Exports Headed in the Right Direction
Export data for March, released last week by the Commerce
Department and USDA’s Foreign Agricultural Service indicated solid,
although unspectacular, performance for U.S. pork exports so far in
Total U.S. pork exports for March amounted to 370.37 million pounds
carcass weight equivalent, just 0.23% higher than one year ago. March
shipments bring year-to-date exports to 1.047 billion pounds carcass
weight, 1.3% higher than at the end of March 2009. Both of the
percentage change figures are lower than they were at the end of
February. But given last year’s difficulties, positive numbers are
winners and are, no doubt, one big contributor to this year’s
excellent pork and hog markets.
For comparison, U.S. beef exports were 26% higher this March vs. one
year ago, while year-to-date beef exports were 25% higher at the end of
March. Shipments were larger for every major beef market except
Vietnam and Mexico, our largest beef exports customer since the
discovery of bovine spongiform encephalopathy (BSE) in the United States
in 2003. Vietnam, it should be noted, is a back door for beef entering
Help Boost Pork Cutout Value
While hog prices have settled back a bit from recent
highs, the run-up in prices certainly came as a welcome respite for
producers who were long overdue for a break from red ink.
Lower inventories are clearly part of the story behind this price surge,
but the wholesale pork cutout also provides some guidance on the factors
driving improved pork demand (Figure 1). At the end of April and into
early May, the cutout averaged around $90/cwt. – 50 to 60% higher than
a year ago. This was the highest value seen since the export-driven
record values posted in August 2008.
While all cuts are performing well compared to the doldrums of 2009, the
carcass value seems to be getting a particularly strong boost from items
typically targeted for export. For example, the ham primal cutout is
nearly $0.76/lb. (about 75%) higher than a year ago. Picnic primals have
surged nearly 90% to about $0.69/lb. Demand for these items has been
extremely strong in Mexico, the No. 1 volume market for U.S.
Predicts Record Corn Crop
USDA’s latest Crop Production and World Supply and
Demand Estimates report predicts a record corn crop of 13.37 billion
bushels for the 2010/11 marketing year. Yield is projected at 163.5
bu./acre, which is 2.7 bu./acre above the 10-year trend. Carryout
stocks are estimated at 1.818 billion bushels, up 5% over 2009. Exports
are predicted at 2 billion bushels, compared to 1.95 billion bushels for
the 2009/2010 marketing year. Corn usage for ethanol is estimated at
4.6 billion bushels, compared to 4.4 billion bushels this marketing
year. Domestic corn feed and residual use are projected at 5.35 billion
bushels compared to 5.374 billion last year. Corn prices are estimated
to range from $3.20 to $3.80/bu. in 2010/2011. Soybean production is
estimated at 3.3 billion bushels, down 49 million from last year’s
record production. Soybean yields are projected at 42.9 bu./acre, down
1.1 bu./acre from 2009. Soybean ending stocks for 2009/2010 are
unchanged at 190 million bushels. Average soybean price is projected at
$8.00 to $9.50/bu. Wheat production is estimated at 2.043 billion
bushels, down 173 million bushels from last year. Wheat usage is
projected to be up 3% with higher expected domestic use and exports.
Exports are projected to increase by 35 million bushels to 900 million
bushels. The season-average farm price is estimated at $4.10 to
Profitability, Market Hog Outlook Highlight Expo Talk
The hog industry’s return to profitability will be a key
point of discussion during Steve Meyer’s market outlook talk during
the 2010 World Pork Expo. Meyer will present a complete hog outlook
during the June 9 and June 10 educational seminar held from noon to 2:30
p.m. in the Marketing Information Center, located in the upper level of
the Varied Industries Building on the Iowa State Fairgrounds in Des
Meyer, president of Paragon Economics, Inc. and weekly contributor to
National Hog Farmer magazine’s Weekly Preview e-newsletter,
predicts slaughter rates will decrease as the year progresses.
But as the market trends upward, Meyer cautions producers to monitor
foreign imports, exports and feed costs.
May 16-19, 2010: Alltech's 26th
International Animal Health and Nutrition Symposium,
For more information contact: www.alltech.com.
June 8-10, 2010: "Sustaining Animal
Agriculture: Balancing Bioethical, Ecnomic and Social Issues."
Jefferson Auditorium, USDA's South Agriculutre Building, Washington, DC;
For more information contact: Council for Agricultural Science and
June 9-11, 2010: World Pork Expo, Iowa State
De Moines, IA;
For more information contact: www.worldpork.org.
It’s Expo time! Thousands of producers and industry
professionals from all over the world will be in attendance. Don’t
miss three jam-packed days of learning, networking and training plus
discover the latest trends, products and innovations. And, don’t
forget the fun — click
here for all the details!
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