With the start of the new marketing year only a week away, the process of monitoring corn consumption and corn consumption prospects is underway.
According to Darrel Good, a University of Illinois agricultural economist, not much is known about consumption prospects as the ongoing process of updating expectations begins.
“In the case of feed and residual use of corn, the USDA’s quarterly Grain Stocks reports are the only source of data on actual consumption,” Good said.
The Sept. 1, 2014, corn stocks estimate to be released on Sept. 30 will allow the calculation of the magnitude of feed and residual use of corn for the final quarter of the 2013-14 marketing year and will provide some guidance for potential use during the year ahead. Expectations of feed use for the year will be derived primarily from weekly, monthly, and quarterly U.S. Department of Agriculture (USDA) reports of livestock and poultry inventories.
“Feed use of corn will not receive much support from the beef sector. The liquidation of the cow herd and the smaller calf crops of the past few years mean there are fewer cattle available for feeding, and that deficit will continue for an extended period. The USDA reported that for feedlots with a capacity of 1,000 head or more, there were 2 percent fewer cattle on feed as of August 1 this year than on August 1 last year. Seven percent fewer cattle were placed on feed during July 2014 than during July 2013,” Good said.
He said the poultry and dairy sectors appear to be experiencing some very modest expansion. The USDA reported that the number of broiler chicks placed for meat production during the two weeks ended August 16 was up 2 and 1 percent, respectively, compared to placements of a year earlier.
“Two weeks do not constitute a trend, so that placement will continue to be followed closely to determine if expansion is actually underway,” Good said.
The average number of layers has been running 1 to 2 percent above those of a year ago each month this year. The USDA also reported that milk cow numbers in 23 selected states were up about 1 percent in July.
Uncertainty in hog sector
According to Good, the most uncertainty about livestock production comes from the hog sector. The USDA reported that the June 1 inventory of market hogs was 5 percent smaller than the inventory of a year earlier, but producers expected to increase the number of sows farrowed by 4 percent in the June-September quarter. Production prospects continue to be clouded by the ongoing impact of the porcine epidemic diarrhea (PED) virus on the number of pigs actually weaned.
The USDA’s monthly Livestock Slaughter report showed a 7 percent year-over-year decline in hog slaughter in July. That decline was partially offset by a 5 percent increase in average slaughter weight. The USDA’s Hogs and Pigs report to be released on Sept. 26 will provide additional information about pork production prospects during the 2014-15 corn marketing year. Good said that because feed consumption of corn includes an unknown and sometimes surprising residual component, only the quarterly stocks estimates will provide a measure of actual disappearance.
Sales of U.S. corn for export during the 2014-15 marketing year were reported at 365 million bushels as of August 14. Sales are about 50 million bushels smaller than those of a year ago, but about 60 million bushels larger than the average for the years 2008 through 2012, Good said. He explained that last year, China had purchased 117 million bushels of U.S corn, compared with essentially none this year. Sales to unknown destinations are also down about 40 million bushels.
On the other hand, sales to Japan and South American destinations are larger than those of a year ago. Total export sales as of August 14 accounted for 21 percent of the USDA’s projection of total marketing-year exports, about the same as sales of a year earlier.
“The level of export sales to date is in line with USDA’s projection of exports for the year,” Good said. “However, the seasonal pattern of sales varies from year to year so that it is not yet known whether the current level of sales reflects only timing decisions or is indicative of total export potential.
“There are some early signs that corn consumption during the year ahead will increase modestly in response to lower prices,” Good concluded. “However, that response is not yet large enough to offset the impact of the market expectation of an even larger corn crop than was forecast by USDA two weeks ago. Corn prices are expected to stay under some pressure at least through the USDA’s Sept. 11 Crop Production report. The size of the corn crop forecast in that report will be important in determining where the low may be in the corn market,” he said.
Indonesian trade officials are reportedly in talks with officials in Japan to resume poultry exports, which were halted in early 2004 following an avian influenza outbreak that affected many local poultry breeders.
Producers in Indonesia have expressed their readiness to ship processed poultry products to Japan, which could boost export earnings to at least US$200 million a year.
McDonald’s Japan discontinued purchasing chicken from China’s Shanghai Husi Food Co. Ltd. after the exposure of a food safety scandal involving sales of expired meat at the end of July 2014. Seeking import substitutes, Indonesian producers may provide an alternate from Thailand, which has been supplying the majority of the Japanese market.
Indonesian poultry producers could meet standards applied in Japan and had already gained a competitive edge compared to rivals in China or Thailand thanks to efficient production, according to Indonesian Poultry Breeders Association (GAPPI) chairman, Anton J. Supit. “I am optimistic now we can make it. We still only need to see whether the price matches or not,” Supit said.
A staff member in agriculture at the Japanese Embassy in Indonesia, Kazuko Takabatake, said two Japanese veterinary officials will carry out on-site inspections at five factories from Aug. 24 to Aug. 29, but declined to specify the names of the firms. According to Takabatake, “They will check to see whether the factories are sufficiently hygienic and whether the whole producing process is carried out appropriately."
A poultry production startup company has been awarded a $750,000 grant to open a new chicken processing line in a former Townsend chicken plant in Siler City, North Carolina.
Carolina Premium Foods, based in Whispering Pines, North Carolina, signed a deal to lease the 95,500-square-foot facility that has remained mostly vacant over the past three years, aside from its partial use by Chaudhry Halal Processing Company, which closed its operation in May 2014.
Carolina Premium Foods reportedly plans to invest $4 million in renovating the facility and equipping it with two broiler production lines, as well as to create 38 full-time jobs that could grow to more than 300 over the next five years.
According to national director of SAG, Angel Sartori, this new publication "is the result of close work that holds the SAG and APA, in order to ensure high standards of product safety for consumers of birds both in Chile and in the abroad. The SAG has all the technical expertise to develop a document with these characteristics that meet the current requirements of the food industry."
Meanwhile, APA president, Juan Miguel Ovalle, said: "Undoubtedly, this Atlas is an important contribution to the inspection process, allowing us to see the process, avoid unnecessary seizures, adding technical and scientific information to the inspection SAG performs today. It also allows to provide a tool for training new professionals entering the process at a time to correct deficiencies and shortcomings of the system."
Nestle, one of the world’s largest food companies, has signed a partnership agreement with World Animal Protection, requiring all 7,300 of the company’s suppliers of animal-derived products to comply with the organization’s tougher animal welfare standards.
Nestle cut ties last year with Wiese Brothers Farm in Greenleaf, Wisconsin, after Mercy for Animals conducted an undercover investigation in which an employee took secretly recorded video of employees beating and stabbing cows and dragging them with farm equipment. Wiese Brothers had supplied milk for Nestle’s pizza division.
"Mercy For Animals praises Nestlé for stepping up to the plate to improve the lives of farmed animals on a global level,” said Nathan Runkle, president of Mercy For Animals, in a report. “We are heartened that Nestlé not only took notice, but also took action, after egregious cruelty was exposed at one of its dairy suppliers.”
Runkle said Nestle’s new policy is the most sweeping animal welfare policy ever adopted by a major food distributor.
In a blog written by Wayne Pacelle, president/CEO of The Humane Society of the United States, commending Nestle’s move, he states: “ … this announcement marks the most comprehensive and ambitious animal welfare program by a global food retailer to date.”
The new program will eliminate standard practices from Nestle’s supply chain that are controversial, including:
Confinement of sows in gestation crates
Confinement of calves in veal crates
Confinement of layers in cages
Forced rapid growth of chickens used for meat products
Cutting of horns, tails and genitals of farm animals without painkillers
Nestle said it has commissioned an independent auditor, SGS, to ensure the new standards of animal welfare are met by its suppliers. Some checks also will be conducted by World Animal Protection. Nestle said it will not work with suppliers who are not willing to meet the new standards.
Nestle brands include Jack's, DiGiorno and Tombstone pizza, Hot Pockets and Lean Cuisine.
The China Feed Study Team became the first group to do hands-on training with the Northern Crops Institute (NCI) Feed Center’s newly upgraded equipment during the Feed Manufacturing Technology course August 18-22 at NCI in Fargo, North Dakota. After three days at NCI, the group traveled to Portland, Oregon, for the wrap-up.
The course was co-sponsored by Minnesota Soybean Research and Promotion Council, North Dakota Soybean Council, and South Dakota Soybean Research and Promotion Council, in conjunction with the U.S. Soybean Export Council (USSEC).
“China is the largest user of soybeans and the largest manufacturer of animal feed in the world,” said Kim Koch, Ph.D., NCI Feed Center manager and lead instructor for the course. “Their demand for feed is increasing annually by 10-12 percent. China raises 50 percent of all the pigs in the world, but their poultry production is gaining ground on swine, and aquaculture is becoming more important. Chinese domestic production of soybeans and corn has probably peaked, and therefore, they are becoming major importers of soybeans and corn.”
“We strongly believe that the high-quality soybeans produced in Minnesota, North Dakota and South Dakota result in better animal performance,” Koch said. “Regional soybean production will continue to increase in the next five to 10 years. NCI is very grateful to the regional soybean commodity groups who conceived and sponsored this course.”
In addition to providing hands-on demonstrations about size reduction and pelleting at the NCI Feed Center, Koch lectured on efficient use of protein, feed mill efficiency, feed mill design, mixing, particle size reduction, hygienic feed manufacturing, and pelleting.
Additional speakers included Frayne Olson, Ph.D., North Dakota State University, who discussed commodity price outlook; Peter Mishek, president of Mishek Inc. & Associates, Omaha, who introduced essential amino acids in soybeans and soybean meal; David Hahn, Ph.D., NCI director of technical services and business development, who spoke on food and feed safe manufacturing practices; and Robert Thaler, Ph.D., South Dakota State University, who presented information on soybean meal utilization.
The group visited the Scott Gauslow farm near Colfax, North Dakota. The group also toured the EGT Export Terminal in Longview, Washington, and the Wilbur-Ellis Company, a feed ingredient company in Clackamas, Oregon, so participants could see first-hand the quality, efficiency and reliability of U.S. soy and logistics systems.
The NCI Feed Center equipment upgrade includes the installation of a new mixer, a new automation system, and the facility’s first micro-ingredient system. Funding for the upgrade was a collaborative effort between the North Dakota Legislature, the feed equipment industry, and regional commodity groups, according to Mark Weber, NCI director.
Trial results from a University of Berlin study have confirmed the benefits of combining phytase superdosing with a high-efficacy single-enzyme xylanase. Compared with phytase superdosing alone, the inclusion of the xylanase produced a significant additional 4 percent improvement in broiler body weight gain (BWG) over a 35-day period.
The trial compared performance of a superdosing-optimized phytase (Quantum Blue) and a latest generation single-enzyme xylanase (Econase XT) in wheat-corn-soy fed broilers grown from 0 to 35 days of age. Superdosing with 1500 FTU/kg of the phytase increased BWG by 3 percent (2205g versus 2140g) compared to the control diet containing a standard 500 FTU/kg phytase dose (formulated using a phytase matrix of 0.2 percent calcium, 0.2 percent phosphorous, 100 kcal/kg AME). Addition of a standard 16,000 FXU/kg dose of the xylanase raised BWG a further 4 percent (to 2291g).
“This is a gain that is not only statistically significant, but is also economically worthwhile, whether used to boost performance or add to the matrix and further reduce feed costs,” said Gilson Gomes, AB Vista’s global technical manager for poultry.
“When the target is phytate elimination, improving the availability of that phytate through the action of a well-targeted xylanase should be an advantage. This trial confirms that when both enzymes are optimized for efficacy, that advantage translates into a genuine performance gain.”