Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on April 8^th documented the start of the 2024 soybean and corn season. Planting of corn has commenced with relatively dry conditions that will allow rapid seeding of prepared acreage.

Based on the sum of the “adequate” and “surplus” categories, surface and subsoil moisture levels were only slightly lower compared to the corresponding week in 2023. For the past week surface and subsoil moisture values were 70 and 66 percent respectively for the two highest categories. These levels were similar to the previous year with values of 74 percent and 69 percent respectively for the two highest categories, demonstrating an acceptable pre-planting situation. It is to early in the expected transition to an El Nino event to predict any impact on crop condition in coming weeks. If dry and warm weather in corn and soy areas occurs yield may be depressed depending on timing and severity.

Reference is made to the April 11^th WASDE Report #647 and the weekly Commodity, Economy and Energy Report in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks.

WEEK ENDING   Crop March 31st  2024        April 7th  2024 5-Year Average Corn planted (18 states) (%) 2 2 2 Soybean planted (18 states) (%)
Crop Condition  (pending USDA reports) V. Poor Poor Fair Good Excellent Corn  2024 (%) Corn  2023 (%)           Soybeans  2024 (%) Soybeans  2023 (%)
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week Past Year   8 10 22 16 58 57 12 17 Subsoil Moisture:         Past Week Past Year   9 12 26 19 56 56 65 69

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through to the end of the 2024 harvest in November.

Export of Shell Eggs and Products, January-February 2024.

Exports of shell eggs during the 12-month period commencing March 2022 were constrained by availability due to progressive and cumulative depletion of 44 million hens as a result of HPAI divided among spring and fall waves. The national flock was about 20 million hens lower than the pre-HPAI complement on an average weekly basis during 2022. Sharp rises in price as a result of supply-demand disequilibrium made U.S. export prices non-competitive as denoted by lower volumes over successive months from March 2022. Egg products were also impacted but to a lesser extent than shell eggs. During June 2023 shell and product exports combined represented 2.5 percent of total production, more than double the volume recorded in January 2023 but exports declined in July to 1.9 percent of production by U.S. flocks. At the present time the national flock is approximately 18 million hens lower than pre-HPAI levels with relatively high prices sufficient to constrain exports of shell eggs. Combined shell and product exports in December 2023 represented 2.6 percent of the output of the national flock. It is questioned whether lost markets other than the USMCA and Caribbean nations will be reclaimed over the intermediate term. Sporadic and short-term exports may be made to various nations based on supply disruption caused by HPAI.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing 2023 with 2022:-

                           U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING

                                              JANUARY-FEBRUARY 2024 COMPARED WITH 2023

SHELL EGGS

Shell egg exports from the U.S. during January-February 2024 increased by 9.9 percent in volume but declined 20.7 percent in total value compared to the corresponding months in 2023. Unit value declined 26.9 percent to $1.98 per dozen compared to January-February in 2023.

Canada was the leading importer of shell eggs during January-February 2024, with 8.1 million dozen representing 66.4 percent of volume and 64.7 percent of the $24.1 million total value of U.S. shipments of shell eggs. Unit price in January-February 2024 was $1.93 per dozen compared to $2.99 per dozen for consignments in February 2023. Imports by Canada are driven by consumer demand balanced against availability from the controlled supply situation. This inhibits flexibility necessitating imports from the U.S. to cater for demand. During February 2024 Canada imported 6.0 million dozen up 81.8 percent over the corresponding month in 2023. Value was up 30.3 percent to $11.6 million but unit value was 28.5 percent lower to $1.93 per dozen.

The Caribbean Region was a distant second in shell egg imports from the U.S. during January-February 2024, with 2.1 million dozen representing 17.2 percent of volume and 19.1 percent of the total value of U.S. shipments of shell eggs. Unit price in February 2024 was $2.19 per dozen

Mexico was the third-ranked importer of shell eggs in January-February 2024 with a volume of 0.5 million dozen representing 4.1 percent of export volume and 3.7 percent of value. This price discrepancy was due to a low unit value of $1.80 per dozen compared to an average value of $1.98 per dozen for all exports.

During January-February 2024 the next three significant importing regions, the Middle East, the E.U. and East Asia, (principally Hong Kong.) with a collective volume of 1.1 million dozen represented 19.8 percent of U.S. exports. Value of exports to these importing regions amounted to $1.6 million in January-February 2024 compared to $1.7 million in January-February 2023. Unit price for these importers in January-February 2024 averaged $1.45 per dozen, compared to the January-February 2024 average USDA export price of $1.98, per dozen, tray packed, excluding processing but with inland transport and outer cartons. The average 12-month trailing USDA benchmark price for nest-run large shell eggs was $1.40* per dozen weighted by high prices during shortages during the first quarter of 2023 resulting from depletion of flocks infected with HPAI.

*USDA 12-month USDA benchmark nest-run unit prices per dozen: $2.13; March, $2.74; April, $1.38; May, $0.60; June, $0.82; July, $0.83 and August, $0.90; September, $1.00; October, $0.89; November, $1.65; December, $1.81; January 2024, $1.72 and February, $2.51.

EGG PRODUCTS

The total volume of exported egg products during January-February 2024 increased 23.6 percent to 3,715 metric tons compared to January 2023. Total value of $22.4 million was higher by 5.2 percent compared to January-February 2023. Unit value decreased by 14.9 percent to $4,879 per ton compared to January-February 2023. During 2023 the U.S. exported 29,814 metric tons of egg products valued at $134.3 million with a unit price of $4,505 per metric ton. Fluctuation in unit price reflects the composition of exports and the relationship between World supply and demand. Ukraine is now restrained in production but India continues as a significant exporter.

Japan was the 1^st-ranked importer by volume of egg products during January-February 2024 receiving 1,137 metric tons from the U.S. valued at $5.8 million representing 24.8 percent of volume and 25.8 percent of value with a unit price of $5,101 per metric ton. Volume for January-February 2024 was down by 17.3 percent and value was lower by 17.1 percent compared to January-February 2023. During February 2024 Japan imported 751 metric tons down 3.1 percent over the corresponding month in 2023. Value was down 9.1 percent to $4.0 million and unit value was 6.1 percent lower to $5,326 per metric ton. During 2023 Japan imported 10,352 metric tons of egg products from the U.S., valued at $49.9 million. With the conclusion of a bilateral trade agreement, the U.S. is no longer at a competitive disadvantage with respect to the E.U.

Mexico fell to the 2^nd rank of importers from the U.S. during January-February 2024 based on a volume of 1,032 metric tons with a value of $3.7 million, representing 22.5 percent of volume and 16.5 percent of the total value of U.S. exports of egg products. Exports to Mexico were up by 10.3 percent in volume but 30.2 percent lower in value compared to January-February 2023. The unit value of $3,585 per metric ton can be compared with the average unit value for U.S. exports of all egg products at $4,879 per metric ton.

Canada was the 3^rd-ranked importer in January-February 2024 based on a volume of 744 metric tons with a value of $2.7 million. Canada represented 15.2 percent of volume and 12.1 percent of value with a unit price of $3,629 per metric ton. During February Canada was 2^nd- ranked with 503 metric tons representing 20.1 percent of exports of egg products and up 5.4 percent from February 2023. Value was $1.6 million or 14.4 percent of the monthly total, up 128 percent from February 2023 due to a 116 percent increase in unit revenue to $3,180 per metric ton, reflecting a change in proportions of egg products consigned. Volumes shipped reflect restoration of the institutional and food service sectors and relative availability of domestic product in Canada.

South Korea was ranked fourth among importers of egg products during January-February 2024 with a volume of 635 metric tons valued at $2.5 million with a unit value of $3,937 per metric ton. Comparing these values with January-February 2023, volume was 177 percent higher and value was up by 92.3 percent. Most flocks in South Korea have been restored to production after depopulation following 2021-2022 outbreaks of HPAI. Import volume may have been influenced by limited but rising flock depletion or alternatively increased demand in advance of the Lunar New Year. In 2023 South Korea imported 1,141 metric tons valued at $5.3 million. Depending on severity, the return of HPAI may result in a disparity between local availability and demand requiring imports in 2024 as in 2022.

COMMENTS

Exports to Canada and Mexico combined in 2022 amounted to $126.5 million in value equivalent to 47.5 percent of the total value of shell eggs and products shipped. During 2023 exports valued at $150.7 million represented 50.8 percent of shell egg and egg products amounting to $296.5 million. Canada represented 59.0 percent of the $162.2 million for shell eggs and 10.3 percent of egg products valued at $121.2 million, consigned during 2023, emphasizing dependence on this USMCA partner. During January-February 2024 the USMCA represented 49.0 percent of combined shell egg and product sales valued at $46.5 million.

Aspirational volumes of exports in excess of five percent of domestic production are unrealistic. The E.U., Japan, South Korea and Taiwan will buy according to their needs for undifferentiated shell eggs and products based on landed price in a competitive World market. Purchase decisions for commodities are determined by FOB price, freight, duty and broker margins. Shell eggs and the various categories of egg products are essentially commodities and generally do not respond to promotion.

Exports will be dependent on the willingness of importers to accept the World Organization for Animal Health (WOAH) principle of regionalization (zoning) in the event of outbreaks of exotic Newcastle disease or isolation of either H5 or H7 avian influenza (AI), in commercial flocks, irrespective of pathogenicity. Most importing nations are now applying regionalization and permitting imports on a zonal, county or state-exclusion basis following H5 or H7 AI infection. Canada and the U.S. operate according to a 2018 bilateral agreement to maintain trade in the event of outbreaks of catastrophic exotic diseases including HPAI and END.

Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI or Newcastle disease in a region.

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report. This data is correlated and interpreted in the WeeklyEggPrice and Inventory Report posted on EGG-NEWS mailed on Fridays each week.

The USDA Cage-Free Report covering March 2024, released on April 1^st 2024, documented the complement of hens producing under the Certified Organic Program to be 18.2 million (rounded to 0.1 million), down 0.5 percent from February 2024. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently declined by less than 0.1 percent from February 2024 to an unaltered 106.5 million. Hen numbers posted by the USDA over the 4^th quarter of 2023 and especially February 2024 are questioned based on the stated average hen-week production. The number of eggs collected is accepted as accurate but since the value for average weekly production is unacceptably high the denominator reflecting number of hens is probably incorrect. Alternatively if conventional eggs from cages are deceptively marketed as cage-free, assuming an accurate number of hens over a given month, the apparent hen-week value would be incorrectly high. Since the inception of the Cage-Free Report monthly figures have shown erratic fluctuation as during the 1^st Quarter of 2024 or alternatively are unchanged in consecutive months. Actual production of eggs is based on the reality of a continuing cycle of placing a predicted number of pullets and depletion of old hens but with limited application of molting for cage-free flocks. The respective numbers of hens claimed for organic and cage-free flocks should reflect chick placements, HPAI depopulation and age-related depletion and should correspond to monthly supply data and inventory extending over successive quarters.

Average weekly production for Certified Organic eggs in March 2024 was down 1.0 percent compared to February 2024 with a questionable average weekly production of 83.8 percent. Down from 84.2 percent in February. Average weekly flock production for cage-free flocks other than Certified Organic was down 0.5 percent in March 2024, also with a questionably high average hen month production of 82.6 percent down from 83.0 percent. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements laid down 22 weeks previously in anticipation of peak seasonal demand periods. March 2024 data may have reflected a presumed higher proportion of younger flocks derived from pullet chicks placed during late August and early September 2023 in anticipation of Easter 2024 demand. Since the proportion of pullets according to housing type is not indicated in the monthly USDA Chickens and Eggs report it is not possible to assess the relative sizes of flocks producing under the certified organic label or for other categories. There is no adequate explanation for the high production rate especially if the stated number of hens is lower than actual, especially with undercounted HPAI flock depopulation that appears to be the case at present. This raises the question of possible illegal diversion of caged eggs into the cage-free or organic streams.

Negotiated nest-run grade-ready cage-free price for March 2024 averaged $2.50 per dozen, down by 6.0 percent from $2.66 per dozen in February 2024, reflecting lower demand relative to supply. The March 2024 advertised U.S. retail price for cage-free eggs over four regions (excluding SW. NW. AK. and HI.) was $3.28 per dozen down 9 cents per dozen from February 2024 over 2,900 stores.

The apparent difference between a recorded average wholesale price of $2.50 per dozen plus a provision of 60 cents per dozen for packaging, packing and transport in relation to the average four-region retail price of $3.28 corresponds to an average retail margin of 5.5 percent (3.4 percent last month) over the average wholesale price for packed eggs delivered to a DC. at $3.11 per dozen. Margins are presumed higher for pastured and other specialty eggs at shelf prices reaching $9.00 per dozen. Chains that are maximizing margins especially on Certified Organic, free-range and pastured categories restrict the volume of sales, ultimately disadvantageous to producers.

Based on the importance of cage-free production, the USDA-AMS issue the Cage-Free report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is obvious doubt as to the accuracy of individual monthly flock numbers especially when reports show a marked change at the end of a quarter or from the previous month without obvious cause, or alternatively when there is no change in the cage-free flock for sequential months.

According to APHIS data approximately 13 million hens were depopulated during the 4^th quarter of 2023 as a result of HPAI. The UEP reported that 47 percent of depopulations have involved cage-free flocks. The approximately 6 million cage-free hens apparently depopulated are not adequately reflected in the recent monthly cage-free reports. The USDA should provide an explanation and appropriate corrections.

It is suggested that USDA should consider a quarterly report with more accurate hen data. This would be more useful to the industry for planning and marketing decisions. Price data is available each week from other USDA reports.

Subscribers are referred to weekly USDA wholesale and retail prices posted in the Egg Price and Inventory Report in EGG-NEWS E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.

USDA Weekly Egg Price and Inventory Report, March 20^th 2024.

Market Overview

• The average wholesale unit revenue values for Midwest Extra-large and Large sizes were up by 0.9 percent and Medium size was up 13 percent this past week. Wholesale prices for Midwest in cartons were approximately $0.25 per dozen above the 3-year average for mid-March. This past week shell egg inventory was down by 2.2 percent, following a rise of 2.1 percent the previous week. Although there has been a progressive weekly increase in pullet flocks transferred to laying houses, hen numbers are diminished by the loss of close to thirteen million hens due to HPAI on twelve complexes holding from 250,000 to 2.6 million hens during the 4^th Quarter of 2023. Pullets are in short supply with losses of 2.5 million growing birds mainly in California.
• This past week, chains widened the spread between delivered cost and shelf price. This could result in a potential increase in generic stock unless compensated by a proportional rise in demand and constant re-ordering to fill the pipeline through mid-month. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods.
• Total industry inventory was down by 3.0 percent overall this past week to 1.66 million cases with a concurrent 6.0 percent decrease in breaking stock, following a 1.3 percent rise during the preceding processing week. Demand for egg products will presumably increase during the two weeks preceding Easter (March 29^th Good Friday) with more home baking and entertaining. Egg products are required for the food service and manufacturing sectors although exports are at a moderate to low level attributed to domestic price. USDA Benchmark wholesale price for eggs in cartons was approximately $0.75 per dozen lower than the corresponding week in 2023.
• It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for small cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
• Cases of HPAI in the commercial poultry industry and backyard (non-commercial WOAH) flocks have tapered, coincident with the end of the Fall migration of waterfowl that was extended in late 2023 by mild weather. The number and extent of future possible outbreaks during the spring and fall months of 2024 cannot be projected but the epornitic appears to be over with migratory birds having moved south following colder weather in January. Unfortunately sporadic cases in backyard poultry in diverse states continue. A case of HPAI was diagnosed in turkeys a week ago in Missouri. More surveillance information should be released by USDA-APHIS concerning the prevalence rate of carriers among resident domestic free-living birds and a review of molecular and field epidemiology for the 2022 spring and fall waves of HPAI. The USDA has yet to identify specific modes of transmission for the 2022-2023 epornitic including likely airborne spread from wild birds and their excreta over short distances.
• The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past two years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
• According to the USDA the U.S. flock in production was down by 0.2 million hens (<0.1 percent) to a new level of 302.1 million for the week ending March 20^th The total flock of 306.4 million included about one million molted hens that will resume lay during coming weeks plus 5.0 million pullets scheduled to attain production. Given the latest figures it is estimated that the producing flock is at least 17 to 20 million hens lower than before the onset of HPAI in 2022. It is evident that USDA has now provided a more realistic figure of flock size having adjusted figures to account for depopulation of 13 million hens spread over the last quarter of 2023.
• The ex-farm price for breaking stock (rounded to one cent) was up 0.3 percent to $1.52 per dozen.Checks delivered to Midwest plants were unchanged at $1.39 per dozen this past week. Prices for breaking stock should follow the wholesale price for shell eggs usually with a lag of about one to two weeks.

The Week in Review

Prices

According to the USDA Egg Market News Reports released on March 18^th 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was up 0.9 from last week to $2.18 per dozen. Large was up 0.9 percent to $2.16 cents per dozen. Mediums were up 13.0 percent to $2.01 per dozen delivered to DCs. Prices should be compared to the USDA benchmark average 4-Region blended nest-run cost of 76.0 cents per dozen as determined by the Egg Industry Center based on USDA data for February 2024. This value excludes provisions for packing, packaging materials and transport, amounting to 57 cents per dozen as determined in mid-2023 from an EIC survey (with low response) and now realistically 60 cents per dozen.

Currently producers of generic shell eggs should be operating with positive margins irrespective of region and customer-supply agreements. The progression of prices during 2023 and 2024 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

The March 18^th edition of the USDA Egg Market News Report confirmed that the USDA Combined Region value (rounded to the nearest cent), was down $0.11 per dozen to $2.23 per dozen delivered to warehouses for the week ending March 11^th 2024. This average price lags current benchmark Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $2.14 per dozen. At the high end of the range, the price in the South Central region attained $2.30 per dozen. The USDA Combined Price last week was approximately $0.27 per dozen above the 3-year average of $1.95 per dozen. This past week Midwest Large was approximately $0.75 per dozen below the corresponding week in 2023 that was rising on demand to $3.00 per dozen as production recovers from HPAI depletion and with declining to stable market demand.

OVERVIEW

The USDA provided preliminary values for the production of corn and soybeans in the March 8^th World Agriculture Supply and Demand Estimates (WASDE) #646, reflecting the anticipated 2024 crop. These values were understandably unchanged from the February edition given the month and are based on projections of acreage, yield, carry-forward levels from 2023, and with realistic assumptions of domestic use and exports giving rise to ending stocks.

The March 8^th WASDE report predicted that corn would be harvested from 86.5 million acres, unchanged from February. The soybean crop will be harvested from 82.4 million acres also unchanged.

The most recent report retained the yield value for the 2024 corn crop at 177.3 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The soybean yield was held at 50.6 bushels per acre compared to 49.9 bushels per acre in 2023.

The March 2024 USDA projections for the ending stocks of corn were 2,172 million bushels, up 0.5 percent from 2,162 million bushels respectively.

The March 2024 WASDE lowered the ex-farm price of corn by 5 cents to 475 cents per bushel. The projected price for soybeans was unchanged from the February WASDE at 1,265 cents per bushel. Soybean Meal was unchanged at $380 per ton.

Projections for world production included in the March 2024 WASDE report reflect the most recent estimates for commodities in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from hostilities in Ukraine with occupation of ten percent of the Nation’s land area by the Russian Federation and following extensive destruction of agricultural infrastructure. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages. Exports from Ukraine have been restored following the collapse of the Black Sea Grain Initiative and destruction of Black Sea and Danube Delta port installations. These adversities have been partly overcome by aggressive naval action allowing the “Humanitarian Corridor” that traverses the national waters of friendly countries along the western Black Sea coast.

It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities and especially U.S. soybeans during the current market year despite drought and taking into effect relaxation of COVID restrictions on consumers with higher demand.

Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS, derived from published USDA-FAS sales data.

CORN

Based on increased yield and acreage projections for the 2024 corn harvest, January through March WASDE Reports predict a crop of 15,342 million bushels compared to 15,234 million bushels in 2023. The U.S. 2023 harvest was a record, 2.0 percent above the previous record harvest of 15,148 million bushels in 2016. The “Feed and Residual” category was unchanged from February at 5,675 million bushels. The Feed and Seed category was retained at 1,405 million bushels. The “Ethanol and Byproducts” Category was held at 5,375 million bushels consistent with estimated demand for E-10 and higher blends. Gasoline consumption is restrained despite lower prices, easing of inflation and changes in commuting patterns persisting from COVID restrictions. Projected corn exports were unchanged at 2,100 million bushels, based on recent orders, the volume of projected shipments to China and taking into account the anticipated lower availability of coarse grains from Eastern Europe and World weather patterns under an El Nino event. Ending stocks of corn in the March WASDE report were unchanged at 2,172 million bushels.

The forecast USDA farm price for corn in the March WASDE report covering the 2024 crop was reduced 5 cents to 475 cents per bushel. At 16H00 on March 8^th after the noon release of the WASDE the CME spot price for corn was 440 cents per bushel, up 1.6 percent from the quotation on February 8^th and down 7.4 percent from the March USDA projection.

MARCH 2024 WASDE #646 Projections For The 2024 Corn Harvest:

1 metric ton = 39.368 bushels

Average Farm Price: 475 cents per bushel. (Down 5 cents per bushel from from the February WASDE Report reflecting the 2024 projected crop)

SOYBEANS

Based on a prediction of acreage to be planted the USDA March WASDE projected the 2024 soybean crop at 4,165 million bushels with an estimated yield of 50.6 bushels per acre from 82.4 million acres harvested. Crush volume was unchanged from the February WASDE report at 2,300 million bushels. Projected exports were held at 1,720 million bushels despite China indicating lower pork production and reduced imports. Ending stocks were anticipated to be 315 million bushels, unchanged from the February WASDE report.

There is uncertainty over orders from China for the current 2023-2024 market year. This is attributed to competition from Brazil and an assumption of lower requirements for animal feed despite relaxation of previous strict COVID restrictions. In reality traders in China are obligated to order on a stable or declining market unless faced with shortages. Prior to 2018, China, the largest trading partner for U.S. agricultural commodities, imported the equivalent of 25 percent of U.S. soybeans harvested.

The USDA February 2024 projection for the ex-farm price for soybeans for the 2024 harvest was unchanged from the February WASDE report at 1,265 cents per bushel. At 16H00 on March 8^th following release of the WASDE, the CME spot price was 1,185 cents per bushel, down 0.8 percent compared to the February 8^th quotation and 6.3 percent below the March USDA projection.

MARCH 2024 WASDE #647 PROJECTION FOR THE 2024 SOYBEAN HARVEST:-

1 metric ton = 36.74 bushels

Average Farm Price: 1,265 cents per bushel (Unchanged from the February 2024 WASDE Report)

SOYBEAN MEAL

The projected production of soybean meal from the 2024 soybean crop will be 54.25 million tons. This was up 0.1 million tons from the February WASDE but inconsistent with an unchanged crush of 2,300 million bushels of soybeans. This figure is questioned based on increased demand for biodiesel with a proportional increase in U.S. crushing capacity. Production is driven both by exports and domestic consumption for livestock feed and for soy oil supplying the food and biodiesel segments. The projection of domestic use was reduced 1.0 percent to 39.03million tons. Exports were raised 0.5 million tons to 15.8 million tons. The USDA retained the ex plant price of soybean meal at $380 per ton as an average for the 2023-2024 season based on supply and demand considerations as reflected in an unchanged ending stock of 400,000 tons representing 0.7 percent of supply.

At 16H00 on March 8^th the CME spot price for soybean meal was $342 per ton, down 1.4 percent compared to the February 8^th CME quotation and $38 per ton or 10.0 percent lower than the March WASDE projection of $380 per ton.

MARCH 2024 WASDE #646 PROJECTION OF SOYBEAN MEAL PRODUCTION AND USE

(Quantities in thousand short tons)

Average Price ex plant:$380 per ton (Unchanged from the February WASDE Report)

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest stable feed production costs for broilers and eggs. Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

For each 10 cents per bushel change in corn:-

• The cost of egg production would change by 0.45 cent per dozen
• The cost of broiler production would change by 0.25 cent per live pound

For each $10 per ton change in the cost of soybean meal:-

• The cost of egg production would change by 0.35 cent per doze
• The cost of broiler production would change by 0.30 cent per live pound.

WORLD SITUATION

With respect to world coarse grains and oilseeds the February 2024 WASDE Report included the following appraisals by USDA:-

COARSE GRAINS:

“Global coarse grain production for 2023/24 is forecast 2.7 million tons lower to 1,507.4 million. This month’s foreign coarse grain outlook is for reduced production, larger trade, and smaller ending stocks relative to last month. Foreign corn production is forecast lower with declines for South Africa, Ukraine, Mexico, Venezuela, and Russia that are partly offset by increases for Argentina and Syria. South Africa is down reflecting lower yield prospects. Mexico is cut based on expectations of lower winter corn area. Ukraine and Russia are reduced based on reported harvest results to date. Argentina is raised based on higher expected area. Foreign barley production is down, with reductions for Iraq and Syria that are partly offset by an increase for Australia”.

“Major global trade changes include higher corn exports for Ukraine and Argentina but reductions for South Africa and India. Corn imports are lowered for the EU, Saudi Arabia, Israel, and South Korea but raised for Mexico, Venezuela, and Indonesia. Barley exports are raised for Australia. Foreign corn ending stocks are lower, mostly reflecting a decline for Ukraine that is partly offset by an increase for Brazil. Global corn ending stocks, at 319.6 million tons, are down 2.4 million”.

OILSEEDS:

“Global 2023/24 oilseed production is reduced 0.7 million tons to 658.7 million, on lower soybean and sunflower seed production partly offset by higher rapeseed. Sunflower seed production is reduced on lower output for South Africa. Rapeseed production is increased on higher output for India, Russia, and Ukraine. Global soybean production is reduced 1.4 million tons on lower production for Brazil and South Africa”.

“Global 2023/24 soybean supply and demand forecasts include lower beginning stocks, lower production, lower crush, higher exports, and lower ending stocks compared to last month. Beginning stocks are lowered 1.4 million tons mainly on historical crush and import revisions for China. Soybean crush for China is raised for 2020/21 to 2022/23 based on a review of in-country estimates and supplies. Soybean imports for China for 2022/23 are also raised to reflect shipping data by major exporters”.

“Global soybean production for 2023/24 is reduced on lower production for Brazil and South Africa. Soybean production for Brazil is lowered 1.0 million tons to 155 million on harvest results in Parana and poor weather conditions in Sa~o Paulo offset by favorable conditions in the north and Rio Grande do Sul. South African soybean production is lowered 0.4 million to 2.1 million on lower yield prospects. Global crush is reduced for Brazil and South Africa on lower supplies, and lower for Ukraine on higher soybean exports. Global soybean exports are raised 3.0 million tons on higher shipments to date from Brazil and Ukraine. Soybean imports are raised on higher imports for China, which are now 0.5 million tons higher than the prior marketing year’s revised estimate. Global soybean ending stocks are lowered 1.8 million tons to 114.3 million on lower stocks for Brazil that are partly offset by higher Chinese stocks”.

*Values rounded to billion metric ton

(1 metric ton corn= 39.37 bushels) (“ton” represents 2,000 pounds)

WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: March 7^th 2024.

OVERVIEW

Prices for feed ingredients were approximately two percent higher compared to last week. Prices were influenced by short covering arising from geopolitical concerns and revised projections for crop sizes in Brazil. Secondary factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and predicted ending stocks of corn and soybeans for the 2024 crop. There was also positioning ahead of the March WASDE

At 14H00 on March 7^th the CME price for corn was up 2.8 percent compared to the previous week to 426 cents per bushel for March delivery. Corn price was influenced by lower ethanol demand and the proportionally high ending stock of corn from the 2023 crop. Export orders for the current market year have increased in response to lower prices. Volumes and prices are indirectly influenced by events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended through to March with a slightly lower Dollar Index assisted by low FOB prices but with higher ocean freight. Total exports for the current market year are 32.9 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans were up 2.1 percent from last week to 1,153 cents per bushel for March 2024 delivery. Gains were attributed to short covering and lower projections for the 2024 Brazil harvest. Total exports for the current market year are 19.3 percent lower than for the corresponding week in the 2022-2023 year.

Soybean meal was up 1.5 percent to $338 per ton for March delivery compared to $333 per ton last week. Price was influenced by demand coupled with high crush volumes for three consecutive months through December but with volume reduced in January by cold weather. Price will fluctuate to reflect the CME price for soybeans and the rising demand for biodiesel. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 included in the February WASDE Report.

 WTI was 1.1 percent higher from last week to $79.38 at 09H00 on March 6^th with low world demand in relation to supply. The rise in price is inconsequential in the face of disruption of shipping in the Red Sea, turbulence in the Middle East and is countered by U.S. production of 13 million barrels per day with ample reserves. The small upward trajectory in price may continue if production cuts by OPEC amounting to 2 million barrels per day and extended through June actually materialize. There was little inter-day fluctuation in price during the week ($79.14 to $80.19 range) with a small upward trend. Crude oil inventory in the U.S., other than the Strategic Reserve, was up 2.3 percent to 31.7 million barrels last week following the seasonal trend. The U.S.is now producing 13 billion barrels of crude each day, constraining domestic and international prices

Factors influencing commodity prices in either direction over the past four weeks included:-

• Weather conditions in areas of the World growing corn and oilseeds especially in Brazil and also Argentine with favorable rain recently under the influence of a strong El Nino The 2023 U.S. harvest was completed ahead of the corresponding weeks in 2022 with higher carryover (downward pressure).

• Geopolitical considerations continue to move markets, especially in the Mideast. Cancellation of the BSGI in July and ongoing attacks on Ukraine port facilities impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deploy airborne missiles. Exports from Ukraine are approaching 1.5 million metric tons per week with a total of 26 million metric tons market year to date, down 11 percent from the equivalent period for 2022-2023 year. Grain production in Ukraine during the current year will be lower than 2022/2023 (Downward pressure on corn and wheat and an indirect effect on soybeans)

• Macroeconomic U.S. factors:-
• Most economists in academia and the private sector are confident of a “soft landing” for the economy following the release of revised Q4 2023 GDP and recent releases of economic parameters including the CPI and anticipated PPI and a decline in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 3.1 percent in January 2024. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating unemployment. There is evident stability in the bank sectors in both the U.S. and Europe. Large U.S. banks passed stringent mid-year “stress tests”. There is now concern over regional banks with exposure to commercial real estate.
• The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on January 31^st 2024, the fourth sequential pause. The Federal Reserve commentary indicated that the rate would be held at 5.25 percent until a pivot with possibly two to three reductions of 25 basis points each in 2024, after the June meeting at the earliest. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on data and demonstrable progress in reducing inflation to achieve an annual 2.0 percent target by mid-2025. Market optimism with projections of five reductions during 2024 now appear unrealistically optimistic, with no reduction expected before June
• The February 28^th Bureau of Economic Affairs announcement of the advanced estimate of Q4 GDP confirmed a value of 3.2 percent, slightly below the consensus estimate of 3.3 percent. The rise was attributed to increased consumer and government sector spending and investment in inventory.
• The February 8^th 2024 S&P Manufacturing Purchasing Managers’ Index Report (PMI) rose to 51.8 in January from 51.0 in December 2023. The PMI is approximately three percent below the 10-year average preceding the COVID years. The recent upward trend suggests recovery from the effects of successive raises in the Federal reserve benchmark interest rate.
• On February 29^th the Bureau of Economic Analysis released the January Personal Consumption and Expenditure Price Index (excluding food and energy) that was up 0.4 percent from the previous month. This was in line with estimates. Food prices increased 0.5 percent but energy was down 1.4 percent. The Index was up 2.4 percent year-over-year also corresponding to estimates. Food prices were up 1.4 percent and energy down 4.9 percent year-over-year. The PCPI is closely followed by the Federal Reserve and confirms declining inflation.
• The February 13^th Bureau of Labor Statistics release of the January 2024 CPI confirmed a 0.3 percent increase from December 2023. The annual increase of 3.1 percent was down from 3.4 percent in December but higher than the anticipated value of 2.9 percent. The increase in the core value (excluding food and energy) was 0.4 percent, and 3.9 percent for the 12-month period, in line with estimates. Food at home was up 0.4 percent from the previous month. Food away from home was up 0.5 percent from December. On an annual basis all food was up 2.6 percent with food at home up 1.2 percent and food away from home up 5.1 percent. Energy was down 0.9 percent in January and down 4.6 percent over 12-months, mainly due to a decline in gasoline (-6.4 percent) and fuel oils (-14.2 percent). The shelter category was up 0.6 percent for the month and 6.0 percent over the past year. The macro trend is clearly towards reduced inflation due to a fall in energy prices. The CPI influences FOMC rate decisions
• The January Producer Price Index for Final Demand (PPI) released on February 16^th was up by 0.3 percent from December and up 0.9 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The reduction was attributed mainly to 0.2 percent decline in final demand for goods and the concurrent cost of energy. The core PPI value excluding volatile fuel and food, was up 0.6 percent for January and up 2.6 percent for the 12-month period. Food was down 0.3 percent compared to a 0.7 percent decrease in December and 1.5 percent over 12-months.
• A Federal Reserve release on February 15^th confirmed that industrial production fell 0.5 percent in January against a projection of a 0.1 percent rise in December. Production was adversely affected by inclement weather during January 2024 with plant closures. Capacity utilization was down 0.2 percent to 78.5 percent, 1.1 percent below the 1972-2020 average.
• The February 26^th report on Durable Goods Ordered for January 2024 was unexpectedly lower by 6.1 percent against a consensus estimate of a 4.5 fall. Transportation and specifically aircraft orders were down 16.2 percent. Excluding the Transportation component, new orders decreased by 0.3 percent in January impacted by inclement weather. Shipments of durable goods decreased 0.9 percent following a fall of 0.6 percent in December 2023.
• The February 15^th release of retail sales data showed a monthly fall of 0.8 percent in January against an expected 0.1 percent decline. This value is compared to the revised 0.4 percent rise in December 2023. Core retail sales increased 0.6 percent in January. Retail sales in January were affected by harsh winter storms and a change in the basis of calculation. The Federal Reserve FOMC closely monitors this index as a measure of the trend in inflation.
• The February 1^st ISM® Manufacturing Index for January rose to 49.1 from 47.4 in December.
• The Conference Board Consumer Confidence Index released on February 27^th for January/February, declined to 106.7 points. This reading was down from a revised 110.9 for the preceding four-week period.
• The March 1^st University of Michigan Index of Consumer Sentiment fell to 76.9 for February down from a revised 79.0 in January. The Index was up 14.9 percent from February 2023. Both the Current Economic Index (79.4 slightly down from 81.9 in January) and the Index of Consumer Expectations (75.2 down from 77.1 in January) denote a cautious increase in consumer sentiment influenced by lower interest rates and moderating inflation despite geopolitical concerns.
• Non-farm payrolls increased by 275,000 in February as documented by the Bureau of Labor Statistics on March 9th more than the 200,000 forecast. This compares to the revised 229,000 value for January. The increase is attributed to workers in the  health care and government sectors. The unemployment rate edged up to 3.9 percent from 3.7 percent with 6.5 million unemployed. Real average weekly earnings for January showed a 0.6 percent increase over December. Average hourly earnings rose 0.1 percent to $34.57 in February up 4.3 percent over 12 months. Wage rates are closely followed by the Federal Reserve.
• The Bureau of Labor Statistics Job Openings and Labor Survey report released on January 30^th estimated 9.0 million job openings in December, unchanged from November and consistent with estimates. The December job openings number was the lowest value in 32 months.
• The seasonally adjusted initial jobless claims figure released on March 7^th was unchanged from the revised seasonally adjusted 217,000 for the week ending March 1^st, but higher than the Reuters estimate of 215,000. The four-week moving average fell 750 to 212,250 The Bureau of Labor Statistics estimated 1.91 million continuing claims for the week ending February 24^th up 8,000 from the previous week. There is evidence from data over the past three months that the labor market is cooling despite sporadic weekly reduction in new claims.
• The February 1^st Bureau of Labor Statistics report recorded a 3.2 percent increase in non-Farm Productivity for Q4; Unit Labor Cost was up by 0.4 percent on a normalized basis and Hours Worked was up by 0.4 percent in Q4
• The ADP® reported on March 6^th that private payrolls increased by 140,000 in February, up 29,000 from the revised 111,000 in January and compared to the Reuters estimate of 150,000 jobs. The increase in employment was mostly in the construction, transport and trade sectors. Annual pay was up 5.1 percent year-over-year compared to 5.3 recorded for January. The increase will not directly influence the probability of short-term future changes in interest rate since the ADP® is regarded by the FOMC as an unreliable statistic

FACTORS INFLUENCING COMMODITY PRICES

• The 2023 harvests of corn and soybeans were completed by late November 2023. The February 8^th WASDE provided a projection for acreage to be planted, yields, crop size and ending stocks for the 2024 crop.
• It is evident that both polarization in the closely divided chambers of Congress and intra-party conflict between and among both sides of the aisle in the House will delay adoption of appropriations bills. Passage of the 2023 Farm Bill will be contentious and is subject to a 12-month extension as a stop-gap measure. Progress on the 2023 Farm Bill has been impeded by contention over SNAP eligibility and other entitlements that collectively represent 75 percent of total expenditure. The August 2^nd downgrade of U.S. debt from AAA to AA+ by Fitch Ratings recognizes Congressional dysfunction. On November 10^th 2023 Moody’s downgraded U.S. credibility from ‘stable’ to ‘negative’ based on an inability to pass required fiscal legislation. The House failed to pass eleven appropriations bills and passed an 11^th hour continuing resolution deferring action to November 17^th to finance the Federal government. Again failure to enact appropriations bills resulted in a second continuing resolution on November 15^th freezing spending at FY 2013 levels pending votes on appropriations with extended deadlines of January 19^th and February 2^nd Little progress occurred in the closely divided House under current leadership with distraction caused by peripheral issues including dissention over the border situation, foreign aid and the magnitude of the national debt. A third continuing resolution was passed on January 18^th extending the laddered deadlines to March 1^st and 8^th respectively. A Federal shutdown should be avoided with passage of a continuing resolution on Friday March 1^st There are questions concerning the assurance from Speaker Mike Johnson (R-LA) and Senate Majority Leader Chuck Schumer (D-NY) that an agreement has been reached on six appropriations bills to be enacted before March 8^th with the remainder before March 22^nd The House approved theappropriations bills on March 7th with the Senate concurring on March 7^th averting a partial government shutdown.

• The delayed 2023 Farm Bill is mired in conflict in both the House and Senate. There is no consensus on major issues comprising the magnitude of SNAP payments and eligibility and requested price supports for crops. The Chair of the Senate Agriculture Committee Sen. Debbie Stabenow (D-MI) is standing firm on maintaining both SNAP-WIC benefits and climate remediation funding even if the Farm Bill is delayed through to the 119^th Congress

• The February 8^th WASDE #645 Projected both corn and soybean production parameters with a potential record corn harvest for the 2024 crop. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 39 percent of the 2024 U.S. crop with a 12.5 percent increase in ending stock. (See February WASDE Report under the Statistics TAB confirming availability, use and ex-farm price projections. March WASDE to be posted next week)

• There is an expectation that for market-year 2023-2024, Brazil will harvest 148 million metric tons (5,438 million bushels) of soybeans down from a previous estimate of 155 million metric tons (5,695 million bushels) Exports of 100 million metric tons (3,674 million bushels) are anticipated and Brazil will crush 56 million metric tons (2,057 million bushels). A corn harvest of 129 million metric tons (5,027 million bushels) is anticipated with export of 54 million metric tons (2,125 million bushels). (Lower prices in the future subject to favorable reports on crop progress and actual harvests)

• The Dollar Index (DXY) was 103.3 on March 6^th, down 0.5 point from last week but under a three-month high with fluctuation following uncertainty over future interest rates and prospects of a prolonged delay in the anticipated pivot by the Federal Reserve FOCM. The DXY has ranged from 99.0 to 107.0 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude.

EXPORTS

The FAS Export Report for corn, released on March 7^th for the week ending February 29^th confirmed that outstanding export orders for corn amounted to 17.87 million metric tons (703.4 million bushels). Net orders for the past week for the 2023-2024 market year amounted to 1.11 million metric tons (43.67million bushels). Shipments recorded during the past working week amounted to 1.16 million metric tons (45.62 million bushels). For the current market year to date cumulative export of 21.36 million metric tons (840.61 million bushels) is 32.9 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders attained 1.62 million metric tons (63.72 million bushels) with no orders this past week

(Conversion 39.36 bushels per metric ton. Quantities in metric tons rounded to 0.1 million)

The FAS Export Report for soybeans covering the week ending February 29^th reflecting market year 2023-2024, recorded outstanding export orders amounting to 5.52 million metric tons (202.7 million bushels). Net orders this past week attained 0.61 million metric tons (22.5 million bushels). Shipments for the past working week attained 1.42 million metric tons (52.10 million bushels). For the current market year to date cumulative exports of 33.92 million metric tons (1,246 million bushels) are 19.3 percent lower compared to the equivalent week of the previous market year. Outstanding orders for the 2024-2025 market year amount to 255,800 metric tons (9.39 million bushels) with 66,000 metric tons ( 2.42 million bushels) ordered this past week.

 (Conversion 36.74 bushels per metric ton)

For the week ending February 29^th 2023 outstanding orders for soybean meal and cake attained 3.64 million metric tons. Net orders this week for soybean meal and cake amounted to 157,700 metric tons. During the past week 384,400 metric tons of meal and cake combined was shipped. The quantity exported to date is 16.8 percent higher than the volume for the corresponding weeks of the previous market year. For the next market year outstanding sales have attained 82,300 metric tons with 64,700 tons ordered this past week.

The February 8^th 2023 WASDE projected:-

• Corn area planted for all purposes in 2024 (‘new crop’) will attain 94.6 million acres, down 0.3 from last year. According to the February WASDE, yield was projected at 177.3 bushels per acre with a resulting production of 15,342 million bushels with 2,172 million bushels as ending stock. The USDA retained the average ex-farm price to 480 cents per bushel for the 2024 crop.
• Soybean area to be planted for 2024 will attain 83.6 million acres, unchanged from 2023. According to the February WASDE, yield was predicted at 50.6 bushels per acre with production of 4,165 million bushels with 315 million bushels as ending stock. The USDA estimated an average season price of 1,265 cents per bushel.
• Crushers are expected to produce 54.15 million tons of soybean meal. Ending stocks will attain 400,000 tons. The USDA held the average projected price at $380 per ton.
• At the 100^th Annual Agricultural Outlook Forum in mid-February, Dr. Seth Meyers revised areas to be planted to the two major crops in 2024. Corn will be planted over 91.0 million acres, down 3.8 percent from 2023. Soybean acreage will increase 4.7 percent to 87.5 million acres.

The preference for planting corn over soybeans in 2023 was based on a favorable projection of the corn to soy benefit ratio. Planting data for 2024 will be ascertained following surveys of farmers during March concerning their planting intentions.

COMMODITY PRICES

The following quotations for the months of delivery as indicated were posted by the CME at 14H00, March 7^th 2024, compared with values at close of trading on February 29^th 2024 (in parentheses): -

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

Corn: March quotation up 12 cents per bushel. (+2.8 percent)

Soybeans: March quotation up 24 cents per bushel (+2.1 percent)

Soybean Meal: March quotation up $5 per ton (+1.5 percent)

The CME spot prices for feedstuffs per short ton at close of trading on March 6^th 2024 with prices for the previous week were:-

• Corn (ZC): $154 per ton, unchanged from the previous week. 52-week range $149 to $233
• Soybean Meal (ZM): $335 per ton, was $328. Up $7 per ton (+2.1 percent) from the previous week. 52-week range $323 to $495

Values for other common ingredients per short ton:-

• Meat and Bone Meal, (According to the USDA National AnimalBy-product Feedstuffs Report on March 1^st: $325 to $400 per ton (Av. $372 per ton) for porcine (ex MN), up 6.7 percent from last week ; $300 to $310 per ton (Av. $305 per ton) for ruminant (ex MN) Up 4.1 percent from last week. Price varies according to plant and location
• According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on March 1^st wheat middlings from St. Louis, MO. and other locations: $75 to $80 per ton (Av. $78 per ton) a 2.5 percent decline from the previous week
• According to the National Grain and Oilseed Processor Feedstuffs Report on March 1^st DDGS, (IA.) was priced at $170 to $215 (Av. $185 per ton down 5.6 percent from last week reflecting lower corn price. Pacific Northwest price at $285 per ton). Price varies according to plant and location and is expected to fluctuate with the price of corn
• University of Missouri Extension Service By-Product Feed Price Listing for February
• Bakery Meal, (MO & TX): $190 to $220 per ton.
• Rice Bran, (AR & CA): $190 to $240 per ton. (Av. $210).

For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

There was a 0.2 cent per dozen increase in the nest-run production cost for eggs this past week due to an increase in the spot price of soybean meal

ENERGY

The October 11^th 2023 U.S. Energy Information Administration (U.S. EIA) report estimated that fuel ethanol blending would average 980,000 barrels per day in 2024, down 2.0 percent from 2023. For the week ending March 1^st, 91.6 percent (93.5 percent for the previous week) of the U.S. ethanol fermentation volume was operational, based on January 2023 U.S. EIA capacity of 1,152 million barrels per day. The outlook for increased production will depend on higher domestic demand, from summer driving in addition to increasing the limited quantity exported attaining approximately 9 percent or the production equivalent to 2.8 days.

During December 2023 (the last month for which US Energy Information Administration data is available) ethanol exports were up 34.2 percent from November to 158.3 million gallons (3.713 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 28.0 percent to Canada; 18.9 percent to Europe; 15.2 percent to Asia, predominantly South Korea and the UAE; 13.1 percent to India; 2.8 percent to Mexico and 7.2 percent to Central and South America and the Caribbean.

According to the U.S. EIA, for the week ending March 1^st 2024 the industry produced on average 1,057,000 barrels of ethanol per day, down 1.9 percent from the week ending February 23^rd 2024 but solidly above the one million gallon per day benchmark.

On March 1^st 2024 ethanol stock was up 0.1 percent from the previous week to 26.1 million barrels, an approximately 24-day reserve. This past week demonstrated increased demand for ethanol, given relative changes in the weekly production level (output down 01.9 percent and inventory up 0.1 percent over the most recent week)

Current Energy Prices:-

• The price of WTI was up $0.84 per barrel, (+1.1 percent) to $79.38 per barrel on March 6^th compared to the previous week. WTI is up 8.1 percent year-to-date. Issues affecting price last week included a conflict premium for Middle East crude and disruption of shipping in the Red Sea resulting in an escalation in bulk and liquid sea-freight. An OPEC+ production cut that commenced in July 2023 in addition to a voluntary one-million barrel per day reduction by Saudi Arabia announced on June 4^th was extended through June 2024 although it is questioned whether all members of OPEC will comply. Angola withdrew from the cartel on December 20^th

The ending stock of crude held at Cushing OK. on March 1^st was up 2.3 percent from last week to 31.7 million barrels and 26.1 percent down from the season high on June 23^rd 2023. Hydrocarbon sources of energy contributed materially to inflation in the third quarter compared to the previous quarter of 2023 but was an important contributor to deflation in the fourth quarter of 2023. On March 1^st 629 rigs were in operation down from 749 on March 3^rd 2023. U.S. crude production averaged 13.3 million barrels per day in February. Consensus estimates for WTI price through the remainder of 2024 average $76.50.

• Ethanol quoted on the CME (EH) on March 6^th was priced at $2.16 per gallon, unchanged for months due to lack of trading activity. The 52-week range is $2.14 to $2.19 per gallon.

• On March 6^th RBOB gasoline traded on NASDAQ (RB) at $2.53 per gallon, unchanged from the previous week. Higher prices are becoming more evident in CME trading and ultimately at the pump. The 52-week range for RBOB gasoline is $1.93 to $2.55.

• The AAA national average regular grade gasoline price was $3.39 per gallon on March 1^st, up ten cents per gallon (3.0 percent) from last week. Gasoline is now $1.23 per gallon more expensive than ethanol but has a 63 percent higher BTU rating. Future rises in fuel cost are inevitable given the increases in benchmark WTI

• The AAA national average diesel price was $4.06 per gallon on March 1^st, down one cent (0.3 percent) from the previous week but with prospects for future increases due to an extremely low national stock and as rising WTI price.

• CME Henry Hub natural gas was priced at $1.93 per MM BTU on March 1^st up 6 cents (3.2 percent) from the previous week on lower demand due to milder weather. Gas prices are depressed following an Administration embargo on new LNG export terminals.

INGREDIENTS

DDGS is freely available with most plants among the 192 operational on January 1^st 2023 (the last available estimate) with a combined capacity of 1,152 million barrels per day functioning at a now restored 93.1 percent compared to 93.5 percent last week. The March 1^st USDA National Grain and Oilseed processor Feedstuffs Report priced DDGS from Iowa plants at $170 to $215 per ton, with an average of $185 per ton. Wide variation in price exists depending on supplier, quantity and location. It is axiomatic that the cost of DDGS will reflect changes in the price of corn with an appropriate lag period. Generally DDGS is currently incorporated at moderate inclusion levels in egg-production formulas based on price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuate in price

The CME soybean price for March 2024 delivery at 14H00 on March 7^th was up 2.1 percent to 1,153 cents per bushel. The current price of soybeans is a reflection of availability for domestic crushing to produce oil, consumption and export orders. Soybean meal was up 1.5 percent on the CME to $338 per ton for March 2024 delivery. Prices of soybeans are obviously influenced by projections of harvest in the three major producing nations in South America, the projected 2024 harvest in the U.S. coupled with domestic demand for soy oil, biodiesel and meal.

According to a release on February 15^th by the National Oilseed Processors Association, whose membership process 95 percent of the U.S. crop, the soybean crush for January attained 185.7 million bushels of soybeans. This was lower than the consensus of estimates averaging 189.9 million bushels. Crush volume was down 4.9 percent from the record December level of 195.3 million bushels. The low January crush was attributed to harsh weather resulting in disruption of transport and plant closures. February crush data will be posted in the March 22^nd 2024 edition of EGG-NEWS.

On March 6^th the CME spot price for soybean oil was down 0.5 cent per lb. (-1.1 percent) from the previous week to 44.8 cents per lb. Prices for vegetable oils have fluctuated over a narrow range in past weeks but have declined with recent lower demand. Asian crude palm oil was also lower this past week on profit taking. It is anticipated that 41 percent of U.S. soy oil was diverted from fuel to biodiesel during 2022 and this proportion will be exceeded in 2023 paralleling the situation in Brazil.

On March 6^th CME soybean meal spot price was $335 per ton, $7 per ton higher than the spot price last week and compared to a 52-week range of $323 to $495 per ton.

On March 6^th Meat and Bone meal (porcine) was quoted over a range of $325 to $400 per ton (Av. $372 per ton) according to the USDA National Animal By-product Feedstuffs Report, Prices quoted were for Minnesota plants but with a wide range based on composition, source and location. Price fluctuation reflects changes in soybean meal and other oilseed meals.

On March 6^th conversion of the CNY to the BRL was BRL 0.70, up CNY 0.01 from last week. The conversion of the CNY to the US$ was CNY 7.20, unchanged from the previous week despite the fractional fall in the Dollar Index.

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

For the 2021-2022 market year net export sales of corn were down 21.5 million metric tons (844 million bushels) compared to the previous market year with cumulative exports of 38.3 million metric tons (1,507 million bushels) 

For the 2022-2023 market year net export sales of soybeans were down 5.6 million metric tons (206 million bushels) compared to the previous market year with cumulative exports of 51.5 million metric tons (1,893 million bushels)

For Market year 2022-2023 ending September 2023, a record 13.2 million metric tons of soybean meal and cake was exported valued at $7 Billion. Expansion in exports was attributed to orders from The E.U., Asia (Viet Nam) and Latin America. Crush volume was driven by the demand for soy oil to produce biodiesel fuel.

During calendar 2022, 58.0 million metric tons (2,243 million bushels) of corn were exported from the U.S., valued at $18,609 million. The top five importers with their respective values expressed as a percentage were: China, 28.2; Mexico, 26.4; Japan, 16.0; Canada, 7.2 and Colombia, 5.3.

During calendar 2022, 57.2 million metric tons (2,099 million bushels) of soybeans were exported from the U.S., valued at $34,392 million. The top five importers with their respective values expressed as a percentage were: China, 72.6; Mexico, 14.8; E.U., 11.3; Egypt, 6.1 and Japan, 7.3.

COMMENT

Subscribers are referred to the December 8^th 2023 WASDE #643 for the 2023 harvest. The preliminary USDA projection for 2024 harvests is included in the February 8^th WASDE retrievable under the STATISTICS tab. The USDA Planted Acreage Report and the quarterly Grain Stocks Report posted under the STATISTICS Tab.

Following cancellation of the Black Sea Grain Initiative (BSGI) Ukraine commenced limited shipment of commodities from the three main Black Sea and Danube Delta ports that remain functional. Projected harvest during the 2022/2023 season will amount to 49.0 million metric tons, 42 percent lower than for 2021/2022. Exports were projected to attain 38.1 million metric tons, 26.5 percent lower than the previous market year.

Either more intense action by Ukraine, a negotiated peace treaty with concessions to the Russian Federation, or their combination will be required to restore unrestricted shipping in the Black Sea. Increasing passage along the costal-route (“Humanitarian Corridor”) has allowed sea-transport of commodities since early August to supply Asia and Africa. Year to date Ukraine has exported 29 metric tons of agricultural commodities with 1.5 million metric tons last week.

Increased multinational naval activity has commenced in the Bab al-Mandeb Strait at the southern end of the Red Sea to restore shipping through the Red Sea and the Suez Canal that carries 15 percent of world sea-freight. Some shipping lines including Maersk of Denmark, Hapag-Lloyd of Germany and CMA of France have suspended transit of the Suez Canal and the Red Sea awaiting a clear resolution of the danger from missiles. This will require destruction of Houthi bases, radar and command installations and mobile launching equipment on the soil of Yemen. This is in progress.

Updated February 2024 USDA Projection for U.S. Egg Production and Consumption. 

On February 14^th 2024 the USDA Economic Research Service issued updated values for egg production during 2022 with a projection for 2023 and a forecast for 2024. Production, consumption and prices were only slightly revised from the previous January 19^th 2024 report.

Projected egg production for 2023 was reduced by three million dozen from the January 2024 Report to 7,887 million dozen This will be 1.4 percent higher than in 2022 due to progressive replacement of the 44 million hens depleted due to HPAI over the period extending from early spring through mid-December 2022. The per capita consumption of shell eggs and liquids combined for 2023 will be 0.1 percent lower than in the December report to 280.9 eggs but up one egg (0.4 percent) from 2022. The projected average 2023 benchmark New York bulk unit price was unchanged from the January report at 192 cents per dozen. This was 31.9 percent lower than in 2022 attributed to a comparison with unseasonal high prices from the end of March through the 2^nd Quarter of 2023.

Subsequent USDA projections will provide greater clarity on the recovery in consumption in an economy that is impacted by declining inflation. The 2023 Midwest in-carton wholesale price peaked at $5.17 per dozen on January 3^rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8^th attaining $2.92 on February 15^th This was above the USDA/EIC projection of the combined nest-run December 2023 cost of 76.8 cents per dozen plus processing, packaging and transport of 60 cents per dozen amounting to $1.37 cents per dozen delivered to a distribution center.

Restoration in flock size after HPAI flock depletions in 2022 progressed at a rate of approximately 0.5 million per week but was limited by the availability of pullet chicks for replacement and in some companies the rate of conversion to alternative housing systems. Restoration of the national flock was compromised by a resurgence of HPAI with 13.0 million layers depleted during the 4^th quarter of 2023 representing 4.0 percent of the nominal producing flock of 325 million hens, mainly on complexes averaging over one million hens. The cost of ingredients will influence margins and may result in cessation of production by some small-scale producers that run out of working capital since financial losses were incurred through summer up to mid-fall. Unpredictable factors affecting price will include the extent of losses during the spring of 2024 due to a predicted reemergence of avian influenza; the supply and cost of ingredients as influenced by world and national availability; exports of eggs and products and the intensity and persistence of domestic consumer demand.

The forecast for 2024 includes a production of 8,000 million dozen, up 1.4 percent from 2023. Consumption will attain 283.7 per capita, up a realistic 2.8 eggs or 1.0 percent above the projection for 2023. This will naturally depress prices with the NY-Large price dropping by 9.9 cents per dozen or 5.1 percent from the average for 2023.

In 2023 egg exports as shell and products combined attained 5,161 million dozen shell-equivalents, or 2.2 percent of production. During 2022 egg imports as a result of HPAI depopulation, some in shell form but predominantly products, attained 25.9 million dozen shell-equivalents, up 42.8 percent from 14.9 million dozen and 26.4 percent from 2021.

During 2023 shell egg exports attained 89.4 million dozen, up 28.6 percent compared to 2022 when high domestic prices prevailed. Egg products were up 18.2 percent to 20,814 metric tons compared to 2022.

February 2024 USDA data is shown in the table below:-

Source: Livestock, Dairy and Poultry Outlook released February 14^th 2024

Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices, exports and related industry statistics.

REVIEW OF JANUARY 2024 EGG PRODUCTION COSTS AND STATISTICS.

The EIC has justifiably separated the production costs and unit revenue values for eggs derived from caged and cage-free flocks for the current year. Accordingly EGG-NEWS will summarize data accordingly but will consolidate production and export statistics for the U.S. egg industry comprising the two shell-egg categories and the breaking-products sector

JANUARY HIGHLIGHTS

• January 2023 USDA ex-farm blended USDA nest-run conventional benchmark price was 172.0 cents per dozen, up 0.9 percent from the December 2023 value of 170.4 cents per dozen. For comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen with a range of 323 cents per dozen in January down to a low of 57 cents in May. Stock levels and prices prior to the onset of flock depletions due to HPAI indicated a relative seasonal balance between supply and demand. Future nest-run and wholesale prices will be largely dependent on consumer demand for eggs and liquid and the rate of replacement of pullets and hens depleted due to HPAI. Other considerations include diversion to shell sales from the egg-breaking sector in an interconnected industry.
• Fluctuation in wholesale price is attributed in part to the amplification of upward and downward swings associated with the commercial benchmark price discovery system in use. Restoration of seasonal prices commenced midway through the fourth quarter of 2023 with a plateau after Christmas followed by a seasonal decline into January 2024. From mid-January through to the present prices have been high for the period. An unknown factor in future pricing will be the incidence rate and severity of highly pathogenic avian influenza in spring months. Close to 13 million hens and 2.5 million pullets were depopulated during the fourth quarter of 2023 among five states with heavy losses in California.
• January 2023 USDA average nest-run production cost for generic eggs from caged flocks, applying updated inputs was down 4.1 cents per dozen to 76.8 cents per dozen compared to the December 2023 value of 80.9 cents per dozen, mainly attributable to an 11.7 percent lower average feed cost per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run cost to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
• January 2024 USDA benchmark nest-run margin attained a positive value of 95.2 cents per dozen for generic eggs from caged flocks compared to a positive margin of 89.5 cents per dozen for December 2023. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022. This differential was mainly due to higher prices following HPAI-depletion of flocks. It is emphasized that the U.S. benchmark price reflects nest-run conventional eggs.
• The January 2024 national flock in production (over 30,000 hens per farm) was stated by the USDA to be down 2.0 percent or 6.1 million hens (rounded) to 299.7 compared to the revised December 2023 value of 305.8 million. This figure apparently takes into account depletion of 4.2million hens during December 2023 that were not recorded in the month. Approximately 3.5 million hens returned to production from molt in January together with projected maturation of 22.0 million pullets, with this number offset by depletion of spent flocks. During the fourth quarter of 2023 approximately 13 million hens were depopulated due to HPAI in five states.
• December 2023 pullet chick hatch of 24.2 million was up 0.8 percent or 0.2 million chicks from November 2023.
• December 2023 exports of shell eggs and products combined was up 38.8 percent from November 2023 to 604,100 case equivalents representing the theoretical production of 8.0 million hens. The increase was attributed to elevated demand especially in products following flock depopulations in importing countries due to HPAI

TABLES SHOWING KEY PARAMETERS FOR JANUARY 2024.

Summary tables for the latest USDA January 2024 flock statistics, costs and unit prices made available by the EIC on February 16^th 2024 are arranged, summarized, tabulated and compared with values from the previous January 10^th 2023 posting reflecting December 2023 costs and production data as applicable. Monthly comparisons of production data and costs are based on revised USDA values.

VOLUMES OF PRODUCTION REFECTING THE ENTIRE INDUSTRY

Notes 1. Texas excluded to maintain confidentiality

PROPORTION OF U.S. TOTAL HENS BY STATE, 2023¹

Based on a nominal denominator of 300 million hens in flocks over 30,000 covering 94.6 percent of the U.S complement.

USDA has amended inclusion of specific states in regions and eliminated Texas data to protect confidentiality of Company flock

Sizes

1. Values rounded to 0.1%

*USDA data is questioned based on known values for hen depopulation and pullet placements with discrepancies in stated values during the 4^th quarter of 2023

Rate of Lay, weighted hen-week (USDA) 83.0% November 2023. 82.8% December 2023

Revised per capita egg consumption 2020:- 285.6 (down 7.8 eggs from 2019)*

Revisedper capita egg consumption 2021:- 282.5 (down 3.1 eggs from 2020)*

Revised per capita egg consumption 2022:- 279.0 (down 3.5 eggs from 2021 due to HPAI) Projected per capita egg consumption 2023:- 281.3 (up 1.3 eggs from 2022) Forecast per capita  egg consumption 2024 284.4 (up 3.1 eggs from 2023 accepting HPAI losses)

*Revised, using data from USDA Livestock, Dairy and Poultry Outlook January 19^th 2023 taking into account demand from the food service sector and presumably including the effect of HPAI depopulation.

Egg Inventories at beginning of January 2024:

Shell Eggs: 1.83 million cases down 5.7 percent from December 2023.

Frozen Egg Products: 769,306 case equivalents up 2.0 percent from December 2023

Dried Egg Products: Not disclosed since March 2020 following market disruption due to COVID. Moderate level of inventory are assumed

Eggs broken under FSIS inspection (million cases)

NOVEMBER 2023, 6.73 DECEMBER 2023, 6.41

THE USDA Agricultural Prices Report released October 31^st posted September prices for agricultural commodities and expenditures.

September Prices Received Index, down 2.9 percent from August

 The USDA ERS summarized prices as follows:-“The September Prices Received Index 2011 Base (Agricultural Production), at 122.6, decreased 2.9 percent from August and 7.1 percent from September 2022. At 113.9, the Crop Production Index was down 4.2 percent from last month and 11 percent from the previous year. The Livestock Production Index, at 133.1, decreased 0.9 percent from August, and 2.6 percent from September last year. Producers received lower prices for corn, hogs, soybeans, and lettuce during September, but higher prices for broilers, milk, grapes, and broccoli. In addition to prices, the volume change of commodities marketed also influences the indexes. In September, there was decreased marketing of cattle, wheat, cotton, and peaches and increased monthly movement for soybeans, corn, dry beans, and apples”.

September Prices Paid Index, Up 0.1 Percent from August

“The September Prices Paid Index for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW), at 138.8, is up 0.1 percent from August 2023 but unchanged from September 2022. Higher prices in September for feeder cattle, feeder pigs, diesel, and nitrogen more than offset lower prices for feed grains, complete feeds, concentrates, and hay & forages”.

Corn farmers received $5.21 per bushel in September 2023 compared to $5.73 per bushel in August 2023, down 9.1 percent. The price received in September 2022 was $7.09 per bushel

Soybean farmers received $13.20 per bushel in September 2023 compared to $14.10 per bushel in August 2023, down 6.8 percent. The price received in September 2022 was $14.20 per bushel

The September 2023 egg price received by farmers was $ 1.22 per dozen for table eggs lower than $1.35 per dozen in August 2023 and compared to $2.65 per dozen in September 2022. The sharp year-on-year increase is attributed to disequilibrium between supply and demand. Highly pathogenic avian influenza resulted in depletion of 44 million hens with a reduction of 20 million producing birds in the supply flock on average from mid 2022 onwards. This situation was coupled with increased demand as consumers increased purchases of eggs representing a competitively priced protein source in an inflationary environment.

The USDA quarterly Grain Stocks Report released on September 29^th 2023, documented storage of the major commodities, classified according to on-site and remote facilities including elevators and commercial installations. Quantities of corn and soybeans, the two major commodities relevant to the cost of poultry production were:-

“Corn stocks in all positions on September 1^st 2023 totaled 1.36 billion bushels, down one percent from September 1^st 2022. Of the total stocks, 605 million bushels are stored on farms, up 19 percent from a year earlier. Off-farm stocks, at 756 million bushels, are down 13 percent from a year ago. The June to August 2023 indicated disappearance is 2.75 billion bushels, compared with 2.97 billion bushels during the same period last year”.

“Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports, and farm program administrative data, the 2022 corn for grain production is revised down 15.0 million bushels from the previous estimate. Corn silage production is revised down 291 thousand tons. Planted area is revised to 88.6 million acres, and area harvested for grain is revised to 79.1 million acres. Area harvested for silage is revised to 6.84 million acres. The 2022 grain yield, at 173.4 bushels per acre, is up 0.1 bushel from the previous estimate. The 2022 silage yield, at 18.7 tons per acre, remains unchanged from the previous estimate”.

“Soybeans stored in all positions on September 1^st 2023 totaled 268 million bushels, down two percent from September 1^st 2022. Soybean stocks stored on farms totaled 72.0 million bushels, up 14 percent from a year ago. Off-farm stocks, at 196 million bushels, are down 7 percent from last September. Indicated disappearance for June - August 2023 totaled 528 million bushels, down 24 percent from the same period a year earlier”.

“Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2022 soybean production is revised down 5.93 million bushels from the previous estimate. Planted area is unchanged at 87.5 million acres, but harvested area is revised to 86.2 million acres. The 2022 yield, at 49.6 bushels per acre, is revised up 0.1 bushel from the previous estimate”.

Prices and commentary are incorporated in the Weekly Energy, Economy and Commodity Report posted each week and a summary of the WASDE #640 released on September 12^th is retrievable under the STATISTICS tab.

The June 30^th 2023 Planted Acreage report documented the respective areas planted to corn and soybeans, the two commodities of relevance to the poultry industry. The USDA confirmed:-

Corn-planted area for all purposes in 2023 is estimated at 94.1 million acres, up six percent or 5.52 million acres from last year. This represents the third highest planted acreage in the United States since 1944. Compared with last year, planted acreage is expected to be up or unchanged in 43 of the 48 estimating States. Area harvested for grain, at 86.3 million acres, is up nine percent from last year.

Soybean-planted area for 2023 is estimated at 83.5 million acres, down five percent from last year. Compared with last year, planted acreage is down or unchanged in 21 of the 29 estimating States.

Together with the Grain Stocks report the Planted Acreage data moved the market for corn and soybeans by about five percent but in contrasting directions.

For corn the acreage was above the most optimistic projection although offset by a lower stock. At 14H30 on the CME after the release of the two USDA reports, corn was down 25 cents per bushel to 556 cents for July delivery and for September, corn was down 34 cents per bushel to 489 cents.

For soybeans the reduced acreage and consequently lower ending stocks was bullish for the new crop. At 14H30 CME soybeans were up 75 cents per bushel to 1,558 cents for July delivery and for September the soybean price was up 73 cents per bushel to 1,354 cents.

According to USDA economists, retail egg prices increased by 8.5 percent in January 2023, approximately 70.1 percent above January 2022.  The USDA-ERS now predicts that egg prices will increase by 37.8 percent in 2023 but with a wide range of 18.3 to 62.3 percent attributed to volatility.  Concurrently the USDA-ERS predicted a 4.7 percent increase in the price of meats, 7.2 percent for dairy products and 12.8 percent for cereals and bakery products.

Wholesale farm-level egg prices are predicted to increase by 7.4 percent in 2023 with a wide prediction interval of -32.6 to 76.1 percent.  Egg prices are extremely volatile, complicating reliable predictions.

EGG-NEWS will monitor weekly USDA wholesale prices by region and average retail prices to document retail margins.