Duxton’s Agri Bits and Pieces – Vol. 342
Posted on: July 25th, 2017

QUOTE OF THE WEEK

This week’s quote of the week comes from Christian Porte owner of the Coteaux de Trumao vineyard in Chile, on the Chilean wine industry’s response to climate change. Following a hot spring and an intensively hot summer which saw crops rushed through their growth cycles 10 percent faster than usual, moving harvest up by three weeks and dropping production by 10 percent.

“Vineyards from central Chile are investing more and more in this area (South), escaping from climate change”

BURGER COSTS HIT A 3-YEAR LOW AHEAD OF INDEPENDENCE DAY

Thanks to a boom in supply, retail-beef prices are low enough to compete with pork and poultry. Americans spent $803 million on beef, the most popular U.S. Independence Day meat, in the two weeks near the Fourth of July holiday last summer, a Nielson report shows.

U.S. beef production is rising for a second straight year, helping to boost meat and poultry output to the highest ever. While wholesale prices have fluctuated this year, ground beef at the grocery store remains near the cheapest since 2014. And hedge funds are signalling they expect prices will remain low. They’ve cut their wagers on a rally for cattle futures to the smallest in 11 weeks.

On the Chicago Mercantile Exchange, cattle futures for August delivery fell 4.4 percent in June to $1.163 a pound. That was the third loss in four months for the most-active contract.

The cattle net-long position, or the difference between bets on a price increase and wagers on a decline, dropped 5 percent to 125,185 futures and options in the week ended June 27, according to U.S. Commodity Futures and Trading Commission data released three days later. That was the lowest since April 11.

American beef production is expected to climb 4 percent this year to 26.292 billion pounds, the highest since 2010, the U.S. Department of Agriculture estimates. The gain comes as feed has stayed cheap for livestock producers, with corn futures falling for four straight years through 2016. Pork and chicken output will both reach records.

Higher output is helping to keep ground-beef prices low at the grocery store. Retail costs have stayed cheap even as wholesale costs climbed, signalling that consumers will likely enjoy lower bills for the next year and a half as production keeps expanding, said Chris Hurt, a professor of agricultural economics at Purdue University in West Lafayette, Indiana.

Wholesale beef is up 11 percent this year to $2.2473 a pound. By contrast, retail ground beef is unchanged since the end of last year at $3.559 a pound as of May, down 4.3 percent from 12 months ago, Bureau of Labor Statistics data show. Prices reached $3.547 in April, the lowest since January 2014.

Wholesale beef dropped 8.5 percent in June, snapping four straight months of gains, just as demand tends to reach its seasonal peak around the July Fourth holiday. Retailers could pass the savings on to customers.

Demand is increasing for U.S. beef exports. In the four months through April, shipments were 20 percent higher than a year earlier, according to data from the U.S. Meat Export Federation. The increases could continue as China has restarted imports of U.S. beef, lifting a ban in place since 2003.

At the same time, the U.S. suspended all fresh beef imports from Brazil amid food-safety concerns. That could tighten up domestic supplies. The growth in domestic and foreign demand may help to boost cattle futures later this year, according to Societe Generale SA. The bank forecasts prices to average $1.30 in the third quarter and $1.25 in the fourth, compared with Friday’s close at $1.163.

SCIENTISTS MAKE ACCIDENTAL BREAKTHROUGH THAT COULD LEAD TO DROUGHT-PROOF CROPS

The Canberra-based researchers have spent the past decade looking at the effects of drought on plants, accidentally discovering some plants have a self-preservation method that is potentially life-saving.

One of the lead researchers, biologist Kai Chan, says the team found chloroplasts do more than capture sunlight through photosynthesis to make plant food.

Dr Chan said they found chloroplasts also worked together with plant hormones during drought stress.

“Chloroplasts are actually capable of sensing drought stress and telling the leaves to shut-up and prevent water from being lost during drought stress… So the chloroplasts are actually helping the plants to prevent losing too much water…We know how the drought alarm actually calls for help and we know how help comes in the form of closing pores on the leaves.”

The team made the discovery while conducting tests on barley and Arabidopsis, a relative of canola and mustard. They found boosting the levels of the chloroplast signal in these plants extended their drought survival by about 50 per cent.

“We have got very strong reason to believe that this ability is also present in other major crops like rice and wheat…if you’re able to help those plants close their pores much earlier during drought that might actually help those crops survive just that little bit longer until the next rainfall.”

Dr Chan said he was working to develop a chemical spray to boost the chloroplast signal that closes pores on plant leaves.

Other collaborators are investigating plant breeding to naturally enhance levels of the chloroplast signal. It is hoped the crop technology could be available within the next five to ten years.

 

CHART OF THE WEEK

This week’s chart of the week comes Bloomberg’s Floods Stall Ivory Coast Cocoa Harvest, showing cocoa futures bouncing back as adverse weather conditions cut expected production, since earlier bumper crops.


 

JOKE OF THE WEEK

 

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