Agribusiness Weekly Update: Agri losses push meat prices up

Beef
Beef packers were losing an average $84 per head processed on Tuesday (Nov. 6), diving $28 per head in the last week, according to Hedgers Edge. Arkansas cattle operators have lost a projected $128 million as a result of the drought over the past two years. The estimated cost to cow/calf producers is $141 per head, according to a recent study by the University of Arkansas Division of Agriculture. Heavy losses are expected to reduce the number of cow/calf herds across the state in 2013. There are about 1.8 million head raised annually on roughly 30,000 farms in Arkansas.

Hogs & Pork
Hog packer margins improved to $9 per head on Tuesday (Nov. 6), up from $2 per head last week, according to Hedgers Edge. The farmers raising hogs averaged a $9.37-per-head loss last week, compared to profits of $18.43-per-head profit on average this first week of November. Feed costs have trended higher around $134 per hundredweight this year, up from $103 a year ago. Slaughter is seasonally higher through the week ending Nov. 2, according to USDA.

Chicken
Chicken processors continue to wrestle with high grain costs keeping operating margins near flat levels in spite of higher wholesale prices. Georgia Dock prices for whole birds are 96 cents per pound, up 7.54% this year. Breast meat prices are $1.64 per pound, up 2.11% since Jan. 1. Leg-quarter prices have been relatively flat this fiscal year trending between 52 and 53 cents per pound. Wing prices have flow higher this week at $1.83 per pound, up 14.3% so far this year. Broiler placements were up 2% last week from a year earlier. Cumulative placements from Jan. 1, through Oct. 27, are down 2% from the same period a year earlier, according to USDA.

Table Eggs
Large egg prices in Arkansas ranged from $1.28 to $1.37 last week, up 4 cents from last year. Shell egg inventory rose 5.7% from a year ago with 1.234 million (30 dozen cases) processed, according to the USDA report on Nov. 2.

Grains
Cash corn closed Monday (Nov. 5) at $7.35, up 13.4% from a year ago. The December corn futures at $7.35 per bushel down 4 cents, according to the Arkansas Farm Bureau. March corn settled at $7.38, down nearly a nickel. Corn, too, may see a slight upward revision in production in Friday’s stock report. Probably not enough to cause any significant declines in the market. Demand remains a concern as end users are finding substitutes like wheat and other sources for the commodity like India and Former Soviet Union countries, according to the Arkansas Farm Bureau.

Cash soybeans closed Monday (Nov. 5) at $14.96, up from $11.77 the time last year. November soybeans traded 22 cents lower to close Monday (Nov. 5) at $15.04. January beans also traded down to close at $15.03. Soybeans continued under pressure extending Friday’s decline. Rain in the dry areas of Brazil and drying conditions in the wet areas provided additional pressure in soybeans. Projections of between  50 to 100 million bushels increase in 2012 production added to the negative undertone, according to Arkansas Farm Bureau.
  
Dairy
The September Dairy report indicated total cheese output (excluding cottage cheese) was 871 million pounds, up just 0.3% from the year-ago period. Butter production was 136 million pounds, 1.1% below September 2011. Nonfat dry milk production fell 18.7% to 84.4 million pounds, while Skim milk powders rose 22.6% to 43.6 million pounds, from a year ago, according to USDA.

Ethanol
Cash ethanol prices are trading at $2.40 per gallon this week, down from $2.85 per gallon a year ago, according to USDA. Ethanol was priced at a $1.06 per gallon discount to gasoline as of Nov. 6, according to AAA.