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.

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.

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

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.

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.

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

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.

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.

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.

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

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.
 

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 , 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.
 

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.
 

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.

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.