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READ the NAFB’s National Ag News as heard inside the BARN for February 11th…

Posted by Brian Allmer on February 11, 2013

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Sponsored by the American Farm Bureau Federation

“Cattle Fax Market Analysts Give 2013 Projections”

CattleFax market analysts gave their projections for the coming year at the Cattle Industry Convention Friday. Art Douglas – Creighton University Professor Emeritus – says there is a chance some regions of the country will see more normal precipitation patterns return in the coming spring and summer growing season. That sounds promising – especially since the multi-year drought has affected more than 70-percent of the cattle industry. If more normal precipitation does return – analysts predict U.S. farmers will plant a record number of corn and soybean acres. CattleFax Grain Market Analyst Chad Spearman says that would lead to lower feed grain prices – with relief on the supply side and ultimately price relief in the second-half of the year. More moisture would also mitigate hay prices after harvest begins in the summer – according to Spearman.

Analyst Mike Murphy says a possible economic slowdown could put pressure on beef prices and demand among consumers – even though input costs may provide relief. Murphy projects net income will be flat in the U.S. with incomes struggling to keep up with inflation – but he also predicts beef exports will continue to provide support for prices. He says an increase in shipments to Japan should increase exports – and imports will also increase substantially due to tighter supplies in the U.S. when there’s strong demand for 90-percent lean trim. All in all – CattleFax Senior Analyst Kevin Good predicts beef production in the U.S. will fall with per-capita supply moving to 2.2-percent. Good says the decrease will be partially offset by increasing carcass weights. He also expects a shift in leverage with the loss of U.S. packing capacity. As a result – Good says feedlots will get a smaller percentage of the wholesale value of beef. CattleFax expects prices to average 126-dollars, yearling prices at 155-dollars and calf prices at 175-dollars.

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“Rabobank Report Shows Coming Challenges for U.S. Cattle Feeders”

The Rabobank Food and Agribusiness Research and Advisory group released a new report about how the availability of cattle for shipment is expected to post a steep decline this year – leaving the U.S. cattle feeding industry looking for ways to make up for the reduced supply. Over the last two to three years – record high feeder and calf prices in the U.S. factored into a surge of exports to the U.S. – according to Food and Agribusiness Research and Advisory Vice President Don Close. He says the severe drought in 2011 specifically prompted a notable increase in exports to the U.S. – making levels unsustainably high.

Mexico has become an aggressive exporter of feeder cattle to the U.S. during the past 30-years – and the U.S. has relied on these imports to supplement supply. Going back to the 1980s – Close says the U.S. would usually get five-percent of the Mexican calf crop – and that shipment was nothing more than a residual of the Mexico market. However – as time has passed – Mexico has become an increasingly sophisticated and much-needed supplier network to the U.S. and Southern Plains cattle feeding industry. At the end of 2012 – Close says 10-percent of the cattle on feed supply in the entire U.S. was of Mexican-origin. It’s even jumped to 25 and 27-percent of the total cattle on feed in the TCFA area and Arizona and California because of the freight advantages. With lowest calf crop since 1958 and that share of Mexican cattle – he says the U.S. is looking at some very serious contraction of available supplies.

Close says cattle feeders are going to need to change several aspects of how they procure cattle – beginning with becoming more dependent on feeders from the southeast cow-calf complex. Overall – he says southern U.S. cattle feeders will be forced to look further north and be more price-competitive in the central and western U.S. – in spite of a freight disadvantage. Since the U.S. cow-calf herd is at a 50-year low – Close says new competition is likely to force feeders with weaker supply sources or weaker operating finances out of the market. He says it can also be expected that U.S. cattle feeders will be required to return to Canada for available feeder cattle numbers.

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“NCBA Leaders List 2013 Priorities”

Passing a farm bill is on the minds of most in the agriculture industry – and the National Cattlemen’s Beef Association says the farm bill is high on its list of priorities. NCBA President-Elect Scott George says the association will work vigilantly to pass a farm bill. With budget issues – George says it has been a difficult environment for writing a farm bill. NCBA finds the conservation and research titles to be most important for cattlemen and women. NCBA Vice President of Government Affairs Colin Woodall says another priority is reauthorizing the Animal Drug User Fee Act – which authorizes FDA to collect fees for certain animal drug applications – allowing new drugs to enter the marketplace for cattle producers. ADUFA’s reauthorization is needed by the end of September – Woodall says – and will garner attention from animal activists who want to end antibiotic and drug use in cattle. Woodall says NCBA will lead the effort to educate Congressional leaders about antibiotic use. He also says NCBA will focus on immigration and border security – requesting a year-round guest worker program since the cattle industry isn’t limited to seasons. The immigration reform proposal from a bipartisan group of senators last month is a step in the right direction – Woodall says – but the framework needs more specifics regarding agriculture.

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“WASDE at a Glance”

The latest World Agricultural Supply and Demand Estimates were released Friday.

WHEAT: U.S. wheat ending stocks for 2012-13 are projected 25-million bushels lower this month with higher expected feed and residual disappearance. Feed and residual use is projected 25-million bushels higher as weaker cash prices relative to corn support opportunities for increased wheat use in livestock and poultry rations. Projected all-wheat exports are unchanged. The projected season average farm price for wheat is narrowed 5-cents on both ends of the range to $7.70 to $8.10 per bushel.

Global wheat supplies for 2012-13 are nearly unchanged with a small increase in beginning stocks more than offsetting a small decrease in production. Global wheat output is projected 0.7-million tons lower. Global wheat trade for 2012-13 is trimmed slightly. Global wheat consumption is virtually unchanged at 673.4-million tons; however, global consumption is projected down 24.6-million tons year to year, mostly reflecting lower feed and residual use in 2012-13. World wheat ending stocks for 2012-13 are also nearly unchanged this month at 176.7-million tons.

COARSE GRAINS: U.S. feed grain ending stocks for 2012-13 are projected higher this month as lower expected exports outweigh an increase in projected domestic usage. Corn exports are projected 50-million bushels lower based on the sluggish pace of sales and shipments to date and prospects for more competition from Brazil. Corn use for ethanol production is unchanged, but corn use for sweeteners and starch is raised 20-million bushels. Projected corn ending stocks are raised 30-million bushels. The projected range for the season-average farm price for corn is lowered 20-cents at the midpoint and narrowed to $6.75 to $7.65 per bushel.

Usage changes for 2012-13 are also made this month for sorghum and barley. Sorghum feedand residual use is projected 25-million bushels lower, but offset by a 20-million bushel increase in food, seed, and industrial use and a 5-million-bushel increase in exports. Projected barley exports are lowered 1-million bushels. Barley ending stocks are increased by the same amount. The projected range for the sorghum farm price is lowered 15-cents at the midpoint and narrowed to $6.70 to $7.60 per bushel. The barley farm price range is narrowed 5-cents on each end to $6.15 to $6.65 per bushel.

Global coarse grain supplies for 2012-13 are projected 2.1-million tons higher. Global 2012-13 corn production is raised 2.1-million tons. Brazil production is raised 1.5-million tons. Argentina production is lowered 1.0-million tons. Global 2012-13 production is also higher this month for sorghum, barley, oats, and rye. Global coarse grain trade for 2012-13 is higher. World corn imports and exports are raised only slightly, but significant shifts are made among countries. Global corn consumption for 2012-13 is lowered with a reduction in world feed and residual usage. Global corn ending stocks for 2012-13 are projected 2.1-million tons higher.

RICE: Slight revisions are made to the U.S. all rice and rice-by-class supply and use balance sheets. U.S. 2012-13 total rice supplies are raised slightly because of an increase in imports. Beginning stocks and production are unchanged from a month ago. Long-grain imports are raised 0.5-million cwt to a record 18.5 million, and combined medium- and short-grain imports are unchanged at 2.5-million. No changes are made on the use side – all rice domestic and residual is still forecast at 125.0-million cwt and exports at 106.0-million. The rice-by-class projections of domestic and residual use and exports are also unchanged from a month ago. All rice 2012-13 ending stocks are raised nearly 2-percent to 30.6-million cwt – all in long-grain rice. The 2012-13 long-grain, season-average price is raised 10-cents per cwt at the midpoint and the range is narrowed to $14.00 to $14.60 per cwt. The combined medium- and short-grain price is lowered 50-cents per cwt at the midpoint and the range is narrowed to $15.90 to $16.50 per cwt. The all rice season-average price is unchanged at $14.90 per cwt at the midpoint, but the range is narrowed to $14.60 to $15.20 per cwt.

Global 2012-13 projections of rice production and consumption are raised from last month, but trade and ending stocks are lowered. Global 2012-13 rice production is forecast at a record 465.8-million. Global consumption is raised 0.7-million tons to a record 469.3-million. Global exports for 2012-13 are lowered slightly. Global 2012-13 ending stocks are reduced 0.5-million tons to about 102.0-million.

OILSEEDS: U.S. soybean ending stocks for 2012-13 are projected at 125-million bushels, down 10-million from last month due to increased crush. Soybean crush is raised 10-million bushels to 1.615-billion. Strong U.S. soybean meal exports during the first half of the marketing year are partly offsetting declining shipments from Argentina where crushing has slowed due to limited soybean supplies. Domestic soybean meal use is raised in line with projected gains in meat production. Soybean oil production is raised on higher soybean crush and a higher soybean oil extraction rate. Soybean oil exports are projected at 2.3-billion pounds, up 150-million from last month as sales continue stronger than expected. Soybean oil stocks are projected at 1.665-billion pounds, up 125-million. The U.S. season-average soybean price range for 2012-13 is projected at $13.55 to $15.05 per bushel, up 5-cents on both ends of the range. The soybean meal price is projected at $430 to $460 per short ton, unchanged from last month. The soybean oil price projection is also unchanged at 49 to 53-cents per pound.

Global oilseed production for 2012-13 is projected at 466.9-million tons, up 1.1-million from last month. Global soybean production is raised fractionally to 269.5-million tons as improved production prospects in Brazil offset deteriorating conditions in Argentina. Global oilseed stocks are projected higher, mostly reflecting higher soybean stocks in Brazil.

SUGAR: Projected U.S. sugar supply for fiscal year 2012-13 is increased 65-thousand short tons, raw value, from last month, due to higher sugar production more than offsetting lower imports. Sugar use is unchanged.

LIVESTOCK, POULTRY, AND DAIRY: The 2013 forecast of total red meat and poultry production is raised from last month reflecting higher forecast beef, pork, broiler, and turkey production. Beef production is raised based mostly on heavier carcass weights. The beef production forecast is also raised as cow slaughter in the first quarter is expected to be relatively high. Pork production is raised as carcass weights are expected to reflect more moderate feed costs. Broiler hatchery data pointed to continued expansion of bird numbers and weights at slaughter have been increasing. Thus, the broiler production forecast is raised from last month. Turkey production is raised slightly on hatchery data. Egg production is raised on higher producer prices and lower forecast feed prices. Estimates of 2012 meat and egg production are adjusted to reflect December data.

The beef export forecast for 2013 is unchanged as trade restrictions by Russia are offset by gains to Japan and other markets. Pork exports are lowered on trade restrictions imposed by Russia although there is expected to be some offset in higher exports to other markets. Broiler and turkey export forecasts are raised from last month on stronger demand from a number of markets. Import forecasts are unchanged from January. Beef and pork export estimates for 2012 are lowered due to slower-than-expected shipments in November. Poultry is raised based on larger-than-expected November shipments. Cattle, hog, and turkey prices for 2013 are unchanged from last month. Broiler and egg prices are raised on expected demand strength in 2013.

The milk production forecast for 2013 is raised. Milk cow numbers are raised as USDA’s Cattle report indicated that the number of cows on January 1 was about unchanged from 2012. Milk per cow forecasts are raised as last quarter-2012 estimates were higher than expected and lower forecast feed costs support higher milk yields in 2013. Fat-basis trade estimates for 2013 are unchanged. The skim-solids export estimate for 2013 is raised largely on expectations of stronger nonfat dry milk (NDM) shipments, but the import forecast is unchanged. Milk production estimates for 2012 are raised, reflecting end-of-year production data. Dairy trade estimates for 2012 reflect the pace of trade through November. Cheese prices are unchanged from last month, but the price range is narrowed. NDM and whey prices are raised reflecting stronger demand, but the butter price is lowered. Despite a higher whey price, the forecast Class III price is unchanged although the range is tightened. Lower butter prices are more than offset by higher NDM prices resulting in a slightly higher forecast Class IV price. The range of all milk price for 2013 is narrowed to $18.90 to $19.70 per cwt.

COTTON: This month’s 2012-13 U.S. cotton forecasts include higher exports and lower ending stocks relative to last month. Estimates of production and domestic mill use are unchanged. Exports are raised slightly to 12.5-million bales. Ending stocks are forecast at 4.5-million bales, accounting for 28-percent of total disappearance. The forecast range for the marketing year average price received by producers of 69-73 cents per pound is raised 3-cents on the lower end and 2-cents on the upper end of the range, reflecting a sharp increase in the price received for December.

The aggregate world 2012-13 production, consumption and stocks forecasts show only slight revisions this month. World production is estimated marginally higher. World consumption likewise is increased marginally. World ending stocks are virtually unchanged at 81.9-million bales.

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“Producers Shouldn’t See Much Change in KCBT Move to Windy City”

The Chicago Mercantile Exchange announced the hard red winter wheat trade being handled on the Kansas City board will be moving to Chicago. Oklahoma State University Grain Marketing Specialist Kim Anderson says CME claims the move will improve efficiency. While Anderson says they will probably have more volume and a higher number of trades – he looks back a year or so when there were basis problems at the Chicago Board of Trade with settlements for corn, beans and wheat and notes there wasn’t a problem with the Kansas City Board of Trade wheat. He thinks the Kansas City Board of Trade has been relatively efficient over the past few years – and isn’t convinced efficiency will improve. Anderson believes it will just be a move from one city to another – without much impact on the producer.

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“Plan to Reduce Mail Delivery Days Makes Waves with Congress”

Postmaster General Patrick Donahoe announced last Wednesday to cut Saturday mail delivery – planning for five-day mail delivery – in order save 2-billion dollars each year. Senate Majority Leader Harry Reid says Donahoe’s actions have damaged his reputation with congressional leaders and further complicates congressional efforts to pass comprehensive postal reform legislation in the future. The Postmaster General not only needs congressional support with this proposal – but also union cooperation for the proposal to move USPS employees to a health insurance program through the Postal Service. However – the plan to move to five-day mail delivery has upset labor leaders so much that two unions have called for dismissal. The National Farmers Union is against this proposal – saying it will negatively impact the economy. Congress is divided on what to do with this proposal.

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“Deadline to File Discrimination Claims Fast Approaching”

Hispanic and women farmers and ranchers who allege discrimination by the USDA in past decades have until March 25th to file a claim. U.S. Ag Secretary Tom Vilsack says USDA urges potential claimants to contact the Claims Administrator for information. This process offers a voluntary alternative to litigation for those who can prove USDA denied his or her application for loan or loan servicing assistance for discriminatory reasons for certain time periods between 1981 and 2000. It was announced in February 2011 that this voluntary claims process will make at least 1.33-billion dollars available for cash awards and tax relief payments – plus up to 160-million dollars in farm debt relief to eligible Hispanic and women farmers and ranchers. There are no filing fees to participate. Visit www dot farmerclaims dot gov (www.farmerclaims.gov) or call 1-888-508-4429 for more information.

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“Grains Council Sees Fruits of Program Efforts in Uruguay”

U.S. Grains Council Regional Director for the Americas Kurt Shultz says Council programs in Uruguay have led to the first-ever import of U.S. DDGS by dairy cooperative Prolesa. Thanks to funding from USDA’s Market Access Program – Shultz says the Council was able to host Prolesa representatives at a regional buyers conference of DDGS and corn gluten feed back in October of 2011. He says attendees received an industry overview and heard about DDGS product profiles, transportation, product management and the actual value of the product for end users. Shultz says Prolesa imported 23-thousand metric tons of DDGS – valued at approximately 6.2-million dollars – from U.S. exporters in 2012. That’s up from zero-dollars in 2011. The Grains Council is hopeful the market for U.S. DDGS will continue to grow in the Latin American market.

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“Case IH Partners with NCBA, Sponsors Top Hand Club”

The National Cattlemen’s Beef Association and Case IH have joined together for a 2013 NCBA membership campaign – using a Case IH Scout utility vehicle as a recruitment incentive. Case IH now sponsors NCBA’s Top Hand Club – along with Roper/Stetson. The membership program is one of the association’s oldest and most popular. It was initiated in 1982 to recognize NCBA members who continually give their time and effort to help increase their organization’s strength. Individuals must recruit at least three new NCBA members to become a Top Hand Club member – and then recruit two new members each subsequent year between October 1st and September 30th. During the Cattle Industry Convention and Trade Show in Tampa – the 2012 Top Hand Club celebrated the recruitment of 907 new NCBA members over the past year. NCBA President J.D. Alexander says membership is central to NCBA – and recruitment efforts by the Top Hand Club allow the association the opportunity to reach out to producers around the country – bringing them together to make the vital decisions that shape the direction of the cattle industry’s future.

From now until September 30th – any active NCBA member may qualify to enter a drawing for a Case IH Scout. If someone recruits 15 new NCBA members in that time period – their name will be entered into the drawing. If they recruit five additional members after the first 15 – the recruiter’s name will be entered an additional time. For more information – email membership@beef.org or call 1-866-BEEF-USA.

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“Texas Ranch Receives Environmental Stewardship Award”

At the cattle industry convention – the National Cattlemen’s Beef Association announced the national winner for its Environmental Stewardship Award Program. The 77 Ranch – operated by Gary and Sue Price – won the award – which recognizes the family’s outstanding environmental stewardship of their ranch. NCBA CEO Forrest Roberts says the 77 Ranch has shown how stewardship and continuous improvement can benefit the environment and also improve the productivity of U.S. lands. Roberts says their ability to maintain their natural resources while also maintaining their ranch speaks volumes about the management techniques and stewardship of the Prices. Dow AgroSciences has sponsored this program for the past 13 years – and representative Dave Owens says the regional winners and national winner exemplify the outstanding innovation of American farmers and ranchers.

SOURCE: NAFB News Service

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