Australian cattle slaughter numbers start year strong
Australian slaughter numbers started the year strong with weather conditions tilting in favour of processors, and a probable decrease in US beef production could make Australian beef exports more competitive in international markets.
Australian slaughter numbers started firm in January compared with two years earlier. Industry group Meat and Livestock Australia reported 99,206 head slaughtered in the week ending 22 January compared with 72,477 head a year earlier and 2021 had yet to start recording kills with processing low until February.
Kill numbers only exceeded 100,000 head eight times last year, with five of those instances occurring in the last five weeks of 2022. With a stronger start to the 2023 processing year a power shift is starting to be seen towards processors with a strong decline in kill prices, putting downward pressure on feeder steer prices.
Above-median rainfall is moderately likely for small parts of eastern Australia, with below-median rainfall likely for the remainder of Australia for February-April, according to the Bureau of Meteorology. Temperatures are very likely to be warmer than usual across most of the country. Lower rainfall in the coming months before winter will see an increase in available cattle in the market as farmers' ability to keep higher herd stocking rates decreases.
US
The US experienced decreased feedlot cattle slaughter and lighter carcass weights at the end of last year, prompting the US Department of Agriculture (USDA) to lower its fourth-quarter production expectation by 115mn lb (52,163t) in its Livestock, Dairy and Poultry Outlook for January.
The USDA sees a rise in fed cattle and feeder steer prices in 2023 in response to firm demand and a reduction in supply.
The impact of drought continues to headline the new year as pasture and forage availability is likely to remain tight, recent US Drought Monitor data show. Rain has bought some relief to producers west of the US, but other parts of the country are still struggling. Over 69pc of the US is experiencing some level of drought, about 4pc less than a year ago, according to the US Drought Monitor report.
Feedlot inventory was at 11.673mn head as of 1 December 2022, about 3pc below 11.985mn head in the same month of 2021, according to the latest Cattle on Feed report by the USDA's National Agricultural Statistics Service.
Tighter market-ready cattle supply compared with a year ago saw a decline in total fed and non-fed cattle slaughter, which was down by about 5pc and 1pc respectively compared with 2021, the USDA said in its January Livestock, Dairy and Poultry Outlook. It lowered its beef export estimate for the fourth quarter of 2022 by 20mn lb (9,071t) to 850mn lb (385,553t), putting it 6mn lb (2,721t) below the fourth quarter of 2021. Its estimate for exports in 2022 is 3.542bn lb (1.61mn t). Its 2023 forecast is unchanged at 3.09bn lb (1.4mn t).
As beef production slows in the US, the country will look to the global market to fill this void through imports, creating increased export opportunities for others, including Australia.
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Bipartisan bill would extend blenders tax credit
Bipartisan bill would extend blenders tax credit
New York, 23 July (Argus) — A bipartisan group of lawmakers has proposed legislation to extend an expiring tax credit for biodiesel and renewable diesel that are blended into the US fuel supply. The bill, which was introduced by representative Mike Carey (R-Ohio) and is pending before the House of Representatives' Ways and Means Committee, would specifically extend a credit offering $1/USG for blenders of biomass-based diesel through 2025. The credit is otherwise set to expire at the end of this year and be replaced in January by the Inflation Reduction Act's 45Z credit, which will be more generous to fuels with lower carbon intensities. The text of the bill has not yet been released. But a draft version shared with Argus by an external group would restrict fuel that is "allowed" a credit under 45Z from also qualifying for the reinstated credit for blenders, a provision that seems to primarily benefit fuel imports. The expiring biodiesel credit allows fuel produced outside the US to qualify, since the credit is claimed by blenders instead of producers, while the new 45Z credit is specifically for refiners producing fuel in the US. The US administration's timeline for finalizing guidance around 45Z is unclear, to the frustration of biofuels groups that have warned that prolonged uncertainty could jeopardize planned investments aimed at boosting production and feedstock supply. An extension of the existing biodiesel credit could potentially provide more certainty to the biofuels supply chain. Fuel retailers that had previously warned that shifting the credit from blenders to producers will raise fuel prices for consumers, including the National Association of Truck Stop Owners and the Society of Independent Gasoline Marketers of America, commended Carey's proposal. But the tax credit extension would also upend other incentives driving biofuel production. The 45Z credit offers up to $1/USG for road fuels, but incentives are more generous the fewer greenhouse gas emissions a fuel produces, whereas the expiring credit does not adjust benefits based on carbon intensity. In addition, prolonging incentives to import fuels could hurt domestic producers and lead to wider biodiesel and renewable diesel availability, potentially weighing on prices of renewable identification number (RIN) credits that refiners submit to regulators to comply with the renewable fuel standard. Market participants have generally expected that prices for RINs, which also act as a source of revenue and incentive to produce low-carbon fuels, will rise next year to account for 45Z providing less of a subsidy than the expiring credit. Clean Fuels Alliance America, which represents biomass-based diesel and sustainable aviation fuel companies, declined to comment or take a position on the legislation. But the group said that it would continue advocating for President Joe Biden's administration to swiftly propose and finalize 45Z guidance. The bill currently has four sponsors, three Republicans and one Democrat, but it is tough to gauge how broad support for any credit extension would be within Congress. It is not uncommon for Congress to pass legislation near the end of the year extending or reinstating tax credits that would have otherwise expired, and various energy tax credits were extended in Congress' lame duck session after the 2020 presidential election. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US House passes waterways bill
US House passes waterways bill
Houston, 23 July (Argus) — The US House of Representatives overwhelmingly approved a bill on Monday authorizing the US Army Corps of Engineers (Corps) to tackle a dozen port, inland waterway and other water infrastructure projects. The Republican-led House voted 359-13 to pass the Waterways Resources Development Act (WRDA), which authorizes the Corps to proceed with plans to upgrade the Seagirt Loop Channel near Baltimore Harbor in Maryland. The bill also will enable the Corps to move forward with 160 feasibility studies, including a $314mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. Water project authorization bills typically are passed every two years and generally garner strong bipartisan support because they affect numerous congressional districts. The Senate Environment and Public Works Committee unanimously passed its own version of the bill on 22 May. That bill does not include an adjustment to the cost-sharing structure for lock and dam construction and other rehabilitation projects. The Senate's version is expected to reach the floor before 2 August, before lawmakers break for their August recess. The Senate is not scheduled to reconvene until 9 September. If the Senate does not pass an identical version of the bill, lawmakers will have to meet in a conference committee to work out the differences. WRDA is "our legislative commitment to investing in and protecting our communities from flooding and droughts, restoring our environment and ecosystems and keeping our nation's competitiveness by supporting out ports and harbors", representative Grace Napolitano (D-California) said. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US House to vote on waterways bill
US House to vote on waterways bill
Houston, 22 July (Argus) — The US House of Representatives is expected to vote on 22 July on a waterways bill that would authorize new infrastructure projects across ports and rivers. The Water Resources Development Act (WRDA) is renewed typically every two years to authorize projects for the US Army Corps of Engineers (Corps). The bipartisan bill is sponsored by representative Rick Larsen (D-Washington) and committee chairman Sam Graves (R-Missouri). The full committee markup occurred 26 June, where amendments were added, and the bill was passed to the full House . A conference committee will need to be called to resolve the different versions of the bill. The major difference between the bills is that the House bill does not include an adjustment to the cost-sharing structure for the lock and dam construction and other rehabilitation projects. The Senate Committee on Environment Public Works passed its own version of the bill on 22 May, with all members in favor of the bill. The House version of the bill approves modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland, along with 11 other projects and 160 feasibility studies. One of these studies is a $314.25mn resiliency study of the Gulf Intracoastal Waterway, which connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Large US corn, soy acreage remains unplanted
Large US corn, soy acreage remains unplanted
New York, 19 July (Argus) — Considerable US corn and soybeans acreage has yet to be planted this season, with the ongoing drop in prices offering little incentive for farmers to complete sowing. But potentially record yields for both crops has at least some market participants less worried. The slower planting could lead to the US Department of Agriculture (USDA) revising down corn and soybeans acreage figures, the US balance sheet tightening, and ending stock projections potentially being cut. Market participants are currently focused on summer weather, as it plays a major role in determining the final yield for both corn and soybeans. But if corn acreage decreases by 1mn acres to 90.5mn acres, corn yields would have to increase by 2 bushels per acre — or 1.1pc — to keep corn production flat. Similarly, a 1mn acre decrease in soybeans planted to 85.12mn acres would require yields to increase by 0.6 bushels per acre, or by 1.2pc, to have production remain stable. And while the increase in yields might not seem large, it would be record yields for both corn and soybeans if achieved. In its 28 June acreage report, the USDA said 3.3mn acres of corn, or 3.7pc of the total corn acreage, and 12.8mn acres of soybeans, 14.8pc of total soybean acreage, were left to be planted. The latest available data for the week ending 7 July shows that there were 1.9mn acres of corn unplanted, 23pc more than the three-year average, and 1.5mn acres of soybeans unplanted, 25pc above the three-year average. The year 2022 serves as a good comparison for 2024. In 2022, 4mn acres of corn, or 4.5pc of corn acreage, and 15.8mn acres of soybean (18pc), were still unplanted when the USDA published its annual report at the end of June. The actual planted acres for 2022 showed that 1.8mn acres of corn and 875,000 acres of soybeans were not planted, according to the USDA. In 2022, the main contributors to the lower final acreage were states that initially had the largest increase in the June acreage report. Corn and soybean prices, as measured by the Chicago Board of Trade (CBOT) futures price, were down 11pc in June 2022 causing farmers to rethink their planting intentions. During June 2024, CBOT corn prices fell by 11pc and soybean prices were down by 5pc. The latest farmers can plant their crops is June, as any crop planted later would mature too late and be at risk of frost damage. The states of Kansas, Iowa and Nebraska had the largest projected increase in corn acreage in the June acreage report, at 1.15mn acres. That report forecast soybean acreage to increase by 600,000 acres for Kansas, Illinois and Minnesota. But the lower corn and soybean prices might lead those farmers to reconsider some of those acres. That said, at least some market participants were not too concerned with lower acreage. The favorable July weather in the Midwest has some market participants anticipating record yields for both corn and soybeans, above the 181 bushels per acre for corn and 52 bushels per acre for soybeans that the USDA currently forecasts. By Eduardo Gonzalez Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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