Cattle leader says deal undermines U.S. beef

A member of the National Cattlemen’s Beef Association board of directors from Missouri says the Japan/Australia trade deal seeks to undermine U.S. trade in the Trans Pacific Partnership which is under negotiation.

Chuck Massengill of Missouri says the U.S. is looking for ZERO tariffs for beef trade with Japan, “We’re looking for zero. We’re not looking for kind of close to zero or something less painful than we have now.”

The deal with Japan will reduce the current 38-and-a-half percent tariff on Australian beef to 19-and-a-half percent in 18 years.  Chilled beef from Australia going into Japan will be levied at 23.5 percent.

The agreement with Australia set a precedent for Japan to negotiate with the U.S. on sensitive items like beef, according to Kent Bacus, with the National Cattlemen’s Beef Association.

“I hope that our negotiators are a little more successful, because deal that was struck with Australia is not even close to anything that would be acceptable to us,” said Bacus on Friday, during an interview with Brownfield Ag News.

But, Massengill tells Brownfield, Australian beef does not come close to what U.S. beef offers to consumers, “Australian grass-fed, or short fed beef, does not anywhere compare to the U.S. grain fed beef (which is) just a standard of quality all over the world. So, we certainly we don’t want to be brought in and held to the same standards as what the Australians trade for.”

Massengill and his wife raise cattle in central Missouri’s Moniteau County. He is the immediate past president of the Missouri Cattlemen’s Association.

Interview with Chuck Massengill (6:00 mp3) 

Wheat, pork exports set marketing year lows

USDA reports corn, soybean, wheat, and soybean production sales for the week ending April 3 were within pre-report estimates. Physical shipments of corn and soybeans were above what’s needed weekly to meet USDA projections for the 2013/14 marketing year, but wheat fell short of its mark.

Old crop wheat was a new marketing year low at 41,800 tons (1.5 million bushels), down 88% from the week ending March 27 and 90% lower than the four week average. The Philippines picked up 60,200 tons and Mexico bought 43,900 tons, but unknown destinations canceled on 232,000 tons. For the 2013/14 marketing year to date, wheat sales are 1.113 billion bushels, compared to 943.8 million in 2012/13. Sales of 349,100 tons (12.8 million bushels) for 2014/15 delivery were mainly to unknown destinations (241,400 tons).

Corn was reported at 658,700 tons (25.9 million bushels), 31% less than the previous week and 30% below the four week average. South Korea purchased 253,000 tons and Japan picked up 171,600 tons, while unknown destinations canceled on 83,400 tons. At this point in the marketing year, corn sales are 1.652 billion bushels, compared to 618.3 million this time last year. Sales of 58,000 tons (2.3 million bushels) for 2014/15 delivery were to Japan.

Soybeans came out at 79,100 tons (2.9 million bushels), 20% larger than the week before, but 8% smaller than the four week average. Mexico bought 59,000 tons and South Korea purchased 25,300 tons, but unknown destinations canceled on 114,600 tons. So far this marketing year, soybean sales are 1.638 billion bushels, compared to 1.334 billion a year ago. Sales of 210,400 tons (7.7 million bushels) for 2014/15 delivery were primarily to China (180,000 tons).

Soybean meal was pegged at 179,600 tons, a decrease of 42% from the prior week and 17% from the four week average. Unknown destinations picked up 70,100 tons and the Philippines bought 43,000 tons. Cumulative soybean meal sales for the current marketing year are 8,690,800 tons, compared to 8,122,900 last year. Sales of 80,100 tons for 2014/15 delivery were to unknown destinations (80,000 tons) and Canada (100 tons).

Soybean oil was reported at 3,400 tons, down 46% from the previous week and 31% lower than the four week average. China purchased 40,000 tons and Mexico picked up 3,000 tons, while unknown destinations canceled on 40,000 tons and Canada canceled on 100 tons. 2013/14 soybean oil sales are 572,200 tons, compared to 820,700 in 2012/13.

Net beef sales were a marketing year high at 18,500 tons, up 34% from the week before and 21% higher than the four week average. The listed buyers were Hong Kong (4,800 tons), South Korea (4,100 tons), Japan (3,900 tons), Mexico (2,400 tons), and Taiwan (1,300 tons).

Net pork sales were a marketing year low at 4,200 tons, a decline of 69% on the week and 48% less than the four week average. The reported purchasers were Canada (1,000 tons), Honduras (600 tons), Japan (600 tons), Mexico (600 tons), and China (500 tons).

USDA lowers corn, soybean ending stocks

USDA has lowered its corn and soybean ending stocks projections.

USDA estimates corn ending stocks for the 2013/14 marketing year at 1.331 billion bushels on expectations for strong export demand. Before the report, estimates ranged from 1.306 billion to 1.478 billion bushels, with an average of 1.403 billion bushels.

Soybeans are seen at 135 million bushels with a bigger export guess cancelling out a larger import figure. Analysts were expecting beans to be around 139 million bushels, with a range of 131 million to 147 million bushels.

Wheat ending stocks came out at 583 million bushels with a decreased feed demand estimate. Pre-report expectations ranged from 550 million to 625 million bushels, for an average of 581 million bushels.

For the 2012/13 marketing year, corn ending stocks were 821 million bushels, soybean ending stocks were 141 million, and wheat ending stocks were 718 million bushels.

The next set of supply and demand numbers is out May 9.

Breakdown of selected supply and demand tables:

Continue reading “USDA lowers corn, soybean ending stocks” »

Japan, South Korea & Australia ink trade deal

Japan, South Korea and Australia have signed a free trade agreement. A combination of bilateral deals between the three countries is being described as a “major windfall for Australian beef” most likely at the expense of U.S. beef.

As part of the Korean pact; Australia will drop tariffs on Korean cars over the next three years and Korea will eliminate a 40 percent import duty on Australian beef over the next 15 years beginning with an 8 percent cut this year. Australia already supplies more than half of Korea’s beef imports while the U.S. supplied 34 percent last year.

The deal with Japan will reduce their current 38.5 percent tariff on Australian beef to 19.5 percent in 18 years. It reduces tariffs on a variety of vegetables and eliminates the tariff on Australian sugar and seafood.

The deal also reduces Japan’s tariffs on Australian dairy products and raises the amount of duty-free cheese from 27,000 to 47,000 metric tonnes per year. Japan bought more than $500 million in dairy products from Australia last year with exporters paying more than $100 million in tariffs and other costs. Under the new trade deal, those charges will be reduced by about $11 million by 2031. Australian producers had hoped for reductions of around $60 million.

In return, Australia lowers tariffs on Japanese cars, appliances, electronics and other items.

 

China to allow corn imports from Brazil

China will begin allowing Brazilian corn imports this month.  China mainly imports corn from the United States, but after officials turned away over 1 million tonnes due to the presence of an unapproved GMO trait, shipments have been curbed.  Reuters reports Brazilian corn exports to China could weigh on US futures, which have come under pressure since China started rejecting US cargoes last fall.

The news comes a week after China’s biggest grain trader, COFCO Corp. agreed to acquire a majority stake in Noble Group Ltd’s agribusinesses.  Noble owns a number of agricultural assets in South America, including grain storage facilities, soybean processing plants and shipping terminals.

An industry analyst with a Chinese official think-tank says China is adding more supply origins to meet growing demand in the long-term and that Brazilian supplies can be very competitive with those of the United States.

Quality of U.S. corn for export remains good

The overall quality of U.S. corn for export continues to be very good and despite year-to-year fluctuations, the crop remained well above U.S. No. 2.

According to the U.S. Grains Council’s 2013/2014 Corn Export Quality Report, corn sampled at the point of export had an average moisture content of 14.5%, which was higher than the previous two years, the average test weight was 57.3 pounds, which was lower than the previous two years.

The average protein content (8.6%) was lower than 2012/13, starch content (73.7%) was higher and oil content (3.7%) was the same as 2012/13.

All samples tested below the FDA level of 20ppb for aflatoxins and 100% of the samples tested below the FDA advisory levels for DON (5 ppm for hogs and other animals and 10ppm for chicken and cattle).

The USGC issued the 2013/2014 Corn Harvest Quality report which surveyed corn quality at the farm gate earlier in the marketing year.

For the complete Corn Export Cargo Quality Report go here.

 

Dairy exports strong in February

U.S. dairy exports in February totaled 166,510 metric tonnes up 19 percent compared to February of 2013. Total value of those dairy products was $585.2 million up 37 percent from a year ago. U.S. Dairy Export Council says on a daily-average basis, that was the highest value ever. 15.5 percent of total milk solids produced in the United States in February went to the export market.

Cheese exports totaled 31,264 metric tonnes up 44 percent from February of 2013. Nonfat dry milk and skim milk powder exports were up 3 percent at 36,168 metric tonnes. Total whey was up 11 percent at 39,339, milk protein concentrate increased 58 percent to 5,321 metric tons, butterfat exports more than double a year ago at 8,944 metric tonnes while whole milk powder sales were 5,441 metric tonnes up 191 percent. Lactose sales declined 3 percent to 27,234 metric tonnes.

For the first two months of the year, cheese exports are up 45 percent, butterfat up 125 percent, MPC is up 79 percent, nonfat dry milk/skim milk powder up 12 percent and whole milk powder is up 236 percent.

Read the full report from USDEC here:

 

China restricts live pork imports

Amid concerns of the Porcine Epidemic Diarrhea virus, China has imposed tougher restrictions for imports of live pigs from the United States.  According to the Wall Street Journal, US Department of Agriculture officials say China has asked USDA to conduct testing and provide certification that live hogs come from herds that are free of PEDv.

A spokesman for USDA’s Animal and Plant Health Inspection Service says the agency, “is both capable and willing” to comply with China’s new requirement for testing and certification.

Live hogs are a small portion of pork-related US exports to China.  According to USDA, the country purchased 14,000 hogs that were valued at $20 million last year.

Request for COOL injunction still alive

The meat industry will get another chance to argue for a preliminary injunction against the USDA’s country of origin labeling (COOL) rule.

A federal appeals court late last week overturned a March 28th ruling denying the injunction. The full 12-judge appeals court panel will rehear the case May 19th.

The American Meat Institute and other groups representing U.S., Canadian and Mexican meat industry interests have sued the USDA in federal court to overturn COOL. The groups have requested the injunction while the lawsuit is pending.

Analysts expect tighter corn, soybean supplies

USDA’s supply and demand report Wednesday is expected to show tighter supplies of corn and soybeans.

According to Dow Jones Newswires, the average estimate for corn ending stocks is 1.403 billion bushels, compared to 1.456 billion in March. Soybeans are seen at 139 million bushels, compared to 145 million last month. Wheat’s expected to be around 581 million bushels, compared to 558 million a month ago.

USDA will also be updating world supply and demand estimates, including corn and soybean production for Argentina and Brazil.

The report is out Wednesday, April 9 at Noon Eastern/11 AM Central.