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Canada Implements New Rules for Feed Imports to Mitigate ASF Risk

The Canadian Food Inspection Agency (CFIA) released new import requirements for unprocessed grains and oilseeds, as well as associated meals destined for use in livestock feed, sourced from countries that have reported an active case of African Swine Fever (ASF) in domestic or wild pigs within the last five years. The new requirements went into effect on March 29 for specific ingredients identified to be the highest risk based on a comparative analysis of livestock feed imports conducted by CFIA. At this time, CFIA is not looking at import controls on any other feed ingredients. “Although feed represents a much lower risk vector for the introduction of ASF into Canada compared to travelers and the importation of illegal meat products, the serious implications to the domestic swine herd if this disease were to enter the country has resulted in a thorough evaluation of all potential risks, including feed,” a CFIA statement says. The import requirements were deemed justified in an effort to minimize the risk of ASF introduction into Canada. CFIA is monitoring the global situation and is taking a proactive and collaborative approach to prevent ASF from being introduced to Canada. They have initiated additional preparedness planning through a National Response team dedicated to ensuring appropriate laboratory and field response capacity are maintained in Canada. However, feed imports are only one of the many measures that are being considered or implemented by the Canadian government to prevent ASF. Given the short timeframe given by CFIA, any shipments that departed on or before March 29 will not be subject to the new requirements. As well, any shipments planned for export shortly after March 29 will be evaluated on a case-by-case basis by CFIA for acceptance into Canada.
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Confirmed: China Buys More U.S. Soybeans

China's top trade negotiator is expected to travel to Washington next week. It comes on the heels of the U.S. and China wrapping up another round of trade negotiations in Beijing on Friday. The week ended with China buying more U.S. agriculture product. USDA confirmed China bought 816,000 mt of soybeans. Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer, and U.S. Treasury Secretary Steven Mnuchin posed for photos after they wrapped up meetings, but they did not comment about the state of negotiations. Reuters reports China has made "unprecedented" offers in talks about forced technology transfers, but National Economic Council Larry Kudlow said the Trump administration is prepared to keep negotiating for weeks or even months in the quest for "a great deal". New numbers from USDA also show China has purchased U.S. corn. It reported export sales from March 15th to March 21st. The numbers show China was the top buyer of corn during that period. It bought 300,000 mt. Total corn sales were 905,500 mt. Wheat saw net sales of 475,000 mt. That's up 59% from the previous week. The top buyer of wheat was Mexico. Soybeans had net sales of just 181,000 mt. That's down 52% from the week before. USDA also reported a flash sale of 150,000 mt of hard red winter wheat to Iraq.
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USDA Reports: Too Much Corn Sinks Markets

The corn market just can’t catch a break. Heading into the March 29 Prospective Plantings and quarterly Grain Stocks report, corn was already seeing some short-term demand drop as massive flooding in the Midwest has compromised 13% of the nation’s ethanol production capacity. Corn prices were hit with a double whammy in the USDA reports—big acres and big stocks. USDA expects U.S. farmers to plan 92.8 million acres of corn, which is up 4% or 3.66 million acres from last year. Additionally, USDA pegged corn stocks at 8.605 billion bushels, up from 2018 and roughly 2.5 million bushels more than the trade expected ahead of the report. “The last thing we need for corn right now was a bearish acre number for corn,” says Greg Lumsden, Cargill product line leader. “The market obviously is taking that extremely hard.” Following the reports’ release, corn prices dove 15¢. “Today in the market is looking at some got short-term demand slowdown, big stocks and big acres,” he says. “If we carry these stock numbers through to new crop, we could be looking at well over 2 billion carryout again. Unfortunately, what we saw today—especially on corn—is going to shift the whole price structure 10¢ to 15¢ lower.” USDA predicts U.S. farmers will plant 84.6 million acres of soybeans, which is down 5% from last year. The decline in soybean prices were less than corn. “You've got a little bit more muted reaction from soybeans, as the acres are certainly helpful and there was a little relief stocks weren’t higher.” Lumsden says farmers should keep the Prospective Plantings report in perspective. “We always try to look at what do we think the USDA is going to say? And, then what do we think ultimately will get planted? That's typically two different things.” With these reports behind us, Lumsden says the focus of the markets will now be trade. “Everybody is tired of talking about it, but it is going to continue to dominate,” he says. “The reason I say that is it we're entering in a period where normally you'd be building risk premium by saying, we've got to plant a crop again this year. Well, we're so far away from that, and while we could be potentially delayed, we've got ample moisture profile out there and nothing fundamentally is exciting out there.” He says the markets are dominated by technical and high-frequency traders that are emboldened to drive this market lower, and today's report is just not going to change that. “The funds are so short, and after today's report they may be approaching a record short position,” he says. Farmers should have sales in place to cash in on market spikes, Lumsden suggests. “Producers really need to key in on is just the basics of grain marketing, and you need to have firm bid offers in the system,” he says. “The market can spike faster or further than you think, but you have to remember we have record corn out there and farmers are so under-marketed that the head pressure can really tamp down those rallies. Take care of some business and get some bushels sold.”
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Japan Vaccinates Wild Boars; Classical Swine Fever Outbreaks Continue

Aichi Prefectural Government officials began vaccinating wild boars on Sunday in an effort to prevent the spread of Classical swine fever (CSF). Officials placed feed containing a vaccine on the ground at select locations in Aichi Prefecture, including a forest in Komaki. This is Japan’s first attempt at vaccinating wild animals in the country, according to an article in The Japan Times. Japan’s CSF outbreaks have occurred mostly at pig farms in central Japan since last year. They believe wild boars are to blame for the spread of this deadly virus. An article in The Japan Times said Aichi Prefecture will conduct the work at a total of 60 locations in the cities of Komaki, Kasugai and Inuyama. Their plan is to complete five more rounds of vaccination work by February 2020. On Monday, the Gifu Prefectural Government also began placing vaccine-containing feed on the ground for wild boars. Officials plan to distribute the “vaccinated” feed at 900 locations in mountainous areas in 18 municipalities by Friday. How will the know if the vaccine gets to its intended recipients? The Japan Times said the prefectural government will monitor whether the feed is eaten by wild boars using security cameras. It will also capture some of the hogs to check whether they test positive for an antibody. A new case of CSF was confirmed at a pig farm in Yamagata, Gifu Prefecture, on Saturday, officials said. The prefecture will slaughter approximately 2,000 pigs raised at that farm. This marks the 12th case of CSF in Japan since September, when the first instance of the disease in 26 years was confirmed in the prefecture. CSF is a contagious, often fatal, disease of pigs. According to the Merck Manual Veterinary Manual, vaccination is allowed only under emergency circumstances. Awareness and vigilance are essential, so that outbreaks are detected early and control measures instituted rapidly to prevent further spread of CSF.
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China's Pork Imports to Double in 2019, Rabobank Analyst Predicts

China’s pork imports are set to double from last year to 2 million metric tons in 2019, a Rabobank analyst said on Thursday, as African swine fever (ASF) sweeps through China. Industry insiders say the 113 reported outbreaks in China are grossly underreported. Chinese pork production is expected to fall by up to 20% in 2019, said Oscar Tjakra, a director of food and agribusiness research at Rabobank. China typically accounts for around half the world’s output of pork. The U.S. agriculture department’s attache in Beijing has forecast pork production at 51.4 million metric tons this year, down 5% from 2018, with imports seen at 2 million metric tons, according to Reuters. Pork production was on the increase for the first three quarters of 2018, said Zhu Zengyong, associate professor at the Agricultural Information Institute of the Chinese Academy of Agricultural Sciences (CAAS), but declined significantly in the fourth quarter after the disease began spreading rapidly. Zengyong said the number of slaughtered hogs fell 1.2% in 2018 to 693.8 million head. Not only has the disease totally disrupted the production plans of many major companies, Zhu said, but it also has halted some expansion. In addition, China’s demand for pig feed is projected to drop 12% in the 2018-19 crop year that runs from October to September. Soymeal demand is expected to drop 5.5% during that same period, said Li Ning, general manager of commodity trader Living Water Trade (Shanghai) Co Ltd. A consultant with Shanghai JC Intelligence Co Ltd said he sees pig feed consumption down 25% to 30% in 2019, and overall feed demand down from 12% to 15%.
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In The Cattle Markets: Impacts of the Cold Wet Winter

The returning to normal of U.S. federal government reports and data sources are revealing the impact of the cold and wet winter on the fed cattle production. As pointed out in last week’s In The Cattle Markets, cattle on feed inventories are very high: 11,678 thousand head in the seven major states. This is above last year’s 11,630 thousand head and average of the prior five years for February 1 of 10,781 thousand head. The inventory of long-fed cattle – cattle calculated to have been on feed over 120 days – is also substantial. This inventory is 3,993 thousand head, is well above last year’s 3,558 thousand head, and the average of the prior five years for February 1 of 3,500 thousand head. There are a lot of cattle to be marketed through the end of March and into April and May. Slaughter volumes reported in the weekly Livestock Slaughter report do not communicate that this is happening. Total cattle slaughter is up modestly. Within total cattle, cow slaughter is higher some weeks by 10 thousand head, fed heifer slaughter is up some weeks 10-20 thousand head, and the largest portion – that being fed steer slaughter – is even with the prior year or softer. April marketings will be an important indicator of the potential strength of the cattle markets through the summer. Weak marketings will suggest a backlog of animals. The Livestock Slaughter reports are also revealing the lower fed animal carcass weights. Fed steer weights for 2019 are all lower than the same week in 2018. Carcass weights are one to 13 pounds lighter each week of this year. Fed heifers, which are a larger portion of the slaughter mix this year, are almost always more than 10 pounds lighter than the week of the prior year. Clearly, the cold wet winter has slowed marketings, extended days on feed, decreased feed conversion, held down slaughter weights, and increased costs of gain. Information provided by Kansas State University and other sources indicates costs of gain are 5-7 cents per pounds higher than the same month this time last year with very similar feed input costs. There is a large volume of animals coming but at lighter weights. Winter weather and general conditions appeared to slow the feeder cattle market down through the end of last year and early this year. In January and February, I worked cattle feeding budgets with fall fed cattle futures, spring feeder cattle futures – both basis-adjusted, and with reasonable projected spring and summer cost of gains. There were close to $100 per head profits that could be hedged in this window for heavier calves. Needless to say, feeder cattle prices have improved since then. The Markets What do the technical say? April through October live cattle futures show strong upward trends with resistance levels repeatedly broken and the trend holding when tested. The more deferred contracts are sitting closer to resistance levels whereas nearby contracts have moved through and into higher prices. Live cattle contracts remain a strong bullish market. I continue to watch the trend lines closely. Hold long positions and wait for uptrends to be broken. These would be sell signals. The spring and fall groups of feeder cattle contracts have begun to show similar strength. There is not enough trading history in the fall contracts be comfortable with technicals. But I anticipate them to more closely mirror the live cattle contracts. Opportunities to hedge feeder cattle should be based on technicals from live cattle contracts. Watch the live cattle trends and the feeder support and resistance levels. And the spring weather conditions. By: Stephen R. Koontz, Colorado State University
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Bovine Tuberculosis Found at Dairy Associated to Texas Calf Ranch Case

Animal health officials in Texas have confirmed the presence of bovine tuberculosis (TB) at a dairy located in the Panhandle region of the state. Texas Animal Health Commission (TAHC) put out a press release on March 14 to announce that a case was confirmed on a Sherman County dairy farm. The investigation has revealed that the Sherman County case is related to a confirmed bovine TB case on a Dallam County calf ranch. The two farms that have bovine TB are currently under quarantine or hold and will remain so until they meet all requirements for release through testing and removal of infected animals. Epidemiological investigations will continue at both farms. There will also be further testing performed at dairy, calf raising and dairy heifer raising operations in Texas and other states that have epidemiological links to the infected herd in an effort to determine a possible origin or prevent the potential spread of the disease. “TAHC is working closely with the dairy involved, United States Department of Agriculture (USDA), the Texas dairy industry and other states to ensure the disease is quickly contained, and the affected dairies can return to normal business practices as soon as possible,” says Dr. Andy Schwartz, State Veterinarian. “Texas’ current TB-free status is not expected to be affected by the new cases.” Bovine TB is a respiratory disease that can cause weight loss and chronic coughing. There are a number of species that are susceptible to the zoonotic disease including elk, deer, bison, goats, swine, cats and humans. Pasteurization of milk removes the risk of transmission to people and meat from infected animals does not enter the food chain. The disease can be spread amongst livestock from TB bacteria being expelled by infected animals into the air to be inhaled or even in contaminated feed. In 2000, Texas was deemed as TB-free by USDA. Then in 2002, the status was temporarily removed when two infected herds were found. Following further testing, Texas regained TB-free status from USDA in October 2006.
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Spring Weather Could Turn Stormy

Despite months of cool to downright-frigid weather, it doesn’t look like farmers in the Midwest will see a reprieve anytime soon. March looks to be a chilly month to kick off planting, and parts of the Midwest will not see above-normal temperatures until May. Many states saw record-setting cold temperatures in January and February with some areas receiving in excess of 40" of snow this winter. “This pattern tilts the odds toward colder-than-average weather temperatures overall for the months ahead,” says Laura Edwards, South Dakota State University Extension state climatologist of the National Oceanic Atmospheric Administration. She says spring could bring flooding to South Dakota and possibly other nearby states, too. March forecasts mean farmers will kick-off the season with some unexpected storms, cooler weather and other less-than-favorable conditions. “A very busy pattern looks to continue at least for the foreseeable future,” explains Michael Clark, the co-owner and meteorologist in charge of BAMWX. “We [have] a couple of bigger systems [in] mid-March where we have research even strongly suggesting tornado outbreaks.” He says this forecast for the Midwest all goes back to what’s going on in the northern Pacific Ocean where there’s a barrage of storms. “I look for this active pattern to be around at least to the end of March,” Clark says. “Right now, it’s probably every three to six days there will be a storm.” Those living in the Ohio Valley and Tennessee Valley should keep a sharp eye out for severe weather. “Western Indian Ocean activity correlates strongly to the pattern here in the U.S.,” Clark says. “Not only does it favor severe weather but it favors violent tornado outbreaks, and I don’t use that term lightly,” he notes. “From the southern Ohio Valley and Tennessee Valley to the deep South, the first two weeks of March and the third week of March, even, can really feature some pretty strong storms that are capable of a couple severe weather outbreaks,” he adds. If you’re located in the areas Clark predicts will see some severe weather early this spring, take the time to study your disaster preparedness plans. Review them with your family as well to help make sure everyone stays safe.
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China Makes First Major U.S. Pork Purchase in Two Years

It’s finally come. China made its largest purchase of U.S. pork in nearly two years last week, according to USDA data released Thursday, reports Reuters. Chinese hog prices continue to climb as the country deals with an ongoing outbreak of African swine fever (ASF). The sale of 23,846 tons of U.S. pork in the week ending March 7 comes with a 62% import tariff imposed by China on U.S. pork, as part of the recent trade war between the two countries. China has made large purchases of U.S. soybeans earlier this year and rumors of corn sales just this week, leaving hog farmers wondering if or when the giant would return to the meat case. A main staple in the Chinese diet, pork is also in high demand in the country from recent celebrations of the Chinese New Year, or the “Year of the Pig.” China’s ASF problem has grown to 111 confirmed cases in 28 provinces and regions, since August 2018. Click here to read in-depth coverage of the ASF outbreaks in China, biosecurity tips for U.S. producers and more. There is no cure for ASF and U.S. leaders say a vaccine could still take 10 to 20 years to develop. The disease does not affect humans but is highly contagious and fatal to pigs. About 1 million pigs have been reportedly culled in China so far in an effort to try to contain the disease. What else could China be purchasing in the next few weeks? Wheat, ethanol, DDGs, beef and poultry are also likely to be on the list.
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Dairy Farms Continue To Close

There’s more bad news for the nation’s dairy industry. USDA reporting licensed dairy farm numbers declined by more than 2,700. It equals a drop of 6.8 percent. There are now just over 37,000 licensed dairy farms in the country. That’s down from more than 40,000 last year. Wisconsin, which has the most dairy farms in the nation, also saw the biggest drop with 590,000 farms alone last year closing.
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