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Rising prices affects US livestock industries

20-12-2006 | |

The higher prices for corn and soybeans are beginning to show its effects in the US animal industry market. The number of breeding sows sent to slaughter in the past 12 weeks was 4% higher than in the same period a year ago, US Department of Agriculture data show.

Pig producers have noticed that corn prices have almost doubled in the past
year. This made them force to reduce their breeding herds. Furthermore,
farmers have begun selling pigs and cattle at lower weights’ to reduce corn use.
The same accounts for chickens.

Corn futures for March on the Chicago Board of Trade reached
a 10-year high on Nov. 27 with $3.935 a bushel (app. 25 kg) and dropped to $3.69
a bushel this week again, but are still in an upward mood.

Soybeans
also in demand
Soybean prices have seen the same price hike, but March
contracts remained unchanged at $6.7225 a bushel (app. 27.2 kg) last week after
the most-active contract dropped 4.2% the previous two weeks. Prices may fall
before the monthly report on the US feedlot cattle inventory, which is scheduled
for release on Dec. 22, analysts said.

Soybean demand for cooking oil,
animal feed and alternative energy is declining, according to market analystst.
US processors including Bunge and ADM crushed 148.2 million bushels of soybeans
last month, down 4.4% from a record 155 million in October, the National Oilseed
Processors Association in Washington said.
Cash value of soybean oil and
soybean meal is above the cost of buying soybeans. The declining crush margin is
a sign of reduced demand for the products produced from soybeans.

More
plantings in Brazil and Argentina
Corn and soybeans also may decline
because higher prices the last three months have encouraged growers in Brazil
and Argentina to plant more acres. Brazil is the world’s second-largest soybean producer and
Argentina is the second-biggest exporter of corn. The US is the world’s biggest producer
and shipper of both crops.

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Beheer