Friday 27th January 2012

Attache says China has potential for growth

Now that they’ve agreed to resume importing U.S. pork and live hogs, China is being viewed for its potential growth as a customer. U.S. Ag Attaché Bill Westman says that when pork and other U.S. products begin to move back into the Chinese market, other opportunities could follow.

“Our projections are that [China’s] middle class will continue to grow quite rapidly through the next ten years,” said Westman, in an interview provided by the USDA. “China, even in poor world economic conditions, they have six percent growth already this year; they’re going to continue to expand.”

Westman says the U.S. needs to take advantage of China’s expanding market.

Missouri Ag Department requests hauling waivers

The Missouri Department of Agriculture has asked the Missouri Department of Transportation to waive certain regulations to help Missouri farmers expedite the transporting of their crops.

The declaration would allow farmers to run trucks 10 percent over weight limits to help get corn and soybeans hauled to elevators. In addition, the Department requested that farmers be granted a 60-day waiver to the hours-of-service requirements.

Late planting and excessive rain have put growers behind.  In news release issued by the MDA, Missouri Director of Agriculture Jon Hagler said the emergency declaration will help farmers get crops to markets.

If granted, the waiver is valid only for transportation of row crops from the farm to storage with no travel allowed on interstate highways.

Grains and oilseeds down on weather, dollar: October 30, 2009

Soybeans were lower on fund and technical selling, profit taking and outside market direction. The dollar was higher while the Dow Jones Industrial Average and crude oil were sharply lower. Forecasts for the coming week continue to look generally warmer and drier than conditions over the past week. Losses in the November were limited by lack of deliveries related to the very tight near term supply, which has been exacerbated by the harvest delays. Also, some early harvested beans in the Delta were of poor quality. Soybean meal was mostly lower on the lower beans but nearbys were up on the tight nearby supply. Bean oil was lower on the lower beans and lower crude oil.

Corn was lower on profit taking, fund selling and spillover from the outside markets. Corn is also keeping an eye on those forecasts for warmer, drier weather in the coming week. However, a lot of the Cornbelt is extremely wet and the corn has high moisture content. According to David Kohli of Allendale, there are even reports of some corn sprouting in the fields due to the excess rain. Ethanol futures were lower.

The wheat complex was lower on technical selling, profit taking and the higher dollar. The supply and demand fundamentals remain very negative and wheat tends to move lower whenever the dollar’s higher. The drier conditions in the coming week should allow for solid soft red winter planting progress. In any event, there wasn’t much fresh news one way or the other Friday, so traders sold, following those fundamentals and the outside markets. The Victoria Department of Primary Industries, in Australia, reports that state could harvest a record wheat crop this year with the estimate at 4.4 million tons, quite a bit more than the Australian Bureau of Ag and Resource Economics’ estimate of 2.75 million. Iraq bought 300,000 tons of wheat, equal amounts from the U.S., Australia and Russia.

Farmers got a little more for their products in October

The preliminary All Farm Products Index of Prices Received by Farmers for October was 7.1 percent higher than September. The Crop Index was up 7.7 percent while the Livestock Index nudged 0.9 percent higher. Producers received more for milk, corn, lettuce and broccoli. Prices were lower for cattle, broilers, snap beans and cucumbers. Prices are 8.8 percent below October of 2008.

In October, the corn price averaged $3.54 per bushel, up 29 cents from September; the all-wheat price was 8 cents higher at $4.56. Soybeans were a penny cheaper at $9.74 per bushel and all-hay was $1.00 lower averaging $106 per ton.

On the livestock side, the October hog price averaged $37.20 per hundredweight, down 50 cents from September. Beef were down $1.70 at $78.90 per hundredweight. The all-milk price was 90 cents higher at $13.80 per hundredweight, fluid grade increased 90 cents and manufacturing grade was 80 cents higher. Broilers were down 2 cents per pound at 40 cents in October while turkeys were 3.6 cents higher at 52.1 cents per pound. Eggs increased 6.7 cents to average 63.5 cents per dozen.

The Index of Prices Paid by Farmers was unchanged from September but 6.4 percent below October of last year. Compared to a month ago, farmers paid less for concentrates, complete feeds, feeder cattle, potash and phosphate. They paid higher prices for feeder pigs, feed grains, herbicides and LP gas.

Dairy continues to nudge higher

Overall, a pretty good week for dairy markets, barrels lost a half-cent but blocks gained a penny and butter was up 6 cents. Class III futures; November gained 13 cents on the week, December up 19 cents, January up 21 cents, February 27 cents and April gained 4 cents.

There were no Commodity Credit purchases of dairy products this week.

USDA Dairy Market News says retail butter demand is good, churning is lower due to tight cream supplies and there have been recent international buyer inquiries for near-term to early 2010 delivery. Reports are export suppliers are reluctant to commit as they do not want to be caught short for holiday demand. Butter stocks are above year-ago levels but 11 percent below a month ago.

Milk production in Western Europe is running below year-ago levels which in turn has slowed their export business. Eastern European production is described as sharply lower than a year ago as low milk prices have hampered farmers. Production in New Zealand usually starts to gain seasonally at this time of year but bad weather has limited the ramp-up. September milk production in Australia was 8 percent below year-ago levels and year-to-date is 4 percent lower.

October live cattle limit down at settlement

Live cattle contracts on the Chicago Mercantile Exchange settled lower. The downward push was due to the October contract going off the board at midday and a few traders trying to get out of the market. That pressured the other contract months. October was down 300 points at 81.65, the new spot December finished 60 points lower at 85.67 and February was down 22 at 86.85. Boxed beef cutout values were weak on light demand and offerings’ Choice boxed beef was .33 lower at 140.83, the select was down .62 at 135.38

Feeder cattle traded in a narrow range from 20 higher to 10 lower. Moderate to sharp losses in the grain markets allowed some buyers to bounce back into the feeder cattle markets. November was down 20 points at 95.07, and January was down 5 at 95.07.

The Feeder cattle receipts at Missouri Auctions this week were 25,605 head. Compared to last week, feeder steers were steady to 1.00 lower, heifers steady to 1.00 higher, Holstein steers under 700 pounds steady to 2.00 lower. Over 700 pounds steady 2.00 higher. Demand was called moderate to good on a moderate supply. Wet conditions had an effect on calf prices as receiving lots are extremely wet and muddy, more like spring than fall. Feeder steers medium and large 1, 871 head averaging 526 pounds traded at 102.23 per hundredweight. 664 heifers weighing 526 averaged 91.29.

The weekly cattle slaughter was estimated at 651,000 head 5,000 more than last week, and 11,000 greater than last year. Slaughter cattle prices improved again this week. Texas and Kansas sold 1.00 to 2.50 higher. Dressed sales in Nebraska were 3.00 higher. Midwest direct market steers and heifers on a live basis brought 86.00 to 87.00, dressed basis from 132.00 to 135. High plains direct markets sold cattle at 87.00 to 88.00. Feedlots are reportedly full; however numbers of market ready cattle are on the decline. Slaughter cattle on a national basis for negotiated cash trades through Friday afternoon totaled 177,172 head. 

Barrows and gilts in the Iowa/Minnesota direct trade closed .22 lower at 52.05 on a carcass basis, the West was down .06 at 52.30, and the East was .04 lower at 49.59.Missouri direct base carcass meat price is steady from 42.00 to 48.00.The weekly hog slaughter is estimated at 2,294,000 head, 34,000 less than last week, and 85,000 fewer than last year.  Processing margins have improved through the week and buyers are expected to do what it takes to fund fairly aggressive chain speed to start out next week as many packers could start out short bought.  Saturday’s kill is now expected to be around 145,000 head.

Lean hogs settled mostly higher .Some traders squared their positions at the end of the month. December was down 50 points at 56.70, and February was up 42 at 63.70. Pork trading was slow, with light to moderate demand and offerings. The pork carcass cutout value was down .51 at 58.17.

Pork bellies closed lower with pressure from the outside markets pushing the February contract down 150 points to settle at 89.30.

Closing Grain and Livestock Futures: October 30, 2009

December corn closed at $3.66, down 13 and 1/2 cents
November soybeans closed at $9.78, down 7 and 1/2 cents
December soybean meal closed at $297.50, up $1.70
December soybean oil closed at 36.40, down 112 points
December wheat closed at $4.94 and 1/4, down 9 and 1/2 cents
October live cattle closed at $81.65, down $3.00
December lean hogs closed at $56.70, down 50 cents
December crude oil closed at $77.00, down $2.87
December cotton closed at 67.64, up 7 points
November Class III milk closed at $13.93, up 13 cents
Dow Jones Industrial Average: 9,712.73, down 249.85 points

Ag must be at the table

Commentary

One of the great frustrations with the federal government is that it’s so obviously out of touch with rural America. I’m talking about both GOP and Democrat administrations here.  It’s nuts that critical, universal legislation is often crafted with nary a nod to food production and delivery in this country.  I’ve never understood how an industry as fundamental to each and every citizen’s quality of life — heck, their survival — is somehow overlooked when Congress crafts legislation like climate change and health care reform.

Each time one of these massive policy initiatives is conjured, agriculture must bang on the door to have a place at the table, and more often than not, no one answers the door. This leaves us to play spoiler, meaning we have to use whatever means is available to us to make ourselves heard.

A good example is the climate change/cap-and-trade bill, a piece of legislation so complex as to make your head hurt. This is the classic story of how ag had to beg, cajole and finally threaten to ensure we weren’t thrown under the bus as our wise colleagues from the urban centers cobbled together what’s “good for America,” all the while parroting White House commitments to a “healthy and vibrant rural America.”   Both the House-passed bill and the pending Senate draft include coverage of so-called “major industries,” i.e. heavy manufacturing, utilities, transportation and the like. But when introduced in the House, the bill was silent on how food production would be treated. In the Senate, we now have “placeholder” language — in the second draft — on how farmers, ranchers and rural communities will fare under a the greenhouse gas control act.

Had not Rep. Collin Peterson (D, MN), chair of the House Agriculture Committee, threatened to blow the House bill to smithereens — and had the votes to do it — I’m guessing House Speaker Nancy Pelosi (D, CA) and House Energy & Commerce Committee Chair Henry Waxman (D, CA) would likely not have worried about agriculture. This is bizarre on its face considering agriculture is California’s number one “major industry.” Peterson had to threaten to bring the Pelosi-promised House climate bill down in order to be taken seriously.  That’s just wrong on so many levels.  And even with that, Peterson was only able to ensure that ag would be part of the carbon credit/allowance formula and USDA would take the lead on the oversight of any program that may emerge.

Likewise in the Senate, Agriculture Committee Chair Blanche Lincoln (D, AR) is only now able to strongly work her will on a draft bill thrown together by Sen. Barbara Boxer (D, CA) — I’m starting to sense an attention deficit disorder among these Californians — who’s chair of the Senate Environment & Public Works Committee.  Boxer’s original draft floated a couple of weeks ago said nothing about food and agriculture. Her latest draft, the subject of three days of monster hearings this week, contains “placeholder” language on ag, and I’m guessing that’s because Lincoln has been so publicly critical of the House bill,  issued so many warnings about the Senate process and has vowed to use her committee’s oversight of the climate package to make things right.

Of the six committee chairs who must bless the climate change bill, only Lincoln said her panel will go beyond hearings and actually mark up the legislation. Ag committee member Sen. Debbie Stabenow (D, MI) is crafting legislative language the full ag committee will consider that will attempt to ensure ag is treated fairly and that the cost of saving the planet does not fall disproportionately on rural communities, farmers and ranchers.

Seizing on this clear thinking, ag and food groups across DC now provide Lincoln, Stabenow and a growing number of like-thinking GOP and Democrat members the statistics, the economic impact anaylses and other data to ensure ag and food is kept whole throughout this process. Not so easy getting to Boxer, Pelosi or Waxman.

But this process shouldn’t be this painful and it could have been more efficient had the aggies been invited to the party up front. No matter, I guess, because we in agriculture have no problem crashing the party.

My advice to my friends on Capitol Hill is this:  Next time you’re going to rewrite major federal laws that affect every citizen’s life, pick up the phone and call Peterson and Lincoln and talk food. It will save you a lot of time and potential public embarrassment.

Animal abuse closes Vermont slaughter plant

Animal abuse caught on video tape during another undercover investigation by the Humane Society of the United States (HSUS) has closed Bushway Packing, Inc. of Grand Isle, Vermont.

The action was taken by USDA Secretary Tom Visack and Vermont Agriculture Secretary Roger Allbee based on information provided by HSUS that showed veal calves being kicked, slapped and repeatedly shocked. Animal scientists Dr. Temple Grandin and Kurt Vogel said after viewing the video, “the practices and attention to insensibility at this plant are unacceptable and must improve.”

An investigation of the plant continues.

Coming in December – Census of Horticulture

Once every 10 years, the USDA’s National Agricultural Statistics Service (NASS) conducts the Census of Horticultural Specialties, which gathers detailed information on horticultural production and sales across the U.S.

“The Census of Horticulture will include producers of floriculture, nursery and other specialty crops”, said Greg Preston, director of the Indiana Field Office of USDA’s NASS. “This is an opportunity for horticultural producers to share their voices and help ensure the continued growth and long-term sustainability of horticultural farming in the United States.”

The census will be mailed in December to known horticultural operations in the U.S. Recipients are required to respond by February 5, 2010.