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 and Arkansas Farm Bureau.
U.S. beef packer margins averaged $25 per head last week, according to Hedgers Edge. Packers have averaged between $20 and $25 profit per head during the past couple of months. June fed cattle are trading this week around $118 per hundredweight, up $1 from the prior week.
The USDA supply/demand table saw beef production for this year revised downward by 102 million lbs. Exports for this year were revised down by 50 million lbs, in response to high beef prices.
Hogs & Pork
Fresh pork processing margins ran in the red by roughly $10.50 per head last week, that compared to $9 per head profited last year, according to Hedgers Edge. USDA said this week
that average live weights are running an astounding 5.8 lbs over last year. Slaughter is running slightly below last year. High retail pork prices combined with a slowdown in the world economies are bearish toward hog prices moving forward.
Chicken processors continue to post positive margins thanks in part to production discipline averaging 4% below a year ago. The Georgia dock quoted price on broilers and fryers for this week's trading is 94.5 cents a pound. Boneless chicken breasts are priced at $1.63, while leg quarters are selling for 55 cents a pound. The market is steady and the live supply is adequate for normal to occasionally light demand. Estimated daily slaughter averaged 4.,595 million head this week.
South central egg prices ended last week at 75 cents a dozen for medium, $1.02 for large and $1.04 for extra large. Table egg production is expected to increase slightly (0.5% in 2012, reaching 6.64 billion dozen, up from 6.61 billion dozen in 2011, according to USDA.
Cash corn prices finished the week $5.97 per bushel, down from $7 a year ago. July corn closed at $5.84, down 80 cents, while the September contract fell 14 cents to close at $5.26. USDA lowered the world production estimate by 7 million metric tons, mostly due to dry weather in Russia and Eastern Europe. Cash soybean prices closed last week at $14.26 per bushel, up sharply. The July contract closed at $14.35 per bushel. August beans traded at $14.01. The U.S. supply of soybeans is tight and likely will remain so until South American growers bring in a new crop, possibly 10 to 11 months from now.
The USDA predicts that the Class III milk price will average $15.75 to $16.15 per hundredweight this year, a downward revision from the forecast of $15.80 to $16.30 last month. Milk production is up 3.2% year-to-date with a 9.272 million dairy cows as of the April report. The May dairy report will be released June 18. Higher spot cheese prices on the Chicago Mercantile Exchange are a bright spot for the industry. Since May 15, the block cheese price has gone up 11.5 cents a pound, which will eventually have a positive effect on Class III prices.
Cash ethanol prices traded at a $1.99 per gallon last week, down from $2.61 per gallon a year ago, according to USDA. Ethanol was priced at a $1.30 per gallon discount to gasoline.