AgDay Daily Recap - January 14, 2011

January 14, 2011 04:37 AM
 

TODAY ON AGDAY:
JANUARY 14, 2011

RECORD BEEF PRICES:
GOOD MORNING. LOWER GLOBAL STOCKS AND INCREASING WORLD DEMAND HAS GRAIN PRICES MARCHING SKYWARD. AND WEDNESDAY'S USDA REPORTS ONLY ADDED FUEL TO THE FIRE. BUT GRAIN ISN'T THE ONLY COMMODITY IN THIS RACE. CATTLE FUTURES ARE ALSO MOVING HIGHER...PENCILING IN THEIR OWN RECORDS ALONG THE WAY. ON WEDNESDAY LIVE CATTLE FOR APRIL DELIVERY HIT $1.14 ON THE CHICAGO MERCHANTILE EXCHANGE, THAT'S ITS HIGHEST MARK SINCE THE COMMODITY BEGAN TRADING THERE IN 1964. FEEDER CATTLE FUTURES SET A RECORD ON WEDNESDAY AND CONTINUED THAT TREND THURSDAY SETTLING JUST UNDER $1.27 A POUND. THAT'S ALSO THE HIGHEST THE MARKET HAS EVER TRADED SINCE LANDING ON THE BOARD IN 1971. PUSHING TRADES ARE CONCERNS, HIGH FEED COSTS, WHICH ARE LINKED TO HIGHER GRAIN PRICES, WILL KEEP SHRINKING MARGINS FORCING EVEN MORE CONTRACTION IN THE U.S. CATTLE HERD. IT IS ALREADY AT ITS SMALLEST POINT IN SOME 50 YEARS.

KOREA FMD:
WHILE PRICES ARE HIGH HERE THEY'RE LIKELY TO BE EVEN HIGHER IN SOUTH KOREA. FARMERS AND AGRICULTURE OFFICIALS IN THAT COUNTRY ARE STRUGGLING TO GET A FOOT AND MOUTH OUTBREAK UNDER CONTROL. SO FAR MORE THAN 100 CASES HAVE BEEN CONFIRMED. 1.2 MILLION OF ITS SWINE AND MORE THAN 100,000 CATTLE HAVE BEEN KILLED. OFFICIALS ESTIMATE IN SIX WEEKS, IT HAS LOST MORE THAN 1 BILLION DOLLARS WORTH OF LIVESTOCK.

DDG TRADE:
ALSO IN ASIA...ACCORDING TO THE BROCK REPORT, AN ANTI-DUMPING INVESTIGATION IN CHINA, AND, IMPORT DUTIES OF MORE THAN 50% HAS DRIED SHIPPERS OF DISTILLERS GRAIN PULLING OUT OF THAT COUNTRY.  THOSE WEST COAST SUPPLIES ARE NOW DIVERTING BACK INTO THE U.S. MARKET...WHICH COULD LOWER COSTS AT HOME. LAST YEAR THE CHINESE IMPORTED NEARLY 3 MILLION METRIC TONS OF DDGS.

ETHANOL RESPONSE:
INCREASING DEMAND FROM ETHANOL PRODUCERS IS ONE PIECE OF THE HIGHER COMMODITY PRICE PUZZLE. THE USDA RAISED ITS DEMAND FORCAST FOR ETHANOL TO 4.9 BILLION BUSHELS. ACCORDING TO THE RENEWABLE FUELS ASSOCIATION, THAT TRANSLATES INTO ABOUT 13.5 BILLION GALLONS OF ETHANOL. THE ASSOCIATION IS SPEAKING OUT ABOUT THE LATEST USDA PRODUCTION REPORTS. IT SAYS THE ETHANOL INDUSTRY CONTINUES TO BE BLAMED FOR HIGH COMMODITY PRICES. THE RENEWABLE FUELS GROUP SAYS THAT WHILE THE 2010 CROP ISN'T AS LARGE AS ANALYIST ORIGINALLY THOUGHT, IT’S STILL THE THIRD LARGEST CROP ON RECORD. IT CALLS THE RUNUP IN PRICES UNJUSTIFIED AND UNSUSTAINABLE.

COTTON STOCKS:
THE U.S.D.A ALSO RAISED ITS PRODUCTION FORCAST FOR U.S. COTTON.
GROWERS ARE ESTIMATED TO HAVE PRODUCED 18.3 MILLION BALES...UP MORE THAN SIX MILLION FROM LAST YEAR. THAT SENT PRICES LOWER ON THURSDAY BUT STILL WITHIN SHOUTING RANGE OF HISTORIC HIGHS.  U.S. CARRY OVER OF COTTON WAS UNCHANGED. NOT THE CASE GLOBALLY. THE U.S.D.A LOWERED EXPECTATIONS FOR GLOBAL PRODUCTION BY ABOUT A HALF MILLION BALES. EXPERTS SAY WORLD SUPPLIES REMAIN TIGHT, ESPECIALLY IN CHINA. OA SAYS CHINA IS THE WORLD'S LARGEST CONSUMER OF RAW COTTON. THAT COUNTRY ACCOUNTS FOR 37% OF THE WORLD'S ACTIVITY. HE BELIEVES IF CHINA DOES START REBUILDING STOCKS, PRICES FOR 2011 NEW-CROP COTTON WILL HOLD IN THAT 1- 40 TO 1-50 RANGE.

LAND VALUES:
HIGH PRICES ACROSS ALL COMMODITIES CONTINUES TO INCREASE THE VALUE OF FARMLAND. MIKE WALSTEN WITH PROFARMER NEWSLETTER BELIEVES PRODUCERS STILL HAVEN'T SEEN THE TOP OF THE MARKET.

WHEAT RESEARCH:
THANKS MIKE. LAND OWNERS IN WHEAT COUNTRY MAY BE EXICTED TO HEAR ABOUT NEW RESEARCH DOLLARS. THE USDA IS PLEDGING 25 MILLION DOLLARS IN GRANTS FOR WHEAT AND BARLEY RESEARCH.  THE GRANT HELPS PUBLIC RESEARCH TEAMS, COVERING FIVE YEARS AND 56 SCIENTISTS FROM 28 INSTITUTIONS. THEY HOPE TO RAISE WHEAT YIELDS BY 20 PERCENT BY THE YEAR 2018...WHILE AT THE SAME TIME, REDUCING NEEDS FOR NITROGEN AND WATER. THE NATIONAL ASSOCIATION OF WHEAT GROWERS IS APPLAUDING THE MOVE.  THEY SAY THERE'S A DIRE NEED FOR NEW VARIETIES OF WHEAT AND NEW TECHNOLOGY. TRADITIONALLY, BREEDING PROGRAMS TAKE A LONG TIME TO DEVELOP NEW VARIETIES. IN SOME CASES IT CAN TAKE UP TO TEN YEARS TO DEVELOP AND GET THOSE GENETICS INTO THE HANDS OF PRODUCERS.

ANALYSIS:
JIM BOWER

IN THE COUNTRY; NWSS PHOTOG:
THE NATIONAL WESTERN STOCK SHOW CONTINUES TODAY IN DENVER COLORADO. WITH MORE THAN 15,000 LIVESTOCK AND NEARLY 650,000 VISITORS...IT’S A VERY BIG EVENT. WHICH IS WHY PHOTOGRAPHER WALT BROARNY BEGAN MAKING THE TREK HIMSELF EVERY YEAR. 41 YEARS LATER IT’S STILL AT THE TOP OF HIS LIST. IN THIS PIECE FROM THE AMERICAN ANGUS ASSOCIATION...WALT GIVES US HIS PERSPECTIVE OF THE SHOW THROUGH THE LENS OF A CAMERA. THE NATONAL WESTERN STOCK SHOW RUNS THROUGH JANUARY 23RD. AND COMING UP...IF A GROUP OF DOCTORS HAVE IT THEIR WAY, CATTLE WON'T BE INCLUDED IN AN UPDATED FOOD PYRAMID. WE'LL TELL YOU ABOUT THE LAWSUIT COMING UP.

FOOD PYRAMID SUIT:
IN FOOD AND YOUR FAMILY WE'VE HAD THE FOOD PYRAMID FOR NEARLY TWO DECADES. BUT IS IT REALLY HEALTHY. A GROUP OF DOCTORS DOESN'T THINK SO AND THEY'RE SUEING THE FEDERAL GOVERNMENT.  THE LAWSUIT WAS FILED IN THE DC DISTRICT COURT BY THE PHYSICIANS COMMITTEE FOR RESPONSIBLE MEDICINE. THEY CLAIM THE USDA AND DEPARTMENT OF HEALTH AND HUMAN SERVICES ARE VIOLATING FEDERAL LAW BECAUSE THEY SAY THE AGENCIES IGNORED A PETITION REQUESTING AN ALL PLANT BASED ALTERNATIVE TO THE FOOD PYRAMID. THEY WANT THE GOVERNMENT TO ADOPT THE POWER PLATE WHICH INCLUDES FRUITS, GRAINS, LEGUMES AND VEGETABLES.

USDA SCHOOL LUNCH:
SPEAKING OF HEALTHY FOODS, THAT'S JUST WHAT THE USDA IS DOING AT THE NATION'S SCHOOLS. THE DEPARTMENT PUBLISHED NEW RULES FOR MEALS SERVED TO KIDS IN THE NATIONAL SCHOOL LUNCH AND BREAKFAST PROGRAMS. THIS IS THE FIRST UPDATE IN SOME 15 YEARS.  THE RULES PUT A CAP ON CALORIES AND SATURATED FAT...REQUIRES MORE WHOLE GRAINS, LESS SALT, LOW FAT MILK, AND MORE FRUITS AND VEGETABLES. USDA IS TAKING INPUT ON THE PROPOSED RULE THROUGH MID APRIL.

CONTACT PAGE:
WE'D LOVE TO HEAR FROM YOU! CONTACT US AT 800-792-4329. OR DROP AN EMAIL TO INFO@AGDAY.COM . YOU CAN ALSO CHECK US OUT ON SOME OF THAT NEW TECHNOLOGY, AT FACEBOOK DOT COM FORWARD SLASH AG-DAY.

 

 

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