Food news for September 21 , 2012.....

http://usda01.library.cornell.edu/usda/current/LiveSlau/LiveSlau-09-21-2012.pdf


Record Red Meat and Pork Production for August

Commercial red meat production for the United States totaled 4.39 billion pounds in August, up 2 percent from the 4.30 billion pounds produced in August 2011.

Beef production, at 2.37 billion pounds, was 1 percent below the previous year. Cattle slaughter totaled 3.00 million head, down 3 percent from August 2011. The average live weight was up 30 pounds from the previous year, at 1,300 pounds.

Veal production totaled 10.1 million pounds, 11 percent below August a year ago. Calf slaughter totaled 72,600 head, down 9 percent from August 2011. The average live weight was down 11 pounds from last year, at 237 pounds.

Pork production totaled 2.00 billion pounds, up 6 percent from the previous year. Hog slaughter totaled 9.94 million head, up 4 percent from August 2011. The average live weight was up 3 pounds from the previous year, at 269 pounds.

Lamb and mutton production, at 14.2 million pounds, was up 8 percent from August 2011. Sheep slaughter totaled 200,500 head, 1 percent above last year. The average live weight was 142 pounds, up 10 pounds from August a year ago.

January to August 2012 commercial red meat production was 32.6 billion pounds, up 1 percent from 2011. Accumulated beef production was down 1 percent from last year, veal was down 9 percent, pork was up 3 percent from last year, and lamb and mutton production was up 4 percent. 

and.....

http://www.businessweek.com/news/2012-09-21/russia-may-curb-grains-exports-to-control-domestic-prices

Russia, the third-largest wheat exporter last season, may curb grain shipments should prices keep rising, Economy Minister Andrei Belousov said. Wheat jumped as much as 2.2 percent before paring gains after Interfax reported that Deputy Prime Minister Arkady Dvorkovich as saying there were no such plans.

The country in 2010 banned overseas sales for almost a year after drought decimated the grain crop. The price of the benchmark Chicago wheat contract more than doubled by February 2011 as Ukraine introduced export quotas. Russia’s government will make a decision in the fall, Belousov told reporters today at a conference in the southern city of Sochi.

“We are simply obliged to protect the domestic market, and we can have no illusions about that,” he said. “We won’t allow any surges in grain or food prices.”

Export restrictions are “not expedient” and would cause a surge in international grain prices, Interfax later cited Dvorkovich as saying. He said Sept. 11 in London Russia may sell cereals from state stockpiles to control prices. The government plans to discuss whether to start such sales at a meeting next week, Dvorkovich said today, as reported by the Prime news agency.

Stockpiled Grain

There is no reason to limit exports as suggested by Belousov because the government has other methods to regulate the market, Deputy Agriculture Minister Ilya Shestakov said today, as reported by Prime. Shestakov said Sept. 6 at a conference selling grain from stockpiles is one such tool.

Wheat for December delivery rose as high as $8.9925 a bushel on the Chicago Board of Trade after Belousov’s comments. The contract was up 1.9 percent at $8.96 by 6:07 p.m. London time. The grain advanced 37 percent this year, leading gains in the Standard & Poor’s GSCI gauge of 24 commodities, which added 3 percent.

Crop prices surged since June as U.S. farmers contended with their worst drought since 1956 and heat waves withered plants across southern Europe. Global wheat production will drop about 5 percent to 658.7 million metric tons this season, according to the U.S. Department of Agriculture. Russia’s harvest will fall 31 percent to 39 million tons, it estimates.

Export Duty?

Prices for fourth-grade milling wheat in Russia rose 19 percent in the European part of the country since July 1, according to data from Moscow-based researcher SovEcon. The government may consider a duty on exports in November or December, Arkady Zlochevsky, head of the country’s Grain Union, said Sept. 18. The group represents the nation’s biggest producers and traders.

Restrictions would discourage farmers from increasing output in the future, Pavel Skurikhin, president of Russia’s Grain Producers’ Union, said in an e-mailed statement today.

Belousov’s warning “could push many people to sell grain more quickly and not to delay sales,” Dmitry Rylko, general director of the Institute for Agricultural Market Studies, said by phone in Moscow today. The economy minister’s remarks were perceived as “irrelevant” for exports, said Andrei Sizov Jr., managing director at SovEcon.

The minister’s comments stemmed from concern about potential food-cost inflation after grain prices rose this season, said Alexander Korbut, vice president of the Grain Union. The government can restrain prices by selling from state cereal stocks without limiting exports, according to Korbut.

Shipment Forecast

“Rumors about Russian grain exports’ death have been greatly exaggerated,” he said.

Russian wheat exports slumped to 3.98 million tons in the 2010-11 season, when the ban was in place, from 18.56 million tons a year earlier, USDA data show. Global sales slid to 132.5 million tons, a three-year low. The agency anticipates 8 million tons of wheat shipments from Russia in the current 2012-13 season, ranking the nation fifth globally after the U.S., Australia, Canada and the 27-nation European Union.

Agriculture Minister Nikolai Fedorov said Sept. 19 Russia would harvest 72 million to 73 million tons of grain, compared with a June forecast of about 85 million tons. Exports may be 10 million to 14 million tons, he said, against a July estimate of as much as 20 million tons. Foreign sales reached a record 27.2 million tons in the 2011-12 season after a 94.2 million-ton harvest, government statistics show.

Farmers harvested 63 million tons of grain from 76 percent of the planted area in 2012-13 as of Sept. 19, Fedorov said. That was down from 77 million tons a year earlier, he said.

and......

http://www.thehindu.com/news/national/article3919185.ece

Centre gears to tackle runaway inflation, fiscal deficit and economic slowdown

In a move to soften the blow of the recent increase in diesel prices and tempering the persistent rise in food prices, the Union government has decided to release 10 million tonnes of foodgrains through the Food Corporation of India in the open market.

According to government data, food prices hit a high of 12.03 per cent in August.

A senior official of the Finance Ministry told The Hindu that this was part of Finance Minister P. Chidambaram’s multi-pronged plan to simultaneously tackle the runaway inflation, an unmanageable fiscal deficit and an economic slowdown, leading to diminished public and private investment despite the growth in demand.

Every month, 2.5 million tonnes of grain will be allocated through auction for the next four months. “We expect food prices to start dropping significantly as a result of this, since we are releasing the foodgrains on a no profit, no loss basis,” the official said.

“In a worst case scenario, the cost of collection and storage of the grain will only be marginally higher than the auction price, but this will be more than offset by the reduction in … inflation. The… spinoff of reduced inflation will be lower interest rates, leading to increased investment,” he noted.

The government data says the annual Consumer Price Inflation (CPI) was 10.03 per cent in August, driven mainly by a rise in food prices. The country’s retail inflation is reportedly the highest among the BRICS nations and above the RBI’s “comfort level.” The Wholesale Price Index also rose to 7.55 per cent in August on the back of rising food prices.

The Ministry’s multi-pronged approach to interlinked issues, which will be implemented in the next few months, underscores its fears that the economy could be hurtling to a point of implosion.

Sources in the Ministry point to the slowdown in public and private investments because of interest rate volatility in an environment of growing demand, which is widening the demand-supply gap. Between 2010-11 and 2011-12, consumption grew by 14 per cent in rural areas and 12 per cent in urban areas, while manufacturing grew by 0-0.1 per cent.

The inability to cap the fiscal deficit by cutting planned public investment either in infrastructure or in welfare schemes like those under the Mahatma Gandhi Rural Employment Guarantee Act has left the government with very little elbow room, they say.

“Only way out”

According to the Ministry, cutting subsidies, as in the case of the recent increase in diesel prices, is the only way out of the present vicious economic cycle to a virtuous one. “As much as 40 per cent of diesel is consumed by industry, including for running mobile towers and power generators in five star hotels and shopping malls, 22 per cent is consumed for transport, while 17 per cent is used by farmers. The government still bears a subsidy of Rs.9 a litre of diesel even after hiking the retail price by Rs. 5. It is… unsustainable for the government to continue subsidising industry in this manner,” the official said.

and.....

http://soberlook.com/2012/09/its-food-prices-stupid.html?utm_source=BP_recent

SATURDAY, SEPTEMBER 15, 2012

It's the food prices, stupid

Once again the world is shocked to see how quickly unrest can erupt across the Muslim world, spreading almost overnight into numerous nations: Tunisia, Egypt, Sudan, Yemen, Pakistan, etc. The trigger this time happened to be an idiotic YouTube post called Innocence of Muslims which pokes fun at Prophet Muhammad and the origins of Islam.

Time: - In a saner world, the trailer for Innocence of Muslims would get no response other than as an example of terrible filmmaking. The 14-minute video, purporting to be excerpted from a larger movie propagandizing present-day Muslims and the life of Muhammad, is confoundingly bad, filled with incongruous accents, haphazard cuts, ludicrous dialogue and green-screen so bad that the actors appear to be floating in the air. 

But how is it that this fringe video could suddenly generate this much hatred and violence - taking numerous lives in the process? The answer is that just as Arab Spring had little to do with zeal for democratic freedom (discussed here), these new violent protests have little to do with a new surge in anti-American sentiment (which has been strong for generations).

The unfortunate reality is that this unrest in numerous Muslim nations (as predicted here) is driven, far more than anything else, by the rise in food prices across the region. This is the same phenomena that toppled brutal dictators who were able to cling to power for decades.

The Economist: - “The food-price spike was the final nail in the coffin for regimes that were failing to deliver on their side of the social contract,” says Jane Harrigan of London's School of Oriental and African Studies.

And once again these price increases bring about severe hardships among the populations of these nations (that are difficult for people in the developed world to fully appreciate), fueling unrest and hatred.

Ahram: - As the United Nations issues warnings over soaring global food prices, Egypt may have more to worry about than most. A net food importer and the world's biggest consumer of foreign wheat, the Arab world's most populous country would be wise to keep an eye on consumer prices indices as well as its budget, say experts.

In late August, three UN agencies made a joint statement suggesting the world could be on the brink of a repeat of the 2007-8 food crisis, citing "sharp increases" in the prices of maize, wheat and soybean caused by summer droughts and scorched crops across the globe.

Global food prices soared a monthly 10 per cent in July, the World Bank said in August as it warned of the effect on domestic prices.

"Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly," the Bank said.

The situation described above is by no means unique to Egypt. Of course the danger going forward is that agricultural commodity prices will stay elevated. What the Great North American Drought had started, the Fed will continue (via monetary expansion), as food inflation is exported globally. And someone will be blamed - if not the local dictators, it will be the US. This (and not any YouTube video) will ultimately translate into dangerous geopolitical uncertainties and further hardships and loss of life.

Diapason Global Agriculture Price Index (Bloomberg)