URBANA, Ill. – Lower cattle prices have been the story this spring and summer. Beef supply has been large due to heavy placements of heavy calves and the beginning of more females coming to market as herd expansion may be slowing. According to a Purdue University Extension economist, retail beef prices have been slow to come down and this has limited consumer purchases of beef in relation to abundant pork and poultry supplies.
“Finished cattle prices have been on the skids since mid-March when prices reached near $140 per hundredweight,” says Chris Hurt. “By last week, prices had fallen to around $115. Noticing the bearish theme in the cash market, the futures market has suggested prices will drop another $5 by the end of this year and proceed downward to near $100 by next summer.”
Hurt says there are plenty of reasons why prices have fallen, the biggest being a large number of cattle coming out of feedlots in recent months.
“That story goes back even further to abundant grass which encouraged cow-calf operations and backgrounders to add more weight to calves before they entered the feedlot,” Hurt says. “As a result, there has been a shift to heavier weight placements. In the first half of this year, placements weighing 800 pounds and more represented a record 40 percent of all placements, compared to a longer-term average around 27 percent.”
According to Hurt, rapid placements of heavy calves meant that marketings were going to rise sharply. Marketings out of feedlots were up 5 percent in May and then up a sharp 10 percent in June. Contributing to higher recent marketings has been a shift to lower slaughter weights since May which has served to “pull cattle forward.” This shift to lighter weights is probably related to the falling finished cattle prices and the desire of feedlot managers to get cattle to market before prices dropped even more.
Because of these heavy marketings, beef production was up 5 percent in May and 10 percent in June compared to the same month in the previous year. The rapid marketings in recent months has reduced the total number on feed to just 1 percent higher than a year ago according to USDA. This should help ease the burdensome volume of cattle and encourage upward price movement.
Hurt says there are early signs that the expansion phase of this cattle cycle could be in the process of slowing. Lower finished cattle prices and extremely weak futures prices may be causing cattle producers to rethink any additional expansion plans. The calf prices implied by $100 finished cattle is simply not profitable for most cow-calf operations. If producers slow the rate of expansion, more females move to market providing added beef supply pressures to already declining cattle prices.
“The signs of slowing expansion are in the rate of increased female slaughter,” Hurt says. In June, the number of heifers processed was up relative to year-previous levels for the first time in several years. In addition, the number of beef cows processed in both May and June was up about 18 percent. For June, total females (heifers and all cows) processed were up 7 percent compared to year-earlier numbers.
“The total number of females in the processing mix remains low, so it is still too early to say this expansion phase has come to an end,” he adds. “However, these signs of higher numbers of females in the processing mix may be the first clues of what is to come.
“Retail beef prices have been slow to fall as much as needed to encourage consumers to buy the added beef supplies,” Hurt continues. “In June, USDA reported the composite retail beef price was $6.20 per pound. This compares to a record-high price of $6.41 per pound in May 2015. Recent retail prices were just 3 percent lower than the record high. In contrast, June retail pork prices were down 11 percent from their high.”
Farm level prices normally drop quickly, but retail prices are much slower to decline, Hurt says. This means the current margin between the farm price and the retail price is at a record-wide level. Packer margins are likely at record-high levels as well.
“As retail prices adjust downward over time, consumers will have more price incentives to buy beef and this could actually help strengthen farm level prices,” Hurt says.
With the number of cattle on feed only up 1 percent on July 1, there should be renewed hope for recovery in cattle prices, Hurt says. “The fact that marketing weights have come down is also an encouragement that feedlot managers are more current in their marketings. In addition, over coming months, retail beef prices should also come down which will serve to narrow packer margins, but improve farm prices.”
According to Hurt, prices of finished cattle are expected to be in the mid-to-higher teens in the third quarter then move upward to the high teens to low $120s this fall.
“Recent live cattle futures prices have been extremely depressed, sending signals of much lower cash prices next year,” Hurt says. “Although prices are expected to be lower next year, they may not be as low as suggested by futures. Still, cow-calf managers will want to continue to be cautious about further expansion of the brood cowherd.”
Industries and researchers join to improve manufacturing drying processes
URBANA, Ill. – One of the most energy-intensive stages in manufacturing paper, food, textiles, chemicals, and many other products is drying. Researchers from two colleges at the University of Illinois are working together to find more efficient and environmentally sustainable drying alternatives through a new research center, an effort sponsored by the National Science Foundation through its Industry/University Cooperative Research Centers program.
The new Center for Advanced Research in Drying is led by Jamal Yagoobi from the Department of Mechanical Engineering at Worchester Polytechnic Institute in Massachusetts. Hao Feng, who is a food science researcher in the College of Agricultural, Consumer and Environmental Sciences at Illinois, will serve as the Urbana-Champaign campus site director for the center.
“The drying process has a direct effect on product quality, from the nutritional value of food to the durability of paper products and textiles,” says Feng. “Inefficient drying processes also create a significant environmental impact. By working to improve the drying process, we can enable production of products with better quality, speed up the delivery of products, and increase manufacturers’ profit margin so everyone benefits, and we can reduce its adverse effects on the environment.”
Irfan Ahmad, from U of I’s College of Engineering, is co-principal investigator/co-site and innovation director of the center. Ahmad is also executive director at the Center for Nanoscale Science and Technology, and a research faculty member in the Department of Agricultural and Biological Engineering.
“Innovation is at the heart of CARD to address such challenges as energy conservation, climate change, product safety and quality, using novel technologies such as micro and nanotechnology-based smart sensors and drying nozzles,” says Ahmad. “It also envisages new engineering education programs to nurture innovation in drying as a vital core competency for the next generation workforce.”
As defined by NSF’s I/UCRC program, the center must demonstrate measureable industry collaboration and involvement that accelerates fundamental research. Evidence of industry-defined fundamental research must show that the proposed industry participation extends the center’s capabilities into areas or projects that might not otherwise be researched.
NSF provides a framework for industries, universities, and the government to join together to solve problems that require a multi-disciplinary effort such as this one. Over 30 industry, organization, and government partners have shared their enthusiasm and financial support for the center’s research on drying.
It is the first center in the United States dedicated to developing energy-efficient technologies for drying moist, porous materials, a problem affecting the competitiveness of U.S. manufacturers across a wide range of industries. The center is one of three NSF I/UCRC centers led or co-led by University of Illinois researchers.
"Innovative drying technologies are critical to advanced, sustainable manufacturing technologies. Numerous challenges remain to be tackled with tangible academia-industry interaction such as CARD. I am sure CARD will play a leadership role in making a definitive contribution to the national and global effort in this field", says Arun Majumdar, editor-in-chief of Drying Technology, and emeritus professor of bioresource engineering at McGill University in Canada.
For more information, visit the Center for Advanced Research in Drying.
New book explains importance of great river management
URBANA, Ill. – University of Illinois soil scientist Ken Olson and his colleague, Lois Wright Morton, a sociologist from Iowa State University, have examined the effects of climate extremes including flooding and droughts in the Mississippi and Ohio River basins from many angles. They’ve co-authored over 20 feature journal articles and recently completed a book on the subject.
Managing Mississippi and Ohio River Landscapes explores the complex and ever-changing Mississippi and Ohio Rivers' landscapes and their systems. In this new century three major concerns have emerged: climate change and impacts, food insecurity, and homeland security including infrastructure, navigation, and water supplies. All three themes run throughout this book.
Through a series of engaging case studies accompanied by illustrative maps and photographs, the book reviews the historical impacts of climate, economic and population growth, and efforts to manage the waterways with engineered structures. Topics include drainage of bottomlands for crop production and other land uses, flooding risks and responses, levee systems and breaches, river navigation, and river ecology. The book concludes with recommendations for future management of these major waterways in the United States.
The hardbound book is 240 full-color pages. Managing Mississippi and Ohio River Landscapes can be pre-ordered online from the Soil and Water Conservation Society website.
New data portal makes research more accessible
• Easy-to-use online tool allows policymakers and practitioners to quickly comb through mountains of data to make better conservation decisions
• The Evidence for Nature and People Data Portal is available online.
URBANA, Ill. – When policy makers need to make conservation decisions, the evidence is either hard to find, hard to access, and/or hard to understand. Much of the information that conservationists seek is in PDFs locked up behind paywalls, buried in organization websites, and lurking on hard drives never to see the light of day. Even when systematic maps and reviews are open access, there is still not an intuitive way to explore and obtain necessary information.
The Science for Nature and People Partnership Evidence-Based Conservation working group recognized this significant barrier between research data and the people and organizations aiming to solve the world’s conservation problems: How to distill critical information from the mountains of existing data.
The group created a new online portal to make conservation data readily accessible and explorable. Users can filter, explore, and visualize desired information using a policy-relevant framework. The portal provides access to thousands of available datasets on human well-being and natural ecosystems so policy makers and others can synthesize the data and make better conservation decisions.
“This tool will be enormously useful to researchers, practitioners, and policymakers, especially in the context of efforts to work toward the new sustainable development goals,” says Daniel Miller, assistant professor of natural resources and environmental sciences at the University of Illinois and former World Bank Program on Forests staff member. “The portal is a ‘one-stop shop’ for information on what we know about how different conservation interventions affect human well-being. It will save time and money, not only by quickly showing what is currently known, but also by highlighting key evidence gaps.”
Miller says this type of portal currently exists and is widely used for a variety of physical, biological, and ecological data. For example, the National Center for Biotechnology Information’s GenBank is the standard repository for genetic information. A few data portals, such as Conservation Evidence, contain information on conservation actions and biological outcomes, but until now no similar database or data portal has existed for the linkages between conservation and human well-being information.
The new SNAPP tool operates as a flexible, graphical data portal for the links between conservation interventions and human well-being outcomes that allows users to download desired information as well as charts and summaries. It collates information from over 1,000 studies in an easy-to-interpret way and visualizes it for quick uptake. Users can filter the information by intervention and outcome type, geographic location, biome and study design – allowing them to hone in on regions and ecosystems of interest and gain quick information on the abundance and general quality of information for specific linkages and areas. The tool also offers the ability to download full datasets and bibliographic information.
“The world is faced with environmental crises ranging from pollution, to overfishing, to climate change,” says Samantha Cheng of the National Center for Ecological Analysis and Synthesis at the University of California Santa Barbara, and a SNAPP post-doctoral research fellow. “The actions that we take to address these issues will have long-lasting and widespread effects, which, if negative, will do more harm than good. Making decisions based on evidence for what works and what doesn’t work is absolutely critical if we want to achieve successful conservation.”
The SNAPP Evidence-Based Conservation working group is led by researchers from Conservation International and Wildlife Conservation Society.
How big is the market for U.S. corn?
URBANA, Ill. – Record-large U.S. corn acreage and prospects for the average yield to be near trend value point to another large crop this year. The USDA projection of acreage harvested for grain of 86.55 million acres and trend yield of 168 bushels per acre point to a crop of 14.54 billion bushels.
University of Illinois agricultural economist Darrel Good provides this analysis:
At the projected level, the 2016 crop would be 939 million bushels larger than the 2015 crop and 324 million bushels larger than the previous record crop of 2014. With carryover stocks of 1.701 billion bushels and imports of 40 million bushels, the supply of corn for the 2016-17 marketing year would total 16.281 billion bushels, 889 million bushels larger than last year’s supply and 802 million bushels larger than the previous record supply for the 2014-15 marketing year.
To prevent an increase in year-ending stocks to a burdensome level, corn use during the upcoming marketing year needs to be large. In the July 12 World Agricultural Supply and Demand Estimates report, the USDA projected use during the current marketing year at 13.692 billion bushels and use during the upcoming marketing year at 14.2 billion bushels. Those projections have been generally characterized as generous.
Corn exports during the current marketing year are projected at 1.9 billion bushels. Outstanding export sales are large enough for exports to reach that level, but with just under seven weeks left in the year, shipments will need to average about 52.5 million bushel per week to reach that level. Export inspections for the six weeks that ended July 14 averaged 54.3 million bushels per week, a pace slightly higher than needed to reach the USDA projection. Exports during the 2016-17 marketing year are projected at a nine-year high of 2.05 billion bushels. The relatively large projection reflects the shortfall in the 2016 Brazilian corn crop and expectations that the United States will gain export market share in the upcoming year. The Brazilian crop is estimated at 2.756 billion bushels, 591 million bushels smaller than the 2015 crop. Brazilian exports totaled 1.357 billion bushels last year and are projected at only 728 million bushels this year and 866 million bushels next year. As of July 7, outstanding export sales of U.S. corn for delivery during the 2016-17 marketing year were reported at 243 million bushels, the largest for that date in three years and 139 million larger than on the same date last year.
Corn used for production of ethanol and co-products during the current marketing year is projected at 5.225 billion bushels, 25 million more than used in the previous year. Use during the first three quarters of the year totaled 3.865 billion bushels, equal to use of a year ago.
Although ethanol production has exceeded that of a year ago, more sorghum has been used as a feedstock. Use during the final quarter will need to total 1.36 billion bushels in order for the marketing-year total to reach 5.225 billion bushels. That is 1.9 percent more than used in the same quarter last year. Ethanol production in June and so far in July has been about 1.3 percent larger than production of a year ago. It appears that corn use could fall just short of the USDA projection unless ethanol production accelerates and/or the use of sorghum as a feedstock declines. Corn used for ethanol production in the upcoming marketing year is projected at 5.275 billion bushels. Ethanol production should be supported by increased domestic gasoline consumption resulting from low prices and continued strong ethanol exports. Corn use should be further supported by a modest reduction in the amount of sorghum used as a feedstock for ethanol production.
Domestic feed and residual use of corn during the current marketing year is projected at 5.2 billion bushels. Use during the first three quarters of the year totaled 4.551 billion bushels, so that summer use needs to be 649 million bushels in order for marketing-year use to reach the projected level. Use at that level would be 107 million bushels larger than use of a year ago and the largest use in seven years. On the surface, such large use seems unlikely given the expected increase in wheat feeding this summer. However, given the large variation in quarterly use from year to year that total cannot be ruled out. Use will be revealed with the USDA’s September 1 stocks estimate to be released on September 30. Feed and residual use during the upcoming marketing year is projected at a nine-year high of 5.5 billion bushels. Use should be supported by abundant corn supplies, low corn prices early in the marketing year, and a modest expansion in livestock production. The USDA projects a 1.4 percent year-over-year increase in the number of grain consuming animal units. An important unknown is the level of wheat feeding during the summer of 2017.
While the 508 million bushel (3.7 percent) increase in the consumption of U.S corn projected for the upcoming marketing year is large, an examination of use by category suggests that the projections are very reasonable. Still, stocks of U.S. corn are likely to increase by the end of the 2016-17 marketing year. The magnitude of that increase will be largely determined by the size of the crop. Crop size will be determined by weather conditions over the next six weeks or so. The USDA will release the first survey-based forecast of crop size on August 12.
Kidwell named College of Agricultural, Consumer and Environmental Sciences dean
CHAMPAIGN, Ill. — Kimberlee Kae Kidwell will serve as the University of Illinois at Urbana-Champaign’s dean of the College of Agricultural, Consumer and Environmental Sciences effective Nov. 1, pending approval by the University of Illinois Board of Trustees.
Currently the executive associate dean of the College of Agricultural, Human and Natural Resource Sciences at Washington State University – a diverse college with 15 reporting units ranging from apparel, merchandising, design and textiles to biological systems engineering – Kidwell is a nationally respected scholar of plant breeding and genetics. She served as the college’s acting dean in 2015-16.
At Illinois, she also will hold the inaugural Robert A. Easter Chair.
“Professor Kidwell has excellent scholarly credentials, leadership experience and management skills,” said Edward Feser, interim provost at Illinois. “She has demonstrated a passion for students and teaching throughout her career, and she has developed her own leadership skills training program, which she plans to relocate to Illinois in partnership with WSU.
“From the exceptional quality of her extensive interactions with campus representatives throughout the search process, it’s clear that she will be an outstanding leader of ACES.”
Kidwell earned two bachelor’s degrees from the University of Illinois at Urbana-Champaign, as well as master’s and doctorate degrees from the University of Wisconsin, Madison. She joined the Washington State faculty in 1994.
Kidwell will succeed ACES Dean Robert Hauser, who has served in that role since 2010. He was interim dean of ACES for a year prior to that, and also served two terms as head of the department of agricultural and consumer economics, from 1995 to 2001 and from 2004 to 2009.
Hauser has developed and led exceptional U. of I. Extension programs, taught several undergraduate and graduate courses since he joined the faculty in 1982, and received numerous research and Extension awards.
“Dean Hauser has been a tireless advocate for the faculty, students and staff of ACES and a respected ambassador for its programs and achievements across Illinois and the U.S.,” Feser said.