John Barone's Weekly Update
In its first look at feed prices for the 2024/25 crop year, the USDA (in Friday’s WASDE report) forecast corn prices to average $4.40 per bushel, down from $4.65 in 2023/24, and $6.54 in 2022/23. Soymeal was pegged at $330 per short ton, down from $380 in 2023/24 and $452 in 2022/23. Those numbers should improve profitability for both poultry and hog producers – and hopefully encourage a bit more production.
After hitting 3-year lows of $3.99 per bushel in February, corn futures have rallied back to $4.60. U.S. corn planting intentions are below year ago. In global markets severe flooding in S. Brazil and crop disease in Argentina are threatening to reduce world supplies – potentially increasing demand for U.S. corn exports. On the plus side, spring weather has been generally favorable.
Just a month ago it was reported that Highly Pathogenic Avian Influenza (HPAI) had spread from birds to dairy cows. This past Thursday, the FDA said that HPAI in dairy cows is widespread, with 1 in 5 milk samples taken from grocery stores testing positive for HPAI gene fragments. On Friday, the FDA clarified that fragments are not live virus, which is killed off during the pasteurization process, and that milk is safe for consumption.
In Friday’s cattle report, the USDA said feedlot inventories on Apr 1st were 11.82M head, up 1.5% from a year ago. However, new placements onto feedlots in March were down 12.3%, and marketings down 13.7% from last year. Herd liquidation may be slowing. Last week’s U.S. drought monitor showed some lingering issues in Kansas and Iowa, but mostly improvement over a year ago and expectations of better grazing conditions this spring.