Market Watch

Georgia's tobacco and pecan crops are on pace for a surprisingly good year, but above-normal temperatures have taken a toll on peanuts and cotton. Pecan trees are alternate-bearing, meaning they produce a full crop every other year; most trees in Georgia are on the same cycle and this was supposed to be an "off" year for pecan production, but Georgia farmers will likely produce 75-80 million pounds, double what has been produced in other off years. Extreme heat in July and early August hurt peanut plants' ability to set peanut pods. Yield is expected to be 3,300 pounds per acre, or 7 percent less than last year. [ University of Georgia Cooperative Extension ]

USDA released its August Cattle on Feed report last Friday, reporting its inventory estimates for feedyards with 1,000+ head capacities. Net placements of cattle on feed during July, at 1.706 million head, were down 6.3% compared to last year, marking the first month since February to see a reduction in placements relative to 2009. While July placements were still 1-2% higher than what the trade expected prior to the report’s release, it did confirm that the sharp increase in placements during May and June slowed last month. Part of this percentage decline in placements relative to a year ago is a function of Summer 2009 placements. Last year, May and June placements were down sharply and July placements were above the 5-year average. Thus, larger placements this May and June and smaller July placements would be expected just for average placements. Feedlot profitability and grass conditions have also driven this summer’s placement pattern. Good feedlot returns following the rally ...

A very solid June performance allowed U.S. pork and beef exports to finish the first half of 2010 with strong momentum. According to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF), pork exports of 164,000 metric tons (361.6 million pounds) were 24 percent higher than June 2009. Pork export value was $316.4 million, up 34 percent. June beef exports were 25 percent above year-ago volumes, totaling 96,578 metric tons (212.9 million pounds), while the value in June was up 37 percent to $377.6 million. For the first six months of the year, pork exports were 3 percent above their year-ago pace in terms of volume (951,803 metric tons or 2.1 billion pounds). But with much-improved pork prices, export value was nearly 10 percent higher at $2.35 billion. This is slightly higher than the value reached in the first half of 2008 ($2.32 billion), the year in which pork export value set an all-time record. Export value per head during the six-month period was mor...

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 ...

The prices of wheat and soybeans have been trending lower since late April and early May. Corn prices declined sharply last week. After moving to near $5.15 in early May, July 2010 wheat futures at Chicago are now near $4.35. Similarly, November 2010 soybean futures spiked to about $9.85 in late April and are now under $9.00, the lowest since last fall. December 2010 corn futures traded in a fairly wide sideways pattern during April and May, with a spike to just under $4.00. That contract is now near $3.55, the lowest since early September 2009. Recent price declines for all three crops continue the general downward trend that began in January 2010. "A record pace of consumption of U.S. corn and soybeans during the current marketing year and prospects for a much smaller U.S. wheat harvest in 2010 provided some price support earlier in the year, but are now overshadowed by other factors," said University of Illinois agricultural economist Darrel Good. "Crop prices have be...

December 2010 corn futures traded to a high of $3.95 in mid-April, retreated to a low of $3.67 early last week, and then rallied back to $3.95. The current price is about $.40 above the contract low established in early September 2009 and about $.75 below the high reached in early June 2009. The contract high, reached in mid-2008, is over $7.00. According to University of Illinois agricultural economist Darrel Good, weakness in corn prices starting in mid-April primarily reflected supply considerations: generally favorable weather for planting, expectations that acreage could exceed March intentions, and expectations that the 2010 yield would be above trend value due to a majority of the crop being planted early. "The current strength in corn prices reflects more favorable demand prospects," Good said. "There is a fair amount of optimism about corn demand in each of the three major categories of consumption." Recent data confirm increasing production and consumption...