Friday May 18 Cattle on Feed plus Ag News

NEBRASKA CATTLE ON FEED UP 4 PERCENT

Nebraska feedlots, with capacities of 1,000 or more head, contained 2.46 million cattle on feed on May 1, according to the USDA’s National Agricultural Statistics Service, Nebraska Field Office.  The inventory was up 4 percent from last year.  This is the highest May inventory since the data series began in 1994.    Placements in feedlots during April totaled 370,000 head, equal to last year and the highest April placements since the data series began in 1994.    Marketings of fed cattle during April totaled 420,000 head, up 14 percent from last year.  Other disappearance during April totaled 20,000 head, compared to 10,000 head in 2011.

Iowa:
Cattle and calves on feed for slaughter market in Iowa for all feedlots totaled 1,340,000 on May 1, 2012 according to the USDA, National Agricultural Statistics Service, Iowa Field Office.  The inventory is down 3 percent from April 1, 2012 and down 2 percent from May 1, 2011.  Feedlots with a capacity greater than 1,000 head had 650,000 head on feed, down 3 percent from last month but up 2 percent from last year.  Feedlots with a capacity less than 1,000 head had 690,000 head on feed, down 2 percent from last month and down 5 percent from last year.

Placements during April totaled 106,000 head, a decrease of 20 percent from last month and down 26 percent from last year.  This is the lowest total placement since May 2011 when 92,000 head were placed.  Feedlots with a capacity greater than 1,000 head placed 55,000 head, down 25 percent from last month and down 20 percent from last year.  Feedlots with a capacity less than 1,000 head placed 51,000 head. This is down 15 percent from last month and down 32 percent from last year.

Marketings for April were 137,000 head, down 5 percent from  last month and down 6 percent from  last year. Feedlots with a capacity greater than 1,000 head marketed 72,000 head, up 1 percent from last month but down 5 percent from last year.   Feedlots with a capacity less than 1,000 head marketed 65,000 head, down 11 percent from last month and down 7 percent from last year. 

United States Cattle on Feed Down 1 Percent
Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.1 million head on May 1, 2012. The inventory was 1 percent below May 1, 2011.

Placements in feedlots during April totaled 1.52 million, 15 percent below 2011. Net placements were 1.44 million head. During April, placements of cattle and calves weighing less than 600 pounds were 355,000, 600-699 pounds were 250,000, 700-799 pounds were 380,000, and 800 pounds and greater were 536,000.

Marketings of fed cattle during April totaled 1.82 million, slightly above 2011.  Other disappearance totaled 78,000 during April, 30 percent above 2011.



ASA Weighs in on Expanded Electronic Trading Hours

On Wednesday, ASA President Steve Wellman wrote to Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler to express concerns about the expansion of electronic trading hours for grain and oilseed futures contracts to a minimum of 22 hours per day. The expanded hours are planned by the Intercontinental Exchange and the CME Group.

"We were surprised to discover that significant changes to trading such as those proposed by the Intercontinental Exchange (ICE) and the CME Group do not require advance notice and interaction with market participants," ASA’s letter states. "In particular, press reports suggest widespread confusion about how expanded trading would coexist with reports regularly released by the U.S. Department of Agriculture. Already, we know there is unequal access to this information based on differing Internet capacity across the country and around the world. We are concerned that unequal access to the reports plus differing abilities to place orders in reaction to reports released during trading hours will create inaccurate price discovery and inequitable opportunities for market participants."

ICE started 22-hour trading this week; the CME Group late Wednesday modified their plan to expand trading of grain and soy futures and options to 21 hours a day. That trading will start Sunday, May 20th and run 5pm to 2pm the next day, Sunday through Friday.



NBB Chairman Testifies at Farm Bill Hearing

The chairman of the National Biodiesel Board (NBB) told lawmakers at a House Agriculture hearing Friday that biodiesel production benefits rural economies across the country and urged them to continue key programs in the 2012 Farm Bill.

Gary Haer, NBB's chairman and a vice president at Renewable Energy Group, a leading U.S. biodiesel producer, testified before the House Agriculture Subcommittee on Conservation, Energy and Forestry on issues relating to the Energy Title of the pending Farm Bill. He highlighted the biodiesel industry's growth and diversity, pointing out that more than half of the lawmakers on the panel have at least one biodiesel production plant in their districts.

"NBB estimates that those plants and others like them across the country supported more than 39,000 jobs in all sectors of the U.S. economy in 2011," Haer said. "Most of the more than 200 biodiesel production facilities in the U.S. are located in rural areas, and a majority of the feedstock used to produce biodiesel is grown or originates in rural areas."

Haer specifically called for the committee to continue funding for the Biodiesel Fuel Education Program and the Bioenergy Program for Advanced Biofuels, programs that are critical to raising awareness of biodiesel and stimulating new production. The programs are succeeding, he noted, pointing out that they helped the industry produce a record of nearly 1.1 billion gallons of fuel last year.

"Biodiesel is part of the "all-of-the-above" energy strategy outlined by many energy leaders across the country," Haer added. "The recent oil price spikes should remind us all why this is important. With domestically produced alternatives to oil, we can reduce the influence that global forces such as OPEC have over our economy."



Moderate Increases in Pork and Poultry Production Expected in 2013
USDA Economic Research Service

Beef/Cattle:  Improved soil moisture conditions have improved the outlook for corn and wheat.  Despite positive profit margins in other cattle and beef sectors, cattle feeders continue to endure negative profit margins.

Beef/Cattle Trade:  U.S. beef exports for 2012 are forecast at 2.6 billion pounds, or 6 percent lower year-over-year.  Beef imports for 2012 are forecast 19 percent higher, year-over-year, at 2.4 billion pounds. U.S. cattle imports through the first quarter are fractionally higher compared with the same period a year ago, as higher Mexican cattle imports are offsetting lower imports from Canada.
 
Pork/Hogs:  In 2013 small increases in farrowings and continued strong sow productivity gains, together with higher average dressed weights due to lower feed costs are expected to translate into a moderate increase in pork production.  U.S. commercial pork production is forecast at 23.8 billion pounds, an increase of 2.3 percent over 2012.  U.S. pork exports are also expected to grow moderately next year.  2013 pork exports are forecast at 5.4 billion pounds, an increase of close to 1.8 percent over this year’s level.  Production and export forecasts point to 22.7 percent of production to be exported next year, compared with 22.8 percent in 2012. 

Poultry:  Broiler production is expected to increase 2.5 percent in 2013, after a forecast decrease of 1.6 percent in 2012.   With expected stronger economic conditions, a forecast of decline in feed costs, and relatively strong prices for competitive meats, broiler integrators are expected to have an incentive to expand production.  Turkey production in 2013 is also expected to be higher, up 1 percent. This would be the third consecutive year of production increases after declines in 2009 and 2010.  Egg production is expected to be mixed in 2013, with table egg production declining slightly and hatching egg production higher. 

Poultry Trade:  Broiler and turkey shipments rose in March 2012. Broiler shipments totaled 595 million pounds, an increase of 7-percent from shipments recorded March 2011. Turkey shipments totaled 64 million pounds, an increase of 9-percent from a year ago.  Broiler shipments in 2013 are projected to be down slightly, while turkey shipments are expected to continue to rise in the coming year.  

Dairy:  Current year milk and dairy product prices continue a downward glide as milk production continues to expand despite lower producer returns in the face of high feed prices.  Next year’s milk production increase is expected to be slight as the cow herd contracts and demand becomes somewhat stronger, lifting prices.  

Click the link to view the entire report... http://www.ers.usda.gov/Publications/LDP/2012/05May/LDPM215.pdf.  



Record Feed Grain Production Projected for 2012/13
USDA Economic Research Service

U.S. feed grain production for 2012/13 is projected at 390 million metric tons, up from 324 million in 2011/12.  An anticipated large corn crop augmented by recovering production for sorghum, barley, and oats boosts the production outlook.  Acreage is projected higher for the four feed grains, and yields are projected up for all but barley. 

For the four feed grains combined, U.S. planted area is up 5.6 million acres.  Planted area is based on producer intentions reported in the March 30 Prospective Plantings.  Projected harvested area is based on historical relationships to planted acreage, and yields are based on trend models, except for corn, which takes into account early May planting progress.  Harvested area is projected at 98.3 million acres, up from 91.1 million  last season.

Beginning feed grain stocks are projected at 24.2 million tons in 2012/13, the lowest since 1996/97.  Total 2012/13 feed grain supply is projected at a record high 416 million tons. 

Total U.S. feed grain use is expected to increase by 30.9 million tons to 365 million tons in 2012/13 due to higher feed and residual use and exports.  Year-to-year feed and residual use is projected up 23 million tons, and exports are projected 7 million tons higher.  Food, seed, and industrial (FSI) use is up slightly.  There is no change in feed grains used for fuel.  Ethanol production is steady as the slowly increasing share of ethanol in gasoline is offset by stagnant gasoline consumption.  Increasing U.S. poultry and hog inventories and lower prices are expected to boost demand for feed.      

The residual component of feed and residual is expected to be much larger in 2012/13 as production expands sharply.  Ending feed grain stocks are projected to advance 27 million tons year-to-year from 2011/12.   Average farm price in 2012/13 is expected to decrease 24 percent from the 2011/12 record high levels, as supplies grow. 
 
Feed and Residual Set To Recover in 2012/13
The 2012/13 feed and residual use for the four feed grains plus wheat on a September-August year is projected at 149.3 million metric tons, up about 21.7 million tons from 2011/12.  Total grain-consuming animal units (GCAUs) are projected less than 1 percent lower year-to-year at 92.9 million.  GCAUs are expected higher because of increased forecast production of broilers and hogs.

Click the link to see the full report... http://usda01.library.cornell.edu/usda/current/FDS/FDS-05-14-2012.pdf.  



April Milk Production Up 3.3 Percent
                       
Milk production in the 23 major States during April totaled 16.0 billion pounds, up 3.3 percent from April 2011. March revised production at 16.4 billion pounds, was up 4.3 percent from March 2011. The March revision represented a decrease of 5 million pounds or less than 0.1 percent from last month's preliminary production estimate.  Production per cow in the 23 major States averaged 1,875 pounds for April, 40 pounds above April 2011.  The number of milk cows on farms in the 23 major States was 8.53 million head, 94,000 head more than April 2011, and 4,000 head more than March 2012.

Milk production in Iowa during April 2012 totaled 384 million pounds, up 3 percent from April 2011, according to the USDA, National Agricultural Statistics Service – Milk Production report.  This is the largest April production since 1972.  The average number of milk cows on hand during  the month, at 207,000 head, was down 2,000 head  from April 2011.  Production per cow averaged 1,855 pounds, up 4 percent from April 2011 and  is  the highest monthly rate on record for April.



Broadband Company LightSquared Files Bankruptcy

Broadband start-up LightSquared announced this week it is declaring bankruptcy after the Federal Communications Commission (FCC) blocked its efforts to deploy technology that would have dramatically expanded broadband access, but at the cost of widespread interference with existing GPS systems.

The company said the move would “give it time to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network” and that it intends to continue operations through the bankruptcy proceedings.

The FCC recently denied a spectrum use waiver request from the company because extensive testing showed the technology would cause significant, and evidently unmitigatable, interference with GPS systems, which are essential parts of the modern agricultural, construction and aviation industries. GPS systems are also used by millions of Americans in their cars, on their mobile phones and for other reasons.

GPS allows farmers to make precise applications for planting, irrigation and crop protection, resulting in productivity growth, increased farm income and decreased environmental impact.

An economic study reviewing crop yields from 2007 until 2010 found that with a 60 percent adoption rate of GPS technology, U.S. farm revenue increased approximately $20 billion per year, or 12 percent of total annual production.

In January, a federal interagency committee determined that proposed fixes to the LightSquared interference problems did not work, saying there “appear to be no practical solutions or mitigations” to the problems.