Corn Prices Continue to Fall

Corn prices continue the long retreat from the peak of September 2012, declining to the lowest level since late August 2010. The most recent price weakness reflects both supply and demand considerations.

On the supply side, ongoing reports of yields that exceed expectations in many areas suggest that the next USDA forecast of the U.S. average yield will be at least equal and perhaps exceed the September forecast of 155.3 bushels.

There is still some uncertainty about the magnitude of harvested acreage that will not be cleared up, at least partially, until the USDA releases the next Crop Production report. Even so, it appears that production will be large enough to result in a sizable buildup in stocks by the end of the current marketing year.

On the demand side, the partial shutdown of federal government activities leaves a void in the usual flow of weekly data, including export sales, export inspections, livestock slaughter, and broiler chick placements. The U.S. Energy Information Administration has also discontinued weekly estimates of ethanol production, imports, and stocks.

The primary news on the demand side has been the leaked report of an apparent EPA proposal to reduce the magnitude of biofuels mandates, including renewable (ethanol) mandates, under the Renewable Fuels Standards (RFS) beginning in calendar year 2014.

The RFS currently calls for a total of 18.15 billion gallons of renewable fuels in 2014, including 3.75 billion gallons of advanced biofuels. The remaining 14.4 billion gallons can be satisfied with either advanced or renewable biofuels. The rumored proposal for 2014 is for a total of 15.21 billion gallons of biofuels, including only 2.21 billion gallons of advanced biofuels and a maximum of 13 billion gallons of renewable biofuels.

The possibility of dropping the overall mandate by almost three billion gallons was not widely anticipated. The reduction in the non-advanced component of the mandate from 14.4 to 13 billion gallons has been interpreted as a negative development for corn demand in 2014 and beyond, he said.

Source: University of Illinois agricultural economist Darrel Good.

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Cattle Market Falls Back

After a couple weeks of higher holiday trade, fed cattle prices settled back last week. The 5-Area slaughter steer price averaged $105.46/cwt on a live weight basis, $0.82/cwt lower than the previous week. Dressed prices were down about $1/cwt as well. Choice boxed beef gained nearly $4/cwt last week to average $165.81/cwt. Feeder cattle volume picked up significantly in the first full week of the year. While price comparisons to the previous week weren’t available in several markets, generally higher prices were noted. The price for yearlings in Nebraska averaged almost $3/cwt higher, while 500-600 lb calves were more than $10/cwt higher. Through Thursday of last week, corn prices were $0.14/bu lower, basis Omaha, NE. Prices for DDGS and WDGS were up another $2-4/ton last week in Nebraska. Source: Darrell R. Mark, Department of Agricultural Economics, University of Nebraska–Lincoln Farm Supply Beef Animal Husbandry Books Farm Magazines Beef Cattle: Keeping a Small-Scale Herd fo...

Low Milk Prices Push Dairy Farm Consolidation

A long period of low milk prices will likely accelerate dairy-farm consolidation in Pennsylvania, according to an industry expert in Penn State's College of Agricultural Sciences. Chad Dechow, associate professor of dairy cattle genetics, sees the United States dairy industry migrating more toward the hog industry model. A sizable contingent of small farms that can produce milk cheaply, rely on nonfarm income sources, or incorporate a niche market will remain. The majority of milk, however, will be produced by a limited number of very large operations with several thousand or more cows spread across "satellite dairies." "We are likely to see fewer single-site, large-family dairies," he said. "Much of this consolidation in Pennsylvania will come from large family dairy farms that continue to grow and some operators may come from Western dairies that purchase satellite dairies farther east." "Unfortunately, some 1,000-cow operations that would have ...

October Pork Exports Set New Monthly Record

U.S. pork exports set new monthly records in October, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF), reaching 218,132 metric tons valued at $607 million. Export volume was 9 percent above last year and broke the previous monthly record of 217,080 mt set in November 2011. Export value exceeded $600 million for the first time, breaking the previous high ($597.85 million, also from November 2011) by 1.5 percent. For January through October, U.S. pork exports were 3 percent ahead of last year’s record pace in volume (1.875 million mt) and 6 percent higher in value ($5.24 billion). Beef exports also posted solid results in October, with export value ($496 million) increasing 10 percent over last year despite a 4 percent decline in volume (101,447 mt). This was consistent with this year’s January-October pattern, which has seen an 11 percent decline in volume (951,886 mt) compared to 2011 while export value ($4.6 billion) remained 2 per...

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