‘Twas the night after Christmas, and down at Mar-a-Lago, the ex-Pres was thriving on loans from Wells Fargo. Indictments were hung by the chimney with care, in hopes that immunity would soon be declared. Then up on the roof there rose such a clatter, he sent up Melania to see what was the matter. When what to her wondering eyes should appear…
Read MoreThe Federal Reserve has finished raising interest rates. At last week’s Open Market Committee Meeting, the Fed held rates steady, and Chairman Jerome Powell said that he anticipated 3 rate cuts next year – most likely in the 2nd half of the year. Some private economists expect 5 cuts. That’s because inflation has mostly been tamed.
Read MoreThe 6-month pause in Avian Flu ended last month. A warm summer delayed wild bird migration (from Canada southward), but now the number of HPAI inflected flocks is piling up. In the month of November, we lost 5.1M egg layers, 1.4M turkeys, and 1.0M broilers. The states up & down the Mississippi flyway have been hardest hit.
Read MoreChicken looks to be what’s on the menu for 2024. Following 11 months in the red, chicken producers finally turned profitable in Sept and look to stay that way. High prices for competing proteins have helped support chicken prices. While on the cost side, corn prices that averaged $6.43 per bushel for the first half of 2023, have tumbled to $4.64 (12/1).
Read MoreConsumers still crave beef but are increasingly forced to trade down from higher-priced beef cuts. That will keep demand for ground beef strong in 2024. On the supply side, beef and dairy cow herd numbers have declined, reducing fat and lean trimmings supplies. In Oct’s WASDE, the USDA forecast that beef imports (mostly lean 90s trim from Australia) will be up 7.8% for 2023 - but increase by just 1.0% in 2024.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories were 11.74M head on Oct 1, up 1.7% from a year ago. New placements onto feedlots in Oct were up 3.8%; Oct marketings were down 2.5%. The Oct 1st percentage of heifers in feedlots was a 22-year high of 40.0% – with no signs (so far) of ranchers retaining additional heifers for breeding.
Read MoreEl Niño’s effect on palm oil prices, and a big increase in soy-oil usage for renewable diesel, are both bullish for soy-oil prices. The USDA pegged soy-oil use for biofuel at 12.8B pounds or 47.4% of all 2023/24 U.S. soy-oil output. However, at Market Vision’s Orlando Conference, Brian Williams of Macquarie Bank said that a large volume of ancillary oils has been filling the gap on additional capacity due to their lower carbon intensity scores.
Read MoreThe U.S. economy has shown resilience, supported by a strong job market and a jump in “experience” spending (travel, concerts, restaurants) by younger Americans. But if the economy takes a turn for the worse in 2024, we may look back on Friday’s Labor Dept. report as a turning point. U.S. employers added 150,000 net new jobs in Oct, less than half Sept’s level.
Read MoreIn Sept, milk production was down 0.2% and below year-ago levels for the 4th straight month. In Oct’s WASDE, the USDA projected milk production to increase by a slim 0.5% in 2023. Class III milk futures, which averaged $13.87/cwt in July, have rebounded to $16.85 (10/27). Cream supplies have been ever tighter, with hot weather boosting ice cream demand this past summer and consumers considering higher-fat dairy products “healthy” these days.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories were 11.58M head on Oct 1, down 0.6% from a year ago. New placements onto feedlots in Sept were up 6.1%, and Sept marketings were down 10.6%. The mid-year percentage of heifers in feedlots and headed to slaughter was a 22-year high of 40.0% – with no signs (so far) of ranchers retaining additional heifers for breeding.
Read MoreThe biggest support for 2.0%+ GDP growth in 2023 (and no recession) came from the lack of any serious economic shocks like fuel spikes, inflation, war, and pandemic that suffocated the economy during the prior 3 years. But economic risks are higher again. And while no single issue can knock a solid U.S. economy off the tracks, a combination of smaller threats could derail GDP in 2024.
Read MoreCrude oil prices have been anything but stable over the past 2 years. History: Nymex light crude oil futures closed out 2021 in the mid-$70s per barrel before the Ukraine war drove prices to a record-high $123.70 on 3/8/22. Oil prices then declined steadily in the 2nd half of 2022 and averaged $74.95 for the 1st half of 2023.
Read MoreIn last week’s quarterly Hogs & Pigs report, the USDA pegged all hog and pig inventories at 74.3M head, up 0.3% from a year ago. It shows that producers have not yet trimmed herd numbers in response to large supplies and lower prices. They are trying, as indicated by the breeding herd being down 1.2% from last year.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories were 11.34M head on Sept 1, down 2.2% from a year ago. New placements onto feedlots in Aug were down 5.1%, and July marketings were down 6.0%. Beef cow herd numbers are at a 52-year low – with no signs that ranchers are planning to expand anytime soon.
Read MoreSoybean oil prices are steady for now, but two powerful forces have the potential to drive prices higher. The first is El Niño’s effect on palm oil in Malaysia and Indonesia. Soy-oil and palm oil prices are highly correlated and past El Niño events have seen drought-affected palm oil prices more than double.
Read MoreDairy markets have continued to strengthen on tightening milk supplies. July milk production, down 0.5%, was below year-ago levels for the 2nd straight month. Class III milk futures are $18.48/cwt (9/8) after averaging $13.87 in July and $17.03 in Aug. Cheese in cold storage was 2.2% below a year ago in July.
Read MoreThe summer might be coming to a close, but demand for ground beef and burgers is showing no signs of slowing. Blame it on the popularity of burgers and ground beef; even at elevated price levels, it is still the best value in the beef category. Beef 90s lean trimmings (USDA market), mostly from old dairy cows and Aussie imports, averaged $2.70 per pound for the 1st half of 2023 and are forecast to average a record-high $3.10 in the 2nd half of the year.
Read MoreThree weeks of intense heat across wide areas of the U.S. has brought yield risk to crops and safety threats to livestock. Despite recent rain in the Midwest, agricultural meteorologists say that the heat has dried up ground moisture quickly and that wheat, soybean, and corn crops are all under extreme stress. On the livestock side, animals reduce food intake and increase water consumption when temps soar.
Read MoreIn Friday’s monthly cattle report, the USDA said feedlot inventories were 11.03M head on Aug 1, down 2.3% from a year ago. New placements onto feedlots in July were down 8.3%, and July marketings were down 5.3%. Beef cow herd numbers are at a 52-year low – with no signs that ranchers are planning to expand anytime soon.
Read MoreCorn futures that started the year at $6.70 per bushel are currently $4.7450 (8/11). That’s probably all you need to know about this year’s corn crop. But if you followed the crop’s development this season, you might expect that prices would be higher. This year’s crop was short of moisture for some of its critical growth stages.
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