In a few weeks, the fall calf run will be underway. All signs point to another disappointing year for cow-calf producers. As compared to last year, feed grain prices are down significantly. It will cost less for feedlots to put on pounds of gain. Unfortunately, the value of fed (slaughter) cattle is also down significantly. The net result is calf prices very similar to last fall. Most 500 to 600 pound steer calves are currently selling for a little more than a dollar a pound. Those prices just don’t pay all the costs. The situation this year is aggravated by a poor hay crop in much of the prairies. With supplies short, good quality hay is selling for about $100 per imperial ton. Cow-calf producers will tell you that they can’t afford to buy hay at those prices. Most are thankful to have their own forage supply, so they won’t have feed purchases as a direct expense. Of course, if you’re going to honestly calculate the cost of production, forage costs should be penciled in at commercial values. After all, if you weren’t feeding that hay, you could sell it. There’s a definite lack of good news in the business. It’s now clear that Saskatchewan’s only major beef packer, XL Foods at Moose Jaw, won’t be reopening this fall as hoped. Yes, markets are always cyclical and eventually the sector should again be profitable, but one wonders how many producers will be left by the time that happens. I’m Kevin Hursh. For informaiton about input cost contact DynAgra at 1.800.941.4811
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Kevin Hursh, PAg CAC
Tags: cow-calf, forage, hay, prices
Most producers would love the opportunity to turn back the clock and redo some of their new crop marketing decisions. Red lentil contract prices were over 35 cents a pound for quite some time in the late spring. Prices now are in the mid-20s. Before Christmas, yellow mustard contracts were available at around 40 cents a pound. The current price is about 30 if you can find a bid. Back in June, the Fixed Price Contract for No. 1 spring wheat with 13.5 per cent protein hit a peak of $300 a tonne basis port position. At the time, that was only about $15 a tonne better than the Pool Return Outlook, so it didn’t look overly attractive. Since that time, wheat prices have steadily declined. That fixed price is now nearly $1.50 a bushel above the August Pool Return Outlook. A new PRO comes out on Thursday and it’s likely to be even lower. On malting barley, some Cash Plus contracts were signed at prices around $5 a bushel, which is about $1.50 above the expected pool price. New crop canola could have been locked in at prices of around $10.50, as compared to the current price of $8.50. Hindsight is always 20/20, but there’s been a lot of money left on the table. I’m Kevin Hursh. for more information on farm management visit www.dynagra.com
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Kevin Hursh PAg, CAC
Tags: barley, marketing, money, prices, wheat
The market outlook in the pork industry continues to be troubling. Prices are weak, producers are losing money on every hog going to market, and there’s no end in sight. Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture puts together a regular Hog Market Update. In the most recent report, he notes that reduced pork demand in the United States, due mainly to lower American exports has weighed heavily on the market. China and Russia are buying a lot less and this reduction in demand seems to have started before the H1N1 outbreak. Lean hog futures prices continue to be well below prices earlier in the year. Based on the futures market, hog prices are going to stay at rock bottom levels for the remainder of this year and for the first quarter of 2010. In Canada, we’re now on our second cull program. The Americans have not been cutting their herd. Total Canadian hog inventory peaked in 2005. Since that time, it has dropped by 20 per cent. The decline is much more dramatic in Saskatchewan. Since 2005, Saskatchewan’s total hog inventory has declined by nearly 42 per cent. It’s amazing that any producers are left in the business after years of losses and no light at the end of the tunnel. I’m Kevin Hursh. DynAgra, your independent ag retailer, is proud to support the pork industry.
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Kevin Hursh PAg CAC
Tags: agriculture, market, pork, prices
As we move towards this fall’s run of calves going to market, there are a number of factors at play. Slaughter steer and heifer prices are a lot lower than a year ago. According to the Cattle Market Update reports from the Saskatchewan Ministry of Agriculture, the live weight price on a fed steer is only about 80 cents a pound right now. A year ago, the price was 96 cents. However, barley prices are lower than a year ago and that has helped support feeder cattle prices. Feeder steers in the 600 to 700 pound weight range have been averaging about $1.02 a pound at Saskatchewan auction markets. That’s lower than the $1.08 a pound at this time last year, but the difference would be much greater without cheaper barley. While barley is cheaper, forage supplies are much more expensive than a year ago so that is going to factor into decision making. Another factor is the big rain received in most areas. That should help some cattle producers prolong their pasture season and may take some pressure off to send calves to market early. Another factor that’s really important for cattle markets is the value of the Canadian dollar. To no one’s surprise, the just released estimates from Statistics Canada show the Canadian beef cow herd continues to decline. I’m Kevin Hursh. For other commodity prices visit www.dynagra.com
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Kevin Hursh PAg, CAC
Tags: barley, Canadian Dollar, prices, slaughter
As we all know, fertilizer prices hit record high levels last year. Agriculture and Agri-Food Canada has just released a new report on fuel and fertilizer prices. The report estimates last year’s Canadian fertilizer expenses at a record high $5.4 billion, an increase of 69 per cent over 2007. A couple years ago, a report commissioned by Keystone Agricultural Producers of Manitoba indicated that fertilizer was often significantly less expensive just across the line in the U.S. That’s not the finding in this new Ag Canada report. A price comparison was conducted between Manitoba and the U.S. border area. Although average prices for major nitrogen fertilizers were higher in Manitoba in the spring and summer of 2008, they fell below the neighbouring U.S. prices in the fall. An overall lower fertilizer price in Manitoba compared to the U.S. was estimated to save Manitoba farmers about $74 million in their 2008 fertilizer bill. Similar findings came in a comparison of Ontario versus U.S. border area prices. If you’re checked out fertilizer prices in recent weeks, you’ll have noticed that they’ve continued to drop since seeding. Last year at this time, prices were skyrocketing. I’m Kevin Hursh.
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Kevin Hursh, PAg, CAC
Tags: AG Retail, change, comparisons, Fertilizer, Fertilizer Buddy, prices
The St. Louis Post-Dispatch had an interesting story on glyphosate prices in a recent edition. The story by Jeffry Tomich says a flood of inexpensive Chinese-made herbicide and deep price cuts by rivals are leading Monsanto to cut profit expectations for Roundup. According to the story, renewed competition from China is coming faster than Monsanto anticipated. Monsanto expects to sell about 200 million gallons of glyphosate-based herbicide this year – 22 per cent less than last year. Still, the company is reported to be continuing the expansion of a glyphosate manufacturing plant in Louisiana that could reportedly increase the global supply by about 10 per cent. The plant expansion is a byproduct of a glyphosate shortage a couple years ago. At that time, prices were rising and supplies were often tough to get, especially the supplies of lower cost generic products. Based on this newspaper story out of Monsanto’s home town of St. Louis, the glyphosate market should become more competitive with better deals available for producers. I’m Kevin Hursh.
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Kevin Hursh, PAg, CAC
Tags: glyphosate, Louisiana, Monsanto, prices, profit expectations
Using the seeding intentions from Statistics Canada and assuming average yields, Agriculture and Agri-Food Canada has come out with new supply and demand estimates for all the major grains, oilseeds, pulse and special crops. From that, the average price levels for the upcoming crop year have been predicted. Prices are forecast to be lower on wheat, durum, malting barley, off-board barley, field peas, lentils and mustard. On a few crops, the prediction is calling for about the same price in the upcoming crop year. This includes oats, flax, chickpeas and canaryseed. The only crops forecast to have a higher average price are corn and canola. Ag Canada notes that seeding intentions are 7 per cent lower on canola. Due to the expectation that yields will drop back to closer to normal, total Canadian production is projected to fall by 20 per cent as compared to the record 2008 canola crop. At 10.2 million tonnes, this would still be the second largest crop in history. Meanwhile, domestic crush is expected to be way up due to new crushing plants coming on line. As well, exports are forecast to remain historically large. As a result, carry-out stocks of canola are forecast to drop sharply. The Ag Canada analysis calls for prices to increase by about 5 per cent - the result of higher premiums for canola oil and tight supply. I’m Kevin Hursh
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Kevin Hursh, PAg, CAC
Tags: Canola, prices, seeding intentions, yields
Cereals suck. There are attractive prices available in oilseed crops and in pulse crops, but cereal grains aren’t keeping pace. In the latest Pool Return Outlook from the Canadian Wheat Board, the PRO has dropped by 38 cents a bushel on wheat, 41 cents a bushel on durum and 15 cents a bushel on malting barley. After deducting average Saskatchewan freight and handling, No. 1 CWRS wheat with 12.5 per cent protein has an expected price of just $5.85 a bushel in the upcoming crop year. That’s 60 cents a bushel below the price expected in this crop year and its $2.55 a bushel below the price in ’07-08. The PRO on number one durum with 12.5 per cent protein has slumped to $6.10 a bushel, less than half the price of two years ago. Two-row designated barley now has a new crop PRO of $3.93 a bushel, down dramatically from the $5.50 pooled price in the current crop year. Another cereal crop – canaryseed – remains at 17 to 18 cents a pound. Feed barley and oats aren’t great either. In the oilseeds, canola isn’t far from $10 a bushel and in the pulse crops, attractive new crop lentil contracts are available. Some producers would like to adopt an ABC policy – Anything But Cereals. I’m Kevin Hursh.
www.hursh.caKevin Hursh, PAg, CAC
Tags: cereals, oilseeds, prices, Pulses
