Informa updates acreage pegs... Informa Economics has updated its 2014 U.S. acreage pegs ahead of USDA's Prospective Plantings Report that will be released on Monday, March 31, at 11:00 a.m. CT. Informa's acreage forecasts are based primarily on surveys taken in early March. Following are Informa's 2014 acreage forecasts:
- Corn: 93.029 million acres; down 290,000 from its previous forecast and down 2.336 million from 2013.
- Soybeans: 81.204 million acres; up 60,000 from its previous forecast and up 4.671 million from 2013.
- All wheat: 56.648 million acres; down 850,000 from its previous forecast but up 492,000 from 2013.
- All cotton: 10.955 million acres; down 130,000 from its previous forecast but up 548,000 from 2013.
Consultant outlines starting point for 2014 U.S. acreage... Pro Farmer Crop Consultant Dr. Michael Cordonnier pegs U.S. corn acreage in a range of 92 million to 93 million, with soybean acreage between 80 million and 81 million. Weather during April will of course be a big determining factor for U.S. corn and soybean acreage, but he feels farmers are wait longer than they have previously before deciding whether to switch from corn to soybeans if there are prolonged spring planting delays.
Dr. Cordonnier says it's more difficult to estimate what a trendline yield should be for the U.S. corn crop after a number of disappointing crop years. But he is starting with a trendline yield between 163 bu. and 164 bu. per acre, and a yield as high as 175 bu. per acre under ideal conditions.
Meanwhile, Dr. Cordonnier says U.S. soybean yields the last few years have been less volatile than corn and he is starting with a trendline of 44 bu. to 45 bu. per acre, and a yield of 46 bu. per acre "or even higher" under ideal conditions.
Brazil soybean harvest 70% complete... Dr. Cordonnier says Brazil's soybean harvest is around 70% complete, with harvest around 90% complete in Mato Grosso and 75% complete in Parana. In Rio Grande do Sul, harvest is around 8% complete compared to 10% at this time last year. Dr. Cordonnier left his estimate of the Brazilian soybean crop unchanged at 86 MMT and he has a neutral bias going forward.
Meanwhile, Dr. Cordonnier says his Brazilian corn crop estimate, currently at 68.5 MMT, could move higher if the rainy season continues longer than usual, as that would benefit the safrinha corn crop.
Soybean harvest in early stages in Argentina... Dr. Cordonnier says just 1% to 2% of the Argentine soybean crop has been harvested compared to 4% last year at this time due to a continuation of wet weather. He expects yields to be better than year-ago in the central production region, but yields will taper off in western Buenos Aires and La Pampa, where soil moisture was never fully recharged. Dr. Cordonnier left his Argentine soybean estimate unchanged at 54 MMT, but says he has a neutral to higher bias.
Dr. Cordonnier also left his Argentine corn crop estimate unchanged at 23 MMT. Harvest is around 7% complete, which is about half of last year's pace. He has a neutral to slightly higher bias toward the crop. There is a lot of variability in the crop this year, depending on when it pollinated.
Rabobank: PEDV to trim U.S. pork production 6%-7%... RaboAgriFinance says so far, the Porcine Epidemic Diarrhea Virus (PEDV) has reached 60% of the U.S. sow herd, 28% of the Mexican herd and is just starting to make an impact in Canada. It says if the virus continues to spread, North American hog slaughter could decline by 12.5% from 2013 levels and U.S. pork production is expected to decline by 6% to 7% from year-ago levels.
RaboAgriFinance says August through October are likely to be the tightest for processors, as slaughter could decline by 15% to 25% compared to 2013 levels. It says if the virus continues at its current rate, the shortfall to U.S. slaughter in 2014 could be as much as 15 million hogs.
The U.S. poultry industry will be the real winner in the PEDV situation, says RaboAgriFinance. It says the shortfall of pork production, on top of the already-reduced beef herd provides an opportunity for the poultry industry to become the "protein of last resort." Get more details.
Proposed rule clarifying Clean Water Act protection preserves ag exemptions... Today, the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers jointly released a proposed rule to clarify protection under the Clean Water Act for streams and wetlands. This much-anticipated release is generally favorable for the ag sector as it maintains all exemptions and exclusions for the industry and it does not expand jurisdiction to any new types of water, such as ditches or groundwater.
In addition, EPA and the Army Corps have coordinated with USDA to "develop an interpretive rule to ensure that 53 specific conservation practices that protect or improve water quality will not be subject to Section 404 dredged or fill permitting requirements." EPA and the Army Corps further clarify, "Any agriculture activity that does not result in the discharge of a pollutant to waters of the U.S. still does not require a permit."
Specifically, the proposed rule clarifies that under the Clean Water Act:
- Most seasonal and rain-dependent streams are protected.
- Wetlands near rivers and streams are protected.
- Other types of waters may have more uncertain connections with downstream water and protection will be evaluated through a case-specific analysis of whether the connection is or is not protecting similarly situated waters in certain geographic areas or adding to the categories of waters protected without case specific analysis.
The proposed rule will be open for public comment for 90 days following its publication in the Federal Register. Learn more.
Food price inflation moving toward 'normal' levels... The all-items Consumer Price Index (CPI), which is a measure of inflation across the economy, rose 0.4% in February to stand 1.1% above year-ago, according to USDA's Economic Research Service (ERS). The CPI for all food rose 0.3% from month-ago in February and now stands 1.4% above year-ago levels. ERS details the food-at-home (grocery store food items) CPI rose 0.3% in February and is up 0.9% over year-ago. The food-away-from home (restaurant buys) CPI also rose 0.3% in February and is up 2.2% from year-ago.
Looking ahead to 2014, ERS anticipates food price inflation will return to a range closer to the historical norm. In fact, the food-at-home CPI has already increased more in the first two months of 2014 than it did for all of 2013. Given its current trajectory, ERS says it is on track for normal annual inflation. ERS explains that since 1990, grocery store prices have risen by an average of 2.8% per year. Therefore, the food, food-at-home and food-away from home CPIs are expected to rise 2.5% to 3.5% from 2013, assuming normal weather. Learn more here.