Texas Agriculture January 15, 2016 : Page 4

Red meat prices to keep dropping First U.S. crude oil export in 40 years sails from Corpus Following the U.S. government’s repeal of a 40-year ban on the export of U.S. crude oil, NuStar Energy and ConocoPhillips have loaded the nation’s first export cargo at Port Corpus Christi. The light crude oil, sold to the international trading company Vitol, has set sail from Port Corpus Christi. Major investments in terminal operations at Port Corpus Christi in recent years have primed the South Texas port for a position as a leading exporter of U.S. crude oil. Deep water, dock space and abun-dant storage, along with plans for further channel deepening, will ac-commodate some of the world’s larg-est tankers for efficient movement of crude and condensate from Port Corpus Christi. Port Corpus Christi is connected via intricate pipeline systems to the South Texas Eagle Ford Shale and to the Permian Basin. “Infrastructure improvements at Port Corpus Christi have placed our port in a unique position as a criti-cal component in the export of U.S. crude and condensate. Port Corpus Christi’s deep draft ship channel and strategic location to some of the largest production areas in the U.S. provide a secure and competitive supply chain to markets worldwide. Future capital improvements, in-cluding deepening the ship channel, will accommodate larger vessels that are required to cost-effectively supply U.S. crude oil to global mar-kets,” said John LaRue, Port Corpus Christi executive director. NuStar has invested heavily in re-cent years to expand its South Texas Crude Oil Pipeline System and in Corpus Christi Terminal operations. “Based on our investments in Corpus Christi and our South Texas pipeline system, NuStar was well-positioned, equipped and staffed to immediately begin loading cargoes for export,” said NuStar President and CEO Brad Barron. “And we plan on further expanding our Corpus Christi operations to provide more options to our customers to move Eagle Ford Shale crude oil, whether it is being moved domestically or internationally. In fact, we are cur-rently in the process of developing a second private dock in the Port of Corpus Christi.” “Today is a great day for our nation, as the first shipment of oil leaves Texas soil through the Port of Corpus Christi. We have made great strides in protecting our national security, economy and the future of the Eagle Ford Shale region by lift-ing the ban on oil exports. Exporting crude oil ensures long-term and sus-tainable growth throughout South Texas,” said Omar Garcia, president and CEO, STEER. Red meat prices are expected to drop, according to an article in Mar-ketWatch . Quite a few individual cuts of meat have already dropped in price—in-cluding ground beef—and should decline even more in the next few months. The price of pork dropped 3.25 per-cent to 4.25 percent from high prices last year, compared with historically rising 2.8 percent. According to MarketWatch , the price of beef rose 6.75 percent in 2015, compared with a historical average rise of 4.1 percent. Prices remained high because of severe droughts that began in Texas and Oklahoma in 2011 and caused ranchers to sell out, lowering cattle inventories. Although herd expansion is un-derway, it takes 16 to 18 months before the beef is ready for consump-tion. Egg prices are also expected to drop this year. Crop, livestock projections for 2016 Lower crop prices are expected to continue until a production short-age in the U.S. or other major pro-ducing region occurs, according to a University of Illinois report. Agricultural economist Darrell Good says corn prices remain pres-sured by three consecutive large crops in the U.S. and expectations of a third consecutive large coarse grain crop outside the U.S. He ex-pects corn prices to average about $3.65 during the current marketing year and $3.85 for 2016-17. Record large soybean crops in the U.S. and South America in 2014 and 2015, combined with an expect-ed record South American crop in 2016, continue to weigh on prices. Good predicts prices may average $8.90 for the current year and stay in that narrow range for the 2016-2017 marketing year. Three consecutive large wheat crops outside of the U.S. are limit-ing U.S. exports and building end-ing stocks. Good says 2015 wheat prices are likely to be less than $4 because of poor quality. He expects 2016 prices to average $4.75. The report also looked at live-stock prices. Good says increases in pork production and exports are ex-pected next year and predicts an av-erage of $50 for hogs in 2015, drop-ping to $48 next year. Good says beef production and exports are also expected to increase. Fed cattle prices in 2015 are projected at $149 and $135 in 2016. J ANUARY 15, 2016 Notable Quotables “Eliminating trade-distorting export subsidies and achieving disciplines on the use of export credits will lower agricultural trade barriers and strengthen U.S. agriculture’s ability to pursue market opportunities in international trade. The measures adopted on food aid also will support U.S. programs that continue to provide food as-sistance around the world.” —Statement by Bob Stallman, former president of the American Farm Bureau Federation, regarding the 10th World Trade Organization’s Ministerial Conference. 4

AgriCurrents

First U.S. crude oil export in 40 years sails from Corpus

Following the U.S. government’s repeal of a 40-year ban on the export of U.S. crude oil, NuStar Energy and ConocoPhillips have loaded the nation’s first export cargo at Port Corpus Christi.

The light crude oil, sold to the international trading company Vitol, has set sail from Port Corpus Christi.

Major investments in terminal operations at Port Corpus Christi in recent years have primed the South Texas port for a position as a leading exporter of U.S. crude oil.

Deep water, dock space and abundant storage, along with plans for further channel deepening, will accommodate some of the world’s largest tankers for efficient movement of crude and condensate from Port Corpus Christi.

Port Corpus Christi is connected via intricate pipeline systems to the South Texas Eagle Ford Shale and to the Permian Basin.

“Infrastructure improvements at Port Corpus Christi have placed our port in a unique position as a critical component in the export of U.S. crude and condensate. Port Corpus Christi’s deep draft ship channel and strategic location to some of the largest production areas in the U.S. provide a secure and competitive supply chain to markets worldwide. Future capital improvements, including deepening the ship channel, will accommodate larger vessels that are required to cost-effectively supply U.S. crude oil to global markets,” said John LaRue, Port Corpus Christi executive director.

NuStar has invested heavily in recent years to expand its South Texas Crude Oil Pipeline System and in Corpus Christi Terminal operations.

“Based on our investments in Corpus Christi and our South Texas pipeline system, NuStar was well-positioned, equipped and staffed to immediately begin loading cargoes for export,” said NuStar President and CEO Brad Barron. “And we plan on further expanding our Corpus Christi operations to provide more options to our customers to move Eagle Ford Shale crude oil, whether it is being moved domestically or internationally. In fact, we are currently in the process of developing a second private dock in the Port of Corpus Christi.”

“Today is a great day for our nation, as the first shipment of oil leaves Texas soil through the Port of Corpus Christi. We have made great strides in protecting our national security, economy and the future of the Eagle Ford Shale region by lifting the ban on oil exports. Exporting crude oil ensures long-term and sustainable growth throughout South Texas,” said Omar Garcia, president and CEO, STEER.

Crop, livestock projections for 2016

Lower crop prices are expected to continue until a production shortage in the U.S. or other major producing region occurs, according to a University of Illinois report.

Agricultural economist Darrell Good says corn prices remain pressured by three consecutive large crops in the U.S. and expectations of a third consecutive large coarse grain crop outside the U.S. He expects corn prices to average about $3.65 during the current marketing year and $3.85 for 2016-17.

Record large soybean crops in the U.S. and South America in 2014 and 2015, combined with an expected record South American crop in 2016, continue to weigh on prices. Good predicts prices may average $8.90 for the current year and stay in that narrow range for the 2016-2017 marketing year.

Three consecutive large wheat crops outside of the U.S. are limiting U.S. exports and building ending stocks. Good says 2015 wheat prices are likely to be less than $4 because of poor quality. He expects 2016 prices to average $4.75.

The report also looked at livestock prices. Good says increases in pork production and exports are expected next year and predicts an average of $50 for hogs in 2015, dropping to $48 next year. Good says beef production and exports are also expected to increase. Fed cattle prices in 2015 are projected at $149 and $135 in 2016.

Red meat prices to keep dropping

Red meat prices are expected to drop, according to an article in MarketWatch.

Quite a few individual cuts of meat have already dropped in price—including ground beef—and should decline even more in the next few months.

The price of pork dropped 3.25 percent to 4.25 percent from high prices last year, compared with historically rising 2.8 percent.

According to MarketWatch, the price of beef rose 6.75 percent in 2015, compared with a historical average rise of 4.1 percent.

Prices remained high because of severe droughts that began in Texas and Oklahoma in 2011 and caused ranchers to sell out, lowering cattle inventories.

Although herd expansion is underway, it takes 16 to 18 months before the beef is ready for consumption.

Egg prices are also expected to drop this year.

Notable Quotables

“Eliminating trade-distorting export subsidies and achieving disciplines on the use of export credits will lower agricultural trade barriers and strengthen U.S. agriculture’s ability to pursue market opportunities in international trade. The measures adopted on food aid also will support U.S. programs that continue to provide food assistance around the world.”

—Statement by Bob Stallman, former president of the American Farm Bureau Federation, regarding the 10th World Trade Organization’s Ministerial Conference.

Read the full article at http://texasagriculture.texasfarmbureau.org/article/AgriCurrents/2369057/287396/article.html.

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