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Feedgrain & Oilseed Caucus
Market Overview
USMEF Strategic Planning & Marketing Conference
Cancun, MexicoNovember 2, 2006
Erin DaleyManager, Research and AnalysisU.S. Meat Export Federation
Overview Introduction Beef Exports Pork Exports Lamb Exports Corn Market/Ethanol Distillers Grains and Beef Cattle Production Conclusions
U.S. Beef Exports (000 MT)
0
200
400
600
800
1.000
1.200
1.400
1994 1997 2000 2003 2006(f)
C/ S AmericaCaribbeanEUTaiwanASEANChina/ HKRussiaCanadaS. KoreaMexicoJapan
636
Source: USDA/USMEF
U.S. Beef and Beef Variety Meat Exports (000 MT)
0
200
400
600
800
1.000
1.200
1.400
1994 1996 1998 2000 2002 2004 2006
BVMBeef
636
Beef*: 369
BVM*:267
Source: USDA/USMEF*Forecast
Jan-August
U.S. Pork Exports by Region (000 MT)
0
200
400
600
800
1.000
1.200
1.400
1994 1997 2000 2003 2006(f)
Oceania
E Europe
C/ S Am.
Caribbean
EU
Taiwan
ASEAN
China/ HK
Russia
Canada
South Korea
Mexico
Japan
Source: USDA/USMEF
U.S. Pork Exports (000 MT)
0
200
400
600
800
1.000
1.200
1.400
1994 1996 1998 2000 2002 2004 2006(f)
PVMPork
* ForecastSource: USDA/USMEF
U.S. Lamb & Mutton Exports MT
0
2,000
4,000
6,000
8,000
10,000
12,000
1994 1996 1998 2000 2002 2004 2006
LVMLamb
13,800
Source: USDA/USMEF
Total Feedgrains and Soybean Meal Exported through Beef and Pork (million bushels)
0
100
200
300
400
500
600
'96'97 '98'99 '00'01 '02'03'04 '05'06 '07'08 '09'10
SBMFeedgrains
Source: USDA/USMEF
Changing Corn Demand: Feed, Fuel, and Exports Livestock feeders largest corn users
Feed & Residual Use predicted around 55 percent of corn production in 2006/07
6 billion bushels Use per GCAU projected down in 2006/07 GCAUs are up slightly???
Drought, bird flu, strong demand… Cattle on feed inventory up 9% but placements were 5% lower
during October Beef, pork, and poultry production projected higher in 2007
Co-products make up the difference?
U.S. Ethanol Production
Renewable Fuels Association (RFA). 2006. From Niche to Nation Ethanol Industry Outlook. Washington DC, February.
105 ethanol plants = 5 BGY44 under construction= total 8.3 BGY
Cattle on Feed
Which feeders don’t have WDGS?
Will more corn go to ethanol production than is exported?
Top 10 U.S. Corn Export Markets
USDA; 1000 MTApprox 2 Billion bushels
Trade-offs between increasing corn prices and increasing supply of distiller’s grains Availability and variety of ethanol co-products Transportation and handling costs
Additional investments Consistency Cattle Performance Environmental regs
Changing co-products/ethanol production innovations
WDGS TransportWDGS 35% Dry MatterHow far can we haul all that water? ~ 35-40% increase in feed weight
WDGS Storage Additional storage
costs Preservatives Silage bags
Use w/in 3 to 5 days Concrete Slab Front-end loaders
Quick Note on Pork & Poultry More difficult to feed distillers grains Can only feed at low inclusion rates (< 15% of the ration on dry matter basis) Generally cannot feed WDGS, only DDGS which partially replaces corn & soybean meal
Soybean meal higher quality protein source more consistent
Economic Returns from Feeding WDGS
Trucking costs: $2.50 per loaded mile
10 year average corn prices Assuming $0.05 to
$0.10/bu basis at plant WDGS 95% price of
corn on equal DM basis
Vander Pol et al. (2006)
At plant optimum WDGS inclusion rate 30 to 40% on dry matter basis
$10-$23 per head return
Changes When ethanol production arrives:
Turn off the steam chest Feed WDGS with dry rolled corn
Increase cattle performance Decrease Natural Gas costs Invest in Roto-mix® trucks If already feeding silage shouldn’t need additional equipment (front end loaders) Increase labor, fuel and maintenance
Feed lower quality forages Vegetarian diets= $$$
Distant from ethanol production 15% DDGS (dry matter basis)
Railed in similar to corn Save processing costs Positive cattle performance results
Also Corn gluten feed…
Finally… Cost effective use of WDGS
depends on inclusion rate, distance from ethanol plant, cattle performance
Even with extra costs, still affordable feed ingredient
Livestock feeders and ethanol producers can co-exist!
