Hot / Humid and the Price of Feed The Chinese farmers are aware of the US drought conditions and had lots of questions on how bad it might be and where it drought is occurring in the United States. Corn prices in China (Shandong province, China) are about $10.50 and soybean meal (SBM) prices are around $540/ton. Pigs are at break-even levels for the year or even less for some. Excellent producers are now making less than $15/head. It is possible that corn in China will go to $15/bushel this next year and SBM to $600/ton.
Much of the poultry industry is failing and falling fast. Most of the feed companies are not making money this year at best and losing a load at worst! The weather has been mild in their eyes, but I find that heat and humidity are pretty much like the worst in the Midwest. Corn looks real good and everything is green! They use irrigation and can do that with individual water hoses that are dragged from row to row by the owners. This is best described by a clear plastic tube that looks to be about 2 ½ inches and pretty light plastic (we ran over one on the driveway and it started a nice water shooting display) [Editor note: text Jim Lease, JBS United].
Agriculture Markets How are commodities and markets important to agriculture? What are some of the information sources to use? What are some of the issues in the markets today? This AgChat conversation, with the help of guest of Farm Futures Arlan Suderman (@ArlanFF101), looks into these questions.
China's growth means that many of its raw materials to sustain the growth must come from other parts of the world. To help gauge Chinese demand for materials, many companies and governments rely on estimates from the China National Bureau of Statistics and other sources, like U.S. Government agencies. If, however, the estimates are wrong one way or the other by a larger than expected margin, the commodity markets start to react, and cause some companies to loose business and revenue.
China's National Bureau of Statistics said that farms produced a record corn crop in 2011 of 191.8 million tonnes. But enthusiastic local officials often overstate the size of crops in China to impress central authorities and win bigger subsidies.
How will the pork industry fare in 2012? Dr. Steve Meyer says 2012 has five key issues to keep an eye on: exports, U.S. Demand, feed prices, hog/pork supplies, and packing capacity. Steve also highlights the relationships between crops and costs.
Total feed supply is going down. This means we either get more efficient or we get smaller.
From the recent Leman conference, keynote presentation featuring Ms. Farha Aslam of Stephens, Inc. How Wall Street views the protein markets and what it means in the greater picture for the industry future.
A conversation with Coatesville, Indiana producer Mark Legan on issues of interest to the industry. Mark and I talked about serving on the NPPC Board and top concerns his committees are dealing with. Of note are the increasing number of producers and growers signing on to the pork check off dollars program and the on going USDA / US Department of Justice hearings / workshops on Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy.