Look for typically slow activity in feedlot country this morning as packer focus exclusively on the colllection of new showlists. We expect the late month offering to be about steady with last week. While producers will be in no hurry to price cattle, it goes without saying that they will be thinking higher money again (e.g., $130-132 on the South; $206 plus in the North). Live and feeder contracts seem likely to open sharply higher, jacked by higher feedlot sales and technical buying interest.
The cash hog trade should launch the week with generally steady bds. Inclement weather, for a third week in a row, While hog harvest levels have been disrupted by weather for the last three weeks with hogs gaining weight accordingly, chain speed is expected to normalize next week. Lean futures are staged to open moderately higher, supported by short covering and spillover enthusiasm from the cattle trade.
| BULL SIDE | BEAR SIDE | ||
| 1) | Feedlot has bolted sharply higher on Friday, another impressive sign of country leverage, curent marketings, and positive packer perceptions of longer-term beef demand. | 1) | Though the January 1 on feed was fairly well anticipated, the December placement total was somewhat larger than expected. According to the DTN placement model, big lots now have 9 percent more steers and heifers to finish in April than the early spring of 2017. |
| 2) | For the week ending January 18, net beef export sales surged to 28,100 MT, the largest weekly total reported since | 2) | Beef processing margins took another big hit last week (gross margin tightening another $50 per head), slammed by sharply higher cattle costs and lackluster product demand. Packers may soon be forced to slow chain speed. |
| 3) | At the same time, net pork export sales soared to 35,000 MT. Increases were reported for Mexico (15,800 MT), South Korea (8,000 MT), Japan (3,900 MT), Australia (2,500 MT), and Canada (2,200 MT). | 3) | Easing cash hog prices and concerns whether the strong domestic and export pork demand that the industry has enjoyed will continue weighed on the market. |
| 4) | Hog weights are expected to move lower for the next five or six weeks, The plrk cutout should move higher consistent with a normal seasonal movement. | 4) | For the week ending January 23, noncommercial traders decreased their net long position in lean hog futures by 1,900 contracts on long liquidation, reducing it to 53,600. |
CATTLE: (Bloomberg News) — Japan's beef purchases are set to climb this year as growing demand for affordable meat counters the first rise in import duties in 14 years.
Japan's beef imports are likely to increase to the highest level since 2001 after growing more than 10 percent last year, Shiro Ohashi, executive director of the Japan Meat Traders Association, said in an interview in Tokyo on Thursday. Foreign beef is sought as a cheaper alternative to Japanese meat and fish, he said.
Beef consumption rose 6.8 percent in the seven months to Oct. 31, heading for the fastest annual expansion in at least 12 years, according to the latest data from the Agriculture Ministry. Japanese producers are unable to keep up with demand as elderly farmers are retiring without successors and as the domestic herd shrinks.
Premium Wagyu beef is becoming too expensive to buy for many Japanese as demand from overseas buyers is expanding, buoying prices, Ohashi said. Less fatty beef from Australia and the U.S. is becoming popular, especially among senior consumers, Ohashi said.
U.S. beef imports are expanding at a faster pace than Australian shipments, even as Japan increased tariffs on U.S. frozen beef in August, because U.S. prices remain competitive, Ohashi said. In the 11 months through November, imports of U.S. beef climbed 26.6 percent from a year earlier and purchases from Australia rose 5.5 percent, according to the Agriculture Ministry. The U.S. accounts for 42 percent of total imports.
Noodle-shop operator Kourakuen Holdings Corp. decided last year to turn some of its restaurants to steak houses through a franchise agreement with Pepper Food Service Co Ltd, the operator of popular "Ikinari Steak" shops. Bronco Billy Co Ltd expects a 20 percent increase in operating profits this year as the company expands its steak restaurants.
"Regardless of the tariff increase, yen-based prices of U.S. beef have stayed low thanks to a weakening dollar," he said. Low feed-grain prices in Chicago and an expanding American herd have also kept U.S. beef affordable, he said.
Imports are likely to expand in the medium term after Japan's trade agreements with 10 Pacific nations and the European Union.
"Ireland is eager to boost beef shipments to Japan, taking advantage of the trade agreement, as the nation expects to lose sales in the U.K. because of Britain's withdrawal from the EU," Ohashi said. Shipments from Canada and Mexico will probably increase after the Trans-Pacific Partnership agreement is implemented.
HOGS: (Farm Futures) — A 2017 study conducted and released by Harry Kaiser, the Gellert Family Professor in the Dyson School of Applied Economics and Management, Cornell University, finds U.S. pork producers receive a positive return on their checkoff investment.
An economic analysis of Pork Checkoff programs is commissioned every five years by the National Pork Board. The study quantifies the returns generated by Pork Checkoff investments in research, pork promotion and producer education programs. The latest results, published in 2017, cover 2011 to 2016 programs.
"It's important to producers -- those who directly fund the Pork Checkoff -- to understand and quantify the value of their investments," said Terry O'Neel, National Pork Board president and a pig farmer from Friend, Nebraska. "The results indicate a positive impact of all aspects of the Pork Checkoff, from conducting production-focused research to growing consumer and export demand for pork."
Key points from the survey:
•Each dollar invested in production research to benefit on-farm practices yielded $83.30 in producer value.
•Each dollar invested in developing foreign markets yielded $24.70 in producer benefits.
•Other pork promotion resulted in benefits of $14.20 for advertising and $12.40 for non-advertising promotion.
•Research on market drivers returned $8.30 for each $1 invested.
•The overall return of checkoff program activities is $25.50 for each dollar invested.
USDA requires a return on investment analysis every five years. The 2001 to 2006 study showed an overall return of $13.80 to $1 invested, and the most previous study, released in 2012 for the time period of 2006 to 2011, found a return of $17.40 to $1 invested.
"This analysis provides a comprehensive review of program development, and more importantly, efficiency of our checkoff program administration," O'Neel said. "The net return of 25 to 1 on checkoff investments demonstrates that we are meeting producer needs in the areas that drive sustainable production and grow consumer demand."
No comments:
Post a Comment