Agribusiness Weekly Update: Processors restrain production beef, chicken

Beef
Beef packers lost about $25 per head processed last week and the red ink continues to flow, according to Hedgers Edge. Total cattle inventories in 2013 are forecast to be lower in the U.S. and Mexico while Canadian cattle inventories may show modest growth after stabilizing in 2012. U.S. beef exports for the year to date are down 12% from the 2011 record levels. Exports are down to most of the major U.S. export customers including Mexico, down 21%; Canada, down 17% and South Korea, down 26%. Lower total beef production and high U.S. beef prices will continue to challenge U.S. beef exports into 2013, according to Darrell Peel, livestock marketing specialist at Oklahoma State University.

Hogs & Pork
Hog processors profited about $6.50 per head last week, packer margins were about the same through Tuesday (Oct. 23), according to Hedgers Edge. U.S. pork inventories climbed 28% at the end of September from a year earlier to the highest in almost a century, according to USDA. Rising feed costs are keeping slaughter numbers elevated. Warehouses held 630.7 million pounds of pork, up from 491.9 million pounds on Sept. 30, 2011, says USDA. Pork inventories are at their highest in history, which should keep pressure on retail prices.

Chicken
Chicken processors are seeing very tight margins as corn and soybean meal prices remain volatile. Chicken-meat inventories at the end of September were 2.7% smaller than a year earlier at 651.7 million pounds, the USDA said. Broiler growers in the 19 state weekly program placed 156 million chicks for meat production during the week ending Oct. 13. Placements were up 1%  from the comparable week a year earlier. Cumulative placements this year were 6.68 billion, down 2% from the same period a year earlier. Whole chicken prices averaged just under 96 cents per pound to start this week, up 7.5% from a year ago. Boneless breast prices are at $1.59 per pound, while leg quarter prices are 54 cents per pound wholesale, according to Georgia Dock prices this week.

Table Eggs
Large egg prices in Arkansas ranged from $1.17 to $1.24 last week, up 7 cents from last year. Table egg inventory fell 0.8%  from a year ago with 1.307 million (30 dozen cases) processed, according to the USDA report on Oct. 22.

Grains
Cash corn prices traded Tuesday (Oct. 23) at $7.59 per bushel, roughly 17.6% higher than a year ago. The December corn futures closed at $7.61 per bushel up 7 cents, according to the Arkansas Farm Bureau. Corn is showing a mixed tone to start this week. At its peak December had closed on the recent high of $7.76 but has since retracted. 

Cash soybean prices closed Tuesday (Oct. 23) at $15.55 per bushel, up from $12.05 a year ago. The November contract started lower this week at $15.34 to close Monday, while January beans closed at $15.36, down 9 cents. Soybeans lost some ground late last week. Lower than expected export sales for the week pressured the market, as did negative outside markets. Indications some South American acreage might move to soybeans instead of corn added to the negative undertone, according to Arkansas Farm Bureau.
  
Dairy
Milk production in the 23 states during September totaled 14.7 billion pounds, down 0.5% from last year, according to a USDA report on Oct. 19. Production per cow in the 23 states averaged 1,732 pounds for September, 10 pounds below the prior year. The number of milk cows on farms was 8.47 million head, 5,000 head more a year ago. Wholesale dairy prices remain under pressure as butter and cheese stocks in cold storage rise from a year ago.

Ethanol
Cash ethanol prices are trading at $2.36 per gallon this week, down from $2.76 per gallon a year ago, according to USDA. Ethanol was priced at a $1.28 per gallon discount to gasoline as of Oct. 23, according to AAA.