There are still questions when in it comes to the trade agreement with China. Some of these involve if, how, and when China will live up to the increased purchases of U.S. goods. Chinese officials have indicated they won’t be buying U.S. agricultural products just to meet a quota. U.S. farmers will be competing with a South American soybean crop shaping up to be even bigger than last year. There are questions regarding the impact on demand for soybeans and meal due to the decrease in hog numbers from African Swine Fever in China. Corn exports have been disappointing overall. Pork exports have been good, but U.S. pork producers certainly have plenty of product to sell, and as repeatedly mentioned, China has a need for pork. Futures markets haven’t seen an upsurge in price with some thinking the trade agreements were already figured in to the market. The two countries have 30 days to implement the agreement, so other traders are taking a wait and see attitude and will be paying close attention to weekly export numbers in coming weeks.
Both Tyson and JBS USA have cited the opportunity of greater pork exports as reasons they began sourcing hogs that haven’t been fed ractopamine. JBS USA stopped using the feed additive in its own farms in August 2019 and is prohibiting its contract growers from using it. Tyson is stopping ractopamine use on its farms and contract farms this year. Smithfield stopped its use on its company-owned and contract farms in 2018. Ractopamine promotes lean muscle growth and is fed to hogs at the end of the finishing period. China has banned its use and does not allow the import of pork from hogs that have been fed ractopamine. This production change will likely be a topic of conversation at Wisconsin Pork Association annual meeting events on Thursday, February 6. Their meeting is held in conjunction with the annual Corn Soy Expo in Wisconsin Dells.
In April 2019, Walmart announced plans to develop its own Angus beef supply chain. To meet this goal, they’ve opened a facility located in Thomasville, Georgia that will concentrate on further processing to supply 500 Walmart stores in the southeastern U.S. with case-ready product. The plant will be managed with Creekstone Farms who will also be harvesting the cattle for the retailer. 44 Farms will source feeder cattle through its feeder calf program Prime Pursuits. Feeder calves must be predominantly Angus, weaned for a minimum of 45 days, have not received implants, and have no more than 90 days between the youngest and oldest in the group. Mc6 Cattle Feeders, Inc. in Hereford, Texas will feed the cattle for Walmart. Roughly 10 percent of Walmart’s beef needs nationally will be supplied by the new facility.
The fall and winter have brought a higher than usual run of beef breed cows to the nation’s auction markets. South Dakota ranchers and marketers are reporting an extremely high amount of open cows. Winner Livestock Auction (in Winner, SD) co-owner Frank Volmer, told Agweek TV “the pregnancy testing hasn’t been going very good. So there’s been a lot of, I would say wrecks out there – 30 percent, 40 percent, 50 percent opens on some of these cows.” A cold winter and late spring meant more cows were thin heading out to pasture. Wet summer weather brought plenty of grass, but nutritionally it was low in energy and nutrients which further impacted fertility. Young, bred replacement beef cows in South Dakota are selling from $1,500 to $1,900/head, with some bred heifer sales reported over $2,000/head. Solid mouth cows (roughly 5 to 10 years of age) have been bringing up to, and in some cases over $1,300/head. Prices will likely continue to climb the closer pasture turnout gets. In addition to challenges in the Dakotas, Texas cattlemen are dealing with drought conditions that have some fearing a repeat of 2011 when an average of just 15 inches fell on the state. According to Drought Monitor, 37 percent of Texas is in moderate drought and about 11 percent of the state is in severe drought. Over half the state is rated as abnormally dry. Texas cattlemen have increased their cow marketings due to the dry conditions.
Wisconsin egg production during December 2019 was up 4 percent from November and 24 percent higher than December 2018.
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