Light to moderate trading developed in parts of cattle feeding country yesterday. Dressed sales in the North were mostly $3-4 lower at $165-166. Limited live biz was noted in Kansas at $105, roughly $2 lower than last week's weighted average. Opening bids this morning should start out near these same levels. Showlists are priced around $107 plus in the South and $170 plus in the North. We probably need to see at least another light to moderate round of trade volume, either today or tomorrow (possibly both). Live and feeder contracts should open some higher thanks to short covering and pre holiday positioning.
Expect hog buyers to resume procurement chores this morning with bids at least a dollar lower. Saturday's kill is expected to total close to 108,000 head. Lean futures seem staged to open moderately higher, supported by follow-through buying and bear spreaders taking profits.
| BULL SIDE | | BEAR SIDE |
| 1) | Although modest progress scored by cattle futures was nothing to write home about, traders do seem to be respecting lateral trading ranges in place since early August. It seems cautiously hopeful of bottom building activity. | 1) | Though the cash cattle trade was only lightly tested at midweek, the early trend was definitely lower. Since late July, such early cracks have proven to be pretty reliance of late-week bearishness. |
| 2) | The comprehensive boxed beef report showed a considerable week-to-week increase on total boxed beef sales, up 529 loads from the week prior, to 7,836 loads, six percent larger than a year ago and the largest weekly total since January 2015. | 2) | For the week ending August 26, U.S.hatcheries set 224 million eggs in incubators, up 3 percent from a year ago. At the same time, chicks placed totaled 184 million chicks, up 3 percent from 2016. |
| 3) | It is not usual for the pork carcass value to see a second seasonal price increase heading out of September and moving into October (especially when the wholesale trade has been hit particularly hard through August). | 3) | For the week ending August 26, Iowa barrows and gilts averaged 277.9 pounds, 1.3 pounds heavier than the previous week and 1.9 pounds greater than 2016. |
| 4) | Post-Labor Day demand for live hogs is honestly difficult to predict as two new packing facilities begin to operate in September. The two plants, adding about five percent to current shackle space, are both set to open the week after Labor Day. At the very least, such uncertain should work to check further selling interest in deeply discounted lean futures. | 4) | The pork carcass closed moderately lower on Wednesday with all primal quoted lower except the ham. |
CATTLE: (cleburnetimesreview.com) -- From gas to food, Harvey's economic impact is already being felt.
Gas prices have inched up and agriculture markets have begun to ripple, according to the Dallas Morning News, with cotton crops and coffee stockpiles threatened by flooding.
But, what could be affected most is meat prices, especially beef, given Texas is the nation's top beef producer, according to the DMN. Flood waters are stranding cattle and other livestock within the 54-county area of the state's disaster zone, which has kept ranchers from assessing damage.
About 1.2 million beef cattle are in the disaster zone, comprising about 27 percent of the state's herd, according to the U.S. Department of Agriculture, but it's not known how many losses the hurricane caused since making landfall on Friday.
How the aftermath of the hurricane affects agricultural markets in North Texas and the Johnson County area will be different than how it will affect the coastal region, said David Kercheval, Field Representative for Trade and Business Development with the Texas Department of Agriculture and associate with the Texas Ranch Brokers in Grandview. But the hurricane's economic impact will be felt throughout the state.
"There will be a number of animals lost in the coastal area," he said. "Obviously the biggest number will largely be cattle. But it can affect other forms of livestock, including the poultry houses."
With the holiday season around the corner, such losses could affect prices on turkey, he said.
Crops such as cotton and sorghum will also be affected because of the flooding, and losses in feed crops may eventually cause a rise in meat prices, he said.
Because the coastal area is such an agricultural resource, every level of market, from futures speculation to retail may be affected, he said.
Unknowns may have impacted the 2.6 percent rise in cattle futures seen Monday on the Chicago Mercantile Exchange, the nation's largest futures exchange, according to the DMN.
It could take a month or more, Kercheval said, for the losses to be sorted out.
"The loss to agriculture is going to be substantial," he said, "possibly as big of a loss as we have ever seen."
The Texas and Southwestern Cattle Raisers Association has been working with state and local response agencies to coordinate relief and support efforts and has special rangers in the region to assist producers. The association also has a hurricane update page on its website at tscra.org/hurricaneupdate.
The Will Rogers Memorial Center in Tarrant County is sheltering for horses from the affected areas and can be reached at 817-713-3964, according to the TSCRA.
"A lot of people in this area have offered to help," Kercheval said, not just with livestock, but with other animals as well.
Several area animal shelters, including Cleburne's, took in dogs evacuated last week before the hurricane made landfall.
HOGS: (foodmarket.com) - China will pay farmers to turn animal waste into fertilizer and power, the Ministry of Agriculture said on Wednesday, as Beijing cracks down on agricultural pollution that has for years leaked into rivers and lakes, angering Chinese residents.
China will give farmers subsidies to build animal waste processing facilities to make fertilisers or to treat manure so it's safe for disposal, and to install biogas plants that use methane to generate electricity, according a government plan announced on Aug. 1.
The plan includes setting up recycling programs by 2020 in 200 major counties that have livestock farms. That's less than half the 586 major counties the government says have hog and poultry farms.
The agriculture ministry gave no details about the size of the subsidies, but the move could be a big step toward curbing chemical fertilizer use and cutting water pollution.
"We will help the farmers fully understand how organic fertilizer can improve energy efficiency and the environment," said Zhong Luqing, director of the fertilizer department at the ministry, at a briefing on Wednesday.
Biogas technology, which can help save on electrical costs, is too expensive for many farmers unless the government helps.
Those researching and using organic fertilizer will also get preferential treatment on loans, taxes, power use and land rent, Zhong said.
Getting rid of animal waste is a major headache for livestock producers worldwide, partly because of the strong odor and damage caused to the atmosphere by the release of harmful gases. Run-off containing animal wastes can also seep into the water table and contaminate rivers and lakes.
In China, how to better dispose of animal waste has become a particular problem due to the fast growth of poultry and hog farming over the past decade to meet demand for higher quality meat. Chinese livestock farms generate nearly 4 billion tonnes of waste annually, according to the agriculture ministry.
"We will strengthen policy support and increase subsidies to support farmers to use organic fertilizer ... especially large-scale farmers, family farms and cooperatives," Zhong said.
The plan is part of Beijing's effort to limit chemical fertilisers and pesticides, which have contaminated soil and water. China uses about one-third of the world's fertilisers.
Beijing has said it was targeting zero growth of chemical fertilizer and pesticide by 2020. It has urged farmers to use less chemical fertilizer and turn to animal manure instead.
