World Perspectives

WPI Spotlight

WPI Spotlight

The WPI Spotlight showcases the best analysis recently written by our analysts.

We've chosen to share these articles so you can see how we approach market and policy analysis and see the value for yourself.

Enjoy reading this collection of "best of" articles and feel free to contact us with any questions.
In my near 40 years in the business, no truer words have been spoken that what I've read in Ag Perspectives. WPI Client and Risk Manager

Like what you see?

Subscribe now for full access to our "best in class" analysis. 

For corporate subscription pricing, please contact us

Study Updates Value of Red Meat Exports to Corn Growers, Provides More Details on Soybean Industry Impact

Beef and pork exports added 85 cents per bushel to the price of soybeans and 39 cents per bushel to the price of corn in 2018, according to the latest report by World Perspectives Inc. (WPI). Over the past three years, WPI has analyzed the impact of U.S. red meat exports on the value of domestic feedgrains and oilseeds.

Among new information included in the latest report are statistics that point to the value of red meat exports to U.S. soybean producers. According to WPI, the market value of pork exports to the soybean industry in 2018 was $783 million. WPI’s updated study shows that without red meat exports, U.S. soybean farmers would have lost $3.9 billion last year and U.S. corn growers would have lost $5.7 billion.

The updated report includes a projection of domestic feed use impacts based on both the long-term 10-year baseline projections for meat exports and a special analysis of the critical importance of the proposed U.S.-Japan trade agreement. USMEF has also prepared state-specific statistics on the value of red meat exports to the top 15 soybean states and top 10 corn states.

The World Perspectives study has been a very useful tool in quantifying the importance of red meat exports to our corn and soybean member organizations,” said USMEF President and CEO Dan Halstrom. “Results of the study and the subsequent updates demonstrate that maintaining global market access for U.S. beef and pork is critical to continued growth and to the continued value that meat exports bring to corn and soybeans.”

The updated study also looks forward, projecting that U.S. pork exports are expected to generate $8.68 billion in market value to soybeans from 2019 to 2028. Red meat exports are expected to generate $19.1 billion in market value to corn and $3.1 billion in market value to distiller’s dried grains with solubles (DDGS) in that same period.

“When the original study came out a few years ago, it gave us a good look at the value of U.S. beef, pork and lamb exports to corn and soybean farmers,” said Dean Meyer, a corn, soybean and livestock producer from Rock Rapids, Iowa. Meyer, a member of the USMEF Executive Committee, noted that the WPI study continues to support the fact that exporting red meat drives demand for livestock, in turn driving demand for livestock feed.

“The updated study offers a fresh look at corn and goes a little deeper into soybean meal and what red meat exports mean for soybean growers. As grain farmers, we are aware that meat exports add value by increasing the volume of soybean meal and corn used to feed cattle and hogs, but the numbers in this study provide a clear picture of just how important those exports really are,” said Meyer.

USMEF and the National Corn Growers Association initially commissioned WPI to quantify the impact of U.S. beef and pork exports on corn use and value in 2016, using 2015 data. Record-setting growth in red meat exports since 2016 – along with an uncertain global trade climate that has developed since the original study – led USMEF to request updates. Using final 2018 data and new 2019 to 2028 USDA baseline projections, WPI updated its analysis of red meat exports’ impact on corn in 2018 and expanded the analysis of the value of pork exports to soybeans.

Highlights from the updated WPI study include:

  • Since 2015, meat exports represent the fastest growing category of corn and soybean meal use.
  • In 2018, exports accounted for:
    • 14.6 percent of total U.S. beef production;
    • 25.7 percent of U.S. total pork production;
    • 459.7 million bushels of corn utilization – with a market value of $1.62 billion at the year-average market price;
    • 2 million tons of soybean meal disappearance — the equivalent of 84.2 million bushels of soybeans with a market value of $783 million.
  • In 2018 beef and pork exports added an estimated $0.39 to the average 2018 corn price of $3.53/bushel, and pork exports added $0.85 per bushel to the average 2018 soybean price of $9.30/bushel.
  • Since 2015, one in every four bushels of added feed demand for corn was due to beef and pork exports, and one in every 10 tons of added feed demand for soybean meal use was due to pork exports.
  • Over the next 10 years, meat exports are forecast to generate a projected $30.8 billion in cumulative annual market value to corn and soybeans based on USDA’s long-term forecast for crop prices.
Murphy's Law for Corn

This article originally appeared in the 22 July 2019 issue of Ag Perspectives

By Dave Juday

Murphy’s Law (i.e., anything that can go wrong will go wrong) has been in full force for corn farmers this year. Floods, cold weather and high soil moisture all delayed plantings. While the final prevented planting acreage total won’t be released by the Risk Management Agency (RMA) until this fall, the current aggregate to date is now reported to be 7-8 million acres of corn and 2-3 million acres of soybeans.

Delayed plantings will extend the growing season, subjecting the crop to the threat of early frost. Moreover, this year’s harvest is likely to be staggered. Wet fields that were planted even later than average will push that harvest even later.

The most recent development to hit this year’s crop is the heat wave across much of the Corn Belt, which is putting stress on the plantings and could reduce yields. Even worse (in keeping with Murphy’s Law), Hurricane Barry added humidity to the hot weather. With growing conditions already very wet, this year’s corn crop will likely have a very high moisture content. There hasn’t been a need for drying in the past five or so years, so that will add a new wrinkle to storage and the corn market this year.

About the only silver lining to this situation is that natural gas prices are down and currently at their lowest since 1998. In its July Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecast the Henry Hub natural gas spot prices for June-August at an average $2.37 per million British thermal units (MMBtu), approximately 55 cents or 19 percent below last summer’s average. However, part of that is based on the moderate temperatures early in the summer that led to a building of stocks. From April through June, additions to natural gas inventories rose about 41 percent. If hot weather persists, though, this could change.

Southeast Europe Regional Analysis

This article originally appeared in the 22 July 2019 issue of Ag Perspectives.

By Matt Herrington

Regional News

819,000 MT of grain were exported from Ukrainian seaports during 13-19 July 2019, up sharply from 499,000 MT the previous week and mostly destined to Jordan, Italy, and Israel.


Milling Wheat

Wheat prices are mostly lower across Europe and the Black Sea as harvesting progresses and fills the pipelines. French and German prices have dropped as the market braces for sales of a crop that is likely to be larger than previously expected. As the Russian wheat harvest pushes into Volga Valley and southern Russia, the latest official data suggests a 3 percent decline in yields. Still, Russian prices are lower as farmers are selling both old and new crop supplies.

The French wheat harvest was 33 percent complete as of 15 July, up from 9 percent the previous week. While that pace is well below the normal 64 percent by mid-July, yields remain better than expected. The recent heat waves across Europe prompted some analysts to cut yield forecasts, but present results from the field suggest there was little negative impact. Recent protein contents are averaging 11 percent or better, a marked improvement from early west coast yields that were below that level. The French crop is increasingly projected to be near 38 MMT, up from 34 MMT last year.

Britain’s wheat harvest is expected to start in the next week to 10 days, and the crop is in generally good shape. Weather over the next two weeks will be a key factor in determining crop quality. Some reports are noting British farmers and exporters may try to ship “a lot” of grain before the possible Brexit deadline of 31 October, after which the pound sterling may weaken substantially.

Ukrainian officials note that the country’s wheat harvest is 63 percent complete with 15.4 MMT harvested so far. 


Feed Grains

Prices are mixed with corn and feed wheat prices under pressure while feed barley and spring barley prices are firming. U.S. and Brazilian corn prices are lower in search of demand, and this is pulling global offers downward as well.

The barley harvest is underway in Europe and the UK with prices holding steady. The market appears well supplied, but farmers/traders are waiting for additional yield clarity before selling or taking positions. UK barley is competitive on world export markets, which should help support prices.

The French and German winter barley harvests are advancing well with good initial yields. Some analysts project a 7 percent increase in French winter barley and a 27 percent increase in spring barley because of a significant expansion in planted area. As the French winter barley harvest has moved north, prices are under pressure from farmer selling. Spring barley prices, however, are firmer as that crop may have suffered more damage during the recent heat wave.

Through 19 July, Ukrainian farmers have harvested 5.6 MMT of barley from 1.7 million hectares (69 percent complete). 



Oilseed prices are mostly firmer this week as the outlook for EU rapeseed continues to tighten. Low yields (2.5 MT/ha versus the average 3.2 MT/ha) and poor oil content in the French crop have pushed prices higher. Oil World reported last week that EU rapeseed production could be as low as 17.5 MMT this year, prompting a forecast of 5.6 MMT to be imported to this region in 2019/20.

Through 19 July, Ukrainian farmers have harvested 2.4 MMT of winter rapeseed from 1 million hectares (79 percent complete) with yields below last year’s levels (2.2 MT/ha versus 2.4 MT/ha last year). Despite lower yields, analysts expect Ukrainian rapeseed production to hit record levels this year. 


Comprehensive Feasibility Study: U.S. Beef Cattle Identification and Traceability Systems

In response to the 2016-2020 Beef Industry Long Range Plan’s key strategic objective, “Secure the broad adoption of individual animal ID traceability system(s) across the beef community to equip the industry to effectively manage a disease outbreak while enhancing both domestic and global trust in U.S. beef and ensuring greater access to export markets,” WPI researched and wrote the industry’s most foundational analytical document on animal identification and traceability. The report offers a series of conclusions based on, among other methodologies, a 600-plus respondent quantitative survey, 90-plus interviews with industry participants from all sectors), and a deep-dive review of 9 global systems supported by direct interviews with foreign industry association and government officials.

Since the report’s initial rollout at the 2018 NCBA Convention in Phoenix, AZ, WPI has presented findings to and led constructive discussion with over 30 audiences of stakeholders from across the industry and beyond.




Updated Analysis: Exporting Corn through U.S. Beef and Pork

On behalf of the U.S. Meat Export Federation (USMEF), in 2018 WPI delivered the results of an updated study aimed at quantifying the value red meat exports deliver to U.S. corn producers. The original 2016 study, as well as the 2018 follow-up, also quantified the impact that red meat exports have on select corn co-products such as distiller’s dried grains with solubles (DDGS). The updated 2018 study concluded that 2018 beef and pork exports will use a combined total of 14.9 million tons of corn and DDGS, which equates to an additional 459.7 million bushels of corn produced – an increase of 29 percent over the 2015 projections.



WPI on Twitter


What most worries you?

Search World Perspectives

Sign In to World Perspectives

Don’t have an account yet? Sign Up