Delmarva Feed Grain Overview and Forecast

Transcription

1 Delmarva Feed Grain Overview and Forecast 09/12/05 Delmarva Breeder, Hatchery and Grow Out Conference Salisbury, MD September 14, 2005 Marketing Sep 2005

2 Operating Organization Board of Directors Jim Perdue Chairman & CEO Poultry Group Mike Roberts President International Poultry Sales Division Bob Turley President & GM Grain & Oilseed Division Dick Willey President & GM Retail Grain and Soy Foodservice PACMA Co-products -Rendering -Venture Milling -Perdue-AgriRecycle The G&O Division merchandises and manufactures commodities such as grains, soy products, and poultry co-products for internal use as well as for external sales to domestic and international customers in feed, food and fertilizer markets. Marketing Sep

3 Grain and Soy Maintain nearly 60 million bushels of grain storage space at more than 40 locations. Purchase approximately 180 million bushels of grains annually. Provide more than 130 million bushels of grains to Perdue feedmills and crush facilities annually. Crush more than 39 mln bu of soybeans at Salisbury, MD and Chesapeake, VA each year. Produce more than 875,000 tons/year of soymeal and more than 230,000 tons/year of crude soyoil. Produce approximately 300 million pounds of refined soyoil at Salisbury, MD. Marketing Sep

4 PACMA Montreal, PQ In addition to grain and soy, Perdue feedmills require 800,000 tons/year of other ingredients. PACMA leverages Perdue Farms internal feed ingredient demand to trade commodities to external customers. Procures alternative ingredients for Perdue feedmills to lower feed cost. Identifies ingredients that can lower feed cost through freight, availability, regional pricing. Toronto, ON Lakeville, NY Palmyra, PA Greencastle, PA Upper Dauphin, PA Turbotville, PA Salisbury, MD Marketing Sep

5 Co-Products Bone 9% Feathers 5% Blood 3% Offal 13% Human Edible 70% Converts poultry co-products into marketable value-added products for the feed, food and fertilizer industries. Perdue-Accomac, VA Rendering Raw material - 4,500 tons/week Finished product - 1,600 tons/week Perdue-Lewiston, NC Rendering Raw material - 3,600 tons/week Finished product - 1,300 tons/week Venture Milling-Seaford, DE Perdue tons/week External - 1,000 tons/week Venture Milling-Ansonville, NC Perdue - 1,000 tons/week External - 1,300 tons/week Perdue-AgriRecycle-Seaford, DE Permitted to process 60,000 tons/week Sales of pelleted and granular fertilizer Marketing Sep

6 Agricultural Outlook Marketing Sep

7 Supply World Corn Supply and Demand (in million tonnes) P Beginning Stocks Production Imports Use Domestic Feed Exports Ending Stocks Stocks to Use 28.4% 24.0% 19.8% 15.5% 18.8% 16.4% Source: USDA, September 12, 2005 Marketing Sep

8 U.S. Corn Supply and Demand September 12, /01 01/02 02/03 03/04 04/05 05/06 P Planted Acres Harvested Acres Yield (bpa) Beginning Stocks Production Imports Total Supply 1,718 9, ,639 1,899 9, ,416 1,596 8, ,578 1,087 10, , , ,775 2,125 10, ,774 Exports 1,941 1,905 1,588 1,897 1,810 2,000 Feed Use 5,842 5,868 5,563 5,798 6,150 5,825 Food/Ind/Seed 1,957 2,046 2,340 2,537 2,690 2,870 Ethanol for Fuel 996 1,168 1,325 1,500 Total Usage 9,740 9,820 9,491 10,232 10,650 10,695 Ending Stocks 1,899 1,596 1, ,125 2,079 Stocks to Use 19.5% 16.3% 11.5% 9.4% 20.0% 19.4% Farm Price $1.85 $1.97 $2.32 $2.42 $2.07 $ Marketing Sep

9 U.S. Ethanol Production 8,000 7,000 6,000 Actual Projected with RFS million gallon 5,000 4,000 3,000 2,000 1, The 7.5 billion gallon Renewable Fuel Standard (RFS) would increase ethanol from a 3.4 to a 7.5 billion gallon market within 7 years. Marketing Sep

10 Mid-Atlantic Production Acres (000) Harvested Yield BPA 2005 P Total (000) Bushels 2004 Maryland ,000 65,025 Delaware ,550 23,256 Virginia ,640 52,200 Subtotal , ,481 Corn Regional Production Estimates USDA September 12, 2005 Report New Jersey ,893 10,296 New York ,235 61,000 Pennsylvania , ,200 Subtotal 1, , ,496 North Carolina ,500 86,580 South Carolina ,400 29,500 Subtotal , ,080 Mid-Atl Total 3, , ,057 Indiana 5, , ,040 Kentucky 1, , ,280 Subtotal 6, ,370 1,102,320 U.S. Total 74, ,638,661 11,807, ,000 bushels of corn at Washington, IN Marketing Sep

11 Spot Corn Futures 1986-present Marketing Sep

12 December, March and July Corn Futures Marketing Sep

13 World Soybean Supply and Demand ( in million tonnes) 02/03 03/04 04/05 05/06 P Beginning Stocks Production Imports Crush Exports End Stocks Stocks/ Use 21.1% 18.4% 21.7% 20.9% Source: USDA, September 12, 2005 Marketing Sep

14 U.S. Soybean Supply and Demand September 12, /01 01/02 02/03 03/04 04/05 05/06 P Planted Acres Harvested Acres Yield (bpa) Beginning Stocks Production Imports Total Supply Crush Exports Seed and Feed Residual Total Usage 290 2, ,052 1, , , ,141 1,700 1, , , ,969 1,615 1, , , ,638 1, , , ,258 1,700 1, , , ,155 1,685 1, ,950 Ending Stocks Stocks to Use 8.8% 7.1% 6.4% 4.4% 10.1% 6.2% Farm Price $4.54 $4.38 $5.53 $7.34 $5.80 $ Marketing Sep

15 Mid-Atlantic Production Acres (000) Harvested Yield BPA 2005 P Total (000) Bushels 2004 Maryland ,745 21,285 Delaware ,764 8,736 Virginia ,020 20,670 North Carolina 1, ,810 51,000 Subtotal 2, , ,691 Soybean Regional Production Estimates USDA September 12, 2005 Report South Carolina ,760 14,840 Pennsylvania ,900 19,550 New Jersey ,535 4,326 New York ,698 6,708 Subtotal 1, ,893 45,424 Mid-Atl Total 3, , ,115 Indiana 5, , ,040 Kentucky 1, ,750 57,200 Subtotal 6, , ,240 U.S. Total 72, ,856,449 3,140,996 bean pile at Salisbury, MD Marketing Sep

16 Spot Soybean Futures 1986-present Marketing Sep

17 November, March and July Soybean Futures Marketing Sep

18 What we are watching: Domestic Issues Corn, soybean, wheat - yield, total crop size, harvest/planting progress Asian Soybean Rust in U.S. Advanced Soybean Rust Damage Source: USDA, ARS Marketing Sep

19 What we are watching: Domestic Issues Corn, soybean, wheat - yield, total crop size, harvest/planting progress U.S. Annual per Capita Consumption (lbs) Asian Soybean Rust in U.S. Animal placements/demand P 2006 E 0 Beef Pork Broilers Turkey Marketing Sep

20 What we are watching: Domestic Issues 12,000 Land Area in Farms (000 acres) 11,400 Corn, soybean, wheat - yield, total crop size, harvest/planting progress 10,000 9,800 Virginia Asian Soybean Rust in U.S. Animal placements/demand Land in agriculture 8,000 6,000 8,900 8,800 8,700 4,000 2,000 3,080 2,750 Maryland 2,250 2,200 2,100 Delaware Marketing Sep

21 What we are watching: Domestic Issues Corn, soybean, wheat - yield, total crop size, harvest/planting progress Asian Soybean Rust in U.S. Animal placements/demand Land in agriculture 30,000 25,000 20,000 15,000 10,000 Acres to be Release from CRP Virginia Maryland Delaware 5, Marketing Sep

22 What we are watching: Domestic Issues Corn, soybean, wheat - yield, total crop size, harvest/planting progress Asian Soybean Rust in U.S. Animal placements/demand Land in agriculture Ethanol expansion/marketing of the DDGS (dried distillers grains with solubles) Marketing Sep

23 What we are watching: Domestic Issues Corn, soybean, wheat - yield, total crop size, harvest/planting progress 25 U.S. Crude Oil Supply - Domestic vs. Imported Asian Soybean Rust in U.S. 20 Animal placements/demand Land in agriculture Ethanol expansion/marketing of the DDGS (dried distillers grains with solubles) million barrels per day Cost of energy s 1970s 1980s 1990s 2000s P 2015 P Domestic Imported Marketing Sep

24 Global Supply: 83.0 mln barrels/day Global Demand = 82.4 mln barrels/day Rest of World U.S., China, Japan, W. Europe OPEC & Russia Source: EIA, PIRA, CERA Marketing Sep

25 Spot Crude Oil Futures 1986-present Marketing Sep

26 What we are watching: International Issues China: Will China export corn? import wheat? China s Port of Dalian (with 980,000 tons of storage), built in the 1990s to move China s grains along the coast of China and elsewhere in Asia. Marketing Sep

27 International Issues China: Will China export corn? import wheat? South 4.5 America: Planting conditions and acreage crops: Corn billion bushels 3.5 Soybeans billion bushels billion bushels U.S. vs. South American Soybean Production 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05F Source: Informa September 2005 U.S. South America Marketing Sep

28 What we are watching: International Issues China: Will China export corn? import wheat? South America: Planting conditions and acreage 2005 crops: Corn billion bushels Soybeans billion bushels Europe: Crop size and harvest progress Perdue-Chesapeake, VA Marketing Sep

29 What we are watching: International Issues China: Will China export corn? import wheat? Euros to U.S. $ Average Rate South America: Planting conditions and acreage 2005 crops: Corn billion bushels Soybeans billion bushels Europe: Crop size and harvest progress Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Currencies: World currencies stronger against the U.S. dollar make our goods cheaper. Marketing Sep

30 Marketing Sep