Evening Report (VIP) -- March 11, 2013

March 11, 2013 09:36 AM


METEOROLOGIST: HELP FROM PRECIP IN SOUTHERN PLAINS LIMITED... World Weather, Inc. Meteorologist Drew Lerner says the recent wetter pattern seen across the Central and Southern Plains will be short-lived, as he expects a return to hotter and drier conditions later in the spring and through the summer. He says the HRW Wheat Belt will see some short-term improvement in April and May, but drought this summer will turn serious again. "The only thing that can help the Southern Plains is tropical weather. The Gulf of Mexico will be in a position to take in more moisture -- some relief -- but most of it will be in eastern Texas," he says.



POET TO USE SORGHUM FOR ETHANOL AT LARGEST PLANT... POET has agreed to process sorghum from Chromatin Inc. into ethanol at its largest plant in Chancellor, South Dakota. This plant produces around 110 million gallons of fuel per year from corn; the plant did not indicate what percentage of that will now be made from sorghum. In December, the Environmental Protection Agency (EPA) ruled that sorghum qualifies as an advanced biofuel under the Renewable Fuel Standard (RFS) program that requires 2.75 billion gallons of advanced biofuels be blended with gasoline or diesel fuel for 2013. Sorghum may play an increasing role in helping refiners to meet that mandated level. This is Chromatin's fourth such deal with U.S. ethanol producers this year.



ATTACHÉ SEES SIGNIFICANT GROWTH IN U.S. BEEF EXPORTS TO JAPAN... The U.S. ag attaché in Japan has raised the forecast for Japanese beef consumption in 2013 to 1.275 MMT and its import forecast by 5% from last year to 774,000 MT. The attaché says due to the rule allowing imports of beef from animals less than 30 months of age, it expects the U.S. to gradually regain much of its market share lost to Australia the past 10 years. The attaché expects U.S. beef imports to climb by 25% from last year to 231,000 MT in 2013.

However, the attaché warns that high prices could impact Japanese beef purchases. "Although the number of Japanese buyers interested in American beef is growing, they are expected to remain price-sensitive and, despite some reported packer discounts, generally remain cautious," states the attaché. Click here for more.



MEAT EXPORT CHALLENGES FOR 2013... U.S. Meat Export Federation's (USMEF) analysis of USDA data revealed a mix of challenges and bright spots for the U.S. beef and pork industry in January. Beef exports started 2013 with a continuation of 2012's trend for higher export values on lower volumes. Beef exports rose 9.3% in value from year-ago despite a 3.2% decline in volume for the January, thanks to sharp gains in exports to Hong Kong, Canada and Taiwan, as well as growth in exports to Japan. The decline in volume was more than accounted for by a 91.5% drop in exports to Russia due to the ractopamine dispute.

Pork exports in January improved from December but lagged year-ago levels by 7.6% in value on a 11.7% decline in volumes. USMEF elaborates, "The ASEAN region was the bright spot with 17.1% higher volumes and slightly higher (2.7%) value."

USMEF President and CEO Philip Seng says the challenges to red meat exports in 2013"will require our industry to be creative and aggressive." Seng elaborates the beef industry is "still dealing with market access barriers in Saudi Arabia and significant obstacles in Russia," but he says expanded beef access to Japan and Hong Kong should provide the market a boost in the months ahead.

An overabundance of domestic pork in South Korea and China's "aggressive efforts to build its domestic pork industry" have trimmed these countries' import needs. Seng also cited the devaluation of the Japanese yen, which has fallen 20% in value against the U.S. dollar since summer 2012, as a major purchasing pattern factor for beef and pork. He says USMEF is focusing on building demand for chilled and branded pork in Japan and Korea as well as overall consumer demand for pork in Mexico. Get more details.



AMI CRITICIZES USDA'S PROPOSED COOL RULE... In "First Thing Today," we reported that USDA issued a proposed rule to bring the U.S. Country of Origin Labeling (COOL) requirement into compliance with U.S. World Trade Organization Compliance, encouraging Canada to express its disappointment with the proposals. Canadian officials were not alone in their critique of the proposed rule. The American Meat Institute (AMI) also criticized USDA's rule. Get more details.

"Only the government could take a costly, cumbersome rule like mandatory country-of-origin labeling (COOL) and make it worse even as it claims to ‘fix it,’" AMI president J. Patrick Boyle said in a statement. Complying with the new regulations would bring costs that would ultimately be passed on to consumers, Boyle says. "An absurd example of one of the proposed changes is this: a plant or grocery retailer that currently labels its product, ‘Product of the U.S.’ would now have to change the labels on its packages to read, ‘Born, raised and slaughtered in the U.S.,’" he observes. Boyle ripped the entire idea of mandatory COOL as "conceptually flawed, in our view and in the eyes of our trading partners." Further, he said, "the anti-free-trade objectives of this labeling scheme’s proponents are no secret. Requiring us now to provide even more information at a greater cost when evidence shows consumers, by and large, are not reading the current country-of-origin information is an ill-conceived public policy option."

Beginning Monday, the public and interested parties will have 30 days to comment. AMS must consider all comments before the rule is finalized. Notice of the proposed rule will be posted in the March 11 Federal Register. Comments, which are due by April 11, should be submitted electronically at www.regulations.gov, or to Julie Henderson, director; USDA, AMS, LPS, COOL Division; 1400 Independence Ave. S.W., Room 2620-S; Washington, D.C. 20250; telephone number (202) 720-4486; or fax (202) 260-4486.

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