Food Business News - March 24, 2015 - (Page 30)

Market Insight A `normal' year for U.S. crops? Prospective prices for the three major U.S. commodities well below year-ago levels he first major piece of the 2015 crop puzzle will fall into place March 31 when the U.S. Department of Agriculture releases its annual Prospective Plantings report. But there have been plenty of hints as to what the Department and private analysts expect this year, and it's mostly different than the past five or six years, maybe even close to "normal." A look at the three major U.S. commodities - wheat, corn and soybeans - along with the macro-economy, transportation and all-important weather will round out the picture. As of mid-March, nearby U.S. wheat, corn and soybean futures prices were well below year-ago levels with not much upside potential seen for the rest of the year. May wheat pric- T 30 FOODBUSINESS NEWS ® es were down about 25%, corn futures were down more than 20% and soybean futures were down 30%. There were modest but mostly typical carries going into the fall, although new crop soybean futures were at a discount to old crop. Based on the U.S.D.A. March 10 World Agricultural Supply and Demand Estimates report, prices paid to farmers in 2014-15 for average $10.20 a bu, down 22% from last year and the lowest since $9.59 a bu in 2009-10. In its long-term outlook released in February in conjunction with the annual Agricultural Outlook Forum, the U.S.D.A. projected 2015-16 (beginning June 1, 2015, for wheat and Sept. 1, 2015, for corn and soybeans) average prices paid to farmers below those of 2014-15 for Planted area of major crops in million acres All wheat Corn Soybeans Cotton 5-year average 55.0 92.7 78.0 11.9 2014 56.8 90.6 83.7 11.0 February 2015 proj. 55.5 89.0 83.5 9.7 March 31 2015 proj. ? ? ? ? Source: U.S. Department of Agriculture all wheat were forecast to average $6 a bu (midpoint of range), down 13% from $6.87 a bu in 2013-14 and the lowest since $5.70 in 2010-11. Prices for corn were forecast to average $3.70 a bu, down 17% from $4.46 a bu last year and the lowest since $3.55 a bu in 2009-10. Prices for soybeans were forecast to all three commodities, with all wheat at $5.10 a bu, corn at $3.50 a bu and soybeans at $9 a bu. The U.S.D.A. also projected planted area in 2015 below 2014 area for all three crops, with the smallest decline for soybeans, which remain a favorable alternative because the crop is expected to produce the best return per acre in 2015 compared with corn, wheat or cotton, with acreage for the latter expected to tumble 12% this year. Wheat planted area in 2015 was forecast at 55.5 million acres, down 2% from 2014 but up 1% from the five-year average of 55.04 million. Corn planted area was forecast at 89 million acres, down 2% from 2014 and down 4% from the five-year average of 92.7 million. And soybean plantings were forecast at 83.5 million acres, down slightly from 83.7 million last year but up 7% from the five-year average of 78 million. Those early forecasts will receive their initial test in the March 31 Prospective Plantings report. Any discussion about wheat, corn and soybean prices can't be made without looking at the macro-economy largely because of the importance of exports in determining domestic grain prices. The value of the dollar against the euro fell to par (one dollar equal to one euro) in the week ended March 13 for the first time since 2003. A strong dollar tends to discourage exports because it makes U.S. commodities more March 24, 2015

Table of Contents for the Digital Edition of Food Business News - March 24, 2015

Food Business News - March 24, 2015
Inside General Mills’ new approach to innovation
Nestle pursuing nutrition-based treatment for autism
Dairy Business News - Inclusion innovation: More than a chip or a chunk
Table of Contents
Web Contents
Editorial - Flexibility is needed to meet new opportunities
Kind raising the bar with innovation
McDonald’s to unlock power of local regions
Lancaster Colony acquires flatbread maker
SodaStream going after Keurig
Six forces shaping natural, organic product development
Stevia slow to penetrate confectionery market
C-Suite insight: C.P.G. at a crossroads
Kroger’s Simple Truth sales hit $1.2 billion for year
Private equity firm buys American Beverage Co.
Washington - Dietary Guidelines coming into focus
Market Insight - A `normal’ year for U.S. crops?
Health and Wellness - Shining a health halo over protein
Meat industry criticizes D.G.A.C. recommendation
Ingredient Innovations - Number of proposed pho alternatives widens
Still no timetable for final GRAS rule
Company Profile - Mondelez gaining momentum
New Food Products
Natural Products Expo West/Engredea
Ingredient Market Trends - Millers forecast soft red winter wheat crop at 381 million bus
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - March 24, 2015