last July.
Oilseeds: The July index, at 278, is up 12 percent from June and 17 percent higher than July 2011. The soybean price, at $15.60 per bushel, increased $1.70 from June and is $2.40 above July 2011.
Fruits & nuts: The July index, at 156, is down 14 percent from June and 16 percent lower than a year ago. The price decreases for peaches and oranges more than offset the price increases for pears and apples.
Commercial vegetables: The July index, at 150, is down 6.2 percent from last month and 8.0 percent below July 2011. Price declines for tomatoes, broccoli, and lettuce more than offset price increases during July for snap beans, onions, and celery.
Potatoes & dry beans: The July index, at 179, is down 0.6 percent from last month and 23 percent below July 2011. The all potato price, at $9.76 per cwt, is down 17 cents from June and $4.43 lower than last July. The all dry bean price, at $43.80 per cwt, is down 40 cents from the previous month but $9.60 higher than July 2011.
Livestock and products: The July index, at 151, is 0.7 percent below last month and down 2.6 percent from July 2011. Compared with a year ago, prices are higher for cattle, broilers, eggs, hogs, turkeys, and calves. The price for milk is lower than last year.
Meat animals: The July index, at 158, is down 2.5 percent from last month but 3.9 percent higher than last year. The July hog price, at $73.80 per cwt, is up $3.60 from June and $2.10 higher than a year ago. The July beef cattle price of $116 per cwt is down $5.00 from last month but $5.00 higher than July 2011.
Dairy products: The July index, at 127, is up 2.4 percent from a month ago but 24 percent lower than July last year. The July all milk price of $16.60 per cwt is up 40 cents from last month but down $5.20 from July 2011.
Poultry & eggs: The July index, at 159, is down 1.9 percent from June but 6.0 percent above a year ago. The July market egg price, at 76.3 cents per dozen, increased 7.5 cents from June and is 7.9 cents above July 2011. The July broiler price, at 49.0 cents per pound, is down 2.0 cents from June but 2.0 cents above a year ago. The July turkey price, at 72.4 cents per pound, is down 1.5 cents from the previous month but up 4.9 cents from a year earlier.
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USDA Feed Outlook
Reports» USDA Feed Outlook» Feed Outlook - August 2012
15 August 2012
Feed Outlook - August 2012
US feed grain supplies for 2012/13 are projected sharply lower again this month with corn production forecast 2.2 billion bushels lower and sorghum production forecast 92 million bushels lower, according to the USDA Feed Outlook.
The forecast US corn yield is reduced 22.6 bushels per acre to 123.4 bushels as extreme heat and dryness continued, and in many areas worsened, during July across the Plains and Corn Belt. Sorghum production is also forecast lower this month due to drought. Total US corn supplies for 2012/13 are projected down 2.0 billion bushels at a 9-year low. The large reduction in forecast corn supplies this month is expected to result in record-high prices, which will ration demand and lower use. Corn use is projected 1.5 billion bushels lower with large cuts in feed and residual use; food, seed and industrial use; and exports. Ending stocks are forecast down 533 million bushels to 650 million bushels, the lowest since 1995/96. Record corn prices for 2012/13 reduce projected foreign corn imports and use this month, but a record corn crop in China and 2 years of large crops in Brazil support some growth in foreign corn feed use in 2012/13.
US Feed Grain Supply Prospects Plunge
Forecast US feed grain beginning stocks in 2012/13 are raised 3.0 million tons from last month but are down 3.5 million tons from the previous year, an 11-percent reduction. US feed grain production is forecast at 285.9 million metric tons, 57.9 million below last month and 37.7 million below the 2011/12 estimate. Compared with volumes in 2011/12, production is down sharply for corn but up for sorghum, barley, and oats. This month saw sharp declines in projected production for corn and sorghum and slight gains for barley and oats. Feed grain supply is projected at 318.7 million metric tons this month, 53.5 million short of last month’s projection and 39.7 million below 2011/12.
Total 2012/13 feed grain use is projected 39.4 million metric tons lower from last month and 30.2 million short of 2011/12. This month’s reduction reflects lower estimates for feed and residual disappearance; food, seed, and industrial (FSI) use; and exports for corn and sorghum due to rationing on higher prices. Sharply lower forecast use for fuel ethanol is accompanied by declines in most other FSI categories. FSI is projected at 155.1 million metric tons in 2012/13, compared with 169.0 million in 2011/12. Exports are forecast at 35.8 million metric tons, down 8.6 million from the previous estimate and 5.2 million below last season.
The US Census Bureau issued revised numbers for calendar 2011, affecting trade estimates this month for corn and sorghum in 2010/11 and for barley and oats in 2011/12. Imports are raised slightly for 2010/11 and 2011/12 and are projected up 1.4 tons for 2012/13, with notable increases for corn and barley. Marketing year exports for feed grains in 2010/11 are raised slightly to 50.7 million metric tons, mostly reflecting a large upward revision for sorghum shipments. In 2011/12, estimated exports are raised for barley and lowered for oats based on the latest Census data, as the marketing year is over. Sorghum and corn export forecasts (the 2011/12 marketing year ends at the end of August) are also adjusted based on the pace of shipments, with corn down 10 times as much as sorghum is increased. Feed grain exports for 2011/12 are projected 1.1 million metric tons lower to 41.0 million. Ending stocks for 2011/12 are up 3.0 million metric tons to 28.7 million. Exports projected for 2012/13 are lowered 8.6 million metric tons to 35.8 million, as tight supplies and high prices affect the export market. When converted to a September – August marketing year, feed and residual use for the four feed grains plus wheat in 2012/13 is projected to total 113.1 million tons, down from 132.2 million last month and down 12 percent from the 2011/12 forecast of 128.0 million. Corn is estimated to account for 92 percent of total feed and residual use in 2012/13, up from 90 percent in 2011/12.
Projected grain-consuming animal units (GCAUs) for 2012/13 are lower than last month at 92.1 million. Estimated GCAUs for 2011/12 are also lower on the month at 93.4 million compared with July’s estimate of 93.7 million. For 2012/13, feed and residual use per animal unit is projected at 1.23 tons, down from last month’s 1.42 tons due to lower cattle carcass weights and lower hog numbers and the impact of tight feed supplies and higher prices.
As Drought Continues, Forecast Yield Is Lowered 23 Bushels per Acre
The NASS August 10 Crop Production report forecast U.S. 2012/13 corn yields 22.6 bushels per acre lower at 123.4 bushels, compared with last month’s forecast of 146 bushels. As forecast, the 2012/13 corn yield would be the lowest since 1995/96. The yield reduction, combined with lower expected harvested acres, down 1.5 million acres from last month’s projection, results in a crop of 10,779 million bushels, 2,191 million bushels lower than July’s projection and 1,580 million below last season. This forecast would result in the lowest production since 2006/07. Harvested acreage for 2012/13 is forecast at 87.4 million acres for grain, up 3.4 million from the previous year. Unusually high temperatures and well below average precipitation across much of the Corn Belt in July sharply reduced yield prospects, despite the early planted crop. As of August 5, only 23 percent of the corn crop was rated in good-to-excellent condition in the 18 major corn-producing States, down 37 percentage points from a year ago. Fifty percent of the crop was in the very poor-to-poor range, compared with 48 percent the previous week and 16 percent at this point last season, a year when yields fell below trend. Corn conditions are extremely variable, with crops in close proximity having very different yield potential.
U.S. Corn Use Expected To Slip
Tight supplies and higher prices are expected to force rationing among corn users. Total US corn use for 2012/13 is forecast down 1,495 million bushels to 11,225 million this month as a result of decreased feed and residual use, FSI use, and exports. Total FSI is projected 470 million bushels lower with corn for ethanol lowered 400 million bushels, along with declines in most other FSI categories. Feed and residual use is projected 725 million bushels lower, one of the largest declines ever, reflecting livestock producers’ reactions to record-high corn prices and reduced residual disappearance with a smaller crop. U.S. exports are reduced by 300 million bushels as high prices dampen demand and foreign feeders shift to more competitively priced corn and wheat from foreign producers.
Total corn use for 2011/12 is forecast down 115 million bushels to 12,490 million bushels this month. Food, seed, and industrial use (FSI) is reduced 65 million bushels to 6,390 million bushels. Lower use for ethanol, down 50 million bushels to 5,000 million, plus a 15-million-bushel reduction for corn used to produce glucose and dextrose, results in the lower FSI use projection. U.S. exports for 2011/12 are reduced 50 million bushels to 1,550 million. Reductions in use leave ending stocks for 2011/12 up 118 million bushels over last month’s projection. Corn prices received by farmers for 2012/13 are projected at a record $7.50-$8.90 per bushel, up more than $2.00 on both ends of the range this month. The marketing year average reflects higher prices for corn, with tighter ending stocks and tight U.S. feed grain supplies. The 2011/12 corn price range is raised $0.10 cents on the low end for an estimated range of $6.20-$6.30 per bushel.
U.S. Sorghum Production Lower
A sharp reduction in forecast yield and lower harvested acreage resulted in a reduced forecast for 2012/13 U.S. sorghum production this month. At 248 million bushels, forecast production is down 92 million from last month, but is 33 million bushels above last year’s crop estimate. Based on August 1 conditions, yield is lowered by 16.3 bushels per acre this month and is projected 6.0 bushels per acre below the last season’s historically low yield. Hot dry weather in Texas, Kansas, and Oklahoma has reduced prospects for the 2012 sorghum crop. As of August 5, 25 percent of the U.S. sorghum crop was rated good to excellent, compared with 27 percent last season and 66 percent in 2009/10.
Total use of sorghum in 2012/13 is projected down 80 million bushels this month to 250 million reflecting tight supplies. Feed and residual is cut 30 million bushels to 70 million as high prices reduce feed demand by livestock producers. Sorghum FSI use is lowered 10 million bushels to 80 million, with lower expected use for fuel ethanol. Export prospects are reduced 40 million bushels to 100 million as demand from Mexico is expected to remain strong, but high prices and tight supplies limit shipments. U.S. ending stocks are projected at 25 million bushels, 12 million bushels lower than last month’s projection and slightly less than forecast for the previous season.
Total use for sorghum in 2011/12 is forecast at 215 million bushels, unchanged from last month. Feed and residual use remains forecast at 75 million bushels. Sorghum used for ethanol is expected lower during the summer quarter, with tightening supplies cutting marketing year FSI use 5 million bushels to 85 million. Exports are raised 5 million bushels to 55 million, reflecting stronger-than-expected recent shipments. Ending stocks for 2010/11 are virtually unchanged this month at 27 million bushels.
Sorghum prices received by farmers for 2012/13 are projected higher with surging corn prices. The projected farm price range, is raised $2.00 on the low end of the range and $2.40 on the high end or the range resulting in a spread of $7.00 to $8.40. The 2011/12 average sorghum farm price is narrowed $0.05 on each end of the range to $6.05-$6.15 per bushel.
U.S. Barley Production Prospects Increase Slightly
U.S. barley production for 2012/13 is forecast at 221 million bushels, up 4 million from last month and up 65 million from 2011/12. Based on August 1 conditions, producers expect yields to average 67.6 bushels per acre, up 1.3 bushels from last month. Production is expected to recover from last season’s record lows on higher harvested acreage, which is partly offset by a lower yield as compared with last year. Area harvested for grain is forecast at 3.3 million acres, unchanged from last month’s forecast and up from 2.2 million last season. On August 5, 61 percent of this year’s U.S. crop was rated in good-to-excellent condition, compared with 72 percent a year ago.
Total projected barley supplies in 2012/13 are raised 14.3 million bushels this month to 306 million, as a result of higher production due to improved yields and higher expected imports. Domestic use is projected at 235 million bushels, 25 million bushels over last month. Exports are unchanged from last month’s projection of 10 million bushels. With gains in supply more than offset by higher use, this month’s ending stocks are projected down 11 million bushels to 61 million, compared with 60 million estimated in 2011/12.
U.S. Census Bureau revisions for calendar year 2011 increase barley exports for 2010/11 slightly. Exports for 2011/12 are raised 2 million bushels this month based on the latest trade data and revisions. Imports are raised 2 million bushels for 2011/12 to 16 million based on the same data.
Prices received by farmers for barley in 2012/13 are expected to average $5.75- $6.75 per bushel, raised 45 cents on both ends of the range this month. This compares with $5.35 per bushel reported for 2011/12. Although prices for feed barley are expected to increase largely in line with those for corn and sorghum, price gains will be moderated for malting barley, as much of the crop is produced under contract at prices established earlier in the year.
Early Maturing Oat Crop Is Second Smallest on Record
Earlier than normal plantings combined with persistent heat in June and July contributed to an early maturing 2012/13 oat crop. As of August 6, fully 87 percent of the oat crop in the nine major producing States had been harvested, up 14 percent from the previous week and up 43 percent over the same time last year.
Despite reports of droughty conditions in several of the major oat-growing areas of the United States, on July 22, the oat crop was rated as 59 percent good to excellent- -a modest improvement over conditions observed during the same time period last year. Just 12 percent of the crop in the nine-State area was rated as poor to very poor, compared with 24 percent for the same week in 2011/12.
Improved quality and increased plantings contributed to growth in the 2012/13 production estimates. The total oat crop is forecast to be 67 million bushels, an increase of 24 percent over last year’s weak harvest of just 5 million bushels. Even with significant year-to-year growth, the 2012/13 oat crop will be the second smallest on record. The 2011/12 crop was the smallest crop ever recorded.
Harvested acreage is forecast to total 1.09 million acres, an increase of 16 percent relative to last year’s harvested acreage of 0.94 million acres. Over the last 10 years, an average of 1.50 million acres of oats has been harvested; this year’s improved harvest acreage figures are still well below trend but are consistent with a 30-year decline in oat acreage.
Average yields are forecast at 61.0 bushels per acre, a modest increase over the July forecast of 59.8 bushels and an increase of 3.9 bushels over the 2011/12 estimate. Irrigation is contributing to yield gains in several States, including Texas, where a record high-yield of 54.0 bushels per acre is forecast.
Total 2012/13 oats supplies are raised slightly to a projected 217 million bushels. This compares to an estimated 215 million bushels for 2011/12. Projected oats use for 2012/13 is raised 5 million bushels to 164 million. Oats imports are projected at 95 million bushels, unchanged this month.
Revised U.S. Census Bureau figures for calendar year 2011 and the latest monthly data reduce 2011/12 oats exports 15 percent from last month to 2.43 million bushels. This compares to a revised estimate of 2.85 million bushels for 2010/11. Census data lower the 2011/12 oats import estimate 1 million bushels to 94.1 million. This is up from 85.1 million for 2010/11.
Projected FSI use for 2012/13 remains unchanged from July and is identical to the previous year’s estimate of 76 million bushels. With tight feed grain supplies and high corn prices, 2012/13 feed and residual use of oats is forecast up 5 million bushels this month to 85 million. The increase in use more than offsets the increase in production, trimming projected 2012/13 ending stocks 4 million bushels to 53 million. This is down slightly from the previous year.
Tightening domestic feed grain supplies are contributing to a higher anticipated average farm price for oats. At the projected range of $3.50-$4.50 per bushel, the 2012/13 season-average price is up $0.51 at the mid-point, compared with the previous year’s estimate of $3.49 per bushel. The average farm price for the 5 years prior to 2012/13 is $2.76 per bushel.
Poor Hay Crop Prompts Federal Response
Prolonged drought conditions continue to contribute to low soil moisture levels in many parts of the country and have resulted in the lowest hay production estimates seen in the U.S. since 1953. This year’s forecast harvest of 120.3 million tons (all hay) follows the meager harvest of 131.1 million tons 2011/12. In response to the poor hay crop, Secretary Vilsack has opened approximately 3.8 million acres of Conservation Reserve Program (CRP) lands, including higher yielding CP25 lands, for emergency haying and grazing.
Hay yields have been adversely affected by the drought and the all-hay yield is anticipated to be 2.09 short tons per acre, down from 2.36 in 2011. The 2012/13 all hay yield is about 14 percent smaller than the 10-year average yield of 2.42 tons per acre. Harvested acres for 2012/13 are forecast at 57.57 million acres, up slightly (1.94 million acres) from last year’s estimate and down very slightly from the July forecast.
Alfalfa hay production is forecast at 54.9 million tons, down more than 10 million tons relative to last year’s production of 65.3 million tons. Based on August 6 crop conditions, yields are expected to average 2.92 tons per acre, down 0.48 tons per acre from last year. If realized, this will be the lowest yield since 1988, when alfalfa yields were estimated at 2.59 tons/acre. Harvested area is forecast at 18.8 million acres, nominally changed from July and down only slightly from last year’s harvested area estimate of 19.2 million acres.
Other hay production is forecast at 65.4 million tons, and is very similar to realized production from the 2011/12 crop. Based on early August conditions, other hay yields are expected to average 1.69 tons per acre, a slight decrease from last year’s estimate of 1.81 tons per acre and the lowest yield since 1988 when a yield of 1.48 tons per acre was realized. Harvested area, forecast at 38.8 million acres, is unchanged from July but up 2.34 million acres from last year.
For the sixth year in a row, roughage-consuming animal units (RCAUs) are estimated to be down. RCAUs are expected to total 67.03 in 2012/13, a decline from the 2011/12 estimate of 67.91. With hay production dropping significantly, available supplies per RCAU also declined from 1.94 tons in 2011/12 to 1.79 tons in 2012/13. This is the lowest hay supply per RCAU ratio in more than 25 years. Scarce hay supplies have driven prices higher. The July 2012 all-hay price was $184 per ton, compared to the July 2011 price of $170 per ton. July alfalfa prices have also increased from $189 per ton last year to $198 in 2012. The July estimate for hay other than alfalfa and alfalfa mixtures is $143 per ton, up from $133 in June 2012 and up significantly from the July 2011 price of $119 per ton.
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Foreign Coarse Grain Production Decline Adds to U.S. Drop
World coarse grain production for 2012/13 is projected down 62.2 million tons this month to 1,121.4 million, with the United States accounting for 93 percent of the drop. However, foreign coarse grain production is forecast down 4.3 million tons to 835.4 million. Expected foreign corn production is down 0.6 million tons this month to 575.2 million, as several large changes are mostly offsetting. Foreign barley production prospects are down 1.2 million tons to 126.0 million, as reduced prospects for Russia and the EU are partly offset by increased output in Ukraine. Foreign millet production is cut 2.5 million tons to 30.9 million, and sorghum production is trimmed 0.3 million tons to 52.9 million due to a subpar monsoon in India. Oats, rye, and mixed grain are each up slightly this month.
Changes to foreign production prospects stem from two distinct causes. Recent weather developments have confirmed above or below trend yields in several countries. And some countries, especially in the Southern Hemisphere, are responding to recent price increases with expanded planting intentions.
EU 2012/13 corn production is forecast down 3.9 million tons this month to 61.5 million, as drought and blistering temperatures struck across key areas of the Balkans into Italy. Corn conditions along the Danube in Romania and Bulgaria had been particularly good due to ample rains in May, but dryness in June was exacerbated by extreme heat in July, devastating corn pollination. Dryness and high temperatures extended across Romania, into Hungary and Serbia, and westward into northern Italy. However, in France, growing conditions have been mostly favorable with mild temperatures and good soil moisture during pollination. EU corn production this month is projected down 2.3 million tons for Romania, 1.5 million for Hungary, 0.9 million for Italy, and 0.3 million for Bulgaria; it is increased 1.0 million for France (with some smaller adjustments in other countries). EU barley production is reduced 0.7 million tons this month to 52.9 million, mostly due to reduced prospects in Spain, where harvest reports confirm the effects of extended dryness. Ample rains across northern and parts of central Europe boost prospects slightly for rye, oats, and mixed grain.
Serbia’s (not part of the EU) 2012/13 corn production is cut 1.5 million tons to 5.5 million, Croatia’s is reduced 0.4 million to 1.7 million, and Bosnia’s is trimmed 0.2 million to 0.5 million. Europe’s dryness and scorching temperatures extended eastward from Romania across Moldova, into southern Ukraine, and across into Russia, especially around Rostov. Corn in north-central Ukraine has had milder temperatures and somewhat better soil moisture, but the poor condition of the corn in southern and eastern Ukraine supports a 3.0-million-ton reduction in 2012/13 production to 21.0 million. Russia’s corn crop is cut 0.8 million tons to 7.0 million, and Moldova’s corn crop prospects are reduced 0.4 million tons this month to 1.0 million. Russia’s dryness extends through parts of the Volga, across the Urals into Kazakhstan and Siberia. Spring barley prospects are reduced 1.0 million tons in Russia, to 14.5 million, and rye is trimmed 0.3 million to 2.7 million. Kazakh barley prospects are trimmed 0.3 million tons to 1.5 million. However, harvest reports in Ukraine support increased barley production, up 0.6 million tons to 6.6 million, and rye, up 0.2 million to 0.65 million, as growing conditions in western and northern parts of the country have been favorable.
In India, the late onset of the monsoon and reduced water supplies for irrigation have caused a reduction in coarse grain planted area. Corn production prospects are cut 2.0 million tons to 20.0 million, millet is cut 2.5 million to 10.0 million, sorghum is trimmed 0.3 million to 6.4 million, and the barley harvest is reduced slightly.
Turkey reported barley yields lower than expected, reducing production 0.3 million tons to 5.5 million. Dryness in parts of Ontario supports a small reduction in corn yields for Canada, trimming production 0.25 million tons to 12.75 million.
Excessive rains in North Korea trimmed corn yield prospects, reducing production 0.1 million tons to 1.45 million. Declining production prospects are partly offset by increased production expected in some countries due to better than average weather. The 2012/13 corn production forecast for China is raised 5.0 million tons to a record 200.0 million on expectations of enhanced yield prospects. Favorable precipitation and temperatures during June and July in the Northeast, particularly in the provinces of Heilongjiang, Jilin, and Inner Mongolia, are the primary basis for the increase. Figure 10 illustrates the deviation from normal June and July rainfall for the three aforementioned provinces weighted by harvested area. These provinces accounted for 30 percent of Chinese corn area in 2010.
Corn production prospects in Mexico are increased 0.5 million tons this month to 21.5 million, as favorable rains boosted soil moisture and attractive prices encouraged increased area planted. Algeria’s barley crop was reported up 0.2 million tons to 1.8 million, with increased yields.
Several Southern Hemisphere countries are expected to respond to high corn prices with increased planted area. In Argentina, corn area is expected to increase 6 percent in 2012/13, as corn prices are attractive. Previous USDA forecasts assumed a 6-percent decline in corn area planted, as producers were expected to shift to soybeans. It is unclear what, if any, effect the government’s export policy changes this month. Corn production is increased 3.0 million tons to 28.0 million, and barley expands 0.4 million tons to 5.8 million. Also, 2010/11 corn production is raised 1.6 million tons this month as exports and estimated domestic use indicate larger production.
Brazil’s corn production response to high international prices is expected to vary depending on region and cropping cycles. For the first or main-season crop in southern Brazil, soybean area is expected to expand at the expense of corn plantings. However, this is expected to be more than offset by the increased incentive to double crop corn after soybeans in Parana, and in regions where soybeans and corn doubled-cropped area is expanding, especially Mato Grosso and parts of the Northeast. Total corn area for 2012/13 is projected up 5 percent yearto- year, boosting production prospects 3.0 million tons this month to 70.0 million. Also, government estimates of the recently harvested second-crop corn for 2011/12 showed sharply higher than expected yields, as late rains extended into the dry season and boosted yields. Production for 2011/12 is up 2.8 million tons this month to a record 72.8 million tons. This is the first year that second-crop corn in Brazil has been bigger and higher yielding than the first crop.
South Africa is expected to respond to high prices and tight supplies with an increase in planted area, boosting projected corn production 0.5 million tons to 13.5 million.
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Increased 2012/13 Beginning Stocks Limit Drop in Supplies
Global coarse grain beginning stocks for 2012/13 are up 5.8 million tons this month to 168.5 million. About half of the increase is in foreign stocks, up 2.8 million tons to 139.8 million. The most important change is for corn in Brazil, up 2.8 million tons to 15.9 million due to increased 2011/12 production. Other changes to 2012/13 beginning stocks are smaller and offsetting. Coarse grain beginning stocks are up 0.5 million tons each for the EU and Argentina and are increased 0.3 million for Egypt, but are cut 0.5 million for Australia, 0.4 million for Mexico, and 0.3 million each for Canada and Indonesia.
Despite the severe U.S. production problems in 2012/13, projected world coarse grain supplies are only down 2 percent year-to-year to 1,289.9 million tons, and are less than a half percent less than in 2010/11. However, estimated global coarse grain use has increased for each of the last 9 years, and it will take record-high prices to reverse that growth in 2012/13.
High Prices To Reduce Global Coarse Grain Use
World coarse grain use in 2012/13 is projected down 43.1 million tons this month, a 4-percent reduction. Much of the reduction is in forecast U.S. use, but foreign consumption is projected down 12.3 million tons as high prices shrink demand. The reaction of foreign demand to the U.S. corn production shortfall is muted by several factors: (1) several countries, such as China and Brazil, have domestic production and stocks that cushion their domestic market from the full impact of international prices, (2) some countries, such as China, have tariff barriers and import quotas that limit the transmission of international prices, (3) economic growth and increased incomes is some countries support increased meat demand despite higher prices, (4) for the past several years, sustained, relatively high grain prices have encouraged importers to diversify the countries they import from, and (5) foreign export competitors have increased production and market share, leaving importers less dependent on U.S. corn. Each country has unique coarse grain supply and demand characteristics, making it uncertain how much and when the demand in that country will adjust to international prices.
Global coarse grain use in 2012/13 is expected to decline for the first time since 2002/03, slipping 0.7 percent to 1,137.8 million tons. World feed and residual use is forecast to increase year-to-year 1.4 million tons to 659.9 million, while food, seed, and industrial use declines 9.3 million tons to 477.9 million. Foreign feed use in 2012/13 is projected at 551.3 million tons, down 10.5 million from the previous month’s forecast but still up 12.7 million tons from feed use projected for 2011/12, when foreign feed-quality wheat was in ample supply in several countries. Some foreign consumers of feed, such as those in China, do not face price increases as steep as those in the United States because their internal market is at least partly isolated from world prices. In other countries, like Brazil, large domestic production limits internal price increases. In countries like Japan, consumers are accustomed to paying higher prices for meat, and derived demand for grain feed use may be relatively price inelastic.
EU 2012/13 coarse grain use is projected down 3.9 million tons this month to 149.0 million, with reduced feed and residual accounting for 3.4 million tons of the decline. Reduced corn production is expected to cause a shift in feed use to wheat, up 1.0 million tons this month, but most of the drop is expected to be caused by reduced meat production as financial losses cause a reduction in previously stagnating animal production.
India’s expected coarse grain disappearance is reduced 3.7 million tons this month due to reduced production. Feed and residual is expected to be down significantly, 1.1 million tons, as poultry and egg production is constrained by high grains and protein meal prices. However, most of the decline, 2.6 million tons, is in food, seed, and industrial use, with coarse grain food use concentrated among the rural poor. Wheat food use is increased 1.3 million tons, offsetting half of the decline. Russia’s coarse grain consumption is forecast down 1.6 million tons this month to 26.6 million, with 1.3 million in reduced feed and residual. Meat production growth is expected to stumble as numerous small pork producers in regions with grain production shortfalls are forced to reduce production.
Japan’s corn feed use forecast for 2012/13 is reduced 0.5 million tons as the previously forecast rebound in corn feeding is no longer expected to be as strong, with sharply higher feed prices.
Canada’s coarse grain use for 2012/13 is reduced 0.5 million tons this month as high grain prices trim meat production prospects. Food and industrial use of corn is projected higher this month based on upward revisions for 2011/12 industrial use. South Korea’s and Vietnam’s corn feed use are each reduced 0.5 million tons and Israel is trimmed 0.4 million as these countries are expected to import more wheat for feeding and less corn. There are also reductions in forecast coarse grain use this month for Indonesia, Turkey, Serbia, Croatia, Syria, Ukraine, Peru, Colombia, and Algeria.
Argentina’s expected coarse grain domestic use is increased 0.6 million tons this month, mostly due to expanded barley processing to support malt exports.
U.S. Stocks Sharply Lower; Brazil, China, and Argentina Increased
Global coarse grain ending stocks projected for 2012/13 are cut 13.4 million tons this month to 152.1 million. The U.S. accounts for the entire reduction as foreign stocks are forecast up 0.8 million tons to 132.9 million. While several foreign countries are expected to react to record world corn prices by drawing down stocks to cushion the effect of prices on use, in Brazil, China, and Argentina, increased production is projected to support increased stocks.
In Brazil, record 2011/12 corn production and near-record prospects for 2012/13 support corn supplies. Moreover, high interior transport costs to move corn to ports and competition with bumper 2012/13 soybean supplies for space in congested ports are expected to limit corn exports, leaving significant stocks of corn in interior locations like Mato Grosso at the end of the local 2012/13 marketing year (March 2014). Coarse grain ending stocks are forecast up 3.8 million tons this month to 17.1 million.
Argentina is expected to move much of its corn surplus into exports, but the sharply increased production still boosts expected 2012/13 ending stocks of coarse grain 0.8 million tons this month to 3.0 million.
China, with a record corn harvest in 2012/13, is expected to increase coarse grain stocks even with reduced imports. Coarse grain stocks are up 2.0 million tons this month to 61.0 million.
Egypt, with higher estimated 2011/12 corn imports, is expected to hold higher stocks in 2012/13, as beginning stocks are increased 0.3 million tons this month to 1.3 million and ending stocks are up 0.1 million to 1.1 million.
However, several countries are projected to respond to higher world prices and/or reduced local production prospects by holding lower ending stocks in 2012/13. EU coarse grain ending stocks are projected down 0.9 million tons this month to 10.0 million, less than 40 percent of the level estimated 3 years earlier. India, with large government stocks of wheat and rice, is expected to let coarse grain stocks dwindle, down 0.9 million tons this month to 0.8 million. Serbia, with corn production devastated by drought, is projected to pull coarse grain stocks to minimal levels, down 0.75 million tons this month to 0.35 million. With tight U.S. supplies of corn and sorghum, Mexico is expected to rebuild coarse grain stocks less than previously projected, with 2012/13 ending stocks prospects down 0.6 million tons this month to 1.7 million. Ukraine, with reduced corn production this month, is projected to hold lower coarse grain ending stocks, down 0.6 million to 2.3 million. Ending stocks prospects are down 0.5 million tons each for Australia and Canada, as increased export prospects for 2011/12 in Australia, and for both 2011/12 and 2012/13 for Canada, trim stocks. Smaller reductions in coarse grain ending stocks are projected this month for Russia, Indonesia, Moldova, Colombia, Algeria, and others.
U.S. Corn Exports, World Trade Prospects Severely Cut
With U.S. production prospects withered by drought, U.S. corn exports for the October-September trade year 2012/13 are cut 6.5 million tons this month to 33.5 million (a reduction of 300 million bushels to 1.3 billion bushels for the September- August local marketing year). This is the lowest level of U.S. corn exports since 1993/94, when global corn trade was 47 percent less than projected for 2012/13. World corn trade is forecast down 6.6 million tons this month to 90.9 million, as some other major corn export competitors also suffered production problems.
Ukraine’s corn export prospects are down 1.5 million tons to 12.5 million; the EU is cut in half, down 1.0 million tons to 1.0 million; Serbia is reduced 0.5 million to 1.3 million; Croatia is down 0.75 to 0.25; and Moldova is trimmed 0.25 million to 0.1 million. Offsetting most of the non-U.S. reductions are increased corn exports projected in 2012/13 for Argentina, up 2.0 million tons to 17.5 million; Brazil, up 0.5 million to 13.0 million, South Africa, up 0.3 million to 2.3 million; and Canada, up 0.2 million to 1.0 million. These countries are expected to have sufficient supplies to respond to higher corn price prospects with increased exports.
High corn prices are expected to limit imports for several countries. China’s projected imports are cut 3.0 million tons to 2.0 million as the price of foreign corn landed in southern China is expected to be unattractive compared to corn produced in China. Some of the previously bought corn for delivery to China in 2012/13 may be sold back to U.S. exporters or diverted to non-Chinese destinations with a significant profit for the Chinese trader, as those contracts were made when prices were significantly lower. EU corn import prospects are cut 2.0 million tons to 3.0 million as grain prices in the EU are not expected to be as strong as the increase in global corn prices. Corn imports are reduced 0.5 million tons each for Indonesia, Japan, South Korea, Morocco, Mexico, and Vietnam. South Korea and Vietnam are expected to replace corn with imports of feed-quality wheat. Japan is not expected to increase the portion of corn in compound feed as previously forecast. In Mexico, disease problems in poultry and the high corn prices are expected to reduce corn demand, and in Indonesia, high prices will limit imports. Israel is also expected to switch to feed quality wheat, trimming corn imports 0.35 million tons. There are smaller import reductions for Colombia, Peru, and Algeria.
The United States is expected to emerge as a significant corn importer in 2012/13. Imports, while small compared to exports, are projected up 1.2 million tons to 1.9 million (up 45 million bushels for the local marketing year to 75 million bushels). Corn seed imports are expected to increase as local seed production in several areas has been hurt by drought. The routine imports of corn from Canada are expected to increase, and some imports from other origins, such as Brazil, are expected to enter feed deficit regions such as North Carolina or California.
There are small increases in projected corn imports this month for Libya, where imports for both 2011/12 and 2012/13 are returning to traditional levels faster than expected, and for Croatia, with corn production stricken by drought.
U.S. corn exports for 2011/12 are reduced 1.0 million tons to 39.0 million (down 50 million bushels to 1.55 billion bushels for the local marketing year). The pace of sales and shipments has been exceptionally slow in recent weeks as increased prices have made U.S. corn unattractive compared to competitors’ supplies. From October 2011 through June 2012 Census corn exports reached 34.7 million tons, down just 10 percent from the previous year, but in July 2012, corn exports according to Grain Inspections reached only 2.3 million tons, down more than 40 percent from a year ago. Moreover, at the end of July, Corn Outstanding Sales for shipment during the current marketing year were also down 40 percent from last year at this time.
However, world corn trade for 2011/12 is estimated up 1.5 million tons this month to a record 98.5 million. The strong pace of recent shipments boosts Argentina’s exports 1.5 million tons to 16.0 million. Ukraine’s corn exports are up 0.5 million tons to a record 14.5 million. The pace of recent exports also supports small increases for 2011/12 for South Africa, Canada, the EU, and Serbia. The recent pace has boosted 2011/12 imports for Mexico, up 0.7 million tons to 11.2 million; Egypt, up 0.5 million to 5.5 million; and South Korea, up 0.5 million to 7.5 million.
However, there are reductions to 2011/12 corn imports for Indonesia and Syria. U.S. corn imports for 2011/12 are raised 0.1 million tons to 0.65 million (up 3 million bushels to 25 million bushels for the local marketing year). Corn imports have been unexceptional in 2011/12, consisting of mostly of routine shipments of seed and cross-border trade with Canada.
U.S. 2012/13 Sorghum Export Prospects Cut, Barley Imports Raised
U.S. sorghum exports for 2012/13 are severely reduced this month, down 1.0 million tons to 2.5 million (down 40 million bushels to 100 million bushels for the local marketing year). The sharply reduced U.S. sorghum production forecast this month limits U.S. export potential. Mexico’s imports are cut by the same amount. U.S. sorghum exports for 2011/12 are estimated up slightly this month as July 2012 export inspections to Mexico were larger than expected. U.S. exports are up 0.1 million tons to 1.4 million (up 5 million bushels to 55 million bushels). Mexico’s imports are raised to 1.2 million tons.
U.S. barley imports are raised slightly this month for both 2011/12 and 2012/13. The October-September trade year imports are up 0.1 million tons to 0.4 million for 2011/12 and are projected up 0.2 million tons to 0.5 million for 2012/13 (local June- May 2011/12 is up 2 million bushels to 16 million and 2012/13 is projected up 10 million bushels to 25 million).
Other changes to projected 2012/13 are severely reduced this month, down 1.0 million tons to 2.5 million (down 40 million bushels to 100 million bushels for the local marketing year). The sharply reduced U.S. sorghum production forecast this month limits U.S. export potential. Mexico’s imports are cut by the same amount. U.S. sorghum exports for 2011/12 are estimated up slightly this month as July 2012 export inspections to Mexico were larger than expected. U.S. exports are up 0.1 million tons to 1.4 million (up 5 million bushels to 55 million bushels). Mexico’s imports are raised to 1.2 million tons.
U.S. barley imports are raised slightly this month for both 2011/12 and 2012/13. The October-September trade year imports are up 0.1 million tons to 0.4 million for 2011/12 and are projected up 0.2 million tons to 0.5 million for 2012/13 (local June- May 2011/12 is up 2 million bushels to 16 million and 2012/13 is projected up 10 million bushels to 25 million).
Other changes to projected 2012/13 world barley trade were small, but Australia’s 2011/12 exports are revised up 0.5 million tons this month to 5.0 million, confirming it as the world’s largest barley exporter that year.
August 2012
Published by USDA Economic Research Service
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10 August 2012
USDA WASDE - August 2012
WHEAT: U.S. wheat supplies for 2012/13 are raised 54 million bushels with higher forecast production and an increase in projected imports. Production is forecast 44 million bushels higher with increased yields for winter wheat, durum, and other spring wheat. Feed and residual use is projected 20 million bushels higher, reflecting the tighter supply situation for corn. Ending stocks for 2012/13 are projected 34 million bushels higher. The projected range for the 2012/13 seasonaverage farm price is raised substantially to $7.60 to $9.00 per bushel, compared with $6.20 to $7.40 per bushel last month, as tighter foreign wheat supplies and sharply higher corn prices raise price prospects for the remainder of the marketing year.
Global wheat supplies for 2012/13 are projected 2.1 million tons lower mostly reflecting a 3.7- million-ton reduction in foreign production. A small increase in 2012/13 world beginning stocks is partly offsetting with 2011/12 updates to trade and use for a number of countries. Lower expected production in the FSU-12 accounts for most of this month’s decline in world output. Production is lowered 6.0 million tons for Russia on reduced area and yield prospects due to July heat and dryness across most of the spring wheat growing areas. Spring wheat in adjoining areas of Kazakhstan was also affected by the same adverse weather reducing production prospects 2.0 million tons. Other reductions this month include a 0.8-million-ton reduction for Turkey based on lower reported yields, a 0.5-million-ton reduction for Argentina reflecting lower expected area, a 0.3- million-ton reduction for Syria, and a 0.2-million-ton reduction for EU-27. Production is raised 2.9 million tons for India, 2.0 million tons for Ukraine, and 0.4 million tons each for Canada and Uzbekistan.
Global wheat consumption for 2012/13 is raised 3.2 million tons as a number of countries are expected to shift some of their livestock and poultry feeding from corn to wheat. Wheat feeding is raised 1.0 million tons each for EU-27 and Ukraine, 0.5 million tons each for South Korea and Vietnam, 0.3 million tons for Israel, and 0.2 million tons each for India and Thailand. Partly offsetting is a 0.5-million-ton reduction for Russia with lower expected production.
Global wheat imports for 2012/13 are raised with increases for several countries, in part, to support higher wheat feeding. Imports are raised 0.5 million tons each for EU-27, South Korea, and Vietnam, and raised 0.3 million tons for Israel. Imports are also raised 0.3 million tons for Brazil. Global 2012/13 exports are raised, but much of the shift among countries also reflects reduced export prospects for Russia, which is lowered 4.0 million tons. Exports are raised 2.0 million tons for Ukraine, 1.0 million tons each for Canada and EU-27, 0.5 million tons each for Australia, Brazil, and Pakistan. Exports are lowered 0.7 million tons for Argentina, 0.5 million tons for Turkey, and 0.2 million tons for Uruguay. World ending stocks for 2012/13 are projected 5.3 million tons lower at 177.2 million.
COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected sharply lower again this month with corn production forecast 2.2 billion bushels lower and sorghum production forecast 92 million bushels lower. The forecast U.S. corn yield is reduced 22.6 bushels per acre to 123.4 bushels as extreme heat and dryness continued, and in many areas worsened, during July across the Plains and Corn Belt. As forecast, the 2012/13 corn yield would be the lowest since 1995/96. Corn area harvested for grain is also lowered, down 1.5 million acres from the last month’s forecast that was based on the June Acreage report. The U.S. sorghum yield is forecast 16.3 bushels per acre lower at 48.6 bushels as drought stressed sorghum from the Central Plains to the Corn Belt. Sorghum harvested area is also lowered slightly.
U.S. corn production for 2012/13 is forecast at 10.8 billion bushels, the lowest since 2006/07. Relatively small increases in carryin and imports only partly offset this month’s substantial reduction in crop size. Ending stocks for 2011/12 are projected 118 million bushels higher with lower expected exports, reduced corn use for ethanol, and a small increase in imports. Imports for 2012/13 are also raised, up 45 million bushels to 75 million, reflecting strong domestic corn prices and competitively priced foreign supplies. Total U.S. corn supplies for 2012/13 are projected down 2.0 billion bushels and at a 9-year low.
This month’s large reduction in U.S. corn supplies and the sharply higher price outlook are expected to further reduce 2012/13 corn usage. Total use is projected 1.5 billion bushels lower and at 11.2 billion would be a 6-year low. The biggest reduction again this month is for feed and residual disappearance, projected down 725 million bushels. Food, seed, and industrial (FSI) use is also projected lower, down 470 million bushels, mostly reflecting a 400-million-bushel reduction in corn used to produce ethanol. Reductions in other food and industrial uses account for the remainder of the FSI decline. Ending stocks for 2012/13 are projected at 650 million bushels, 533 million lower and the smallest carryout since 1995/96. The 2012/13 season-average farm price for corn is projected at a record $7.50 to $8.90 per bushel, up sharply from the $5.40 to $6.40 per bushel projected in July. Projected farm prices for the other feed grains are also raised.
Global coarse grain supplies for 2012/13 are reduced 56.5 million tons mostly reflecting the forecast 55.7-million-ton reduction in the U.S. corn crop. Larger 2012/13 corn beginning stocks in the United States and Brazil partly offset lower U.S. and foreign coarse grain production. Brazil corn beginning stocks are raised 2.8 million tons based on higher reported production for 2011/12.
Foreign corn production for 2012/13 is mostly unchanged with increases for China, Argentina, Brazil, Mexico, and South Africa mostly offset by reductions for EU-27, Ukraine, India, Serbia, Russia, Croatia, Moldova, and Canada. Foreign sorghum production is lowered 0.3 million tons with a reduction for India. Reductions in barley production in FSU-12, EU-27, and Turkey lower global barley production 1.1 million tons. A 2.5-million-ton reduction in India millet output also lowers world coarse grain supplies.
Global 2012/13 corn trade is projected sharply lower this month in response to tighter U.S. supplies and higher prices. Corn imports are lowered for China, EU-27, Indonesia, Japan, South Korea, Mexico, Vietnam, Israel, Colombia, Peru, and Syria. In addition to the United States, corn exports are reduced for Ukraine, EU-27, and Serbia. Partly offsetting are export increases for Argentina, Brazil, South Africa, and Canada. Global corn consumption is projected 38.9 million tons lower with the United States accounting for more than three-fourths of the reduction. Foreign corn feeding drops 8.8 million tons with only part of the decline offset by higher wheat feeding. Corn feeding is lowered for EU-27, India, Canada, Japan, South Korea, Russia, Ukraine, Vietnam, Israel, and Indonesia. Global corn ending stocks are projected 10.8 million tons lower with increases for China, Brazil, and Argentina only partly making up for the large reduction in the United States and smaller reductions in a number of other countries.
RICE: U.S. total rice supplies for 2012/13 are projected at 244.4 million cwt, down 2.5 million from last month. Projected beginning stocks, imports, and production are each lowered from a month ago. USDA's first survey-based forecast of the 2012/13 U.S. rice crop is 190.0 million cwt, down 1.0 million from last month's projection, but up nearly 3 percent from the previous year. Average all rice yield is forecast at 7,196 pounds per acre, down 39 pounds per acre from last month’s projection, but up nearly 2 percent from last year. Long-grain production is forecast at 132.1 million cwt, down 1 percent from last month, while combined medium- and short-grain production is forecast at 57.9 million, up less than 1 percent from a month ago. The all rice import projection is lowered 0.5 million cwt to 21.0 million due in part to an expected slower pace of long-grain imports from South and Southeast Asia, a continuation of the trend observed in 2011/12. All rice beginning stocks for 2012/13 are lowered 1.0 million cwt to 33.5 million because of an increase in the 2011/12 export estimate to 102.0 million.
U.S. total rice use for 2012/13 is projected at 216.0 million cwt, down 2.0 million cwt from last month. All rice domestic and residual use is lowered 2.0 million cwt to 124.0 million, all in longgrain. The all rice export projection is unchanged at 92.0 million cwt, however, the rough rice component is raised 1.0 million and offset by a 1.0 million reduction in combined milled- and brownexports (rough-equivalent basis). The long-grain and combined medium- and short-grain export projections are unchanged at 60.0 million cwt and 32.0 million, respectively. U.S. all rice ending stocks for 2012/13 are projected at 28.4 million cwt, down 0.5 million from last month, and 15 percent below the previous year.
The 2012/13 long-grain U.S. season-average farm price is projected at $13.50 to $14.50 per cwt, up 50 cents per cwt on each end of the range. The combined medium- and short-grain price is projected at $15.50 to $16.50 per cwt, unchanged from a month ago. The 2012/13 all rice price is projected at $14.10 to $15.10 per cwt, up 30 cents per cwt on each end of the range. A smaller crop and tighter supplies, particularly for long-grain rice, are expected to support prices. The all rice stocks-to-use ratio at 13.2 percent in 2012/13 is the lowest since 2007/08, and the long-grain rice stocks-to-use ratio at 10.6 percent is the lowest since 2003/04.
Lower projected global 2012/13 total supply more than offsets a slight decrease in total use resulting in an expected decrease in ending stocks. Global production is lowered 1.9 million tons to 463.2 million, due primarily to forecast reductions for India, Brazil, and North Korea, which are partially offset by increases for China and South Korea. Beginning stocks are increased 0.8 million tons due to a 1.0-million-ton increase for India, which is partially offset by reductions for Brazil and Indonesia. World consumption is reduced 0.4 million tons. A 1.0-million-ton increase in China offsets an identical reduction for India. Consumption forecasts are also lowered for Brazil, North Korea, and the United States, partially offset by an increase for Indonesia. Global trade is changed little from a month ago. Global ending stocks for 2012/13 are projected at 101.8 million tons, down 0.7 million from last month, and a decrease of 3.2 million from the previous year. The largest stocks reductions for 2012/13 are for Brazil and Indonesia, each just over 0.3 million tons.
OILSEEDS: U.S. oilseed production for 2012/13 is projected at 83.4 million tons, down 9.4 million from last month, as a lower soybean production estimate is only partly offset by higher crops of peanuts and cottonseed. Soybean production for 2012/13 is projected at 2.7 billion bushels, down 358 million due to lower harvested area and yields. Harvested area is projected at 74.6 million acres, down 0.7 million from the July projection. The first survey-based soybean yield forecast of 36.1 bushels per acre is 4.4 bushels below last month’s projection and 5.4 bushels below last year’s yield. Soybean supplies for 2012/13 are projected 12 percent below last month to a 9-year low on lower production and reduced beginning stocks. Soybean exports are reduced 260 million bushels to 1.11 billion bushels. Soybean crush is also reduced as higher prices reduce domestic use and prospective exports for both soybean meal and oil. Soybean ending stocks are projected at 115 million bushels, down 15 million.
U.S. changes for 2011/12 include increased soybean crush and exports and reduced ending stocks. Crush is increased 15 million bushels to 1.69 billion reflecting increased exports and domestic use of soybean meal. Soybean exports are increased 10 million to 1.35 billion bushels reflecting strong shipments in recent weeks. Soybean ending stocks are projected at 145 million bushels, down 25 million.
Soybean and product prices for 2012/13 are all raised to record levels this month, reflecting the impact of sharply reduced soybean and corn production. The U.S. season-average soybean price is projected at $15.00 to $17.00 per bushel, up $2.00 on both ends. Soybean meal prices are projected at $460 to $490 per short ton compared with $365 to $395 last month. Soybean oil prices are projected at 53 to 57 cents per pound, up 0.5 cents on both ends.
Global oilseed production for 2012/13 is projected at 457.3 million tons, down 8.5 million tons from last month. Reductions for soybeans, sunflowerseed, peanuts, and cottonseed are only partly offset by increased rapeseed production. Lower soybean production is projected for the United States, Canada, and EU-27 due to lower yields resulting from hot, dry weather. Soybean production is raised for Brazil and Paraguay as producers are expected to respond to sharply higher prices with increased plantings. Brazil’s soybean production is projected up 3 million tons at a record 81 million. Sunflowerseed production is reduced for EU-27, Ukraine, and Moldova due to the effects of hot, dry weather during the reproductive stage of the crops. Other changes include higher rapeseed production for EU-27 and Ukraine, lower rapeseed production for China and Australia, lower peanut production for India and Indonesia, and lower cottonseed production for India.
Global oilseed and meal production, trade, and consumption for 2012/13 are all reduced this month reflecting the impact of reduced oilseed supplies and higher prices. Projected soybean imports for China are reduced 1.5 million tons to 59.5 million as domestic soybean stocks contribute a larger component of soybean meal consumption. Soybean exports for Brazil and Argentina are forecast higher but only partly offset a reduction for the United States.
SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is decreased 251,000 short tons, raw value, compared with last month. Carry-in stocks are reduced mainly due to data revisions in Sweetener Market Data, which lower 2011/12 ending stocks. Imports from Mexico are decreased due to higher sugar consumption and carryout stocks in Mexico. Total use is unchanged.
COTTON: The U.S. 2012/13 cotton supply and demand estimates include larger production and ending stocks compared with last month. Production is raised 651,000 bales to 17.7 million, up nearly 4 percent, based on USDA’s first crop survey. Domestic mill use is unchanged. Exports remain forecast at 12.1 million bales, despite the larger supply, due to reduced import demand by China. Ending stocks are now forecast at 5.5 million bales, equal to 35 percent of total use. The range for the marketing year average price received by producers is narrowed 1 cent on each end to 61 to 79 cents per pound.
This month’s world 2012/13 cotton estimates also show larger supplies and ending stocks. Beginning stocks are raised nearly 2.0 million bales in China as a result of adjustments to 2011/12 which both increase imports and reduce consumption. The higher China stocks are partially offset by lower beginning stocks in Australia, Malaysia, Pakistan, and others, resulting in a net global increase of 1.1 million bales. World production is raised 300,000 bales, as increases for the United States, China, Burkina Faso, and Mali are partially offset by lower production for India, Brazil, Argentina, and others. World consumption is reduced 820,000 bales, due mainly to reductions for China and Pakistan. World trade is reduced slightly, as lower imports by China are partially offset by small increases for several countries. World stocks are raised to 74.7 million bales, including an increase of nearly 2.4 million bales in stocks held by China; lesser increases for the United States, Pakistan, and Uzbekistan are about offset by decreases for India, Australia, and Brazil. Projected China stocks of 34.2 million bales account for 46 percent of the world stocks forecast, and assume a net increase in China’s national cotton reserve of about 20 percent during 2012/13.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2012 total red meat and poultry production is raised from last month but the forecast for 2013 is reduced as higher feed prices are expected to pressure producer returns. Beef production is raised from last month for both 2012 and 2013 due to higher expected placements in feedlots and increased dairy cow slaughter in late 2012 and during 2013. Carcass weights are forecast higher based on recent weight trends, but higher feed prices are expected to temper the increase and carcass weights are expected to be lower in 2013 compared to 2012. Pork production is reduced from last month for both 2012 and 2013. The reduction for 2012 reflects lower slaughter in the third quarter and lighter expected carcass weights through the year. As a result of high feed prices and recent hot weather, forecast pig crops are lowered in the second half of 2012 with declines continuing into 2013. Pork production is forecast lower in 2013 due to a combination of smaller hog supplies and lower expected carcass weights. Broiler production is raised in 2012 as production in the second quarter was higher than forecast last month and hatchery data points to higher than previously forecast levels of production in the third quarter. However, high feed costs are expected to result in lower broiler production in 2013. Turkey production is forecast lower in 2012 on lower second-quarter production. The production forecast for 2013 is reduced as feed prices squeeze producer returns. The egg production forecast is lowered for both 2012 and 2013.
Beef imports are reduced for 2012 based in part on weaker second-quarter data but are unchanged for 2013. Beef exports are reduced for both 2012 and 2013 as exports have slowed and tight supplies of pork and poultry are expected to support domestic beef demand. Pork and poultry exports are reduced for both 2012 and 2013.
Cattle prices are reduced from last month with the expectation of larger fed cattle marketings in both 2012 and 2013. However, prices are likely to remain strong in 2013 as total meat supplies are tight. Hog prices are raised in both years due to smaller hog supplies. Broiler prices are reduced in 2012 due to larger expected supplies and somewhat weaker demand, but for 2013, tighter supplies are expected to help support higher prices. Turkey and egg price forecasts are raised on lower production.
Milk production forecasts for 2012 and 2013 are reduced from last month as higher forecast feed prices are expected to pressure producer returns and encourage a more rapid decline in the cow herd. Milk per cow is also reduced due to tighter feed supplies. Imports for 2012 are raised on both a fat and skim-solids basis and are raised on a fat basis for 2013. Exports are raised for 2012 but exports for 2013 are reduced from last month on tighter supplies. Ending stocks are reduced. Product prices are forecast higher for 2012 and 2013 as tighter supplies support prices. With higher product prices, both Class III and Class IV price forecasts are raised. The all milk price is forecast at $17.55 to $17.75 per cwt for 2012 and $17.80 to $18.80 per cwt for 2013.
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Meeting the Greatest Global Farming Challenge
21 August 2012
ANALYSIS - The world is facing the greatest farming challenge of all time with a booming global population and a potential quadrupling of the number of people who will be able to afford to eat high quality diets.
This was the message from Dennis Avery, the director of the Center for Global Food Issues, to the 58th International Congress of Food Science and Technology in Montreal, Canada.
In his keynote speech, ‘The Future for Healthful Meat’, Mr Avery said that food demand and probably meat demand as well will double by 2050.
And he questioned how such a massive growth in demand for food and meat will be met without “displacing huge tracts of wildlife habitat and its dependent species for more low yield farming and pastures”.
Mr Avery said to meet the goals and needs of a growing population, there should be an end to subsidies and mandates for corn ethanol and biofuels, more high yield farming research aimed at rapidly tripling the food productivity of the land now in farming and opening direct conversation between farmers and consumers on the merits of intensified farming to protect wildlife.
“The reality is that the world population is set to stabilize, probably at about eight billion people, after another 34 per cent increase, and probably about 2045,” said Mr Avery.
“Affluence will instead become the biggest factor in 2050’s food requirements. I estimate seven billion affluent people then, instead of today's 1.5 billion.
“The current ‘minor’ crises over American mortgage subsidies and European overspending need to be corrected – and I predict the correction will be painful. However, capitalism and science are then poised to produce very large increases is global incomes, both in the West and in the emerging economies. There should be no reason that the Chinese cannot have dairy products and beef to go along with their pigs and poultry. There is no reason why India should not have the poultry and ice cream they crave. Africa, too, should be able to have its Green Revolution, finally. This will not come overnight, but it will almost certainly come.
“There will even be a pet challenge as people have greater affluence and fewer children. I predict that India and China will eventually add hundreds of millions more cats and dogs to their households – none of them vegetarian.”
Mr Avery told the Congress that the real challenge for farmers and their support institutions in the next 40 years will be to save the world's wildlife and wildlands as well as feeding a population of eight to nine billion.
He said the key will be to triple food yields from the current crop and pasture lands and to do this the farming sector will have to invest in intensification.
“This will be very difficult, because at the moment, the affluent publics think they want ‘organic’, ‘natural’, ‘local’ food production – the very opposite of high-yield wildlands conservation. They have been carefully taught this misconception by the intellectual elite, which was actually worried about overpopulation. Now that the world’s population growth is nearly over, we can put that worry behind us,” he said.
Mr Avery also attacked governments, largely in the developed world, for diverting grain and oilseed crops from the food bank to produce fuel.
“Food prices have shot up in recent years, severely damaging the markets for meat, milk and eggs. The real reason is simple. The United States, the European Union, Canada, and Indonesia decided – suddenly – to divert a major portion of their grain and oilseed crops to making auto fuel instead of food,” he said.
“This food diversion produced lots of inflation in food prices, but little gain in energy supplies. One-third of the US corn crop in 2011 went into ethanol production, but the true net energy gain from ethanol is only about 108 gallons worth of gasoline per acre. This means an acre of corn can fuel about seven family cars for a week instead of feeding a family for a year. Ethanol represents a pitiful solution to the energy crisis and carries with it an increased risk of hunger for the world.”
He said the diversion of land use and grains to energy production rather than food was made on a false premise that it is greener and is reducing global warming.
“Today’s high food prices have given us a peek at the world’s impending food reality with current government policies-expensive food and massive losses in global wildlife habitat – unless we shift the ‘renewable fuels’ resources back to food production,” he said.
Mr Avery forecast that, in future, food production will be stimulated by more industrial fertiliser and will also see more and safer pesticides and veterinary medicines. Crops will also rely more on irrigation systems.
However, he added that the consumer has to be convinced that this is the right way to go.
He predicted that biofuels will be “crowded out of the market” in favour of meat, milk and eggs.
“They will be pushed out by public discontent,” he said.
With food production having to rise by 70 per cent to meet the growth in population, meat consumption is expected to rise from 270 million tonnes a year to 470 million tonnes – an increase of 42 per cent.
“I expect an even higher rate of market growth for both poultry and pork than the USDA and FAO predict in the years ahead,” Mr Avery told the congress.
“In pork, I am impressed that China believes its massive pork consumption will double again as its rural incomes rise.
“I am impressed that the leader of China is saying he wants to provide milk for each school child, in a nation where milk has not been widely available until recently.
“I am impressed with the demonstrated demand growth for milk in India, and the potential for that to continue. And, with the potential sales growth for ice cream throughout the developing countries as they get electricity.
“I further believe the FAO is underestimating the meat and livestock product demand increase, probably believing that higher costs for meat and livestock production will sharply limit demand growth.”
He forecast that incomes will rise sharply to meet the prospective rise in meat and food prices.
Furthermore, higher incomes and their related luxury market potential will stimulate production efficiencies, and attract new farming, processing and infrastructure capacity investments to meet the potential demand.
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FAO Food Price Index Holds Steady
07 September 2012
GLOBAL - The FAO Food Price Index averaged 213 points in August 2012, unchanged from July.
Presenting the Index at a press conference at FAO headquarters in Rome, Director-General José Graziano da Silva said: “This is reassuring. Although we should remain vigilant, current prices do not justify talk of a world food crisis. But the international community can and should move to calm markets further,” he added.
The FAO Food Price Index spiked six per cent in July after three months of decline.
The new Index showed international prices of cereals and oils and fats changed little in August but sugar prices fell sharply, compensating for rising meat and dairy prices.
Although still high, the FAO Index currently stands 25 points below its peak of 238 points in February 2011 and 18 points below its August 2011 level. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.
The FAO Cereal Price Index averaged 260 points in August, the same as in July, with some increases in wheat and rice offsetting a slight weakening in maize. Deteriorating crop prospects for maize in the United States and wheat in the Russian Federation initially underpinned export quotations, but prices eased towards the end of the month following heavy rains in areas hardest hit by drought in the United States and the announcement that the Russian Federation would not impose export restrictions. Renewed import demand sustained international rice quotations.
Tightening supply-demand balance
Latest forecasts also confirm a significant tightening of global grain supply-demand balance in the 2012/13 marketing season. FAO's Cereal Supply and Demand Brief, published together with the Food Price Index, said global cereal production will not be sufficient to fully cover expected utilization in 2012/13, pointing to a larger draw-down of global cereal stocks than earlier anticipated.
FAO's latest forecast for world cereal production in 2012 stands at 2 295 million tonnes, down 52 million tonnes, or 2.2 per cent, from the record in 2011. This forecast is some 4 per cent below the estimate in FAO's previous report in July, largely reflecting the worsening of maize production prospects in the United States because of the widespread and severe drought.
Global cereal utilization in 2012/13 is forecast at 2 317 million tonnes, down marginally from the previous season and 2 per cent below the 10-year trend. High grain prices are seen as curbing demand, especially for production of fuel ethanol from maize.
Coarse grains
World production of coarse grains - maize, barley, sorghum, millet, rye and oats - is projected at 1 148 million tonnes, down 17 million tonnes, or 1.5 per cent, on 2011. The anticipated fall mainly reflects a smaller maize crop, which is expected to decline to 864 million tonnes in 2012, 20 million tonnes less than in 2011.
The FAO's forecast for world wheat production has also been downgraded from July. Global wheat production is anticipated to reach 663 million tonnes in 2012, down 15 million tonnes, or 2 per cent, from the previous forecast. Wheat output in the Russian Federation is forecast to decline by 29 per cent to 40 million tonnes compared to 2011, while production also looks set to fall sharply in Kazakhstan and Ukraine, by 47 per cent and 37 per cent respectively. By contrast, United States' wheat production is seen as increasing by 13.5 per cent to an above-average level of 61.7 million tonnes while record harvests are also expected in India and China.
Other food commodities
Regarding other food commodity prices, the FAO Oils/Fats Price Index averaged 226 points in August, unchanged from July. Gains in soybean oil prices and strengthening quotations for sunflower and rapeseed oils were offset by persistent weakness in palm oil values.
The FAO Meat Price Index averaged 170 points in August, up 4 points, or 2.2 per cent, from July. All meat prices rose, but most of the momentum came from the grain-intensive pig and poultry sectors. The August price increase follows three consecutive months of declines.
The FAO Dairy Price Index averaged 176 points in August, up 3 points, or 1.6 per cent, from July, sustained by increases in the prices of skim milk powder, casein, butter and whole milk powder, while cheese prices remained stable. Much of the recent strength stems from firming demand combined with production constraints in areas affected by drought and rising feed costs.
The FAO Sugar Price Index averaged 297 points in August, down 27.7 points, or 8.5 per cent, from July, and 97 points, or 25 per cent, from August last year. This month's sharp fall in sugar prices reflects an improved production outlook amid more favourable weather conditions in Brazil, the world's largest sugar exporter, supportive of sugarcane harvests, and recovering monsoon rains in India.
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USDA WASDE - September 2012
WHEAT: The 2012/13 U.S. wheat balance sheet is unchanged this month; however, small by-class adjustments are made to projected exports and stocks. Projected exports for Hard Red Winter wheat are lowered 25 million bushels with Hard Red Spring and White wheat exports raised 15 million bushels and 10 million bushels, respectively. Corresponding changes are made to projected ending stocks for these three classes. The projected range for the 2012/13 season-average farm price is lowered to $7.50 to $8.70 per bushel compared with $7.60 to $9.00 per bushel last month. Prices reported for the summer months, when producers typically market nearly half the crop, have remained well below cash bids and futures prices, suggesting substantial forward pricing by producers earlier in the year.
Global wheat supplies for 2012/13 are projected 3.1 million tons lower mostly due to lower expected production in Russia. An increase in foreign beginning stocks partly offsets the projected 4.1-millionton reduction in world wheat output. Beginning stocks are raised for Canada and Egypt, but lowered for Argentina. Production for Russia is reduced 4.0 million tons with lower reported area and reduced yields as harvest results confirm additional drought and heat damage to both the winter and spring wheat crops. Production is also lowered 0.5 million tons for adjoining Kazakhstan, which experienced the same adverse drought and heat during July and August that affected spring wheat in the central and eastern growing regions of Russia. EU-27 production is lowered 0.5 million tons mostly reflecting lower expected yields in the United Kingdom. Ukraine production is raised 0.5 million tons based on higher reported yields. Production for Afghanistan is raised 0.4 million tons mostly on higher reported area.
Global wheat consumption for 2012/13 is lowered 2.6 million tons mostly on lower wheat feed and residual use in Russia and Kazakhstan. Food use is also lowered slightly for both countries with additional reductions projected for food use in Egypt and Nigeria. Food use is raised for Afghanistan, Iran, and Libya.
Global wheat trade for 2012/13 is lowered slightly this month with imports reduced for China, Egypt, EU-27, Israel, and Nigeria. Import increases for Turkey and Iran limit the global decline in trade. Exports are reduced 2.0 million tons for Ukraine based on the recent agreement between government officials and grain traders to limit shipments because of concerns about tightening domestic supplies. Higher expected exports for Brazil, EU-27, and Turkey mostly make up for the Ukraine reduction.
World ending stocks for 2012/13 are projected 0.5 million tons lower with changes to a number of countries. The largest declines in stocks are for Russia, EU-27, China, Brazil, and Argentina. The largest increases are for Ukraine, Canada, Iran, and Turkey.
COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected higher this month with a reduction in forecast corn production more than offset by higher projected corn carryin. U.S. corn production is lowered 52 million bushels with the national average yield forecast 0.6 bushels per acre lower at 122.8 bushels. Lower yields and production in the Corn Belt and Central Plains are partly offset by increases elsewhere, particularly across the South where an early harvest is boosting available supplies.
U.S. corn supplies for 2012/13 are projected 108 million bushels higher as an increase in expected beginning stocks more than offsets lower production this month. Exports for 2011/12 are lowered 10 million bushels reflecting the slowing pace of shipments during August. Feed and residual use for 2011/12 is lowered 150 million bushels based on the record level of crop maturity and harvest progress as of September 1. State-level crop progress reports indicate that nearly 11 percent of the 2012 corn crop was harvested before the September 1 start of the 2012/13 marketing year. Based on state-by-state production forecasts from the September 12 Crop Production report, nearly 1.2 billion bushels of new-crop corn are estimated to have been available for use before the end of the old-crop 2011/12 marketing year. This is up more than 700 million bushels from a year ago. Early new-crop corn use is expected to displace use of 2011 old-crop corn and boost old-crop inventories on September 1. As a result, early new-crop usage reduces the feed and residual calculation in the balance sheet. (For a more complete discussion see Westcott and Norton, Implications of an Early Corn Crop Harvest for Feed and Residual Use Estimates, FDS-12F-01, Economic Research Service, USDA, July 2012, www.ers.usda.gov/media/828975/fds12f01.pdf .)
Total U.S. corn use for 2012/13 is raised this month with higher expected feed and residual disappearance more than offsetting lower projected exports. Feed and residual disappearance is projected 75 million bushels higher, in part reflecting higher expected September-December disappearance with the expected rise in early new-crop usage during the 2011/12 marketing year. Exports for 2012/13 are projected 50 million bushels lower with increased competition from lowerpriced South American supplies. Ending stocks for 2012/13 are projected 83 million bushels higher at 733 million. The projected range for the corn season-average farm price is lowered 30 cents on both ends of the range to $7.20 to $8.60 per bushel.
Global coarse grain supplies for 2012/13 are projected 4.0 million tons lower despite higher beginning stocks of corn in the United States and barley in Canada. Reduced corn production prospects for EU-27, Serbia, and Canada add to the decline in the United States to reduce world corn output 8.0 million tons. Higher barley production for EU-27 and Canada mostly offset reductions in oats, barley, rye, and millet production in Russia. Corn production is lowered 4.4 million tons for EU-27 with yield reductions for France, Italy, Romania, and Hungary as extended drought and heat in August further reduced production prospects across southern Europe. Serbia production is also lowered 1.2 million tons reflecting the same adverse weather conditions. Canada corn production is lowered 1.1 million tons based on the latest survey results from Statistics Canada. Global 2012/13 corn exports are lowered 1.8 million tons this month with the largest reduction for the United States. Corn exports are also lowered for Serbia and EU-27. Partly offsetting these reductions is a 1.0-million-ton increase for Brazil exports. Lower barley exports from Russia are more than offset with increases for Canada, Ukraine, and EU-27. Foreign coarse grain consumption is lowered mostly on lower corn usage. Corn feeding is lowered 4.0 million tons for the EU-27, 1.0 million tons for Canada, and 0.4 million tons for Serbia. Corn feeding is raised 0.8 million tons for Egypt. Barley feeding is raised 1.0 million tons for EU-27, 0.9 million tons for Canada, and 0.2 million tons for Iran. Barley feeding is lowered 0.5 million tons for Ukraine, and 0.2 million tons for Russia. Global corn ending stocks are projected 0.6 million tons higher with the increase for the United States partly offset by a reduction for Brazil.
RICE: U.S. 2012/13 rice supplies are increased 12.4 million cwt or 5 percent because of increases in beginning stocks and production. U.S. rice production in 2012/13 is forecast at 196.3 million cwt, up 6.3 million from last month due to both an increase in harvested area and yield. Harvested area is estimated at 2.68 million acres, up 37,000 acres. The average yield is estimated at a record 7,334 pounds per acre, up 138 pounds per acre from last month, with large increases in Arkansas and Mississippi. Long-grain rice production is forecast at 138.3 million cwt, up 6.2 million from last month. Combined medium- and short-grain production is forecast at 58.1 million cwt, up slightly from a month ago. All rice beginning stocks for 2012/13 are raised 7.6 million cwt from last month to 41.1 million (rough-equivalent basis) based on USDA’s Rice Stocks report released on August 27. The import projection is lowered 1.5 million cwt to 19.5 million, all in long-grain, as the increase in production and stocks will reduce imports.
Domestic use and exports are raised for 2012/13. Domestic and residual use is increased 2.0 million cwt to 126.0 million, largely because of a substantial increase in supplies, particularly for long-grain rice. All rice exports for 2012/13 are projected at 100.0 million cwt, up 8.0 million cwt from last month, all in long-grain rice. Larger supplies, particularly for long-grain rice, will likely pressure prices and make U.S. rice more competitive. All rice ending stocks for 2012/13 are projected at 30.9 million cwt, up 2.4 million from last month, but down 10.2 million from 2011/12.
The long-grain season-average farm price range is projected at $12.50 to $13.50 per cwt, down $1.00 per cwt on both ends of the range from last month compared to $13.40 per cwt for 2011/12. The combined medium- and short-grain farm price range is projected at $16.50 to $17.50 per cwt, up $1.00 per cwt on each end of the range from last month compared to a revised $16.50 per cwt for 2011/12. The 2012/13 all rice season-average farm price is forecast at $13.70 to $14.70 per cwt, down 40 cents per cwt on each end of the range from last month compared to a revised $14.30 per cwt for 2011/12. Larger supplies of long-grain rice will pressure prices and tighter supplies of combined medium- and short-grain rice will support prices.
Projected global 2012/13 rice supplies are raised more than the increase in use, resulting in a net increase in ending stocks from a month ago. Beginning stocks are raised 0.7 million due mostly to increases for Indonesia, Brazil, and the United States. Global rice production is projected at a near record 464.2 million tons, up 1.0 million tons from last month, primarily due to larger expected crops in China, the Philippines, EU-27, and the United States. China’s 2012/13 rice crop is increased 1.0 million tons to a record 143.0 million, as harvested area and average yield are raised. Global consumption is raised 1.3 million tons from a month ago to a record 467.7 million tons due to increases for China, the Philippines, and a number of smaller changes for other countries. Global exports are raised from a month ago largely due to an increase in the United States, which is partially offset by a decrease for Burma. Global ending stocks for 2012/13 are projected at 102.2 million tons, up 0.4 million from last month, but down 3.5 million from the previous year. Stocks are raised for Brazil, China, Indonesia, the Philippines, and the United States, and lowered for Sri Lanka and Pakistan.
OILSEEDS: U.S. oilseed production for 2012/13 is projected at 82 million tons, down 1.4 million from last month. Lower soybean and cottonseed production is only partly offset by an increase for peanuts. Soybean supplies for 2012/13 are reduced due to lower forecast production and beginning stocks. Soybean production is projected at 2.634 billion bushels, down 58 million due to lower yields in the Midwest. Soybean exports are reduced 55 million bushels to 1.055 billion mainly due to reduced supplies. Soybean crush is reduced 15 million bushels to 1.5 billion, the lowest since 1996/97. The reduction reflects lower projected soybean meal exports and domestic soybean meal consumption. Although soybean ending stocks are projected unchanged at 115 million bushels, they would fall to a 9-year low. Other changes for 2012/13 include reduced soybean oil production and ending stocks.
Soybean crush for 2011/12 is increased 15 million bushels to 1.705 billion reflecting higher-thanexpected crush reported for July. Soybean exports are increased 10 million to 1.36 billion. Residual use is lowered 10 million bushels reflecting the impact of early harvest of the 2012/13 crop in the South. Ending stocks are projected at 130 million bushels, down 15 million from last month. Other changes for 2011/12 include increased soybean oil production, exports, and ending stocks and increased domestic disappearance of soybean meal.
The U.S. season-average soybean price for 2012/13 is projected unchanged at $15.00 to $17.00 per bushel. Soybean meal prices are projected at $485 to $515 per short ton, up $25.00 on both ends of the range. Soybean oil prices are projected at 54 to 58 cents per pound, up 1 cent on both ends of the range.
Global oilseed production for 2012/13 is projected at 453.1 million tons, down 4.2 million from last month. Reductions for soybeans, sunflowerseed, and rapeseed are only partly offset by increased peanut and cottonseed production. In addition to the United States, projected soybean production is reduced for Ukraine and Canada. Early harvest results for Ukraine indicate a lower yield in part reflecting unusually hot temperatures during the growing season. Lower soybean production for Canada is based on the most recent crop survey results reported by Statistics Canada. Rapeseed production for Canada is reduced 0.9 million tons to 15.4 million based on lower yields and harvested area reported by Statistics Canada. At this level the crop is record large. Rapeseed production is also raised for the 2011 crop based on the latest Statistics Canada estimates. Other changes include higher rapeseed production for EU-27, lower sunflowerseed production for Russia, Ukraine, and EU-27, and lower cottonseed production for Brazil.
SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is decreased 36,000 short tons, raw value, compared with last month, as lower carryin stocks more than offset increased imports. Lower total imports in 2011/12, reflecting pace-to-date estimates, reduce that year’s ending stocks by 141,000 tons. Imports for 2012/13 are increased to reflect the announced refined sugar tariff rate quota. For Mexico, higher 2012/13 carryin stocks offset lower projected production reflecting lowerthan-expected government estimates of sugarcane harvest area.
COTTON: The 2012/13 U.S. cotton supply and demand estimates include slightly lower production and exports, resulting in lower ending stocks compared with last month. Beginning stocks are raised marginally, reflecting a revision to estimated U.S. 2011/12 ending stocks. The 2012/13 production estimate is reduced 3 percent, due mainly to lower estimated production for Texas and Mississippi, partially offset by increases for the Southeast. Domestic mill use is unchanged from last month, but exports are slightly lower due both to lower U.S. production and a reduction in total world imports. Ending stocks are now estimated at 5.3 million bales, equivalent to 35 percent of total use. The forecast range of 62 to 78 cents per pound for the marketing-year average price received by producers is narrowed 1 cent on each end.
An increase of nearly 2 million bales in world 2012/13 ending stocks is mainly attributable to sharply higher beginning stocks. Prior year adjustments for China, India, and Australia account for most of the increase in beginning stocks. For China, higher-than-expected 2011/12 imports and lower consumption are raising stocks by 1.3 million bales. For India, changes to the 2010/11 and 2011/12 balance sheets mainly reflect revisions published recently by India’s Cotton Advisory Board and raise stocks by 400,000 bales. World 2012/13 ending stocks are now projected at 76.5 million bales, including a revision to the India residual. Projected world stocks include 35.5 million bales for China. World 2012/13 production is lowered 82,000 bales from last month, as increases for India and the African Franc Zone are more than offset by reductions for Brazil and the United States. World consumption and imports are reduced 600,000 bales, as lower demand by China is partially offset by increases for Pakistan and others; exports are reduced for Australia, India, and the United States. The decrease in China’s consumption is consistent with the 2011/12 reduction. China’s consumption is expected to fall 2.5 percent from last season due to the government’s price support, reserve, and stock policies.
LIVESTOCK, POULTRY, AND DAIRY: The forecasts for 2012 and 2013 red meat and poultry production are reduced from last month as lower expected pork and poultry production more than offsets a higher beef production forecast. Beef production is raised in 2012 as higher fed beef and cow slaughter is forecast. The 2013 forecast is raised as higher forecast placements in second-half 2012 will result in larger fed cattle supplies in the first part of 2013. The pork production forecast for 2012 is reduced due to a slightly slower expected pace of slaughter in the third quarter and slightly lower carcass weights in the second half of the year. Pork production is reduced for 2013 as carcass weights are tempered. USDA will release the Quarterly Hogs and Pigs report on September 28, providing an indication of producer farrowing intentions into early 2013. Broiler production is reduced in both 2012 and 2013 as producer returns are expected to be pressured by higher soybean meal prices. Turkey production is raised fractionally for 2012, but the forecast for 2013 is reduced as soybean meal prices are forecast higher. Egg production is forecast lower for both 2012 and 2013 as hatching egg production is expected to reflect reduced demand from the broiler sector. Beef imports are reduced for 2012 based on the current pace of imports, but are unchanged for 2013. Beef exports are unchanged for 2012, but the forecast for 2013 is lowered as supplies will remain relatively tight and tighter poultry supplies are expected to support domestic demand. Pork exports are reduced for both years on weaker expected demand from Asia. Poultry export forecasts are unchanged for both 2012 and 2013.
Cattle prices for 2012 are raised from last month on stronger second-half demand, but the forecast for 2013 is unchanged despite higher forecast production as demand remains relatively strong. Pork prices for 2012 are forecast lower, largely reflecting current prices, but prices for 2013 are unchanged from last month. Broiler price forecasts are raised for both years as supplies are lower. Turkey and egg prices are forecast lower for 2012, reflecting current prices; forecasts for 2013 are unchanged.
The 2012 milk production forecast is reduced slightly from last month, reflecting a slower rate of growth in milk per cow in the second half of the year. The production forecast for 2013 is unchanged from last month. Skim-solids imports are raised, but the export forecast is unchanged. Product prices are forecast higher for 2012 as the milk production forecast is reduced and demand is somewhat stronger. With higher product prices, both the Class III and Class IV price forecasts are raised. For 2013, the butter price forecast is reduced slightly on weaker expected demand but forecasts for other products are unchanged. Thus, the Class II price forecast is unchanged but the Class IV price is lowered. The all milk price is forecast at $17.80 to $18.00 per cwt for 2012 and $17.85 to $18.85 per cwt for 2013.
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Global Water Crisis: an Urgent Security Issue
13 September 2012
GLOBAL - The world today faces a water crisis with critical implications for peace, political stability and economic development, experts warn in a new report issued jointly by the InterAction Council (IAC), a group of 40 prominent former government leaders and heads of state, United Nations University, and Canada’s Walter and Duncan Gordon Foundation.
“The future political impact of water scarcity may be devastating,” says former Canadian Prime Minister and IAC co-chair Jean Chrétien. “Using water the way we have in the past simply will not sustain humanity in the future. The IAC is calling on the United Nations Security Council to recognize water as one of the top security concerns facing the global community.”
“Starting to manage water resources more effectively and efficiently now will enable humanity to better respond to today’s problems and to the surprises and troubles we can expect in a warming world.”
In her foreword to the report, “The Global Water Crisis: Addressing an Urgent Security Issue,” IAC member and former Norwegian Prime Minister Gro Harlem Brundtland, underlined the danger in many regions, particularly sub-Saharan Africa or West Asia and North Africa, where critical water shortages already exist.
“As some of these nations are already politically unstable, such crises may have regional repercussions that extend well beyond their political boundaries. But even in politically stable regions, the status quo may very well be disturbed first and most dramatically by the loss of stability in hydrological patterns.”
In an exhaustive compilation of the many factors contributing to deteriorating water security worldwide, 23 eminent international water expert authors identify a host of serious security, development and social risks associated with the water crisis, including food, health, energy and equity issues.
Already, approximately 3,800 cubic kilometers of fresh water is extracted from aquatic ecosystems globally every year. With about 1 billion more mouths to feed worldwide by 2025, global agriculture alone will require another 1,000 cubic km (1 trillion cubic meters) of water per year - equal to the annual flow of 20 Niles or 100 Colorado Rivers.
It is expected that water demand in India and China alone - the world’s two most populous countries – will exceed supplies in less than 20 years.
The report anticipates new conflicts caused by changes in fundamental hydrology, with both water scarcity and flooding expected to become major trans-boundary water issues.
Water security is key to peace between the Palestinians and Israelis, and between Israel and its regional neighbours, the report adds.
It also notes that in 1950, there were 500 large dams on the planet; today, there are over 45,000. This translates to a staggering average of two large dams added daily worldwide since the Korean War.
Meanwhile, greater competition between the energy sector and other water users for already limited freshwater resources in many world regions will impact future energy development, with significant potential impacts on energy reliability and security.
The report calls on Governments and international institutions to:
•Radically reform attitudes toward water and how it is managed globally, including programs to reduce demand through conservation, efficiency, re-use and the replenishment of natural systems;
• Increase annual investment in water supply and sanitation-related efforts by approximately US $11 billion;
• Create an international governance mechanism and relevant institutions to cope with the growing number of environmental migrants foreseen in years to come;
• Create new water governance alliances between public, private and civil society sectors, emphasizing the participation of women;
• Pursue a ‘Blue Economy’ economic paradigm in which water sustainability is rewarded;
• Underline the need among government and finance leaders to understand the relationship between clean, safe water and health, development and national economic well-being.
“Water security is the foundation for food and energy security and for overall long-term social and economic development. It underpins health, nutrition, equity, gender equality, well-being and economic progress, especially in developing countries but increasingly in some of the world’s most developed countries.”
Zafar Adeel, Director of the United Nations University’s Canadian-based Institute for Water, Environment and Health said: "The main challenge facing the agricultural sector is not so much growing 70 per cent more food in 40 years, but making 70 per cent more food available on the plate. Reducing losses in storage and along the value chain may go a long way towards offsetting the need for more production.
"Although projections vary considerably, the UN Food and Agriculture Organisation estimates an 11 per cent increase in irrigation water consumption from 2008 to 2050," he notes.
"This is expected to result in a roughly five per cent increase of water withdrawals for irrigation. Although this seems a modest increase, much of it will occur in regions already suffering from water scarcity,” he says.
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Agflation Pushes Food Prices up 15 Per Cent
21 September 2012
GLOBAL - Skyrocketing agricultural commodity prices are causing the world to re-enter a period of "agflation", with food prices forecast to reach record highs in 2013 and to continue to rise well into Q3 2013, according to a Rabobank report.
Unlike the staple grain shortage of 2008, this year's scarcity will affect feed intensive crops with serious repercussions for the animal protein and dairy industries.
Luke Chandler Global Head of Agri Commodity Markets Research at Rabobank said: “The impact on the poorest consumers should be reduced this time around, as purchasers are able to switch consumption from animal protein back towards staple grains like rice and wheat. These commodities are currently 30 per cent cheaper than their 2008 peaks. Nonetheless, price rises are likely to stall the long-term trend towards higher protein diets in Asia, the Middle East and North Africa.
"In developed economies – especially the US and Europe – where meat and corn price elasticity is low, the knock-on effect of high grain prices will be felt for some time to come.”
Due to the long production cycles of the animal protein and dairy industries, the affects of grains shortages will be more sustained as herds (especially cattle) take longer to rebuild, maintaining upward pressure on food prices. However, food makes up a smaller proportion of budget spend in such countries, so the current period of agflation should not lead to the unrest witnessed in response to the shortage in 2008.
Rabobank estimates that the Food and Agricultural Organisation (FAO) Food Price Index will rise by 15 per cent by the end of June 2013. In order for demand rationing to take place, in turn encouraging a supply response, prices will need to stay high. As such Rabobank expects prices – particularly for grains and oilseeds – to remain at elevated levels for at least the next 12 months.
Government intervention
Whilst the impact of higher food prices should be reduced by favorable macroeconomic fundamentals (low growth, lower oil prices, weak consumer confidence and a depreciated US dollar); interventionist government policies could exacerbate the issue. Stockpiling and export bans are a distinct possibility in 2012/13 as governments seek to protect domestic consumers from increasing food prices.
Increased government intervention will likely encourage further increases in world commodity and food prices. Rabobank expects that localised efforts to increase stockpiles will prove counterproductive at the global level, with those countries least able to pay higher prices likely to see greater moves in domestic food price inflation. This is a vicious circle, with governments committing to domestic stockpiling and other interventionist measures earlier than usual—recognising the risk of being left out as exportable stocks decline further.
On top of that, Rabobank warns that global food stocks have not been replenished since 2008, leaving the market without any buffer to adverse growing conditions. Efforts by governments to rebuild stocks are likely to add to food prices and take supplies off the market at a time when they are most needed.
Current price inflation is the result of weather driven events in large exporting nations, principally a severe drought in the US (its worst since 1936) and similar water shortages in Russia and South America. This rally in grain and oilseed prices will have a significant knock-on effect on other F&A supply chains especially the animal protein industry, resulting in rising meat prices.
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Weekly Overview: Danes Mystified by Antibiotic Resistance in Chicken
27 September 2012
ANALYSIS - Last year, 2011, saw a sharp rise in the percentage of Danish chicken meat samples positive for bacteria with the ESBL resistance gene. This is a curious result as cephalosporins, which are associated with the development of this type of resitance, have not been used in Danish poultry production for 10 years. Fears of overuse of antibiotics hit German poultry meat consumption temporarily but the annual per-capita uptake figure has since recovered to its previous level.
Nearly half of the samples from chicken meat imported into Denmark contain ESBL bacteria and for the first time, according to the new Danish surveillance report, DANMAP, the level is almost as high in Danish chicken meat.
ESBL bacteria are among the most rapidly increasing global resistance problems. ESBL bacteria are resistant to the broad-spectrum antimicrobial agents, cephalosporins, that are widely used for treating life-threatening infections in humans.
The annual DANMAP report from 2011 shows that almost one in every two samples of both imported and Danish chicken meat contains ESBL bacteria. It is significantly more than found earlier in Danish chicken meat. In 2010, almost one in every 10 samples of Danish chicken meat was positive.
"The high occurrence of resistance to cephalosporins in chicken meat is alarming because there is a risk that bacteria are transferred from chicken meat to humans," commented Yvonne Agersø, Senior Researcher at the National Food Institute at the Technical University of Denmark.
Poultry meat consumption in Germany is reported to be stable although shifts between the types of meat and meat products might be due to varied price developments in the individual segments. With a volume of approximately 7.3 million tonnes, the demand for meat and meat products remains unchanged as compared to the previous year, according to InterMeat, a trade show that took place in Düsseldorf this week.
As the result of adverse publicity about use of antibiotics in the poultry industry, the consumption of poultry meat dropped for a short while but the latest figures point to a recovery back to about 11.5kg per person.
Taking place in Naples at the end of last week was the general assembly of a.v.e.c., the European association of poultry producers and processors. One of the issues that sparked debate was a recent report that Brazilian poultry producers have been promised a tax break by the government, which the a.v.e.c. participants consider to be unfair competition.
Jackie Linden - Senior Editor
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FAO Food Price Index up Slightly
05 October 2012
GLOBAL - Dairy, poultry and pork have helped to push the FAO Food Price Index up slightly in September 2012 by 1.4 per cent, or three points, from its level in August, following two months of stability.
The Index, based on the prices of a basket of internationally traded food commodities, climbed to 216 points in September from 213 points in August. The rise reflected strengthening dairy and meat prices and more contained increases for cereals. Prices of sugar and oils, on the other hand, fell.
The FAO Index currently stands 22 points below its peak of 238 points in February 2011, and 9 points below its level of 225 points in September 2011.
The FAO Cereal Price Index averaged 263 points in September, 1.0 per cent, or three points up from August, as gains in wheat and rice prices offset a decline in maize. While shrinking maize export availabilities and high maize prices have been leading cereal markets in recent months, tightening wheat supplies have also become a concern.
Nonetheless, international wheat prices fell towards the second half of the month, following the announcement by the Russian Federation that it would not impose restrictions on exports.
Meat Prices
The FAO Meat Price Index averaged 175 points in September, up 2.1 per cent, or four points, from August. The grain-intensive pig and poultry sectors recorded particularly strong gains, increasing by six per cent and two per cent respectively. The FAO Dairy Price Index averaged 188 points in September, up seven per cent, or 12 points, from August, representing the sharpest monthly increase since January 2011. All the five dairy products monitored saw prices rise. World demand for milk products remains firm which, combined with increasing feed costs, is underpinning world prices.
Word Cereal Harvests Revised Down
Meanwhile, FAO's latest forecasts confirm a decline in global cereal production this year from the record registered in 2011. But record harvests are expected in Low-Income Food-Deficit Countries (LIFDCs).
World cereal production in 2012 is now forecast at 2,286 million tonnes, slightly down from the 2,295 million tonnes estimated in September, according to the new issue of FAO's quarterly Crop Prospects and Food Situation report.
At the currently forecast level, world cereal production in 2012 would be 2.6 per cent down from the previous year's record crop but close to the second largest in 2008. The overall decrease comprises a 5.2 per cent reduction in wheat production and a 2.3 per cent reduction for coarse grains.
This is expected to result in a significant reduction in world cereal stocks by the close of seasons in 2013 (down by 28 million tonnes to 499 million tonnes), even with world demand sliding as a result of high prices. Production has been affected by drought in key producing areas such as the United States, Europe and Central Asia.
However, very early indications for wheat crops in 2013 are encouraging, with winter wheat planting in the northern hemisphere already well advanced under generally favourable weather conditions.
Record Harvests Expected in LIFDCs
Crop Prospects and Food Situation focuses on developments affecting the food situation of developing countries, and LIFDCs in particular.
Its forecast for the LIFDCs' 2012 aggregate cereal production points to a record level of 534 million tonnes, up 1.7 per cent from the good harvest of 2011.
Excluding India, the largest country in this group which is expected to see a stagnant total cereal harvest this year, the aggregate cereal output of the remaining 65 LIFDCs is estimated to expand by 2.9 per cent.
Nonetheless, currently high prices are expected to drive the 2012/13 cereal import bill for LIFDCs to a record $36.5 billion, compared to $35.2 billion in 2011/12.
In North Africa, wheat production declined sharply in Morocco as a result of unfavourable weather conditions. As the sub-region is highly dependent on wheat imports, the anticipated larger import bills, combined with staple food subsidies, would result in additional budgetary pressures.
In West Africa, notwithstanding favourable harvest prospects in the region, the food security situation in the Sahel is still of concern with close to 19 million people in need of continued assistance largely due to the lingering effects of last year's poor harvests.
A desert locust threat also remains a serious concern.
Improvement in East Africa
In East Africa, the overall food security situation has started to improve with the beginning of the harvest season in several countries, marked by declining food prices and improved livestock productivity due to enhanced rains. However, about 13.4 million people in the Horn of Africa are still in need of humanitarian assistance.
In Southern Africa, a prolonged dry spell caused a drop in overall cereal production in 2012, with several countries registering significant declines, including Lesotho. The lower cereal harvests have contributed to an increase in the number of food insecure.
In East Asia, the 2012 aggregate cereal harvest is estimated to exceed the record harvest of 2011. However, delayed monsoon and erratic weather conditions in some countries may dampen the final outcome. Improved harvests are expected to reduce overall cereal imports.
Syria a Major Concern
In West Asia, deteriorating food security amid civil unrest continues to be a major concern in Syria and Yemen.
In Syria, the number of people in need of urgent food assistance has increased to 1.5 million and could double by the end of the year if the current situation does not improve.
In Yemen, ten million people, or nearly half of the population, are estimated to be in need of emergency food assistance as a result of high levels of poverty, prolonged conflict and high food and fuel prices. But in Afghanistan, a bumper wheat harvest has been gathered.
In the CIS countries, cereal output has sharply dropped from last year's levels. Lower export availabilities in the region have resulted in higher regional prices and strengthened domestic prices of main staple wheat flour in importing countries.
Crop Prospects and Food Situation listed 35 countries, 28 of them in Africa, as affected by food insecurity and requiring external assistance for food.
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USDA WASDE - October 2012
WHEAT: Projected U.S. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projected exports. Production for 2012/13 is raised 1 million bushels based on the latest estimate from the September 30 Small Grains report. Feed and residual use is projected 95 million bushels higher reflecting the September 1 stocks that indicated higher-than-expected June-August disappearance. Exports are lowered 50 million bushels on the pace of shipments and sales to date and stronger expected competition. Export projections are lowered for Hard Red Winter and Soft Red Winter wheat. The projected range for the 2012/13 season-average farm price is narrowed 15 cents on both ends to $7.65 to $8.55 per bushel. Small revisions to 2011/12 feed and residual disappearance and seed use reflect recent updates to stocks and acreage.
Global wheat supplies for 2012/13 are projected 6.2 million tons lower mostly reflecting lower production for Australia, Russia, and EU-27. Production for Australia is lowered 3.0 million tons as a continuation of dryness through September during critical flowering and grain fill stages has reduced yield potential for this year’s crop. Production for Russia is lowered 1.0 million tons reflecting the latest harvest reports that indicate lower yields and harvested area for spring wheat. Production is lowered 0.8 million tons for EU-27 mostly reflecting a reduction for the United Kingdom where excessive harvest-time rainfall has reduced production. Other EU-27 country changes were smaller and mostly offsetting. Production is also reduced for Uruguay, Canada, Algeria, and Kyrgyzstan, each down 0.3 million tons based on the latest indications from government sources. Also reducing 2012/13 supplies this month is a 0.5-million-ton reduction in global beginning stocks mostly on higher 2011/12 exports for Australia. Upward revisions for 2010/11 and 2011/12 Argentina production partly offset the Australia reduction.
Global wheat consumption for 2012/13 is lowered 2.4 million tons as higher feed and residual use in the United States, Canada, and EU-27 is offset by lower wheat feeding for Russia, lower food use for India, and the reduction in Thailand and Vietnam consumption driven by reduced Australia production and exports. Australia exports are lowered 3.0 million tons for the 2012/13 local October-September marketing year and raised 1.0 million tons for the 2011/12 local year. Most of the reduction for 2012/13 is expected after June 2013 maintaining substantial competition for U.S. exports during the remainder of the 2012/13 June-May U.S. marketing year. Argentina 2011/12 exports are also raised 0.6 million tons for the local DecemberNovember marketing year further adding to pressure on U.S. exports during 2012/13.
Global wheat exports for 2012/13 are lowered 4.0 million tons with the Australia and U.S. reductions, and reductions of 1.0 million tons and 0.5 million tons, respectively, for EU-27 and Canada. Increases of 1.0 million tons each for India and Russia are partly offsetting. Smaller export changes include a 0.3-million-ton reduction for Uruguay and a 0.2-million-ton increase for Mexico. World ending stocks for 2012/13 are projected 3.7 million tons lower mostly reflecting reductions for Australia, the United States, and Russia.
COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected lower with reduced carryin and production this month. Corn beginning stocks for 2012/13 are lowered 193 million bushels based on the September 1 stocks estimate. Sorghum beginning stocks are lowered 4 million bushels also on the September 1 stocks. Forecast corn production for 2012/13 is lowered 21 million bushels with higher area more than offset by lower yields. The U.S. corn yield is forecast at 122.0 bushels per acre, down 0.8 bushels from the previous month. Lower yields in Illinois are only partly offset by increases for Minnesota and North Dakota. Forecast sorghum production is raised 6 million bushels with higher yields for Texas and Arkansas. For 2012/13, corn supplies are projected 214 million bushels lower and sorghum supplies are projected 2 million bushels higher. Barley supplies are down 6 million bushels with a small production decline from the Small Grains report and a 5-million-bushel reduction in projected imports with a smaller crop in Canada. Oats supplies are down with a 3-million-bushel reduction in output, also from the Small Grains report.
U.S. corn use for 2012/13 is lowered with a 100-million-bushel reduction in projected exports. Corn exports are lowered based on the slow pace of sales to date and strong competition from Brazil. Corn ending stocks for 2012/13 are projected 114 million bushels lower at 619 million. Projected ending stocks are raised slightly for sorghum, but lowered for oats. Barley ending stocks are projected 19 million bushels higher reflecting a 25-million-bushel reduction in expected feed and residual use based on indications from the September 1 stocks. The season-average farm price for corn is lowered 10 cents on both ends of the range to $7.10 to $8.50 per bushel based on early season cash and futures prices and prices available for forward delivery through early 2013.
Global coarse grain supplies for 2012/13 are projected 11.0 million tons lower mostly reflecting reduced corn beginning stocks in the United States and Brazil. Brazil beginning stocks are lowered with 2011/12 exports increased 4.5 million tons. Global corn production for 2012/13 is lowered 2.0 million tons with reductions for EU-27, Serbia, and the United States. Global sorghum production is raised 0.7 million tons with small increases for Australia, the United States, and several African countries. Global rye production is raised 0.5 million tons with an increase for EU-27. Offsetting these increases is a 1.8-million-ton reduction in world barley output mostly on smaller crops in Australia and Canada, and a 0.5-million-ton reduction for oats with a smaller crop in Australia.
Global 2012/13 corn exports are lowered 1.1 million tons this month with the U.S. reduction partly offset by a 1.0-million-ton increase for Brazil and a 0.5-million-ton increase for India. Imports for EU-27 are raised 2.0 million tons with the smaller crop. Global corn feeding is down 1.4 million tons. Corn and sorghum food use is raised this month for several African countries where these grains remain a staple food. Global barley feeding is lowered with reductions for Australia, Canada, EU-27, and the United States. Barley feeding is raised for Saudi Arabia. Global coarse grain ending stocks for 2012/13 are lowered with projected corn ending stocks down 6.7 million tons on reductions for Brazil and the United States.
RICE: U.S. rice production in 2012/13 is forecast at 198.9 million cwt, up 2.5 million from last month with the increase entirely due to higher yield. The average all rice yield is a record at 7,428 pounds per acre, up 94 pounds from last month. Yields are raised in all States but Missouri where the yield is unchanged from a month ago. Record yields are forecast for Arkansas, Louisiana, and Texas. Harvested area is unchanged at 2.68 million acres. Both long-grain and combined medium- and short-grain rice production are raised from last month, with long-grain production projected at 140.1 million cwt and combined medium-and short-grain production at 58.8 million. The all rice import forecast is unchanged at 19.5 million cwt. Domestic and residual use for 2012/13 at 127.0 million cwt is up 1.0 million from a month ago. Total rice exports are projected at 100.0 million cwt, unchanged from last month. All rice ending stocks are projected at 32.4 million cwt, up 1.5 million from last month.
The 2012/13 long-grain season-average farm price range is projected at $13.20 to $14.20 per cwt, up 70 cents on each end of the range from last month. The combined medium- and shortgrain farm price range is projected at $16.50 to $17.50 per cwt, unchanged from a month ago.
The all rice season-average farm price is forecast at $14.20 to $15.20 per cwt, up 50 cents on each end of the range. Long-grain rice prices will be supported in part by expected stronger prices among South American competitors including Argentina, Brazil, and Uruguay. Competition in the medium-grain market is expected to be stronger as the U.S. will face competition from both Egypt and Australia for limited international markets. Egypt lifted the rice export ban as of October 1, 2012. Australia’s 2012/13 rice area is expected to expand by 11 percent from the previous year as irrigation supplies are plentiful.
Global total use of rice for 2012/13 is raised more than the increase in total supplies resulting in a slight decline in world ending stocks. World rice production is raised 0.9 million tons to a record 465.1 million, up slightly from the previous year. The boost in production is due mostly to a 1.0-million-ton increase in India’s crop to 99.0 million tons. Favorable late-season monsoon rains in India’s eastern and northeastern rice areas benefitted kharif rice. Additionally, the late season rains should also benefit India’s rabi rice crop. Rice crops are also increased in Australia, Egypt, Japan, and the United States, and dropped in Uruguay and several SubSaharan African countries. Global consumption is raised 0.9 million tons to a record 468.6 million, with most of the increase in China, India, and Nigeria, partially offset by decreases for Bangladesh, Egypt, and Tanzania. Global exports are raised 0.4 million tons, with increases for Egypt and India, partially offset by reductions for China and Uruguay. Imports are raised for Sub-Saharan Africa and the Middle East. Global 2012/13 ending stocks are projected at 102.0 million tons, down 0.3 million from last month, and 3.5 million below 2011/12. Forecast ending stocks are lowered for Bangladesh and India, but increased for Nigeria.
OILSEEDS: U.S. oilseed production for 2012/13 is projected at 88.2 million tons, up 6.2 million from last month. Soybean production is forecast at 2.860 billion bushels, up 226 million based on higher harvested area and yield. Harvested area is raised 1.1 million acres to 75.7 million. The soybean yield is projected at 37.8 bushels per acre, up 2.5. Soybean supplies for 2012/13 are projected 10 percent above last month on both increased production and beginning stocks. Peanut and cottonseed production are also projected higher this month.
U.S. soybean exports for 2012/13 are raised 210 million bushels to 1.265 billion reflecting increased supplies, lower prices, and the record pace of export sales through early October. Soybean crush is raised 40 million bushels to 1.540 billion mostly due to increased soybean meal exports and increased soybean supplies. Soybean crush is also supported by an increase in domestic disappearance of soybean oil which reflects the impact of the increase of the biodiesel mandate for 2013 recently announced by the Environmental Protection Agency. Soybean ending stocks are projected at 130 million bushels, up 15 million from last month.
Prices for soybeans and products are all reduced this month. The U.S. season-average soybean price range for 2012/13 is projected at $14.25 to $16.25 per bushel, down $0.75 on both ends of the range. The soybean meal price is projected at $470 to $500 per short ton, down $15 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, down 1 cent on both ends. Global oilseed production for 2011/12 is projected at 457.7 million tons, up 4.6 million from last month as higher soybean and cottonseed production more than offset reduced rapeseed production. Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. A small increase for India soybean production is offset by a small reduction for Canada based on the latest survey information from Statistics Canada. Rapeseed production is reduced for Canada based on lower yields reported in the most recent survey from Statistics Canada. Early excess moisture resulted in delayed planting which was followed by dry conditions and heat during flowering, leading to the lowest yields since 2007. Rapeseed production is also reduced for Australia. Other changes include increased cottonseed production for China, India, and Pakistan.
Revisions to the world 2012/13 oilseeds estimates include reduced soybean exports for Brazil and Argentina, increased soybean imports for China and Mexico, and increased soybean crush for Argentina, China, and Mexico. Lower rapeseed exports for Canada and Australia are partly offset by reduced imports for several countries including China, EU-27, Japan, and Mexico. Global oilseed stocks for 2012/13 are increased 3.6 million tons to 64 million. Soybeans account for most of the change, with higher stocks in Argentina, Brazil, China, and the United States.
SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is increased 122,000 short tons, raw value, compared with last month, due to higher carry-in stocks and a small increase in imports from Mexico. The increase in 2011/12 ending inventories is a result of higher-thanexpected production and lower total use more than offsetting lower imports. These 2011/12 changes are mainly the result of end-of-year final estimates. For 2012/13, U.S. exports are increased 25,000 tons, in line with an increase in Mexico’s imports. For Mexico, higher 2012/13 carryin stocks and imports are nearly offset by higher expected deliveries of sugar for the products re-export program.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2013 red meat and poultry production is raised slightly as higher pork and poultry production more than offsets lower beef production. Lower expected cattle placements in the third quarter will manifest itself as slightly lower supplies of fed cattle in early 2013. The recent Quarterly Hogs and Pigs report estimated a small decline in the June-August pig crop and indicated that producers intend to reduce farrowings through early 2013, but it is expected that continued growth in pigs per litter will mitigate much of the decline in farrowings. The forecast for 2013 poultry production is raised slightly. For 2012, the total meat production forecast is reduced on lower beef and broiler production forecasts, although pork and turkey are forecast higher. Egg production is forecast higher for both 2012 and 2013 based on hatchery data.
Beef imports are reduced for 2012 based on a slower pace of imports from Canada, but are unchanged for 2013. Beef exports are unchanged for 2012 and 2013. Pork exports are unchanged for 2012, but are raised slightly on expected late 2013 improvements in sales. Imports are reduced slightly for 2013. Poultry export forecasts are unchanged for both 2012 and 2013.
Only small changes are made to 2012 livestock and poultry prices, generally reflecting small adjustments to fourth-quarter prices. Cattle and hog prices for 2013 are unchanged, but the broiler price is tightened at both ends of the range and the turkey price is lowered at the high end of the range.
The 2012 milk production forecast is reduced from last month, as slower growth in milk per cow more than offsets a slower expected decline in cow numbers. Higher forecast milk prices in late 2012 and into 2013 are expected to slow the rate of decline in cow numbers and help support higher growth in milk per cow in 2013. Thus, the production forecast for 2013 is raised. Imports are forecast higher for both 2012 and 2013. Fat basis exports for 2012 are lowered but skimsolids exports are forecast higher. Exports for 2013 are unchanged from last month.
Product prices are forecast higher for 2012 and 2013 as recent strength in dairy product demand is expected to carry into 2013. Forecasts for butter, cheese, nonfat dry milk, and whey are raised from last month. With higher product prices, both the Class III and Class IV price forecasts are raised. The all milk price is forecast at $18.50 to $18.60 per cwt for 2012 and $19.00 to $19.90 per cwt for 2013.
COTTON: This month’s 2012/13 U.S. cotton supply and demand estimates include slight revisions, resulting in an increase of 300,000 bales in forecast ending stocks. Production is raised 178,000 bales from last month to 17.3 million, due mainly to increases in the Mississippi Delta states. Domestic mill use is unchanged, but exports are reduced based on lower forecast imports by China. The forecast range for the 2012/13 marketing year average price received by producers of 62 to 74 cents per pound is lowered 4 cents on the upper end of the range, reflecting lower prices in recent months. In addition, the final 2011/12 marketing year average price is pegged at 88.3 cents per pound.
A combination of sharply higher production and reduced consumption raises projected 2012/13 world ending stocks by 2.6 million bales this month. Production is raised mainly in India, China, Brazil, Pakistan, and the United States. Consumption is reduced 2.0 million bales for China as the high domestic support price continues to erode offtake. However, about three-fourths of the China reduction is offset by increased spinning use in other countries with access to lower cost raw material, including India, Turkey, Pakistan, Indonesia, Taiwan, and Vietnam. World trade is reduced marginally as a reduction of 1.0 million bales in China’s imports is mostly offset by increases for other countries. World stocks are raised to 79.1 million bales, including 37 million bales projected for China.
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World Food Day Raises Concerns over High Food Prices
16 October 2012
GLOBAL - This year's World Food Day - today, 16 October - coincides with international concerns about food prices, writes Charlotte Johnston.
First held in 1979 to raise awareness of food security and agricultural issues, World Food Day is celebrated during the annual Committee on World Food Security, which meets this week in Rome, to discuss solutions to skyrocketing food prices.
Tonight across the world, 870 million people - more than one and a half times the population of the European Union - will go to bed hungry. And with food prices expected to continue upwards it would appear this problem will only get worse.
Extreme weather conditions have pushed global food prices close to their highest ever levels.
This is likely to spark the food versus fuel debate, with the European Commission set to propose a five per cent cap on food-based biofuels this week.
But as well as responding to the current crisis, how can we prevent this happening again?
Focus on agricultural co-operatives
Agricultural co-operatives are the focus of World Food Day 2012. It hopes to highlight the role of cooperatives in improving food security and contributing to the eradication of hunger.
Cooperatives are an important piece of achieving food security for all. Seventy per cent of those who face hunger live in rural areas where agriculture serves as the economic mainstay. Smallholder farmers are central to addressing hunger, yet many face barriers such as a lack of infrastructure, outdated farming practices and a lack of access to financial services.
Cooperatives improve farmers’ agricultural productivity and equip them with access to marketing, savings, credit, insurance, and technology. Farmer cooperatives serve both to connect farmers to markets and to increase food production.
It is estimated that one billion individuals are members of cooperatives worldwide, generating more than 100 million jobs around the world. In agriculture, forestry, fishing and livestock keeping, members participate in production, profit-sharing, cost-saving, risk-sharing and income-generating activities, which lead to better bargaining power for members as buyers and sellers in the marketplace.
Charlotte Johnston - Editor
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Food Scares Boost Organic Food Sales
26 October 2012
CHINA - While recent food scare issues have been well documented in China, new research from Mintel on consumer lifestyles there reveals that consumers are employing a variety of self protection strategies, with the organic food sector being the major beneficiary - with 80 per cent of urban Chinese consumers claiming that organic food and drink products are worth paying more for.
Indeed, it appears that Chinese consumers are buying more organics and today, some 56 per cent of urban Chinese consumers claim to have upped their spend on organics. Over half (56 per cent) of urban Chinese consumers purchased organic fresh foods in the past year and over one in five (22 per cent) purchased organic frozen. Fresh milk (purchased by 37 per cent of Chinese urban consumers), Cooking Oil (35 per cent), Pork (33 per cent), Beef (26 per cent) and Chicken (26 per cent) are the top five categories where Chinese consumers have purchased organic food. Supermarkets are the most common purchase channel with 75 per cent of consumers buying organic products from a supermarket, followed by 51 per cent shopping for organics at a hypermarket.
Paul French, Chief China Market Strategist at Mintel, said: “The fact that Chinese consumers claim to have upped their spend on organics indicates a growing awareness of organic as a possible means of self protection. In a world where food contamination, spoilage, fake goods and poisoned products are a daily news story, how do you protect yourself, your children or your family? This is a major question for Chinese people and consumers are adopting multiple self-protection strategies in the face of the deluge of food scares that just keep on coming."
"The significant rise in consumption of organic foods illustrates the extent to which (higher income) consumers will embrace any opportunity to buy and ‘consume’ foods they perceive to have stronger provenance or origins in the way that it was grown and sourced. The success of foods grown and produced for export, and those foods from ‘trusted’ foreign sources, are providing a level of ‘confidence’ that is seeing consumers engage more effectively with the brands.” Mr French continues.
There were seven major food scares in China during 2011, and they reflect the range and scope of the challenge that the food and drink market faces. Food scares around tainted infant formula have definitely made their mark and today nearly half (43 per cent) of urban Chinese consumers say that they check the label of infant formula products.
However, despite repeated scares about false product claims on packaging in China, some 87 per cent are also likely to spend more on foods labelled as “all-natural”. And it seems checking packaging information and labelling is also an important protection tool for consumers - and today 97 per cent of urban Chinese consumers say that they check the sell by date stamp before purchasing food and drink. Indeed, claim checking remains an important issue, with some 87 per cent of consumers checking consumption instructions, 82 per cent storage instructions, 78 per cent checking the Net Content, 67 per cent the country of origin, 67 per cent the name and address of the manufacturer and distributor and 66 per cent the industry certification label. Brand also remains a key issue - with 92 per cent claiming they would check this.
“As China’s food scares crisis persists, companies continue to seek effective strategies to ensure that their products do no harm. However, a food scare is a many-headed hydra – farmers, logistics suppliers, food manufacturers, packagers and retailers are all weak points in a very weak chain. Brands can tap into this by ensuring their own supply chain is safe and that their customers’ trust is retained. The alternative is, at best, reduced sales and, at worst, criminal liability. Food safety in China is now a very serious business, not just for consumers but also for manufacturers and brands.” Mr French concludes.
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China Has Invested Over Six Trillion Yuan Into Agriculture
02 November 2012
CHINA - To promote the development of its agricultural sector, China invested more than six trillion yuan ($930 billion) during the decade from 2003 to 2012, the highest in the country's history, according to the Ministry of Finance.
Over that time, expenditure on the sector from the central budget jumped from 214 billion yuan in 2003 to 1.2 trillion yuan, with an annual increase of more than 21 per cent, according to the ministry.
The financial support facilitated the implementation of policies and measures that contributed to a system to improve farmers' livelihoods and incomes as well as the country's agricultural output, the ministry said.
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Agricultural Sector Grows by 1.9 Per Cent
13 November 2012
PHILIPPINES - The country’s agriculture sector has a total value of P956 billion at current prices, as it grew by 1.93 percent during the first nine months of the year, the Department of Agriculture said.
In a statement, Agriculture Secretary Proceso J. Alcala said the modest growth was led by the crops, livestock and poultry subsectors, citing estimates by the DA’s Bureau of Agricultural Statistics (BAS), during a media briefing at the sidelines of the ninth National Organic Agriculture Congress in Cebu City.
The crops subsector, which accounted for 50.7 per cent of total output, increased by 3.33 per cent, as palay (paddy rice) and corn production grew by 6.9 per cent and 7.5 per cent, respectively, during the first nine months of 2012 versus the same period last year.
Total palay harvest amounted to 11.5 million metric tons (MMT), while corn output was estimated at 5.9 MMT.
The BAS said the Ilocos region recorded improvement in yield, early harvests and more plantings during the period. Early plantings were encouraged in support of the ‘5-in-2’ program of the DA and National Irrigation Administration (NIA) in Cagayan Valley, while Central Luzon recovered from last year’s crop damage due to typhoons.
“Our efforts are paying off,” said Mr Alcala, as he expressed confidence that total palay harvest for the entire year could reach 18 MMT, with a forecast production of roughly 6.5 MMT for the 4th quarter palay crop.
He said the projected fourth quarter palay output would include those from 100,000 hectares under the third cropping scheme, where thousands of farmers were encouraged to plant in September, as the DA through the Philippine Crop Insurance Corporation (PCIC) provided free crop insurance coverage of P10,000 per hectare, and the DA through its National Rice Programme offered free certified seeds to participating farmers. The initiative was undertaken in partnership with Irrigators’ Associations (IAs), covering areas served by major irrigation systems under the supervision of the DA-NIA.
As for other major crops, the BAS said higher production levels were registered by coconut, pineapple, coffee, tobacco and rubber. The crops sector grossed P566B at current prices.
The livestock subsector, which shared 15.6 per cent to total agricultural output, grew by 0.86 per cent, with a gross value of P150.9B.
The poultry subsector continued to post positive gains at it further increased by 4.6 per cent, with a total production worth P121.7B. The sector contributed 14.3 per cent to total output during the first nine months of 2012.
Finally, the fisheries subsector dipped by 2.5 per cent as commercial fishery catch continued to decline. The BAS said it was due to a combination of factors that included a ‘fish moratorium’ in Zamboanga Peninsula, lesser fishing efforts in several areas (Cagayan Valley, Quezon province, Western and Eastern Visayas, and Soccsksargen) due to rough seas, unstable fuel prices, and lesser appearance of some species.
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FAO Food Outlook: Meat and Meat Products
Thursday, November 22, 2012
Global meat markets are challenged by high feed prices, stagnating consumption, and falling profitability, with growth in total output slowing down to two per cent, according to the FAO Food Outlook report for November 2012. With international prices close to record highs, growth in world trade is also decelerating.
Meat and Meat Products: Market Summary
Struggling with high feed prices and stagnating consumption, global meat production in 2012 is forecast to grow by less than two per cent to 302 million tonnes. As falling industry profitability has translated into modest output gains in the developed countries, most of the world expansion is likely to take place in the developing countries, which now account for 60 per cent of world output. Virtually all of the sector growth in 2012 is forecast to stem from the feed-dependent poultry and pig meat sectors, as gains in both bovine and sheep meat outputs are anticipated to be modest.
World meat market at a glance
Concerns about the profitability of the meat sector have been compounded by a weakening of the growth of export markets, with trade expansion anticipated to slow down to two per cent from eight per cent in 2011. Global meat exports are expected to edge up by about 600 000 tonnes to 29.4 million tonnes in 2012, mainly sustained by increased poultry and pig meat flows and with much of the market expansion likely to be captured by developing countries, in particular Brazil and India.
Escalating feed prices and slowing meat production growth have pushed up international meat prices in late 2012, to levels approaching the highs attained in 2011. Accordingly, the FAO meat price index, which has jumped by five per cent since July 2012, averaged 174 points between January and October, which compares with 176 for the same period last year. Most of the recent increase in the meat price index reflect price gains for poultry and pig meat, which have soared by nine per cent and 12 per cent, respectively, since July.
FAO International Meat Price Indices
(2002-2004 = 100)
Pig Meat
Disease recovery in Asia and a downsizing of operations in developed countries sustain pig meat production in 2012
Disease recovery in Asia and a downsizing of operations through higher slaughter in many developed countries are expected to translate into a two per cent increase in world pig meat production to 110.8 million tons in 2012. This, along with a build up of pig meat stocks in some countries, is exerting short-term downward pressure on prices in some local markets. The impact, however, is likely to be short-lived, with pig meat prices on international markets already firming.
Herd liquidation is resulting in record slaughter and output in the United States while negative margins in Canada are behind pig farms bankruptcies and a contraction of output. In the EU, restructuring of the sector to comply with stringent welfare and environmental regulations is resulting in lower production. In the Russian Federation, the continued spread of African Swine Fever is anticipated to slow down output growth to two per cent in 2012, which compares with an average seven per cent in the previous four years.
Nearly 90 per cent of output gains in 2012 will be in the developing countries, specifically in Asia. In the region, policy support in China, the world's largest producer, is sustaining the sector expansion. A strong recovery from last year's FMD-depleted supplies is boosting output in the Republic of Korea while in Japan, output is returning to pre-tsunami levels. In Viet Nam, policies and investments in feed and processing are behind an expected five per cent output increase. In Mexico, the sector is expanding, underpinned by improved genetics and productivity, which are translating into increased piglets per litter and higher animal weights. On the other hand, a rapid decline in hog prices is depressing production in Thailand.
Pig meat trade continues to grow but Asia remains on the side-lines
Stagnant consumption in traditional sources of exports, such as in Canada, the EU and the United States, are resulting in large excess supplies, which, along with firm import demand, are expected to boost global pig meat trade by three per cent to 7.4 million tons this year. Pig meat imports by China, which surged in 2010 and 2011, in the wake of disease outbreaks, have continued to grow despite early year indications of adequate supplies and falling domestic prices, and may end up six per cent larger by the end of the year. The Russian Federation, Ukraine and Mexico are also foreseen to step up their purchases. Japan's imports are expected to record only a slight increase, as the sector recovers from the tsunami-related losses in 2011. Smaller volumes are forecast to flow to other Asian traditional markets, reflecting a stalling consumer demand and recoveries in production the Republic of Korea and the Philippines. Purchases by Argentina are also forecast to contract, as the recent resolution of a trade dispute with Brazil will only restore product movement between the two countries late this year.
As for exports, increased availability in the United States is expected to boost US pig meat deliveries to a record 2.3 million tonnes, three per cent up from last year. Competitively priced product in the EU could also facilitate an increase of sales, despite this year's elimination of export restitutions for pork. Developing country exports are also rebounding. For instance, shipments from Brazil are recovering following the lifting of Russian restrictions on pig meat from a number of processing units and a diversification of sales to other markets, in particular Hong Kong SAR, Ukraine and Angola. Sales by non-traditional exporters, such as Chile and Mexico, are also expected to rise, even sharply, in the case of Mexico, assisted by its newly recognised status as free of Classical Swine Fever. Shipments from Belarus are also set to increase, facilitated by a newly negotiated Customs Union with the Russian Federation.
Profitability for pork and poultry producers hit by inability to raise prices to factor in high feed costs
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USDA Agricultural Prices
Reports» USDA Agricultural Prices» USDA Agricultural Prices: November Farm Prices Received Index Down 6 Points
03 December 2012
USDA Agricultural Prices: November Farm Prices Received Index Down 6 Points
The preliminary All Farm Products Index of Prices Received by Farmers in November, at 203 percent, based on 1990-1992=100, decreased 6 points (2.9 percent) from October.
The Crop Index is down 7 points (3.0 percent) but the Livestock Index increased 5 points (3.1 percent). Producers received lower prices for soybeans, corn, and apples and higher prices for broilers, eggs, and milk. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly movement of corn, milk, cattle, and cotton offset the decreased marketing of soybeans, peanuts, potatoes, and sunflowers.
The preliminary All Farm Products Index is up 19 points (10 percent) from November 2011. The Food Commodities Index, at 188, decreased 8 points (4.1 percent) from last month but increased 16 points (9.3 percent) from November 2011.
Prices Paid Index Down 1 Point
The November Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 217 percent of the 1990-1992 average. The index is down 1 point (-0.5 percent) from October but 11 points (5.3 percent) above November 2011. Lower prices in November for concentrates, diesel, supplements, and gasoline offset higher prices for feeder pigs, mixed fertilizer, supplies, and complete feeds.
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USDA Livestock, Dairy, Poultry and Aquaculture Outlook
Reports» USDA Livestock, Dairy, Poultry and Aquaculture Outlook» USDA Livestock, Dairy and Poultry Outlook - December 2012
18 December 2012
USDA Livestock, Dairy and Poultry Outlook - December 2012
October pork exports were 2.2 percent above October 2011, with strong shipments to Mexico, Canada, and Russia more than offsetting persistent weakness in Japanese sales and lower shipments to China-Hong Kong. For the first 10 months of 2012, US pork exports were more than 7 percent higher than in the same period of 2011.
Pork/Hogs
Fourth-Quarter Pork Exports Begin on a Solid Note
October pork exports were almost 493 million pounds, 2.2 percent above October 2011. For the first 10 months of the year, US pork exports totaled almost 4.5 billion pounds, more than 7 percent higher than the same period of 2011. The figure below graphs January- October US pork exports for this year and 2011.
Strong year-over-year gains through July 2012 were largely due to shipments to China-Hong Kong. In October, year-over year lower shipments to Japan (-1.1 percent in October, and -5.2 percent for January- October) and China-Hong Kong (- 61.6 percent in October, and +16.5 percent for January-October) were more than offset by strong exports to NAFTA partners Mexico (+32.8 percent in October, and +15.6 percent for January-October) and Canada (+20.3 percent in October and +17.4 percent for January-October), and Russia (+75 percent in October, and +45 percent for January-October).
US pork imports in October were almost 4 percent below a year earlier, due mostly to lower imports from Denmark. Imports of live swine from Canada were fractionally higher in October (+0.56 percent). Imports of feeder pigs (23-50 kgs) were 36 percent higher than a year ago, likely due to strong prices for finishing animals in the United States. Strong imports of feeder pigs offset year-over year lower imports of all other categories of imported live swine.
US pork exports: 2011 and Jan. - Oct. 2012
Souce: http://www.ers.usda.gov/data-products/livestock-meat-international-trade-data.aspx
US pork exports to China + Hong Kong:
2011 and Jan. - Oct. 2012
Source: http://www.ers.usda.gov/data-products/livestock-meat-international-trade-data.aspx
Poultry
Broiler Meat Production in October Up 8 Percent
Year-over–year changes in broiler meat production have varied widely in the last 2 months, chiefly due to changes in the number of slaughter days compared with the previous year. Broiler meat production was 3.3 billion pounds in October, up 8 percent from the previous year, mostly because the month had 2 additional slaughter days compared with October 2011. In contrast, production in September 2012 was down 8 percent due to its having 2 fewer slaughter days than in the previous year. Examining broiler meat production over a slightly longer time frame shows that production has been very similar to the previous year. Broiler meat production from August to October 2012 was only 0.3 percent less than in the same period in 2011.
In October 2012, the number of broilers slaughtered was up 6.3 percent to 746 million birds, while the average liveweight per bird was 5.95 pounds, an increase of 1.1 percent from the previous year. Broiler meat production for fourth-quarter 2012 is forecast at 9.05 billion pounds, an increase of 50 million pounds from the previous estimate and 2.7 percent higher than the previous year. The fourth-quarter 2012 increase is expected to come from a greater number of broilers slaughtered and slightly higher average liveweights in the quarter.
The high corn prices forecast for the remainder of 2012 and into 2013, even with relatively strong prices for a number of broiler products (mostly whole birds, breast meat, and wings), are expected to lead broiler integrators to scale back production in 2013. The number of chicks being placed for growout continues slightly lower than in the previous year. Over the last 5 weeks, (November 10 to December 8), chick placements have averaged 155 million, down 0.9 percent from the same period in 2011. Chick placements are expected to remain below year-earlier levels into the first half of 2013 and then to gradually exceed year-earlier levels in the second half of 2013. The timing and speed of this change will largely depend on corn and soybean supplies.
In October 2012, 727 million broiler chicks were hatched, up 2 percent from the previous year. Over the first 9 months of 2012, the monthly number of broiler chicks hatched had all been lower when compared with the same month the previous year. The October gain in chicks hatched may not continue, as the number of broiler eggs in incubators as of the first of November was 569 million, down just under 1 percent from the same time in 2011. In 2012, the number of eggs in incubators was lower in 9 of the first 11 months compared with the same months a year earlier.
Broiler stocks at the end of October totaled 626 million pounds, down 6 percent from the previous year. Stocks for most broiler products were well below their year-earlier levels, with the exception of legs and wings. Whole bird stocks were down considerably from the previous year (by 27 percent), placing upward pressure on prices. Stocks of breast meat, thighs, and thigh meat were also down sharply. The declines for most broiler product stocks were partially offset by strong gains in two areas: stocks of legs totaled 12.8 million pounds, up 32 percent from the previous year and stocks of wings were 37 percent higher than a year earlier at 70 million pounds.
Cold storage holdings of broiler products at the end of third-quarter 2012 were revised downward slightly to almost 623 million pounds, a decrease of 2.6 percent from the end of September 2011. With broiler meat production expected to be higher in fourth-quarter 2012 and broiler exports expected to decline somewhat, the estimate for fourth-quarter ending stocks was increased by 25 million pounds to 625 million pounds. This would be 35 million pounds higher than the previous year (up 6 percent).
Prices for most broiler products were higher in November than in the previous year. One exception was leg quarters, which averaged 51 cents per pound, down 1 percent from November 2011. Leg quarter prices were generally steady through much of the first 10 months of 2012. Whole bird prices were supported by much lower stock levels, averaging $0.99 per pound in November, up 24 percent from the previous year. Lower stocks for other broiler products also helped to move their prices higher. Prices for boneless/skinless breast meat and breasts with ribs were up 7 and 21 percent, respectively. Although cold storage holdings of wings were up 37 percent at the beginning of November, prices have remained very strong. In November, wing prices averaged $1.88 per pound, 47 percent above the previous year and 44 percent more than boneless/skinless breast meat. Despite higher yearover- year production expected in fourth-quarter 2012 and higher cold storage holdings for the end of 2012, broiler prices are expected to be relatively stable during the end of 2012 and into 2013.
October Turkey Production Jumps 11 Percent
Turkey meat production in October totaled 580 million pounds, 11 percent higher than a year earlier. Again, much of the year-over-year gain was due to the 2 more slaughter days in October 2012. This more than offset the reverse situation in September (2 fewer slaughter days), where turkey meat production fell by 4 percent compared with a year earlier. Over the last 3 months, turkey production has totaled 1.56 billion pounds, 4.3 percent higher than in the same period in 2011. In October, much of the increase in turkey production was due to a higher number of birds slaughtered, up 7.3 percent, but a 2.4 percent gain in the average liveweight of birds at slaughter to 29 pounds also played a role.
Cold storage holdings of turkeys and turkey parts totaled 454 million pounds at the end of October. This 68-million-pound reduction from the previous month was driven by many whole turkeys being taken out of storage in preparation for the Thanksgiving holiday. Between the end of September and the end of October, stocks of whole turkeys fell by 47 million pounds and stocks of turkey products fell by 21 million pounds. Even with the decline in whole turkey stocks, the stocks were still 25 percent higher than at the same time a year earlier. In contrast, the stocks of turkey products (196 million pounds) were down 2 percent from a year earlier. This increase in cold storage holding for whole turkeys is a significant change from earlier in the year and is expected to place downward pressure on prices for the rest of fourth-quarter 2012 and into 2013.
During the first 9 months of 2012, the national price for whole hens was higher than the previous year. However, with higher production, stocks of whole birds have expanded compared with year-earlier levels, pressuring prices downward. Prices in November averaged $1.09 per pound, down 4 percent from a year earlier, and are expected to decline seasonally in December and remain well below a year earlier.
The wholesale price in fourth-quarter 2012 is forecast at $1.05 -$1.08 per pound, a decrease from the $1.12 per pound in fourth-quarter 2011. Higher stocks are expected to pressure prices throughout the first half of 2013.
Over the first 10 months of 2012, turkey poults placed for growout totaled 239 million, an increase of 3.1 percent from the same period in 2011. Over the last 3 months, the percentage change from the previous year has varied considerably, with the number of poults hatched in August and September down (2 and 7 percent). However, in October the number of poults placed totaled 22.7 million, a gain of 6 percent from the previous year. Given higher stocks and lower prices for whole birds, turkey producers are expected to lower production in 2013.
Table Egg Production Higher in October
The table egg laying flock in October was estimated at 288 million hens, 2.2 percent above the previous year. The number of hens in the table egg flock on a year-overyear basis was higher throughout the first 10 months of 2012. With higher hen numbers, the number of table eggs produced has increased. In October, table egg production was 574 million dozen, an increase of 2.2 percent from 2011. Table egg production on a year-over-year basis has been higher in every month so far in 2012. Overall table egg production in the first 10 months of 2012 was 5.5 billion dozen, an increase of 1.3 percent from the same period in the previous year. The table egg flock and table egg production are expected to be at higher levels than the previous year through the remainder of 2012. At the beginning of November, the number of birds in the table egg flock was 291 million, up 2.5 percent from last year, and table egg production is expected to total 1.72 billion dozen in the fourth quarter of 2012, up 2 percent from the previous year.
The table egg laying flock in October was estimated at 288 million hens, 2.2 percent above the previous year. The number of hens in the table egg flock on a year-overyear basis was higher throughout the first 10 months of 2012. With higher hen numbers, the number of table eggs produced has increased. In October, table egg production was 574 million dozen, an increase of 2.2 percent from 2011. Table egg production on a year-over-year basis has been higher in every month so far in 2012. Overall table egg production in the first 10 months of 2012 was 5.5 billion dozen, an increase of 1.3 percent from the same period in the previous year. The table egg flock and table egg production are expected to be at higher levels than the previous year through the remainder of 2012. At the beginning of November, the number of birds in the table egg flock was 291 million, up 2.5 percent from last year, and table egg production is expected to total 1.72 billion dozen in the fourth quarter of 2012, up 2 percent from the previous year.
Even with larger table egg production, wholesale prices for eggs have continued to be strong. The fourth-quarter 2012 wholesale price for one dozen Grade A eggs in the New York market is expected to average $1.30 to $1.33, roughly the same as in the previous year. At the beginning of December, wholesale prices for Grade A large eggs in the New York market were approximately $1.38 per dozen.
Hatching egg production was lower than the previous year throughout the first 10 months of 2012. With lower broiler production, the decline in hatching egg production has largely been due to significantly lower production of meat-type hatching eggs in every month compared with the previous year. Over the first 10 months of 2012, production of meat-type hatching eggs was 4 percent lower than the previous year, while the production of egg-type hatching eggs was 1 percent higher. Decreased production of meat-type eggs is expected to continue into the first half of 2013 until broiler integrators begin to expand production.
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Total Egg Exports Much Higher in October
Exports of eggs and egg products in October totaled the equivalent of 33.4 million dozen, up almost 49 percent from a year earlier. Much of the gain was the result of higher exports of shell eggs. Shipments of shell eggs totaled 18.1 million dozen, up 58 percent from a year earlier. The gains were concentrated in the major markets of Hong Kong, Canada, and Mexico. Shipments to Mexico were more than double those of the previous year, but well below those in September, which implies that the Mexican egg industry is beginning to recover from its earlier disease problem and production is increasing.
In October, exports of egg products totaled the equivalent of 15.2 million dozen eggs, 40 percent higher than in October 2011. Much of the increase is due to larger exports to Canada, which rose by 248 percent to 4.1 million dozen. These gains in shell eggs and egg product exports came despite strong egg prices in the US market.
Poultry Trade
Broiler Shipments Dropped in October
October broiler shipments totaled 648.7 million pounds, a 6-percent decline from the same period in 2011. The main reason for October’s reduction in broiler shipments was low broiler exports to Hong Kong and Angola. In October 2011, Hong Kong imported 40.5 million pounds (or 268 percent) more broiler meat than it did in October 2012. Shipments to Hong Kong remained below 33 million pounds after October 2011, falling as low as 13.7 million pounds in July 2012. The US lost most of its Hong Kong market shares to Brazil, in part as a result of competitive export prices. United States broiler shipments were also down 29.5 percent to Angola from a year ago.
Broiler shipments to Mexico reached an all-time-high of 114.7 million pounds. Compared with October 2011, shipments to Mexico were up 41.6 percent in October 2012. Substantial increases in broiler shipments were also seen in smaller markets such as Kazakhstan and the Philippines. Overall, however, the increases in broiler exports were not enough to offset October’s decline in total broiler shipments.
Turkey Shipments Up in October
Turkey shipments totaled 77.6 million pounds in October 2012, up 31 percent from a year ago. October’s total turkey shipments constitute the second largest monthly number recorded, behind the levels of August 2012. The chief reason for the increase in turkey shipments was the strong demand from major and minor turkey markets. Shipments to two of the US major markets, Mexico and China, rose 18 percent and 109 percent, respectively, in October 2012 from a year ago. Turkey shipments to the Philippines were up 1.6 million pounds from October 2011, an 86- percent increase. Canada’s imports of US turkey meat also rose 44 percent in October 2012. Minor markets such as Russia, Taiwan, Panama, South Africa, Guatemala, Gabon, and Singapore were also contributors to the US increase in total shipments.
Beef/Cattle
Dairy Cow Slaughter Higher Year-Over-Year
Increasing cow slaughter in the fall is a seasonal pattern, but drought has led to beef cow slaughter above that expected with normal weather patterns. Unfavorable milk prices in the face of high feed costs have led to much higher dairy cow slaughter than in 2011. Although total cow slaughter has been down overall from corresponding periods in 2011, weekly dairy cow slaughter has been significantly higher. Federally inspected beef cow slaughter has also increased seasonally, but remains below year-earlier levels for the corresponding weeks, at a rate that more than offsets the year-over-year increased dairy cow slaughter rate.
Commercial cow slaughter in fourth-quarter 2011 was the highest since 1996. Since 1996, January 1 cow inventories have been higher year-over-year in only 2 years (2005 and 2006). Fourth-quarter 2012 cow slaughter to date is about even with fourth-quarter slaughter in 2011. Cow prices have declined about $10 per hundred pounds (cwt) from their May 2012 record levels, but remain $10-$12 higher than for the same periods in 2011. Demand for ground beef products and the fact that cow inventories are the lowest in decades will likely continue to support cow and bull prices through the remainder of 2012, 2013, and into 2014 or 2015.
As with cow slaughter, where the first three quarters were year-over-year lower, commercial heifer slaughter was down about half a million head through the first three quarters of 2012. This fact, combined with the NASS preliminary estimate of a 2012 calf crop well below the 2011 crop, implies a significant reduction in heifers available for retention as replacements during 2013. While a lower year-over-year cow inventory on January 1, 2013 is likely, the significantly reduced pool of heifers available for replacements has implications for January 1 cow inventories for the next several years. In addition, increased heifer retention for breeding will reduce the supply of feeder heifers available for placement on feed, resulting in fewer cattle on feed and marketed from feedlots. Reduced fed-cattle inventories should be supportive of fed cattle prices over the next few years.
Wheat Pasture and Negative Margins Pressure Cattle Prices
Much of the wheat pasture in the Southern Plains is deteriorating as the drought continues. As a result, feeder cattle prices have slipped somewhat recently and are well below their February-March 2012 highs. Lightweight calf prices remain slightly above year-earlier prices, while heavier-weight feeder cattle prices are lower by about the same dollar amounts. Pressure on prices is mounting as the wheat pasture deteriorates in the Southern Plains and as cattle feeders continue to register negative profit margins due to high feed grain prices, which are not expected to decline until late in 2013 when new-crop corn is harvested.
Cattle feeders are caught between high feeder cattle and feed prices and packers whose profit margins have been mostly negative since mid-2011. The Cattle Buyers’ Weekly observed that during 2012, at least one feedlot closed, some pen space was reportedly reallocated to growing space, and one-time feeding capacity declined in 2012 by almost as much as it had increased in 2011.
Heavier Weights Offset Reduced Slaughter
Beef production is projected to be higher year-over-year for the fourth quarter of 2012, largely due to heavier dressed weights and despite lower projected year-overyear quarterly cattle slaughter. While continuing above year-earlier levels, wholesale prices have slipped in recent weeks. This slippage—largely a seasonal phenomeno—-will likely cause packers to attempt to pressure fed cattle prices downward. The average Retail Choice beef price, at $5.15 per pound, was well above October’s price, setting a new record, and the All-Fresh beef price also set a new record at $4.81 per pound.
Dairy
December Dairy Outlook Changed Little from November, Milk Prices Are Forecast Up Slightly
The 2012/13 forecast corn supply and use was unchanged this month from November based on the most recent World Agricultural Supply and Demand Estimates (WASDE) report the corn season-average price is forecast at $6.80-$8.00 a bushel, a price reduction based on lower year-to-date reported prices. The relatively early corn harvest this year increased marketings and pressured prices downward. Similarly, soybean production was unchanged in this month’s WASDE. However, crush was raised and soybean meal domestic disappearance was lowered slightly, in line with expected livestock product production forecasts. Consequently, soybean meal prices were lowered this month to $440-$470 per ton. Corn and soybean meal prices will still be higher in 2013 than in 2012 despite the small downward price revisions. According to the November Agricultural Prices report, the preliminary November alfalfa price this year remains above the 2011 price. Although feed prices will likely be lower later in 2013 than those in 2012, dairy producers will face relatively high feed prices in 2013 compared with other recent years.
The projected 2012 US dairy herd size is unchanged from last month at 9,225 thousand cows. Cow numbers were raised, boosting the 2013 average herd size in December’s forecast to 9,130 thousand cows. Current-year yield per cow was unchanged this month at 21,640 pounds. Milk per cow is forecast at 21,880 pounds next year, also unchanged from November. Milk production is projected at 199.7 billion pounds in 2012, unchanged from last month’s projection. Milk production for 2013 remains forecast at 199.7 billion pounds, unchanged from the November forecast.
Fats basis imports are forecast at 3.9 billion pounds for 2012, based largely on higher butterfat imports. Skims-solids basis imports are projected at 5.8 billion pounds, unchanged from last month. Current-year fats basis exports were reduced in December to 8.9 billion pounds. The pace of butterfat exports has slowed as US prices are less competitive with world prices. Skims-solids exports are projected at 33.8 billion pounds for 2012. For 2013, milk equivalent imports on both a fats and skims-solids basis were unchanged this month from November at 3.8 and 5.4 billion pounds, respectively. Commercial exports on a fats basis were raised to 8.9 billion pounds and to 33.2 billion pounds on a skims-solids basis. The increases are based on improved global demand for both cheese and whey products.
Commercial ending stocks for 2012 on a fats basis were lowered in December based on lower expected butter stocks. Current year stocks on a skims-solids basis were raised based on higher than expected October stocks of nonfat dry milk (NDM). Fats basis commercial ending stocks for 2013 were lowered slightly in December, reflecting lower butter beginning stocks. Commercial ending stocks in 2013 on a skims-solids basis were lowered from November.
Cheese and butter price forecasts for 2012 were reduced from November estimates, but NDM and whey were raised. The 2012 cheese price was lowered this month to $1.700-$1.710 per pound but was raised to $1.750-$1.830 per pound for 2013. The stronger 2013 prices are based on improved cheese demand in both domestic and foreign markets. Butter price forecasts were lowered to $1.585-$1.615 per pound and to $1.595-$1.705 per pound for 2012 and 2013, respectively. Butter demand has been weak and stocks ample. Butter prices will likely improve in 2013 compared with current year prices. NDM prices are forecast at $1.320-$1.340 per pound in 2012 and $1.440-$1.500 per pound in 2013, both upward revisions from November. Whey prices are projected at 59.0-60.0 cents per pound this year, a boost from November, and raised to 60.0-63.0 per pound from last month for 2013. Strong demand both internationally and domestically for dry products is expected to support the higher prices.
The Class III price forecast was lowered this month from November to $17.40- $17.50 per cwt and raised for 2013 to $18.00-$18.80 per cwt based on higher whey prices. The Class IV price for 2012 was unchanged from last month at $15.95- $16.15 per cwt as lower butter prices were largely offset by higher NDM prices. The Class IV price was raised in 2013 from last month to $17.00-$17.90 per cwt. The slightly better Class IV price outlook is due to higher forecast NDM prices next year. The all milk price is unchanged from November at $18.50-$18.60 per cwt. For 2013, the all milk price is unchanged but the range is narrowed 5 cents on each end to $19.15-$19.95 per cwt.
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Government Sure of Agricultural Growth Despite 'Pablo' Damage
11 December 2012
PHILIPPINES - There's nothing stopping good practices and improved systems, especially in the agriculture sector. Agriculture Secretary Proceso J. Alcala is confident that the agriculture sector would post a positive growth for the last quarter of the year and that the damage brought about by typhoon Pablo will not cause any shortage in food supply.
This was revealed by the agriculture chief during a radio interview over the weekend where he emphasized that the recent calamity will not make a significant dent in the supply of domestic consumption or even in the exports of various agricultural products, specifically of coconut which suffered over P766 million in losses.
This despite seemingly overwhelming damages to agriculture that reached P8.5 billion, with the banana industry suffering the bulk of Pablo’s wrath at P6 billion. Banana was the one of the major industries in the affected regions in Mindanao. Production damage to rice was valued at more than P177 million, while corn posted over P245 million in damages.
Fisheries incurred more than P28 million in damages, while livestock and poultry suffered a total of P393 million combined loss. Agricultural infrastructure suffered a total of P36.2 million in loss, while damages to the country’s rice buffer stocks reached P20 million.
“The over-all figures show that more than P7.9 billion in damages was recorded in Region 11, one of the worst-hit regions in Mindanao,” Mr Alcala said.
As such, DA will roll out a series of interventions to help affected farmers and their families in Davao region.
A total of 15,719 bags of certified rice seeds, as well as open-pollinated variety and hybrid corn seeds will be distributed to be replanted to 35,120 hectares (ha) affected farmlands. Tissue culture plantlets of Cavendish bananas will also be dispensed to replace destroyed bananas in over 20,000-ha plantations.
“We are currently implementing measures to help Cavendish banana growers so that they will be able to meet the delivery schedule of their overseas contracts,” he added.
To assist the exporters fulfill their commitments, government is tapping unaffected plantations in Regions 10, 12 and also in the Autonomous Regions of Muslim Mindanao.
“The Philippine Crop Insurance Corporation will be set aside P22M million in insurance claims of banana farmers. DA is also looking at a supplementary budget to cover the cost of rehabilitation assistance,” he announced.
Mr Alcala has also instructed the Philippine Coconut Authority to replant more than P6.6-million worth of coconut and commence the immediate fertilization of affected trees. Meanwhile, the National Irrigation Administration will start the repair and rehabilitation of affected water systems.
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Chinese Farm Produce Prices Rise
28 December 2012
CHINA - Price of major farm produce in 36 medium and large sized cities in China rose last week compared to the previous week and the price of material for production has risen for teh past for two weeks, according to data from the Chinese Ministry of Commerce (MOFCOM).
The wholesale price of pork saw an increase of 0.7 per cent as compared with that of the previous week, with a year-on-year decrease of 7.3 per cent.
The prices of pork in Shenzhen, Beijing and Chongqing were up by two per cent, 1.8 per cent and 1.3 per cent respectively.
Wholesale prices of beef and lamb rose 0.5 per cent and 0.2 per cent as compared the previous week.
The retail price of chicken remained unchanged as compared with the previous week, while the retail sale price of eggs rose 0.6 compared with the previous week. There has been a 1.9 per cent rise in the price over the last five weeks. The prices of eggs in Guangzhou, Tianjin, and Beijing saw an increase of 2.1 per cent, 2.2 per cent and 0.9 per cent respectively.
Average wholesale prices of 8 kinds of aquatic products were up by 0.3 per cent, of which, small cutlass fish, carp and small yellow croaker were up by 1.1 per cent, 0.8 per cent and 0.7 per cent respectively as compared to the previous week.
Retail prices of grain and oil mostly rose, of which, small packages of rice and small packages of wheat flour rose by 0.3 per cent and 0.2 per cent as compared to the previous week and peanut oil, soybean oil and rapeseed oil increased by 0.3 per cent, 0.2 per cent and 0.1 per cent respectively.
The average prices of 18 kinds of vegetables last week rose 6.9 per cent as compared with that of the previous week, of which, cucumber, eggplant, white radish and Chinese cabbage were up by 18.2 per cent, 12.6 per cent, 11.8 per cent and 11.2 per cent respectively.
Last week, of major products, the prices of mineral products, rubber, materials for agricultural production and steel rose compared with the previous week, building materials and chemical products remained unchanged, and raw materials for light industry, energy resources and non-ferrous metal dropped slightly.
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News
Measures Targeted at Supply Chain Expenses
31 December 2012
CHINA - China's cabinet rolled out 10 measures on Wednesday to reduce costs in supply chains as the country strives to expand domestic demand amid urbanization.
The measures seek to deal with challenges facing services and product suppliers, but economists called for further steps to boost consumer confidence and increase their income.
Utility costs in agricultural production and supply should be lowered, according to a statement released after an executive meeting of the State Council, presided over by Premier Wen Jiabao.
Power and water costs in pig farming and vegetable production will be equal to agricultural production costs, while power, gas and heating costs in farmers' markets will be the same as industrial costs.
Moreover, fees in farmers' markets will be cut and standardized. Suburban farmers will be entitled to sell their home-grown fresh agricultural products in specialized areas of farmers' markets without paying slotting fees, the release said.
The government also required the value-added tax exemption to be expanded to apply to some meat and egg products. The land-use and house property tax of wholesale markets of agricultural products and farmers' markets will be exempted for three years by 2013.
Fees in public services will be subject to stricter regulations, according to the release.
The rate of fees, including installation fees, maintenance fees and inspection fees, will be publicized, while the standard bank-card fee will be optimized and adjusted as soon as possible.
These measures came in the wake of a notice issued in early August by the State Council to reform the structure of supply chains and boost the development of the industry to increase the sector's contribution to economic growth.
China's economic growth expanded to 7.4 percent in the third quarter, the slowest pace since 2009, and the government aims to balance the driving force of investment and exports with domestic demand.
Xu Wei, a researcher from the China Center for International Economic Exchanges, said: "These measures mainly aim to regulate the supply and sale of agricultural products.
They are of great significance because the increasing sales of agricultural products not only promotes the development of agricultural industry, but also enhances farmers' incomes and purchasing power."
Jin Linbo, vice-president of the National Academy of Economic Strategy at the Chinese Academy of Social Sciences, agreed, saying that the measures are timely in view of weak domestic consumption.
"These measures intend to solve problems confronting services and product suppliers. However, the key to expanding domestic demand lies in increasing consumers' income and enhancing their consumption confidence.
"More measures should be introduced to resolve social security concerns as well as medical and educational challenges in the process of urbanization," Jin said.
He added that these measures may not benefit Chinese exporters tapping the domestic market because of market environment differences.
Instead, research and design will help exporters improve their products and meet international demands.
China's exports in the first 11 months rose by 7.3 percent from a year earlier, and the whole year's exports are expected to drive down the country's economic growth.
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CME: Highlights of 2013 Price Predictions
31 December 2012
US - The University of Illnois’ Farmdoc Daily predictions of 2013 prices were part of the recent 2012 Farm Economics Summit, write Steve Meyer and Len Steiner.
Dr. Darrell Good presented the group’s outlook for 2013 crop and livestock prices. Some highlights from the published paper are:
•Crop prices will remain very volatile due to production uncertainty and continued turmoil for broader economic issues. A transition to lower prices is anticipated and the extent of the price decline will be largely determined by the size of 2013 crops.
•Smaller corn crops in other parts of the world and continuing strong demand will reduce overseas inventories — on top of the obvious reductions in U.S. stocks that have resulted from the poor 2012 crop. Argentine corn production, which, at 827 million bushels, was down 17% yr/yr last year, is expected to improve to 1.102 billion bushels this year — a gain of 33%.
•“Stable” U.S. acreage and a return to a trend yield (which Dr. Good’s slides indicate would be about 163 bu. per acre) would result in a U.S. corn crop in excess of 14 billion bushels, “allowing a substantial rebuilding of inventories.” Where average U.S. farm prices will average above $7 for the ‘12-’13 marketing year, prices for the ‘13-’14 marketing year could be from $4,75 to $5.50.
•Sharply higher late-2012 soybean prices were driven by small crops in both South America and the U.S. Current expectations are for a record-large South American harvest. “Stable” acreage and a return to trend soybean yield (which appears to be about 44 bushels/acre from Dr. Good’s slides) would put the 2013 crop very near the 2009 record. Larger crops in both major growing areas would expand world inventories and push the U.S. average farm price for beans into the $11 to $12/bushel range, sharply lower than the expected “12-’13 average of $14.50.
•U.S. wheat production rebounded nicely in 2012 but output in the rest of the world fell, improving U.S. export demand. High corn prices helped wheat by driving more wheat feeding but year-end stocks will be adequate. Good expects U.S. wheat acreage to expand to roughly 56 million acres in 2013 but the big concern remains drought conditions in the hard red wheat growing areas of the U.S. Prices will remain high for the first half of 2013 but will decline into the range of $6 to $7 in the second half of the year.
•U.S. pork production is expected to decline from 23.26 billion pounds in 2012 to 22.94 billion pounds (-1.4%) in 2013. The U of I economists expect exports to remain stable near 2012 levels, lowering U.S. per capita pork supplies from this year’s 45.7 pounds to just 44.9 pounds in 2013. Live prices of $64/cwt ($85.33/cwt carcass) are expected for the coming year. Those compare to $61 live ($81.33 carcass) in 2012 and $66 live ($88 carcass in 2011.
•Beef production is forecast to decline from 25.7 billion to 24.6 billion pounds in 2013. Lower production will limit 2013 exports to about 2.45 billion pounds, down slightly from this year’s 2.47 billion pounds. Domestic per capita availability will be 54.8 pounds in 2013, a full 2 pounds lower than the 56.8 pounds available to U.S. consumers in 2012. The U of I team has fed cattle prices pegged at $125 in 2013, $3 higher than the 2012 average.
We found two numbers in the U of I paper almost shocking — 2013 forecast beef and pork production differ by only 1.7 billion pounds. And what is even more shocking is that the Livestock Marketing Information Center’s forecasts for 2014 are for beef output to be 23.743 billion pounds and pork production to be 23.199 billion pounds, a difference of only 274 million pounds. As can be seen below, beef production was once nearly 13 billion pounds larger than pork production and it could be virtually the same in two years. For the record, net ready-to-cook chicken production is forecast to be a record 37.119 billion in 2014. That chicken weight does include a higher proportion of bone and skin but chicken’s lead is still formidable.
US Beef Production Minus US Pork Production
Finally, a collection of populist farm groups has called on the Justice Department to block the purchase of the XL Four Star Beef plant in Omaha by JBS Swift. The group claims the acquisition will add to market power in the beef sector. It should be noted that about any change in packer structure other than the closure of a plant would likely get the same opposition from this group. The Omaha plant processes cows. As can be seen from the Packers and Stockyards data below, this is the least concentrated of any U.S. slaughter sector. Our information indicates that JBS Swift has no cow slaughter operations at present so we’re not sure how the purchase could increase concentration in that sector.
Four-Firm Concentration Ratios
Species
2010
2009
2008
2007
2006
2005
All Cattle
NA
NA
69
70
70
70.6
Steer/Heifer
85
81
79
80
81
80
Boxed Beef
NA
NA
76
80
84
83
Cows/Bulls
52
53
55
55
54
48
Sheep/Lamb
65
70
70
70
68
70
Hogs
65
63
65
65
61
64
Source: USDA GIPSA, 2011 Packers & Stockyards Program Annual Report
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Biliran Statistics Office to Conduct Census on Agriculture, Fisheries
09 January 2013
PHILIPPINES - To establish an inventory of the agricultural and fishery resources of which data collected will be used by policymakers and planners the National Statistics Office (NSO) will conduct the 2012 Census on Agriculture and Fisheries (CAF).
This was revealed by Rose Marie Lumbre, statistics officer of NSO-Biliran, who said that the 2012 CAF will be conducted within a period of three months starting in February until April, this year.
The 2012 CAF, she said, is a large-scale nationwide government undertaking aimed to collect and compile basic information on the agricultural and fisheries sector of the country.
She added that over the years, the CAF has always been the source of a comprehensive statistics in agriculture and fisheries used by the general public, government, business, industries and by research and academic institutions.
The conduct of the 2012 CAF, she said, is important in making meaningful decisions as far as the agriculture and fisheries sectors are concerned. Data collected will provide basic information on the kind of crops planted in the different parts of the country, area planted to each crop, the kind and number of livestock and poultry raised, the kind of species cultured in aqua farms and information on fishing activities which are useful to investors, farmers and fishermen in planning the quantity and types of commodities to be produced, among others.
Lumbre said that the data gathered will be treated with strict confidentiality and will not be revealed to anybody except to authorized NSO personnel involved in the 2012 CAF.
In line with the conduct of the said activity, she is requesting the full cooperation of residents of Biliran to answer all questions asked by the enumerators for the attainment of the objectives and success of the activity. (PIA 8, Biliran with reports from NSO-Biliran)
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Weekly Overview: New Year's Resolution: Feeding the World
14 January 2013
ANALYSIS - 2013 started with the publication of a new report on the huge amount of food wasted each year between 'field and mouth'. Reducing the amount by just a small percentage could make a big difference to the growing human population, as could further development of biotechnology. These are huge challenges that we will all have to face, sooner or later. And sooner or later, we must accept our share of the responsibility for feeding present and future generations.
A call has gone out for urgent action to prevent 50 per cent of all food produced in the world ending up as waste - up to an estimated two billion tonnes of food wasted.
A new report by the Institution of Mechanical Engineers has found that as much as half of all food produced around the world never reaches a human stomach due to issues as varied as inadequate infrastructure and storage facilities through to overly strict sell-by dates, 'buy-one, get-one free' offers and consumers demanding visually perfect food.
The degree to which science, emotion or assumed ethics should drive technological changes in agriculture and farming are becoming central to the arguments over the development of biotechnology and genetic modification (GM), according to Editor in Chief, Chris Harris, who attended the annual Oxford Farming Conference in the first week of January.
Concerns over the growth in the global population and how to feed growing numbers at a time of climate change and diminishing land and water resources were at the forefront of the debate.
The question of the acceptability of GM foods was first raised by the UK Environment Secretary, Owen Paterson, who told the conference: "GM needs to be considered in its proper overall context with a balanced understanding of the risks and the benefits.
"We should not however be afraid of making the case to the public about the potential benefits of GM beyond the food chain, for example, significantly reducing the use of pesticides and inputs such as diesel."
He added: "I believe GM offers great opportunities but I also recognise that we owe a duty to the public to reassure them that it is a safe and beneficial innovation."
While the Environment Secretary embraced the potential of GM products, it was a former leading anti-GM campaigner, Mark Lynas, who, in the Frank Parkinson lecture, openly attacked the anti-GM lobby for not basing their arguments on scientific fact.
Turning other news, the use of antibiotics on farm has been causing concern among consumers, farmers, politicians and lobby groups for some time and it is starting to become a major crusade for some to restrict their use, including in the US and the UK.
Russia has banned meat from US and Canada because veterinary authorities have detected traces of the beta-agonist growth promoter, ractopamine.
And finally, the Chinese veterinary authorities have announced a new outbreak of foot and mouth disease in Sichuan. Ten outbreaks of classical swine fever have been reported in south-east Latvia in the second half of December.
Jackie Linden - Senior Editor
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Government to Strongly Support Filipino Livestock Farmers
18 January 2013
PHILIPPINES - The Department of Agriculture will continue to nurture the continued development and modernisation of the country’s livestock industry to make it globally competitive.
Agriculture Secretary Proceso J. Alcala (at rostrum) made the commitment at a ‘Multi-Sectoral Agricultural Summit,’ 11 January, 2013, in San Juan City, organised by the Swine Development Council, composed of 23 agri-industry, livestock organizations and party lists.
He said the DA remains firm in supporting Filipino livestock farmers and industry stakeholders by providing technical, postharvest and marketing assistance, coordinating with the Bureau of Customs to curtail ‘technical smuggling’ of meat and meat products, and protecting their interests by addressing incoherent government investment policies.
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Weekly Overview: New Technology May Help to Feed the World
21 January 2013
ANALYSIS - Sustainability - in its widest sense - has hit the headlines in the news in the last week. The need for new technology to feed a growing world population has been discussed at a recent conference, and mention was made of the contribution of genetic improvements to achieving that goal. Canada fears for the economic sustainability of its pig industry as it counts the cost of mandatory country of origin labelling on meat in the US. A new report highlights the growing importance of offals and less popular cuts to the global meat industry. Making the best of the food we produce is also part of the sustainability goal.
This year's Oxford Farming Conference brought the questions on genetics, new technology, genetic modification and improvements in agriculture into sharp focus.
At a time when the global population is growing and growing largely in underdeveloped and developing countries, the need to produce more food, more efficiently is unquestioned.
How that increase in production can be met sustainably and economically is the big question taxing scientists, politicians, farmers, processors and consumers alike.
As the Oxford Farming Conference heard this year, genetics has a big role to play in the improvements of yield - whether it is in crops or in animal protein - but genetic improvement is not the sole solution.
"We are now looking at selection for production and fitness and we are even looking at the vet costs in production as well," said Mark Smith, global bovine product development and production director at Genus.
"Genetics have contributed approximately 50 per cent of the phenotypic improvement we have seen over the last 50 years and basically, we need to produce more from less and genetic improvement is going to be key to this," he said.
Also on the subject of sustainability but turning to the future of a nation's pig industry, the Canadian pork industry has called on the US to follow the World Trade Organization rulings on country of origin labelling (COOL) or face retaliatory action.
The Canadian Pork Council (CPC) report shows that the direct impacts on hog producers calculated from official live trade data amount to over $1.9 billion as of October 2012, and were expected to exceed $2 billion by the end of 2012, at the current pace of accumulation of $500 million per year.
The CPC report added that $357 million in pork trade has been lost since the implementation of COOL, and a further $85 million in price suppression of feeder pig trade.
The importance of animal by-products to the global meat industry is expected to alter carcass valuation in the long term after changes in consumer demand has headed a matrix of factors shifting carcass valuation from prime cuts to processing cuts, a new Rabobank report says.
The transition from valuing slaughtered animals around prime meat prices has been observed since 2009. This change could force the processing industry to look at longer term contracts to ensure supply and alter the criteria for sourcing meat, adds the report.
Jackie Linden - Senior Editor
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Storm Quinta Caused P15-Million Damage in Aklan
24 January 2013
PHILIPPINES - Tropical storm “Quinta” that hit Aklan last year has caused P15.3 million worth of damages in the province.
Heavy rains on 26 December last year caused flooding and damages to agricultural crops, fisheries, livestock and poultry. Low-lying towns and those traversed by the Aklan River were severely affected, data from the Bureau of Agricultural Statistics (BAS) revealed.
Provincial Agricultural Statistics Officer of BAS-Aklan said the reported damages in Aklan were on palay, corn, aquafarms, vegetables and poultry and livestocks which the office validated.
The validated reports had since been submitted to the Department of Agriculture (DA) Regional Office 6 by BAS-Aklan, which would be releasing the reports officially, Delegencia said.
Vegetables, both harvestable and fruiting, suffered the highest loss amounting to P6.2 million, followed by fisheries, which had P3.8 million; livestock and poultry, P2.9 million; corn, P1.3 million and palay, with P1.1 million.
Affected towns included Kalibo, Libacao, Numancia, Banga, Lezo, Madalag and Malinao.
In the case however of fisheries/aquafarms, only Kalibo and Numancia suffered damages, as these towns, being low-lying and along coastal areas, are the only ones with fishponds.
Fighting cock raisers in Numancia also suffered P1.4 million in losses when their farms were submerged in deep flood waters, drowning the roosters.
All the seven listed municipalities suffered losses on their livestock and poultry, vegetable and corn crops, while five reported damages on their palay crops – Lezo, Banga, Malinao, Madalag and Libacao.
The seven affected towns had been declared by the Sangguniang Panlalawigan under the State of Calamity in the aftermath of Tropical Storm Quinta.
Also declared under the State of Calamity was the town of Ibajay, located in the western side of Aklan.
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Asipulo Farmers, Women Learn Organic Duck, Native Pig Raising
19 February 2013
PHILIPPINES - Personnel of the Provincial Veterinary Office (PVET) conducted lectures on organic duck raising and upgraded native pig production to farmers and members of women organizations of the remote community of Natkak in barangay Camandag recently.
Led by Dr Roland Pila and assisted by agriculturists Antonio Taguilingon and Ferdinand Dunuan and Animal Technician Michael Bulahao, all of the PVET conducted the lectures on 14 and 15 February to educate the farmers as an alternative livelihood and source of their income.
Dr Pila lectured on livestock diseases and their prevention and control including information on the anti-rabies campaign while Dunuan explained organic duck raising and upgraded native pig production which are suitable to the families in the area.
Actual demonstration of fermented feed preparation was also done by Bulahao using indigenous materials as ingredients, replacing commercial feeds which are very expensive. By using materials available in the area, they can save money and earn more income as they engage in organic duck and pig raising, he said.
Meanwhile, the PVET team also conducted information dissemination campaign to 120 students, men and women at the Haliap National High School Annex located in Natkak on the anti-rabies drive of the PVET pursuant to Republic Act 9482 or the Anti-Rabies Act of 2007. They also taught them corsage making which participants may find useful with graduation time fast approaching.
The PVET also delivered two water pumps to the women organization of the barangay to augment water supply for their farms.
According to Mr Dunuan, their visit to the barangay was facilitated by Jane Fortich, president of the Ifugao Women Organizations.
He added that they will disperse ducks and pigs to interested farmers and women organization members by the first week of March.
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Feed and Nutrition Featured Articles
Feed and Fodder Challenges for Asia and the Pacific
Thursday, March 07, 2013
Harinder P.S. Makkar, Animal Production Officer with the FAO in Rome explores the options to address feed and fodder challenges in Asia in the coming years. He focuses on making better use of feed resources, seeking alternative feeds and fodders and putting a greater emphasis on ruminants to provide animal protein as they can use food sources that humans cannot.
Feed and fodder play a central role in providing proper nutrition to livestock. The feeding of a diet balanced in all nutrients and at a level that meets the production objective considering the animal’s physiological state is imperative for achieving high and sustained livestock productivity.
According to the author, whose paper was published in an FAO report, 'Asian livestock: Challenges, opportunities and the response', the proceedings of an international policy forum held in Bangkok, Thailand in August 2012, the success of animal reproduction and health programmes rests on proper nutrition. Improper feeding leads to productivity losses and increase in emission of pollutants in the form of methane (up to 12 per cent of feed energy is lost in the form of methane) and nitrogen and phosphorus release (60 to 70 per cent of the nitrogen and phosphorus fed in intensive production systems is lost to the environment) in soil and water channels, which if not managed properly could cause water pollution, resulting in erosion of biodiversity, deterioration of human health and decrease in agricultural productivity (Van Horn 1998; IAEA 2008).
Proper animal nutrition, therefore, plays an important role in addressing ongoing and emerging challenges imposed by increasing human population, global warming, land degradation, water shortage and pollution, biodiversity erosion and increasing energy prices.
During the last couple of decades, both production and consumption of animal products have substantially increased. In 1975, Asia’s contribution towards world meat production was 18 per cent, which increased to 42 per cent in 2010, and the corresponding values for milk production were 12.7 per cent and 35.9 per cent respectively (FAOSTAT 2010). The average per annum consumption of animal products of a person in Asia is lower than the world average – meat consumption is lower by approximately 25 per cent and milk consumption by approximately 40 per cent.
In the next four decades, the world consumption of animal products is projected to double what it is today (FAO 2011a) and a large part of this increase will be in Asia. If we take feed conversion ratios of approximately 2, 4 and 9 for poultry, pigs and cattle, respectively, and also consider carcass percentages, a high demand for feed will ensue by 2050. It is a challenge especially when we are faced with: a) increase in population, b) decrease in arable land for crop production, c) water shortage, d) food-feed-fuel competition, e) limited supply of phosphorus, f) frequent climate extremes, g) increasing animal and human health risks and h) economic instability.
This paper attempts to propose some options to address feed and fodder challenges.
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"The animal industries in emerging economies in Asian are heavily dependent on import of feed and feed ingredients"
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Feed Trade and Feed Shortage and Their Implications
In 2011, China imported approximately five million tonnes of maize - in 2012, a decrease in import was recorded - largely for use as feed; and a sharp increase in demand for animal products in China could increase its maize import four-fold by 2020 (USDA 2012). The Philippines, Thailand and Viet Nam are also projected to import 1.9, 1.2 and 0.7 million tonnes of maize, respectively, by 2025 (Falcon 2008). In the last 20 years, import of soybean in Asia has also increased by seven-fold (FAOSTAT 2010). The animal industries in emerging economies in Asian are heavily dependent on import of feed and feed ingredients. Any disruption in trade or increase or extreme volatility in cost of feed could be detrimental for the animal food industry and therefore impact food security.
There is a chronic shortage of feed in Asian countries. As an example, in 2009 shortage of feed in India was of the order of 162.6 million tonnes of crop residues and 79 million tonnes of green fodder as dry matter. In 2020, India is expected to need 526 million tonnes of dry matter, 56 million tonnes of concentrate feed and 855 million tonnes of green fodder (as fed) (Dikshit and Birthal, 2010).
In 2011, in China, maize and soybean shortages were estimated to be 15 million tonnes and 60 million tonnes, respectively. By 2015, feed requirement by the swine industry in China is projected to be 75 million tonnes, with a shortage of seven million tonnes (C. Wang, Institute of Dairy Science, Zhejiang University; personal communication). The same is the situation with Thailand, which is, and will remain, a major meat-exporting nation in Asia.
There is need for Asian countries to enlarge their indigenous feed resource base and rely more on locally available feed resources and their efficient use. To this end, Asian countries should also consider increasing fodder production, which would decrease reliance on imported feed ingredients and also decrease cost of feeding. Lower costs of protein and energy supply from fodder/forages than from concentrates has been recorded (Salgado et al., 2012). Development of the animal industry based on locally available feed resources is expected to decrease livestock’s carbon footprint and reliance on the trade.
By 2020, the projected increase in poultry meat requirement in India is nine million tonnes and in order to meet this requirement, an additional 27 million tonnes of feed would be required (Robinson and Makkar 2012), which translates to an additional protein requirement of approximately six million tonnes (equivalent to 60 million tonnes of cereals or 2.4 million tonnes of soybean; Makkar 2012a).
For meeting the 2020 production targets of meat from poultry and pig sectors in Asia, feed protein requirement is expected to be 132 million tonnes – double that consumed by these two sectors in 2009. To obtain 132 million tonnes of protein, 1.32 billion tonnes of cereals or 330 million tonnes of soymeal are required.
With the currently used monogastric feeding systems, almost 100 per cent of the feed protein required competes with food. A huge increase in the requirement of feed protein for monogastric animals in the future could further adversely impact food security. Policy and research attention must be paid to decreasing dependence of livestock production on feed ingredients that compete with human food.
Options for Enhancing Feed and Food Security
Make the Best Use of Available Feed Resources
Enhance efficiency of available feed resource use: According to a famous management quote, 'If you cannot measure it, you cannot manage it' and most developing countries do not have a National Feed Inventory (NFI). The inventory should contain information on type and quantity of feed resources and during which period of the year (when) these are available. Information provided by livestock feed inventories would be of immense use for policy-makers, government agencies, non-government organizations, intergovernmental agencies and development agencies, among others in formulating and implementing sustainable livestock development activities and in preparing and coping with climatic variations such as droughts, floods, severe winter weather events and global climate change.
Spatial and temporal assessments of current and forecasted feed resources, including forages, will assist in disaster management and policy-making. Feed assessments would also enable informed decision-making related to the nature and quantities of commodities, the feed resources that could be traded locally, potential areas for feed markets and feed resources involved in imports and exports.
Estimates of feed resources and demands are needed to assess the fractions of food grain that is used for feed. Although livestock feed shortages have clearly constrained productivity in many countries, the impacts of feed shortages at national levels have been poorly characterised due to the lack of national-scale feed assessments. In addition, information on the availability of feed ingredients at the country level will enhance the efficiency and profitability of the animal feed industry and assist researchers to formulate sustainable feeding strategies. Such information would also be useful for determining the input-output relations for countries, e.g. the estimation of edible protein outputs versus protein inputs.
Estimates of feed resources would also improve the accuracy of assessments of the environmental impacts of livestock resulting from land-use transformations as well greenhouse gas (GHG) emissions and element fluxes (e.g. nitrogen) associated with livestock production. Production and consumption of feed significantly affects the potential of ecosystems to sequester carbon.
Country-level feed balances based on feed inventory data will facilitate planning within the livestock industry, e.g. in determining how many animals can be supported or produced based upon existing feed resources, and in identifying what feed resources would and could be developed to achieve production objectives. Such efforts will, in turn, translate into enhanced food security balanced with environmental sustainability.
A manual containing methodologies, tools and guidelines for establishing and maintaining NFIs is available (FAO 2012a), the use of which would assist countries to generate the required feed-related information.
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"In addition to shortage of feed, imbalanced nutrition is one of the major factors responsible for low livestock productivity."
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Implement balanced feeding: In addition to shortage of feed, imbalanced nutrition is one of the major factors responsible for low livestock productivity. Balanced nutrition - supply of nutrients based on the physiological conditions of the animal and keeping in view the objective of raising an animal - contributes to improving animal output as well as to reducing both the cost of production and the emission of greenhouse gases per unit of animal product produced.
A number of software programs are available for preparing balanced rations, which are used by professionals looking after big commercial farms, both in the monogastric and ruminant sectors. However, in the smallholder dairy and beef sectors, the feeding of imbalanced feed is widely prevalent as many farmers are unskilled in preparation and feeding of balanced diets. As a result, animal productivity is low and feed C and N get wasted and are not utilised efficiently in animal products, causing excessive release of greenhouse gases. Imbalanced feeding also causes metabolic and behavioural stress in animals.
A ration-balancing programme, being implemented by the National Dairy Development Board of India in 50 villages and on 3,100 animals, has demonstrated an increase in net daily income of farmers by 10 to 15 per cent through an increase in milk production and a decrease in feed cost. Milk production efficiency (fat-corrected milk yield/feed dry matter intake) of cows increased by 34 per cent, implying that more milk was produced from 1kg of feed when using balanced rations.
Feeding a balanced ration to dairy animals reduced faecal egg counts of internal parasites and increased levels of the serum immunoglobulins IgG, IgM and IgA, suggesting improved animal immunity. Furthermore, feeding balanced rations also reduced enteric methane emissions by 15-20 per cent per kilogram of milk produced and increased efficiency of microbial protein synthesis (FAO 2012b; Garg et al. 2013).
Large-scale implementation of such programmes can help improve the productivity of livestock raised by smallholder farmers. It has also been recorded that correction of mineral imbalances enhances animal productivity (FAO 2011b). Similar approaches can also be adopted for adolescent and beef animals, by taking into consideration local feeding and management conditions. Smallholder production systems contribute over 65 per cent of the milk production and over 55 per cent of meat production and hence targeting smallholder farmers should be the priority.
Concerted efforts in other countries and donor participation in the programme will be catalytic to delivering the benefits of ration-balancing programmes to farmers. In addition, implementation of such a programme at the grassroots level will enhance resource-use efficiency and decrease the release of environmental pollutants from livestock production systems.
Integrate quality control system in feed analysis: In preparing and feeding a balanced ration, it is imperative that the chemical composition of feed ingredients is reliably known. Field experiences show that such data originating from many laboratories in Asian countries are not reliable because quality control systems and good laboratory practices are not integrated in the feed analysis. A manual to address these issues has been produced by FAO (FAO 2011c). Science managers and feed industries must ensure that the quality control systems and good laboratory practices are used on a routine basis in feed analysis laboratories.
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"Improving the management of crop residues as animal feed should be one of the main priorities"
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Reduce loss of feeds: In many Asian countries, for example India, Bangladesh, Pakistan, Myanmar and Indonesia, ruminant production is largely based on feeding of crop residues and agro-industrial by-products. However, these resources need to be properly managed. Straw worth millions of dollars is burned every year in many parts of Asia, causing environmental problems and soil degradation, in addition to loss of this valuable feed resource. In India alone, burning of crop residues releases CO2, CO, CH4, N2O and SO2, equivalent to 6.6 million tonnes of CO2 annually (INCCA 2007).
Improving the management of crop residues as animal feed should be one of the main priorities. There is an urgent need to optimize use of the limited feed resources, including straw for ruminant feeding.
Crop residue management could include the use of specially-designed balers for collection of straw from the field, followed by the use of processing technologies for the manufacture of balanced complete feed for ruminants.
In this respect, the technology for making densified total mixed ration blocks (DTMRBs) or densified total mixed ration pellets (DTMRPs) based on straw and oilseed meals is an innovative approach, which provides an opportunity for feed manufacturers and entrepreneurs to remove regional disparities in feed availability and to supply the balanced feed to dairy and other livestock farmers on a large scale. The DTMRB or DTMRP technology can also be effective in disaster management and emergency situations that arise due to natural calamities, for example floods, droughts and human conflicts.
Feed banks could be set up to overcome the problem of feeding animals during these natural calamities, which are common in the tropics. The method for preparation of DTMRBs and DTMRPs and advantages of their feeding are given in FAO (2012c). Their feeding increases animal productivity and decreases wastage of feed ingredients, including straws.
From the discussions at the FAO e-conference on 'Successes and failures with animal nutrition practices and technologies in developing countries' (FAO, 2011b), it could be surmised that application of technologies such as urea-ammoniation of straw and urea-molasses blocks that aid in enhancing the efficiency of utilisation of crop residues and low quality forages has been success in areas where the extension services and farmers’ linkages to the market were good.
In addition, the discussions suggested that adoption of these technologies would be higher if the straw treatment and preparation of the blocks are conducted at a community/cooperative level or by private entrepreneurs since it reduces the operational cost and relieves the farmers from devoting time and efforts for the treatment of straw or preparation of the blocks. Despite overall negative impression prevailing about the relevance of these technologies, there seems to be potential, under some situations, for generating impact at the farmers' level using these technologies.
In addition, feeding of total mixed rations has also been shown to have several advantages such as decrease in feed loss, higher nutrient availability, lower enteric methane production and higher animal performance over feeding ingredients separately (FAO 2011b; FAO 2012b), which is conventionally practised in most Asian countries. Information on the production and feeding of these rations should be widely disseminated.
Other simple technologies, such as chopping of forages, increase animal productivity and reduce waste of forage. Animals consume considerable energy in chewing forage and chaffing allows saving of this energy and its diversion for productive purposes. Intake of chopped forage is higher than unchopped forage (FAO 2011b).
Silage-making, especially using locally available resources as done in Bangladesh (FAO 2011b), is also an attractive approach for reducing wastage of forages whose availability is high in rainy seasons. In some months of the year availability of vegetable and fruit wastes is also high which can also be converted into a valuable resource through silage making. These resources can be used for feeding during the dry season when availability is low. These approaches convert 'disposal problems into opportunities for development'.
Due to lack of proper storage conditions, fungal infestation of feed ingredients such as cottonseed cake and maize is a chronic problem in many Asian countries. Moist conditions lead to production of mycotoxins by the fungus present, which decrease productivity and animal and human health. According to an estimate, losses in the Philippines, Indonesia and Thailand are approximately US$900 million per annum due to aflatoxin alone (Schmale and Munkvold 2012). Aflatoxin is one of the many toxins produced by fungus. Substantial feed losses in Asian countries can be prevented by using proper postharvest technologies.
The application of afore-mentioned approaches will also contribute to producing more animal products per animal unit.
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Tap New Feed Resources
The interest in the search for alternative/additional food and feed ingredients is of paramount importance mainly because of the global demand for grains which has exceeded production and the stiff competition between humans and the livestock industry for existing food and feed.
Biofuel co-products as livestock feed: Much grain is being diverted to biofuel production. For example, in 2011 in the United States, more than one-third of the maize produced was used for ethanol production. However, there are many opportunities for using the co-products of the biofuel industry as livestock feed.
FAO's in-depth study over the last two years in this area has revealed some novel co-products that could be used as livestock feed. These are: distillers’ grains from various grains, glycerol, gluten meal, cassava residue, Camelina sativa meal, sweet sorghum residue, kernel meal from toxic Jatropha after detoxification and from non-toxic Jatropha, pongamia meal, castor meal, palm kernel meal and algae residue (FAO 2012d).
Distillers’ grains from maize are produced in the United States while Europe produces distillers’ grains from wheat and barley. The weight of distillers’ grains that is available from grains is one-third the weight of the grains taken for ethanol production. The distillers’ grains are being used extensively in the diets of ruminants, poultry and pigs. They are rich in protein and can be a good substitute for soybean in animal diets. Among Asian countries, only in China are distillers’ grains produced in considerable amounts (7.0 million tonnes, USGC 2012). However, they are being imported and used by other Asian countries such as Republic of Korea, Japan (in 2011 import increased by 31 per cent in one year), Indonesia, Thailand and Viet Nam (Hammamoto 2012). Since mycotoxins, pesticides and antibiotic residues present in grains become concentrated in distillers’ grains as yeast used in conversion of starch to ethanol does not degrade these compounds, caution is required in using distillers’ grains.
The potential of other co-products listed above has been discussed extensively in FAO (2012d). During the 1980s, a number of seed cakes, for example neem, castor and pongamia, were detoxified in India for use in livestock feed (FAO 2012d); however none of these methods was upscaled to industrial scale. During the 1980s and 1990s grain and oilseed prices were low which probably discouraged upscaling of the detoxification processes.
Now with the changed scenarios of high cost of feed and grains, there is a need to revisit those technologies and develop a business model for detoxification of unconventional feed resources. India is the largest producer of castor beans. A low-cost detoxification process using calcium oxide is available and incorporation of the detoxified cake in animal diets has shown satisfactory results. Setting up of a pilot-scale detoxification plant and subsequently a large-scale plant could be an option. The same could also be considered for other unconventional cakes.
A number of countries in Asia have planted or are in the process of planting Jatropha curcas as an energy plant. The seed of this plant has approximately 30 per cent oil which can be converted to high quality biodiesel. However, almost all the plantations have been implemented using the toxic genotype and after extraction of oil, the seed cake or kernel meal left cannot be used as a livestock feed because they are highly toxic due to the presence of phorbol esters.
These feed resources could be used after detoxification. On the other hand, a non-toxic genotype of J. curcas is present in Mexico. The seed cake and kernel meal from this genotype have been demonstrated to be excellent protein-rich feed resources for addition to poultry, swine, turkey, fish and shrimp diets. It can also be safely fed to small and large ruminants (FAO 2012d). The seeds of this non-toxic genotype have oil and protein contents similar to those in the toxic genotype. Germplasm improvement for yields and other useful traits and cultivation of the non-toxic genotype of J. curcas should also be considered.
Glycerol, a co-product of biodiesel production, is produced in a volume that is one-tenth of the original oil taken for biodiesel. A substantial amount of glycerol is available for the feed industry. It is a good energy source for animals and guidelines for its safe use for different animal categories are discussed in FAO (2012d). It may be noted that glycerol produced from biodiesel production from oil obtained from the toxic genotype of J. curcas should be used with caution as it could contain toxic constituents (Makkar et al. 2009).
Other novel feed resources: Barley is fed to animals as grain, green foliage and fodder (hay and silage) and often has quality superior to that of other fodder crops (McCartney and Vaage 1994; Abbeddou et al. 2011). It is a rapidly growing crop and has high nutritive value for both food and feed uses and requires fewer supplements for nutritive balance than many other fodder sources. Barley is already a viable green fodder crop in developed countries, e.g. in Australia, Europe and North America, but this use is not widespread in developing countries. Barley occupies specific niches in cropping systems because of its response to cool weather, low water availability and productivity in marginal soil; it offers potential in enhancing land-use efficiency. Also mutants with low lignin, without awns and reduced lodging are available (Meyer et al. 2006; Franckowiak et al. 2010; Sameri et al. 2009). These useful traits could be considered for introduction in local varieties in use in Asian countries.
The improved lines of barley could be valuable feed resources that could fit well in the feeding calendar for the winter months especially in hilly areas where other feed resources are scarce. Winter oat also enjoys many traits common to winter barley and it is also a useful forage (Salgado et al., 2012).
Further integration and incorporation of research work on other food-feed crops such as sorghum, millet, oat, wheat etc being conducted in a number of CGIAR and other international institutions with the aim to enhance nutritional quality of crop residues into the work of National Agricultural Research Systems will contribute to further increasing the utilization of crop residues. In addition, spill-over effects of the intensive research efforts on utilization of crop residues for generation of second generation biofuel is expected to benefit livestock feed industry in future. Azolla also needs to be promoted, and thornless cactus is a good feed for small ruminants in the dry areas (FAO, 2011b).
Leaves of Moringa oleifera are high in crude protein and almost all the crude protein is present in the form of true protein. In addition, the amino acid composition and protein digestibility is as good as soybean (over 92 per cent). Furthermore the leaves are rich in carotenoids, vitamin C and other antioxidants (Makkar and Becker 1997; Foidl et al. 2002). Its intensive cultivation (dense plantation) with the application of fertilizer and water supply, gives a dry matter yield of up to 120 tonnes per hectare, with seven to eight cuttings in a year (Foidl et al. 2002). This is a novel approach in which a fast-growing tree such as moringa was densely planted and was not allowed to turn into a tree by cutting the plant every 45 to 50 days to obtain high forage biomass of high quality for feeding to livestock.
This approach of turning a fast-growing tree into a forage plant after dense plantation and frequent cuttings should also be tried on other fast-growing plants that give high quality forage. Examples of such plants are mulberry and leucaena, among others.
Using forages such as moringa that have high leaf yield with high protein of as good a quality as soybean, an integrated monogastric and ruminant feeding system can be supported. The protein content of moringa leaves is 25 per cent and that of soybean is 40 per cent (both on dry matter basis). The fibre content of moringa leaves is also very low (and so is lignin). Dry matter yield of 120 tonnes per hectare and year of moringa forage, if containing approximately six per cent leaves and the remainder soft stems and twigs, would give approximately 7.2 tonnes of moringa leaves (on protein equivalent basis this equals 4.5 tonnes of soymeal), which could be used as feed for poultry or pigs. The remaining 112.8 tonnes of soft twigs and stems containing approximately 15 per cent crude protein may be used as good quality forage for ruminants.
Average soybean yield is 2.0 tonnes per hectare, while that of moringa leaves on a protein equivalent basis could be more than double. This is one of the examples wherein a feed ingredient that competes with human food can be replaced in the diets of monogastric animals with a lesser-known or unconventional feed resource. Similarly, protein isolates prepared from unconventional oilseed cakes and agroindustrial by-products with the addition of synthetic amino acids, in case they are deficient in an amino acid(s), could be attractive options for feeding monogastric animals. Scientific options are available to implement the concept of 'sustainable animal diets' being developed at FAO which consider the suggestion of reducing grains and other food materials in diets of monogastric animals as they compete with human food (Makkar 2012b).
Lesser known plants: A challenge facing animal nutritionists is to introduce and promote alternative feed resources that have high nutritive value and are adapted to harsh environmental conditions. The ongoing climate change development is also expected to create harsher conditions: high temperature, drought, floods and drastic climatic variations, with the greatest impact to be felt among ‘subsistence’ or ‘smallholder’ farmers in developing countries.
Wild under-utilized plant resources should therefore receive more attention. A number of other lesser-known and under-utilized plants adapted to local, harsh conditions are available today. The neglect of such potentially excellent animal feed resources also results in loss of biodiversity. In lieu of this, the cultivation and judicious use of such plants as feed resources is expected to enhance plant biodiversity. Thus, there is a need to identify such potential feed resources and use them to conserve biodiversity.
Many lesser-known plants with good nutritional values and high palatability are already in use in some pockets of the world; if their use as animal feed is promoted, they would enhance animal productivity in addition to contributing to conservation of plant biodiversity. Twenty lesser-known plants with potential for use as livestock feed have been identified (FAO 2012e). Collaborative efforts among scientists and farmers must particularly be directed towards establishing and developing innovative feeding systems using high-protein fodders from promising species of trees and shrubs that are adapted to harsh environmental conditions. The ultimate objective of future research on lesser-known plants should be to:
1.improve the availability of feed resources to provide an adequate strategic feed supplement to animals during critical periods
2.increase biodiversity and
3.meet the challenges of ongoing climate change.
In addition, tropical and subtropical areas house plants that have a wide range of bioactive compounds. Due to harsh environmental conditions, the levels and distribution of compounds with bioactivities are much higher in tropical areas than in temperate zones. Most developing countries have tropical and subtropical climates and they need to recognize the tremendous plant wealth they have. The use of natural plant products in the developed world is in vogue and tropical plants could be valuable sources of a number of bioactive compounds that could replace synthetic ones that have adverse effects on humans, animals and the environment. Concerted efforts including South-South cooperation are required to exploit these untapped and hidden resources present in the form of lesser-known or lesser-used tropical plants.
Insects: Some insects such as the black soldier fly or Hermetia illucens, maggots (larvae of the housefly Musca domestica), yellow mealworm (Tenebrio molitor), silkworms (Anaphe infracta) and grasshoppers (e.g. Oxya hyla hyla) are also good sources of protein and macro-and microminerals. The protein content of insects could range from 40 to 60 per cent on a dry matter basis, with protein quality as good as muscle protein (Feedipedia 2012). They are also good sources of iron, zinc, vitamin A and polyunsaturated fatty acids; and have been found to be good feed ingredients for poultry and pig diets (Newton et al. 2005; Hwangbo et al. 2009; Ijaiya and Eko 2009). In addition, insects are considered to be better converters of feed into protein than conventional livestock and they may also release lower greenhouse gases per unit of protein production than ruminants.
The challenge at present is to establish economically viable insect mass-rearing techniques that give large and regular outputs of insects for use by the feed industry. Also, a regulatory framework needs to be developed for safe use of the insects as animal feed, which also includes registration of insects as a feed. Preparation of protein isolates from non-edible insects and feeding to monogastric animals including aquaculture species could also be an attractive option. Preparation of protein isolates from such insects could be a way to eliminate toxins and anti-nutritional factors present in non-edible insects. In addition, insects could also be a source of several bioactive compounds with agricultural and pharmaceutical applications.
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Enhance Fodder Production
Cultivated land under fodder production has decreased in Asia. In India, the area under cultivated fodder has decreased by approximately 10 per cent in the last decade (GOI 2009). This means that more fodder needs to be produced from a smaller area. However, in Asia, fodder production is largely carried out using uncertified seeds. As a result, the fodder yields are low.
A number of steps (e.g. production of nucleus seeds, breeder seeds and foundation seeds) and contributions from a number of organizations such as research institutions, ministries of agriculture, production agencies, seed growers, seed certification and seed marketing agencies are required in the production of these seeds. There is a need to strengthen the fodder seed production system through enhancing coordination between these organizations. Also strengthening collaboration between crop and animal husbandry research institutions and public-private institutions will further strengthen the production and distribution of certified and transparently-labelled fodder seeds. In addition, policies must encourage private companies to produce and market fodder seeds.
From the same land area, use of certified or transparently-labelled seeds could double fodder production. In addition, common lands should be developed for fodder production. Globally, out of 14 billion hectares, 4.0 billion hectares of land are classified as common land. Rao (2012) describes approaches for using common lands for fodder production. Production and use of Napier grass in the dairy areas around Chiang Mai in Thailand, promoted through an FAO project, have also resulted in increased availability of fodder and higher profit for farmers (Waritthitham 2012). The farmers have been successful in reducing the cost of feeding while obtaining the same or slightly higher milk yield (personal observations).
In many situations, the cost of nutrients (protein, calcium, phosphorus and vitamin A) supplied through green fodder is expected to be much lower than that from other sources. Use of green fodder could decrease the cost of feed and contribute to decreasing dependence of livestock industry on imported feed ingredients, thus enhancing their sustainability and making them more resilient.
Increase Nutrient Availability from Intestinal Tracts
Control of intestinal parasites: Internal parasites divert feed nutrients from the production of animal products to their own development. In addition, the presence of parasites decreases intake and digestibility of feed. Apparently, there is no reliable quantitative information on the impact of the presence of internal parasites in animals on decrease in productivity in developing countries, however, the strategic addition of fenbendazole and other anthelmentics in diets has been shown to increase animal productivity and farmers’ profits (Knox 1995; IAEA 2006).
Smallholder farmers find anthelmintics expensive and under such systems the use of validated herbs and plant materials could be used to control internal parasites. A study conducted in Bangladesh, the Philippines and Indonesia showed that the efficacy of pineapple leaves in controlling helminthes is equivalent to fenbendazole (IAEA 2006, 2010), and also feeding of calliandra, sericea and cassava leaves and other tannincontaining plants was also effective in controlling helminthes (Min et al. 2004, 2005, 2008; Athanasiadou et al. 2009). The antiparasitic effect of pineapple leaves is attributed to the presence of bromolein (a cystein protease) (Makkar et al. 2007). These and other tropical leaves could be effective substitutes for expensive synthetic anthelmintics, against which resistance of internal parasites has also been increasingly recorded.
Mineral addition in the diet: For maximum nutrient availability in the rumen for the production of microbial protein and other fermentation products required for productive purposes such as milk production, growth, reproduction etc., optimum rumen fermentation is necessary. Deficiency of minerals such as Co, Mo, Mg, Zn, Na, Cl etc. could decrease rumen fermentation because these are vital for various activities of rumen microbes. Suboptimal rumen fermentation can decrease nutrient availability from feed by up to 15 per cent, which is a loss of valuable nutrients.
It may be noted that for ruminants, 'We feed the microbes and microbes feed the animals'. Correction of mineral deficiency in the field has been shown to increase milk production by 10 to 15 per cent in dairy cows. In sheep 60 per cent of anoestrus females came into oestrus within 15 to 21 days and the remaining 40 per cent after 42 days of mineral supplementation (FAO 2011b).
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"Producing meat from ruminants using feed that does not compete with human food would be a viable and attractive option for enhancing food security"
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Greater Emphasis on Development of Ruminants
Conventionally, when compared to ruminants, monogastric animals are considered to have higher efficiency of protein production from feed. However, following the current feeding practices, almost all the sources that provide protein to the diets of monogastric animals compete with human food, while this is not the case for ruminant diets. If we define efficiency of protein production as 'Human edible protein produced/human edible protein fed', the efficiency is higher for ruminants than for monogastrics.
Over one billion people go to bed hungry every day for want. mainly of grains. On the other hand, meat plays an important role in meeting protein and mineral requirements of pregnant mothers and growing children in developing countries. Therefore, producing meat from ruminants using feed that does not compete with human food would be a viable and attractive option for enhancing food security.
Furthermore, in future, increase in cost of cereals, energy and other inputs compounded by increasing competition for arable land for fuel, food and fuel will impose a challenge on economic viability and overall sustainability of the present monogastric production system. Two billion tonnes of straw are produced worldwide and considering feed conversion efficiency of 10:1 potential exists to produce 200 million tonnes of live animal annually (100 million tonnes of meat), which could support four billion people at 25kg per year (Devendra and Leng 2011).
A study on the effects of supplementation of a low-quality pasture hay with cottonseed meal (CSM), barley or sorghum grain (young cattle were given poor quality pasture hay and minerals and then given graded amounts of the various supplements according to their live weight - McLennan et al. 1995, cited in Leng 2004) showed: a) efficiency of conversion of the supplement to live weight gain with increasing amounts of CSM was approximately four-fold greater as the increments were increased progressively to 0.5 per cent of live weight when compared with the efficiency of conversion above this level, and b) the response with CSM meal was higher than that with sorghum or barley grains.
Using data from a number of growth trials on the effect of supplementing young cattle (200 kg live weight, grazing dry pasture or given straw) with a protein meal such as CSM, the analysis of Leng (2004) can be summarized as:
•With up to 0.7kg per day of CSM meal, the response in live weight gain would be approximately 0.84kg per day or a conversion efficiency of supplement to live weight gain of 1.2kg live weight gain per kg CSM consumed. It may be noted that 0.7kg per day of the seed meal supplementation to a 200-kg live weight steer is 0.35 per cent of the body weight per day.
•Above this level of supplementation, the improvement is approximately 0.35kg live weight gain per kg CSM.
In practice, a supplement such as oilseed meal, which is usually more expensive then the basal feed (here basal feed being crop residues), should rarely be fed at above 0.5 per cent of the animal’s live weight. Interestingly, daily oilseed cake supplementation in the diet at a level of 0.5 per cent of the body weight of the animal produced four-fold growth, a response of 1.2kg live weight gain per kilogram of the supplement (up to 0.35 per cent of the body weight).
When used strategically, the utilization of oilseed cakes as useful products in ruminants should not be undervalued. The absolute value of the efficiency of oilseed meal conversion into body weight will depend on the type and quality of the crop residues and genetic potential of animals, and hence call also for enhancing the genetic potential of local ruminant livestock.
In a similar vein, rabbit production also needs the attention of policy-makers and science managers as they can be reared on a diet containing high content of forages (Makkar and Singh 1987; de Blas and Wiseman 1998) and their reproductive efficiency is very high.
Greater emphasis on development of ruminants and rabbit production for meat production would also contribute substantially to pulling smallholder farmers out of poverty and in making economic growth inclusive because these species are generally reared by poor farmers.
It is evident from the aforesaid discussion that technological options are available to meet the high demand for animal products while conserving the environment, biodiversity and natural resources; however for optimal delivery of solutions proper institutional support and sound policies are required. Technology and institutions must work together, and policies must provide an enabling environment for this to come about.
Main Messages and General Remarks
Make efficient use of available feed resources by:
•establishing national feed inventories through institutional support and infrastructure
•implementing the concept of feeding balanced rations in the field and
•integrating quality control systems in feed analysis laboratories.
Reduce feed losses by:
•securing crop residues from fields and converting them to densified complete feed blocks
•promoting use of total mixed rations and methods for silage making and chopping of forages and
•using proper postharvesting technologies to prevent losses due to mycotoxins.
Enlarge the feed resource base by:
•using co-products of the biofuel industry and conducting R&D on efficient use of the co-products;
•scaling up proven laboratory-scale detoxification processes to pilot and industrial scales;
•promoting the use of forages such as moringa leaves, thornless cactus, azolla and winter barley and
•tapping local knowledge to identify lesser-known feeds adapted to harsh climates and by creating business models to use them.
Enhance fodder availability by:
•strengthening certified fodder seed production and marketing systems, including bringing on board the private sector
•strengthening extension and training of farmers on good agronomic and cultivation practices to grow high-yielding fodder varieties/hybrids and
•developing policies and mechanisms to develop common land for fodder production.
Increase nutrient availability from intestinal tracts by:
•preventing ‘grabbing’ of nutrients by helminthes and
•using mineral mixtures.
Give greater emphasis to ruminant production by:
•supplementing strategically oilseed meals/cakes to low quality roughages;
•enhancing fodder production and
•enhancing use of agro-industrial by-products that do not compete with human food, as animal feed.
General remarks
Common sense must prevail. Animal diets have the same importance for animals as human diets have for humans. Animal nutrition must get due attention, especially at the policy level and funding by donors.
So far this area has remained neglected. As a result of this neglect the full genetic potential of animals is not realized in the field and the animal health and animal reproductive interventions are not as effective as they should be.
Animal feeding is the foundation of livestock production systems and animal breeding and reproduction and animal health are the two pillars. If the foundation is weak, the building is likely to crumble.
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Census of Agriculture, Fisheries On-Going
22 March 2013
PHILIPPINES - The National Statistics Office (NSO) is currently conducting the nationwide Census of Agriculture and Fisheries (CAF) for 2012 which started 25 February and expected to end on 13 April, 2013.
This was learned from Director Raul F. Dones of NSO-Region 8 who said this is the sixth in a series of decennial agriculture census and the fifth in the decennial census of fisheries in the country.
According to Director Dones, the 2012 CAF is a large–scale government undertaking that is geared towards the collection and compilation of basic information on the agricultural and fishery sectors in the Philippines.
It provides basic information on the kind of crops planted in various parts of the country, area planted to each crop, kind and number of livestock and poultry raised, kind of species cultured in aqua farms, and information on fishing activities which are useful to investors, farmers, and fishermen in planning the quantity and types of commodities to be produced.
The data collected in this census shall constitute the bases from which policymakers and planners formulate their plans and programs for the socio-economic development of the country.
Over the years, the CAF has been a source of comprehensive statistics on agriculture and fisheries for use of the general public, government, business, industry, research and academic institutions.
In Eastern Visayas, about 3,704 enumerators and 1,814 team supervisors were hired to augment the field personnel of NSO for this undertaking.
Levels of training were conducted for all the personnel who were involved in order for them to be equipped with the necessary knowledge and skills for the operation.
The hired enumerators are currently conducting actual house to house visit and interview of the households, persons who were engaged and operators in agricultural, aquafarm and fishing operation activities during the year 2012.
NSO calls for the support and cooperation of the Barangay constituents, partner agencies, Local Chief Executives, and other stakeholders for the successful conduct of this nationwide undertaking.
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Report Confirms Ag Sector’s Continued Growth, Economic Value
28 March 2013
CANADA - "An Overview of the Canadian Agriculture and Agri-Food System 2013", a report released by Agriculture and Agri-Food Canada (AAFC), shows the strong contribution of the agriculture and agri-food sector to Canada’s economy.
"Farm performance overall continues to remain strong as the industry becomes more competitive, innovative, and profitable," said Agriculture Minister Gerry Ritz. "The report shows that the agriculture and agri-food sector continues to be internationally focused, which is why our government continues to place such a strong emphasis on opening new and maintaining existing markets."
Using historical data up to 2011, the Overview shows that the farm and food sector displayed robust performance in 2011, enjoying high farm income levels, record levels of government investment in agriculture-related research and development, strong market receipts, and strong performance of agricultural exports.
Highlights
•The agriculture and agri-food system continues to make a significant contribution to Canada’s gross domestic product (GDP) and employment, directly providing one-in-eight jobs, employing 2.1 million people, and accounting for 8 per cent of total GDP, or $101.1 billion.
•Shifting consumer and societal demands are influencing changes throughout the agriculture and agri-food system. Consumers are seeking more variety, more convenience, and more environmentally friendly and healthier food choices, as well as food that reflects consumer values (e.g. organic and halal products).
•Relative to other countries, Canadians enjoy some of the lowest food costs in the world, with spending on food and non-alcoholic beverages from stores accounting for just under 10 per cent of personal household expenditures, which is higher than in the US (6.6 per cent) but lower than in France (13.5 per cent).
•The food and beverage processing industry is one of the top manufacturing industries in Canada.
•The mix of crops and livestock production is evolving, reflecting changes in the types of products consumers are demanding and changing market prices and conditions. Non-durum wheat has been overtaken by canola, and planted soybean area increased between 2006 and 2011.
•Federal, provincial, and territorial government spending in support of public research and development in agriculture and agri-food is important for the future productivity growth and competitiveness of the sector. This spending has been increasing over the past four years and is expected to reach $561 million for the 2011 12 fiscal year.
The annual Overview provides basic information about the agriculture and agri-food sector, tracks how the sector performs over time, and reflects the challenges and changes that have occurred in recent years. It reviews in detail the whole value chain, covering not only primary agriculture and input suppliers but also food and beverage processing, food distribution, consumer trends, and government investment.
AAFC also recently released the Farm Income Forecast and the Medium Term Outlook. Together, these three reports provide a comprehensive historical profile of the sector, as well as a financial and market outlook for producers, industry and stakeholders, and governments as they plan for the years ahead.
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Global Feed to Meat Industry Propelled VIV Asia to New Heights
02 April 2013
THAILAND - The global cattle, meat, poultry meat and egg industries contributed to making VIV Asia 2013 an unparalleled success, say the trade show's organisers.
"The combination of western businesses and the enthusiasm and levels of interest shown by the emerging Asian economies resulted in a sensational atmosphere where plenty of deals were concluded. Decision makers gathered in Bangkok in large numbers, resulting in a real buzz on the trade show floor," said Project Manager, Ruwan Berculo, on behalf of VIV.
He continued: "The event offered a comprehensive, clear and complete range of products and services. The packed audiences at the seminars and conferences are testimony to the fact that VIV Asia has become an event of global stature. Decisions regarding major projects have been taken at VIV Asia. As the organisers, we are proud of the results we have booked together as a sector."
W.R.B. Souther, Senior Vice President Asia of Aviagen (pedigree lines for the production of commercial broilers and turkeys) commented: "We see VIV Asia as an ideal occasion to strengthen our relationships but for us, it is the only trade show that actually generates business. This is the place where contracts are signed."
David Hazenbroek, president of Foodmate (cut-up and deboning equipment), added: "VIV Asia is an important gateway to Asia's emerging markets. The introduction of OPTI LTD brought many interesting new contacts. At the next edition, we want to expand our presentation area so we can display more solutions. Our new focus lies on South-Korea and Japan."
The 770 exhibitors at VIV Asia, which was held from 13 to 15 March in Bangkok, were not only visited by key managers representing the strongly growing animal protein industry in South East Asia, but also by large Russian investors. In addition, there were many visitors from India, Pakistan and the Middle East.
During VIV Asia, Meyn Food Processing Technologies concluded a major contract with Big Bird Group from Pakistan to provide state-of-the-art systems and equipment for a complete processing plant.
Robbert Birkhoff, Sales Director of Meyn, explained: "With innovations on display and a huge number of visitors to our stand, we can confirm that our participation at VIV Asia was an outstanding success! We are proud of the contract with Big Bird Group to construct the largest automated poultry plant in Pakistan."
Henry Arts, Marketing Director of Pas Reform (hatchery technologies), also noted some significant success stories, including entering an agreement with Amrit Group from India.
He said: "Visitors from all over Asia have been extremely positive and enthusiastic about the innovations that we brought to Bangkok this year. With such positive feedback and confirmation of new contracts, this year's show has been a great success, both in terms of new contacts and in delivering genuine opportunities for further business development."
Moba introduced the new series of egg graders. Christoffer Ernst, Sales Director Asia Pacific, commented: "The first two days of the exhibition especially were extraordinarily busy, with many visitors from throughout Asia and the Middle East. VIV Asia is a great show for us to meet existing customers and find new ones. The new LighT egg graders- a new, affordable machine for the emerging markets in Asia - attracted a lot of interest."
Trade show manager, Mr Berculo continued: "You see that all the up-and-coming countries converge here and that top managers are keen to meet each other. An entire contingent travels to Bangkok. It's tangible in the city. Everything seems to be linked to VIV in one way or another. Everyone who is anyone in the industry wants to meet the others. Another successful element was providing a complete reception package for the VIPs. This was one of the innovations we introduced to make the trade show even better and more exciting. The formula of offering even more service, hospitality and personal attention to important, international business relations is one we also intend to introduce at other VIV events."
As well as the trade show, the parallel programmes with 30 seminars and conferences were also a success. According to Mr Berculo, the Animal Health Summit, the Partner Country Programs for Indonesia and the Philippines, and the new Dairy Production Conference were particular triumphs.
Antoon van den Berg, CEO of Hendrix Genetics, said: "There is an increasing thirst for high quality scientific information. Mr "VIV Asia is a leading exhibition for us. We were very pleased to notice the improved quality of the programme. This makes a visit to the exhibition even more valuable."
In Mr Berculo's view, the level of the seminars and conferences also reflects the great value of helping the industry to develop well in the emerging countries.
He said: "Animal health and food safety are already very important issues in those countries. Retail chains there with a serious approach impose the same food safety standards as European and American supermarket chains."
This opinion is shared by Carel Neervoort, Area Manager for HatchTech in Asia, who commented: "There is a strong focus on producing healthy and safe products. Our products are designed and developed for the production of strong and healthy chicks. At VIV Asia, HatchTech demonstrated the HatchBrood system. HatchBrood balances and controls all crucial environmental variables during the brooding period, ensuring that all chicks maintain a uniform and optimum body temperature. VIV Asia visitors indicated their interest in being able to reduce medicine usage in their poultry operations by producing stronger flocks, resulting in a healthier product at the consumer's table."
Overall, the exhibitors were exceedingly pleased. The number of visitors totalled 33,229 from 118 countries, which exceeds the expected figure of 27,000. Visitors rated the exhibition with a score of 8.3, while exhibitors rated VIV Asia 2013 as 8.1.
Despite these positive results, Mr Berculo still has some aspirations for the future. He explained: "The event has a very strong profile in the poultry husbandry chain. That's excellent, as there is a huge demand for it. But we want to really promote the pork chain too.
"Our Aquatic Asia exhibition, held concurrently with VIV, has not yet produced the results we intended or expected either. The range offered at Aquatic Asia 2013 was limited, while VIV Asia had around 250 suppliers of products for the aquaculture sector. Visitors to Aquatic Asia, 695 in total, still attach great value to a dedicated event for their sector. The conference programmes about fish farming and aquaculture were very well attended. This aspect forms a firm foundation for future developments. The same applies to Dairy. Events that start modestly with a small conference could have the potential to grow into a strong pillar of the VIV concept. In short, the lines have already been set out for the 2015 edition."
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Food Price Index up Slightly in March on Higher Dairy Prices
12 April 2013
GLOBAL - The FAO Food Price Index (FPI) crept higher by one per cent in March compared with a month before, driven mainly by an 11 per cent increase in dairy. Dairy products carry a 17 per cent weight among the various commodity prices included in the calculation of the overall FPI.
Meanwhile, FAO's monitoring of the global cereal supply and demand situation has slightly revised the 2012 crop production estimate upward by nearly three million tonnes, which now stands two per cent lower than the record set in 2011.
"World cereal production in 2013 could recover strongly barring unfavourable weather in major producing regions," FAO says in its latest Cereal Supply and Demand Brief.
The outlook for all cereal crops is positive overall, with wheat crops already well advanced and plantings for rice and coarse grains expected to increase these coming cropping months owing to attractive prices. Global wheat production in 2013 is expected to increase by four per cent to 690 million tonnes, the second highest ever after the 700 million tonnes produced in 2011.
Exceptional volatility in dairy
The FAO Dairy Price Index jumped by 22 points in March to 225, one of the largest recorded changes. The price surge is caused by hot, dry weather in Oceania, which has led to milk production falling off steeply and a concomitant reduction in the processing of dairy products in the region.
The dairy prices used in the Price Index calculation are based on the exports of New Zealand, as it is the world's largest dairy exporter, accounting for about one-third of global trade. Export prices for dairy products have also risen for other important exporters, such as the European Union and the United States, but not to the same degree.
"The exceptional increase is in part a reflection of market uncertainty as buyers seek alternative sources of supply," the Food Price Index report says. "In addition, dairy output in Europe has yet to come fully online after a particularly cold winter, which has delayed pasture growth to feed dairy animals."
Other major commodity prices stable
The FAO Cereal Price Index averaged 244 points, unchanged from February. While maize prices increased last month on a fall in exportable supplies from the United States, lower wheat prices on prospects of a good world harvest offset those increases. Global rice prices remained stable.
The FAO Oils/Fats Price Index fell 2.5 per cent from February, due mostly to soy oil prices, which dropped on account of favourable weather conditions in South America, a record 2013 US soybean crop and a cancellation of purchases by China. Palm oil prices were also slightly down.
The FAO Meat Price Index averaged nearly 176 points in March, down two per cent from February.
The FAO Sugar Price Index edged higher 2.8 points, or one per cent, from February.
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Government to Reduce Food Import Bill
19 April 2013
JAMAICA - The Ministry of Agriculture and Fisheries will be pursuing initiatives aimed at enhancing Jamaica’s food security and reducing the country's annual food import bill of US$1 billion.
Portfolio Minister Roger Clarke identified some of the imported items, that "take a big chunk out of our import bill”, as wheat flour, corn, animal feed, rice and some fish products.
He said that the establishment of the eight Agro Parks will make a significant contribution to agricultural development, while moving towards food security.
“In these Agro Parks, the government will be working towards putting in basic infrastructure, such as irrigation, drainage, storage, and packing house facilities. We will be concentrating extension officers in those specific areas to deal with production, so that the farmers can have a continuous linkage with their extension officers,” Mr Clarke stated.
Over the next three years, some US$8 million will be invested to develop the parks in six parishes, including St. Thomas, St. Catherine, Clarendon, Manchester, St. Elizabeth and Trelawny.
Focus will be placed on the production of onions, Irish potato, yam, honey, small ruminants, hot pepper, ginger, turmeric, pineapple, and on aquaculture.
In addition, Mr Clarke noted that the Ministry will seek to put in place a proper marketing strategy for the agricultural sector.
“We are even looking at an exchange, somewhat like the stock exchange, to deal with how we market our farm produce,” he said.
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Grant for Polillo Farmers
26 April 2013
PHILIPPINES - The Department of Agriculture is allotting an initial P80 million for various agricultural and fishery projects to further increase the productivity and incomes of small farmers and fisherfolk in five towns comprising the Polillo group of islands, in Quezon.
Agriculture Secretary Proceso J. Alcala said such assistance is also aimed at making Polillo sufficient in rice, other staples, fish, vegetables and other crops. He led the distribution of various farm inputs, equipment, and projects to more than 1,000 farmers, fisherfolk and local government officials during a two-day visit, highlighted by an ‘Agriculture and Fisheries Development Summit,’ at Polillo town hall, on April 15, 2013.
He said the DA through its Region 4-A (Calabarzon) office and other concerned DA agencies are assisting the local governments of the five towns (Polillo, Jomalig, Patnanungan, Burdeos, and Panukulan) craft a medium-term agriculture and fisheries development plan or roadmap to make Polilians sufficient in rice and major staples.
"We need to expand the area planted to rice in each of the barangays in Polillo group of islands in line with the Aquino government's goal to achieve sufficiency in rice by end of 2013," said the DA chief. He asked Polillian farmers to coordinate with the DA’s Bureau of Soils and Water Management (BSWM), led by Dir Vince Tejada, to locate springs to be tapped as sources of irrigation, and establishment of small water impounding projects (SWIPs).
The bulk of the interventions consisted of P54.7-M worth of crop and accident insurance coverage from the DA’s Philippine Crop Insurance Corporation (PCIC), for farmers, fisherfolk and their families in the five towns of Polillo (P13.5-M worth of insurance), Jomalig (P15M), Patnanungan (P9.6M), Burdeos (P8.35M), and Panukulan (P8.25M).
For its part, the DA’s Bureau of Fisheries and Aquatic Resources (BFAR) provided P5-million worth of fish nets, fishing gears and paraphernalia.
Two barangay food terminals worth P2M will be established by the DA’s Agribusiness and Marketing Assistance Service (AMAS), while P1.5-M worth of farm equipment (hand tractors, water engine pumps, and coffee dryer), native pig and chicken, and a training module was allotted under the DA’s organic agriculture programme.
The DA rice and corn programmes gave P1.4-M worth of certified rice seeds (200 50-kilo bags worth P240,000), 150 bags of yellow and white corn seeds (P360,000), and dozens of farm equipment that included hand tractors, rice cutters, knapsack sprayers, collapsible dryers, and laminated tarps or trapal.
Polillian rural women and youth, who are members of Rural Improvement Clubs (RICs) and 4-H Clubs, also received P170,000-worth of livelihood projects from the DA’s Agricultural Training Institute.
During the forum, Secretary Alcala promptly addressed the concerns and issues raised by farmers and fisherfolk. He was assisted by head of DA agencies present that included Assistant Secretary and national corn programme coordinator Edilberto de Luna, PCA Administrator Euclides Forbes, PCIC President Jovy Bernabe, BSWM Director Silvino Tejada, BFAR Director Asis Perez, and DA Region 4-A Director Vilma Dimaculangan.
Secretary Alcala also raffled off to participants several head of farm animals (cattle, carabaos with implements piglets, sheep, and cattle), and hand tractors to each of the five municipalities in Polillo.
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Consumers Value Locally Sourced Food
03 May 2013
US - New research confirms that interest in locally sourced foods is taking hold among consumers who equate “local” with “fresh” and “healthier” and who want to support their local economy.
Yet definitions of “local” vary widely by age group and were found to encompass national brands, according to a survey commissioned by food industry marketing company Charleston|Orwig.
In the recent survey, consumers indicated that a national brand can be considered “locally sourced” based on where its growers/products are located (63 per cent). Nearly that many, 58 per cent , believe a national brand is “locally sourced” when it uses local sources for ingredients and products. About half of the restaurant operators surveyed agreed with both statements, at 55 per cent and 45 per cent .
Both consumers and operators said a brand can be considered locally sourced because units/sales help the local economy (27 per cent and 19 per cent). On the other hand, 21 per cent of operators and 17 per cent of consumers say a national brand can never be considered locally sourced.
When asked to define “locally sourced,” a majority of consumers responded “food or products from within their state.” Younger consumers, however, defined “local” as much closer to home, within five to 10 miles.
The new survey was inspired by 2012 Charleston|Orwig-sponsored research that found a majority of consumers had recently purchased locally sourced food. Interestingly, “local” was a more important consideration than “organic” and was cited as a key driver of “sustainability,” according to consumers surveyed last fall.
“It seems locally sourced is gaining ground around the country and certainly is a frequent topic among our clients and friends in the food industry,” said Mark Gale, Charleston|Orwig partner and chief executive officer. “We thought it was important to dig deeper into this trend and the insights from last year’s research.”
Safety First
The 2013 survey compared priorities between locally sourced food and brand, convenience, availability and cost. Datassential led the research, which surveyed more than 2,700 consumers and 300-plus restaurant and food-service operators.
As much as both consumers and operators value locally sourced, they identify significant hurdles to purchasing and offering local items including short growing seasons that limit stocks of fresh produce, price, and quality and safety concerns. Both groups agree that food safety is more important than locally sourced, with operators showing particular concern about food safety.
“The research suggests an opportunity for national brands to support chain and franchisee efforts to source some ingredients locally,” said Gale. “And national brands can source locally to appeal to consumers and operators who see the benefits of locally sourced, but are concerned about safety and availability.”
Gale noted that addressing locally sourced concerns is important for brands: one-third of consumers and one-quarter of operators in the Charleston|Orwig survey identified themselves as brand loyal. Half of consumers and two-thirds of operators said they are “somewhat” brand loyal.
The research further noted a correlation between retail purchases of locally sourced and demand for local foods when dining out. Nearly 50 per cent of the consumers surveyed by Datassential who “always” or “usually” purchase locally sourced foods for home use, also order local foods when eating out. But finding local items on restaurant menus may be difficult because nearly 60 per cent of operators surveyed indicated they do not include locally sourced or farm-identified items on menus because of seasonal availability and cost issues or safety concerns.
Fine and casual dining operators are most likely to offer local or farm-identified items, indicating an opportunity for quick-serve and midscale restaurants to address demand for locally sourced foods, Gale said.
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Another Rise for Global Food Price Index
10 May 2013
GLOBAL - The FAO Food Price Index moved up in April for the second consecutive month.
The FAO Food Price Index averaged 215.5 points in April 2013, up two points (1.0 per cent) from its revised March value of 213.2 points and from April last year. At that level, the index is only nine per cent below the peak reached in February 2011. Similar to the price development in March, the April increase was driven almost exclusively by a sharp rise in dairy quotations, as meat prices rose marginally while those of the other food commodities fell.
The FAO Cereal Price Index averaged 234.6 points in April, down 10 points (4.1 per cent) from March but nearly 11 points (4.9 per cent) above the corresponding period last year. Most of the decline in April was triggered by weaker maize prices on expectation of higher closing stocks and favourable 2013 crop prospects. Wheat prices changed little, as the downward pressure stemming from expectation of larger inventories was offset by the upward pressure resulting from concern over the poor growing conditions and spring crop planting delays in the United States. Rice prices were marginally down, depressed by falling Indica rice quotations, while Japonica and, especially, fragrant rice prices moved upwards.
The FAO Oils/Fats Price Index averaged 199.0 points in April, down two points (1.5 per cent) from March. The decline was mainly led by palm and soy oil. Palm oil prices eased further reflecting abundant stocks held both by exporting and importing countries, and an expected acceleration in production. The decrease in soy oil prices reflects good progress in South America’s record soybean harvest, larger than anticipated inventory levels in the United States and initial forecasts of a record US soybean crop later this year. Furthermore, weakening energy prices and persistent global macroeconomic concerns continued to weigh on the vegetable oil complex as a whole.
The FAO Dairy Price Index averaged 258.8 points in April, a sharp rise of nearly 34 points (14.9 per cent) from March. The main cause of the price surge seen in recent months is a steep decline in New Zealand’s milk production, following an abnormally prolonged dry period at the start of the year leading to farmers drying off or culling milk cows early, which in turn caused a reduction in the processing of dairy products. The leap in prices is partly a reflection of the absence of commercial stocks to cater for such an unexpected reduction in availability, rather than a more profound shortage of supplies, as New Zealand’s overall output for the 2012/2013 (June-May) production year is projected to finish at record levels. In Europe, warmer weather during April has allowed cumulative milk production to return to the seasonal average in some countries.
The FAO Meat Price Index averaged 178.7 points in April, a level which it has maintained since the latter part of 2012, moving within the narrow band of 177 to 179. Nevertheless, meat prices overall remain high by historical standards: from the early part of 2011, the index has stayed above its previous peak of 170 reached in mid-2008. Quotations for the different types of meat showed some variation in April, with poultry and pork rising by one per cent and three per cent, respectively, despite a limited reduction in feed prices, and those of sheep meat and beef falling slightly.
The FAO Sugar Price Index averaged 252.6 points in April, down over nine points (3.6 per cent) from March. After rebounding in March, prices fell sharply in April mostly on expectation of a significant recovery in cane crop for the new crushing season in Brazil, the world’s largest exporter. With larger production of sugar expected to enter the world market and weaker import demand, sugar export prices were put under downward pressure.
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Allendale Releases Cold Storage, Cattle on Feed Estimates
17 May 2013
US - Analysts at Allendale, Inc. have released their Cold Storage and Cattle on Feed estimates ahead of the May 17th USDA report.
April placements are expected to be 14.7 per cent higher than last year. Feedlot margins remain negative. Cash cattle prices averaged $128 in April compared with March's $127.
April placements appear large as they are compared with the low April 2012 placement (which was 14.8 per cent less than 2011). Cattle placed in April will be marketed from September through November.
Allendale anticipates a marketing total 2.2 per cent higher than April of 2012. This is made after a 4.6 per cent increase due to a calendar adjustment, one more weekday in 2013 vs. 2012, for this month.
Total Cattle on Feed as of May 1 will be 3.5 per cent smaller than last year. This would be larger than the April 1 survey which showed 5.0 per cent fewer cattle. Market ready cattle numbers are tight now and will transition to adequate by late summer.
Allendale projects a 664 million lb. total pork stock level for the end of April. The five year average is 594 million lbs. for the end of April. The Allendale estimate represents an increase of 16 million lbs. from the previous month. The five year average month to month change for April is a 4 million lb. increase.
Beef stocks, at 531 million lbs., are above the five year average of 432. This month's number represents a 17 million lb. increase from the previous month. The five year average change is for a 6 million lb. decrease.
Allendale Cattle On Feed Estimates
**Pork Belly stocks are estimated - in million pounds while Cattle on Feed is estimated as a percentage compared to last year.
Sarah Mikesell, Senior Editor
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Philippines Agriculture, Fisheries Grows 3.3 Per Cent in Q1 2013
17 May 2013
PHILIPPINE - The Philippine agriculture industry grew by 3.3 per cent in the first three months of 2013, as all four subsectors — crops, fishery, poultry and livestock — posted respective increases, grossing a total of P352.5 billion at current prices.
Citing estimates of the Department of Agriculture’s Bureau of Agricultural Statistics (BAS), Agriculture Secretary Proceso J. Alcala said the crops subsector, accounting for more than one-half (54.1 per cent ) total agricultural production, increased by 3.6 per cent . It was bannered by palay and corn, which grew by 4.45 per cent and 11.43 per cent , respectively.
For the first quarter of the year, the country’s farmers harvested a total of 4.17 million metric tons (MMT) of palay (unmilled rice) and 2.25 MMT of corn, valued at P66 billion (B) and P27.8 B, respectively, at current prices.
The DA chief said the increased harvests of palay and corn were mainly due to early plantings, adequate supply of irrigation water, higher average yields as a result of increased usage of hybrid and certified rice seeds, hybrid and OPV corn seeds, and additional areas planted to both rice and corn.
“Our efforts are paying off, and we hope to attain our sufficiency targets by year-end,” said Secretary Alcala. “For these achievements, we thank our country’s farmers and fishers for their continuous hard work and perseverance, and strong cooperation of local government units and the private sector,” he added.
The DA targets to produce 20 MMT of palay and 8.4 MMT of corn by end of 2013, making the Philippines sufficient in both staples. Last year’s output totaled 18 MMT of palay and 7.4 MMT of corn.
Just recently, the country started exporting 35 MT of aromatic and organic black rice to Dubai. Another batch of 80 MT of premium and organic, colored rice varieties is being readied for shipment to other countries. The DA in partnership with the private sector also exported 24 metric tons (MT) of corn feed silage for cattle to South Korea. It is part of a total 15,000 MT of corn silage to be shipped to that country this year.
Several major crops also posted positive gains during the first three months of 2013, which included pineapple (increased by 5.8 per cent ), mango (4.5 per cent ), tobacco (4 per cent ), sugarcane (2.5 per cent ), and onions (8.5 per cent ), among others.
The fisheries subsector, which shared 16.3 per cent to total agricultural production, rebounded with a 5.6 per cent growth, as production of aquaculture species like milkfish (bangus) and tilapia has increased.
Larger catch of marine species like roundscad (galunggong) and tuna were also recorded, as result in part of the conservation measures imposed in Zamboanga and Visayan Seas, and lifting of the tuna ban in the Pacific Ocean.
Total value of fishery production amounted to P59.5 B at current prices.
The poultry subsector, accounting for 14.4 per cent to total agricultural production, posted a 2.8 per cent growth, with total value of production at P45.8B at current prices. The subsector was led by chicken, whose output grew by 3.3 per cent , worth P34.6B.
The livestock subsector, which contributed 15.3 per cent to total agricultural output, barely grew, at 0.3 per cent , with total production value of P54.3B at current prices. The hog industry grew by 0.36 per cent , valued at P44.87B at current prices.
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Pork Commentary: December Corn Goes Below $5.00
09 July 2013
Jim Long is President &
CEO of Genesus Genetics.
US - Last Friday December corn closed was at $4.91 a bushel - the first time December corn closed below $5.00 for over two years, writes Jim Long.
The market is reacting to a record US corn planting (highest since the 1930’s), favourable weather and moisture. The scenario could lead to a record US corn harvest. How low could corn go? In Brazil last week bid prices for corn per bushel were as low as $2.54 per bushel at Rondonopolis. Other areas were higher in price and some up to the mid $4.00 mark but the idea of $7.00 corn in the coming crop year is getting to the level of delusional thinking in either Brazil or the US.
We have expressed the opinion several times that the hog market and its potential profitability is currently tied to feed prices. We are a corn market not a hog market. Corn price goes down, hog profitability goes up. The supply of hogs is relatively static. For the next year as the US Hogs and Pigs Report showed us last week, we can expect little change in hog supply. To some extent hog prices are profitable within $10.00 per head. Corn and feed though have a window to affect hog margins up to $30 to $40 per head from where it has been.
The current scenario of potentially lower feed prices and static hog supply with what is already historically high hog prices is setting up for fifteen months of quite positive returns for hog producers. We expect many producers will average $20 plus per head profit farrow to finish the next fifteen months.
Hog Market
The US hog market continues its strong run with lean hogs over $1.00 per pound. Weekly hog marketings continue to run very close to last year despite the fact last year had the hottest summer on record. We expect lean hog prices will continue to hang around $1.00 until mid – August.
The canary in the mine for the markets is currently early wean and feeder pig prices. A year ago early weans were below $10 and feeder pigs $18. This year early weans are over $30 and feeder pigs are over $50. We are told repeatedly by feeder pig brokers demand is outstripping supply - this despite July usually the worst time of year to find buyers. If this keeps up we expect early weans could be $50 in October and feeder pigs $70. December corn goes lower in price? We are low with our price projection.
Observations
No doubt the United States has the most arable acres and the greatest capacity to produce food with 417,081 million acres. China has a large amount of arable acres and has proven its ability to produce food for a massive population. All of these and many other dynamics are affecting us every day. We are in a truly global economy. Indeed the recent strength in the US dollar due to many global and domestic factors is keeping current hog and grain prices for US producers. For Canadian producers the opposite stronger US dollar helps their margins. The point is markets react to Global Supply and demand. We don’t live on an island!
Author: Jim Long, President & CEO, Genesus Genetics
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Weather Impacts Food Prices in China
26 July 2013
CHINA - The humid weather last week has affected the country's agri-food prices.
According to a survey of 36 medium and large sized cities conducted by the Ministry of Commerce (MOFCOM) there was a small rise in prices.
The average wholesale prices of meat saw ups and downs, among which, prices of pork and mutton were up by 0.8 per cent and 0.1 per cent respectively compared to the previous week and the price of beef was steady.
The retail price of chicken and eggs fluctuated by a small margin. The price of chicken was up by 0.3 per cent and price of egg fell by 0.3 per cent compared to the previous week.
The average wholesale prices of eight kinds of aquatic products were down by 0.1 per cent as compared with that of the previous week.
The top drop was seen in price of large yellow croaker and Small hairtail, down by 2.8 per cent and 0.8 per cent respectively.
Retail prices of cooking oil and food grain were steady. Both peanut oil and rapeseed oil were up by 0.1 per cent compared to previous week, soybean oil was down by 0.1 per cent and the price of small package of rice and small package of flour remained the same.
The average wholesale prices of 18 vegetables went u
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AHDB Pig Market Weekly
Reports » AHDB Pig Market Weekly » AHDB Pig Market Weekly - 1 August 2013
01 August 2013
AHDB Pig Market Weekly - 1 August 2013AHDB Pig Market Weekly - 1 August 2013
Latest AHDB/BPEX forecasts for UK pig meat supplies indicate that the fall in pig slaughterings this year will be smaller than previously thought.
AHDB
Little change forecast for UK slaughterings and production
For the year as a whole, clean pig throughputs are expected to be just over 10 million head, still lower than last year but only marginally. Sow slaughterings are likely to be back more significantly, particularly in the second half of the year when they were inflated last year as a result of high feed prices. However, these declines will be offset by higher clean pig carcase weights, so pig meat production is set to be fractionally higher than last year at 828,000 tonnes. The upward revision of the forecasts is largely the result of better-than-expected improvements in sow productivity. With some recovery in the herd forecast, slaughterings and production should resume their upward trend in 2014.
With tight supplies elsewhere in the EU and increased retailer preference for UK pig meat, imports so far this year have been lower than a year earlier. This trend is expected to continue for the remainder of the year, with volumes stabilising next year. UK exports have been strong so far in 2013, buoyed by demand from China but growth may slow in the remainder of the year with supplies tighter. Nevertheless, shipments for the year as a whole should be up significantly, a trend expected to continue into 2014. The net result is likely to be lower supplies for domestic consumption, a trend apparent in figures for retail sales for the year to date.
More details on the outlook for UK pig meat supplies can be found in the latest edition of Pig Market Trends, which can be downloaded by clicking here.
Production costs fall further in July
Latest AHDB/BPEX provisional estimates show that the cost of pig production fell further in July. This was largely due to the easing of spot feed prices as prospects for this year’s harvest still look positive. Average costs in July were estimated to be just under 159p per kg. This is the lowest level since June 2012 and around five pence lower than the month before. Costs have fallen by over 14p per kg since January and are now below the level a year earlier for the first time since feed prices began rising last summer.
With the average pig price standing at over 168p per kg in July, producer margins are back in the black, having been in negative territory since late 2010. However, while this reflects the trading position in the latest month, it is worth remembering that pigs being sold during the month will have been fed through a period when costs were typically much higher. In addition, some producers will have bought feed ahead earlier in the year and they will not yet have benefitted from the lower spot prices on which the estimates are based.
UK pig prices
For the week ended 27 July, the EU-spec DAPP came down to 168.25p per kg. Finished pig prices have started to experience some downward pressure, with a week-on-week fall of 0.56p, as recent price rises started to hit consumer demand. This meant that the difference between the latest price and the same period last year narrowed to just under 18p. The recent turn in the weather will have dampened demand for the barbecue season but it could help sales of some other products. Estimated slaughterings were slightly up on a year earlier, at 163,400 head. Carcase weights increased slightly during the week, to 78.82kg but the hot weather appears to be delaying the seasonal increase in weights which would normally be seen at this time of year. Nevertheless, this week’s average was more than a kilo up on a year earlier.
For the eighth consecutive week, cull sow prices rose, to 112.61p per kg for the week ended 20 July. Fuelled by a more robust market across the continent, this was almost 3p up on the week. The recent increases have taken the sow market above year earlier levels for the first time since November last year, with the annual change for the week up 4p.
With the finished pig market easing slightly, the weaner price was again little changed. The latest quote, for the week ending 3 August, fell to £53.54 per head. This was four pence lower than a week earlier but the year-on-year increase remains large, at nearly £14 per head.
Pork marinades up as the summer arrives
In the 12 weeks to 7 July, consumer spending on pork increased 1% compared with the same period last year, according to the latest figures from Kantar Worldpanel. This growth continues to be driven by price rises (up 4%), as the amount purchased fell 3% on the year. Pork marinades were the main bright spot, making up 14% of all pork sales by volume. The largest gains were for ribs, likely driven by the barbecue season. Most other cuts recorded a decline in volume purchases compared to last year.
Over the same period, spending on bacon was 1% below last year, as the amount purchased declined 5%. Fewer households purchased and those that did shopped less frequently. Expenditure on sausages was up by 10%, despite volume purchases falling 4%, although premium sausages again performed well. Sliced cooked ham has shown good growth, with expenditure up 4% and the amount purchased 5% ahead of last year, due to shoppers buying more often and buying more per trip.
In the most recent 4-week period, volume sales of pork declined 6%, resulting in a spending decrease of 2% compared to last year. Marinades were again the only cut to show volume growth. Bacon sales fell further behind last year as the amount purchased declined 10%. Spending on sausages again increased despite volume purchases declining but ham continued to perform better.
EU pig prices on the up
With demand having been subdued for much of the year, EU pig prices showed little sign of life. However, that began to change in June as improved weather conditions stimulated demand in northern Europe, as did the approaching holiday season in the south. At the same time, export markets were improving, notably Russia where EU pork replaced supplies from the Americas. Into July, tighter supplies meant that prices increased rapidly with demand remaining strong. By week ended 21 July, the EU average reference price had risen to €182.09 per 100kg. This was its highest level since November, up €18 since the low point in May and nearly €14 more than a year earlier. With prices starting to approach similar levels to last autumn, the impact on consumer demand remains to be seen.
Prices have increased in recent weeks across all major producing Member States. In Germany, the reference price had increased by €16 since mid-May, with similar rises in neighbouring Belgium, the Netherlands and Poland. There were even larger increases in Southern Europe, with the Italian reference price up by over €30 in six weeks and the Spanish quote moving above €200 per 100kg for the first time since 2001. Growth was somewhat slower in Denmark, up by only €8 since May and less than €3 in the last four weeks. Although the UK reference price remained firm through this period, upward movement was more limited so the UK’s premium over the EU average price fell from over €24 in mid-May to less than €10 in the latest week.
Feed market update
The Nov-13 UK feed wheat futures price closed on Tuesday two pounds lower over the week at £162.50/t. However, this represents an increase on Monday’s close as the UK price followed Chicago wheat prices higher on Tuesday. In a longer term context, this is a decline of more than £35/t since the Nov-13 price peaked last November. Global wheat prices have seen some support recently on strong export demand from Japan and Egypt plus concerns for the US wheat quality. The US weather continues to get the main attention as every day gets closer to the realisation of the estimated bumper crops. Some more weather risk is expected to be taken out of the market as more rain is forecast for the next two weeks.
The Hi-pro any origin soyameal (ex-store East coast) price as at Friday 26 July was £432/t for July delivery, up £5 on the week. The Chicago soyameal Dec-13 futures price closed at $401.10/t on Tuesday, down 4% from the week before. Rape meal prices have continued to decline due to improving global rapeseed crop conditions on top of the favourable US soyabean crop conditions. According to analysts Oil World, physical supplies of soyameal were still rather tight in the EU in July, keeping nearby delivery prices firm and above average. However, arrivals are expected to pick up in the coming weeks.
To read more about the latest developments in the feed market click here.
Most pig farms taking action to prevent disease
New figures from Defra show that 90% of farms with pigs are undertaking at least one practice to prevent animal disease. The most common of these, employed by 80% of farms, were measures to prevent disease being brought onto farm by visitors. This was more prevalent among pig farmers than those in other livestock sectors and was particularly common in the main pig producing regions of Yorkshire and East Anglia. Farms with pigs were also more likely than other livestock farms to be taking other measures, such as using strict stock replacement policies and separating new livestock from existing animals.
However, only just over half of pig farms had implemented a farm health plan in consultation with their vet, a lower proportion than for dairy or poultry farms. Similarly, at 40%, fewer farms had provided training in disease management than in the dairy or poultry meat sectors. Most livestock farms carrying out preventative measures were doing so for animal welfare or financial reasons. Overall, only a quarter cited the market or customer as a reason for doing so but for pig farms this factor was mentioned by well over half of farms.
The full report can be downloaded by clicking here.
June Pig Market Trends out now
The July edition of Pig Market Trends (PMT) was published on Tuesday. As well as the usual coverage of producer prices, slaughterings and production, trade, retail sales and prices, costs of production and other industry news, this month’s edition includes the latest outlook for UK pig supplies (see above).
Key messages this month include:
•GB pig prices, already at record levels, continue to increase in June on strong demand for UK pig meat
•Little annual change in UK slaughterings in June but carcase weights remain high
•UK pork exports in May up on the year again on the back of strong demand from Germany
•Pork imports in May similar to year earlier but cured and processed volumes lower
•Trust in food retailers recovering from horsemeat revelations but shoppers more aware of quality standards
•Cereals prices decline further as global weather remains favourable but soya expensive in short-term
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Feed Production, Prices Rise
09 August 2013
UK - Retail production of animal feed was 6.7 per cent higher in June 2013, while average prices for the quarter are well above the levels of the previous year.
Statistics on animal feed production in Great Britain for the April to June quarter have been published by Defra.
For the latest month of June 2013, total GB retail production of animal feed was up 6.7 per cent compared with June 2012 at 853,300 tonnes of compound feed, blends and concentrates. The moving 12-month figure stands at 10.756 million tonnes.
Total integrated feed production was 5.1 per cent higher in June 2013 than the same month last year.
Total raw material usage in the retail production of animal feed was up 5.3 per cent compared with June 2012.
Feed price increases appear to be levelling off somewhat this year but they are well above those of a year ago for all species. Average prices per tonne for the quarter April to June 2013 (with the corresponding figure from 2012 and percentage change in brackets are:
•Cattle and calf feed - £253 (£223; +13.5 per cent)
•Pig feed - £288 (£259; +11.2 per cent)
•Poultry feed - £311 (£268; +16.0 per cent)
•Sheep feed - £257 (£222; +15.8 per cent)
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Food Prices Stay Stable in China
16 August 2013
CHINA - Meat prices remained stable indicating just a slight increase, wherein the wholesale pork prices rose by one per cent as compared to the previous week.
Beef was up by 0.3 per cent, and lamb remained unchanged.
The retail prices of chicken and eggs kept rising, up by 0.5 per cent and 0.6 per cent respectively compared to the previous week.
The average wholesale prices of eight kinds of aquatic products were up by 0.5 per cent compared to the previous week. The top price rises were big yellow croaker, small cutlass fish and crucian carp, up by 2.9 per cent, two per cent and 1.6 per cent respectively.
The wholesale prices of 18 vegetables dropped by 2.4 per cent compared to the previous week having risen for three consecutive weeks previously.
The main falls were bitter gourd, cucumber and tomatoes as market supply is on the increase, and prices fell 10.8 per cent, 7.6 per cent and 6.9 per cent respectively.
The retail prices of edible oil and food-grains remained basically stable with a slight decline.
Soybean oil, small packages of flour and rapeseed oil fell by 0.3 per cent, 0.2 per cent and 0.1 per cent respectively compared to the previous week, and small package of rice and peanut oil remained unchanged.
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USDA GAIN: Livestock and Products
Reports » USDA GAIN: Livestock and Products » USDA GAIN: Mexico Livestock and Products Annual 2013
23 August 2013
USDA GAIN: Mexico Livestock and Products Annual 2013USDA GAIN: Mexico Livestock and Products Annual 2013
Cattle inventories continue falling but new programs and a focus on improving genetics and management practices may help the industry rebound. Red meat prices remain the driving factor affecting consumption which has led to reduced beef and an upswing in pork demand. Mexico’s industry and the government are looking to expand their own exports while the United States was able to export over $1 billion in pork and $725 million in beef to Mexico in 2012 with growth expected in 2013 and 2014.
USDA GAIN: Livestock and Products
Commodities:
Animal Numbers, Swine
Meat, Swine
Production:
The Post 2014 Mexican pork production forecast is 1.29 MMT CWE and the revised 2013 production estimate is 1.265 MMT CWE. This is due to the continued incorporation of new breeding lines, better farm management techniques, and increased slaughter weights that have allowed production of more meat from fewer hogs. In addition, industry members are expanding production with the potential opening of the Chinese market. Mexican access to China has been discussed at the head of state level and received significant industry and media attention in the first half of 2013. Post’s 2012 production estimate has been revised upward based on the latest preliminary official data from SAGARPA to 1.239 MMT CWE. The data shows that the state of Jalisco was responsible for 19.2 percent of pork production, followed by Sonora (18.6 percent), Puebla (9.9 percent), Guanajuato (8.7 percent), and Veracruz (8.6 percent).
Genetics Continue Improving and Additional Feeding Options are Developing
Genetic improvements are allowing the pork sector to nudge the live pig crop higher in 2014. These hogs also have better genetics and are able to gain desired market weights faster with improved rates of gain. Recently, the government of Mexico (GOM) restricted the import of swine for breeding purposes from the United States as a response to the porcine epidemic diarrhea (PED) outbreak (see GAIN Report MX3051). However, live breeding animals from other countries (e.g., Canada) and genetic materials can still be imported into Mexico which should help the industry to make continued production improvements.
Industry sources report that swine continue to be slaughtered at around 115 kg live weight with a carcass weight of around 82 kg. These members report that swine are held in feed lot operations for around 50 days.
Pork feed is based on yellow corn as well as sorghum and represents approximately 64 percent of the production cost. Industry sources report that although these feed grains are a staple, northern Mexico producers are feeding hogs with Durum wheat, which is seasonally over supplied, as a special request from interested customers. Spokespersons for the Mexican pork sector report that pork producers in the states of Sonora and Sinaloa have been requested to supply specific Asian markets with pork meat from animals exclusively fed on wheat. Reportedly, the taste, color and tenderness of resulting pork cuts are an added-value asset which is appreciated by high-end consumers.
Consumption:
The Post 2014 total pork consumption forecast is 1.96 MMT CWE as purchasing power gains as well as pork’s attractiveness in comparison with beef and poultry will continue contributing towards increased demand. This could be tempered, however, if the Chinese market opens and pushes prices higher while other suppliers are not able to immediately put product into the domestic market. Post’s 2013 estimate of pork consumption remains unchanged while the 2012 estimate was revised upward based on official data.
Pork Consumption Is On the Upswing
Middle income consumers (a smaller portion of the population) continue shifting consumption habits from poultry and beef back to pork due to high beef prices and more recently due to concerns over the widespread highly pathogenic avian influenza (HPAI) outbreak and increased poultry product prices. Reportedly, as well, promotion and marketing campaigns launched by the industry have been successful. It appears that pork is slowly gaining acceptance among consumer groups and shoppers as part of a healthy diet.
Prices Shape Buying and Production Decisions, but Culture Important, Too
Industry sources reported unusual consumption patterns and prices for early 2013. Usually, pork consumption and prices drop during the 40 days prior to Holy Week (i.e. Easter) however, pork prices moved lower than traditionally witnessed. Some sources blame the high volume of imported pork for keeping prices depressed while other signs indicate that some producers slaughtered larger numbers of swine in the latter part of 2012 and early part of 2013.
Trade:
The Post 2014 import forecast is 790,000 MT CWE based on sustained strong demand and pork’s competitive prices. The trade forecast is based on higher demand from Mexican consumers who have greater purchasing power and a consumption preference for varied sources of animal protein. The Post 2013 pork import is also revised upwards slightly to 775,000 MT CWE as imports from the United States, Canada, Chile, and Spain are all growing. The majority of Mexico’s pork imports remain hams and picnic as well as mechanically deboned meat (MDM) for the preparation of sausages, deli hams, and other cold cuts. Post’s 2012 pork import figures were kept unchanged from official data.
Industry sources have indicated that the authorization of an export quota of 300,000 MT to China could lead to an increase of frozen pork meat imports as it would be used as export replacement in Mexico or, if allowed, possibly used in the preparation of exports for China.
Historically, trade data has indicated the United States is the main supplier to Mexico. Thus, no changes in this pattern are likely to occur in the short to medium term.
Mexican Pork Meat Exports: The Key to Open China’s Door for Other Products?
The Post pork export forecast for 2014 is 120,000 MT CWE as the country looks to open export markets in other Asian markets and has been able to steadily grow its exports in these markets. The Post forecast for 2013 is kept unchanged at 110,000 MT CWE as overall demand from Asian countries remains stable (although South Korea is not buying pork from Mexico right now, it appears that Japan’s purchases have stepped up). The sector has thus been able to continue supplying these markets with added-value products, with significant manual labor, at attractive prices. Post’s 2012 export estimate is unchanged and based on official data.
Jalisco is the main pork producing state but Sonora is the number one exporter. Industry sources report that out of every 10 MT exported, 9 MT comes from Sonora. Japan remains Mexico’s number one export market by volume and value. Pork meat exports are mostly loin to Japan, loin to the United States, and have traditionally been bone-in pork to South Korea.
Policy:
The United States’ recognition of Mexican States as free of classical swine fever (CSF) has been one of the key factors to opening foreign markets for Mexican pork and sources suggest that expanded Mexican access for raw pork to the United States will serve to increase access to other countries. As such, one of Mexico’s most important trade policy goals with the United States is expanded pork access.
NOTE: Mexico is a large market for pork offals and other non-skeletal muscle items. The trade volumes reflected below are based on CWE calculations for harmonized tariff system codes 020311, 020312, 020319, 020321, 020322, 020329, 021011, 021012, 021019, 160241,160242, and 160249.
August 2013
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Global Organic Food Market Growing
28 August 2013
ANALYSIS - The global market for organic food grew by more than 25 per cent since the start of the global economic crisis between 2008 and 2011.
According to the Soil Association’s Organic Market Report 2013, worldwide sales of organic food and drink reached $63 billion – more than €45 billion – by the end of 2011.
The latest figures from the Research Institute of Organic Agriculture (FiBL) and the International Federation of Organic Agriculture Movements (IFOAM) organic farming is practised in 162 countries.
In 2011 37.2 million hectares of farmland were managed organically and organic farming had a 0.86 per cent share of agricultural land surveyed.
The report says that it is estimated that there are another 32.5 million hectares of organic wild areas and non-agricultural land bringing the total organic farm land to 69.7 million hectares.
The countries with the largest organic areas of form land are Argentina, the US and Australia, which the Falkland Islands with 35.9 per cent if its land, Liechtenstein with 27.3 per cent if its land and Austria with 19.7 per cent of its land have the highest proportions of organic farm land.
Oceania has 12.2 million hectares of organic farmland, Europe 10.6 million hectares and Latin America 8.4 million hectares, while Asia had 2.8 million hectares.
The greatest demand for organic food is in the US and Europe – accounting for more than 90 per cent of sales.
Sales in the US during 2011, the latest year recorded in the report, were worth €21 billion. In Europe, Germany had sales worth €6.6 billion, while France had sales of €3.8 billion.
While Europe as a whole is experiencing a rise in organic food sales, the UK has seen its market slide.
The UK saw a 1.5 per cent decrease in sales overall in 2011 down to £1.64 billion and the number of businesses fell by 4.9 per cent to 6,929. The amount of farmland devoted to organic farming also fell – by 8.7 per cent to 656,000 hectares.
However, the report shows that despite these falls, there are areas of significant growth for organic Products including parts of the dairy sector, large specialist retailers, home delivery, non-food products and catering.
In Europe, the highest average annual consumption was in Switzerland, where it reached €177 per person. In Denmark it was €162 and Luxembourg €134.
The highest market shares of the food and drink market for organic products were in Denmark, Switzerland and Austria.
Europe is the largest consumer of organic foods and overall organic farming accounts for 2.2 per cent of the total European farm land and 5.4 of the farm land within the EU.
Overall in Europe organic sales grew by nine per cent in 2011 to reach €21.5 billion.
The Soil Association report shows that the US organic market, while being the biggest, is dominated by large companies throughout the supply chain.
With an organic land area of 2.7 million hectares, the market is worth €22.9 billion and sales of organic produce grew by 9.4 per cent in 2011 to €21 billion. Organic products now account for four per cent of food and drink sales.
The US organic market received a boost in the middle of last year, when EU and US organic standards were recognised as equivalent, removing the need for separate certification.
The report says that Latin America with 8.4 million hectares of organic farm land is an important producer and exporter, with growing domestic consumer markets and with Brazil leading the way.
The report shows that the Asian market for organic produce is growing steadily as the awareness of organic methods bolsters demand.
Most sales are in the affluent countries such as Japan, South Korea, Taiwan, Hong Kong, Malaysia and Singapore.
Most of the organic produce, however, is imported from Australasia, Europe and the US.
The market in Australia, New Zealand and the Pacific Islands is relatively small, but Australia and New Zealand are both important producers of organic product.
The report says that Africa is a continent of mass small-scale organic farming with more than half a million producers on 1.1 million hectares of land. Almost all the organic produce goes for export and largely to the EU.
The report concludes: “Against an uncertain background in the UK there is encouraging news in the continuing growth of organic food sales elsewhere in Europe and in North America.
“This growth shows no sign of abating, and indicates that the long-term prospects for the organic market in the UK should also be good.
“It is hard to anticipate when the UK market will return to growth, but less difficult to predict that it will surely do so.
“The new wave of interest in ethical shopping among young consumers has the potential to lead the organic revival.”
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GLOBAL - The Agri Commodity Market Research team at Rabobank is bearish on most agri-commodity prices, predicting further falls in grain and oilseed prices to the end of 2014.
In the latest Poultry Quarterly Review for the third quarter of 2013, Rabobank's Agri Commodity Market Research team reports that a further downward slide is expected from current levels as the new crop supply becomes more certain.
Rabobank quarterly average price forecast (3rd quarter 2013 - 2nd quarter 2014)
Source: Bloomberg, Rabobank, July 2013
For wheat, prices are forecast to remain bullish as harvests are forecast to be higher than last year in the Black Sea region, the EU and Canada.
With favourable weather in the US, the maize (corn) market globally is described as 'bearish' as fears of a crop failure there diminish.
Rabobank is forecasting bullish conditions for soybeans although it warns of possible volatility ahead in case of adverse weather conditions.
The Review adds that improving market conditions in the Chinese animal protein market are pushing up demand in China, which is supporting global markets.
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FAO Food Price Index Continued to Fall
06 September 2013
GLOBAL - The FAO Food Price Index averaged 201.8 points in August 2013, nearly four points (1.9 per cent) below its July value and 11 points (or 5.1 per cent) less than in August 2012.
Last month’s decline, the fourth in a row, was driven by continued falls in the international prices of cereals and oils, as dairy, meat and sugar prices rose slightly.
The FAO Cereal Price Index averaged 210.9 points in August, down 16.4 points (7.2 per cent) from July and 49.4 points (or 19 per cent) from August 2012. This steep decline follows an already sizeable drop in July, is consistent with expectations for strong growth in world cereal production this year and, especially, a sharp recovery in maize supplies.
While prices of wheat and rice were down by two to three per cent, the fall reached 14 per cent in the case of maize in spite of some late-month gains on concerns over drought and heat stress conditions in the United States.
The FAO Oils/Fats Price Index averaged 185.5 points in August, 5.7 points (or 3.0 per cent) below the July value and the third consecutive monthly decline. The slide in the index continued to be driven by palm oil, as ample inventories in Southeast Asia kept prices under pressure.
Soy oil values first eased on abundant export availabilities from Argentina and generally good crop prospects for 2013/14, only to regain strength when the United States lowered the forecast for its own forthcoming soy harvest.
Overall, however, the prospect of expanding total vegetable oil supplies in 2013/14 is pointing towards a general decline in vegetable oil prices.
The FAO Dairy Price Index averaged 239.1 points in August, 2.8 points (1.2 per cent) more than in July and 37 per cent above its level in August last year. Prices increased last month for all the dairy products that make up the index, except butter, as export supplies remain limited in major trading countries.
Furthermore, with milk production declining seasonally in the northern-hemisphere and the new production season only just starting in Oceania and South America, availabilities for the remainder of 2013 are uncertain. This has lent support to prices, as importers seek to cover commitments for coming months.
Strongest growth was recorded for skimmed milk powder, which rose by 2.7 per cent, following a similar change in July; whole milk powder prices also increased.
The FAO Meat Price Index averaged 175.0 points in August, an increase of 2.2 points (1.3 per cent). The rise mainly reflected stronger prices for pig meat, which rose by 4.5 per cent, as those of other types of meat changed little.
An important element sustaining pig meat prices was the strengthening of the Euro relative to the US Dollar.
Poultry prices registered a fourth consecutive monthly decline, dropping by 1.3 per cent, partly as a result of lower feed costs.
The FAO Sugar Price Index averaged 241.7 points in August, up 2.7 points (1.1 per cent) from July. The small rebound in sugar prices after three months of consecutive declines was mostly due to estimates showing that Brazil, the world’s largest sugar producer and exporter, was using more sugarcane for ethanol production at the expense of sugar.
Overall, sugar prices displayed large volatility during the month, amid uncertainties regarding the size of the anticipated production surplus in the major producing areas.
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Agricultural Sectors to be Shaped by Global Food Demand
04 October 2013
ANALYSIS - In the future, food demand will define the shape of the livestock, agriculture and farming sectors and their support industries, writes Chris Harris.
While billions of Euros and dollars are being spent on research to improve crop, livestock and food production, the supply of food as populations grow in size and wealth will largely be determined by the climate and land availability.
However, while the demand for food is growing and people are getting wealthier, the proportion of household incomes that is being spent on food is now less than it was 30 or 40 years ago.
A changing global population, with an emerging growing middle class and changing eating habits has seen a switch to a more meat based diet.
According to Mario Pezzini, the director of the OECD Development Centre the global middle class is expected to grow from 1.8 billion in 2009 to 3.2 billion by 2020.
In the last 20 to 30 years red meat consumption globally has doubled and is expected to continue to accelerate.
As meat consumption grows, farming methods are also likely to change from the extensive grazing production of red meat to more feed lots that will use more wheat and grains for feed, according to Gordon Rennick from the pesticide control division of the Irish Department of Agriculture.
Speaking at the British Crop Production Council congress in Brighton this week, Mr Rennick said that this in turn will bring into question land availability and also the availability of water to irrigate the land and provide water for livestock.
At present, agriculture accounts for 70 per cent of the water used in the world with about 20 per cent of the global crop land being irrigated. The use of water for the production of grain and meat will become more critical as the demand for food increases and as it takes between 1,000 and 3,000 litres of water to produce a kilogramme of rice and 13,000 to 15,000 litres of water to produce a kilo of grain fed beef and 1,500 litres to produce a kilo of grain.
“There is an increase in the number of hectares of land that need irrigating, so water availability will become more and more important,” said Mr Rennick.
Not only will there be a need to conserve water and for more water and irrigation, but there will also be a need for more land and the growing population requires more grain both for human and livestock consumption.
In all it is estimated that there will be a need for an additional 300 million hectares of land to grow an additional 255 million tonnes of wheat, 48 million tonnes of barley, 322 million tonnes of maize, 95 million tonnes of soybeans, 263 million tonnes of rice sand 22 million tonnes of rapeseed to feed the extra 2.5 billion people that will populate the world between now and 2050.
The extra 300 million hectares is an area the size of India, Mr Rennick told the delegates at the BCPC congress.
The alternatives available to meet the needs of this growing population are also to maximise crop production from existing land resources and also to reduce crop spoilage.
These alternatives will all require extra research and development in cultivar enhancement, crop protection, water usage, agricultural machinery and even laboratory production of food.
The other alternatives are to encourage people in developing countries to have smaller families or to accept that more people will suffer from starvation.
With a need for improved yields in crops and increased production Mr Rennick said that the future is looking bright for those not only producing food but also in the sector producing products to help enhance production.
In particular, companies producing plant protection products and the chemical pesticide industry should have a bright future if the sector can overcome concerns over its image and regulatory constraints – and he said that in the EU the chemical pesticide industry is more constrained than in any other developed country.
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Weekly Overview: Adverse Weather and Animal Disease Increase the Challenge of Feeding the World
21 October 2013
Adverse weather in Argentina has hit the wheat harvest, creating a shortage of grains there and underlining the precarious nature of the global food supply. Meanwhile, pig diseases in Russian and the US only add to the challenge of feeding the growing human population.
World Food Day was held last week, on 16 October. Diversity of food and food production methods are crucial in the solution to under-nutrition and micronutrient deficiencies affecting the world’s human population, according to the United Nations Food and Agriculture Organization (FAO).
As more grains are needed for animal feed to increase meat and protein production to feed a growing and wealthier global population, wheat is becoming a major driver in the world grain market, according to Jack Watts, senior analyst for cereals and oilseeds at the UK's Agriculture and Horticulture Development Board (AHDB). He was speaking at the Home Grown Cereals Authority's Grain Market Outlook Conference in London last week.
He added that there is currently more risk to the world's cereal markets and in particular, more weather risk.
Highlighting this point, in the last few days, it has been revealed that maize and wheat are in short supply in Argentina. Wheat prices are reported to be sky-rocketing and livestock farmers say there is not enough maize (corn) to go around.
The difficult corn situation has been blamed on a shortfall of up to four million tonnes between the forecast and actual harvest figures, while poor weather has hit the country's wheat crop. Prices for the new harvest, which starts in November, are at US$500 per ton for immediate delivery while in Chicago, the price is US$250 a ton.
Continuing on the theme of feed grains, a judge in Mexico has ordered the government to stop issuing permits to multinational companies for planting genetically modified (GMO) corn at an experimental or commercial scale.
Mexico banned the planting of GMOs back in 1998 but that law was modified in 2005 to allow the planting of test plots. The judge cited the risk of imminent harm to the environment as the basis for the latest decision. There are fears that the many native corn varieties in Mexico could become contaminated if GMO corn is planted. Corn is the country's main food staple.
Livestock diseases also threaten the global food supply, not least or pig meat. The last week has brought reports of more than 30 outbreaks of African Swine Fever in Russia, in both domestic pigs and wild boar across several regions. The country has also announced an outbreak of Classical Swine Fever in September in Amur oblast in the south-east of the country.
The US, meanwhile, seems to be struggling to contain Porcine Epidemic Diarrhoea. Kentucky has reported its first positive result, bringing the number of affected states to 18. The total number of swine samples testing positive exceeded 2,000 at the last count and the weekly increase has been accelerating over the last month. North Carolina now holds the unfortunate privilege of being the most affected state.
Jackie Linden, Senior Editor
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Cassava as Animal Feed in Ghana: Past, Present and Future
Tuesday, October 29, 2013
The use of cassava as a feed for ruminants and non-ruminants (poultry and pigs) in Ghana could reduce the high cost of feed, increase livestock production and create job opportunities, according to a new report from UN Food and Agriculture Organization (FAO).
The study on the use of cassava as animal feed in Ghana was commissioned as part of FAO’s initiative supporting poverty reduction in northern part of the country.
It is covered in the new report, Cassava as Animal Feed in Ghana: Past, Present and Future, by K. Oppong-Apane for the FAO.
The report includes the following chapters:
•Introduction to Ghana (location, population, agriculture)
•Livestock in Ghana
•Cassava (description, importance and uses
•Cassava production (global, in sub-Saharan Africa, in western Africa and in Ghana)
•Cassava supply and consumption as food (global and in Ghana)
•Use of cassava in animal feed globally
•Use of cassava as animal feed in Ghana
•Limitations/challenges to the use of cassava for livestock
•Detoxification of hydrocyanic acid for livestock feeding
•Response to cassava products and by-products by ruminants and non-ruminants in sub-Saharan Africa
•Research on cassava for animal feed in Ghana
•Evaluation of practical advantages and disadvantages of using cassava and its different fractions and preparations compared with other feed components in Ghana.
•Steps needed to realise sustainable and successful use of cassava-based feed resources in Ghana and future successful use of cassava-based feed resources in Ghana and future research needs
•SWOT analysis
•Conclusions and references
The summary of the report explains that cassava (Manihot esculenta) is one of the main staple food crops grown by almost all farming families in Ghana, contributing to large proportion of daily calorie intake of the population. It is used to prepare fufu, the local popular dish, and considered as the poor man’s food.
Ghana is the fourth largest cassava grower in Africa, after Nigeria, Democratic Republic of Congo and Angola. In 2010, Ghana produced 13.5 million tons of cassava. Available information suggests that, cassava is cultivated by over 90 per cent of the farming population and contributes to 22 per cent to the agricultural GDP, making it the right target for the fight against poverty in the country.
The multi-purpose use of cassava as food for humans and animals, making various industrial products, including its use as input for breweries, attracted many projects and programmes working on its value chain in Ghana. These projects, particularly the IFAD funded Root and Tuber Improvement Programme, introduced improved varieties for better yield, reduced post-harvest losses, improved agro-processing and better access to markets, etc. The various interventions enhanced production and marketing of cassava in the country improving income of producers and other actors involved in the value chain and generating more employment for women and youth, contributing in this way to poverty reduction.
FAO, with its comparative advantage of promoting agricultural and food production and rural development, is supporting poverty reduction initiatives in Ghana. In particular, FAO through its Strategic Objective three is implementing an initiative targeting reduction of rural poverty in Northern Ghana. One of the expected outputs of this initiative is to better equip beneficiaries create viable markets through agro-related livelihood activities linked to the cassava value chain. Among the activities contributing to this output, the livestock team has targeted linking livestock to the cassava value chain for poverty reduction, on which this study is based.
Cassava, in its different forms, has been used as animal feed in many parts of the world. Cassava foliage (leaves and stem), peels and particularly the root; fresh, dried or in silage form; alone or mixed with other feed is used in feeding different species of animals. Dried cassava roots are processed into pellets, chips and meal, mainly for poultry and pig industries.
Several studies conducted in West Africa showed that cassava in its different forms has large potential as animal feed. In countries like Ghana where livestock production is largely constrained by lack of good quality feed, the availability of alternative source of feed like cassava is important.
The main ingredient for producing feed for non-ruminant animals raised in intensive production is maize. Ghana produces maize but as the quantity is not adequate to cope with the year-round demand, from time to time, the country is obliged to import it. The fact that animal feed is produced with high cost, mainly due to the elevated cost of maize, makes poultry and pig production very expensive, constituting between 60 and 75 per cent of the total cost of production.
Because of high cost, many farmers, particularly pig producers, are shifting towards using agro-industrial by-products. Although cassava is an ideal partial substitute of maize as source of energy, livestock producers have not yet exploited this potential to the fullest. This can be attributed to the high moisture content of the cassava tuber, which makes handling, transportation and storage difficult. The poor content of cassava in protein, vitamin and some minerals could be another factor, which might have contributed to its low usage as animal feed in Ghana.
The high moisture levels of cassava which reduce its shelf-life and the high content of cyanogenic glycoside which releases toxic hydrocyanic acid, detrimental to the health and productivity of livestock as well as its low protein content are challenges which need to be addressed for the efficient use of the crop as animal feed in Ghana.
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"The use of cassava as animal feed in Ghana can reduce the current high cost of feed, increase livestock production and create job opportunities"
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Cassava roots can be sliced to appropriate thickness and dried using solar dryers, reducing in this way the moisture levels responsible for mould infestation and mycotoxin production. Slicing and drying cassava, in addition to extending its shelf life, reduces also the level of hydrocyanic acid to safe levels for animal feeding.
Lessons learned from projects implemented in the country in the past assist in setting up easy and affordable methods of slicing and drying cassava, according to the FAO report. The limitation of cassava due to its low content of protein, some vitamins and minerals, leading to rating it inferior to maize can also be corrected through proper balancing.
In order to enhance the demand and supply of cassava based feed in Ghana, it is necessary to develop viable intermediaries acting as secondary processors or bulking agents in the value chain and ensuring a consistent supply of raw and processed materials. The private sector can and should participate actively in this regard. Therefore, effective sensitisation of the actors involved in the cassava value chain on its potential and policy measures enabling its use as animal feed is required.
The use of cassava as animal feed in Ghana can reduce the current high cost of feed, increase livestock production and create job opportunities, concludes the FAO report.
The report's author adds that key to enhancing the demand and supply of cassava-based feed in Ghana is to develop viable intermediaries acting as secondary processors or bulking agents in the value chain and ensuring a consistent supply of raw and processed materials.
Reference
Oppong-Apane, K. 2013. Cassava as animal feed in Ghana: Past, present and future. Edited by Berhanu Bedane, Cheikh Ly and Harinder P.S. Makkar, FAO, Accra, Ghana
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Nutritional Value of Fermented Soybean Meal in Pig Diets
Wednesday, November 06, 2013
New research at the University of Illinois sheds light on the nutritional value of fermented soybean meal in pig diets, which was found to be a suitable substitute for fish meal in starter diets without adversely affecting the energy or digestible amino acid content of the diet.
Soybean meal contains anti-nutritional factors, such as oligosaccharides and antigens, that restrict its use in diets fed to weanling pigs.
Fermentation of soybean meal eliminates some of these antinutritional factors, making fermented soybean meal a potential lower-cost substitute for animal protein in starter diets. Soybean meal fermented in the presence of Aspergillus oryzae and Lactobacillus subtilis has recently become available on the United States market. To aid in the formulation of diets containing fermented soybean meal, researchers at the University of Illinois have determined the digestibility of energy and amino acids in this ingredient.
"Fermented soybean meal contains fewer antinutritional factors and is well tolerated by weanling pigs," said Hans Stein, professor of animal sciences. "But there is a lack of data on the digestibility of energy and amino acids. So our goal was to determine those values."
Professor Stein's lab conducted two experiments. In the first, they determined the concentration of digestible, metabolisable and net energy in fermented soybean meal. In the second, they determined the standardised ileal digestibility of crude protein and amino acids. Both studies included conventional soybean meal and fish meal for comparison.
On a dry matter basis, fermented soybean meal contained 4,296kcal per kg digestible energy (DE), 3,781kcal per kg metabolisable energy (ME), and 2,710kcal per kg net energy (NE). These values compared favourably to those in fish meal, which contained 3,827kcal per kg DE, 3,412kcal per kg ME and 2,450kcal per kg NE. DE, ME and NE were decreased in fermented soybean meal compared with conventional soybean meal, which contained DE, ME and NE of 4,553kcal per kg, 4,137kcal per kg, and 2,972kcal per kg, respectively.
Professor Stein explained: "Fermentation of soybean meal removes sugars and oligosaccharides. Sucrose is easily digested by pigs and oligosaccharides are almost completely fermented. When these are removed, the remaining meal contains a greater percentage of fibre, which reduces the digestibility of energy in the diets."
Digestibility of crude protein and amino acids in fermented soybean meal was the same as or greater than that of soybean meal. Digestibility values for most amino acids were greater in fermented soybean meal than in fish meal.
Professor Stein said the results indicated that fermented soybean meal could replace fish meal in starter diets without negatively affecting the energy content or digestible amino acid content of the diets.
"With this new product on the market in the United States, producers have another option for providing protein in weanling pig diets," he said.
The study, entitled 'Concentration of digestible, metabolizable, and net energy and digestibility of energy and nutrients in fermented soybean meal, conventional soybean meal, and fish meal fed to weanling pigs', was recently published in the Journal of Animal Science and was co-authored with Oscar Rojas, a PhD candidate in the Stein Monogastric Nutrition Laboratory at Illinois. It is available online [click here].
November 2013
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New Law Needed for Insects to Contribute to Livestock Sustainability
15 November 2013
EU - The EU-funded project PROteINSECT co-ordinated in the UK by FERA (The Food and Environment Research Agency) with partners in China and Africa as well as mainland Europe is working to drive changes to current legislation.
There is growing global interest in the use of insects as an alternative source of protein in animal feed. However, current European legislation represents a barrier to the development of large-scale production processes.
Food security concerns have highlighted a need to find more sustainable sources of protein for use in animal feed. Insects are increasingly being recognised as an excellent alternative. Many species are highly nutritious and the production of insects has less environmental impact compared with traditional sources of animal feed protein.
Additional major advantages of insects as a protein source are that they can be reared successfully and quickly on a range of organic waste materials, such as vegetable, domestic and organic waste, reducing the volume of that waste in the process by up to 60 per cent. The residue can also be recycled as fertilizer.
At present, EU law prohibits the inclusion of protein derived from insects in animal feed, with the exception of feed intended for fish or shellfish. As evidence of efficacy and safety of insect protein increases, through research delivered by the EU-funded PROteINSECT and other research projects, it is hoped that insect protein will also be permitted in pig and poultry feed in the future, particularly as these animals already consume insects as part of their natural diet.
Elaine Fitches, Co-ordinator of the PROteINSECT project at FERA, said: "To enable protein from insects to become a significant component of animal feed, European legislation must be changed if we want to allow it to be fed to pigs and poultry as well as fish. Our work in PROteINSECT is establishing the evidence base that this is a sustainable, safe and economic source of protein, delivering quality food for human consumption as well as significant environmental benefits."
Attention will also need to be paid to legislation covering the safe use of substrates, such as vegetable and domestic waste and manure, on which insects can be reared most economically.
Ms Fitches continued: "The views of the public about the production and use of insect protein for animal feed are of great interest to our project. A short survey is available now on our website and I do urge everyone to please complete it."
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Philippines Acts to Help Farmers and Fishermen after Typhoon
19 November 2013
PHILIPPINES - Following the impact of the typhoon Haiyan, the Philippine Department of Agriculture has set up interventions intended to stabilise markets, provide seeds for early recovery of crops and support the municipal fishery sector of the Eastern Visayas Region.
Agriculture Secretary Proceso J. Alcala has instructed Department of Agriculture officials to immediately transport frozen chicken, potatoes and other vegetables from Manila and Baguio to Tacloban using three refrigerated vans from the Bureau of Fisheries and Aquatic Resources (BFAR), the department reported on Monday.
Three more vans, from the Philippine Fisheries and Development Authority will load and deliver food items from Albay in Region V to Tacloban and neighbouring areas.
“We will be also utilising all available closed vans of the Department and its attached agencies to deliver eggs and other dry food items,” he said.
The agriculture chief has also instructed BFAR Director Asis Perez to deploy a 1,200-tonne vessel, currently anchored in Cagayan de Oro (CDO), to deliver food items to the Region.
Smaller ships will ferry food items to smaller islands.
The department is set to implement market mechanisms to move food items from the production areas to affected communities via the Barangay Food Terminal and local government food trading centres.
Functional food warehouses will also be used for stocking food.
“We will engage big market players such as the San Miguel Corporation in CDO to supply poultry products to affected areas,” Alcala said.
The National Food Authority in Region VII will begin to supply rice to parts of the region in an effort to augment rice stocks in areas severely damaged by the super typhoon.
The Philippine Coconut Authority has committed 300 chainsaws to be used for clearing operations.
A portable saw-mill will also be moved to the PCA yard in Tacloban.
Apart from the action to address the immediate needs of the local residents, the Philippine department of agriculture is also distributing rice, corn and vegetable seeds such as pechay, mustasa, upland kangkong, and okra seeds under the Early Recovery Programme of the government to enable farmers to start replanting and build for the future.
Mr Alcala announced the immediate suspension of the closed season in the Visayas and Palawan until 1 December to enable fishermen to catch various marine species for consumption and even to sell.
A total of 1,300 fishing boats, equipped with 5-horse power engine, 4000 fishing nets will be constructed and divided among the affected families.
The department is also set to position a total of 200 payaos amounting to P40 million, to aid affected municipal fishermen. Payao, a floating artificial reef, is a fishing device used for catching high value fish species.
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Post Typhoon Message for Dairy Workers21 November 2013 NEW ZEALAND – A message of support and sympathy has been broadcast by Dairy New Zealand to the typhoon struck Filipino community, in recognition of their plight and contribution to farming.Chair of the industry group, John Luxton, voiced farmer concerns for Filipino morale this week, stating that support will be necessary to help worker stress level following a ‘hectic spring’. Filipino’s are essential to the sector, making up eight per cent of the New Zealand workforce, explained Mr Luxton. "They are working on farms all around the country but many are based in Canterbury and Southland. This is a busy time on farms so we are conscious that this may be adding to their stress levels.” He added: “I'd urge any workers who have been affected to talk to their employers as they will want to help them as much as they can. I know a lot of support has already been shown by farmers.” Dairy New Zealand has been in contact with the Filipino Dairy Workers in New Zealand group to assist in support. Farmers are welcome to seek advice on how to manage workers at this time
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China Reports Slight Drop in Farm Produce Prices
28 November 2013
CHINA - According to monitoring by MOFCOM in 36 medium and large sized cities, price of agro-foodstuff saw a rise by small margin and the price of material for production fell slightly last week (11-17 November).
Wholesale price of meat rose slightly, of which the wholesale price of pork was up by 0.4 per cent, while beef and lamb rose by 0.5 per cent and 0.9 per cent respectively.
The average wholesale prices of aquatic products were up by 0.3 per cent as compared with that of the previous week, and top price rise that of small yellow croaker, grass carp and big yellow croaker, up by 1 per cent, 0.6 per cent and 0.5 per centrespectively.
The retail prices of chicken and egg remained basically stable with a slight increase, of which the price of chicken was up by 0.1 per cent as compared with that of the previous week, and eggs remained unchanged.
Retail prices of edible oil and cereals fluctuated slightly, of which small package of rice, small package of flour and rapeseed oil rose by 0.2 per cent, 0.2 per cent and 0.1 per cent respectively as compared with that of previous week, soybean oil fell by 0.1 per cent, while peanut oil remained unchanged.
The average wholesale price of 18 vegetables fell by 0.5 per cent as compared with that of the previous week, of which tomatoes, cabbage and lettuce fell by 11 per cent, 2.8 per cent and 2.8 per cent respectively.
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China's Farm Produce Prices Slightly Higher
11 December 2013
CHINA - Farm produce prices in 36 major Chinese cities rose slightly in the week ending 8 December compared with the previous week, according to a Ministry of Commerce statement.
The wholesale price of pork went up 0.3 per cent, while the cost of beef and mutton rose 0.5 per cent and 0.2 per cent, respectively.
The average wholesale price of aquatic products gained 0.6 per cent and the cost of rice and peanut oil went up 0.2 per cent and 0.1 per cent, respectively.
The price of vegetables and eggs dropped slightly last week. The average wholesale price of 18 kinds of vegetables dipped 2.3 per cent from a week earlier and that of eggs down 0.2 per cent.
Food accounts for about one third of China's consumer price index (CPI), a main gauge of inflation.
The CPI grew three per cent year on year in November, down from 3.2 per cent in October, the National Bureau of Statistics (NBS) said on Monday.
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What Was Achieved at WTO Agriculture Trade Talks on Bali?
13 December 2013
ANALYSIS - The World Trade Organisation’s Bali Ministerial Conference ended last week in a fanfare of triumph, writes Chris Harris.
Agreement had been reached on a package of issues designed to streamline trade, allow developing countries more options for providing food security, boost least developed countries’ trade and help development more generally.
Indonesia’s Trade Minister Gita Wirjawan, who chaired the conference, said: ““We did it! We achieved what many said could not be done.”
WTO Director-General Roberto Azevêdo said: “For the first time in our history: the WTO has truly delivered.
“I challenged you all, here in Bali, to show the political will we needed to take us across the finish line. You did that. And I thank you for it.”
The Bali Package is ostensibly a selection of issues from the broader Doha Round negotiations.
“With the Bali package you have reaffirmed not just your commitment to the WTO — but also to the delivery of the Doha Development Agenda,” Mr Azevêdo said.
“The decisions we have taken here are an important stepping stone towards the completion of the Doha round.
“And it is very welcome that you have instructed us to prepare, within the next 12 months, a clearly defined work program to this end.”
Mr Azevêdo, said members’ attention should now turn the rest of the round, known semi-officially as the Doha Development Agenda.
But how far forward has the much acclaimed Bali agreement taken world trade negotiations?
On some crucial issues, the agreement does not seem to have advanced things at all. In the agricultural negotiations, which have been the historical sticking point for any agreement, there still appears to be stalemate over some issues between the developing and the developed nations.
The agreement appears to agree to disagree and put things on hold while further negotiations are conducted.
On trade facilitation, the WTO ministerial agreement says: “The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. It will be a legally binding agreement and is one of the biggest reforms of the WTO since its establishment in 1995 — other agreements struck since then are on financial services and telecommunications, and among a subset of WTO members, and agreement on free trade in information technology products.
“The objectives are: to speed up customs procedures; make trade easier, faster and cheaper; provide clarity, efficiency and transparency; reduce bureaucracy and corruption, and use technological advances. It also has provisions on goods in transit, an issue particularly of interest to landlocked countries seeking to trade through ports in neighbouring countries.”
The WTO said that the agreement on the agriculture part of the Bali Package required sorting out two issues.
Much of the focus was on shielding public stockholding programmes for food security in developing countries, so that they would not be challenged legally even if a country’s agreed limits for trade-distorting domestic support were breached.
The rules allow developing countries to support the farming sector by buying in stocks of up to 10 per cent of production.
The developing countries were and are concerned that if they exceed their support and help poorer farmers more, they are going to be punished by the WTO.
The Bali deal came up with an interim solution, which will exist until a permanent one is agreed, with a work programme set up aiming to produce a permanent solution in four years.
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"On some crucial issues, the agreement does not seem to have advanced things at all."
Even before the Bali meeting, the WTO was admitting that no firm agreement was going to be reached over this issue.
“As the Bali conference approached, it became clear that amending the Agriculture Agreement on this point was too controversial to be agreed in time for the conference. Instead, chairperson John Adank, New Zealand’s ambassador, began working with members on an interim solution,” the WTO pre-Bali documents state.
The compromise that was approved at Bali means that countries will temporarily refrain from lodging a legal complaint (“due restraint”, sometimes also called a “peace clause”) if a developing country exceeded its Amber Box limits – the 10 per cent of production - as a result of stockholding for food security.
Work on finding a longer term solution is to continue after the ministerial conference.
However, disagreement still exists on the “safeguards” to ensure that the public stockholding programmes would not be misused, that the released food would not affect trade, the number of eligible products (“traditional staple food crops”), how long the restraint on disputes would last and the work to be undertaken after Bali.
Another issue - "tariff quota administration" – or how a specific type of import quota is to be handled when the quota is persistently under-filled also caused difficulties.
The WTO negotiators agreed on a combination of consultation and providing information when quotas are under-filled.
The WTO paper says: “Under the proposal, if a quota is persistently under-filled — and information-sharing and consultations prove fruitless — the importing government would have to apply one of a prescribed set of methods for administering quotas aimed at removing impediments. Either they would accept quantities within the quotas, first come first served, at the importing ports until the quota limit is reached, or they would issue import licences for every request (“automatic licence on demand”) up to the quota limit.”
The one remaining issue to be settled was which countries would reserve the right not to apply the system after six years. They will be Barbados, Dominican Republic, El Salvador, Guatemala and the US – the only developed country and one of the world’s major exporters and importers.
The third major issue that has caused political turmoil in the negotiations surrounding the Doha Agreement and the post Uruguay round of talks at the WTO is in the area of export refunds and subsidies.
At Bali, the ministers agreed to ensure export subsidies and other measures with similar effect are low.
Prior to the Bali talks, the WTO starkly admitted that this would be a stumbling block.
“It is also proving a difficult subject for the Bali meeting, with some developing countries complaining that the demands on them to make commitments in trade facilitation are not matched by developed countries’ willingness to make commitments on export subsidies. Some other countries say the two should not be linked,” the WTO said.
The outline for the Bali agreement was that WTO countries would “exercise utmost restraint” in using any form of export subsidy.
They would “ensure to the maximum extent possible” that progress will be made in eliminating all forms of export subsidies, that actual subsidies will be well below the permitted levels, and that disciplines will apply to export policies that may have the same effect as subsidies.
In May, the G–20 group of developing countries had called on developed countries to halve their ceilings on the money they spend on export subsidies by the end of 2013 and phase in a 540-day limit in the repayment period for export credit. The final target is 180 days.
The G-20 also called for a limit on the quantities of subsidised exports, at the average actually exported with subsidies for 2003–2005.
However, a number of countries opposed any legally binding decision in Bail, including lower limits on export subsidies. They said they could only do this as part of an overall agricultural package within the Doha Round.
Because of this inability to reach binding decisions, the Bali agreement is open ended and relies on good will and restraint.
In all, the agricultural package in the Bali agreement has move the stakes on very little.
With no legally binding arrangements, the good will statements are open to abuse and the disputes’ panel of the World Trade Organisation could be just as busy as it has been with countries arguing over subsidies and tariffs and quotas as much as they have over the last decade.
The fact that the US has opted out of the tariff quota arrangements also forewarns of arguments and trouble and it appears that the current trend for bilateral negotiations for free trade agreements will be the route forward and the work in the WTO, on agricultural issues, could be largely ignored.
Chris Harris, Editor-in-Chief
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Phasing out Antibiotics for Growth Promotion in US: What Are the Consequences?
16 December 2013
ANALYSIS - The proposed changes to the regulations on the use of antibiotics in the US for food-producing animals will mean a reduction of around 16 per cent in antibiotic use in pigs, an increase in feed conversion ratio, higher veterinary costs and a shift in the oversight for antibiotic use from farmers to veterinarians, writes Jackie Linden.
The US Food and Drug Administration (FDA) has implemented a plan to help phase out the use of medically important antimicrobials in food animals for food production purposes, such as to enhance growth or improve feed efficiency. The plan would also phase in veterinary oversight of the remaining appropriate therapeutic uses of such drugs.
In FDA's final guidance - issued last week - the agency lays out a road map for animal pharmaceutical companies to voluntarily revise the FDA-approved use conditions on the labels of these products to remove production indications.
The news that certain antimicrobial drugs are to be phased out as growth promoters in livestock means livestock producers now have a time-frame to adjust production practices, commented professor of clinical sciences in K-State's College of Veterinary Medicine, Mike Apley.
He estimates that, for pigs, the new rule will remove about 16 per cent of the use of medically important antibiotics in feed for growing pigs. Cattle production will be less affected than pigs because cattle growth promoters are typically ionophores, which are not considered medically important, according to Professor Apley.
He added: "This news means the clock is ticking. Livestock producers and pharmaceutical companies have three months and three years to get it done," he said, referring to a three-month comment period which will be followed by a three-year period for drug companies to voluntarily revise FDA-approved labelled use conditions.
Professor Apley stressed that among the major implications of the new rule are that it removes the uses for improving performance and shifts oversight of the remaining uses to veterinarians.
In their 'Hog Outlook', market analysts, Ron Plain and Scott Brown, highlight that the new policy is likely to affect adversely decrease livestock and poultry feed conversion and thus increase feed demand. It would also drive up per-head veterinary costs, they add, especially for smaller operations.
Representing the poultry industry, the US National Chicken Council said in a statement: “We strongly support the responsible and judicious use of FDA-approved antibiotics and the involvement of veterinarians in raising healthy chickens.
“Antibiotics are not always used in raising chickens; rather, they are administered only when needed and on those occasions, they are used judiciously under the care of a veterinarian. For those antibiotics that are FDA-approved for use in raising chickens, the majority of them are not used in human medicine and therefore do not represent any threat of creating resistance in humans.
“That being said, we realise that there are strong emotions and conflicting views on the issue of antibiotic resistance – an issue that is very complex, and not black and white."
Animal health company, Zoetis, has announced that it supports the FDA’s efforts to voluntarily phase-out growth promotion indications for medically important antibiotics in food-producing animals. Zoetis has already taken action with the view to implementing Guidances #209 and #213 and has already taken action.
Professor Apley stated that Elanco has also already indicated it will comply with the guidelines.
Responding to the news that the rules are voluntary, long-time opponent of the use of antibiotics in farm animals, Congresswoman Louise Slaughter commented: “The FDA’s voluntary guidance is an inadequate response to the overuse of antibiotics on the farm with no mechanism for enforcement and no metric for success.
“Sadly, this guidance is the biggest step the FDA has taken in a generation to combat the overuse of antibiotics in corporate agriculture, and it falls woefully short of what is needed to address a public health crisis,” she added.
Jackie Linden, Senior Editor
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Global Food Security Relies on Trade
20 December 2013
GLOBAL - On a global scale food supply is sufficient to feed the entire population but its uneven distribution leaves a significant proportion of the world’s population food insecure while others live in abundance of food, writes Chris Harris.
While the global food supply could be increased by using methods such as novel technological solutions, reform of current agricultural practices and reduction of food waste, any substantial improvement in food security will require real efforts for a more equal distribution of global food supply.
According to a new report by Miina Porkka, Matti Kummu, Stefan Siebert and Olli Varis “From Food Insufficiency towards Trade Dependency: A Historical Analysis of Global Food Availability” published by PLOS, within the past 50 years, the world has moved from food insufficiency towards an increasing dependency on food trade.
This has improved food availability, but mainly in regions with a sufficiently strong economy to be a notable player in the trade markets.
The authors say that while a secure food supply has been outsourced in various parts of the globe, a large share of global population is still living with insufficient food supply.
“Food security is not merely a question of food availability but increasingly also a question of access to food,” the report says.
The research team from Aalto University in Finland looked at the development of the food chain and the progress of food supply between 2965 and 2005.
The proportion of the population, who get enough food - more than 2 500 calories a day - has nearly doubled to 61 per cent over the 40 year period.
Those living on a critically low food supply of less than 2 000 calories a day have shrunk from 51 per cent to three per cent.
The researchers found that food availability has improved especially in the Middle East and North Africa, Latin America, China, and Southeast Asia.
Although food availability has increased on the global level, food self-sufficiency has remained relatively low.
The report says: “Food availability has improved considerably while food self-sufficiency has remained relatively low during the entire study period. Trade of food products has, thus, soared in importance in securing an adequate food supply. In many parts of the world, diets are increasingly abundant in calories and animal source foods.”
“In the 1960s and 1970s, insufficient food production in a country amounted to food shortage, but nowadays the production deficit is increasingly balanced through food imports,” said Aalto University researcher Miina Porkka.
The proportion of people living in countries that are significant net importers of food has more than tripled during the period under examination.
The countries of North Africa and the Middle East, for instance, have become increasingly dependent on imported food. In these countries, food availability has increased from low to a very high level, even though domestic food production has remained inadequate.
Brazil, on the other hand, has become one of the world's most important producers of food for export. In the 1960s, food supply in the country was still inadequate, but in the past decades Brazilian food production has grown exponentially and food consumption is now more than sufficient.
The study also examined dietary changes that have taken place in different countries.
The proportion of people consuming large amounts (more than 15 per cent of energy intake) of animal-based nutrition has increased from 33 per cent to more than 50 per cent.
This together with over consumption of calories in many countries is putting an increased pressure on the planet’s limited natural resources. At the same time, however, over a third of the world’s population is still living with insufficient food supply.
The study was conducted by the researchers from Aalto University in Finland and University of Bonn in Germany. The research was financed by Maa- ja vesitekniikan tuki ry., the Academy of Finland and the German Federal Ministry of Education and Research.
Chris Harris, Editor-in-Chief
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Holistic Farming Approach to Meet World Food Demand Sustainably 19 December 2013 GLOBAL - A holistic long-term approach may be the key to introducing sustainability into the food and agriculture (F&A) equation, according to a new report from Rabobank.Fundamentally, this would entail a shift in farmers' focus away from yield maximisation and towards input optimisation. However, there is no one-size-fits-all solution and technological innovations tailored towards the specific issues within a farming category are pivotal to improving best practices, and impact the way farm input companies view their business models. "Without a holistic approach towards feeding the world, the global agriculture industry's capacity to keep up with demand will be stretched at the expense of the environment," said Rabobank analyst, Dirk Jan Kennes. "A strategy that includes resolving structural resource imbalances, optimising F&A supply chain efficiency and reducing waste within the global F&A complex would ease the pressure on agricultural yield improvement and would help align the interests of the different stakeholders." Rabobank has identified the over-application of fertilisers and inefficient water usage as critical to a step change shift in farmers' perception of best practice. Agriculture accounts for 70 percent of global water demand and technologies to optimise irrigation systems will be key to future water conservation. Similarly, an integrated approach is needed to optimise farm inputs to enable farmers to apply at the right time, place and rate; subsequently reducing the environmental impact and initial cost. Technological innovations in both areas are being developed as higher farm input prices incentivise farm input companies to spend more on research and development (R&D). Every year, an estimated 1 billion tonnes of produce is wasted along global F&A supply chains. In addition to reducing waste, it is crucial that all links in the supply chain work together to solve the food supply problem. However, there is no one-size-fits-all solution. Rabobank has identified four different farming groups-agro-enterprises, family farms, smallholders and agricultural adventurers-which each require a unique approach to improving best practices. Such methods include: Soil conditioning for those farms which operate with less crop rotation High-tech innovations including accurate soil-water sensors and GPS technology for variable planting density Research, education and farming recommendations through less intensive ICT-services Land transformation and infrastructure through collaborations of funders, agronomic consultants and contract farmers "The ability to gather a broad set of data on climatic conditions, soil conditions and crop conditions transfers farming into more of a science", Mr Kennes added. "Turning this data into farming practices requires intense cooperation between all partners in the agricultural production chain for which product form, application technology and farm operations need to be fully aligned.
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US Consumers Confused about GMOs
30 December 2013
US - Over half of US consumers express some level of concern about genetically-modified organisms (GMOs).
However, when asked to describe GMOs, many grocery shoppers are unclear and say that it is genetically altered sometimes in a favourable way while at other times in an unfavourable way, according to recently released food market research by global information company The NPD Group.
Genetic modification is defined by the US Department of Agriculture (USDA) as “the production of heritable improvements in plants or animals for specific uses, via either genetic engineering or other more traditional methods.”
The NPD study entitled, Gauging GMO Awareness and Impact, asked consumers to tell, in their own words, what the term GMOs means and the answers were diverse.
Common words used to describe GMOS from consumers were “genetically altered,” “not natural” and many consumers say “don’t know.”
Forty-four per cent of consumers say GMOs have some kind of benefit, yet at the same time, a higher percentage has some level of concern.
The study points out GMOs are more top-of-mind with consumers because of media coverage and various states’ legislative efforts to label genetically modified foods.
This increased awareness could also be a factor in increased levels of concerns about GMOs. In 2002, 43 per cent of consumers expressed any level of concern about genetically-modified foods and a decade later over half of US adults have some level of concern, according to NPD’s Food Safety Monitor, which continually tracks consumer awareness and concern about food safety issues and eating intentions.
As far as levels of concern, less than 10 per cent of adults were “very” or “extremely” concerned about GMOs in 2002, but now that concern level is at more than 20 percent of adults, and has steadily increased.
“GMO’s have been an issue for some time now,” said Harry Balzer, chief industry analyst and author of Eating Patterns in America.
“We are once again seeing more American adults concerned than not. I expect the market to follow these concerns.”
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OFC: Farmers Must Change Mind-set to Grow Food Sustainably
07 January 2014
UK - Farmers need a new mind set to be able to grow and produce food sustainably and profitably, writes Chris Harris, from the Oxford Farming Conference (OFC).
A new report for the Oxford Farming Conference produced by consultancy Bidwells says that the UK farming sector has to be more open to changes in land management and must not solely consider that farmers must own the land they farm.
The report says that a mind-set that is closed to new business structures, limited collaboration and a lack of investment in farm infrastructure is holding UK farming back.
In opening the conference co-chairman Adrian Ivory said that agriculture needs to play a part in the changing demographic of the world society that is seeing a larger population and changing eating habits.
In this relation the report produced for the conference Opportunity Agriculture: The Next Decade challenges farmers and farm business operators to think more widely about sources of capital and to explore agreements such as share farming or partnering with external investors.
“The context to this important research is that our farming sector has far-reaching opportunities, but it needs to adapt to profit from them,” said conference co-chairman Julian Gairdner.
He said that farm businesses need to adopt an openness and willingness to embrace change.
“It is likely that more transformation will happen in the UK farming industry in the next 10 years than we have seen in the past 50, so the industry needs to be prepared to adopt new systems, structures and partner investors, who understand agriculture.
“The report delivers some hard-hitting punches and, intentionally, it doesn’t hold back in spelling out the progress needed,” Mr Gairdner added.
The report says that farmers will need to look for alternatives to their tried and tested methods of food production.
It says that further decoupling of farm ownership from farm operation in the UK is inevitable.
The future profitability of farming will mean inter-farm collaboration on infrastructure such as buildings, roads, water systems in order to achieve sufficient capacity.
“Water security will be the key defining issue for food production in a decade’s time and farmers need to prepare for this,” said Ian Ashbridge the author of the report from Bidwells.
He warned that farming has to be allowed to access new technologies that will improve yields of key food crops and not fall victim to the same “Luddite attitudes as GM has”.
The report also calls for the farming sector to invest in people.
“The UK risks exporting its talent both in the science community and also in agricultural leadership and business management,” said Mr Ashbridge.
Chris Harris, Editor-in-Chief
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Food Waste Threat: Potential Nightmare to Livestock Industry
20 January 2014
AUSTRALIA - Victorian food outlets are supplying pig owners with food waste, putting Australia’s livestock industry at risk of contracting Foot & Mouth Disease (FMD), according to the Victorian Farmers Federation.
A recent Department of Environment and Primary Industries (DEPI) survey of 613 regional Victorian restaurants, hotels and other food outlets found 71 of them supplied their waste to pig owners.
“That’s 12 per cent of food outlets surveyed, which could mean there are hundreds of food outlets across Australia supplying their waste to pig and other livestock owners,” Victorian Farmers Federation Pigs president, John Bourke said.
“The risk is that a fair proportion of this food waste contains meat, which cannot be fed to pigs or other livestock. It’s called swill and anyone feeding it to livestock faces a $17,280 fine.”
But the fine is a pittance compared to the risk swill feeding poses to Australia’s pig, beef and sheep industries.
ABARES estimates an outbreak of the exotic FMD would cost the livestock industry $52 billion.
Australia’s livestock and meat exports would come to a grinding halt. Given we export 60 per cent of our livestock, the domestic market would be flooded with meat and prices would collapse.
Potentially thousands of livestock, on and around infected properties, would have to be slaughtered or vaccinated. Stock movements would be restricted and there’s no doubt consumers would panic, despite assurances that the meat was safe to eat.
“It’s a nightmare Australian livestock producers never want to face. But we can’t afford to close our eyes to the evidence DEPI’s latest survey has delivered to the industry,” Mr Bourke said.
“Some would say the risk of FMD contaminated meat or dairy product entering Australia and being fed to livestock is minute.
“But the improbable came close to the possible when a consignments of frozen uncooked meat products from FMD-affected South Korea, were found on Australian retailers’ shelves in 2011.”
The Australian Quarantine and Inspection Service discovered about 3000 tonnes of illegally imported uncooked and cooked pork, chicken and beef spring rolls and dim-sims had been shipped into Australia from South Korea for at least 12 months. This at a time when South Korea had just gone through another FMD outbreak.
The South Korean imports had already been distributed to food outlets before AQIS discovered the breach.
“It would have only taken one of these outlets to supply some out of date food waste to a pig producer to create Australia’s first FMD outbreak.
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How Big is Carbon Footprint of Food Waste?
14 February 2014
GLOBAL - The carbon footprint of worldwide food losses and food waste amounts to the equivalent of 3.3 giga tons of CO2 emissions.
Compared to the CO² emissions of individual countries this volume, which is the estimate produced by the FAO’s Food wastage footprint – impacts on natural resources, 2013 ranks third among the world’s biggest greenhouse gas emitters after China and the USA.
What this means in concrete terms is that the greenhouse gas associated with the production, processing, transport and storage of all non-consumed food corresponds to roughly half of what both China and the USA emit into the atmosphere each year, according to SAVE FOOD, a joint initiative of the Food and Agriculture Organisation of the United Nations (FAO) and Messe Düsseldorf GmbH.
For Germany this figure stands at approximately one giga ton - less than one third of all global emissions caused by food loss and waste.
By comparison the with 3.3 giga tons (billion tons) of food waste emissions, the greenhouse gas emissions associated with road traffic in all of the USA was 1.5 giga tons in 2010.
Broken down into food categories, cereals (at 34 per cent) account for the biggest share in greenhouse gas emissions caused by food loss and waste, followed by meat and vegetables at 21 per cent each.
At only five per cent, the percentage of meat in the total amount of food loss is far lower than that of cereals (25 per cent) and vegetables (below 25 per cent).
This means meat has a clearly bigger carbon-footprint, because it causes in excess of one fifth of greenhouse gas emissions.
In Germany the situation is similar. In North Rhine-Westphalia, for example, meat accounts for almost half the carbon footprint in the food value chain – while only accounting for about 10 per cent of total food waste volume, according to the Reduction of Food Waste study by Münster University of Applied Sciences in March 2012.
The main reasons for meat’s very large carbon footprint lie in the high levels of energy and resources needed to grow feed, in the machinery used for raising and transporting livestock, in refrigeration – and last but not least in the substantial CO2-emissions of ruminants.
This is also why cattle raising is considered particularly greenhouse-gas intensive, the campaign claims.
Losses and carbon footprints also vary across the various stages in the value chain. The highest losses occur in production whereas carbon footprint is at its largest in the consumption stage, according to the FAO’s Food wastage footprint – impacts on natural resources – also due to the energy required for storage and cooking in private households, restaurants, canteens and the like.
Greenhouse gas emitted in food manufacturing, transport and storage puts a burden on the environment.
But if this food then even perishes or is disposed of, these pollutants have been emitted to the atmosphere without any benefit.
Minimising waste and loss is therefore indispensable for these reasons alone. Add to this the fact that one in eight human beings on earth suffer from hunger while one third of all produced foodstuffs are not consumed.
Greenhouse gas emitted in food manufacturing, transport and storage puts a burden on the environment. But if this food then even perishes or is disposed of, these pollutants have been emitted to the atmosphere without any benefit.
Minimising waste and loss is therefore indispensable for these reasons alone. Add to this the fact that one in eight human beings on earth suffer from hunger while one third of all produced foodstuffs are not consumed.
The whole set of problems associated with food loss and waste will be on the agenda of the second international SAVE FOOD Congress in Düsseldorf from 7 to 8 May at the beginning of the Interpack trade fair.
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Long-term Support for Farming, Fishing Communities in the Philippines13 March 2014 PHILIPPINES - FAO Director-General José Graziano da Silva has witnessed the positive results of FAO's Typhoon Haiyan response programme and committed FAO to supporting the recovery of fishing and farming livelihoods in the longer term.Graziano da Silva travelled together with Secretary Proceso Alcala of the Philippine Department of Agriculture (DA) and the Philippine Permanent Representative to FAO, Ambassador Virgilio Reyes, to Basey, a municipality of Samar province, in the Eastern Visayas. Meeting with affected farmers and fishers, he handed over bags of fertilizer and tools and ate lunch with farmers supported by FAO. Making landfall four months ago, Typhoon Haiyan (locally known as Yolanda) claimed over 6 200 lives, displaced millions and devastated the agriculture and fisheries sectors. Striking between two planting seasons, the typhoon destroyed ready-to-harvest, harvested and newly planted rice crops, wiping out whole coastal communities and damaging or destroying some 33 million coconut trees. Collaborative efforts secured the harvest In the weeks immediately following the typhoon, FAO responded to an official Government request for support to affected rice farmers, providing 75 per cent of the Government-requested rice seeds. Thanks to a coordinated response by FAO, the Government and partners, farmers who would otherwise have been unable to plant in time for the December/January planting season were able to go back to their fields, and will soon be harvesting the first rice crop since the typhoon hit the country. Graziano da Silva visited flourishing rice fields planted with FAO rice seed and was thanked by Alcala for FAO's timely response and support to the Government, which enabled 44,000 farming families to restore their livelihoods by securing what would otherwise have been a lost harvest. To bolster FAO's, the government's and partners' rice seed distributions, FAO is distributing 4,000 tonnes of fertilizer to more than 80,000 families along with 13,000 farming tools which ensures planted rice seed can reach full production potential and produce an optimum yield, which, in turn, ensures food security and a full recovery. Graziano da Silva and Alcala personally handed over bags of fertilizer and hand tools to Ricardo Gula and Wilma Regala, two farmers supported by FAO from Barangay Canabay in Basey, Samar, some thirty minutes away from Tacloban. Asked by Graziano da Silva about the quality and quantity of the expected harvest, Ricardo Gula expressed his appreciation for FAO's support and said he was confident the high-yielding certified rice seeds' production would help his family to recover from the damage caused by the typhoon. "Once harvested in March/April of this year, the quality certified rice seed is expected to yield enough to feed around 800,000 people for more than a year. Our rapid response cost around $5 million and will yield $84 million in rice, providing real value for money to donors," said Mr Graziano da Silva. Fishing communities need immediate support With up to 400,000 fisherfolk impacted and an estimated 30,000 fishing vessels damaged or destroyed, the fisheries sector was one of the most severely affected. Estelita Taboy, representing one of the fishing communities in Basey, thanked FAO for the support received so far and added that "although the government has helped us to rebuild our boats, we still need fishing inputs, such as nets, hooks and cages that were all destroyed by the typhoon." "Supporting the recovery of fishing communities through boat rebuilding and the provision of key fishing inputs is another top priority," said Mr Graziano da Silva. Over lunch with farmers and fishers, he listened to their testimony on how they benefitted from FAO and the government's collaborative efforts and lauded the Filipinos' positive attitude in the face of recurring disasters. "We are committed to ensure that affected populations can build resilience to future disasters and make sure that when the next typhoon hits, they are able to build back better and safer," he added. Thanks to the generous donations of the governments of Belgium, Ireland, Italy, Norway and Switzerland FAO has to date mobilized $11.7 million as part of its component of the UN's Strategic Response Plan, around 31 per cent of the $38 million that it appealed for as part of it's response programme. Ongoing discussions with donors have resulted in total committed funds of more than $30 million. With these funds FAO aims to support 138,000 of the most affected farming and fishing households in the Philippines. FAO continues to advocate for urgent support to affected farmers and fishers and has received confirmation from several donors for significant additional funding that will enable it to deliver an effective and well funded response.
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EU Ag Sector Role in Economic Crisis Outlined at Major Conference
17 March 2014
EU - The agriculture sector is key for helping the EU survive the economic crisis, speakers at a high-level European conference on the future Common Agricultural Policy (CAP) said in Seville.
The Conference "The new CAP: Future for Farmers, Future for Society, organised by the Spanish Farm Organisation Asaja and co-partnered by Copa-Cogeca was attended by over 300 people across Europe.
Speaking at the event, the Regional Vice-Minister for Agriculture of Andalusia said "Agriculture has played a positive role in the economic crisis, with agriculture growth rising by eight per cent last year in Andalusia and exports good".
The CAP played a crucial role in facilitating this.
But speakers warned that the new CAP will be more complicated and red tape will increase in the future and support less.
"In particular, the greening measures under reform will be costly and agriculture production will be endangered which is especially worrying with food demand set to rise by 60 per cent by 2050", Copa Vice-President Harry Sinclair warned.
He consequently outlined ways to enable farmers to have a more viable future through green growth, with a more efficient use of resources. This means the huge potential of agriculture must be exploited, he said.
He pointed out that more money is available for agriculture research under Horizon 2020. But we have to ensure that knowledge is transfered to farmers to encourage the uptake of innovative solutions. For the implementation of innovative ideas at farm level, investment and modernisation measures are needed, he insisted.
Mr Sinclair went on to highlighted the need to strengthen farmers position in the food chain to get more income from the market, since they currently only get a fraction of the price of a product.
This was also highlighted by the Spanish Secretary-General Ms Isabel Garcia Tejerina for Agriculture and Food who insisted that agri-cooperatives need to be encouraged to enable farmers to better market their produce and get a better income from the market. All elements of the CAP must be used to improve the competitivity of the agriculture sector , she said. Farmers themselves also need to be more entrepreneurial and improve their positioning on the market.
Wrapping up, Asaja Sevilla President Mr Riccardo Serra Arias highlighted the importance of communicating to consumers the benefits of the CAP and of the work farmers do. He pointed out the success of this communication campaign The new CAP: Future for farmers, Future for society which included city farm events in Spain and Portugal, attracting over 300,000 visitors. After this conference, a final event will be held in Brussels in European Parliament on 24th March exhibiting photos which portray positive images of agriculture and show the crucial role farmers play in providing quality, healthy food and environmental services, maintaining rural areas, for society, thanks to the CAP.
A declaration was presented at the end of the conference outlining key ways to ensure a viable sector for farmers and society in the future.
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First Global Feed Sustainability Guidelines Released
18 March 2014
GLOBAL - The International Feed Industry Federation (IFIF) has announced the Global Feed Life Cycle Assessment (LCA) guidelines developed by the United Nations Food and Agriculture Organization (FAO)-led Livestock Environmental Assessment and Performance Partnership (LEAP) are now available for public review.
IFIF together with the American Feed Industry Association (AFIA) and the European Compound Feed Manufacturers’ Federation (FEFAC) is a founding member of LEAP, which aims to improve how the environmental impacts of the livestock industry are measured and assessed, an important step to reduce the impact of livestock products on the environment.
FEFAC and AFIA jointly developed Feed LCA recommendations as part of their LEAP contributions, and these form a significant part of the LEAP draft guidelines.
In less than two years, the LEAP partners were thus able develop a methodology that will introduce a harmonised, science-based, practical and international approach to the assessment of the environmental performance of feed supply chains, while taking into account the specificity of the diverse production systems that exist globally.
Mario Cutait, IFIF’s Chairman, said: “The sustainable development of global livestock production is one of the key priorities for IFIF. The LEAP guidelines are the first feed-specific LCA guidelines that reflect a consensus among partners in the multi-stakeholder process, including the FAO, national governments, private sector organizations as well as NGOs. IFIF welcomes these efforts, which represent an important step towards a globally harmonized industry standard for Feed LCA.”
AFIA’s President and CEO Joel G. Newman, commented: “With global supply chains, it is important to rely on globally harmonised metrics. The LEAP guidelines are a significant step forward to help feed companies to develop consistent and credible environmental assessments and therefore to reduce the environmental footprint of livestock products.”
FEFAC President Ruud Tijssens, added: “Common methodology for environmental footprinting is a pre-competitive issue and is part of our customer’s expectations.
“The main recommendations of the Product Environmental Footprint Guide developed by the European Commission were taken into account in the LEAP process. From a European perspective, this means the LEAP guidelines are the logical and relevant starting point to develop a standard aligned with the recommendations of the European Commission.”
The public review of the feed guidelines begins today and comments are welcome from interested parties until 31 July 2014.
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World Water Day: Agriculture and Water Inextricably Interlinked
21 March 2014
GLOBAL - This Saturday, 22 March, the world celebrates World Water Day. Water and agriculture are inextricably interlinked and interdependent. Agriculture is a major user of both ground and surface water for irrigation, accounting for about 70 per cent of water withdrawal worldwide.
Modern irrigation practices, including centre pivot irrigation systems, can help improve crop productivity and yields. Unfortunately, according to Food Tank, irrigation is also the source of excessive water depletion from aquifers, erosion and soil degradation. But using rainwater harvesting, zai pits, micro-irrigation, bottle irrigation, gravity drip buckets, rotational grazing systems and other water-saving practices can all help create diverse landscapes, supporting wildlife and culture.
According to the Organization for Economic Cooperation and Development (OECD), 47 per cent of the population could be living under severe water stress by 2050. “The world is thirsty because it is hungry,” reports the UN Food and Agriculture Organization (FAO). We each consume around 3,800 litres of water everyday and 92 per cent of that is used to produce the food we eat, making sustainable practices and reducing water consumption in food, also known as “virtual water,” even more necessary.
Europe uses, on average, 44 per cent of water for agricultural use. In the United States, agriculture accounts for around 80 per cent of consumptive water use. And in Western US States, such as California, over 90 per cent of water use is for agricultural purposes.
California is also facing the worst drought since records began, 100 years ago - approximately 95 per cent of the state remains in a drought, with about 23 per cent experiencing “exceptional” drought. The state also happens to be America’s breadbasket, supplying nearly half the country's fruits, nuts, and vegetables, and is a major producer of almonds, artichokes, grapes, olives and other products.
But all over the world, says Food Tank, farmers are using innovative practices to utilise water more efficiently and in lesser quantities to produce more nutritious foods. And eaters can profoundly reduce water waste and consumption through the food choices they make each day.
In Syria, in the four regions hit hardest by groundwater shortages, the FAO helped the Ministry of Agriculture improve irrigation technology and management techniques. The project benefited 2,750 farmers by providing drip irrigation systems and training farmers on their installation. Drip irrigation saves both water and fertiliser inputs by allowing water to drip slowly through a network of tubing to the roots of plants. And it’s something that can be used on both small large farms all over the world.
Drip irrigation was also introduced on Cape Verde, helping boost the island’s horticultural production from 5,700 tonnes to 17,000 tonnes over an eight year period. And now more than 20 per cent of the country’s irrigation has been converted to drip irrigation. Rethinking crop production has helped conserve water resources as well - farmers on the island converted their sugar cane plantations, which are water-intensive, to more diverse crop production, including cultivating peppers and tomatoes, that require less resources and are more suitable to the region’s climate.
In Israel and Spain, farmers have started re-using drainage water from urban areas mixed with groundwater for supplying water to crops. And in California agricultural waste water from irrigating crops is being reclaimed and treated for re-use, benefiting the environment by avoiding discharge of chemicals into surface water and helping retain soil nutrients by preventing them from being washed away with the run-off water.
Across India, the Watershed Organization Trust (WOTR) regenerates watershed communities by harvesting rain water, organising communities to sustainably manage the land, optimising irrigation, and planting crops based on water availability. WOTR has reached more than 300,000 people in 300 villages, rejuvenating 200,000 hectares of land.
Food Tank adds that consumers can all do their part to save water by incorporating more native foods into their diets, eating more locally grown foods and less meat, steaming vegetables rather than boiling them, reducing food waste, reconsidering lawn and garden irrigation methods, and supporting family farmers that use less water intensive practices.
On World Water Day this year, Food Tank will honour the projects, people, and programmes working tirelessly to achieve more with less water and creating innovative systems for the future.
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FAO Food Price Index up Sharply for Second Consecutive Month
03 April 2014
GLOBAL - The FAO Food Price Index averaged 212.8 points in March 2014, up 4.8 points, or 2.3 per cent, from February and the highest level since May 2013.
According to the FAO, last month’s increase was largely driven by unfavourable weather conditions affecting some crops and geopolitical tensions in the Black Sea region. Overall, except for the FAO Dairy Price Index, which fell for the first time in four months, all the other commodity price indices registered gains, with sugar and cereals increasing the most.
The FAO Cereal Price Index averaged 205.8 points in March, up as much as 10 points, or 5.2 per cent, from February, marking the second month of significant increases. While in March the Index rose to its highest value since August 2013, it remained well below (34.6 points or 14.4 per cent) its value in March 2013. Last month’s strength stemmed from a surge in wheat and maize prices reflecting a strong pace in grain imports, growing concerns over the effect of continued dryness in the south-central United States on winter wheat crops, and unfavourable weather in parts of Brazil. Geopolitical tensions in the Black Sea region, in particular uncertainties with regard to grain shipments from Ukraine, also provided a boost. Rice prices were generally stable.
The FAO Vegetable Oil Price Index averaged 204.8 points in March, up another 7 points (or 4.5 per cent) from February and the highest level in 18 months. The rise in the index mainly reflected a surge in palm oil, on continued concerns over the impact of protracted dry weather in Southeast Asia. Tight inventories in Malaysia and the prospect of rising domestic consumption in Indonesia, the top palm oil producer and exporter, contributed to the strengthening in palm oil values, as did reports about a possible El Niño weather event later this year. International prices for soy, sunflower and rape seed oil also firmed.
The FAO Dairy Price Index averaged 268.5 points in March, a fall of 6.9 points, or 2.5 per cent, over February. Demand for all dairy products has been affected by reduced purchases by China and uncertainty over trade with the Russian Federation. Additionally, an extended season in New Zealand and a good start to the dairy-year in the northern-hemisphere have meant that supplies for export have increased. The dairy commodity subject to the sharpest price drop was Whole Milk Powder, reflecting reduced buying interest from China, in particular.
The FAO Meat Price Index averaged 185 points in March, 2.7 points, or 1.5 per cent, above February. The main driver was higher bovine meat prices, which were associated with dry weather conditions affecting production in both Australia and the United States. Prices for pigmeat also rose, in part on concerns over the effect of Porcine Epidemic Diarrhea virus on export supplies in the United States. Prices of poultry and ovine meat were only slightly stronger.
The FAO Sugar Price Index averaged 253.9 points in March, up 18.5 points, or 7.9 per cent, from February. Sugar prices kept strengthening amid concerns of declining export availabilities from Brazil and Thailand, due to drought and reduced sugarcane output, respectively. The likelihood of sugar crops being adversely affected by El Niño later this year also contributed to the price surge.
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Plants Host Pathogenic Bacteria from Livestock Farming
11 April 2014
NETHERLANDS - Disease-causing bacteria resulting from livestock farming can contaminate food products and find their way to humans.
This occurs remarkably effectively via plants, which explains why recent outbreaks due to infection with EHEC and other E. coli and Salmonella strains are regularly attributed to the consumption of fresh vegetables. These are the findings of researchers from Wageningen UR (University & Research centre), who carried out a literature study on outbreaks like the EHEC one.
EHEC outbreak in Germany
In the spring of 2011 EHEC bacteria caused an outbreak in northern Germany. The source of infection, with an unusual variant of Escherichia coli, turned out to be fenugreek, a seed sprout many restaurants use to decorate food. This particular outbreak resulted in a number of deaths and led to numerous investigations into the relationship between these bacteria and the consumption of sprouted and seedling vegetables.
The research showed that the pathogens involved were remarkably good at surviving on products of plant origin. In other words, the ‘traditional’ route to humans via meats, eggs or dairy products must be extended to include plants and products containing plants. Even more worrying: these human pathogens can adapt themselves to plants and their direct environment without losing their ability to cause illness in humans.
Microorganisms on plants
Since the EHEC outbreak, almost 200 studies into its causes and background have been published. Researchers at Wageningen have summarised the results in a literature review, which has demonstrated that some pathogenic bacteria can reside in or on plants for long periods. This means a higher risk of transmission to humans.
The researchers believe these microorganisms survive such a long time on plants because they have acquired genes from other microorganisms – those that normally occur in the soil, in manure or in irrigation water. In particular, the researchers hold bacteriophages (virus-like particles that only infect bacteria) and plasmids (independent pieces of DNA present in bacteria) responsible for gene transmission to human pathogens on or in plants. More research is needed to confirm this suspicion.
Development of new detection systems
This new discovery is important for understanding how human pathogens adapt themselves to plants. A study of the transmitted genes in outbreak strains could lead to the development of new detection systems, and thus a quicker and more effective estimation of the risks to consumers. This would also ensure more accurate information is supplied during new outbreaks.
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Chinese Farm Produce Prices Continue to Fall25 April 2014 CHINA - The prices of major farm produce in China continued to fall last week according to a survey of 36 large and medium-sized cities conducted by the Ministry of Commerce, MOFCOM.Last week, vegetables in various regions went on the market in bulk, with the average wholesale prices of 18 vegetables going down 5.1 per cent compared with that of the previous week. The prices of cucumber, lettuce and oilseed rape decreased 14.9 per cent, 13.5 per cent and 9.9 per cent respectively week on week. The average wholesale prices of meat also fell, with the price of pork down 0.3 per cent from the previous week. The prices of beef and mutton dropped 0.2 per cent and 0.4 per cent respectively. The average wholesale prices of aquatic products decreased by 0.4 per cent, with the prices of small hairtail, large hairtail and chub moved down 1.7 per cent, 0.7 per cent and 0.6 per cent. The retail prices of grain and edible oil were stable with only a slight decline, with the prices of rice, flour and soy-bean oil remaining the same as those of the previous week. The prices of peanut oil and rapeseed oil went down 0.1 per cent. The retail prices of poultry and eggs saw ups and downs, with the price of chicken down 0.1 per cent and the price of eggs up 0.4 per cent.
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US$9.2 Billion Set Aside for Investment in Indian Agriculture
02 May 2014
INDIA - In order to develop agriculture infrastructure in the country, India has set aside US$9.2 billion to develop integrated schemes for agricultural marketing in the 12th plan period (2012-2017), writes Jagdish Kumar.
Under the plan, investments will be used for developing agriculture marketing infrastructure, secondary agriculture and policy for internal and external trade.
The funds will also be invested as per the recommendation of the Indian Planning Commission Working Group on Warehousing Development and Regulation, 35 million tonnes of storage capacities needs to be added during XII Plan period.
The investment will also be made on developing infrastructure for managing marketable surplus of agriculture, which includes horticulture as well as dairy, poultry, fishery, livestock and minor forest produce.
The government will also focus on promoting innovative and latest technologies in agricultural marketing infrastructure by encouraging private and cooperative sector investments.
Besides, storage, infrastructure will be developed for grading, standardisation and quality certification of agricultural produce so as to ensure a fair price to the farmers.
Apart from grading and quality certification of produce, government will also pledge financing and marketing credit, negotiable warehousing receipt system and promotion of forward and future markets to increase farmers’ income.
Of the funds set aside some will go in building integrated value chain that has been defined in agriculture marketing which will provide proper flow of subsidy to the entrepreneurs under the scheme.
The government’s main focus is providing agriculture marketing subsidies through transferring direct benefits to the farmers.
Another focus will be to push for pledge finance to the farmers to prevent them from distress sell and to keep their produce in the storage infrastructure and those farmers who will keep the produce in storage infrastructure will be eligible for pledge loan on hypothecation of their produce.
In order to discourage distress farmers, the scheme will provide small and marginal farmers with credit support if they have a Kisan (farmers) credit card.
The farmers will be encouraged to store their produce in warehouses against warehouse receipts to gain these benefits.
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China Consumer Prices up in April
09 May 2014
CHINA - China's consumer prices increased at a slower pace in April as the cost of fresh vegetables and pork both declined, official data showed on Friday.
The Consumer Price Index (CPI), a main gauge of inflation, increased 1.8 per cent year on year in April, down from 2.4 per cent in the previous month, according to the National Bureau of Statistics (NBS).
Slower increases in food prices were the main contributor to the lower CPI figure. Food prices increased 2.3 per cent year on year, down from 4.1 per cent in March.
Prices of pork, a staple of the Chinese diet, fell 7.2 per cent, dragging down the CPI by 0.21 per centage points. Prices for the whole meat and poultry category dipped 0.7 per cent, dragging down the CPI by 0.05 percentage points.
Fresh vegetable prices went down 7.9 per cent, pulling down the CPI figure by 0.28 percentage points, the NBS said.
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Ag Economist Offers Insights to Latest US Farm Bill
15 May 2014
Purdue News
US - A Purdue Extension agricultural economist has published two articles that include analysis of what the 2014 farm bill could mean for farmers and agriculture in the Midwest.
The articles, "What Will the 2014 Farm Bill Mean for Midwest Agriculture?" and "Beginning to Evaluate Choices in the Farm Bill," were authored by Roman Keeney and are available for download free of charge in the most recent edition of the Purdue Agricultural Economics Report.
The bill, formally named the Agriculture Act of 2014, was signed into law 7 February, but many of the law's specific rules are left to the US Department of Agriculture to interpret and implement. And while the new programmes outlined in the bill will apply to the 2014 crop, Dr Keeney said it's likely signups won't be available until late in 2014.
In his articles, Dr Keeney explains the ways the farm bill has changed agricultural policy, outlines the new farm revenue protection programmes and helps farmers start to evaluate their programme decisions.
"The new farm bill is a major overhaul of commodity policy in the United States," he said. "The articles provide an overview of those changes, introduce some of the decisions farmers will be making, and considers the continuing evolution of US agricultural policy."
One of the biggest changes farmers will see is the elimination of the longstanding direct and countercyclical payments system. Instead, lawmakers decided to offer farmers a more robust insurance and revenue protection system.
Part of what makes farmers' revenue protection programme decisions so important is that farmers are locked into their enrollment decisions for the five-year life of the farm bill, which runs through 2018.
The programmes they'll be offered:
•Price Loss Coverage (PLC), a price protection programme that triggers payments when market year average prices fall below target levels, which are called reference prices.
•Agricultural Risk Coverage County (ARC-C), a revenue protection programme that triggers payments when the county revenue per acre falls below a benchmark revenue guarantee per acre set for the county.
•Agricultural Risk Coverage Individual (ARC-I), a revenue protection programme that triggers payments when there is a revenue-per-acre shortfall on the individual farm that falls below a benchmark revenue guarantee per acre for that farm.
The decision is more in-depth than just selecting a programme per farm. Farmers will be able to enroll different commodities into different programmes. There also are some additional options available with all three programmes - all highlighted in Dr Keeney's articles.
The USDA is expected to have the remainder of the farm bill rules interpreted this summer, giving farmers time to learn more before they enter the enrollment period later this year.
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How Valuable are UN’s Food and Agriculture Business Principles?
20 May 2014
ANALYSIS - The United Nations six Food and Agriculture Business Principles that were launched this week, designed to help agricultural communities in underdeveloped and developing regions, in particular, produce food sustainably, while receiving general support, may not be the ultimate panacea the global leaders had hoped, writes Chris Harris.
An analysis of the proposals from the University of Wageningen points to some fundamental and elementary flaws and concerns in the way the principles have been presented and how these principles can be adopted by farming communities and implemented effectively.
The six principles cover:
•Minimising waste and pollution, protecting biodiversity and conservation and mitigating climate change
•Protecting smallholders and eradicating poverty, ensuring market access and fair mechanisms and emphasising a supply chain-wide approach
•Protecting smallholders and eradicating poverty and investing in local communities and protecting children
•Focusing on accountability and anticorruption, with a need for government involvement and a need for monitoring systems and standards
•Educating smallholders, investing in local communities and disseminating knowledge and creating sharing platforms
•Food safety and health care together with a change of food patterns and consumer behaviours and minimising waste and pollution.
However, the report from Herman Brouwer and Guan Schellekens from Wagineningen, Validating the Food and Agriculture Business Principles, says that while there is broad support for the principles “the high level language of the FAB Principles draws concerns from stakeholders regarding how they might be applied in implementation and actually translated into partnerships and enabling actions relevant for local situations”.
They call for greater clarity on what signing up to the principles actually means and requires.
“Do the FAB Principles call for endorsement, implementation, or advocacy?” the report’s authors say.
“A view on what adherence to the principles means, or could practically be, would be helpful to have in place when the Principles are adopted.”
The feedback from consultation has called for a number of changes and improvements. One of the main points is to broaden the focus of the principles to include forestry and fisheries.
The consultation also showed a desire to give just a prominent role to the consumption end of the food chain as the production end.
The criticisms said there was a need to work more on a waste reduction strategy to become more sustainable.
There were concerns that the principles could be used to isolate certain communities by taking them as single silos and not working together or with other similar initiatives.
“Generally, stakeholders mention the need to position the FAB Principles clearly in relation to other sustainable agriculture initiatives. This would help avoid confusion between initiatives, and make the FAB Principles more actionable in conjunction with other initiatives,” the Wagineningen report says.
“The feedback suggests that ongoing effort is needed to prioritize underrepresented stakeholder groups to achieve a better regional and industry balance in implementing the FAB Principles.”
The consultation suggestions called for the role of women in the agricultural communities to be considered in the report as well as the non-food industry in relation to food security.
The feedback to the report paid long and strong consideration to waste reduction and called for more explicit wording on land and water management, and reference to biodiversity.
It added that there should be emphasis on limiting the negative impacts of capture fisheries, aquaculture and extractive industry on the environment.
The wording of economic viability, unprofitability, and shared value needs to be clarified the critics said and there should be a stronger reference to the role of regulators and retailers in delivering shared value.
The critics said the report should consider extending the description beyond ‘Businesses... to be transparent in their activities’ by including ‘and accountable for their commitment’ and it should “consider reference to ethics within the business model”.
Chris Harris, Editor-in-Chief
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Cutting Malnutrition by 2050 Depends on Ag Output, Climate Change
30 May 2014
Purdue News
US - Global malnutrition could fall 84 per cent by the year 2050 as incomes in developing countries grow - but only if agricultural productivity continues to improve and climate change does not severely damage agriculture, Purdue University researchers say.
"The prevalence and severity of global malnutrition could drop significantly by 2050, particularly in the poorest regions of the world," said Thomas Hertel, Distinguished Professor of Agricultural Economics. "But if productivity does not grow, global malnutrition will worsen even if incomes increase. Climate change also adds a good deal of uncertainty to these projections."
Hertel Baldos Purdue global malnutrition agriculture sustainability
Agricultural economists Uris Baldos (left) and Thomas Hertel
Professor Hertel and doctoral student, Uris Baldos, developed a combination of economic models - one that captures the main drivers of crop supply and demand and another that assesses food security based on caloric consumption - to predict how global food security from 2006 to 2050 could be affected by changes in population, income, bioenergy, agricultural productivity and climate.
According to the models, income growth coupled with projected increases in agricultural productivity could raise more than half a billion people out of extreme hunger by mid-century.
Income is also set to eclipse population as the dominant driver of food security, a "historical first," said Mr Baldos.
He said: "We expect that the population driver will diminish relative to per capita income in the coming decades, especially in the developing world."
Growth in income will allow people to increase the amount of food they consume and "upgrade" their diets by adding more meat and processed foods to staples such as crops and starches. The shift toward a diet higher in calories and richer in protein could lift many in hunger-stricken regions such as sub-Saharan Africa, South Asia, China and Mongolia above the malnutrition line.
Globally, the volume of food consumed per capita could increase by about 31 per cent. In developing regions with strong growth in income and population, consumption could rise by about 56 to 75 per cent.
But these projections depend heavily on corresponding increases in agricultural productivity, Professor Hertel said. Productivity is a measure of crop yields relative to the inputs used in producing them such as land, labor and fertilisers. Increased global productivity improved the availability of food over the last 50 years, but this trend must continue between now and 2050 to buttress food security.
He explained: "There is a clear link between productivity growth in agriculture and the number of malnourished people. Boosting productivity tends to lower food prices, and declines in the cost of food in turn can allow for better nutrition. Income growth alone will not be enough to solve the malnutrition problem."
Historically, agricultural productivity has been driven by investments in agricultural research and development. The researchers said improvements in food security depend on increasing research spending, especially over the next two decades.
Professor Hertel continued: "The decisions we make now about funding for agricultural research will have implications for a number of malnourished people in 2050. If agricultural productivity stagnates, there will be far more malnourished people in the future, particularly in regions where chronic hunger is already present."
The researchers also cautioned that the impacts of a changing climate on crop yields remain uncertain.
Rising temperatures could extend the growing season in northern latitudes, and an increase in carbon dioxide in the atmosphere could benefit some crops by improving water efficiency. But climate change is complicated, Professor Hertel said.
He added: "Up to 2050, there could be some pluses for agriculture. But in the longer run, adverse temperatures will likely become overwhelming, and rising carbon dioxide concentrations won't help after a certain point. Eventually, you drop off a cliff."
The models show that climate change is a less influential driver of global food security than income, population and productivity - but it could still pose a significant risk to the nutrition levels of people living in the world's poorest regions, Mr Baldos said.
"People living in the most hunger-stricken areas will be the most vulnerable to climate change."
The paper was published in the Australian Journal of Agricultural and Resource Economics. Funding for the research was provided by the US Department of Energy.
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Philippines Agriculture, Fisheries Growth Despite Typhoon Yolanda28 May 2014 PHILIPPINES - Despite the devastation brought about by Typhoon Yolanda (international name Haiyan) during the latter part in 2013, Philippine agriculture still managed to grow by 0.67 percent in its output for the first quarter of this year, the Bureau of Agricultural Statistics (BAS) recently reported.Overall, the agriculture grossed P386.6 billion at current prices, a 10.75 per cent higher than the gross earnings recorded last year brought about by output increases in the crops, livestock and poultry subsectors, negating the contraction in the fisheries subsectors, BAS reported. Crop production improved by 1.53 per cent, compared with last year, and contributed 54.40 per cent to the total agricultural production. Palay production went up by 3.28 per cent while corn posted an increase of 1.33 per cent during the reference period. For its value, the crop subsector produced some P225.8 billion at current prices, a notable increase of 17.58 per cent from the year-ago level. The general growth pattern in production of the crop subsector was pulled down by contraction in the production of coconut, coffee, abaca, and the fisheries sector, BAS noted, adding that “the slowdown in the sector’s growth could be traced to the devastating effects of typhoons that hit the country last year.” Sugarcane production went up by 5.54 per cent compared with last year’s reporting period, caused by favorable weather conditions in Capiz, negros Occidental, Bukidnon and Iloilo. The livestock subsector grew by 1.20 per cent in the reporting period, with a 15.44 per cent share in the total agricultural output. The hog industry mainly pulled up the production with its 1.25 per cent growth, driven by increased demand of pork from industrial areas in Bataan and Metro Manila. Carabao and cattle reported 0.10 and 0.82 per cent increase respectively. The livestock growth translated into P57.4 billion at current prices, and a 5.58 per cent higher compared with last year. The poultry subsector with its 14.46 per cent contribution to the total agricultural growth registered a 1.33 per cent improvement compared with last year. Chicken meat with its 2.50 per cent growth led the improvement, followed by duck meat at 0.10 per cent. Chicken egg production however posted 2.36 per cent decrease. The poultry subsector grossed P45.7 billion at current prices, a 5.29 per cent improvement from last year. With Typhoon Yolanda destroying thousands of fishing boats in the Eastern Visayas region which produces almost 25 per cent of the aquatic resources in the country, the fisheries sector contracted by 3.25 per cent for the first quarter of the year. Its share in the total agricultural produce is 15.70 per cent. Almost all of the major aquatic resources posted decreases in production, from roundscad (galungong) and milkfish to tiger prawn and seaweeds, except for skipjack tuna which expanded by 4.62 per cent. Production of remaining species declined by 5.70 per cent during the reference period due to occurrence of low pressure area in most of the fishing regions, including the fishing ban on sardines in Zamboanga which is needed to stabilize the food supply for Tuna and other fish-eating species. At P57.8 billion gross value, the fisheries production amount was 2.64 lower than last year. In its first quarter outlook for palay and corn BAS also released recently, an increase of 3.89 percent for palay and 4.88 percent for corn in the first half of 2014 is expected, basing its calculation on the outputs of the main grain crops surpassing their 2013 levels by 3.28 per cent and 1.33 per cent respectively.
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I was asked to watch the men of the people who read it.
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Indian President Commits to More Govt Investment in Agriculture
13 June 2014
INDIA - Agriculture is the source of livelihood for the majority of our people, the President of India, Pranab Mukherjee said at the first session of both houses of parliament after the general elections to the 16th Lok Sabha, writes Jagdish Kumar.
Government will increase investment in agriculture, both public and private, especially in agricultural infrastructure, as in the recent past, as our farmers have been under severe stress with hopelessness driving some of them to suicide, the President said.
He stressed that steps will be taken to convert farming into a profitable venture through scientific practices and agro-technology.
The President said that his government will address issues pertaining to pricing and procurement of agricultural produce, crop insurance, post-harvest management and productivity of animal husbandry will be increased.
Government will incentivise the setting up of food processing industries and existing cooperative sector laws will be reviewed to remove anomalies and lacunae.
He said that the government will adopt a National Land Use Policy which will facilitate scientific identification of non-cultivable land and its strategic development.
As a majority of farmers depend on rain for agriculture, the president said, government is committed to giving high priority to water security. It will complete the long pending irrigation projects on priority and launch the Pradhan Mantri Krishi Sinchayee Yojana (Prime Minister Agriculture Irrigation Scheme) with the motto of Har Khet Ko Paani (Every farm gets water), the president stressed.
The latest data shows that as many as 20 states reported a decrease in areas of cultivable land to the extent of 790,000 hectares in four years from 2007-08 to 2010-11.
The President also highlighted the need for seriously considering all options including linking of rivers, where feasible; for ensuring optimal use of water resources to prevent the recurrence of floods and drought.
By harnessing rain water through Jal Sanchay (water conservation) and Jal Sinchan (ground water recharge), water conservation can be nurtured and ground water recharged. Micro irrigation will be popularised to ensure per drop-more crop, the president pointed out.
In order to transport perishable agricultural products across the country cutting wastages, the president said that the country will have a network of freight corridors with specialised agri-rail networks.
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Three Truths about Public’s Perception of Genetic Modification
25 June 2014
ANALYSIS - The use of genetically modified organisms (GMOs) in the American food system is controversial. Public discourse of GMO has been characterized by polarization and inflated rhetoric, write Oistein Thorsen and Garret Higgins, both with trie.
Proponents of GMO hail it like a holy grail for feeding a growing population, while opponents’ talk of “frankencrops” invoke somewhat Luddite fear of new technology and science. In an attempt to clarify what exactly the American consumer is taking from this contentious debate, the authors have reviewed a series of recent public perception research from reputable sources like the International Food Information Center (IFIC), Gallup and the New York Times. What emerges are the following three truths:
1.People are concerned and largely skeptical of GMOs and thus in favor of labeling.
2.Distrust of the food industry and general ignorance about what constitutes genetic modification - its prevalence and common applications - are major drivers of public concern.
3.The public needs more accurate information from trustable sources if misperceptions are to be corrected.
The Public’s Awareness of GM
American consumers are largely wary of GMO. Many state legislatures are deliberating bills that would mandate labeling. Multiple polling studies show popular opinion is in favor of labeling based on beliefs about GE-caused health risks.
The FDA currently does not require GM and/or food with GM ingredients to be labeled. Currently, most row crops bred in the US are modified. According to the USDA, about 94% of soy, 95% of sugar beets, and 90% of cotton plants are GM varieties (USDA, 2013).
Polls conducted by researchers at Rutgers University found that 43% of survey participants were aware that GM food is available in supermarkets, and only 26% knew they had eaten food containing genetically modified products (Rutgers, 2013).
The Rutgers poll also found that consumers are uninformed as to which types of food are genetically modified and sold in grocery stores. More than half mistakenly believed that GM tomatoes (56%), wheat (55%), and chicken (50%) are on the market (ibid.).
“Nearly half” of respondents in a New York Times poll were aware that food containing GMO is commonly sold. Four out of ten wrongly thought that “most or a lot of their fruits and vegetables were genetically modified.” (NYT, 2013).
A Gallup poll conducted in July, 2013, asked if respondents follow news about biotechnology and GE. Twelve percent affirmed that they follow updates “very closely.” Thirty percent, however, follow news related to GMO “not at all.” (Gallup, 2013).
In May of 2014, the IFIC published a survey finding mixed results. Twenty-four percent of respondents said they had read/heard something positive about GMO, while 25% said what they had read or heard was negative. Thirty-eight percent responded that the information they’ve heard is neutral (IFIC, 2014).
Demand for Labeling
Nutrition LabelThe public is unified in support of labeling GM food. Surveys from various media all overwhelmingly found consumers to favor transparency. However labeling is not a simple matter; as Cathleen Enright of the Biotechnology Industry Organization says, labeling needs to be “without prejudice.” GM labeling in the European Union, the Scientific American wrote, can unduly constrain the food market.
Many people argue for GMO labels in the name of increased consumer choice. On the contrary, such labels have limited people's options. In 1997, a time of growing opposition to GMOs in Europe, the E.U. began to require them. By 1999, to avoid labels that might drive customers away, most major European retailers had removed genetically modified ingredients from products bearing their brand. Major food producers such as Nestlé followed suit. Today it is virtually impossible to find GMOs in European supermarkets (Scientific American, 2013.).
A survey by the New York Times found that 93% of people think food containing GM ingredients should be labeled (NYT, 2013). A poll conducted by ABC News also resulted in 93% of respondents in support of required labeling (ABC News, 2013). In the Washington Post’s public poll, 94% answered that GM food should be labeled (Washington Post, 2013). Although not as overwhelming as the aforementioned polls, 73% of respondents to the Rutgers University Poll believed GM labeling should be required (Hallman et al., 2013).
Because of this mass concern, many state legislatures are taking action. In 2013, Connecticut and Maine passed GE labeling legislation. In May 2013, a bill to ban genetically engineered crops on the island of Hawaii was introduced in a county council (NYT, 2014). Since the start of 2014, 34 new GE labeling bills have been introduced in 19 states (CFS, 2014).
In September 2013, Sen. Elizabeth Warren called on the FDA to finalize a draft guidance for GE labeling. However that initiative has drawn the ire of anti-GMO activists, as compliance on the part of the food industry is voluntary (Politico, 2013).
Consumers adamantly demand labeling largely because of perceived health risks. In the poll conducted by the New York Times, 75% of respondents “expressed concerns” about GMO (NYT, 2013). Thirty-seven percent “feared” possible carcinogens and allergens, and 26% believed GM food is “not safe to eat, or toxic” (ibid.). Forty-eight percent of Gallup’s respondents believe GE food pose a serious health risk. (Thirty-six percent said it isn’t a health risk, and 16% answered “no opinion.”)
This is the first of a two-part series of GMOs. Watch for the part two which covers consumer trust.
Garret Higgins is a graduate from Pace University, where he studied business and political science. He is currently an intern with trieSM in New York City.
Oistein Thorsen
Principal Consultant, trie
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Growing Market for Global Animal Feed Additives
04 July 2014
GLOBAL - The global animal feed additives market is growing at a steady pace and the market is projected to grow in the future because of the increasing demand for meat and meat products around the world.
Epidemics such as bird flu, other diseases such as foot-and mouth-disease, and environmental concerns have led to increase in concern over animal health around the globe, because of which, meat producers have increased their focus on feed quality and certification, according to a new report from Research and Markets, "Global Animal Feed Additives (Swine, Poultry, Cattle, Aquaculture, Others) - Forecasts to 2018".
Animal feed additives are pharmaceutical or nutritional substances, which are not of natural origin and are added to prepared and stored feeds.
Feed additives are gaining importance due to various functions such as growth promotion, controlling infectious diseases and enhancement of feed digestibility in animals.
North America and Asia-Pacific are the top two consumers of feed additives in the world, together accounting for more than 60 per cent of the consumption.
Asia-Pacific is estimated to be the fastest growing region in terms of revenue. Growth is particularly high in emerging countries such as China, India, and Brazil, because of increasing income levels and rising per capita meat consumption.
The poultry market is estimated to account for the market share for feed additives followed by swine.
The driving factors of the global animal feed additives market are rise in global meat consumption, increasing awareness towards meat quality and safety, increasing mass production of meat, and recent disease outbreaks in livestock.
The restraints of the market are, increasing raw material cost and regulatory structure.
However, the report says that increasing cost of natural feed products is creating an opportunity for feed additives as a cheap alternative.
Leading manufacturers are focusing on expansion of businesses across regions and setting up new plants for increasing their production capacity.
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Fisheries Leads Economic Growth in Northern Mindanao
01 August 2014
PHILIPPINES - The Northern Mindanao economy has posted a 5.6 per cent growth in 2013, according to the National Statistical Coordination Board (NSCB), due in part to a growth in the fisheries sector.
However, the growth was lower than the 7.2 per cent growth recorded by the region in 2012, Brenda Lynn M. Castro, Statistical Coordination Officer IV of the NSCB-10, said in a news conference.
Ms Castro said the slowdown was attributed to the decelerated growths in the Industry and Service sectors.
Although the Agriculture, Hunting, Forestry and Fishing (AHFF) sector experienced acceleration with a growth of 3.2 per cent from 2.5 per cent in 2012, she said its improved performance was not enough to sustain the region’s economic growth as the two major sectors showed decelerated growths.
The improved performance of AHFF was attributable to the accelarated growth in the fishery sector which is three times faster than its growth in 2012. Ms Castro said this was due to the increase in production of tiger prawns.
The performance of the AHFF was not also largely affected by the 1.9 per cent decelerated growth of the Agriculture and Forestry sector. The decelerated growth of this subsector was due to the decline in production of sugarcane and corn.
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FAO Food Price Hits a Six-month Low in July
07 August 2014
GLOBAL - Falling grain, oilseed and dairy prices push index to lowest level since January 2014.
The FAO Food Price Index decreased for a fourth consecutive month in July mainly due to a sharp decline in international prices for maize, wheat and certain oilseeds, reflecting ample supplies for these commodities.
Based on the prices of a basket of internationally-traded food commodities, the FAO Food Price Index averaged 203.9 points in July 2014, down 4.4 points (or 2.1 per cent) from a revised value in June and 3.5 points (or 1.7 per cent) below the July 2013 level.
"The lingering decline of food prices since March reflects much better expectations over supplies in the current and forthcoming seasons, especially for cereals and oils, a situation that is expected to facilitate rebuilding of world stocks," said FAO senior economist Concepción Calpe.
In contrast, meat prices rose for the fifth consecutive month in July, and those for sugar remained firm. The fall in quotations for grains, oilseeds, as well as dairy products pushed down the FAO Food Price Index to its lowest level since January 2014.
"Livestock product markets have their own dynamics: in the case of meat, beef in particular, many exporting countries are in a herd rebuilding phase, which is limiting availability for exports and sustaining prices," Ms Calpe said.
"As for dairy products, supplies available for trade appear to be abundant, which, along with a faltering import demand, has weighted on July's quotations," she added.
Sharp Slide in Cereal and Oilseed Prices
The FAO Cereal Price Index averaged 185.4 points in July, down 10.7 points or 5.5 per cent from June and as much as 36.9 points or 16.6 per cent below the level one year ago.
In particular the fall in international prices for maize (down 9.2 per cent from June) and wheat (down 5.8 per cent) reflected excellent production prospects as well as expected abundant exportable supplies in the 2014/15 marketing season.
In contrast, rice prices edged marginally higher, on renewed import demand, especially as Thailand's sales from public reserves remained suspended.
The FAO Vegetable Oil Price Index averaged 181.1 points in July, down 7.7 points or 4.1 per cent from June. The decline continued to be primarily driven by falling soy and palm oil prices.
Soy oil values fell mainly in response to record crop prospects for the United States as well as abundant supply in South America while palm oil quotations eased on persisting strength in Malaysia's currency and slow global import demand. Prices for rape and sunflowerseed oil also weakened, reflecting ample crop prospects for 2014/15.
The FAO Dairy Price Index averaged 226.1 points in July, down 10.3 points (4.4 per cent) over June and 17.5 points (7.2 per cent) less than the same period last year. Reduced import demand - including a decline in purchases of butter by Islamic countries during Ramadan - contributed to the downward trend in dairy prices.
Meat Prices Rise While Sugar Remains Volatile
A continued strong demand for meat in Asia and particularly China, helped to edge up the FAO Meat Price Index which averaged 204.8 points in July, 3.7 points (1.8 per cent) higher than its revised value in June and 25.4 points (14.1 per cent) above the same period last year. Average prices for poultry and ovine meat also rose, while those for pig meat fell back somewhat from the all-time high registered in June.
The FAO Sugar Price Index averaged 259.1 points in July, marginally up by 1.1 points (0.4 per cent) from June, and 20.2 points (8.4 per cent) higher than in July 2013. International sugar prices have been relatively volatile over the last three months, amid uncertainty over the impact of a drought on sugarcane in Brazil, the world's largest producer and exporter and indications of below average monsoon rains in India, the second largest world sugar producer.
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Russian Demand Sees Brazil Meat Prices Rocket
21 August 2014
BRAZIL – Extra Russian demand is seeing ‘soaring’ pork prices in Brazil which is now inflating beef and chicken markets at a low supply ebb.
The national price surge is driven by increased demand following Russian trade sanctions due to limited availability across protein segments, says the Centre for Advanced Studies on Applied Economics.
Brazil’s swine and cattle herds have contracted, meaning limited pork and beef availability through 2014 has been inflamed by export demand this month.
Chicken prices have subsequently lifted after consumers turned to poultry.
Exceptionally high pork prices have hit the Sao Paulo and Minas Gerais regions which CEPEA pins on the prevailing independent market.
“These areas react faster to changes in market conditions,” CEPEA explained in a monthly update. “Due to higher hog prices, slaughterers and wholesalers have pushed up carcasses and cuts.”
Cepea market intelligence states that high prices may put consumers off meat entirely.
Analysts are expecting a ‘counterbalance’ effect from exports if consumption weakens.
Russia, importing 35.7 per cent of Russian meat this year is Brazil’s prime destination leading Hong Kong, Angola and Singapore.
Cepea added: “Pork shipments usually move up in the second semester and this year may be reinforced by increasing Russian purchases.”
Cattle prices are also elevated. Calf prices are 20.2 per cent higher on the national index for July.
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Conflict Will Not Leave Ukraine Hungry
29 August 2014
UKRAINE – Ukraine will not be allowed to go without food, agriculture minister Igor Shvaika has declared on live television.
Regardless of fighting in the East and the Crimean occupation, Mr Shvaika pledged food for the nation on ZIK, an independent channel for western Ukraine.
He added that government corruption issues are being addressed across all departments, including agriculture.
Summarising current government ethos, he said: “We must work in conditions of maximum transparency, honesty and openness."
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No Harm in Feeding Livestock GE Feed, Science Review Finds02 October 2014
GLOBAL – It is safe to feed genetically engineered crops to livestock, according to a research review assessing the performance of over 100 billion animals.
Data on animal health, performance and the nutritional profile of resulting food products of animals fed genetically engineered crops show no detrimental effects. The data set ran from 1983 - before GE crops - to 2011.
The study, considered the most comprehensive ever in GE crops and livestock, found improved feed-to-gain ratios and decreased age to market.
This was from US field data including nine billion broilers annually.
Such an observation, “suggests that feeding GE crops did not have any detrimental effects to the birds’ health,” researcher Dr Alison Van Eenennaam told the US Grains Council.
Furthermore, no rise in tumours, decreased rates of post-mortem condemnation and improved feed to gain ratio showed animals in the study were not showing ‘unfavourable or perturbed trends’, she said while reviewing field data.
She called on more consistent regulatory approvals of GE crops, explaining that ‘asynchronous’ adoption of newly developed crops is an “increasing problem” hampering trade.
Dr Van Eenennaam described “asynchronous regulatory approval” as, “considerable discrepancies in the amount of time required to review and approve new GE crops in different countries.”
She added: “This leads to a situation where GE crops may be cultivated and marketed in some countries and remain unapproved in others.”
In addition to being safe, the study review, conducted at the University of California, Davis, highlighted the benefits of genetically engineered (GE) crops in assisting food production and minimising the environmental impact of agriculture.
The study, which appeared in the Journal of Animal Science, described these efficiencies as ‘improved agronomic practices’ e.g. reduced pesticide applications.
On a national level, the paper said this resulted in major environmental, economic and food safety benefits which have propelled GE crops to being, “the fastest adopted crop technology in recent history.”
Since their introduction in 1996, GE plantings, as of 2013, accounted for 90 per cent of the cotton and corn acres in the US, with a greater proportion of soy and sugar beet being GE.
Currently, animal agriculture consumes 70-90 per cent of GE crops and of the world’s nine billion animals, 95 per cent consume GE food, the report added.
The report added that GE crops had been shown to reduce greenhouse gas emissions by the equivalent of taking 11.8 million cars off the road in 2012 alone.
This is through reduced pesticide spraying, down 8.7 per cent because of GE crops, and the subsequent fuel saved, alongside carbon sequestration and reduced tillage.
In its conclusion, the paper said scientific literature revealed, “No unexpected perturbations or disturbing trends in animal performance of health indicators.”
Furthermore, it was not possible to see differences in nutritional profiles after consumption of GE feed, the report added.
Looking ahead, the paper warned: “There is a pressing need for international harmonization for both regulatory frameworks for GE crops and governance of advanced breeding techniques to prevent widespread disruptions in international trade of livestock feedstuffs.”
More sophisticated crop engineering, which looked at output traits, such as improving rate of energy conversion would form the ‘second generation’ of crops.
This will ‘further complicate' the sourcing of GE feed.
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VIET NAM - The organisers of VietStock 2014 remind visitors to prepare for the show, which takes place next week in Ho Chi Minh City.
The VietStock show series was initiated in 2004 and so is celebrating its 10th anniversary this year. The last event, in 2012, was attended by 8,000 visitors.
VietStock 2014 Expo and Forum will be held in the Saigon Expo and Convention Centre (SECC) in HCM City from 15 to 17 October. At the same time and location will be VietFeed and VietMeat.
Exhibitors will include National Pavilions from countries such as the US, the UK, the Netherlands, Singapore, Korea, Taiwan and China.
For further information on VietStock 2014and associated events, visit the web site, www.vietstock.org/.
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INDIA - The Compound Feed Manufacturers Association (CLFMA) of India which plays a very important role in Indian feed market has got a new chairman. 5m Publishing spoke to Amit Saraogi (pictured), new chairman about his priorities and challenges facing the association.
What are your major challenges as chairman of CLFMA of India?
a) The major challenges would be taking up issues on chicken leg imports.
b) Issues on import duties on feed agriculture.
c) Difficulty in clearances of feed agriculture.
d) Availability & prices of raw material.
How does CLFMA help farmers/industry in the country?
CLFMA is providing updated information and education to farmers and its member industries and help them to upgrade their standards. We keep on updating scientific development in this field through various seminars; update them through our news bulletin and newsletters. CLFMA is a platform to resolve the issues related to livestock sector.
Could you throw some light in India’s current feed market?
According to the report of 2011- 2012, the Indian livestock industry continues to grow, albeit at differing rates. The fastest growing segment is the poultry layer industry at 10 per cent annually followed by the broiler industry at eight per cent annually.
The dairy industry continues to be world’s largest and is growing steadily four per cent annually.
The beef (buffalo meat) industry has grown rapidly based on the fast expanding export demand leading India to become the world’s largest beef exporter in 2012.
The fisheries industry is not growing too fast where the stagnation in marine fishing is being compensated by inland fishing growth.
The key growth factors helping the livestock industry are the growing affluence in the population, increasing export and domestic demand and the increasing share of the organised sector in the same.
The key limiting factors are the availability and volatility of inputs, availability of funding, very low value addition and poor infrastructure.
The demand for animal feed is likely to increase by an average of three per cent per annum over the next five years but the demand for feed from the organised sector should exceed the growth of the industries as the organised sector at 15 million tonnes is barely 10 per cent of the total market.
The animal health sector is also growing rapidly with more awareness of preventive and additives in the market. The sector is expected to grow at seven-eight per cent annually over the next five years.
There are issues of antibiotics in animal feed, your comment?
We want a judicious use of antibiotic in animal feed and it should not be used one week before marketing the product.
Do you support ban of antibiotics in animal feed?
If we do not use antibiotics, the farmers will discriminate the use of it. There will be other substitutes in the farms which would hamper and will create problems for consumers.
What are the challenges for your industry today?
a) I will have to popularize CLFMA in the livestock sector as well as other industries.
b) Increase member base
c) There is high expectation among the members I have to cope up with that.
Has the government done enough for your sector?
Yes, we are getting good co-operation and with their help and great support we are prospering.
Eg: The government has reduced import duties in oil seeds.
But I always feel that there is more scope in this sector and the government has to initiate these programmes, such as more scientist researches, the researcher should work for industry base.
As an industry we must spend more on research and development and should take help from the government and they should facilitate such researches.
There are reports that there will be a shortage of animal feed in years to come, your view?
We are taking appropriate measures to create awareness among the industries so that the demand and supply gap would be minimised.
What role CLFMA plays with government in decision making for the livestock sector?
They work hand in hand; CLFMA is a facilitator between the government and the livestock sector.
As the human population is growing, does India have sufficient livestock?
No. We need to produce more taking into consideration regional demand and their habits as well.
The government will need to do extensive work for the promotion of this industry so that sufficient livestock can be there.
Could you tell me more about CLFMA of India?
CLFMA was formed in 1967 with the objective of helping the promotion of overall animal husbandry, including promotion of concept of balanced feeding of animals in accordance with their nutritional requirements for deriving from them maximum output through productivity improvement.
There are number of industries who are members of our organisation, who are from feed industries, feed additive industries, raw materials, breeder and integrators, etc. We are representing the livestock industry.
Providing information and education to the members and farming communities to upgrade their standards and performance level. Our one of objectives is to interface with scientific and other communities as well within and outside country to facilitate application of new scientific development in the industries.
We are providing a forum for the interaction within the Industry to learn and implement best practices amongst its members. CLFMA is a platform to resolve the issues and also to create awareness amongst the member industry by brainstorming on the challenges and opportunities in the livestock sector.
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Oct.30/2014
Mike Brumm
CHINA - Now that he has been back in the US for five days, Mike Brumm offers his thoughts about China and the changes he has witnessed. Words cannot begin to describe how fast China is modernising, he writes.
I was in seven different ‘cities’ in eight days and the upgrade in standard of living I observed was phenomenal, reports Mike Brumm. There were new 40-plus-storey apartment buildings everywhere. In many cases, I observed the demolition of the old brick and plaster single story historic housing as they upgrade the housing for 1.5 billion people.
When you have a discussion of US agriculture with Chinese counterparts, it is impossible for them to contemplate the scale of our agriculture. The traditional measure of land in China is approximately one-sixth of an acre (a small lot in a developing suburb in the US).
I saw corn harvested by hand and ears of corn aligned in rows on rural rooftops for drying. Corn stalks were cut off after harvest and often dumped in piles along field ends vs being returned to the soil as a carbon source (fall tillage in the US).
At a couple of the meeting sites I had interactions with traditional producers who had 100-300 sows farrow-finish. Their biggest questions/concerns were animal health and included questions on how to differentiate PEDv scours from E. coli or rotovirus. They are very concerned about their future as many of the US and European joint-venture farms rapidly expand.
Food safety is slowly making its way into the daily culture of the Chinese. The better farms have protocols for drug usage and withdrawal that mimic many of the successful US protocols. In some instances, the production systems have become fully integrated from feed milling to slaughter house.
These systems see their economic advantage being linked in part to their ability to deliver a safe and wholesome product into the Chinese (and now Russian) market.
Feed grains are very expensive in China. Because of the mountainous terrain there is not enough bulk freight transportation between the grain growing regions in northern China and grain consuming regions in southern China. US origin corn and soybeans are cheaper commodities than China grown grains.
However, producers in China were currently paying over $11 per bushel for US corn (old crop corn). Soybean meal was over $600 per ton. This demonstrates very clearly the cost of production advantage US, Canadian and Brazilian producers have when they can grow pigs at sites associated with feed grain production versus transporting grain long distances to grow livestock.
There is a huge demand/need for education of Chinese producers as they modernise their production capacity. For example, while some production systems are purchasing US feeders and drinkers, many sites still use Chinese designed and manufactured equipment.
At these sites, 15 to 20 per cent feed wastage is not uncommon. Even with fully slatted flooring, they often wash down all pens every day, meaning water usage for wean-finish facilities is 20 litres per day versus the US average of four litres.
In China, there are people everywhere. In one ‘city’ I asked about the population. The reply was their province was one of the smaller ones around – only 55 million people. Contrast that with less than one million people in South Dakota and less than two million in Nebraska and you can begin to see how different agricultural conditions are.
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07 November 2014
GLOBAL - The FAO Food Price Index averaged 192.3 points in October 2014, marginally (0.2 per cent) below the revised September figure but 14.3 points (6.9 per cent) short of its corresponding level one year ago.
A firming of international prices of oils and, especially, of sugar, compensated for a retreat of dairy and meat, while cereal prices remained stable around their relatively low September value.
The FAO Cereal Price Index averaged 178.4 points in October, virtually unchanged from September, but 18.2 points (9.3 per cent) lower year-on-year. After five months of steep falls, international prices of wheat and coarse grains firmed slightly in October, supported by harvest delays in the United States (maize) and deteriorating prospects in Australia (wheat). On the other hand, rice prices tended to soften on newly harvested supplies and a slowing pace of sales.
The FAO Vegetable Oil Price Index averaged 163.7 points in October, 1.6 points (1.0 per cent) up from September, interrupting the declining trend initiated in April 2014. Palm oil strongly contributed to the reversal, as production slowdowns in Malaysia and Indonesia, combined with a revival in global import demand caused palm oil prices to strengthen after six consecutive months of contraction.
Sunflower seed quotations also rose, mostly reflecting smaller than anticipated harvests in the Black Sea region. By contrast, soyoil prices weakened further, still driven by the prospect of ample availabilities.
The FAO Dairy Price Index averaged 184.3 points in October, down 3.5 points (1.9 per cent) from September and 66.8 points (26.6 per cent) less year-on-year. Quotations for butter and whole and skimmed milk powder fell, while those for cheese were unchanged. The October slide constituted the eighth consecutive monthly decline, bringing the Index to its lowest value since August 2012.
The FAO Meat Price Index averaged 208.9 points in October, 2.3 points (1.1 per cent) less than its revised value for September. However, quotations for most types of meat are still at historic highs and the Index stands 21.6 points (11.5 per cent) above its corresponding level in 2013, principally because of strong bovine meat prices.
In October 2014, the quotations of bovine meat and, especially, pig meat moved lower, while those of poultry and ovine meat were, respectively, stable and slightly stronger. Pig meat prices have shown signs of weakness since July, as production recovered in some of the countries affected by outbreaks of porcine endemic diarrhea (PED) – reducing import demand and increasing availability for export. Also, favourable weather and prices are supporting a recovery in the bovine herd in Australia and hence export availability.
The FAO Sugar Price Index averaged 237.6 points in October, up 9.5 points (4.2 per cent) from September 2014. Last month’s rebounding mainly followed reports of a smaller than expected sugarcane crop in drought-affected areas in Brazil. However, against a backdrop of ample supplies, international sugar prices remain more than 10 per cent below their level in October 2013.