US Beef Exports Set New Monthly Record

Last Week’s Moves 

Corn 593-0  (-2.91%)  |  Soybeans 1355-2 (-1.79%)  |  SRW Wheat 811-4 (-0.03%)

KC Wheat 868-6 (-0.60%)  |  Live Cattle 141.050 (+0.30%)  |  Lean Hogs 93.900 (-.50%)

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Welcome to your weekly agriculture report, where we cover everything you’ll need to know for the week ahead. This week, U.S. beef exports set new monthly records, rising input costs and dry weather impact the profit margin for farmers and the steep price of entry for future farmers creates a challenge for U.S. agriculture. 

US Beef Exports Set New Monthly Record, Pork Exports Reach New High

U.S. beef exports set volume and value records in May, topping $1 billion for the fourth time this year, according to info from the U.S. Department of Agriculture and the U.S. Meat Export Federation.

• The steaks are high…U.S. beef exports reached 135,006 metric tons (mt) in May, up 1% from the previous high posted in May 2021. Export value climbed 20% to $1.09 billion, breaking the March 2022 record, despite a slight year-over-year volume decline in the two largest export markets, South Korea and Japan.
   
• Pork Peak Performance…May pork exports were well below last year’s large totals, but shipments were the largest of 2022 in volume (224,677 mt) and value ($655.1 million), led by strong performances in Mexico, the Dominican Republic, and Colombia.

Rising Input Costs and Dry Weather Impacts Profit Margin for Farmers

Farmers face rising costs for farmland, fertilizer, fuel, seeds, and chemicals.  On top of that, farmers are also dealing with dangerously low rainfall this summer, which means it's possible that yields may be lower than expected. 

• On the rise…A USDA report released June 30, called the Agricultural Prices report, shows that farm input costs continue to rise, putting additional financial pressure on farmers and ranchers.  In May, the price of livestock feed increased 0.8% from April and 15% from May 2021 The cost of fertilizer in May 2022 was 77% higher than it was in May 2021.
   
• Condensation is crucial for corn crops…Weather conditions are likely to remain unfavorable for corn crops in the key producing states of the US as they enter the crucial stage of pollination in the next few days, which could impact yield.  
   
• Weathering the storm…Current and future weather conditions are crucial for determining yield in US crops as inclement weather conditions delayed planting and the ongoing conflict in Ukraine disrupted supply chains.

Costs create challenges…The steep price of entry to start a farm, along with rising input costs and volatile markets, make it hard for young and beginning farmers to take their places.  According to the most recent agricultural census from the U.S. Department of Agriculture,  a third of America’s 3.4 million farmers are over 65.  

• Funding for future farmers…House lawmakers are looking for ways to mitigate some of these risks and support young and beginning farmers in the next farm bill, the sweeping legislation that will set programs and funding levels for farm and food support for the next five years.
• Loans lagging…The Agriculture Department’s Farm Services Agency has an array of different loans available to farmers, including one targeted at young and beginning farmers.  But in practice, producers say the federal loan process can be extensive, slow, and hard to access.
   

What else you need to know… 

• Swine will be fine…Scientists from the DA’s Agriculture Research Service have developed a vaccine for African swine fever that protects hogs from the ASF strain found in Europe and Asia.
• So(y) many soybeans… Illinois is on pace to grow more acres of beans than corn this season for the first time since 1983. In the June 30 acreage report, the USDA raised soybean plantings by 200,000 acres in Illinois compared to the March estimate.
• Data discrepancies…PlanetWatchers Analysis finds $2.6 Billion in 2022 crop insurance premiums at risk due to imprecise acreage reporting.  The new report tracks 50 million acres of cropland across the U.S and found up to 26% variation between the USDA data and the SAR data.

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input.

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• Wheat Turns Around for Tuesday
• Red Start for Corn’s Tuesday
• Wheat Futures Gain on Monday