May 27, 2009

Volume I / Issue 3.3



Note to Readers: We are publishing today in recognition of the Dragon Boat Holidays tomorrow (HK & Taiwan) and Friday ( Taiwan ). Our next edition will be published June 5, 2009. Happy Holidays!


Memorial Day, May 26, is the biggest beef grilling day of the year. This year, initial analysis suggests that consumers traded down to cheaper priced chicken and pork, preventing a strong spring rally expected in May. The lack of a rally is even of more concern given that beef production is down 4.5% so far this year (through May 23) from last year's pace. The most recent cattle-on-feed report showed that as of May 1, there were 2.8% less cattle on feed than a year ago. Marketings of fed cattle in April fell 7% from April '08, and although feedlotters placed 4.2% more cattle on feed in April than a year ago, many of those animals were light weight. This could mean fed cattle supplies may be tight through the end of the August.

Live Cattle Price: 05/26 - US $ 85 /cwt.

Hog markets have moved sideways since the recovery from early H1N1 concerns. Loin prices are helping to support overall carcass values (see chart below), but producers are still concerned about the lack of a strong spring rally. Hog producers have lost money 17 of the last 19 months. Per head losses are in the range of $27 for average producers. Analysts state that higher prices are needed soon or producers will start to exit the industry.

Hog Carcass Price: 05/26 - US$ 60.05 / cwt.



The World Organization of Animal Health (OIE) voted unanimously yesterday in its General Session to accord Japan the BSE risk designation of 'controlled risk country'. Colombia also received a controlled risk designation, while Chile was awarded a negligible risk designation. Analysts hope that Japan 's new OIE




risk designation, the same as that of the United States , will lead to expanded import access for US beef, which currently is restricted to beef and beef products from animals under twenty-one months of age. OIE guidelines state that countries can safely import beef and beef products from cattle of all ages - bone-in or boneless - from controlled risk countries as long as specific risk materials (SRMs) are removed.


Hormel Foods (www.Hormel.com) is set to open a new processing plant in Dubuque , Iowa in January of 2010. The plant will process several of Hormel's popular processed meat lines, including the Compleats line of microwaveable shelf stable meals, and canned Dinty Moore stew and Hormel Chili. The $89 million 327,000 square foot facility will employ 200 workers. Hormel markets a range of brands, including Hormel products, Jennie-O (Turkey products), Chi-Chi's (Mexican products), Lloyds (pre-cooked ready-to-eat barbecue products), Spam , Dinty Moore , Valley Fresh (canned chunk poultry), Stagg Chili , Farmer John (fresh pork), Di Lusso Deli (deli meats), World Food (ethnic sauces and flavorings), Saags (gourmet sausages), Herb-Ox (boullion), Not-So-Sloppy-Joe (Sloppy Joe sauce).


Last week we published 1 st quarter red meat imports into Hong Kong . This week, we publish US beef and pork export statistics for Asian markets for the 1 st quarter of 2009. In general, US red meat exports to the world have largely held, despite expectations of large falls from the very high volumes exported during the 1 st quarter of last year. As predicted, US pork exports to HK/China have fallen sharply as domestic Chinese hog prices have declined and supplies increased. The decline in pork exports to China - and Russia (off 38% in the 1 st quarter) have been more than offset by increased trade with Mexico and Japan . On the beef side, major areas of growth for the US include Vietnam and Korea . In the 2 nd quarter, US pork exports are expected to be pinched by China 's ban on most US pork, and a weak economy. Exporters are hoping that a pick-up in the global economy in the 3 rd and 4 th quarter could help boost demand for exports. Also, the US dollar has been slipping in recent week, raising the competitiveness of US exports .


•  Food & Hotel China , Beijing : June 10-12, ??09

•  Food Taipei : June 23-26, ??09


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