Editor's note: The Agribusiness Weekly Update, compiled from various sources by The CityWire staff, is presented each week. Sources include the U.S. Department of Agriculture, Hedgers Edge, Arkansas Farm Bureau , Darrell Peel with Okla. State University and Wall Street Journal.
U.S. beef packer margins last week averaged $27 per head, improving to $47.80 by Tuesday (Aug.21 ), according to Hedgers Edge. Beef and cattle markets have recovered significantly from lows about a month ago, according to OSU beef analyst, Derrell Peel. He reports demand improvement is reflected in higher (Choice) boxed beef price, up over $12 per hundredweight in the past two weeks. Feeder cattle prices are also higher with the biggest improvement in lightweight feeders, up about $10 per hundredweight from the lows one month ago. Beef cow slaughter in the last four weeks is averaging 13.4% below the same period last year. However, last year was up over 20% from the year before, according to USDA.
Hogs & Pork
Fresh pork processing margins were a $4.85 per head last week, according to Hedgers Edge. Margins rose to $8 by Tuesday (Aug.21). The short-term trend in the cash hog market looks to remain down over the near-term and the seasonal increase in slaughter into the fall could be magnified by the increased flow of gilts and sows moving to the market. However, the market has already priced-in a large drop in the cash market into October, and this could help limit the downside in the market until the cash market catches up.
Chicken processors are seeing negative margins as corn and soybean meal prices remain high. Processors continue to shave back production levels from a year ago. In July breeders placed 6.07 million broiler chicks for meat production, down 6.07% from the same month in 2011, according to USDA report Aug. 21. Wholesale boneless breast prices are averaging $1.70 per pound this week, up 9.67% from the same week in 2011. Wholesale chicken prices have risen 7.04% from a year ago, according to Georgia Dock pricing on Aug. 20..
Large egg prices ranged from $1.26 to $1.30 last week, down 16 cents from last year. Table egg inventory rose 9% from a year ago with 1.167 million (30 dozen cases) processed, according to the USDA report from Aug. 20.
Cash corn prices traded Tuesday (Aug. 21) at $8.29 per bushel, rising 12.7% from a year ago. The September corn futures closed at $8.31 per bushel, corn for December delivery traded at $8.39, according to the Arkansas Farm Bureau. Corn was higher again today, with solid gains carrying the December within a dime of the recent contract high. The current crop tour is generally finding corn yield is below current projections. EPA says there will be a 30-day comment period on the the waiver of the Renewable Fuels Standard Mandate. The agency will have until Nov. 13 to make a decision, according to Arkansas Farm Bureau analysts.
Cash soybean prices closed Tuesday (Aug. 21) at $17.35 per bushel, up from $13.73 a year ago. The September contract traded at $17.53, up 49 cents while November beans closed at $17.32 up 49 cents. Soybeans moved sharply higher on technical buying and strong fundamentals. On the fundamental side crop tour results are mixed, but tend to suggest lower than projected yields. At the same time cheaper freight rates and strong Chinese demand suggest price is still not high enough to ration a short supply, according to analysts with Arkansas Farm Bureau.
Milk production in the 23 major states during July totaled 15.5 billion pounds, up 0.8% from 2011. June revised production at 15.5 billion pounds, was up 1.1% from 2011. The June revision represented an increase of 2 million pounds or less than 0.1% from last month's preliminary production estimate. Production per cow in the 23 major states averaged 1,826 pounds for July, 6 pounds above July 2011. The number of milk cows on farms in the 23 major states was 8.50 million head, 41,000 head more than July 2011, but 7,000 head less than June 2012, according to USDA Dairy production report Aug, 17.
Cash ethanol prices traded at a $2.53 per gallon last week, down from $2.77 per gallon a year ago, according to USDA. Ethanol was priced at a $1.12 per gallon discount to gasoline as of Aug. 21.