Dr Dinesh T Bhosale March 21 2013

Dr. Dinesh T. Bhosale March 21, 2013

Corn to Six-Week Peak on Dwindling Supplies Source: Reuters (dated 19/03/2013) March 19 - Chicago Board of Trade (CBOT) corn futures rose nearly 1 percent on Tuesday to a six-week peak on dwindling supplies of corn, slow farmer selling and firm cash basis markets. Active spot May futures broke above technical resistance at the 200 -day moving average, reaching a session high of $7. 31 per bushel, the highest for a spot contract since Feb. 6. "Corn is reflecting the tight cash situation and strong basis levels. I also think they're putting a little premium in ahead of the USDA report next week, " Mc. Cambridge said. Tight supplies of U. S. corn are expected to again be confirmed when the U. S. Department of Agriculture (USDA) releases its quarterly stocks report at 11: 00 a. m. CDT ( 1600 GMT) on Thursday, March 28. USDA also will release its prospective plantings of U. S. crops on that day. In its March supply/demand report, the USDA projected the smallest supply of corn in 17 years at the end of summer in the United States, the world's largest supplier. Wheat resumed its upward march, a day after tumbling 1. 5 percent as investors liquidated long positions on concern about bank deposits in Cyprus and how a bailout in the country would affect the euro zone. Wheat's tumble on Monday also reflected profit taking after seven straight sessions of advances. "We pushed the market down to oversold conditions so there is some short-covering and profit-taking, " said Shawn Mc. Cambridge, analyst for Jefferies Bache. "Also, we're seeing some export tenders show up so it looks like we've gotten down to a point to draw some business in. " Soybeans reversed five days of losses and firmed as investors saw the potential for increased U. S. export business amid slow shipments of soy from South America and following news that China, the world's largest soybean buyer, planned to cancel soy orders from Brazil. Soybean futures had tumbled near 5 percent over the past five trading sessions as China moved to the sidelines, a large crop of South American soy became available to buyers and as crop weather prospects improved in the United States. At 10: 49 a. m. CDT (1549 GMT) , CBOT May wheat was up 7 -1/4 cents per bushel at $7. 20 per bushel, May corn was up 6 at $7. 26 and soybeans for May delivery were up 8 -1/2 cents per bushel at $14. 18. CHINA'S MOVES SCRUTINIZED; EURO ZONE'S TOO Traders said the soybean market was on edge after China's leading soybean trader, the Sunrise Group, said it would cancel almost 2 million tonnes of Brazilian soybean cargoes because shipments have been delayed by severe port congestion in the South American nation, a company official said on Tuesday. "The Chinese cancellations indicates Chinese demand is a little softer than people realized. If they really needed the beans they wouldn't have canceled, " said Sterling Smith, futures specialist for Citigroup. Wheat, corn and soybean investors also were nervous a day after prices slid on a strong dollar and risk aversion on fears of financial turmoil in Cyprus and the euro zone. "Grains and beans could work lower unless there is a big breakdown in the dollar, which is doubtful given the Cyprus situation, " Smith said. "People will probably keep buying the dollar and selling commodities. " The dollar was flat to firm and crude oil was weak as global markets continued to digest the potential longer-term impact of the bailout of Cyprus and that country's plans for a levy on bank deposits to raise cash for recapitalisation of its banking sector. The chairman of euro zone finance ministers said there will be no need to impose a levy on assets in other euro zone countries. U. S. crop watchers were also encouraged by better weather. "There also is more moisture in the Midwest which will improve soil moisture, " Citigroup's Smith said. Below-normal temperatures and wetter weather are expected in the U. S. crop belt over at least the next two weeks, which will help boost depleted soil moisture reserves but also slow early spring fieldwork and corn plantings, an agricultural meteorologist said on Tuesday. "It looks like below normal temperatures on into the first of April so there certainly won't be much planting done, " said Don Keeney, meteorologist for MDA Weather Services.

From allaboutfeed. net • • India: Decline in maize production According to Second Advance Estimates of Production of Foodgrains for 2012 -2013 forecast, there is a 3. 2% decline in the production of maize from 21. 76 million tonnes to 21. 06 million tonnes. "In a globalised and market determined economy, there is always a competing demand on raw materials from different user industries, " said Union Commerce & Industry Minister Anand Sharma in a written reply in the Lok Sabha. "At present, there is no such proposal to ban or restrict the export of maize, " he said. "The export of agricultural products depends on various factors including availability of surplus over and above the requirement of buffer stock including strategic reserve, if any, concerns of food security, diplomatic/humanitarian considerations, international demand supply situation, quality standards in the importing countries, varieties traded and price competitiveness, need to balance between remunerative prices to the growers and availability of agricultural products to common man at affordable prices, " said the minister. (allaboutfeed. net)

Hindu Business Line • • Chicken may rule firm as demand outstrips supply Rising prices of maize are likely to be a source of concern for the Reserve Bank of India over the next two years, with the demand-supply gap for the key feed ingredient expected to exacerbate in this period. Food inflation in India has been driven by a sharp rise in the cost of poultry meat, which in turn has been spurred by the spiral ascent of maize (corn) prices globally. Chicken prices shot up by 21 per cent in January 2013 in comparison to the corresponding month of the previous year. It was the primary driver of food inflation during the month. Prices of poultry were nearly 14 per cent higher on an average in 201112 than the previous year. Simultaneously, eggs and milk prices have also been rising steadily as a consequence of costlier feed. According to International Grains Council (IGC) forecasts, production of maize is expected to fall short of consumption by 15 million tonnes (mt) in 2013 -14, resulting in upward pressure on prices in India and overseas. The gap is expected to narrow to 3 mt in 2014 -15 as cultivation of the crop is stepped up and in 2015 -16, the situation will vastly improve as production outstrips demand by 3 mt, which will expand to 7 mt in 2016 -17 and 2017 -18. Over the past five years, production of maize has only risen by 0. 9 per cent, even as consumption grew by 1. 7 per cent. In 2013 -14, however, production will shoot up by 10. 3 per cent and consumption by 6. 2 per cent. Over the 2014 -15 to 2017 -18 period, demand is expected to grow by 1. 7 per cent and consumption by 5. 5 per cent. Spot prices of maize have fallen from their peak of Rs 15, 770 a tonne on the MCX in August 2012. But the worst appears to be over and the long-term trend for the agri-commodity is upward. Corn is presently trading at Rs 13, 125 a tonne on the MCX. The immediate support is at Rs 12, 950/ tonne and the support after this level is at Rs 11, 750/ tonne. The key resistance will be at Rs 1, 410 a tonne. Maize is the third-largest agricultural crop in India, accounting for over 50 per cent of total kharif coarse cereal production. Production of maize has grown at a compound annual growth rate (CAGR) of 4. 9 per cent over the past decade and amounted to 21. 5 mt in 2011 -12. In contrast, consumption of maize has grown at a CAGR of 3. 28 per cent and stood at 18 -18. 5 mt last fiscal. Around 50 per cent of total consumption is used for feed, primarily poultry feed, while around 5 -10 per cent is used by the starch industry. The weather will play an important role in determining the extent of maize production in 2013 -14. Temperature, rainfall and moisture are factors that determine the condition of the crop. But the minimum support prices announced by the Government for maize will play an equally important role in motivating greater cultivation of the commodity. At any rate, the availability of substitute products at a cheaper rate could weaken demand, particularly if the price of corn becomes too high to stomach. For example, jowar and bajra may be substituted by poultry feed manufacturers instead of maize. But seasonal fluctuation should be expected, as prices tend to be lower as harvesting progresses and produce starts coming into the market, but rises at the time of sowing and before harvesting due to the tight supply situation.

Hindu Business Line • • India’s demand for milk likely to touch 210 mt by 2020 -21: Amrita Patel National Dairy Development Board (NDDB) Chairman Amrita Patel on Thursday said with increased income levels, the demand for milk is expected to go up to 200 -210 million tonnes by 2020 -21, and called for collective efforts and increased productivity. While delivering the keynote address at the 41 st Dairy Industry Conference, with theme “Global Dairy Industry and Food Security” in Mumbai, she said the first obligation of the dairy industry is to continue to build and expand the domestic market and find creative ways with the Central and State Governments to ensure that an increasing proportion of children drink milk, according to an NDDB release here. Dr Patel pointed out that milk production has been growing at over four per cent annually compared to the growth in world milk production which is 2. 75 per cent. Per capita availability of milk has also increased to 290 gm a day, which is comparable with the world per capita availability of 289 gm/day. Stressing upon a scientific approach, she said a comprehensive Web-based National Information Network covering all aspects of productivity enhancement, i. e. , breeding, feeding and healthcare, has been developed at NDDB and is available to any organisation, producer, service provider and policy maker that wishes to link up. The NDDB is also setting up a national HRD facility to offer need-based technical, managerial and leadership training programmes, deliver distance education and facilitate training of trainers. The dairy industry must ensure that prices remained affordable and competitive, she added.

Category 2007 2020 CB cattle 33. 06 65. 30 Indigenous cattle 166. 02 161. 37 Buffalo 105. 33 115. 60 Sheep 71. 56 74. 78 Goat 140. 53 142. 23 Pigs 11. 13 11. 91 Poultry 648. 83 1062. 69 Fish** 7. 13 12. 38 ** million tons Crossbreds double, poultry 1. 6 times, fish 1. 7 times Source: NIANP, 2012

Scenario I – 100% each to productive & non productive animals Scenario II – 90% to productive animals & 80% to non productive animals Scenario III – 90% to productive animals & 60% to non productive animals

Category Dry fodder Green fodder Concentrate Requirements * Availability * % (million tons) Deficit * 530 404 24 880 96 NIANP Estimates 590 61 33 37

Oilseed Production (Million tons) Extraction rate of cake (%) Potential Oil Cake (MT) 6. 95 # 60 2. 92 Rape & Mustard 6. 96 67 4. 66 Soybean 12. 2 73 8. 91 Sesame 0. 73 60 0. 44 Sunflower 0. 54 70 0. 38 Lineseed 0. 14 67 0. 09 Niger 0. 09 72 0. 06 Safflower 0. 09 70 0. 06 Cotton 35. 2* 84 3. 32 Ground Nut Total 20. 85 Ø # kernels to nuts ratio- 70% Ø *million bales of 170 kg each consisting of 2/3 seeds and 1/3 cotton Ø Assuming 60 -70% of the potential availability ( leaving aside the direct consumption, use as seeds, differences in extraction efficiency etc) the actual availability works out to be around 12 -14 million tons.

Breeders Broilers Eggs 32 Million 53 Million 60 mil/wk 100 mil/wk 65 Billion 93 Billion Source: Internal analysis

65 Billion eggs produced / year` @ 125 Grams of layer feed / egg 8. 1 Million MT of layer feed Approximately 85% is home mix Sizing the market for poultry feed Source: BAHS 2010 (Ministry of Agriculture); Internal estimates

60 Million broiler / Week @ 3. 5 Kg of feed / broiler 10. 9 million MT of broiler feed Sizing the market for Poultry feed Source: BAHS 2010 (Ministry of Agriculture); Internal estimates

Shrimp 0. 19 MT Fish 3. 65 MT 0. 34 MT 6. 76 MT Source: Internal analysis

3. 65 million MT of pond cultivation 525, 000 MT of floating fish feed @ 1. 2 FCR 70, 000 MT of sinking fish feed @ 1. 5 FCR Rest is RM feeding (DORB) @ 3. 0 FCR Sizing the market for aqua feed Source: Internal estimates

185, 000 MT of shrimp production @ 1. 5 FCR > at least 50% now vannamei 2. 80 lakh MT of shrimp feed Sizing the market for aqua feed Source: Internal Estimates

State 4, 05, 000 34. 0 Area developed (ha) 50, 405 31, 600 2. 7 12, 877 40. 8 1, 50, 000 12. 6 76, 687 51. 1 800 0. 1 130 16. 3 Tamil Nadu 56, 000 4. 7 5, 286 9. 4 Kerala 65, 000 5. 5 14, 106 21. 7 8, 000 0. 7 1, 910 23. 9 Goa 18, 500 1. 6 310 1. 7 Maharashtra 80, 000 6. 7 1, 281 1. 6 3, 76, 000 31. 6 2, 271 0. 6 1, 65, 263 13. 9 West Bengal Orissa Andhra Pradesh Pondicherry Karnataka Gujarat Total Potential area ( ha) 11, 900 Potential area ( %) Area developed (%) 12. 5 Source: Internal data

1 • Nutrient Density 2 • Local Availability 3 • Cost 4 • Seasonal Availability 5 • Limited Inclusion Rate 6 • Handling / Processing/ Storage 7 • Health / Production Effects

• To a nutritionist maize is one of the golden ingredients which solves a lot of problems. It is a good source of energy and there is no other ingredient which can compete with maize in terms of its energy value. It is basically a source of energy and gives around 3250 kcal/kg ME. The main advantage of maize is that it contains less crude fiber and the number of incriminating factors are also very less in it. However, it is poor source of limiting amino acids.

• In fact, if maize is available at good prices, it can be included at very high levels. Generally, in broiler diets the inclusion level of maize may vary between 55 -70% from the starter to the finisher stages. As such there is no such upper limit for inclusion of maize because there is practically no toxic or antinutritional factors present there. Today we are looking for some alternative ingredients only because the price of maize has gone up. Had it been available at RS 11 a kg then the formulation job would have been much easier.

• Very difficult to get maize replaced as we do not have any ingredient which is comparable to maize in terms of nutritive values. The only comparison can be made with broken rice. However, in pelleted feeds, broken rice above 20 -25% may pose problem in getting good quality pellets. Wheat may be another option but again you can not get as much energy from wheat as you can get from maize. However, when maize is not available or highly priced then alternatives may be bajra or jower. In mash feed broken rice will also work. Generally, for millets the 20 -25 % inclusion does not have any negative impact. Total replacement of maize is also possible with these ingredients although that will be a high risk affair.

Maize Requirements • • • Broiler Feeds: 6. 5 MMT Layer Feeds: 3. 5 MMT Cattle Feeds” 1 MMT Others: 1 MMT Total: 12 MMT

Raw material cost – accounts for 70% of feed production. Tends to rise when operation becomes bigger. Good input gives better finished products. Paying attention to raw material quality always gives dividend

Feed ingredients are by products from other industries. Quality of raw material depends a lot on the processing of the main material – beyond the control of the manufacturer. A sort of underdog situation !!!!

Difficult indeed – unless there is a high grade QC lab. NIR is the most reliable way to get the most realistic picture. Wet chemistry is time consuming – may be erroneous if the lab technician is not trained enough. Automation in moisture analysis is a good way – needs regular calibration.

Yellow Maize Specifications • • • Moisture Foreign matter Weevilled Seeds Damaged otherwise Discoloured/immature kernels Broken seeds Aflatoxin Free from live weevils : min 12 to max 14. 0% : max 2% : max 5% : max 2% : 30 ppb to 50 ppb

Private Sector % 80% 78% 73% 67% 71% 24% But That Would Require R&D, Which Almost No Indian Company Is Doing Source: European Commission, CII

Rs crore (Current Prices) Sector GDP FY 2009 -10 ICAR Budget FY 2011 -12 Livestock 170, 237 533 Total Agriculture 767, 119 4611 22. 2% 11. 6% Livestock as % of Total By the way, most of this is for dairy! ICAR budgets also ignore animal science Source: CSO, ICAR

Nutreco R&D Expenses Total Sales R&D as % of Sales Tyson Foods EUR 19. 8 million USD 38. 0 million EUR 4. 9 billion USD 28. 4 billion 0. 40% 0. 13% Could we all agree to invest 0. 25%? we need to adopt global animal science R&D funding benchmarks Source: Annual Reports

ü Dr. Dinesh T. Bhosale (Chairman) ü Mr. Rahul Kumar (Deputy Chairman) ü Dr. Sandeep Karkhanis (Deputy Chairman) ü Mr. Amit Saraogi (Deputy Chairman) ü Dr. P. G. Phalke (Hon’ Secretary)