100-Dollar-Ideas

Profit Tracker: Feeding Margins Above $220 Per Head

Fri, 07 Jul 2023 19:16:59 GMT

Cattle feeding margins increased $50 per head last week as cash cattle prices improved $5 per cwt., according to the Sterling Beef Profit Tracker . The increase in margins was the second consecutive weekly gain, leaving average profits above $220 per head. A year ago feedyards were losing nearly $40 per head. Farrow to finish pork margins improved $5 per head to $33. Both beef and pork profit margins are calculated by John Nalivka, president, Sterling Marketing, Vale, Ore.

Feed costs continue to decline for livestock feeders, and both cattle and pork margins are significantly higher than a year ago. The estimated cost of feed to finish a steer in a feedlot is more than $100 less than it was last year at this time.

Beef packer margins declined $50 per head last week as they paid more for cattle and saw wholesale beef prices decline nearly $1 per cwt. Beef packer profits totaled $30 per head last week, significantly higher than $22 per head profits they earned last year. Pork packers saw a $5 per head decline in profit margins to $4.9 per head. Cash prices for fed cattle are nearly $38 per cwt. higher than last year, and negotiated hog prices are $6 per cwt. higher than last year.

Profit Tracker: $40 Gains, Packers Slip

Fri, 07 Jul 2023 19:16:43 GMT

Last week’s $2.50 rally in the cash market was another step in the right direction, but closeouts remain $26.46 per cwt. short of break even. Cattle feeding margins improved $40 per head which left losses at $343, according to calculations by Sterling Marketing, Vale, Ore.

Last week’s 5-area cash price was $136.69 per cwt., well short of the $163.15 per cwt. required to break even. Beef packer margins declined $37 per head, resulting in average profits of $13 on every animal processed. Packer margins have declined $70 per head in the past month.

A month ago cattle feeders were losing $360 per head, while a year ago profits were pegged at $213 per head, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 74%.

A month ago beef packers were earning $83 for every animal processed, while a year ago packers were losing $69, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $14 per hog last week, a decrease of $3 per head from the previous week and up $1 from a month ago.

Pork packers saw their margins improve $2 per head to $23. Negotiated prices for lean hogs were $71.56, per cwt. last week, a decrease of $1.38 per cwt. from the previous week. Cash prices for fed cattle are $32 per cwt. lower than last year, and negotiated hog prices are $23 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $490 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $277 per cow.

Profit Tracker: Catastrophic Feedyard Losses

Fri, 07 Jul 2023 19:16:43 GMT

Cattle feeders hope the cash market found its bottom last week. Cash prices tumbled another $11 per cwt., which produced an astonishing drop in margins that has the industry in turmoil and some on the brink of financial collapse.

Cash fed cattle prices for the 5-area direct steers averaged $117.79 last week, and the result was a $190 per head increase in cattle feeding losses for a total per head loss of $550, according to calculations by Sterling Marketing, Vale, Ore. Cash cattle prices have declined $24 per cwt. over the past month. Beef packer margins increased $14 per head to $99.40.

A month ago cattle feeders were losing $270 per head, while a year ago profits were pegged at $200 per head, according to Sterling Marketing . Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 73%.

A month ago beef packers were earning $118 for every animal processed, while a year ago packers were losing $60, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $19 per hog last week, an increase of $4 per head from the previous week and up $7 from a month ago.

Pork packers saw their margins improve $1 per head to $14. Negotiated prices for lean hogs were $72.85, per cwt. last week, an increase of $1.71 per cwt. from the previous week. Cash prices for fed cattle are $42 per cwt. lower than last year, and negotiated hog prices are $38 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $506 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $372 per cow.

Profit Tracker: Losses Now Exceed $600!

Fri, 07 Jul 2023 19:16:43 GMT

Uncharted territory. That’s where America’s cattle feeding industry finds itself as fed cattle lose $611 per head. Calculated breakeven prices on closeouts last week were $170.56 per cwt., according to Sterling Marketing, Vale, Ore. USDA’s reported 5-area cash price last week was $123.52 per cwt., or $47.04 short of breakeven.

“This unbalanced situation cannot be sustained in a market that will see 4% more beef, continued record pork production, and a likely 4% increase in chicken production during 2016,” says Sterling Marketing president John Nalivka. “Prices are aligning to a changed supply situation. Cattle weights will remain relatively high during 2016 with increased numbers as herds expand. While hog producer margins have turned red with significantly lower lean carcass values, this is not likely to cause a setback in continued herd expansion through most of 2016. Poultry production will increase, too. The result will be increased total meat supplies and lower prices and it will be noticeable for beef after 2 years of record prices, although prices are expected to generally remain above 2013 levels.”

The ongoing market wreck has pulled feeder cattle prices significantly lower. Oklahoma City feeder steer prices factored into Sterling Marketing’s sample closeout against last week’s fed cattle was $225.79 per cwt. The same steers factored into last week’s placements at $172 per cwt., or $461 per head less.

Beef packer margins increased $9 per head, resulting in average profits of $28 on every animal processed. Packer margins are about $1 per head better than last month.

A month ago cattle feeders were losing $486 per head, while a year ago profits were pegged at $45 per head, according to Sterling Marketing . Feeder cattle represent 79% of the cost of finishing a steer, compared to 78% last year.

A month ago beef packers were earning $27 for every animal processed, while a year ago packers were losing $78, Sterling Marketing estimates.

Farrow-to-finish pork producers lost $26 per hog last week, slightly better than the $30 per head loss the previous week, but slightly lower than the $20 per head loss found a month ago.

Pork packers saw their margins decline $2 to a profit of $27 per head. Negotiated prices for lean hogs were $54.66 per cwt. last week, an increase of $1.59 per cwt. from the previous week. Cash prices for fed cattle are $43.25 per cwt. lower than last year, and negotiated hog prices are $33.31 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $490 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $295 per cow.

Profit Tracker: A Step Back

Fri, 07 Jul 2023 19:16:33 GMT

The march toward break even for cattle feeders stumbled last week as average losses increased $36 per head, leaving closeouts $113 in the red, according to the Sterling Beef Profit Tracker.

Feedyard margins have improved steadily the past six weeks, finally falling the below the triple digit loss mark two weeks ago for the first time in more than a year.

The retreat for feeding margins comes despite a $1 gain in cash cattle prices. USDA’s 5-area direct price was $139.04, yet breakeven prices increased to $147.73 due to higher feeder cattle prices calculated against last week’s marketings.

Feeder cattle prices averaged $192.24 against the fed cattle sold last week, an increase of roughly $50 per head more than the previous week, according to John Nalivka, president of Sterling Marketing, Vale, Ore. The total cost of finishing cattle marketed last week was $1,928 per head.

Beef packer margins improved $54 per head, earning profits of $93 per animal. Packer margins are about $78 per head better than a month ago.

Sterling Marketing estimates feedyards lost a cumulative unhedged $4.7 billion in 2015, with average weekly losses of $239.26 per head. That compares to an unhedged profit of $3.9 billion in 2014, and losses of $1.1 billion in 2013.

A month ago cattle feeders were losing $224 per head, while a year ago feedyard closeouts were $172 in the red, according to Sterling Marketing. Feeder cattle represent 77% of the cost of finishing a steer, compared with 81% a year ago.

A month ago beef packers were earning $15 for every animal processed, while a year ago packers were losing $48 per head, Sterling Marketing estimates.

Farrow-to-finish pork producers found profits of $6.10 per hog last week, about double the $3.05 profits of a week earlier.

Pork packers saw a $3 increase in profit margins to $12.62 per head. Negotiated prices for lean hogs were $64.69 per cwt. last week, down $1 per cwt. from the previous week. Cash prices for fed cattle are $24 per cwt. lower than last year, and negotiated hog prices are $4 per cwt. higher than last year.

Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $263 per cow. Last year’s estimated average cow-calf margins were $432 per cow. Cow-calf profits for 2014 were estimated at $517 per cow.

Profit Tracker: Gaining Momentum

Fri, 07 Jul 2023 19:16:30 GMT

A cash market rally helped add $62 per head to feedyard margins last week, ending with total average profits of $212 per head, according to the Sterling Beef Profit Tracker. USDA’s 5-area cash price increased more than $4 per cwt., closing the week at $129.01. The total cost of finishing cattle last week was $1,582, compared to $1,586 the previous week and $2,230 last year.

Beef packer margins increased $19 per head, resulting in average profits of $145 on every animal processed. Packer margins are about $100 per head better than a month ago.

A month ago cattle feeders were losing $30 per head, while a year ago losses were pegged at $64 per head, according to Sterling Marketing. Feeder cattle represent 72% of the cost of finishing a steer, compared to 78% last year.

A month ago beef packers were earning $46 for every animal processed, while a year ago packers were earning $13, Sterling Marketing estimates.

Farrow-to-finish pork producers earned $30 per hog last week, roughly the same as last week’s profits, but $4 better than a month ago.

Pork packers saw their margins improve about $2 from last week to an average of $7 per head. Negotiated prices for lean hogs were $76.88 per cwt. last week, an increase of $0.61 per cwt. from the previous week. Cash prices for fed cattle are $26 per cwt. lower than last year, and negotiated hog prices are $4 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $177 per cow this year. Last year’s estimated average cow-calf margins were $432 per cow.

Livestock Indemnity Program Can Benefit Producers

Wed, 05 Oct 2022 18:44:12 GMT

By Ellen Crawford, North Dakota State University

The federal Livestock Indemnity Program is available to provide payments to livestock producers who lose animals as a result of adverse weather conditions this year.

“With flooding this spring, this program could be very helpful to producers,” says Oliver County, North Dakota Extension agent Rick Schmidt. “But the program is not limited to livestock losses from flooding. It also applies to losses from blizzards, wildfires, and extreme heat or cold.”

Livestock losses from diseases also may be eligible if the disease is caused by weather, according to Jim Jost, Farm Service Agency (FSA) farm program specialist for North Dakota. The FSA administers the Livestock Indemnity Program.

Producers who have losses because of diseases must provide documentation to support how the disease was accelerated or intensified by an eligible adverse weather event. Diseases that can be prevented by implementing a vaccination program are not eligible cases of loss. For example, livestock that perished from pneumonia, scours or clostridium perfringens are not eligible.

Producers may be eligible for payments if livestock losses exceed normal mortality and are caused by an eligible adverse weather that occurs before Oct. 1, 2011. The FSA also requires that producers must have legally owned the livestock on the day the animals died.

Animals covered

The program covers livestock such as cattle, sheep, swine, poultry and goats, as well as alpacas, deer, elk, emus and llamas, that were being used for commercial purposes as part of a farming operation. The program excludes wild, free-roaming animals; pets; and animals used for recreation, such as hunting, roping or showing.

“Producers need to document all losses in a timely manner and provide proper documentation on the losses,” Schmidt says.

Producers must file a notice of loss to the FSA within 30 days of the loss being apparent. The notice of loss may be completed by telephone, in person or by email or fax.

“The notice of loss is simply a report to FSA that the livestock producer lost livestock due to an identified adverse weather event that occurred on a specific date,” Jost says. “The number and type of livestock that perished will be provided during the application process.”

Applicants must provide proof of the livestock deaths

The proof may include verifiable documentation such as veterinary records, bank or other loan documents, or production records. Other reliable records such as photos with imprinted dates and calving books may be accepted.

If these types of records are not available, a certificate from a third party may be accepted if the third party is not affiliated with the producer’s operation and has specific knowledge of the deaths.

A third-party verifier can be a veterinarian, another livestock producer not related to the producer whose livestock died or someone else from the area who has experience with livestock, says Charlie Stoltenow, North Dakota State University Extension Service veterinarian.

The applicant also must provide inventory records if the proof of death is by a third-party certification or reliable records.

Inventory records could include vaccination records, balance sheets, loan records, sales and purchase receipts, or private insurance documents.

“Provide as much information as possible, such as reasons for death: temperatures, wind, snow or other weather conditions,” Schmidt says.

Applications with supporting documentation must be completed by Oct. 31, 2011.

For more information about the program, contact your local FSA office.

FarmBill Release Delayed

Fri, 20 Nov 2020 05:49:14 GMT

(Bloomberg) --

House Agriculture Committee Chairman Michael Conaway said he’s delaying the release of a draft law renewing farm and nutrition programs to try and produce a bill with bipartisan support after intense Democratic opposition over cuts to the food-stamp program raised the possibility the bill could be imperiled.

“What I don’t want to be is in those negotiations, put something out there and have to change it,” the Texas Republican told reporters Tuesday. “We’re in negotiations.”

Representative Collin Peterson of Minnesota, the ranking Democrat on the farm panel, said the additional work requirements for more recipients and other changes proposed by Republicans would drop 8 million people from the Supplemental Nutrition Assistance Program, dooming support from Democrats.

Conaway has denied that many people would lose benefits, but budget-hawk Republicans may balk at any plan that doesn’t do enough to cut food stamps and farm subsidies.

Conaway said he won’t rule out releasing a farm bill designed to appeal only to Republicans, which would put it at risk in the Senate, where Democratic votes are needed. He said he is still trying to gain Democratic support. The chairman had previously said his committee would send a farm bill to the House floor with the goal of a full-chamber vote by the end of March. That becomes more difficult without any bill this week.

Senate Agriculture Chairman Pat Roberts said it’s crucial to get the farm bill to get done this year because of the possibility that tariffs imposed by President Donald Trump might trigger retaliation that would hit farmers.

“At a time when farm income is down and exports are threatened from a protectionist trade policy it is the duty of the agriculture committees to provide farmers with some certainty,” Roberts of Kansas said. The Senate may release its version of the legislation in April, he said.

The impasse echoes divisions that delayed the current farm bill by nearly a year-and-a-half when it was last renewed in 2014. It also casts doubt on how much money will go to grocers such as Kroger Co. via the food-stamp program as well as the shape of subsidies paid to farmers who are struggling with low profits.

The bill, the cost of which has topped $ 100 billion in previous years, authorizes programs overseen by the Agriculture Department, ranging from payments to growers of corn and soybeans and funds to prevent forest fires to nutrition to aid poor people. The current farm law ends Sept. 30, after which subsidies begin to phase out.

Lawmakers from both parties as well as Agriculture Secretary Sonny Perdue predict that this year’s law will be more evolutionary than revolutionary, after farm programs were revamped in 2014.

Still, farmers are becoming more dependent on government payments, as an agriculture boom that ended around the time the last law was passed has left farmers expecting their lowest profits since 2006. Dairy and cotton producers are seeking more money, and conservatives continue to target food stamps as wasteful government spending, along with farm subsidies they call too generous.

Perdue in January said work-eligibility rules are necessary to discourage a “lifestyle” of welfare dependence, and in February proposed a “Harvest Box” program of food kits distributed to the poor as a cost-saving replacement for some SNAP aid.

Roberts last year signaled a tough stance on food-stamp fraud, even as also acknowledged that major changes were less likely in the more evenly-divided Senate. Senator Debbie Stabenow of Michigan, the top Democrat on Senate Agriculture, said that House-crafted food-stamp cuts as proposed are “not going to fly” in her chamber.

“There’s no question. We are not doing that in the Senate,” she said on Monday.

The farm bill’s complexity makes it difficult to assemble a bipartisan coalition that can get it through the House – and cuts that make a Republican-only bill possible then founder in the Senate, said Josh Sewell, senior policy analyst for Taxpayers for Common Sense in Washington and a subsidies critic.

“It’s a mishmash of a lot of policies to begin with, and that creates a lot of headwinds,” he said. While some Republicans, often the ones most interested in maintaining farm subsidies, want to keep food-stamp cuts minimal so as to ease passage in the Senate, others push for bigger change to both nutrition and farm-aid spending, he said.

In 2017, spending on food stamps fell 15 percent, to $68 billion, from its peak four years earlier, and about 41.7 million people were using the program as of November, the most recent month available. But with that program still responsible for up four-fifth’s of the bill’s spending, disputes over its mechanisms may derail it, said Jim Weill, head of the Food Research and Action Center in Washington, which seeks to end poverty-related hunger.

“I’d rather see no farm bill than anything that looks like what Conaway has put on the table,” he said.

Copyright 2018, Bloomberg News

More Meat, Please

Fri, 20 Nov 2020 05:49:09 GMT

After remaining fairly steady from 2008 to 2014, total U.S. meat production began to sharply increase in 2015—and consumers have responded by increasing annual meat consumption by 20 lb. in recent years. Cheaper feed and growing domestic and international demand have factored into growth. With relatively stable feed costs projected for the next couple of years, meat supplies will continue to increase faster than the rate of population growth in the U.S. through 2018, according to the Food and Agricultural Policy Research Institute. —Katie Humphreys

Russia Bans Brazilian Pork & Beef Amid Ractopomine Concerns

Fri, 20 Nov 2020 05:49:05 GMT

Russia banned pork from Brazil at a time that imports from the Latin American country, the biggest foreign supplier of the meat, have been rising and as the Kremlin has sought to encourage its own farm industry.

The government barred Brazilian pork and beef imports from Dec. 1, saying testing had found the muscle growth stimulant ractopamine, which is prohibited in Russia. A Brazilian lobby for the industry said the feed additive isn’t used in production of the exported meat, which adheres to Russian rules.
Total imports of pork to Russia are rising for the first year in four and may reach 300,000 metric tons, according to Russia’s National Pig Farmers Union. Supply from Brazil, which make up 90 percent of the shipments, are competing with local producers on price, the union said.

“Brazil was left alone as a major supplier,” Yury Kovalev, head of the union, said in Moscow. “They were reminded that we have certain requirements.”
Miratorg Agribusiness Holding and Ros Agro Plc are among Russian producers that stand to gain from import curbs. Miratorg’s President Viktor Linnik told the RBC newspaper last month that Brazil sells almost $1 billion of meat to Russia every year. As of Nov. 12, pork imports had risen about 13 percent from the same period a year earlier, the Agriculture Ministry said on its website, citing customs data.

Alternative Routes

Russia imported 230,395 tons of Brazilian pork this year through October, about 40 percent of the Latin American country’s total shipments, figures from Brazil’s Agriculture Ministry show. It also imported 131,083 tons of beef, about 11 percent of the total.

JBS SA, Brazil’s largest meat exporter, and BRF SA, its largest chicken and pork exporter, declined to comment on the ban. Brazil beef exporter Minerva SA will maintain shipments to Russia through units in Paraguay, Uruguay and Argentina, it said in a statement. Marfrig Global Foods SA said Russia makes up just 3 percent of its Brazil beef exports.

“The industry is confident about the characteristics of its product, and ensures that shipped pork production does not use ractopamine,” the Brazilian Animal Protein Association lobby said in a statement.

Russia, the world’s biggest wheat exporter, is seeking to start sales of grain, vegetable oil and fish to Brazil, Russian Agriculture Minister Alexander Tkachev said last month when he met his counterpart Blairo Maggi last month. Brazil sells more than it buys in the trade, he said. Brazil is seeking to expand sales of beef, pork and soybeans to Russia, Maggi said.

Copyright 2017, Bloomberg News

USDA Withdraws GIPSA Rule

Fri, 20 Nov 2020 05:49:02 GMT

DES MOINES, Iowa (AP) - The Trump administration’s decision to kill a rule designed to protect the rights of farmers who raise chickens, cows and hogs for the United States’ largest meat processors has infuriated farmer advocates, including a Republican senator from Iowa who said he has “violent opposition” to the move.

The rule would have made it easier for farmers to sue companies they contract with over unfair, discriminatory or deceptive practices. Called the Farmer Fair Practice Rule, it was rolled out by the U.S. Department of Agriculture during President Barack Obama’s final days in office but never took effect. The agency under President Donald Trump delayed its April 22 start date for six months, then announced Tuesday that it would not implement the regulation at all.

“They’re just pandering to big corporations. They aren’t interested in the family farmer,” Sen. Charles Grassley, an Iowa farmer, said in an uncharacteristic criticism of the Trump administration. “The USDA is the U.S. Department of Agriculture, not the U.S. Department of Big Agribusiness.”

The rule was first proposed by the USDA in 2010 but faced delays after meeting resistance in Congress and by the meat processing industry. The USDA finally released it last December.

Currently, several court rulings have interpreted federal law as saying a farmer must prove a company’s actions harm competition in the entire industry before a lawsuit can move forward. The rule would have eased that high burden of proof.

Chicken and pork producers, for example, must often enter long-term contracts with companies like Tyson Foods and Pilgrim’s Pride that farmers allege lock them into deals that fix their compensation at unprofitably low levels and forces them deeply into debt.

But the Grain Inspection, Packers and Stockyards Administration within the USDA, known as GIPSA, concluded the rule is inconsistent with several court decisions and would lead to further lawsuits.

“Protracted litigation to both interpret this regulation and defend it serves neither the interests of the livestock and poultry industries nor GIPSA,” the agency said.

National Chicken Council President Mike Brown said the rule would have “opened the floodgates to frivolous and costly litigation” and National Pork Producers Council President Ken Maschhoff said the regulation “would have reduced competition, stifled innovation and provided no benefits to anyone other than trial lawyers and activist groups that no doubt would have used the rule to attack the livestock industry.”

Kansas Republican Pat Roberts, chairman of the Senate Agriculture Committee, commended the USDA action, saying it demonstrates the Trump administration’s commitment to promoting economic prosperity and reducing regulatory burdens in rural America.

“The Obama administration spent the better part of a decade ignoring the calls from farmers, ranchers, and agriculture economists warning of the billion dollar blow this rule would have levied against American agriculture,” he said.

But others said the rule would have protected farmers.

“Farmers have made clear that they need protection from harmful and abusive practices that are standard in their industry,” said Sally Lee, program director for the nonprofit Rural Advancement Foundation International-USA, a North Carolina family farm advocacy group.

Mike Weaver, a Fort Seybert, West Virginia, poultry farmer called on Trump to issue an executive order to implement the rule.

“The administration is allowing multinational corporations led by foreign interests to hold America’s farmers and ranchers hostage with their monopolistic, retaliatory and predatory practices,” he said.

Copyright 2017 The Associated Press.

Demand Drives Meat Production Growth

Fri, 20 Nov 2020 05:49:02 GMT

Three billion pounds is a lot of meat. That’s what the U.S. livestock industry added in 2015, and it’s done nothing but increase since, says Scott Brown, a livestock marketing specialist with University of Missouri Extension.

“As long as we keep increasing record amounts of meat each year, prices will decline. A lot more meat is passing through U.S. markets,” Brown says. “Growth is not over.”

Beef, pork and chicken producers could add another 3 billion pounds of meat in the coming year. Sow numbers are going up. Beef herd owners saved every heifer they could to add to the cowherd.

“Producers respond a lot faster to rising prices than they do to falling prices. We’re still expanding breeding herds,” Brown explains. The problem becomes what to do with the growing meat supply.

“We eat it, export it or cut the price to sell it,” he says.

Pig Productivity. U.S. hog producers intend to have 3.07 million sows farrow from September to November this year, up 1% from actual farrowings during the same period a year ago and up 5% from 2015, according to USDA’s latest Hogs and Pigs report.

The percentage of pigs raised by larger operations continues to grow, which is a big reason there are more pigs on the market. It’s a credit to U.S. producers, says Kevin Grier, president of Kevin Grier Market Analysis and Consulting based in Guelph, Ontario, Canada.

“From a Canadian perspective, we look at the U.S. with envy in terms of capacity. But the breeding herd increasing between 1% and 2% is similar to what’s happening in Canada,” he says. “The root of expansion seems to be productivity.”

This is the 12th quarter in the past 13 in which USDA’s figures turned out higher than farrowing intentions, explains Ron Plain, professor emeritus at the University of Missouri in Columbia.

“I’m not blaming USDA, but full recovery from PED was faster than most people expected,” Plain says.

Exports and domestic consumer demand for pork will be key to maintaining producer profits. Both forms of demand appear to be on the upswing, and new packing capacity will help maintain profitable prices.

Beef And Poultry. The beef industry might not face last fall’s sharp price drop, but market signals suggest there are still challenges ahead, says John Nalivka, principal of Vale, Ore.-based Sterling Marketing. He estimates beef production for the third quarter will be up 6% over a year ago, the highest level since 2013.

“Feedlot inventories remain well above a year ago, and carcass weights continue to increase,” Nalivka adds.

Beef herd expansion from 2014 to 2017 has been the “most aggressive three-year start to any expansion on record,” says Trevor Amen, animal protein economist at CoBank.

High meat prices have prompted chicken producers to build their flocks quickly. Broiler production is about 3% above 2016 levels, but the industry has seen only marginal growth versus a year ago.

Six Factors Influencing the Markets for Livestock And Poultry

Low grain prices are contributing to overall growth of the livestock industry including pork, beef and poultry.

The pork industry is expanding, and new processing capacity will create opportunity for additional buildout.

Beef herd expansion is putting pressure on rancher profitability.

Processors are expected to invest in automation and robotics to reduce the risk of skilled-labor shortages

Ongoing modernization of plants will improve efficiency and productivity, helping plants meet advanced food-safety protocols.

Demand domestically and from export markets will be critical to profitability for all livestock segments

China Online Mall Pledges Billion Dollar Buy of US Beef & Pork

Fri, 20 Nov 2020 05:49:02 GMT

(Bloomberg) --

JD.com Inc. will buy $2 billion of U.S. goods, more than half of which is beef and pork, in a deal that coincides with President Donald Trump’s visit to China.

JD.com, China’s second-largest online mall, will buy more than $1.2 billion of beef from the Montana Stock Growers Association and pork from Smithfield Foods Inc. over the next three years, the company said in a statement released after a signing ceremony in Beijing. The agreement is part of a commitment to buy U.S. goods across a wide range of categories, it said.

U.S. companies and China announced deals worth about $9 billion on Wednesday, according to Commerce Secretary Wilbur Ross. Trump arrived in Beijing on the third leg of a five-nation Asia tour, accompanied by executives from some 40 companies seeking deals in sectors ranging from energy to aviation to financial services. While China has reopened its borders to U.S. beef imports, shipments remain low due to the limited supply that meets requirements. China is the world’s biggest pork producer, consumer and importer.

“China’s shoppers will rest assured knowing that they are able to purchase safe, high-quality meat products imported from the U.S.,” JD.com Chief Executive Officer Richard Liu said in the statement. The procurement agreement is for an initial three years, with a minimum commitment of $200 million in beef to be imported from Cross Four Ranch and MSGA members at fair market value, according to the statement.

Copyright 2017, Bloomberg News

Mighty Earth Attacks Crop Farmers to Advance Anti-Meat Agenda

Fri, 20 Nov 2020 05:48:49 GMT

A report last week from Mighty Earth , a campaign of the Center for International Policy , took a break from criticizing farmers and ranchers that raise livestock for meat, and instead turned their attention to the meat companies and feed suppliers (ie. crop farmers), asking them to provide “pollution-free” feed.

In “ Mystery Meat II: The Industry Behind the Quiet Destruction of the American Heartland, ” Mighty Earth says “Demand for feed crops is driving widespread water contamination across the country, destroying America’s last native prairies, and releasing potent greenhouse gases.” The report claims excess fertilizer and manure washes off fields, contaminating local drinking water and creating algae blooms that cause Dead Zones in the Gulf of Mexico.

While the agricultural industry does have an impact on these issues (see here and here ), the report does little to quantify agriculture’s contribution to the problem versus other industries.

The article calls out Tyson Foods, charging “America’s largest meat company” is in the “regions suffering the worst environmental impacts from industrial meat and feed production—from grassland clearing in Nebraska, Iowa, and Kansas, to manure and fertilizer pollution pouring into waterways from the Heartland down to the Gulf states.”

In a written statement to Farm Journal Media, Tyson responded “We share this group’s concern about the environment but disagree with its misleading characterization of our company. Tyson Foods is not in the business of raising the crops and we own very few livestock farms. Instead, we depend on thousands of independent farmers to raise our chickens or sell us their cattle or hogs. We work closely with our partners from farm-to-fork to identify and deploy new technologies designed to better protect the environment, our workforce, and the communities we serve.”

In an article by the Des Moines Register, Mark Peterson, a farmer near Stanton who has reviewed the report, said it may be impossible to produce “pollution-free feed.” … But farmers can adopt conservation practices — such as no-till or conservation tillage, cover crops, buffers and grass waterways — that reduce nutrient losses.

The negative characterizations of the agriculture industry in the report is a long list. However, it failed to include the fact that crop and livestock production is regulated and monitored by USDA’s Food and Drug Administration or the Environmental Protection Agency. Nor did it mention that many farmers and ranchers participate in quality assurance programs to document animal health and environmentally friendly practices. Tyson discloses its environmental efforts on its website.

Livestock feed is just one use of grain products grown in the U.S. In this chart from USDA, shows the growing market for biofuels, as well as consumer food and industrial uses. Source: USDA

Wildfire Recovery: Lending a Helping Hand

Fri, 20 Nov 2020 05:48:45 GMT

Written by Ken Blight (Albion MI), Zach Ducheneaux (Eagle Butte, SD), and Jesse Larios (Brawley, CA). All are Lead Farmers in the Farm Journal Foundation’s Farmers Feed the World Program. They are also all cattle producers.

Early in March, a massive wildfire swept across the Southern Plains states, burning 1.5 million acres of grassland, and affecting farmers and ranchers in three states--Texas, Oklahoma, and Kansas. The human cost was significant--the rapidly moving fire killed seven people, either trying to save cattle or flee their homes. While the economic cost is still being tallied, we do know that at least 20,000 head of cattle and hogs were killed and an estimated 18,000 miles of fencing was destroyed.

Most Americans are unable to imagine living--let alone earning a livelihood-- in an area where the distance between neighbors is measured in miles rather than yards. The heart of this region is a weathered and tough group of Americans that for generations have provided our great nation with much of its beef supply. Although adversity is no stranger to these folks, the wildfires that raged through their ranches this early spring devastated even these rugged cattle producers. Asking for help is surely a foreign concept for a people as self-reliant as these. The isolation of living on the prairie leaves you with yourself, a few neighbors, and our creator to look out for each other. But this time, the wildfires left little for neighbors to share when entire herds, feed supply, equipment, barns and homes were consumed by the fires.

As Americans, we take a lot of pride in our country. Pride in our history, culture, and land but most of all, our willingness and ability to help others in times of need. We do not wait for FEMA to show up, but rather pitch in almost as soon as the wind dies down or the waters begin to recede. In many ways, the March wildfires in the Southern plains were Agriculture’s version of Katrina. In a matter of hours, the wildfires changed a landscape--both land and people. Our agricultural communities were immediately gathering vital commodities that they knew were going to be vital for the recovery of their fellow Ag members. Trailer after trailer, countless waving American Flags, were seen rolling down highways headed north, south, east, and west. Farmers from across the nation donated truckloads of hay and other supplies to help ease the initial shock of the devastating fires.

No one waited for government intervention, payment, or acknowledgement. Why?? That’s who we are. That’s how we were brought up. This sense of community is part of our culture, and our way of life. That’s the heartbeat of America. On occasions like this massive wildfire, and the Atlas snow storm in western South Dakota in the autumn of 2013 which killed thousands of cattle, we have seen the impact that a lack of specific infrastructure implemented by local, state, or federal officials have on a producer’s ability to recover. We hope that producers’ readiness to help a neighbor in need can serve as an example to public officials of the importance of having thoughtful, timely, and meaningful assistance available to those in distress in both town and country.

A few months have passed, but the hard pull of rebuilding the herds, fences, and facilities that took these hard-working families generations to build, has barely begun. Farm Journal Foundation and Farm Journal Media has teamed up with the Howard G. Buffet Foundation in establishing the Wildfire Relief Challenge to raise money for these ranchers to rebuild. For every dollar you donate, the Buffett Foundation will match with an additional dollar, up to a total of $1 million. Visit www.wildfirerelieffund.org to take part.

Please join us, as many in the agricultural community have already done, and help these hard-working farmers and ranchers to continue the work of rebuilding miles and miles of fence, restocking their herds and replacing equipment left in ashes. Since April, donations to the Wildfire Relief Challenge already totals more than $600,000. Let’s keep the momentum going!

It’s About Putting a Face to Agriculture and Having a Dialogue

Fri, 20 Nov 2020 05:43:29 GMT

“It’s about having a dialogue, not just telling a story,” said Cameron Bruett, chief sustainability officer and head of corporate affairs for JBS USA, Inc. at the 2015 Animal Agriculture Alliance Stakeholders Summit. “We have this huge modern disconnect with agriculture; most of the consumers’ interaction with agriculture is the grocery store.”

A disconnect with consumers was a common talking point for all of the first-day Summit speakers noting that the agriculture industry has a great story to tell, but there is a lack of engagement with the audience that couldn’t survive without the farmers and producers. When there is no dialogue and engagement, consumers’ perceptions about our food supply will hinder the move towards a more sustainable and efficient future for everyone.

Another overarching topic was defining what sustainability actually means. “Sustainability means something different for whoever is talking about it,” Bruett said.

“Simply defined, sustainability is responsibility meeting the needs of the present while improving the ability of future generations to responsibly meet their own needs,” Bruett said. He added that it’s more about finding a balance between three things: social responsibility, economically viable and environmentally sound.

John Graettinger, director of food chain affairs at Merck Animal Health discussed the topic of consumer trust on a panel alongside Mandy Hagan, vice president of state of affairs at Grocery Manufactures Association.

“We need to show our face because people like people,” Graettinger said. “If you put that face on our production facilities, we are going to go far.”

Hagan followed by introducing the notion that the agricultural industry needs to make the conversation about the consumers and show how agriculture benefits them, not just the companies, especially when talking about technology in agriculture. Hagan gave the example of GM crops and how adding vitamin A to a developing world’s staple food could save lives.

“Our side of the story is much more complicated,” Hagan said. “If it’s a benefit for the consumer then the dialogue will change. I don’t think it’s too late.”

To close out the first day, two bloggers from the Alliance’s blogger tour took the stage and shared their personal experiences as well as how their new role in the industry can have a positive impact for farmers and consumers.

Ilina Ewen, writer for the blog Dirt & Noise, said that the experience for her was very “eye-opening” and said the agriculture is really about family, people and culture. “Food in this country is something we take for granted and [the tour] made me value our food system,” Ewen said. “The passion that is demonstrated in ag is unparalleled to any other industry.”

Lisa Frame, writer for the blog A Daily Pinch, shared that she came from a farming family and that agriculture is really about “becoming part of a family” and that her experience made her and Ewen a part of the family. “We are vested in your fishbowl now,” Frame said.

Source: Animal Agriculture Alliance

Groups Requests COOL Delay

Fri, 20 Nov 2020 05:36:44 GMT

In a letter to Agriculture Secretary Vilsack, several meat, poultry and retail associations requested that implementation of the proposed country-of-origin labeling (COOL) rule be delayed until WTO determines whether the final rule brings the United States into compliance.

The groups making the request include:

American Meat Institute
Food Marketing Institute
National Cattlemen’s Beef Association
National Chicken Council
National Grocers Association
National Pork Producers Council
North American Meat Association
Southwest Meat Association

The letter also strongly encourages the Office of the United States Trade Representative to negotiate a “sequencing agreement” with Canada and Mexico that would obviate the need for the complainants to put in a retaliation request within 30 days of the expiration of the compliance period on May 23, 2013. Such an agreement would preserve Canadian and Mexican legal rights until the completion of the compliance process (panel and appeal.) The letter argues that implementing the rule before these steps occur would do significant harm to the industry. The letter is available here .

Take a Video Tour of Pork Plant

Fri, 20 Nov 2020 05:36:44 GMT

The American Meat Institute (AMI) released a video tour of a pork slaughter plant hosted by leading animal welfare expert Temple Grandin, Ph.D., professor of animal science at Colorado State University. The video is available on the Institute’s dedicated animal welfare web site http://www.animalhandling.org/ .

The pork plant video tour and brochure augment the beef plant video tour, also hosted by Grandin, which was released in August 2012. Since its release, the beef plant video has been viewed nearly 50,000 times on line and in countless classrooms and other settings

The pork video tour starts on the farm in a finishing barn, depicts pig loading on trailers, unloading at the plant, stunning of pigs to make them insensible to pain, which is required by law, the bleeding process, carcass chilling and fabrication of carcasses into cuts that consumers eat. The video details the widespread use of the AMI animal welfare audit, developed by Grandin for the industry in 1997, and now a global standard.

Grandin selected the two plants that are featured in the video as representative of typical beef and pork slaughter plants. She was on-site for the taping and narrated the videos in her own words.

“I’m really pleased the American Meat Institute is working on putting these videos out because I think we need to show people what’s done in the industry when it’s just done right in a typical large plant,” Grandin says in the introduction to the video. The brochure also includes a series of commonly asked questions about animal welfare with answers provided by Dr. Grandin.

“We recognize that many consumers want more information about how livestock are handled and processed in U.S. meat and poultry plants. Our Glass Walls Project is an effort to increase transparency,” said AMI Senior Vice President of Public Affairs and Member Services Janet Riley, who also serves at liaison to the Institute’s Animal Welfare Committee. “We were fortunate that Dr. Grandin, a leading expert on animal handling and welfare in meat plants, agreed to host the video tours and played such a pivotal role in their production. We are proud to offer an honest look inside our plants and to show the public our long-standing commitment to ensuring optimal livestock welfare.”

To view the videos or download the brochures, visit http://www.animalhandling.org/ .

Antibiotics Report Ignores Food Safety Facts

Fri, 20 Nov 2020 05:36:40 GMT

A recent Environmental Working Group (EWG) report blames antibiotic use in food animals for the presence of antibiotic resistant bacteria. This report overlooks important data and the facts about food safety.

Consumers can remain confident that strict government regulations and industry practices ensure the safe and precise use of antibiotics to protect public health.

The EWG report is an interpretation of the 2011 Retail Meat Annual Report of the National Antimicrobial Resistance Monitoring System (NARMS), a joint project of the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC) and U.S. Department of Agriculture (USDA). In releasing these data, the FDA warned that the data were not comprehensive enough to show trends in resistance.

Unfortunately, the EWG used the data anyway.

The EWG report overlooks the clear decline in foodborne bacteria. The CDC recently reported that foodborne illnesses and outbreaks are down 40 percent over the last decade.
In an Apr. 22 statement, officials from the FDA, Center for Veterinary Medicine responded: “While FDA is always concerned when we see antimicrobial resistance, we believe the EWG report oversimplifies the NARMS data and provides misleading conclusions.”

Food producers take antibiotic use seriously. When farmers use antibiotics in food animals, they work closely with veterinarians to treat and prevent disease. The FDA and USDA Food Safety Inspection Service enforce strict regulations to ensure that meat and poultry products do not contain antibiotic levels that violate FDA standards.

Dr. Keith Belk, professor in red meat safety at the Department of Animal Sciences at Colorado State University, said antibiotics are heavily regulated.

“To even get a new antibiotic approved for use in livestock production is a very rigorous and hugely expensive long-term process,” Belk said.

Belk said some antibiotics are given to improve livestock and poultry health throughout their lives. Better animal health means more safe, nutritious products for everyone. Belk said the types of antibiotics used to promote health are not normally used in human medicine.

It is also important to remember your part in food safety. Cooking meat and poultry thoroughly is a crucial step in protecting food safety.

Souce: Statement from the American Society of Animal Science Board of Directors

Trade Barriers, Slow Demand Challenge Meat Exports

Fri, 20 Nov 2020 05:36:36 GMT

February continued the trend set at the end of 2012 for U.S. beef and pork exports with higher values on lower volumes for beef and a continued slight decline for pork, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports managed a 5 percent increase in value ($430 million) over February 2012 despite a slight decline in volume (86,367 mt). February pork exports slipped 5 percent in volume (178,510 mt) and 6 percent in value ($494.6 million) compared to a year ago.

“The good news is that the long-awaited change in beef access to Japan came through in February,” said USMEF President and CEO Philip Seng. “Conversely, trade barriers and other obstacles seem to be emerging at a rather alarming rate in 2013. Sluggish economic conditions in certain markets also create a challenge, but this is why we have made such a strong effort to diversify our destinations for red meat exports over the years. As some of our key markets struggle, growth in other regions has helped provide balance.”

Canada, Hong Kong lead beef export value growth
Through the first two months of the year, beef exports totaled 172,975 mt valued at $873.8 million – 2 percent lower in volume but 7 percent higher in value than last year’s pace. Beef export value in February averaged $239 per head of fed slaughter – up nearly $31 from a year ago. This drove the January-February export value to $220.39 per head, compared to $202.89 in 2012. The percentage of U.S. beef production exported in February was 10 percent for muscle cuts and 13.4 percent for combined muscle cuts and variety meat. This compares to 9 percent and 12.6 percent, respectively, from a year ago.

Beef exports to Canada are off to an outstanding start in 2013, totaling 31,464 mt (+31 percent) valued at $200.2 million (+46 percent) through February. Other markets performing well above year-ago levels include:

Hong Kong, 15,821 mt (+144 percent) valued at $85.5 million (+126 percent).
Taiwan, 5,708 mt (+16 percent) valued at $42.6 million (+39 percent).
Philippines, 2,463 mt (+19 percent) valued at $11.3 million (+45 percent).
Dominican Republic, 617 mt (+41 percent) valued at $5.6 million (+70 percent).

Because access for U.S. beef exports to Japan was expanded on Feb. 1 to include beef from cattle less than 30 months of age (up from 21 months), expectations for the month were very high. Exports to Japan did record small gains in February and moved 3 percent higher in volume (19,918 mt) and 12 percent higher in value ($137.9 million) for the year. Based on weekly export data the improvement in market access didn’t trigger an increase in export activity late February, so the impact will be more pronounced in March.

The ractopamine impasse with Russia has had a dramatic impact on this year’s export results. Coming off a record year in 2012, beef exports to Russia through February totaled only 1,693 mt (-82 percent) valued at $2.1 million (-94 percent). The downturn in beef exports to Russia alone more than accounted for the overall volume decline in February.

Exports to former No. 1 market Mexico were also sharply lower at 29,933 mt (-21 percent) valued at $130.6 million (-23 percent).

Lower results in Mexico, Japan slow pork exports
Pork exports through February totaled 365,191 mt valued at just under $1.02 billion – down 8 percent in volume and 7 percent in value from a year ago. Pork export value in February averaged $57.56 per head, down slightly from last year’s $58.17. (January-February export value averaged $54.89, down 6 percent from a year ago.) Pork exports in February equated to 22 percent of muscle cut production and 27.9 percent when adding variety meats. This compares to 24 percent and 27.7 percent, respectively, in February 2012.

Pork exports to leading volume market Mexico slowed from the record pace established in 2012, declining 13 percent in volume (98,237 mt) and 12 percent in value ($183.5 million) through February. Value leader Japan also saw lower results, falling 11 percent in volume (71,248 mt) and 6 percent in value ($320.1 million). Exports to the China/Hong Kong region were relatively steady, falling 2 percent in volume (76,402 mt) but increasing 1 percent in value ($160.4 million). Exports to Canada were slightly ahead of last year’s pace in both volume (37,339 mt, +2 percent) and value ($130.6 million, +1 percent).

Markets performing well above year-ago levels through February included:

Philippines, 7,851 mt (+42 percent) valued at $18.3 million (32 percent).
Colombia, 3,598 mt (+62 percent) valued at $9.2 million (+51 percent).
Honduras, 3,559 mt (+17 percent) valued at $8.7 million (+24 percent).
Dominican Republic, 2,448 mt (+28 percent) valued at $5.7 million (+44 percent).
New Zealand, 1,780 mt (+76 percent) valued at $5.1 million (+57 percent).

The impact of Russia’s ractopamine restrictions was not as dramatic for pork, though exports through February were down 15 percent in volume (7,037 mt) and 16 percent in value ($21.1 million). Demand in South Korea continues to be hampered by sluggish consumer spending and a surge in domestic meat production, as exports through February fell 30 percent in volume (25,540 mt) and 32 percent in value ($70.7 million) compared to a year ago.

Lamb export value up, despite lower volume
U.S. lamb exports continued to trend lower in volume through February (1,885 mt, -20 percent) but were 15 percent higher in value ($4.4 million) compared to last year. Exports to leading market Mexico gained 37 percent in value ($2.6 million) despite a 3 percent decline in volume (1,558 mt).

Complete export results for U.S. beef, pork and lamb are available online .

USDA Issues Proposed Rule Amending COOL

Fri, 20 Nov 2020 05:36:32 GMT

The U.S. Department of Agriculture (USDA) has issued a proposed rule to modify the labeling provisions for muscle cut commodities covered under the Country of Origin Labeling (COOL) program.

“USDA expects that these changes will improve the overall operation of the program and also bring the current mandatory COOL requirements into compliance with U.S. international trade obligations,” said Agriculture Secretary Tom Vilsack.

The proposed rule would modify the labeling provisions for muscle cut covered commodities to require the origin designations to include information about where each of the production steps (i.e., born, raised, slaughtered) occurred and would remove the allowance for commingling of muscle cuts.

In June 2012, the Appellate Body of the World Trade Organization (WTO) affirmed an earlier WTO Panel decision finding that the United States’ COOL requirements for certain meat commodities discriminated against Canadian and Mexican livestock imports and thus were inconsistent with the WTO Agreement on Technical Barriers to Trade. The United States has until May 23, 2013, to come into compliance with the WTO ruling in COOL.

Notice of the proposed rule will be displayed in the March 11, 2013 Federal Register and can be viewed at http://www.federalregister.gov/public-inspection.

Under COOL, retailers must provide their customers with information about the origin of various food products, including fruits, vegetables, fish and shellfish and meats. Mandatory COOL requirements help consumers make informed purchasing decisions about the food they buy. USDA’s Agricultural Marketing Service (AMS) is responsible for the implementation, administration and enforcement of the COOL regulations.

The final COOL regulations became effective March 16, 2009. Since then, AMS has devoted significant resources to education and outreach. Over these last four years, AMS has closely reviewed industry compliance with COOL. In 2012, USDA and its state cooperators conducted more than 3,800 compliance reviews of retailers. These reviews established an estimated 98 percent compliance rate for commodities under COOL. To learn more about COOL visit www.ams.usda.gov/COOL.

There were mixed reactions from agriculture and cattle groups:

Read the National Cattlemen’s Beef Association statement here .

Read the National Farmer’s Union statement here.

Challenges Frame 2013’s Opening Red Meat Export Report

Fri, 20 Nov 2020 05:36:32 GMT

The first month of 2013 offered a mix of good news and challenges for exports of U.S. beef and pork during January, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports continued the trend shown in 2012 with higher export values on lower volumes while pork exports improved slightly from December’s levels but remained behind year-ago totals.

Led by sharply higher exports to Hong Kong, Canada and Taiwan, and solid growth to Japan, beef exports for January rose 9.3 percent in value from year-ago levels on slightly lower (-3.2 percent) volumes.

Pork exports rebounded slightly from December, but closed 7.6 percent lower in value on 11.7 percent smaller volumes compared to January 2012. The ASEAN region was the bright spot with 17.1 percent higher volumes and slightly higher (2.7 percent) value.

“The year ahead will offer no shortage of challenges to red meat exports, which will require our industry to be creative and aggressive,” said Philip Seng, USMEF president and CEO. “On the beef side, we are still dealing with market access barriers in Saudi Arabia and significant obstacles in Russia, but there are signs for optimism in the months ahead with expanded beef access to Japan and Hong Kong that will provide a boost.”

Also in Asia, Seng noted that an overabundance of domestic pork in South Korea is driving down demand for imports there while China’s aggressive efforts to build its domestic pork industry appear to be bearing fruit as its need for imports declines.

Seng also indicated that the continued devaluation of the Japanese yen, which has fallen 20 percent in value versus the U.S. dollar since last summer, will be a factor in purchasing patterns by this key trading partner for both beef and pork.

Beef export highlights

For the month of January, U.S. beef exports totaled 86,608 metric tons valued at $443.8 million. The decline in volume versus January 2012 was more than accounted for by a 91.5 percent drop in exports to Russia, which has been delisting U.S. beef plants for detection of growth promotant residues.
Canada emerged as the top volume and value market for U.S. beef exports in January, buying 16,586 metric tons (up 32 percent from last year) valued at $102.9 million (42 percent increase).
Hong Kong saw its U.S. beef purchases rise 144 percent in volume and 115 percent in value to 7,004 metric tons valued at $37.1 million – pushing it to No. 6 on the beef export list.
Taiwan continued its recovery as an export market with its January purchases rising 14.5 percent in volume and 39.7 percent in value (3,167 metric tons valued at $22.6 million).
The value of beef exports to South Korea rose 12.2 percent to $58.2 million on slightly lower volumes (down 1 percent to 11,602 metric tons).
Anticipating the Feb. 1 expansion of the market to beef from cattle under 30 months of age, Japan increased its U.S. beef purchases 5.5 percent in volume and 21.6 percent in value to 10,217 metric tons valued at $72.5 million.

Pork export highlights

For the month of January, pork exports totaled 186,681 metric tons valued at $523.7 million – declines of 11.7 percent in volume and 7.6 percent in value from last January, but up slightly from December’s totals of 186,135 metric tons valued at $515.9 million.
Japan remains the value leader, buying 37,745 metric tons of U.S. pork (-9.5 percent) valued at $173.6 million (+1.7 percent).
Mexico remains the volume leader, purchasing 55,103 metric tons (-9 percent) valued at $102.7 million (-6.9 percent).
Russia posted the largest pork export gains at 3,314 metric tons (+8.2 percent) valued at $10.2 million (+9.7 percent), although some of that purchase may have been made in anticipation of Russia’s closing of its borders to U.S. pork and beef in February.
The ASEAN region posted a 17.1 percent gain in pork volume (to 4,921 metric tons) and a 2.7 percent bump in value to $10.8 million.

“Looking ahead, USMEF is focusing on building demand for chilled and branded pork in both Japan and Korea as well as overall consumer demand for pork in Mexico,” said Seng. “We will see benefits from these campaigns in the year ahead.”

Lamb export highlights

Exports of U.S. lamb also were mixed, up 16.6 percent in value over last January’s totals on lower volumes – down 28.2 percent. Totals for the month were 984 metric tons valued at $2.4 million.

Mexico remains the top export destination, buying 851 metric tons (86.5 percent of total exports) valued at $1.6 million (64.3 percent of total value). Sales to Mexico rose 37.2 percent in value on 16.7 percent lower volume for the month.

Canada and the Caribbean are the No. 2 and No. 3 regions for U.S. lamb exports, and both posted double-digit declines from year-ago levels.

Complete export results for pork, beef and lamb are available online .

CME Concerned Over Sequestration Impact on Livestock Futures

Fri, 20 Nov 2020 05:36:28 GMT

On Thursday, the CME sent a letter to its customers warning of potential impact the federal spending cuts may have on some livestock and dairy contracts:

“As a valued customer, we wanted you to be aware this is an issue we are closely monitoring, as it’s possible mandatory spending cuts – should they begin on March 1 – could have an impact on the physical delivery and cash settlement mechanisms of certain CME livestock and dairy products. In addition, the budget cuts could result in the disruption of USDA reports that are used in the daily calculation of the CME Feeder Cattle Index and CME Lean Hog Index and the monthly calculations used to determine settlement prices for CME Dairy futures products.

“As the CME Live Cattle contract utilizes USDA grading/inspection in the delivery process, a furlough of USDA staff may require the Exchange to modify in accordance with Exchange rules the current operational process around delivery/settlement of these products. In addition, CME Group’s cashsettled livestock and dairy products could also be impacted in the event the data used to compile these indexes is unavailable. Finally, CME Group’s spot call dairy markets could be impacted in the event USDA grading/inspection staff is unavailable effective on March 1, 2013.”

The CME livestock and dairy contracts that may be impacted, include:

Live Cattle futures Feb 2013 contract
Lean Hog futures and options, April 2013 and subsequent contracts
Feeder Cattle Futures, March 2013 and subsequent contracts
Milk (Class III and IV), Butter, Cheese, Non-Fat Dry Milk, and Whey March 2013 and subsequent
contracts
Spot Call (Butter, Cheese and Non-Fat Dry Milk), March 1 and subsequent trading days

Access the full letter here.

Cattlemen Concerned about Possible FSIS Furlough

Fri, 20 Nov 2020 05:36:24 GMT

The National Cattlemen’s Beef Association’s (NCBA) membership is highly concerned by statements from United States Department of Agriculture’s Secretary Tom Vilsack regarding the sequestration process and a possible 15 day furlough of all Food Safety Inspection Service (FSIS) employees, including food safety inspectors. NCBA President and Wyoming cattle producer Scott George made the following comments in response to the situation:

“Under the Federal Meat Inspection Act and other related legislation, Congress has charged the USDA with providing federal inspection of meat, poultry and egg products at government expense. This places a legal duty on the USDA and the administration to carry out this service, a duty which the USDA has recognized as ‘essential’ in the past. And while we understand the hardships placed on the agencies through the possibility of sequestration, we are severely disappointed Secretary Vilsack has chosen to take this path of threatening to halt FSIS inspections.”

“Secretary Vilsack is using America’s cattlemen and women as pawns in the agency’s political wrangling with Congress. While we are certain the USDA contains other ‘non-essential’ employees, the Secretary has chosen to announce the consequences of sequestration in terms of a furlough of FSIS inspectors, essentially threating to close down all production, processing and interstate distribution of meat. This action has already cost cattle producers significant amounts of money with the downward slide in the futures markets caused by rampant speculation, with untold effect on producers through further regulatory uncertainty.”

Under the Federal Meat Inspection Act, the Poultry Products Inspection Act and the Egg Products Inspection Act the production, processing or interstate distribution of meat, poultry and egg products is prohibited absent federal inspection. Such a move would impact approximately 6,290 establishments nationwide and the agency estimates the move would cost over $10 billion in production losses. Industry workers they estimate would experience over $400 million in lost wages, consumers would experience limited meat and poultry supplies and potentially higher prices and food safety could be compromised.

“NCBA will not stand by while the administration threatens this kind of action against the industry. We are calling on producers to contact their Senators and Congressional Representatives to send a clear signal to the USDA that this is not an acceptable exercise of executive authority.”

Meat Prices Expected to Rise in 2013

Fri, 20 Nov 2020 05:36:20 GMT

Cattle prices are expected to set new records in 2013 while hog prices are expected to have their second highest year ever. High feed costs have led to lower numbers of animals, which University of Missouri Extension agricultural economist Ron Plain says is why meat prices will be going up.

“The U.S. meat supply per capita has been steadily declining,” Plain said during the 2013 MU Extension Winter AgMarketing Outlook Conference. “It’s expected that 2013 will be the seventh consecutive year with less meat per person, down 22 pounds from 2006 and the lowest per capita supply since 1991.”

Slaughter steer, yearling and slaughter cow prices all reached record highs in 2012. It was the third straight year for steers to set record prices and the second consecutive year for both yearlings and slaughter cows.

“The expectation is that all three will set new price records again in 2013,” Plain said. “We are not yet to the peak in cattle prices.”

Hogs have also been hit by the high cost of feed. Plain says there is a high correlation between the price of corn and the break-even cost for hog production. Even so, surveys show some producers are looking to expand.

“If we look out ahead of us and anticipate good crops and lower feed prices, there is reason to think hog producers will want to expand despite the tough financial year last year,” Plain said. “On average, the typical hog sold for a $12 loss in 2012, but it looks like if you give the hog industry more feed they’ll expand hog numbers.”

The number of farrowing sows this spring is forecast to be down 1.9 percent, a modest reduction.
“It looks a bit down this year in the number of litters to be farrowed,” Plain said. “But pigs per litter keep going up, so most likely any reduction in the number of sows being farrowed will be covered by more pigs per litter, so we’ll end up with the same to maybe a few more pigs born in 2013 than what we had last year.”

The calf crop is expected to be smaller than last year. Plain says that 2012 was the 17th consecutive year with a smaller calf crop. With the shrinking herd and tightening supplies, Plain thinks 2014 prices will be even higher than 2013.

“The forecast for the coming year is 4.3 percent less beef than a year ago, 0.2 percent more pork, 0.4 percent less chicken, and 0.3 percent more turkey,” Plain said. “Total meat production is forecast to be down 1.3 percent. The population will grow about 0.9 percent, so it’s about 2.2 percent less meat per person, unless we see a big jump in meat imports.”

Handouts and audio recordings from the conference are available for free download at agebb.missouri.edu/mkt/teleconf .

U.S. Beef, Pork Exports Dip Slightly; Lamb Rebounds

Fri, 20 Nov 2020 05:36:15 GMT

Source: U.S. Meat Export Federation

U.S. pork exports for the first 11 months of 2012 continued to exceed the record-setting pace of 2011, the value of beef exports remained slightly above 2011’s record levels despite continued lower volumes and the value of lamb exports in November bounced back from an otherwise slow year, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

With only one month yet to be recorded for 2012, pork exports continue to top 2011 levels by 2 percent in volume (2,075,974 mt) and 5 percent in value ($5.8 billion), while totals for November declined 7.7 percent in volume and 5.4 percent in value versus last year. It is important to note, however, that November 2011 ranks as the second-best month in history (behind October 2012) for U.S. pork exports.

Mexico continues to perform as the United States’ top pork volume destination, with November’s totals up 7.2 percent in volume and 4.6 percent in value, pushing the 11-month totals to 550,408 mt (up 15 percent) valued at just over $1 billion (up 11 percent).

Although exports to Japan are trailing 2011 volume, they could still eclipse the $2 billion mark this year, with value up 3 percent through November and volume down 6 percent.

Other top pork markets in November were Canada (up 15.3 percent in volume and 17.1 percent in value), South Korea (up 26.4 percent in volume and 8.5 percent in value), Russia (up 100 percent in volume and 78.7 percent in value), and Central/South America (up 21.1 percent in volume and 10 percent in value).

With U.S. production declining in 2012, beef exports fell a modest 1 percent in value on a 13.3 percent drop in volume in November. For the year, volumes are down 11 percent (1,043,151 mt) but the value of those exports is $5.05 billion – still 2 percent above the record-setting value pace of 2011.

Canada (up 18.5 percent in volume and 37.8 percent in value), Hong Kong (up 18.8 percent and 62.6 percent in volume and value, respectively), Russia (up 19 percent in volume and 4 percent in value) and Central/South America (up 42.4 percent in volume and 56.3 percent in value; including record exports to Chile, up 119 percent) were the top-performing beef export markets in November. Export value to South Korea increased nearly 6 percent on a slight decline in volume.

“Volume has been an issue for beef exports all year,” noted USMEF President and CEO Philip Seng. “That continued in November, but an appreciated value of those products has helped the industry hold its own in a challenging year.”

Beef exports to price-sensitive markets like Mexico are down this year, but the value of exports to premium markets like Japan (up 19 percent for the year) and Canada (up 13 percent) continue to grow even as volumes remain low.

Another positive for beef exporters is the rebound of the Taiwan market, which was once a top five U.S. beef export market but was hindered for most of this year by ractopamine-related barriers that have since been resolved. In November, the value of beef sales to Taiwan jumped 13.7 percent over last year on slightly reduced volumes. For the year, exports to Taiwan are down 48 percent in volume and 40 percent in value, but recent numbers are encouraging for 2013. Pork exports to Taiwan, however, continue to be affected by Taiwanese restrictions on products with ractopamine residues.

“There is no question that rising production costs and slowing economic growth have kept buyers on the sidelines or moved them toward less expensive options,” said Seng. He noted that higher domestic meat production in certain markets (such as Korea, Japan and China) also have affected exports this year. Market access issues – such as Indonesia’s tighter import quotas aimed at boosting domestic production and Saudi Arabia’s closure due to BSE – have also impacted exports.

“While volumes are lower, the quality and reputation of U.S. red meat products have helped support higher values, and that is not a statement that most of our competitors in the international marketplace can make,” he said.

Year-to-date, U.S. pork exports account for 27 percent of total production (23.5 percent for just muscle cuts) and the per-head export value is $56.12 – up 3 percent from last year. Beef exports account for 12.6 percent of total production (9.8 percent for just muscle cuts) with a per-head value of $214.64, up 5 percent from last year.

The value of exports was the positive news for the U.S. lamb industry in November. The volume of American lamb sales internationally has been down throughout the year: declining 27 percent for the first 11 months and 22.3 percent in November. While the value of those exports also has been down for the year (-13 percent), it jumped 12.4 percent in November on the strength of strong sales to the top lamb export market, Mexico.

Complete export results for pork, beef and lamb are available online .

Livestock Producers Get Income Tax Relief After Drought

Fri, 20 Nov 2020 05:36:15 GMT

By Jennifer Stewart

Some Midwestern livestock producers might find themselves facing higher income tax bills if the drought forced them to cull and sell more animals than normal in 2012 - but help is available, two Purdue Extension agricultural economists say.

The lack of forages and the high cost of feed led many producers who might normally have carried livestock through the winter to instead sell them at weaning. More sales at weaning usually would mean more taxable income in 2012.

But there is help in the form of income deferment and averaging.

“Federal income tax law may allow farmers affected by weather-related conditions to defer reporting of this income, in some cases, to even out incomes and avoid potentially higher taxes,” said Michael Langemeier, who also is associate director for Purdue’s Center for Commercial Agriculture. “Farm income averaging, which was enacted after the weather-related provisions, is another alternative that could result in lower income taxes for producers in some situations.
“Effective tax management involves consideration of several tax years rather than just minimizing the current year’s tax bill.”

Producers forced to sell draft, breeding or dairy animals because of weather have a two-year reinvestment period. That means producers don’t need to report the income if it is used to buy qualified replacement animals within two years of the end of the tax year in which animals were sold, said George Patrick, who specializes in farm tax management.

Although this provision doesn’t require producers to live in a designated disaster area, producers need to show that weather conditions forced them to sell more livestock than is typical for their businesses.

“For example, a beef producer who normally sells five cows per year might have sold 20 cows in 2012 because of limited forage and feed supplies,” Patrick said. “Gains from the sale of the extra 15 cows would not have to be reported as income if the producer purchased at least 15 qualified replacement animals before the end of 2014.

“The new livestock must be used for the same purpose as the livestock that was sold. Thus, beef cows must be replaced with beef cows. Similarly, dairy cows must be replaced with dairy cows.”
Livestock producers who sold extra animals due to weather but don’t intend to replace them also could qualify for an exception that allows them not to report receipts as taxable income in 2012.

“Producers whose principal business is farming can postpone reporting these receipts as income for one year for both income and self-employment tax purposes,” Patrick said.
In this scenario, only livestock sales beyond what is normal for each business would qualify for deferral.

Langemeier said one example of this would be a producer who normally farrows and feeds 2,000 pigs each year. Drought, which resulted in a disaster declaration for the county where the hog farm is located, forced the farmer to sell 1,000 pigs as feeder pigs in 2012 instead of feeding them and selling them as market hogs in 2013. The producer’s normal practice is to sell no feeder pigs, so income generated from the sale of the 1,000 head can be deferred until 2013.
If the feeder pigs sold at $35 per head, that means $35,000 of income could be deferred to 2013, he said.

More of Patrick and Langemeier’s comments about tax management can be found in their publication, “Drought, Livestock and Income Taxes,” available for free download via Purdue’s Center for Commercial Agriculture at http://www.agecon.purdue.edu/commercialag/resources/taxmgmt/index.html .

More in-depth information about farm income tax management is available in the Internal Revenue Service publication, “The Farmer’s Tax Guide,” found at http://www.irs.gov by searching “Publication 225" in the publication search menu.