News last update:6 Aug 2012

Rising prices affects US livestock industries

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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