Friday 27th January 2012

Sara Lee will split

Sara Lee will split. The board of directors of the Downers Grove, Illinois-based company has voted to put its foodservice, Jimmy Dean, Hillshire Farm, Ballpark and other meat business in a new company under the Sara Lee name. That group had revenues of $4.1 billion in 2010. Interim CEO Michael Smits will be permanent Chief Executive of the company.

The North American and international beverage and bakery side of the business which reported $4.6 billion in revenue last year will form a yet-to-be-named company. Chief Executive for North America, C.J. Fraleigh becomes CEO of the new company.

The decision to split came after bids from JBS and a group of investors led by Apollo Global Management fell through earlier this week. There is speculation JBS will make a run at the new, smaller and more affordable Sara Lee meat company.

Japan blames migratory birds for H5N1

Officials in Japan say infected flocks in East Asia are probably the source of the avian influenza outbreak in their country. An ornithology professor at the University of Tokyo says wild ducks were infected by domestic poultry on the mainland then migrated to Japan for the winter. Colder-than-normal weather on the mainland has driven more birds to Japan this year, the Ministry of Environment says there are now 33 wild bird species which are vulnerable to the virus and spending the winter in Japan.

Authorities have culled more than half-a-million poultry around five sites since November in an effort to halt the spread of the H5N1 virus in Japan.

Mycotoxin killed the 200 steers in Wisconsin

Despite suggestions of apocalyptic significance, it turns out moldy sweet potatoes are what caused the death of 200 steers in Central Wisconsin a couple of weeks ago. The Wisconsin Veterinary Diagnostic Lab has determined a mycotoxin developed in sweet potato waste which had been fed to the steers.

The cattle showed symptoms of pneumonia so initial thoughts were a viral infection like IBR or BVD but tests found no virus. A private animal health concern working with the farm attributed the deaths to a rare acute interstitial pneumonia brought on by smoke from burning hay. But the Vet Lab found the mycotoxin ipomeanol in feed samples from the farm. Associate Director of the Lab, Peter Vanderloo says the mycotoxin came from moldy sweet potatoes which were a major component in the animals’ ration at the time. Central Wisconsin is a major potato-growing area. Vanderloo adds the sweet potato waste is a byproduct and never entered the human food chain.

The animals started dying on the farm on January 10th and by January 14th, 200 were dead.

Read the release from U.W. Madison here:

Midday cash livestock prices

Though trade volume totals in the cattle look fairly light about 144,362 head, the cash cattle business appears to be done for the week. Processing margins look excellent on paper according to DTN and John Harrington says he is a bit surprised packers remain so cautious in terms of procurement. Perhaps beef salesmen are fearful the other shoe in the box trade will fall hard in early February. At any rate cattle buyers are likely to be quite apathetic throughout the day, pretty much ignoring eleventh-hour asking prices of 106.00 to 107.00 in the South and 170.00 plus in the North.

Boxed beef cutout values are lower in the morning report. Choice beef is down .55 at 172.55, and select is .49 lower at 171.12.

Feeder cattle receipts at Missouri auctions this week totaled 32,239 head. Compared to last week, feeder steers weighing less than 650 pounds were steady to 2.00 higher, over 650 pounds steady to 3.00 lower. Heifers weighing less than 700 pounds were steady to 2.00 higher, over 700 pounds steady to 2.00 lower. Holstein steers were steady to 3.00 higher. Demand was good for a moderate supply. The lower prices on the Mercantile Exchange and weaker slaughter cattle prices pressured the yearling market, but the calf market is still holding on to record high prices. Feeder steers medium and large 1; 1124 head averaging 575 pounds averaged 141.53 per hundredweight. 850 heifers weighing 572 brought 125.96 per hundredweight.

Barrows and gilts in the Iowa/Minnesota direct trade are up .13 at 78.33 on a carcass basis, the West is .35 higher also at 78.33, and the East is up 4.79 at 79.88. Missouri direct base carcass meat price is steady from 69.00 to 70.00 on a light Friday supply.

Cash appreciation in the hog market has been impressive this week, helped by both tighter numbers and expanding product demand, much of it tied to the hot South Korean appetite. The Saturday kill should total close to 90,000 head.

Science, innovation and global food leadership

Commentary.

President Obama in his State of the Union call to arms on restoring the U.S. to its preeminent role in science and technical innovation waxed eloquent on the contribution home-grown technology makes to the overall economic health of this country. That call came on the heels of an executive order instructing all federal agencies to review regulations pending and on the books to ensure they’re not “job-killers.” Both of these public commitments by the White House are encouraging, giving support to his inaugural pledge of following the “best available science and the rule of law” in dealing with federal rulemaking.

I hope he’s serious.

And I hope his folks who wrestle with things agricultural and food-related understand such acknowledgement by their boss must extend to those innovations and technologies – both in practice and on the not-too-distant horizon – that keep this country well fed, safely and at a price all consumers can afford.

The naïve purist in me would believe President Obama’s declarations means the shrill voices of the anti-technology forces arrayed against production agriculture will be met with a deaf ear at the White House, and that USDA, FDA, EPA and others in the federal camp will be equally dismissive of the activist call for a return to 1930s agriculture.

That belief, however, is predicated on those who make the policy decisions understanding that what they do when it comes to the technology of food production affects how we do business. It means that uppermost in their minds is their ability to make the connection between erasing technological advances and surrendering the goal of food security, both at home and abroad. It means they understand that succumbing to the demands of activists that we do away with antibiotics on farm, delay unnecessarily the approval of biotechnology-enhanced food animals, by telling us we can’t use certain housing or handling technologies – or worse, dictate those practices which can be used – will, in fact, drive industries overseas, cost farmers and ranchers their livelihoods, and ultimately, force consumers to pay significantly higher prices for the foods they need.

This Administration has for the past couple of years essentially viewed conventional food production as a bit of problem in need of a solution, spending a good chunk of time and money promoting organics, digging up federal lands to plant “peoples’ gardens,” urging local purchasing, etc. There needs to be a more holistic view; the White House needs to come at ag-related policy decisions in a context that no one system is superior to another, that different doesn’t automatically translate into better, and that what’s always been the hallmark of food production in this country is innovation and the uncanny ability of producers, processors and retailers to create niche markets to satisfy consumer desires.

I thought it interesting that when the Chinese dipped into our soybean market and scarfed up the largest one-day purchase of soybeans since USDA began issuing daily sales reports in 1977, Secretary Vilsack said this was evidence of how the Chinese see the U.S. as a reliable market for quality product. Inherent in that trust, however, is a technological ability to continue to innovate to meet such demand.

There is no way U.S. farmers and ranchers – now less than 1.5 million strong – can continue to grow the crops and raise the animals that feed this country and big chunk of the world without technology – biotechnology, animal health, animal science, housing, climate control, transport, etc. – and I’m hoping the White House gets it.

Firm forecasts record Brazilian soybean crop

A South American crop forecaster is predicting a record Brazilian soybean crop.

According to a report on DTN, Agroconsult is the first major forecaster to peg the 2010-11 Brazilian soybean crop at over 70 million metric tons as fears of a La Nina-related drought subside. The firm raised its forecast to 70.3 million tons, up from 68.4 million in December and outstripping last year’s record of 69 million tons.

An Agroconsult spokesman says as the harvest season begins, the crop looks great in all parts of Brazil.  In his words, “it looks like a bumper crop.”

Brazil’s 2010-11 crop got off to a rocky start with dry weather, which meteorologists associated with the La Nina weather phenomenon, delaying planting in September and October. But since then, rains have been fairly consistent across the soy belt.

NPPC president discusses ‘contingency plan’

The head of the National Pork Producers Council says a call for a “corn contingency plan” by Iowa pork producers deserves serious consideration.

The Iowa group is concerned about a possible shortage of corn in 2012 should the 2011 crop fall short of expectations.  They suggest that, if the corn stocks-to-use ratio falls below five percent, a plan for rationing corn among the major end users—livestock, biofuels and exports—should be in place.

NPPC president Sam Carney of Adair, Iowa says he understands those concerns. 

“You can’t starve the animals,” Carney says. “We can shut other things down—do something different—we’ve just got to make sure we have enough feed to feed the livestock so we have an adequate food supply here in the U.S. until we get the next crop in.”

Carney says he would hope that the end users could come up with their own plan, before getting the federal government involved.

“We’re just going to have to see if we can get all the producers to sit at the table and work something out,” he says. “I’m hoping we can do it and try not to have any other involvement from outside parties.”

Carney says one of his concerns is that, if corn supplies become too tight, there could be a “knee-jerk” reaction from the feds, such as a limit or ban on corn exports.  He says that is something pork producers do not want to see happen.

The contingency plan resolution will be discussed at the National Pork Forum in early March.

AUDIO: Sam Carney (6 min MP3)

Iowa farmer is increasing his non-GMO soybean acres

Cheaper seed, lucrative premiums  and concerns with glyphosate resistance have prompted more U.S. crop producers to consider planting non-GMO soybeans over the past couple of years.  Jeremy Atwood of Fairfield, Iowa is one of those farmers growing non-GMO beans.  Atwood says it’s a program that is working well for him and he plans to increase his non-GMO acres again in 2011.

AUDIO: Jeremy Atwood (3 min MP3)

Campaign aims to increase FFV awareness

Legislation introduced in the Senate this week would mandate that 90 percent of all vehicles produced in the U.S. by the year 2016 be flex fuel vehicles.  But getting more flex fuel vehicles on the road is only half the battle. 

According to Burl Haigwood, coordinator of a national Flex Fuel Vehicle Awareness Campaign, only a small percentage of current FFV owners realize that their vehicles can burn high volume ethanol blends like E85.

“There’s nine million on the road today.  About 90 percent of those vehicle owners don’t know they have this special vehicle,” Haigwood says, “and then the automakers are making a million more every year—and they’re not really engaged in selling the consumer because there’s not E85, or high blends, available—until now.  So that’s changed and we’re really trying to work with the FFV dealers and the E85 sellers to teach consumers.”

Haigwood says the FFV awareness campaign is targeting major ethanol producing states as well as urban areas where high concentrations of FFVs are registered.  The campaign has been tested in Texas and Florida and is currently being rolled out in Ohio.

Haigwood was in Lincoln, Nebraska Thursday for a presentation to the Nebraska Ethanol Board.

AUDIO: Burl Haigwood (6:30 MP3)

2011 food prices projected to rise 2 to 3 percent

The USDA projects the Consumer Price Index for food will rise by 2 to 3 percent this year. The agency cites higher commodity and energy costs for putting upward pressure on the price of food.

Added convenience in food has brought with it a change in the way food prices react to elevated commodity prices, says Ephriam Leibtag, an economist at the USDA.

“The food industry has evolved over time so that we have additional processing, value-added convenience items, and so the raw food ingredients are a smaller and smaller share of the overall food dollar,” said Leibtag, in an interview provided by the USDA, “and that means even when commodities surge, we’re going to take a little bit of time and potentially not even have huge impacts for some categories.”

Leibtag says prices for relatively non-processed commodities, like meat, milk and eggs, are rising at a faster rate than what’s projected for the price of food.

“If that trend continues, we would of course have to be adjusting upward our expectation,” said Leibtag.

Food price inflation has been slow. An increase of .08 percent between 2009 and 2010 is the lowest food inflation rate since 1962.