Agribusiness Weekly Update: Meat demand improves

Beef
U.S. beef packer margins averaged $21.25 per head last week, according to Hedgers Edge. A year ago packers pocketed about $8 a head. June fed cattle are trading this week around $117 per hundredweight, down $1 from the prior week. Hedgers Edge expects the May cattle report to show a 17% increase in the number of feeders in lots since the April. Beef production of 1.99 billion pounds was 3% below the previous year in April. Cattle slaughter totaled 2.57 million head, down 6% from April 2011. The average live weight was up 25 pounds from the previous year, at 1,282 pounds, according to USDA.
  
Hogs & Pork
Fresh pork processing margins ran in the red by roughly $10.95 per head last week, that compared to $8 per head profited last year, according to Hedgers Edge. Packer losses were slightly lower this week. Pork cutouts up until this week were struggling with fairly big cold storage inventories. Since Memorial Day, sales demand has picked up helping to move lots of product from the freezer and lift wholesale prices.

Chicken
Chicken processors continue to post positive margins thanks in part to production discipline averaging 4% below a year ago. Commercial hatcheries in the 19 state weekly program set 201 million eggs in incubators last week. This was down 3% from the eggs set a year earlier. Average hatchability for chicks hatched during the week was 85%. Broiler growers in the 19 state weekly program placed 166 million chicks for meat production last week. Placements were down 4% from a year ago, according to USDA.

Table Eggs
South central egg prices ended last week at 72 cents a dozen for medium, $1.02 for large and $1.07 for extra large. Table egg production is expected to increase slightly (0.5% in 2012, reaching 6.64 billion dozen, up from 6.61 billion dozen in 2011, according to USDA. Demand for shell eggs shows improvement following last week's retail ad push targeting Memorial Day consumption, but still lags just below average.
  
Grains
Cash corn prices finished the week $5.65 per bushel, down from $7.35 a year ago. July corn closed at $5.72, up 50 cents, while the September contract rose 62 cents to close at $5.21. Corn futures jumped on renewed weather concerns and the lower dollar index. Cash soybean prices closed the week at $12.77 per bushel, coming down a little from the prior week. The July contract closed at $13.63, up $1.30  per bushel. August beans traded at $13.42 up 84 cents on the week. The market continued to be weighed down by the negative economic situation in China. Weakness in the dollar index and dry weather forecasts over the next 7 to 10 days lifted deferred contracts.   

Dairy
April nonfat dry milk, production totaled 192 million pounds, up 31.1% from a year ago. Skim milk powders totaled17.5 million pounds, down 35.4%, according to USDA. Milk production in the 23 major states during April totaled 16.0 billion pounds, up 3.3% from year ago. Production per cow averaged 1,875 pounds for April, 40 pounds above April 2011. June 18 will be the next report on U.S. milk production for the month of May.

Ethanol
Cash ethanol prices traded at a $2.05 per gallon last week, down from $2.55 per gallon a year ago, according to USDA.  Ethanol was priced at a $1.13 per gallon discount to gasoline.