Friday December 23 Ag News

NEBRASKA HOG INVENTORY UNCHANGED

Nebraska inventory of all hogs and pigs on  December 1, 2011, was 3.15 million head, according to the USDA’s National Agricultural Statistics Service, Nebraska Field Office.  This was unchanged from December 1, 2010, but down 3 percent from September 1, 2011.  Breeding hog inventory, at 385,000 head, was up 3 percent from December 1, 2010, and up 1 percent from last quarter.  Market hog inventory, at 2.77 million head, was down slightly from last year and down 4 percent from last quarter.   The September-November 2011 Nebraska pig crop, at 1.87 million head, was up 3 percent from 2010.  Sows farrowing during the period totaled 180,000 head, unchanged from last year.   Nebraska hog producers intend to farrow 180,000 sows during the December 2011-February 2012 quarter, up 3 percent from the actual farrowings during the same period a year ago.  Intended farrowings for March-May2012 are 185,000 sows, unchanged from the actual farrowings during the same period the previous year.  

IOWA
Iowa inventory of all hogs & pigs on December 1 was 19.8 million, according to the Quarterly Hogs and Pigs report  released  by  USDA,  National  Agricultural  Statistics  Service.  This  was  down  1 percent  from  the 20.0 million in September 2011, but up 700,000 head from December 2010.  The September-November  2011  pig  crop was  4.99 million  head.   A  total  of  480,000 sows  farrowed with  an average litter size of 10.4 pigs per sow.   As  of  December  1,  producers  planned  to  farrow  475,000 head  of  sows  and  gilts  in  the  December  2011  – February 2012 quarter. Farrowing intentions for the March - May 2012 period were estimated at 480,000 as of December 1, 2011. 

US Hog Inventory up 2 Percent
United States inventory of all hogs and pigs on December 1, 2011 was 65.9 million head. This was up 2 percent from December 1, 2010, but down 1 percent from September 1, 2011.  Breeding inventory, at 5.80 million head, was up slightly from last year, but down slightly from the previous quarter. Market hog inventory, at 60.1 million head, was up 2 percent from last year, but down 1 percent from last quarter.

The September-November 2011 pig crop, at 29.0 million head, was up 2 percent from 2010. Sows farrowing during this period totaled 2.89 million head, up slightly from 2010. The sows farrowed during this quarter represented 50 percent of the breeding herd. The average pigs saved per litter was a record high 10.02 for the September-November period, compared to 9.89 last year. Pigs saved per litter by size of operation ranged from 7.40 for operations with 1-99 hogs and pigs to 10.10 for operations with more than 5,000 hogs and pigs.

United States hog producers intend to have 2.87 million sows farrow during the December 2011-February 2012 quarter, up 1 percent from the actual farrowings during the same period in 2011, but down slightly from 2010. Intended farrowings for March-May 2012, at 2.89 million sows, are down 1 percent from 2011, and down 1 percent from 2010.

The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 45 percent of the total United States hog inventory, unchanged from last year.



Former E3 Biofuels Plant Set to Reopen this Spring under New Ownership

A closed-loop, Nebraska biofuel plant touted as the first of its kind before shuttering in the wake of bankruptcy appears to be getting a new life. The former E3 plant was constructed next to a 30,000-head cattle feedlot near Mead, NE, and was designed to produce ethanol. The plant would be powered by an anaerobic digester converting methane drawn off the feedlot, while also producing dried distillers grain for cattle feed.

The idea for the $25 million venture was to feed the grain byproducts from ethanol production to 30,000 cattle in an adjoining feedlot, and then to use their manure and methane digesters as an energy source to operate the plant.

The plant was hailed in 2006 by then-EPA Administrator Stephen Johnson as a model for future sustainable energy production in the agriculture sector. But a boiler explosion, fluctuating corn prices and some technology issues forced the E3 Biofuels into bankruptcy. Kansas City-based Spectrum Business Ventures, operating as AltEn Opportunities I, purchased the plant at auction last year and announced plans to reopen the facility. Spectrum officials say construction is expected to be finished and production underway by the end of this coming spring.

The plant, which is designed to produce 25 million gallons per year, could employ as many as 75 people. Company officials say the technology planned for the plant has yet to be used elsewhere, setting the facility up still as the first of its kind.



NBB hosts farmers for New York City Bioheat tour

Farmer-leaders from throughout the country descended on New York City to see the bourgeoning Bioheat industry in action. The National Biodiesel Board hosted about 20 farmers Dec. 11-13 on a biodiesel and Bioheat tour of New York City.

"New York City is a major energy center," said Tom Verry, director of development for the National Biodiesel Board. "High volumes of biodiesel are used here too, which makes it the perfect place to show soybean farmers how their long-term vision for biodiesel and Bioheat has become a reality."

The group toured CME Group, the world's leading and most diverse derivatives marketplace, where energy is bought and sold. An educational session there on the Bioheat market includes speakers such as John Maniscalco, president of the New York Oil Heating Association; and New York City Councilman James Gennaro.

Starting in October of next year, all heating oil sold within New York City will contain at least 2 percent biodiesel.

The group also toured Central Park and JFK International Airport, getting an up-close look at the biodiesel facilities of New York City Department of Parks & Recreation and the Port Authority of New York and New Jersey. Both use biodiesel blends in their diesel vehicles, as does the Department of Sanitation. Steven Levy of Sprague Energy, a leading biodiesel supplier in the area, says those three agencies use about 11 million gallons of biodiesel blends a year, ranging from 5 to 50 percent biodiesel.

"It's exciting for us to see the passion in New York City among biodiesel's many champions," said Greg Anderson, a soybean farmer in Newman Grove, Neb., taking the tour for the second time. "New York City represents more than just another market for biodiesel. It's a strategic partner in furthering biodiesel acceptance in the Northeast, and nationwide. Our champions here want to leverage their position as energy leaders to promote biodiesel growth. That's a powerful partnership."

The farmers also visited the facilities of Metro Energy, one of the largest petroleum distributors in New York City and the Northeast. In 2009 the company sold 10 million gallons of biodiesel to be used as Bioheat in New York City alone. Metro is building a 110 million gallon biodiesel production facility in Brooklyn.

"The biodiesel and Bioheat industries would not be where they are today without the support of farmers, the United Soybean Board, and the soybean checkoff in developing this fuel," said Paul Nazzaro, who runs the Bioheat program for the National Biodiesel Board. "It's a pleasure to show them how their vision has materialized into reality."



Pipeline More Uncertain Than Ever

The payroll tax bill passed by U.S. Congress contains a provision forcing President Barack Obama to speed his decision on the Keystone XL oil pipeline, but his approval is far from certain.

The bill, which passed on Friday, said Obama must grant a permit for TransCanada Corp's Canada to Texas pipeline in 60 days, unless he determines the line does not serve the national interest.

"The project now faces further uncertainty following its entanglement in Congressional maneuvering around the payroll tax extension legislation," Robert Johnston, a director for energy and natural resources at the Eurasia Group, said in a research note.

Obama bowed to huge pressure from environmentalists, who staged high-profile protests to stop the pipeline that would deliver oil sands crude from the boreal forests of Alberta to refineries in Texas.

In November the State Department, which has the power to give the project a final permit because it would cross the state border, announced it would delay its decision until after next year's presidential election.

Environmentalists oppose the project for the carbon emissions that come from processing oil sands. But the line also faced stiff opposition in Nebraska because of concerns a pipeline spill would contaminate a huge aquifer that serves millions or spoil its fragile Sandhills region.

Despite the language in the bill, Obama still has the ability to delay the project. He could reject it based on the national interest argument or he could give it a thumbs up but delay it by awaiting a route study.

If Obama decides the pipeline is not in the national interest, "it would effectively be the end of the project," said Johnston, although TransCanada would likely still move forward with a smaller leg of the pipeline from the Cushing, Oklahoma oil hub to Texas.

But even if Obama approves it within 60 days, he could do so conditionally by declaring the project is in the national interest, but contingent on the completion of the State Department's study on alternative routes through Nebraska.

The State Department delayed its decision because it said it needed to do additional analysis on the line's routes in Nebraska, to avoid environmental damage.

That decision came a day after some 10,000 environmentalists and other opponents of Keystone circled the White House in protest of the pipeline.

White House officials have also said the congressional maneuvering does not help the project. Dan Pfeiffer, a White House communications director, tweeted before the Senate passed its version of the payroll tax bill last week: "How will (Republicans) explain to their members that the bill doesn't force the President to approve Keystone, it essentially kills it?"

Daniel Weiss, of the Center for American Progress, said last week that even if Obama approves the line, it would not survive the court process, as U.S. law clearly states that environmental impact statements have to be fully completed before the government can determine whether a project is in the national interest.

If Obama kills the project, Republicans would likely try to use that against him in the campaign, particularly if oil prices rise next summer, and as the jobless rate remains stubbornly high.

Supporters say the pipeline would create 20,000 jobs, but the State Department has said the number is closer to 7,000.



November Pork Production at Record High

Commercial red meat production for the United States totaled 4.26 billion pounds in November, down 2 percent from the 4.33 billion pounds produced in November 2010.

Beef production, at 2.15 billion pounds, was 4 percent below the previous year. Cattle slaughter totaled 2.79 million head, down 3 percent from November 2010. The average live weight was down 6 pounds from the previous year, at 1,293 pounds.

Veal production totaled 10.8 million pounds, 5 percent below November a year ago. Calf slaughter totaled 73,000 head, up slightly from November 2010. The average live weight was down 14 pounds from last year, at 255 pounds.

Pork production totaled 2.09 billion pounds, up 1 percent from the previous year. Hog slaughter totaled 10.04 million head, up 1 percent from November 2010. The average live weight was unchanged from the previous year, at 278 pounds.

Lamb and mutton production, at 12.6 million pounds, was down 12 percent from November 2010. Sheep slaughter totaled 186,700 head, 15 percent below last year. The average live weight was 135 pounds, up 4 pounds from November a year ago.

January to November 2011 commercial red meat production was 45.0 billion pounds, up 1 percent from 2010. Accumulated beef production was up slightly from last year, veal was down 3 percent, pork was up 2 percent from last year, and lamb and mutton production was down 9 percent.

State Production (million pounds, % of Nov, 2010)
Iowa ..................:  604.5,  102%      
Nebraska ...........:  612.5,  97%      
South Dakota .....:  101.0,  102%      



Feedlot Forum 2012 Features Old and New

The cattle industry will soon begin a new year, but much of 2011 — high feed costs, a smaller calf crop and a slow economy — will linger. These and new factors affecting profitability will be the focus of Feedlot Forum 2012 on Jan. 17 in Sioux Center, according to Beth Doran, Iowa State University (ISU) Extension and Outreach beef program specialist.

“The forum begins with Bill Davis as he presents a broad overview of the agricultural financial climate and discusses the outlook for agricultural lending and availability of ag credit for operating and expansion,” Doran said. Davis is senior vice president and chief credit officer for Farm Credit Services of America at Omaha, Neb.

Record corn futures prices of $7.99¾ in June, coupled with severe drought in the south, have elevated the prices for all feedstuffs, Doran said.

Dan Loy, Iowa Beef Center (IBC) interim director and ISU Extension feedlot specialist, will talk about low-cost feed approaches feedlot operators can implement to enhance profitability.

“Extension ag engineers Shawn Shouse and Kris Kohl will team up to present 'Handling and Land Applying Feedlot Runoff,’” Doran said. “Shawn will cover best management practices to maximize the nutrient value of manure and protect the environment, and Kris will focus on a new, low-cost method of pumping manure.”

Cattle Fax market analyst and grain expert Chad Spearman will present trends and expectations for the cattle and beef markets, including a snapshot of what has happened and what the future holds for beef producers. The 2012 Feedlot Forum also features a trade show with new product displays from more than a dozen ag businesses, and will include the District One meeting of the Iowa Cattlemen’s Association. During the meeting, CEO Matt Deppe will share his vision for the organization and address membership questions.

A forum flyer with registration form is available on the IBC website. Registration is $25 per person which includes the noon meal and a beef certificate, and is due Jan. 12 at the Sioux County Office. For more information, contact Doran at 712-737-4230 or e-mail doranb@iastate.edu.



USDA Lowers Food Inflation Outlook

The U.S. government lowered its 2011 food-inflation estimate Friday on lower-than-expected price increases at restaurants, but said customers eating at home continue to see steep price increases for meat, eggs and dairy products.

The price of all food for 2011 will be up 3.25% to 3.75%, the U.S. Department of Agriculture said, down from a November forecast of 3.5% to 4.5%. The downward revision is due to a cut in the food-away-from-home inflation forecast, which the USDA projected at 2% to 2.5%, down from a November forecast of 3% to 4%.

The forecast demonstrates that consumers, struggling with high food prices in a sluggish economy, have increasingly opted to eat at home instead of going out, said Ricky Volpe, a research economist with the USDA.

The USDA narrowed its food-at-home inflation forecast to 4.25% to 4.75%, versus 4% to 5% the prior month.

"Food-at-home has easily outpaced food-away-from-home all year," Volpe said.

Food costs broadly have been driven up by high prices for fuel and agricultural commodities. Those higher prices are a bigger factor for grocery stores than restaurants, Volpe said, as restaurant prices are also driven to a larger degree by other factors such as labor costs and advertising.

The government's forecasts don't show that meals at home are more expensive than restaurant meals, only that the price of a meal at home is rising more quickly.

The government continued to raise inflation estimates for many dinner-table staples. Meat, fish and poultry prices are estimated to increase 7% to 7.5% in 2011 versus a year ago, up from a prior-month forecast of 5.5% to 6.5%. Beef prices are projected up 9.5% to 10%.

The government also sharply increased the inflation estimate for eggs. It estimates 2011 egg prices will be up 8.25% to 8.75%, compared with a November forecast of a 5% to 6% rise.

Fats and oils prices are estimated to jump 8.5% to 9% from a year ago, up from the November forecast of 6.5% to 7.5%.

The only category for 2011 the USDA lowered was cereals and bakery products. It projected those prices would be up 3.5% to 4%, down from last month's forecast of 4% to 5%.

The government reiterated Friday it expects food inflation to cool in 2012. It projects prices for all food to climb 2.5% to 3.5% next year, and food at home to increase 3% to 4%.



Soyoil Accounting for Large % of Crush Value
DTN Contributing Analyst Joel Karlin

The value of soybean meal has reached a very low point historically in comparison with corn.  Also, soybean meal has also reached a historically low point versus soybean oil.  In recent weeks, soybean oil has accounted for almost half the crush value, compared with the average 38.1%.  Reasons for the relative strength in soybean oil as opposed to soybean meal include the sharp reduction in the intensive protein meal consuming poultry sector in recent months, poor crush margins, and the surge in crude oil to more than $100 per barrel, which has allowed soybean oil to tag along.



Lawmaker: Don't Move Agro-Defense Lab

A New York congressman wants to take the "For Sale" sign off Plum Island.  In a letter this week, Rep. Timothy Bishop argues it is ludicrous for the federal government to be spending as much as $1 billion to construct a new laboratory in Manhattan, Kan., to study animal diseases that could devastate the country's livestock industry when a "perfectly good" facility already exists off the tip of eastern Long Island.

The Long Island Democrat, who previously has criticized the Department of Homeland Security's relocation plan, notes in a letter to the Office of Management and Budget that the National Academy of Sciences is again studying the suitability of placing a new lab in the so-called Beef Belt. He adds that plans to sell the New York island -- made famous in a 1997 Nelson DeMille best-selling book of the same name, and its mention as a possible home for Hannibal Lecter in the film "Silence of the Lambs" -- to finance the move to Kansas are more than 18 months behind schedule.

"Let's just say this was a bad idea and move on," Bishop told The Associated Press.

Kansas officials, who recently authorized $45.4 million in bonds for the next phase of construction on the $650 million National Bio and Agro-Defense Facility, counter that there is no reason to turn back.

"Plum Island is not the long-term solution that our country needs to protect our food supply," Gov. Sam Brownback said. "Building the National Bio and Agro Defense Facility is integral not only to the security of our nation's food supply but also to our capacity to respond to acts of terror directed against the American people."

The Department of Homeland Security, which was formed after the Sept. 11, 2001, terrorist attacks, took responsibility for the research laboratory at Plum Island in 2003. Scientists there study highly dangerous and contagious pathogens that could wipe out the nation's cattle or hog populations if they were released. The site was chosen in the 1950s because it was located off the mainland of the United States.

Homeland Security officials determined several years ago that the aging facility may not be suitable for continued research and studied several sites around the country, settling on Manhattan, Kan. That lab is not supposed to open until at least 2018, so DHS officials in the interim have spent $35 million on security and other enhancements at Plum Island in recent years.

Although Plum Island was considered as a possible site for the new lab, officials ruled it out after Bishop and others opposed plans to upgrade the laboratory to a Bioscience Level-4 facility, which means it could also study diseases dangerous to humans. The Kansas site will be a Level-4 facility, while Plum Island, which is not expected to close until at least 2018, remains at Level-3.

"Simply upgrading the outdated Cold War-era Plum Island Animal Disease Center is not an option for many reasons, among them that the local community, led by Rep. Bishop, sought and received a commitment from DHS in 2003 not to build a BSL-4 lab on Plum Island," said Rep. Lynn Jenkins, R-Kan. "His latest argument that he is opposed to building NBAF in order to save money is a faulty, disturbing, and transparent argument."

Bishop counters there are existing Level-4 facilities at Fort Detrick, Md., and elsewhere, that could handle the research on human diseases envisioned for Kansas. He argues that in hard economic times, moving research to Kansas is unnecessary.

"One of the things I've been elected to do is protect the needs and interests of my own district and there are 200 jobs at this facility," Bishop said. "I would also suggest that Kansas' interest is no more enlightened than my interest. If they're going to accuse me of playing parochial politics, I could easily level the same accusation against them. From a fiscal point of view, given the difficulty we had, this is a facility we don't need.

"So am I trying to protect local jobs? You're damn right I am. But do I also believe there are significant, larger national interests at play here, absolutely."

Sen. Tom Harkin, D-Iowa, a member of the appropriations and agriculture committees, also opposes the move to Kansas. The appropriations committee is holding up $50 million in funding for the Kansas laboratory in next year's budget pending the outcome of a National Academy of Science study on the feasibility of placing the lab in the nation's heartland. A previous study identified a 70 percent chance that a release of foot-and-mouth disease could occur at the new facility during its projected 50-year lifespan. Damages to the livestock industry could total as much as $50 billion if a release were to occur, officials have said.

The academy is again studying the feasibility of placing the lab in Kansas; a report is due next summer.

Meanwhile, the General Services Administration had originally promised a draft environmental impact statement on the proposed sale of Plum Island in the summer of 2010, with public hearings to follow. The report was delayed in part because officials were obtaining additional information on the 840-acre pork-chop shaped island from the U.S. Fish and Wildlife Service and others. The draft is now expected in January or February.

Bishop also derides notions that any sale of Plum Island will offset the costs of moving to Kansas. One eastern Long Island real estate expert has estimated that the island could fetch as much as $50 million, far less than the estimated $650 million for the new laboratory.

"Sheer fantasy," Bishop said of the idea that the Plum Island sale would cover the cost of the new lab. He adds that the estimates don't include the cost of possible environmental remediation at the island, where secret Cold War-era chemical warfare testing is believed to have taken place. "You would have to do at least $80 million to $100 million worth of environmental cleanup, so there's no way the numbers add up at all," Bishop said.