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, Arkansas Farm Bureau and Wall Street Journal.
U.S. beef packer margins were negative $15 per head last week, improving to a positive $12 by Tuesday (Aug.14), on higher beef cutout prices, according to Hedgers Edge. The USDA expects beef production to fall 3.9% in 2013 to 24.671 billion lbs. The next USDA cattle on feed report will be released Friday, Aug. 17. Retail beef prices have risen more than 10% from a year ago.
Hogs & Pork
Fresh pork processing margins were a $1.60 per head last week, according to Hedgers Edge. Margins rose to $7 head by Tuesday (Aug.14). Hogs are cheaper for processors as farmers are moving them to market earlier because of the drought. The USDA expects pork production to be 22.96 billion pounds in 2013, down 1.2% from this year. Retail pork prices rose 5.8% in the first half 2012, from a year ago.
Chicken processors are seeing negative margins as corn and soybean meal prices continue to escalate. Processors continue to shave back production levels averaging 4% below a year ago. USDA expects production in 2013 will decrease another 1.3%. Exports are also expected to fall 1.8% in 2013 on softer overall demand. Wholesale boneless breast prices are averaging $1.64 per pound this week, up 3.2% from last week. Wholesale chicken prices have risen 8.69% in the past year, according to Georgia Dock pricing on Aug. 14.
Large Southeast egg prices ranged from $1.49 to $1.53 last week, up 15 cents from last year. Table egg inventory rose 9% from a year ago with 1.094 million (30 dozen cases) processed, according to the USDA report from Aug. 14.
Cash corn prices traded Tuesday (Aug. 14) at $7.91 per bushel, rising 9.8% from a year ago. The September corn futures closed at $7.79, corn for December delivery traded at $7.89, according to the Arkansas Farm Bureau. Corn traded a little lower this week as the market continues to slip following last week’s report. Yield reports appear to still be working lower as many indicate harvest was less than expected, according to Arkansas Farm Bureau analysts.
Cash soybean prices closed Tuesday (Aug. 14) at $16.48 per bushel, up from $13.38 a year ago. The August contract traded at $16.80, up 23 cents while November beans closed at $15.98, up 11 cents. Soybeans posted modest losses this week. November beans are down almost a dollar over the last week. Soybeans closed mixed as the market attempted to reverse Monday’s big gains. Soybean use continues strong as indicated by the July crush number which was 137.4 million bushels and was higher than the high end of projections. This kept the August contract firm as it nears expiration. November futures dipped below $16 but rallied to close just below that level. A close above last week’s high of $16.68 would signal another leg higher, while a close below $15.50 would be negative, according to analysts with the Arkansas Farm Bureau.
The Class II milk price was $14.51 per hundredweight for the month of July, up 19 cents from the previous month. Class III price rose $1.05 to $16.68 per hundredweight. Class IV price in July was $14.45 per hundredweight, up $1.21 from the previous month, according to USDA. In the past year all three classes of milk have seen a wholesale price decline by an average of 10%.
Cash ethanol prices traded at a $2.47 per gallon last week, down from $2.65 per gallon a year ago, according to USDA. Ethanol was priced at a $1.11 per gallon discount to gasoline as of Aug. 14.