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Weekly global protein digest: USDA protein outlook, China's soymeal hits record high

25 February 2022
Jim Wyckoff Commentary -  TheCropSite

Market analyst Jim Wyckoff shares highlights from this week's activities in the global protein market.

USDA annual ag outlook highlights

Following are nuggets from the annual USDA Ag Outlook Conference that began Thursday.

Cattle/Beef: Beef production for 2022 is forecast at 27.38 billion pounds (down 2% vs 2021) with higher weights only partly making up for lower slaughter numbers, with total beef exports of 3.27 billion pounds and imports at 3.37 billion pounds. The 5-area steer price is seen at $137.5 per cwt. in 2021.

Hogs/Pork: Commercial production is seen at 27.38 billion pounds (down 1% from 2021) with lower hog numbers lightly offset by higher carcass weights. Pork exports are seen declining to 6.81 billion pounds with imports at a record 1.31 billion pounds. The national base 51% -52% lean, live equivalent prices is seen at $65 per cwt.

Broilers: Record-large production of 45.49 billion pounds with broiler meat exports seen at a record 7.38 billion pounds after two years of flat exports. National composite wholesale broiler price forecast at $1.13 per pound, up $1.02 per pound in 2021.

Dairy: Milk production is forecast at 227.2 billion pounds, with a reduction in the US cow herd a factor for the growth of just 0.4%. Output per cow is seen up 1.3%. Exports on a fat-basis are seen at 11.0 billion pounds and on skim-solids basis they are forecast at 51.2 billion pounds. The all-milk price forecast is $23.55 per cwt., up $4.86 per cwt. from 2021.

China soymeal prices hit a record high

China’s soymeal prices rallied to a record high on Thursday amid worries over tight supplies in the market even as the government plans to release soybeans from state-owned reserves. Dalian soymeal futures rose 5% to hit 4,064 yuan ($643) per metric ton. Crushers did not build up much inventory before the Lunar New Year holiday because of poor margins and came back from the holiday short-bought on supplies, Zou Honglin, an analyst with the agriculture division of Mysteel in China, told Reuters. Chinese soybean inventories last Friday were 3.017 MMT, down 14.4% from the previous week, and down 33.3% from last year. Soybean meal inventories fell 47.4% from a year ago, to 385,300 MT, according to data from Mysteel.

January US milk production down 1.4 percent

USDA reports milk production in the 24 major States during January totaled 18.2 billion pounds, down 1.4 percent from January 2021. December revised production, at 18.0 billion pounds, was down 0.8 percent from December 2020. The December revision represented a decrease of 35 million pounds or 0.2 percent from last month's preliminary production estimate. Production per cow in the 24 major States averaged 2,053 pounds for January, 14 pounds below January 2021. The number of milk cows on farms in the 24 major States was 8.88 million head, 63,000 head less than January 2021, and 5,000 head less than December 2021.

Meantime, the annual production of milk for the United States during 2021 was 226 billion pounds, 1.3 percent above 2020. Revisions to 2020 production increased the annual total 89 million pounds. Revised 2021 production was down 18 million pounds from last month's publication. Annual total milk production has increased 12.8 percent from 2012.

Production per cow in the United States averaged 23,948 pounds for 2021, 171 pounds above 2020. The average annual rate of milk production per cow has increased 10.2 percent from 2012.

The average number of milk cows on farms in the United States during 2021 was 9.45 million head, up 0.6 percent from 2020. The average number of milk cows was unrevised for 2021. The average annual number of milk cows has increased 2.3 percent from 2012.

US grocery prices have been rising for months and will keep climbing

New price increases are coming every week and stores are studying how much of these jumps to absorb and how much to pass along to consumers. Overall, however, supplies are ample, supermarket operators and food makers say. Shoppers will find what they are looking for but may have to opt for different brands.

US justice department urged to oppose Sanderson chicken

Sen. Elizabeth Warren, backed by some dozen other U.S. lawmakers, told the Justice Department that a plan to merge chicken producer Sanderson Farms with smaller rival Wayne Farms "raises significant antitrust concerns." Commodities trader Cargill Inc and Continental Grain Co announced in August that they would buy Sanderson Farms SAFM.O, the third largest chicken producer, and combine it with Continental's Wayne in a deal worth some $4.53 billion.

Bullish USDA US pork report

USDA’s latest monthly Cold Storage Report showed a smaller-than-normal build in frozen pork stocks during January. Frozen pork inventories at 428.5 million lbs. rose 32.0 million lbs. (8.1%) from December, far less than the five-year average gain of 56.7 million lbs. during January. Pork stocks were 29.0 million lbs. (6.3%) under year-ago and 121.7 million lbs. (22.1%) less than the five-year average. Beef stocks totaled 526.4 million lbs., up 19.3 million lbs. (3.8%) versus December, whereas the five-year average was a 2-million-lb. decline during the month. Beef stocks were 7.1 million lbs. (1.4%) above January 2021 inventories but 14.9 million lbs. (2.9%) under the five-year average.

 

TheCattleSite News Desk

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