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Daily livestock report apr 04 2013

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Daily livestock report apr 04 2013

  1. 1. Sponsored by Vol. 11, No. 63 / April 4, 2013  In one of those “Well, duh.” moments, we managed to U.S. PORK EXPORTS BY COUNTRY,omit one critical factor from our list of issues that have been im-pacted pork and beef prices this spring — export challenges. And ANNUALthe challenges are indeed serious and involve two important markets, 600 JapanRussia and China, and concerns over residues of ractopamine, a beta Canadaagonist used in pork, beef and turkey production. The product is sold 500 Mexicounder the trade name Paylean for pigs and Optiflexx for cattle. South Korea Russia and China play different roles in the two sectors. As 400 Chinacan be seen in the charts at right and on page 2, China is a major mar- T Russia Mket for both pork and pork variety meats but has long had in place a de d Hong Kong nfacto ban on U.S. beef and beef variety meat products. China was the a 300 Australia s uthird largest destination for pork exports in 2011 and the fourth largest in o h Taiwan T2012. Adding Hong Kong to those totals would leave China the number 200three destination in both years. But China has quickly risen to the num-ber two ranking among markets for pork variety meats and is our top 100customer if Hong Kong is included. China is now the clear leader in thevalue of pork variety meat exports. The United States Export Federa-tion estimates that pork and pork variety meat exports to China account 0 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2for roughly $7 and $4.75, respectively, per head of U.S. hogs. 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 Russia, is a smaller but important customer for both species,ranking as high as fourth on our pork customer list in 2008 and growing U.S. BEEF EXPORTS BY COUNTRY,to be our sixth largest beef customer in 2012. Russia has consistentlybeen the second largest destination for U.S. beef variety meat exports ANNUALsince 2007. USMEF estimates that the impact of losing Russian mar- 400 Canada Japanket for beef and pork products would be $800 million or $15/head of Mexico Korea, South 350cattle and $4/head of hogs. Hong Kong Russia Vietnam China Russia notified U.S. officials in December that they would be 300required to certify that products were free of ractopamine residues.Russia then closed its markets when the U.S. government did not start T 250 Ma program to meet those demands. d n a 200 China has demanded that U.S. product be certified to be racto- s u opamine free but the exact “certification” requirements are still in doubt. h T 150U.S. packers with whom we have talked are concerned that“certification” will not be sufficient to meet China’s demand since the 100product may be tested when it arrives, implying that all product must beractopamine free. Our sources indicate that it is virtually impossible to 50prevent cross contamination in a plant — especially with testing meth-ods allowing detection at the parts per trillion level. This means that 0 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2segregation of ractopamine-fed and ractopamine-free animals may not 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2be possible. It is our impression that to avoid potential problems, allanimals in a plant will have to be ractopamine free. Those positions do not necessarily fit together but they do, it seems, How will the situation be rectified? There is no easy answer to address the realities of today’s international trade environment. Chinathat question. USMEF’s March statement on the situation said: and Russia are not the only countries that have trade restrictions that do “Russia’s ban on residues . .. brings into clear focus the dilemma that not agree with internationally-accepted scientific standards. The EU is arises when our support for science-based trade and meeting the notorious for adopting additional trade restrictions. Taiwan has banned demand of our customers collide with a foreign country’s non-science U.S. exports over ractopamine for several years. Working toward sci- -based import requirements. . . . The industry has encouraged our ence-based standards is well and good but recognizing the desires of government to press Russia to adopt a science-based standard for our customers still seems like good business — so long as those cus- beta agonists. At the same time, we also asked USDA to develop a tomers are made to pay all of the costs of their preferences. It remains program to certify residue-free exports.” to be seen whether that will be the case for U.S. beef and pork. The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com to contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003. The Daily Livestock Report is published by Steve Meyer & Len Steiner, Inc., Adel, IA and Merrimack, NH.   To subscribe, support or unsubscribe visit www.dailylivestockreport.com. Copyright © 2013  Steve Meyer and Len Steiner, Inc.  All rights reserved.  The Daily Livestock Report is not owned, controlled, endorsed or sold by CME Group Inc. or its affiliates and CME Group Inc. and its affiliates disclaim any and all responsibility for the informa on  contained herein.   CME Group®, CME® and the Globe logo are trademarks of Chicago Mercan le Exchange, Inc.   Disclaimer: The Daily Livestock Report is intended solely for informa on purposes and is not to be construed, under any circumstances, by implica on or otherwise, as an offer to sell or a solicita‐ on to buy or trade any commodi es or securi es whatsoever. Informa on is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or  possible where projec ons of future condi ons are a empted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indica on of future performance.  Futures are a leveraged investment, and because only a percentage of a contract’s value is require to trade, it is possible to lose more than the amount of money ini ally deposited for a futures  posi on. Therefore, traders should only use funds that they can afford to lose without affec ng their lifestyle. And only a por on of those funds should be devoted to any one trade because a  trader cannot expect to profit on every trade.  
  2. 2. Sponsored by Vol. 11, No. 63 / April 4, 2013  U.S. PORK VARIETY MEAT EXPORTS, ANNUAL180 Japan160 Canada Mexico140 South Korea120 ChinaT RussiaM100d Hong Kongna Australiasu 80o TaiwanhT 60 40 20 0 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 U.S. BEEF VARIETY MEAT EXPORTS, BY COUNTRY 200000 180000 160000 140000 Canada T Japan M120000 d Mexico n a100000 s Korea, South u o Hong Kong h 80000 T Russia 60000 Vietnam 40000 China 20000 0 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2

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