Friday 27th January 2012

US poultry producers will soon ship to Russia

U.S. poultry producers will be able to resume shipments to Russia once the agreement reached last week is signed. US Trade Representative Ron Kirk and Ag Secretary Tom Vilsack welcomed the breakthrough. Negotiations have been going on for several months since Russia refused US poultry imports because a chlorine rinse was used in production.

As part of the agreement, USDA says it will publish on its website which disinfectants and pathogen reduction treatments are known to be approved by Russia for poultry and all food processing. And, information will be given to Russia on the solutions U.S. companies use on poultry that’s exported. The US will provide Russia with an updated list of facilities authorized to ship poultry there.

Vilsack says Russia’s been the biggest export market for U.S. poultry and “regaining access to that market has been a top priority for the Obama Administration. US poultry exports to Russia were valued at 767 Million dollars last year.

Weather forecasts push corn lower

Soybeans were steady to higher on technical buying and pre-weekend position squaring. Also, the dollar was weak and crude oil was sharply higher. Weather forecasts do show improved weather over the next few days but at this point, there’s still a long way to go for beans. Even with the increasingly bearish fundamentals, there was some background support from good near term demand prospects, concentrated in the nearbys. Soybean oil was modestly lower with pressure from profit taking and support from crude oil. Soybean meal was mostly firm on product spread trade.

Corn was lower for the fifth straight day, hitting new two week lows on fund selling and consolidation. With the crop completely planted those better weather forecasts were a bigger negative for corn than soybeans. Also, there wasn’t much buying interest, corn’s facing increasing feed competition from soft red winter harvest and traders expect a bearish USDA acreage update on June 30. That said – there’s still a very long way to go for this year’s U.S. crop. Ethanol futures were lower.

The wheat complex was lower on profit taking and fund selling. Minneapolis led the way down on profit taking with Canadian crop issues factored in. Losses were limited by concerns over U.S. conditions. Kansas City had additional pressure from harvest selling with Oklahoma pretty much done and hot and dry weather on tap in Kansas. In Chicago, fund selling was the big bearish feature with losses limited by the unwinding of spreads with the MGEX. European wheat was mixed with no real fresh news one way or the other; November Paris was down .2% and November London was up .2%. Tunisia purchased 50,000 tons of soft milling wheat, Japan picked up 39,350 tons of food wheat and 21,260 tons of malting barley in a sell-buy-sell tender, and Egypt issued a tender for 120,000 tons of wheat.

Feedlot operators are expected to price cattle higher on Monday

The feedlot cash cattle trade was pretty well completed on Thursday with just a few clean up deals on Friday.  Cattle traded mostly steady this week with live sales mostly 91.00 to 91.50 and dressed sales 145.00 to 146.00. USDA Mandatory confirmed negotiated trades through Friday morning at 167,351 head. Look for the new show lists to be priced 1.00 to $2.00 higher on Monday with producers trying hard to build on this week’s stability. The weekly cattle kill was estimated at 667,000 head the same as last week, but 3,000 less than last year. Boxed beef cutout values ended the day weak on light demand and offerings. Choice boxed beef was down .19 at 154.29, and select was .68 lower at 146.05.

Chicago Mercantile Exchange live cattle contracts settled 15 to 57 points higher with overall support coming from the stability and firmness in this week’s cash trade as well as the moderately flat wholesale trade. The market remained quiet as traders looked ahead to next to next week’s trade where cash cattle show lists are expected to be priced higher. June settled .30 higher at 90.95, and August was up .22 at 89.37.

Feeder cattle settled 25 to 72 points higher on light follow through support in a sluggish trade. August finished .52 higher at 113.70, and September was up .72 at 113.82.

Feeder cattle receipts at Missouri auctions this week totaled 27,975 head.  Compared to last week, steers under 700 pounds were steady, over 700 pounds 1.00 to 4.00 higher. Heifers weighing less than 700 pounds steady to 1.00 lower, over 700 lbs steady to 2.00 higher. Demand was moderate to good for a moderate supply. Yearling cattle and calves that are weaned and with a round or two of shots are finding new homes with relative ease, however fleshy un-weaned calves are harder to move and only at discounted prices. Feeder steers medium and large 1, 1014 head weighing 575 traded at an average of 123.52, 931 heifers weighing 574 brought 113.36 per hundredweight.

Iowa/Minnesota barrows and gilts closed .50 lower at 77.16 on a carcass basis, the West was down .18 at 77.52, but the East was 1.17 higher at 80.23.The weekly hog slaughter was estimated at 1,956,000 head 55,000 less than last week, and 75,000 under last year. While processing margins look less than irresistible country hog receipts have been hit and miss, and it feels like some packers would like to put a few more barrows and gilts into next week. Still, Saturday kill plans remain nonexistent, suggesting that buyers are not likely to get too carried away with their generosity.

Lean hogs finished the session 17 to 115 points higher ahead of the hogs and pigs report released after the close of trade. Traders had been looking for a three to four percent drop in overall hog and breeding stock numbers. The total inventory was down four-percent from 2009, but up 1 percent from March. The breeding inventory and pig crop were both down three-percent. With the numbers falling into the pre release ranges it is likely to be already factored into the market. July lean hogs settled .65 higher at 80.72, and August was up .67 at 83.92. Pork trading was very slow with light demand and offerings. Pork carcass cutout value was .41 lower at 83.85.

July pork bellies settled at 100.00 up 1.10 on spillover support from the lean pit.

Peterson wants early markup of ’12 Farm Bill

House Ag Chairman Collin Peterson says starting work on the 2012 Farm Bill early is crucial, given the financial difficulties ahead. Peterson spoke Thursday at a hearing of the House subcommittee that oversees commodity programs. He says there won’t be more money, there’ll be less and there may be a bumper crop, “We could have prices down from what we’ve experienced the last few years and that’ll present challenges in addition to the fiscal challenges that we have.”

Peterson says he appreciates all the work the ag and commodity groups are doing to review safety net programs, “Seeing if there’s a better way for us to provide this safety net that’ll be more effective, more efficient, less complicated.” And, he says, they’re making good progress.

Peterson says his plan is to begin markup of the 2012 Farm Bill next May or June. The current Farm Bill ends September 2012. “I, for one, am determined that we get this done prior to September 20-12 , ” say Peterson, “So winter wheat guys know what the program is when they’re planning, the southerners know what the program is when they’re planning. So, that is the goal, at least of this member.”

Even if the funding is reduced for the next Farm Bill, Illinois Farm Bureau President Philip Nelson, speaking on behalf of American Farm Bureau, said the structure of the 2008 bill should be the same.

Missouri rice farmer Gary Murphy – chairman of the Rice Producers Association – argued that some adjustments may be needed because, in his words, “rice farmers are certainly not seeing any windfalls from farm programs and neither are our brethren who produce other crops.”

National Farmers Union treasurer Kent Peppler testified that it’s hard to defend payments when commodity prices are “relatively high.”

Closing Grain and Livestock Futures: June 25, 2010

July corn closed at $3.44 and 1/2, down 4 and 1/4 cents
July soybeans closed at $9.57, up 1 and 1/2 cents
July soybean meal closed at $289.60, down 50 cents
July soybean oil closed at 37.16, down 1 point
July wheat closed at $4.56 and 1/4, down 6 and 3/4 cents
June live cattle closed at $90.95, up 30 cents
July lean hogs closed at $80.72, up 65 cents
August crude oil closed at $78.86, up $2.35
July cotton closed at 84.72, up 24 points
July Class III milk closed at $13.55, up 25 cents
Dow Jones Industrial Average: 10,143.81, down 8.99 points

25×25 to hold National Summit

“MISSION ACHIEVABLE” is the theme of the 6th National 25×25 Summit coming up June 29-July 1 in Washington, D.C.

Ernie Shea, 25×25 Alliance project coordinator says that from a panel of leading renewable fuels executives talking about the progress made to date, to what lies ahead, to a discussion on renewable fuels when it comes to national security, the 25×25 National Renewable Energy Summit has a program with a broad range of perspectives, and it’s coming at a time when the energy policy debate gathers steam on Capitol Hill.

“Our summit provides a golden opportunity for the agricultural and forestry sectors to be here in Washington to talk about our vision, our solutions and to remind policy makers that we’re an integral part of our nation’s energy future,” said Shea.

Audio: Ernie Shea, 25×25 Alliance (5:15 MP3)

Iowa-based company offers precision ag solutions

HTS Precision Ag Solutions entered the world of precision agriculture early on—back in 1995—before the technology was really mainstream.   In its early years, the company was called Western Iowa GPS, focusing on aerial imagery, yield monitoring, soil testing, mapping as well as some equipment manufacture and sales.  At a recent HTS Technology Showcase near Harlan, Iowa, sales manager Adam Gittins talked about how the company has evolved and discussed the latest developments in precision farming with Brownfield’s Ken Anderson.

AUDIO: Adam Gittins (3 min MP3)

Inventory update shows smallest June 1 hog herd in three years

USDA’s Quarterly Hogs and Pigs inventory update came out near pre-report expectations with the lowest as of June 1 hog herd in three years.

USDA has all hogs and pigs at 96% of a year ago or 64.400 million head, compared to the average pre-report guess of 96.9% of a year ago.

The breeding herd was pegged at 5.788 million head, down 3% on the year, with market hogs at 58.612 million head, a 4% decrease from last year.

By weight, hogs weighing less than 50 pounds were reported at 18.879 million head, 97% of a year ago, 50 to 119 pound hogs came out at 16.877 million head, 95% of a year ago, 120 to 179 pounders were placed at 12.279 million head, 97% of a year ago, and hogs weighing 180 pounds and over were pegged at 10.578 million head, 98% of a year ago.

The March to May pig crop came out at 28.199 million head, 3% less than last year with farrowings at 2.875 million head, 5% below a year ago, and pigs per litter a record high 9.81 head.

Farrowing intentions for June to August are projected at 2.890 million head, 2% lower than a year ago, with September to November intentions at 2.899 million head, 1% below last year.

Overall, the numbers look neutral for futures trade.

Save those dollars, but spend wisely

Commentary

I heard yet again this week that another food group in DC is trying to gin up financial support for a “pro-ag” consumer campaign. The “ask?” A pot load of money up front to “do the necessary consumer research,” and a commitment of up to $30 million a year — yes, you read that correctly — to keep priming the ag promotion pump.

I suppose it was inevitable a cottage industry of consultants, media companies, communications firms and the like would spring up around the collective food and agricultural angst over animal rights and other anti-technology forces arrayed against us. I’m hoping folks are smart enough or conservative enough in their spending not to fall for anyone who says they’ve got the silver bullet for this challenge and all you have to do is write a big ol’ check to make the issue go away.

The good news: We’ve got more energy and more attention being paid to those folks who demand we return to 1930s farming and ranching than in my memory. Further, every check-off group, every processing organization worth its salt and every food company has more than enough research — all saying the same thing — than we need to develop a game plan to beat the buggers back.

The bad news: We’re running in circles, talking to ourselves about how bad everything is/will be. We’re still hamstrung by silly commodity rivalries, association competitions and our own egos. We’re not using the tools we’ve already paid for and coordinating our messaging to consumers, DC and local politicians and other folks who can significantly mess with our livelihoods if left ignorant.  Back in the 1990s, what I just described was the weakness of the activists; today’s it’s our problem.

I’ve seen most of the consumer research done over the last 20 years to tell you it all pretty much says the same thing: Consumers deserve and demand sufficient openness and information — not the nitty gritty details of day-to-day production, but relevant information — about food production, animal care and ethical behavior to be reassured that the trust they have for folk down on the farm is justified.

This does not take a new massive, multi-million education program. It takes the creative side of our industry to take the dollars we pay them and come up with clever, catchy ways of reminding consumers there are real live, breathing, caring, professional people who produce their food. This is called putting a face on the process, not just the product.

The California dairy industry is doing it — honest-to-gosh dairy farmers talking to consumers about where milk and other dairy products come from, and the ethics of the folks who husband the animals. Ohio farmers and ranchers are doing it. Just go to the Ohio Farm Bureau’s website.

The beauty here? The message is the same, but it’s being multiplied by different messengers with their own spin. A single loud message about “love the farmer” will not have the impact as multiple consistent messages from multiple sources.

The answer to the “consumer education” challenge is not to throw millions of new, hard-to-come-by dollars at it with new and short-term advertising programs, but to take the tools we already have, including current check-off product promotion/advertising programs, and rejigger them to give the producer and his/her family consistent equal billing with the product. This does not mean ignoring product sales; this means enhancing product sales through creating a relationship between the consumer and the producer.

No one sympathizes with a big corporation, but folks in the city definitely sympathize with their cousins in the country. 

The key to rebuilding consumer trust and confidence is to reintroduce the city folks to the rural folks. We let them get away from us; it’s time to bring them back.

25×25: Mission Achievable

The theme of the 6th National 25×25 Renewable Energy Summit is, 25×25: MISSION ACHIEVABLE, to learn more I asked Ernie Shea, project coordinator for the 25×25 Alliance to highlight the summit agenda.

Audio: Ernie Shea, 25×25 Alliance (5:15 MP3)