Tuesday November 22 Ag News

Soybean Demand Boosts State and National Economies
Promar International, a farm, environment and agri-food consulting firm that specializes in research in the global agricultural and agri-food sectors, released its 2010 Economic Analysis of Animal Agriculture, reporting that in 2010 alone, U.S. animal agriculture contributed:
-  1.8 million jobs to the economy;
-  $289 billion to gross domestic product;
-  $51 billion to household incomes;
-  $13 billion income taxes paid; and
-  $6 billion in property taxes paid.

Further, the farmers and ranchers involved in animal agriculture contributed more than five percent of gross state product in 13 states—Alabama, Arkansas, Idaho, Iowa, Kansas, Mississippi, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota and Vermont.

The study—which provides a state-by-state breakdown of animal agriculture economics—identifies animal agriculture’s contributions to output, earnings, employment and taxes.  The study tracked the various shifts in animal production from 2000 to 2010, showing that the increased value of animal agriculture production in those 10 years resulted in a boost of more than $22 billion in total national economic output.

“This growth increased household incomes by almost $4 billion and created nearly 129,000 jobs, which is especially important when you consider that the national economy lost about 1,000,000 jobs over the same period,” said Philip Lobo, Director of Feed Utilization with the United Soybean Board.

Animal agriculture is the largest source of demand for soybean meal (domestic animals consumed 30 million tons in 2010), linking the success of the two industries to one another.  And considering this recent analysis of animal agriculture’s economic contribution, the success of those industries plays a major role in the nation’s overall well being—yet another example of how the health and vibrancy of U.S. agriculture is a driving force to recovery in an otherwise sputtering economy.

The study was funded by the United Soybean Board’s Domestic Marketing Committee. 



Summit on the Proposed Revised 2011 P-Index

A Dec. 5 University of Nebraska-Lincoln Extension Animal Manure Management team workshop will help those who work closely with livestock operations and their nutrient management plans.

The "P-Index Summit" will be at the Nielsen Community Center, 200 Anna Stalp Ave. in West Point, Neb. The program will be from 9 a.m.-3 p.m. Central Time.

Topics include: the science and history of the P-Index, discussion on proposed revisions, case studies illustrating the differences between the 2007 and 2011 versions and discussion of livestock environmental issues of interest. CCA continuing education units will be available.

For more information, contact Leslie Johnson at 402-584-3818, email ljohnson13@unl.edu. Pre-registration is requested and can be done by calling Johnson. Register to ensure an opportunity to attend. Registration is $20 per participant if sent with your registration or $25 at the door. The use of a computer with Microsoft Excel is necessary; please bring your laptop as there will only be a few extra computers. To save time the day of the event, old and new versions can be downloaded at http://go.unl.edu/847. 

These workshops are sponsored by the UNL Extension AMM team which is dedicated to helping livestock and crop producers better use the state's manure resources for agronomic and environmental benefits.

For additional information and other resources for managing manure nutrients, visit http://manure.unl.edu.



Tyson Plans Expansion in Dakota City NE

Tyson Foods packing plant in Dakota City, Nebraska is planning an $8.4 million expansion according to building permit applications filed with the city of Dakota City.

Public records indicate that Tyson sought permission to build an $8 million building and a $400,000 addition to one of the buildings already on the site. Details of the permits reveal that the company is planning a 102,000-square-foot, two-story "harvest floor building." The building would have a 45,030-square-foot main floor and consist of masonry construction with poured concrete walls.

Tyson Spokesman Gary Mickelson says a project is under way, but said the company wasn't releasing many details.  "Because of the size of our Dakota City beef complex, we're frequently involved in various improvement projects," Mickelson said. "There is currently one project under way that is expected to result in some additional jobs in a couple of years, however, for competitive reasons we would rather not provide more details at this point.



Tyson Q4 Earnings Down by Half

Tyson Foods Inc.'s (TSN) fiscal fourth-quarter earnings fell 54% as the meat-processing company saw weakness in its chicken business despite higher prices and volume growth.

Tyson's sales have grown in recent quarters as growing export demand for pork and beef allowed the company to pass through higher prices. But the largest U.S. meatpacker had predicted a fourth-quarter loss for its chicken business due to high grain costs and a glut of chicken. Tyson is cutting its own chicken production amid broader industry reductions and is also streamlining operations as a weak economy dampens consumer demand and as feed costs continue to soar.

For the quarter ended Oct. 1, Tyson reported a profit of $97 million, or 26 cents a share, down from $213 million, or 57 cents, a year earlier. Sales jumped 13% to $8.4 billion.  Gross margin fell to 4.7% from 9%.

Earnings in the beef segment -- the largest top-line contributor -- were down 2.5% as revenue rose 16% on a 19% jump in average prices, but volume fell 2.3%.  The chicken business swung to a loss despite 9.2% revenue growth, and volume rose 3.7% with 5.3% higher prices.  Its smaller pork business's earnings fell 10% as revenue increased 14%. Volume rose 1% and prices jumped 13%.

The company projects full-year sales will exceed $34 billion while analysts surveyed by Thomson Reuters also expect $34 billion.



S.Korea Ratifies Landmark US Trade Deal

South Korea's ruling conservatives rammed a bitterly contested free trade deal with the United States through parliament on Tuesday as legislators scuffled and one opposition MP let off a tear gas device, briefly clearing the chamber.

The deal, which economists say could boost the $67 billion in annual trade between the two countries by as much as a quarter, had been stalled in parliament as the government shied away from forcing it through for fear of violent confrontations in the legislature might further dent its waning popularity ahead of general and presidential elections next year.

The bill was passed with 151 members largely from the ruling Grand National Party (GNP) voting for it and seven against, as most members of the opposition Democratic Party abstained. The two countries had set a Jan. 1 target for the pact to take effect.

Analysts said the bitterness of the dispute could put parliament into a legislative limbo with potential problems for the 2012 budget bill that has a Dec. 2 deadline under the constitution. However, that deadline has often been missed in the past.

Gridlock in parliament has all but paralyzed proceedings in the final weeks of budget deliberations and could leave members fighting into December up to the January fiscal year start.

Though it was the opposition which initiated the FTA deal when it was in power, its legislators argue that subsequent changes to allow U.S. carmakers a major inroad into the market and a dispute settlement mechanism will strip Seoul of any ability to defend its interests.

President Lee Myung-bak made a last ditch effort last week to try to persuade the opposition to let the trade pact come to a vote but liberal parties rejected his plea. His office said after the bill's passage that it was time to get down to work on ensuring the deal leads to more jobs.

The GNP worried that the row over the trade deal would damage its image, already battered after losing key by-elections in April and last month in what were seen as tests of support before elections next year.

The by-election results indicated voters would likely back the liberals at the national level, which would mean a step back from the big-business policies of President Lee and a shift toward more welfare initiatives, analysts said.

The deal was approved by the U.S. Congress last month and signed into law by President Barack Obama, and is the biggest U.S. trade pact since the North America Free Trade Agreement went into force in 1994.



USMEF Media Statement: South Korea Ratifies FTA with U.S.
Danita Rodibaugh, Chairman, U.S. Meat Export Federation

Ratification of the Korea-U.S. Free Trade Agreement by the Korean National Assembly today is a successful outcome both for the U.S. agricultural sector as well as consumers in South Korea.

This is true globalization – the highest level of exchange that countries can experience is when consumers can trade goods and services around the world in a borderless economy.

Korean consumers have endured rampant food inflation, and this trade pact will provide relief. Tariffs on U.S. beef imported by Korea will drop from 40 percent to zero over 15 years, and duties on U.S. pork, which range from 22.5 percent to 25 percent, will be phased out over two years starting Jan. 1, 2014.

For the American producers and exporters, this pact will create expanded opportunities for red meat exports to a market that has a demonstrated appetite for U.S. beef and pork. Already this year (through September), U.S. beef exports to Korea are up 45 percent in volume and 37 percent in value over 2010 levels, reaching 119,044 metric tons (262.4 million pounds) valued at $527.7 million. Even at that, Korea is just beginning to show the potential it demonstrated in 2003 when it purchased 543.6 million pounds of U.S. beef valued at $815 million.

And U.S. pork exports to Korea through September are up 139 percent in volume and 189 percent in value versus last year, reaching 153,330 metric tons (338 million pounds) valued at $395.1 million.

The value of U.S. red meat exports for American producers has never been higher than it is right now. Both beef and pork exports are projected to hit record highs, exceeding $5 billion in value this year. And the per-head value of those exports also is at a high, topping $202 per head for beef and $54 for pork. The invigoration of our trading relationship with South Korea will only add more value to that trade that will benefit the U.S. agricultural sector.



USDA Cold Storage Highlights

Total natural cheese stocks in refrigerated warehouses on October 31, 2011 were down 3 percent from the previous month and down 4 percent from October 31, 2010.  Butter stocks were down 14 percent from last month but up 19 percent from a year ago.

Total frozen poultry supplies on October 31, 2011 were down 7 percent from the previous month and down 4 percent from a year ago. Total stocks of chicken were up 4 percent from the previous month but down 5 percent from last year. Total pounds of turkey in freezers were down 20 percent from last month and down 1 percent from October 31, 2010.

Total frozen fruit stocks were up 17 percent from last month but down 7 percent from a year ago.  Total frozen vegetable stocks were up 4 percent from last month but down 6 percent from a year ago.

Total red meat supplies in freezers were down 2 percent from the previous month but up 1 percent from last year. Total pounds of beef in freezers were down 3 percent from the previous month and down slightly from last year. Frozen pork supplies were down slightly from the previous month but up 2 percent from last year. Stocks of pork bellies were down 7 percent from last month and down 63 percent from last year.



Ag Economist:  Pork to See Profit in 2012
The pork industry is expected to have a profitable year in 2012. In fact, the level of profitability could be the most favorable during the high-priced feed era, says Chris Hurt, a Purdue University agricultural economist.

"Profits in 2012 are currently forecast to be near $17 per head, which would be the highest since 2006. That was the last year of the low feed-price era when corn prices received by farmers averaged about $2.30 per bu. for the calendar year and estimated hog profits were $27 per head," he says.

Although a return to profitability is welcome news, there are deeper and more important implications, he says.

"The first is that the pork industry, like most other animal industries, has made the adjustments necessary to live in a world of high-priced feed. The second is that the pork industry probably has turned the corner on high feed prices as we look to 2012 with abundant and cheap feed wheat, prospects for moderation in the rate of growth in corn use for ethanol, the potential for a larger South American soybean crop, and hope for a return to higher U.S. corn and soybean yields," he says.

The pork industry had a difficult road making the transition to the high feed-price era, as did all animal industries. High feed prices and recession in 2008 and 2009 and H1N1, unfortunately termed swine flu, led to large losses in 2008 and 2009, estimated at $17 and $24 per head, respectively, he says.

"These large financial losses resulted in some downsizing of the industry through discouragement and bankruptcy. As a result of downsizing and robust pork buying from foreign countries, the amount of pork available to U.S. consumers will drop from about 51 lb. per capita in 2007 to around 46 lb. in 2012. This 9% reduction of per capita supply has enabled retail pork prices to rise from $2.87 a lb. in 2007 to $3.43 a lb. in 2011, a 20% increase," he notes.

The large loss years of 2008 and 2009 ($17 and $24 per head) will finally be offset by the profitable years of 2010, 2011 and 2012 ($14, $10 and $17 per head). Hog producers would say this in a different way: It has taken three years just to get back the money lost in the two bad years when feed prices surged, he says.

"Another way to look at this is to say that the pork industry has adjusted to $7-a-bu. corn such that they can break even if cash corn prices stay at that level and make money if prices are below $7. The current prospect for cash corn prices to be in the lower $6.00 area is a primary reason for the profit opportunity in 2012," he says.

Are feed prices now moving into their post-peak period? No one can know the answer with much confidence, but the declining prices of corn and soybean meal since August will have many debating that issue. There clearly are fundamental reasons to believe that could be the case, as we have just itemized, he says.



Brazilian Soy Planting Moves Forward

Brazilian soybean planting continues to run ahead of schedule across the majority of the grain belt.  Farmers had sowed 78% of their crop up to Nov. 18, up from 66% last week and ten percentage points ahead of the average for this time of year, according to local agricultural consultancy Safras e Mercado.  Planting is almost complete in the key soybean states of Mato Grosso -- 95% planted -- and Parana -- 93% planted.  Out of the major states, only the perennial late starters Rio Grande do Sul -- 57% planted- and Bahia -- 40% planted -- have significant portions of the crop still to be sowed.  Rain fell across most of the soybean producing areas last week, creating excellent planting conditions and helping to relieve drought concerns in southern Mato Grosso, Goias , Mato Grosso do Sul and Minas Gerais.



Fertilizer Prices Continue Unmoved

Fertilizer prices tracked by DTN continued to change very little during the third week of November 2011.  Five of the eight major fertilizers were higher compared to one month earlier, but none of the fertilizers rose any significant amount. DAP had an average price of $714/ton, 10-34-0 $823/ton, anhydrous $819/ton, UAN28 $408/ton and UAN32 $462/ton.  Two fertilizers were slightly lower compared to the third week of October. MAP had an average price of $742/ton and urea $619/ton.  One fertilizer, potash, was nearly identical compared to one month earlier with an average price of $661/ton.

Six of the eight major fertilizers continue to show double-digit increases in price compared to one year earlier. Leading the way higher is 10-34-0. Prices for this starter fertilizer skyrocketed early this year, but have fallen back some in recent months. It is now 55% higher compared to the third week of November 2010.  Urea has jumped 31% while potash has increased 25% from a year ago and UAN32 21%. UAN28 is now 19% higher and anhydrous 16% compared to year earlier.  The two phosphorus fertilizers continue to bring up the rear. MAP is 8% more expensive while DAP is 7% higher compared to November of 2010.



Delegates Create, Revise More than 50 Policies During 145th Annual National Grange Convention  

More than 50 delegates debated and weighed in on about 160 resolutions from Granges throughout the nation during the 145th Annual National Grange Convention held in Tulsa, Oklahoma.

Of the initial resolutions submitted ranging from internal definitions for membership to large-scale agriculture and rural access issues, more than 50 became National Grange policy through delegate action from Nov. 6 through 10.

Dairy pricing, postal reform and expansion of rural broadband were just three areas in which new policy was adopted.

During the legislating process the delegates worked intensely on updating National Grange policy on several controversial issues such as U.S. Postal Service Reform, the build-out of broadband in rural areas and dairy pricing issues whose regional diversities can prove difficult to reach consensus on.

As the U.S. Postal Service continues to press for Congressional action on needed reforms, National Grange delegates reinforced their support for six-day mail delivery but committed to actively supporting necessary reforms and business model flexibility to preserve the 200-year-old agency that is so vital to rural Americans.

Grange delegates also collaborated to produce a state-of-the-art policy supporting America's Broadband Connectivity Plan and a new funding mechanism that will help provide the universal service of high-speed internet to all Americans regardless of where they chose to live.

National Grange President Ed Luttrell said the convention was successful, both in terms of policy creation and fraternal spirit.

"The members of our Order were able to come together and express their views on issues important to themselves and their neighbors in a very poignant manner, work with each other to create policy for which we'll advocate on the national level, and do so with a mutual respect and in a dignified manner," Luttrell said.

National Grange Legislative Director Nicole Palya Wood said the actions of the delegates reflects a true focus on the betterment of rural America and quality of life for those in the field of agriculture.

"I am incredibly proud of the diligence of our members to address controversial and regional issues in such a cohesive manor. Congress could learn something from National Grange delegates and how we establish policy on such a wide ranges of issues," Wood said. "This year we have seen some great movement in the areas of rural broadband build-out, and the preservation of the U.S. Postal Service remains a top priority for the Grange."



October Egg Production Up 1 Percent

United States egg production totaled 7.78 billion during October 2011, up 1 percent from last year. Production included 6.74 billion table eggs, and 1.04 billion hatching eggs, of which 968 million were broiler-type and 70 million were egg-type. The total number of layers during October 2011 averaged 336 million, down slightly from last year. October egg production per 100 layers was 2,317 eggs, up 1 percent from October 2010.
                                   
All layers in the United States on November 1, 2011 totaled 337 million, down slightly from last year. The 337 million layers consisted of 283 million layers producing table or market type eggs, 50.2 million layers producing broiler-type hatching eggs, and 2.94 million layers producing egg-type hatching eggs. Rate of lay per day on November 1, 2011, averaged 74.7 eggs per 100 layers, up 1 percent from November 1, 2010.

Egg-Type Chicks Hatched Down 8 Percent
Egg-type chicks hatched during October 2011 totaled 37.8 million, down 8 percent from October 2010. Eggs in incubators totaled 38.3 million on November 1, 2011, down slightly from a year ago.  Domestic placements of egg-type pullet chicks for future hatchery supply flocks by leading breeders totaled 266 thousand during October 2011, up 56 percent from October 2010.

Broiler-Type Chicks Hatched Down 7 Percent
Broiler-type chicks hatched during October 2011 totaled 717 million, down 7 percent from October 2010. Eggs in incubators totaled 575 million on November 1, 2011, down 7 percent from a year earlier.  Leading breeders placed 6.29 million broiler-type pullet chicks for future domestic hatchery supply flocks during October 2011, down 9 percent from October 2010.



Sugar Growers Accuse Corn Refiners of False Advertising

Sugar cane and sugar beet growers have filed an amended complaint in federal court charging that corporate members of the Corn Refiners Association (CRA) -- makers of High Fructose Corn Syrup (HFCS) -- are behind a "conspiracy" deliberately designed to "deceive the public."

Specifically, the amended complaint, filed late Friday in U.S. District Court in Los Angeles, alleges that senior executives of agribusiness conglomerates, including Archer-Daniels-Midland, Cargill and others "organize[d] collectively in order to dominate and ... control" the ongoing marketing campaign to rename HFCS as "corn sugar." Their national advertising campaign also claims that HFCS is a "natural" product equivalent to real sugar from cane and beet plants. The sugar farmers argue that those claims are untrue.

Last month, a federal judge in Los Angeles ruled that a coalition of American sugar farmers and producers had provided sufficient evidence about the HFCS advertising campaign by the CRA to demonstrate "a reasonable probability of success" in proving that its key claims are false.

The amended complaint charges that the CRA member companies, under the guise of the CRA, provided "the funding that has been required to orchestrate and maintain this significant, broad-based, national media, multi-million dollar advertising campaign."

The lawsuit argues the CRA and several of its members, including Archer-Daniels-Midland, Cargill, Corn Products International, Roquette America and Tate & Lyle Ingredients America, conspired to engage in false advertising as part of their campaign.

The sugar farmers allege that the defendants have spent at least $50 million in a mass media rebranding campaign that misleads the consuming public by asserting falsely that HFCS is natural and is indistinguishable from the sugar extracted from sugar cane and sugar beets.

The HFCS manufacturers, through the CRA, have also asked the Food & Drug Administration to allow HFCS to be called "corn sugar" on food and beverage ingredient labels. That request was made last fall even though "corn sugar" has for many decades been the FDA-approved, commonly used name for dextrose, a distinct corn starch product that contains no fructose.

A recent consumer survey commissioned by the sugar farmers shows that changing the name of HFCS to "corn sugar" would further confuse consumers and interfere with their attempts to avoid HFCS when shopping for themselves and their families. Increasingly, consumers have sought to avoid products containing HFCS because of a wide range of health concerns.

"Let's be clear about what is at stake here. This litigation is about false advertising funded by CRA's biggest members," said Adam Fox of Squire Sanders, lead attorney for the sugar growers. "Sugar cane and beet farmers want the defendants to stop their false and misleading statements that harm consumers, harm the makers of real sugar and harm any dialogue based on the truth. This lawsuit seeks to put an end to the intentional deception."



Sugar Lawyers Refile Claims Already Rejected By Court

In another legal maneuver, the sugar industry is attempting to revive claims against member companies of the Corn Refiners Association (CRA) that a federal judge recently dismissed.

"The simple truth is that the sugar industry is attempting to use the courts to stifle free speech but it lacks the facts to support its claims against our member companies. The court made that fact clear in its last ruling, and we continue to believe these claims against the companies should be dismissed," says Audrae Erickson, president of the Corn Refiners Association, CRA. "The more important issue, as the court has recognized, is that of health effects, and we believe the sugar industry is wrongfully alleging that high fructose corn syrup (a sugar made from corn) causes health issues that do not arise from consuming cane and beet sugar."

"We believe that the sugar industry's views are misleading American consumers," Erickson says. "The CRA will continue its work to educate consumers about high fructose corn syrup and will vigorously oppose the sugar industry's attempt to stifle public discussion of this important health issue."