Agribusiness Weekly Update: Meatpacker losses continue

Beef
U.S. beef packers lost $93.81 per head processed, versus $14.95 lost a year ago. Cattle slaughter was down 1.3%, while beef production rose 2.6% from a year ago. A  50% drop in the price of lean trimmings in the last month, coupled with reduced ground beef demand due to the negative headlines surrounding “pink slime” has caused boxed beef cutout values to fall to their lowest level since mid-August last year.

Hogs & Pork
Pork processors lost 57 cents per head last week, compared to $8.58 profited last year. Weekly hog slaughter numbers rose 3%, while pork production increased 3.5% compared to 2011. Hog future contract prices continue to slide as there are more pigs than expected coming to market.

Chicken
The chicken processing margin averaged one cent a pound, 10 cents better than a year ago. Broiler egg sets were down 5.69% to 197 million eggs. Heads slaughtered declined 7.9% year over year, while pounds produced fell 6.8%. Egg sets totaled 197.8 million last week, down 4.9%. For the week, breast meat prices averaged $1.30 per pound, about a nickel cheaper than a year ago.Leg quarters were 49 cents per pound up 5 cents  from 2011 levels. At $1.53, wing prices traded 73 cents above last year’s price.

Table Eggs
The egg margin averaged 59 cents per dozen, 18 cents higher than a year ago. Southeast egg prices were $1.29 per dozen, up 16 cents from a year ago. Prices post Easter are trending 17 cents lower to $1.12 per dozen as retail and foodservice demand is light to mostly moderate.
  
Grains
Cash corn prices finished the week up 16 cents to $6.59 per bushel and 11.9% lower than a year ago. Soybean prices rose 34 cents to $14.17 per bushel, up 3.8% from a year ago. The USDA April World Agricultural Supply Demand report was bullish for soybeans and slightly bearish for corn as South American soy production was cut more than anticipated. Corn production and ending stocks were in line with or higher, than trade estimates.

Dairy
Nonfat dry milk  production was up 54.7% year over year. Butter production was up 10% from a year ago.The Daily Dairy Report expects production to continue to outpace the prior year due to ample milk supplies and additional processing capacity that is expected to come on line in May 2012.

Ethanol & Energy
The ethanol crush margin averaged 48 cents per gallon, up 3 cents from last week and 9 cents below last year. Ethanol averaged $2.28 per gallon, trading at a $1.06 discount to gasoline. U.S. ethanol production in the week ending March 30 declined 3.2% from last year to a 13.4 billion gallon per year run-rate. Inventories were 12.4% above last year.