Editor's note: The Agribusiness Weekly Update, compiled from various sources by The City Wire staff, is presented each week. Sources include the U.S. Department of Agriculture, Hedgers Edge, Cattle Buyers Weekly and Derrell Peel, livestock specialist at Oklahoma State University.
U.S. beef packer margins turned positive in the last couple of weeks averaging about $18 per head, according to Hedgers Edge. A year ago packers were just breaking even. Cattle slaughter was down more than 6% from a year ago. Slaughter rates continue to be light as feedyards try to hold out for better prices. Beef production, at 2.16 billion pounds, was 5% below the previous year. Futures traders are worried the European debt crisis could harm US beef demand, adding pressure to beef prices.
Hogs & Pork
Fresh pork processing margins ran in the red by roughly $5 per head last week, that compared $3.50 cents per head profited last year. Weekly hog slaughter and production were flat to year ago. The June contract is up 75 cents at $85.10 and July is up 77 cents at $85.35.
Chicken processors have enjoyed positive margins for several weeks thanks in part to production discipline. The estimated number of broiler-fryers available for slaughter the week is 155.5 million head compared to 167.5 million head slaughtered the same week last year, according to the USDA. Retail breast meat prices averaged $1.25 per pound last week, compared a 5-year average of $1.40 and $1.50 a year ago. Conversely, leg quarter prices have held steady at 50 cents per pound, up from 45 cents a year ago and a 40-cent per pound average over the past five years.
South Central egg prices averaged 98 cents per dozen for extra large down to 69 cents for medium size eggs. Total egg production is down about 3.5% from a year ago. Retail and food service demand is light to moderate.
Cash corn prices finished the week down 15 cents to $6.08 per bushel. Soybean prices fell 7.5 cents to $13.33 per bushel. There is renewed concern over the EU debt situation, pressuring grain commodities. Corn traders moved to the sidelines ahead of USDA’s supply and demand update on May 10. USDA is expected to cut 2011/12 ending stocks by about 50 million bushels to 750 million, but ending stocks for 2012/13 are likely to up nearly 1 billion bushels from this year. July corn is 8.5 cents lower at $6.14. The December contract is 9.5 cents lower at $5.18. Soybean futures are also being weighed down by expectation for tighter stocks in 2012/13. The July contract is down 12 cents at $14.26, and the November contract is down 12 cents at $13.28.
Global dairy prices are off 20 to 30% from their spring 2011 peaks, as swelling milk production worldwide has turned supply deficits into surpluses. Rising inventories are expected to keep downward pressure on international dairy markets in the second half of 2012, according to the U.S. Dairy Export Council.
Ethanol averaged $2.12 per gallon this week, compared to $2.60 a year ago, according to the USDA. Cash ethanol prices were $1.35 cents than gasoline on a per gallon basis.