Image provided by: University of Oregon Libraries; Eugene, OR
About Capital press. (Salem, OR) 19??-current | View Entire Issue (Dec. 18, 2015)
14 CapitalPress.com December 18, 2015 Dairy/Livestock Subscribe to our weekly dairy or livestock email newsletter at CapitalPress.com/newsletters EU milk growth complicates global dairy recovery By CAROL RYAN DUMAS Capital Press Quarterly dairy prices forecast (U.S. dollars) World (FOB* Oceania) Many factors will keep re- covery at bay in global dairy markets in the year ahead, but the bottom line is the world is swimming in milk. That’s the message Ra- bobank analysts delivered in their latest quarterly dairy re- port, which forecasts market doldrums to continue until late in 2016. While production growth has slowed considerably in most export regions, European production continues to grow strongly, exceeding expecta- tions, as a result of the removal of quotas in April, Tim Hunt, Rabobank global dairy analyst, said during the bank’s Dec. 11 market webinar. “Any recovery is likely to be fairly modest, capped at the moment by the strength of the U.S. dollar and slow demand growth and the weak role Chi- Price per ton Item Q4 2015 Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Whole milk powder Skim milk powder Butter Cheddar cheese Sweet whey powder $2,500 2,070 3,030 3,160 685 $2,500 2,000 3,000 3,100 650 $2,500 2,000 3,000 3,100 700 $2,700 2,200 3,300 3,300 750 $3,200 2,800 3,600 3,700 900 U.S. (USDA AMS announced) Item Price per pound Q4 2015 Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Nonfat dairy milk AA butter Block cheddar Whey powder $0.87 2.60 1.67 0.23 $0.85 1.71 1.46 0.26 $0.85 1.64 1.46 0.29 $0.94 1.70 1.60 0.32 $1.17 1.93 1.78 0.40 Class III milk Class IV milk 15.37 16.67 Price per hundredweight 13.28 12.38 13.44 12.08 15.10 13.10 17.50 16.10 *Free on board (Transportation costs to be paid by buyer post-shipment.) Source: Rabobank forecasts, USDA Capital Press graphic and Russia’s political sanc- tions, but suppliers have had to push products at much lower prices, he said. International product pric- na will play in the recovery,” he said. Second-tier importers have been able to pick up the slack left by China’s full pantries es are now 20 percent to 50 percent below their three- year average. And while the U.S. market has seen tremen- dous premiums for butterfat, which has underpinned prices throughout the complex, that market has begun to crack. More of the same in the com- ing months will lead to a full price correction, with U.S. farmgate prices likely to fall below break-even for much of 2016, he said. Farmgate prices have al- ready fallen elsewhere, and markets are starting to see milk production give way. Milk prices in New Zealand equate to less than $10 per hundred- weight, pushing culling rates up 30 percent through October, said Tom Bailey, Rabobank U.S. dairy analyst. Production in the U.S. is expected to contract marginal- ly in the first half of 2016. Per- cow production has recently fallen off, but farmers were Retaliatory tariffs would add to U.S. meat export problems By CAROL RYAN DUMAS Capital Press U.S. meat exports world- wide have faced gusty head- winds in 2015, with year-over- year beef shipments down 13 percent in volume and 12 per- cent in value and pork up only 1 percent in volume and down 16 percent in value. A sizable dent in exports to two of the largest meat im- porters — Canada and Mexico — could deepen now that the World Trade Organization has authorized retaliatory tariffs on U.S. products over the U.S. country of origin label rule. Retaliatory duties by Can- ada and Mexico could add to the struggles U.S. beef and pork exports already face in those countries, whose curren- cies have weakened dramat- ically against the U.S. dollar, said Joe Schuele, USMEF vice president of communications. U.S. beef and pork exports to Mexico and Canada, January through October Beef volume (U.S. tons) Country Mexico Canada 2014 2015 Value ($ millions) Percent change 2014 2015 Percent change -21 -13 $752.1 852.7 $676.2 745.6 -10 -13 130,439 103,682 119,346 104,106 Pork volume (U.S. tons) Country Mexico Canada 2014 2015 Value ($ millions) Percent change 2014 2015 Percent change 12 -4 1,073.4 737.1 876.1 637.3 -18 -14 466,444 520,108 179,131 171,457 Source: U.S. Meat Export Federation Carol Ryan Dumas and Alan Kenaga/Capital Press Beef exports from January through October were down $107 million to Canada and $76 million to Mexico. Pork exports were down almost $100 million to Canada and $197 million to Mexico, USMEC reported. “We can ill afford to have additional duties imposed as a result of this” COOL conflict, Schuele said. The $1 billion in retaliato- ry tariffs set by WTO are less than the $3 billion Canada and Mexico has sought. But de- pending on how the duties are imposed, they could still have a significant impact on U.S. meat exports to those coun- tries, he said. Mexico was the largest ex- port market for U.S. pork in LET ‘ER BUCK! With this Special Holiday Offer for Pendleton Round-Up Fans Get both Pendleton Round-Up at 100: Oregon’s Legendary Rodeo 2014, with sales of $1.6 billion, and the second largest market for U.S. beef at $1.2 billion. Canada was the fourth-largest export market for U.S. beef at $1 billion and the third-largest market for U.S. pork at $905 million, USMEF reported. The U.S. is the dominant foreign beef and pork supplier for Canada and Mexico, having duty-free meat trade as a result of the 1994 North American Free Trade Agreement. But there is growing competition for U.S. product in both mar- kets, Schuele said. Canada has targeted Mex- ican pork markets after being shut out of Russia by that coun- try’s sanctions. They were in response to Western sanctions against Russia over its annex- ation of Crimea in mid-2014. Canada is also exerting a grow- ing presence in Mexican beef markets, he said. Lower trans- portation costs are making Can- ada a more formidable compet- itor in Mexico than in the past, he said. Growing competition in Canada for U.S. pork is primar- ily from the EU, whose pork products were banned from Russia in early 2014 due to an outbreak of African swine fe- ver, even before Russia’s sanc- tions over Crimea, he said. EU pork has been “pouring into every region of the world for the last 22 months,” he said. In addition, Canada recently approved imports of EU beef, which had been shut out since the EU’s earliest case of bovine spongiform encephalopathy in the mid-1990s. There hasn’t been much in the way of ship- ments yet, but imports have been approved, he said. stocking more cows to ac- count for yield loss. As pric- es fall, farmers will gradually cull excess cows and herd size will finally move into year- over-year negative territory, he said. Rabobank anticipates a de- cline in the global milk supply in the first half of 2016, even with continued growth in Eu- rope in the first quarter. New Zealand will play a big role in that reduction, with milk pro- duction expected to be down 8 percent to 10 percent in the 2015-2016 season, Bailey said. “This should enable us to start making inroads across our excess stock,” he said. Strong production growth in 2015 has resulted in 4.2 million tons of excess stocks, equivalent to more than two weeks of international trade. Markets can and will clear it, but it’s been sitting around for some time and needs to move, he said. Rabobank expects rela- tively stable prices on dairy products in the international market through the first half of the year as production slows and demand picks up a bit, Hunt said. “But we’ve got these ex- cess stocks that we’ll have to work through to help close the gap and (which) really pre- clude a significant tightening of the market in the first half of the year,” he said. The second half of the year should see stocks start to erode, China back in the mar- ket and product prices moving up, he said. Rabobank analysts are forecasting Class IV (pow- der and butter) milk prices near $12 per hundredweight and Class III (cheese) milk prices near $13 per hundred- weight in the first half of the year, with income over feed dropping significantly below break-even. Per calorie, veggie production tough on the environment, study reports Eating a vegetarian diet may contribute to climate change, according to research conducted at Carnegie Mellon University. In a study published in Environment Systems and Decisions, researchers found that eating “healthier” foods prescribed by the U.S. Depart- ment of Agriculture increases a person’s impact on the envi- ronment. That’s because on a per cal- orie basis, production of fruits and vegetables requires more water and energy and produc- es more greenhouse gas emis- sions than meat. “Eating lettuce is over three times worse in greenhouse gas emissions than eating bacon,” Paul Fischbeck, professor of social and decisions sciences and engineering and public policy, said in a CMU press release. “Lots of common veg- etables require more resourc- es per calorie than you would think. Eggplant, celery and cucumbers look particularly bad when compared to pork or chicken.” Fischbeck, Michelle Tom, a Ph.D. student in civil and environmental engineering, and Chris Hendrickson, the Hamerschlag University Pro- fessor of Civil and Environ- mental Engineering, studied the food supply chain to de- termine how the obesity epi- demic in the U.S. is affecting the environment, according to the press release. Specifically, they examined how growing, processing and transporting food, food sales and service, and household storage and use take a toll on resources in the Courtesy National Pork Board Black pepper pork chops cook on the grill. Researchers at Carnegie Mellon University say that on a per calorie basis, pro- duction of fruits and vegetables requires more water and energy and produce more greenhouse gas emissions than meat. form of energy use, water use and GHG emissions. On one hand, the results showed that getting our weight under con- trol and eating fewer calories has a positive effect on the environment and reduces en- ergy use, water use and GHG emissions from the food sup- ply chain by approximately 9 percent. However, eating the recom- mended “healthier” foods — a mix of fruits, vegetables, dairy and seafood — increased the environmental impact in all three categories: Energy use went up by 38 percent, water use by 10 percent and GHG emissions by 6 percent. “There’s a complex rela- tionship between diet and the environment,” Tom said in the press release. “What is good for us health-wise isn’t always what’s best for the environ- ment. That’s important for public officials to know and for them to be cognizant of these tradeoffs as they develop or continue to develop dietary guidelines in the future.” Minnesota lifts final remaining bird flu quarantines AND A Rodeo to Remember: The Centennial Pendleton Round-Up in Photos ST. PAUL, Minn. (AP) — Minnesota has lifted the last re- maining quarantines on poultry farms that were infected with a deadly form of bird flu, officials announced Tuesday, marking a milestone in the state’s recov- ery from an outbreak that cost its turkey and egg producers more than 9 million birds. Ninety percent of the 108 infected farms were cleared to restock as of Oct. 6. The few remaining sites have now com- pleted the cleaning, disinfection and testing needed to gain ap- proval for restocking, the Board of Animal Health said in a state- ment. Minnesota announced its first case of the highly pathogen- ic N5N2 avian influenza March 5 and confirmed its last case June 5. Restocked poultry on all affected farms have tested neg- ative, providing additional as- surances that the virus has been eradicated from Minnesota, the board said. “While seeing no new cas- es of HPAI is encouraging, we know that detecting future cases remains a possibility,” State Vet- erinarian Bill Hartmann said. Dairy product prices sink lower By LEE MIELKE For the Capital Press $35 L only includes shipping and handling You’ll get more than 1,000 photographs, including rare images from family collections, a complete list of a century of rodeo winners and Round-Up royalty and a recap of the history of Eastern Oregon’s premier event. Order Today! Call 800-882-6789 or email roundupbook@eomediagroup.com 50-1/#13 ast week’s CME cash Cheddar cheese pric- es added to the previ- ous week’s losses as traders awaited the Global Dairy Trade auction and anticipated Friday’s November Milk Pro- duction report. The blocks closed the sec- ond Friday of December at $1.4450 per pound, down 7 1/4-cents on the week and 15 1/2-cents below a year ago. They inched up a quarter-cent Monday but retreated Tuesday to the lowest level in almost five years, at $1.4375, down a penny on the day. That is the lowest block price since Jan. 10, 2011, when it was trading at $1.37. The barrels were down 6 1/4-cents last week, ending Friday at $1.4225, 8 3/4-cents Dairy Markets Lee Mielke below a year ago. The barrel price regained 1 1/4-cents Monday but gave back a half- cent Tuesday, retreating to $1.4350. Sixteen cars of each traded hands last week at the CME. Ten cars of block and six of barrel had already traded hands as of Tuesday. Cheese production re- mains active across most of the Midwest, according to Dairy Market News. Dairy and Food Market Analyst editor, Matt Gould, said on Friday’s “DairyLine” that the cheese “demand season” for Thanksgiving and Christmas is behind us and Super Bowl will complete it. Imports from New Zealand are adding to the supply, he said, and the flush awaits us. I never realized you could hear butter melt but we did last Thursday where the CME price plunged 49 cents and then lost a dime Friday to close at $2.20 per pound, down 70 1/4-cents on the week but still 31 cents above a year ago. Only one car was sold last week at the CME. It plunged another 13 cents Monday, to $2.07, the lowest price since Aug. 14, and paused there on Tuesday. Gould said the butter price drop marks the end of the de- mand season. Supply is being rebuilt, he said, and he be- lieves the price will fall more, considering its relationship to global levels but “when and how low has yet to be deter- mined.”