CME: Governors Urge Assistance for Pork Sector
US - USDA will release yet another highly anticipated Crop Production report (and the accompanying World Agricultural Supply and Demand Estimates or WASDE) on Wednesday, 12 August at 8:30 a.m. EDT, report Steve Meyer and Len Steiner.
10 August 2009
3 minute read
The August report is the first of the crop year that uses objective data to predict yields. In addition, USDA has "re-surveyed" many areas regarding corn and soybean acreage following the July Acreage report that surprised almost everyone with the number of estimated corn acres. So, this year’s August report has a bit more intrigue than normal. Results of Dow Jones’ monthly survey of grain market analysts appear in the table below.
| Average | Range | USDA, July | 2008 | |
|---|---|---|---|---|
| (Billion Bushels) | ||||
| Corn Crop | 12.472 | 11.792 - 12.814 | 12.290 | 12.101 |
| Soybean Crop | 3.213 | 3.000 - 3275 | 3.260 | 2.959 |
| Wheat Crop, All | 2.150 | 2.086 - 2.238 | 2.112 | 2.500 |
| (Bushels per Acre) | ||||
| Corn Yield | 157.1 | 153.0 - 160.3 | 153.4 | 153.9 |
| Soybean Yield | 42.1 | 40.9 - 43.5 | 42.6 | 39.6 |
As a
group, analysts expect the corn yield estimate to be higher than that of July
while they expect USDA to reduce the soybean yield slightly. Readers
should note that the 153 bushel per acre estimate that marks the bottom of
the range of corn yield estimate is perhaps an outlier — the next closest
estimate was 155.6 bushels per acre. Analysts also expect USDA to
slightly raise its estimate of the 2009 wheat crop.
Governors of eight states sent a letter to the Obama Administration
on Friday requesting assistance for struggling pork producers.
The letter does not, as some reports indicated, ask for any sort of bailout for
the US pork industry. It asks for three things:
- A $50 million purchase of pork products for public feeding programs.
- A relaxation of the current spending cap on Section 32 funds to allow their use for the $50 million purchase.
- That the administration turn up the heat on China to drop its "unwarranted" ban on imports of US pork products predicated on Novel H1N1 influenza.
Three other governors indicated that they would request assistance with
letters of their own but the nature of those requests were not known.
It should be noted that the first request is not at all unusual. Many
producer groups make the same request when prices fall. In fact, government
purchases of several products have been so large this year that they
have depleted the available funds and predicated request #2. China is the
only US export market of any significance that is still banning US pork.
The value of a hog purchased through a negotiated trade fell to
less than $100 on Friday. That hog cost roughly $135 to produce.
