Agribusiness Weekly Update: Tough times for beef sector

Beef
U.S. beef packer margins last week averaged a loss of $23.25 per head, according to Hedgers Edge. With higher operating costs the beef sector is facing serious economic challenges. Beef export volume in July reached 108,971 metric tons, down 9.5% compared to the year-ago period, according to USMEF. Year-to-date exports through July were flat at 11%t below the record pace of 2011 in volume (659,433 metric tons) but increased 4% in value to $3.17 billion.

Hogs & Pork
Fresh pork processing margins were a $22.80 per head last week, according to Hedgers Edge. July pork exports declined nearly 3% to 164,720 metric tons, according to USMEF. This represents the smallest volume since October 2010. Pork export value was $467.4 million, down 3% from a year ago. Through July pork exports were 4% above last year’s record pace in volume (1.3 million metric tons) and 11% higher in value ($3.63 billion).

Chicken
Chicken processors are seeing very tight margins as corn and soybean meal prices remain high. Broiler-type chicks placed for meat production in Arkansas were 20.9 million during the week ending Sept. 8. Placements were up 7% from a year ago. Arkansas hatcheries set 19.1 million broiler-type eggs last week, up 5% from the same period last year. Boneless breasts traded at $1.74 per pound this week, up 12% from a year ago, according to Georgia Dock pricing.

Table Eggs
Large egg prices ranged from $1.15 to $1.20 last week, down 7 cents from last year. Table egg inventory fell 2% from a year ago with 1.803 million (30 dozen cases) processed, according to the USDA report from Sept. 12.

Grains
Cash corn prices traded Wednesday (Sept. 12)  at $7.78 per bushel, rising 9.88%% from a year ago. The September corn futures closed at $7.40 per bushel, corn for December delivery traded at $7.69, according to the Arkansas Farm Bureau. Corn yield was lowered just 0.6 bushels per acre to 122.8. That was not as much as most expected. In addition, 2012/13 beginning stocks were adjusted upward by 160 million bushels. Use was raised 75 million bushels and exports lowered 50 million bushels. The net change was ending stocks up 83 million bushels to 833 million bushels.

Cash soybean prices closed Wednesday (Sept. 12) at $17.53 per bushel, up from $13.55 from a year ago. The September contract traded at $17.40, up 44 cents while November beans closed at $17.45, also up 44 cents. Soybeans were sharply higher as the USDA report trimmed production 58 million bushels, with yield down 0.8 bushels per acre to 35.3. Changes in use, lower exports mainly, left projected ending stocks unchanged at a very tight 115 million bushels.

Dairy
USDA total milk production totaled 15.520 million pounds in July, up from 15.395 million pounds a year earlier. The All Milk price totaled $16.60 per hundredweight, down from $21.80 a year ago.

Ethanol
Cash ethanol prices traded at a $2.48 per gallon last week, down from $2.84 per gallon a year ago, according to USDA. Ethanol was priced at a $1.23 per gallon discount to gasoline as of Sept. 12.