Podcast Summary
Cattle on Feed Report: The July Cattle on Feed report showed a slight increase in cattle on feed, with more heifers in the feedlot, which was bullish for the beef market
The July Cattle on Feed report showed a slight increase in the number of cattle on feed, up 0.5% compared to last year. However, this increase was less than pre-report estimates. The marketing numbers were adjusted for two fewer days in June 2024 compared to the same month in 2023, making the marketing number even with the previous year. The steers were up nearly 1%, while heifers remained even with last year in terms of numbers in the feedlot. However, the percentage of heifers in the feedlot increased slightly, making up 39.6% of the total cattle on feed on July 1, 2024. Overall, the report was considered bullish for the beef market due to the slight increase in cattle on feed and the high percentage of heifers being fed.
Fraudulent used cooking oil imports: The 45Z tax credit is inadvertently encouraging the import of potentially fraudulent used cooking oil from countries like China, leading to significant losses for American farmers and shrinking profits for global agricultural companies.
The 45Z tax credit, set to take effect in 2025, is inadvertently encouraging the import of potentially fraudulent used cooking oil from countries like China, leading to a significant drop in prices for American soybean and corn farmers. This trend, driven by China's efforts to secure its food supply amid extreme weather challenges, has resulted in substantial losses for American farmers, estimated to be at least $5.4 billion. Meanwhile, global agricultural companies are facing shrinking profits due to bumper harvests, a downturn in crop markets, and slowing demand for farm equipment. For instance, St. Louis-based Bunge reported earnings of $1.73 a share in the second quarter, the lowest since the start of the COVID-19 pandemic. The combination of these factors is posing significant challenges for the agricultural sector, both in the US and globally.
Agricultural Industry Challenges: Despite improvements in market conditions, agricultural industry sectors like grain merchants, equipment manufacturers, and crop protection and seed companies face decreased revenues and earnings, affecting ADM, C&H Industrial, Corteva, and FMC.
The agricultural industry is facing challenges in various sectors, including grain merchants, equipment manufacturers, and crop protection and seed companies. Bungie's CEO, Greg Heckman, acknowledged the current market conditions' improvements but expressed limited visibility into the future. Meanwhile, companies like ADM, C&H Industrial, Corteva, and FMC have reported decreased revenues and earnings for the first half of the fiscal year. ADM's ag services and oil seeds branch suffered a significant plunge in quarterly operating profits, while C&H Industrial lowered its full-year profit forecast due to slowing tractor and combine demand. Corteva and FMC reported decreases in sales and earnings, respectively. Despite these challenges, Food Export Midwest and Food Export Northeast announced the opening of the 2025 program year, aiming to support small and medium-sized food and agricultural companies and create new events and emerging markets.
Supporting small food businesses: Food Export Midwest and Food Export Northeast help small and medium-sized food businesses export their products through education, trade shows, and funding opportunities.
Teresa Miller with Food Export Midwest and Food Export Northeast emphasized their commitment to supporting small and medium-sized businesses in exporting their food products. They provide a robust educational calendar, access to trade shows, and various funding opportunities. Meanwhile, at the National FFA State Officer Summit in Washington DC, FFA leaders from all 50 states, Puerto Rico, and the US Virgin Islands advocated for agriculture and agricultural education, as well as the extension of FFA funding through the Farm Bill. They also requested support for grants that benefit youth organizations, including FFA, 4-H, Boy Scouts, and Girl Scouts. For more information, visit foodexport.org and ffa.org.