The Grain News

Grain News: July 2010

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U.S. producers still looking at record corn production, supplies

Corn markets and analysts were caught a bit by surprise when the U.S. Department of Agriculture released its updated planted acres and grain stocks report June 30. Both planted corn acres and stocks were lower than anticipated, although, should the growing season continue as it has, U.S. farmers will harvest another record corn crop this year.

As for plantings, USDA said U.S. farmers planted 87.87 million acres (35.56 million hectares) of corn this year. While plantings are up 1.6 percent from last year and 2.2 percent from 2008, the figure was 1.5 percent less than average pre-report expectations of private analysts, said Dan O’Brien, extension grain economist at Kansas State University. It was also below USDA’s March estimate.

When you plug in the standard average yield of 163.5 bushels per acre (10.27 tons per hectare), that would give a crop of 13.25 billion bushels (336.4 million tons), a new record. However, many analysts believe there is still an opportunity for yields to increase considering that the crop’s overall ratings remain positive and on par with last year when the yield was 164.7 bushels per acre (10.34 tons per hectare).

Allendale Inc., for example, has a yield estimate of 167.0 bushels per acre (10.76 tons per hectare), which would produce a crop of 13.53 billion bushels or 343.59 million tons. Should that scenario play out, corn in storage at the end of the marketing year would increase. Should the standard yields prevail, ending stocks would, according to USDA estimates, come in at 1.37 billion bushels (34.89 million tons), off slightly from this year.

In either case, O’Brien said, U.S. corn in storage as of June 1 totaled 4.3 billion bushels (109.5 million tons), an increase of 1.1 percent from last June but less than what some industry experts expected.

Darrel Good, an ag economist with the University of Illinois, said there are several theories as to why the corn stocks figure was lower than expected. Some theories, like lower test weight corn requiring more corn to be fed to U.S. livestock, don’t add up, he said, because livestock numbers haven’t grown and more farmers are feeding distillers grains.

Good said it comes down to an over estimate of the 2009 crop or USDA will “find some of the missing bushels” in its next stocks report; time will tell.

Barley, sorghum update

USDA’s updated barley and sorghum plantings showed a decrease for both crops – as increases in other crops, including soybeans and cotton, took away a few acres.

For barley, USDA said 3.0 million acres (1.2 million hectares) were planted this spring, below the 3.3 million (1.3 million hectares) of barley it estimated in March and 3.6 million (1.5 million hectares) planted last year.

Barley stocks, however, are high – some 30 percent larger than last year at 115 million bushels (2.5 million tons), even though barley use over the previous three months was larger than last year.

Sorghum plantings fell to 6.0 million acres (2.4 million hectors), off from USDA’s March estimate of 6.4 million (2.6 million hectares) and down from last year’s 6.6 million (2.7 million hectares).

 

Nutrition guide offers opportunity for swine producers

Research conducted over the last dozen years has added a significant amount of knowledge to the nutrient requirements of swine. Add in changes in swine genetics and overall animal performance and it makes sense that nutrient standards published years ago are simply out of date today.

It also explains why seminars on the 2010 National Swine Nutrition Guide are so popular, both in the United States, where it was developed, and in China and Vietnam, where seminars were conducted about the guide as part of a U.S. Grains Council effort earlier this year.

“There is a lack of modern nutrition specifications in many parts of the world, and the nutrition guide and related ration formulation and evaluation software are a great resource,” said Dr. Robert Thaler, a swine nutrition expert at South Dakota State University. “There was tremendous interest during Council-sponsored sessions in Vietnam and China, but the guide really could be of benefit in many locations around the world.”

The guide consists of 34 different fact sheets, nutrient recommendation tables and the diet formulation and evaluation software, which includes the ability to develop least-cost rations. Its development was funded by a United Soybean Board grant and was a collaboration among faculty at land-grant universities, agri-businesses and the U.S. Pork Center of Excellence.

Thaler was one of many researchers to help develop the guides, which are designed to be used by swine producers, nutritionists, feed companies, veterinarians and others interested in swine nutrition, feeding and management.

“The last National Research Council publication on swine nutrient recommendations was published in 1998, and a lot has changed since then,” Thaler said. “At the same time, many state and regional guidelines were outdated, which is why a national effort was made. The results offer a lot of opportunity to improve swine nutrition and management.”

He said the guide is a hybrid of National Research Council’s publication and the Pork Industry Handbook. In its 300-plus pages, the 34 fact sheets cover everything from weaning nutrition and management to water use to amino acid recommendations. All include guidelines for different growth stages of the animal.

“They basically cover every nutrient category and every phase of swine production,” Thaler said, noting that the guides were reviewed by those in the swine industry and at universities.

A version in Mandarin will be available sometime next year.

Software allows ‘what if’

The ration formulator is a Microsoft Excel-based spreadsheet that contains many options to customize it for individual operations.

“If you wanted to balance a ration for a 150-pound barrow, you can do that, or you can develop a specific ration for high-performing sows,” Thaler said. “It also allows users to do ‘what if’ scenarios, like analyzing different feed ingredients or the impact of switching from a four-phase to seven-phase finisher program. It can help producers make better decisions.”

The software works well around the world because local ingredients can be added to the spreadsheet.

“You just need to know the basic nutrient content of the ingredient and its local price to include it in the database,” Thaler said. “You can also tweak the nutrient content of common grains to better reflect what is available locally.”

The software is particularly helpful in identifying opportunities to use new ingredients. Thaler specifically mentioned distiller’s dried grains with solubles (DDGS). He said in some countries, the availability of U.S. DDGS offers a cost savings over other ingredients – and the software helps identify that and others.

Depending on the operation, carcass characteristics and average daily gains can be included in the spreadsheet to allow more specific rations to be developed. It also helps producers gain a better understanding of feed efficiency and overall performance.

“The software is a great teaching tool that can help make producers better,” Thaler said. “It can also save money by aligning a ration to the operation and not overspending on a ration that won’t allow the swine to perform any better than on a lower-cost ration.”

More information on the nutrition guide and software is available from the U.S. Grains Council or by going to www.USPorkCenter.org.

 

Standards, protocols ensure consistency

Without grain quality standards, including standardized sampling and grading methods, there would be no way to accurately and consistently describe the quality and quantity of grains moving through export channels.

“Just as important to having standards, however, is to have an organization that maintains the inspection system for taking the sampling and performing the analysis to make sure a shipment meets specific contract requirements,” said Jay O’Neil, a senior agricultural economist with Kansas State University. “In the United States, the Federal Grain Inspection Service (FGIS) maintains the system and acts as an independent entity that examines grain exports and ensures standards are upheld.”

Official grain inspections are based on established standards and on proven and standardized procedures, techniques and equipment. This ensures consistency of test results and services. It also ensures that an export shipment matches what was specified on the load order created by a shipper. The load order is completed to the specifications laid out in a sales contract.

O’Neil said without standardized procedures, techniques and equipment, test results would be inconsistent. “We see this happen when receivers employ different sampling methods and utilize different analysis procedures with equipment that is not properly calibrated,” he said. “This can lead to destination results that don’t match the official export certificate and cause customer confusion.”

The U.S. Grains Council conducts workshops that help buyers and their representatives understand the U.S. system of procedures and testing for grain quality and the benefits it provides. Most recently, the Council hosted 21 representatives from the Central American feed industry who attended a course on quality control offered by the International Grains Program at Kansas State University.

“It was important to bring them in and help them understand the standards and sampling and grading analysis that FGIS does,” O’Neil said. “It made them better informed buyers and gave them insights as to how they might design an efficient, cost-effective quality program for their own feed mills.”

The Council also helped set up a lab in Egypt and before that, O’Neil said, the Council assisted several grain buyers in Mexico establish their own labs. “By understanding what types of equipment to purchase, where and how to train lab technicians and how to establish protocols, these labs become more efficient and produce consistent, reliable results,” he said.

In fact, the Council often hosts sessions at the lab in Egypt to educate buyers and technicians in the region. “This helps improve grain sampling standards in the region but also helps buyers understand that grain exported from the United States will match the origin grade certificate,” O’Neil said.

Having and maintaining standards is critical, he said, because buyers want to know they are getting what they purchased. “The export shipment is tested and graded by FGIS, an independent third party,” he said. “This adds greatly to the reliability and credibility of the results. It’s assurance that buyers and sellers can appreciate.”

Proposal aims to update DDGS classification

Following a series of tests and a gathering of technical information, the United States submitted a proposal to the International Maritime Organization (IMO), a United Nations body that establishes international shipping rules, regarding the shipping classification of distiller’s dried grains with solubles (DDGS).

There has been confusion at times regarding DDGS’ shipping classification, which has led to shipping disruptions, increasing the potential for higher transportation costs. Concerns by insurance companies and shippers came up because DDGS is not classified by IMO. Without a classification, insurance companies consider DDGS to be “seed cake,” which is generally classified as a hazardous material.

The U.S. Grains Council spearheaded an industry effort that sponsored laboratory tests and gathered technical information to encourage the classification of DDGS as a non-hazardous material. Tests included those for self-heating and combustion, as well as oxygen depletion measurements and temperature tests on actual DDGS shipments. All tests were positive for DDGS and fell below standards used to classify a material as hazardous.

The Council’s Erick Erickson contacted the U.S. Coast Guard, which represents the United States in the IMO, and submitted the findings. The Coast Guard worked with the Council to develop a proposal, and then endorsed the proposal and submitted the document to IMO for its consideration.

DDGS has been shipped as bulk product for more than 25 years and there is no record of any incidents involving DDGS as a result of self-heating, spontaneous combustion or oxygen depletion.

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