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LIVESTOCKS => AGRI-NEWS => Topic started by: mikey on April 11, 2008, 08:26:18 AM

Title: American Hog News USDA
Post by: mikey on April 11, 2008, 08:26:18 AM
Thursday, April 10, 2008Print This Page
Aid Pleas Begin as US Pork Crisis Bites
US - USDA needs to intervene do something about the increasing cost of pig feed, says the American Farm Bureau Federation (AFBF). Pork producers are feeling the pinch and crisis looms, writes Peter Shinn.


In an article for agri news service Brownfield, he quotes AFBF President Bob Stallman as saying that US pork producers face uncertainty and a dismal outlook and he's calling for US Ag Secretary Ed Schafer to use Section 32 emergency funds to buy up pork and stabilize the cash hog market.

And the Iowa Pork Producers Association isn’t waiting for USDA to act. IPPA issued a statement earlier this week detailing the many ways its members are trying to boost domestic pork consumption and exports in a bid to cut back supplies

However, there’s a limit to ways IPPA can increase pork disappearance, said IPPA President Dave Moody.

"We can only do so much in trying to promote and get people to consume the product. And if we can't enough of it moved, we've got to get supplies cut back, and we're definitely at some pretty high supply numbers right now," he told Brownfield.

Moody didn't discount AFBF's call for additional Section 32 purchases of pork by USDA. He also emphasized that lower cash hog prices are coming at a time of record-high feed prices, so virtually all pork producers are operating in the red.

"You look at the markets, where they're at right now, and by the time you pay your feed bill and what you get out of you pig, you've got maybe $30 left to have bought that pig and got it to the 50 pound-point, whatever it took," Moody explained. "There's not too many people who are going to find a 50 pound pig for $30 and not have any other costs, so nearly everybody is losing money right now."




Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 07:53:03 AM
USDA Quarterly Pigs and Hogs Report: March 2008
U.S. Hog Inventory up 7 Percent
U.S. inventory of all hogs and pigs on March 1, 2008 was 65.9 million head. This was up 7 percent from March 1, 2007, but down 2 percent from December 1, 2007.

Breeding inventory, at 6.14 million head, was up less than 1 percent from last year, but down slightly from the previous quarter. Market hog inventory, at 59.8 million head, was up 7 percent from last year, but down 2 percent from last quarter.

The December 2007-February 2008 pig crop, at 28.1 million head, was up 6 percent from 2007 and up 9 percent from 2006. Sows farrowing during this period totaled 3.05 million head, up 5 percent from 2007 and up 7 percent from 2006. The sows farrowed during this quarter represented 50 percent of the breeding herd. The average pigs saved per litter was 9.21 for the December 2007-February 2008 period, compared to 9.09 last year. Pigs saved per litter by size of operation ranged from 7.50 for operations with 1-99 hogs and pigs to 9.30 for operations with more than 5,000 hogs and pigs.

U.S. Quarterly Hogs and Pigs Inventory: March 2008



U.S. hog producers intend to have 3.05 million sows farrow during the March-May 2008 quarter, up slightly from the actual farrowings during the same period in 2007, and up 4 percent from 2006.

Intended farrowings for June-August 2008, at 3.04 million sows, are down 2 percent from 2007 but up 4 percent from 2006.

The total number of hogs under contract, owned by operations with over 5,000 head, but raised by contractees, accounted for 40 percent of the total U.S. hog inventory, up from 39 percent last year.

Revisions
All inventory and pig crop estimates for March 2007 through December 2007 were reviewed using final pig crop, official slaughter, death loss, and updated import and export data. Based on the findings of this review, an adjustment of slightly more than 2 percent was made to the September 1, 2007 total inventory along with an adjustment of slightly larger than 4 percent to the June-August 2007 pig crop.

Adjustments of less than 3 percent were made to the December 1, 2007 total inventory and September-November 2007 pig crop.




Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 07:56:22 AM
Russian Federation - Livestock and Products Semi Annual Report 2008
Pork production is expected to increase 6 percent in 2008, due in most part to growing investments in swine production and higher reproductive yields, according to the USDA Foreign Agricultural Services. This growth is directly related to investment credit subsidies as laid out by the National Priority Project in agriculture as well as imposition of import restrictions.



2008

Semi-Annual
2007

Annual Summary

Semi-Annual
2006

Annual Summary

Semi-Annual
2005

Annual Summary

Executive Summary
By contrast, beef production is expected to decrease 3.5 percent in 2008 as poor cattle husbandry and generally negative profitability continues to scare away potential investors. Production of beef fell by approximately 5 percent in 2007. The Federal Customs Service issued an order in late 2007 announcing a new list of approved customs declaration points authorized to handle meat and meat products that left out many major points in the Russian Far East and the port of Saint Petersburg. Russia and the United States are currently negotiating new health protocols for live cattle, live pigs, live horses and bovine embryos. Veterinary certificates for beef and bovine semen have already been negotiated.

Overview
Private plots generate 48 percent of cattle, 43 percent of swine and 54 percent of sheep and goats in Russia. The Russian government recently approved a new program that will succeed the National Priority Project in agriculture (NPP) titled, “The State Program for Development of Agriculture and Regulation of Food and Agricultural Markets in 2008-2012,” that encourages pork and beef production and attempts to address Russia’s declining cattle numbers. This program includes import-substitution policies designed to stimulate domestic livestock production and to protect local producers.

In the beginning of 2007, the economic environment for swine production was generally unfavorable. The average production cost was RUR40-45/kilo of live weight, while the farm gate price was RUR40/kilo live weight. Pork producers have been expressing concern for years about sales after implementation of the NPP as pork consumption is growing at a slower rate than pork production. As a result, the pork sector has been lobbying the Russian government to regulate imports in spite of the meat TRQ agreement.

From January-September 2007, 1.38 million metric tons (MMT) of red meat was imported. A 12-year decline in beef production has resulted in limited beef availability in the Russian market leading to a spike in prices. In response, the Russian government has been force to take steps to increase the availability of beef by lifting a meat ban on Poland and by looking to Latin America for higher volumes of product. Feed stocks decreased during the first 11 months of 2007 compared to the previous year which will likely create even greater financial problems for livestock operations in 2008 as feed prices continue to skyrocket. Grain prices increased rapidly in Russia through the middle of July 2007 before stabilizing at high levels as harvest progress reports were released.

The Russian pig crop is expected to increase by 6 percent in 2008, while cattle herds are predicted to decrease by 3.5 percent. Some meat market analysts predict that by 2012, as new and modernized pig farming complexes reach planned capacity, pork production could reach 3.5 MMT – up 75 percent from 2008 estimates.

According to the Russian Statistics Agency (Rosstat), 1/3 of all Russian “large farms” are unprofitable. Many of these are involved in livestock production. Small, inefficient producers are uncompetitive and have already begun disappearing from the market. The Russian veterinary service continues to playa decisive role in meat import supply management.

Production
Swine production is expected to increase by 6 percent in 2008 and will equal 41.7 million pigs. Larger pig stocks are sustained by high meat prices and subsidized credits as part of the now expired NPP. The forecast of 2008 swine production was increased slightly over the previous forecast due to slighter better than expected reproductive yields. The forecast for pork production was also revised and increased by 1.5 percent. This represents a 6 percent increase overall in 2008 from normal slaughter weights and higher reproductive yields. Some meat market analysts predict that by 2012, as new and modernized pig farming complexes reach planned capacity, pork production could reach 3.5 MMT – up 75 percent from 2008 estimates.

Cattle inventories are forecast to decrease 3.5 percent in 2008, continuing a 12-year decline in this sector. In 2008 the cattle herd is forecast to decrease a further 3 percent due to low production and reproductive efficiency. As a result, beef production is expected to fall 3.5 percent. Beef production also fell 4 percent in 2007, as poor cattle husbandry and general negative returns have not made beef an attractive area for investment.

Under the NPP, 114 new pork production facilities are to be built and are expected to raise domestic pork production (live weight) by 855,000 MT in 2008 and 950,000 MT in 2009 (in comparison to 2005 numbers). Many of them will feature foreign equipment imported under a resolution adopted in November 2006 that extended duty-free importation of all agricultural machinery and equipment that are not produced domestically. The Russian government has set a goal for annual domestic pork production of 2.4 MMT (once all proposed measures are fully implemented and successful).

Domestic livestock production is currently cost prohibitive due to unreasonably high production costs, feed conversion ratios and rising energy prices. As a result, 65 percent of swine farms operate with an inefficient business model. Such farms cannot compete with the other 35 percent that operate using the latest technology available. Modernized swine farms are stable due to the fact that they many have their own feed supplies, use modern technologies and management practices, and, in many cases, have their own processing and trading facilities. In general, meat production costs are much higher in Russia in comparison with other countries that export meat to Russia. The Ministry of Agriculture has identified several areas where pork producers need to improve, including:

Swine genetics: Russian breeds represent only 35-38 percent of meat consumed, while domestic meat usually accounts for 60 percent of consumption in other countries, according to Dr. Andrey Lisitsin, Director of Scientific Research of the Institute of Meat Processing. Meat processing companies cannot rely solely on domestically produced meat for their products due to a lack of uniformity and brand standards. Furthermore, at the beginning of 2007, the farm gate hog price was RUR40/kilo, in comparison with RUR50/kilo in the summer of 2006. At the same time, processors were forced to pay RUR60/kilo to ensure appropriate and stable quality.

Integration of new technologies and equipment: Most farms currently use equipment purchased over a decade ago, while Russian agricultural machinery factories sit almost idle. Manual labor is the current modus operandi for more than 50 percent of pig farms.

Education of managers and workers at all levels of farming: Many old cadres are not familiar with modern, up-to-date technologies and management methods.

Construction of swine farms with 200-300 head per farm: This objective would not require significant levels of investment. An efficient system for swine collection and transportation from the production site to the slaughterhouse should be developed to ensure the quality and safety of the meat.

Improve current storage, transportation and trade networks: The predominant players in the Russian meat market are small companies that, in most cases, deliver meat by unrefrigerated ground transport to small collection centers. Meat is then stored at a temperature of -2 to -6 degrees Celsius in most cases, instead of the required -18 degrees. This is mainly due to Russia’s lack of modern cold storage facilities.

Processed meat production totaled 2.3 MMT in January-November 2007, up 15.7 percent from 2006. Sausage production also increased 6.5 percent to 2.1 MMT, according to Rosstat. Of the 5 MMT of meat produced in Russia, 3 MMT was produced by small farms or private households. Animals are slaughtered at on–farm facilities under generally unsanitary conditions. According to Dr. Lisitsin, so far as he is aware, Russia is the only country where carcasses are washed with water and brushed after slaughter, which significantly reduces the shelf life of the meat products to 10-15 days, whereas the shelf life of chilled meat from Argentina is 90 days and from Brazil, 120 days.


Feed Stocks
Feed stocks decreased during the first 11 months of 2007 compared to the same period in 2006. Low feed stocks will create even greater problems for livestock operations in 2008 as domestic feed prices have been skyrocketing. Grain prices increased rapidly in Russia through the middle of July before finally stabilizing at high levels as harvest progress reports were released (see RS8013).

Increases in the consumption of feed by the livestock sector and potentially high demands on grain exports will place upward pressure on grain prices beginning late fall 2008. To limit the negative effects of grain exports on feed prices, the Russian government issued a resolution on December 15, 2007 that authorizes the government to impose, as deemed necessary, the export of several “essential commodities” such as grain and grain products (see RS7094).

Currently Russia is developing protocols to register feed produced from genetically modified organisms (GMOs). A Russian government resolution transferred the testing and registration of feeds containing GMOs to the Ministry of Agriculture’s Federal Veterinary and Phytosanitary Surveillance Service (VPSS). VPSS has developed the draft administrative regulation for registration and has already begun accepted applications based on the procedures described in that draft (see RS7078).

 
*One feed unit equals 1 kilogram of oats in energy equivalent.
 
Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 08:00:12 AM
Feed Prices Whipping up a Perfect Storm
US - All those in hope of some relief on food prices this summer can think again as feed prices continue their relentless increase.



The increase is largely due to rapidly increasing animal feed costs, a result of competition for corn and oilseeds between livestock and poultry feeding and alternative fuels production, the American Feed Industry Association (AFIA) board of directors was told at its recent meeting.

AFIA President & CEO Joel Newman, in his state of the industry report to the AFIA board, said Congress and the Bush Administration must recognize that $5 a bushel corn – and similar price jumps for soybeans and other food grains -- can no longer be viewed as anomalies or temporary. “$5 corn looks to be closer to the new ‘normal,” Newman said, adding ethanol’s use of corn will hit 27% of the U.S. corn crop during the 2007-2008 crop year.


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"The industry’s cost of production escalation has only just started to work its way through the system" 
AFIA President & CEO Joel Newman
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The AFIA Board was told the average 5% increase in consumer food prices experienced last year is just the beginning, with food prices likely jumping another 10-12% this year.

“The industry’s cost of production escalation has only just started to work its way through the system. Feed price increases will be pushed through the food chain over the next six months,” Newman said, “Consumers can expect to see even higher prices for meat, poultry and dairy products.”

Newman laid out the “perfect storm” of factors forcing food prices higher, starting with crude oil prices topping $100 a barrel and increasing demand for alternative fuels. Couple that demand surge with the effect of global livestock liquidation, particularly in the swine industry, increasing export demand for U.S. grains and oilseeds to meet stronger global demand for animal protein, an 11% increase in world feed production – which has led to record low U.S. stocks-to-use ratios – combined with a weak U.S. dollar and significant increase in ag commodity speculators, and you have the inevitable pressure on U.S. food prices, Newman said.

Supporting the AFIA internal analysis is a report released this week by the Coalition for Balanced Food & Fuel, of which AFIA is a member. In his report, presented at the Annual Meat Conference this week in Nashville, TN, Dr. Tom Elam, president of Farm Econ, an analysis firm, said he estimates the cumulative costs to the food industry of the federal renewable fuel program will be about $100 billion for 2005-2010.

Elam said broiler industry input costs this year are up $3.4 billion (53 cents per bird); turkey input costs are up $646 million ($3.40 per turkey); swine input costs are up $2.9 billion ($38 per hog); cattle input costs are up $2.24 billion ($117 per fed beef animal) and dairy input cost are up $2.7 billion.

AFIA is the world’s largest organization devoted exclusively to representing the business, legislative and regulatory interests of the animal feed industry and its suppliers. Membership includes over 500 domestic and international companies; state, national and regional associations. Firms are feed and pet food manufacturers, integrators, pharmaceutical companies, ingredient suppliers, equipment manufacturers and companies which supply other products, services and supplies to feed manufacturers.



Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 08:03:06 AM
Livestock Slaughter: Total Red Meat Production Down from Previous Month
By the USDA's National Agricultural Statistics Service

 

Commercial red meat production for the United States totaled 3.97 billion pounds in February, up 10 percent from the 3.62 billion pounds produced in February 2007.

Beef production, at 2.04 billion pounds, was 4 percent above the previous year. Cattle slaughter totaled 2.64 million head, up 3 percent from February 2007. The average live weight was up 11 pounds from the previous year, at 1,285 pounds.

Veal production totaled 11.0 million pounds, 9 percent below February a year ago. Calf slaughter totaled 69,100 head, up 4 percent from February 2007. The average live weight was down 36 pounds from last year, at 272 pounds.

Pork production totaled 1.90 billion pounds, up 16 percent from the previous year. Hog kill totaled 9.38 million head, up 16 percent from February 2007. The average live weight was up 2 pounds from the previous year, at 271 pounds.

Lamb and mutton production, at 15.0 million pounds, was up 4 percent from February 2007. Sheep slaughter totaled 211,400 head, 3 percent above last year. The average live weight was 143 pounds, up 3 pounds from February a year ago.

January to February 2008 commercial red meat production was 8.38 billion pounds, up 9 percent from 2007. Accumulated beef production was up 4 percent from last year, veal was down 16 percent, pork was up 15 percent from last year, and lamb and mutton production was up 1 percent.



U.S. Monthly Commercial
Red Meat Production




U.S. Monthly Commercial Slaughter
Hogs
Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 08:34:59 AM
Wednesday, April 09, 2008Print This Page
AFBF Urges Help for Pork Producers
WASHINGTON, DC – The American Farm Bureau Federation this week asked the Agriculture Department to make additional Section 32 purchases of pork to help provide some stability for the sector, as well as supply the healthy protein source to users of the nation’s nutrition programs.


“Additional Section 32 purchases would help the pork industry at this critical time,” said AFBF President Bob Stallman in a letter to Agriculture Secretary Ed Schafer. “We request that you evaluate such a purchase for the benefits that it would provide both producers and consumers.”

Section 32 is a permanent appropriation USDA uses to support non-farm program commodities while enhancing nutrition programs. The purchases could help the pork industry during a crucial time, said Stallman.

According to AFBF, prices for live market hogs have plunged to levels not seen in nearly a decade. On April 1, wholesale pork prices hit their lowest level in four years at $54.87 per hundredweight, only to rebound somewhat later in the week. Yet, despite the small increase, producers still face uncertainty and a dismal outlook for their industry, Stallman said.


Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 08:37:28 AM
Wednesday, April 09, 2008Print This Page
New Study Proves Virkon® S Misting's Superior Value
Us - A team of leading researchers in the USA have found that directed misting of a four per cent solution of disinfectant Virkon® S can successfully reduce environmental bacterial contamination, such as Staphs and Salmonella, to extremely low levels - significantly lower than many other disinfectant could achieve.

 
The misted dilution was successful in reducing environmental bacterial CFUs by > 99.9999% or the equivalent of a highly effective 6 logs1. Typically, a reduction factor or 3 to 5 logs is considered the minimum needed for effective disinfection, says manufacturer DuPont Animal Health Solutions.

Based on their earlier work2 with Virkon® S, Gage Patterson and Paul Morley of the Animal Population Health Institute and Colorado State University, USA performed a new field study to evaluate the efficacy of four per cent Virkon® S applied as a mist to surfaces in a large animal hospital. The purpose of the new study was to find a less labour intensive and disruptive means to disinfect the veterinary hospital's large animal facilities with extensive, unsealed electrical conduits and fixtures in the high ceilings of the buildings.

Various locations around the hospital were inoculated with Staphylococcus aureus and Salmonella enterica onto polyester transparencies. After misting with Virkon® S viable bacterial numbers were quantified and compared with growth from control transparencies to assess the reduction in bacterial count. The study showed that the mean reductions in recovery of Staphylococcus aureus and Salmonella enterica were significantly reduced by > 6 logs for both bacteria, an equivalent of a > 99.9999% reduction in CFUs.

On a Par and Better
When compared with other disinfectants, the authors stated that the efficacy of Virkon® S was similar to that achieved through aerosolisation of formaldehyde, but superior to that achieved by aerosolisation of a glutaraldehyde and quaternary ammonium compound mixture.

"From our experience with previous studies2, we selected a four per cent solution of Virkon® S as this has the greatest killing capacity,"explains Paul Morley.

"Our high, 20 foot surfaces and electrical work make cleaning and disinfection a challenge. We clean all the surfaces first, followed by a combination of foaming with disinfectant and then misting with Virkon® S to minimise environmental bacterial loads. Directed misting disinfection using Virkon® S enables us to get into all the difficult-to-access nooks and crannies," he adds.

In conclusion his team found that the directed misting application of four per cent Virkon® S proved to be a very rapid and efficient method of distributing disinfectant that could be easily applied to a variety of agricultural or veterinary settings. References
Efficacy of directed misting application of a peroxygen disinfectant for environmental decontamination of a veterinary hospital. G Patterson, PS Morley, KD Blehm, DE Lee, M Dunowska. JAVMA, Vol 227, No 4, August 15, 2005
Dunowska M, Morley PS, Hyatt DR. The effect of Virkon S fogging on survival of Salmonella enterica and Staphylococcus aureus on surfaces in a veterinary teaching hospital. Vet Microbiol 2005; 105:281-289.
Title: Re: Aid Pleas Begin as US Pork Crisis Bites:
Post by: mikey on April 12, 2008, 10:06:09 AM
Friday, April 11, 2008Print This Page
Pork Futures: Pork Mostly Weak
KANSAS CITY - Lean hog futures closed mostly lower, with April through October down while deep deferred December and February '09 rallied to finish modestly higher.


The summer and early autumn contracts fell rather sharply near the middle of the session on the wide premiums to current cash prices held by those contracts, analysts and brokers said. Technical factors such as broken moving average support and losses that slipped into the chart gaps on some contracts also contributed to the declines.

A broker said uncertainty about the near-term direction in wholesale pork prices also left some traders cautious about buying at that time.

After one-week lows were hit, selling interest slowed, and some traders, said to be mainly locals, began buying. Some of the buying was said to be short covering.

A broker/analyst said with the premiums carried by futures to current cash prices and April hogs scheduled to expire on Monday, there could be additional pressure on May and June hogs into next week. However, the direction that cash hog and wholesale pork prices take from here could affect the next two trading months into and past April's expiration.

Rich Nelson, analyst with Allendale Inc. in McHenry, Ill. said the gains that were posted in lean hogs last week through Wednesday occurred without any significant new developments, and the trading volume during the rally was not all that big. It appeared that there was not enough bullish news available this session to keep the rally going, he said.



Title: Re: American Hog News USDA
Post by: mikey on April 14, 2008, 08:50:00 AM
Friday, April 11, 2008Print This Page
Export Markets Are Bright Spot For US Pork and Beef Industries
US - Continued success in the export market helped buoy the US pork industry in the first two months of 2008, according to data released by the US Department of Agriculture (USDA) and compiled by the US Meat Export Federation (USMEF).

 
“The growth engine for the US meat industry will continue to be the export market,” said Philip M. Seng, USMEF president and CEO. “The weakened US dollar, competitive pricing for US exports, and declining production by some of our competitors combine to create conditions that support continued growth internationally.”

The US pork industry enjoyed its fifth consecutive month of record-breaking exports (including variety meats) in February. Exports in February reached 346 million pounds (156,969 metric tons), an increase of 6 percent over the record set in January, and a 55 percent jump over export totals from February 2007.

“Pork production is running 12 percent over last year, making it impossible to raise prices to cover the ever-increasing costs of production,” said Erin Daley, USMEF manager of research and analysis. “Without pork exports, at these production rates the US market would have to absorb the equivalent of an additional 60,000 hogs per day, which would drive prices down significantly.”

For the two-month period (January-February 2008), pork plus pork variety meat exports were up 41 percent, totaling 671.6 million pounds (304,651 metric tons) valued at $685 million.

The US beef industry export news also is positive. Exports of beef muscle cuts increased 36 percent to 168.5 million pounds (76,445 metric tons) when compared to the same two-month period in 2007, and beef variety meat exports increased 17 percent to 118 million pounds (53,529 metric tons) for a combined total of 286.5 million pounds (129,974 metric tons) valued at $442 million, an increase of 40 percent.

Pork export highlights
On a volume basis, China/Hong Kong was the largest market for US pork and pork variety meats for January/February 2008 (164.7 million pounds or 74,745 metric tons – a 287 percent increase over the same time period in 2007). However, Japan remains No. 1 on a value basis at $210.9 million, or 31 percent of total pork and pork variety meat export value.

Other highlights from the two-month period for pork plus pork variety meat exports:

Japan: up 4 percent to 143 million pounds (64,927 metric tons)
Mexico: up 2 percent to 122 million pounds (55,384 metric tons), but still trailing the record export volumes of 2006
Canada: up 28 percent to 59.4 million pounds (26,955 metric tons). Exports were basically on track with the strong volumes recorded during the final quarter of 2007, reflecting large live hog imports from Canada
Russia continues to be a tremendous growth market: 164 percent growth to 58.9 million pounds (26,716 metric tons, including 21,812 metric tons of muscle cuts and 4,904 metric tons of variety meats). “This is an excellent example of the competitiveness of US pork, enhanced by the weak dollar,” noted Daley. February exports at 34.8 million pounds (15,786 metric tons) were nearly equal to the monthly record of 35.1 million pounds set in November 2007.
South Korea: down 2 percent to 53 million pounds (24,051 metric tons), but February exports were larger than any monthly volume last year with the exception of December. Also note that South Korean import statistics show imports from the United States up 10 percent while imports from the EU are down 16 percent and those from Canada are down 10 percent.
ASEAN: exports to the Philippines increased 141 percent to 7.6 million pounds (3,470 metric tons) and exports to Vietnam grew from essentially zero to 2.4 million pounds (1,099 metric tons). Total exports to the region in February (nearly 6.7 million pounds) surpassed the monthly record set in December 2007.
EU: exports were up 83 percent to 11.6 million pounds (5,275 metric tons), primarily destined for France (4.4 million pounds), Germany (1.8 million pounds) and Italy (1.3 million pounds). However, USMEF notes that US exports (reported by the Department of Commerce) are significantly larger than EU imports, reported by the European Commission. For example, Department of Commerce pork export stats for January 2008 show 3.8 million pounds while EU stats show 2.0 million pounds of beef imports from the United States.
Caribbean: up 42 percent to 8.3 million pounds (3,780 metric tons), including exports to the Dominican Republic (up 200 percent to nearly 2.8 million pounds).
Central and South America: up 4 percent to 11.7 million pounds (5,337 metric tons) led by Honduras (up 3 percent to 3.5 million pounds).
Oceania: down 16 percent to 14.6 million pounds (6,635 metric tons), but Daley notes the good news that the Australian Productivity Commission released its final report and did not recommend safeguard action against pork exports to Australia. Therefore, the United States can continue to export pork to Australia duty-free.
Taiwan: down 19 percent to 5.1 million pounds (2,341 metric tons) as market access issues continue to impede US pork exports.


Title: Re: American Hog News USDA
Post by: mikey on April 15, 2008, 07:27:41 AM
Soybean and Livestock Go Hand in Hand
US - Livestock and poultry consume about 98 percent of domestically used soybean meal, making them the No. 1 customer for U.S. soybean producers.


 
Soybean harvest

It's always a good idea to know more about one's top customer, which is why the United Soybean Board and the soybean checkoff funded research to identify SBM usage by state. Knowing SBM usage by state allows soybean farmers to see the value livestock and poultry bring, both to their state's soybean industry and their state and local economies.

"It's important to realize what a big customer animal agriculture is for soybean farmers," says Tom Brown, USB director and a farmer from Morral, Ohio. Brown sees the connection between soybean farmers and livestock producers firsthand, as his brother serves on the National Pork Board.

The top 10 SBM-consuming states in ranking order are Iowa, North Carolina, Arkansas, Georgia, Texas, Minnesota, Alabama, Mississippi, California and Oklahoma. Each of these states boasts a strong animal agriculture economy.

One interesting trend is that most top SBM-consuming states do not grow much of their own soybeans. Of the top 10 SBM-consuming states, only Iowa and Minnesota are producing enough soybeans to meet the demands of their livestock and poultry producers.

The top 10 soybean-producing states are Iowa, Illinois, Minnesota, Indiana, Missouri, Nebraska, Ohio, North Dakota, South Dakota and Kansas. Together those states account for nearly 59 million acres of soybean production.

"Animal agriculture is vitally important to soybean farmers, but it is also important to rural America," says Brown. "Livestock and poultry production adds revenue to rural America in the form of income tax, property tax and employment."

To learn more about the top SBM-consuming states and how they are the number one customer for soybean farmers, visit www.animalag.org. You can click on Supporting Studies and Data and use the Production Map tool to see how your state ranks in soybean acres; SBM utilization; and beef, dairy, pork, poultry and sheep production.

USB is made up of 68 farmer-directors who oversee the investments of the soybean checkoff on behalf of all U.S. soybean farmers. Checkoff funds are invested in the areas of animal utilization, human utilization, industrial utilization, industry relations, market access and supply. As stipulated in the Soybean Promotion, Research and Consumer Information Act, USDA's Agricultural Marketing Service has oversight responsibilities for USB and the soybean checkoff.

Title: Re: American Hog News USDA
Post by: mikey on April 15, 2008, 07:39:54 AM
Monday, April 14, 2008Print This Page
Now Could Be TheTime to Invest in Pigs
IOWA - With hog prices so poor that a farrow to finish hog operation would lose 30 percent of its asset value in a year, would anyone want to build more hog buildings and expand operations, asks David Kruse, president of CommStock Investments Inc.



The hog market is cyclical and when weak non-integrated producers either tire or are financially forced out, the hog market will turn and profits return, he says in an article in Iowa's Times Republican. He says that now could be the perfect time to invest and take advantage of the next upturn in the hog price cycle.


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"There is a time and tested adage that when corn prices set major highs, livestock prices will follow with accompanying new highs after liquidation from preceding industry losses occur. " 
avid Kruse, President of CommStock Investments Inc.
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There is a time and tested adage that when corn prices set major highs, livestock prices will follow with accompanying new highs after liquidation from preceding industry losses occur. And although Kruse believes there is some merit in the old adage, producers must also remember that the modern industry is highly integrated and so the outcome may not necessarily be the same.

Packers own many of the hogs they process today so when fully integrated, profitable processing margins eliminate or minimize production losses on these hogs.

Inherent Advantages
This gives integrated producers like Smithfield Foods an inherent advantage over independent producers who only market hogs. Sustained high production levels of hogs have resulted in low pork prices to retailers and whatever bargain they pass on to consumers. The demand base for pork, both domestic and export has been expanded by sustained large supplies of pork.

Fertilizer costs have soared to where NPK for corn can cost $150/acre. Manure can replace most commercial fertilizer requirements so has become valuable, a profit center in itself for farmer/feeders.

Demand for manure to manage fertilizer costs has generated interest from farmers in providing sites for hog production facilities to hog companies. These buildings are located relative to adjacent crop ground to facilitate manure application.

Title: Re: American Hog News USDA
Post by: mikey on April 15, 2008, 07:44:04 AM
Monday, April 14, 2008Print This Page
China Link Adds Impetuts to Indiana Pork Business
US - Solid corn and soybean prices and slumping hog prices are spelling trouble for Indiana pork producers. Its proving difficult to compare income vs. expenses on the hog budget sheet right now.



However,  report in the states Prairie Farmer, says that in spite to tough time, one Indiana hog company is moving forward. Whiteshire Hamroc LLC, a Noble County swine genetics company, announced a joint venture with Tangrenshen, an integrated pork company in Huhnan Province, China.

Whiteshire Hamroc is the largest purebred genetic producer in the USA and will supply pigs to the Chinese company. Pigs headed to the Far East will include highly-tested Yorkshires, Landrace and Durocs.

This is no small project. The Chinese pork company will introduce 1,000 females from Whiteshire Hamroc's Nucleus herd into their system. They will become the base for what the Chinese businessmen hope will become an operation that produces 10 million market pigs per year.

For technology buffs, there's an interesting angle to the arrangement. This is far from a 'sell them and leave' arrangement. Instead, Whiteshire Hamroc with continue working with the company, and be involved in monitoring and assessing daily production activities. How can that happen when the two businesses are literally a world apart? Enter the power of the Internet. The system will allow the Indiana pork company to provide genetic analysis and recommended matings for the company all the way off in China.


Title: Re: American Hog News USDA
Post by: mikey on April 16, 2008, 07:42:44 AM
Tuesday, April 15, 2008Print This Page
Pork Commentary: Exports on a Roll
US - Last week Jim Long reported that the Iowa-Minnesota lean price was US$48.89 on 21 March. Three weeks later - 10 April - the price was US$ 58.76, giving a 10¢ ($20 per head) increase in 3 weeks. He says producers can expect another $30/head increase in the next few weeks.

 

We have believed hog prices would tear ahead and it is happening.  But why?
Exports are on a roll. United States exports in February were up 55 per cent over February last year. China – Hong Kong was up 433 per cent.

Exports accounted for almost 25 per cent of all U.S. pork production. One out of four hogs are going somewhere else (Canadians take note – export pork is exempt from COOL. Do you really think no one will kill your hogs?)

Exports are saving our bacon. Prices would be even worse if not for foreign markets.

We expect exports to continue at record levels. The European price for hogs last Friday was 1.64 Euros a kilogram ($1.14 US per lb). Since January, Europe’s hog price has risen from 90 Euros per kilogram - an increase of $100 US plus per head.

With our hogs significantly lower priced than the Europeans, we have a huge price advantage in export markets (record February exports). This is lifting our prices and will continue to do so. The high price of grain in Europe (corn $9.00 US bushel) has eliminated 750,000 sows out of the European production system. Indeed, the European pork industry is expecting even higher prices.

Advantage Over the World
The US is gaining a huge cost of production advantage relative to the rest of the world. The US advantage is a corn price spread of $3.00 to $5.00 a bushel and has never been greater. The relative competitiveness of the U.S. industry coupled with a weak U.S. dollar is allowing our pork marketers to pound into every conceivable export market. We do not believe the marketplace has fully realized this competitive advantage.

There has never been such a scenario that could so radically increase our prices. Prices can accelerate beyond comprehension fueled by massive global export demand and, for the first time, not by a large decrease in hog numbers.

In our opinion, our industry is liquidating sows. At the same time, poultry and beef supply will decline. This will not only increase exports but domestic demand.

Crazy? Maybe Are we too bullish? We obviously don’t think so. The corn ethanol insanity has pushed grain prices to record levels. The global liquidation of livestock will leave a smaller supply of meat for increasing world demand. The only way to ration is higher prices. Already, Europeans have double our pork price but still have twice our per capita pork consumption. High grain prices have already made feedlot cattle very expensive to produce. Our feed conversion rate, at half that of cattle, is our advantage. In Europe, beef consumption is low, as domestically produced beef is very expensive. High cattle prices have helped lead to higher pork consumption as the red meat alternative.
Demand Increase
In the end, we expect demand for pork globally and domestically to continue to increase. Over the last 5 years, there has been an extra 30 million hogs produced per year every year. That trend is in reverse. We will have fewer hogs produced in the world over the next few months. Demand will push prices to levels we cannot comprehend. Remember, 46 per cent of all meat consumed in the world is pork. Despite our current economic plight, we should not lose sight that we are producing the world’s number one meat.

Title: Re: American Hog News USDA
Post by: mikey on April 16, 2008, 08:28:59 AM
Fetal Pig Programming - An Emerging Concept with Possible Implications for Swine Reproductive Performance
By Mark J. Estienne and Allen F. Harper, VA Tech Tidewater AREC, Suffolk, VA. Livestock Update, April 2008.



Introduction
Consider for a moment the life of replacement gilts from birth to the point at which they farrow their first litters of pigs. At any point within that spectrum of time, modern swine production has benefited from many years of research attempting to define the optimum environment (number of pen-mates, size of pens, temperature, etc.) in which gilts are raised so as to ultimately maximize their reproductive efficiency. For example, litter size in which gilts are raised impacts the size of the litters that they produce. Nelson and Robison (1976) reported the results of an experiment during which litter size was standardized at either six or twelve pigs. Later in life, gilts from the small litters had more ovulations and embryos at 25 days post-mating compared to gilts from the large litters; Gilts that farrowed averaged over one more pig born alive. These data suggest that larger litter size imposes some type of “stress” pre-weaning that negatively impacts a female’s future reproduction. This potential negative effect can be addressed by strategic cross-fostering.

The post-weaning environment in which gilts are raised can ultimately impact reproduction as well. For example, in an experiment conducted at the Tidewater AREC (Lindemann et al., 1988), the percentage of gilts reaching puberty at less than 285 days of age tended to be greater for females allowed adequate floor space during the grower and finisher phases of production, compared to gilts allowed less floor space (6 versus 3 ft2 during the grower phase, and 7.8 vs. 6 ft2 during the finisher phase). Moreover, Kuhlers et al. (1985) placed grower gilts in pens of 8 or 16 animals each. Gilts reared in the smaller groups ultimately farrowed one more pig per litter than did gilts reared in larger groups.

Thus, an enormous amount of research has been conducted to determine the effect of various environmental factors to which gilts are exposed from birth onward, with reproductive capacity they ultimately achieve as the measured endpoint. Receiving far less attention, however, is another period of time during which “environmental” factors may impact subsequent gilt reproduction. Indeed, an exciting and growing body of evidence supports the notion that the maternal environment in which gilt fetuses develop plays a profound role in the development of the reproductive and other physiologic systems.

The objectives of this paper are to provide the reader with a brief introduction to the concept of “fetal programming” and then describe how this phenomenon possibly relates to a very contentious issue facing the swine industry that being the housing of gestating sows.

Prenatal Development and Fetal Programming in the Pig
Fertilization by sperm cells of the ova (or “eggs”) released by sows or gilts during the process of ovulation occurs in the oviduct a few hours after mating. Cell division begins soon after and the fertilized egg passes into the uterus by the third day post-mating. Cell specialization and rearrangement begins by the sixth day. Eleven day-old embryos begin to show signs of attachment to the lining of the uterus and true implantation and formation of the placenta occurs around day 18. By this time within the embryo the ectoderm, mesoderm, and entoderm are clearly formed and cell specialization continues. From the ectoderm arise the skin, mammary and sweat glands, hair and hoofs, the intestinal lining, teeth enamel and the nervous system. From the entoderm arise components of the digestive tract, thyroid gland, trachea, and lungs. From the mesoderm arise the skeleton, skeletal muscle, connective tissue, blood vessels, blood cells, heart, smooth muscle, adrenal glands, reproductive organs, and the kidneys. Many of the major organs can be seen by day 20 post-mating. The size of the developing fetuses increases tremendously during the last half of the gestation period. Shown in Table 1 are some important chronological events in the prenatal growth of female swine, and emphasize the development of reproductive organs.

Table 1. Chronological Events in Prenatal Development of Gilts


Fetal programming refers to the process by which an acute or chronic stimulus in utero (i.e., in the uterus) establishes a permanent response in the fetus that impacts physiologic function later in life. When reviewing the time course of fetal development of the pig described in the preceding paragraph and Table 1, it becomes intuitive that depending on the nature and timing of the stimulus, various physiological systems can be differentially impacted. The concept of fetal programming in swine is illustrated by an experiment reported by O’Gorman et al.(2007). In that study, gestating crossbred sows were allocated to one of two treatment groups: control or stressed. “Stressed” sows were subjected to daily restraint for five minutes during weeks 12 to 16 of gestation. Female offspring were checked for estrus twice daily beginning at 122 days of age. Age at first estrus was significantly delayed in gilts farrowed by stressed sows (172 + 6 days) compared to gilts farrowed by control females (158 + 2 days).

Does the Type of Housing in which Sows Gestate Impact Subsequent Reproduction in Gilt Offspring?
Individually housing pregnant females results in certain production advantages, and it is estimated that at least 60% of the sows and gilts in the U.S. are kept in stalls throughout gestation (Barnett et al., 2001). This method of sow housing, however, is the most contentious welfare issue facing pork producers. Typical gestation stalls measure 2’ x 7’ and limit sows to standing, sitting, and lying. This restricted freedom of movement has been, and continues to be, robustly criticized by animal rights and animal welfare activists who proclaim that gestation stalls are inherently stressful and do not provide for sow well-being. On the basis of a comprehensive review of the scientific literature, however, McGlone et al. (2004) concluded that well-managed stalls or group pens generally produce similar states of well-being for pregnant sows in terms of physiology, behavior, performance, and health. Results from research conducted at the Tidewater AREC (Estienne et al., 2006) generally support this conclusion.

We conducted an experiment utilizing a total of 56 gilts, which compared pregnancy rates and the number of embryos present 30 days post-mating in females group-housed in pens of three or housed individually in gestation stalls. Between groups, there were no differences in the proportion of animals displaying stereotypies, defined as repeated movements, oral activities without obvious finality, rooting and nosing. Group-housed gilts gained significantly more weight than did gilts housed in stalls. Injury scores and the incidence of lameness were significantly greater in gilts housed in groups, but serum concentrations of cortisol, a classical “stress” hormone tended to be greater in gilts housed in stalls (79.4 versus 57.1 ng/mL; SE = 7.8). Pregnancy rate was higher for gilts housed in stalls (100%) compared with group-housed individuals (85.7%); however, there was no effect of treatment on the number of embryos recovered.

We are now in the midst of an investigation funded in 2007 by the Virginia Pork Industry Board, the objective of which is to determine if the type of housing in which sows gestate impact subsequent reproduction in gilt offspring. Our working hypothesis is that if there is indeed a difference between housing systems (individual stalls versus group pens) in terms of “stress” to, and well-being of, the sow, then due to fetal programming, growth and reproductive performance of gilt offspring may be impacted.

Gilts were mated by artificial insemination (AI) and allotted to one of three types of gestation housing: I. individual stalls throughout gestation, II. group pens throughout gestation (5 to 6 gilts/pen); or III. individual stalls for 30 days post-mating and then group pens for the remainder of gestation. At day 110 of gestation, gilts were moved to the farrowing barn. Data for the experimental females is contained in Table 2 and graphically depicted in Figure 1. Barrow pigs were cross-fostered among litters within a treatment group so that sows were nursing an approximately equal number of pigs (10.5 + 0.3).

Table 2. Farrowing data for females that were kept in individual stalls or group pens throughout gestation or that were kept in individual stalls for the first 30 days after mating and then group pens for the remainder of gestation.








Figure 1. Pigs born alive for gilts housed in group pens for the entire gestation period, stalls for the entire gestation period, or stalls for the first 30 days post-mating and then group pens for the remainder of gestation (n = 6 to 7 gilts per treatment). Bars with different superscripts tend to differ (P = 0.11).
There were no significant effects of treatment on litter size, although there was a trend for a greater number of pigs born alive for females kept in stalls throughout gestation or in stalls for the first thirty days post-mating and group pens for the remainder of pregnancy, compared to gilts kept in group pens throughout gestation. The body weights of gilts pigs were similar at birth and at weaning (24.6 + 0.3 days of age) among treatments.

At weaning, gilts were placed in nursery pens each containing three pigs farrowed exclusively by gilts exposed to one of the three gestation housing systems described above. During the 5-week nursery phase of the study, average daily gain and feed conversion efficiency were similar among groups (Table 3). Thus, piglet growth during the lactation and nursery phases was unaffected by the type of gestation housing to which the dams were exposed. This suggests that if gestation housing does indeed affect gilt offspring performance via fetal programming, the effects are manifested later in life and not during early postnatal growth. Consistent with this hypothesis, in a review of literature, Foxcroft and Town (2004) concluded that variation in growth performance after birth is pre-programmed during fetal development in the uterus and it is likely that these pre-programmed limitations in growth performance express themselves in the late grower or early finisher stages of production.

Table 3. Nursery performance for gilts farrowed by females that were kept in individual stalls or group pens throughout gestation, or individual stalls for the first 30 days after mating and then group pens for the remainder of gestation.


Summary
Fetal programming refers to the process by which an acute or chronic stimulus in the uterus establishes a permanent response within the fetus that impacts physiologic function later in life. This phenomenon occurs in swine as illustrated by the fact that subjection of sows to five minutes of daily restraint during weeks 12 to 16 of gestation delays the onset of puberty in gilt offspring. Ongoing research at the Tidewater AREC is testing the hypothesis that performance of gilt offspring is impacted by the type of housing (stalls and/or pens) in which their maternal sows are kept during gestation. At the conclusion of our study, we will also have data to either support or refute the argument that the well-being of sows (as assessed by performance of gilt offspring) is compromised by gestation stall housing. This study will offer insight into the emerging concept of fetal pig programming and findings could impact future housing systems.

Literature Cited
Barnett, J.L., P.H. Hemsworth, G.M. Cronin, E.C. Jongman, and G.D. Hutson. 2001. A review of the welfare issues for sows and piglets in relation to housing. Australian Journal of Agricultural Research 52:1-28.
Estienne, M.J., and A.F. Harper. 2006. Reproductive traits in gilts housed individually or in groups during the first thirty days of gestation. Journal of Swine Health and Production 14:241-246.
Foxcroft, G.R., and S.C. Town. 2004. Prenatal programming of postnatal performance - The unseen cause of variance. Advances in Pork Production 15:269-279.
Kuhlers, D.L., S.B. Jungst, D.N. Marple, and C.H. Rahe. 1985. The effect of pen density during rearing on subsequent reproductive performance in gilts. Journal of Animal Science 61:1066-1069.
Lindemann, M.D., E.T. Kornegay, and E. van Heugten. 1987-1988. Influence of stocking density on performance and immune response of swine. Virginia Tech Livestock Research Report No. 7:185-188.
McGlone, J.J., E.H. von Borell, J. Deen, A.K. Johnson, D.G. Levis, M. Meunier-Salaun, J. Morrow, D. Reeves, J.L. Salk-Johnson, and P.L. Sundberg. 2004. Review: Compilation of the scientific literature comparing housing systems for gestating sows and gilts using measures of physiology, behavior, performance, and health. Professional Animal Scientist 20:105-117.
Nelson, R.E., and O.W. Robison. 1976. Effects of postnatal maternal environment on reproduction of gilts. Journal of Animal Science 43:71-77.
O’Gorman, C.W., E. Gonzales, M.D. Eaton, K.A. Collard, M. Reyna, J.C. Laurenz, R.L. Stanko, D.H. Keisler, J.A. Carroll, and M.R. Garcia. 2007. Fetal exposure to maternal stress influences leptin receptor gene expression during development and age at puberty in gilts. Journal of Animal Science 85(Suppl. 2):13.
Pond, W.G., J.H. Maner, and D.L. Harris. 1991. In: Pork Production Systems: Efficient Use of Swine and Feed Resources. Van Nostrand Reinhold, New York, NY.

April 2008
Title: Re: American Hog News USDA
Post by: mikey on April 19, 2008, 10:17:37 AM
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Friday, April 18, 2008Print This Page
Hog Companies Agree to Change
US - Pork producers in the Lower Arkansas Valley say a bill before Gov. Bill Ritter that requires more space for pregnant pigs will be a financial burden, but they support it.


This week the state Senate approved new regulations that calves raised for veal and pregnant sows must be kept in pens large enough so they can stand up, lie down or turn around without touching the sides of their pens. Ritter is expected to sign the bill into law.

Glenn McClelland, the chief executive officer of M2P2, LLC, which owns Heritage Farms, an operator of several hog farms in the Lamar area, said hog farm facilities will have to rip out narrow stalls and replace them with larger pens. Individual stalls for sows, which are female pigs that are or will become pregnant, have been standard practice in the swine industry. Hog farmers say the stall keep sows from rolling over on their young. The stalls also are narrow to reduce the cost of housing hundreds of animals.

McClelland, whose company raises about 7,800 sows, said that the entire industry has a lot of research to complete before changing their barns.


Title: Re: American Hog News USDA
Post by: mikey on April 19, 2008, 10:32:05 AM
Thursday, April 17, 2008Print This Page
Neurology Conference Debatesl Illness in Pork Plant Workers
CHICAGO – New details on the neurological illness that has affected workers at several pork processing plants will be presented at the American Academy of Neurology’s 60th Anniversary Annual Meeting in Chicago, April 12–19, 2008.



The information will be presented as part of the Late-Breaking Science program, designed for research of major scientific importance or interest that warrants expedited presentation.


--------------------------------------------------------------------------------
*
"This appears to be" "a novel neurological disorder caused by an immune system response to something in the workplace environment shared by these individuals" 
Daniel Lachance, MD, of the Mayo Clinic in Rochester, MN, and a Fellow member of the American Academy of Neurology.
--------------------------------------------------------------------------------
 
Neurologists have identified the illness as a new disorder which causes symptoms ranging from a transverse myelitis syndrome, inflammation of the spinal cord, in one patient to mild weakness, fatigue, numbness and tingling in arms and legs. Researchers are classifying this condition as an immune polyradiculoneuropathy, (a disease of the peripheral nerves and spinal nerve roots) and it has been referred to as “progressive inflammatory neuropathy.”

Details about the initial epidemiology investigation were described in an article in the Morbidity and Mortality Weekly Report on February 8.

The current presentation focuses on the clinical description of patients who worked at a Minnesota pork processing plant. Other cases associated with working at a pork processing plant have been reported in Indiana and Nebraska. All of the Minnesota cases had evidence of nerve involvement, typically affecting the legs and likely caused by an inflammatory process.

Electrodiagnostic tests showed that the patients had damage to the nerves at the root level, adjacent to the spinal cord, and at the farthest reaches of motor nerves, near the connection with muscle. Thirteen out of 15 patients had elevated protein levels in their cerebrospinal (brain and spinal cord) fluid. Most patients had evidence of inflammation on spinal MRI examinations. All had evidence of activation of their immune systems. This was shown by a pattern of specific antibody production that has not been seen before.

“This appears to be a new syndrome of immune-mediated polyradiculoneuropathy, or more simply, a novel neurological disorder caused by an immune system response to something in the workplace environment shared by these individuals,” said study author Daniel Lachance, MD, of the Mayo Clinic in Rochester, MN, and a Fellow member of the American Academy of Neurology.

Lachance said the researchers will present additional details at the AAN Annual Meeting.

The American Academy of Neurology, an association of more than 21,000 neurologists and neuroscience professionals, is dedicated to improving patient care through education and research. A neurologist is a doctor with specialized training in diagnosing, treating and managing disorders of the brain and nervous system such as Alzheimer’s disease, epilepsy, multiple sclerosis, Parkinson’s disease, and stroke.



Title: Re: American Hog News USDA
Post by: mikey on April 20, 2008, 07:47:40 AM
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Thursday, April 17, 2008Print This Page
Hi-tech Monitoring Advances Methane Energy
US - Engineers at Washington University engineers have founds that vigorous mixing helps microorganisms turn farm waste into alternative energy.


The researchers have used hi-tech imaging technology to monitor the mixing efficacy and study how microorganisms break down manure. They found that vigorous mixing helps the process. The goal is to produce a simple method that farmers can use to treat their waste and generate energy, says a report by Christopher Leonard for the Associated Press.

Pig and cow manure is a persistent pollutant from industrial-sized barns and feed lots, but can become a useful source of fuels like methane when broken down by bacteria.

The research team, which includes Washington University professor Muthanna Al-Dahhan says that these new findings are just a small step toward making a reliable "digester" that farmers could use to turn manure into methane.

"Each year livestock operations produce 1.8 billion tons of cattle manure," Al-Dahhan said in a statement. "Treating manure (with microorganisms) gets rid of the environmental threats and produces bioenergy at the same time. That has been our vision," said Professor Muthanna Al-Dahhan

The research was funded by a $2.1 million grant from the US Department of Energy given in 2001.

The technology has been getting more interest as energy prices rise, although large-scale investment has faltered recently along with projects to build new ethanol and biodiesel plants.

Last week in Clovis, NM, Gibbs Energy President Joe Maceda said construction would be delayed on a $25 million plant that would make methane gas from cow manure. The project faltered after its primary investor was crippled financially because of the sub-prime mortgage crash.


Title: Re: American Hog News USDA
Post by: mikey on April 22, 2008, 10:18:14 AM
Effects of Lysine Supplements on Growth Performance
Research at the University of Nebraska by Roman Moreno, Phillip S. Miller and Thomas E. Burkey1 looked at the Effect of Increasing Lysine:net Energy Ratio on Growth Performance and Plasma Urea Nitrogen Concentration of Late-Finishing Barrows Fed Low-Protein Amino Acid-Supplemented Diets and Ractopamine.

 

Low-crude protein, amino acid-supplemented diets containing ractopamine balanced to contain 4.57 to 5.2 g of lysine/Mcal of net energy can adequately supply amino acids for growth in late finishing pigs.

Summary
An experiment was conducted to determine the optimum lysine (lys):Net energy (NE) ratio of low-crude protein (CP) amino acid (AA)-supplemented diets needed in conjunction with ractopamine (RAC) to improve growth performance of late-finishing barrows from the University of Nebraska-Lincoln (UNL) herd. Treatments consisted of five low CP, AA-supplemented diets with addition of ractopamine (16% CP; 4.5 g/ton), formulated to contain 3.35, 3.95, 4.57, 5.2 and 5.83 g of lys/Mcal of NE. A corn-soybean meal diet with no RAC supplementation served as negative control (20% CP; 5.24 g of Lys/Mcal of NE).Treatment did not affect growth performance (P > 0.05). Despite the lack of treatment effect (P = 0.09), increasing dietary lys/NE concentration resulted in a linear decrease in final backfat (P = 0.01). Treatments did not affect final longissimus muscle area (P = 0.69). Results indicate that the optimum lys/NE for late-finishing pigs from the UNL herd fed low-CP AA supplemented diets containing 4.5 g of RAC is between 4.57, and 5.2 g of lys/ Mcal of NE.

Introduction
Ractopamine (RAC) is a betaadrenergic compound which has been used in late-finishing pigs to increase protein and to reduce fat deposition by redirecting a portion of the energy that the pig would use for fat synthesis to protein accretion. There is evidence that these changes in energy distribution result in increments in average daily gain (ADG), and gain:feed (G:F) as well as reduction in average daily feed intake (ADFI). Pigs fed diets supplemented with RAC require increased amounts of limiting amino acids (AA) especially lysine (lys), in order to respond to RAC inclusion.

Increasing crude protein (CP) concentration in the diets of pigs may result in an excess of dietary non-essential AA concentration. The nitrogen (N) generated by the degradation processes of the excess of amino acids, eliminated by the pigs in feces and urine, has the potential to contaminate soil and water. The use of low-CP AA-supplemented diets appears to be effective to provide essential AA to pigs in the adequate amounts while avoiding feeding excessive CP concentration which in turn will help to reduce N excretion into the environment.

The objective of the present investigation was to determine the optimum lys:Net energy (NE) ratio of low-CP AA-supplemented diets needed in conjunction with RAC to improve growth performance of late-finishing barrows from the UNL herd.

The present experiment was designed based on the results obtained in two previous experiments performed to define adequate CP and lys:NE dietary contents to maximize response to RAC of late-finishing from the UNL herd.

Procedures
Animals and Treatments
Twenty-four crossbred [(Nebraska XL line × Danbred) × Pietrain] late-finishing barrows were used in a 28-day experiment. The average initial body weight (BW) was 184 lb and the final average BW was 254 lb. Pigs were individually penned in fully-slotted pens, maintained at 72º F, and had ad libitum access to feed and water.

All management and experimental procedures were approved by the UNL Institutional Animal Care and Use Committee.

Experimental Diets
The pigs were randomly assigned to one of six dietary treatments. To create the dietary treatments six diets were balanced for lys:NE. The control diet contained 5.2 g/Mcal NE and 20% CP. The five low-CP AA-supplemented counterparts contained 16% CP and varying lys:NE concentration ranging from 3.4 to 5.8 g of lys/Mcal of NE and 4.5 g RAC/ton (Table 1). Two of these diets had lys:NE less than adequate (3.35 and 3.95 g of lys/Mcal of NE), one of them was adequate (4.57 g of lys/Mcal of NE) and two had excessive lys:NE (5.2 and 5.83 g of lys/Mcal of NE) compared to NRC recommendations.

All diets meet or exceed the lys to limiting AA ratios (Met + Cys, Trp, and Thr) proposed by the Nebraska-South Dakota Swine Nutrition Guide for late-finishing pigs fed RAC. All other nutrients met or exceeded the NRC (1998) requirements.

Table 1. Ingredient and calculated nutrient composition of the experimental diets, as-fed basis.


aCP = Crude protein.
bLys:NE = Lysine: Net energy.
cRAC = Ractopamine.
dSupplied per kilogram of diet: Vitamin A (as retinyl acetate), 4,400 IU; vitamin D (as cholecalciferol), 440 IU; Vitamin E (as á-tocopheryl acetate), 24 IU; vitamin K (as menadione dimithyl pyrimidinol bisulfi te ), 3.5 mg; ribofl avin, 8.8 mg; d-pantothenic acid, 17.6 mg; niacin, 26.4 mg; vitamin B12, 26.4 mg.
eSupplied per kilogram of diet: Zn (as ZnO), 128 mg; Fe (as FeSO4•H2O),128 mg; Mn (as MnO), 30 mg; Cu (as CuSO4•5H2O), 11 mg; I (as Ca(IO3)•H2O), 0.26 mg; Se (as Na2SeO3), 0.3 mg.
fME = Metabolizable energy.
Data and Sample Collection
Average daily gain (ADG) average daily feed intake (ADFI) and feed efficiency (G:F) were estimated based on pig weight and feed disappearance.

Blood samples for the PUN determinations were taken by venipuncture of the vena cava region at the beginning of the experiment and weekly thereafter.

The samples were centrifuged at 2,000 × g for 20 min. Plasma was maintained at -4oF until analysis for urea nitrogen concentration (PUN).

Statistical Analyses
Each pig was considered an experimental unit and data were analyzed for treatment, linear and quadratic effects using the MIXED procedure (SAS Inst., Inc., Cary, N.C.). Pen was considered a random effect.

Table 2. Response of ADGa, ADFIb, G:Fc backfat and LMAd to treatment and signifi cance of linear and quadratic responses to lys/NE.


aADG = Average daily gain.
bADFI = Average daily feed intake.
cG:F = Average daily gain/average daily feed intake.
dLMA = Longissimus muscle area.
eCP = Crude protein.
fLys:NE = Lysine:Net energy ratio g/Mcal NE.
gRAC = Ractopamine.
hSEM = Standard error of the mean.


Table 3. Response of PUNa to treatment and signifi cance of linear and quadratic responses to lys/NEb.


aPUN = Plasma urea nitrogen.
bLys:NE = Lysine:Net energy.
cCP = Crude protein.
dRAC = Ractopamine.
eSEM = Standard error of the mean.
Results and Discussion
Growth Performance
Table 2 shows the growth response of pigs to RAC inclusion and increasing dietary lys/NE. There was no difference among treatments, linear or quadratic response to lys/NE on final weight (FW), ADG, ADFI or G:F (P > 0.05).

Ultrasound Measurements
Despite the lack of treatment effect (P = 0.09), increasing dietary lys/NE concentration resulted in a linear decrease in final BF (P = 0.01). This reduction in BF as lys/NE increased may be partially explained by the numeric reduction in ADFI as lys/NE increased. The later could be an indication that feeding diets containing less than adequate lys/NE concentrations may affect the ability of the pigs to use energy for protein deposition; therefore, the energy that otherwise would be use for protein accretion may be used for fat deposition. Treatments did not affect LMA (P = 0.69).

Plasma Urea Nitrogen
There was a significant treatment effect for PUN on d 21 and 28 (P= 0.01, and 0.03 respectively; Table 3); however, there were no linear or quadratic effects of lys/NE (P > 0.05). The PUN concentration recorded for the control treatment was the greatest for all sampling days except for day 14. These differences may be the consequence of a greater protein concentration of the control diet compared to the low-CP AA-supplemented diets plus RAC treatments (20 vs. 16% CP). The later is supported by findings reported in the literature that showed increased PUN as dietary CP concentration increased. This increase in PUN in pigs receiving the control diet may be the consequence of an excess of AA supplied by the diet. The low-CP AA-supplemented and RAC dietary treatments, demonstrated decreased PUN which may be an indication that the concentration of AA supplied was closer to the adequate concentration of AA in the diet.

Conclusions
The outcome of this experiment indicates that the optimum lys/NE for late-finishing pigs from the UNL herd fed low-CP AA-supplemented diets added with 4.5 g RAC is between 4.57 and 5.2 g of lys/Mcal of NE. Increments above 5.8 g lys/ Mcal of NE may negatively affect growth performance.

Barrows from the UNL herd showed a reduction in BF in response to increasing lys/NE fed low-CP AA supplemented diets and with 4.5 g of RAC/ton. The results of this experiment also suggest that pigs receiving RAC and low-CP AA-supplemented diets received more adequate AA concentration compared to the standard diet.

Footnote
1Roman Moreno is a graduate student and research technologist; Phillip S. Miller is a professor and Thomas E. Burkey is an assistant professor in the Animal Science Department.



Title: Re: American Hog News USDA
Post by: mikey on April 23, 2008, 08:00:43 AM
Tuesday, April 22, 2008Print This Page
Record Conference in the Name of Welfare
ATLANTA, US - Top animal welfare experts gathered in record numbers for a conference highlighting new trends, the latest research and leading strategies to implement better care on the farm.



 The annual conference, featuring international heavyweights in the field, is hosted by Alberta Farm Animal Care (AFAC), a partnership of Alberta's major livestock groups with a mandate to promote responsible, humane animal care within the livestock industry.

“We’re pleased to have you participate in what we believe is the largest livestock animal welfare conference ever held in Canada,” outgoing AFAC Chair Dr. Terry Church told the more than 230 livestock producers, students and other industry representatives in attendance. “This is a strong testament to the commitment of the industry to animal care and to all of the work that has gone on in this province to support and promote that commitment.”

Church’s comments were reinforced in a brief welcome by John Knapp, Deputy Minister, Alberta Agriculture and Rural Development, who commended industry livestock care efforts. “Right now, when our livestock sector is going through a period of not just difficulty but great difficulty, we need the type of support that AFAC can bring,” says Knapp. “While a regulatory system is vital to the messaging about animal care and the standards of care, the work that the industry does through AFAC is supremely important as an educator and integrator across livestock sectors.”

The main conference session was highlighted by a presentation by Dr. Temple Grandin of Colorado State University on “Are we there yet?” in livestock care. Grandin, one of the world’s leading authorities on animal welfare issues and a designer of handling systems used widely in North America, delivered a presentation jam-packed with proven rules of thumb on how to handle livestock humanely and effectively. Throughout, she hammered on the need for simple, practical and measurable approaches to livestock care.

Compelling
In a compelling talk, punctuated with nuggets of wisdom such as “Scoring prevents bad from becoming normal,” and “See things from the animal’s point of view,” Grandin provided a comprehensive overview of what has worked and what still needs attention to improve livestock well-being.

She emphasized the need for all involved with the issue, including policy makers, regulators and food company executives, to get an on-the-ground perspective of what happens on the farm to make sure all solutions make practical sense. “Eyes need to be opened up,” says Grandin. “When things get abstract, that’s when you get problems.”

Providing an overview of international developments and trends in animal welfare was another leading international authority, Dr. John Webster of the University of Bristol in England. Webster was a founding member of the UK Farm Animal Welfare Council and is the original proponent of the “five freedoms” concept that has become central to emerging animal welfare policy and strategies worldwide. The concept states that farm animals should enjoy freedom from thirst, hunger and malnutrition; freedom from discomfort; freedom from pain, injury and disease; freedom to express normal behavior; and freedom from fear and distress.

Webster portrayed new expectations as moving toward a “virtuous bicycle” model, where incorporating welfare standards as part of food quality assurance can deliver benefits to all parts of a “fork-to-farm” market-driven chain, including animals, producers and consumers. “This includes profit-generating opportunities for farmers related to producing a value added product, which are critical to their survival in a competitive environment.”

Dr. Ed Pajor from Purdue University in Indiana noted that emerging animal welfare policy from powerful world bodies such as the World Organization for Animal Health (OIE) is set to have a major influence on policy on North America and that the free market is already having a major impact, with major food companies increasingly preferring to work with suppliers who can provide proof of responsible animal welfare practices. “This means higher expectations for the livestock industry, but it can also mean a great opportunity for those who can provide this assurance,” says Pajor.

Dr. John Church, Livestock Welfare Specialist with Alberta Agriculture and Rural Development, reported recent progress in providing livestock care assurance at meat plants in the province. Alberta has 50 licensed red meat plants, all of which have been audited for livestock handling and stunning practices. Dr. Terry Whiting of Manitoba Agriculture outlined the role and challenges of potential legislative approaches.

New Messages
Closing speaker Dan Murphy, commentator with U.S.-based Meat & Poultry magazine, offered perspective on how the livestock industry can reframe its message to the public to battle the rhetoric of animal activist groups and better showcase the good things it is doing. “You folks are the vanguard,” he told participants. “You have the credibility to speak up and speak out for your industry.”

“This conference has been designed to bring together international leaders in animal care in a major educational effort,” says Susan Church, AFAC Manager. “More information on AFAC including additional articles on the Livestock Care Conference is available at www.afac.ab.ca.”


Title: Re: American Hog News USDA
Post by: mikey on April 25, 2008, 07:30:51 AM
Thursday, April 24, 2008Print This Page
USDA Must Address Crisis, say Pork Industry Leaders
US - In the face of rising feed costs and tightening credit markets and in an effort to stem mounting financial losses, the US pork industry has asked the US Department of Agriculture for assistance.


Officers and top staff with the National Pork Producers Council today met with Agriculture Secretary Ed Schafer to urge him to take immediate action to address what now is a hog industry economic crisis, which likely will affect the broader US economy, says a report for USagnet.

Over the past seven months, US pork producers have lost more than $2.1 billion. Due almost solely to a doubling of feed costs, producers now are losing $30-$50 on each hog marketed. Lenders are estimating that some producers could lose up to half or more of the equity in their operations by year-end.

10 Percent reduction Needed
Economists have estimated that the industry will need to reduce production by at least 10 percent – meaning a reduction of 600,000 sows - to restore profitability. But that cutback could be costly, with less-efficient packing plants closing; less manure for crop fertilizer and correspondingly a need for more man-made, foreign-produced fertilizer; a hike in pork retail prices because of a smaller supply; and lost pork industry jobs. Other industries that benefit from pork production, such as Main Street businesses, feed mills and trucking companies, also likely would see job losses. Additionally, there likely would be agricultural credit problems as some producers default on loans.

During discussions with Schafer - and in a letter presented to the secretary - NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio, requested that USDA purchase an additional 50.5 million pounds of pork for various federal food programs. This would reduce the US. sow herd by nearly 163,600 animals. Black also asked that the secretary implement emergency programs and loan guarantees to help producers purchase feed, consider allowing early release without penalty of non-environmentally sensitive Conservation Reserve Program acres back into crop production and support pork exports through USDA's Market Access Program and Foreign Market Development Program.


Title: Re: American Hog News USDA
Post by: mikey on April 25, 2008, 07:32:58 AM
Thursday, April 24, 2008Print This Page
Peta Offer a $Million for In Vitro Meat
US - Scientists around the world are researching or seeking funding to research ways to produce meat in the laboratory without killing any animals. Now the People for the Ethical Treatment of Animals (PETA) has decided to up the pace by offering a million dollars to first person to do so.



in vitro meat production would use animal stem cells that would be placed in a medium to grow and reproduce. The result would mimic flesh and could be cooked and eaten. Some promising steps have been made toward this technology, but we're still several years away from having in vitro meat be available to the general public.

PETA is now stepping in and offering a $1 million reward to the first scientist to produce and bring to market in vitro meat.

Why is PETA supporting this new technology? More than 40 billion chickens, fish, pigs, and cows are killed every year for food in the United States by, what Peta believes are, unethical means. They say in vitro meat would spare animals from this suffering. In addition, in vitro meat would dramatically reduce the devastating effects the meat industry has on the environment.

Of course, humans don't need to eat meat at all—vegetarians are less likely to get heart disease, diabetes, or various types of cancer or become obese than meat-eaters are—and a terrific array of vegetarian mock meats already exist. But as many people continue to refuse to kick their meat addictions, PETA is willing to help them gain access to flesh that doesn't cause suffering and death.

Contest Details
PETA is offering a $1 million prize to the contest participant able to make the first in vitro chicken meat and sell it to the public by June 30, 2012. The contestant must do both of the following:

Produce an in vitro chicken-meat product that has a taste and texture indistinguishable from real chicken flesh to non-meat-eaters and meat-eaters alike.


Manufacture the approved product in large enough quantities to be sold commercially, and successfully sell it at a competitive price in at least 10 states.
Judging of taste and texture will be performed by a panel of 10 PETA judges, who will sample the in vitro chicken prepared using a fried "chicken" recipe from VegCooking.com. The in vitro chicken must get a score of at least 80 when evaluated in order to win the prize.


Title: Re: American Hog News USDA
Post by: mikey on April 26, 2008, 07:46:58 AM
Friday, April 25, 2008Print This Page
Goats' Milk Helps Fend off E. coli-related Illness
US - Pigs fed goats' milk that was genetically modified to carry an important antibacterial enzyme found in human breast milk showed signs of better resisting attack by common E. coli bacteria than did pigs fed unmodified goats' milk without the human enzyme, report researchers at the University of California, Davis.


The findings, says a report on science site Physorg.com, provide evidence that milk carrying high levels of the human lysozyme enzyme - produced by genetically modified, or transgenic, goats - may improve the gastrointestinal health of pigs and other animals that consume the milk.
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"We are hopeful that milk with similar benefits one day will be available to protect infants and children against diarrheal illnesses, which every year kill millions of children around the world." 
Research scientists James Murray and Elizabeth Maga.
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Pigs were used in this study because they have digestive systems that are similar to those of humans. So, these results demonstrate that biotechnology can be used to improve the healthfulness of the milk of dairy animals by introducing beneficial properties of human milk

"We are hopeful that milk with similar benefits one day will be available to protect infants and children against diarrheal illnesses, which every year kill millions of children around the world," said James Murray, who led the study and fellow scientist Elizabeth Maga.

In tears
The enzyme lysozyme is found in the tears, saliva and milk of all mammals. While lysozyme is found at high levels in human breast milk, goats' milk contains only 0.06 percent as much lysozyme as does human milk. In this study, the transgenic goats produced milk with 67 percent as much lysozyme as human milk.

Lysozyme inhibits the growth of bacteria by destroying the bacterial cell wall, causing the cell contents to leak out. Because lysozyme limits the growth of bacteria that cause intestinal infections and diarrhea, and encourages the growth of beneficial intestinal bacteria, it is considered one of the main human-milk components that contribute to the health of breast-fed infants.

In this study, which is published in the May issue of Journal of Nutrition, the researchers gave the young pigs solid feed and pasteurized, lysozyme-rich milk produced by transgenic dairy goats. A control group of young pigs received solid feed and pasteurized regular, non-transgenic goats' milk that did not have human lysozyme.

Half of the pigs were also given a dose of enteropathogenic Escherichia coli (E. coli), a common bacterial strain known to cause gastrointestinal illness. During the study, the researchers found that the pigs fed the lysozyme-rich milk from transgenic goats had significantly lower levels of coliform bacteria, including E. coli, in their small intestines, than did the control group of pigs fed regular goats' milk.

Furthermore, the pigs receiving the lysozyme-rich milk and the pigs in the control group demonstrated normal weight gain, growth and blood composition.


In support
These results substantiated findings from a similar 2006 study by the researchers, which investigated the impact of transgenic goats' milk with human lysozyme on young goats and pigs.

The researchers note that further studies are needed to more completely characterize and understand the full impact of transgenic lysozyme-rich goats' milk on young pigs' intestinal bacteria, including potential positive effects on beneficial bacteria

Reference:
Dottie R. Brundige3, Elizabeth A. Maga3, Kirk C. Klasing3 and James D. Murray3,4
3 Department of Animal Science and 4 Department of Population Health and Reproduction, University of California, Davis, CA 95616

Title: Re: American Hog News USDA
Post by: mikey on April 26, 2008, 07:49:23 AM
Friday, April 25, 2008Print This Page
US and Canadian Hog Inventory Up Three Percent
US - This publication is a result of a joint effort by Statistics Canada and NASS to release the total hogs, breeding, market hogs, sows farrowed, and pig crop for both countries within one publication.

 

This information was requested by the US hog industry to provide producers additional information about potential hog supplies. U.S. inventory numbers were previously released on March 28, 2008.

US and Canadian inventory of all hogs and pigs for March 2008 was 78.9 million head. This was up 3 percent from March 2007 and up 5 percent from March 2006. The breeding inventory, at 7.64 million head, was down less than 1 percent from a year ago and last quarter. Market hog inventory, at 71.3 million head, was up 3 percent from last year but down 2 percent from last quarter. The pig crop, at 36.0 million head, was up 5 percent from 2007 and up 6 percent from 2006. Sows farrowed during this period totaled 3.86 million head, up 4 percent from last year.

US inventory of all hogs and pigs on March 1, 2008 was 65.9 million head. This was up 7 percent from March 1, 2007, but down 2 percent from December 1, 2007. The breeding inventory, at 6.14 million head, was up less than 1 percent from last year, but down slightly from the previous quarter. Market hog inventory, at 59.8 million head, was up 7 percent from last year, but down 2 percent from last quarter. The pig crop, at 28.1 million head, was up 6 percent from 2007 and up 9 percent from 2006. Sows farrowed during this period totaled 3.05 million head, up 5 percent from last year.

Canadian inventory of all hogs and pigs on April 1, 2008 was 13.0 million head. This was down 12 percent from April 1, 2007 and down 14 percent from April 1, 2006. The breeding inventory, at 1.50 million head, was down 5 percent from last year and down 2 percent from last quarter. Market hog inventory, at 11.5 million head, was down 13 percent from last year and down 6 percent from last quarter. The pig crop, at 7.95 million head, was down 1 percent from 2007 and down 4 percent from 2006. Sows farrowed during this period totaled 809,000 head, down 2 percent from last year.


 
Title: Re: American Hog News USDA
Post by: mikey on April 29, 2008, 08:11:15 AM
Monday, April 28, 2008Print This Page
'Red Ink' Remains for Hog Producers
DES MOINES - Farm analysts say that pig producers will continue to struggle with profitability due to low hog slaughter prices and high grain costs.


It's a trend that has already kicked in the rest of the world, but John Lawrence, Iowa State University Extension economist, says US farmers will have to accept the situation is going to be the same here in the US,

"We're looking at big-time red ink. There will be some producers who will opt out of hog production," particularly those farmers who are diversified in crops and who can sell their corn and soybeans at today's high prices," he said in a report for TH Online. Lawrence believes that Iowa hog producers can expect more losses for the rest of this year and the first quarter of 2009. Hog producers here have lost money on each hog sold for five straight months and recent reports released by the US Department of Agriculture indicate farmers are likely to slow their hog production.

Hitting the Brakes
"People are hitting the brakes pretty hard. The trajectory is for hog production to drop," he added.

James Mintert, a Kansas State University professor, said large supplies of competing meats such as beef and poultry will continue to depress hog prices.

He added that the high demand for grain and the already high prices could be a very bad situation if the US has a poor crop season.

Title: Re: American Hog News USDA
Post by: mikey on April 29, 2008, 08:13:36 AM
Monday, April 28, 2008Print This Page
Drug User Fee Law Critical, says NPPC
US - The National Pork Producers Council has urged Congress to reauthorize the Animal Drug User Fee Act (ADUFA), after the US Food and Drug Administration sent recommendations for the law to Capitol Hill.



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"It's a critical tool needed by the pork industry and veterinarians to maintain animal health and to provide safe, wholesome and nutritious pork" 
Bryan Black, NPPC President.
--------------------------------------------------------------------------------
 

Enacted in 2003, ADUFA authorizes FDA to collect fees from the animal health industry to be used for the review and approval of animal health products. The fees supplement the agency’s annual congressionally-approved appropriations and have enabled FDA to dramatically reduce its review time of new animal drugs, bringing medications to the market more quickly while maintaining high standards for safety and effectiveness.

“ADUFA ensures that animal health companies are able to provide in a timely manner products to treat and control the new diseases that our animals will face,” said NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio.

“It's a critical tool needed by the pork industry and veterinarians to maintain animal health and to provide safe, wholesome and nutritious pork,” he said.

Since ADUFA was signed into law, four new swine health products have come on the market, helping producers fight the increasing challenges that swine respiratory diseases have created for the industry. Additionally, last year alone, veterinarians and pet owners received nine new products to help pets live longer, healthier lives.

Recommendations
Among its recommendations, FDA proposed a new user fee program – the Animal Generic Drug User Fee Act (AGDUFA) – to support the review of generic animal drug applications. Currently, FDA’s review of generic animal drugs is entirely funded through appropriations. The agency also recommended an “end review amendment” process, which would allow it to work with a drug manufacturer at the end of a review to make corrections to an application, resulting in reduced review time. FDA also asked that the reauthorized law include an agreement between the agency and industry to participate in 10 workshops over the next five years to improve communications between regulators and industry.

Lawmakers are expected to take up reauthorization of ADUFA, which expires Sept. 30, in the coming weeks. The law is expected to generate $98 million in user fees over the next five years; AGDUFA is estimated to bring in $27 million.

“NPPC will be very aggressive in lobbying Congress for a quick, clean reauthorization of this important law,” said Black. “ADUFA is a top priority for the U.S. pork industry.”



Title: Re: American Hog News USDA
Post by: mikey on April 30, 2008, 08:04:07 AM
Tuesday, April 29, 2008Print This Page
Mandate Weight Crushing Texan Livestock
TEXAS, US - Seeking immediate relief from skyrocketing food costs, Texas Governor Rick Perry today asked the federal government for a 50 percent waiver from the federal renewable fuel standard (RFS) mandate for ethanol produced from grain.



Corn prices rose 138 percent globally over the last three years and global food prices increased 83 percent over the same time period. With the implementation of the new RFS mandate, some estimates predict corn prices will rise to $8.00/bushel for the 2008 crop, resulting in a negative impact of $3.59 billion to the state.


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"A waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done." 
Texas Governor Rick Perry
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The RFS mandates the levels of renewable fuel usage regardless of market signals. The artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on the state’s economy while driving up food prices around the world.

Texas plays a significant role in feeding and fueling the nation. Not only is the state the nation’s largest beef-producer, Texas also ranks in the top 10 states in poultry/egg and dairy production, which rely heavily on corn-based products for feed.

"We appreciate the good intentions behind the push for renewable fuels. In fact we’re diversifying our state’s energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans’ family food bill," said Gov. Perry. "There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done."

The impact on the cattle industry is particularly harmful to family ranches. According to the USDA, two-thirds of the 149,000 cattle producers in Texas have fewer than 50 head of cattle.

In 2007, 25 percent of the U.S. corn crop was diverted to produce ethanol, according to the United States Department of Agriculture, which projects that 30 to 35 percent will be diverted in 2008. With ever increasing mandates of corn crop diversion to ethanol production through 2015, the impact on food prices globally, and to Texas specifically will only worsen.



Title: Re: American Hog News USDA
Post by: mikey on May 01, 2008, 08:48:52 AM
Wednesday, April 30, 2008Print This Page
IFAP Damned on Health, Welfare & Environment
US - Industrial Farm Animal Production methods have been critisised by a report deeming them unacceptable and a risk to public health, the environment and animal welfare.



The report comes after an extensive two-and-a-half year examination conducted by the Pew Commission on Industrial Farm Animal Production (PCIFAP).

Commissioners have determined that the negative effects of the IFAP system are too great and the scientific evidence is too strong to ignore. Significant changes must be implemented and must start now. And while some areas of animal agriculture have recognized these threats and have taken action, it is clear that the industry has a long way to go.

Public Health
Over the past five decades, the number of farms producing animals for food has fallen dramatically, yet the number of food animals produced has remained roughly constant. It is the concentration of farm animals in larger and larger numbers in close proximity to one another, along with the potential of IFAP facilities to affect people, that give rise to many of the public health concerns that are attributed to IFAP. Animals in such close confinement, along with some of the feed and animal management methods employed in the system, increase pathogen risks and magnify opportunities for transmission from animals to humans. This increased risk is due to at least three factors: prolonged worker contact with animals, increased pathogen transmission within a herd or flock, and the increased opportunities for the generation of antimicrobial resistant bacteria (due to imprudent antimicrobial use) or new strains of viruses. Stresses induced by confinement may also increase the likelihood of infection and illness in animal populations.

Communities near IFAP facilities are subject to air emissions that can significantly affect certain segments of the population. Those most vulnerable--children, the elderly, and individuals with chronic or acute pulmonary or heart disorders--are at particular risk. The impacts on the health of those living near IFAP facilities have increasingly been the subject of epidemiological research. Adverse community health effects from exposure to IFAP air emissions fall into two categories: (1) respiratory symptoms, disease and impaired function, and (2) neurobehavioral symptoms and impaired function.

Environment
As with public health impacts, much of IFAP's environmental impact stems from the tremendous quantities of animal waste that are concentrated on IFAP premises. Animal waste in such volumes may exceed the capacity of the landscape to absorb the nutrients and neutralize pathogens. Thus, what should be a valuable byproduct (e.g., fertilizer) becomes a waste that must be disposed of.

According to the EPA, the annual production of manure produced by animal confinement facilities exceeds that produced by humans by at least three times. Unlike most human sewage, the majority of IFAP is spread on the ground untreated. Manure in such large quantities carries excess nutrients and farm chemicals that find their way into waterways, lakes, groundwater, soils and airways. Excess and inappropriate land application of untreated animal waste on cropland contributes to excessive nutrient loading and, ultimately, eutrophication of surface waters. Eutrophication is an excess of nutrients in a body of water, mostly nitrates and phosphates from erosion and runoff of surrounding lands, that causes a dense growth of plant life and the death of aquatic animal life due to lack of oxygen.

IFAP runoff also carries antibiotics and hormones, pesticides, and heavy metals. Antibiotics are used to prevent and treat bacterial infections and as growth promoters. Pesticides are used to control insect infestations and fungal growth. Heavy metals, especially zinc and copper, are added as micronutrients to the animal diet.

According to a 2006 UN report, globally, greenhouse gas emissions from all livestock operations account for 18% of all anthropogenic greenhouse gas emissions, exceeding those from the transportation sector. IFAP can produce greenhouse gases such as methane and carbon dioxide. Other greenhouse gases, primarily nitrous oxide, arise mainly from the microbial degradation of manure.

Air quality degradation is also a problem in and around IFAP facilities because of the localized release of significant quantities of toxic gases, odorous substances, and particulates and bioaerosols that contain a variety of microorganisms including human pathogens. Some of the most objectionable compounds are the organic acids, which include acetic acid, butyric acids, valeric acids, caproic acids, and propanoic acid; sulfur containing compounds such as hydrogen sulfide and dimethyl sulfide; and nitrogen-containing compounds including ammonia, methyl amines, methyl pyrazines, skatoles and indoles.

It is also recognized that ammonia emissions from livestock contribute significantly to the eutrophication and acidification of soil and water. Some level of nutrient overload occurs naturally, but this process can be accelerated by human activities. Acidification can put stress on species diversity in the natural environment.

Animal Welfare
IFAP methods for raising food animals have generated concern and debate over just what constitutes a reasonable life for animals and what kind of quality of life we owe the animals in our care. It is an ethical dilemma that transcends objective scientific measures, and incorporates value-based concerns.

Physical health as measured by absence of some diseases or predation, for example, may be enhanced through confinement since the animals may not be exposed to certain infectious agents or sources of injury that would be encountered if the animals were raised outside of confinement. It is clear, however, that good animal welfare can no longer be assumed based only on the absence of disease or productivity outcomes. Intensive confinement (e.g. gestation crates for swine, battery cages for laying hens) often so severely restricts movement and natural behaviors, such as the ability to walk or lie on natural materials, having enough floor space to move with some freedom, and rooting for pigs, that it increases the likelihood that the animals suffer severe distress.

A number of retailers, such as Burger King, Wolfgang Puck, and Safeway, are beginning to move away from supporting suppliers that use some of these extreme confinement practices. Florida, Arizona, Oregon and Colorado are phasing out gestation crates while Arizona and Colorado are phasing out veal crates, too. A measure on California's November ballot -- the Prevention of Farm Animal Cruelty Act -- would phase out battery cages, gestation crates and veal crates. These are the types of modest animal welfare public policy improvements that the Commissioners recommend implementing.

Rural America
Life in rural America has long been challenged by persistent poverty. The causes are many, but among them is the lack of economic diversity in rural economies. Workers have few options in the event of a plant closure or other dislocation, and unemployment rates are high. Consequently, IFAP is frequently considered an attractive new source of economic opportunity by local economic development officials, but with this transition comes significant change including public health threats.

The industrialization of American agriculture has transformed the character of agriculture itself and, in so doing, the face of rural America. The family-owned farm producing a diverse mix of crops and food animals is largely gone as an economic entity, replaced by ever-larger operations producing just one animal species, or growing just one crop, and many rural communities have fared poorly.

As the food animal industry shifted to a system of captive supply transactions controlled by production contracts, economic power shifted from farmers to livestock processors or so-called integrators. Farmers relinquished their once autonomous, animal husbandry decision -- making authority in exchange for contracts that provide assured payment, but require substantial capital investment. Once the commitment is made to such capital investment, many farmers have no choice but to continue to produce until the loan is paid off. Such contracts make it nearly impossible for there to be open and competitive markets for most hog and poultry producers, who must enter into contracts with the integrators (meat packing companies) if they are to sell their production.

Although the proponents of the industrialization of animal agriculture point to the increased economic efficiency of IFAP operations, the Commission is concerned that the benefits may not accrue in the same way to affected rural communities. In fact, industrialization leading to corporate ownership actually draws investment and wealth from the communities in which specific IFAP facilities are located.

The Commission's recommendations focus on appropriate siting of IFAP facilities in order to prevent further degradation of air, water, and soils and to minimize the impact on adjacent communities.

The Commission's key recommendations
Ban the non-therapeutic use of antimicrobials in food animal production to reduce the risk of antimicrobial resistance to medically important antibiotics and other microbials.


Implement a disease monitoring program for food animals to allow 48-hour trace-back of those animals through aspects of their production, in a fully integrated and robust national database.


Treat IFAP as an industrial operation and implement a new system to deal with farm waste to replace the inflexible and broken system that exists today, to protect Americans from the adverse environmental and human health hazards of improperly handled IFAP waste.


Phase out the most intensive and inhumane production practices within a decade to reduce the risk of IFAP to public health and improve animal wellbeing (i.e., gestation crates and battery cages).


Federal and state laws need to be amended and enforced to provide a level playing field for producers when entering contracts with integrators.


Increase funding for, expand and reform, animal agriculture research.
"The goal of this Commission is to sound the alarms that significant change is urgently needed in industrial farm animal production," says John Carlin, PCIFAP Chairman and former Kansas governor. "I believe that the IFAP system was first developed simply to help increase farmer productivity and that the negative effects were never intended. Regardless, the consequences are real and serious and must be addressed."

Our energy, water and climate resources are undergoing dramatic changes that, in the judgment of the Commissioners, will require agriculture to transition to much more biologically diverse systems, organized into biological interactions that exchange energy, improve soil quality, and conserve water and other resources. "Long-term success will depend on the nation's ability to transform from an industrial economy that depends on quickly diminishing resources to one that is more sustainable, employing renewable resources and understanding of how all food production affects public health and the environment," says Michael Blackwell, PCIFAP Vice Chair and former dean of the University of Tennessee College of Veterinary Medicine and former Assistant Surgeon General, (Ret.) USPHS.

The PCIFAP consists of 15 Commissioners who bring individual knowledge and expertise in diverse fields, including public policy, veterinary medicine, public health, agriculture, animal welfare, the food industry and rural society. The Commission assessed the current state of industrial animal agriculture based on site visits to production facilities across the country; consultation with industry stakeholders, public health, medical and agriculture experts; public meetings; peer-reviewed technical reports; staff research; and Commissioners' own expertise. PCIFAP is a project of The Pew Charitable Trusts and the Johns Hopkins Bloomberg School of Public Health.


Title: Re: American Hog News USDA
Post by: mikey on May 01, 2008, 08:51:38 AM
Wednesday, April 30, 2008Print This Page
The Key To Recovery For Hog Producers
US - A hog market analyst in Memphis, Tennessee says immediate sow herd reduction is the key to the recovery of the hog industry.

American pork production has grown by 11 per cent in 2008. Ron Geitz says he expects production will be scaled back to last year's levels by the 4th quarter of 2008, with the American lean hog price around $55.

He notes American producers, unlike their Canadian counterparts, have just come off 4 consecutive strong years. Geitz says this is part of the problem since Americans are only starting to feel the pressure brought on by the excess supply of pork.



Title: Re: American Hog News USDA
Post by: mikey on May 02, 2008, 10:19:51 AM
Thursday, May 01, 2008Print This Page
Report Sees Impending US Food Safety Crises
US - A news report developed by the Trust for America's Health has lambasted the US food safety system, claiming to have uncovered major gaps in state regulations that leave American unnecessarily vulnerable.



It goes on to identify obsolete laws, misallocation of resources, and inconsistencies among major food safety agencies. Outdated practices of inspecting every poultry, beef and pork carcass, were also picked out, even though changing threats and modern agriculture practices and technology make this an unproductive use of government resources;

"Our goal should be reducing the number of Americans who get sick from foodborne illness. But we can't adequately protect people from contaminated foods if we continue to use 100 year-old practices," said Jeff Levi, PhD, Executive Director of TFAH. "We need to bring food safety into the 21st century. We have the technology. We're way past due for a smart and strategic upgrade."

Some problems outlined in the report, Fixing Food Safety: Protecting America's Food from Farm-to-Fork, include:

The U.S. food safety system has not been fundamentally modernized in over 100 years;


Inadequate resources are spent on fighting modern bacteria threats, such as trying to reduce Salmonella or dangerous strains of E. coli;


An estimated 85 percent of known foodborne illness outbreaks are associated with foods regulated by the U.S. Food and Drug Administration (FDA), but the agency receives less than half of the federal funding for food safety;


In the past 3 years, the main food safety function at FDA has lost 20 percent of its science staff and 600 inspectors;


Gaps in current inspection practices mean acts of agroterrorism -- such as contamination of wheat gluten or botulism -- could go undetected until they are widespread;


While 15 federal agencies are involved in food safety, the efforts are fragmented and no one agency has ultimate authority or responsibility for food safety;


For instance, the FDA regulates frozen pizza, but if the pizza is topped with 2 percent or more of cooked meat or poultry, then the Food Safety and Inspection Service (FSIS) at the U.S. Department of Agriculture becomes the regulatory agency;


Only one percent of imported foods are inspected. Approximately 60 percent of fresh fruits and vegetables and 75 percent of seafood consumed in the U.S. is imported; and


States and localities are not required to meet uniform national standards for food safety.
Approximately 76 million Americans -- one in 4 -- are sickened by foodborne diseases each year. Of these, an estimated 325,000 are hospitalized and 5,000 die. Medical costs and lost productivity due to foodborne illnesses in the U.S. are estimated to cost $44 billion annually. A 2007 public opinion poll conducted by TFAH found that 67 percent of Americans are worried about food safety, and that public concerns about food safety rank higher than Americans' concerns about a biological or chemical attack and natural disasters like Hurricane Katrina.

The TFAH report follows a series of studies by experts raising concerns about America's food safety, including a 2007 review by the U.S. Food and Drug Administration's Science Board that concluded that the U.S. food supply "grows riskier each year" and a Government Accountability Office report that found federal oversight of food safety to be one of the government's "high risk" programs.


Title: Re: American Hog News USDA
Post by: mikey on May 02, 2008, 10:21:35 AM
Thursday, May 01, 2008Print This Page
Pew Report Overlooks Producers Progress
US - Recommendations issued yesterday from a commission composed primarily of members opposed to modern livestock production would raise the cost of producing food animals and increase meat prices in the face of a global food crisis, says the the National Pork Producers Council.



The Recommendations were based on a $3.4 million, two-year “study” of the affects of livestock production on the environment, public health and rural economies conducted by the Pew Commission on Industrial Farm Animal Production. They include phasing out certain production practices, banning certain animal antibiotics and placing new restrictions on the use of manure.

The commission overlooked the substantial progress made by the nation’s pork producers in addressing all of those issues, said NPPC.

“Pork producers have taken extensive steps over the last decade to meet various industry challenges,” said NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio. “We constantly are looking for better ways to raise our pigs, including protecting them from diseases, and we always have been good stewards of the land, air and water that we use.”

Already Complying
Data from eight of the top 10 swine-producing states show, for example, that since 2000 less than one percent of hog farms have had a manure release. Additionally, NPPC pointed out, a tough new federal water pollution regulation covering CAFOs, which is due out late this summer, will protect water supplies from pollution from all large livestock operations by imposing a zero-discharge policy. Most swine CAFOs already comply with the rule.

“With the discharge issues largely addressed, it is hard to argue that large pork operations threaten human health, but more research is needed,” said Black. “As for our operations’ affects on air, the concentration of emissions outside our buildings is well below the established, available public-health standards.”
--------------------------------------------------------------------------------
*
"There was a lack of balance among commission members, and the commission's work was directed by a group unfriendly to animal agriculture. 
NPPC President Bryan Black.
--------------------------------------------------------------------------------
 
NPPC added that the Environmental Protection Agency recently commissioned a first-of-its-kind, livestock industry-supported study to determine the level of air pollution from all types of livestock operations. Findings from the two-year study, which began last summer, will provide the foundation for developing ways to ensure that air emissions from livestock operations don’t harm the environment.

On the issue of animal antibiotics, NPPC noted that a ban on sub-therapeutic drugs – which the commission recommended – would lead to more pig deaths from disease and an increase in the use of post-therapeutic drugs. Both would lead to a rise in pork prices.

NPPC disputed the commission’s characterization that large animal feeding operations are bad for the rural economy, pointing out that pork operations alone are major contributors to farm communities, generating more than 550,000 mostly rural jobs and contributing an estimated $20.7 billion of personal income and $34.5 billion of gross national product to the economy.
Meatless Objective?
The organization also questioned the objectivity of the commission, whose work was directed by the Center for a Livable Future, which is part of the Johns Hopkins University Bloomberg School of Public Health. Among the center’s projects is “Meatless Mondays.”

“There was a lack of balance among commission members, and the commission’s work was directed by a group unfriendly to animal agriculture,” said Black. “As a result, in its deliberations, the commission did not give adequate weight to the views of the numerous credible voices from within commercial animal agriculture who share the commission’s objectives for a livestock sector that is protective of the environment, food safety, public health and animal welfare.

“Lastly, it’s hard for us to react to the substance of the commission report because it failed to issue all but one of its technical papers,” added Black. “The lack of serious, fact-based findings and apparent reliance on numerous anecdotal, non-peer reviewed allegations only confirms our perception that the report recommendations were largely predetermined.”

 

Title: Re: American Hog News USDA
Post by: mikey on May 02, 2008, 10:23:35 AM
Thursday, May 01, 2008Print This Page
Biodiesel from Pork Fat Production Begins at Guymon
OKLAHOMA CITY — Texas County has long been recognized as the leading agricultural county in the state. Now it is also Oklahoma’s top biofuel county.



High Plains Bioenergy, a joint venture between Seaboard Foods and Oklahoma City-based Musket Corporation, held its grand opening ceremony April 24 in Guymon, Oklahoma. Seaboard Foods President Rod Brenneman said the biodiesel plant is currently producing more than 60,000 gallons of fuel each day and will produce 30 million gallons annually at full capacity.

"We’re committed to sustainable business practices and the biodiesel plant represents this commitment well," he said.

"This was an opportunity for Seaboard Foods to add value to a product and further diversify our operation. The result is more jobs and new opportunities for Guymon and the state of Oklahoma."

Porking Good Fuel Source
Pork fat, a relatively low-value byproduct of Seaboard’s Guymon processing facility, is remarkably efficient as a source of biodiesel. High Plains Bioenergy says one gallon of biodiesel can be made from every gallon of pork fat. Glycerin, a high value component used in a variety of products ranging from cosmetics to soaps feeds is a byproduct of the biodiesel manufacturing process.

The plant was the result of Seaboard employees experimenting with ways to add value to pork fat. Brenneman said the first batch of biodiesel from Seaboard Foods was actually made in someone’s garage.

"That experiment led us to spend $40-plus million for a biodiesel plant," he said to laughter during the grand opening.

The partnership with the Musket Corp. was necessary "because we did not want to market or distribute biodiesel," Brenneman added.

"We have no experience there and Musket is very successful both nationally and internationally. It’s a terrific partnership."
Co-operation Praised
Terry Peach, State Secretary of Agriculture, praised the partnership saying it shows what the state can accomplish when industries work together.

"When Governor Henry first took office he challenged everyone in his administration to find ways to bring everyone in all our industries together and find common ground to improve not only our state’s economy but our quality of life," Peach said.

"High Plains Bioenergy is the perfect example of our state’s two leading industries, agriculture and energy, to come together and create this tremendous asset to Oklahoma."
 



Title: Re: American Hog News USDA
Post by: mikey on May 02, 2008, 10:25:26 AM
Thursday, May 01, 2008Print This Page
Minnesota's Pork Producers Suffering
US - Minnesota pork producers are not benefiting from higher prices. And rising feed costs are hurting the industry.



With rising food prices and skyrocketing commodity costs, the profits raining on farms across the country have not fallen evenly. Arablr growers may be benefitting from higher farm gate proces but pig farmers are suffereing

Faced with runaway feed and energy costs, the pork industry has gone months without turning a profit, say the Star Tribune. Analysts say it will be a year, possibly longer, before prices and costs break even.

The fallout will shutter some pig farms, shrink others and raise the cost of pork at supermarkets. It also has members of the Minnesota Congressional delegation asking the federal government to help shore up farmers' losses.





Title: Re: American Hog News USDA
Post by: mikey on May 04, 2008, 08:53:25 AM
Friday, May 02, 2008Print This Page
Swine, Avian Flu Genes in Same Virus
US - An unknown pathogen isolated from infected pigs at two midwestern swine production facilities in 2006 has proved to be a new strain of H2 influenza virus.



The pathogen is similar to the one that caused the 1957 flu pandemic, says the USDA Agricutural Research Service.

Reporting the findings in the May June issue of Agricultural Research magazine, it says the virus was first identified by a University of Minnesota veterinary diagnostician - and it proved to have a startling new twist because it contained genes of both swine and avian influenza viruses.

Molecular studies indicate that the mystery pig pathogen is actually an H2N3 influenza virus closely related to an H2N3 strain found in mallard ducks—being seen for the first time in mammals.

Both swine facilities used pond water frequented by migrating waterfowl.

In the newly isolated swine H2N3, the avian H2 and N3 gene segments mixed with gene segments from common swine influenza viruses, giving it the ability to infect swine—as well as mice and ferrets

. This suggests the need for continued monitoring of both swine and livestock workers for H2-subtype viruses and other influenza strains.



Title: Re: American Hog News USDA
Post by: mikey on May 04, 2008, 08:55:55 AM
Saturday, May 03, 2008Print This Page
Market Preview: Hog Prices Just an Anomaly?
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



To use an appropriate porcine question: Will demand save our bacon?

When we look at the last two weeks, the answer could certainly be a resounding “Yes!” Why else would packers be aggressively chasing hogs when slaughter rates are so high? And why else would prices be near year-ago levels on year-to-date (YTD) slaughter that now stands 11.5% higher than one year ago?

Supply is way up. Prices are hardly below last year. Life is good – or at least better.

But can this hold? Can hog demand maintain the 8% increase we saw from January through March, as was pointed out by Professor Glenn Grimes at the University of Missouri? Will packer margins remain large enough, without pushing hog prices downward, to maintain the incentive to process 420,000-plus hogs/day? Will the normal seasonal break in beef prices put pork behind the eight ball in the retail meat counter this summer? Can broiler producers reduce supplies enough to drive near-record prices to new highs and, thus, support the entire meat complex? Is the recent rise in the U.S. dollar (the June U.S. Dollar Index reached its highest level since early March last week) a turning point?

So many questions; here’s my inadequate answer: “We’ll see.”

All of these variables have contributed to a remarkable run-up in cash hog prices. I want to believe that the worst is behind us and the predictions of $80-90 hogs this year, and upward for next year, are correct. I really do. And if you believe that prices efficiently and accurately reflect all of the information in the market, then you should probably buy into those forecasts. Those $70-plus bids this week may be here to stay, but I’m not a believer yet.

The reasons are simple: Large meat supplies. Huge pork supplies. More beef on the way – at least seasonally. Higher fuel prices this summer. And even if the hog prices remain higher, we still face substantial risk for feed prices since we have thus far put seed corn in the ground at a pace roughly commensurate with that once achieved by a Model A John Deere and a two-row planter! Corn at $7/bushel is still well within the realm of possibility.

What are you saying to your banker when he poses these questions:

“I understand you are losing money, but what are you doing to minimize your losses?
“How long will these losses last?”
“What is the extent of your cash needs until cash flows turn positive?”
Bankers do not want to shut good producers down. They did not go into banking in order to own hog farms or, especially, take care of hogs. They make little money by holding cash. They want people in business so those people will borrow money and pay interest.

What they do not want is a customer who is borrowing money, doesn’t have a plan or an idea of how to limit that borrowing and, therefore, doesn’t know how much will be needed before the banker can stop advancing funds. They probably feel the same way you would feel if your college son or daughter came to you with a large credit card bill and no way to pay it. You want to help, but without a plan, you would (or at least should!) say “No” because it is the best thing for everyone.

I have admonished producers for some time to have a plan in place to limit the upside risk in feed prices. Though the level at which that protection can be placed is much higher than it once was. Still, it’s a prudent idea.

“But those call premiums are just a rip-off and I’m cash poor as it is,” you say. True. But are you going to drop the insurance on all of your hog buildings this year because cash is tight? That’s a similar proposition and the chances of higher-priced corn are, at the moment, probably better than the chances of a fire or a tornado.

And while the level of coverage available on corn is not as good as it once was, the potential “ceiling” level for soybean meal has fallen pretty sharply. So the news is not all bad.

As for hogs, the average of the eight futures contracts to cover the next 12 months is, as of Friday morning, $75.77/cwt., carcass or $56.82/cwt., live. The average for the rest of this calendar year is $73.95 carcass, $55.47 live. History tells us that the summer futures are likely near their peak as they normally fall from May 10 onward. In fact, Tuesday’s break in Lean Hog futures could have marked the seasonal peak.

How would your financial situation be if you put a lid on feed costs at current levels and could lock in hog prices at $72-$73/cwt., carcass? That is available. Would the answers for your banker be good enough to keep him/her on board and keep you in the business until the good times return?


NORTH AMERICAN PORK INDUSTRY DATA




COMPETING MEATS
PRODUCTION & PRICE
Title: Re: American Hog News USDA
Post by: mikey on May 04, 2008, 08:58:05 AM
Saturday, May 03, 2008Print This Page
Weekly Review: Pork Demand Takes Giant Leap
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Demand for pork from January-March of this year was up slightly from a year earlier at the consumer level. However, demand for beef at the consumer level was down 3 percent from the same three months in 2007.

Demand for broilers for January-March was up 3.2 percent and turkey was up 7.7 percent from twelve months earlier.

Demand for live hogs for the first three months of 2008 was up a whopping 8.0 percent from the same months in 2007. For these three months, the demand for live fed cattle was up 0.2 percent from a year earlier. The large increase in live hog demand was due to the sharply higher pork exports in 2008 than in 2007. The stronger live fed cattle demand then consumer demand for beef was also largely a result of larger exports and smaller imports.

Live hog weights for barrows and gilts last week in Iowa-Minnesota at 264.6 pounds were down one pound from a week earlier and down 2.9 pounds from a year earlier. Average carcass weight for barrows and gilts finally dropped to a year earlier level for the week ending April 12th and 19th. Hopefully we will continue to see a bigger decline in weights than normal as we move from spring to summer.

On Tuesday, the Food, Safety and Inspection service, a branch of the USDA, announced they were notified last week that four pork plants will be ineligible to export pork to Russia because of violations of Russia’s drug tolerances. The futures market responded by being 200-290 points lower at the close then a day earlier. On Wednesday, the futures market rallied and on Thursday was $5.26 per cwt to $0.90 per cwt lower than the close on Friday, April 25th.

Sow and gilt slaughter continues to run well above a year earlier. Gilt slaughter since the 1st of March through the week ending April 26 has been up over 2 percent and sow slaughter through the week ending April 19th from March 1 has been up 11.9 percent from twelve months earlier. This data continues to indicate some sell-off of the breeding herd is occurring.

Pork product prices pushed higher again this week with the cut-out per 100 pounds of carcass at $74.38 per cwt Thursday afternoon up $2.17 per cwt from a week earlier. Loins were at $104.67 up $9.59 per cwt, Boston butts were at $77.96 up $0.18 per cwt, hams were at $54.20 down $6.73 per cwt and bellies were at $84.98 per cwt up $4.08 from seven days earlier.

Live hog prices Friday morning were up $3-4 per cwt compared to a week earlier. Weighted average negotiated carcass prices Friday morning were up $1.13-1.80 per cwt compared to seven days earlier.

The weighted average negotiated carcass prices were western Cornbelt $72.55 cwt, eastern Cornbelt $70.18 per cwt, Iowa-Minnesota $72.63 per cwt and nation $71.27 per cwt.

The top live hog prices at select markets were Peoria $45 per cwt, Zumbrota Minn. $51 per cwt and interior Missouri $52.75 per cwt.

Slaughter this week under Federal Inspection was estimated at 2155 thousand head up 9.3 percent from a year earlier but down 4.3 percent from a week earlier.


Title: Re: American Hog News USDA
Post by: mikey on May 06, 2008, 08:05:37 AM
Monday, May 05, 2008Print This Page
USDA Announcement Pleases AFBF
KENTUCKY - The USDA has made an announcement to purchase up to $50 million worth of pork products.



In a statement, Bob Stallman, President, American Farm Bureau Federation said:

“The American Farm Bureau Federation is pleased with the Agriculture Department’s announcement this week that it will purchase up to $50 million of pork products for child nutrition and other domestic food assistance programs. AFBF, along with the National Pork Producers Council, requested this action last month in response to continued low prices for pork and live hogs, which have resulted in financial distress to many producers.

“Prices for live market hogs have plunged to levels not seen in nearly a decade. Experts have predicted that 2008 will likely be the worst financial year for pork producers in modern history. USDA’s help could not come at a more critical time.

“This procurement program offers two important benefits: it helps farmers facing record-low pork prices, while at the same time providing healthy, nutritious protein to their fellow citizens who are in need. It's a win-win for producers and the public.”




Title: Re: American Hog News USDA
Post by: mikey on May 07, 2008, 09:16:09 AM
Tuesday, May 06, 2008Print This Page
The Pros and Cons of Individual and Group Housing
MISSOURI - At the Missouri Pork Expo, Tim Safranski, University of Missouri Extension swine specialist reviewed individual and group housing and described the pros and cons of each.



He said either option can work with proper pig care, which improves performance in any system. Proper care means ensuring basic needs like food, water and protection from weather, Mr Safranski said. It also means reducing hazards and competition and allowing sows to express most normal patterns of behavior.

Pig welfare depends not on the use of gestation stalls or group housing but on the quality of individual pig care, said Mr Safranski University of Missouri Extension swine specialist.

"Managed correctly, any of the housing systems can work. If we look at the body of scientific literature, it doesn't matter how sows are housed. It matters more how they're cared for," said Tim Safranski.

At the Missouri Pork Expo, Mr Safranski reviewed individual and group housing and described the pros and cons of each. He said either option can work with proper pig care, which improves performance in any system.

Proper care means ensuring basic needs like food, water and protection from weather, Mr Safranski said. It also means reducing hazards and competition and allowing sows to express most normal patterns of behavior.

"With all the sow-housing options, gestation stalls fit most of those. Group housing could fit most of those. None of them really fit every point perfectly," he said.

Mr Safranski cited a 2005 paper from the American Veterinary Medical Association that concluded that "no existing housing system for pregnant sows is better than another."

Overall, stalls prevent fighting, reduce stress and injury, and make vaccinating, medical care and artificial insemination easier. Stalls also make individual care much easier, Mr Safranski said. "We can control individual feed intake: get those skinny sows more food, give those fat sows less."

But stalls restrict movement and some natural behaviors, like socializing and foraging. Limited mobility may cause joint stiffness. Stalls also make sows entirely dependent on humans for basic needs and physical comfort.

With sows in stalls, daily observation is critical, Mr Safranski said. An exercise pen may help sows showing signs of difficulty. "If we see a sow having trouble walking, giving her space to exercise and stretch may help the system overall be more productive," he said.

Group housing makes specialized care and feeding harder, but also allows sows more social interaction and movement.

Sow groups range in size from five or six sows to 80 or more. Group size affects management issues like sorting, daily observation and whether new sows can be added.

With small groups it is essential to sort, creating groups based on size, appetite, body condition and speed of eating. With 25 sows, for example, five or more groups are needed. "Somebody's still going to be the boss pig, he said, "but if we can at least get them even to start with, they're going to stay a lot closer to uniformity than if we don't."

Once created, small groups should remain fixed. Changing sows will increase fighting and producer costs. If sows must be mixed, it's helpful to mix them into a new pen to reduce territorial behavior. "Get them all out, walk them down the aisle and put them somewhere else," Mr Safranski said. "That way, nobody's invading my house; I'm moving into a house with strangers."

Pens must also have adequate space. This can be hard, as very little data exists on how much space group-housed sows need, Mr Safranski said.

With large-group housing, the idea is that sows fight less because they can't figure out who the bullies are, Mr Safranski said. This allows for dynamic groups that can be continually mixed. Broad sorting is still helpful to account for different feeding needs or temperaments.

Observing individual sows is still harder, which can complicate breeding, vaccinating, heat checking and control of individual feed intake.

Trickle feeding or electronic sow feeders offer possible technological solutions for the feed dilemma of group housing. Each has pros and cons.

Limiting sow stress just after mating can also improve group housing, Mr Safranski said. "Sows are most sensitive to stress from the time of mating to about 30 days after," he said. "If we can avoid stressing sows from group housing during that period, it adds value."

After that, sows can physiologically handle a lot of stress, such as fighting, which is associated with group housing, and still maintain pregnancy.

Mr Safranski said the European standard combines both housing types. Groups are used post-weaning to deal with stress, help sows cycle and sort those in heat. Sows ready for mating move to the boar area to be mated. They remain in a stall for 30 days then return to groups.

Regardless of housing type, the key is attention to detail, Mr Safranski said.




Title: Re: American Hog News USDA
Post by: mikey on May 07, 2008, 09:17:57 AM
Tuesday, May 06, 2008Print This Page
NPPC Urges USDA to Address Pork Industry Crisis
US - Pork producers, who are losing an estimated $30 to $50 per hog, called on USDA to take steps that would address what the National Pork Producers Council (NPPC) calls an “industry economic crisis.”



NPPC leaders in a recent meeting with Ag Secretary Ed Schafer requested USDA purchase an additional 50.5 million pounds of pork for various federal food programs.

USDA this week responded to that request, announcing plans to purchase as much as $50 million of pork products for donation to donate the pork to child nutrition and other domestic food assistance programs.

“The action by USDA to buy additional pork will benefit America’s pork producers, the U.S. economy, and people who rely on the government’s various food programs,” said NPPC President Bryan Black.

U.S. pork producers in the past seven months have lost an estimated $2.1 billion. Lenders estimated some producers could lose half or more of the equity in their operations by year’s end, NPPC reported.

Phil Borgic, president of the Illinois Pork Producers Association (IPPA) and farmer from Nokomis, last week during an interview with FarmWeek discussed the impact higher input prices and mounting financial losses are having on the pork industry.

“I’ve been saying all along the pork industry will make money. I just don’t know what it (the industry) will look like,” Borgic said. “I don’t know how many pigs we’ll be producing and how many farms will be left.”



Title: Re: American Hog News USDA
Post by: mikey on May 08, 2008, 08:32:29 AM
Wednesday, May 07, 2008Print This Page
Chicken and Pork Prices Expected to Rise
US - According to the Tennessean, it is likely that the US will be getting yet another dose of inflation, with the rise in chicken and pork prices.



Overall food inflation could double this year, lifted by the rising costs of fuel, corn and soybeans, some analysts predict.

Food inflation hit four per cent last year, up from 2.4 per cent in 2006.

While beef prices were already high, chicken and pork prices didn't reflect record costs for feed and fuel.

That's poised to change as chicken and pig producers who have been losing money slaughter more animals to decrease the supply and raise the prices they can charge.

U.S. shoppers spent 5.8 per cent of their income on food in 2006, according to the U.S. Department of Agriculture, a lower proportion than in any other nation. In the United Kingdom, consumers spent 8.7 per cent of their income on food, and in most of the world it's at least 10 per cent.

But the U.S. portion seems certain to rise, as chicken and pig producers say prices have to go up as feed costs increase.

"American consumers are only just beginning to feel the impact of sharply higher food prices," said Pilgrim's Pride Corp. Chief Executive Clint Rivers.

Tyson Foods Inc., the world's biggest meat producer, forecasts that its expenses will rise $1 billion this year, including $600 million for corn and soybean meal and $100 million on grain.

Pork farm losses, though, may total $3.8 billion for 2008, one-quarter of total production, according to Chris Hurt, an agricultural economist at Purdue University.

He calls the industry "a financial disaster in progress."

The biggest driver to prices is grain costs, which have been affected by the rise in ethanol production and strong export demand due to the weak dollar.

Corn costs have more than doubled over the last two years from $2.50 a bushel to $6.

Smithfield said in February that it would slaughter four per cent to five per cent of its breeding sows.

A smaller breeding population and a wave of expected hog farm failures will boost pork prices by 2009, Hurt predicted.






Title: Re: American Hog News USDA
Post by: mikey on May 09, 2008, 09:01:41 AM
Thursday, May 08, 2008Print This Page
AFBF Speaks Up About HSUS Livestock Auction Video
WASHINGTON, D.C. - Bob Stallman, President, American Farm Bureau Federation, speaks about the mistreatment of farm animals.



In a statement, Mr. Stallman said: “If allegations related to the marketing of non-ambulatory cattle or the mistreatment of any farm animal are substantiated during an investigation by legal authorities, and those actions are in violation of our tough industry standards, or laws were broken, those who were knowingly responsible must be held fully accountable.

“Neither our laws nor industry standards, which have become much stronger over the years, allow the inhumane treatment of farm animals. Quality assurance programs at the national and state levels provide farmers and ranchers with strict guidelines for the production of safe, wholesome animals, including recommendations on necessary animal handling and facilities. Those standards are based on the expertise of veterinarians, farmers, ranchers and animal scientists – the people who work with farm animals daily.

“We are not certain of the validity or scope of the claims HSUS is making about the marketing of non-ambulatory cattle, however, America's farmers who rely on animals for food production know that healthy, well-cared-for animals mean healthy, safe food for Americans and their families. America’s farmers and ranchers take all possible steps to ensure that animals are well cared for seven days a week, 52 weeks a year. As farmers and ranchers, we recognize that superior animal welfare practices lead to the production of high-quality, safe and wholesome meat, milk and eggs, and we’re constantly seeking ways to improve the well-being of our animals. Simply put, without healthy and content animals, farmers and ranchers would not be in business.”




Title: Re: American Hog News USDA
Post by: mikey on May 12, 2008, 07:27:04 AM
Saturday, May 10, 2008Print This Page
Pork Futures: Hogs Settle Mostly Firm
CHICAGO - Feeder cattle and pork bellies also finished higher while most lean hogs closed firm, reports FXStreet.



CME hogs settled mostly firm on generally supportive cash quotes, June/July bull and July/August bear positioning and deep-month speculative buying.

Most pork contracts at first moved up slightly on follow-through buying and positive fundamentals, but quickly faded after profit takers arrived. Also, some in the pit were compelled to sell October and 2009 April through June contract that made new contract highs Thursday.

Meanwhile, nervousness about futures premiums and sporadic CBOT corn pullbacks pressured deferred hog months that were later rescued by late-session speculative buyers.

Also, those who fished for a market bottom were lured by spot-June and nearby-July psychological support levels at around 76.50 cents.

Country hog buyers anticipate steady to firm cash hog bids for Monday. Some producers are expected to conduct fieldwork that might limit the number of animals trucked to market.

Pork bellies ended higher on speculative hedging and technical support.

June lean hogs closed up 40 points at 76.87 cents a pound, and July closed down 15 points at 76.95 cents.




 

Title: Re: American Hog News USDA
Post by: mikey on May 13, 2008, 08:22:06 AM
Monday, May 12, 2008Print This Page
Manure Management Webcast Coming Soon
US - A live webcast for those interested in adding to the bottom line by implementing certain manure management practices will be broadcast on 16 May.



The program, viewable on the Web at http://connect.extension.iastate.edu/lpelc/ will begin at 1:30 p.m. Central Daylight Time. The Web meeting room opens 15 minutes before the start time.

Three presenters will give an overview of market-based conservation and experiences from two programs. One program generates carbon credit revenue with methane capture covers on manure lagoons and storage facilities. The other is the New York City watershed program; upstate farmers are paid to implement best management practices to protect the New York City water supply. The webcast will end with a discussion of what is needed to promote market-based conservation in the United States.

The webcast is produced by eXtension, an educational partnership of cooperative Extension services throughout the United States. K-State Research and Extension is a partner in eXtension.

The presenters for the May one-hour seminar are Suzy Friedman, Environmental Defense Fund; Dale Dewing, Cornell University; and Jim Jensen, Environmental Credit Corporation.

The seminar is hosted by the Livestock and Poultry Environmental (LPE) Learning Center, part of eXtension. The center advocates that individuals involved in public policy issues, animal production and delivery of technical services for confined animal systems should have on-demand access to the nation's best science-based resources.

The center has a monthly online newsletter, to which anyone can subscribe. All information, including archived monthly Webcasts from the past year, is on www.eXtension.org under the resource area animal manure management.

Another Webcast will be available June 20 on nutrient management for small-scale farms.



Title: Re: American Hog News USDA
Post by: mikey on May 14, 2008, 11:02:50 AM
Tuesday, May 13, 2008Print This Page
2008 Beef/Pork Exports Continue Upward Trend
US - U.S. red meat exports continued their strong showing in the first quarter of 2008 with an increase of 41 percent in pork exports and 29 percent in beef (including variety meat), according to the U.S. Meat Export Federation (USMEF).

 
“We’re seeing continued strong performance in both sectors,” said Erin Daley, USMEF manager of research and analysis. “The weak U.S. dollar is certainly a factor, and gains are being made despite the growing shortage of shipping containers to take our exports to overseas markets. That issue may become more significant in the second quarter, particularly as the South Korean beef market begins to heat up.”

U.S. Pork Exports
Pork exports for the first quarter totaled 366,411 metric tons (807.7 million pounds), 39 percent more than the first quarter of last year. When combined with 87,631 metric tons (193.2 million pounds) of pork variety meat exports (up 54 percent), the U.S. pork industry sold 454,042 metric tons (1 billion pounds) valued at more than $1 billion to international markets. March exports of 149,391 metric tons (329.3 million pounds) were second only to the monthly record set in February of 2008.

Japan resumed its position as the No. 1 volume and value market for U.S. pork, with exports up 11 percent in the first quarter: 105,780 metric tons (233.2 million pounds) sold for $336.6 million. March exports to Japan were up 24 percent compared to 2007, setting a new monthly record at 40,853 metric tons (90 million pounds). At the same time, Japan’s imports from the European Union (primarily Denmark) fell 20 percent. According to Daley, this trend is expected to continue since Danish hog numbers were down 10.4 percent in April. Danish producers are losing an estimated 47 euros ($72) per hog slaughtered, mainly due to high feed prices, according to the European Market Survey (MLC Economics).

U.S. pork exports to China and Hong Kong valued at nearly $170 million totaled 102,469 metric tons (225.9 million pounds) — 74,007 metric tons of muscle cuts and 28,462 metric tons of variety meat — 280 percent more than the first quarter of 2007. In March alone, pork plus pork variety meat exports to China and Hong Kong totaled 27,724 metric tons (61.1 million pounds) compared to 7,651 metric tons (16.8 million pounds) in March 2007, but down from the record 40,894 metric tons (90.1 million pounds) set in February 2008.

According to Chinese import statistics, the United States was the largest supplier during the first quarter, followed by the EU (France and Denmark) and Canada. Chinese pork production is expected to remain around 16 percent below the peak of 2005 due to continued disease issues. The decrease in Chinese production, as estimated by the U.S. Department of Agriculture (USDA), is around 6 million metric tons (13.2 billion pounds), compared to total (record) U.S. production of 9.96 million metric tons (21.9 billion pounds) last year.

U.S. pork exports to Mexico rebounded 3 percent from last year’s levels, totaling 78,646 metric tons (173.3 million pounds) valued at $123 million, while quarterly exports to Canada were 22 percent greater (39,995 metric tons or 88.1 million pounds) with monthly exports remaining at more than 13,000 metric tons (28.6 million pounds) since September last year.

The U.S. pork industry sold 39,864 metric tons (87.8 million pounds) to Russia during the quarter, an increase of 142 percent, including 7,186 metric tons (15.8 million pounds) of variety meat. Already the United States has met two-thirds of the annual tariff rate quota (TRQ) for Russia with exports valued at $85.7 million. In a surprise move, Russia banned imports from Canada in April then delisted a number of EU plants and, most recently, delisted four U.S. plants. Over the same first quarter of the year, Brazil’s exports to Russia have declined 17 percent.

U.S. pork (including variety meat) exports to South Korea in the first quarter were 1 percent higher at 35,270 metric tons (77.7 million pounds) valued at $72 million.

Another monthly record was set in U.S. pork exports to the ASEAN region in March: 4,608 metric tons (10.1 million pounds), primarily to the Philippines, Singapore and Vietnam, again showing the competitiveness of U.S. pork enhanced by the weak dollar. Exports to the ASEAN valued at $17.6 million totaled 10,119 metric tons (22.3 million pounds) for the first quarter, an increase of 239 percent.

Exports to the European Union (EU) increased 80 percent to 8,452 metric tons (18.6 million pounds), primarily destined for France, Germany and Britain. They were valued at $22 million. Daley noted that EU pork production is contracting, resulting in higher prices, but not enough to offset the high costs of production. Export refunds for chilled and frozen pork continue and the 100,000 metric tons (220.4 million pounds) of pork in storage, subsidized by private storage aid, will be released onto the market through the summer months.

Exports to Central and South America were up 6 percent, totaling 8,410 metric tons (18.5 million pounds) valued at $17.4 million, with most of the growth occurring in exports to Honduras.

Exports to the Caribbean were up 48 percent to 6,884 metric tons (15.1 million pounds), including the Dominican Republic, which was up 250 percent to 2,778 metric tons (6.1 million pounds). The exports were valued at $13.4 million.

U.S. Beef Exports
In the first quarter of 2008, U.S. beef exports increased 37 percent over the first quarter of the previous year to 117,730 metric tons (259.5 million pounds) and beef variety meat exports increased 19 percent to 79,913 metric tons (176.1 million pounds) for a combined 29 percent increase to 197,643 metric tons (435.7 million pounds) – a 40 percent increase in value to $682.7 million.

March exports of beef plus beef variety meat totaled 67,669 metric tons (149.1 million pounds) compared to 51,005 metric tons (112.4 million pounds) last year and 99,189 metric tons (218.6 million pounds) in 2003. Mexico and Canada remain the top two markets: exports to Mexico are up 21 percent for the quarter to 97,353 metric tons (214.6 million pounds) valued at $328.7 million while exports to Canada are up 64 percent to 32,449 metric tons (71.5 million pounds) valued at $145.4 million.

Excluding variety meat, Japan is the No. 3 market, with exports increasing 23 percent in the first quarter to 9,517 metric tons (20.9 million pounds) with a value of $50.7 million, an increase of 33 percent over the previous first quarter. According to Japanese import statistics, beef imports from Australia fell 16 percent in the first quarter to 81,898 metric tons (180.5 million pounds), but still accounted for 80 percent of total Japanese beef imports. Japan’s chilled beef imports from the United States increased 57 percent during the first quarter, reflecting growth in the retail presence of U.S. beef compared to last year and an increase in the supply of U.S. beef that meets Japanese import requirements. Japan’s delisting of National’s Brawley Beef plant did not keep Aeon from resuming U.S. beef sales in May — supported by USMEF’s “We Care” campaign.

Vietnam has emerged as the fourth-largest market for U.S. beef, with exports valued at $23 million totaling 9,016 metric tons (19.8 million pounds) in the first quarter. March exports to Vietnam were 3,600 metric tons (7.9 million pounds), breaking the previous monthly record of 3,145 metric tons (6.9 million pounds) set last October. Exports to Vietnam reflect the strong demand in the Greater China region amid tight supplies and high prices for both beef and pork, said Daley.

Exports to Taiwan continued to increase through March, with March exports at 2,243 metric tons (4.9 million pounds) up 37 percent from March last year and second only to the record set in November 2007. For the first quarter, exports were up 27 percent in volume and 37 percent in value (6,116 metric tons or 13.4 million pounds valued at $29.76 million). USMEF-Taiwan notes that importers are expecting higher U.S. prices with the resumption of U.S. beef exports to Korea, but also due to strong demand for beef from Australia and New Zealand in Russia and the EU. Taiwanese importers plan to continue to import U.S. beef even at higher prices, but demand could be constrained by dampened consumer purchasing power, Daley said. Due to the growing popularity of yakiniku restaurants, USMEF-Taiwan plans to promote chuck short ribs, short plate, chuck flap and other low- to medium-priced cuts.

“U.S. beef is popular at these barbecue-style restaurants due to its marbling and high quality attributes, and it is price-competitive with Australian beef – and a bargain compared to Australian wagyu,” Daley said. She noted that USMEF-Taiwan also initiated more promotion activities with high-end restaurants due to the recent price competitiveness of U.S. tenderloins, ribeyes and striploins. U.S. beef has a 65 percent market share of Taiwan’s chilled beef imports and a wide presence in retail stores.

First-quarter beef exports to the EU exceeded last year’s first quarter by 263 percent, totaling 3,335 metric tons (7.3 million pounds) valued at $20 million. The EU is facing tight supplies of beef due to restrictions on Brazilian beef imports, which permit only small volumes from less than 100 approved farms, and the impasse over Argentina’s export restrictions. Daley noted that Argentina has announced a complicated resolution to its beef export ban, which could result in a monthly allowance similar to the previous export quota, about 45,000 metric tons (99.2 million pounds) per month. Beef exports have not yet resumed, however.

Uruguay is exporting more beef to the EU in the absence of the other South American suppliers. It is benefiting from record prices at this time of unprecedented demand and total slaughter through April was up 12 percent year on year. Cow slaughter increased 10 percent, which will lead to a future tightening of supply, she said. At the same time, U.S. beef imports from Uruguay are down nearly 90 percent.

U.S. beef exports to the Caribbean were down 2 percent at 3,135 metric tons (6.9 million pounds) but up 12 percent in value to $15.6 million. Exports to Jamaica, the second-largest destination following the Bahamas, increased 35 percent to 567 metric tons (1.2 million pounds) valued at $2.6 million.

Exports to Hong Kong grew 4 percent over last year, due to strong volumes in January, but are still restricted to boneless beef from cattle under 30 months of age. According to Hong Kong import statistics, imports from Brazil increased 77 percent and accounted for 42 percent of the total.

“While USDA data do not show significant volumes of beef exports to Russia, judging from the number of Statements of Verification (SOVs) issued by the U.S. Agricultural Marketing Service (AMS), exports for December 2007 through April 2008 totaled about 5,300 metric tons (11.6 million pounds), including variety meat,” said Daley. “USMEF understands that both U.S. beef and pork are extremely competitive in Russia due to relatively high prices for Brazilian beef and pork and Australian beef. Australia’s beef exports to Russia are about five times larger than last year, further reflecting the drop in exports – and higher prices – from Brazil.”

Beef variety meat exports in the first quarter increased 40 percent in value to $176 million. Mexico, the top destination, jumped 29 percent to 47,541 metric tons (104.8 million pounds). Exports to the second largest market, Egypt, fell 13 percent to 17,950 metric tons (39.5 million pounds). Exports to Russia are beginning to recover, at 1,719 metric tons (3.7 million pounds), and exports to Central and South America, especially Peru, increased 79 percent to 1,668 metric tons (3.6 million pounds). Exports to the ASEAN also increased 95 percent to 1,236 metric tons (2.7 million pounds) in the first quarter.



Title: Re: American Hog News USDA
Post by: mikey on May 17, 2008, 09:44:05 AM
Friday, May 16, 2008Print This Page
Revised Meat Packers' Legislation Issued
WASHINGTON, D.C. - The much anticipated legislation requiring meat packers to report the prices they pay producers for food animals has finally been issued.



The National Pork Producers Council worked diligently to get the mandatory price reporting law approved and submitted comments on the regulations proposed by the U.S. Department of Agriculture.

The Livestock Mandatory Reporting Act, first approved in 1999 and amended and reauthorized in October 2006, is administered by USDA to provide information to producers, packers and other market participants on pricing, contracting for purchase and supply and demand conditions for livestock, livestock production and livestock products.

Packers have been voluntarily reporting livestock prices since the law expired Sept. 30, 2005. Making the reporting mandatory, points out NPPC, means that USDA can audit reports.

“During this time of economic crisis for many pork producers, having mandatory price reporting helps producers make business and production decisions that will allow them to get the best price for their hogs,” said NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio.

The reauthorized price reporting law, which will take effect July 15, 2008, includes three enhancements to the pork reporting provisions:

More sows are included in pricing reports to more accurately reflect the sales and prices paid in the sow market.
Changes in the timing for data reporting to help USDA with its workload and, thus, to increase report accuracy and efficiency.
USDA may publish price distributions for net prices to provide more information that is more reflective of market situations.



Title: Re: American Hog News USDA
Post by: mikey on May 21, 2008, 10:07:19 AM
Tuesday, May 20, 2008Print This Page
Sustainability Becomes a Desirable Product Factor
US - Half of U.S. consumers say they consider at least one sustainability factor when selecting brands to buy or stores to shop, according to a recent Information Resources Inc. (IRI) survey.



In the study, 22,000 U.S. consumers surveyed were asked to determine the impact of four key sustainability features in their product and store selection—organic, eco-friendly products, eco-friendly packaging and fair treatment of employees and suppliers. One-fifth of those surveyed were determined to be “sustainability driven,” taking at least two sustainability factors into account when making their selections.

Key findings highlighting the evolution of sustainability factors in consumer decision-making include:

Approximately 30 percent of consumers said they look for eco-friendly products and packaging in their brand selection
Up to one-quarter of those surveyed consider fair trade practices along with eco-friendly or organic designations in selecting a shopping destination
Nearly 40 percent of consumers search specifically for organic products
The survey also underscored the significance of sustainability across every consumer age group. Though contrary to assumptions that the focus on sustainability is a more youth-oriented phenomenon, IRI data shows that older consumers are actually the more likely audience to weigh multiple sustainability factors in their purchases.


Title: Re: American Hog News USDA
Post by: mikey on May 25, 2008, 09:03:48 AM
Saturday, May 24, 2008Print This Page
Market Preview: Cold Storage Trending Up
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



USDA’s monthly cold storage report, released yesterday (May 21), showed a slight reduction in April 30 frozen pork inventories from their record level of March 31. Total pork in commercial warehouses amounted to 652.2 million pounds, fractionally lower than last month’s 652.7 million pounds (see Figure 1). This level is still the second highest on record.

Figure 1




The increase was led on a percentage basis by stocks of butts, which grew by 158% vs. April 2007. The actual increase in butt inventories amounted to 16.937 million pounds, putting butts third on the actual tonnage increase list for this month. The 27.7 million pounds of butts in cold storage is a new record, breaking the old mark set two months ago. Note that butt inventories had never exceeded 20 million pounds until January 2008 and they have done so each month since.

Figure 2



The largest tonnage increase for April cold storage stocks was bellies at 38.58 million pounds. Those stocks now stand 62% larger than one year ago. Ham inventories increased by 30.6 million pounds or 38.5% over last April.

I think at least a portion of the increases in inventories of these three cuts is attributable to the refrigerated shipping container shortage, which we have discussed in the past. While many think the U.S. pork industry primarily exports loins and tenderloins, these three cuts have become much more important in the export mix in recent years – especially as more price-sensitive markets, such as Mexico and China/Honk Kong, – have grown. Any difficulties for exports in general will show up in these inventory numbers.

Figure 3



Loin inventories grew by 23%, year/year, or 8.75 million pounds in April.

I am still not overly concerned about the levels of cold storage inventories. As can be seen in Figure 2, cold storage stocks as a percentage of production dropped in April, indicating that March was very likely the high for the year. If that’s the case, this year’s peak will be lower than in six of the past 10 years.

 


Figure 4

Meat Inventories Plentiful
Demand has been, by all accounts, exceptional this spring. If that continues, these stocks will not pose a problem for the U.S. pork industry. On the other hand, one must remain concerned about the sheer volume of product that is in warehouses. Should any hiccup develop for pork demand – either at home or abroad – these supplies would become burdensome to prices very quickly.

That concern increases when one considers the amount of total meat and poultry in cold storage (Figure 3). April’s level of 2.354 billion pounds is just 10 million pounds shy of the April record set back in 2002. Turkey stocks will continue to grow through next fall, so it will take some pretty dramatic reductions in either chicken or pork stocks or both to keep from surpassing the 2002 record levels the rest of this year.

Figure 5




And current levels of output do not portend well for large reductions of frozen inventories. Figure 4 shows the amount of combined weekly meat and poultry production increase over last year. I have used a six-week moving average to smooth the data a bit, but the message is clear: We are producing a huge amount of meat protein each week.

 

Corn Concerns Grow
Finally, the situation with this year’s corn crop does not look good at all. Figures 5 and 6 show data as of last Monday for the percent of corn acres planted and percent emerged. The planting rate is the second lowest since 1990 – barely ahead of the flood year of 1993, while the percent of corn emerged is far and away the lowest since 1999 (the first “emergence” data that I could find in the USDA database). Hopes for more than the planned 86 million acres of corn are now, I think, long gone and the hope for at least a trend-line yield of 153 or so bushels per acre is in dire jeopardy.

Figure 6




Consider the likely consequences of 86 million acres and lower-than-needed yields, plus crude oil surpassing $130/barrel this week. What does that mean for corn prices if gasoline and ethanol follow the oil market? Will there be any reason to run ethanol plants below their capacities?

This is not a good situation for the meat business. But you’ve heard that before, right?









 



Title: Re: American Hog News USDA
Post by: mikey on May 27, 2008, 08:37:13 AM
Monday, May 26, 2008Print This Page
Mankato Company and U of M Develop PRRS Vaccine
MINNESOTA - A Mankato-based company, along with researchers from the University of Minnesota, has developed a new pig vaccine that farmers and veterinarians are hoping will gradually obliterate PRRS, a disease that costs the industry more than $550 million a year.



According to the Mankato Free Press, porcine reproductive and respiratory syndrome (PRRS, pronounced ‘pers’) has been a bane to hog farmers, killing piglets and preventing them from thriving for over 20 years.

Until now, farmers have been trying to control outbreaks but were unable to ward off future strains. They’ve focused on biosecurity and hygiene in a less than successful effort to prevent infection.

But “this vaccine we hope and we think will be a breakthrough that will allow that (eradication) to happen,” said Mark Whitney, hog specialist for the U of M Extension Service.


Title: Re: American Hog News USDA
Post by: mikey on June 08, 2008, 09:18:27 AM
Saturday, June 07, 2008Print This Page
WPX Report: Companies Team Up to Produce Non-antibiotic Feed Supplement
US - Nutrition and animal health companies Chr Hansen and TechMix in the US have joined forces to create a range of nutritional supplements for young piglets.



The two companies announced their joint effort in combining their knowledge of oral rehydration and direct feed microbials (DFM) to produce BlueLite Plus 2Bw at World Pork Expo in Des Moines Iowa, USA this week.

The product is designed to help reduce the threat of weaning and intestinal problems in piglets without antibiotics.

The companies describe the product as a combination of hydration support through an electrolyte formula and gut microbials to produce active enzymes in the piglet's small intestinal tract.

"BlueLite Plus 2Bw is an excellent product for any feeder pig or farrow-to-finish operation that's concerned about the health and quality of their piglets," said Dr Peter Franz, chief veterinarian at TechMix.

"You just add it to the piglets' drinking water after weaning.

"BlueLite Plus 2Bw provides three critical things: rehydration through palatable acidification, electrolyte energy fortification and direct-fed microbial supplementation that promotes long-term intestinal health."

Dr Franz said that pig producers have reported that the new supplement ahs been quickly accepted and has shown improved feed in-take and improved long-term performance.

Dr Brian Kremer at Chr Hansen said that the antimicrobial aspect of BlueLite Plus 2Bw stabilises the piglets' intestinal health.

"Basically, we're reducing the bad bugs and delivering more good bugs.

"In the field, we're seeing less mortality, increased feed intake and increased daily gain - all without antibiotics."



Title: Re: American Hog News USDA
Post by: mikey on June 10, 2008, 07:48:32 AM
Monday, June 09, 2008Print This Page
Hog Lagoon Replacement Plan Funded
US - Environmentalists regard hog lagoons as a hazardous cause of pollution. They also represent health threats due to waste disposal.



A lagoon that burst at an Onslow County hog farm in 1995 sent nearly 25 million gallons of untreated waste flooding into the New River, killing thousands of fish and prompting a state moratorium on new hog farms, reports StarNewsOnline.

An in-depth study by N.C. State University, funded by the hog industry under an agreement with the state, backed up that fact.

But that doesn't mean officials are backing away from their long-term goal of phasing out the state's nearly 5,000 active and abandoned lagoons.

Taking its first tentative step in seeing if a next-generation disposal system is feasible, the N.C. Division of Soil and Water Conservation last week announced that it would give as much as $500,000 each to two farms and a waste-processing operator. The money will allow the farms to install the necessary equipment to separate the solids from the water waste and Super Soil Systems Inc. USA to expand its plant to process the additional solid waste into fertilizer and other gardening products.

Joe Rudek, a scientist with Environmental Defense Fund's Raleigh office, called the move an important first step in moving the process along.

But he said the program wasn't meant to subsidize the hog industry in cleaning up its ways, but to help the farmers who were willing to embrace the new but economically unproved technology.

"This lagoon-conversion program is not a program to fund conversion of the entire industry," Rudek said. "The purpose is to reward these farmers who are taking that risk."

Ray Campbell, president of Clinton-based Super Soils Systems, admitted that his company's disposal system isn't as cheap as the traditional lagoon-and-sprayfield method.

The Super Soils system is just one of the innovative technologies officials are interested in getting in the ground. Others would seek to capitalize on methane gas from hog waste.

Angie Whitener, director of policy development with the N.C. Pork Council, said the hog industry trade group was looking forward to seeing how the Super Soils and other innovative technologies performed environmentally and economically.
Title: Re: American Hog News USDA
Post by: mikey on June 11, 2008, 09:23:41 AM
Tuesday, June 10, 2008Print This Page
CME: Corn and Soybean Plantings
US - CME's Daily Livestock Report for 9th June, 2008.



All eyes will be on USDA’s monthly Crop Production report and World Supply and Demand Estimates (WASDE) Tuesday morning to see what, if any, changes USDA’s statisticians and economists have made to estimates for this year’s corn production numbers. It is pretty unusual for USDA to make any dramatic changes in the June report since planted acreage and crop condition are still unknown but respondents to DowJones Newswire’s monthly pre-report survey think that some small changes may be made. The ranges and averages of those estimates appear in the table at right. We have to wonder just where USDA will reduce 2007-08 usage to bring year-end stocks upward as these analysts expect.

 


Meanwhile, conditions have deteriorated for this year’s corn and soybean crop. The percentage of corn acres rated good and excellent by USDA fell by 3% to just 60% this week. The graph at left shows the best and worst years as well as the 10-year average ratings and those for last year and this. This year’s good-excellent percentage is still 6% ahead of 2002 but the proximity to the year of the worst average annual ratings and the trend are both concerning, especially given the amount of rain received in the Midwest this past week. River conditions in Iowa are fast approaching those of 1993’s record year for flooding. Several central Iowa rivers are projected to crest above 1993 levels later this week even without further rain.

E-Livestock Volume 6/9/08 6/6/08 6/2/08
LE (E-Live Cattle): 7,843 11,060 7,166
GF (E-Feeder Cattle): 413 405 315
HE (E-Lean Hogs): 20,731 23,597* 17,075
*Denotes a new record for Globex volume

USDA’s weekly Crop Progress report did not include an update to last week’s 95% of all acres planted, indicating that few more may be planted. See charts on page 2. USDA’s next estimate for total 2007 acres will come in the Acreage report on June 30. Corn had emerged on 89% of all acres as of Sunday. That compares to 99% last year and a 5- year average of 95% and still leaves 2008 as the slowest year on record for corn emergence.

Soybean planting progress slowed sharply last week, with only 8% being added to the previous week’s 69%. This week’s 77% compares to 94% last year and a 10-year average of 89%. Soybean emergence, at just 32%, is the slowest on record.

That’s the bad news for grain buyers but there is some good news — there is still time to make these crops! Iowa State University climatologist Dr. Elwyn Taylor told audiences Thursday and Friday at World Pork Expo that the threat of drought has lessened dramatically and that, though heat-degree days have lagged behind their normal level, they could still reach a level to provide good yields. His objective yield estimates for the U.S. as of last week, based on 100 years of yield data, are 148 bushels/acre for corn and 37 bushels/acre for soybeans.








Title: Re: American Hog News USDA
Post by: mikey on June 12, 2008, 11:45:10 AM
Wednesday, June 11, 2008Print This Page
CME: Another Look at Corn and Soybeans
US - CME's Daily Livestock Report for 10th June, 2008.



In case you cannot tell, Steve Meyer writes today: My apologies for another grain themed DLR. If we keep this up, economist ethics (I hope that is not an oxymoron) will force us to rename this newsletter. But three factors force me to write once again about grains. First, they are the dominant news of the day and, in my opinion, the most important factor that will affect livestock markets over the next few years. Second, the conditions for the potential feed cost train wreck that I have been writing about for the past couple of years are all coming to pass. Third — and absolutely related to the other two — I spent several hours this afternoon helping fill sandbags to protect homes and businesses in my home town of Adel, Iowa from the rising waters of the Middle Raccoon River. My family, home and business are all out of harm’s way but the river will crest sometime tomorrow at or above the level of the Flood of 1993. Saylorville Reservoir north of Des Moines will breach a remodeled spillway tonight that is 6 feet higher than it was in 1993. And the National Weather Service is forecasting 2-4 inches of rain tomorrow night for much of Iowa.

I tell you this not to be any kind of hero or to entice your sympathy but to point out that the situation with excess moisture is very, very serious. Planted acres in 1993 fell 2.1 million short of the planned level. Only 85.9% of planted acres were harvested — the lowest level since 1983 (a severe drought year) and one of only two times (the other was 2002) since 1990 when less than 90% of planted acres were harvested. Finally, the average national corn yield in 1993 was 100.7 bushels per acre. Compare that to 1992’s 131.5 and 1994’s 138.6. That 1993 yield was 17.5% BELOW the 1980-2007 trend. In short — it was a large train wreck.

E-Livestock Volume 6/10/08 6/9/08 6/3/08
LE (E-Live Cattle): 8,129 7,843 11,444
GF (E-Feeder Cattle): 431 413 236
HE (E-Lean Hogs): 23,963** 20,731 12,663
**Denotes a new record for Globex volume



The major difference between 1993 and what we see this year is timing. The 1993 flood occurred in mid-July to early August after a long period of constant and heavy rains in the upper Mississippi River valley. The earlier pattern this year provides some hope of a respite but conditions had better change quickly.

Steiner Consulting Group included the graph in their bi-weekly Meat and Deli Planner last week and I thought it deserving of some attention. It is no accident that corn (black line, right-hand scale) and crude oil (red line, left scale) have risen almost lockstep over the past few years. Ethanol has provided a direct demand-side connection that did not exist to any great degree before the withdrawal of MTBE as a gasoline additive in 2005. It is almost certain that the connection will continue.

USDA released its monthly Crop Production report today and it contained a projected national average corn yield of 148.9 bushels — 5 bushels lower than last month’s trendline yield. The tables on page 2 show USDA’s supply and use estimates for both corn and soybeans. The lower yield forecast, combined with lower feed/residual use and exports, pushed projected corn carryout to only 673 mil. bu. or 5.3% of total projected usage. Interestingly, the latest yield estimate is very close to that of ISU’s Dr. Elwyn Taylor that we cited yesterday.


Title: Re: American Hog News USDA
Post by: mikey on June 16, 2008, 11:08:49 AM
Friday, June 13, 2008Print This Page
NIST: Crude 'Oil' from Pig Manure
US - After studying crude oil from pig manure, NIST's (National Institute of Standards and Technology) chemists have come to a series of conclusions, one of them being that it "smells worse than manure", to quote NIST chemist Tom Bruno.



But a job's a job, so the NIST team has developed the first detailed chemical analysis revealing what processing is needed to transform pig manure crude oil into fuel for vehicles or heating. Mass production of this type of biofuel could help consume a waste product overflowing at U.S. farms, and possibly enable cutbacks in the nation's petroleum use and imports. But, according to a new NIST paper, pig manure crude will require a lot of refining.

The ersatz oil used in the NIST analyses was provided by engineer Yuanhui Zhang of the University of Illinois Urbana-Champaign. Zhang developed a system using heat and pressure to transform organic compounds such as manure into oil.

As described in the new paper, Bruno and colleagues determined that the pig manure crude contains at least 83 major compounds, including many components that would need to be removed, such as about 15 percent water by volume, sulfur that otherwise could end up as pollution in vehicle exhaust, and lots of char waste containing heavy metals, including iron, zinc, silver, cobalt, chromium, lanthanum, scandium, tungsten and minute amounts of gold and hafnium. Whatever the pigs eat, from dirt to nutritional supplements, ends up in the oil.

While the thick black liquid may look like its petroleum-based counterparts, the NIST study shows that looks can be deceiving. "The fact that pig manure crude oil contains a lot of water is unfavorable. They would need to get the water out," Bruno says.

The measurements were made with a new NIST test method and apparatus, the advanced distillation curve, which provides highly detailed and accurate data on the makeup and performance of complex fluids. A distillation curve charts the percentage of the total mixture that evaporates as a sample is slowly heated. Because the different components of a complex mixture typically have different boiling points, a distillation curve gives a good measure of the relative amount of each component in the mixture. NIST chemists enhanced the traditional technique by improving precision and control of temperature measurements and adding the capability to analyze the chemical composition of each boiling fraction using a variety of advanced methods.

NIST researchers analyzed the graphite-like char remaining after the distillation by bombarding it with neutrons, a non-destructive way of identifying the types and amounts of elements present. Two complementary neutron methods detected the heavy metals listed above.

Bruno and colleagues currently spend much of their time analyzing military jet fuels and are not planning a major foray into pig manure. But Bruno concedes that the effort may have a payoff. "Who knows, it might help decrease the nuisance of manure piles."



Title: Re: American Hog News USDA
Post by: mikey on June 16, 2008, 11:10:25 AM
Friday, June 13, 2008Print This Page
US Running Out of Corn
US - According to the latest figures from the US feed grains outlook, American producers are going to see tough times ahead. Lower production, strong domestic demand and lower ending stocks are going to set a trend of tight corn supply and point towards upcoming shortfalls.



The 2008-09 US corn crop is projected at 12.1 million bushels, down 7% from record in 2007-08. Adding pressure is torrential rains across the US Midwest region, which has delayed corn plantings. This has made many producers anxious as out of season plantings risk lower yields. Early June is the latest producers can look at planting corn, otherwise they will need to switch to other crops.

Regardless of delayed plantings, corn yields are still forecast to be lower than last year, which will fail to meet the US 13-billion bushel demand. Ending stocks of corn are forecast to the lowest since 1995-96. A consequence of tighter supplies is higher prices, with the USDA forecasting the season-average price to be $5 to $6/bushel, well above the previous forecast of $4.10 to $4.40/bushel.

Despite lower forecast US corn output, globally coarse grain production is projected to increase slightly to 1.1 billion tonnes, due to increased corn production in Argentina, Brazil, China and EU-27.

The US corn crop is used for three main reasons, feed, fuel (ethanol) and export. The US is a huge player in the global market, producing 42.5% of the global crop and expected to account for 64% of all corn traded internationally during this marketing year. If the US corn crop declines, it affects not only the price of corn, but also the price of related products that can be substituted, including wheat, soybeans and hay.

Predictions are that the feed and feed residue element of the corn crop will be substantially lower in the 2008-09 season than 2007-08. This should cause livestock production to eventually fall, as predicted by USDA for 2009. Also, feeders will turn to distillers dried grains (DDG’s), a by-product of ethanol production, as they try and contain feed costs.



Title: Re: American Hog News USDA
Post by: mikey on June 20, 2008, 12:38:51 PM
Thursday, June 19, 2008Print This Page
EPA Urged to Push Biofuels Out of Food Domain
US - A delegation of 58 members of Congress sent a letter to the U.S. Environmental Protection Agency (EPA) encouraging the agency to pursue advancing the development of cellulosic biofuels and other fuels that do not contribute to rising food prices and environmental concerns as it evaluates the impact of renewable fuel standards.



“As you know, domestic food prices are rising twice as fast as inflation and global food prices have nearly doubled in the last three years,” the letter, addressed to Administrator Steve Johnson, states. “There are many factors contributing to rising prices, including growing global demand, the price of oil, import restrictions, poor weather and the recent acknowledgement that the biofuels mandate is also a factor.”

Approximately 25 percent of America’s corn crop was diverted to produce ethanol in 2007 and 30 to 35 percent will be diverted in 2008.

The letter encourages the use of cellulosic biofuel, noting that cellulosic biofuel could displace one-third or more of domestic gasoline supplies, could significantly reduce the price of gasoline and could reduce greenhouse gas emissions from fuels by 80 percent or more, while fuels derived from corn and other crops will displace only about 4 percent of America’s gasoline supplies this year.

“As you evaluated the impact of the renewable fuels standard on rising food prices, we urge you to do so in a way that will accelerate the development of advanced biofuels,” the letter concludes.



Title: Re: American Hog News USDA
Post by: mikey on June 22, 2008, 10:00:59 AM
Higher Bacteria Count on Organic Pigs
COLUMBUS, US – While consumers are increasing demand for pork produced without antibiotics, more of the pigs raised in such conditions carry bacteria and parasites associated with food-borne illnesses, according to a new study.

 

A comparison of swine raised in antibiotic-free and conventional pork production settings revealed that pigs raised outdoors without antibiotics had higher rates of three food-borne pathogens than did pigs on conventional farms, which remain indoors and receive preventive doses of antimicrobial drugs.

“Animal-friendly, outdoor farms tend to have a higher occurrence of Salmonella, as well as higher rates of parasitic disease,” said lead study author Wondwossen Gebreyes, associate professor of veterinary preventive medicine at Ohio State University.

 
Wondwossen Gebreyes
More than half of the pigs on antibiotic-free farms tested positive for Salmonella, compared to 39 percent of conventionally raised pigs infected with the bacterial pathogen. The presence of the Toxoplasma gondii parasite was detected in 6.8 percent of antibiotic-free pigs, compared to 1.1 percent of conventionally raised pigs. And two naturally raised pigs of the total 616 sampled tested positive for Trichinella spiralis, a parasite considered virtually eradicated from conventional U.S. pork operations.

As long as pork is cooked thoroughly according to federal guidelines, the presence of these infectious agents in food animals should pose no risk to human health. The U.S. Department of Agriculture recommends that consumers cook fresh pork to an internal temperature of 160 degrees Fahrenheit. The pathogens generally do not cause illness in the animals.

Gebreyes won’t recommend one type of pork production practice over another.

“We are just doing the science and showing the results,” he said. “Does having an antibiotic-free and animal-friendly environment cause the re-emergence of historically significant pathogens? I think that is an extremely important question for consumers, policymakers and researchers to consider.”

The study is published in a recent issue of the journal Foodborne Pathogens and Disease.

On conventional farms, pigs remain indoors in ventilated barns and have free movement within pens. Antibiotics are added to their feed to promote growth and protect against infections, followed by a withdrawal period before slaughter to ensure the meat doesn’t contain any antibiotic residue.

On antibiotic-free farms, pigs are reared in open fields with free access to soil and water. They are given antibiotics only for treatment against active infections, and once sick pigs are treated, they are separated from the herds and no longer marketed as naturally raised pork.

The scientists tested pigs on farms in North Carolina, Ohio and Wisconsin. Of the total studied, 324 were raised in antibiotic-free systems and 292 lived on conventional farms. The researchers took blood samples to test for the presence of antibodies against bacterial and parasitic infections. The higher rates of infection on natural farms were consistent in all three geographic regions.

Of the three pathogens studied, the positive tests for the Trichinella roundworm surprised researchers the most. Gebreyes said federal inspectors might expect to find one positive test for the parasite among more than 14,000 pigs, so the two positive tests among 600 pigs were significant.

The infection resulting from this parasite, trichinellosis, has historically been associated with undercooked pork, but in the recent past, the parasite has been associated mostly with wild mammals. People with this infection typically experience diarrhea, vomiting, fatigue and fever first, followed by headaches, cough, and aching joints and muscle pains. The symptoms can last for months, and severe cases can be fatal, according to the Centers for Disease Control and Prevention.

Prescription drugs are available to treat the infection. The nearly 7 percent of naturally raised pigs infected with Toxoplasma, while a relatively small number, still represented a significantly higher infection rate than that found in the conventional herds.

Most people with a functioning immune system can resist symptoms associated with infection by Toxoplasma, which is considered most risky for pregnant women and those with compromised immune systems.

Salmonella is a common cause of food-borne illness, typically causing diarrhea, fever and abdominal cramps that resolve within a week and rarely require treatment in healthy people. More than 1 million people are infected by Salmonella in the United States each year, according to the World Health Organization.

Gebreyes noted that routine antibiotic use does not fully prevent the occurrence of Salmonella bacteria even in conventional pig herds, as shown by the 39 percent of those pigs in this study that tested positive for the pathogen. By comparison, 54 percent of antibiotic-free pigs tested positive for Salmonella.

“The advantage of using antibiotics is to prevent these infections from occurring. The disadvantage is it appears to create a favorable environment for strains of the bacteria that are resistant to antibiotics,” he said. “On the other hand, when antibiotics are not used, the pigs tend to get less resistant bugs, but higher rates of the common bacteria of food safety concern. The prevalence of Salmonella was significantly higher in the antibiotic-free herd than in the conventional herd. That could cause concern down the road about eating this product.”

The researchers theorized that naturally raised pigs’ exposure to moisture, vegetation and other animal species could contribute to their higher rates of pathogens. This study is part of a comprehensive examination of food safety issues related to pork production that includes testing pigs for a broader range of disease-causing organisms.



Title: Re: American Hog News USDA
Post by: mikey on June 22, 2008, 10:07:12 AM
Total Red Meat Production at Record High for May
US - Commercial red meat production for the United States totaled 4.22 billion pounds in May, up 4 percent from the 4.08 billion pounds produced in May 2007.

 

Pork production totaled 1.82 billion pounds, up 3 percent from the previous year.

Hog kill totaled 9.06 million head, up 3 percent from May 2007.

The average live weight was down 1 pound from the previous year, at 268 pounds.

January to May 2008 commercial red meat production was 21.0 billion pounds, up 7 percent from 2007. Accumulated beef production was up 4 percent from last year, veal was down 11 percent, pork was up 11 percent from last year, and lamb and mutton production was down 4 percent.

May 2007 contained 23 weekdays (including one holiday) and 4 Saturdays.
May 2008 contained 22 weekdays (including one holiday) and 5 Saturdays.


Title: Re: American Hog News USDA
Post by: mikey on June 30, 2008, 08:03:33 AM
Saturday, June 28, 2008Print This Page
Market Preview: Anxiously Awaiting Hog and Crop Forecasts
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



All eyes turn to USDA reports as agency statisticians publish estimates of hog numbers on Friday and, perhaps more importantly, crop acreage and grain stocks on Monday. Watch your e-mail on Monday for our summary of the Hogs and Pigs Report.




Figure 1 shows the results of DowJones’ quarterly pre-report survey of market analysts regarding their expectations for the report. These numbers generally agree with my expectations. I believe (perhaps it is more hope than believe) that the breeding herd may be a bit smaller than this. I expect a 2% reduction based on both sow slaughter and gilt slaughter data from the University of Missouri.


I believe a few of these numbers are quite notable. First, analysts still expect the market herd to be significantly larger than last year. June slaughter has run 7.0% higher than last year when one compares the same number of weekdays and weekends. As usual, that number vs. the 180-lb. and over inventory will serve as an early checkpoint for the report.


Second, the March-May pig crop expectations are at +2%. If true, this means that we will not get much supply relief until 2009. Historically, we have had to adjust that number downward for death losses and upward for imports from Canada to arrive at an expected slaughter two quarters hence. The death losses should be much smaller, suggesting that fourth-quarter slaughter could be more than 2% larger. Imports of both market hogs and feeder pigs from Canada (See Figures 2 and 3.) have gone below year-earlier levels and, thus, suggest that fourth-quarter slaughter growth will be less than 2%. How those numbers balance will be important for fall hog markets.

Third, analysts see a larger reduction of output in the future as evidenced by the larger reductions in farrowing intentions. Those reductions, though, are slower than I expected given the feed cost situation we face.



High Futures Prices Aren’t Profitable
Which brings us to the elephant that remains in the room. Figure 4 shows cost and hog price projections based on Chicago Mercantile Exchange (CME) Group futures prices on June 23. These include those $99-plus Lean Hogs futures prices for next summer and note that they do not cover costs. While that purple line representing projected hog prices appears pretty close to the red cost line, readers must look at the vertical distance between them to estimate losses per cwt. of carcass – and that difference is significant. A 200-lb. carcass will incur losses of $25.10 in June, $34.28 in September and $40-plus in October and November. If you sell one pig per month at these costs and prices through May (i.e. those June Lean Hog futures prices impact May more than June), you would lose right at $300.

I do not see much relief in sight for this situation. There is at least as much chance for the corn crop to get smaller as there is for it to get bigger. Oil prices hit $140/barrel yesterday and that adds value to ethanol and corn used for ethanol. Hog prices could be higher, but these futures prices are optimistic relative to the prices I get from basic supply-demand analysis. Excellent consumer demand or export demand could help, but helping enough to alleviate these projected losses is unlikely, in my opinion.



Communicating the Crisis
I spent Tuesday and Wednesday in Washington, DC, with National Pork Producers Council officers and staff, and Dr. Robert Wisner of Iowa State University and Mark Greenwood of Agstar Financial in Mankato, MN. Our mission was to inform key members of Congress and the administration (USDA, the White House, Council of Economic Advisors) of the serious situation facing the pork industry. The midwestern floods have created a teachable moment, it appears, as we got far more attention than ever before.

NPPC is asking Washington for five things:

Penalty-free release of non-environmentally sensitive land enrolled in the Conservation Reserve Program (CRP). This has been a controversial issue, but it appears to be gaining some support. It is estimated that 12-15 million of the 34 million CRP acres could be cultivated without detrimental environmental impacts. NPPC is asking for this release by Aug. 1 to allow farmers to plan for the 2009-2010 crop year – and in hopes that some acres might get planted to winter wheat to provide feed supply help as early as next June.

Support the request by Texas Gov. Rick Perry to waive the renewable fuel standard. My impression is that there is sincere interest in reducing the standard or, perhaps, just pushing the numbers out one year given this year’s tight supplies. That would mean the standard for 2010 would be 9 billion gallons instead of 10.5 billion.

Eliminate the blender’s tax credit. The amount of agreement to “leveling the playing field” for corn buyers surprised me. A more politically palatable alternative might be structuring the credit so it is negatively related to corn prices – i.e., significant when corn prices are low and zero when corn prices are high. The trick is defining high and low – but it is possible and, I think, should be pursued.

Eliminate the import tariff. This goes hand-in-hand with a change in the tax credit.

Waive farm program rules to allow a harvestable crop to be planted yet this year on acres that have not been planted or have been lost due to weather. This is point 5 just because there probably is not enough time to get it done at Washington, DC’s notoriously slow pace.

Time to Get Involved
Now is the time to get involved whether you agree with these five items or think something entirely different should be done. Congress will have limited opportunities to take action over the next two months. Please let your representatives and senators know what you think.





Title: Re: American Hog News USDA
Post by: mikey on June 30, 2008, 08:06:19 AM
Friday, June 27, 2008Print This Page
USDA Approves of First Swine Visual Tag
MINNESOTA - Digital Angel, an advanced technology company in the field of animal identification and emergency identification solutions, announced today that its Destron Fearing unit has received approval from the U. S. Department of Agriculture (USDA) for Premises Identification Number (PIN) tags for identification of swine entering harvest channels.



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"Having premises identified is the first step in improving the animal health infrastructure of the country. The availability of USDA-approved tags for market sows is a logical next step toward enhancing traceability and improving the industry’s ability to detect diseases earlier so the spread of a disease can be limited efficiently." 
Patrick Webb, Director of swine health programs for the National Pork Board
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This is the first instance of a visual livestock identification tag to gain USDA approval. While not intended for use as unique individual animal identification, the new, non-RFID tags, manufactured by Destron Fearing, will provide a valuable tool to enhance the traceability of breeding stock and to support the USDA’s National Animal Identification System (NAIS).

Consisting of a pink tamper-proof button and a pink visual panel stud, each tag carries the official USDA shield, the assigned premises identification number (PIN) and a notice stating “unlawful to remove”. Finally, there is space available on the visual panel for producers to include an individual management number should they choose to use one.

“Over 73 percent of pork producing sites have registered their premises and received a premises identification number, or PIN,” said Patrick Webb, Director of swine health programs for the National Pork Board, a non-profit agency created by the U.S. Congress that collects pork production fees and administers industry programs.

“Having premises identified is the first step in improving the animal health infrastructure of the country. The availability of USDA-approved tags for market sows is a logical next step toward enhancing traceability and improving the industry’s ability to detect diseases earlier so the spread of a disease can be limited efficiently,” he said.

Joseph J. Grillo, Chief Executive Officer of Digital Angel, commented, “We are very proud that Destron Fearing is the first to receive NAIS approval for a visual tag. As the oldest livestock identification manufacturer in the United States and the originator of both visual tags in 1945 and radio frequency identification (RFID) tags in the 1980s, we believe it is important to provide our customers with new value-added solutions that help to keep them ahead of the curve in today’s changing marketplace.”

NAIS is a modern, streamlined information system that helps producers and animal health officials respond quickly and effectively to animal health events in the United States. The program, which is voluntary at the federal level, consists of three parts: premises registration, animal identification and tracing. Destron Fearing already produces three other NAIS-compliant products, including an injectable RFID transponder for use in horses, alpacas and llamas.


 
Title: Re: American Hog News USDA
Post by: mikey on July 03, 2008, 10:48:31 AM
Animal Feed & Animal Nutrition News AVMA questions antibiotic ban in animals
// 02 jul 2008

Scientific data do not support a ban on the preventative use of antibiotics in food animals, according to The American Veterinary Medical Association (AVMA).

 
Dr. Lyle P. Vogel, AVMA assistant executive vice president said that evidence suggests that when livestock are not given antimicrobials for prevention of disease - as has happened in Denmark since the 1990s - an increase in illnesses is likely to occur. In some instances, he added, antibiotic resistance in humans is 10 times greater in Denmark than in the US despite the Danish ban.

"Risk assessments demonstrate a very low risk to human health from the use of antimicrobials in food animals, and some models predict an increased human health burden if the use is withdrawn," Vogel testified. "Non-risk-based bans of approved uses of antimicrobials will negatively impact animal health and welfare without predictably improving public health."

Vogel told the Senate Committee on Health, Education, Labor & Pensions that the Food & Drug Administration's evaluations of antibiotic use in livestock are more stringent than for human antibiotics. FDA evaluates each food animal antibiotic for human, environmental and animal safety, and additionally, public and private surveillance systems monitor the use of the drugs for the emergence of antibiotic resistance.

AVMA's written testimony and information about the issue will be posted on AVMA's food safety advocacy website.


Title: Re: American Hog News USDA
Post by: mikey on July 11, 2008, 07:19:52 AM
Thursday, July 10, 2008Print This Page
Pork Producers Should Try Marketing Lighter Pigs
US - In a university report, Purdue University Extension swine specialist Allan Schinckel says that pork producers who are feeling pinched by high feed prices should contemplate marketing lighter pigs.



With corn and soybean meal prices climbing, producers can cut their losses $4 to $5 per head by selling their animals to processors at the minimum acceptable weights, Schinckel says.

"We have corn at $7 a bushel and soybean meal at $350 per ton -- a more than doubling of feed prices," he says. "Market hog prices haven't gone up to compensate for those higher prices, and producers are in a position where they are unprofitable and losing money.

"They can minimize those losses by taking the pigs to the pork processor on the lower end of the pork processor's acceptable weight range. If there's no discount for pigs above 250 pounds, you would market pigs semi-load by semi-load at just above 250 pounds."

According to Agriculture Online, processors pay the highest market price for pigs weighing 250 to 280 pounds, Schinckel said. When corn was $2.50 per bushel and soybean meal $180 per ton, producers could maximize their profits with pigs weighing at least 271 pounds, he says.

Research by Schinckel and fellow Purdue animal sciences and agricultural economics colleagues Paul Preckel, Mark Einstien, Todd Hobbs and Brian Richert found lower acceptable weight marketing is a producer's best strategy in high feed cost cycles. The findings were based on the percent lean requirements of three major pork processors: Tyson Foods, Indiana Packers Corp. and Farmland Foods, reports Agriculture Online.

Marketing lighter pigs is more labor-intensive, Schinckel says.

"A producer is going to have to sort pigs," he says. "They will go into each pen and separate the heavier animals two additional times per finishing unit. That comes out to about another six to 10 man-hours of labor per thousand-head finisher barn."

Producers who follow a lighter pig marketing strategy will make more frequent trips to the processor, Schinckel says.

The Purdue researchers also found that producers save on feed costs with pigs that maintain a higher lean growth rate and better feed conversion at heavier weights.

"Each producer needs to know the marginal feed conversion of their pigs between 230 pounds and about 280 pounds," Schinckel says. "They also need to know if their pigs are dropping in percent lean enough that the percent lean discount is changing as the pigs go to the heavier weights.

"In general, low to average percent lean pigs require more feed per pound of liveweight gain and are dropping in percent lean, and should go to the lower market weights. So pigs that stay lean to heavier weights and have a higher lean gain are a little bit less sensitive to high feed prices than pigs which are fatter and less efficient."

Eventually, market prices paid to producers are going to have to catch up with feed costs for the industry to remain viable, Schinckel says.

Title: Re: American Hog News USDA
Post by: mikey on July 11, 2008, 07:22:01 AM
Thursday, July 10, 2008Print This Page
Hog Industry Faces Crisis After a Decade
CHICAGO - Hog producers are about to face some of the worst losses after a decade this fall when a plenitude of pigs, fed high-priced feed, enters the market.



According to Reuters, ten years ago prices for hogs dropped sharply, hitting a 50-year low of $10 per 100 lbs, as supplies exceeded the pork industry's capacity to process them. The industry lost millions of dollars then and needed years to recover.

It is unlikely hog prices will drop to $10 this fall, but for big losses to pile up they don't have to.

Prices for corn and soybean meal, key feeds, are so high that if hogs sell from $40 to $45 per 100 lbs this fall, as expected, losses will be huge, because it will cost $55 to $60 per 100 lbs to produce them. On a 260-pound hog, that equates to a loss of about $40 per head.

"The magnitude of producer losses in the fourth quarter, due to high corn, could approach levels of 1998," said Jim Robb, agricultural economist at the Livestock Marketing Information Center. "There is a 50-50 chance we could lose that amount of money."

It is assumed these big losses will force some hog producers out of business and others to reduce production. As a result, economists and Chicago hog traders believe that fewer hogs will mean much higher prices in 2009, reports Reuters.

That is largely why the June 2009 hog contract 2LHM9 at the Chicago Mercantile Exchange has been setting records. On Wednesday, it peaked at 100.25 cents per lb on a carcass basis, the highest ever for any CME hog contract. The 100.25 cents is equivalent to $74 per 100 lbs on a live-hog basis.

"I think hog prices will increase after the first of the year, which they typically do, but it is the costs that are just outrunning cash," said John Lawrence, agricultural economist at Iowa State University.

Because of strong demand for corn, a smaller crop this year, and losses due to flooding, corn prices are expected to stay high for much of 2009.


Title: Re: American Hog News USDA
Post by: mikey on July 23, 2008, 10:56:35 AM
Tuesday, July 22, 2008Print This Page
Amendment to Block Argentine Meat Moves On
US - A move to close US borders to the threat of foot and mouth disease from meat and livestock imports from Argentina has taken a step closer.





Senator Time JohnsonSouth Dakota Democrat senator Tim Johnson has seen his ammendment to the 2009 Agriculture Appropriations bill, based on his bill, The Foot and Mouth Disease (FMD) Prevention Act of 2008, has passed the Appropriations Committee.

The amendment would prevent the USDA from spending any money to implement the plan in Fiscal Year 2009 to open US borders to import fresh meat and livestock from Argentina.

"Today’s action is a strong step forward for our agricultural community, which would be devastated by the extreme risk Foot and Mouth Disease presents to our livestock herds," said Senator Johnson, a member of the Agriculture Appropriations Subcommittee.

"The USDA’s proposal is shortsighted, and I remain committed to ensuring that no dangerous products from Argentina cross our borders."

The USDA recently announced plans to allow cattle, sheep and pig and certain livestock product imports from a region within Argentina.

Senator Johnson said that although the region itself is believed to be free of the disease, FMD is found in the surrounding regions and countries. The potential risk of airborne transmission and contamination remains high.

Johnson and Senator Mike Enzi, a Republican from Wyoming developed The Foot and Mouth Disease Prevention Act of 2008 following the repeated concerns of their constituents worried about the risks of the proposal. Since its introduction on July 10, thelegislation hass an additional 11 cosponsors from both sides of the political aisle.

The legislation also has the strong support of organizations across the state and nation, including the American Sheep Industry Association, the South Dakota Cattlemen's Association, R-CALF, the South Dakota Stockgrowers Association, the US Cattlemen's Association, the Western Organization of Resource Councils, Dakota Rural Action, the South Dakota Farmers Union, National Association of State Departments of Agriculture and the National Farmers Union.

The majority of veterinarians within the National Assembly of State Animal Health Officials (NASAHO) also oppose the USDA’s plan, including Dr. Sam Holland, South Dakota State Veterinarian and NASAHO President.

"I am pleased that the Appropriations Committee has approved this provision and I hope that the Senate will consider the Ag Appropriations bill sooner rather than later. The United States has been free of Foot and Mouth Disease since 1929, and we should demand the same from our trade partners," Senator Johnson added.



Title: Re: American Hog News USDA
Post by: mikey on August 06, 2008, 12:36:55 PM
Monday, August 04, 2008Print This Page
Countries of Meat's Origin Soon to be Stated
US - Imagine this - picking up a T-shirt with the label: Product of the United States, China, Indonesia and/or Honduras.



Shoppers could see labels like that in the supermarket meat case, starting this fall.

A law requiring meat to be labeled with the country of origin takes effect Oct. 1, but rules that resulted from a compromise among industry interests might leave consumers scratching their heads, says the Honolulu Advertiser.

The law, altered by the new farm bill, allows special labeling for ground meat and for products of hogs and cattle that were born in Mexico or Canada but fattened and slaughtered in the United States. The U.S. Agriculture Department last week issued rules for interpreting the modified law.

A lot of pork will likely carry the label: "Product of the United States and Canada."

Allowing that label means packers won't have to keep track of whether the hogs they are slaughtering were born in Canada or the United States. Millions of young Canadian pigs are imported for fattening in the Midwest each year, and packers don't want to have to process them separately from U.S.-born swine. The common label means they won't have to.

Labels for ground beef could be even longer. Industry officials say any one package of ground beef often contains meat from a variety of different countries. But under the new rules, packers won't be required to keep track of what beef goes into a particular package.

The rules should certainly make it easier for processors, but is this really helping shoppers? Chris Waldrop of the Consumer Federation of America thinks so.

"It will provide them with information that they haven't had up until now," he said. "It will at least give them a group of countries that the meat could have come from. If they are concerned about any one of those countries, they can shop elsewhere."

Whether this has any real impact on consumer behavior remains to be seen.



Title: Re: American Hog News USDA
Post by: mikey on August 14, 2008, 08:07:26 AM
Wednesday, August 13, 2008Print This Page
Visit to World's Largest Pig Plant
US - Smithfield's facility at Tar Heel is the world's largest pork processing plant and occupies one million square feet. It employs 5,000 people and produces an average of 8 million pounds of meat daily.



Having seen a small slaughterhouse operation, Andrea Weigl of News & Observer wanted to tour Smithfield Packing's plant south of Fayetteville.

She reports that Smithfield Packing Co. has a huge presence in North Carolina. Of the company's 14,000 US employees, 10,000 work at facilities in Tar Heel, Wilson, Kinston, Elon, Clayton and Clinton.

Last year, Smithfield announced it would phase out gestation crates at its farms by 2017. Smithfield's contract farmers will be expected to do the same.

The 2-by-7-foot crates confine sows during their four-month pregnancies. The sows can stand or lie down but not turn around. Animal activists hailed Smithfield's decision and hoped other companies would follow suit.

The pigs are unloaded from tractor-trailers into a series of concrete corrals that hold at most 15,000 pigs for an average of four hours. It is a sea of pink flesh.

One by one, the pigs are guided into one of four gas chambers where seven pigs are killed at once. Gassing causes less trauma for the animals and creates a better product; less muscle constriction means the meat is more tender, says Dennis Pittman, director of corporate communications.

The pigs' bodies are then hung by their feet onto overhead tracks in a sweltering part of the plant that smells of excrement and blood. Jugular veins are cut, and troughs on the floor collect the drainage. To remove hair, the carcasses are dipped in hot water, beaten by paddles inside a machine and enveloped in flames.

From there the pig carcasses proceed along a massive disassembly line: to the head room, the casing room, the chitterlings room, the marination room.

From a viewing area inside one large processing room, you stand above a maze of conveyor belts along which workers wield knives. A line of pig mid-sections rolls by. The loins veer off down one line, ribs are cut out by another line of workers, bacon and skin veer off to their own conveyor belts.

Cardboard boxes about the size of small jacuzzis are everywhere, being filled with up to 2,000 pounds of meat.

All the workers are encased in plastic smocks that come down to their knees. They wear safety helmets, a hair net that covers part of their face, ear muffs and latex gloves.

No human hands touch the meat. Those wielding knives wear belly guards and steel mesh gloves to protect themselves.

The rooms are filled with the rattle and hum of the conveyor belts and the intermittent beeps of the many forklifts moving those jacuzzi-sized boxes of meat.

On this day, hams were headed to Europe, hot dog casings to Korea, bacon to Wilson to be smoked and cured.

Every part of the animal is used: the blood is sold to cosmetics companies; the pancreas and pituitary glands are sold for medical uses; and the parts of the pig not for human consumption become dog food.

Finding other uses for all parts of the pig lowers the price of bacon and hams, Mr Pittman says.

"We're able to offer a quality product at a reasonable price," he says. "If it were not for agribusiness, as I like to call it, they would not be able to do that," concluding the News & Observer report.



Title: Re: American Hog News USDA
Post by: mikey on August 14, 2008, 08:09:34 AM
Wednesday, August 13, 2008Print This Page
Pork Producers: Only the Sharp Survive
US - Dr David Meisinger, executive director of the US Pork Center of Excellence, gives his take on the causes of the current extremely tight margins in pork production in the US and elsewhere.

 

Globalization has never been more apparent in the pork industry than it is right now, writes Dr Meisinger on Farms.com.

The price of corn, fueled by its demand for ethanol production and by the Chinese appetite, has had a major impact on feed prices. The global market for all energy sources has been impacted as acres or hectares are used for production of different commodities. The prices for all energy sources have taken a free ride along with corn on world markets. Land prices are also following suit.

This is the first time in my memory that we have seen tight margins, not so much due to falling prices for pigs but because of rapidly escalating production costs.

Fortunately, in spite of record kills by day, week and month, we have not tested the shackle space limit yet so hog prices have not totally wrecked as they did in ’98. And also fortunately (although many in other businesses would not agree) we have a weak dollar, which has bolstered prices through record exports.

Other pork-producing countries that have lived with high feed prices are even worse off than we are. Many of them pay exorbitantly high transportation costs to procure feedstuffs from other places. This has resulted in greater losses and tighter margins, causing producers in these countries to liquidate and/or reduce production and their exports. Pork is the meat of choice in many regions of the world including much of Europe and Asia. Reductions in their own production or their inability to import pork at a reasonable price have pushed many of them right to our door.

While some estimates are that we have lost over two billion dollars in equity in our industry, which could be considered catastrophic, just think about how much worse it could have been if we had a stronger dollar and exports were not as evident; if these negative margins were more localized to our producers; if we were also experiencing a shortage of shackle space; or if we had some national outbreak of a foreign animal disease that shut down our borders. I am not trying to sugar coat a situation that has brought the ruin of many hog operations today, but I am saying that we should count our blessings once in a while.

In previous times with tight margins, pork producers have had to be very diligent in their businesses to capture every cent they could from their operations. Now, with extremely high input costs mostly in terms of feed, energy and transportation costs, producers need to constantly evaluate their businesses and all their business decisions. They need to be especially vigilant.

Tim Belstra of Belstra Milling in Indiana told a group of extension educators last week, that he has had to carefully watch every aspect of the company’s feed and pig production business, because only a couple of wrong decisions can send the operation over the edge. He claimed they were doing well, but only because of an excellent staff and some very good decisions along the way that have kept them sustainable.

These are tough times – sharp decisions by shrewd pork producers are more important than ever.



Title: Re: American Hog News USDA
Post by: mikey on August 17, 2008, 12:45:03 PM
Saturday, August 16, 2008Print This Page
Market Preview : Demand-Driven Rally Tied to Exports
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



The hog price rally that I wrote about two weeks ago has now carried U.S. farm-level hog prices to near-record highs (see Figure 1). This week will almost surely best last week’s $82.04 national negotiated net price for the high for 2008. Thursday’s price was $84.04. The only prices between these and a clear-cut all-time record are those of the summer of 1990 when live prices reached a level just over $89 on a carcass weight basis.

Figure 1

U.S. NEG'D NET PRICE, WTD. AVERAGE



At a meeting this week, a woman asked a very good question – one you will likely hear fairly often if these prices remain high. She asked: “How can we argue that higher corn prices due to ethanol are causing these higher hog prices?” The answer is: “We can’t.” And, I would add: “We shouldn’t even try!”

I firmly believe that we are headed for higher hog and pork prices in 2009 and beyond because our costs will be higher. Part of that increase is feed costs, but some of it is also higher costs for buildings and capital costs. The latter of those is not due to interest rates, but rather due to the dramatically higher amount of capital that will be required to raise pigs.

Ethanol is primarily responsible for the higher feed costs we see today and will continue to see in the future. Prices must rise to cover those costs. They simply have to.

But this price rally is not being driven by costs. Cost-driven price rallies are caused by lower production. Slaughter is still running 6% higher than last year with year-to-date slaughter still 10% higher than in 2007 (Figure 2).

Figure 2
HOG SLAUGHTER: YR/YR CHANGE



This rally is being driven by demand, pure and simple. Further, it is being driven by export demand. University of Missouri professor Glenn Grimes’ index of domestic consumer-level demand was down again in June, falling to -2.3% from the 2007 level. (You might recall that May’s index was down 1.9%). This only leaves exports and by-products as possible sources of strength for live hog demand; by-product values are highly dependent on export trade.

We will get a more quantified read on this situation when June export data and July retail price data are released on Aug. 13 and 14, respectively. But I think wholesale pork prices clearly tell the story. Notice in Figure 3 that prices for the more “American” wholesale cuts (loins, butts, spareribs and bellies) have moved sideways or downward since hitting their seasonal peaks in mid-May.

Figure 3
PORK WHOLESALE CUT VALUES



On the other hand, the more “export-oriented” cuts, at least for this time of year, have kept rising steadily since that time. In fact, prices of these export cuts began a steady climb at the beginning of this year and the climb shows little sign of slowing. I do not recall ever seeing the prices of all of the major wholesale pork cuts falling within this tight of a price range. One of the benefits of trade is the ability to sell less-preferred cuts in markets that value them more. The beauty of the deal is that, in doing so, we offer consumers in those markets something they want and need. If not, they would not be buying.

 

RFS Waiver Request Nixed
Those are the good news items for this week and they are indeed good. The bad news item is yesterday’s announcement by the Environmental Protection Agency (EPA) that it has denied Texas Governor Rick Parry’s petition for a partial waiver of the renewable fuel standard (RFS) mandate for biofuels. In making the announcement, EPA Administrator Stephen Johnson said that the evidence did not support the claim that the RFS would cause “severe harm” to the economy or the environment. He did point out that EPA concluded that biofuels had been a cause of higher corn prices, but he also concluded that the RFS mandate, specifically, had not been a factor in those higher prices.

Technically, he is correct. The RFS has not actually caused fuel blenders to use more ethanol than they would otherwise have used. In economic-speak, “the constraint has not been binding.” Ethanol output has stayed ahead of the mandated level – sort of. This year’s production may actually be just short of the mandated 9-billion-gallon level, but blenders can apparently use credits (called RINs) they have received for above-mandate blending in past years to satisfy the shortfall this year. We may hear more about these RINs in the future.

Regardless, the RFS has contributed to the growth of the ethanol industry and, therefore, higher corn prices by guaranteeing a government-enforced growing market for ethanol. The RFS says that blenders will be required to use (translated: BUY) 10.5 billion gallons of ethanol in 2009, 12 billion in 2010, and then 0.6 billion gallons more each year until 2015, when the requirement levels out at 15 billion gallons.

What would pork producers and packers do if the government said that retailers and restaurants would be required by law to use 5% more pork each year for the next six years? Do you think that might spur a building boom for hog farms and processing plants? A guaranteed growing market is the stuff of business managers’ dreams. But government fiat does not necessarily make good economic sense. Let’s hope those dreams do not turn to nightmares.



NORTH AMERICAN PORK INDUSTRY DATA




COMLETING MEATS
PRODUCTION AND PRICE SUMMARY



 

Title: Re: American Hog News USDA
Post by: mikey on August 21, 2008, 10:13:17 AM
Wednesday, August 20, 2008Print This Page
Cargill Reports Q4 and Fiscal 2008 Earnings
US – Cargill reported earnings from continuing operations of $744 million in the 2008 fourth quarter ended May 31, up 18 percent from $628 million in the same period a year ago. A $310 million gain on the sale of discontinued operations brought fourth-quarter net earnings to $1.05 billion.



For the full fiscal year, Cargill earned $3.64 billion from continuing operations, a 55 per cent increase from $2.34 billion a year ago. The $310 million gain on the sale of discontinued operations in the fourth quarter brought fiscal 2008 net earnings to $3.95 billion.

Revenues for the full year rose 36 per cent to $120.4 billion. Cash flow from operations increased 77 per cent to $7 billion.

"Cargill posted a record financial performance in a year of exceptionally strong commodity demand, market turbulence and price risk," said Greg Page, Cargill chairman and chief executive officer. "By bringing to bear our business diversity, the full capacity of our global assets, strong risk management and a significant increase in capital deployed, we operated successfully in the most volatile agricultural and energy markets in decades. Despite tight stocks of many agricultural commodities, we maintained reliable supply chains for our customers and created value-adding solutions."


--------------------------------------------------------------------------------
*
'Earnings in agriculture services, food ingredients and applications, and risk management and financial were below the year-ago levels for the three segments' 
 
--------------------------------------------------------------------------------
 
Mr Page said Cargill's investment in the fertilizer industry also contributed significantly to company results. Since 2006, global demand for crop nutrients has surged in response to the world’s increased need for higher crop yields to meet rising demand for food and agricultural commodities.

Among Cargill's five business segments, fourth-quarter earnings were led by the origination and processing segment and the industrial segment, both of which were up substantially from the same period a year ago. Earnings in agriculture services, food ingredients and applications, and risk management and financial were below the year-ago levels for the three segments.

For the full year, earnings were led by origination and processing, which increased results substantially from last year's level. The industrial segment, which includes Cargill's investment in the fertilizer business, also posted exceptionally strong earnings. Both the agriculture services and the food ingredients and applications segments were well ahead of last year. Earnings in risk management and financial declined moderately from last year's high, though outstanding performances in several areas reflected the segment's diversification.

Mr Page underscored the importance of Cargill's attention to maintaining a strong balance sheet. "Over the past two years, it has required on average an additional $15.5 billion in total assets to run the company. Given the persistent turbulence in credit markets, Cargill's adherence to disciplined financial management was a significant element of our performance."

In assessing economic forces at work in the world, Mr Page noted that growth in gross domestic product among the world's developing economies has averaged more than 6 per cent a year since 2000. Although this expansion is projected by the International Monetary Fund and others to slow somewhat in 2008 and 2009, it has given millions of people the means to improve their diets, which has lifted demand for grains and oilseeds. Underpinned by high oil prices and government mandates and subsidies, global production of biofuels also has boosted demand. Yet world grain stocks sit at 35-year lows, drawn down by weather-affected crops and slower growth in average crop yields worldwide. The tight dynamic sent prices and price volatility in fiscal 2008 to new highs and elevated energy prices increased the cost of producing and transporting agricultural commodities.

Mr Page said the world has the means to give agriculture the chance to catch up with demand. "If markets are allowed to work, today's prices can spark a supply response from farmers. A rekindling of public and private investment in agriculture and in rural infrastructure will drive productivity gains."

Cargill continues to invest in global food and agriculture, including in developing countries worldwide where more than half of its 160,000 employees live and work. "Cargill people play valuable roles in helping improve the quality of local agriculture, in providing farmers with access to world markets, and in managing basic and value-adding food-processing facilities," said Mr Page. "This generates income and investment flows in rural communities and, of key significance today, allows food commodities to move from places of surplus to places of need."

Mr Page emphasized the importance of innovation in food, agriculture and risk management. "We are finding new ways to connect with customers, non-governmental organizations and academic institutions so that together we can nourish new ideas and possibilities in the complexity that is today's global economy."

In its report on Cargill's financial results, The StarPhoenix based in Saskatoon, Canada, says that in fiscal year 2008, Cargill spent $2.5 billion on acquisition and capital expenditures, which included buying a grain export terminal and elevator network in Canada, buying a Hungarian grain company and acquiring two poultry processors.

Title: Re: American Hog News USDA
Post by: mikey on August 21, 2008, 10:16:37 AM
Wednesday, August 20, 2008Print This Page
First Fresh US Pork Traced Back to Farm
US - Nature's Premium Brand, a leader in premium, all-natural fresh pork, is the first North American pork company to track DNA for reliable and accurate traceability back to the farm where the animals were raised. Nature's Premium will use IdentiGEN's DNA TraceBack(R) system, a USDA Process Verified, DNA-based traceback system, for indisputable product verification.


 

Nature's Premium Brand pork packages will carry IdentiGEN's DNA TraceBack seal at the meat case to guarantee to consumers that each cut came from the unique Nature's Premium production and processing system. Retailers carrying Nature's Premium pork with DNA TraceBack include Kowalski's Markets of Minneapolis, Minn.; Sendik's Food Markets of Milwaukee, Wisc.; New Leaf Community Markets of Santa Cruz, Calif.; Dave's Marketplace stores of Rhode Island; Donelan's Supermarkets of Boston, and Bogopa, a food distributor serving several international foods markets in greater New York. Nature's Premium Pork is also available through select foodservice distributors nationwide.

The Nature's Premium breed-specific Duroc pigs are raised by family farmers in the Midwest on a strict vegetarian diet with no animal byproducts. Animals are never administered antibiotics or growth promotants. The company's participating farms offer exceptional animal healthcare, sanitation and humane treatment. Its ultra-modern processing facility is unique in the industry for its small size, eco-friendliness and dedication to safe processes.

"Simply put, this program equates to trust," said Nature's Premium Brand founder and CEO John D. Stewart. "We take samples of the actual DNA of every animal in the program to assure that we are delivering the premium quality assurances customers expect."

Nature's Premium began conducting internal trials of the DNA TraceBack system with IdentiGEN's U.S. lab in Lawrence, Kan., in May. The Nature's Premium / DNA TraceBack partnership means that grocery retailers can offer Nature's Premium Brand pork with confidence, knowing that, in the event of a question about the safety or integrity of the product, its source can be definitively verified, Stewart added.

Boyd Oase, Meat and Seafood Director of Kowalski's Markets, said, "From a food-safety standpoint, DNA TraceBack is extremely valuable to my department. And for my customers, it provides 100 percent reassurance that Nature's Premium Pork is a safe, wholesome, all-natural product."

"DNA is a uniquely accurate, permanent and tamper-proof identification tool," said IdentiGEN CEO and President Donald R. Marvin. "Because it uses nature's bar-code -- the unique DNA of every animal -- DNA TraceBack is the ultimate proof of product integrity."

IdentiGEN's DNA TraceBack system is an approved USDA Process Verified Program (PVP). PVP designation signifies that the USDA has verified the IdentiGEN system as a consistently reliable program in which meat processors, meat producers, retailers and consumers can have confidence. There are currently 36 approved USDA Process Verified Programs.



Title: Re: American Hog News USDA
Post by: mikey on August 21, 2008, 10:18:33 AM
Wednesday, August 20, 2008Print This Page
U.S. and Canadian Hog Inventory Up 3 Percent
US - This publication is a result of a joint effort by Statistics Canada and NASS to release the total hogs, breeding, market hogs, sows farrowed, and pig crop for both countries within one publication. This information was requested by the U.S. hog industry to provide producers additional information about potential hog supplies. U.S. inventory numbers were previously released on June 27, 2008.

 

U.S. and Canadian inventory of all hogs and pigs for June 2008 was 80.6 million head. This was up 3 percent from June 2007 and up 5 percent from June 2006. The breeding inventory, at 7.56 million head, was down 2 percent from a year ago and down 1 percent from last quarter. Market hog inventory, at 73.1 million head, was up 3 percent from last year and up less than 1 percent from last quarter. The pig crop, at 36.9 million head, was up 3 percent from 2007 and up 7 percent from 2006. Sows farrowed during this period totaled 3.89 million head, up 1 percent from last year.

U.S. inventory of all hogs and pigs on June 1, 2008 was 67.7 million head. This was up 6 percent from June 1, 2007, and up 1 percent from March 1, 2008. The breeding inventory, at 6.07 million head, was down 1 percent from last year, and down 1 percent from the previous quarter. Market hog inventory, at 61.6 million head, was up 7 percent from last year, and up 1 percent from last quarter. The pig crop, at 29.0 million head, was up 4 percent from 2007 and up 9 percent from 2006. Sows farrowed during this period totaled 3.09 million head, up 2 percent from last year.

Canadian inventory of all hogs and pigs on July 1, 2008 was 13.0 million head. This was down 12 percent from July 1, 2007 and down 14 percent from July 1, 2006. The breeding inventory, at 1.49 million head, was down 5 percent from last year and down 1 percent from last quarter. Market hog inventory, at 11.5 million head, was down 12 percent from last year but virtually unchanged from last quarter. The pig crop, at 7.88 million head, was down less than 1 percent from 2007 but up slightly from 2006. Sows farrowed during this period totaled 801,700 head, down 1 percent from last year.


Title: Re: American Hog News USDA
Post by: mikey on August 30, 2008, 10:27:32 AM
Friday, August 29, 2008Print This Page
CME: Sharp Decline in Pork and Hog Markets
US - CME's Daily Livestock Report for 28th August 2008.



Pork and hog markets have declined sharply in recent days on speculation that pork exports are slowing down and could decline even more significantly if Russia decides to curtail purchases of US pork. Hog futures continued to move lower on Thursday and Q4 hog futures have lost almost 500 points in the past two days. Cash hog prices also have posted dramatic declines, which should be even more worrying than speculation of what may or may not happen with Russian shipments. The IA/MN lean hog carcass (USDA wt. avg.) closed on Thursday afternoon at $70.73/cwt, $18 or 20% lower than the high of August 8.

The recent speculation about export markets and the sharp reaction of futures to it highlighted a point that has become ever more prominent in recent years, namely the increasing reliance of the US pork industry on exports to clean up growing pork supplies. There are clearly rewards in becoming a top supplier in the global marketplace. US producers reaped significant profits for an extended period of time between 2003 and 2007 in large part due to this expansion. While the rise in feed costs eroded many of those profits, there is little question that US producers would be in very dire straits this summer had it not been for strong exports. The risk, however, is one that other large world exporters know too well. Export markets tend to be fickle due to animal disease risk and political power plays. Producers no longer can manage their margins by managing their supplies. They are now also dependent on forces that shape global trade flows.

The attached charts seek to show the significant shift in US pork exports during the past five years. To be consistent, we compared pork export data for the first half of 2008 with the same time period in 2003. Five year ago, US pork exports accounted for about 9% of overall US pork production and pork exports to Russia and China/Hong Kong accounted for about 0.5% of US pork production. In the first half of this year, exports to these two markets now account for almost 7.5% of TOTAL US PORK PRODUCTION and 34% of the 2.5 billion pounds of pork exported during this period. Overall pork exports in 2008 have accounted for 21.5% of all pork produced in the US. The increasing reliance on exports has increased the potential for profit but also the risk associated with it. Over time, we suspect this will lead to further consolidation and integration of the US pork industry in order to derive even greater efficiencies but also better manage the increased risks.

 









Title: Re: American Hog News USDA
Post by: mikey on August 30, 2008, 10:29:45 AM
Friday, August 29, 2008Print This Page
Learning About Animal Welfare Online
US - TheHumaneTouch.org Web site is American Humane Certified's(TM) latest tool for consumers to learn more about the humane treatment of farm animals used to produce food. The animal welfare organisation says that the site is a resource for consumers, producers, retailers and the food service industry to learn more about animal welfare standards.



American Humane Certified is a voluntary, fee-based service available to agricultural producers of protein products. The program provides independent, third-party audited verification that the care and handling of animals of enrolled farms meet the strict animal welfare standards set forth by American Humane Certified. Producers who meet the standards may use the American Humane Certified label on their products.

The American Humane Certified farm animal program is the nation's original independent certification and labeling program for humanely raised food.

All producers certified by American Humane meet basic criteria that requires animals have clean and sufficient food and water; have a humane environment under conditions and care that limit stress; are able to express normal behaviors and live in an appropriate and comfortable environment that includes sufficient space, shelter, a resting area and company of their own kind; and have a healthy life, benefiting from prevention of disease and injury and rapid diagnosis and treatment.

A 2007 survey for American Humane Certified, conducted by the independent Public Opinion Strategies organization, found that 58 percent of consumers said they would spend an additional 10 percent or more for products (meat, poultry, eggs or dairy) labeled as "humanely raised." This same group of consumers ranked the humane label as most important, even over organic or natural labels.

Consistent with the program's mission, the new website addresses the program's goal to be good for animals, good for people and good for businesses that raise and sell food products. The site features information for consumers, grocers and producers, as well as providing a secure Certified producer's section with auditing and management tools. Users can learn about American Humane Certified producers, their unique operations and their dedication to animal welfare. In addition, users can find where to purchase products certified by American Humane as well as upcoming trade and consumer events that will feature the program.


 
Title: Re: American Hog News USDA
Post by: mikey on August 30, 2008, 10:31:47 AM
Thursday, August 28, 2008Print This Page
CME: Pork and Poultry Exports to Russia
US - CME's Daily Livestock Report for 27th August 2008.



A big chill permeated livestock markets on Wednesday following rumors that Russia was preparing to reduce the number of permits for pork and poultry products from the US. While Russian authorities and representatives from the US poultry industry had been discussing possible cuts in imports of US poultry products, the reductions now appear to be on a fast track following the rising tensions over the war in Georgia and the Russian recognition of two Georgian breakaway provinces as independent states.

The fact that the cut in permits would involve not just poultry but also pork seemed to catch the market by surprise. Most hog futures declined the permissible 300 point daily limit and cattle futures also were down sharply on concern than lower prices for competing meats would pressure beef prices going forward.

It is yet too early to know what impact a reduction in Russian purchases of US pork and poultry products will have on markets in 2009. We don’t know how big the cuts will be and when will they go into effect. There is no question, however, that Russia has become a key market for US meat products in recent years. As the chart to the left shows, monthly exports of pork products to Russia have increased from less than 5 million pounds a month in 2005 to around 40 million pounds in the first half of 2008. The fact that Russia is a large buyer of pork trimmings as well as pork variety meats has been a boon for pork packers, especially in recent months when the price of pork trimmings hit all time record levels. Indeed, lean trim prices were trading over the price of ham in some cases. Even more problematic for the meat complex, however, is the outlook for US poultry exports to Russia.

There is a fear that a significant decline in poultry exports to that country would depress prices for dark meats at a time when the industry is already pressured by high feed costs and negative margins. Limited access to the Russian poultry market would certainly require even more significant cutbacks in poultry production. In the short term, however, poultry prices would suffer and in the process pressuring prices for beef and pork. USDA currently expects US pork exports in 2008 to reach 5.406 billion pounds, or 23% of overall US pork production. If the Russian action is swift and dramatic, and it can be, it would remove about 80-100 million from projected Q4 exports. This would be the equivalent of half a million more hogs coming to market than previously expected. It’s a big number considering we are looking at new all time record slaughter this fall.










Title: Re: American Hog News USDA
Post by: mikey on August 30, 2008, 10:33:50 AM
Thursday, August 28, 2008Print This Page
MRI Device Tested to Measure Body Fat in Piglets
US - A new magnetic resonance imaging (MRI)-based device - more advanced than the technology used today for body composition tests - can accurately and precisely measure total body fat in piglets using the principles of quantitative magnetic resonance (QMR), according to Agricultural Research Service (ARS) scientists who evaluated the new technology.



The new device, called EchoMRI, was tested by ARS researchers to measure not only total body fat, but lean tissue mass, free water mass and total body water in piglets. The research was done under a grant from the National Institutes of Health, which wants to know if the new technology could have future applications for human pediatric use.



A new device can more accurately and precisely measure total body fat, lean tissue mass, free water mass and total body water in piglets and may have future applications for human pediatric use.Standard MRI systems are commonly used to scan and visualize tissue in humans. However, when used for body composition analysis, imaging systems are subject to substantial error rates caused by the interpretation of visual images using software that relies on population averages.

EchoMRI uses a new type of QMR methodology to obtain body composition results. Its measurement principle depends on the density of hydrogen nuclei and the physical state of the tissue.

ARS animal scientist Alva Mitchell at the Animal Biosciences and Biotechnology Laboratory in Beltsville, Md., tested the device, developed by Echo Medical Systems, to determine EchoMRI's precision and accuracy in piglets as compared to dual x-ray (DXA) technology and chemical analysis.

Twenty-five piglets, each weighing between 3.5 pounds and 8 pounds, were screened live, anesthetized, and post-mortem, using a prototype EchoMRI device for infants. The piglets were also scanned using DXA and then subjected to chemical analysis.

After DXA scans, EchoMRI screenings, and chemical analyses were completed, EchoMRI was found to be a precise and accurate method suitable for measuring piglet whole body composition, total body fat, lean tissue mass, free water mass, and total body water. While these studies were conducted on piglets, EchoMRI may be transferable to market-weight pigs.

EchoMRI allows for measurements to be conducted in only a few minutes without anesthesia or sedation, is radiation-free, and does not require the subject to remain completely motionless. This facilitates convenient, low-stress repeated tracking of small changes in body composition and can be advantageous to researchers to optimize feed utilization. It could also help researchers identify high-value hogs for breeding.


 
Title: Re: American Hog News USDA
Post by: mikey on September 15, 2008, 07:54:54 AM
Friday, September 12, 2008Print This Page
CME: July Pork Exports HUGE!
US - CME's Daily Livestock Report for 11th September 2008.



USDA’s Foreign Agricultural Service released meat export data for July today and it showed a continuation of both remarkable pork exports and a recovery of beef exports. It is important to note that these data are for July, not August — when we believe exports really became interesting. We noted last week the growth of beef exports to Korea and exports are about the only explanation for August’s pork and hog price run-up. But those data will not be released until mid-October.

Meanwhile, July was another HUGE month for pork exports — up 86.7% from July 2007. What is unbelievable is that the July year-on-year increase is the smallest since March, following 93.7% in April, 96.% May and 111.7% in June. That final number is larger than was widely quoted because it is based on product weight data from FAS, not carcass weight data from ERS. China-Hong Kong led the growth parade once again at +185.3% from last year. China-Hong Kong was also the largest customer for U.S. pork in July — the fourth time this year that Japan has been number two after never having been before. Year-todate pork exports now stand at +70% (please refer to the graph below). Japan is still the largest customer for 2008 but look at the total YTD growth for China-Hong Kong: +425%. Shipments to Mexico in July were just over double those of July 2007 to push YTD shipments up to +39%. Shipments to Russia are up 144% for the year putting Russia in a dead heat with Canada for our fourth largest export customer.


Similar growth of pork variety meat exports has helped hog values by pushing total by-product values to nearly $25/head. As can be seen in the chart below, China-Hong Kong is the leader of that growth as well and has drawn virtually even with Mexico, which was once by far the largest customer for U.S. pork variety meats. Sales to Russia and Korea have grown significantly this year as well.


Figures 1 and 2 show YTD results for the value of pork and pork variety meat exports. They reflect this year’s major volume growth but also indicate that the growth has not been accomplished through price reductions. The value of exports has grown almost as much as has the quantity meaning that prices have fallen only slightly. The value of pork variety meat exports has actually grown more than the quantity indicating higher prices. Both results speak clearly of very strong export demand.

U.S. beef exports grew to 61,869 metric tons in July, 15.9% higher than last year. That growth rate is about half the rate of the January through June rates mainly because this years’ data are being compared to a very good month in July 2007. Japan led the growth in both unit and percentage (+82.6%) terms in July. Shipments to Canada, Mexico, Taiwan and Vietnam grew from last year as well with the last of those being 5 times as large as last year — but still small, accounting for only about 4.5% of total exports. July exports to Korea were 86% lower than in last July but here is another case where one needs to be careful about percentages. July of 2007 was the peak for shipments to Korea after the initial agreements regarding BSE protection mechanisms. In fact, nearly half of our 2007 exports to Korea occurred in July.

 




Title: Re: American Hog News USDA
Post by: mikey on September 16, 2008, 10:30:35 AM
Monday, September 15, 2008Print This Page
Lessons that Record-High Hog Prices Teach
US - The week of Aug. 16 saw hog prices set a record high at just over $90.43. It eclipsed a 17-year mark set after the pork industry’s dramatic consolidation and restructuring of the 1980s and the launch of the “Other White Meat” campaign, writes Troy Marshall.



The pork industry’s last 17 years are similar to what we’ve seen in the packing and feeding industries – concentration and increased economies of scale, along with new technology and improved genetics, which led to higher levels of efficiency. That efficiency and its resulting cost reductions enabled producers to both accept lower margins and maintain margin levels despite overall inflationary pressures and increasing supplies.

This new record-price level for hogs in 2008 is unique in that it was set without a reduction in supply (pork production is up nearly 9% on the year). The driver in hog prices has been demand, not domestically but via exports, the same as in the beef industry.

Two weeks ago, a near-record drop in hog prices was seen, the result of slumping exports and not really reflective of either domestic demand or supplies, reports BEEF Magazine. Thus, the hog market is once again validating the theory that domestic supply and demand are now secondary items in predicting price levels for our products. The two primary factors needed to determine long-term pricing levels are now global and political in nature. Export demand, market access and global supplies, coupled with political initiatives (e.g., ethanol), have become the drivers.

Understanding the ramifications of Russia's recent aggression toward Georgia and its likely impact on market access, discerning the differences in farm policy, changing attitudes toward free trade and energy policy depending on whether Obama or McCain is coupled with a strengthened Democratic majority in Congress, are the factors that will have the most impact on livestock prices and profitability.

Even key metrics regarding consumers are shifting. A decade ago, the main concerns in the US were eating quality, consistency, uniformity and relative price relationships between competing meats or alternative sources of protein. It’s not that issues such as aggregate domestic supply and demand figures are irrelevant; it’s that success in addressing these issues has moved them well down the priority list.

The branded revolution, along with industry initiatives, has removed some of these concerns about US products. It has, thus, allowed consumers to begin to differentiate products on other issues, such as whether the product is locally grown, natural, organic, humanely treated, traceable or perceived to be environmentally and nutritionally positive. It's been found that consumers will afford what it is that they want, and the real driver is in the country's ability to identify and respond to those consumer desires
Title: Re: American Hog News USDA
Post by: mikey on September 28, 2008, 08:35:50 AM
Friday, September 26, 2008Print This Page
Chinese Swine Industry to Expand its Market
US - The U.S. Grains Council is hosting a Chinese swine management team in the United States.



The team attended the Alan Leman Swine Production Conference in St. Paul, Minnesota, to learn more about swine disease eradication programs, which have been successfully implemented in the United States. The programs target diseases such as Porcine Reproductive and Respiratory Syndrome (PRRS) and Porcine Circovirus Associated Diseases.

The team also visited several veterinary clinics and production labs to gain more knowledge on practical health management systems. “The team was especially interested in the conference’s private sessions which discussed new technologies and disease control methods,” said Jason Yan, USGC technical program director in China.

“Some of the team members are close to hog industry services labs in China and will utilize the knowledge gained to help influence best health management practices used within these industries.”

The recent PRRS outbreak in China created a shortage in pork output and caused prices to skyrocket. Additionally, with expected growth in pork demand over the next five to ten years, China will need to embrace more modern approaches to swine production and management, most important of which will be the application of improved technologies associated with animal nutrition and health.

According to Yan, the team was also interested in the new ethanol facilities on the West coast that will focus on exports of distiller’s dried grains with solubles (DDGS) to China “It will be easy to ship DDGS to China from there and the facilities will also supply quality feed for the market,” he said. “Since healthy hogs and greater numbers on feed will create demand and sales opportunities for U.S. feed grains and coproducts, the Council will continue to provide training and technical support to this vital sector of the Chinese meat production industry.”
Title: Re: American Hog News USDA
Post by: mikey on November 11, 2008, 08:34:08 AM
Friday, November 07, 2008Print This Page
Vitamin in Meat and Fish Fights Alzheimer's
US - Researchers at the University of California Irvine have found that high doses of a vitamin helped mice to overcome memory problems similar to Alzheimer's disease in humans. And that vitamin - nicotinamide - is found in poultry meat, pork and fish.



Researchers report that huge doses of an ordinary vitamin appeared to eliminate memory problems in mice with the rodent equivalent of Alzheimer's disease, reports USA Today.

At the moment, it is not known if the treatment will have the same effect in humans. Researchers are beginning to enroll Alzheimer's patients in a new study, and it is too soon for scientists to recommend that people try the vitamin on their own outside of normal doses.

"It's definitely promising, and if we combine this with other things already out there, we'd probably see a large effect," said study author Kim Green, a researcher at the University of California at Irvine.

Alzheimer's disease affects an estimated 5.2 million Americans, causing senility and often leading to death. The Alzheimer's Association estimates that the disease will strike one in eight Baby Boomers.

There is no cure for the neuro-degenerative condition, and medications have only limited effects.

In the new study, Dr Green and colleagues looked at nicotinamide, a form of vitamin B3 that is found in foods such as pork, peanuts, turkey, chicken, veal, fish, salmon, swordfish, tuna and sunflower seeds.

Previous research has suggested that vitamins such as vitamin E, vitamin C and vitamin B12 may help people lower their risk of developing Alzheimer's disease, said Dr Ralph Nixon, vice chair of the Alzheimer's Association Medical & Scientific Advisory Council.

In the new study, researchers genetically engineered mice to develop the equivalent of human Alzheimer's disease. They tested their memory by putting them in a shallow pool of water and seeing if they could remember the location of a platform that would allow them to emerge from the water.

The researchers then gave vitamin B3 to some of the mice; the amount was equal to 2-3 grammes of the vitamin for humans, Green said. The mice were again tested in the pool.

The findings were published online on 5 November in The Journal of Neuroscience.

The forgetful mice that took the vitamin did well.

"Cognitively, they were cured," Dr Green said. "They performed as if they'd never developed the disease."

The vitamin appears to work by clearing 'tangles' of a protein known as tau in brain cells. In Alzheimer's disease, the protein becomes poisonous and contributes to dangerous clogging inside brain cells.

The vitamin holds promise for people, because it is cheap — Dr Green bought a year's supply for $30 — and appears to be safe. Even so, "until we've done the proper clinical trials, I wouldn't advocate people rush out and eat grams of this stuff each day," he said.

Dr Nixon said the new study is "intriguing," but people should be cautious and not assume that "more is better" when it comes to possible treatments, even ones that appear to be safe, concludes the report in USA Today.

Title: Re: American Hog News USDA
Post by: mikey on November 19, 2008, 08:30:40 AM
Tuesday, November 18, 2008Print This Page
Sales of Animal Medicines Rose in 2007
US - The Animal Health Institute has published a report covering the volume of medications used in farm animals and pets in 2007. Total sales were up by 5 per cent compared to the previous year, which could be explained by increased meat production.



Working with veterinarians to provide them the tools to keep farm animals and pets healthy, animal health companies increased sales of antibiotics in 2007. Antibiotics are critical disease-fighting medicines used to treat diseases in dogs, cats and other companion animals, and in farm animals to improve their well-being and ensure the production of safe and wholesome food.

Total sales for use in animals rose 5 percent over 2006, according to data provided by the research-based companies that produce animal medicines. One factor that may have contributed to the increase was an increase in U.S. meat production of more than 2 billion pounds.


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"The entire increase in the percentage of the total amount used for growth and efficiency was in ionophores, compounds not used in human medicine." 

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The antibiotic data were collected from a survey of members of the Animal Health Institute (AHI), consisting of companies that make medicines for pets and farm animals.

"Animals are prone to illness and they require medicines to treat and prevent disease," said AHI President and CEO, Alexander S. Mathews. "Animals need medicine, too, and the availability of these medicines to protect animal health is an essential tool in the fight to protect human health."

The amount of the total used for growth and efficiency in 2007 was estimated to be 13 per cent, up from less than 5 per cent the previous year.

Two factors accounted for this increase. First, revisions to prior years' reports were recognized. Second, some increase was expected as animal producers struggle with high grain prices and seek to capture both the economic efficiencies and the health benefits derived from the use of these products. Notably, the entire increase in the percentage of the total amount used for growth and efficiency was in ionophores, compounds not used in human medicine. The amount of non-ionophore compounds used for growth declined slightly in 2007.

"These figures are an indication that producers are employing judicious use principles," said Mr Mathews. "As they try to gain efficiency to combat high feed costs, they are being careful to use compounds that have no chance of impacting human health."

All antibiotics undergo a rigorous approval process at the Food and Drug Administration that includes an assessment of safety of the product for the treated animal and safety of the milk and meat produced. In addition, all proposed antibiotic products as well as those previously approved undergo a risk assessment procedure, called Guidance 152, to scientifically measure the safety of the product with respect to health hazards resulting from the spread of antibiotic resistance. The Food and Drug Administration (FDA) approves antibiotics used in animals for four purposes: Disease treatment, disease control and disease prevention, which are considered by FDA and the American Veterinary Medical Association to be therapeutic, and for growth promotion.




Title: Re: American Hog News USDA
Post by: mikey on November 19, 2008, 08:33:04 AM
Tuesday, November 18, 2008Print This Page
ISU Seeks Link Between Pathogens and Illness
US - Iowa State University researchers are examining the link between food-borne salmonella from pork and interventions in the slaughterhouse.



No food processor wants pathogens contaminating the product in the plant for at least one obvious reason: the product on sale at retail might carry the risk of foodborne illness. Beyond that, it is unclear what are the chances that a consumer will become ill.

Helen Jensen and colleagues are seeking to connect the dots to determine how changes in the pork production process affect the predicted number of people who become ill with salmonellosis because of pork and how food safety interventions affect risk as well as industry costs. By learning that information, the meat industry would be able to figure the costs of intervening at points in the production process that would be the most effective in making the product safer.



Professor Helen Jensen"We think this model will be helpful for the industry whether it's the packing plant or the Pork Board," said Professor Jensen, an Iowa State University (ISU) professor of economics. She has collaborated with Scott Hurd, an associate professor of veterinary diagnostic and production animal medicine who is spending most of 2008 on leave from ISU as deputy undersecretary for food safety at the US Department of Agriculture. They are pursuing the research with support from the Food Safety Consortium.

Professor Jensen said in discussing the subject with the pork industry, the key question has been whether to invest resources in the farm or in the slaughterhouse. "Then if we do invest resources in the slaughterhouse or on the farm, what's the gain we're going to get? Gain in this situation is measured by reduction in the number of human cases of illness," she said.

It is unusual to carry the research all the way to measuring the number of human illnesses. Professor Jensen noted that US research has not explored that angle to the extent that Europeans have done. Data are limited on salmonella in the United States for anyone seeking to find out about its sero-prevalence - the number of persons who test positive for a disease stemming from the bacterium.

"We're mostly depending on one study done here at Iowa State which has found that the really large swine farms have a somewhat higher sero-prevalence than everybody else," Professor Jensen said. "Now we're converting our data by size categories so that we can put them into our model and say, 'If that's true for the whole the whole US and we apply those data across all herds in the US, how is that going to work out as far as the number of contaminated carcasses?'"

The epidemiological model is being integrated with a multi-market economic model that evaluates producer and processor behaviour and the economic effect on the pork industry.


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"How many human cases of salmonella can we reduce per dollar invested?" 
Professor Jensen
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One significant question to follow is what interventions can be made during the production process that will have an effect on curbing human illness. It is not an easy matter to resolve.

"There's a tendency to think that there's a nice linear relationship - every reduction of salmonella on the pig farm is going to reduce human health risk by the same portion. And that's just not true, for a number of reasons," Professor Jensen said.

Professor Hurd analysed data from Denmark, which has kept more extensive records of the cause-and-effect situation than has the United States. In Denmark, the data show that pathogen reduction on the farm had little impact on human health risk. But pathogen reduction in the slaughterhouse did make a difference.

"The Danish study showed the most cost-effective place to invest resources was in the slaughterhouse because you get a better return on your investment when return is measured in terms of human health cases," Professor Jensen explained. "How many human cases of salmonella can we reduce per dollar invested?"

Title: Re: American Hog News USDA
Post by: mikey on November 28, 2008, 08:23:21 AM
Thursday, November 27, 2008Print This Page
Milo the New Corn for Pigs?
US - Many central US swine producers in recent years switched to a corn-based diet for their stock. That decision may now need to change.



"With our recent harvests, as well as the increasing demand for corn in ethanol production, corn prices have risen dramatically -- especially in comparison to milo's (grain sorghum). As a result, milo is emerging in many areas of Kansas as the more economical feed alternative," said Bob Goodband, swine specialist with Kansas State University Research and Extension.

He uses a long-established price-point "rule" to assess when milo becomes competitive. That rule suggests milo merits a serious look whenever its price is 96 percent or less of the market value of corn.

"In some locations, milo now is just 70 percent of the value of corn," Goodband said.

Pound for pound, milo can totally replace corn in all swine diets, he said. A milo variety's color (red, yellow, etc.) seems to have no impact on its nutrition. Average daily gains of pigs fed milo-based diets have proven to be similar to those of pigs fed a corn formulation.

Producers may want to consider, however, the fact that milo is a bit lower than corn in both energy and lysine content. Unless countered, this can lead to a small drop in feed efficiency.

"They might want to make a slight adjustment in soybean meal or synthetic amino acids," he said.

Milo has a small kernel that's much harder than corn's. So, proper processing is vital, Goodband warned. Roller mills are best for achieving the optimum particle size of 600 to 700 microns for meal diets.

Title: Re: American Hog News USDA
Post by: mikey on December 05, 2008, 07:48:15 AM
US pig firm to import wheat for feed

Murphy-Brown, the pig-raising unit of Smithfield Foods Inc. plans to import wheat from Britain and Brazil for use as animal feed, a company spokesman said earlier this week. It is cheaper to import the wheat to the U.S. East Coast than to transport domestically grown corn or wheat by rail from the Midwest, spokesman Don Butler said.


The company also plans to import some wheat middlings, a by-product of milling wheat that can be used in dietary formulas, from Nigeria, he said. Butler would not say how much wheat Murphy-Brown plans to import or how much money it will save by importing it. The grain will come into the U.S. through Wilmington Bulk LLC, a North Carolina-based feed-buying consortium representing large southeastern livestock companies.

"We will be bringing in some wheat in December and January to really take advantage of the differential between ocean going freight rates and rail delivery," Butler said. Traders on the Chicago Board of Trade agricultural floor have heard rumors for the past several weeks that U.K. wheat would be imported to the U.S. East Coast. This will be the first time in three years that Murphy-Brown has imported grain through Wilmington Bulk, Butler said.

It is a bit surprising that Brazil would import wheat to the U.S. as analysts recently have suggested Brazil may need to buy U.S. wheat to meet its own needs. Brazil normally buys most of its wheat from Argentina, but Argentina is facing a shortfall due to dry weather and reduced plantings.
Title: Re: American Hog News USDA
Post by: mikey on December 09, 2008, 09:51:43 AM
Monday, December 08, 2008Print This Page
Iowa Discovers New Value in Hog Manure
IOWA - High fertilizer costs have some Iowa farmers warming up to a previously shunned byproduct of the business - manure.



There's no indication that Iowans have taken to the smell of manure that hovers around many of the state's hog lots, but a new survey from the Agricultural Law Center at Drake University shows farmers are placing a higher value on the commodity, says KCCI.com.

Farmers said that is because manure is a much cheaper alternative to commercial fertilizer.




Title: Re: American Hog News USDA
Post by: mikey on December 09, 2008, 09:54:41 AM
Monday, December 08, 2008Print This Page
Using Futures Markets Can Improve Margins
US - Purdue University agricultural economist Chris Hurt says pork producers should take advantage of the chance to make money.



According to Pal-item.com, Mr. Hurt said using the futures market to sell lean hogs, while buying less costly grain, will improve margins.

"Hog producers lost a lot of money this year and we're seeing herd cutbacks in the US and Canada. In addition to herd cutbacks, the financial crisis is pushing feed costs down," Mr. Hurt said.

Consumers may eat more pork because it's lower in price, about $2.92 a pound compared to $4.31 a pound for beef, Hurt said. Corn and soybean meal prices are down, making it less costly to feed livestock.

"When you combine the lower cost of production with the smaller hog supply, pork producers should see some profitability by later winter -- February or March," Hurt said.




Title: Re: American Hog News USDA
Post by: mikey on January 07, 2009, 06:27:55 AM
Tuesday, January 06, 2009Print This Page
Behaviour and Performance of Weaned Pigs
US - From the University of Minnesota, Li and Johnston have published a paper on the behaviour and performance of pigs previously housed in large groups. They highlighted possible welfare issues when mixing pigs born to group-housed lactating sows. Body weight variation led to more aggression and injuries for the unfamiliar pigs.



A study was conducted to evaluate the effects of social familiarity and initial bodyweight (BW) variation at mixing on performance and welfare of pigs born to group-housed lactating sows.

A total of 180 pigs from 24 litters were used in a random design with 4 treatments in a 2 x 2 (social familiarity x initial BW uniformity) factorial arrangement. Pigs were born in group-farrowing rooms where they mingled in large groups of 66 to 80 pigs from 10 d of age. At 8 weeks of age (BW = 23 ± 3.1 kg), pigs were allocated to 20 pens of 9 pigs (5 castrated males and 4 females) in a grow-finish room, with five pens assigned to each of four treatment combinations without consideration of relatedness.

Familiar groups consisted of pigs from one farrowing room, and unfamiliar groups consisted of three pigs from each of three different farrowing rooms. Uniform weight groups were formed by using the middle two quartiles, and variable weight groups by using the heaviest and lightest quartiles of pigs.

Aggression and activity behaviour were directly observed by either scan or continuous sampling during a period of four hours on the first 3 days, day 7 and day 14 after grouping. Injury scores were assessed on all pigs immediately before and 48 hours after grouping. Weight gain and apparent feed intake were measured every 2 weeks for 14 weeks. Aggression in familiar groups was minimal throughout the observation periods.

Compared with that in familiar groups, total duration of fighting was greater in unfamiliar groups on day 0 (upon grouping, 48.5 versus 0.5 ± 10.88 s/pig(-1).4h(-1); P<0.001) and on day 1 (10.8 versus 0.4 ± 3.24 s/pig(-1).4h(-1); P< 0.05) after grouping.

Unfamiliar pigs had greater injury scores (6.6 versus 1.8 ± 0.28; P<0.001) and spent less time eating on day 0 (5.1 versus 8.8 ± 0.92 per cent of total observation time; P<0.01) after grouping compared with familiar pigs.

Average daily gain and average daily feed intake were lower in unfamiliar groups during the initial 6 weeks but not for the entire 14-week period in comparison with familiar groups.

Weight variation did not affect behaviour and performance in familiar groups but increased aggression-induced injuries in unfamiliar groups.

The results indicated that grouping unacquainted pigs derived from large groups induced overt aggression, associated injuries and initial reduction in performance, which causes welfare concerns on mixing pigs born to group-housed lactating sows.

Reference
Li Y.Z. and Johnston L.J. West Central Research and Outreach Center, University of Minnesota, Morris MN 56267. Behavior and performance of pigs previously housed in large groups. J Anim Sci. 2008 Dec 19. [Epub ahead of print]




Title: Re: American Hog News USDA
Post by: mikey on January 07, 2009, 06:30:52 AM
Monitoring Nutrient Deficiencies in Pigs
US - A new South Dakota State University publication explains how to monitor certain nutrient deficiencies in starter, growing, and finishing pigs.


With current high feed costs and lower market prices for pigs, producers are looking for ways they can to reduce the cost of production. Since feed represents more than 70 per cent of the cost of raising pigs, producers often look to lower production costs by reconsidering their feed options.

Phosphorus is one of the more expensive ingredients used in supplementing pig diets, and many producers have decreased the level of supplemental phosphorus levels in swine diets.

The publication looks at the increasing costs of dietary ingredients, and spells out the necessity of calcium, phosphorous, and vitamin D3 in the diets of pigs of various ages and weights.

Using tables to explain the required levels of these key nutrients, the publication offers illustrations of various problems such as rachitic rosaries and abnormal bone formation caused when producers do not provide adequate levels of calcium, phosphorous, and vitamin D3.

Chris Hostetler and Bob Thaler, both faculty members in the SDSU Department of Animal and Range Sciences, authored the publication.

Title: Re: American Hog News USDA
Post by: mikey on January 10, 2009, 03:29:45 AM
Thursday, January 08, 2009Print This Page
Presence of US Pork Growing in Russia
US - The United States and Russia recently agreed to changes in the protocol governing trade of poultry, beef and pork.

 

The biggest gain for US farmers and ranchers in this new agreement is a near doubling of the country-specific tariff rate quota for US pork.

The quota had been 50,300 metric tons (110.9 million pounds) per year, but has now been increased to 100,000 metric tons (220.5 million pounds) for 2009. The trade protocol between the two countries has been in place since 2005, and the US pork quota has never exceeded 55,000 metric tons during that time. The previous high was 54,800 metric tons – about 119 million pounds - during 2006.

According to USMEF Economist Erin Daley, Russia is attempting to grow its own pork industry. But it simply doesn’t have enough domestic pork production at this time to meet its growing needs.

Ms Daley explains that the increase in the quota will help make US pork more affordable to Russia. Pork entering Russia within the quota is only subject to a 15 per cent duty, while the tariff rate for above-quota imports is increasing from 60 per cent to 75 per cent. The higher quota is especially important, because of a growing presence of US pork in Russia.




Title: Re: American Hog News USDA
Post by: mikey on January 17, 2009, 08:01:44 AM
Friday, January 16, 2009Print This Page
The Future of US Livestock is Genetically Modified
US - The US Food and Drug Administration today issued a final guidance for industry on the regulation of genetically engineered (GE) animals, which advises the use of GE animals for food.



The guidance, titled "The Regulation of Genetically Engineered Animals Containing Heritable rDNA Constructs," clarifies the FDA's statutory and regulatory authority, and provides recommendations to producers of GE animals to help them meet their obligations and responsibilities under the law.

Genetic engineering generally refers to the use of recombinant DNA (rDNA) techniques to introduce new characteristics or traits into an organism. When scientists splice together pieces of DNA and introduce a spliced DNA segment into an organism to give the organism new properties, it is called rDNA technology. The spliced piece of DNA is called the rDNA construct. A GE animal is one that contains an rDNA construct intended to give the animal new characteristics or traits.

“This guidance will help the FDA efficiently review applications for products from GE animals to ensure their safety and efficacy ," said Randall Lutter, Ph.D., deputy commissioner for policy.

The FDA released the draft guidance in September 2008 with a 60-day public comment period, and received about 28,000 comments. The agency has summarized and responded to these comments on the Web site listed below.

The FDA's Center for Veterinary Medicine (CVM) says it has been working with developers of GE animals on both early stage and more mature applications.

“At this time, it is our intent to hold public scientific advisory committee meetings prior to making decisions on GE animal-related applications" said Bernadette Dunham, D.V.M., Ph.D., director of CVM.

Relating to food animals, the document says: "if you wish to introduce investigational animals or animal products into the food or feed supply, you must request an Investigational Food Use Authorization (21 CFR 511.1(b)(5)). For those animals subject to slaughter inspection by the USDA Food Safety and Inspection Service (FSIS), we will inform FSIS if our safety concerns are met and we grant you an Investigational Food Use Authorization".

FSIS has oversight of most meat, poultry, and egg products, and enforces tolerances (maximum allowable amounts) set by FDA on new animal drug residues in such products.


Title: Re: American Hog News USDA
Post by: mikey on January 18, 2009, 05:03:35 AM
Saturday, January 17, 2009Print This Page
Weekly Review: Poultry Cutback Good for Pork
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
The current cutback in broiler production is big in absolute terms as well as based on history. US broiler slaughter for the 52 weeks ending 27 December was 0.7 per cent lower than the previous 52 weeks. Broiler production has a record of growth practically every year and the declines in the past have been small --0.2 per cent or less.

Fourth quarter broiler slaughter was 5.8 per cent lower than one year earlier. Broiler egg sets were 7.6 per cent lower in the fourth quarter of 2008 compared to a year earlier. This suggests broiler production in the second quarter will continue at record-high reductions from 12 months earlier.

Also positive is the broiler-type hatchery flocks. As of 1 December, 2008, they numbered only 52.4 million head, the lowest level since September 1997.

The cross-demand relationship between pork and poultry is quite high based on the most recent research. Therefore, this reduction in poultry supplies and higher prices should be positive to pork demand.

Pork exports in November were up from a year earlier but by only 0.47 per cent. Exports of pork to Hong Kong and Mainland China were down 57 per cent from 12 months earlier.

For the first 11 months of 2008, total pork exports were up 53.45 per cent. Mainland China and Hong Kong purchases from the US were up 155.7 per cent for January-November.

Pork imports for January-November into the US were down 15.7 per cent and for November, pork imports were down 6.0 per cent from 12 months earlier.

For January-November, net pork exports in 2007 were 9.73 per cent of production. For the same months of 2008 they were 16.91 per cent of production. In other words, we reduced the supply of pork for domestic consumption by 7.18 per cent of production.

For November 2007, net pork exports as a per cent of production were a positive 13.2 per cent. For the same months of 2009, net pork exports were 14.6 per cent of production.

Pork product prices were pushed down to a about $56 per cwt of carcass, which pushed packers' margins deep into red territory on Wednesday afternoon. For the week through Thursday, the cutout at $56.26 per cwt was down $3.06 per cwt from a week earlier. Loins at $76.48 per cwt were up $1.07 per cwt, Boston butts at $60.54 per cwt were up $3.70 per cwt, hams at $40.11 per cwt were down $10.99 per cwt and bellies at $64.76 per cwt were down $3.22 per cwt from a week earlier.

Live hog prices Friday morning were $2-3 per cwt higher compared to seven days earlier. Weighted average negotiated carcass prices were $0.32-$1.19 per cwt higher compared to a week earlier.

The top live prices Friday morning for select markets were: Peoria $36.00 per cwt, Zumbrota, Minnesota, N/A and interior Missouri 41.00 per cwt. The weighted average negotiated carcass prices by area were: western Cornbelt $57.12 per cwt, eastern Cornbelt $55.69 per cwt, Iowa-Minnesota $56.76 per cwt and nation $55.97 per cwt.

Feeder pig prices this week at United Tel-O-Auction were up to $15 per cwt above two weeks earlier. All of the United pigs weighed in the 50-60 pound category and sold from $101-126 per cwt.

Slaughter this week under Federal Inspection was estimated at 2325 thousand head, down 3.9 per cent from 12 months earlier.

Title: Re: American Hog News USDA
Post by: mikey on January 27, 2009, 05:47:28 AM
Monday, January 26, 2009Print This Page
Will US Consumers Eat Up GM Meat Rule?
US - On January 15, the U.S. Food and Drug Administration decided how it will regulate genetically engineered animals, for the first time paving the way for such animals or their products to be sold as food and medicine.



A wide range of interested parties, including companies developing genetically engineered animals and consumer protection groups, are generally comfortable with the FDA decision, writes Jill U. Adams of the Los Angeles Times. And yet, consumer acceptance of transgenic animals, particularly as food products, is still an unknown.

According to the Los Angeles Times report, American consumers have been eating food from genetically engineered crops, such as corn, soybeans and canola, for a decade. However, transgenic animals have not been sold, pending the FDA deliberations on how to regulate them.

Genetic engineering is a high-tech way to "breed" desirable traits into livestock. The benefits might be for the producer, such as a disease-resistant cow or an easy-to-raise salmon. It might be for the environment -- pigs that produce milder manure, for example -- or for the consumer, say, more nutritious meat.

The old-fashioned way of breeding farmed animals requires selecting offspring with desired traits over successive generations. Ron Stotish, chief executive of Aqua Bounty Technologies in Waltham, Mass., says the power of genetic engineering is that the same end is achieved in "one fell swoop." Transgenic animals also can be fitted with traits they probably would never develop naturally, as in the case of omega-3-producing pigs
Title: Re: American Hog News USDA
Post by: mikey on January 27, 2009, 05:48:54 AM
Monday, January 26, 2009Print This Page
Calls for Obama to Stop US Animal Identification Rule
US - The Farm-to-Consumer Legal Defense Fund called on the new administration to permanently halt a U.S. Department of Agriculture proposed rule that would effectively mandate the implementation of the first two stages of the National Animal Identification System (NAIS) for thousands of Americans.



The proposed rule, entitled the “Official Animal Identification Numbering Systems,” was published by the USDA’s Animal and Plant Health Inspection Service (APHIS) in the Federal Register January 13. On Tuesday, the Obama administration ordered federal agencies to halt all pending regulation until they can be reviewed.

“The APHIS regulation is further evidence of the department’s unrelenting effort to make a so called voluntary program mandatory, and it should be permanently stopped by the new administration,” said acting Fund president Pete Kennedy.

“This effort by the former Bush administration is yet another back-door attempt to circumvent the will of the U.S. Congress which has repeatedly failed to pass legislation making NAIS mandatory and the will of four separate state legislatures that have passed legislation explicitly prohibiting the mandatory implementation of NAIS,” said Kennedy.

The Fund filed suit last year against the USDA and the Michigan Department of Agriculture to stop the mandatory implementation of NAIS, which is the USDA’s plan to electronically track every livestock animal in the country. The Michigan Department of Agriculture has implemented the first two stages of NAIS – property registration and animal identification – as part of a state-wide bovine tuberculosis disease control program required by a grant from the USDA.

The proposed APHIS rule seeks to amend current domestic livestock regulations to allow only numbers beginning with an 840 prefix to be used to tag animals for use in official programs such as existing disease control efforts. Numbers beginning with 840 are specific to the NAIS program, and, in order to obtain an 840-numbered tag, animal owners will need to first register their premises with NAIS.

“This proposed rule is just the latest in a series of actions taken by the USDA to make NAIS mandatory over the objections of small farmers, ranchers and four state legislatures,” Kennedy noted. “Not only will the use of the 840 tags cost them money, but their private information and data will now be entered into a national database that will be accessible not only by state and federal agencies, but also by private organizations. Farmers don’t want that,” Kennedy said.

In September of last year, USDA issued a memo to its Veterinary Services Management Team ordering federal, state and private veterinarians to assign a premise identification number to any property whose owners participate in or are subject to a disease management program such as having their animal vaccinated. Those who refused were to be registered against their will.

“In the face of overwhelming opposition, USDA cancelled the September memo with a follow-up memo in December, but in doing so, reiterated its policy of using NAIS premise identification numbers for the administration of animal disease programs,” Kennedy said, “thus continuing its effort to make NAIS mandatory.”

Both the September and December memos were cited by the Fund in an amended complaint filed Jan. 16 to its original suit.

The suit, which was filed in the U.S. District Court – District of Columbia on September 8, 2008, asks the court to issue an injunction to stop the implementation of NAIS at both the state and the federal levels by any state or federal agency. If successful, the suit would halt the program nationwide.

The suit charges, in part, that USDA has published rules and issued guidance documents (that are tantamount to legislative rules) regarding NAIS in violation of the Federal Administrative Procedures Act; has never performed an Environmental Impact Statement or an Environmental Assessment as required by the National Environmental Policy Act; is in violation of the Regulatory Flexibility Act that requires the USDA to analyze proposed rules for their impact on small entities and local governments; and violates religious freedoms guaranteed by the Religious Freedom Restoration Act.




Title: Re: American Hog News USDA
Post by: mikey on January 27, 2009, 05:50:29 AM
Friday, January 16, 2009Print This Page
Pork Exports Continue to Exceed 2007 Pace
US - Red meat exports continued their strong pace through November, with pork up 20 per cent and beef up nine per cent (including variety meat) compared to November 2007.

 

For the first 11 months of 2008, pork and pork variety meat exports were 61 per cent larger than 2007, nearing the 2 million metric ton mark (1,898,698 metric tons or 4.18 billion pounds). 2008 pork exports through 11 months were valued at $4.5 billion, an increase of 59 per cent.

“Global protein supplies remain tight, with the exception of a few situations in key countries where stocks of imported red meat are weighing on the market, specifically in Korea and China,” said Erin Daley, US Meat Export Federation (USMEF) economist. “As currencies and prices stabilize, inventories will decline and demand for US red meat will likely continue at a relatively strong level. Although pork exports are not expected to maintain the stunning pace of 2008, they are forecast to exceed 2007 volumes,” Daley said.

“The bottom line is that, regardless of the global economic situation, people have to eat,” said Daley. “US beef and pork prices are lower than they were during the summer, which helps offset the increased strength of the US of the dollar.”

Despite the slowing of global trade in all products, pork exports from the major suppliers, the European Union (EU), the US and Canada, remained fairly steady from September through November. Pork exports from Brazil, however, declined by 50 per cent in November, and its beef exports fell 35 per cent compared to November 2007. Reduced exports to Russia and Hong Kong account for most of the decline. Australia’s beef exports remained strong from September through November, largely due to an increase in exports to the United States, with US import demand stimulated by the strengthening US dollar.

Pork Exports
For the first 11 months of the year, exports of pork and pork variety meat accounted for nearly 25 per cent of production, with export value equating to $43 per head slaughtered compared to less than $30 per head during the same period in 2007, Daley said.

“Pork remains a very affordable protein, and our exports continue to defy projections,” said Daley.

Mexico was the top pork export market in November, reaching another new record at 41,402 metric tons (91.3 million pounds), up 50 per cent from November 2007. January through November exports to Mexico increased 40 per cent to 348,458 metric tons (768.2 million pounds) valued at $614.2 million.

Japan was the second-largest market in November with exports at 40,354 metric tons (88.9 million pounds), up 22 per cent. January through November, Japan was still the largest destination for US pork, with exports were up 27 per cent to 417,986 metric tons (921.5 million pounds) valued at $1.43 billion. Although the strong yen has unique implications for pork exports, due to the gate price system, exports are expected to remain strong in 2009 especially as the US is the dominant supplier of chilled pork.

The China/Hong Kong region was the third-largest market for US pork in November, with exports totaling 19,469 metric tons (42.9 million pounds), primarily to Hong Kong. Muscle cuts accounted for 8,747 metric tons (19.3 million pounds). November exports to this region were the smallest monthly volume since December 2007 and were 17 per cent lower than November 2007. Still, Daley noted that January through November exports were up 148 per cent, totaling 377,431 metric tons (832.1 million pounds) valued at $652.6 million. Large supplies of imported pork are weighing on the market, compounded with the increase in Chinese production. Although it is difficult to predict the pace of exports to the region in 2009, US pork will benefit from the wide exposure to the product during the massive shipments in 2008.

November exports to Russia were off 8 per cent from November 2007, totaling 14,613 metric tons or 32.2 million pounds (muscle cuts accounted for 8,840 metric tons or 19.5 million pounds). January through November exports to Russia were up 141 per cent and totaled 214,960 metric tons (473.9 million pounds) including 148,552 metric tons (327.5 million pounds) of muscle cuts valued at $469.3 million. In 2008, muscle cut exports to Russia exceeded the US tariff rate quota (TRQ) of 49,800 metric tons (109.8 million pounds) by more than 100,000 metric tons (220.5 million pounds). In other words, more than 100,000 metric tons of US pork entered Russia subject at a duty of 60 per cent.

As recently reported by USMEF, the US TRQ for pork exports to Russia increased to 100,000 metric tons ( 220.5 million pounds) for 2009, which will be beneficial, especially considering oil priced at approximately $40/barrel and the global economic situation. It may be difficult to export large volumes of pork outside the TRQ this year, so a doubling of the quota size was critically important, Daley noted.

Pork exports to Canada set a new monthly record in November at 17,474 metric tons (38.5 million pounds), up 8 per cent from November 2007. January through November exports were up 17 per cent totaling 157,146 metric tons (346.4 million pounds) valued at $514.27 million.

“Exports were surprisingly strong considering the weakening of the Canadian dollar and the slowing of live hog exports to the US (imports of Canadian slaughter hogs were down 38 per cent during 2008),” said Daley. “Hopefully the revisions to COOL in the recently published rule will result in more favorable trade with Canada and Mexico.”

Exports to South Korea were steady at 10,712 metric tons (23.6 million pounds), putting the January through November total up 42 per cent to 122,997 metric tons (271.2 million pounds) valued at $262.9 million. Pork exports to Korea should remain strong, as an affordable protein with a positive image.


Other Pork Export Markets
ASEAN region – exports up 173 per cent to 4,361 metric tons (9.6 million pounds) in November. January through November total at 54,840 metric tons (120.9 million pounds), an increase of 328 per cent. The Philippines, Vietnam and Singapore are the largest markets. Recent exports to Vietnam have declined dramatically due to large supplies and low prices in China, but exports to the Philippines and Singapore remain significantly larger than historical levels.
European Union – up 127 per cent to 4,584 metric tons (10.1 million pounds) in November. January through November totals up 146 per cent to 44,764 metric tons (98.7 million pounds).
Australia – up 64 per cent in November, totaling 3,123 metric tons (6.9 pounds) with a January through November increase of 36 per cent to 38,176 metric tons (84.2 million pounds). Exports to New Zealand were up 17 per cent, totaling 6,040 metric tons (13.3 million pounds) through November.
Central and South America – up 30 per cent to 5,001 metric tons (11 million pounds) with exports up 22 per cent through November, totaling 36,465 metric tons (80.4 million pounds). Honduras is the largest market, followed by Colombia and Guatemala.
Caribbean (excluding the Dominican Republic) – up 77 per cent to 3,025 metric tons (6.7 million pounds) in November with exports up 21 per cent through November, totaling 18,228 (40.2 million pounds).
Dominican Republic – up 103 per cent to 1,127 metric tons (2.5 million pounds) in November, putting the January through November total at 12,453 metric tons (27.5 million pounds), up 158 per cent.
Taiwan – up 89 per cent through November, totaling 28,735 metric tons (63.3 million pounds).



Title: Re: American Hog News USDA
Post by: mikey on January 28, 2009, 03:38:06 AM
Tuesday, January 27, 2009Print This Page
Meat Processing Giant Reports $198 Million Loss
US - The world's largest meat processing company Tyson Foods made an operating loss for the first quarter of the 2009 financial year of $198 million.



The loss was on increased sales of $6.521 billion compared to $6.476 billion for the same period last year when the company made a profit of $94 million.

The major losses were in the chicken sector where the company said it reflected the increased grain costs of $183 million and increased net losses of $197 million from the company's commodity risk management activities related to grain purchases, as compared to the same quarter last year.

Chicken segment sales were $2.2 billion and operating loss was $286 million in the first quarter of the 2009 financial year.

Sales and operating results were impacted positively by higher average sales prices and increased sales volumes, primarily due to our foreign operations.

Operating results were also adversely impacted by an increase in net losses of $18 million from our commodity risk management activities related to energy purchases, as compared to the same period of the 2008 financial year. These net losses exclude the impact from related physical purchase transactions, which will impact future period operating results. Operating results also included a non-cash inventory adjustment for a lower-of-cost-or-market valuation allowance of $20 million.

Beef segment sales were $2.7 billion and operating results were break even in the first quarter of the 2009 financial year.

Operating results were positively impacted by increased average sales prices and lower average live prices, partially offset by a decrease in sales volume.

Operating results were positively impacted by net gains of $41 million from our commodity risk management activities related to forward futures contracts for live cattle as compared to the same period of fiscal 2008. This amount excludes the impact from related physical purchase and sale transactions, which will impact future period operating results.

Pork segment sales were $878 million and operating income was $55 million in the first quarter of the 2009 year financial.

Operating results were impacted positively by increased average sales prices, offset by higher average live prices and decreased sales volume.

Operating results were negatively impacted by a decrease in net gains of $20 million from our commodity risk management activities related to forward futures contracts for live hogs as compared to the same period of fiscal 2008. This amount excludes the impact from related physical purchase and sale transactions, which will impact future period operating results.

Prepared Foods segment sales were $746 million and operating income was $35 million in the quarter.

Operating results were impacted positively by higher average sales prices and increased sales volumes, offset by higher raw material costs.

“I’m honored to lead this great company once again as we work aggressively to return our chicken business to profitability and best-in-class performance,” said Leland Tollett, interim president and CEO of Tyson Foods.

“While the first quarter of fiscal 2009 was clearly challenging, our chicken segment fundamentals are improving. Product values are up, and our input costs are down. When our demand began a noticeable decline, we reduced production by approximately 5% in early December. We also remain intensely focused on improvements in such areas as product mix, yields and efficiencies.”

Mr Tollett indicated the outlook for Tyson’s Beef, Pork and Prepared Foods segments, as well as international trade and renewable products initiatives, remains positive.

“We’ve experienced improvements in beef market conditions since December,” Mr Tollett said.

“Pork margins are expected to remain above normalized levels, and we believe our Prepared Foods business will continue to experience solid returns because of the demand for processed meats such as pizza toppings, hams, bacon and lunch meat.”

Mr Tollett expressed optimism about the direction of Tyson International, as well as the company’s Renewable Products division.

“I’m excited about the progress of our new poultry initiatives in South America, China and India,” Mr Tollett said.

“I’m also pleased that construction is underway for the Dynamic Fuels plant in Louisiana, which will convert animal fat and greases into renewable diesel and jet fuel. I am confident these new endeavors will generate shareholder value in the future.”









Title: Re: American Hog News USDA
Post by: mikey on January 31, 2009, 04:20:17 AM
Friday, January 30, 2009Print This Page
2009 to be a Rough Year, Say UGA Farm Economists
US - University of Georgia economic experts at the 2009 Ag Forecast in Gainesville, Georgia, used no flattering words to describe the current or future economic outlook for the US and Georgia’s agriculture sector, still staggering from major blows received last year.


“It’s certainly a year filled with the most uncertainty that I can think of,” said John McKissick, director of the UGA Center for Agribusiness and Economic Development. “Unfortunately, it really is a horrid situation. As we look through most of 2009, we still have a rough patch to go yet.”

UGA predictions say the recession could last through the fourth quarter of 2009, making it the longest since the Great Depression.

Production decreases
For the first time in a long while, farmers will reduce production for what is called the meat complex, which includes beef, pork and poultry.

Beef cattle producers will continue to liquidate their herds. Their cost of production has increased from 80 cents per pound to $1.20 per pound. Milk prices will be down from record high prices last year, he said.

“The crop choices don’t look good at all, partly because of price expectations but mostly because of continued high cost of production,” Mr McKissick said. “So the potential crop profit situation has completely changed from 2008.”

Mr McKissick predicts a bidding war between corn and soybeans for limited farm acreage again in 2009 with soybeans winning out. In Georgia, soybeans will likely gain acreage. Peanut, corn and wheat acreage will go down.

“There is a lot out there that will and can influence the bottom line,” he said. “We can never dwell too much on food quality and safety, and its impact on demand. We see over and over again what that can do to an industry and consumer demand.”

Trade increases
As the world’s population increases, the “percent of agricultural products in the world that move through international trade is going to grow, is growing, especially value-added commodities,” said Octavio Ramirez, head of the UGA College of Agricultural and Environmental Sciences Department of Agricultural and Applied Economics.

Historical markets for US farm commodities are shrinking, Mr Ramirez said. Population decline in higher-income areas like Europe, Japan and Russia will lead to lower demand there.

“Where the growth is going to be is in low-income countries,” he said.

By 2050, populations in high-income countries will increase only 2 per cent. Low-income countries will boom by 46 per cent, adding 2.5 billion consumers in mostly Africa and Asia. Other population growth will occur in Latin America and the US. Europe’s population will decline.

“How many people currently in low-income countries that are lifted out of poverty will be the most significant factor affecting trade in the future,” Mr Ramirez said.

The US is in a good situation when it comes to feeding and clothing the world. Much of the world’s quality soil is in Canada and the US, where yields are high and water is available.

“People have been talking about how we’re going to run out of food for a long time, for 50 to 60 years,” he added. “Ag research has actually increased productivity faster than demand growth.”

Innovation needed
But the US needs to continue to innovate, he said, creating technologies to increase yields and producers’ profits. There are bright spots, Mr McKissick said. Crude oil prices have dropped. After topping out at $140 a barrel, prices plummeted to $40 a barrel. This is good news for producers who saw much of their 2007 and 2008 earnings go to fuel costs. Fuel prices will move up over time, he said, but without dramatic increases.

The US dollar has strengthened. This isn’t good news for US exports because it makes them more expensive. But it is good for imports.

“There are a lot of challenges out there. But there are also reasons for us to be optimistic,” Mr McKissick said to sum up the forecast.


Title: Re: American Hog News USDA
Post by: mikey on February 05, 2009, 05:04:17 AM
Wednesday, February 04, 2009Print This Page
NFU President Testifies on Market Speculation
US - National Farmers Union President Tom Buis appeared before the House Agriculture Committee in support of increased oversight and transparency of the commodities markets.


Mr Buis, citing last year’s record high commodity prices, followed by a historic collapse in the grain, livestock and dairy prices, said unabated speculative commodity futures trading is increasing market volatility.

“Speculators created a market bubble and false sense that higher prices were here to stay and as a result producers locked in higher priced input and feed costs. The economic collapse and bursting bubble have jeopardized the economic livelihoods of many Americans and is rippling throughout our rural communities,” Mr Buis said.

Mr Buis commended the committee’s commitment to addressing market speculation and increase transparency and called for passage of the Derivatives Markets Transparency and Accountability Act (DMTAA) of 2009.

“This legislation will increase transparency in the commodity markets, allowing for an open process that will keep the public apprised of those involved in commodity markets,” Mr Buis said. “The Commodity Futures Trading Commission will finally have the necessary tools to ensure markets remain open, fair and transparent.”

Buis commended the legislation’s requirements for transparency when considering prospective over-the-counter (OTC) transactions and requirements for the CFTC to study and report on the effects of potential position limits within OTC trading.

“This information will enhance the public’s confidence that markets are not being manipulated, fraudulently exploited or overwhelmed by speculation. And if so, corrective action can be launched,” Mr Buis said.

Title: Re: American Hog News USDA
Post by: mikey on February 06, 2009, 03:51:40 AM
Thursday, February 05, 2009Print This Page
Piglet Feed Supplements Support Immune Systems
US - As feed costs rise and the production of ethanol from corn grain increases, swine producers have ramped up their search for new feed supplements for younger swine.



According to studies by Agricultural Research Service (ARS) scientists, feeding dried distiller's grains (DDGS) to piglets can give their immune systems an extra boost.



Research leader Brian Kerr evaluates piglets’ ability to use nutrients in corn coproducts for growth and development. After 4 weeks of a diet supplemented with dried distiller’s grains with solubles (DDGS), the immune response of piglets increased. (Image source: ARS)The US ethanol industry generates an estimated 10-14 million metric tons of DDGS annually from the milling of corn grain that yields fermentable sugars for conversion into fuel alcohol. The majority of DDGS are fed to beef and dairy cattle.

But livestock producers also use DDGS to supplement the diet of older pigs. So Tom Weber, a physiologist at the ARS Swine Odor and Manure Management Research Unit in Ames, Iowa, partnered with research leader Brian Kerr and microbiologist Cherie Ziemer to study the effects of feeding DDGS to young pigs.

For their research on piglets, the team divided weanling pigs into four groups and fed them either a standard control diet or diets supplemented with DDGS, soybean hulls or citrus pulp. After one week, the researchers observed an increase in cytokine expression in the pigs’ small intestine, which they linked to DDGS consumption.

Cytokines are chemical messengers that are essential for proper immune function.

This response reinforced findings of previous DDGS studies showing that pigs consuming diets supplemented with DDGS exhibited reduced levels of ileitis, a common inflammation of the small intestine.

Kerr and others have found that adult pigs can be fed with a corn and soy-meal feed that is up to 40 percent DDGS. However, piglets are given feed with a maximum DDG content of 7.5 per cent, because their growth may be reduced when they consume too much fiber.




Title: Re: American Hog News USDA
Post by: mikey on February 06, 2009, 03:53:16 AM
Thursday, February 05, 2009Print This Page
Pork Plant Lays off 600
US - A US pork processing plant has laid off 600 of its staff because of crippling cash flow problems.



According to a report in the News-Gazette, Meadowbrook Farms, a farmers cooperative in Illinois is facing losses of between $4 million and $5 million following a default on a contract.

The cooperative, owned by 100 farmers, is pulling out all the stops and has called in help from the USDA, private lenders and the village of Rantoul to restart the plant.

The company is hoping the USDA can provide a loan guarantee to get things up and running again.

The problems revolve around debts from Triad Food Group in Chicago and Meadowbrook Farms has filed a complaint against the company in the local circuit court.

Meadowbrook provided anti-biotic-free pork to Triad.




Title: Re: American Hog News USDA
Post by: mikey on February 06, 2009, 03:55:31 AM
 
China imported 1.925 million tonnes of US pork in 2008
[05 February 2009] According to US Meat Export Federation China (and Hong Kong) imported 1.925 million tonnes of pork and pork products last year, including 1.161 million tonnes of pork variety meats and 764,000 tonnes of pork cuts and to become the largest export market for US pork. The imports, though huge, represents less than 5% of China’s total consumption. 
Title: Re: American Hog News USDA
Post by: mikey on February 07, 2009, 04:01:52 AM
Friday, February 06, 2009Print This Page
Hog Producers Could Break Even in 2009
US - A prominent livestock economist expects at least some short term improvement for pork producers this summer despite the fact that most of them continue to see a lot of red ink.



According to American agricultural news source, Brownfield, Iowa State University Extension Economist John Lawrence says hog producers could break even in 2009, "[producers are] still in the red ink now...it looks like the summer will be profitable, but unfortunately back to break even or lower in the fall."

So what can a producer do to keep the losses from cutting too deep? Aside from trying to protect their profit margins, Prof. Lawrence says one big thing producers can do is have "at least" a 60 day supply of feed on hand, "While I don't think we'll repeat last summer's $7 corn, I wouldn't be surprised to see some volatility in that market. I'd like to have a supply I control, that I can go to when the prices are quite high."

Prof. Lawrence adds that another key factor will be export demand and the performance of the dollar against the currencies of our big pork importers.




Title: Re: American Hog News USDA
Post by: mikey on February 08, 2009, 06:02:09 AM
Saturday, February 07, 2009Print This Page
Market Preview: Questions to Answer Before Expanding
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



A few weeks ago, a banker friend called and asked for some advice. He has a client in the heart of the Corn Belt with 300 sows, farrow-to-finish, who was contemplating a move to 600 sows. But the producer was concerned that there was no place at all for small producers in the future. He wanted to know what I thought. Having given it considerable thought, I decided to share my comments with North American Preview readers.

First, as I said, this producer is in the heart of the Corn Belt. He can arbitrage DDGS vs. corn when prices allow it. He is within easy transport distance of five slaughter plants owned by four different firms. By his banker’s account, it is a really good, well-run, 300-sow operation. All of those are important background to the questions and answers that follow:

Can he compete on a cost/cwt. basis – with all hog production costs covered? This implicitly means that he has records that accurately tell him what these costs are. It also means paying market price for his corn, paying for full shares of the tractors, telephone, pickup, labor, etc. The critical concept is “all”. Many smaller producers are diversified and they don't put enough costs against the livestock business.


Can he deliver a high percentage of full-value pigs? This is a concept championed in recent years by independent economist Dennis DiPietre and others who challenge our assumptions about some “natural” number of tail-enders and dropouts, and the optimum weight at which we sell market hogs. It is even more critical now, given the amount of capital it takes to get a hog to market weight. With so much money invested, we can hardly afford to take less than full value for any animal. Accomplishing this goal takes tremendous attention to detail. A 600-sow operation may not have any one person who can or will accept that responsibility.


Are his hogs and his relationship with one or more packers good enough that he will have a place to sell 12,000 pigs per year? That is a pretty small number by today's standards, but it is still a lot of hogs even to Tyson, Farmland or Swift. I would think he could secure a formula hog contract to guarantee 70-80 per cent of his hogs’ shackle space as long as the hogs are good and he isn't a jerk to work with. Packers, like most people, don't like to do business with jerks, regardless of how valuable that business may be.


Does he have a competitive advantage vs. a specialized pork producer? If this producer has some grain production, it is definitely a competitive advantage. He can live off his grain revenue (while still paying full price for corn for his hog operation) if grain goes high and hogs do not. Specialized companies can't do that. If we have another year like last year, those companies may be in a bind unless they do some very good risk management. Some succeeded and some failed on that count in 2008. Raising a good portion of your own corn may be an acceptable strategy to handle this risk.


Does he have the ability and time to manage risk effectively by forward pricing feed and hogs when it is called for? The big boys have someone whose sole job is to buy feed ingredients and sell hogs. It is difficult to match them on this point, but I think it is a pretty important question. An option is to sit down and define some pricing objectives for both feed ingredients and hogs, then hand this function over to someone who does it full time. This can be handled by someone completely outside of the operation. I think a lot of producers would be better off if they took this approach. They won't win 100 per cent of the time but, over the long haul, they'll gain from having a person focused on the subject and removed from the emotional connections.


Finally, is there anywhere else to invest the money that he is considering investing in the expansion that would earn a higher rate of return than he has been making in hogs? That is a basic investment question, but one that many farmers never ask themselves. Equities are very low right now and it may be a better, safer play to buy a good mix of diversified mutual funds. He's probably talking some pretty good coin for the purchase and any remodeling that needs to be done. With the equity market price-to-earnings ratio at a very low level, I find it hard to argue against investing there. And, he can do chores sitting at a computer indoors where it is 72°, year 'round.
I think this producer must answer "yes" to numbers 1 through 3 to proceed. He would be better off if he can say "yes" to #4 and #5, as well, since both reduce risk. If he says "yes" to #6, the hog deal is off, I suppose, but he still needs to answer that question. He may be far better off diversifying away from agriculture and this could be a great time to do it.

The outlook for the economy is still very negative, but farmers need to expand their idea of diversification. Corn, beans and hogs are diversification to a small degree. Corn, beans, hogs, small-cap growth stocks, large-cap income stocks and emerging market stocks is diversification on steroids – at least by the standards of most farmers.

 



As published in National Hog Farmer's Weekly North American Preview.

Title: Re: American Hog News USDA
Post by: mikey on February 08, 2009, 06:04:08 AM
Saturday, February 07, 2009Print This Page
Weekly Review: Need for Hog Herd Reduction
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
The demand for the three major meats was down last year. Pork demand was down 3.5 per cent, beef down 4.1 per cent and broiler down one per cent.

Demand weakness for all meats in the last year is probably mostly due to the weak general economy and relative high unemployment rate. Though the odds are very high that demand for meats will be down in 2009 from 2008.

This weaker demand along with the relative high grain prices means the hog herd will need to be reduced more than we have done so to date. We probably need to reduce the breeding herd at least double the 1 December 2008 reduction from a year earlier. We believe the herd will need to be reduced at least 5 percent and maybe as much as 10 per cent if demand continues weak as seems most likely.

Barrow and gilt weights continued their seasonal decline with Iowa-Minnesota weights at 268.7 pounds last week down 0.3 pounds from a week earlier but up 0.4 pounds from a year earlier. This data continues to adds evidence to the belief that marketing are not as current as they were since late summer.

Gilt slaughter for the past month has been below a year earlier. This suggests we probably have stopped the decline that was started last winter. The probabilities are high that we need to reduce the breeding herd another 3-5 per cent to get marketing more in line with demand and get a price that at least meets costs for the average cost producer.

Pork product cutout held basically steady this week with quite small changes day to day. The cutout this Thursday afternoon at $57.14 was up $0.14 per cwt from a week earlier. Loins at $74.66 per cwt were up $0.10 per cwt, Boston butts at $58.23 were down $1.97 per cwt, hams at $39.34 per cwt were up $0.36 per cwt and bellies at $72.31 were down $0.10 per cwt from seven days earlier.

Unless demand strengthens or marketing are less than expected, 2009 will likely register losses for the average cost production that did not take price protection.

The national trend on feeder pigs last week was $2-3.00 per head lower. The average price for early-weaned 10-pound basis pigs was $40.98 per head. For 40 pound basis pigs the average price was $58.00 per head. We would still rather be sellers than buyers at these prices.

The top live prices for barrows and gilts Friday morning were $0.25 to $1.50 per cwt higher compared to last week. The weighted average negotiated carcass prices Friday morning were $1.76 - $6.74 per cwt lower compared to a week earlier.

The live prices for select markets Friday morning were; Peoria $36.00 per cwt, Zumbrota Minnesota $38.00 per cwt and interior Missouri $40.25 per cwt.

The weighted average negotiated carcass prices by areas Friday morning were; western Cornbelt $53.55 per cwt, eastern Cornbelt $52.95 per cwt, Iowa-Minnesota $53.10 per cwt and nation $52.97 per cwt.




Title: Re: American Hog News USDA
Post by: mikey on February 11, 2009, 04:04:55 AM
Tuesday, February 10, 2009Print This Page
Moving Market Pigs with Less Stress
US - Dr Matt Ritter (Elanco Animal Health) and Dr Nick Berry (Cargill, Inc.) have studied the effects of moving market weight pigs in different group sizes during loading on stress responses and transport losses at the packing plant for Pork Information Gateway.


Dead and non-ambulatory pigs at the packing plant represent animal welfare and economic concerns to the US swine industry. Furthermore, non-ambulatory livestock are the subject of increased rules and regulations. Therefore, it is essential to identify pre-disposing factors for transport losses in market weight pigs and to develop management strategies to reduce these losses under current US commercial conditions.



Picture: Pork CheckoffA collaborative research project was recently conducted by Cargill, Inc. and Elanco Animal Health to evaluate the effects of moving market weight pigs (approximately 265 lbs) in two different group sizes (groups of four versus groups of eight) through a 30-inch wide aisle during loading on loading time, physical signs of stress (during loading and unloading) and transport losses at the plant.

The key findings from this study were that pigs moved in groups of four compared to groups of eight during loading:

required less time to load
had lower rates open-mouth breathing and skin discoloration during loading and unloading and
had lower percentages of dead and non-ambulatory pigs at the plant.
These data confirm that group size during loading has a major impact on transport losses at the plant. Additional research is necessary to determine the optimal group size for moving pigs of all ages through various aisle widths
Title: Re: American Hog News USDA
Post by: mikey on February 11, 2009, 04:07:01 AM
Tuesday, February 10, 2009Print This Page
CME: Cost Pattern Differences for Hogs and Cattle
US - CME's Daily Livestock Report for 9 February 2009.



Profits in the pork and cattle feeding sectors have been hard to come by in recent months and recent changes in both grain and market animal prices suggest that they may not be just around the corner in 2009. The graphs below contain historical cost and price data as well as estimated costs.

 


The top graph is based on Iowa State Univerisity’s Estimated Returns for Iowa Farrow-to-Finish Operations. The historic data seen here can found at Dr. John Lawrence’s ISU website — jdlaw@iastate.edu. Note that the blue line represents ISU’s actual cost estimates while the red line is a prediction equation using corn and soybean meal futures lagged 1 and 6 months and a time variable as the independent variables. The prediction equation has an R-square of 0.97 meaning that it explains 97 per cent of the historic variability in ISU’s cost estimates. The green line is for Iowa-Minnesota butcher hog prices. The losses of late 2007 and most of 2008 are apparent from the relationships between the price and cost lines. Only last summer’s impressive and rather unexpected hog price rally prevented 2008 from being even worse.

Hog production costs have fallen sharply since last summer when they peaked out in the low $80s for pigs sold in July and August. The reason, of course, is the sharp reduction in grain prices since a) the 2008 crop became obviously adequate and b) oil prices fell by over $100/barrel. Projected production costs for 2009 are in the $67—$69/cwt carcass range using corn and meal prices from Monday. At the time of last summer’s cost peak, futures prices for corn and beans implied breakeven costs for 2009 above $90/cwt carcass. But don’t let the cost decline, though significant and VERY welcome by pork producers, distract you from the fact that 2009 breakeven costs are still nearly $20/cwt carcass above the pre-2007 “normal” level of $52—$54. Only summer CME Group Lean Hog futures lie above that price level at present.

The lower graph shows estimates of Southern Plains cattle feeding costs from Denver’s Livestock Marketing Information Center. The forecast costs run only through July. As can be seen, the average price of cattle in the Southern Plains has failed to cover estimated costs since mid-2007 and was $20/cwt. live ($240/ head or so) short in December. Projected breakeven costs for fed cattle are on their way down but CME Live Cattle futures through June are still nowhere near high enough to cover these projected breakeven cost levels.

Readers might ask “Why the difference in cost patterns for hogs and cattle - especially in 2004-2005 and now projected for 2009?” The answer is feeder cattle prices. They exploded when BSE was discovered in Canada in May 2003 and cattle imports from Canada were banned. The feeder cattle price increase drove breakevens from around $75/cwt live to the upper $80s. The cost increase driven by corn prices from 2006- 2008 was then not nearly as dramatic for cattle feeders as for pork producers simply because part of that increase was taken out of feeder cattle prices. Now, lower feeder cattle prices and lower corn prices suggest a much sharper reduction in fed cattle production costs than for hog production costs in 2009. There is no feeder pig market reflected in the farrow-to-finish (ie. birth to market weight within one business entity) operation modeled by the top chart so the cost changes are driven exclusively by lower input prices.



Title: Re: American Hog News USDA
Post by: mikey on February 13, 2009, 03:47:42 AM
Thursday, February 12, 2009Print This Page
US Pork Export on Winning Streak for 17 Years
US - The international marketplace continued to roll out the red carpet for US pork, beef and lamb products in 2008, recording double-digit increases for all over 2007 levels, according to statistics released by the US Meat Export Federation (USMEF).

 

Pork has been the pacesetter for US red meat exports, achieving a 17th consecutive record-setting year of increased export numbers in 2008. For the month of December, total pork (pork plus variety meat) export volumes rose 19.7 per cent over 2007 while export values rose 19.2 per cent. While those are healthy gains, they are dwarfed by the 12-month figures for 2008: volume up 57 per cent to more than 2 million metric tons (4.5 billion pounds) and value up 55 per cent to nearly $4.9 billion.

While there are ups and downs on a country-by-country basis, the key export markets for US red meat continue to perform fairly consistently, according to USMEF Economist Erin Daley.

Ms Daley noted that Mexico, the largest US pork market in December, set a monthly record with 48,151 metric tons (106.2 million pounds) valued at $77 million. This represents a jump of 16 per cent in volume over the prior month and a 77 per cent increase over the previous December. For the year, Mexico was the third-largest destination for US pork, registering a 43 per cent hike in pork volume (396,609 metric tons or 874.4 million pounds) and a 54 per cent jump in value (to $691 million).

The largest market for US pork, Japan reported substantial gains for December and the entire year: achieving 16 and 28 per cent gains in volume and value, respectively, for the month versus December of 2007, and 26 per cent and 34 per cent in volume and value for the year. Japan imported 451,853 metric tons (996.2 million pounds) of pork valued at $1.5 billion – accounting for 31.6 per cent of total US pork export value in 2008.

Areas of concern
While the numbers tell a great story, Ms Daley notes that there are areas of concern for exports driven by the global economic slide.

"With 35 US pork facilities delisted, exports to Russia could face a rough start in 2009, not to mention the challenging economic situation and the devaluation of the ruble," she said. The only good news is that Russia increased the United States’ tariff rate quota (TRQ) from 50,700 metric tons (111.8 million pounds) to 100,000 metric tons (220.5 million pounds) for 2009 – allowing an additional 49,300 metric tons (108.7 million pounds) to enter at 15 per cent duty instead of the over-quota rate of up to 75 per cent (not less than 1.5 euro/kg).

Still, for the year US pork exports to Russia reached 217,767 metric tons (480.1 million pounds) valued at $476 million, increases of 118 per cent in volume and 130 per cent in value over 2007. In December, both the volume and value of pork exports was down sharply from one year ago, reaching the lowest volume levels since December 2006.

China is another area that bears watching, Ms Daley believes. The greater China/Hong Kong region emerged as the No. 2 market for US pork in 2008, purchasing 399,562 metric tons (880.9 million pounds) valued at $689.4 million – increases of 136 per cent in volume and 155 per cent in value over 2007.

However, Ms Daley believes it is unlikely that China's pork imports in 2009 will match last year's record. Increased industry profitability last spring, coupled with a range of hog raising subsidies, is supporting a substantial expansion of China's herd and lower hog and pork prices.

According to the National Bureau of Statistics, by the end of the third quarter of 2008, China's live hog inventory had increased 6.6 per cent from the year-earlier figure, and the sow population increased 12.4 per cent. Total marketed hogs increased 5.8 per cent and meat production was up approximately 6 per cent.

Pork Export Facts
During 2008, 24.4 per cent of US pork production (including variety meat) was exported. This compares to 16.5 per cent in 2007.


The value of exports per head slaughtered equated to $42.31 compared to $29.16 in 2007.
Other pork highlights
Canada - US pork imports remained fairly close to year-ago levels during the last quarter of 2008, with December exports at 13,390 metric tons (29.5 million pounds). For the year, exports were up 15 per cent to 170,536 metric tons (nearly 376 million pounds) valued at $557.6 million, a 13 per cent increase.
"Imports of Canadian hogs were down 50 per cent in January, with a corresponding increase in Canadian slaughter (up 15.8 per cent) and pork production (up 9.9 per cent)," Ms Daley noted. "Live hog trade has been impacted by the weak Canadian dollar, making production in Canada more competitive."



South Korea – Imports were steady in December at 10,535 metric tons (23.2 million pounds). Although below year-ago levels, this volume was not far off the 2008 monthly average of 11,128 metric tons (24.5 million pounds). For the year, exports to Korea were up 34 per cent to 133,532 metric tons (294.4 million pounds) valued at $284.5 million, up 23 per cent versus 2007 totals.



Title: Re: American Hog News USDA
Post by: mikey on February 14, 2009, 05:43:30 AM
Friday, February 13, 2009Print This Page
Enhanced Fertility in Boars with Selenium
US - Boars fed a supplement of organic selenium were more fertile than those fed inorganic selenium or no supplement, according to researchers working for Virginia Cooperative Extension.



The specific objectives of the research reported by Dr Mark Estienne of Tidewater AREC and co-authors were to evaluate sperm fertilizing capability for boars fed selenium from either organic or inorganic sources and to determine if enhanced motility characteristics and fertility exhibited by spermatozoa collected from boars fed selenomethionine (Sel-Plex) are maintained during long-term liquid storage in commercially available extenders.

The researchers concluded that supplementation of boar diets with selenomethionine resulted in enhanced motility characteristics of spermatozoa and fertilizing capability during liquid storage at 18°C compared with boars fed sodium selenite or boars not receiving selenium supplementation.

They added, "These results have tremendous implications for AI breeding programmes within the swine industry. The mechanisms responsible for the effects demonstrated in this report remain to be determined."

Reference:
Estienne M.J., A.F. Harper, J.W. Knight and S. M. Speight. Enhanced Fertility in Boars Fed Diets Supplemented with Sel-Plex® Selenium. Virginia Cooperative Extension, Livestock Update, February 2009.

Title: Re: American Hog News USDA
Post by: mikey on February 15, 2009, 07:46:44 AM
Saturday, February 14, 2009Print This Page
Weekly Review: Packers Get Aggressive Again
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Feeder pigs at United Tel-O-Auction this week were about $10 per cwt below four weeks earlier. The United pigs by weighted groups were: 50-60 pounds $91-113 per cwt and 60-70 pounds $84 per cwt.

The prices for the US last week shows 50-54 per cent lean 10 pound basis pigs between $39-40 per head and 50-54 per cent lean 40 pound basis a little over $59 per head average.

The average weight of barrows and gilts in Iowa-Minnesota live last week at 269 pounds up 0.3 pound from a week earlier and up 0.9 pound from a year earlier. Carcass weights at 201 pounds under Federal Inspection for the week ending 24 January were the same as a year earlier. For the week ending 31 January carcass weights at 202 pounds up two pounds from 12 months earlier.

These data continues to indicate producers slowed marketings relative to a year earlier. In August, live barrow and gilt were as much as three pounds below a year earlier. This change in weights suggests producers have backed up marketings between one to two days since late summer.

Packers have been very aggressive again this week in buying hogs Thursday the afternoon cutout was $58.54 per cwt and the western Cornbelt negotiated base price was 61.40 per cwt. This means they had only a portion of the drop to pay their entire slaughter and processing costs, which means red ink.

The live hog price Friday morning were $0.50-2.00 per cwt higher compared to a week earlier. The weighted average negotiated carcass prices Friday morning were $2.88-8.99 per cwt higher compared to seven days earlier.

The live prices Friday morning for select markets were: Peoria $3.65 per cwt, Zumbrota, Minnesota, $40 per cwt and interior Missouri $41 per cwt. The weighted average negotiated carcass prices Friday morning by areas were: western Cornbelt $62.05, eastern Cornbelt $55.83 per cwt, Iowa-Minnesota $62.09 per cwt and nation $58.61 per cwt.

We still believe the odds are high for the normal seasonal increase in hog prices this spring. In the past five years the increase in price from February to June has been about $8 per cwt live or nearly $11 per cwt in carcass.

Slaughter this week under Federal Inspection was estimated at 2,236 thousand head, up 0.7 per cent from a year earlier.



Title: Re: American Hog News USDA
Post by: mikey on February 15, 2009, 07:48:48 AM
Saturday, February 14, 2009Print This Page
Market Preview: Pork Export Value Up 49.5 Per Cent in 2008
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



December pork exports were surprisingly strong, given all of the doom and gloom we’ve heard, plus the sharp strengthening of the US dollar last fall. Figures 1 and 2 show exports from two slightly different views.

 


Figure 1 is carcass weight equivalent from USDA’s Economic Research Service (ERS). ERS converts Commerce Department/Foreign Agricultural Service data to carcass weight so it can be easily compared to production numbers here in the United States. On this basis, December 2008 shipments were 3.2 per cent higher than in December 2007 – an improvement from November’s 0.5 per cent year-on-year increase. December’s 312.3 million pounds of carcass weight exports brings the yearly total to 4.668 billion pounds, 48.6 per cent higher than in 2007. That amounts to 19.96 per cent of total US commercial pork production – definitely close enough to 20 per cent to use the rounded up number. Wow! The pork from one in every five pigs slaughtered last year went overseas. Unimaginable in 1995, when the United States was the world’s-largest pork “importing” country.

Figure 2 shows annual exports on a product weight basis. These data come from the Commerce Department and the Foreign Agricultural Service. They are published in metric tons, the quantity units of international meat trade, but I have converted them to million pounds here. On this measure, exports grew by 49.4 per cent in 2008, with China/Hong Kong vaulting to the No. 2 ranking among US export markets. Shipments to Japan grew by 20.9 per cent last year – the largest annual growth rate since 2001 for our largest export market. Shipments to Mexico rebounded nicely (+51.6 per cent) after a difficult 2007. Finally, exports to Russia grew by 78 per cent last year, while exports to Canada continued their steady growth at +15.2 per cent.

Figure 3 is more important to the US pork business than either of the other two charts, since it is value that actually enhances the ability of packers to pay more for US hogs. The value of exports grew last year by 49.5 per cent -- slightly higher than the increase in export quantity, which means that export prices increased even while export quantities were exploding. That implies strong demand indeed.


Figure 3 also shows the true importance of a customer like Japan. They buy more and they buy higher-valued products. Canada remains the second largest US customer on a value basis, but both Mexico and China/Hong Kong closed the gap on Canada significantly in 2008.

In addition to the $4.116 billion of pork exports, the industry sold a record $559 million of pork variety meats abroad last year. That number was 102 per cent higher than in 2007, and was accomplished by selling 956.65 million pounds of variety meats, 94.8 per cent more than in 2007. The total value of pork and pork variety meat exports – $4.675 billion – equals $40.14/ head for each of the 116.458 million hogs slaughtered in the United States in 2008.

The string of record export years now stands at 17. Reaching 18 in 2009 will be very difficult, but the December export performance is encouraging since it occurred after the US dollar strengthened.

Hog Supplies on the Mark
A quick thought on hog supplies: They have been almost precisely what I expected coming out of the December Hogs and Pigs Report. Figure 4 shows the actual data for 2008 and 2009, and my forecasts for weekly slaughter for December 2008 through 2009. Note that the actual numbers have been very close to the forecasts, deviating only 0.5 per cent since 1 December. That’s good enough for me!


Does that mean that the rest of the December report – including the September-November pig crop that was pegged at 6 per cent lower than last year – is accurate? Not really. But it also doesn’t call that report into question. The more I hear about empty finishing barns in Iowa and Minnesota, the more I think my projected slaughter levels of just over 1.9 million per week in May and June are pretty solid.

Just how aggressive packers will be in chasing those pigs remains to be seen. They have had miserable margins over the past three months and have run inverted meat margins (i.e. the hog price has been higher than the cutout value) for six out of seven weeks this year. So, things need to improve on the product side to get hog prices significantly higher. Will the spring bring a normal surge of demand? I think so. But I’ve never had to make that call with an economy like this and I don’t think anyone yet knows how to factor it in to meat demand.



As published in National Hog Farmer's Weekly North American Preview.

Title: Re: American Hog News USDA
Post by: mikey on February 18, 2009, 02:42:29 AM
Tuesday, February 17, 2009Print This Page
New Guidelines for 'Fatigued' Pigs
US - USDA's Food Safety Inspection Service (FSIS) has set new guidelines for the handling of pigs that are reluctant to move at the packing plant.



USDA's Food Safety Inspection Service has issued guidance to its inspectors on handling 'fatigued' or 'slow' hogs at packing plants, reports Pork Magazine.

Among the guidance suggestions, plants may elect to have a written protocol on handling fatigued or slow hogs. The protocol should explain measures that ensure all pigs are handled humanely and include procedures for tracing fatigued pigs through the process. The protocol should ensure that the requirements are met so that all pigs receive ante-mortem inspection.

It also should address whether slow pigs will be moved as a group to the stunning area after inspection, or if they will be stunned in a pen specified to hold slow or fatigued pigs. The pigs should then moved immediately to the sticking area for post-mortem inspection.

According to National Pork Producers Council and its Packer-Processor Industry Council developed materials to help FSIS understand the science of fatigued pigs and how such pigs currently are handled in plants.

Title: Re: American Hog News USDA
Post by: mikey on February 19, 2009, 12:48:42 PM
Wednesday, February 18, 2009Print This Page
US and Canadian Hog Inventory Down Four Per Cent
US - This publication is a result of a joint effort by Statistics Canada and NASS to release the total hogs, breeding, market hogs, sows farrowed, and pig crop for both countries within one publication.

 

This information was requested by the US hog industry to provide producers additional information about potential hog supplies. US inventory numbers were previously released on 30 December 2008.

US and Canadian inventory of all hogs and pigs for December 2008 was 79.1 million head. This was down four per cent from December 2007 but up two per cent from December 2006. The breeding inventory, at 7.49 million head, was down three per cent from a year ago but virtually unchanged from last quarter. Market hog inventory, at 71.6 million head, was down four per cent from last year and down three per cent from last quarter. The pig crop, at 36.3 million head, was down four per cent from 2007 but up three per cent from 2006. Sows farrowed during this period totaled 3.79 million head, down five per cent from last year.

US inventory of all hogs and pigs on 1 December 2008 was 66.7 million head. This was down two per cent from both 1 December 2007 and 1 September 2008. The breeding inventory, at 6.08 million head, was down two per cent from last year but up slightly from the previous quarter. Market hog inventory, at 60.6 million head, was down two per cent from both last year and last quarter. The pig crop, at 28.4 million head, was down four per cent from 2007 but up 6 per cent from 2006. Sows farrowed during this period totaled 2.99 million head, down six per cent from last year.

Canadian inventory of all hogs and pigs on 1 January 2009 was 12.4 million head. This was down 10 per cent from 1 January 2008 and down 17 per cent from 1 January 2007. The breeding inventory, at 1.40 million head, was down seven per cent from last year and down one per cent from last quarter. Market hog inventory, at 11.0 million head, was down 11 per cent from last year and down four per cent from last quarter. The pig crop, at 7.86 million head, was down three per cent from 2008 and down four per cent from 2007. Sows farrowed during this period totaled 799,200 head, down four per cent from last year.

Title: Re: American Hog News USDA
Post by: mikey on February 23, 2009, 12:06:07 PM
Saturday, February 21, 2009Print This Page
Market Preview: Packers Feeling the Pain
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Smithfield Foods’ announcement this week stating plans to close six processing plants, eliminate 1,800 jobs and reduce the number of operating business units from seven to three is definitely a sign of the times. While efficiency has always been important, it is now indispensable. Even the juggernaut that was (and still may be) Smithfield, is not immune to that requirement.

Some industry observers have long marveled at Smithfield’s standard operating procedure of buying another company, making sure it had good management and systems in place, and then more-or-less leaving it alone. The practice worked pretty well for years and Smithfield’s stock soared from $1.30/share in early 1990 to a peak of over $35 in mid-2004. It’s hard to argue with success.

But difficult times have hurt Smithfield and many other companies in and out of the food and agricultural sectors. Obviously, Smithfield management decided it was time to streamline. The operating units will be centered on the company’s three largest packing entities – Smithfield Packing, John Morrell and Farmland Foods. The closures have no impact on Smithfield’s packing capacity since all of the companies’ slaughter plants were spared.

That is an important message, I think. The John Morrell plants at Sioux Falls, South Dakota, and Sioux City, Iowa, have long been on the short list of US slaughter plants that are long in years and perhaps short on efficiency. The Sioux Falls plant was once considered a definite dinosaur, since it dates to the day of four-species (beef, pork, lamb and veal) operations under one roof. But the addition of major processing capabilities in the ’90s has made it a very important plant for Morrell’s value-added products.
,br> Sioux City, on the other hand, is strictly a kill-and-cut operation located near a revitalized downtown area. It doesn’t even have the stockyards next door anymore. How much longer will it last in this kind of environment? I hope it is needed for a long time, but the same change in philosophy that led Smithfield to make this week’s changes could impact this plant and industry capacity as well.

With that said, I do not think we are at great risk of losing a slaughter plant this year. US market hog production will be lower in 2009, especially in the second quarter. Imports of Canadian market hogs will be much smaller, too. I expect no more than 500,000 or so this year (compared to 2.3 million in ’08) and, depending on how the mandatory country-of-origin-labeling (COOL) soap opera turns out, perhaps far fewer. Feeder/weaner pig imports will decline as well in 2008. I expect them to fall from last year’s seven million to 5.0 to 5.5 million this year.

These reductions will not leave large chunks of unused slaughter capacity for long periods of time. Utilization rates will indeed be lower than in 2007 and 2008, but closing a plant is pretty much a forever decision, and I don’t think 2008 supplies will dictate that it be made – especially after Smithfield has passed on an opportunity to close a plant that many industry observers believe to be vulnerable.

The exception may, sadly, be the Meadowbrook Farms plant in Rantoul, IL. The plant is closed at present due to a cash flow crunch caused by a contract dispute with a major customer. There are no plans to permanently close the plant, but the situation is serious. USDA’s Grain Inspection Packers and Stockyards Administration met with Meadowbrook suppliers last week and they usually only get involved when serious livestock payment issues arise. I hope the plant survives because I have friends involved as owners and as staff. Undeniably, the prospects don’t look good in the current economic environment.

With all of that said, it is important to realize that the current situation for pork packer margins is abysmal (see Figure 1). In a period of six months, US packers have gone from the highest per-head margins in the past nine years to the lowest per-head margins in the past 12 years. What is even more unusual is that the margins fell apart in September and October – the very time of year when pork packer margins usually strengthen.


Why the dismal performance? In a nutshell, packers are paying too much for hogs relative to cutout and by-product values. Meat margins (the spread between the cutout value and the hog price) have been negative in eight of the past nine weeks. By-product values have actually recovered some since Christmas, but last week’s $15.25/head (7 February) is over $8/head lower than last summer’s record high.

I think packers are trying to maintain both customer and supplier relationships as they wait for warmer weather and, hopefully, a seasonal increase in pork demand. It is a logical approach but one that, at least for now, is getting a bit expensive.

Title: Re: American Hog News USDA
Post by: mikey on February 23, 2009, 12:07:35 PM
Saturday, February 21, 2009Print This Page
Weekly Review: Japan Still Reigning as US Customer
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Pork exports for 2008 were up 48.6 per cent from 12 months earlier. Pork imports were down 14.1 per cent last year from a year earlier.

Net pork exports as a percent of production in 2008 was up to 16.4 per cent. This compares with 9.9 per cent in 2007. This was the major reason why live hog demand was up 6 per cent while consumer demand for pork was down 3.5 per cent from 12 months earlier.

Japan continues to be our number one customer of pork in 2008 and exports were up 23.4 per cent, China and Hong Kong, was up 139.8 percent, Mexico was up 49.3 per cent, Canada was up 14.9 per cent, South Korea was up 12.1 per cent, Russia was up 76 per cent, Taiwan was up 70.7 per cent, Australia was up 40.3 per cent and other countries were up 83.8 per cent from 2007.

December pork exports were up 3.2 per cent from 2007. China and Hong Kong were down 27.1 per cent in December from a year earlier. USDA is estimating pork exports in 2009 will be down about 15 per cent from 2008.

Pork cutout this Thursday afternoon at $57.22 per cwt was down $1.32 per cwt. With the weak consumer demand, pork cutout is not likely to increase much until we reduce slaughter more than we have to date. Loins at $72.06 per cwt was down $4.64 per cwt, Boston butts at $63.75 per cwt down $1.33 per cwt, hams at $40.03 per cwt down $1.42 per cwt and bellies at $72.26 per cwt down $0.10 per cwt from a week earlier.

Live hog weights for barrows and gilts in Iowa-Minnesota trended lower seasonally with the weight at 268.2 pounds down 0.8 pound from a week earlier but still up 1.2 pounds from a year earlier; continuing to support the belief that marketings are not as current as they were last fall.

Good news from north of the border. Canada's hog herd was down 10.2 per cent on 1 January from a year earlier. The breeding herd was down 7.1 per cent, sows and bred gilts were down 6.9 per cent from 12 months earlier.

Even with nearly a seven percent reduction in the sow herd, the farrowing intentions for January-March are only down 3.4 per cent and the April-June intentions are only down 2.6 per cent. With some growth likely in litter size, pig production in the first half of the year may be down only between two and three per cent from last year. With the weak consumer demand we need more reduction in the North American sow herd than we have had to date. The most recent sow and gilt slaughter data continues to support the belief that producers are not currently reducing the breeding herd. Sow slaughter in January was down 4.1 per cent after adjusting for the smaller herd which means the number of sows slaughtered was down between six and seven percent from a year earlier. The bottom line is that additional reductions in the hog herd in North America is needed to stop the bleeding.

Live hog prices this Friday were $1.00 – 2.00 higher per cwt compared to last week. Weighted average negotiated carcass prices were $0.10-4.91 per cwt lower Friday morning compared to seven days earlier.

The top live prices Friday morning for select markets were: Peoria $36.50 per cwt, Zumbrota, Minnesota, $39.00 per cwt and interior Missouri $43.00 per cwt. The weighted average negotiated carcass prices Friday morning by areas were: western Cornbelt $57.92 per cwt, eastern Cornbelt $55.73 per cwt, Iowa-Minnesota $57.00 per cwt and nation $56.47 per cwt.

Slaughter this week under Federal Inspection was estimated at 2214 thousand head up 0.4 per cent from a year earlier.




Title: Re: American Hog News USDA
Post by: mikey on February 24, 2009, 05:02:12 AM
Monday, February 23, 2009Print This Page
Judge Rules Recumbent Pigs May be Processed
CALIFORNIA, US - Contrary to a state law, a federal judge has ruled that pigs unable to stand may still be slaughtered and processed for food. Four welfare groups will appeal against the ruling.



A federal judge in Fresno has ruled that pigs too weak or stressed to stand up can still be butchered despite a state law to the contrary, reports Los Angeles Daily News.

US District Judge, Lawrence J. O'Neill, ruled that a 102-year-old federal food safety law that allows swine too sick to stand to be slaughtered under certain conditions supersedes the California law.

Four groups that work for the humane treatment of animals criticized the ruling on 20 February, saying it endangers the nation's food supply. They vowed to appeal.

"This challenge to California law is a stunning example of the meat industry's utter disregard for animal suffering and public safety," said Bradley Miller, national director of the Humane Farming Association, in a written statement.

Representatives of Miller's group, along with The Humane Society of the United States, Farm Sanctuary and the Animal Legal Defense Fund, said the ruling creates a loophole that could lead to the butchering of sick and injured animals.

The state law banning the slaughter of so-called downer animals was written last year in response to an animal rights group's taping of abuse at a Southern California slaughterhouse. Two meat industry groups sued, arguing that the statute would cause good pork to go to waste, concludes the report in Los Angeles Daily News.


 

Title: Re: American Hog News USDA
Post by: mikey on February 25, 2009, 04:18:45 AM
Tuesday, February 24, 2009Print This Page
GAO Report Warns of Shortage of Veterinarians
US - The Government Accountability Office (GAO) has put out a statement highlighting the growing national shortage of veterinarians.



Veterinarians are essential for controlling zoonotic diseases - which spread between animals and humans - such as avian influenza. Most federal veterinarians work in the Departments of Agriculture (USDA), Defense (DOD), and Health and Human Services (HHS). However, there is a growing national shortage of veterinarians.

GAO determined the extent to which:

the federal government has assessed the sufficiency of its veterinarian work force for routine activities
the federal government has identified the veterinarian work force needed during a catastrophic event, and
federal and state agencies encountered veterinarian work force challenges during four recent zoonotic outbreaks.
GAO surveyed 24 federal entities about their veterinarian work force; analyzed agency work force, pandemic, and other plans; and interviewed federal and state officials that responded to four recent zoonotic outbreaks.

The federal government lacks a comprehensive understanding of the sufficiency of its veterinarian work force. More specifically, four of five component agencies GAO reviewed have assessed the sufficiency of their veterinarian work force to perform routine activities and have identified current or future concerns. This includes USDA's Animal and Plant Health Inspection Services (APHIS), Food Safety and Inspection Service (FSIS) and Agricultural Research Service (ARS); and DOD's Army. Current and future shortages, as well as noncompetitive salaries, were among the concerns identified by these agencies.

HHS's Food and Drug Administration (FDA) does not perform such assessments and did not identify any concerns. In addition, at the department level, USDA and HHS have not assessed their veterinarian work forces across their component agencies, but DOD has a process for doing so. Moreover, there is no government-wide effort to search for shared solutions, even though 16 of the 24 federal entities that employ veterinarians raised concerns about the sufficiency of this work force.

Further exacerbating these concerns is the number of veterinarians eligible to retire in the near future. GAO's analysis revealed that 27 per cent of the veterinarians at APHIS, FSIS, ARS, Army and FDA will be eligible to retire within three years.

Efforts to identify the veterinarian work force needed for a catastrophic event are insufficient. Specifically, agencies' plans lack important elements necessary for continuing essential veterinarian functions during a pandemic, such as identifying which functions must be performed on-site and how they will be carried out if absenteeism reaches 40 per cent – the rate predicted at the height of the pandemic and used for planning purposes.

In addition, one federal effort to prepare for the intentional introduction of a foreign animal disease is based on the unrealistic assumption that all affected animals will be slaughtered, as the United States has done for smaller outbreaks, making the resulting veterinarian work force estimates irrelevant.

A second effort lacks crucial data, including data on how the disease would spread in wildlife. If wildlife became infected, as they have in the past, response would be greatly complicated and could require more veterinarians and different expertise. Officials from federal and state agencies involved in four recent zoonotic disease outbreaks commonly cited insufficient veterinarian capacity as a work force challenge. However, 10 of the 17 agencies that GAO interviewed have not assessed their own veterinarian work force's response to individual outbreaks and are thus missing opportunities to improve future responses. Moreover, none of the entities GAO reviewed has looked across outbreaks to identify common work force challenges and possible solutions.




Title: Re: American Hog News USDA
Post by: mikey on February 25, 2009, 04:21:15 AM
Tuesday, February 24, 2009Print This Page
Pork Production Lower than a Year Ago
US - Commercial red meat production for the United States totalled 4.17 billion pounds in January, down six per cent from the 4.42 billion pounds produced in January 2008, reports the USDA's National Agricultural Statistics Service (NASS).

 

Pork production totaled 2.03 billion pounds, six per cent below the previous year.

Hog kill totaled 9.92 million head, six per cent below January 2008.

The average live weight was down one pound from the previous year, at 272 pounds.

January 2008 contained 23 weekdays (including two holidays) and 4 Saturdays.
January 2009 contained 22 weekdays (including two holidays) and 5 Saturdays.

US Monthly Commercial
Red Meat Production
 

US Monthly Commercial Slaughter
Hogs
 

US Monthly Commercial Slaughter
Average Live Weight
Hogs
 

US Monthly Federally Inspected
Average Dressed Weight
Hogs
 

US Monthly Federally Inspected
Average Dressed Weight
Barrows and Gilts
 

US Monthly Federally Inspected
Average Dressed Weight
Sows

Title: Re: American Hog News USDA
Post by: mikey on February 26, 2009, 05:16:44 AM
Wednesday, February 25, 2009Print This Page
CME: Pork and Beef Prices Higher Than a Year Ago
US - CME's Daily Livestock Report for 24 February 2009.



We have been saying for some time that US retail meat and poultry prices had to eventually rise in order to generate enough income at the retail and foodservice level to pull producer level demand up and compensate growers for higher costs. That entire process is in some jeopardy now as consumer incomes and wealth levels fall and consumers begin to deal with much tighter family budget situations. USDA’s retail price data for January indicated a bit of a mixed bag for average retail prices but the pattern still fits our expectations: Higher retail meat and poultry prices in 2009 LED BY POULTRY.

Poultry’s leadership position in this matter is driven by two factors. First, chicken is the most consumed animal protein in America on a retail weight basis and trails beef by less than two pounds per person on a boneless equivalent basis. Chicken is a major component of both foodservice and retail meat sales and dominates convenience food offerings. More important in our minds, though, is the fact that chicken can respond more rapidly to market conditions than any other animal protein species. Only 8 to 11 weeks, depending on end weights, are required to go from an egg placed in an incubator to a ready-for-slaughter bird. It takes nearly one year to go from breeding a sow to having a finished market hog and more than two years from breeding a beef cow to having a market-weight fed steer or heifer.

Therefore, we have expected chicken to be the first of the animal protein species to be able to respond to higher costs. The process has been slower and has exacted more pain on poultry companies that we expected but it appears to be happening. Egg sets and broiler slaughter reductions have been happening since July and prices are finally responding, as can be seen in the top graph below.

 


Composite broiler prices were record high in January, reaching $1.837/lb., 3.1 per cent higher than in December and 8.4 per cent higher than in January 2008. Turkey prices, which would be expected to respond rather quickly to higher feed costs as well, also set a record in January at $1.365/lb., 2.5 per cent higher than in December and 13.1 per cent higher than one year ago.

Both beef and pork prices declined from December levels in January but began this year higher than one year ago. USDA’s All-Fresh beef price fell 7.4 cents/lb from December to settle at $3.927/lb. That price is still 2.7 per cent higher than one year ago. The composite pork prices declined just less than 1 cent/lb. from December. January’s $2.996/lb. was 4.9 per cent higher than one year ago. Note that both beef and pork retail prices set all-time records in September before declining during the fourth quarter. That decline is quite normal for pork but was far more pronounced for beef this year — likely owing to the financial crisis and lower incomes.

Of course when it comes to demand, relative prices are paramount —whether the relationship be to each other or to income. The lower graph above shows beef, pork and turkey prices as a percentage of the chicken price. It appears that both beef and pork are relatively less expensive than they have been in the past. That could be due to weaker demand or just a lag relationship with chicken prices. When both species’ relative prices fell in early 2008, they came roaring back to set September’s records. Might it happen again?



Title: Re: American Hog News USDA
Post by: mikey on February 27, 2009, 03:08:36 AM
Thursday, February 26, 2009Print This Page
US Maintains Access to Philippine Pork Market
US - In a victory for US pork producers, the Philippine government indicated this week that it will maintain current rules for the administration of its tariff rate quota (TRQ) for pork, preserving US access to a fast-growing market for US pork exports.



The Philippine government had threatened in recent months to severely restrict pork imports by denying to legitimate Philippine importers the licenses they need to import pork within the country’s 54,210 metric ton pork TRQ. (Amounts of imported pork below the TRQ are subject to a lower, or in-quota, tariff rate. Once imports reach the TRQ threshold a higher tariff rate kicks in.)

In response to that threat, the National Pork Producers Council filed a petition with the Office of the US Trade Representative in December 2008, requesting removal of the Philippines from the US Generalized System of Preferences (GSP). In filing the petition, NPPC noted that the Philippine action would have violated World Trade Organization rules and a 1999 Memorandum of Understanding between the United States and the Philippines.

GSP is a program designed to provide developing countries such as the Philippines with preferential duty access to the US market. In 2007, the Philippines exported $1.1 billion worth of products to the United States under the GSP program.

"We are delighted the Philippine government has lived up to its international obligations and given Philippine importers full access to the pork TRQ," said NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio. "In light of that, we have withdrawn our GSP petition. However, we will remain vigilant to ensure the Philippine government continues to give the US pork industry full access to its pork market."

The Philippine decision to maintain its current TRQ administration rules preserves a growing market for US pork exports. US pork sales to the Philippines in 2008 surged by 360 percent to 25,300 metric tons valued at $46 million.




Title: Re: American Hog News USDA
Post by: mikey on March 01, 2009, 08:40:42 AM
Saturday, February 28, 2009Print This Page
Weekly Review: Cycle in Pork Demand Observed
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Retail pork prices in January were down 0.3 per cent from December but up 4.9 per cent from a year earlier. Live hog prices in January were 12.7 per cent above 12 months earlier.

All segments of the pork industry benefited from the nearly five percent increase in retail pork prices in January. However, in late January and so far in February packers’ margins have been very undesirable with deep red ink part of the time.

Surprising as it may seem to be our demand index for November 2008 through January 2009 shows about a two percent increase in pork demand and above a one percent increase in live hog demand.

There appears to be a cycle in pork demand and the rate of decline in demand was decreasing through fall.

Certainly, three months is not a long enough period to project a trend; but with the weak general economy, we will take stronger demand for any length of time we can get it.

Our gilt and sow slaughter data continues to support the belief that producers have stopped the decline in the size of the hog breeding herd. Some observers of the hog industry believe we need to reduce the herd another five percent or about 300 thousand head. To get this much more reduction will take some time and producers are likely to feel substantially more pain in accomplishing this goal.

Feeder pig prices at United Tel-O-Auction this week were steady to $5 per cwt below two weeks earlier. United only had pigs in the 50-60-pound category this week and they sold for $107 per cwt.

The national average price last week for early-weaned pigs 10-pound basis sold for an average of $37.72 per head. The national average for 40-pound basis pigs was $55.45 per head. I would still rather be the seller than the buyer at these prices.

Pork cutout was pushed lower again this week with the cutout Thursday afternoon at $56.67 per cwt, down $0.65 per cwt from seven days earlier. Loins at $71.97 were down $0.09 per cwt, Boston butts at $60.91 were down $2.84 per cwt, hams at $40.65 per cwt were up $0.62 per cwt, and bellies at $71.26 per cwt were down $1.00 per cwt from a week earlier.

Live barrow and gilt weights for Iowa and Minnesota continued the seasonal decline at 262.4 pounds, down 0.8 pound from a week earlier but still 0.6 pound above a year earlier. Barrow and gilt carcass weights under Federal Inspection for the week ending February 14 were still two pounds above a year earlier.

This weight data supports the belief that the larger marketings than expected in the last few weeks are not due to pulling marketings forward. Based on weights, marketings have slowly become less current in the last six months.

Live hog prices Friday morning were $2.50 - $4.25 per cwt lower compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $2.79 – $4.66 per cwt lower compared to seven days earlier.

The top live prices Friday morning for select markets were: Peoria $34 per cwt, Zumbrota, Minnesota, $36 per cwt and interior Missouri $38.75 per cwt. The weighted average negotiated carcass prices Friday morning were: western Cornbelt $54.21 per cwt, eastern Cornbelt $51.07 per cwt, Iowa-Minnesota $54.21 per cwt and nation $51.84 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,179 thousand head, down 0.5 per cent from a year earlier.

Title: Re: American Hog News USDA
Post by: mikey on March 03, 2009, 03:18:14 AM
Monday, March 02, 2009Print This Page
CME: What's to Determine Meat Prices in 2009?
US - CME's Daily Livestock Report for 27 February 2009.



We have discussed the rather obvious fact that demand is a huge risk factor for 2009 and, since we doubt that the people in charge in Washington are going to offer any meat demand stimulus packages, our concern remains high. The year-on-year change figures in this week’s Production and Price Summary add some credence to those concerns. FI cattle slaughter was DOWN 2.23 per cent last week from one year ago at the same time that live and dressed steer prices were DOWN as well. Not exactly a relationship that supports a downward sloping demand curve. FI hog slaughter and hog prices last week were also both below the levels of one year ago. Chicken slaughter/production and the 12-city composite broiler price had the same year-on-year change signs last week — though the Georgia dock broiler price, which represents a smaller bird usually destined for foodservice, was over 10 per cent higher this year. Even turkey prices were lower last week versus 2008 while turkey supplies were down over 6.5 per cent.

We have seen some instances of this in past weeks, especially in the beef sector but this is the first week that the relationships was expressed in all species. We fully realize that one week does not a trend make but the breadth of these same-sign relationships at farm and wholesale levels are troubling and are certainly worthy of watching closely in weeks to come.

Now we wouldn’t be living up to our economist pedigree if we didn’t chime in with an “On the other hand . . . “ — so consider the most recent demand information from the University of Missouri. Professor Glenn Grimes’ released demand indexes last week for the 3-month period from November through January that indicate that US consumerlevel demand actually improved relative to one year ago. Professor Grimes figures show pork demand up 2 per cent, beef demand up 1 per cent, broiler demand up 5.6 per cent and turkey demand up 3.8 per cent during that period. In addition, live hog demand was 1 per cent higher while fed cattle demand was down 5.1 per cent.

How do these square with recent markets? First, remember that they are for November through January and markets have been pummeled by continued bad news and negative expectations since then. Second, Professor Grimes quite correctly uses deflated retail prices as part of his calculations to determine the whether a demand curve has moved. Under “normal” inflationary conditions, these real prices generally fall from year to year, requiring a larger per capita consumption increase if an increase of demand is to be shown. But from November through January, there was no inflation (the all-item CPI actually fell by 1.3 points or 0.6 per cent). That means that smaller volume increases (or, depending on what direction retail prices moved, even volume declines) were needed to conclude that demand had increased. And the domestic per capita consumption increases needed to support a conclusion that demand is higher are much easier to come by now as exports have softened. Finally, the retail prices of all species are significantly higher than one year ago as the retail market finally responds to the lower domestic availability that started last year when exports increased.

Which of these dueling demand stories will prevail in 2009? The answer to that will be a major determinant of livestock and meat prices.







Title: Re: American Hog News USDA
Post by: mikey on March 04, 2009, 02:57:17 AM
Tuesday, March 03, 2009Print This Page
Weekly Outlook: Producers May Still Return to Profits
US - Pork producers may be on the verge of returning to profitability after experiencing losses dating back to October 2007, writes Chris Hurt, Extension Economist at Purdue University.

 Chris Hurt
Extension Economist
Purdue University
 

Hog prices are expected to rise seasonally in coming months and costs for feed continue to drop under the concerns of slowing world economic activity. For the year, hog producers are expected to see an average live price of about $47.50 per hundredweight, but costs of production are expected to drop to near $45.50, providing a modest profit.

The crisis in the world economy is having negative impacts on pork demand, but is also helping to lower feed costs as corn and soybean meal prices decline. In fact, yearly average hog prices had very little variation in 2006, 2007, 2008, and now in 2009 when average prices were between $47 and $48. Wide fluctuations in costs of production are the primary reason for an estimated profit of $27 per head in 2006 and an estimated loss of $17 per head in 2008. Changing prices of corn and soybean meal have been the drivers of returns.

Hog prices will not see much enhancement this year due to reductions in demand, particularly export demand. The robust pace of pork export demand in 2008 is not going to be maintained as USDA anticipates a 14 per cent drop. Even though domestic pork production will drop one to two percent in 2009, fewer exports mean that pork supplies available for US consumers will rise modestly for the year, but with some differences by quarter.

Pork available per person is expected to rise modestly in the first quarter and be 6 per cent higher in the second quarter. The large increase in domestic supplies in the second quarter are because of large exports to China in the same quarter a year-ago. More modest Chinese purchases in the second quarter 2009 will leave considerably larger amounts for US consumers. Availability will be about unchanged in the third quarter and down four percent in the final quarter.

Hog prices on a live weight basis are expected to average $42.50 for 51 to 52 per cent lean carcasses in the first quarter of 2009. Prices are expected to begin to rise immediately from the low $40s currently, to near $50 by May. Late spring and summer prices are expected to be in the lower $50’s. Seasonal declines are anticipated after August with prices dropping to the mid-$40s by year end. By quarter, 2009 prices are expected to average about $42.50, $50, $51, and $46, respectively.

How much will declining corn and soybean meal prices lower costs of production in 2009? Estimated costs for farrow-to-finish operations increased from about $37 per live hundredweight in 2006 to a record high of $54 in 2008. The previous record high estimated annual cost was $48 in 1996. The current estimated 2009 corn price of $3.36 is down from $4.78 last year. High protein meal price this year of $261 per ton would be down $70 per ton from 2008. Estimated 2009 prices for corn and soybean meal are based on the actual prices for the first two months and adjusted futures prices as of 2 March 2009.

Given these hog price and costs estimates, pork producers are expected to return to profitability in April of this year. Estimated losses of $11 per head in the first quarter would give way to profits in the second through fourth quarter of $12, $15, and $6, respectively. For the entire year, profits would be about $5 to $6 per head.

Like all sectors of agriculture, pork producers face large uncertainties from the general economic conditions. This means that reductions in the breeding herd will likely continue throughout the year. Smaller pork supplies into 2010 would seem to put a brighter face on profit prospects, but further loss of pork demand in a weakening economy could offset those gains.

The extreme uncertainty of the moment implies that pork producers, like all of agriculture, should be conservative and defensive this year. Perhaps management decisions in 2009 should be focused on increasing odds of survival, rather than looking for big opportunities.


 
Title: Re: American Hog News USDA
Post by: mikey on March 05, 2009, 01:43:17 AM
Wednesday, March 04, 2009Print This Page
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech. Thank you to everyone for your thoughts and condolences in our time of loss. Now, let’s get back in the saddle.



LEAN HOGS on the CME closed down on Monday. The APR’09LH contract closed at $60.275/cwt; down $0.625/cwt. The JUNE’09LH contract lost $1.050/cwt to $71.475/cwt. Futures closed lower on the souring economy and other commodity declines despite higher cash hog prices. There was a slaughter slowdown last week based on Smithfield Foods closing of one of its Smithfield, VA plants. USDA on Monday reported cash hogs up $2.22/cwt at $57.53/cwt. USDA on Friday put the Pork Cutout at $56.35/cwt; down $0.22/cwt. According to HedgersEdge.com the average pork plant margin for Monday was a negative $0.45/head based on the average buy of $39.98/cwt vs. the average breakeven of $39.82/cwt. Sell hogs when ready. It would be a good consideration to put off buying feed needs for a couple of weeks if possible.

CORN futures on the Chicago Board of Trade (CBOT) closed off on Monday. MAR’09 corn futures closed at $3.434/bu; off 7.25 ¢ /bu. The JULY’09 contract closed at $3.594/bu; down 9. 0 ¢ /bu. DEC’09 corn futures finished at 3.802/bu; down 10.75 ¢ /bu. A drop in crude oil, plunging equity markets, and gains in the US dollar pressured prices. Japan placed an order to import corn for feed from Romania over the US for the first time in ten years. USDA placed corn inspected for export at 31.39 mi bu vs. expectations for between 24.0-30.0 mi bu. Corn exports are shown off last year’s pace in the table below.

Period
Ended Corn % chg
YTD 08/09 774,575 -39.5
YTD 07/08 1,280,038 NA
-2009-
Feb 26 31,390 10.1
Feb 19 28,500 -17.4
Feb 12 34,522 15.8

Cash corn in the US Midwest was steady to firm. Cash corn in the U.S. Mid-Atlantic states were 11.0- 15.0 lower. Funds were net sellers having sold over 6,000 lots. A couple of floor traders said most traders think the CBOT corn market is overpriced. Ethanol futures closed off 3.0 ¢ /gal finishing at $1.510/gal. New surveys show that many producers have ’08 corn still in the bin. It would be a very good idea to get it sold at this time. It might be a good idea to price up to 45 per cent of the 2009 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. MAR’09 soybean futures closed at $8.484/bu; off 26.0 ¢ /bu. The NOV’09 contract closed at $7.930/bu; down 34.5 ¢ /bu. The same market influencers plus one weighed in on soybeans. The additional factor pushing soybeans lower is the news that the Argentinean government is interested in taking over their large soybean industry so they may regulate prices to their own buyers. USDA put soybeans-inspected-for-export at 27.22 mi bu vs. expectations for between 25.0 – 28.0 mi bu. It was reported that China will shift its business to South America from the US. This should pressure US prices as 64 per cent of this week’s US export total belonged to China and is typical of the last few weeks. The table below illustrates how exports have fallen off pace.

Period
Ended Soybeans % chg
YTD 08/09 821,975 12.9
YTD 07/08 728,073 NA
-2009-
Feb 26 27,219 -10.1
Feb 19 30,283 -37.6
Feb 12 48,550 0.2

Large specs are in net bear positions by about 1,400 lots as of Feb. 24. Cash soybeans are steady to stronger. It might be a good idea to get all old crop beans sold and price up to 25 per cent of the ’09 crop.

WHEAT futures in Chicago (CBOT) closed down on Monday. The MAR’09 contract closed at $4.496/bu; off 15.75 ¢ /bu. JULY’09 wheat futures finished down 15.25 ¢ /bu at $5.180/bu. The same outside markets weighing on other commodities pressured the wheat markets. There are reports that Iran will need to import 7 million tonnes (257 mi bu) this coming year. Spain is said to import more wheat from the Black Sea area after delays in current orders. Two floor sources stated that the market is waiting on word from an Iraq tender that closed over the weekend to see who got the bid. However, they acknowledged that Canada and Russia are expected to get the bulk of the order as US wheat is too expensive. There is some fundamental support as rain is needed in the US Plains wheat growing area. However, the main focus on the wheat market this week will continue to be focused on the floundering US stock market and crude oil. US wheat exports were off with USDA placing wheat-inspected-forexport at 8.66 mi bu vs. expectations for between 13.0 – 16.0 mi bu. The table below shows year-to-date running behind last year at this time.

Period
Ended Wheat % chg
YTD 08/09 775,149 -19.9
YTD 07/08 967,359 NA
-2009-
Feb 26 8,664 -16.4
Feb 19 10,359 -2.3
Feb 12 10,604 -45.0

For large speculators net positions remained short by 2,539 lots for the week of Feb. 24. It would be a good idea to hold off selling any more of the ’09 wheat crop as wheat demand will most likely remain inelastic (stable) for food demand.




Title: Re: American Hog News USDA
Post by: mikey on March 10, 2009, 12:39:48 AM
Monday, March 09, 2009Print This Page
Livestock Slaughter 2008 Summary - March 2009
US - Total red meat production for the United States totaled 50.4 billion pounds in 2008, 3 per cent higher than the previous year, according to the United States Department of Agriculture (USDA).

 

Red meat includes beef, veal, pork, and lamb and mutton. Red meat production in commercial plants totaled 50.2 billion pounds. On-farm production totaled 137 million pounds.

Commercial hog slaughter totaled 116.5 million head, 7 per cent higher than 2007 with 99.1 per cent of the hogs slaughtered under federal inspection.

The average live weight was down 1 pound from last year, at 268 pounds.

Barrows and gilts comprised 96.6 per cent of the total federally inspected hog slaughter.

There were 818 plants slaughtering under federal inspection on 1 January 2009 compared with 807 last year. Hogs were slaughtered at 618 plants, with the 12 largest plants accounting for 55 per cent of the total.

Iowa, Kansas, Nebraska, and Texas accounted for 50 per cent of the United States commercial red meat production in 2008, similar to 2007.


Title: Re: American Hog News USDA
Post by: mikey on March 11, 2009, 12:44:38 AM
Tuesday, March 10, 2009Print This Page
CME: Exports 'Okay but Not Great' or 'Dead'?
US - CME's Daily Livestock Report for 9 March 2009.



A MAJOR discussion topic these days in meat and poultry markets is the status of exports and the discussion is certainly not passing interest — exports are critical to US animal protein sectors. The phenomenal performance of US pork and pork variety meat exports in 2008 — up 57 per cent in volume, up 54 per cent in value and now representing 20 per cent of US production — has been addressed on several occasions in these pages. But 2008 was also a record year for US broiler exports.

The 6.96 billion pounds exported was 17.9 per cent higher than 2007’s total and represented a record 19.1 per cent of net ready-to-cook broiler production. And beef exports, though not record-high due to the continuing recovery from BSE in 2003, were 32 per cent higher than 2007 and represented 7.1 per cent of total production. Clearly, all three of these businesses have much at stake in export markets. Consider what would happen if a significant portion of 2008’s shipments had to be consumed in the US To use a poultry metaphor — Everyone has a lot of eggs in this export basket!

So what is happening this year? That is difficult to tell. Some in the trade report that exports are “dead”, others have told us they are “okay but not great”. No one has provided any glowing descriptions but that is no surprise considering the 2008 yardsticks to which 2009 business will be compared, especially for chicken and pork. And actual data from the Department of Commerce and USDA are delayed six weeks, meaning that we still have no actual data for 2009. The first will be released next Monday.

The only data approaching “real time” that we have is for beef exports. Why the special treatment? Because the industry (both producers and packers) asked for it and got it as part of the Livestock Mandatory Reporting Act of 1999. Chicken was not included in that legislation. Pork was included but pork producers and packers agreed to not pursue weekly export data based on the concern that publication of that information would likely help competitors such as Canada, Denmark and Brazil more than it would help U.S. producers and packers. And don’t scoff at that idea too quickly.

Consider that, in 1999, the US beef sector was producing essentially a unique product for export markets — grain fed beef. Only Canada was a significant competitor. Australia produced a bit but not much until BSE came along in Canada and the US and created a golden opportunity in 2003 and 2004. On the other hand, pork was and is pretty much pork. There is not near as much difference among pork from various suppliers as there was difference between grain fed and grass fed beef. Some now regret that decision by the pork industry and pork producers at their recent annual meeting actually voted to ask USDA to begin mandatory weekly export reporting.

So, only weekly beef export data can give us much of an idea what is going on in US meat and poultry export markets — and it says things are going pretty well (top graph below). Weekly shipments have been hot and cold so far in 2009, but they are 9 per cent higher YTD. The data coming out next Monday is monthly data, so we have provided the 2008 monthly beef export chart to compare to its weekly counterpart. The patterns are clearly similar even though the data cannot be compared precisely — weekly data are in product weight vs. carcass weight for monthly and, of course, months just refuse to operate well on a whole-week basis.

Title: Re: American Hog News USDA
Post by: mikey on March 12, 2009, 01:45:16 AM
Wednesday, March 11, 2009Print This Page
Know the Rules for Handling Animal Losses
US - A new US Food and Drug Administration (FDA) rule could impact the disposal of dead farm animals.



The rule, scheduled to go into effect in April, would prevent the use of brains and spinal cords of older cattle for animal food. The new rule covers all cows 30 months and older and is aimed at preventing the spread of bovine spongiform encephalopathy, commonly known as mad cow disease.

Many Kentucky farmers and counties depend on professional hauling companies to remove carcasses and deliver them to rendering facilities. Some of these companies may choose to discontinue their enterprise due to this new restriction.

With the decision by at least one hauler to suspend services, at least temporarily, the University of Kentucky Livestock Disease Diagnostic Center has been receiving calls regarding disposal. But that is not a part of the center's mission.

"LDDC is primarily a diagnostic laboratory, not a statewide carcass disposal facility," said Craig Carter, director. "Our mission is disease surveillance and diagnosis."

Kentucky has nearly 3 million cattle, swine and sheep, and death losses are an unfortunate but real part of animal agriculture. Their proper disposal is critical to safeguarding water supplies and reducing the spread of disease. Robert C. Stout, state veterinarian, said his office gets more complaints about animal carcasses than on any other subject.

"The enhanced feed ban rule will have a tremendous impact, not only on animal agriculture but also on public health and the environment," Stout said. "Farmers must have a means of disposing of dead animals that is readily accessible and affordable."

While this new rule could make disposal more challenging and costly, farmers should not forget there are laws in place establishing proper disposal practices.

State law requires farmers to dispose of dead animals through an approved method within 48 hours of death. These methods include incineration, boiling or steaming, burying, removal by a licensed rendering establishment, disposition in a contained landfill or composting. These methods are outlined in the Kentucky Agriculture Water Quality Act under Livestock Best Management Practice No. 15. Improper dumping of an animal carcass in a stream, sinkhole or field is unlawful, said Amanda Gumbert, UK extension water quality liaison.

UK College of Agriculture environmental specialists and engineers can assist farmers with information on developing and implementing agricultural water quality plans, on-farm composting facilities and other aspects of complying with dead animal disposal laws. UK publication, ID-67, On-farm Disposal of Animal Mortalities, is available through the local office of the UK Cooperative Extension Service. This publication is a good starting point for farmers in learning the rules.





Title: Re: American Hog News USDA
Post by: mikey on March 17, 2009, 01:53:17 AM
Monday, March 16, 2009Print This Page
CME: Corn Costs to Depend on Nitrogen Purchases
US - CME's Daily Livestock Report for 13 March 2009.



Spring is still a week away but it is time to begin the annual process of estimating US farmers’ planting intentions — and again this year, the numbers are very, very important. Perhaps not the estimates but certainly the final ones! On Friday, Informa Economics and Allendale, Inc. both released estimates for 2009 planted acreage. Allendale also included its trendline estimate for corn and soybean yields and its estimates for the total US corn and soybean crops. The numbers from both firms appear below. Both sets of estimates are based on producer surveys.


As you can see, the two firms’ estimates for corn acres are VERY different while their estimates for soybean acres are much closer. Last year’s actual figures were 85.982 million for corn and 75.718 million for corn. In 2007, a record 93.6 million acres were planted to corn and only 64.7 million were planted to soybeans. USDA’s survey-based estimates will be released in the 31 March Prospective Plantings report.

The planting decisions for a good portion of these acres were made last fall when many farmers applied nitrogen fertilizer on acres they were sure to plant to corn. Many acres are rotated between corn and soybeans every year but a growing number of acres are planted to continuous corn with that practice made more practical and profitable by modern corn hybrids with genetically engineered abilities to resist certain pests and tolerate specific herbicides. Planting decisions for those acres are not yet final and will largely hinge on the potential profitability of corn and soybeans.

Relative profits, of course, depend on relative prices and relative costs. Corn costs more to raise than do soybeans, primarily due to the need for more fertilizer. Corn yields, as can be seen from Allendale’s trend yields, are also about 4X those of soybeans. Corn costs this year are going to depend heavily on the timing of nitrogen purchases. A good amount of anhydrous ammonia was purchased last fall at over $1000/ton. That price is significantly lower now so the decision is going to vary greatly form producer to producer. Figure 1 shows the ratio of November soybean futures to December corn futures. This key ratio has moved decidedly in corn’s favor since mid-February. The ratio on Friday was even lower than the same week in 2007 — when those 93.5 million acres were planted to corn. It will take a lower ratio to get that done this year given higher corn costs but these price relationships appear to now favor corn.

Title: Re: American Hog News USDA
Post by: mikey on March 18, 2009, 03:13:39 AM
Tuesday, March 17, 2009Print This Page
CME: Impact of Recession on Meat Exports Mixed
US - CME's Daily Livestock Report for 16 March 2009.



The impact of the global economic recession on US meat exports so far has been mixed. Beef shipments have slowed down but remain above year ago levels in large part due to access to the Korean market, which was not available last year. Pork exports are down but not as much as previously thought, in part due to strong growth in shipments to Japan and Mexico. And in a sign that the shit to less expensive meat protein is a global phenomena, US broiler exports are booming. Below is a recap of the highlights from the latest export data.

US pork exports in January were 322.7 million pounds, 8.7 per cent lower than a year ago but 33.7 per cent higher than the 2004-08 average. As the chart shows, the decline in shipments was for the most part due to sharp reductions in exports to the Chinese and Russian markets. On the other hand, exports to Mexico continued to post very strong growth and helped offset some of the declines in other markets.


January exports to Japan were 114 million pounds, 20.9 per cent higher than a year ago and 37 per cent higher than the five year average. Exports to Mexico were 79.7 million pounds, 62.8 per cent higher than a year ago and a new all time monthly export volume to this market. The increase in US pork exports to Mexico is even more impressive considering the sharp depreciation in the value of the Peso vs. the US currency. In part, we think the rise in US pork purchases reflects the rise in demand for less expensive meat products but also the decline in domestic pork supplies in the Mexican market. Exports to China, a booming market for US pork in 2008, are now back to long term trend levels. January exports to China/Hong Kong were 24.3 million pounds, 70 per cent lower than a year ago. Exports to Russia have for the most part disappeared. Exports to this market in January were just 6.5 million pounds, a quarter of what they were a year ago and a fraction of the 50+ million shipped to this market back in August.

Beef exports in January fared better than pork but total volume was lower than the levels we saw last summer. Total beef exports for the month were 128.6 million pounds, up 8.2 per cent compared to a year ago. Exports to Mexico at 45.6 million pounds were down 9.9 per cent while shipments to Canada at 20.9 million pounds declined 30 per cent from last year.


As for broiler exports, total shipments in January were reported at 607.8 million pounds, 33.4 per cent higher than a year ago. Broiler exports recovered in January in large part due to strong exports to the Russians.




Title: Re: American Hog News USDA
Post by: mikey on March 19, 2009, 01:03:36 AM
Wednesday, March 18, 2009Print This Page
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME closed down on Monday. The APR’09LH contract closed at $62.750/cwt; down $0.450/cwt. The JUNE’09LH contract lost $0.150/cwt to $74.075/cwt. The market couldn’t make up its mind which side it wanted to trade until late in the day when prices went south. USDA on Friday put the Pork Cutout at $59.55/cwt, up $0.85/cwt. The latest CME Lean Hog Index was lowered $0.18/cwt to $61.21/cwt.

Title: Re: American Hog News USDA
Post by: mikey on March 21, 2009, 03:29:28 AM
Friday, March 20, 2009Print This Page
CME: US Pork Supplies Likely to Contract in Q2
US - CME's Daily Livestock Report for 19 March 2009.



It is broadly expected that US pork supplies will contract significantly in the second quarter. We should get a better idea of how large the decline will be from the USDA quarterly inventory numbers, expected to be released on Friday, 27 March. Based on the December inventory data, implied Q2 hog slaughter is expected to be down as much as 5 per cent, a decline that is in part due to fewer Canadian hogs and feeder pigs entering the US market.

High feed costs in the last few years, a sharp appreciation of the currency (at least until last fall) and COOL legislation, all have negatively impacted hog producers in Canada, leading to a significant net reduction in the breeding herd as well as the number of hogs and pigs entering the US market. For the period 4 January-7 March 2009, US hog producers imported approximately 898,000 Canadian feeder pigs, almost half a million feeders less (-35 per cent) than the same period a year ago.

Imports of slaughter hogs are down even more as US packers have imported around 112,000 head so far this year, down some 460,000 head or 80 per cent compared to year ago levels. In total, imports of Canadian slaughter hogs and feeder pigs during the first nine weeks of the year is down by almost 1 million head, or 48 per cent lower than the same period a year ago. Due to the decline in such imports, we calculate that for the week ending 7 March, Canadian born hogs made up just 5.7 per cent of US total hog slaughter, compared to 8.5 per cent a year ago and 7.3 per cent average of the past five years.

We calculated this number based on entries of slaughter hogs from the previous week as well as a lagged imports of feeder pigs (allowing for the time they spend on feed before coming to market). While the reduction in feeder pigs numbers will likely be captured in the USDA inventory survey, the decline in slaughter hog imports will not. It is a factor that needs to be accounted for when looking at out front projections of hog slaughter based on the USDA survey data.

A much smaller breeding herd in Canada will limit the overall supply of feeder pigs coming into the US during much of 2009. Given the changes made to the COOL final rule, which just came into effect this week, the burden on US packers and producers is less significant than when it was initially put in place and should ease some the pressure on Canadian imports. However, there is lingering uncertainty as to what USDA may do next in terms of further revising COOL rules, especially if packers do not abide by the request from the USDA Secretary to “voluntarily” impose more explicit labels for meat products.

Title: Re: American Hog News USDA
Post by: mikey on March 24, 2009, 12:45:33 AM
Monday, March 23, 2009Print This Page
Commercial Red Meat Production Lower than 2008
US - Commercial red meat production for the United States totaled 3.83 billion pounds in February, down four per cent from the 3.97 billion pounds produced in February 2008, according to the USDA's National Agricultural Statistics Service (NASS).

 

Pork production totaled 1.82 billion pounds, down 5 per cent from the previous year.

Hog kill totaled 8.91 million head, down 5 per cent from February 2008.

The average live weight was up 1 pound from the previous year, at 272 pounds.

January to February 2009 commercial red meat production was 7.99 billion pounds, down 5 percent from 2008.

February 2008 contained 21 weekdays (including one holiday) and 4 Saturdays.
February 2009 contained 20 weekdays (including one holiday) and 4 Saturdays.

Title: Re: American Hog News USDA
Post by: mikey on March 25, 2009, 09:48:45 AM
Tuesday, March 24, 2009Print This Page
CME: Good News for US Meat Demand
US - CME's Daily Livestock Report for 23 March 2009.



Virtually every analyst that we know considers meat and poultry demand to be the number one risk factor for 2009 and there was some good news on the meat demand front on Friday.

Professor Glenn Grimes at the University of Missouri released his demand indexes for the December through February quarter and the indexes for both beef and pork were higher than one year ago.

Consumer level beef demand was 3.4 per cent higher than one year ago while pork demand at the same level was up 1.6 per cent. Note that we say “consumer level” since these indexes do not separate retail and foodservice.

They use only the retail price since a) no separate prices are published for the price of meats sold to consumers through foodservice (and separating the meat portion of a dinner bill would be very difficult) and b) if foodservice sales rise, supplies available to retail will fall and drive retail prices upward.

That is, the retail price is an effective shadow price. You can argue with that logic but the truth is that the retail price is all that we have to work with so this is about the best we can do. Fed cattle and live hog demand did not fare nearly so well with cattle demand falling 7.1 per cent short of year-ago levels and hog demand falling 1.5 per cent short.

That finding is no surprise to cattle feeders who have seen prices lower than one year ago in spite of lower slaughter levels. And lower hog slaughter runs have not driven prices up by nearly the expected -3:1 ratio that has characterized recent years’ markets.

Lower pork packer margins were not enough to offset the impact of lower exports while higher beef packer margins in December and January more than offset the positive impact of higher beef exports and better consumer-level beef demand. But consumer demand appears to be holding up. Chicken and turkey indexes will be available this week. Hog prices published by USDA under the mandatory price reporting law have exhibited large spreads between the four pricing method categories.

The graph at left shows weekly averages and the “Other Market Formula” series, which is comprised almost entirely of prices based on CME Lean Hogs futures has been FAR above the Negotiated and Swine/Pork Market Formula prices (ie. the “spot” market) for much of the past 20 months. So have “Other Purchase Arrangement” prices which are, generally, prices tied to production costs or feed prices.

The only trouble with this price, though, is that it has hardly ever been high enough to actually cover producers’ average costs. These contracts paid just over $64/cwt carcass in Jan and Feb. Iowa State University estimates that breakeven costs were $70-$72/cwt carcass in those months.



Title: Re: American Hog News USDA
Post by: mikey on March 26, 2009, 04:01:42 AM
Wednesday, March 25, 2009Print This Page
Antibiotics Vital to Animal Health and Food Protection
US - The American Farm Bureau Federation is expressing strong opposition to legislation that would remove and restrict important antibiotics for veterinary and farm use.



In a letter to Congress, AFBF President Bob Stallman said the bills (H.R. 1549 and S. 619) would handicap veterinarians and livestock and poultry producers in their efforts to protect the nation’s food supply and maintain the health of their farm animals.

"Farmers and ranchers and the veterinarians they work with use antibiotics carefully, judiciously and according to label instructions, primarily to treat, prevent and control disease in our flocks and herds," Mr Stallman said. "Antibiotics are critically important to the health and welfare of the animals and to the safety of the food produced."

Mr Stallman said more than 40 years of antibiotic use in farm animals proves that such use does not pose a public health threat. In fact, Mr Stallman said that "recent government data shows the potential that it might occur is declining." Bacteria survival through food processing and handling is decreasing, food-borne illness is down, development of antibiotic resistant bacteria in animals is stable and resistant food-borne bacteria in humans are declining.

"In order to raise healthy animals, we need tools to keep them healthy – including medicines that have been approved as safe and effective by the Food and Drug Administration," Mr Stallman said. "Restricting access to these important tools will jeopardize animal health and compromise our ability to contribute to public health through food safety."

Mr Stallman told members of Congress that by opposing the bills, they would "protect the professional judgment of veterinarians and livestock producers in providing safe and healthful meat products" for consumers.

Title: Re: American Hog News USDA
Post by: mikey on March 26, 2009, 04:03:09 AM
Wednesday, March 25, 2009Print This Page
US Swine Economics Report
US - On 27 March USDA will release the results of their latest survey of the US swine inventory. My estimates are that the breeding herd is 1.9 per cent smaller than a year ago, the market hog inventory is 3.9 per cent smaller, and the total herd is 3.7 per cent smaller than on 1 March 2008, writes Professor Ron Plain in his Swine Economics Report.

 
Ron Plain
Total slaughter of barrows and gilts was down nearly 2 per cent during December-February due to a 65 per cent drop in imports of slaughter hogs from Canada. Slaughter of US raised hogs was a bit higher than expected based on the December inventory report. Any revisions that USDA makes to their December inventory estimates are likely to be small.

In their last inventory report, USDA predicted December-February farrowings would be 3.3 per cent smaller than a year earlier and March-May farrowings would be down 1.6 per cent. I'm predicting winter farrowings actually were down 3.5 per cent and spring farrowings will be down 2.0 per cent. I'm forecasting summer farrowings will be down 1.0 per cent compared to June-August 2008. Declining feed prices in the second half of 2008 halted what had been a rapid reduction in the sow herd. December-February, sow slaughter was 7.4 per cent lower than a year ago.

I'm estimating that pigs per litter were up 2.4 per cent this winter, as it was the two previous quarters. My estimate is the December-February pig crop was 98.9 per cent of a year earlier. Feeder pig imports during December-February were 35 per cent below last winter's level, so the light weight market hog inventory should be down considerably more than the fall pig crop.

My estimates of the 1 March market hog inventory by weight groups are: 180 pounds and heavier 97.6 per cent, 120-179 pounds 95.5 per cent, 60-119 pounds 95.0 per cent, and under 60 pounds 96.4 per cent of a year earlier.

My estimate of hogs in the 60-179 weight groups implies that second quarter daily hog slaughter will be more than 5 per cent below year-ago levels, if the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $52/cwt ($68.50/cwt carcass) in the second quarter of 2009.

I expect hog slaughter during the third quarter of 2009 to be 4 per cent lower than the number slaughtered in July-September 2008. If so, look for third quarter 2009 hog prices to average close to $53/cwt on a live basis and $70/cwt on a carcass basis.

Title: Re: American Hog News USDA
Post by: mikey on March 26, 2009, 04:04:43 AM
Wednesday, March 25, 2009Print This Page
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME closed down on Monday. The APR’09LH contract closed at $60.65/cwt; off $1.100/cwt and $2.100/cwt lower than a week ago. The JUNE’09LH contract lost $1.150/cwt to $72.625/cwt; $1.450/cwt lower than last Monday’s close. Losses were pared late in the day on sell stops and short covering. USDA’s cold storage report last Friday proved bearish. USDA said that February stocks broke last year’s record of 611.8 mi lbs by 14.71 mi lbs as supply was increased almost 30 mi lbs to a record 626.6 mi lbs. USDA on Friday put the Pork Cutout at $58.73/cwt, down $2.07/cwt. Good news in the DOW did not provide much support for pork prices. The latest CME Lean Hog Index was placed at $58.15/cwt at $0.82/cwt. Pork packer margins were in the black by $2.55/head based on the average buy of $40.62/cwt vs. the average breakeven of $41.59/cwt. Hold off on feed buys for the short term while selling hogs when ready. It won’t pay to put additional weight on at this time.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. MAY’09 corn futures closed at $3.954/bu; off 1.0¢/bu but 3.0+¢/bu higher than this time last week. The JULY’09 contract closed at $4.060/bu; down 1.0¢/bu but 4.25¢/bu higher than last Monday. DEC’09 corn futures finished at $4.272/bu; off 0.75¢/bu but up 5.75¢/bu over a week ago. After reaching highs not seen in over 8 weeks farmer selling picked up and knocked the wind out of the price run up. Federal action continues to affect all markets while sending the US stock market soaring. Exports remain lack luster coming in at 29.984 mi bu vs. 47.727 mi bu this time last year. USDA did confirm the sale of 110,000 tones (4.3 mi bu) of ‘08/’09 US corn to South Korea. Some weather concerns were noted regarding delayed planting due to cool, wet weather slowing fieldwork. Farmer-hedge sales pressured futures to below chart support levels as sell-stops under $4.00/bu in May futures were noted. Higher crude oil prices were supportive. Cash corn bids in the US Midwest were steady to firm on Monday. In the US Mid-Atlantic states cash corn prices were 2.0-5.0¢/bu lower than previous bids. Ethanol margins narrowed on rising corn prices. Funds bought over 2,000 contracts as large speculators turned net bullish for the first time in a while. The market is still very jittery. One floor source said it best, “If we get a big jump this week, people are going to take the money while it lasts. It’s very risky at this time.” The time to get your old crop corn sold is NOW as this sales window is not expected to last. It is a very good idea to get the ’09 crop priced to 45 per cent if you haven’t done so already. Feed purchasers should wait at least another week or two to buy.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were up on Monday on a soaring stock market and higher crude oil prices. Questions remain whether or not the rally is sustainable or merely a blip. MAY’09 soybean futures closed at $9.554/bu; up 3.5¢/bu and 44.5¢/bu over this time last week. The JULY’09 contract was up 3.0¢/bu at $9.520/bu and 44.5+¢/bu over last Monday’s close. The NOV’09 contract closed at $8.594/bu; up 2.5¢/bu and 9.0¢/bu higher than last report. Lower-than-expected exports and brisk farmer-hedge-selling pressured prices while continued political turmoil in Argentina provided some support. The market was pressured enough to come off the day’s 5-week high. Soybeans-inspected-for-export were placed at 20.536 mi bu vs. expectations for between 22-27 mi bu. Chinese shipments accounted for 32% of the reported numbers. Cash soybean bids in the US Midwest weakened at river ports while those in the US Mid-Atlantic States were steady to firm ranging from 5.0-11.0¢/bu cents higher. Funds bought nearly 3,000 contracts while large speculators cut net bear positions for the week ended 17 March. If you haven’t done so already it is a good idea to sell all old crop soybeans in the bin and get up to 35 per cent of the ’09 crop priced now. A consensus of sources over the last few days has agreed it is not unreasonable to see loan rate soybeans before this market is done.

WHEAT futures in Chicago (CBOT) closed off on Monday. The MAY’09 contract closed at $5.492 /bu; down 1.0¢/bu but 5.0¢/bu higher than this time last week. JULY’09 wheat futures finished off 0.75¢/bu at $5.616/bu but 6.0¢/bu higher than a week ago. Farmer selling and profit taking on technical buying subdued the market near the close after surging to 5-week highs. Fair export numbers, fears of flooding in the Red River Valley, and a strong performance by the DOW and other outside markets supported wheat prices. USDA placed wheat-inspected-for-export at 22.388 mi bu vs. expectations for between 14-19 mi bu. Large speculators were seen cutting net bear positions for the week ended March 17. Hopefully 25 per cent of the 2009 crop has been sold by now. If not, hold off at this time.



Title: Re: American Hog News USDA
Post by: mikey on March 27, 2009, 08:50:52 AM
Thursday, March 26, 2009Print This Page
Pork Industry Given a New Chance at Life
US - The country's farmers produce more meat than Americans can eat, but parts of the hog not favored in the US are in demand in Asian markets.



The sharp increase in pork exports in 2008 represents an anomaly, and numbers are expected to drop 14 per cent this year because of the global economic downturn and an increase in pork production by China and other importing countries. However, exports are still expected to be significantly higher than in 2007, according to Readingeagle.com.

Joe Schuele, spokesman for the US Meat Export Federation (USMEF), said the "off-the-charts" pork exports in 2008 were propelled by an unusually high demand from China - the result, he said, of a cyclical decline in China's swine herd, disease issues that hurt pork production and a major Sichuan earthquake.

China's increased production isn't expected to hurt US exports significantly. Last year, China accounted for $334 million of the $4.9 billion in US exports. That compared with $1.54 billion from Japan.

As US farmers have expanded sales into other countries, they have changed how they breed, feed, prepare and package hogs in an effort to keep a hold on the overseas market, Readingeagle.com reports.

More than 20 per cent of the pork now consumed in Japan is from the United States. The Japanese prefer leaner cuts for their processed pork and especially like pork loins and butts.

For table cuts, they want high-quality pork that is deep red and firm, with more marbling.

Mexicans favor legs and picnic shoulders; the Chinese prefer variety meats.

USMEF President Philip Seng said pork exported to Japan and China is often sliced into smaller pieces to make it easier to eat with chopsticks. Pork is also sold as deli meat in Japan because of the large number of convenience stores there.

Many countries pay a premium for parts of the hog that aren't in demand among American consumers.

Title: Re: American Hog News USDA
Post by: mikey on March 27, 2009, 08:53:26 AM
Thursday, March 26, 2009Print This Page
CME: Smithfield to Purchase Only US-Bred Hogs
US - CME's Daily Livestock Report for 25 March 2009.



Hog futures have been trading sideways for much of this week on uncertainty about future supplies as well as ongoing export demand concerns. The upcoming USDA hogs and pigs inventory report should provide an indication of current and future hog supplies and will be especially useful in gauging farrowings in the past quarter as well as the impact of reduced Canadian shipments on the size of the total inventory.

There has been plenty of talk in recent months of empty sow barns across Iowa and the upcoming inventory numbers should provide some indication of where we stand with regard to the size of the breeding herd.

Sow slaughter has been running significantly below year ago levels (almost –10 per cent since mid January). Prices for 500-500 lb. sows in March are some 80 per cent over year ago. This suggests that producers at this point see little reason to continue to liquidate productive animals, especially given current feed grain prices.

Also important going forward will be the decision by Smithfield Foods to only purchase hogs that are born and raised in the US, effective April 2009. News reports indicate that other large packers may follow suit, restricting or eliminating the purchase of Canadian born animals. In the short term, this will tend to boost demand for slaughter animals at a time when supplies will be the tightest (see below). Attached is a summary of analysts’ estimates from a survey conducted by Dow Jones (per cent of year ago).

Title: Re: American Hog News USDA
Post by: mikey on March 28, 2009, 07:19:04 AM
Friday, March 27, 2009Print This Page
CME: Exports to Mexico and Canada Lowered
US - CME's Daily Livestock Report for 26 March 2009.



US, Mexican and Canadian officials are finding it ever more difficult to cope with the rising tensions on a number of trade issues. Our neighbors to the north are frustrated by the negative economic impact of the Country of Origin Labeling law (COOL), which came into effect last week. While the final rule seemed to provide more leeway with regard to handling product that was of mixed origin, the matter has been muddled by the implied threat that USDA could at some future point re-open the issue if US packers did not ‘voluntarily’ adopt more explicit labels than those proscribed by the final rule.

Smithfield Foods, the largest US pork packer, announced this week that starting in April 2009, its buyers would stop purchasing hogs of Canadian origin. Other US packers could follow suit, leading to a two tiered market and significant discounts for Canadian product. Canadian authorities are clearly paying attention and the Canadian Agriculture Minister was reported to have said that “Canada's World Trade Organization (WTO) challenge of US COOL, a challenge that was suspended when the COOL interim rule was published, is "idling at the curb, ready to go." (USDA GAIN Report, 3/20).

Mexican officials, on the other hand, already have lodged a complaint with WTO over COOL and their anger boiled over last week as the US shut down a pilot program that allowed long haul Mexican trucks to operate in the US. Mexico immediately announced that it would impose tariffs on about 90 US agricultural and manufactured products. According to news reports, the tariffs would not affect meat products.

It would be hard to overstate the importance of the Canadian and Mexican markets to US meat trade. As the charts to the left show, trade with Mexico and Canada accounted for more than half of all US beef and turkey shipments in 2008. It also accounted for about 23 per cent of the 4.7 billion pounds of pork and 14 per cent of the 7 billion pounds of chicken the US exported last year.

Overall, US red meat and poultry exports to Mexico and Canada accounted for about a quarter of the 14.2 billion pounds exported in 2008. Growth in exports to Mexico and Canada has accounted for about 30 per cent of the overall increase in US red meat and poultry exports since 2000. The US has in the past decade become the biggest meat exporter in the world. It has accomplished this, in part thanks to the openness and tariff free trade in the Canadian and Mexican markets. Let’s hope it continues to stay that way.




Title: Re: American Hog News USDA
Post by: mikey on March 31, 2009, 06:35:27 AM
Monday, March 30, 2009Print This Page
CME: USDA Quarterly Report Bullish and Bearish
US - CME's Daily Livestock Report for 27 March 2009 comments on the latest USDA Hogs and Pigs Report.



USDA’s quarterly Hogs and Pigs Report, released on Friday, 27 March, was a mixture of potentially bullish and bearish numbers — which will likely be viewed pretty neutral come Monday morning. The report indicated continuing liquidation of the US breeding herd and a commensurately smaller market herd but rising productivity that will offset some of the cutbacks late in 2009 and into 2010. Figure 1 shows the report’s key numbers and well as the averages of pre-report estimates and differences between the two sets of year-on-year numbers.


Some of the highlights of the report are:

6.011 million breeding animals, 3 per cent lower than last year and nearly 1 per cent lower than analysts expected. The USDA number is a bit lower than sow slaughter and gilt retention implied, especially considering that imports of cull Canadian sows and boars have been 10 per cent lower YTD. This number would be considered a bit bullish for the long term.


59.378 million market animals, 2.7 per cent less than one year ago but 0.5 per cent more than were expected. The reduction of market numbers was quite consistent across the four weight classes with the 60-119 pound and 120-179 pound categories both exceeding average estimates by 1.3 per cent. These categories would contain pigs from the farrowings of Sep-Nov 2008 which, you might recall, were 6 per cent lower than those of 2007. The Sep-Nov pig crop was 3.7 per cent lower than one year earlier. Imports of Canadian pigs were over 1 per cent smaller and yet these categories are down only down 2.5 per cent vs. last year. Those smaller reductions in middle- weight inventories may be a bit bearish for April, May and June LH.


Lower farrowing intentions for both March-May (-2.9 per cent) and June- August (-4 per cent) would be bullish for fall hogs except for the next factor.


RAPIDLY INCREASING REPRODUCTIVE EFFICIENCY could be eating up most or all of the reduction in production capacity. Dec-Feb pigs saved per litter were record-high for that quarter (just as has been the case in the three previous quarters) and the 2.6 per cent increase is the largest since 1996 and the fourth largest EVER. It follows year-on-year increases of 2.0, 1.9, 1.7, 2.0, 2.4 and 2.4 per cent the past 6 quarters.
The biggest challenge in using these numbers to predict future supplies will be accounting for changes in the imports of Canadian market hogs and feeder pigs. Feeder pigs imported before 1 March are included in the numbers since they are among the inventories of US feeders. But imports since 1 March that differ from one year ago will impact year-on-year slaughter figures. Market hog import changes will immediately impact slaughter levels. In fact, 1.5 per cent of the 3.1 per cent decline in March slaughter is attributable to reduced number of Canadian market hogs. The remaining 1.6 per cent is due to lower numbers of US hogs. That is a bit large relative to the 2.4 per cent decline in 180-lb. and over pigs but not enough to question the validity of the report. Lower feeder pig imports since 1 March will begin to impact US slaughter about 21 weeks out — 15 July or so. There were about 2 per cent fewer in March but the year-on-year decline will get smaller later in 2009.


Title: Re: American Hog News USDA
Post by: mikey on March 31, 2009, 06:38:13 AM
Market Preview: Pig Crop Projections and Long-Term Trends
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



This afternoon, USDA will release its estimates of US hog and pig inventories on 1 March. Watch your e-mail on Monday for a summary of the report and its implications for supplies and prices through the first quarter of 2010.

Figure 1 contains the results of DowJones’ quarterly survey of analysts for their pre-report estimates. The expectations are obviously for more reductions in supplies over the next two quarters, but those heavyweight pig inventories are larger than were suggested for the same pig groups in the December report. In addition, analysts’ expectations of farrowings and litter sizes for the rest of this year suggest supplies near year-earlier levels for Q4-09 and Q1-10.


Long-Term Trends
Where is US pork supply headed on a long-term basis? That question is being asked by many observers and market participants as we head into this report and the 2009 crop-growing season. To explore an answer, let’s consider some history.

Figure 2 shows long-term annual US pork production back to 1930. To that actual data I have added two trend lines. The solid black line represents the trend for the entire time period. Beginning in 1930, this trend says that US pork production has grown at an average rate of 1.27 per cent -- at least that is the rate that results in a line with the best fit to all of the data points.


But note that this line has fallen farther and farther behind actual production levels for the past 11 years. Now those data points are part of the computations that go into the 1930-2008 trend line, but they are outweighed by that 65 or so years of data that covered a slower-growth period from 1930 to 1997.

So, what is the growth trend of the “modern” US pork production system? I went back to 1984 and computed a linear trend line (the blue diamonds) that grows at a rate of 1.8 per cent. I chose 1984 because it marked the end of the wild fluctuations in pork output that followed the major shifts of grain prices and inflation in the early 1970s. It also marked the beginning of some major technology shifts – climate-controlled buildings, gestation stalls, advanced nutrition concepts, artificial insemination and others.

Finally, it marked a new era in hog and pork trade. Pig imports from Canada began to grow quickly in the late 1980s (remember the countervailing duty that was then in place to offset the Canadian Tri-Partite support system?), and US net imports of pork reached their largest levels in 1985-1987 at roughly 1 billion pounds. The remainder of the time covered the period that US pork exports were growing – often dramatically.

But the clear lesson is this: The output growth of the past two years is not sustainable. A less clear lesson is very likely. The output levels of the past two years may not be sustainable either.

The 2007 observation exceeds the “new trend” for US production by 539 million pounds or 2.45 per cent. That is a pretty large number considering the US per capita consumption has been basically constant for 50 years.

But the 2008 number is pretty shocking. It exceeds the “new trend” by 1,558 million (or 1.558 billion) pounds – nearly 6.7 per cent. If we could see exports grow by 50 per cent every year, that level of output and growth may be okay. But 50 per cent growth when exports are now taking 20 per cent of our production is very, very unlikely.

Trim Sow Herd Another 3-5 Per Cent
Will the numbers in Figure 1 get this done? No. US sow numbers have fallen – but only by 163,000 head (2.6 per cent) since the most recent peak in December 2007. Canadian numbers have declined more (229,100 head or 14 per cent) since their all-time high of 1.634 million head in January 2005. But the major contributor to the surge of output in 2007 and 2008 is a dramatic increase in productivity. Circovirus vaccines were the most important driver of that increase, but genetics and management are playing big roles as well in realizing larger litters.

The expected “hole” in marketings this spring is no indictment of your productivity efforts. The productivity piece driving the December report’s estimate of a short pig crop last fall is litters per sow – primarily because we culled and slaughtered a good number of pregnant sows last summer when corn prices skyrocketed.

How many less sows do we need to return to “reasonable” profit levels? That depends on one’s definition of “reasonable,” but 3 per cent would be a good start and 4 to 5 per cent would be even better, given that at least a third of the reduction will be offset by productivity gains. The trouble is that financial losses this year may not be large enough to get much of that done – especially if my long-predicted spring rally finally arrives.

 



As published in National Hog Farmer's Weekly North American Preview.
Title: Re: American Hog News USDA
Post by: mikey on April 01, 2009, 02:19:37 AM
Tuesday, March 31, 2009Print This Page
Hogs & Pigs Report Once Again Bullish
US - USDA’s quarterly Hogs and Pigs report, released on Friday, was once again a mixture of bullish and bearish numbers with market supplies a bit bearish and breeding herd numbers a bit bullish in the long run, writes Steve Meyer, Ph.D., Paragon Economics, Inc.



The key numbers in the report appear in Table 1.


Some highlights of the report are:

Sharply higher reproductive performance. The 9.48 pigs saved per litter for December-February is the highest ever for that quarter, the fourth highest since 1983 and the highest mark since June-August 1996. The increase continues a string of seven quarters of year-on-year growth of 1.8 per cent or more with the December-February 2.6 per cent increase being the largest. The increases coincide with two major changes in the US industry. First, producers began late in the process of moving to later weaning ages on many farms. That change had two main benefits: Higher quality pigs and larger litters in subsequent litters due to allowing the sow a bit more recovery time. It appears to be paying off. The other change was, of course, circovirus vaccines. While most of the impact has been felt at the grow-finish level, the vaccines have had a positive impact on sow units as well. As Figure 1 shows, litter sizes have been going up more quickly, matching the pace set back in 1995-1997, a time of major structural change in the industry.

A smaller-than-expected US breeding herd. USDA estimates that the herd is at 6.011 million head, 3 per cent smaller than last year. But will this reduction result in fewer pigs? Given the growth of average litter size, that is the question. December-February farrowings are right in line with the breeding herd, so adding 2.6 per cent from larger litters would drive pig numbers close to last year, right? Wrong! The December-February pig crop is pegged at 97.4 per cent of last year in spite of 97 per cent as many litters and litter size at 102.6 per cent. Those figures don’t fit, but we usually charge on using the pig crop number which implies lower June-Aug. farrowing intentions. But we will make a note to follow up on these figures in future reports.


Somewhat larger-than-expected middle-weight market hog inventories, implying that the “shortage” of pigs this spring may not be as large as I thought last fall. Recall that the September-November farrowings were sharply lower (down 6 per cent) than those of 2007 and that the September-November pig crop was 3.7 per cent lower than one year earlier. However, this report says that the two weight categories comprised of those pigs are only 2.5 per cent smaller than last year. Those are 1.3 per cent larger than analysts expected, so that may take some luster off the May, June and July contracts on Monday (30 March). We will watch closely over the next few weeks to discern whether slaughter follows the December report pattern more or less than this pattern from the March report.


Summer farrowing intentions that are reasonably in line with the sow herd, but lower than analysts’ predicted. These could be bullish for deferred contracts.
Canadian Imports Hold the Key
The trick for predicting supplies using this report has nothing to do with the report. It is how far imports of Canadian pigs will decline this year vs. last year. Market hog imports will impact slaughter immediately, while reduction in weaned/feeder pigs imports will reduce slaughter 20-24 weeks later. I use 21 weeks, realizing that it may not be 100 per cent accurate.

Figure 2 shows my forecasts for weekly slaughter levels using reductions of from 2 per cent down to 0.4 per cent down for lower market hog imports through year’s end. I also reduced future slaughter by 2 per cent starting in early August when early March imports would be ready for market. My feeder pig import reduction falls gradually to 0.4 per cent in Q1-2010.


The net impact of the March report is to increase my forecast for 2009 federally-inspected slaughter marginally to 110.5 million head, 3.5 per cent lower than that of 2008. Those numbers compare to my December forecasts of 110.456 million head, 3.6 per cent lower than in 2008.

If the March report is correct, then the quarterly patterns will change a bit, though with Q2 being higher and Q3 being lower. I expect Q2 slaughter to be 3.4 per cent lower while Q3 slaughter is 4.9 per cent lower. Q4 slaughter will be 3.6 per cent lower, but will still amount to 28.498 million head.

As predicted in December, the first quarter of 2009 has indeed been a tough one. National weighted average net price averaged $56.91/cwt., carcass, through last week, about $2/cwt. lower than my Q1 forecast coming out of the December report, which in spite of Q1 slaughter, has been about 1 per cent lower than I expected.

I now expect the average national weighted average net prices for both Q2 and Q3 to be in the range of $74 to $78/cwt., carcass. I expect Q4 prices to be in the $61-$64/cwt., carcass, range bringing the forecast range for the 2009 annual average to $66 - $69/cwt., roughly $1 lower than I had forecast in December.

Watch this week’s North American Preview for my normal table including the slaughter and price forecasts of several noted analysts.

Title: Re: American Hog News USDA
Post by: mikey on April 01, 2009, 02:21:50 AM
Tuesday, March 31, 2009Print This Page
March Quarterly Hogs & Pigs Report Summary
US - USDA's 1 March Hogs & Pigs Report came in a little more bullish than the trade estimates for the breeding herd but were within the potential sampling error, write Glenn Grimes and Ron Plain.

 
Ron Plain
The breeding herd was down 3 per cent according to the report. The average of the trade estimates was for a 2.1 per cent decline. The market herd and the total herd were down 2.7 per cent based on the USDA estimate. The trade estimate was for the market herd to be down 3.2 per cent and the total herd down 3.1 per cent.

March slaughter on a daily basis from domestic production was down 1.7 per cent and the 180-pound and heavier market hog inventory was down 2.4 per cent. So, slaughter was somewhat larger in March than indicated by the report.

Imports of live slaughter hogs from Canada during December, January, and February were down enough to reduce total US slaughter by 2.2 per cent. Imports from Canada are expected to continue to decline through most of 2009.

The breeding herd was about 1 percentage point smaller than indicated by our gilt and sow slaughter data but was well within the possible sampling error for both sets of data.

The heavier weight market hog inventories in March were larger than indicated by the lightweight market inventories in December. On 1 December the under 60-pound market inventory was down 5.5 per cent from 12 months earlier but the 1 March heavy weight inventory was down only 2.4 per cent.

Demand for pork at the consumer level was up 1.6 per cent for December-February according to our demand index. In fact, demand for both beef and pork at the consumer level was up during this period. Therefore, the financial problems in the US hog industry are due to large supplies and high feed costs rather than weak demand. With current production costs, we are just producing too many hogs to make a profit. Costs are not likely to get much, if any, lower this year than they are now. However, when the general economy starts to improve, it is likely to carry oil prices somewhat higher and corn prices are likely to follow the price of oil.

Retail pork prices in February were down 1.2 per cent from January but were up 4.8 per cent from February 2008. January and February retail pork prices were up 4.9 per cent. Everyone in the pork industry except the packer benefitted from these higher retail prices. In January and February the processor-retailer margin was up 7.4 per cent from 12 months ago and live hog prices were up 5.5 per cent from these months in 2008. However, the packer margin was down 8.6 per cent and deteriorated more in March based on preliminary data.

Pork exports in January were down 8.7 per cent from a year ago and imports were down 1.7 per cent. Net pork exports were 12 per cent of US pork production in January 2009 as compared to 13 per cent in January 2008. That gap is expected to continue to widen through the summer of 2009.

US pork exports in January compared to a year ago were up 20.9 per cent to Japan, up 62.8 per cent to Mexico, down 9.3 per cent to Canada, down 19.9 per cent to South Korea, down 75 per cent to Russia, down 90.1 per cent to mainland China, down 17.8 per cent to Hong Kong, up 70 per cent to Australia, up 74 per cent to Taiwan, and down 7.5 per cent to other countries.

Based on USDA's heavier weight market inventory and the likelihood that slaughter hog imports will be down enough to reduce slaughter by 2 per cent, we are forecasting slaughter for the April-June quarter to be down 4.5 per cent from 2008. This is a somewhat larger slaughter than indicated by the lightweight market inventory on 1 December.

For July-September, we expect slaughter to be down 5 per cent from 12 months earlier. As for the second quarter, we expect slaughter hog imports from Canada to continue to decrease through the third quarter compared to a year earlier.

March-May farrowing intentions indicate slaughter in the fourth quarter will be down near 3 per cent. Some additional decline is likely because of fewer imports from Canada.

USDA's June-August farrowing intentions indicate a 4 per cent decrease from a year earlier. This looks like too much of a decline with the breeding herd down only 3 per cent and the productivity growth experienced in recent years. We expect slaughter from domestic production to be down less than 4 per cent in the first quarter of 2010.

Our estimates of slaughter and prices for the next 4 quarters are in Table 4. Despite a forecasted decline of 4 per cent in hog slaughter, our annual price forecast is similar to last year due to an expected decline in pork exports.

Table 1.  Hog Inventories March 1, U.S.
______________________________________________________________
 
                                           2009 as % of 2008
       Market                                     97.3
       Kept for breeding                          97.0
       All hogs and pigs                          97.3
______________________________________________________________
 
 
Table 2.  Market Hogs on Farms March 1, U.S.
______________________________________________________________
 
     Weight Category                       2009 as % of 2008
        Under 60 pounds                           96.9
        60 - 119 pounds                           97.5
        120 - 179 pounds                          97.5
        180 pounds and over                       97.6
______________________________________________________________
 
 
Table 3.  Sows Farrowing and Intentions, U.S.
______________________________________________________________
 
                                            2008 as % of 2007
    September-November                           94.0
 
                                            2009 as % of 2008
       December-February                           97.0
       March-May                                   97.1
       June-August                                 96.0
______________________________________________________________
 
Table 4.  Estimated Commercial Hog Slaughter by Quarter and Live Hog Prices
______________________________________________________________________________________
 
                  Commercial  Terminal Mkt. 51-52% Lean  Non packer sold
                  Slaughter  Barrow & Gilt    Hogs       Hogs (avg. net
Period           (mil. hd.)  (price/cwt)   (price/cwt) carcass price/cwt)
_________________________________________________________________________
 
2003 1              24.654      $33.32       $35.38         $50.40
     2              23.922       39.86        42.64          58.92
     3              24.747       38.66        42.90          59.27
     4              27.608       34.15        36.89          52.36
     Year          100.931       36.50        39.45          55.25
 
2004 1              25.717      $40.82       $44.18         $60.56
     2              24.737       51.56        54.91          72.74
     3              25.817       53.72        56.58          74.73
     4              27.192       50.58        54.35          71.58
     Year          103.463       49.17        52.51          69.90
 
2005 1              25.538      $48.46       $51.92         $69.33
     2              25.030       49.08        52.09          70.25
     3              25.528       46.72        50.51          68.37
     4              27.486       42.20        45.54          61.68
     Year          103.582       46.62        50.02          67.43
 
2006 1              26.208      $39.23       $42.63         $58.37
     2              24.839       45.81        48.45          65.96
     3              25.810       46.92        51.83          69.13
     4              27.880       41.56        46.13          62.04
     Year          104.737       43.38        47.26          63.86
 
2007 1              26.684      $41.49       $46.04         $62.69
     2              25.526       48.14        52.55          71.39
     3              26.566       45.07        50.34          69.17
     4              30,396       33.61        39.44          56.83
     Year          109.172       42.08        47.09          65.04
 
2008 1              29.601      $33.86       $39.64         $57.41
     2              27.941       46.68        52.51          72.24
     3              28.696       51.76        57.27          78.05
     4              30.214       37.82        41.92          61.38
     Year          116.452       42.53        47.83          67.27
 
2009 1 (part. est.) 28.515      $37.20       $42.20         $60.40
     2 (projected)  26.700      43 - 47      48 - 52        66 - 71
     3 (projected)  27.250      46 - 50      51 - 55        70 - 75
     4 (projected)  29.300      39 - 43      44 - 48        60 - 65
     Year (proj.)  111.765      41 - 44      46 - 49        64 - 68
 
2010 1 (projected)  27.600     $38 - 42     $42 - 46       $58 - 63
_________________________________________________________________________



Title: Re: American Hog News USDA
Post by: mikey on April 02, 2009, 07:44:23 AM
Wednesday, April 01, 2009Print This Page
United States Pig Herd Continues to Shrink
US - The United States pig inventory on 1 March shows a continuing decline in the national herd, down three per cent from March last year, and down two per cent since December.


Farrowings during the March-May this year are predicted to be down three per cent.

Farrowings for June-August will be down four per cent.

Title: Re: American Hog News USDA
Post by: mikey on April 02, 2009, 07:46:02 AM
Wednesday, April 01, 2009Print This Page
USDA to Purchase Pork and Turkey to Aid Sectors
US - Agriculture Secretary Tom Vilsack yesterday announced USDA's intention to purchase turkey, pork, lamb, and walnut products for federal food nutrition assistance programmes.

 

"These purchases will assist the turkey, pork, lamb and walnut sectors, which are currently struggling due to depressed market conditions," said Secretary Vilsack. "Today's announcement will help mitigate further downward prices, stabilise market conditions, stimulate the economy, and provide high quality, nutritious food to recipients of our nutrition programmes."

USDA intends to purchase $60 million of turkey, $25 million of pork, $2 million of lamb, and $29.7 million of walnuts. With today's announcement to buy commodities, USDA will survey potential suppliers to seeking the lowest overall cost by publicly inviting bids and awarding contracts to responsible bidders.

These purchases reflect a variety of high-quality food products each year to support the National School Lunch Program, the School Breakfast Program, the Summer Food Service Programme, the Food Distribution Programme on Indian Reservations, the Commodity Supplemental Food Programme and The Emergency Food Assistance Programme. USDA also makes emergency food purchases for distribution to victims of natural disasters.

Government food experts work to ensure that all purchased food is healthy and nutritious. Food items are normally required to be low in fat, sugar and sodium. The commodities must meet specified grade requirements and be USDA-certified to ensure quality. USDA only purchases products that are grown in America.

NPPC Commends USDA Decision
The National Pork Producers Council has commended the decision made by the USDA.

“The action by USDA to buy additional pork will benefit America’s pork producers, the US economy and the people who rely on the government’s various food programmes,” said NPPC President Don Butler. “We are extremely pleased with Secretary Vilsack’s decision to purchase more pork. It will help our industry bring supply and demand closer into balance and allow producers to continue to provide consumers with economical, nutritious pork.”

NPPC asked Secretary Vilsack to take action to address a crisis that over the past 18 months has cost the pork industry more than $3 billion in equity. Due mostly to higher feed costs, producers since October 2007 have lost an average of $20 on each hog marketed.

In a 30 January letter, NPPC urged USDA to buy pork products from market hogs for emergency food programs, food pantries, senior and elderly feeding programs, hunger programmes or other non-commercial food channels. NPPC suggested that the agency purchase cooked sausage patties, pork crumbles, trimmings, picnics (shoulders) and boneless picnic meat.

This is the second time in less than a year that USDA has agreed to a supplemental pork purchase. Last April, at NPPC’s request, the agency agreed to a $50 million purchase of pork products derived from sows as a way to reduce the national herd and stabilise pork prices. (Some industry economists estimate that recent productivity gains – more pigs per sow – will reduce the herd by two to four per cent.)

In its most recent request, NPPC also asked Secretary Vilsack to use USDA resources, including the Market Access Program and the Foreign Market Development Program, to support pork exports, which in 2008 were at record levels and helped temper pork producers’ losses.

Title: Re: American Hog News USDA
Post by: mikey on April 02, 2009, 07:47:28 AM
Wednesday, April 01, 2009Print This Page
US Swine Economics Report
US - USDA’s latest survey of the US swine herd said the market herd was down 2.7 per cent on 1 March and the breeding herd was down 3.0 per cent compared to 12 months earlier, according to Professor Ron Plain.

 
Ron Plain
The total inventory of hogs and pigs was down 2.7 per cent. The breeding inventory was a bit smaller than trade expectations and the market hog inventory was a bit larger than the average of trade forecasts.

USDA said December-February farrowings were down 3.0 per cent and forecast March-May farrowings to be down 2.9 per cent and June-August farrowings to be down 4.0 per cent. USDA’s forecast of summer farrowings was well below the trade forecast. Pre-release trade estimates put December-February farrowings at down 3.4 per cent, forecast March-May to be down 2.0 per cent and June-August down 1.5 per cent.

Pigs per litter in the December-February quarter averaged 9.48 head, up 2.6 per cent compared to a year earlier, the 22nd consecutive quarter above year-ago levels, and the biggest year-over-year increase since the summer of 1992.

USDA said the inventory of market hogs weighing 60-179 pounds was down 2.5 per cent on 1 March. If correct, daily hog slaughter during the second quarter should be down 2.5 per cent plus the drop in slaughter hogs from Canada. Look for hog slaughter during April-June to average at least 4 per cent lower than last year and carcass hog prices to average in the mid to upper $60s.

USDA said the inventory of market hogs weighing less than 60 pounds was down 3.1 per cent on 1 March, implying hog slaughter during the third quarter of 2009 will be down roughly 5% given the sharp downward trend in hog imports from Canada. I expect third quarter carcass hog prices to average close to $70/cwt.

I expect 2009 hog slaughter will be down about 4 per cent and carcass hog prices in 2009 will average close to $63/cwt. Unfortunately, the cost of production could average close to $69/cwt on a carcass basis, resulting in a loss of $6/cwt or roughly $12 per head.

Perhaps the most interesting numbers in the March report is the mis-match in market hog numbers. USDA says the December inventory of pigs weighing less than 60 pounds was 5.5 per cent below year-earlier levels but the March inventory of hogs weighing over 60 pounds is only down 2.5 per cent. Imports of feeder pigs from Canada were down 35 per cent during December-February. What explains the difference? I don’t know.

Title: Re: American Hog News USDA
Post by: mikey on April 07, 2009, 04:39:50 AM
Monday, April 06, 2009Print This Page
AVMA Warns of Continued Veterinary Shortages
US - The American Veterinary Medical Association (AVMA) expects the shortage of farm animal veterinarians to continue despite producers cutting back their flock and herd sizes.



Meat, poultry, and dairy producers have overall been cutting back the sizes of herds and flocks, according to the AVMA. But there will be 'huge demand' for food supply veterinarians for a long time, said Dr David M. Andrus, who headed a research team for the May 2006 Food Supply Veterinary Medicine Coalition Report and is a professor at Kansas State University's College of Business Administration.

"There was such a huge shortage that even a fall in production of animals won't overcome the need for more food supply veterinarians," Dr Andrus said.

That is not to say the production cutbacks will not affect veterinarians through reduced spending and delayed payments by clients.

Use of corn for ethanol, drought, increased oil prices, price drops for some animal by-products and high-end meat cuts, and declines in export demand have all contributed to the recent financial woes experienced by animal agriculture producers, according to several agricultural economists.

James Robb, director of the Livestock Marketing Information Center, said that in 2008, US cattle feeders, for example, lost more money on average for each animal sold than any other time in history, and through January 2009 they had 20 consecutive months of negative returns on cattle sold. The number of cattle available for slaughter may not increase until 2013, he said.

"Beef cow numbers will decline for at least two more years, so that means less work to deal with beef cows," Mr Robb said. "Dairy cow numbers, because of low milk prices, were declining precipitously."

Reports from the Department of Agriculture state the following:

For 2008, the number of cattle and calves in the US dropped about 2 per cent, from 96 million head to 94.5 million. The year's calf crop was also down 2 per cent.
During the fourth quarter of 2008, about 198 million chicken eggs were set in incubators weekly, down 7.3 per cent from the previous year. The number of chicks placed for growth averaged 161 million weekly, or 6.8 per cent lower.
There were 66.7 million head of hogs in the US on 1 December, down about 2 per cent from a year earlier. The breeding inventory, at 6.08 million head, was also down about 2 per cent from a year earlier, and the market hog inventory of 60.6 million head was down 2 per cent.
By 1 January 2009, the breeding sheep inventory decreased 4 per cent from a year earlier, from 4.43 million head to 4.25 million. The total inventory of sheep and goats declined about 2.8 per cent, or about 251,000 head, in the same period.
Turkey meat production for 2009 has been predicted to total 6 billion pounds, about 3.6 per cent less than in 2008.
Despite predicting continued declines, Mr Robb also said, "We still don't have enough large animal vets."

Dr Andrus said he does not think temporary fluctuations in production based on economic conditions will have an impact on long-term demand.

"As the world population grows also, there'll be greater demand for animal protein, which the US supplies quite a bit of with beef, swine and poultry," Dr Andrus said.

Dr Michael J. Gilsdorf, executive vice president of the National Association of Federal Veterinarians, said he thinks the cutbacks by producers are part of a cyclical rise and fall related to supply and demand, and he does not expect a substantial impact on members of his association. He said changes in production are not severe, and the shortage of food supply and food safety veterinarians remains.

While some slaughter plants may close, Dr Gilsdorf said those changes have more to do with management than widespread changes in production. He said those operations will be picked up by other plants.

Feed's cost in creating food
High prices for feed, particularly corn, are part of the reason food animal industries are not growing, Mr Robb said. Corn cost less than $2 per bushel in 2005, $3.40 in 2007, and $8 at its peak in 2008, according to the USDA.

Mr Robb attributed the record-high corn prices set in mid-2008 to use of the grain in producing ethanol. Dr Kenneth Mathews, an agricultural economist with the USDA Economic Research Service, said export demand for corn also rose, contributing to the jump in prices.

Information from the USDA also states the yearly average soybean price was $6.43 per bushel in 2006, $10.10 in 2007, and $9.25 in 2008.

Mr Robb said cattle herds are also declining in Argentina, Australia, Brazil, Canada, Europe, Mexico and Uruguay. And he said grain prices and economic conditions "really have the worldwide livestock numbers on the defensive at a minimum and probably declining more than many people realize."

Cutbacks
Shayle Shagam, livestock analyst with the World Agricultural Outlook Board for the USDA, said the past two years of contraction of the cattle herd was at least partly related to drought and poor forage conditions for supporting herds as well as the high grain prices. Producers of hogs, cattle, and chickens have, on average, been experiencing poor or negative returns.

Dr Mathews also said high feed and energy costs probably set cutbacks in motion, and several years of drought were a contributing factor.

Ronald L. Plain, professor of agricultural economics at the University of Missouri, said weak sales of steaks and spareribs may impact veterinarians' pay, despite strong sales of less-expensive cuts.

"The net result is lower livestock prices and more red ink for producers, and I suspect that means less money available to pay their veterinarians," Professor Plain said.

By February, hide and offal prices had declined about one-third from a year earlier, Mr Robb said. By-product sales are heavily tied to leather sales.

Strong demand for dairy exports pushed producers to continue expanding their operations in 2008, despite high feed costs, said Dr David Anderson, a livestock economist with Texas AgriLife Extension Service. That came to an end when milk prices collapsed in early fall 2008, and the USDA forecasts that global recession, increased production abroad, and a strong dollar will hinder exports in 2009.


 

Title: Re: American Hog News USDA
Post by: mikey on April 08, 2009, 12:22:57 AM
Tuesday, April 07, 2009Print This Page
Weekly Outlook: Have Hog Producers Made It?
US - There has been some recent good news for the hog industry, but some bad news as well, writes Chris Hurt, Extension Economist at Purdue University.

 Chris Hurt
Extension Economist
Purdue University
 

But breakeven covers all costs, including full capital replacement and family labor costs. After a year and one-half of losses, average cost hog producers should finally make money this spring and summer.

The best of the news is that hog prices should soon begin a strong increase related to the normal seasonal pattern. Hog prices tend to move higher from mid-April into the spring. In the last five years, as an example, live hog prices have increased an average of about $10 per hundredweight from the second week of April to mid-May. Participants in futures markets expect a similar increase this year. As of this writing, the May lean hog futures price is $9.60 per live hundredweight higher than the April futures price.

This expected rally would take live hog prices from the current low $40s into the low $50s over the next four weeks or so. These higher prices tend to be maintained through August and would be expected to be in a range from about $50 to the mid $50s, depending on the week. Second quarter prices are expected to average $51 with costs around $49. This small quarterly profit would be the first after six consecutive quarters of losses dating back to the fourth quarter of 2007.

There are a few other positives as well. The size of the US breeding herd and upcoming farrowings are somewhat smaller than had been expected. The March inventory from USDA indicated the breeding herd is now down three percent and that farrowings will be down three percent in the spring and four percent in the summer. Also adding to a smaller US slaughter supply this year will be 2.3 million fewer hogs coming from Canada as the breeding herd there has dropped sharply under heavy financial losses.

Offsetting these positive attributes are the prospects for higher feed prices and weak pork export demand. The tone toward higher corn and meal prices came from smaller than expected planted acres and 1 March stocks. Since the release of those reports on 31 March, higher corn and soybean meal prices have added to costs of hog production by $1.25 to $1.50 per live hundredweight. Those costs are estimated in the very high $40 for 2009 and about $50 for 2010.

Reduced pork exports from the US are the other major factor keeping the industry from registering better profits. Pork exports are expected to be down 14 per cent this year from last year when China was an enormous buyer. This means there will be almost 700 million pounds less pork shipped out of the country, and that will have to be absorbed by domestic consumers.

In summarizing the positive and negative factors, there will be about two percent less domestic pork produced in 2009, but the per capita supplies will be nearly unchanged from last year due to reduced exports. This means that 2009 average hog prices probably will not be much different than last year’s level around $48 live. The difference in profitability, then, is due to expected lower feed costs this year with total estimated costs at $48.50 versus $54 in 2008.

Hog prices are expected to exceed costs in the second and third quarter this year before returning to modest losses in the fourth quarter and first quarter of 2010. Some further reduction in the size of the US and Canadian breeding herds is expected into 2010 and this, along with recovery in the world economy, may provide a slightly more positive tone for hog prices in 2010.

Unfortunately, an improving world economy would also increase grain and soybean utilization and likely strengthen feed prices as well. This suggests that the hog industry must continue to cut the herd size somewhat to elevate hog prices to parity with costs of production in 2010.

Feed prices remain a concern for 2009. Tighter than expected corn and soybean inventories mean that harmful growing weather this spring and summer would force higher prices and rationing of short supplies. However, it is not likely that corn and meal prices would have the upward potential experienced in the spring of 2008. The world is much different today with a stronger U.S. dollar, a less robust US ethanol industry, and reduced world incomes.



Title: Re: American Hog News USDA
Post by: mikey on April 08, 2009, 12:24:26 AM
Tuesday, April 07, 2009Print This Page
New Food Wash Kills Pathogens Fast
US - Georgia scientists have created a technology that kills pathogens on food at home and in restaurants, grocery stores and food-processing facilities.



Created at the University of Georgia's Center for Food Safety, the technology has been licensed to the maker of FIT Fruit and Vegetable Wash, reports UPI.

University researchers said the process can kill significant numbers of E. coli and salmonella bacteria in less than one minute. The technology can be used as a food wash, with commercial applications for the produce, poultry, meat and egg processing industries.

"The re-formulated FIT food wash will kill more harmful microbes faster," said Mike Doyle, Center for Food Safety director, who invented the technology with microbiologist Tong Zhao. He added that the new anti-microbial food wash is orders of magnitude more powerful and twice as fast as previous similar products.

Dr Doyle said the wash has no effects on smell, taste or appearance of the foods that are treated.


 

Title: Re: American Hog News USDA
Post by: mikey on April 08, 2009, 12:25:52 AM
Tuesday, April 07, 2009Print This Page
Meeting Addresses Antibiotic Use in Food Chain
US - A conference last week entitled Minimizing Antibiotic Resistance Transmission Through the Food Chain revealed widespread concern among academics and the USDA that antibiotic resistance remains a problem.


"The rapid emergence of antibiotic resistant pathogens has major public health and social impact," said Dr. Hua H. Wang, a food scientist at Ohio State University, Columbus, Ohio, at a conference here addressing the growing tendency of disease-causing organisms to be able to resist antibiotic drugs and drug therapy meant to fight them, both in animals and humans.

The conference, Minimizing Antibiotic Resistance Transmission Through the Food Chain, was jointly sponsored by the Cooperative State Research, Education, and Extension Service (CSREES) of the US Department of Agriculture, the Ohio State University Extension, and Ohio Agriculture Research and Development Center. Leading the conference, in addition to Dr Wang, were Dr John N. Sofos, Center for Meat Safety and Quality, Colorado State University, Fort Collins, Colorado, and Dr Thaddeus B. Stanton of USDA's Agricultural Research Service, Ames, Iowa.

Dr Wang said in the last couple of decades, an intensive discussion on the correlation between the use of antibiotics in human and veterinary medicine, food animal production, agriculture applications and the development of resistance in human pathogens has been a hot topic in science which has led to several government policy changes in both the EU and the US. "The problem of antibiotic resistance still exists," she said.

Speakers at the conference noted bacteria and other microorganisms causing infections are remarkably resilient and can develop ways to survive drugs meant to weaken them. This antibiotic resistance is due largely to the increasing use of antibiotics, although several speakers noted the problem is complex and cannot be tied simply to this use. Speakers pointed out that that food-producing animals are given antibiotic drugs for important therapeutic, disease prevention or production reasons. However, these drugs can cause microbes to become resistant to medications used to treat human illnesses, ultimately making some human sicknesses more difficult to treat.

Does this mean antibiotic use in agriculture should be curtailed? That was the question addressed by keynote speaker Dr Abigail Salyers, from the Department of Microbiology, University of Illinois, Urbana, Illinois. She said even though antibiotics are usually used at very low concentrations in agriculture, they can still select for antibiotic-resistant bacteria.

"The resistant bacteria then enter the food supply. A potential hazard of consuming such food is that resistant bacterial pathogens such as Salmonella typhimurium can cause disease," she said. "Another potential hazard seldom considered but probably more serious is the transfer of resistance genes from bacteria passing through the human intestinal tract to bacteria normally occupying that site. Such bacteria are common causes of post-surgical infections." There is not yet enough data to enable scientists to quantify the risks associated with such scenarios, but there is evidence such scenarios are possible, she added.

In speaking about antibiotic resistance in meats and other foods, Dr Sofos pointed out antimicrobials find numerous beneficial applications in human, animal and plant health, as well as in food production. Their selective pressure, however, may lead to the emergence of resistant pathogen strains.

"Therefore, it is important to maintain the ability of pathogens to be affected by antimicrobials," he said. "The best approach to minimising antibiotic resistance negative impact is through risk assessments. Major recommendations for control include prevention of disease; use of antibiotics of lesser importance to human medicine, and treatment with alternative methods, including vaccines."

Dr Sofos noted in tracking resistance of Salmonella to antibiotics in eight beef plants, resistance occurred mostly on cattle hides, but only a small amount of resistance to antibiotics existed on beef carcasses, notes the Meat and Poultry report. "There was more resistance by the Campylobacter pathogen in poultry," he noted. "Research should also focus on the potential of antibiotics to enter animal production environments through waste streams."

Title: Re: American Hog News USDA
Post by: mikey on April 13, 2009, 05:41:52 AM
US Breeding Herd Tumbles (April 2009)
By Chris Harris, Senior Editor. Our snapshot of the ongoing global pig industry trends as reported in April 2009 Whole Hog Brief.


Check out this month's contents
at the foot of the page
The total stock of hogs, pigs and breeding herd in the US has dropped by three per cent from March 2008 according to the latest US Hogs and Pigs Census.

The Whole Hog reports that the inventory of 65.4 million is also down by two per cent on the previous quarter.

The breeding herd at 6.01 million is three per cent down on March 2008 and one per cent down on the last quarter of 2008.

However, the Whole Hog also shows that US pork exports of cuts and variety meats rose again in January this year to 149,383 tonnes - a rise of 1.7 per cent on December last year and 6.7 per cent up on the same month the previous year.

At the same time, US pig meat imports fell by 7.3 per cent on December to 31,169 tonnes.

Exports of Canadian pork are also still rising, with total shipments in January reaching 83,542 tonne, 3.4 per cent up on January 2008.

The Whole Hog says that the rise in mainly due to an in crease in exports to Taiwan, Australia and Japan.

Chinese Pig Meat Production

The Whole Hog reports that Chinese pig meat production is expected to rise by four per cent in 2009, to reach 48.7 million tonnes.

However, in reporting the figures from the USDA FAS, it says that the rise in production is expected to be slower than last year when it rose at a rate of eight per cent.

The rise has been helped by subsidies following the blue ear disease outbreak in 2007, which helped in the increased imports of breeding sows.

However, while production is increasing at four per cent, consumption is expected to rise by five per cent to 48.8 million tonnes.

Global Pig Prices on the Edge
The Whole Hog's monitor of global pig prices shows that they are just about holding up.

It says that they are rising and falling without ever achieving previous peaks.

The main prop to global pig prices is the Canadian price, but this is not going to be sufficient to sustain the cycle's peak.

"We are definitely on the edge," the Whole Hog says.

"The market is unclear and yet the message is becoming clear. We are poised for a turn in the price cycle."

The Rise and Fall of Hungary's Pig Sector
The latest figures from the Hungarian Agriculture Ministry shows that the total number of pigs in the national herd was 3.38 million with a breeding herd of 320,000.

This is a fall from 9.368 million in 1974, which at the time was enough to cover national needs and some exports to the then Soviet Union, the Whole Hog reports.

However, it predicts that the pig sector in Hungary is threatened with further contraction, with production forecast to fall by a further 10 per cent this year.

EU Prices Don't Look Like a Single Market
EU average pig producer prices for March are 1.9 per cent up on February but down by 4.1 per cent year on year, at €137.03 per 100 kg.

However, the Whole Hog shows that in Spain Germany prices were way above the average at €145.06 and €140.76 respectively, while the French prices were below the average at €131.80.

The Whole Hog said that Easter was expected to see a brisk demand for pig meat and prices will stabilise.

Japanese Imports Rise
The latest figures from Japan show a rise in imports of pork by eight per cent between November and December last year and seven per cent year on year.

Imports from the US rose by 4.3 per cent and from Canada they were up by 25.3 per cent month on month.

In South Korea, imports reached 21,381 tonnes in January - a 1.9 per cent rise on December, but 33.5 per cent down on January 2008.

Imports from South Korea's leading shipper, the US, were down by 3.1 per cent the Whole Hog reports.

The latest figures from Australia show that exports in December last year slipped to 2,935 tonnes, down by 21.1 per cent.

At the same time, the Whole Hog reports that total pig meat imports to Australia increased by 10.9 per cent compared to December 2007.


Chris Harris, Senior Editor


--------------------------------------------------------------------------------
Whole Hog Brief is published monthly.
Title: Re: American Hog News USDA
Post by: mikey on April 15, 2009, 02:59:56 AM
Tuesday, April 14, 2009Print This Page
CME: Meat and Poultry Exports Surprisingly Strong
US - CME's Daily Livestock Report for 13 April 2009.



NOTE: Our data for US pork and beef exports and exports of variety meats of both species come direct form the Foreign Ag Service’s website. They represent USDA’s product weight numbers for those categories. We have seen other published data that differ from these, presumably because some other items (sausage casings, fat, etc.) have been added in. At this point we have chosen to stick with the actual muscle cut and variety meat data as reported by USDA. We just wanted DLR readers to know why these data may be different from others they have seen.

US meat and poultry exports were, in many observers’ eyes, surprisingly strong in February. US beef exports were 11.1 per cent higher than last year with South Korea being the big contributor to growth, increasing by 8,862 per cent (see Figure 1). That percentage increase, of course, was from a number very near zero one year ago but the shipment volume of 28.2 million pounds was a major reason for year-on-year growth. The other major contributor to beef export growth was Vietnam, which nearly doubled its year-todate imports through February to become the fourth largest destination for US beef. Shipments to Japan grew slightly from last year’s levels as shipments to Mexico and Canada stand 15 per cent and 18 per cent smaller than last year, respectively. One reason for that decline, of course, is that cattle imports from both of these countries have been driven lower by mandatory country of origin labeling, leaving more cattle available for domestic packers in Mexico and Canada, thus increasing domestic production and supplanting US exports. The value of US beef exports through February stands 10.8 per cent higher than last year with South Korea and Vietnam accounting for nearly all of the growth in this item as well. The value of shipments to Canada is down 23.4 per cent YTD.


US pork exports were 9.7 per cent smaller in February versus one year ago. That brought YTD pork exports down to 7.1 per cent lower than last year (see Figure 2) with China/Hong Kong (-68 per cent) and Russia (-51 per cent) the primary reasons for the reduction. Shipments to Mexico amounted to 44.04 million pounds product weight, 54 per cent higher than in 2008, and drove YTD exports to Mexico to +60.3 per cent. That in spite of a sharply devalued peso. YTD shipments to Japan are also up — 16.6 per cent — while Australia and Taiwan saw small unit gains. On the value side, US shipments through February have actually increased by 0.7 per cent with Japan (+33.5 per cent) and Mexico (+59.6 per cent) leading the way. Exports to Canada are down in both volume (10.5 per cent) and value (11.4 per cent) this year, in part due to higher Canadian pork production from MCOOL-reduced Canadian market hog imports.


The huge success story for pork in February was variety meats — up 54.3 per cent in volume and 52.5 per cent in value through February (Figures 3 and 4). While China/Hong Kong has been a disappointment on the meat side, they have been a boon on the by-product side, taking 32% more product and paying 47 per cent more dollars for it thus far in 2009. Mexico remains our largest pork variety meat market and has exhibited remarkable growth again this year.

 







Title: Re: American Hog News USDA
Post by: mikey on April 16, 2009, 12:36:39 AM
Wednesday, April 15, 2009Print This Page
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME closed down on technical selling Monday with the exception of April futures. The APR’09LH contract closed at $58.175/cwt; up $0.175/cwt but $1.550/cwt lower than this time last week. The JUNE’09LH contract was off $0.175/cwt at $74.100/cwt but $1.350/cwt higher than last Monday. Good packer demand was not enough to offset losses on a shrinking DOW and crude oil losses. There is hope that cash hogs will trade $1-$2/cwt higher on Tuesday and news that packers will need hogs unless they continue to reduce production levels this week. Several plants shut down on Monday for the Easter holiday and some of those may remain closed for one more day, according to several pit sources. On Monday, USDA placed slaughter at 290,000 head vs. 415,000 head last week and 433,000 head a year ago. USDA also placed the Pork Carcass Cutout at $59.99/cwt; up $0.51/cwt. The CME Lean Hog Index was off $0.230/cwt to $57.16/cwt and down $0.02/cwt from this time last week. According to HedgersEdge.com, the average pork plant margin was raised $9.45/head as that margin rose to a positive $2.60/head. This was based on the average buy of $41.16/cwt vs. the average breakeven price of $42.14/cwt. It is a good idea to price feed needs now and hold hogs to heavier weights if possible.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. MAY’09 corn futures closed at $3.874/bu; off 2.75¢/bu and 18.0¢/bu lower than last week. The JULY’09 contract closed at $3.972/bu; down 2.5¢/bu and 18.5¢/bu lower than last Monday. DEC’09 corn futures finished at $4.192/bu; off 2.5¢/bu and 17.5¢/bu under last report. Corn futures closed near session highs. A weak DOW and lower crude oil prices weighed on prices. The market rebounded on wet-weather fears delaying planting. Late Monday USDA put corn seedings at 2 per cent vs. a 5-year average of 6 per cent for this time of year. Exports were neutral-to-slightly bearish with USDA placing corn-inspected-for-export at 31.4 mi bu vs. expectations for between 33.0-37.0 mi bu. Funds increased net-bull positions by 4,233 contracts to 293,981 lots while large speculators also grew net bullish positions to 96,099 contracts; up 1,680 lots. Cash corn bids were steady amid slow farmer selling of old crop supplies in the US cornbelt. Cash bids in the US Mid-Atlantic States were steady as well with opening bids ranging from $3.98-$4.08/bu for old crop and $3.94-$4.09/bu for new. Hopefully some of the ’09 crop has been sold. Feed purchasers should consider pricing some feed needs at this time.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were up on Monday. MAY’09 soybean futures closed at $10.214/bu; up 14.5¢/bu and 22.0¢/bu over this time last week. The JULY’09 contract finished up 13.75¢/bu at $10.156/bu and 22.25¢/bu over last Monday. The NOV’09 contract closed at $9.272/bu; up 5.25¢/bu and 15.75¢/bu higher than last report. The Chinese are seen as supporting the global soy market at this time while exports from Argentinean farmers are being held hostage to local politics. China normally buys from Argentina this time of year but are now buying Brazilian and US soybeans because of farmer and government turmoil. Bullish fundamentals are supportive as USDA’s report last week showed a shrinking supply of US soybeans due to increased exports for this time of year. USDA placed soybeans-inspected-for-export at 20.481 mi by vs. expectations for between 17.0- 21.0 mi bu. Right at 10.4 mi bu of that was headed for China. Funds bought over 3,200 contracts increasing net-bull positions to 111,171 lots while large speculators increased net-bull positions by 15,209 lots to 47,776 net long contracts. Cash soybeans in the US Midwest were steady while those in the US Mid-Atlantic States were also steady ranging from $9.92-$10.42/bu. It is a really good idea to sell 45 per cent of the ’09 crop now. Soybean users might want to consider locking in some needs at this time as prices are expected to go higher.

WHEAT futures in Chicago (CBOT) closed up on Monday. The MAY’09 contract closed at $5.232/bu; up 1.25¢/bu but 32.5¢/bu lower than this time last week. JULY’09 wheat futures finished up 1.25¢/bu at $5.346/bu but 34.5¢/bu lower than a week ago. The markets traded both sides in chart-based activity and sell or buy stops. Farmers in the global economy supplied wheat on short stocks and now wheat prices are declining. Spring wet weather has been good for winter wheat crops as the CME Group reports that even though wet weather has slowed maturation of soft red winter wheat ample moisture shows promise of boosting yield potential. Exports were somewhat supportive with USDA placing wheat-inspected-forexport at 20.7 mi bu vs. expectations for between 16.0-20.0 mi bu. It has been reported that US wheat had made up 15 per cent of Iranian imports for the ‘08/’09 year. Funds bought about 1,000 contracts as large speculators increased net-bull positions in wheat futures and options. It was a very good idea last week to have 25 per cent of the 2009 crop sold. It is a good idea to hold off pricing any more for now.



Title: Re: American Hog News USDA
Post by: mikey on April 21, 2009, 01:56:59 AM
Monday, April 20, 2009Print This Page
Swine Nutrition Research Meets Economic Value
US - The way Iowa State University animal science associate Professor John Patience sees it, pork producers who don’t include nutrition and diet information as part of their whole farm plan are missing the boat.

 

Professor Patience, who went to ISU in 2008 following a 21-year stint at Prairie Swine Centre in Saskatchewan, Canada, said it’s crucial for producers to integrate the design of their feeding program into the plan of the whole farm.

"For example, some producers’ goal is to maximize throughput growth rate yet minimize feed costs,” he said. “This is one time when the two objectives disagree and a major disconnect occurs. Farmers must work together with the nutritionist to make sure feeding is included in the major plan."

Professor Patience and his lab manager Amanda Chipman are focusing their research on possible solutions to economic issues facing farmers, with the goal of helping create economic success. Their specific applied swine nutrition studies target energy metabolism, alternative feed ingredient evaluation, and feeding and management of weanling and grow-finish pigs.

"Our current projects will take from two to seven years, with longer times possible for more complex parts," Professor Patience said. "We’re combining nutrition with related issues, in order to help improve long term sustainability of the pork industry."

As Professor Patience meets with producers and others in the state’s pork industry, he said there are some important "take home" messages.

"Producers can use alternative feeding ingredients to help minimize feed costs, because doing so offers more flexibility and more options. This can translate into more control over feed costs, especially if that product is competitively priced," he said. "However, if a producer isn’t familiar or has not experience with a particular product, there’s the possibility of increased risk."

Professor Patience said research like his plays a major role in assisting producers because it provides quality information on new products that producers can trust.

"For example, even though corn and soybean meal rations dominate swine diets in Iowa, pigs can perform equally well on rations with different ingredients just as they did in the past," he said. "Farmers just need to conquer their fear of using new products as long as the economics are favorable to that use. Our research will help determine that."




Title: Re: American Hog News USDA
Post by: mikey on April 23, 2009, 01:00:13 AM
Wednesday, April 22, 2009Print This Page
Swine Flu Reported in Two Children; Doctors Warned
CALIFORNIA, US - The Centers for Disease Control (CDC) has published case reports of two children in southern California who became ill as the result of a new form of the H1N1 swine influenza virus in March and April 2009.



On 17 April 2009, CDC determined that two cases of febrile respiratory illness occurring in children who resided in adjacent counties in southern California were caused by infection with a swine influenza A (H1N1) virus.

The viruses from the two cases are closely related genetically, resistant to amantadine and rimantadine, and contain a unique combination of gene segments that previously has not been reported among swine or human influenza viruses in the United States or elsewhere.

Neither child had contact with pigs; the source of the infection is unknown.

Investigations to identify the source of infection and to determine whether additional persons have been ill from infection with similar swine influenza viruses are ongoing.


Title: Re: American Hog News USDA
Post by: mikey on April 23, 2009, 01:01:54 AM
Wednesday, April 22, 2009Print This Page
CME: Pork Freezer Stocks Lower Than a Year Ago
US - CME's Daily Livestock Report for 21 April 2009.



USDA released the results of its latest survey of refrigerated warehouses on Tuesday afternoon (21 April) and the report showed that at the end of March, inventories of beef, pork and chicken products continued to trend below year ago levels, a result of a sharp reduction in US meat production but also due to efforts from end users to reduce freezer stocks and free up financial resources.

The impact of the reduction in supplies has been more pronounced in the chicken industry, whereby the cutbacks in slaughter and relatively good export volume have caused ending inventories to decline both compared to year ago and five year average levels. Below are some of the highlights from the report.

Pork: Total pork freezer stocks as of 31 March were 593.2 million pounds, 9.8 per cent lower than a year ago but still 12.1% higher than the five year average. Ham stocks fell sharply in March, partly due to smaller production volumes and possibly because of good exports to Mexico. Also, Easter Sunday this year was on 12 April, so there was some drawdown in inventories at the end of March as product was processed and transferred to distribution centers and stores. Total ham stocks were 73.3 million pounds, 22.7 per cent lower than a year ago but still 11.9 per cent higher than the five year average. Pork belly stocks moved counterseasonally lower in March. Normally stocks build up into the spring as end users prepare for the high demand summer business. However, 31 March pork belly inventories were 73.3 million pounds, 3.1 per cent lower than the previous month and 25.9 per cent lower than a year ago. Belly stocks still are 5.6 per cent higher than the five year average.


Beef & Poultry: Total beef stocks at the end of March were 422.5 million pounds, 1 per cent lower than a year ago but 1.7 per cent higher than the five year average. Total chicken stocks were 634.7 million pounds, 17 per cent lower than a year ago and 9.6 per cent lower than the five year average. This was the smaller chicken freezer inventory level since May 2007. Turkey inventories was the only category among the main species to still show an increase over year ago levels. Total turkey stocks at the end of March were 508.0 million pounds, 18.6 per cent higher than a year ago and 22.6 per cent higher than the five year average.
Title: Re: American Hog News USDA
Post by: mikey on April 25, 2009, 10:10:58 AM
Friday, April 24, 2009Print This Page
CME: Murky Outlook for Pork Values This Summer
US - CME's Daily Livestock Report for 23 April 2009.



It has been a disappointing week for hog futures, in large part due to weaker than expected wholesale pork prices and a murkier outlook for pork values this summer. Normally pork prices begin to move higher at this time of year, in large part due to smaller supplies but also because of better demand for retail cuts destined for the outdoor grill, such as loins.

The upward shift in pork prices appeared to be underway last week and this buoyed hog futures, with the June contract closing last Friday at 73.625, a much smaller number than what the market was thinking at the start of the year but maybe the start of better things to come. The rally seemed to run out of steam pretty quick, however. Instead of continuing to climb, as they seasonally do at this time of year and as lower slaughter numbers would indicate, the pork cutout lost 80 cents on Tuesday and another $1 on Wednesday. On Thursday the pork cutout took back some of the losses but still, at $59.78/cwt, it was $2.13 lower than the week before and a whopping $12.43 /cwt or 17.2 per cent lower than a year ago.

Part of the reason for the decline in wholesale pork values is due to the inability of packers to charge more for pork loins, an item that should carry the cutout at this time of year. Loin prices (1/4”) on Thursday were quoted at $92.76/cwt, 5.3 per cent lower than last Friday and some 20 per cent below year ago levels. Why items such as loins have so far failed to gain traction is a matter for debate.

It could be that inexpensive beef offers in late February and March pushed a number of retailers towards planning more beef features this spring thus limiting demand for pork cuts going into the start of the grilling season. Keep in mind that retail features are planned a number of months in advance so that could explain why pork finds itself at a disadvantage despite sharp slaughter cutbacks.

Another reason could be that even with smaller year over year output, total pork production still is relatively large by historical standards. Yes, pork supplies in Q2 are expected to decline about 3 per cent from year ago levels but last year pork production exploded and was greatly supported by a red hot export market. 2009 Q2 pork production is still expected to be up 5.7 per cent compared to Q2 in 2007 and up 8.3 per cent compared to Q2 in 2006.

As the bottom chart shows (below), pork currently has become much more competitive with beef and this could cause retailers looking for fill in business to take another look at late minute pork features. It could still save the day for pork packers but the clock is ticking...

 




Title: Re: American Hog News USDA
Post by: mikey on April 29, 2009, 02:45:50 AM
Tuesday, April 28, 2009Print This Page
CME: Pork Demand Amid Swine Flu Scare
US - CME's Daily Livestock Report for 27 April 2009.



CME Group Lean Hogs Futures traders voted a resounding “SCARED” today over the spreading swine flu outbreak — which some are already referring to as a pandemic. The key issue, of course, is demand for pork when “swine flu” is making people sick in several countries and has now killed nearly 150 people in Mexico. US pork and meat groups fought today to clear pigs’ honorable name and appear to be making some headway.

The World Health Organization issued a press release late in the day pointing out that the virus should not be called “swine flu” since it contains genetic material from swine, asian and avian (bird) flu strains. WHO recommended that it be called “North American influenza.” We’re not sure why it isn’t “Mexico influenza” since virtually every case points to that country as the source of the virus. There has still been no documented case of the virus in pigs and it is still not known whether the virus will even infect pigs. WHO, the US Centers for Disease Control (CDC) and most media reports point out that the virus is not spread through pork but that mention usually comes very late in the story.

The demand issues are three-fold. First, there is demand in the US domestic market — where 80 per cent of all US production was sold last year and, very likely, a higher percentage will need to move this year. Continued repetition of the “it doesn’t come from pigs or pork” message and the name change, if it is actually picked up, will help but some of our contacts fear that the damage may already be done. The second issue will be pork demand in Mexico — our second largest export market thus far in 2009. Closed businesses and schools and restrictions on movement will slow Mexico’s economy and the pig and flu connection may be more difficult to break there, especially with press reports that the flu may have started in a small boy who lived near a pig farm in Veracruz state.

Finally, there are other export markets. Russia banned all meat imports from Kansas, Texas and California today and banned pork imports from those states plus Alabama, Georgia, Kansas, New Mexico, Louisiana and Oklahoma. As we pointed out yesterday, Russia has a long history of blocking meat imports for about any reason, so this is no surprise. There are reports that China will officially ban pork imports from some states as well and other Southeast Asia countries have announced bans — pretty understandable given their past experience with bird flu.

There was some good news for livestock producers today — the pace of US corn planting grew sharply last week. USDA reported that 22 per cent of acres are now planted. That compares to only 10 per cent last year but an average of 34 per cent over the past 5 years. The big catch-up state was an important one — Iowa, where 47 per cent of the corn acres are now planted.

Title: Re: American Hog News USDA
Post by: mikey on April 30, 2009, 07:52:40 AM
Wednesday, April 29, 2009Print This Page
CME: Just How Important are Import Bans?
US - CME's Daily Livestock Report for 28 April 2009.



To get a feel for what US pork producers and packers are going through, imagine that someone with the same name as you robbed the local bank and, upon his/her apprehension, your local newspaper included YOUR picture in the front page, above-the-fold story. A definite sinking feeling that makes you want to scream and cry at the same time, huh? That is about what the pork people have been through with swine flu/ North American influenza/Influenza A (H1N1) over the past few days.

That last moniker (Influenza A (H1N1)) is the latest name for the virus that has now been identified in people around the globe but not in a single pig that anyone knows of. In fact, no one knows yet if pigs will even contract the virus — though those experiments are no doubt ongoing.

It does not appear, though, that the press is picking up on the nonswine names to any great degree, so the industry is still fighting to get the message out that the virus is not transmitted through pork. Secretary of Agriculture Tom Vilsack finally made that statement today. No one knows for sure whether US consumers have reacted negatively but it is very likely. Both futures and cash markets have moved sharply lower the past two days. Nearby May Lean Hog futures were down $2.75 today after falling the $3.00 limit yesterday. June and July were down $2.35 and $1.78 today after limitdown moves yesterday as well. The weighted average price of hogs sold through negotiated trades in Iowa-Minnesota lost a combined $2.83/cwt the past two days. Assuming carcasses equal in weight to last week’s estimated barrows and gilts average (201 lbs.), and that the $2.83/cwt decline applies to all of the 826,000 head slaughtered this week, the price drop has already cost hog producers $4.8 million — or more, since a price rally has been expected.

Just how important are the import bans announced by our foreign customers? Not unimportant but none of them are as important as Mexico — which has not banned imports but where the most damage to our export demand may occur due to the name connection between pigs and flu. The table at left shows pork and pork variety meat exports to Mexico, Russia and China/Hong Kong through February. The last two countries are the most notable ones which have blocked imports from some states. Note that Mexico is MUCH, MUCH more important in about every way — volume of pork and pork variety meats, value of both classes of products, year-on-year growth. China/Hong Kong is an important factor in the pork variety meat market but readers should realize that over 75 per cent of the volume and value of pork variety meats going to China/Hong Kong have gone through Hong Kong and Hong Kong has NOT announced any ban on US pork products. Do you think product might still find its way to China through Hong Kong much as product from pigs fed ractopamine did last year? We think it is very, very likely. Russia is a growing market for US beef variety meats but represents only 7 per cent of the volume and 4.3 per cent of the value of ‘09 YTD shipments.

We know that “facts” aren’t always what drives markets and that US consumer demand may indeed suffer. But the pressure on meat markets has every earmark of a panic based on emotion and psychology. An understandable panic, perhaps, but a panic nonetheless. We wouldn’t call the import bans “panics”, though. They are simply clear-headed decisions with no basis of fact — and the countries make them are no surprise.







Title: Re: American Hog News USDA
Post by: mikey on April 30, 2009, 11:09:55 PM
Thursday, April 30, 2009Print This Page
North American Influenza Hits US Pork Sector
US - It could take weeks - or longer - before US pork producers recover from export restrictions tied to a worldwide influenza outbreak, said Purdue University agricultural economist, Chris Hurt.

Purdue News
 

With China, Russia and Ukraine refusing to accept pork from US states and other nations increasing their screening of pork imports, hundreds of millions of pounds of pork could wind up in the US retail market at discounted prices, Chris Hurt said. That means lower prices for a pork industry already reeling in a tough economic climate, he said.

"This couldn't get much worse for the pork industry," Professor Hurt said. "You've got other countries starting to follow the lead of Russia and China by limiting their import of our pork. Then there are the consumers worldwide who are linking the word 'swine' to pork, even though this influenza strain did not come from swine. And then there's the world economy in general."

The H1N1 influenza virus has been blamed for up to 159 deaths in Mexico and one in the United States. Although commonly called "swine" flu, the virus is a new strain combining parts of bird, human and pig influenza viruses. Nearly 70 people in seven states, including Indiana, have been infected with the virus.

Although no cases of the new H1N1 strain have been reported in pigs and properly handled and cooked pork is safe to eat, the pork industry is feeling the brunt of public misunderstanding about the virus, Professor Hurt said.

"China and Russia represented 27.4 per cent of our pork exports in 2008. Any loss of those sales to those important markets will lower pork prices," Professor Hurt said. "May lean hog futures have fallen 8 per cent since Friday (24 April), closing at about $63.30 per hundredweight, or more than $5 lower.

"This is, in essence, the market anticipation of what this flu event means over the next few months. The concerns are that 'swine' flu could reduce US pork exports, that US consumers could reduce pork consumption and, more broadly, that the flu could cause a slowing of world economic growth, which would reduce demand for food products in general."

China and Russia are the second and fourth largest international buyers of US pork, respectively. Together, the two nations imported 1.28 billion pounds of the nearly 5 billion pounds of pork exported from the United States in 2008.

American hog farmers produced 23.3 billion pounds of pork this past year.

H1N1 fallout is just the latest setback for pork producers, Professor Hurt said.

"The pork industry has been losing money since the fall of 2007," he said. "Producers are near break-even right now. We had hoped that producers would return to profitability by May, but that isn't likely to happen now."

The flu outbreak is the third major shock to the pork industry in the past 18 months, Professor Hurt said. Hog farmers were beset by sharply rising feed prices in late 2007 and 2008 and the global financial crisis this past fall, he said.

"The pork industry uses 28 per cent of the grains fed to livestock and 23 per cent of the protein meals fed to livestock," Professor Hurt said. "If this flu event causes demand for pork to drop, that means less usage of corn and soybean meal, with downward impacts on those prices, as well."

As bad as it is for the pork industry, Hurt doubts that hog farmers will be hit as hard by the H1N1 outbreak as beef producers were by the US mad cow disease cases in late 2003 or the poultry industry by avian influenza in 2005-06.

"Both beef and poultry exports were negatively impacted," Professor Hurt said. "In fact, US beef exports have only recovered to about 75 per cent of their 2003 levels.

"Pork producers should not panic. The immediate reaction of humans and markets to situations like we have now is often more severe in the short term than the long term."

Meanwhile, the World Organization for Animal Health (OIE), in a written written statement released on Wednesday has said that the trade bans on pork and pork products are unjustified. The organisation has said that "there is no case of infection in animals confirmed in the zones where cases of human infection have been detected".

"Given there is no case of infection in animals confirmed in the zones where cases of human infection have been detected, it is not necessary to introduce specific measures for international trade in swine or their products nor to consider that consumers of pork products are at risk of infection," the statement said.

Title: Re: American Hog News USDA
Post by: mikey on May 06, 2009, 09:08:49 AM
NPB Reinforcing 'Pork is Safe' Message
US - To assure consumers that pork is safe, and will continue to be safe to eat, the National Pork Board on Thursday, 30 April, approved funding for a national media advertising program. The advertising, which should begin appearing this week, will be targeted to major daily newspapers and to a variety of Internet-based media.



"We have been conducting nightly consumer research this week to measure consumer reaction to the deluge of information about 'swine flu,'" said Chris Novak, chief executive officer of the National Pork Board. "Even though the World Health Organization, the US Department, the Centers for Disease Control and Prevention, the US Department of Agriculture and others have said this influenza strain should be called H1N1 and not swine flu, we needed to know if consumer behavior is being impacted."

More than 8 of every 10 consumers continue to believe pork is safe to eat, according to the daily consumer tracking research. And among consumers who have purchased pork products recently, more than 9 in 10 believe it is safe.

"But we know from the research that there is additional work that needs to be done to continue to provide assurances for consumers," Mr Novak said. "In addition to emphasizing the pork safety message, this advertising effort also gives us the opportunity to remind consumers about the nutritional benefits from eating pork."

Mr Novak said that based on the board's approval, plans for the advertising message and for the selection of media are being finalized. Preliminary plans call for using both newspapers with national reach and some regional newspapers, plus online search engines and sites that reach those consumers who make food purchasing decisions.

Additionally, the board approved additional funding for other efforts to get the "pork is safe" message to consumers. Those efforts include making experts about food safety and nutrition available to television stations and to other media.

"The early and extensive reporting of this terrible disease as swine flu, even though international health organizations were saying there has been no proven connection between this virus and pigs, did some damage," Mr Novak said. "It has been devastating for our producers who have seen hog prices fall each day this week.

"But the positive consumer attitudes about the safety of pork we are seeing in our tracking research are good news. We are optimistic that consumers will continue to make pork part of their families' daily meals."

Steve Weaver, a California pork producer and president of the National Pork Board, noted that record-high prices for corn and soybeans over the last year already have put many pork producers in a perilous financial position. "The events of the last week have added to that stress," Mr Weaver said. "The National Pork Board understands these challenges and remains committed to doing whatever it can to help producers in these difficult economic times."

Title: Re: American Hog News USDA
Post by: mikey on May 06, 2009, 09:10:29 AM
Second Quarter Was Better for Tysons
US - Tyson Foods has reported its second quarter (Q2) and six-month results. Operating margins for its Pork, Beef and Prepared Foods businesses were positive, and there was an improvement in the performance of its Chicken activities compared to the previous quarter.



Highlights
Tyson Foods has reported its Q2 and six-month results. Q2 2009 earnings per share was $(0.28) as compared to $(0.02) last year. Income tax expense includes $62 million, or $(0.17) per diluted share, from changing the method of recognizing interim income taxes.

Chicken operating loss was $46 million, an improvement of $240 million versus first quarter 2009. Pork operating margin was $29 million, or 3.4 per cent, while Beef operating margin was $28 million, or 1.2 per cent. Prepared Foods operating margin was $19 million, or 2.8 per cent; excluding the impact of plant closing charges of $15 million, operating margin was $34 million, or 5.0 per cent. The company ended the quarter with over $1.1 billion of cash at the end of the quarter, including restricted cash.

CEO's Comments
"Our loss of $0.24 per share from continuing operations in the second quarter includes $0.17 from a change in the method we used to recognize interim income taxes and $0.02 from a one-time charge for a prepared foods plant closure," said Leland Tollett, interim president and CEO of Tyson Foods.

"Our Chicken segment has been profitable since the end of February, and I am pleased with the consistent progress we are making. We have improved our operational efficiencies, our product mix, and we are benefiting from lower grain costs and more favorable chicken prices. Our Beef, Pork and Prepared Foods segments generated financial returns at or near normalized ranges in the second quarter, excluding one-time charges in Prepared Foods. Our tax rate for the remainder of the fiscal year should be closer to normal, and we believe the operational recovery we are experiencing will be reflected in our results for the third and fourth quarters.

"It is too soon to predict the impact of the H1N1 outbreak. At this point, none of our pork plants are impacted by export bans. Our multi-protein, multi-sales channel business model puts us in a good position should consumers change which proteins they buy or where they buy them. Protein demand usually picks up as we move into the summer grilling season, and we are cautiously optimistic despite current conditions."

Business Summary
The following is a summary of the operating earnings impact (in millions) of selected derivative activities. These amounts exclude the impact from related physical sale and purchase transactions, which impact current and future period operating results.


Chicken sector
The Chicken business accounted for 37.4 per cent of Net Sales in Q2 2009, and 35.8 per cent of Net Sales in the first six months of 2009.

Chicken segment sales were $2.4 billion and $4.6 billion, respectively, in the second quarter and six months of fiscal 2009. Operating loss was $46 million and $332 million, respectively, in the second quarter and six months of fiscal 2009.

Sales and operating results were impacted positively by increased sales volume, partially offset by lower average sales prices. The increase in sales volume for both the second quarter and six months of fiscal 2009 was due to inventory reductions and sales volume related to recent acquisitions.

The inventory reductions and recent acquisitions led to an overall decrease in average sales prices, as most of the inventory reduction related to commodity products shipped internationally and sales volume from recent acquisitions are on average lower priced products.

Operating results were adversely impacted in the second quarter and six months of fiscal 2009, as compared to the same periods of fiscal 2008, by a decline of $106 million and $321 million, respectively, from our commodity risk management activities related to grain and energy purchases. These amounts exclude the impact from related physical purchase transactions, which impact current and future period operating results. As compared to the same periods of fiscal 2008, operating results were also adversely impacted in the six months of fiscal 2009 by an increase in grain costs of $172 million, while the company had a slight benefit from a reduction in grain costs during the second quarter of fiscal 2009.

Operating results for the second quarter and six months of fiscal 2008 included charges of $13 million related to closing the Wilkesboro, North Carolina, cooked products plant.

Beef sector
The Beef business accounted for 38.4 per cent of Net Sales in Q2 2009, and 39.6 per cent of Net Sales in the first six months of 2009.

Beef segment sales were $2.4 billion and $5.1 billion, respectively, in the second quarter and six months of fiscal 2009. Operating income was $28 million in both the second quarter and six months of fiscal 2009.

Operating results as compared to the same periods in 2008 were impacted positively by lower average live prices, offset by lower average sales prices and decreased sales volume. Operating results were impacted in the second quarter and six months of fiscal 2009 by a decline of $6 million and an improvement of $35 million, respectively, from our commodity risk management activities related to forward futures contracts for live cattle as compared to the same periods of fiscal 2008. These amounts exclude the impact from related physical sale and purchase transactions, which impact current and future period operating results.

Operating results for the second quarter and six months of fiscal 2008 included charges of $25 million related to restructuring operations at the Emporia, Kansas, plant and an impairment of packaging equipment.

Pork sector
The Pork business accounted for 13.4 per cent of Net Sales in Q2 2009, and the same percentage of Net Sales in the first six months of 2009.

Pork segment sales were $844 million and $1.7 billion, respectively, in the second quarter and six months of fiscal 2009. Operating income was $29 million and $84 million, respectively, in the second quarter and six months of fiscal 2009.

Operating results as compared to the same periods in fiscal 2008 were impacted positively by increased average sales prices, offset by higher average live prices and decreased sales volume. Operating results were impacted in the second quarter and six months of fiscal 2009 by a decline of $17 million and $37 million, respectively, from our commodity risk management activities related to forward futures contracts for live hogs as compared to the same periods of fiscal 2008. These amounts exclude the impact from related physical sale and purchase transactions, which impact current and future period operating results.

Operating results were negatively impacted by higher operating costs as compared to the same periods of fiscal 2008.

Prepared Foods sector
The Prepared Foods business accounted for 10.8 per cent of Net Sales in Q2 2009, and 11.1 per cent of Net Sales in the first six months of 2009.

Prepared Foods segment sales were $684 million and $1.4 billion, respectively, in the second quarter and six months of fiscal 2009. Operating income was $19 million and $54 million, respectively, in the second quarter and six months of fiscal 2009.

Operating results were impacted positively by higher average sales prices and increased sales volumes, offset in the six months of fiscal 2009 by higher raw material costs. Operating results for the second quarter and six months of fiscal 2009 included charges of $15 million related to closing its processed meats plant in Ponca City, Oklahoma.


Title: Re: American Hog News USDA
Post by: mikey on May 16, 2009, 11:31:48 PM
CME: International Pork Shipments VERY Good
US - According to CME's Daily Livestock Report for 14 May 2009, though late April and early May have been a challenge for US meat exports in general and US pork exports in particular, international beef shipments in March were good and pork shipments were VERY, VERY good considering they are following last year’s remarkable performance.



The graphs below show monthly exports to key destinations for both pork and beef. Note that these are in carcass weight equivalents (from USDA’s Economic Research Service) where some data you will see are in product weight (from the Department of Commerce and USDA’s Foreign Ag Service). The carcass weight data are directly comparable to beef and pork production totals. We realize these charts are a bit busy but we have found few other representations that show country detail and context quite as well as these. Please pardon our making you squint.

 


Some highlights of March and year-to-date export data are:

March ‘09 pork exports were actually 2.2 per cent LARGER than in March 2008. The biggest gainer in percentage terms was Taiwan at +120 per cent of a very small number last year. March shipments to Mexico, at 67.6 million pounds were 65 per cent larger than one year ago — a fact that makes the difficulties of recent weeks even more painful since Mexico’s share of US exports through March was nearly 21 per cent this year versus 12 per cent last. Shipments to Canada were 12 per cent higher than last March while shipments to South Korea were 22 per cent higher.


Year-to-date pork exports thru March amounted to 1.033 billion pounds carcass weight, only 6.6 per cent less than last year’s March YTD figure of 1.106 billion pounds. That number compares to –10.8 per cent at the end of February. Shipments to Japan and Mexico were up 9.7 per cent and 60 per cent, respectively, YTD at the end of March but all other major markets were lower — Canada by 2.6 per cent, Russia by 45 per cent, Korea by 9 per cent and, perhaps most important, China/Hong Kong by 63 per cent. Note, however, that shipments to both Russia and China/Hong Kong have improved since the beginning of the year when business with Russia was especially dismal.


The value of pork exports, at $922.4 million, is still ahead of its 2008 pace by 3.7 per cent as of the end of March. The two most important contributors to this growth in terms of both dollars and percentage change are Japan and Mexico.


Pork variety meat exports were up 61 per cent in volume and 59 per cent in value through March.


March beef exports of 132.4 million pounds carcass weight were 5.2 per cent larger than one year ago. That increase leaves YTD beef exports thru March at 383.7 million pounds, 6.6 per cent larger than last year. South Korea (+3827 per cent from last March’s shipments of only 238,000 pounds), Japan (+42 per cent) and Other markets (+42 per cent — and these, if they were one country, would constitute our SECOND LARGEST beef market) led the year-on-year growth. March shipments to Canada and Mexico were 15.8 and 22.7 per cent lower, respectively. The value of beef exports at $548.6 million, YTD thru March, was 8.3 per cent higher than in 2008.
Title: Re: American Hog News USDA
Post by: mikey on June 17, 2009, 09:29:17 AM
Market Preview: Defining Demand for Pork
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



We all know demand is not what it should be, right? But which demand are we talking about? Specifying just where any demand problems may lie is a point upon which even I have not been clear enough lately. In addition, what I am seeing in hog prices is not squaring with information I’m hearing about consumer attitudes and behavior. So I did a little number crunching last week.

First, a bit of background. Hog prices have languished far below last year’s level and levels where virtually everyone expected them to be this summer. But does that mean pork demand is bad? Well, sort of, if you are talking about wholesale demand, which is closely correlated with hog demand since wholesale prices and by-product values are the major determinants of hog bids.

But why is wholesale demand soft? We know exports are very soft given the difficulties we face with pork demand in Mexico and political gamesmanship by Russia and China. But what about domestic demand? It has to have been hurt by all of the "swine flu" talk and sick people and a few related deaths, right? Funny thing, though, the National Pork Board’s tracking surveys have shown that consumers understand that pork is safe and, after an initial setback, responses indicating a willingness to buy pork have bounced back. So is it just exports? I went back to my data files and did a bit of ciphering to see if I could figure out a bit more about what is going on.

Let’s go back to 24 April (wouldn’t we like to do that knowing what we do now?). At that time, Chicago Mercantile Exchange’s Group Lean Hogs futures indicated a normal seasonal rally of a little over $10/cwt carcass (see Figure 1). Let’s call those expected prices since a lot of people were betting real money on them, thus bringing a great deal of collective information and brainpower to the marketplace.


On 24 April, there was also an expected level of slaughter. My calculation is represented by the red line in Figure 2. It is based on the year-on-year changes in the inventory of pigs of various weights in the March Hogs and Pigs Reports and some adjustments for lower imports from Canada and historical relationships. On average, my expectations for weekly slaughter since 1 March had been almost perfect relative to actual slaughter but, as you can see, averaging baled me out some weeks when the actual slaughter was either higher or lower than my expectations. Now, everyone’s expectations were not the same as mine but they were probably pretty close since mine were based on the major sources of public data. Let’s add in some "expected weights" and we get "expected supply."


So we have a set of expected supplies and expected prices. So what changed to make the actual prices (the fuscia line in Figure 1) and new price expectations (the red line in Figure 1) so much different? Demand went in the tank when H1N1 flu hit, right? Maybe not.

Consider the following numbers:

Mexico took 3.7 per cent of US commercial pork production in January through March. Last week’s product-weight export data for Mexico showed that shipments were lower in April and at least part of that decline could have been due to H1N1 influenza becoming an issue there even before April 24. So let’s ignore April as tainted data.


Russia took 1.3 per cent of US commercial pork production in February and March after starting the year very slowly.


China took about 0.7 per cent of US commercial pork production in March after two months of just less than 0.3 per cent. I include China here just for information. I’m not going to count this as a lost market since Hong Kong is still open.


Since 25 April, federally inspected hog slaughter has been 1.6 per cent larger than my expected levels.


I expected carcass weights to run one pound higher this summer vs. one year ago. Since 25 April, weights have been roughly two pounds or 1 per cent larger than I had expected.
Added Supply Dampens Prices
Add up the non-China items and we see that the supply of pork to US consumers is 7.6 per cent higher now than I, and very likely many others, expected to be the case at the end of April. That is a lot of extra pork to sell!

Is the difference between actual/expected prices commensurate with this change in supply? Yes, they pretty well are. Using a price flexibility (ie. the percentage change in price for a one percent change in supply) of -2, the change in expected supply would be expected to drive prices 15.2 per cent lower. Comparing actual cash prices through June 5 and June 5 futures prices to the 24 April futures shows that prices fell -9.1 per cent below the expected level the week of 1 May and the decline grew to -14.1 per cent last week. The June 5 futures prices suggest that the impact will be about -20 per cent this week and fall to -17 to -18 per cent through 10 July.

Those numbers aren’t precise but economics is not chemistry. They are reasonably close and they suggest that EXPORTS ARE THE BIGGEST PART OF THIS PROBLEM and that DOMESTIC DEMAND IS STILL REASONABLY STRONG. The reason domestic prices are so low (we’ve all heard of $1.50/lb. boneless loins) is that so much product has been placed on the domestic market by a) export reductions and b) higher-than-expected slaughter and weights.

Reduce Slaughter Weights
What can be done? Get weights down as quickly as you can. That’s easier said than done with packers managing pig and product flows carefully but do whatever you can! Eat pork and encourage others to do so! I know you do that regularly but do it more! I’ve told the Pork Board that we need to jump-start pork demand in Mexico. I know they and the US Meat Export Federation are trying but the situation with Mexican consumers is a tough one. And finally, the National Pork Producers Council is doing whatever it can to get Russia and China open – but the rule of international trade law is not highly regarded by the folks on the other side of those talks.

 



As published in National Hog Farmer's Weekly North American Preview.

Title: Re: American Hog News USDA
Post by: mikey on June 17, 2009, 09:32:14 AM
CME: When it Rains, it Pours for Pork Producers
US - According to CME's Daily Livestock Report for 12 June 2009, finding positive news in the meat business is not an easy task these days and, while not as bad a week as some in the recent past, this week was no feel good source for battered livestock and meat producers.



Generally, meat prices continued to decline on lower week-on-week and year-on-year offerings, a negative statement about the state of farm-level demand. The chicken business is a different story, however — more on that later.

First for beef — the Choice cutout value lost 1.1 per cent for the week and 11 per cent versus last year on FI slaughter that was 1 per cent lower than last week and 3 per cent lower than last year. None of those relationships are encouraging. Lower slaughter runs had held the promise of higher cattle prices at some point this summer but pork and beef demand (or is it supply? — more on that later, too!) have kept beef prices under pressure. Cattle feeders have finally gotten weights back to near year-ago levels, a positive factor in this market but lower production is still not commanding higher prices as ample pork supplies and continued export challenges cloud the cattle demand picture. It is too early to tell what the impact of the CWT dairy buyout might be. Note that beef cow slaughter in the table at left is for two weeks ago — Memorial Day week. Dairy cow slaughter has been erratic but trending upward the past four weeks but look for it to grow sharply as we get into July and the CWT cows start moving to harvest.

And now pork. It appears that when it rains, it pours for pork producers. Last week’s slaughter was 1.2 per cent lower than the week before but 1.3 per cent HIGHER than last year in a week when the March Hogs and Pigs Report and changes in Canadian imports suggested that slaughter should be 3 per cent of so LOWER than last year. As can be seen in Figure 1, FI hog slaughter has exceeded the levels suggested by the March report for 5 weeks now. “That’s because H1N1 backed hogs up,” someone says. But where was the week when slaughter was sharply lower than expected? Yes, packers slowed hogs down some the week of 1 and 8 May, but it doesn’t show up in this graph. “But weights are not falling as they should be, we must be backing hogs up.” True, see Figure 2. But taken together, these facts say we are seeing some unexpected pigs. Ugh, more hogs (by 1.6 per cent versus our forecast levels since 5 May), bigger hogs (2 lbs. or 1 per cent more than the 1 lb. or 0.5 per cent increase we expected) PLUS the lion’s share of the 3.7 per cent of our production that Mexico was taking through March and the 1.3 per cent of our production that Russia was taking in February and March. Add those up and you get 7.6 per cent more pork on the US market than was expected in late April. A demand issue — export demand that is — has caused a supply issue. Compare the expected price impact of 7.6 per cent more product to what has actually happened and domestic pork demand doesn’t look bad at all.

 


And that brings us to chicken. 12-city composite broiler prices have increased over $10/cwt since early April. Breast meat prices have strengthened about 10-cents/lb. but are still only $1.50/lb. for boneless/ skinless breast. The star has been legs and leg quarters: Up 22 and 40 per cent, respectively since 4 April (see Figure 4). Those importers in Mexico, Russia and China had to buy something, didn’t they?

 

 





Title: Re: American Hog News USDA
Post by: mikey on June 18, 2009, 08:01:45 AM
Smithfield Records $190 Million Loss
US - US pork producer and pig meat processing giant Smithfield foods has reported a loss of $190.3 million for the last financial year.



The loss was on the back of a 10 per cent rise in sales compared to last year of $1.1 billion.

Last year the company has a net income of $128.9 million.

Smithfield said that hog production had suffered because of the record feed costs.

However, despite the losses, the company announced that it had achieved record profits in export sales and in the packaged meats division.

The company has reduced its debt during the year by more than $890 million and cut its capital expenditure by 62 per cent.

Smithfield has started to restructure its pork group with the aim of improving pre-tax profits by $55 million in the coming year and by $125 million in the 2011 financial year.

The current results have included the initial costs of this restructuring of $88.2 million.

During the year, Smithfield announced that it had merged with the Spanish meat processing company Campofrio, increasing its stake in the company to 37 per cent.

Smithfield has also completed the sale of its beef processing and cattle feeding operations for $575.5 million, giving a pre-tax gain of $99.7 million.

The fourth quarter for Smithfield saw the loss at $78 million, which was largely driven by losses in hog production because of continuing high costs. However, Smithfield said it expects these costs to moderate in the near future.

"Fiscal 2009 was one of the most challenging years in over three decades for the company," said Smithfield President and CEO Larry Pope.

"We faced grain and oil markets that reached record highs and then fell precipitously. These input dynamics, combined with an oversupply of all proteins as well as a worldwide recession and credit constraints, put significant pressure on the business.

"But despite the challenges we confronted, we did not sit on the sidelines and wait for the economic conditions to improve; we have taken numerous actions to make us a more profitable company: namely, we repositioned the company's operations and made meaningful improvements to our liquidity and financial strength.

"As a result, I am especially pleased with our packaged meats business which delivered record profits even as fresh pork was weak in the face of an economic downturn.

"For the full year, the pork segment produced record profits, before the $88 million of restructuring costs, and is set to deliver very strong results going forward," Mr. Pope said.

"While the meat business looks very good, we are concerned about our hog production business as it deals with an oversupply of live hogs and the unintended consequences of the current ethanol policy."

Mr Pope added: As we move into fiscal 2010, our highest priority is on continuing the restructuring of the Pork Group, continuing to reduce debt, improving liquidity and strengthening the balance sheet."

"I strongly believe that the hog production industry has reached an inflection point where, due to deep and extended losses, liquidation is now a recognised reality by all in the industry.

"To date, Smithfield has already reduced the size of its US herd by two million market hogs annually, and we are initiating a further reduction of three percent of our US sow herd, effective immediately.

"This reduction, combined with the additional cuts by our fellow producers should shrink supply to a point where the industry can return to profitability. This liquidation is long overdue," he said.

"We believe that the A(H1N1) virus had only a short-term effect on U.S. fresh pork demand, which hurt our business last month. As the consumer received more accurate information about the virus, we saw domestic market conditions begin to move back to more normal levels.

"Unfortunately, we continue to experience restrictions in some international markets, specifically China, which is negatively impacting exports in the first quarter of fiscal 2010."




Title: Re: American Hog News USDA
Post by: mikey on June 20, 2009, 11:56:09 AM
CME: While Beef, Pork Prices Down, Poultry Up
US - According to CME's Daily Livestock Report for 17 June 2009, the latest data on meat prices at the consumer level (May) continued to show a deflationary trend in the price of beef and pork items but less so for poultry prices.



The recession has clearly had a bigger impact on the first two but for different reasons. In the case of beef, consumers likely traded down and opted for less expensive food options. Over the last few months, retailers likely realized that the only way to move beef volume was to give consumers lower prices.

As for pork, prices also continued to drift lower, mostly because of increases in the amount of pork available in the domestic market. The pork industry clearly was hurt by the slowdown in export purchases and the fact that despite much talk about it, producers were not able or willing to cut production as much as expected.

Poultry price inflation has outpaced the other two major species. In part this may reflect the consumer shift towards less expensive meat protein options, especially in the last six months. Also, the industry has been able to cut production significantly in recent months, removing a considerable amount of slack in the system and eliminating the need for constant discounts in order to move product. Clearly ‘poultry’ as a category is quite broad and within that some items have depreciated more than others.

In all, however, poultry prices are currently up some 17 per cent in the past five years while beef and pork prices are up 13 per cent and 8.6 per cent, respectively. Below are some highlights from the May CPI release:

The CPI index for beef & veal prices declined 0.5 per cent from the previous month and was up just 1.6 per cent vs. May 2008. The pork price index declined 0.4 per cent from the previous month and is currently running 1.1 per cent higher than a year ago. Poultry prices declined a full 1 per cent from the previous month but are up 3.1 per cent vs. May 2008.


Overall food inflation declined 0.2 per cent from the previous month and it is currently up 2.7 per cent from a year ago. In 2008, all food inflation averaged around 5.5 per cent.


Food away from home prices rose 0.1 per cent from a year ago and are surprisingly running some 4.2 per cent above year ago levels. There is plenty of anecdotal evidence suggesting restaurants are providing customers with more value but that is yet to be reflected in the CPI data.


Prices for food consumed at home declined 0.5 per cent from the previous month and were up just 1.5 per cent compared to a year ago.
Title: Re: American Hog News USDA
Post by: mikey on June 22, 2009, 10:54:58 AM
Weekly Review: Sow Prices Under Pressure
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.


Sow prices have come under pressure in the last two weeks with light-weight sow prices a bit harder than heavy-weight sows. Hopefully, this means we have gotten more serious about reducing the size of the sow herd.

Pork exports in April were over 21 per cent below a year earlier. For January through April, pork exports were down nearly 11 per cent. For these four months, pork exports to Japan were up 8.5 per cent, to Mexico up 54 per cent, to Canada down 6.8 per cent, to South Korea down 3.9 per cent, to Russia down 47.2 per cent, to China and Hong Kong down 64.2 per cent, to Australia up 40 per cent, to Taiwan up 69.8 per cent and to other countries down 8.8 per cent compared to last year.

Pork imports in April were down 3.4 per cent from the same month in 2008. For January-April, pork imports were down 5.0 per cent from a year earlier. In January-April, our pork imports from Canada were up 2.4 per cent, from Denmark down 8.5 per cent, from Mexico down 71.5 per cent, from Poland down 18 per cent, from Italy down 10.1 per cent and from other countries down 27.7 per cent from 2008.
Net pork exports as a percent of production for January-April were at 16.65 per cent in 2008 and declined to 14.29 percent in 2009 or a reduction of 14.2 per cent from 2008 to 2009.

For January-April, the value of pork exports per hog slaughtered in the US was $32.51; add pork variety meats in and the amount per hog was $39.44. Even though it was down from last year, exports are still very important to the US hog industry.

Hog slaughter in the last month has been almost exactly the same as last year. Weights have added at least 2 per cent to the pork supply. Exports during April were enough smaller to add 3.9 per cent to the domestic supply; and in the last month the reduced pork exports have probably added between five and six per cent to the domestic supply. When one considers we have had seven to eight percent more pork recently this year domestically than last year, it indicates our problem as to prices has been supply and not demand.

The H1N1 flu probably impacted demand negatively at the consumer level in late April and early May but has come back in recent weeks.

Demand for live hogs is down because of the smaller exports. Retail pork prices in 2009 were up 1.4 percent from April and up 1.8 per cent from May of 2008. Retail pork prices for January-May were up 3.5 per cent this year from last year.

The processor-retailer got most of the increase in retail price. For January-May the processor-retailer margin was up 9.1 per cent. The producers' live hog price was down 4.3 per cent, and the packers' margin was down 7.3 per cent.

Pork cutout this week Thursday afternoon at $55.58 per cwt of carcass was down $1.05 per cwt from a week earlier.

Live hog prices Friday morning were $0.75 - $4.00 per cwt higher compared to a week earlier. The weighted average negotiated carcass price Friday morning was $0.54 - $1.32 per cwt higher compared to last Friday.

The live prices for select markets Friday morning were: Peoria $33 per cwt, Zumbrota, Minnesota, $37 per cwt and interior Missouri $39.50 per cwt.

The weighted average negotiated carcass prices by area Friday morning were: western Cornbelt $56.43 per cwt, eastern Cornbelt $52.68 per cwt, Iowa-Minnesota $56.47 per cwt and nation $54.25 per cwt.

Feeder pig prices this week at United Tel-O-Auction were mixed with some pig prices sharply lower than two weeks ago. All of the pigs weighed 50-60 pounds and sold from $47-93 per cwt.

Nationwide feeder pig prices were $5-7 per head lower last week. Ten-pound-basis pigs sold for $25.23 per head and 40-pound-basis pigs sold for $27.15 per head.

Slaughter this week under Federal Inspection was estimated at 2,062 thousand head, down one per cent from last year.

Title: Re: American Hog News USDA
Post by: mikey on June 24, 2009, 07:37:59 AM
Weekly Outlook: Expectation for USDA Reports
US - On 30 June, the USDA will release its quarterly Grain Stocks and annual Acreage reports. Under the current scenario of declining soybean stocks and late planting in the eastern corn belt, these reports will provide important information for the corn and soybean markets.



A useful way to put the estimates of 1 June stocks into perspective is to compare the actual estimates when they are released to the calculation of expected stocks based on the combination of known use during the previous quarter and estimates of unknown use based on the USDA’s projections for the year. For corn, the USDA projects feed and residual use for the year at 5.35 billion bushels, 588 million less than during the previous year. Use during the first half of the current year has been reported at 3.572 billion bushels, 589 million less than during the first half of the 2007-08 marketing year. If the USDA’s projection for the year is correct, use during the last half of the year should be equal to that of a year ago. Use during the third quarter this year, then, should have been near the 1.095 billion bushels of a year ago.

For seed, food, and industrial use of corn, the USDA projects a 15.5 per cent increase for the year. Use during the first half of the year was 19 per cent larger than that of a year ago. Use during the last half of the year should be only 12.4 per cent larger. Third quarter use, then, should have been near 1.305 billion bushels. Census Bureau export estimates are available through April. Adding the USDA estimate for May suggests that third quarter exports were near 483 million bushels. Total use of 2.883 billion bushels during the quarter would leave June 1 stocks at 4.08 billion bushels, about 50 million larger than stocks of a year earlier. Based on available information, this method appears to overestimate feed use and underestimate processing use of corn for the quarter, but the estimate of total use appears reasonable.

For soybeans, Census Bureau estimates of crush and exports are available through April, so only consumption for May needs to be estimated. Using the USDA estimate of May exports, exports for the third quarter of the year were likely near 245 million bushels. For the year, the USDA projects the domestic soybean crush at 1.65 billion bushels, 8.4 per cent smaller than the crush during the 2007-08 marketing year. Through April, the domestic crush totaled 1.127 billion bushels, 9.1 per cent less than during the same period last year. If the USDA’s projection for the year is correct, crush during the final four months of the marketing year will total 523 million bushels, 6.8 per cent less than during the same four months last year. If the May 2009 crush was 6.8 per cent less than the May 2008 crush, crush for the quarter totaled 427 million bushels

Seed and residual use of soybeans during the quarter is difficult to anticipate because of the large year to year variation in use. The five year average for the quarter is 41 million bushels, in a range of 19 to 63 million. If seed and residual was at 41 million, total use should have been near 713 million bushels, leaving 1 June stocks near 590 million bushels. Based on the acceleration in the rate of domestic crush in March and April, the crush for May might be slightly underestimated here, suggesting slightly smaller June 1 stocks.

In March, the USDA reported producer intentions to plant 84.986 million acres of corn in 2009, nearly one million less than planted in 2008. Soybean planting intentions were reported at 76.024 million acres, about 300,000 more than planted in 2008. Due to late planting in the eastern corn belt, the general expectation is for the June Acreage report to show fewer acres of corn. Delayed planting in some corn and spring wheat areas suggests that soybean acreage will exceed March intentions. Guesses seem to center on 1.5 to 2 million fewer acres of corn and 2.5 to 3 million acres more soybeans than reported in March. The June estimates this year may contain more than the usual amount of producer intentions since considerable unplanted acreage still remains in the wettest areas of the eastern corn belt. In addition, the final report of planted acreage can vary from the June report. For corn, actual planted acreage in the previous 5 years has varied by as little as 40,000 acres to as much as 1.35 million acres from the June estimate. For soybeans the difference has ranged from 400,000 to 1.185 million acres.

In addition to planted acreage, 2009 corn and soybean production potential will be influenced by yield prospects. With the most critical part of the growing season yet to come, the recent sharp price declines suggest the market does not have significant concerns about yields at this time.




Title: Re: American Hog News USDA
Post by: mikey on June 25, 2009, 01:33:45 AM
US Swine Economics Report
US - On 26 June USDA will release the results of their latest survey of the US swine inventory, writes Ron Plain in his Swine Economics Report.

 
Ron Plain
My estimates are that the breeding herd is 2.0 per cent smaller than a year ago, the market hog inventory is 0.9 per cent smaller, and the total herd is 1.0 per cent smaller than on 1 June, 2008.

Total slaughter of barrows and gilts was down roughly 3.4 per cent during March-May due, in large part, to a 56 per cent drop in imports of slaughter hogs from Canada. Slaughter of US raised hogs was a bit higher than expected based on the March inventory report. Since 1 June, slaughter of US raised barrows and gilts has been up about 1 per cent compared to the same weeks last year.

My estimates of the 1 June market hog inventory by weight groups are: 180 pounds and heavier 101.2 per cent, 120-179 pounds 99.0 per cent, 60-119 pounds 98.0 per cent, and under 60 pounds 99.0 per cent of a year earlier.

In their last inventory report, USDA predicted March-May farrowings would be 2.9 per cent smaller than a year earlier and June-August farrowings would be down 4.0 per cent. I'm estimating spring farrowings actually were down only 1.0 per cent and summer farrowings also will be down 1.0 per cent. I'm forecasting fall farrowings to be down 0.8 per cent compared to September-November 2008. Declining feed prices in the second half of 2008 halted what had been a rapid reduction in the sow herd. December-February, sow slaughter was 7.4 per cent lower than a year earlier and March-May sow slaughter was down 15.2 per cent.

I'm estimating that pigs per litter were up 1.8 per cent this spring. My estimate is the March-May pig crop was 100.8 per cent of a year earlier. Feeder pig imports during March-May were 25 per cent below last spring's level.

My estimate of hogs in the 60-179 weight groups implies that third quarter daily hog slaughter will be 2-3 per cent below year-ago levels, if the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $47/cwt ($62/cwt carcass) in the third quarter of 2009.

I expect hog slaughter during the fourth quarter of 2009 to be 1-2 per cent lower than the number slaughtered in October-December 2008. If so, look for fourth quarter 2009 hog prices to average close to $42.50/cwt on a live basis and $55/cwt on a carcass basis.

Title: Re: American Hog News USDA
Post by: mikey on June 26, 2009, 04:17:37 AM
New Compound Has Potential for Mycotoxin Control
US - Agricultural Research Service researchers have identified a compound that has potential to control the mycotoxin, fumonisin B1, which affects livestock and poultry.



A key bacterial compound that inhibits the growth of the plant pathogen, Fusarium verticillioides, has been identified by Agricultural Research Service (ARS) scientists. The compound could help protect plants, livestock and poultry from fusarium infection.

The compound is produced by Bacillus mojavensis strain RRC101. Finding better controls for F. verticillioides is important because fumonisin mycotoxins – especially fumonisin B1 – are toxic to livestock and poultry.



A compound produced by the bacterium Bacillus mojavensis, now identified as Leu7-surfactin, could help protect plants, livestock and poultry from fusarium infectionMicrobiologist and research leader, Charles Bacon, and his team at the ARS Toxicology and Mycotoxicology Research Unit in Athens, Ga., identified Leu7-surfactin as the inhibiting compound that controls F. verticillioides. The research team includes microbiologist Dorothy Hinton, chemist Maurice Snook and technician Trevor Mitchell. Their study was published in the April 2009 issue of the Journal of Agricultural and Food Chemistry.

B. mojavensis is a plant-residing bacterium that can be used to control fungal diseases in corn and other plants. Though B. mojavensis is known to work as a biocontrol agent, the specific substance responsible for inhibition of Fusarium was not identified until recently.

The Leu7-surfactin was isolated from growing the bacterium in liquid cultures. In lab tests, the compound proved effective in inhibiting growth of the fungus. Surfactin has a detergent-like activity that dissolves the lipid membranes inside the fungus, eventually killing it.

In Dr Bacon's tests, Leu7-surfactin was effective at controlling F. verticillioides at very low concentrations of 20 microgrammes per litre of liquid, making it more efficient to use. In addition to its antibiotic effects, surfactin can be used in textile manufacturing, environmental remediation, and fossil fuel recovery. This compound's properties create great potential for biotechnological and biopharmaceutical applications.

Dr Bacon and his colleagues examined all currently available strains of B. mojavensis and found that all of the strains are endophytic, i.e. living within the plant, and all were active against F. verticillioides and other fungi in lab tests. The genus Bacillus is known for the production of more than 24 antibiotics, several of which are fungicidal with the potential to control plant diseases.




Title: Re: American Hog News USDA
Post by: mikey on June 27, 2009, 07:28:21 AM
CME: No Reductions in Breeding and Market Herds
US - According to CME's Daily Livestock Report for 25 June, many observers of what a journalist called “the hog mess” in a phone call this week may be wondering just why the much discussed pre-report expectations do not indicate more reductions in US swine breeding and market herds.



For reasons that we think you will see momentarily, we begin our discussion of the subject with the chart below. Recall that, according to Iowa State University’s Estimated Costs and Returns, in August 2007 the US pork industry had just enjoyed its longest string of profitable months ever. Iowa farrow-to-finish operations, on average, made money for 35 straight months from February 2004 through December 2006. After a loss of $0.60/head on sales in January 2007, these operations returned to profitability for another 8 months before losses began in October 2007. That’s 43 of 44 months profitable at an average rate of just under $20/head. Producers, to say the least, became quite well-healed with some having no operating debt and very little long term debt and the entire segment reaching an estimated 75-80 per cent equity. Bankers could find very few who needed to borrow money.


Since then, to use a baseball analogy, producers are batting 0.100 — 2 for 20. And as can be seen from the chart, the two “hits” they did get last summer were the equivalent of bloop singles Three other months might be classified as infield outs but the rest of the months since September 2007 have been strike-outs –perhaps not of producers doing but strikeouts nonetheless. (We apologize now to our international readers since we have no idea how to make a soccer/football/futbol analogy for this situation. Bu we may learn after the US’s stunning upset of world #1 Spain on Wednesday — aren’t you impressed that we even KNEW about that?) . But we digress.

The string of profitable months explains a great deal of US producers’ delay in reducing output — they had money and they thought they could weather the financial storm, especially after exports in 2008 caused the storm to lull, providing what in hindsight appears to be a very false sense of security. In addition, Lean Hogs futures spent much of the past 4 years constantly telling producers that prices were going to get better. And many producers took advantage of those higher futures prices to avoid much of the cash market losses depicted in the chart above. Another reason for the here-to-fore lack of action.

But the two events at right now demand action. The top graph (similar to one used in the June 10 edition of DLR) shows the dramatic jump in slaughter of US born pigs in the fall of 2007. It coincides perfectly with the introduction of circovirus vaccines in the summer of 2007. The 11.9 per cent figure represents the difference of the average for Q4-2007 to date versus Q4-2003 through Q3-2007. The bottom graph shows the almostsimultaneous increase in production costs, driven primarily by the increased use of corn for ethanol. The average breakeven cost in the ISU estimates for 2007 to date is $69.56/cwt. carcass weight, 30.7 per cent higher than the average of $53.22/cwt carcass for 1998 through 2006.


Producers’ response through March had been to reduce the breeding by only 3.6 per cent — nowhere near enough to offset the downward pressure of more pigs on prices and the need, whose long-term status is now clear, for higher prices to cover higher costs. It may not have started by 1 June but it is likely underway now.

Title: Re: American Hog News USDA
Post by: mikey on June 27, 2009, 07:32:08 AM
US Pork Outlook Report - June 2009
By USDA, Economic Research Service - This article is an extract from the June 2009 issue of Livestock, Dairy and Poultry Outlook Report.

 

Highlights
Higher expected feed prices and relatively weak hog prices in 2010 should result in 2010 pork production of 22.3 billion pounds, down 1.8 per cent. In the face of relatively weak hog prices and higher feed prices, producers are expected to hold down growth in hog weights.

Pork Production To Fall in 2010
Projected pork production for 2009 was increased from last month. Higher slaughter weights in the second quarter have boosted the production forecast in that quarter, which more than offsets the reduced second half forecast. Imports of hogs are forecast lower as higher feed prices and relatively weak US hog prices reduce producer returns and, coupled with a weaker US dollar, reduce incentives to import hogs. For 2009, pork production is forecast at 22.7 billion pounds, down 2.6 per cent from 2008.

Higher expected feed prices and relatively weak hog prices in 2010 should result in 2010 pork production of 22.3 billion pounds, down 1.8 per cent. In the face of relatively weak hog prices and higher feed prices, producers are expected to hold down growth in hog weights. Imports of hogs are forecast lower as weak returns limit producer incentives to feed out Canadian hogs. The Quarterly Hogs and Pigs report, to be released on 26 June, will provide a better indication of producer farrowing intentions through the end of 2009.

Weak pork demand is pressuring hog and pork prices. The National Base Lean hog price for the second quarter is forecast at $43 to $44 dollars per hundredweight (cwt; live equivalent), about 17 per cent below 2008. Prices will likely rise seasonally in the third quarter but as slaughter increases further in the fourth quarter, prices will drop back to the low $40s. As supplies tighten in line with slaughter reductions and little increase in carcass weights, hog prices are expected to increase. For 2010, the National Base Lean hog price (live equivalent) is forecast to average $48 to $51 per cwt.


Title: Re: American Hog News USDA
Post by: mikey on June 28, 2009, 01:51:17 AM
Weekly Review: Slaughter Close to a Year Ago
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.


The trade estimates for the 1 July Hogs and Pigs report are for the total herd to be down 1.9 per cent, breeding herd down 2.4 per cent and the market herd down 2 per cent. Slaughter along with weights of current market hogs suggest the market herd on 1 March was underestimated. Slaughter in recent weeks has been very close to a year earlier.

The live weights of barrows and gilts for Iowa-Minnesota for the four-week period ending June 20 averaged 5.2 pounds per head above a year earlier. The average carcass weight for barrows and gilts under Federal Inspection was five pounds per head above a year earlier for the last four week data available. These data indicate marketings are at least two and possibly three days less current than they were at this time last year.

Early weaned pigs and all feeder pigs were $2-3 per head lower last week. Pigs estimated at 50-54 percent lean, early weaned, ten-pound-basis were $26.47 per head, 40-pound-basis pigs estimated at 50-54 percent lean were $25.41 per head. The reason why early weaned pigs are higher than 40-pound pigs is that they had a higher percentage of the pigs with a formula price.

Pork product cutout per 100 pounds of carcass Thursday afternoon at $54.86 per cwt was down $0.72 per cwt from a week earlier. Loins at $71.76 per cwt were up $0.04 per cwt, Boston butts at $70.21 per cwt were up $2.07 per cwt, hams at $34.47 per cwt were down $3.19 per cwt and bellies at $62.81 per cwt were down $0.41 per cwt compared to seven days earlier.

Demand for live hogs is down this year to date because of smaller pork exports, but pork demand domestically is believed to be up a little from last year.

Live hog prices Friday morning were steady to $2.00 per cwt higher compared to a week earlier. Weighted average carcass negotiated prices Friday morning were $1.39 lower to $2.51 per cwt higher compared to seven days earlier. The top live prices for select markets were: Peoria $35.50 per cwt, Zumbrota, Minnesota, $37 per cwt and interior Missouri $40.00 per cwt.

The weighted average negotiated carcass prices by area were: western Cornbelt $55.04 per cwt, eastern Cornbelt $55.19 per cwt, Iowa-Minnesota $55.18 per cwt, and nation $55.16 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,032 thousand head, down 5 per cent from the same week in 2008.

The June 1 Hogs and Pigs report came in very close to trade expectations. The trade expected the total herd to be down 1.9 per cent, USDA estimate is two per cent; market herd trade estimate down two per cent, USDA down 1.9 per cent; the trade estimate for breeding herd was down 2.4 per cent, USDA down 2.7 per cent.

We believe the market inventory needs to be looked at with some concern. Slaughter in the second quarter was substantially larger then indicated by the March inventories.

Marketings during the third and fourth quarters are expected to be down three percent or a little more based on the 1 June inventories. These levels of slaughter would probably result in prices in the low to mid-40s for live 51-52 per cent lean hogs.

A more detailed summary will be on AgEBB by noon 29 June.




Title: Re: American Hog News USDA
Post by: mikey on June 30, 2009, 01:06:40 AM
H1N1 Has Hit Pig Farmers Hard
MASSACHUSETTS, US - A report of how one the business of two pig farmers in the state has suffered in the wake of the H1N1 flu crisis.



Pig farming: As a profession, it is uniquely unglamorous, according to MassLive. Yet, it has a long and honorable tradition, and on the Earle M. Parsons & Sons' farm in Hadley, the tradition is especially long. After all, a Parsons was among the first settlers of Northampton, and there's been a Parsons farming in the area for 12 generations.

The farm also had a profitable tradition until late April, when a flu virus emerged in Mexico that was quickly dubbed the swine flu. Across the world, as the strain spread, the situation rapidly became a pig or hog farmer's worst nightmare.

"Due to the overreaction, the pork market took quite a dive for several days after it hit the press. And, it hasn't come back yet," said Matthew J. Parsons, a partner with his cousin Earle in the farm, which sells about 2,500 pigs a year. A hog is generally thought of as a pig of more than 120 pounds, and the Parsons family markets most of their pigs before they reach 100 pounds.

"The price had been about 67 cents a pound, but it went down into the 30s. Wholesalers were nervous that consumers would not purchase pork, so they did not purchase as much nationwide," he said.

Pork prices have since recovered some, but they are still 10 to 15 percent below the level prior to the flu outbreak. Prices are also down because of the poor economy, which has reduced demand for pork products. Initial fears that the flu would prove to be the deadly global pandemic that had been predicted for years were not borne out. In fact, the swine flu has been milder than many other flu strains that regularly appear during the flu season, and it has produced fewer deaths.

In a typical flu season in the United States, 36,000 people die from influenza or its complications, according to the US Centers for Disease Control. As of 25 June, the swine flu, formally named H1N1, had sickened nearly 28,000 people in the United States, including nearly 1,300 cases in Massachusetts, and it had been linked to 127 deaths nationwide.

Michael A. Cahill, the director of the Division of Animal Health for the state Department of Agricultural Resources, told MassLive it was unfortunate that the virus took on the name swine flu.

"It's not appropriate," Mr Cahill said. "I don't know who named it, but shortly after that, it was renamed H1N1. There are pieces of the virus ... that resemble other kinds of flu, and there is also a human influence in the virus. But there is zero connection to pig farming whatsoever, even in Mexico."

"For consumers, there is really no risk," Mr Cahill added. "Just like any meat, pork needs to be handled appropriately and cooked appropriately. But, the flu virus couldn't be transmitted that way."

Pig farming is certainly not big business in the Pioneer Valley, which, with its generally rich soil, is better known for its crops, from tobacco and sweet corn to squash and asparagus. But livestock farming has a place here, especially on land that is not great for planting, such as on rocky hillsides or in locations where the soil drains poorly.

Throughout the US in 2008, there were 66.8 million hogs and pigs raised, according to the US Department of Agriculture. In Massachusetts, there were about 10,000 head raised.

Wayne E. Walton and his wife Monica operate the Carl Popielarz Pig Farm in South Hadley. They are the fourth generation in the family to do so. They raise about 250 pigs a year, typically selling them to a slaughterhouse in upstate New York. Their pigs take about two months to reach marketable weight, going from around a pound at birth to 40 pounds when they're sold.

"I've been doing this for the past six years. I took over my grandfather's pig farm, which has been in the family for 86 years," Mr Walton told MassLive. "It's constant work, but I have a lot of help."

Mr Walton may be the definition of a workaholic. He's at the farm at 05:30 in the morning, doing chores. Then he goes to his full-time job with the South Hadley Water Department. In addition, he has an excavation business, which he said is the major source of his income.

"The only thing I know how to do is work," he said. "The work on the farm is cleaning and feeding for the most part. The feeding is usually about a two-hour process. Then you have to clean the pens. Then you may have to do things like repair fences. But most of the time, I find it pretty enjoyable."

Pigs have a reputation for being ornery [cantankerous], but from his experience it's undeserved, Mr Walton said. "They're very good-natured."

However, their reputation for questionable table manners is deserved. Indeed, he said, they eat like pigs. "Absolutely. Just like a pig, they chew with their mouths open."

Title: Re: American Hog News USDA
Post by: mikey on July 01, 2009, 12:20:20 AM
New Theory: Flu Virus May Have Come from Asia
US - Officials now believe that the influenza A/H1N1 virus may have emerged in pigs in Asia and travelled to North America in a person.



Contrary to the popular assumption that the new swine flu pandemic arose on factory farms in Mexico, federal agriculture officials now believe that it most likely emerged in pigs in Asia but then travelled to North America in a human, according to New York Times.

But they emphasised that there was no way to prove their theory and only sketchy data underpinning it.

There is no evidence that this new virus, which combines Eurasian and North American genes, has ever circulated in North American pigs, while there is tantalising evidence that a closely related 'sister virus' has circulated in Asia.

American breeding pigs, possibly carrying North American swine flu, are frequently exported to Asia, where the flu could have combined with Asian strains. But because of disease quarantines that make it hard to import Asian pigs, experts said, it is unlikely that a pig brought the new strain back West.

"The most likely scenario is that it came over in the mammalian species that moves most freely around the world," said Dr Amy L. Vincent, a swine flu specialist at the Agriculture Department's laboratory in Ames, Iowa, referring, of course, to people.

The first person to carry the flu to North America from Asia, assuming that is what happened, has never been found and never will be, because people stop carrying the virus when they get better.

Moreover, the officials said, the chances of proving their theory are diminishing as the virus infects more people globally. It has now reached more than 90 countries, according to the World Health Organization. Since some of those people will inevitably spread it to pigs, its history will become impossible to trace.

"To tell whether a pig is newly infected by a human or had the virus before the human epidemic began really can't be done," Dr Kelly M. Lager, another Agriculture Department swine disease expert, told New York Times.

The highly unusual virus – which includes genetic bits of North American human, avian and swine flus and Eurasian swine flu – has not been detected in any pigs except those in a single herd in Canada that was found infected in late April.

A carpenter who worked on the farm after visiting Mexico had been thought to have infected the herd. But in mid-June, Canadian health agencies said he was not to blame. The whole herd was culled, and the virus has not been found elsewhere in Canada, as it would have been if it were endemic, since American and Canadian laboratories test thousands of flu samples to help the pork industry develop vaccines.

But a sample taken from a pig in Hong Kong in 2004 was recently found to have a virus nearly matching the new flu. That flu, which had seven of the new flu's eight genome sequences, was noted in an article in Nature magazine on 11 June, which called it a 'sister virus'.

Scientists tracking the virus's lineage have complained that there is far too little global surveillance of flu in swine. Public databases have 10 times as many human and avian flu sequences as they do porcine ones, said Dr Michael W. Shaw, a scientist in the flu division of the Centers for Disease Control and Prevention, and there are far fewer pig flu sequences from Asia than from North America and Europe, and virtually none from South America or Africa.

"Something could have been going on there for a long time and we wouldn't know," Dr Shaw told New York Times.

But national veterinary officials said they knew of no close relatives of the new virus in the large private North American databases, either. That makes it most likely, they said, that it has been circulating in Asia.

The new virus was first isolated in late April by American and Canadian laboratories from samples taken from people with flu in Mexico, Southern California and Texas. Soon the earliest known human case was traced to a five-year-old boy in La Gloria, Mexico, a rural town in Veracruz.

Because that area is home to hog-fattening operations with thousands of pigs, opponents of factory farming were quick to blame the industry.

In May, the Mexican government said it had tested pigs on the Veracruz farms and found them free of the virus. Smithfield Foods, an owner of the farms, and the National Pork Producers Council, the industry's lobbying arm, were quick to publicise that announcement.

But outside veterinary experts still disagree on whether those tests proved anything.

According to Smithfield, Mexican government veterinarians tested snout swabs taken on 30 April and blood samples stored since January.

But since the human outbreak in Veracruz is believed to have started in February, many veterinary experts said testing pig snouts for live virus in April proved nothing. Any pig sick in February would have long since recovered and, since hogs are usually slaughtered at six months old, many of those alive in early February would be bacon by April.

Dr Greg Stevenson, an expert in swine diagnostics at Iowa State University told New York Times that since flu could persist in a large herd for months, "if it had been there in February, it would probably still be there at the end of April".

The blood tests – in which scientists look for antibodies formed in response to a previous infection – present a different set of problems. Antibodies are much harder to tell apart from one another than viruses are.

A pig that had the new H1N1 flu would come up positive on an antibody test. But so would a pig that had the regular H1N1 swine flu that has circulated since 1930, or even a pig that had been vaccinated against the earlier H1N1 flu – and all the Smithfield pigs routinely get flu shots.

The company said vaccinated pigs could be distinguished from previously ill pigs because illness produced more antibodies.

But outside experts were sceptical. An antibody test specific enough to identify only the new flu strain "would take months to develop, at a minimum, and would require considerable R"D expertise and technology," said Dr Christopher W. Olsen, a swine flu expert at the University of Wisconsin's veterinary medical school.

The governor of Veracruz has asked the National Autonomous University of Mexico to do its own investigation of industrial hog farming in his state; the work is expected to take months. Carlos Arias, the biochemist leading the team, told New York Times he hoped to test all the swab and tissue samples stored by the farms and the national veterinary laboratory.


 

Title: Re: American Hog News USDA
Post by: mikey on July 01, 2009, 12:22:33 AM
Swine Industry Continues to Retract
US - The US swine industry continued on its course of retraction in the first half of this year, writes Shane Ellis.

A year ago, it appeared that things could be turning around for the swine industry. Hog prices were up, domestic demand was strong and exports were growing at an unprecedented pace. There was optimism that despite extremely expensive feed producers would once again regain see some profitability. But after hog prices tumbles from record highs last fall there has been a very apparent need for more reduction in pork supply to even up with weaker demand. From the June Hog and Pig report it is apparent that the retraction continues and hog supplies are starting to decline. The US hog industry has reduced June sow inventories to their second lowest level on record, the lowest being in 2005. While year over year sow numbers have been declining for the past 15 months, market hog numbers have only declined in the past nine.

The US swine breeding herd now numbers 5.97 million head, down 2.7 per cent from last year. Market hog numbers are down 1.9 per cent to 60.1 million head. Total hog numbers are down two per cent from a year ago at just over 66 million head. Farrowing intentions for the next quarter are down more than three per cent, showing producer plans of continued thinning the sow inventories. Forth quarter farrowing are also expected to be down more than two per cent. While the hogs from the first quarter pig crop are currently in the slaughter supply, fall hog slaughter will be similar to the levels of a year ago. Pig supplies have not declined as rapidly as the number of sows in part due to ever improving litter sizes which are 2.5 per cent larger than a year ago. This improvement in efficiency decreases costs per pig and is a tribute to improved animal management, it has offset much of the needed reduction in production capacity. Table 1 summarises the recent swine report for national and Iowa inventories.


In Iowa, the reduction in sow numbers has been much more pronounced, with a 5.6 per cent reduction in sow numbers from a year ago. There are now slightly more than one million breeding swine in the state. Iowa farrowing intentions are down nearly six per cent for the next two quarters. The total number of market hogs in the state has increased 1.4 per cent from a year ago as the state continues to import feeder pigs. However the number of light weight pigs (<60lbs.) is down nearly one per cent. This is an early and albeit weak signal that the number of market hogs being fed may be starting to decline. With the production cost advantage that the state has, Iowa will be one of the last states to see a reduction in the number of hogs finished.

The hog market has been very slowly improving, slowly stepping producers up from the record large losses seen at the beginning of the year. Still losses are in the double digits and the badly needed improvement in hog prices does not appear to be in the near future. Usually during June there is a strong bull market for hogs, but any upturn in prices was much weaker than hoped or anticipated a few months ago. The appearance of the H1N1 virus with its misnomer 'swine flu', weaker than expected exports and a continuing global recession have dampened not only the upturn in prices but also hopes of any improvements for the rest of the year. Eight months ago, there were opportunities to hedge a hog-to-corn margin that would have put a hog producer in the black, but such opportunities do not appear to be available in the near future.

Table 2 contains the ISU and futures market forecast for live hog prices in the next four quarters, along with a forecast for domestic pork supplies. While the number of market hogs available is declining, remember that domestic supply is impacted by the amount of product being exported. Pork exports are down more than 11 per cent this year compared to last. When previously 20 per cent of last year's supply was exported and now more than a tenth of that will remain in the domestic supply, a two per cent reduction in market hogs is quickly mitigated. Hog slaughter weights are also up (an average 3 to 4 lbs) from a year ago. This is due partially due to the more temperate weather of the last spring and producers holding their hogs just a little bit longer in hopes that the expected summer price rally would come.


Additional market information will be available in the July Iowa Farm Outlook newsletter to be released July 1. In addition a new hog margin decision aid will be presented.

Title: Re: American Hog News USDA
Post by: mikey on July 02, 2009, 07:33:47 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were mixed on Monday. JULY'09LH futures closed at $58.025/cwt; up $1.325/cwt but $2.425/cwt lower than this time last week. AUG'09LH futures were up $0.925/cwt at $58.625/cwt but $2.225/cwt lower than last report. The DE'09LH contract fell $0.525/cwt to $55.325/cwt. Bull spreads in the July/December and the October/February were the plays for the day. In addition, several floor sources said today’s gains were the result of short covering in contracts that had taken a beating recently on slow pork sales and weak cash prices. USDA's Hogs and Pigs report last Friday was viewed as bearish. Deferreds are pressured by the slower-than-expected pace of herd liquidation. USDA put the June 1, US swine herd at 98 per cent of a year ago or 66.079 million head. The breeding herd was reduced only 3 per cent to 5.967 mi head but higher pigs-per-litter numbers at 102 per cent of a year ago offset previous expectations for lower hogs-to-market. USDA on Friday put the average pork cash price at $55.28/cwt, up $0.42/cwt. Packer demand is expected to slack off due to the Friday holiday and ample hog supplies. USDA on Monday placed the average pork cutout at $55.77/cwt, up $0.49/cwt. According to HedgersEdge.com, the average pork plant margin declined another $2.10/head from this time last week to a negative $7.75/head. This was based on the average buy of $41.90/cwt vs. the average breakeven price of $39.03/cwt. The latest CME Lean Hog Index was placed at $59.03/lb, up $0.09/lb and $1.00/lb higher than a week ago. It would be a good idea to sell hogs when ready.

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) gained on short covering and buy stops Monday. The AUG'09LC contract closed up $2.150/cwt at $84.625/cwt; $1.775/cwt higher than this time last week. DEC'09LC futures closed at $90.250/cwt; up $1.575/cwt and $2.425/cwt higher than last report. Action was brisk with approximately 400 limit-up bids unfilled in the August contract at the close. Early buying sparked the advance and fueled fast action at times, according to floor sources. Beef demand looks better with slaughter still up placed at 130,000 head last week vs. 127,000 this time last year. Cash cattle prices were level with last week’s trade and several traders said they expect them to strengthen going against the seasonal slump in beef prices. However, tight supplies on negative producer margins have decreased stocks. Packers may pick up the buying pace this week to keep processing lines full but the shortened processing week may keep the lid on. USDA's 5-area price average was placed at $81.63/cwt. Early Monday USDA put the Choice Boxed Beef cutout at $139.38/cwt, up $0.45/cwt but $1.71/cwt lower than a week ago. A beef recall of 421,000 lbs did not seem to affect trading. According to HedgersEdge.com average packer margins were raised $4.85/head to a positive $13.55/head based on the average buy of $81.51/cwt vs. the average breakeven of $82.57/cwt. It is still a good idea to hold cattle to heavier weights if you can. If you need corn now is good time to buy near-term needs.

FEEDER CATTLE at the CME rose sharply on Monday. AUG'09FC futures finished at $101.725/cwt; up $2.750/cwt and $2.800/cwt higher than last report. The OCT'09FC contract closed at $101.325/cwt; up $2.750/cwt and $2.275/cwt higher than this time last week. Live cattle and lower feed costs on top of short covering and buy-stops were very supportive. October/January bull spreads were noted. The latest CME Feeder Cattle Index was placed at $97.67/cwt, up $0.44/cwt and $1.30/cwt higher than a week ago. It is a very good idea to move feeders when ready.

CORN futures on the Chicago Board of Trade (CBOT) were down on Monday. The JULY'09 contract closed at $3.770/bu; off 7.2¢/bu and 8.25¢/bu lower than last Monday. DEC'09 corn futures finished at $3.972/bu; down 7.0¢/bu and 8.2¢/bu under last report. Good growing weather, lower-than-expected exports, and large speculators backing off bullish positions pressured prices. USDA put corn-inspected-for-export at 27.667 mi bu vs. expectations between 30.0-35.0 mi bu. This was 14.935 mi bu off last week’s pace. Traders were adjusting positions prior to Tuesday's USDA June-plantings and quarterly stocks report. Average estimates for corn seedings were placed at 84.158 mi acres vs. USDA's March report at 84.986 mi acres. Cash corn bids were weaker amid slow farmer selling. USDA rated the US corn crop at 72 per cent good-to-excellent condition. The market expected a 68 per cent-70 per cent rating as several floor sources said this time of year crop condition starts to drop. Funds sold about 4,000 contracts as large speculators decreased net bull positions in CBOT corn. Hopefully up to 60-70 per cent of the '09 crop has been priced. It would be good to consider selling another 10 per cent bringing the ’09 crop to 70-80 per cent sold. Corn continues to submit to seasonal declines.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were down on Monday with the exception of the July contract. The JULY’09 contract closed up 14.0¢/bu at $12.15/bu and 63.75¢/bu over last report. The NOV'09 contract closed at $9.834/bu; off 7.5¢/bu but 2.5¢/bu higher than Monday. Bull spreads in the July/August on tight supplies were supportive while good crop weather, expectations that USDA will lift soybean acres, and so-so exports held prices back. Trade expectations for soy-planted acres average 78.305 mi acres, up 2.281 million acres from the March estimate. USDA put soybeans-inspected-for-export at 12.934 mi bu versus trade expectations between 10.0-15.0 mi bu. Cash soybeans were steady-to-firm amid slow grower sales. Funds sold 2,000 lots while large speculators sold right at 4,000 contracts. If you didn't get the '09 crop priced to 70 per cent, now is a good time. If you have beans left in the bin, it would be a good to consider selling them.

WHEAT futures in Chicago (CBOT) were down again on Monday. JULY'09 wheat futures finished off 5.75¢/bu at $5.284/bu; 17.75¢/bu lower than last report. The SEPT'09 wheat contract closed at $5.576/bu; off 5.25¢/bu and 17.5¢/bu lower than this time last Monday. Heavy global stocks, sluggish exports, and harvest activity weighed on prices. USDA put wheat-inspected-for-export at 10.126 mi bu vs. estimates between 13.0-17.0 mi bu. Harvest progress was placed at 36 per cent vs. the five-year average of 46 per cent and 45 per cent of the U.S. wheat crop was rated good-to-excellent. Funds and large speculators increased bearish positions. It would be a good idea to finish pricing the '09 crop at this time.

Title: Re: American Hog News USDA
Post by: mikey on July 02, 2009, 07:36:14 AM
Livestock Transport Standards Being Developed
US - American Humane Certified is to develop humane livestock transport standards.



The US's leading animal welfare monitoring and humane-labelling programme for food products – American Humane® Certified – will convene a panel of experts in animal handling, animal science, veterinary medicine and transportation equipment manufacturing to develop improved welfare standards for design, technology and monitoring of livestock transportation. American livestock transportation equipment that meets the standards will be recognised with the American Humane Gold Award.

American Humane Certified will begin monitoring the research and testing of a new humanely designed trailer, recently introduced at the World Pork Expo in Des Moines, Iowa. Advanced Livestock Transport (ALT), a new USA livestock trailer company, has imported its first trailer into the United States from trailer manufacturer Castañe of Spain, for introduction to the American pork industry, as well as other species that are transported by truck. ALT is the first transport company to sell equipment in North America that complies with European Union (EU) regulations on animal welfare.

The research on the ALT trailer will be conducted by Texas Tech University, under the direction of Professor John McGlone. Among data to be tracked are the rates of dead on arrival, and non-ambulatory and non-injured pigs compared to other transportation equipment designs. ALT has engineered temperature controls designed to reduce the rate of dead and downed pigs. The trailer also has increased floor space to be able to provide science-based space allowances and an elevator that eliminates the need for ramps. The trailer includes on-board GPS tracking, and temperature and video monitoring of animals during transport. The early research is expected to be completed by late 2009.

The certification of transportation equipment is a reintroduction of American Humane's historic Gold Award for humanely designed transportation equipment. It was first awarded in 1887 to the A.C. Mather Co. for its improved cattle rail car. Over the decades, American Humane has worked closely with the livestock and transportation industries to develop humane methods and equipment that improve animal welfare during transport.

"American Humane has been involved in creating more humane conditions for animals in transport since our founding in 1877," said Tim Amlaw, director of American Humane Certified. "It is fitting that we revisit our legacy and once again recognize humane practices in the transportation of livestock."



Title: Re: American Hog News USDA
Post by: mikey on July 03, 2009, 09:15:00 AM
US Swine Economics Report
US - USDA's latest survey of the US swine herd said the market herd was down 1.9 per cent on 1 June and the breeding herd was down 2.7 per cent compared to 12 months earlier, writes Ron Plain in his Swine Economics Report.

 
Ron Plain
The total inventory of hogs was down 2.0 per cent. The breeding inventory was smaller and the market hog inventory was a bit larger than the average of trade forecasts.

USDA said March-May farrowings were down 2.7 per cent and forecast June-August farrowings to be down 3.3 per cent and September-November farrowings to be down 2.2 per cent. Pre-release trade estimates put March-May farrowings at down 2.7 per cent, forecast June-August to be down 3.3 per cent and September-November down 2.5 per cent.

Pigs per litter in the March-May quarter averaged a record 9.61 head, up 2.5 per cent compared to a year earlier, and the 23rd consecutive quarter above year-ago levels. The last four quarters have averaged 2.45 per cent more pigs per litter, offsetting much of the decline in farrowings.

Perhaps the most interesting numbers in the June report are the young pig inventories. USDA says the June inventory of pigs weighing less than 60 pounds was 2.4 per cent below year-earlier levels, but the March-May pig crop was only down 0.3 per cent. Imports of feeder pigs from Canada were down 25 per cent during March-May. Thus, Canada accounted for 90 per cent of the drop in our inventory of light weight pigs.

USDA said the inventory of market hogs weighing 60-179 pounds was down 2.2 per cent on 1 June. If correct, daily hog slaughter during the third quarter should be down 2.2 per cent plus the drop in slaughter hogs from Canada. Look for hog slaughter during July-September to average at least 3 per cent lower than last year with carcass hog prices averaging in the mid to upper $50s.

USDA said the inventory of market hogs weighing less than 60 pounds was down 2.4 per cent on 1 June, implying hog slaughter during the fourth quarter of 2009 will be down roughly 3 per cent given the sharp downward trend in hog imports from Canada. I expect fourth quarter carcass hog prices to average in the low to mid $50s.

Hog slaughter will be down 3-4 per cent this year and hopefully even more in 2010. Unfortunately, there is no end in sight to the string of financial losses plaguing producers.


Title: Re: American Hog News USDA
Post by: mikey on July 03, 2009, 09:17:02 AM
Small US Slaughterhouses Continue to Decline
US - A new report issued today by Food & Water Watch examines how the slow demise of local small slaughter and processing operations in the United States is preventing farmers and ranchers from fully satisfying rising consumer demand for meat from sustainably raised livestock.



Entitled Where’s the Local Beef?, the report identifies the reasons for the disappearance of small plants, presents examples of the next generation of processors and offers policy solutions to rebuild the small slaughterhouse sector of the meat industry.

“The decline of small slaughter and processing operations in the U.S. is part of a general trend in agriculture toward the industrial model of food production,” said Wenonah Hauter, executive director of Food & Water Watch. “A variety of public policies, including USDA food safety regulations, economic development programs and rules governing livestock markets must change in order to level the playing field for small meat plants.”


Key findings of the report include
Small slaughter and processing operations have been closing across the country because of industry consolidation, low profit margins, the complexities of federal regulation and difficulty disposing of slaughter byproduct.
Small slaughter operators are expected to adhere to a regulatory framework that is biased toward large, corporate facilities that can afford the expensive techniques and equipment now incorporated into government inspection requirements.
Changes to USDA’s meat inspection program to help rebuild local meat processing infrastructure that include providing resources for small plants such as generic food safety plans, performing microbiological testing based on the volume of production and conducting investigations to find the source of contamination when it is first detected at small plants that do not slaughter animals.
“Despite the odds stacked against them, some small slaughterhouses and processors are finding ways to survive,” said Hauter. “It’s time for USDA and other government agencies to make sure that their policies work for more than just the largest players in the meat industry.”





Title: Re: American Hog News USDA
Post by: mikey on July 07, 2009, 12:26:32 PM
Market Preview: No Relief in Pig Crop Report
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Last Friday's Quarterly Hogs and Pigs Report did little to allay fears that the North American pork industry is in for another year of economic difficulty. As has been the story in most recent reports, any reductions of productive capacity being made by U.S. producers are being almost simultaneously offset by rising productivity.

The key numbers from the USDA report appear in Table 1. Note that virtually all of the numbers are very close to analysts' pre-report estimates, published last week per a survey by DowJones. Anything within 1 per cent is usually deemed "as expected" and likely to be neutral for Lean Hogs futures. Early trading on Monday indicates that the market was a bit surprised by the size of the fall pig crop (down only 0.1 per cent) and somewhat disappointed that the breeding herd was not lower – even though I don't know how current data could have suggested a significantly lower breeding herd.


The only numbers that were a bit of a surprise relative to expectations were the 180-lb.-plus inventory figure at 99.9 per cent of last year and the March-May average litter size of 9.61 pigs, up 2.5 per cent from last year.

I was not surprised at all by the 180-plus number since it agrees quite well with June slaughter after adjusting for fewer Canadian market hogs. I thought the average pre-report estimate was low all along as it did not agree with June slaughter.

Litter Size Continues to Climb
The magnitude of the growth in litter size has been truly amazing over the past two years. Figure 1 shows average litter size on a quarterly basis from 1984 to present. As can be seen, the past eight quarters have seen the fastest growth on record, rivaled only by litter size growth in 1994 through 1997. The difference in these two time periods, of course, is that the mid-90s growth was driven by massive structural change in the US industry. More efficient, specialised and generally larger sow units were replacing geographically dispersed farrowing operations that were, in many cases, parts of diversified farming operations. Sows from specialised maternal lines under fulltime, professional management simply performed better than sows from traditional rotational breeding systems managed by producers who had to divide their time, expertise and talents among several, often-competing, enterprises.


From what I hear from some of the industry's leading consulting veterinarians, it is no accident that the recent increase in litter size coincides with the advent of circovirus vaccines. Even with the periodic porcine reproductive and respiratory syndrome (PRRS) outbreak or a bout with true swine influenza, hog herds are simply healthier than they have ever been – and it shows. In addition, the ton or so of feed that a sow consumes each year now costs 20 to 30 per cent more, providing a stronger incentive to save more pigs. Finally, the move to later weaning ages led to larger subsequent litters. Add it up and the increases in litter size are offsetting much of the reduction in the breeding herd – and pig survival rates are more than offsetting the remainder of breeding herd reduction.

Price Forecasts
Tables 2 and 3 show forecasts for supplies and price based on Friday's report – and the picture is not pretty. Modest reductions in slaughter are coming, but much of it is driven by fewer imported market hogs and feeder/weaner pigs from Canada. At present feed costs (and those implied by corn and soybean meal futures), none of the quarterly prices in Table 3 are profitable. Q2-2010 Lean Hogs futures are very close at present but this report will, perhaps, put more pressure on summer 2010 futures.

Some of the forecast numbers have likely changed since this survey was done in early June. The first 10 days of June saw a huge sell-off in Lean Hogs futures and the continuing struggles of pork cutout values and cash hog prices finally, I think, got some producers thinking seriously about cutting sow numbers or exiting the business. Cull sow prices have fallen by 30 to 40 per cent as sow offerings have increased.

Sow processors are taking more sows but the pace of the reduction will be dictated by how well sow products like breakfast sausage, brats, etc. move to consumers. Prices of these products will decline some but remember that many of these are branded, value-added products whose prices carry significant quality connotations. One doesn't destroy many years of value-building by using fire sale prices, so these companies will be careful about how to use price to sell more product regardless of how badly some of us may want to ship some sows.


Title: Re: American Hog News USDA
Post by: mikey on July 08, 2009, 08:06:56 AM
Weekly Outlook: Luck May be Changing for Producers
US - The breeding herd is not dropping fast enough to bring pork production back to profitability, writes Chris Hurt, Extension Economist at Purdue University.

 Chris Hurt
Extension Economist
Purdue University
 

However, falling corn prices and prospects for lower soybean meal prices this fall are allowing producers to begin to feel like there may be some rays of hope.

The breeding herd on 1 June was reported by USDA to be down about three per cent. Producers’ farrowing intentions are down three per cent this summer and down two per cent this fall. While smaller farrowings would seem to signal similar reductions in pork supply, that will not be the case because of more pigs per litter and somewhat higher marketing weights as corn prices are expected to be lower.

As producers reduce sow numbers, they tend to cull the least productive sows. This means the highest productive sows remain and the number of pigs per litter increases more rapidly. As an example, in the first-half of 2009, the number of pigs per litter increased by 2.5 per cent. This compares with an average of just 0.8 per cent annual rate over the past decade. The critical point is that pork supplies will not change much even with the smaller breeding herd. Weights will likely be higher in the coming 12 months as feed prices drop, reflecting the larger anticipated size of corn and soybean production. Pork production is expected to drop only about one per cent over the coming 12 months. This small supply reduction will not boost prices back to profitability in 2009.

The loss of demand due to H1N1 has likely been the single most significant factor in causing the failure of a spring pork price rally. It is most likely the loss of exports rather than loss of domestic demand that has caused the price weakness. The May trade data will be released on 10 July and will give the first picture of how much damage there was to export volumes. Unfortunately, about five per cent of the US pork production may have been diverted from the foreign market to domestic consumers.

H1N1 may have longer lasting impacts. Flu will be in the news again this fall as medical experts around the world caution against the second wave of H1N1. It was the second wave of the 1918 “Spanish Flu” in the fall of 1918 that had the highest human fatality rates. Even though H1N1 in humans is not related to pork consumption, simply having flu in the news likely means there will be some continued loss of pork export demand.

While producers couldn’t get a break in the past two months, their luck may have shifted. Summer weather is more favorable and yield prospects are rebounding. On 24 April when news of H1N1 broke, July corn futures were $3.86. They reached a high of $4.50 in early June and now have dropped closer to $3.40 per bushel. July soybean meal was $318 per ton on April 24th reached $433, and has now moderated a bit toward $400 at this writing.

Estimated cost of production has come down with the recent sharp drop, especially in corn prices. Estimated production costs are now near $48 per live hundredweight for this summer and drop closer to $46 this fall. Given current feed price expectations based on futures markets, estimated costs in 2010 would average about $46 to $47 per live hundredweight.

What about hog prices? Prices are expected to average in the higher $40s this summer and mid $40s in the final quarter of 2009. Prices should once again trade in the mid-to-higher $40’s this winter, move into the lower $50s for the spring, and low-to-mid $50s in the summer of 2010, especially if the impacts of H1N1 are negligible by that time.

These prices and costs would mean the producers would continue to operate with losses of about $5 to $7 per head for the second-half of 2009. This is at least an improvement over an estimated loss of $20 per head in the first-half of 2009. Profitability could return as early as late-winter 2010.

Corn prices are lower right now than many had anticipated. Ownership of corn for the coming year’s feeding needs should be considered. Soybean meal prices should also collapse as we near the more abundant new crop supplies, and as markets this winter look to the restoration of the Southern hemisphere crop. Waiting to cover meal needs seems prudent at this point.

Maybe the luck has shifted for pork prices as well. Lean hog futures have been so depressed a sizable rally would not be out of the question. If producers feel that luck is finally shifting their way, then waiting for further recovery in pork prices seems prudent as well.



Title: Re: American Hog News USDA
Post by: mikey on July 09, 2009, 11:49:31 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.


LEAN HOGS on the CME were mostly up on Monday with the exception of the May 2010 contract. JULY’09LH futures closed at $60.65/cwt; up $0.675/cwt and $2.625/cwt higher than this time last week. AUG’09LH futures were up $0.900/cwt at $62.050/cwt and $3.425/cwt higher than last report. The DEC’09LH contract gained $0.750/cwt to $59.000/cwt and $3.675/cwt over last Monday’s report. Prices were supported by strong chart signals and the lifting of the Russian pork import ban. Funds bought on lower CBOT corn futures. The weak US economy and higher crude prices were somewhat bearish. USDA put the average pork cutout at $55.00/cwt, up $1.23/cwt but $0.28/cwt lower than this time last week. Several floor sources noted position adjustment ahead of the official Goldman Roll that will begin on Wednesday. This is a shifting of nearby month’s positions into the next month in a relation to the Standard & Poor’s Goldman Sachs Commodity Index. The latest CME Lean Hog Index was placed at $58.75/lb vs. $59.03/lb this time last week. Packer demand is expected to be unaffected due to the fire at Smithfield Food’s plant fire in Wisconsin. A spokesperson for SFDS said that other plants would take up the processing slack. According to HedgersEdge.com, the average pork plant margin declined $2.65/head from this time last week to a negative $10.40/head. This was based on the average buy of $42.74/cwt vs. the average breakeven price of $38.83/cwt. It would be a good idea to put a few extra pounds on those finishing hogs before letting them go.

CORN futures on the Chicago Board of Trade (CBOT) were down again in on Monday after a weak open. The JULY’09 contract closed at $3.432/bu; off 2.4¢/bu and 33.75+¢/bu lower than last Monday. DEC’09 corn futures finished at $3.442/bu; down 13.25¢/bu and 53.0¢/bu under last report. Good crop weather, bull spreading, a strengthening US dollar causing exports to slow, and lower crude oil prices pressured the corn market. Support was found in tight supplies on slow farmer selling. Israel and South Korea were among export buyers as USDA reported corn-inspected-for-export at 31.1 mi bu vs. expectations between 30.0-35.0 mi bu. USDA placed the US corn crop at 71 per cent good-to-excellent condition vs. 62 per cent this time last year. Funds sold about 12,000 contracts as large speculators continue to increase net bear positions. It looks like the December ’09 corn chart may have posted an exhaustion gap while technically oversold with a Relative Strength Index (RSI) of 24.18. An RSI at or below 30 is considered oversold while an RSI at or above 70 is considered overbought. These prices may be too low for large specs and funds to resist. Hopefully the ’09 crop is 70-80 per cent sold.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were down on Monday. The JULY’09 contract closed off 43.0¢/bu at $12.000/bu and 15.0¢/bu under last report. The NOV’09 contract closed at $9.630/bu; off 43.0¢/bu and 20.5¢/bu lower than Monday a-week-ago. The same negative factors affecting corn worked on soybeans: ideal crop weather; a firm US dollar; and a sharp drop in crude oil prices. Exports were supportive as USDA put soybeans-inspected-for-export at 14.1 mi bu vs. expectations between 10.0-13.0 mi bu. Basis remained firm amid quiet farmer sales. USDA placed soybeans in good-to-excellent condition at 66 per cent vs. 68 per cent last week and 58 per cent this time last year. Funds sold about 3,000 lots in positions squaring. Hopefully 70 per cent of the ’09 crop has been priced.

WHEAT futures in Chicago (CBOT) were off on Monday. JULY’09 wheat futures finished off 9.75¢/bu at $4.904/bu; 38.0¢/bu lower than last report. The SEPT’09 wheat contract closed at $5.192/bu; off 9.75¢/bu and 38.5¢/bu lower than this time last Monday. Nearby wheat futures fell to four-month lows. Good harvest numbers on rising global supply are proving bearish for prices. In addition, bearish outside markets and a stronger US dollar weighed on price. Exports were neutral with USDA placing wheat-inspected-for-export at 12.1 mi bu vs. expectations between 11.00-14.0 mi bu. Saudi Arabia bought 440,000 tonnes (16.17 mi bu). Late Monday USDA placed the US wheat crop at 72 per cent good-to-excellent condition vs. 76 per cent last week and 69 per cent this time last year. Sinking US prices pressured prices in Europe while heat stress on the crop in northern France was supportive. Reports from early wheat harvest in the center-west of France indicated acceptable yields and very good milling quality wheat. Funds sold 3,000 contracts. As suggested last week, it would be a good idea to finish pricing the ’09 crop at this time. It will not pay to store wheat this year.


 


Title: Re: American Hog News USDA
Post by: mikey on July 14, 2009, 08:04:20 AM
CME: May Pork Exports Lower Than a Year Ago
US - CME's Daily Livestock Report for 10 July reports that there were a number of USDA reports released on Friday and it will take more than a couple of paragraphs to digest all the information available.



Given all the speculation about the state of US meat exports following the flu outbreak, we will focus on the May export data and then cover some of the highlights of the grain and meat supply and demand data on Monday.

US meat exports contracted sharply in May, partly due to the outbreak of H1N1 flu virus but also due to lingering effects of the global recession and a relatively stronger US currency compared to year ago levels. Also, last year’s export volume was quite high, which tends to skew the year over year comparisons. The data below is quoted on a shipped weight basis and the comparisons will vary slightly from the carcass weight export data that will be released on Monday by ERS.

The data showed that total US pork exports in May were 104,905 MT, 34.02 per cent lower than a year ago. Shipments to all major markets declined compared to a year ago but declines to some were truly staggering. Pork exports to China and Hong Kong were down 40 per cent from the previous month and were 82.8 per cent lower than the previous year. Exports to these markets were expected to contract following the Olympics induced bubble of a year ago but the most recent decline was clearly driven by the flu outbreak and resulting bans. Total US pork exports to Mexico in May were 16 per cent lower than the previous month and now 5.7 per cent lower than a year ago. Also, shipments to Japan, the top market for US pork, were down 13.5 per cent from the previous month and 15.7 per cent lower than a year ago.


As for US beef exports, they also declined compared to a year ago despite the fact that, different from a year ago, US beef packers now have access to the Korean market. Total US beef and veal exports in May were 53,000 MT, 4.8 per cent lower than a year ago. Exports to Mexico, the top US beef market, were 14,927 MT, 20.7 per cent lower than a year ago. Shipments to Korea have cooled off significantly compared to a year ago and in May were just 2,500 MT, compared to almost 7,000 MT back in January. Part of the reason for the decline may be seasonal but also a stronger US dollar has negatively impacted trade.

As for chicken exports, they too have lost some of their sizzle. Total US exports of fresh/frozen chicken in May were 257,296 MT, 10.3 per cent lower than a year ago.



Title: Re: American Hog News USDA
Post by: mikey on July 15, 2009, 08:16:27 AM
Market Preview: Pork Exports Have Ups & Downs
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



US pork exports for May were, as expected, significantly lower than one year ago, with shipments to virtually all major US markets falling relative to last year. Total US pork exports were 231.2 million pounds, product weight. That is 34 per cent lower than last year, but remember, May of 2008 is the all-time record US export month at 350.4 million pounds, product weight.

Shipments grew on a year-on-year basis for only two major US markets: Australia (+22.1 per cent vs. 2008) and, surprisingly, Russia (+8.2 per cent from last May). The Russian figure is a surprise given the country’s ban on meat imports from several states in the wake of the H1N1 influenza virus outbreak. Those restrictions, however, always allowed shipments from some states with pork packing plants and Russian buyers apparently took advantage of those opportunities.

The largest year-on-year reduction was, as expected, in shipments to China. We shipped 95 per cent less pork to China this year than we did last year in May. A bit of a surprise was the drop in shipments to Hong Kong (down 71 per cent from last year) given that Hong Kong never officially stopped imports from the United States. Many observers, including me, had guessed that trade with Hong Kong had grown in order to satisfy buyers in China. But that was not the case – at least in May.

The other mild surprise was that exports to Mexico were down only 5.7 per cent from last year. But May 2008 was the first month of a recovery of shipments to Mexico and the year-on-year comparisons may get worse this summer unless business with Mexico picks up sharply. I have heard anecdotal reports of a rebound, but I don’t think “sharp increase” would be appropriate – yet.

Even shipments to Japan were lower, year-on-year, in May, falling by 15.7 per cent. The good thing, as always, is that Japanese buyers continue to buy high-value products. The value of May exports to Japan fell by “only” 6.4 per cent. Japan’s gate price mechanism, whereby the average value of a container of pork product must exceed the gate price to avoid a tariff, is a major driver of this high-value slant for Japan’s purchases.

Year-to-date, US exports are now 14 per cent lower than in 2008 (see Figure 1) and that number could worsen in the next three months as we compare this year’s performance to huge months last year.


Variety Meats Sales Encouraging
Year-to-date export value, a more important driver of hog demand than volume alone, is now 7.8 per cent lower than last year and a primary reason for soft hog demand and lower butcher hog prices.

Pork variety meat exports continue to be a bright spot with year-to-date quantities up 43.5 per cent and year-to-date value up 40.6 per cent. The primary driver of that growth has been Mexico where variety meat shipments thus far in 2008 are up 95 per cent in volume and 84 per cent in value. In fact, variety meat exports to Mexico in May were 68 per cent higher than last year and the value of those shipments was 49 per cent higher than last year.

This, plus the smaller-than-expected drop in muscle meats shipments to Mexico, tells me that the main driver of lower exports was the Mexican economy and, quite possibly, the impact that the H1N1 influenza virus outbreak had on the economy during May. Take most of a week out of any country’s economy and you very likely have a significant impact on consumers’ incomes and expenditures. This reduction in pork exports and increase in variety meat exports could well be simply a symptom of less money to spend.


Feed Costs Ease
Finally, last week’s World Agricultural Supply and Demand Estimates provided some more respite from high feed costs. USDA is now forecasting a 12.3 billion bushel corn crop and 1.55 billion bushels in storage at the end of the 2009-2010 crop year. It is also forecasting a 3.26 billion bushel soybean crop with 250 million in 2009-2010 year-end stocks – much higher than previously predicted levels for this fall.

Those estimates, plus the acreage estimates of June 30, have pushed new crop corn $0.60/bu. lower and new crop soybean meal $20/ton lower. The impacts on forecast feed prices (Figure 3) and breakeven hog production costs (Figure 4) have been dramatic. While losses of $2.13/cwt. for the next 12 months are no cause for celebration, they beat the early June estimates by a mile – and may be critical for some producers who are willing to lock in at least some of the profits being offered.

Title: Re: American Hog News USDA
Post by: mikey on July 16, 2009, 08:13:34 AM
CME: Pork Packer Margins Dismal All Year
US - Anyone wondering about the reasons behind Smithfield Foods and Tyson Fresh Meats idling pork plants on Monday need only look at the graph below, says CME's Daily Livestock Report for 14 July.

Pork packer margins have been dismal all year but have hit their lowest level in our data set which goes back to 1992. The $5.31/head for the week of July 4 is the worst ever and plenty good reason for a lack of enthusiasm for operating plants. Smithfield’s Sioux City, Iowa and Sioux Falls, SD plants were reportedly dark on Monday. Those reports came from dealers and producers who supply the plants as the company does not comment on operations. Tyson Fresh Meats’ Columbus Junction, IA plant was also dark on Monday and that was confirmed by the company. Monday’s slaughter was estimated at only 360,000 head, compared to 423,000 on year ago.

It should be pointed out that temporary shutdowns of pork slaughter plants are not terribly unusual at this time of year. Packer margins are usually near their lowest level of the year in the summer months when hog supplies tighten and hog prices rise. Taking a day off usually allows some much needed maintenance work to be done and saves the company some bucks. We wouldn’t be surprised to see some more of this in the next few weeks if margins stay this poor.

The packer margin graph represents gross, not net, packer margins. It is simply the value of the carcass less the value of the live animal plus the value of the carcass by-products such as fat and organ meats (often referred to as "variety meats"). Packers must still pay all non-livestock costs from this margin and those are estimated to be anywhere from $16 to $22 per head, depending primarily on whether the plant runs single or double shifts.

What is so concerning about these margins is that they have occurred with very low hog prices. And the lesson there is that cutout values have been positively awful — especially for this time of year. In fact, the cutout value for the week of July 4 ($54.65/cwt carcass) was the lowest so far this year. While last week’s May export data was not as bad as some had feared, the H1N1 influenza export demand problems (whether market-driven as in Mexico or politics-driven as in China and Russia) have still put 3% or so of U.S. production back on the U.S. market. Add another 1.8% or so for higher-than-expected slaughter and 1% (and perhaps more) for higher slaughter weights, and you have a huge supply surge that can only be moved at lower prices. So, at a time when cutout values are usually making annual highs, they are making annual (at least so far) lows this year.


But there has been a positive development. Figure 1 below indicates that barrow and gilt slaughter weights have finally declined, falling 2 pounds to 197 pounds the week of June 26. That puts weekly weights within 3 pounds of last year instead of 4 and 5 pounds higher as they have been for much of the summer. Producers have been trying to get weights down and are apparently making some headway but backing up 50-60 thousand head for one day will work against the reduction in the short run. Lower feed price will slow the trend in the longer term.







Title: Re: American Hog News USDA
Post by: mikey on July 21, 2009, 09:48:13 AM
CME: Pork Cutout Values Increase 11 Per Cent
US - Weekly average pork cutout values rose over $6/cwt or 11 per cent this week (see Figure 1) to provide some of the first good news that the meat and poultry business has seen in a while, according to CME's Daily Livestock Report for 17 July.

The increase was driven by a second VERY short week of FI hog slaughter. Last week’s short run was not much of a surprise since it shared the holiday impact with the week of 3 July. But this week’s run of only 1.954 million head was the smallest non-holiday weekly total since the week of 14 July 2007 when FI slaughter was 1.951 million head. The temporary closings of one Tyson plant and, reportedly, two John Morrell (Smithfield) plants last Monday was a contributor to this shortfall, of course. We had expected slaughter to fall relative to year-ago levels following the Fourth of July holiday but nothing like last week’s 8.7 per cent year-on-year decline. Pork packers have thus far taken this opportunity to get healed up a bit from the margin beating they have been suffering. Cash hog prices (based on the daily national afternoon purchased swine report — HG 203) began creeping up by about $0.50/cwt per day on Wednesday but made no large moves.

After dropping sharply before the holiday, hog weights have increased again the past two weeks (see Figure 2), suggesting that we may have backed up a few pigs with lower weekly slaughter runs. Last week’s average weight of 200 pounds were the heaviest on record for this week, breaking the record set in 2007 by 2 pounds. Barrow and gilt weights from USDA’s mandatory price reporting (MPR) system (report HG- 201) show the exact same pattern as the weight of all hogs in Figure 2. The average weight of MPR hogs (which includes only barrows and gilts from packers subject to mandatory reporting) last week was 199 lbs., 3 lbs. heavier than last year and 1 lb. higher than the previous record for MPR pigs, also set in 2007.


We have heard nothing of plant closures this week. Of course, the rise in cutout values reduces one of the incentives for shutdowns. It will be interesting to see how aggressively packers bid for hogs given this increase in cutout values. Historically, they have not been able to stand prosperity for long but this year’s profit pain may slow their "pig chasing" a bit.

The other quite interesting number in this week’s table is the quote for Omaha corn — $3.02 per bushel. And we found another source for an Omaha corn price that says $2.98 per bushel. We are not sure why the quotes are different but we know this: It is the first time since October 2007 that Omaha corn prices have flirted with the idea of beginning with a "2". Some extensive driving over the past few weeks (Iowa, Missouri, Kansas and Ohio) leaves us impressed with the condition of both the corn and soybean crops — but they are no doubt late. Both crops need heat units and central Iowa saw some near-record low temperatures Thursday night. Late development and cool weather mean that the date of the first frost will be very important.

All of this is good news/bad news for the pork industry. Good since it means lower losses but potentially bad since it also reduces the incentives to make the herd reductions needed to get back to profitability.



Title: Re: American Hog News USDA
Post by: mikey on July 22, 2009, 09:29:45 AM
Canadian Pork ‘Bail Out’ Would Hurt US Producers
US - An emergency government subsidy program for the Canadian pork industry proposed by the Canadian Pork Council would have a "lethal impact" on US pork producers, according to the National Pork Producers Council.



The CPC has asked the Canadian government to pump $800 million into the country’s pork industry. The key component of the program is a loan to pork producers – to be repaid over 10-15 years – of $30 for each market hog. A second component would provide $500 for each sow culled plus the market value of the animal.

The proposal would artificially prop up Canadian pork production and, according to Iowa State University economist Dermot Hayes, US live hog prices would be approximately 7 per cent lower than otherwise would have been the case.

"Such a subsidy program would have a lethal impact on US pork producers," said NPPC President Don Butler. "NPPC is extremely concerned about such a program, which will shift financial pain to US producers, who already have lost an average of more than $21 per hog since October 2007."

Mr Butler pointed out that while the program is described as a "loan," it is unlikely that commercial banks would make unsecured, subordinate loans to Canadian pork producers at a time when they are losing money. "The program is really a cash bailout," he said.

"NPPC is keeping all options open to address this issue," said Mr Butler.


 

Title: Re: American Hog News USDA
Post by: mikey on July 22, 2009, 09:31:23 AM
Weekly Outlook: Focus on Yield Potential
US - Prices of corn and soybeans declined sharply during the last half of June into early July. December 2009 corn futures declined from the $4.70 area to under $3.30 while November 2009 soybean futures dropped from $11.00 to about $8.80.



The sharp decline in prices reflected a number of factors. Improving weather conditions reduced concerns about the potential yield impact of late planting in the eastern corn belt. For corn, the larger than expected planted acreage estimate was especially negative. Weakness in financial and energy markets also contributed to weakness in corn and soybean prices. These factors outweighed prospects for larger exports this year and next and the potential for extremely small year ending stocks of soybeans. Prices traded in a relatively narrow range for the past two weeks, with strength in the financial and energy markets, along with weakness in the US dollar providing some support.

For the next several weeks, yield and production prospects will likely determine if a low in corn and soybean prices has been established. Weather conditions have been viewed as generally favorable for both corn and soybeans. Extreme heat has remained south and west of major production areas, with the Midwest experiencing generally below normal temperature in July. Moisture concerns are minimal. Overall crop condition ratings are relatively high as of 12 July, the USDA reported 71 per cent of the corn crop and 66 per cent of the soybean crop in either good or excellent condition. The highest ratings are generally in the western corn belt. A year ago, 64 per cent of the corn crop and 59 per cent of the soybean crop was rated in good or excellent condition. There is an extremely high correlation between the per cent of the crop rated good or excellent at the end of the season and the US average trend adjusted yield. For corn, for example, the crop condition model based on observations from 1986 through 2008 would project a 2009 US average yield of 163.2 bushels per acre IF 71 per cent of the crop is rated good or excellent at the end of the season. Each 1 per cent change in the proportion of the crop rated good or excellent would alter the yield forecast by about 0.66 bushels per acre. Our crop weather model forecasts a US average yield of 161.9 bushels if growing conditions through August are favorable. The yield expectations based on current crop ratings or the assumption of favorable weather for the rest of the season are well above the long term trend calculation for 2009 of 154.9 bushels per acre.

For soybeans, favorable weather through August would point to a US average yield of 44.7 bushels per acre, well above the long term trend calculation of 42.2 bushels per acre. For both corn and soybeans, yield projections based on the crop weather model assume that frost/freeze dates are not earlier than normal.

Based on current acreage estimates, yields at levels projected by either current crop condition ratings or by a crop; weather model assuming favorable weather for the remainder of the season, point to prospects of large supplies and further price weakness into harvest. Using USDA’s most recent projections of 2009-10 marketing year consumption, a US average corn yield of 162 bushels, for example, would result in year ending stocks of 2.236 billion bushels. Use might well exceed current projections due to lower prices under this yield scenario, but stocks could exceed 2 billion bushels. For soybeans, a US average yield of 44.1 bushels and use at the level current projected would result in year ending stock of 410 million bushels.

The USDA will release the first corn and soybean yield estimates of the year on 12 August. Due to the lateness of the crop, objective yield estimates for the eastern corn belt states included in that portion of the survey, will be based heavily on plant populations, suggesting more uncertainty about yield estimate than would normally be the case. Estimates of planted and harvested acreage of corn and soybeans will be updated in October as acreage certification information from the Farm Service Agency becomes available.

Corn and soybean markets have prices in relatively large crops, but considerable production and price uncertainty remains. The November soybean futures are now about $.50 above the spring price guarantee for crop revenue insurance products offering an opportunity for some additional pricing of the 2009 crop. In contrast, December corn futures remain well below the crop revenue insurance price guarantees.




Title: Re: American Hog News USDA
Post by: mikey on July 23, 2009, 07:00:15 AM
CME: Temporary Reductions in Slaughter
US - According to CME's Daily Livestock Report for 21 July, hog futures lost ground on Tuesday on concerns that the surge in cutout values may be rather fleeting, reflecting the short term impact of big slaughter cutbacks rather than a demand driven summer rally.



The pork cutout has surged higher in recent days as slaughter cutbacks have allowed packers to clean up inventories. The pork cutout value on Tuesday was quoted at $66.70 per cwt, some $1.2 per cwt higher than Monday’s levels and $12.9 per cwt or +24 per cent higher than at the beginning of July. Lean hog prices (IA/MN wt. avg.), on the other hand, were quoted on Tuesday afternoon at $58.30 per cwt, $1 higher than the previous day but only slightly higher than where they were on 1 July.

The fact that hog values have failed to get much traction despite the surge in cutout values has some market participants worrying that the recent pork rally may not be sustainable going into August. The bullish argument would suggest that current reductions in slaughter are due to tighter hog supplies. If that is the case, as pork cutout values move higher, packers have to raise their bids for live hogs in order to secure enough product to meet demand and so forth.

The more bearish argument would suggest that the reductions in slaughter were temporary, reflecting decisions by packers to reduce output in the face of big losses. In that case, hogs that would have been processed last week are still available this week, albeit with more pounds on them. In that case, packers bids stay flat and may even decline should a backlog of hogs and/or pork develop. Slaughter was again light on Monday at 356,000 head, in part due to production issues at one slaughter facility but also because of slower slaughter overall.

Tuesday slaughter was 416,000 head, slightly ahead of last year’s pace. Going forward, it will be important to see whether producers remain current. One positive development in the last few weeks has been the decline in hog carcass weights. Weights were somewhat out of control following the flu outbreak and the backlog that developed. More recently, lean hog carcass weights have declined but one should be careful not to make too much of this. Seasonally weights go down in the summer as heat takes its toll on animals.

What is important to note is not just the fact that weights decline but also the rate of the decline compared to normal. Last week USDA reported hog carcass weights of around 200 pounds, which we think is too high given that weights were 199 pounds for the week ending 4 July. We should see weights decline another three pounds between mid July and early August. The concern is that by less than what the seasonal suggests, adding more pounds to a summer market that already seems to have more protein than it can handle.

Title: Re: American Hog News USDA
Post by: mikey on July 24, 2009, 07:41:00 AM
Meat, Poultry are Major Sources of PBDE Exposure
US - Red meats and poultry have been found to be major sources of exposure to polybrominated flame retardants, known as PBDEs, in the US. The conclusion follows research just published in Environmental Health Perspective by Fraser and co-workers.



People who eat meat and poultry have significantly higher levels of common flame retardants compared to vegetarians, according to a summary of Fraser and co-authors' paper in Environmental Health News. The findings indicate that food may be a more important source of the contaminants, known as PBDEs, than previously thought. PBDEs are omnipresent in the environment This is the first large-scale study to examine the contribution of red meat and poultry to dietary PBDE body burden in the US.

Methods used in the study
Data collected as part of 2003-2004 National Health and Nutrition Examination Survey (NHANES) were examined for a correlation between food eaten and blood levels of PBDEs. A randomised sample of 2,337 participants that were 12 years or older supplied dietary information via a 24-hour food recall list and a food frequency questionnaire. Food was assigned to one of the following groups: poultry, red meat, dairy, egg, seafood and non-animal products.

The blood levels of ten PBDEs (BDE-17, 28, 47, 66, 85, 99, 100, 153, 154 and 183) were measured. Only five with the highest measured levels (BDE-28, 47, 99, 100 and 153 – all components of pentaBDE) and their sum were compared to the participants' diets.

Results were adjusted statistically for age, sex, race or ethnicity, income, body mass index (BMI), and socioeconomic and demographic variations.

Main findings
Serum levels of five different PBDEs were associated with eating poultry. People who more poultry had higher levels of the PBDEs. Poultry fat was the greatest contributor to the body burden of PBDEs.

Red meat intake was associated with two of the measured PBDE levels. Seafood and dairy were not associated with any changes in the PBDE levels in serum.

Vegetarians had 23-27 per cent less PBDEs circulating in their serum as compared to meat-eaters.

The highest levels of PBDEs were found in males, the youngest age group examined (12-19 years old), the poor and the underweight (subjects with lowest BMI).

Implications
The major source of human exposure to PBDEs has been assumed to be via contaminated dust at work or in the home. Some recent findings have pointed toward other possible sources, including diet.

This study indicates that food is a more important route than previously thought.

A number of scientific studies have suggested that PBDE levels in food supplies are rising. These studies, however, have been limited by small sample sizes and by small geographic scope.

The greatest strength of this study is the large sample number that the researchers used for their analysis. Based on their comprehensive research, poultry and red meat are major sources of dietary PBDE exposure in the US. Identifying which foods are most contaminated is a major step in limiting public exposure.

Since this study lacks information about the household exposure of the subjects to PBDEs, scientists refrain from commenting on the relative contribution of dietary exposure to overall body burden of flame retardants. The authors conclude that comprehensive studies that include dietary, household, and geographic data will be needed to determine the contribution of each factor more accurately.

PBFEs and human health
Polybrominated flame retardants, known as PBDEs, are suffused into consumer products to suppress fires, save lives and lower the economic burden of fire accidents. Electronics, plastics, textiles, car interiors and many other products now contain the chemical fire suppressors.

The long-lived chemicals are not fixed into materials, so they slowly leak out of the products and into the environment. More chemicals are released as the products age.

In North America, meat, poultry, dairy and fish are known to be contaminated with PBDEs. The food comes into contact with PBDEs during processing and through packaging materials.

Most human exposure is thought to be through food and dust, but which contributes the most to human exposure is not known.

In the last few decades, as PBDE use increases, levels of PBDEs in human tissue have increased significantly. Americans and Canadians have 10 to 20 times higher levels of PBDEs than people in Japan or Europe. The highest levels have been detected in US children between the ages of two and five years.

The first scientific evidence about the toxicity of several types of PBDEs surfaced in mid 1980s. European regulations began to limit PBDE use in the 1990s and took tightened restrictions further in 2004; by 2008 several US states had taken action against at least one of the PBDEs. Two types of PBDEs are no longer manufactured in the US because of health concerns. Exposure continues, however, both because products that contain them are still in use and because the chemicals themselves are highly persistent. Consumer goods that have entered the waste stream, for example, in landfills, continue to release PBDEs. Sewage sludge can be heavily contaminated

PBDEs accumulate in the liver, kidney and thyroid gland and are known endocrine disruptors. Chronic exposure and elevated levels lead to disruption of estrogen and thyroid systems. Animal and epidemiological studies link PBDE exposure to several types of reproductive and nervous system impairments.

The health effects associated with exposure to PBDEs are a major public health concern. Children may be especially vulnerable to their toxic effects because of their developing nervous systems.

Reference
Fraser A.J., T.F. Webster and M.D. McClean. 2009. Diet contributes significantly to the body burden of PBDEs in the general US population. Environmental Health Perspective doi: 10.1289/ehp.0900817.

Other resources
Birnbaum, L. and D.F. Staskal. 2004. Brominated Flame Retardants: Cause for Concern? Environmental Health Perspectives 112:9-17.
National Health and Nutrition Examination Survey. Centers for Disease Control and Prevention.
Polybrominated diphenylethers (PBDEs). US Environmental Protection Agency
Reducing your exposure to PBDEs in your home. Environmental Working Group.
Schecter A., T.R. Harris, N. Shah, A. Musumba and O. Päpke. 2008. Brominated flame retardants in US food. Molecular Nutrition and Food Research 52:266-72.

Title: Re: American Hog News USDA
Post by: mikey on July 29, 2009, 07:59:11 AM
Market Preview: No Gain Without Some Pain
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



I had the honor once again to speak to the annual National Pork Industry Conference at the Lake of the Ozarks in Missouri last week. The event was, given the economic conditions of the pork industry, surprisingly well attended. The mood was somber, but not what I would call depressed, even though everyone was obviously growing weary of the continuing economic challenges.

I began my talk with the old joke about the guy who walks into the doctor and says, "Doc, it hurts when I do this," and then moves his arm up and down. The doctor, of course, responds with an emphatic "Then stop doing that!"

The metaphor for the pork industry is obvious: If the economic outcomes of our businesses are to change, we have to not do what we’ve been doing.

Factors Impacting Pork Prices
Now some of what we have been doing is really not our fault. The H1N1 Flu Outbreak Virus forced "us" to sell a lot more pork on the US market. Without that extra supply, things would have been different this summer.

Another "problem" of what we have been doing is the paradoxical impact of improving efficiency. Becoming more productive is what the American farmer is all about, right? But the surge in productivity – especially litter size – in the past two years has completely confounded any output rationalization efforts that we have seen. It appears that the sow reductions to date have simply been the removal of the “circovirus compensating” sows that were in place to keep pig flows reasonable in the face of large death and morbidity losses.

An aside on this topic: I have mentioned several times that we heard several anecdotal reports of a surge in sow productivity after the introduction of circovirus vaccines. That surge appears in the data as we compared the production from vaccinated sows in 2008 to that of unvaccinated sows in 2007.

That impact should have been over when we began comparing 2009 data to that from the vaccinated sows in 2008, right? But it has not ended, and one well-known veterinarian explained to me that a reason is the impact that circovirus suppression is having on the immune systems of vaccinated animals. We have not only eliminated circovirus, but we have enabled the animals to fight other pathogens more effectively, thus raising their health level another notch and providing this added surge of productivity.

I doubt that that impact can continue forever, but it certainly is not waning yet and provides a huge challenge: If we are to reduce output to drive prices up, we must reduce the sow herd by a larger per centage than productivity growth. And we haven’t done that yet.

My "it hurts when I do this" schtick reminds me of another famous (at least in Oklahoma) comedy routine by Archie Campbell on the old Hee-Haw television show. Archie would weave stories that had some good happening, to which Roy Clark or some other accomplice would say, "That’s good" and Archie would respond "No, that’s bad!" He would then describe some awful happening to which Roy would say. "Oh, that’s bad!" Archie, of course, would reply with "No, that’s good!" And on and on they would go. It was great fun.

Lower Feed Prices Are Good – and Bad
I feel that way – without the fun part – about the recent drop in corn and soybean meal prices and the surge we have seen in cutout values over the past two weeks. While the latter has yet to translate into higher hog prices – and that may take awhile given the fact that the cutout and hog prices have been upside down for much of this year (see Figures 1 and 2) – the profit picture improved markedly from mid-June to last week, and then declined sharply as Lean Hog futures fell to contract life lows for most contracts on Monday morning.

 


Figures 3 and 4 show my forecasts through July 2010 as of 21 June and then again today. Note that the projected losses through year’s end and through July 2010 are both smaller now than they were in June. But they are over $3/cwt larger than they were just one week ago.

 


So – the drop in feed prices is good because it means producers are losing less. That’s good. No, that’s bad – because we still need to reduce the sow herd enough to offset productivity gains and reduce supplies and that will not happen with less economic pain. So – the drop in Lean Hog futures this past week is bad because it hurts producers’ profits prospects and adds to their financial stress. No, that’s good – since it increases incentives to reduce the sow herd and will lead to higher long-term profit levels.

I could go on, but you get the drift. Economics is all about incentives and the incentives for output changes are shifting weekly and, in some instances, daily. I still believe we need to produce less to bring some semblance of consistent profits that are large enough to compensate producers for the risks they take. Unfortunately, it will take economic pain to get that done.

 

Title: Re: American Hog News USDA
Post by: mikey on July 31, 2009, 06:15:53 AM
US Livestock Industry Under Stress
US - At a time when many crop producers continue to show profits, even with sharply higher input costs, the entire livestock industry is under extreme financial stress, according to the Iowa Pork Industry Centre



Livestock producers have been hit hard with a combination of declining market prices, higher feed costs and operating expenses, declining export markets and unforeseen events. The negative profit margins and financial stress are especially prevalent in the swine and dairy industries – two very important segments of Minnesota’s economy. The continued negative profit margins and potential future reductions in the livestock industry should be a concern to crop producers, local communities and the state of Minnesota.

The growth of the biofuels industry in recent years has driven much of the discussion on future usage of US corn and soybean production. The total amount of the US corn supply used for ethanol production has increased by nearly one-third in the past two years, from just over 3 billion bushels/year in 2007-2008, to an estimated 4.1 billion bushels for 2009-2010. However, feed usage for livestock production is estimated to utilize approximately 5.2 billion bushels of corn in 2009-2010, or about 41 per cent of the total US corn usage. As recently as 2007-2008, livestock feed usage accounted for nearly 50 per cent of the total US corn usage. In addition, the other byproduct from increased Midwest ethanol production is increased volumes of dried distillers grains (DDGs), the vast majority of which are used for cattle and hog feed.

The interaction with the livestock industry is very similar for soybeans. Nearly 60 per cent of the soybeans produced in the US are processed into soybean meal and soybean oil at plants such as ADM in Mankato and CHS in Fairmont and Mankato. Over 90 per cent of the soybean meal produced is utilized as livestock feed.

Swine Industry’s Negative Profits
The recent worldwide concern over the H1N1 virus (so-called "swine flu") has had a major impact on the pork industry, and lead significant financial losses for producers. This followed highly negative profit margins in 2008, due to rapid increases in feed costs and production expenses and a struggling US and worldwide economy. Let’s review some of the numbers and facts leading to the current negative financial situation in the swine industry:

In May, it was estimated that swine producers were receiving an average of $110-115 gross value for every market hog produced, while the average cost of production was approximately $140 per hog, resulting in a loss of $25-30/hog.


Iowa State University (ISU) calculates the actual estimated breakeven price for sow operations and hog finishing operations on a monthly basis, based on changes in hog market prices, feed costs and operating expenses. Sow operations have shown losses in the past 15 straight months, with losses of $15-31/head for each 50-lb. feeder pig produced in the six-month period from September 2008 through February 2009. The hog finishing segment of the industry has not fared much better, showing losses in 17 of the past 19 months. Losses from finishing feeder pigs have averaged approximately $20/head from January to April 2009, after losses of over $40/head late in 2008.


The feed cost for finishing a market hog rose from just over $50/head in July 2007, to nearly $80/head by July 2008. Current feed costs are near $65/head.


To some extent, the swine industry is a victim of its own success in recent years. Pork producers with sow operations have steadily improved genetics, herd health and production practices, which has lead to producing more pigs per sow per year. While this is good for the financial bottom-line of the individual producer, it adds to the available supply of pork and thus puts pressure on hog prices. The pork production per sow has increased by over 11 per cent in the past four years. So, even though the total number of sows in the US has declined by 3.6 per cent since 2007, the total supply of pork has continued increase.


The May lean futures price for hogs at the Chicago Mercantile Exchange (CME) dropped about $10/cwt in one week following the H1N1 outbreak, dropping from a closing price of $69/cwt on April 24 to near $59/cwt on May 1. The CME May futures price actually fell to a low of $55.50 on May 4, a loss of nearly 20 per cent of market value in just over 10 days. CME hog futures have rebounded somewhat, and were near $60/cwt in mid-June. Following the H1N1 virus outbreak, US pork exports dropped by 15-20 per cent.
Bottom Line
The swine industry is a key segment of Minnesota’s economy, and creates thousands of jobs in rural communities throughout the state. Minnesota ranks third in the nation in hog production, with approximately 4,400 swine operations that produce over 11 million hogs annually, which is just under 10 per cent of the US total. Over 40 per cent of Minnesota’s hog production originates from south-central Minnesota, with Martin, Blue Earth, Nicollet, Waseca and Brown counties all in the top hog-producing counties in the state. For the future demand for corn and soybeans, and for the future economic stability of rural communities in the region, it is very important for livestock production to return to profitable levels and greater financial viability. Unfortunately, in order to stabilize the livestock industry, it will require overall production of meat and milk to shrink, which will require some producers to exit the livestock business.

Title: Re: American Hog News USDA
Post by: mikey on July 31, 2009, 06:17:20 AM
CME: Steady Retreat in Hog Prices
US - CME lean hog futures took another step lower on Tuesday as the market was clearly worried about the impact of higher hog slaughter rates on pork prices, according to CME's Daily Livestock Report for 28 July.



Hog slaughter on Monday was 418,000 head and on Tuesday it was 422,000 head. At this pace, we could see hog slaughter for the week at around 2.1 million head, likely above the 2.093 million head slaughtered in the comparable week a year ago. And once we add to the larger hog numbers the heavier hog weights, likely +3 pounds over year ago, we could see pork production for this week up about 13 million pounds or 2 per cent compared to a year ago. The cutout rally of the last two weeks saw pork production down about 7 per cent from year ago levels. As we pointed out last week, there was some hope that the rally in the pork cutout would help boost hog values. But in order for the rally to be sustained, it needs to be driven either by a meaningful reduction in supplies or a notable demand boost. It does not appear that any of these factors were behind the recent up move.

There was no real reduction in supplies, packers simply reduced kills for a few days, only delaying when hogs would come to market and in the process causing them to put on a few more pounds and boosting supplies down the road. As for demand, it appears that there has been no perceptible shift, maybe exports are somewhat better than they were in late April and May but still way off from year ago levels. USDA pegged the pork cutout on Tuesday at $62.04, $2.11 lower than the Monday close and $4.66 lower than the week before.

The steady retreat in hog prices has generated much talk as to where the industry needs to be with regard to the size of the breeding herd and pork supplies down the road. Back in June there was talk about a sow herd retirement program, similar to what dairy producers are doing, but that initiative fizzled quickly. Then there was the announcement by Tyson that it would remove some 20,000 sows, which also seemed to buoy markets. Despite all the talk, the monthly sow slaughter data paint a somewhat less bullish picture.

Sow slaughter in June remained below year ago levels and in the first six months of 2009 US producers have slaughtered some 224,000 fewer sows than they did in the first half of 2008. And based on weekly slaughter data for July, we will likely see July sow slaughter also lower than year ago levels. So while there is much talk about liquidation and tighter supplies down the road, it will be difficult to accomplish that goal if production units do not decline and productivity gains continue.

Title: Re: American Hog News USDA
Post by: mikey on July 31, 2009, 06:19:06 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



The trip was a good one. I was able to meet with several producers, processors, and agriculture ministry officials. The downturn in the global economy has European decision makers wanting to know more about how our risk management system works and to implement it in some form or fashion. The European Union farm support program has become very expensive.

One thing was very clear. Although our risk management system has its warts, the market is free to work.

A visit to Omaha Beach in Normandy made very clear that we must never take our freedom for granted.

LEAN HOGS on the CME finished mixed on Monday. AUG’09LH futures closed up $0.125/cwt at $59.175/cwt. The DEC’09LH contract slid $0.325/cwt to $54.050/cwt. Futures found support in short covering. USDA on Friday put the pork cutout price at $65.00/cwt; up $0.15/cwt. The cutout was down $1.70/cwt from last Tuesday’s high. The latest CME Lean Hog Index was posted at $60.09 cents/lb; up $0.54/lb. Packers are expected to pick up buying Tuesday or Wednesday on profitable margins through this week. However, a consistent bearish tone of daily hog kills above 400,000 head has returned to the market. According to HedgersEdge.com, the average pork plant margin rose $18.60/head from a negative $10.40/head to a positive $8.20/head. This was based on the average buy of $43.13/cwt vs. the average breakeven price of $46.23/cwt. It would be a good idea to sell hogs when ready and price up to four week’s feed needs.

CORN futures on the Chicago Board of Trade (CBOT) were up on Monday. The SEPT’09 contract closed at $3.222/bu; up 6.0 /bu. DEC’09 corn futures finished at $3.336/bu; up 6.4 /bu. Steady to stronger corn exports were supportive as good crop growing weather and retreating demand on a shrinking US cow herd limited gains. USDA placed US corn-inspected-for-export at 52.234 mi bu vs. expectations for 31-34 mi bu. Late Monday USDA rated the US corn crop in good-to-excellent condition at 70 per cent; 1 per cent lower than this time last week but 4 per cent better than a year ago. Cash corn bids were steady amid slow farmer sales. USDA is expected to issue an updated crop plantings report in early August. This should give a clearer picture of US corn crop acres planted and therefore supply expectations. Funds bought 5,000 contracts while large speculators increased net bear positions in CBOT corn by 15,700 lots. The December 2009 contract posted a Relative Strength Index of 32.26 indicating that this market will attract increased speculator interest. Hopefully all of the old crop corn is gone and up to 70 per cent of the 2010 crop is sold on previous advice. Old crop corn is fast losing its premium to new crop corn.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were down on Monday with the exception of the August ’09 contract which was up 2.0 /bu. The SEPT’09 contract closed off 6.5 /bu at $9.450/bu.

The NOV’09 contract closed at $9.064/bu; off 8.4 /bu. Tight old crop stocks and short-covering supported the nearby August contract. Exports were disappointing with USDA reporting soybeans-inspected-for-export at 8.145 mi bu vs. expectations for 11-14 mi bu. Over half of these were bought by China. Processors and suppliers south of the equator are filling most global needs at this time. Late Monday USDA put soybeans in good-to-excellent condition at 67 per cent; unchanged from last week. Cash soybean bids were steady to weaker as old crop sales finish up. Funds sold just over 1,000 lots while large speculators decreased net bull positions in CBOT soybeans by 4,800 contracts. If you have any old crop soybeans at all they should be sold now. Old-crop beans are swiftly losing their premium basis value and will soon be valued near new crop levels. Up 70-80 per cent of the new crop should have been priced on previous advice.

WHEAT futures in Chicago (CBOT) were up on Monday. SEPT’09 wheat futures finished up 4.25¢/bu at $4.904/bu; 38.0¢/bu lower than last report. The JULY’10 wheat contract closed at $5.192/bu; up 5.25¢/bu. Good weather conditions for the US crop hindered price advances. Short covering was price supportive but gains were limited by large global stocks.

USDA put wheat-inspected-for-export at 10.683 mi bu vs. expectations for 14-17 mi bu. Good weather in the US and parts of Europe are allowing the harvest to fill up the supply line. Funds bought 2,000 contracts while large speculators cut net short positions by 2,700 lots. Under pressure from traders and regulators to fix its problem with convergence in the market, the CME Group is reportedly looking at more changes in storage charges as well as a new cash settlement index. Meanwhile, the CME is waiting to see if previous changes made to the soft red winter wheat contract; additional delivery locations; and increased storage charges that began the first of June can improve hedging performance. Reports from wheat harvest in the center-west of France indicate acceptable yields and very good milling quality wheat. Consider pricing up to 20 per cent of the 2010 crop at this time.


 
Title: Re: American Hog News USDA
Post by: mikey on August 01, 2009, 07:10:43 AM
CME: Pork Index Strong on Consumer Level
US - An observant reader asked about the difference between the calf crop numbers we discussed in the July 24 edition and the numbers in the chart labeled US Calf Crop in that issue, says CME's Daily Livestock Report for 30 July.



His confusion was understandable since the numbers in the chart were actually the number of cattle on US farms on July that weighed 500-lbs o less. The actual calf crop chart appears as Figure 1. It looks quite similar to the 500-lb. and under inventory but the numbers on the Y axis are different. USDA predicts that we will see 1.2 million fewer calves born this year than just two years ago. That is an important comparison because the animals in this year’s slaughter were, pretty much, part of that 2007 calf crop. We think that speaks volumes about slaughter levels in 2011.


Demand indexes for January-June, released this week by the University of Missouri, continue to appear just as we expected them to appear in this recession—even though the pork demand index is substantially higher than even the optimistic among us had likely thought possible. The numbers from Professor Glenn Grimes appear at left along with the historical data for these indexes. Remember that these indexes are strictly descriptive. They indicate the apparent movement of the various demand curves in P-Q space but offer no information as to why those movements may have occurred. That interpretation is up to us market observers and analysts. Some critical issues with this month’s indexes:

The consumer-level pork index is surprisingly strong and the reason is that USDA’s June retail price data show NO DECLINE from May even though domestic pork disappearance was 14.5 per cent higher than last year and 4.8 per cent higher than in 2007. June 2009 domestic disappearance was the second highest ever for June. Readers should note that a big reason for the 14.5 per cent year-on-year increase was VERY low domestic disappearance last year when exports were near record high. And an extra slaughter day this year helped as well since disappearance is simply the residual after we deduct all of the measured uses from total supply which is the sum of production, imports and beginning stocks. We find the disappearance numbers quite believable but we don’t for a minute believe the retail price was constant given the widespread featuring of pork in June to keep large supplies moving.


The lower chicken demand index is caused by prices that have not improved as much as sharp reductions in US output and disappearance would have suggested. We believe it is likely that his situation will eventually be rectified but it will almost certainly require enough economic recovery to get people back into the habit of eating out. While some indicators suggest that the recession may be easing, unemployment and payrolls will almost certainly lag that recovery so a bounce for chicken demand may be slow in coming.


Ditto the chicken situation for beef with one exception: retail beef prices in June fell by 0.5 per cent from last year. Total domestic beef disappearance in June was 2.6 per cent lower than in 2008.
Title: Re: American Hog News USDA
Post by: mikey on August 02, 2009, 08:03:28 AM
Weekly Review: Pork Demand Up at Consumer Level
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Packers pushed hog slaughter under Federal Inspection well above 400 thousand per day; as a result, pork product prices were pushed lower. Pork prices Thursday afternoon at $59.09 per cwt of carcass were down $5.76 per cwt from a week earlier.

Demand for pork at the consumer level for January-June was up 4.2 per cent from the same months in 2008. Demand for beef at the consumer level was down 0.9 per cent, broiler demand at the consumer level was down 4.4 per cent and turkey demand was up 5 per cent for these six months compared to a year earlier.

Demand for live hogs for January-June was down 4.2 per cent from the same months in 2008. Demand for live fed cattle for January-June was down 6.9 per cent compared to the same months in 2008.

The weaker live hog demand than pork consumer demand was due to reduced exports and wider marketing margins at the processor-retailer level.

Sow slaughter continues to run low. For the four-week period ending 18 July, sow slaughter was down 9.2 per cent from a year earlier after adjusting for sow herd size. We still see no signs that the breeding herd is being reduced very much. Gilt slaughter for the four-week period ending 25 July was below a year earlier.

Even though profitability in the hog industry is quite negative, hog producers find it difficult to cut back in number with the large investment in the herd per sow.

It now looks like it will require bankruptcy by a substantial number of producers to get the sow herd reduced enough to get back in a profitable situation for the average cost producer.

Slaughter weights of barrows and gilts in Iowa-Minnesota for the week ending July 25 were up 0.1 pound per head from a week earlier and up a whopping seven pounds above a year earlier.

The cooler-than-normal July weather and packers cutting the bill to try to get product prices up are contributing to these heavier weights.

The average carcass weight for barrows and gilts for the week ending 18 July at 196 pounds was up 4 pounds from 12 months earlier. There are no questions about hog marketings being backed up some in the summer of 2009.

Prices for wholesale cuts of pork Thursday afternoon showed loins down $8.99 per cwt at $74.61 per cwt, Boston butts at $53.66 per cwt were down $6.35 per cwt, hams at $44.22 per cwt were down $8.30 per cwt and bellies at $84.11 per cwt were up $0.75 per cwt from seven days earlier.

National feeder pig prices last week were $2-4 per head higher than a week earlier.

Pigs weighing 10 pounds averaged $28.24 per head, 40-pound-basis pigs were at an average of $29.05 per head. Pigs weighing 10 pounds sold on formula averaged $34.07 per head, 40-pound-basis pigs formula priced were $50.20 per head. Negotiated or cash priced 10-pound-basis pigs sold for $17.46 per head and 40-pound-basis pigs on spot market sold for $27.79 per head.

United Producers feeder pig prices this week were $5-15 per cwt above two weeks ago. All of the United pigs weighed 50-60 pounds per head and all sold for $50-69 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,104 thousand head, up 0.5 per cent from 12 months earlier.

Live hog prices Friday morning were $2-3 per cwt below a week earlier. Top Peoria price was $34 per cwt and interior Missouri was $39.50 per cwt. Weighted average negotiated carcass prices ended the week $4.61-5.30 per cwt below seven days earlier. The weighted average negotiated carcass price in the western Cornbelt was $52.55 per cwt, eastern Cornbelt $52.40 per cwt, Iowa-Minnesota $52.72 and nation $52.41 per cwt.

Title: Re: American Hog News USDA
Post by: mikey on August 05, 2009, 09:47:56 AM
Market Preview: Pork’s Good, Bad and Ugly Scenario
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Corn prices are down! That’s good, right? No, that’s bad because incentives to reduce numbers are low. Oh, that’s bad. No, that’s good because it means producers aren’t losing as much money and thus might be able to hang on until pig production economics improve. Oh, that’s good. No, that’s bad.

This give and take could go on and on, continuing last week’s closing theme, but suffice it to say that last week’s grain and hog markets added a new act to our Hee-Haw tragedy play.

Sharply higher soybeans drove the grain complex higher. That strength included corn, which was apparently along for a sympathy ride since there was no real bad news about this year’s crop. Yes, temperatures are still cool and that makes the first frost date a critical factor. Some parts of the eastern Corn Belt still look rough, but crop conditions in the big corn states are very good and that likely kept corn price increases in check to some degree.

And not only did feed prices rise, but the rally in pork cutout values came to an abrupt halt as hog slaughter swelled and carcass weights remained constant. Are these hogs backed up by slower chain speeds and floating holidays in recent weeks? Or, are these hogs being pulled ahead by very good summer growing conditions? I think it is some of both and the balance may be that we are about normal on marketing pace. Still, I’m concerned that we may have plenty of hogs out there in the short run.

The bottom line is that we still need to reduce output if we are to return to profitability. Demand may increase in coming months, but it almost certainly will not grow enough to cover breakeven costs in the low- to mid-$60s/cwt., carcass weight.

So why aren’t we cutting back more aggressively? The answer is that the market has not (at least until last week) said to do so! That was the message of Iowa State agricultural economist John Lawrence delivered last week at the Livestock Outlook session of the Agricultural and Applied Economics Association (formerly the American Agricultural Economics Association).

Lawrence’s message was clear: Economic theory tells us that a firm will not cease production in the short run until it fails to cover variable costs and, for the most part, the pork industry has covered variable costs – or at least has had solid expectations that variable costs can be covered in the future. In the long run, of course, total costs must be covered but in the short run, firms will operate as long as they can cover variable costs – those that will go away if production ceases.

To support his viewpoint, Lawrence offered a series of charts showing estimated feed, total variable costs and total costs from the Iowa State University (ISU) Estimated Costs and Returns series that he and colleague Shane Ellis track. I have included four of those charts (Figures 1-4) that document hog price and production cost forecasts for 1 April, 20 May, 17 July and 29 July. Note that the only time that projected prices were significantly below variable costs was in the 29 July chart and that the losses vs. variable costs lasted only through January 2010.

 


Some may ask: “Why haven’t producers responded to prices being below variable costs for much of the period since September 2007?”

There are two primary reasons. First, pork producers do not know that prices will be below variable costs when they decide to produce. The theoretical condition of instantaneous adjustment is a luxury not bestowed on pork producers. Second, pork producers know this is a cyclical business. Their plan is always to weather the storm of the low price cycle in order to be standing when profits return. And that storm will often involve some months where variable costs are not covered.

They constantly look ahead to see whether futures markets and other price forecasts offer an eventual respite from the financial pain. Both of those have, for the most part, offered such assurances this year.

Before the H1N1 scare began in late April, futures prices and price forecasts said profits would return this summer. The message was – hang on! Even early last week (29 July), futures markets were saying variable costs would be covered in February and total costs would be covered for several months next summer. And, while last week’s futures price changes were painful, they still indicate profits for next summer with May through August futures near or above $70/cwt., carcass weight, and projected costs per the ISU production parameters in the mid-$60s.

The ultimate question, of course, is this: "Are we still in the ‘short run’ or have we moved into the ‘long run’?"

One can go only so long not paying fixed costs – depreciation (or principal payments), interest, taxes, repairs, insurance. The point at which producers and/or bankers finally say "no more" may be upon us. Last week’s markets moved us closer to that point and as of noon on Monday, corn is up 19-23 cents/bu., soybean meal is up $2 to $11/ton, and hogs are mixed – although October through February are all down more than $1/cwt. The decision point is getting closer.

Title: Re: American Hog News USDA
Post by: mikey on August 06, 2009, 08:36:20 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME finished off on Monday. AUG’09LH futures closed off $1.075/cwt at $54.950/cwt; $4.225/cwt lower than a week ago. The DEC’09LH contract slid $1.525/cwt to $51.700/cwt; $2.350/cwt lower than last Monday’s report. Lower cash hogs are creating expectations for further weakness during the week. Fund selling was noted in October futures. The market is still oversold and trading at a discount to the index. Packers were cutting back on processing rates by as much as 100,000 head as six plants shut down on Monday. USDA estimated Monday’s slaughter at 316,000 head vs. 418,000 last Monday and 378,000 a year ago. This will cut pork meat production by 23 per cent. This may support price in the long run but hurt cash hog prices in the short run as supplies languish on the farm. The latest CME Lean Hog index for placed at $59.83/lb, off $0.23/lb and $0.26/lb lower than last report. According to HedgersEdge.com, the average pork plant margin declined $1.10/head to a positive $7.05/head. This was based on the average buy of $39.44/cwt vs. the average breakeven price of $42.09/cwt. It would be a good idea to sell hogs when ready while hedging the next 4 weeks feed needs.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The SEPT’09 contract closed at $3.580/bu; up 18.5¢/bu and 35.75¢/bu over last week at this time. DEC’09 corn futures finished at $3.690/bu; up 19.5¢/bu and 35.5¢/bu higher than last Monday. The market is anticipating deteriorating crop conditions due to the hot weather. A weaker US dollar contributed to better export expectations while higher crude oil prices boosted corn futures. USDA lowered the US corn crop rating by 2 points in its weekly report late Monday. USDA put corn-inspected-for-export at 47.3 mi bu vs. expectations for 38-43 mi bu. Argentinean corn will begin to compete on global markets as corn export limits were lifted in that country today. Funds bought 18,000 contracts while large speculators decreased net bear positions. It is a good idea to have up to 70 per cent of the 2010 crop sold.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were up on. The SEPT’09 contract closed up 44.5¢/bu at $10.880/bu; $1.43/bu higher than this time last week. The NOV’09 contract closed at $10.304/bu; up 48.5¢/bu and $1.24/bu higher than a week ago. A falling US dollar, tight stocks, gains in the stock market, and higher crude oil prices buoyed prices. USDA placed soybeans-inspected-for-export at 4.6 mi bu vs. expectations for between 10-13 mi bu. Monsoon rains in India are expected to hurt global supplies. USDA to held the US soybean crop rating to week-ago levels in its weekly report. Funds bought over 7,000 contracts while large speculators increased net bull positions. Up 70-80 per cent of the new crop should be priced.

WHEAT futures in Chicago (CBOT) were up Monday. SEPT’09 wheat futures finished up 21.0¢/bu at $5.492/bu; 58.75+¢/bu higher than last report. The JULY’10 wheat contract closed at $6.186/bu; up 22.0¢/bu and 99.5¢/bu over last report. The same factors influencing corn and soybeans supported wheat futures. USDA placed wheat-inspected-for-export at 13.5 mi bu vs. expectations for 13-16 mi bu. The Argentinean government announced it would remove wheat export limits today. This put a damper on futures near the end of the session. The hot, drier weather is seen as a positive for the US wheat crop harvest while putting a damper on prices. Funds bought over 10,000 contracts while large speculators decreased net-bear positions. Consider pricing another 10 per cent of the 2010 crop taking you to 30 per cent priced.

Title: Re: American Hog News USDA
Post by: mikey on August 07, 2009, 08:43:01 AM
CME: When Will Someone Blink?
US - Profit prospects for pork producers have taken a sharp turn for the worse in the past week as projected feed costs have risen and CME Lean Hogs futures have hit new contract life lows, write Steve Meyer and Len Steiner.



The graph below is a familiar one to DLR readers but it looks more negative than perhaps ever as of yesterday’s futures market close. Note that we have extended the graph to cover all of 2010 since we now have futures contracts on the board for all of those months.


Since 27 July, projected costs have increased by $5-$6/cwt carcass as corn and soybean meal futures have rebounded. Projected breakevens had gotten near $62, on average, through July 2010 in July.

The sell-off in LH futures have pushed projected cash prices for this fall BELOW $50/CWT ON A CARCASS WEIGHT BASIS. That equates to live weight prices below $37.50/cwt, levels not seen since the cycle lows of 2002 — when breakeven costs were in the mid-$50s on a carcass weight basis.

As of today, the only month that can be projected to be profitable between now and the end of 2010 is July and the projected profit is $0.76/cwt carcass or about $1.50 per head.

The question from many is "When will someone blink?" Sow slaughter through the week of 17 July was still running substantially below last year’s runs. Total sow slaughter was 11 per cent lower than in 2008 that week but deducting higher imports of Canadian sows shows that slaughter of US sows was actually 20 per cent lower than last year. Gilt slaughter data from the University of Missouri does indicate that the percentage of total slaughter accounted for by gilts remains high, averaging 50 per cent since 1 May. That is 0.5 per cent higher than the average for that time period over the past 10 years. A gilt percentage of 49.2 to 49.4 is about equilibrium so the sow herd is being reduced by lower gilt retention. The pace, however, is slow due to lower sow shipments.

Why such delay? One answer is structure. In 1997, producers selling 6000 or fewer hogs per year accounted for about 40 per cent of total marketings. Using 2008 USDA inventory data and assuming 2 marketings for each 1 animal in inventory, that number is now near 20 per cent. The remainder of the hogs — 80 per cent as of 2008 -- are in the hands of larger producers and involve large investments in fixed assets and a substantially more important part of the farm enterprise mix. For many the hog operations is the ENTIRE farm enterprise mix and, quite understandably, one they will not give up without a fight.

And this challenge in the pork sector has wide fallout. We received a recent e-mail from a friend in the cattle business chiding the pork industry with "If those guys could ever rally a bit, it may give cattle prices a chance." Indeed, pressure from lower hog prices is weighing on other species as well. Something has to eventually give, right?



Title: Re: American Hog News USDA
Post by: mikey on August 11, 2009, 08:32:58 AM
US Herd Reduction Half of What is Needed
US - An agricultural economist with the University of Missouri estimates the US hog industry has reduced production by about half the amount necessary to stimulate a rebound in live hog prices, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
American hog producers have lost money in 20 of the last 22 months and losses in Canada have continued even longer.

Agricultural economics professor Dr. Ron Plain says a stronger world economy and more demand for pork and more exports would help and probably, what's more realistic, is to cut back on production, tighten up supply of pork and push up prices that way.

Dr. Ron Plain-University of Missouri
Both herds are being reduced which is what needs to happen.

The reduction's been much larger in Canada than in the United States.

Again, because of the exchange rate differences, the red ink started flowing a little bit sooner and it's certainly been worse financially in Canada than it has in the United States and Canadian producers are well ahead of the United States on cutting back.

The Canadian breeding herd's down six per cent or so compared to a year ago.

The US sow herd is not quite three percent smaller so a much bigger cutback occurring in Canada than here in the United States.

Since this thing has started we've been talking about trying to and probably needing to down-size the US sow herd by about 10 per cent.

We're only down about four percent or so from that peak that we had back there in December of 2007 so we have not quite gotten half way to what I think it's going to take in order to get hog numbers low enough that we can have a very good chance of making a profit for an entire year.

Dr. Plain notes, because the US industry is three times the size of that in Canada, a cut in Canada doesn't move us as far toward getting the total pork supply down as is the case when we reduce numbers in the United States.



Title: Re: American Hog News USDA
Post by: mikey on August 11, 2009, 08:36:42 AM
CME: Governors Urge Assistance for Pork Sector
US - USDA will release yet another highly anticipated Crop Production report (and the accompanying World Agricultural Supply and Demand Estimates or WASDE) on Wednesday, 12 August at 8:30 a.m. EDT, report Steve Meyer and Len Steiner.



The August report is the first of the crop year that uses objective data to predict yields. In addition, USDA has "re-surveyed" many areas regarding corn and soybean acreage following the July Acreage report that surprised almost everyone with the number of estimated corn acres. So, this year’s August report has a bit more intrigue than normal. Results of Dow Jones’ monthly survey of grain market analysts appear in the table below.

  Average Range USDA, July 2008
(Billion Bushels)
Corn Crop 12.472 11.792 - 12.814 12.290 12.101
Soybean Crop 3.213 3.000 - 3275 3.260 2.959
Wheat Crop, All 2.150 2.086 - 2.238 2.112 2.500
(Bushels per Acre)
Corn Yield 157.1 153.0 - 160.3 153.4 153.9
Soybean Yield 42.1 40.9 - 43.5 42.6 39.6

As a group, analysts expect the corn yield estimate to be higher than that of July while they expect USDA to reduce the soybean yield slightly. Readers should note that the 153 bushel per acre estimate that marks the bottom of the range of corn yield estimate is perhaps an outlier — the next closest estimate was 155.6 bushels per acre. Analysts also expect USDA to slightly raise its estimate of the 2009 wheat crop.

Governors of eight states sent a letter to the Obama Administration on Friday requesting assistance for struggling pork producers. The letter does not, as some reports indicated, ask for any sort of bailout for the US pork industry. It asks for three things:

A $50 million purchase of pork products for public feeding programs.
A relaxation of the current spending cap on Section 32 funds to allow their use for the $50 million purchase.
That the administration turn up the heat on China to drop its "unwarranted" ban on imports of US pork products predicated on Novel H1N1 influenza.
Three other governors indicated that they would request assistance with letters of their own but the nature of those requests were not known.

It should be noted that the first request is not at all unusual. Many producer groups make the same request when prices fall. In fact, government purchases of several products have been so large this year that they have depleted the available funds and predicated request #2. China is the only US export market of any significance that is still banning US pork.

The value of a hog purchased through a negotiated trade fell to less than $100 on Friday. That hog cost roughly $135 to produce.

Title: Re: American Hog News USDA
Post by: mikey on August 12, 2009, 08:20:01 AM
Market Preview: Pork Industry Here to Stay
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Is there anything about this hog industry that is positive? That’s a question I keep hearing and, from an economic standpoint, it is a difficult one to answer. But the truth is that the US and Canadian pork industries certainly will not disappear. They are not destined for total destruction and there will be vibrant pork industries in both countries in the future. I write that with 100 per cent confidence and there are not very many things that I consider a certainty.

Here is why the pork industry survival is assured:

People will still eat pork. Perhaps not as much as they would if prices remained lower, but they will still eat pork. Per capita pork consumption hasn’t changed much in 50 years. That is a problem when we talk about growing demand, but it’s some consolation when we contemplate difficult times.


The United States and Canada are still among the three lowest-cost places in the world to raise pigs. Figure 1 shows the results of a PIC survey from 2006. As you can see, the United States, Canada and Brazil were among the lowest-cost countries along with China and Argentina. China is always a bit of a question mark due to shaky data and the fact that an estimated one-third to one-half of China’s pigs are raised in back yards and fed primarily garbage – pretty low cost. Argentina has, by its export policy decisions, basically abdicated its position as a low-cost player in world markets. That leaves the big three – and the United States is the biggest of those.

The United States and Canada have a huge advantage over other countries in terms of a) animal health status and b) geographic location that conveys some hope of maintaining that advantage. I read one time that the Soviets could not imagine why the United States ever felt threatened during the Cold War since we had vast oceans on both the east and west and friendly neighbors on the north and south. That isolation from international borders is an advantage when it comes to microbes and viruses as well!


Our product fits modern lifestyles better than in the past. Pork is leaner (perhaps too lean in some instances) and we offer more convenience products than ever before.


We have technical capabilities at least as good as producers in other parts of the world. Our producers know how to raise pigs. Our veterinarians are among the world’s best in managing herd health. Our packers are superior to all others in terms of efficiency. Our transportation system is better than our nearest rival, Brazil.


US and Canadian farmers will remain among the world’s best at producing large amounts of grain and plant proteins at competitive costs. As long as the United States remains an exporter of corn, high feed costs here will mean high feed costs worldwide. Our technical capabilities and the fact that we are located nearest to the world’s major grain surplus area will keep our feed costs competitive – higher than they once were, but still competitive with the world. Yes, they will share our high-cost misery.
Note, though, that I did not say that there will be vibrant US and Canadian pork industries of the same size as before. While our industries will remain among the best in the world, remaining competitive suppliers of pork and pork by-products to consumers worldwide, they will be smaller.

US citizens made a collective decision, through the actions of their government, about five years ago, to have smaller animal protein sectors for meat, poultry, milk and eggs. That aspect of our biofuels decisions and policies was hardly acknowledged and was not widely discussed until the 2007 decision to raise the levels of the Renewable Fuels Standard. Just because a decision was not acknowledged or discussed does not mean it was not made. The decision to choose course A is an implicit decision to accept consequence B. The current bloodbath in the animal protein business is consequence B – no matter how you cut it.

Limited Options
Higher costs must eventually be covered by the price of the product. In a commodity business that can happen just two ways: Demand must increase or supply must decrease.

In a world where a 2 per cent increase in demand is huge, I think it is unrealistic to think that demand will increase anywhere near fast enough to cover a 20-30 per cent increase in costs. If I am right, the only way to drive prices upward is to reduce supply and that means taking productive assets out of production – empty barns, fewer businesses.

The poultry business has already downsized substantially and continues to do so. Dairy producers have lost huge amounts of money and are struggling to get production in line with a profitable level of consumption. Ditto for pork producers – it just takes longer. Ditto again for beef producers -- it just takes longer yet. And last year’s export surges, especially for dairy and pork, merely delayed the inevitable. We hoped they would last, but was that ever a reasonable possibility?

US and Canadian pork producers still need to reduce output. That means that some will not be in the hog business next year. I am so sorry that is the case, but it is. Still, many of you will be part of a smaller, vibrant and profitable business. It still will not be easy. Never has been.

 





Title: Re: American Hog News USDA
Post by: mikey on August 13, 2009, 08:20:08 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were mixed on Monday. AUG’09LH futures closed off $0.500/cwt at $48.30/cwt; $6.650/cwt lower than a week ago and a whopping $10.875/cwt lower than week before last. This is an 18.4 per cent price loss in two weeks! The hog industry is hurting so bad now that governors from 9 hog producing states have written a letter requesting intervention to President Obama. They are calling the President to ask USDA to spend $50 million buying up US hog supplies for public consumption. The DEC’09LH contract slid $0.250/cwt to $44.600/cwt; $7.100/cwt lower than last Monday’s report. The weak cash market is still killing hog prices as feed inputs climb. Short covering provided some support late in trading. Futures were oversold but gained after October fell to a near seven-year low and all months put up contract lows. The market still expects future hog herd liquidation due to low prices and that is keeping a lid on prices. One bright spot; Russia lifted the ban on meat imports from Florida, the last remaining state where restrictions were put on over fears from the H1N1 flu virus. USDA on Friday put the average pork price at $54.57/cwt, off $0.07/cwt and the lowest since early July. The latest CME Lean Hog Index was placed at $54.21lb; off $0.82/lb and $5.62/lb lower than last Monday. According to HedgersEdge.com, the average pork plant margin increased $0.20/head to a positive $7.25/head. This was based on the average buy of $35.78/cwt vs. the average breakeven price of $38.51/cwt. It would be a good idea to sell hogs when ready.

CORN futures on the Chicago Board of Trade (CBOT) closed steady to slightly higher on Monday amid unchanging fundamentals. The SEPT’09 contract closed at $3.242/bu; up 2.2¢/bu but 33.75+¢/bu lower than this time last week. DEC’09 corn futures finished at $3.304/bu; up 4.0¢/bu but 38.75¢/bu lower than last Monday. Adjustments in the more than 3-to-1 soybean/corn spread, short covering, and fund buying were supportive amid position adjustment prior to the August 12 release of USDA’s World Agriculture Supple Demand Estimate (WASDE) report. Lower than expected exports held back optimism. USDA reported corn-inspected-for-export at 35.0 mi bu vs. expectations for between 44.0-48.0 mi bu. Exporters did report a sale of 120,000 tonnes (4.72 mi bu) to Egypt. Good weather is forecast for the developing US corn crop. This is expected to further weigh on futures this week. Late Monday USDA placed the US corn crop in good-to-excellent condition at 68 per cent, the same as a week ago. The market expected a 1-2 per cent decline. Funds turned net bullish after buying over 5,000 lots. Cash corn was steady in the US cornbelt while bids for corn in the US Mid-Atlantic States ranged 8.0-15.0¢/bu lower. It is a very good idea to have up to 70 per cent of the 2009 crop sold on any upticks at this time.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed off on Monday. The SEPT’09 contract closed down 14.0¢/bu at $11.704/bu but 82.5¢/bu higher than this time last week. The NOV’09 contract closed at $10.100/bu; off 28.5¢/bu and 20.5¢/bu lower than a week ago. Position adjustment in soybean/corn spreading, long-liquidation, and profit-taking pressured prices. Exports were neutral with USDA reporting soybeans-inspected-for-export at 9.6 mi bu vs. expectations for between 6.0-13.0 mi bu. Late Monday USDA met market expectations for crop condition by lowering the good-to-excellent rating 1 per cent to 66 per cent. Hot weather forecast for the US Midwest is seen as hastening crop development casting off frost worries. Cash soybeans in the US Midwest were steady amid slow farmer sales. Cash bids for soybeans in the US Mid-Atlantic States ranged from 9.0-19.0¢/bu higher. Funds added to net bull positions buying over 3,000 contracts. Up to 70-80 per cent of the new crop should be priced on these upticks.

WHEAT futures in Chicago (CBOT) were up Monday. SEPT’09 wheat futures finished up 4.75¢/bu at $4.942/bu; but 55.0 ¢/bu lower than last report. The JULY’10 wheat contract closed at $5.620/bu; up 2.5¢/bu but 56.75¢/bu lower than last report. Short covering and positioning ahead of the USDA WASDE report supported futures. Exports were neutral with USDA reporting wheat-inspected-for-export at 14.4 mi bu vs. expectations for between 11.0-17.0 mi bu. A stronger US dollar held back exports. France increased its wheat crop production estimate to 36.08 mi tonnes (1.3 bi bu). I have to admit the French wheat crop really looked good when I passed through there a week ago. It was hard to even drive across country with so many loaded wheat carts on those narrow French roads. Taiwan is expected to tender for wheat on Friday while Bangladesh issued a new tender for 100,000 tonnes (3.67 mi bu) on Monday. Good weather persists for the final harvesting of the US Winter wheat crop. The Urals and Kazakh are seeing significant wheat crop losses due to drought there. Funds bought about 2,000 contracts while large speculators added 540 short contracts to net bear positions ending at 50,378 short contracts. Now would be a very good time to consider getting 40 per cent of the 2010 crop priced.

Title: Re: American Hog News USDA
Post by: mikey on August 14, 2009, 08:15:38 AM
Korea Lifts Restrictions On US Hogs, Pork
US - The National Pork Producers Council yesterday hailed the Republic of Korea’s decision to inspect only a sample of US pork exports rather than 100 per cent of them and to lift a ban on live hog imports from the United States. The restrictions were put in place in the wake of the H1N1 flu outbreak.



"South Korea’s decision is good news for US pork producers," said NPPC President Don Mr Butler. "NPPC has been working closely with US and foreign government officials to terminate all remaining H1N1 restrictions on US hog and pork exports. Korea is a top market for US pork exports and an important destination for swine breeding stock. Our producers are enduring very difficult financial times, and the removal of these restrictions by Korea is appreciated."

The US pork industry since September 2007 has lost nearly $4.5 billion, and producers have lost an average of more than $21 per hog marketed since then. While high production costs – mostly feed grain prices – are the primary culprit for the industry’s economic woes, restrictions on US pork and hog exports put in place in early May by a number of countries that cited fears of H1N1 exacerbated the problems.

In 2008 South Korea was the sixth largest market for US pork, with exports valued at $284 million. In 2009 exports to Korea through May were down 10 per cent by volume and 7 per cent in value. Breeding stock exports to South Korea also are down in 2009 because of the H1N1-related ban. The country ranked as a top destination for US live hogs in 2008 with exports of $1.1 million.

Korea’s decision to lift the restrictions will reignite enthusiasm for the US-Republic of Korea Free Trade Agreement, which contains tremendous benefits for US pork producers, according to NPPC, which helped secure favorable treatment for US pork and pork products. According to Iowa State University economist Dermot Hayes, when the FTA is fully implemented, US pork exports to the Asian nation will rise to nearly 600,000 metric tons. That’s significantly more than the amount currently shipped to Japan, the No. 1 export market for US pork. Hayes also estimates that the FTA will increase by $10 the price producers receive for each hog marketed.

"This is the single most important trade agreement ever for the US pork industry, and it will generate hundreds of millions of dollars in new export sales," said Mr Butler. "We need Congress to approve the FTA with South Korea as soon as possible."

Under terms of the FTA, tariffs on all frozen and processed pork products will be eliminated by 2014. Fresh chilled pork will be duty free 10 years after implementation. US pork products currently face tariffs as high as 25 per cent. Additionally, South Korea has agreed to accept all pork and pork products from USDA-approved facilities.

The trade deal with South Korea was made possible in part because of the effective working relationship between NPPC and the National Pork Checkoff Board and their shared goal of increasing US pork exports.




Title: Re: American Hog News USDA
Post by: mikey on August 14, 2009, 08:17:10 AM
CME: Pork Exports Drifted Lower in June
US - Export numbers for June are in and they show significant year over year declines in the case of pork, moderately lower exports in the case of chicken and only a slight increase in the case of beef, write Steve Meyer and Len Steiner.



Please note that the numbers referenced below and in the attached charts reflect shipped weight and are reported in metric ton. ERS usually follows up with another release that converts shipped weight product into carcass weight equivalent, which is useful when trying to compare to other series expressed on a carcass weight basis.

As the charts below show, pork exports continued to drift lower in June and compared to a year ago total pork exports were 102,541 MT, down 33.4 per cent and the smallest monthly export volume since December 2007. The value of US pork exports declined by a similar amount. US pork exports in June were valued at $266.1 million, $125 million or 32 per cent lower than a year ago. The graphic illustrates the primary reason for the year over year decline in US pork exports. Shipments to China/Hong Kong, which provided much of the impetus for growth last year, have declined sharply and they are now approaching the levels we saw back in 2006 and 2007.


For all the talk of a growing middle class, and thus growing appetite for meat protein in China, one tends to forget that China has the largest sow herd in the world, spread across many small farms. As such, Chinese producers have the ability to expand production quite rapidly, as demonstrated so far in 2009 following two years of disease induced output reductions. But the decline in exports to China is not the only reason why June pork shipments were lower than a year ago. Exports to Japan, Korea, Taiwan, Russia and a number of smaller markets also were lower than a year ago. Pork exports to Japan were down 5,637 MT, 16.2 per cent lower than year ago. The only positive number in the June pork export data were shipments to Mexico, which continued to show decent growth. At 24,671 MT, pork exports to Mexico were up 22.7 per cent compared to a year ago and almost 34 per cent higher than the five year average.

Title: Re: American Hog News USDA
Post by: mikey on August 15, 2009, 07:28:20 AM
Slump Continues for US Pork Exports
US - The lingering global economic slump and low prices for domestic beef and pork products in key export markets contributed to a decline in US pork exports in June, according to statistics compiled by the US Meat Export Federation (USMEF).

 

Through the first six months of the year, 2009 is still shaping up as the second-best year for US pork exports, but it remains 9 per cent behind 2008 in terms of volume and 7 per cent in value. Thus far in 2009, the US has exported 925,339 metric tons (more than 2 billion pounds) of pork and pork variety meat valued at nearly $2.2 billion.

Compared to export totals in June of 2008 – the second-highest single month totals in history – combined pork and pork variety meat exports were down 31 per cent in June of 2009, totaling 133,594 metric tons (294.5 million pounds) valued at $320.4 million.

"The H1N1 influenza virus has been an important factor for US pork exports," said Jon Caspers, USMEF chairman and a pork producer from Swaledale, Iowa. "We have had market access issues in two of our top six pork export markets (China and Russia), which makes it all the more important to maintain a strong presence in our other key markets."

To ensure that US red meat products maintain a high profile in key markets, USMEF is employing a variety of tactics to support beef and pork exports.

"In challenging economic conditions like these, there is no one silver bullet that will drive exports, so we are looking at a whole spectrum of marketing and education programs that can be tailored to the specific market," said Philip Seng, USMEF president and CEO. "For example, we are taking the American Beef Club concept popularized in Russia and the European Union and introducing it in the Philippines. We are conducting pork cooking competitions at four-star hotels in Japan. We are training chefs in Cambodia, conducting junior chef competitions in the Middle East and providing instruction to meat buyers in Singapore, Thailand and Vietnam."

In the No. 1 market for US pork exports, Mexico, USMEF recently conducted an extensive training program for personnel in the hotel, restaurant and institutional (HRI) sector to familiarize them with US red meat. Mexico has rebounded well from its experience with the flu virus, and US pork exports there are up 52 per cent in volume to 248,694 metric tons (658.5 million pounds) for the first half of 2009. The value of those exports is up 37 per cent to $369.6 million. In June of 2009 versus one year ago, pork exports were up 22 per cent in volume but slipped 4.3 per cent in value as consumers continue to look for more affordable menu options.

The United States’ No. 2 pork market, Japan, also is up for the first half of the year. Volumes rose 1 per cent to 223,290 metric tons (492.3 million pounds) while the value of those exports is up 13 per cent to $808 million. For the month of June, export volumes to Japan dipped 13.5 per cent versus a year ago while the value of the exports slipped just under 6 per cent.

On the flip side, exports to the No. 3 market, the greater China/Hong Kong region, are off just over half for the year, dropping 52 per cent in volume (to 121,412 metric tons or 267.7 million pounds) and 54 per cent in value to $203.3 million. Russia, the No. 6 pork export market, has seen volumes drop 35 per cent to 60,826 metric tons (134.1 million pounds). The value of pork exports to Russia is down 37 per cent compared to the first half of 2008, reaching $123.9 million.

The story is not the same for exports of pork muscle cuts and variety meat in the first half of 2009 versus 2008: pork variety meat exports are up 27 per cent in volume to 245,984 metric tons (542.3 million pounds), and the value of those exports is up 29 per cent to $379.2 million. At the same time, the market for pork muscle cuts is down 18 per cent in volume to 679,355 metric tons (nearly 1.5 billion pounds) valued at almost $1.8 billion, a 12 per cent decline.




Title: Re: American Hog News USDA
Post by: mikey on August 15, 2009, 07:29:52 AM
Governors Urge Obama to Help Pork Producers
US - The National Pork Producers Council has commended the governors from a number of the nation’s top pork-producing states for urging President Obama to take immediate action to help US pork producers through a nearly 2-year-old economic crisis.



In a letter sent to the president on Friday (7 August), the governors of Colorado, Illinois, Iowa, Kentucky, Michigan, Nebraska, North Carolina, Oklahoma and Wisconsin asked the administration to:


--------------------------------------------------------------------------------
*
"For the pork industry to remain as vibrant entities in rural communities, we need your prompt actions to assure that our communities and the US pork industry remain competitive world wide." 
US Governors in a letter to President Obama
--------------------------------------------------------------------------------
 
Support at least an additional $50 million of pork purchases for government feeding programs. (The US Department of Agriculture annually buys pork for federal food programs; it bought nearly $62.6 million worth in 2008, for example.)

Remove a spending cap on USDA’s Section 32 food-assistance program so that additional purchases of surplus agriculture products, including pork, can be made. (Congress imposed the cap as part of USDA’s fiscal 2009 budget.)

Urge China to quickly lift a ban on US pork that was put in place because of the H1N1 flu outbreak and to eliminate other barriers to US pork exports.

"Today, the pork industry is facing an economic crisis that is catastrophic in nature," said the governors in their letter to the president. "For the pork industry to remain as vibrant entities in rural communities, we need your prompt actions to assure that our communities and the US pork industry remain competitive world wide."

Since September 2007, the US pork industry has lost nearly $4.4 billion, with producers losing an average of $21.37 per pig over the past 21 months. Many pork producers have gone, or are in jeopardy of going, out of business, threatening thousands of the more than 550,000 mostly rural jobs they help support.

"US pork producers, who provide America’s families with a safe, wholesome, nutritious product, are grateful to the governors for intervening on their behalf with President Obama," said NPPC President Don Butler. "These state executives recognize that pork production is a significant value-added industry for their states and for our country."

[The following governors signed the letter: Bill Ritter, D-Colo.; Pat Quinn, D-Ill.; Chet Culver, D-Iowa; Steven Beshear, D-Ky.; Jennifer Granholm, D-Mich.; Dave Heineman, R-Neb.; Beverly Perdue, D-N.C.; Brad Henry, D-Okla.; and Jim Doyle, D-Wis.]




Title: Re: American Hog News USDA
Post by: mikey on August 17, 2009, 10:44:10 AM
Weekly Review: Lower Feed Prices Positive for Hog Industry
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Corn production in 2009 is forecast at 12.8 billion bushels, up 5 per cent from 2008 but down 2 per cent from 2007. If this forecast holds, it will be the second largest crop of record trailing only 2007.

Corn yields are expected to average 159.5 bushels per acre, up 5.6 bushels per acre from last year and the second largest crop yield of record exceeded only by 2004.

Soybean production for this year is forecast at a record-high 3.2 billion bushels. The yield for 2009 is forecast at 41.7 bushels per acre, up 2.1 bushels per acre from 2008. Acres for soybean harvest are forecast at 76.8 million acres, up slightly from June and 3 per cent higher than 2008.

The USDA estimated farm price for corn for the 2009-2010 marketing year is $3.10-3.90 per bushel, down from $4.00-4.10 per bushel for the current marketing year. The estimate by USDA for soybean meal prices for the 2009-2010 marketing year is $260-320 per ton, down from the $325 per ton for the 2008-2009 marketing year.

These lower prices for corn and soybean meal will be positive for the hog industry, but the US breeding herd still needs to be reduced by at least five per cent from the current level and possibly a ten per cent reduction will be necessary to get production in line with demand to provide profits for the average-cost hog producer.

Live barrow and gilt weights last week at 267.5 pounds were up one pound from a week earlier and up 10.4 pounds from a year earlier. This is a record-high change for a year.

The average carcass weight for barrows and gilts under Federal Inspection for the week ending August 1 at 197.0 pounds was up 6.0 pounds from a year earlier.

Feeder pig prices last week on a national basis were $2-7 per head below a week earlier. The average price per head for 10-pound-basis pigs was $25.37. Pigs weighing 40-pounds sold for an average of $24.62 per head. The formula price for 10-pound-basis pigs was $31.85 per head, and the formula price for 40-pound-basis pigs was $43.83 per head. The negotiated or spot price for 10-pound pigs was $11.02 per head, and the spot price for 40-pound-basis pigs was $23.16 per head.

The price for pigs at United Tel-o-Auction was $1-20 per cwt below two weeks earlier. The pigs at United weighed between 40 and 50 pounds and sold for $49 per cwt.

Pork exports in product weight in June were down 33.4 per cent. For January-June pork exports in product weight were down 18 per cent from a year earlier. However, the value of pork exports for January-June was down only 12 per cent. Pork exports in carcass equivalent will be in next week's letter.

Pork cutout per cwt of carcass for Thursday afternoon at $52.31 per cwt was down $2.33 per cwt from a week earlier. Loins at $68.50 per cwt were down $2.29 per cwt, Boston butts at $59.29 per cwt were down $1.17 per cwt, hams at $40.34 per cwt were up $2.27 per cwt, and bellies at $55.99 per cwt were down $13.04 per cwt from a week earlier.

Live hog prices Friday morning were $4-6 per cwt lower compared to seven days earlier. Weighted-average negotiated carcass prices Friday morning were $0.90-2.11 per cwt lower compared to a week earlier.

The top live prices Friday morning were: Peoria $26 cwt, Zumbrota, Minnesota, $29 cwt and interior Missouri $30.50 per cwt.

The weighted-average negotiated carcass prices by area Friday morning were: western Cornbelt $46.39 per cwt, eastern Cornbelt $44.73 per cwt, Iowa-Minnesota $46.43 per cwt and nation $46.06 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,240 thousand head, up 4.5 per cent from a year earlier.

Title: Re: American Hog News USDA
Post by: mikey on August 18, 2009, 08:57:15 AM
Could Viruses Promote Health?
US - Agricultural Research Service (ARS) scientists think that virus enzymes may promote human and animal health.



Could viruses be good for you? Scientists with the Agricultural Research Service (ARS) have shown that enzymes from bacteria-infecting viruses known as phages could have beneficial applications for human and animal health.

Phage enzymes called endolysins attack bacteria by breaking down their cell walls. Unlike antibiotics, which tend to have a broad range, endolysins are comparatively specific, targeting unique bonds in the cell walls of their hosts. This is significant because it means non-target bacteria could be less likely to develop resistance to endolysins.



ARS studies have shown that enzymes from bacteriophages (like the one shown) can be used to fight multi-drug-resistant bacterial pathogens, such as MRSAResearchers at the ARS Animal Biosciences and Biotechnology Laboratory in Beltsville, Maryland, in collaboration with federal, university and industry scientists, have developed and are patenting technology to create powerful antimicrobials by fusing genetic material from multiple cell-wall-degrading endolysins. Now the researchers are collaborating with biopharmaceutical companies to evaluate and further develop the technology.

Studies led by ARS biologist, David M. Donovan, show that phage enzymes could be used to wipe out multi-drug-resistant pathogens that affect both animals and humans, such as methicillin resistant Staphylococcus aureus, also known as MRSA.

The scientists showed that the enzymes can knock out pathogens in biofilms, which are matrices of microorganisms that can attach to a variety of surfaces. Biofilms are resistant to antibiotics and contribute to many human infections.

In a related study, the scientists showed that using the endolysins lysostaphin and LysK in concert inhibited the growth of staphylococcal strains that cause mastitis in cattle and staph infections in humans.

This research was published recently in the journal, Biotech International.




Title: Re: American Hog News USDA
Post by: mikey on August 19, 2009, 08:18:36 AM
Tuesday, August 18, 2009Print This Page
NPPC Asks USDA to Save US Pork Industry
US - Asking for help to save the US pork industry and thousands of jobs, the National Pork Producers Council yesterday urged the US Department of Agriculture to lend assistance to US pork producers to help them weather a nearly two year old economic crisis.



In a letter sent to Agriculture Secretary Tom Vilsack, NPPC requested $250 million in financial assistance and other actions that should help producers, who since September 2007 have lost an average of more than $21 on each hog marketed. It asked the agency to:

Purchase immediately an additional $50 million of pork for various federal food programs – other than ones in USDA’s Section 32 program – using fiscal 2009 funds. Fiscal 2009 ends Sept. 30. The funds would not come from USDA’s Section 32 program. (USDA annually buys pork for food programs; it bought $62.6 million worth in 2008, for example.)

Urge Congress to lift a spending cap on the Section 32 program, and use $50 million of $300 million available to purchase pork for the program, which uses customs receipts to buy non-price-supported commodities for school lunch and other food programs.

Buy on 1 October a minimum of $50 million of pork, using fiscal 2010 funds. Fiscal 2010 begins 1 October. The purchase would be in addition to USDA’s annual buy.

Use $100 million of the $1 billion appropriated for addressing the H1N1 virus for the swine industry. This would include $70 million for swine disease surveillance, $10 million for diagnostics and H1N1 vaccine development and$20 million for industry support.

Work with the US Trade Representative to open export markets to US pork. Several countries, including China, continue to impose unwarranted bans on US pork because of the H1N1 flu.

Study the economic impact on the livestock industry of an expansion of corn-ethanol production and usage. The US Environmental Protection Agency has proposed raising the cap on blending ethanol into gasoline to 15 per cent from its current 10 per cent.

"U.S. pork producers are in desperate straits right now, and they need a little help from USDA," said NPPC President Don Butler. "The request NPPC has made today not only will help pork producers and Americans who benefit from government feeding programs but tens of thousands of mostly rural jobs supported by the US pork industry."

Governors from nine states on 7 August also asked the federal government to help US pork producers, urging USDA to make a supplemental $50 million purchase of pork and to lift the Section 32 spending cap to make additional pork buys.




Title: Re: American Hog News USDA
Post by: mikey on August 19, 2009, 08:20:23 AM
CME: Pork Markets Still a Topic of Interest
US - Following up on Friday's discussion about sow prices reported by USDA, it was pointed out to us that the quoted USDA sow prices reflect the price of sows slaughtered the day prior, reports Steve Meyer and Len Steiner.



Those sows were naturally bought earlier than their slaughter date and, as a result, do not reflect actual sow prices for that specific day. In addition, one should point out that there are two separate USDA reports that cover the sow market. One of them is a mandatory report and the other is a voluntary report. The prices quoted in the Friday issue were from the voluntary report, not the mandatory report. You can see the actual USDA numbers for mandatory sow report and voluntary sow report.

Pork markets remain a topic of interest and it was interesting to see on Friday an announcement by the Canadian government that it was stepping in to support their struggling hog producers. The Canadian hog industry has been in a contraction mode since 2005 but the contraction has accelerated in the last two years following sharply higher feed costs, lower hog prices as well as the implementation of the Country of Origin Labeling Law in the US, which distorted demand for Canadian born feeder pigs.

The most recent Canadian government support program envisions a CAD$75 million fund (~US$68 million), which will provide support to producers that wish to stop or suspend production for at least three years. The program also would create a CAD$17 million fund to support global marketing efforts to promote Canadian pork. Furthermore, and likely just as important, there is a provision that would allow banks to provide “long-term loans with governmentbacked credit.” This is important since many Canadian hog producers are finding it difficult to secure credit in the current environment.

According to the news release "The Government of Canada will share the loan loss risk. Lending organizations will be required to ensure that the borrower has a credible business plan..." Clearly the Canadian government wants to prevent a complete collapse of this once fast growing industry, a collapse that would have significant social and economic consequences for many farming communities.

Title: Re: American Hog News USDA
Post by: mikey on August 19, 2009, 08:29:30 AM
Market Preview: No Banner Year for Packers Either
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



The situation with pork packing margins has been somewhat of a mystery this year. There is always mystery regarding the actual level of packers’ profit margins since they are quite understandably reluctant to publicize those numbers beyond what is required of the publicly traded companies, such as Smithfield Foods, Tyson Foods and Hormel Foods.

I think it is safe to say that most pork producers feel the same way about their financial performance data. But we do have enough data to estimate pork packers’ gross margins (i.e. the margins that they achieve above the amount they pay for hogs) by comparing the pork cutout value to the cost of hogs and then adding in an estimate of by-product revenue. Figure 1 shows these estimates for 2008 and 2009, year-to-date, as well as the five-year average.


It is easy to see that 2009, as bad as it has been for pork producers, has not been a banner year for pork packers either. The first week of July was the lowest estimated gross margin in the history of my data, which goes back to January 1992. That $3.22/head estimate is even more shocking considering the fact that packer margins were at their highest level since 1999 just last summer when export demand added significant value to both pork and pork by-products.

Following that abysmal record, packers successfully pushed margins back to longer-term averages by mid-July when a few reduced-throughput days drove cutout values higher. Those did not last long, however, when packers returned to more normal hours and chain speeds. Cutout values fell back to pre-slowdown levels and packers have reduced hog bids since that time in an effort to maintain margins.

So, is this good or bad? The answer is "Both". Packers cannot operate forever on low margins. They proved that by reducing throughput in July. While not popular with producers, packers are in a much better position to manage margins and they will do so. Higher margins will keep hogs moving – an imperative given the size of the hogs coming to market. We have to keep animals moving and low packer margins may not get that done.

Finally, these packer margins are not large by any stretch – and probably do not represent net profits after packers pay for labor, utilities, packaging, transport and fixed costs. Their misery may not be as large as producers’, but they aren’t rolling in the roses, either.

The Question of "Accuracy"
There is just one more point to make: Are these computed gross margins accurate? I compute them using the best information I can access, but the fact that gross packer margins were so low for so long makes me question how accurate they may be.

I’m confident about the hog price. I use the national total net weighted average price, which should reflect the average hog cost for packers. Further, it comes from the mandatory price reporting system. USDA audits the packer data, so it should be dependable – at least over time.

I’m reasonably comfortable about the by-product value. It comes from the Livestock Marketing Information Center in Denver, uses publicly quoted prices and has been computed in the same manner using the same weighting factors for the entire position in question.

That leaves the cutout value. I know how USDA computes it and I know that their procedure changes from time to time. It changed rather sharply in 1998 and has changed some since then as USDA has updated yield coefficients for various cuts. I’m not aware of any changes during the period in question, but it appears from Figure 2 that the relationship between hog price and cutout value began to change in 2007. The cutout has fallen so much relative to hog prices that the difference (i.e. the "meat margin") has been positive in only four of 32 weeks thus far in 2009.


Can that be? Is there something amiss here? UDSA’s computations do not include “overages” that packers get for certain specifications. So, have base values fallen and “overage” increased over the past two years? Has the growth in the number of hogs priced off the cutout value caused packers to report lower product prices? That hardly seems reasonable since a high proportion of pork cuts are formula priced but . . .

I don’t know the answer to those questions, but I will try to find out more. And there is, hopefully, some help on the way. The Obama Administration finally got some key positions filled at USDA this summer and that got a Congress-mandated study of wholesale pork price reporting off dead center. The project will be carried out by researchers from Kansas State University, Michigan State University and the University of Missouri with results reported back to USDA this fall. The ultimate question is whether the pork industry would benefit from a mandatory wholesale pork price reporting system similar to the one that already exists for beef. The entire industry is, I think, looking forward to that answer.

Title: Re: American Hog News USDA
Post by: mikey on August 20, 2009, 11:22:28 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were off on Monday with the exception of the nearby October. OCT09LH futures finished up $0.050/cwt at $44.700/cwt. The DEC09LH contract closed down $0.250/cwt at $44.575/cwt. While lower commodities and outside influences put a drag on prices short-covering and bull spreading made up for the a mixed bag of prices. In addition, lack of any fresh news regarding increased sow slaughter, expectations for persistent large hog supplies, and slow exports continued to pressure prices. USDA on Friday put the average pork price at $52.52/cwt, off $2.05/cwt from this time last week. The latest CME Lean Hog Index was placed at $49.73/lb, down $0.56/lb. Canada is reportedly offering to pay producers to stop raising hogs by offering loans to help restructure and paying a premium of $500.00 C per sow to the producer. Cash hog prices were generally steady with HedgersEdge.com lowering the average pork plant margin $1.00/head to a positive $6.25/head. This was based on the average buy of $34.65/cwt vs. the average breakeven price of $36.99/cwt. Move market hogs when ready.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The SEPT’09 contract closed at $3.142/bu; off 5.0¢/bu. DEC’09 corn futures finished at $3.216/bu; down 6.0¢/bu. Pressure from falling stock prices, lower crude oil futures, a higher US dollar, weak exports, and good corn-growing weather all weighed on prices. Sell stops were noted in December 2009 futures. USDA placed corn-inspected-for-export at 40.881 mi bu vs. expectations for 44-48 mi bu. The latest Pro Farmer Midwest Crop tour is finding a good crop growing in the fields. Cash corn was steady in both the US Midwest and US Mid-Atlantic states. Large speculators added 2,126 contracts to net bull positions while funds sold between 8-10 thousand contracts. Hopefully 70 per cent of the 2009 crop has been sold.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed off again on Monday. The SEPT’09 contract closed down 36.5¢/bu at $9.880/bu. The NOV’09 contract closed at $9.544/bu; off 27.0¢/bu. The same pressures affecting corn weighed on soybeans. Funds and other non-commercials noted long-liquidation, selling over 5,000 lots. Exports were disappointing with USDA reporting soybeans-inspected-for-export at 5.620 mi bu vs. expectations between 6-13 mi bu. The US crop tour kicked off this week expecting to see a good crop. Speculators added to net bull positions as cash soybean prices plummeted in the country. Up to 70-80 per cent of the new crop should be priced at this time.

WHEAT futures in Chicago (CBOT) were off on Monday. SEPT’09 wheat futures finished down 10.0¢/bu at $4.710/bu. The JULY’10 wheat contract closed at $5.412/bu; off 9.5¢/bu. Futures are technically weak with contract lows posting in many months. Exports were neutral with USDA posting wheat-inspected-for-export at 13.915 mi bu vs. expectations for between 11-17 mi bu. Funds sold about 4,000 lots while large speculators added to net bear positions posting 54,196 sold contracts as of 11 August.

Title: Re: American Hog News USDA
Post by: mikey on August 22, 2009, 06:49:00 AM
CME: Producers Prepare for Continued Cutbacks
US - The latest numbers from Statistics Canada confirmed what many market watchers already knew, inventories of cattle and hogs in Canada continue to drift lower and they are now significantly smaller than only a few years ago, write Steve Meyer and Len Steiner.



Based on the 1 June and 1 July inventories for US and Canada, respectively, the combined US + Canada cattle inventory currently stands at 116.640 million head, 1.8 million head or 1.6 per cent lower than a year ago. This is the smallest combined cattle inventory number since at least 1996 (no Canadian data available prior to that year). The combined hog inventory now stands at 78.184 million head, 2.2 million head or 2.7 per cent lower than the previous year.

Despite the big decline in overall hog numbers, however, the combined hog inventories in US and Canada are by not means small. They are just 0.6 per cent smaller than in 2007 and the third largest on record. The North American hog industry expanded rapidly, thanks to strong global demand for pork and it will take time for the market for find the right balance given current industry losses.

While current inventories paint a picture of the overall supply picture in North America, the breeding stock numbers provide a glimpse of what is to come. In both cases, the outlook is for smaller supplies due to a sharp contraction in the beef cow and sow inventories.


The combined US and Canada beef cow inventory was 36.788 million head, 1.9 per cent smaller than a year ago and the second consecutive year of big inventory reductions. The inventory of beef cows in US and Canada has been declining for over a decade and this is the lowest since at least 1996. The semi-annual surveys show that there is little appetite for expansion, in the US or Canada. The number of US heifers held back for beef cow herd rebuilding on June 1 was 4.5 million head, 2.2 per cent smaller than a year ago. Canadian heifers held back for beef cow replacement were 638,400 head, 2.5 per cent less than a year ago. The situation in the hog complex has changed even more dramatically, considering that only two years ago this was still a growing industry. The combined US and Canada sow inventory declined 2 per cent last year and another 3 per cent this year.

As we noted a few days ago (8/17), the Canadian sow herd has been declining for some time. But because the US sow herd accounts for more than 80 per cent of the total North American breeding stock, it will take significant changes in US operations in order to see a meaningful impact in the combined breeding stock. The Canadian report showed that, just as in the US, producers are preparing for continued cutbacks going forward. Canadian producers indicated that farrowings in Q3 are expected to be down 4.1 per cent and decline 5.5 per cent in Q4. Some of this will likely be offset by increased productivity, which in the case of the US will likely offset most of the decline in farrowings.







Title: Re: American Hog News USDA
Post by: mikey on August 22, 2009, 06:50:45 AM
US and Canadian Hog Inventory Down 3 Per Cent
US - This publication is a result of a joint effort by Statistics Canada and NASS to release the total hogs, breeding, market hogs, sows farrowed, and pig crop for both countries within one publication. This information was requested by the US hog industry to provide producers additional information about potential hog supplies. US inventory numbers were previously released on 20 August 2009.

 

US and Canadian inventory of all hogs and pigs for June 2009 was 78.2 million head. This was down 3 per cent from June 2008 and down 1 per cent from June 2007. The breeding inventory, at 7.35 million head, was down 3 per cent from a year ago and down slightly from last quarter. Market hog inventory, at 70.8 million head, was down 3 per cent from last year but up 1 per cent from last quarter. The pig crop, at 35.9 million head, was down 2 per cent from 2008 but up slightly from 2007. Sows farrowed during this period totaled 3.71 million head, down 4 per cent from last year.

US inventory of all hogs and pigs on 1 June 2009 was 66.1 million head. This was down 2 per cent from 1 June 2008 but up 1 per cent from 1 March 2009. The breeding inventory, at 5.97 million head, was down 3 per cent from last year and down slightly from the previous quarter. Market hog inventory, at 60.1 million head, was down 2 per cent from last year but up 1 per cent from last quarter. The pig crop, at 28.5 million head, was down slightly from 2008 but up 2 per cent from 2007. Sows farrowed during this period totaled 2.97 million head, down 3 per cent from last year.

Canadian inventory of all hogs and pigs on 1 July 2009 was 12.1 million head. This was down 7 per cent from 1 July 2008 and down 18 per cent from 1 July 2007. The breeding inventory, at 1.38 million head, was down 5 per cent from last year and down slightly from last quarter. Market hog inventory, at 10.7 million head, was down 7 per cent from last year but up 2 per cent from last quarter. The pig crop, at 7.3 million head, was down 6 per cent from 2008 and down 8 per cent from 2007. Sows farrowed during this period totaled 738,500 head, down 7 per cent from last year.


Title: Re: American Hog News USDA
Post by: mikey on August 22, 2009, 11:35:14 PM
US Pork Outlook Report - August 2009
Summer prices for pigs and pork cuts remain at low levels due to slow demand for pork products, according to the USDA ERS August 2009 Livestock, Dairy and Poultry Outlook.

 

Highlights
Summer prices for hogs and pork cuts continue to languish at year-over-year lower levels due to lacklustre demand for pork products. Second-quarter pork exports were 31 per cent lower than a year ago, largely due to lower demand for US pork in Asia.

Hog and Pork Prices Significantly Lower than a Year Ago
Summer prices for hogs and pork cuts continue to languish at year-over-year lower levels at a time of year when prices are typically buoyant. Lackluster demand from recession-battered consumers—both domestic and foreign—is ultimately the culprit for low pork and hog prices. Unwillingness/inability of consumers to pay year-over-year higher pork prices is reflected in lower wholesale prices. Wholesale US pork prices in July – approximated by USDA’s Estimated Pork Carcass Cutout – were almost 18 per cent below prices in July 2007, and nearly 27 per cent below July of last year, when China was a strong presence in the US pork market.

Weak domestic and foreign demand reflected in lower wholesale prices, together with stronger-than-expected July production, kept July live equivalent 51-52 per cent hog prices at $42.74 per cwt, more than 24 per cent below prices a year ago.

Third-quarter hog prices are expected to average $40-42 per cwt, with production almost two per cent below the same period last year. For 2009, USDA expects hog prices to average $40-41 per cwt, almost 15 per cent below 2008. Commercial pork production for 2009 is expected to be 22.8 billion pounds, more than two per cent below last year.

Higher Cold Stocks Reflect Lower Demand
Lower pork supplies, such as those forecast for this year, should cause prices to move higher. Part of the reason that lower 2009 pork production has failed to boost prices of hogs and pork cuts is that pork demand – domestic and foreign – has fallen faster than the decline in production. Most of the pork products not exported or marketed in the United States are being held as cold stocks. In fact, the projected average quarterly pork stocks-to-disappearance ratio for 2009 is 0.14, whereas this ratio averaged about 0.11 for the period 2000-2008.

Ending stocks for June were more than nine per cent larger than a year ago, and 23 per cent above the 2006-08 average.

Pork products not exported and not stored are marketed to US consumers.

Although slightly more pork will be available to US consumers this year than last year due to weak demand, US population increases have reduced per capita pork disappearance by about 0.5 of a pound. Retail per capita pork disappearance this year is expected to be 49 pounds, down about 1 per cent from 49.5 pounds in 2008.

Lower Exports on Weak Asian Demand
Second-quarter US pork exports dropped sharply from a year ago. Total shipments were 952 million pounds, down 31 per cent from the same period last year. The 10 largest foreign markets for US pork products are listed below for the second quarter and the first half of 2008 and 2009. All major export destinations, with the exception of Mexico, imported less US pork in the second quarter. Lower exports are most likely attributable to lower consumer incomes and uncertainty resulting from the worldwide recession. Surprisingly, the impacts of H1N1 concerns in Mexico appear limited.

Although exports to Mexico were three per cent lower in May, exports in June were almost 27 per cent higher than a year ago, representing a resumption of strong year-over-year increases of exports to Mexico in 2009.

The 10 largest foreign markets for US pork products: first-half of 2009 and 2008

2009 Pork, Swine Imports Decline from a Year Ago
Second-quarter 2009 imports of more than 196 million pounds were almost five per cent below a year ago. Larger imports from Canada, which accounts for more than 80 per cent of US pork imports, were not sufficient to offset declines from other import sources. Imports from Denmark, which typically accounts for over 10 per cent of US imports, were almost 11 per cent below second-quarter 2008. First half imports were five per cent below same period last year. Lower imports so far this year are more than likely due to reduced incentives to import pork that derive from lower domestic pork prices.

Second-quarter 2009 live swine imports of 1.6 million head of Canadian animals were 25 per cent below a year ago. Imports of slaughter-ready animals and breeding animals continue to decline the most year-over-year. Imports of animals weighing between 15 and 51 pounds, however, were actually higher than second-quarter 2008, an indication, perhaps, of the recent willingness of some US packers to process Canadian-origin animals. Total first-half imports were more than 33 per cent lower than the same period last year. Lower swine imports are largely due to ongoing industry contraction from continued dismal producer returns in Canada.

Title: Re: American Hog News USDA
Post by: mikey on August 25, 2009, 12:11:25 PM
CME: Bearish Undertones for Pork Supplies
US - USDA issued two supply related reports (Cattle on Feed and Cold Storage) on Friday afternoon and both held some surprises that may affect livestock futures, write Len Steiner and Steve Meyer.



Below is a brief recap of the cold storage numbers, including details:

The cold storage numbers held some bearish undertones, especially with regard to pork supplies. USDA reported that total pork in cold storage as of 31 July was 547.3 million pounds, 8.3 per cent larger than a year ago and 24.8 per cent higher than the five year average.

Supplies of ham in cold storage continued to rise at a fast pace, although they remain below year ago levels thanks to some significant revisions to year ago numbers. Total ham stocks at the end of July were 137.8 million pounds, 5 per cent less than last year but a whopping 23.6 per cent higher than the five year average. Ham prices normally help carry hog carcass values in Q4 but with such an increase in ham stocks, demand in Q4 could be softer than usual and negatively impact overall pork values.

Beef stocks were reported to be 448.2 million pounds, 4 per cent higher than a year ago and 2.3 per cent higher than the five year average. Broiler supplies remain below year ago levels but they are also showing some upward movement. Total whole broiler and broiler meat stocks at the end of July were 677.7 million pounds, 8.3 per cent lower than a year ago and 5.5 per cent lower than the five year average. Combined beef, pork, broiler and turkey stocks were reported to be 2.313 billion pounds, 0.8 per cent higher than a year ago and 7.9 per cent higher than the five year average.

Title: Re: American Hog News USDA
Post by: mikey on August 25, 2009, 12:13:11 PM
July Red Meat Production Below Previous Year
US - Commercial red meat production for the United States totaled 4.12 billion pounds in July, down 3 per cent from the 4.25 billion pounds produced in July 2008, reports the USDA's National Agricultural Statistics Service (NASS).

 

Pork production totaled 1.83 billion pounds, down 1 per cent from the previous year.

Hog kill totaled 9.15 million head, down 3 per cent from July 2008.

The average live weight was up 5 pounds from the previous year, at 267 pounds.

January to July 2009 commercial red meat production was 28.4 billion pounds, down 3 per cent from 2008.

Accumulated pork production was down 3 per cent from last year.

July 2008 contained 23 weekdays (including one holidays) and 4 Saturdays.
July 2009 contained 23 weekdays (including one holidays) and 4 Saturdays.

Title: Re: American Hog News USDA
Post by: mikey on August 26, 2009, 11:34:43 AM
Weekly Outlook: 'How Much Longer?' Ask Producers
US - Equity has eroded and is continuing to erode quickly. Hog producers are asking how long the hog market will continue to drain their net worth, writes Chris Hurt, Extension Economist at Purdue University.

 Chris Hurt
Extension Economist
Purdue University
 

How big has the equity drain been? That depends on the financial position of each producer, but a comparison to the 1998/99 financial disaster reveals the seriousness. Using estimates of losses in the 1998/99 disaster, a 10,000 head per year producer would have lost $213,000 in the seven quarters of loss beginning with the first quarter of 1998. In contrast in the first seven quarters of losses in the modern period, the 10,000 head per year operation would have estimated losses of $315,000. That spans the period from the fourth quarter of 2007 through the second quarter of 2009. Unfortunately, current forecasts are for losses to continue to mount for three additional quarters, through the first quarter of 2010, and rise to $396,000 of accumulated losses. This downturn is both longer and more severe than in 1998/99.

Producers have been slow to reduce the breeding herd this time. In the past two years, the US breeding herd has dropped by just three per cent. In contrast, from mid-1998 to mid-2000, the breeding herd was down ten per cent. There are at least four potential reasons for the slower rate of liquidation. The first may be that this time the industry’s losses were primarily related to much higher feed prices. Perhaps producers were not convinced that feed prices would stay high after their acceleration in late 2007.

Second may have been a miss-reading of the pork export surge in the spring and early summer of 2008, primarily driven by China and a cheap dollar. That surge was the primary stimulus for live hog prices moving from $39 in March 2008, to $58 in May, and to highs above $60 in August. Prices that high meant $5 per bushel corn was not as big of threat as earlier thought and unfortunately this delayed breeding herd liquidation. Looking back, that export surge was a onetime unique event, as exports have returned to much lower, but more normal levels.

Third, industry structure may be a culprit in such a slow downward herd adjustment. The industry has never had to make such a large downward adjustment with such a concentrated set of producers.

Finally, while the current string of losses has been large, the profits and net worth accumulated in the generally profitable period from 2000 until the current downturn began in the final quarter of 2007 were large. Taking the hypothetical 10,000 head producer’s accumulated returns from the start of 1998, the losses accumulated to $213,000 by the end of the third quarter of 1999. But then the industry returned to overall profitability for a long run. By the third quarter of 2007, the farm had overcome the losses of 1998/99 and accumulated $1.45 million of profits. For the farm continuously in production since 1998 the current losses that may accumulate to near $400,000 on this downturn may be coming from a high equity base.

This makes the point that all hog farms are probably not in financial trouble. Those most vulnerable to the current financial losses are those that have started production in the last three years, those that have had large expansions in the past few years, and those that diverted some of their hog earnings in 2000 to 2007 into assets such as stocks or residential housing that plunged in value as well.

How much longer? I expect modest losses this fall, with live hog prices averaging about $40 to $42 and all costs near $45. For the winter, hog prices are expected to be in the low to mid $40s with costs near $46. Profits may return in the spring of 2010 with prices rising to the higher $40 and costs remaining in the $46 to $47 range. For all of 2010, I expect a modest profit of $2 to $5 per head.


 
Title: Re: American Hog News USDA
Post by: mikey on August 26, 2009, 11:36:36 AM
Tuesday, August 25, 2009Print This Page
CME: Canadian Breeding Herd Down from July
US - We discussed the combined US and Canadian hog and cattle numbers last Thursday but thought some more detailed information on the Canadian pork industry might be helpful since the changes there have been so large for so long, write Steve Meyer and Len Steiner.



Some key information from Statistics Canada’s Hog Statistics report are:

Canada’s swine breeding herd is down 4.6 per cent from July 2008 to 1.38 million head. That herd is 15.6 per cent smaller than Canada’s peak breeding herd back in January 2005. The curious part of the July number is that is was only fractionally lower than the April figure in spite of the liquidation of Stomp Farms (about 12,000 sows) in June.


The reduction of Canada’s herd plus the slow reduction of the US herd puts the combined breeding herds 3 per cent lower than one year ago (graph below). The pace of decline slowed for both countries this summer but it is very likely that it has picked up again after the huge selloff in Lean Hogs futures contracts during July. Many analysts believe that the two countries need to cut an additional 400,000 sows, about the same as they have cut since October 2007 when the combined herds peaked at 7.752 million head.

Canada’s market herd on 1 July numbered 10.725 million head, 6.7 per cent lower than on year ago. As has been the case for some time, the largest decline in Canadian pig numbers can in the under-20 kg category, which was down 11.3 per cent. In the past, these larger declines in the light-weight inventory have been driven by larger exports of Canadian weaned and feeder pigs to the US But those shipments are 1.135 million (26 per cent) lower this year. The larger decline in light-weight pigs is more likely driven by the fact that producers of these pigs have borne a huge share of the economic pressure this year. That is especially true for those who sell on spot markets where pig prices have been below $10/head for several weeks.


Farrowings in the April-June quarter were 7.7 per cent lower than one year ago — a number probably more reflective of the spring quarter’s breeding herd that was over 6 per cent lower than in April 2008. Producers in the western provinces farrowed nearly 10 per cent fewer sows than one year ago while those in the east farrowed 4.6 per cent fewer litters. That also continues a longrun pattern of larger cuts in the west — a fact at least partially (and many believe largely) attributable to Quebec’s provincial farm support programs.


Farrowing intentions for the fall Q3 and Q4 show this regional disparity even more starkly. Nationwide, Canadian producer intend to farrow 7.5 per cent fewer litters in Q3 — the west is down 14.4 per cent and the east is down 0.5 per cent. The Q4 numbers aren’t that out of balance but western producers plan to farrow 4.5 per cent fewer litters while the eastern producers plan to farrow 0.6 per cent fewer. Nationally, Canadian producers plan to farrow only 2.5 per cent fewer litters in Q4.
NOTE: All these numbers came from a survey done in early July and represent 1 July figures. While they are of value for plannint, much has changed since then and we suspect that the September report data will be different.



Title: Re: American Hog News USDA
Post by: mikey on August 27, 2009, 11:36:20 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were off on Monday. OCT09LH futures finished down $1.025/cwt at $46.825/cwt; but $2.125/cwt higher than a week ago. The DEC09LH contract closed down $1.325/cwt at $46.000/cwt; but $1.425/cwt higher than last report. The run has been good but will it last? Better cash pork prices and expectations that pork prices may improve on seasonal demand were supportive. However, poor export prospects, bearish technical signs showing possible outside reversal chart formations weighed on prices. USDA’s cold storage report on Friday was bearish showing as of July 31 pork stocks were up 42 mi lbs (8.3 per cent) from this time last year. USDA on Friday put the average pork cutout price at $53.79/cwt; up $2.45/cwt from the previous report but only $1.27/cwt over last week’s report. The latest CME Lean Hog Index was placed at 49.04; up $0.02 but $0.69/cwt lower than a week ago. Some processors were looking to fill lines for the rest of the week. According to HedgersEdge.com the average pork plant margin was raised $3.00/head to a positive $9.25/head. This was based on the average buy of $34.45/cwt vs. the average breakeven price of $37.93/cwt. Several floor sources on Monday said the bearish overtone to the market will continue until sow numbers decline in earnest.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The SEPT’09 contract closed at $3.294/bu; up 7.75¢/bu and 15.25¢/bu higher than a week ago. DEC’09 corn futures finished at $3.554/bu; up 9.25¢/bu and 33.75+¢/bu over last week at this time. Support from strong gains in the soy complex, better crude oil prices, and a firmer stock market supported prices. The market traded on the notion that USDA’s crop condition report late Monday would reflect a decline of 1 per cent point to remaining even. However, USDA late Monday raised the US Corn crop in good-to-excellent condition 2 per cent points to 70 per cent vs. 68 per cent last week. This and expectations for good corn-growing weather should weigh on prices Tuesday. The Pro Farmer tour is also reporting good crop conditions while expecting large corn and soybean crops. Exports were steady to weaker with USDA placing corn-inspected-for-export at 38.6 mi bu vs. estimates for between 39.0-42.0 mi bu. Cash corn was steady to weaker amid quiet farmer selling in the US Midwest. Cash corn prices in the US Mid-Atlantic states were firm ranging from 10.0-23.0¢/bu higher. It was announced today that the CFTC had closed a loophole that allowed large non-commercial speculators to have large positions. This could mean more liquidation of bullish positions by large non-commercial speculators. There was some evidence of this on Monday as funds bought 6,000 lots while large speculators turned net bearish by 1,485 contracts finishing at 13,941 net short positions. Hopefully 70 per cent of the ’09 crop has been sold.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The SEPT’09 contract closed up 57.0¢/bu at $10.800/bu. The NOV’09 contract closed at $10.074/bu; up 34.5¢/bu. Support came from increased Chinese demand for US soybeans, a gripping drought in China, monsoons in India, and concerns the US soybean crop won’t be able to mature before frost on already tight supplies. According to USDA data the nation’s stocks will be 110 mi bu at the close of the ’08-’09 marketing year on August 31. This will be 46 per cent lower than this time last year and the lowest since the ’76-’77 crop year. In its crop rating late Monday USDA raised the US soybean crop good-to-excellent condition 2 per cent to 69 per cent. Floor sources were expecting USDA to leave it unchanged or lower it by 1 per cent. The recent Pro Farmer tour is reporting a good soybean crop so far. Exports were neutral with USDA placing soybeans-inspected-for-export at 7.6 mi bu vs. expectations for between 6.0-9.0 mi bu. Cash soybeans in the US Midwest were steady to weak while those in the US Mid-Atlantic States ranged 35.0-55.0¢/bu higher amid slow farmer sales. The CFTC as of last Tuesday showed large non-commercial speculators trimming net bull positions by 21,900 lots to 45,200 contracts. Up to 70-80 per cent of the new crop should be priced at this time.

WHEAT futures in Chicago (CBOT) were up on Monday. The markets were technically oversold and due for some upswing activity. SEPT’09 wheat futures finished up 11.5¢/bu at $4.716/bu; almost even with this time last week. The JULY’10 wheat contract closed at $5.440/bu; up 12.25¢/bu and 2.75¢/bu higher than last Monday. Support came from strong soybeans and corn futures. Exports were somewhat supportive with USDA placing wheat-inspected-for-export at 16.7 mi bu vs. expectations for between 14.0-17.0 mi bu. Australia and Argentina are facing drought while rains in the US have delayed the harvest of spring wheat. Late Monday USDA placed the harvest rate for the US Spring wheat crop at 22 per cent vs. the 5-year average of 66 per cent. The CFTC reported last Tuesday large non-commercial speculators increased net bear positions in CBOT wheat futures by 3,400 lots to 57,600 contracts. It would be wise to get up to 30 per cent of the 2010 crop sold on these upticks as the world still has ample supplies of wheat.

The following are the cash hog/corn ratios as calculated by Dow Jones using industry-accepted fob cash hog prices from USDA and cash corn prices from private sources. Historically ratios at or above 20-1 for hogs on a live basis have resulted in expansion of production while a ratio of 15-1 or less has resulted in contraction.


The table below shows ratios using lean hog futures (dressed basis) versus corn futures. The lean hog futures contract specification is for 51-52 per cent lean carcasses with .80-.99 inches of back fat at the last rib or equivalent. Note that in hogs, the ratio for dressed is about 33 per cent higher than its equivalent live-based ratio. Therefore, the historic threshold for expansion on a dressed-based ratio would be 27-1, with less than 20-1 resulting in contraction.


Herd contraction is expected judging from these ratios but reported US sow numbers just aren’t coming down enough to suit pit traders. Meanwhile many report they do not believe the Chinese hog herd numbers. They believe they are higher than reports show.

Lean Hogs October 2009, 24 August 2009
Title: Re: American Hog News USDA
Post by: mikey on August 29, 2009, 07:53:27 AM
CME: Breeding Herd Reduction Finally Underway
US - The long-anticipated, apparently late and, according to many analysts, BADLY needed reduction of the US swine breeding herd may have finally gotten underway the week of 15 August, write Steve Meyer and Len Steiner.



FI sow slaughter for that week, released today by USDA’s Agricultural Marketing Service (AMS) was 69.1 million head, up 17 per cent from the prior week and 3.1 per cent from one year ago. This marks the first week since JANUARY that weekly US sow slaughter has exceeded the level of the corresponding week in 2008.


One of the difficulties in discerning what is going on in the swine breeding herd is that sow slaughter data runs two weeks behind. AMS estimates weekly hog slaughter for each week on Friday of that week but that number includes all hogs — barrows, gilts, sows, and boars. AMS does not break out the sexes or classes of animals until the Thursday two weeks hence. AMS does, though, have daily data on the number of sows purchased by packers who must report under the mandatory price reporting system.

The current MPR rules became one year old in mid-July so they now provide current data that is comparable to the data generated one year ago, providing a frame of reference. Since 1 January, the number of sows purchased each week has run about 16,000 head lower (since some sow slaughter companies are not covered by the MPR system) than actual sow slaughter. Adjusting the purchase data for this difference indicates that slaughter for the week of 22 August should again be near 70,000 head. Anecdotal evidence from producers, bankers and sow brokers tell us it may well be higher.

The graph below shows cash prices implied by CME Lean Hogs futures back on 24 April, actual negotiated barrow/ gilt prices and cash prices implied by Lean Hogs futures on Monday, 25 August. 24 April was the day before H1N1 influenza became big news. The difference in the "expected" prices in April and the actual prices to date have reduced hog producers’ revenues by about $1 billion, with nearly $246 million of that reduction coming since 1 August when cash prices began to fall sharply. That drop in actual revenue and the accompanying downward shift in the red line representing futures- implied cash prices through March 2010 have apparently put enough pressure on producers and bankers to get liquidation rolling.

Title: Re: American Hog News USDA
Post by: mikey on August 30, 2009, 09:14:17 AM
Weekly Review: Canadian Inventory Lower than a Year Ago
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

The 1 July hogs and pigs inventory in Canada was down 6.7 per cent from a year earlier. The breeding herd was down 4.6 per cent, the market herd was down 7.0 per cent, sows farrowed in the second quarter were down 6.9 per cent and the second quarter pig crop was down 6.4 per cent from 12 months earlier.

Canada has reduced the hog herd more than the United States, but both countries need to reduce more to get prices up into profitable levels.

Consumer demand for pork in the United States is doing quite well with a 4.0 per cent increase in the last year for the January-July period. Beef demand at the consumer level was down 1.5 per cent, broiler demand was down 3.5 per cent and turkey demand was up 4.5 per cent.

Both live hog demand and live fed cattle demand for January-July were down from a year earlier with live hog demand down 2.7 per cent and live fed cattle demand down 8.1 per cent.

As has been stated several times this year, our problem in the hog industry is not demand relative to the past but high costs of production because of ethanol. However, the only way to solve the problem is to reduce production because feed costs are going to stay high relative to history.

Current gilt and sow slaughter indicates any reduction in the hog herd is at a slow rate. Sow slaughter for the year through the week ending August 15 is down 7.8 per cent, and gilt slaughter for this period is down 0.1 per cent from a year earlier. But sow slaughter for the week ending August 15 was up 6.0 per cent from 12 months earlier.

Feeder pig prices were lower again last week nationally and this week at United Tel-o-auction pigs were $10-20 per cwt lower than two weeks ago. All of the Tel-o-auction pigs weighed between 50-60 pounds and sold for $30-37 per cwt.

Nationally last week 10-pound pigs averaged $15.32 per head with 40-pound pigs at $13.47 per head. The formula priced 10-pound pigs sold for $30.56 per head and the 40-pound pigs sold for $37.66 per head. The spot priced 10-pound pigs sold for $6.91 per head and the 40-pound pigs sold for $12.17 per head. The lowest priced 10-pound pigs sold for $2.00 per head and the lowest priced 40-pound pigs sold for $8.00 per head.

Pork product prices moved counter seasonally with very good gains this week. For Thursday afternoon the cutout at $58.57 per cwt was up $7.23 per cwt from a week earlier. Loins at $66.49 per cwt were down $0.04 per cwt, Boston butts at $61.83 per cwt were up $6.19 per cwt, hams at $52.56 per cwt were up $12.14 per cwt and bellies at $58.61 per cwt were up $2.43 per cwt from seven days earlier.

Live hog prices Friday morning were $0.75 per cwt lower to $2.00 per cwt higher compared to last Friday. Weighted average negotiated carcass prices Friday morning were $0.26 - 1.26 per cwt higher compared to a week earlier.

The top live prices Friday morning were: Peoria $27 per cwt, Zumbrota, Minnesota $30 per cwt and interior Missouri $32.75 per cwt. The weighted average negotiated carcass prices Friday morning were: western Cornbelt $46.90 per cwt, eastern Cornbelt $44.57 per cwt, Iowa-Minnesota $46.90 per cwt and nation $45.90 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,196 thousand head, down 1.4 per cent from a year earlier.



Title: Re: American Hog News USDA
Post by: mikey on September 02, 2009, 07:32:11 AM
CME: High Consumer Level Demand for Pork
US - First — We do indeed realize that it would take 20+ years to slaughter 69.1 million sows in the US, write Steve Meyer and Len Steiner.



That should have read 69.1 THOUSAND in Thursday’s DLR. We still haven't discovered the optimal number of proofreads for just one person to do. It is obviously more than three!!! In addition, we also now realize that US sow slaughter for the week of 25 July was indeed higher than one year ago, so that 69.1 THOUSAND total for the week that ended 15 August was the second week this year that has seen sow slaughter exceed one year ago. The point remains that we haven’t slaughtered many sows this year — not near enough yet to make any significant difference in the sow herd.

The University of Missouri’s July estimates for demand indexes for the three largest meat/poultry species showed more of the same: Higher for pork, lower for both beef and broilers. These indexes measure the position of a demand curve in a standard P-Q supply demand diagram relative to its positioning in 1985. We then present these indexes as a percent change from one year ago. Beef demand is down 1.5 per cent for the year to-date while pork demand is up 4 per cent and chicken demand is down 3.5 per cent.


Some readers may wonder how the pork industry can be in such a financial crisis while consumer level demand for pork is higher. The answer, in part, is that hog demand is lower as is shown in the chart below. The consumer-level demand index does not measure the impact of exports, a critical factor so far in 2009, or packer margins which, until recently had been so low that they have actually HELPED hog demand relative to consumer-level demand for much of this year. Higher consumer-level pork demand has been driven by 1.5 per cent higher per capita consumption through June. The reasons for that jump, of course, have been higher production and export difficulties which have forced product on to the US market. But the reason that the demand index is higher is that retail prices have not fallen by as much as would be expected for that increase in domestic consumption. They have, in fact, RISEN by 3 per cent, YTD.


Both the beef and fed cattle indexes are down, year-to-date. Per cap beef consumption has fallen by 2.9 per cent YTD and retail beef prices have risen by only 1.4 per cent, a smaller amount than would have happened has demand been constant. Fed cattle demand has been helped by exports this year but hurt by MUCH lower by-product values.

Title: Re: American Hog News USDA
Post by: mikey on September 02, 2009, 07:33:57 AM
CME: Breeding Herd Reduction Finally Underway
US - The long-anticipated, apparently late and, according to many analysts, BADLY needed reduction of the US swine breeding herd may have finally gotten underway the week of 15 August, write Steve Meyer and Len Steiner.



FI sow slaughter for that week, released today by USDA’s Agricultural Marketing Service (AMS) was 69.1 million head, up 17 per cent from the prior week and 3.1 per cent from one year ago. This marks the first week since JANUARY that weekly US sow slaughter has exceeded the level of the corresponding week in 2008.


One of the difficulties in discerning what is going on in the swine breeding herd is that sow slaughter data runs two weeks behind. AMS estimates weekly hog slaughter for each week on Friday of that week but that number includes all hogs — barrows, gilts, sows, and boars. AMS does not break out the sexes or classes of animals until the Thursday two weeks hence. AMS does, though, have daily data on the number of sows purchased by packers who must report under the mandatory price reporting system.

The current MPR rules became one year old in mid-July so they now provide current data that is comparable to the data generated one year ago, providing a frame of reference. Since 1 January, the number of sows purchased each week has run about 16,000 head lower (since some sow slaughter companies are not covered by the MPR system) than actual sow slaughter. Adjusting the purchase data for this difference indicates that slaughter for the week of 22 August should again be near 70,000 head. Anecdotal evidence from producers, bankers and sow brokers tell us it may well be higher.

The graph below shows cash prices implied by CME Lean Hogs futures back on 24 April, actual negotiated barrow/ gilt prices and cash prices implied by Lean Hogs futures on Monday, 25 August. 24 April was the day before H1N1 influenza became big news. The difference in the "expected" prices in April and the actual prices to date have reduced hog producers’ revenues by about $1 billion, with nearly $246 million of that reduction coming since 1 August when cash prices began to fall sharply. That drop in actual revenue and the accompanying downward shift in the red line representing futures- implied cash prices through March 2010 have apparently put enough pressure on producers and bankers to get liquidation rolling.

Title: Re: American Hog News USDA
Post by: mikey on September 03, 2009, 10:19:16 AM
CME: Improvement in Cash Pork Prices
US - Lean hog futures were one of the few green spots in a sea of red on Tuesday, report Len Steiner and Steve Meyer.



Most agricultural futures were lower on the day following sharp declines in equity and energy markets. Grain futures were lower, led by a reversal in soybean futures. The nearby September soybean contract was down 86 cents while the nearby corn market was down 14 cents per bushel. It is sort of odd to see hogs leading the parade after a lost summer rally and an ever worse outlook for the fall. Some of the talk in the market about recent hog gains centered on the apparent strength of the hog prices in the cash market. The IA/MN lean hog carcass value (wt.avg) was quoted on Tuesday at $49.46 /cwt, $1.76 higher than the previous day and $3.73 higher than the previous week.

Cash hog prices have followed higher prices for pork at the wholesale level. Gains for some pork items, especially hams, boosted overall cutout values and provided some hope that maybe not all was lost for hogs this fall, hopes that a sudden surge in export orders could boost packer demand going forward. Indeed, as the charts to the right show, there was some improvement in cash pork prices last week, especially with regard to hams. The price of 23- 27# hams rose from around $44/cwt on 18 August to as high as $65/cwt on 28 August.

Indeed, as the charts below show, there was some improvement in cash pork prices last week, especially with regard to hams.

 


The price of 23- 27# hams rose from around $44/cwt on August 18 to as high as $65/cwt on 28 August. The spike caught many by surprise and was attributed to a rush of export orders that apparently cleaned up the spot market and caused domestic end users looking to fill routine orders to raise bids in order to secure product. But the ham story is old news at the moment and looking at the wholesale pork market, it is difficult to get real excited. Ham prices have declined in the last two days and the price for 23-27# hams on Tuesday was at $59/cwt, still a higher than it was two weeks ago but $6 lower than on Friday. Even more importantly, much of the increase in overall cutout values was due to the rise in ham prices rather than a broad based improvement in pork prices.

On Tuesday, the pork cutout value was quoted by USDA at $54.71/cwt, $3.11/cwt lower than on Monday. In order for the rise in hog prices to be sustained this fall, demand has to keep up at a time when hog supplies tend to be at the highest point for the year. High cold storage inventories and uncertainty following predictions of a second outbreak of the flu virus this fall will continue to weigh on pork prices. How long hog values defy gravity remains to be seen.



Title: Re: American Hog News USDA
Post by: mikey on September 03, 2009, 10:20:59 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were mixed on Monday. OCT’09LH futures finished up $0.075/cwt at $48.150/cwt; and $1.325/cwt higher than a week ago. The DEC’09LH contract closed down $0.225/cwt at $46.225/cwt; but $0.225/cwt higher than last report. Reports showing higher sow slaughter were supportive. A recent firmness in retail prices, steady cash hog calls, and higher processed numbers were supportive. USDA put the average pork cutout price at $57.90/cwt; down $0.67/cwt from the previous report but $4.11/cwt higher than a week ago. The latest CME Lean Hog Index was placed at $48.56/lb, down $0.24/lb and $0.48/lb lower than last Monday. According to HedgersEdge.com the average pork plant margin was raised $8.00/head from last week to a positive $17.25/head. This was based on the average buy of $34.50/cwt vs. the average breakeven price of $40.97/cwt. It is a good idea to move hogs when ready.

CORN futures on the Chicago Board of Trade (CBOT) were mixed on Monday. The SEPT’09 contract closed at $3.262/bu; up 5.25¢/bu but 3.25¢/bu lower than a week ago. DEC’09 corn futures finished at $3.296/bu; up 0.75¢/bu but 28.75+¢/bu lower than last week at this time. The rest of the deferreds were down on falling soybean prices. Short covering, end-of-month fund buying to balance positions, and a zesty demand were supportive. Exports were somewhat bearish with USDA posting corn-inspected-for-export at 34.9 mi bu vs. estimates for between 37-42 mi bu. A drought in China’s corn growing region helped prices. Cash corn in the US Midwest were steady to weaker early on Monday while in the US Mid-Atlantic States corn bids were 1.0¢/bu – 2.0¢/bu higher in most places. Deliveries are expected to remain light because of good basis levels. Funds bought 2,000 lots while large speculators sold contracts bringing their net bear position in CBOT corn to 21,500 shorts. Hopefully 70 per cent of the ’09 crop has been sold.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The SEPT’09 contract closed off 35.75¢/bu at $11.000/bu but 20.0¢/bu higher than a week ago. The NOV’09 contract closed at $9.794/bu; down 31.5¢/bu and 28.0¢/bu lower than last Monday. Fears that Chinese owned firms will terminate derivative contracts for over-the-counter hedging services pressured the market. Prospects for good production weather also contributed to the bearish tone. Exports were bullish. USDA reported soybeans-inspected-for-export at 17 mi bu vs. expectations for between 7-11 mi bu. China bought 10.4 mi bu of those exports as drought persists in that country. Cash soybeans in the US Midwest were strong with buyers in the US Mid-Atlantic-states bidding 31.0¢/bu -52.0¢/bu lower. Funds sold 4,000 contracts while large speculators trimmed net bull positions by 3,700 lots. Up to 70-80 per cent of the new crop should be priced at this time.

WHEAT futures in Chicago (CBOT) were up on Monday. SEPT’09 wheat futures finished up 4.0¢/bu at $4.710/bu. The JULY’10 wheat contract closed at $5.434/bu; up 3.5¢/bu. Large global supplies and brisk sales competition from Russia, France, and Canada pressured prices. Some end-of-month position squaring was noted. USDA placed wheat-inspected-for-export at 15.5 mi bu vs. expectations for between 11.0-16.0 mi bu. Drought in Argentina and New South Wales continues while monsoons in India destroy the wheat crop there. Large speculators increased net bear positions by 1,500 lots while funds bought an estimated 3,000 contracts. Today’s short covering is viewed as a bounce at best. It would be a good consideration to stay at 30 per cent new-crop sold for now.

Title: Re: American Hog News USDA
Post by: mikey on September 04, 2009, 08:08:14 AM
Cost of Organic Pork Production
Iowa State University's Ben Larson and Professor James Kliebenstein (Department of Economics) and Associate Professor Mark Honeyman (Department of Animal Science) investigate the cost of organic pork production. Not surprisingly, they found it costs more to produce organic pork than conventional pork. There were also seasonal differences: moving from a seasonal (summer only) farrowing system to continuous farrowing had significant cost implications.

 

Introduction
Niche markets in the pork industry are still relatively small but are growing in importance. An example of a niche market is the organic pork market, a relatively new and expanding segment of the industry. Market opportunities are expanding as specific consumer preferences are better identified.

One issue, which frequently surfaces in the organic pork production industry is the relatively limited information on production costs. It is well known that cost of organic pork production is greater than traditional pork production due to increased feed costs and decreased swine performance. The industry has dealt with these differences by paying premiums to producers who produce the product.

The objective of this report is to determine the cost of organic pork production. This report addresses the issue by examining the increase of costs involved in expanding a seasonal (summer only farrowing) organic pork production system to continuous production of organic hogs. Both a seasonal and a continuous system of production are used to provide a basis to determine cost differences between the two types of production systems. It is also necessary to examine the production cost differences between summer and winter for the continuous system.

Materials and Methods
Projected costs for two organic pork production systems are provided: a seasonal system and a continuous production system.

The seasonal system has spring and summer only farrowing. Farrowing occurs in April, June/July, and September. One group is farrowed in April and again in September/October, whereas another group is farrowed in June/July. The April and September farrowing are sows retained from the June/July gilt farrowings of the previous year. With continuous farrowing, there are six groups of females farrowed twice per year. Farrowing occurs every month. The seasonal system has two groups of 80 females, whereas the continuous system has six groups of 27 females each. Facility and breeding herd investment levels are determined for each system.

Information in Table 1 shows the investment level for the two organic pork production systems analyzed. Gilt prices were $175, whereas boars were $750.00 When breeding herd investment is adjusted for sow and boar cull values, the net annual investment is $19,681 for the seasonal organic system and $16,970 for the continuous system.

Table 1. Facility, equipment and breeding herd investment for organic pork production
  Seasonal System Continuous System
Total ($) Annual ($) Total ($) Annual ($)
Facility and equipment 273,150 48,622 287,012 51,340
Breeding herd   39,894   30,708
Breeding herd-neta   19,681   16,970
aThese values represent adjustment for cull sow and boar sales

Ration costs per pound are as follows: 10.9 cents for the nursery, 9.3 cents for the grower, 8.0 cents for the finishing, 8.8 cents for lactation, and 7.3 cents for gestation. Winter feeding uses 10 per cent more feed to produce a pound of gain. These relationships are what has been shown over time at the Iowa Sate University Rhodes Research/Demonstration Farm on seasonal pork production. The overall feed efficiency used for the seasonal system is 3.89 lbs of feed per pound of gain. It is 4.00 for the continuous system.

Results and Discussion
Information from Table 2 summarises organic pork production costs for the seasonal production system and the continuous production system. Costs from the traditional seasonal outdoor farrowing system were adjusted to reflect the differences between winter and summer farrowing as well as organic production. Costs from an organic budget previously prepared by Becker, Kliebenstein and Honeyman were adjusted for additional costs for winter-farrowed organic hogs such as iron and a decrease in pigs farrowed and marketed. Bedding use was taken, in part, from current research on hoop buildings at the Iowa State University Rhodes Research Farm with bedding costs added for farrowing and increased for winter farrowed groups. Annual repairs were set at 10 per cent of the initial facility price. Record keeping was set at $5,000 per year for each system due to the requirements for maintaining records for organic audits as well as a mandatory one per cent charge on sales revenue for hogs sold organically. Labour was placed at $10.00 per hour and was set at 13 hours per litter for the continuous system (12 in the summer and 14 in the winter) and 10 hours per litter for the seasonal system. This difference is due to increased cleaning required for the floored insulated sheds, smaller batch sizes of feed prepared, increased snow removal and additional winter farrowing care.

The cost of production per hundred pounds was $63.88 for pigs from the continuous system compared with $59.45 for the seasonal system – a difference of $4.43 per hundred pounds or $11.09 per market pig.

Table 2. Organic pork production costs for seasonal and continuous production
Total cost comparison
Continuous farrowing Seasonal (summer farrowing) Differences
Variable costs Total costs Per Head Variable costs Total costs Per Head
Feed $179,490 $86.97 Feed $175,872 $83.71 $3.26
Health costs 1,032 0.50 Health costs 735 0.35 0.15
Bedding 10,319 5.00 Bedding 8,929 4.25 0.75
Repairs 3,842 1.86 Repairs 3,633 1.73 0.13
Record keeping 5,000 2.42 Record keeping 5,000 2.38 0.04
Fuel/utilities 4,128 2.00 Fuel/utilities 3,152 1.50 0.50
Sub-total $203,812 $98,75 Sub-total $197,322 $93,92 $4.84
Interest 10,191 4.94 Interest 9,866 4.70 0.24
Labour 42,120 20.41 Labour 31,500 14.99 5.42
Breeding herd 16,970 8.22 Breeding herd 19,681 9.37 (1.14)
Trucking 5,160 2.50 Trucking 5,253 2.50 0.00
Total variable $278,252 $134.82 Total variable $263,621 $125.47 $9.35
Fixed costs $51,340 $24.88 Fixed costs $48,622 $23.14 $1.73
Total $329,592 $159.70 Total $312,244 $148.61 $11.08
Total hogs sold 2,064 Total hogs sold 2,101
Total weight sold 515,970 Total weight sold 525,263
Production cost/cwt $63.88 Production cost/cwt $59.45
Total production cost difference per hundred pounds $4.43

It is also necessary to compare production costs between the winter and summer seasons for the continuous production system. Table 3 provides a total cost comparison of the winter farrowed (October-March) and the summer farrowed hogs (May to September) within the continuous system.

The largest difference between systems is the labor costs with a $5.07 per head difference. The facilities, which differ by an impermeable pad provided for winter farrowing is the second largest cost difference at $4.87/pig due largely to the fact that there is a 0.3 difference in pigs finished per litter.

Winter-farrowed pigs have also $0.89 more in feed costs than the summer-farrowed pigs. This result may, at first, appear as low but the winter-farrowed pigs are in the grow-finish phase during the spring and summer months. The break-even production costs per hundred pounds was $66.92 for the winter-farrowed pigs compared with $61.11 for the summer-farrowed pigs – a difference of $5.81 per hundred pounds or $14.52/ pig.

Table 3. Organic pork production costs for continuous production winter versus summer
Winter Summer Difference
Variable costs Total Per head Variable costs Total Per head
Feed $85,977 $87.43 Feed $93,513 $86.54 $0.89
Health costs 671 0.68 Health costs 361 0.33 0.35
Bedding 5,418 5.51 Bedding 4,902 4.54 0.97
Repairs 1,921 1.95 Repairs 1,921 1.78 0.18
Record keeping 2,500 2.54 Record keeping 2,500 2.31 0.23
Fuel/utilities 2,476.66 2.52 Fuel/utilities 1,651.10 1.53 0.99
Sub-total $98,963 $100.64 Sub-total $104,840 $97.03 $3.61
Interest 4,948 5.03 Interest 5,242 4.85 0.18
Labour 22,680 23.06 Labour 19,440 17.99 5.07
Breeding herd 8,485 8.63 Breeding herd 8,485 7.85 0.78
Trucking 2,458 2.50 Trucking 2,701 2.50 0.00
Total variable $137,535 $139.86 Total Variable $140,718 $130.23 $9.64
Fixed costs $26,970 $27.43 Fixed costs $24,370 $22.55 $4.87
Total $164,505 $167.29 Total $165,088 $152.78 $14.51
Total hogs sold 983 Total hogs sold 1,081
Total weight sold 245,835 Total weight sold 270,135
Production cost/cwt $66.92 Production cost/cwt $61.11
Total production cost difference per hundred pounds $5.81

Table 4 provides a summary of the production costs (break-even prices) of the two systems as well as the break-even values for the summer- and winter-farrowed pigs within the continuous production system.

The lowest cost is with the seasonal system or summer-only farrowing. The highest cost occurs for the winter-farrowed group.

Table 4. Organic pork production cost ($) by system and season
System or season Per pig Per CWT
Seasonal 148.61 59.45
Continuous 159.70 63.88
Winter continuous 167.29 66.92
Summer continuous 152.78 61.11

Summary and Implications
This report has shown that it costs more to produce organic pork than conventional pork. This result has been documented and supported by previous studies as organic feed ingredient costs per unit are higher and feed efficiency for organic pork production is not as good.

This study also provides a seasonal comparison of organic pork production costs. Cost increases incurred by producers in moving from a seasonal (summer only) farrowing system to a continuous farrowing organic production system can be significant. Incentives are needed to encourage producers to shift to continuous production practices that provide a more uniform supply of fresh pork. Cash flow difficulties can be created if premiums do no reflect seasonal differences in production costs.

One of the key questions involved in the relevance of the production cost projections is the scale of production used. The production system that was developed is larger than many of the organic operations that are currently in use. However, the information is on a per pig comparison. Cost of production values can be adjusted to fit alternative sizes of production systems. For example, the system can be reduced to half of the current size with very little added per pig cost by reducing the size of the groups of sows that are being farrowed by 50 per cent in the continuous system and by reducing sow numbers in the seasonal system. These adjustments would not have a significant impact on the difference on costs. The facilities are not capital-intensive and there are not significant economies of size for building construction. Facility costs represent approximately 15 to 16 per cent of production costs.

Organic pork production cost per hundred pounds was projected to be $59.45 for the seasonal system. This cost compared with $63.88 per hundred pounds for the continuous system. The seasonal system had a cost advantage of $4.43 per hundred pounds. When comparing organic pork production costs by season of the year in the continuous system, cost for winter farrowing was $5.80 per hundred pounds over summer farrowing. Production costs for winter farrowing was $66.92 compared with $61.11 for summer farrowing in the continuous system.

This result clearly points out that production costs differ by production system and seasons of the year.

August 2009
Title: Re: American Hog News USDA
Post by: mikey on September 05, 2009, 07:19:33 AM
Major USDA Purchase Boosts Pork Producers
US - Embattled pork producers who have seen a stream of losses for two years learned Thursday that the US Department of Agriculture would buy $30 million worth of pork immediately.



"Every little bit helps, and we appreciate it," said Howard Hill, president of Iowa Select Farms, which finishes about 3 million hogs in confinements in Iowa. "But this by itself won't bring us back to profitability. It's been a bloodbath out there."

Pork producers thought they would have to wait until after 1 October, the beginning of the federal fiscal year, for another federal purchase of pork. Agriculture Secretary Tom Vilsack had said last month that no money was available this fiscal year.

"Iowa's hog farmers and their families have struggled as the price of pork has fallen steadily the past two years," said US Rep. Leonard Boswell, a member of the House Agriculture Committee and chairman of the general farm commodities and risk management subcommittee. "I applaud the USDA's planned pork purchases as one more step to getting Iowa's pork producers back on their feet."

Don Butler, National Pork Producers Council president, said, "The action by USDA to buy additional pork will benefit America's pork producers, the US economy and the people who benefit from government food programs. NPPC is extremely grateful to Secretary Vilsack for recognizing the plight of our producers and for taking action to help them."

The USDA will buy the pork for food and nutrition initiatives, such as school breakfast and lunch programs. More money could be available during the next fiscal year.

The purchase falls short of the $50 million that the National Pork Producers Council, along with Iowa Governor Chet Culver and eight other governors, requested last month.

"I applaud and thank Secretary Vilsack and President Obama for responding to the challenges farmers are facing," Governor Culver said. "Today's decision by USDA is a great step forward in providing much-needed help to pork producers in Iowa and across the nation."

The USDA already had spent $62 million on pork in the last year to try to shore up hog markets, reports DesMoinesRegister.com.

Hog prices have fallen from almost $1 per pound a year ago on futures markets to under 50 cents per pound because of oversupply, loss of some exports in the world economic downturn, and the slump in demand after the H1N1 flu virus scare arose in late April. Fresh publicity about what has commonly been called swine flu, accompanying the opening of schools and the need to protect students, further stoked market fears.

Nonetheless, pork prices rose by 1 cent per pound to 50 cents on the October contract at the Chicago Mercantile Exchange Thursday. Longer-term contracts for delivery next spring and summer show prices at 68 cents per pound.

Iowa is the nation's largest hog producer, with an inventory of 19 million animals. The state accounts for about 23 per cent of US pork production, and hog sales put $4 billion to $5 billion into Iowa's economy annually.

Title: Re: American Hog News USDA
Post by: mikey on September 05, 2009, 07:35:40 AM
US Vets Respond to Report into Intensive Production
US - The American Veterinary Medical Association's CEO, Dr Ron DeHaven talks about the Pew Commission's report and the AVMA's response, calling the report 'flawed and unscientific'.



In the spring of 2008, the Pew Commission on Industrial Farm Production issued the report Putting Meat on the Table: Industrial Farm Animal Production in America. Considering the importance of the US food system and the ramifications of minor or major proposed modifications, the American Veterinary Medical Association (AVMA) believes it is crucial to closely and carefully examine the Commission's research and methodology and the implications of the report.

The AVMA's analysis of the Pew Commission's report found several areas of concern, beginning with the technical assemblage of academics to research and review the report. The Pew Commission purports to have utilised a process that melds the thoughts of top academics and diverse stakeholders into its grandiose examination of food animal production. However, AVMA says the Pew Commission's process for gaining technical expertise in the technical reports was biased and did not incorporate the findings and suggestions of a significant number of participating academicians. AVMA cautions readers that we found disparities within the report, potentially due to the lack of incorporation of differing interpretations and conclusions offered by subject matter experts.

In terms of the report's meat and bones, the AVMA identified the points addressing antimicrobial resistance, the environment and animal welfare as the most pertinent to veterinary medicine. While it believes there is value in some of the recommendations offered by the Pew Commission, AVMA asserts that many of the Commission's sub-points have significant shortfalls and lack in comprehensive idea development or in how the Commission would execute a new plan or program.

Both in substance and in approach, therefore, AVMA says the Pew report contains significant flaws and major dalliances from both science and reality. These mis-steps lead to dangerous and under-informed recommendations about the nature of the food system – and shocking recommendations for interventions that are scarcely commensurate with risk. The report is, in many ways, a prolonged narrative designed to romanticise the small, independent farmer, while vilifying larger operations, based simply upon their size.

The suggestions presented in the following analysis of the Pew Commission's report offer thoughtful insight into what the AVMA asserts are critical research and programmatic needs as next steps in promoting the optimal health and welfare of our nation's animals and people. AVMA re-states its belief that it is imperative to base decisions on evidence and research that is grounded in the basic principles of scientific inquiry. By disregarding these elementary guidelines of thought, the Pew Commission's report is based on what is possible, rather than what is probable. The following analysis cautions against the propagation of these untruths, which could easily scare the American public and, ultimately, compromise the safety of our nation's food supply.


Title: Re: American Hog News USDA
Post by: mikey on September 06, 2009, 07:46:20 AM
Weekly Review: Opportunity Offered by Futures Market
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

The average loss for all independent producers of hogs for the period of October 2007 through July 2009 has been $16.98 per hog. This is a lower value than we had been using because of a misunderstanding of the price used by John Lawrence who produces the best data available as to profits or losses for producing hogs.

We have no information as to the losses of packers who slaughtered their own hogs. Assuming that packers used the futures market at the rate of independent producers, the losses for the total industry for October 2007 through July 2009 would amount to 3.592 billion dollars, down from 4.565 billion calculated earlier.

The losses in 1998 and 1999 amounted to $4.454 billion dollars. However, we are not through losing money for the current period with a high probability of losses for another 10 or 11 months than included in the October 2007 through July 2009 period. This cycle will be the biggest losses for hog production in a cycle in my working experience.

The futures market has offered the opportunity for much lower losses in the October 2007 through July 2009 period with the average loss of $6.10 per head for producers who market by using the other market formula contract used by packers. The price paid by this contract is determined by the futures market.

The total losses have been reduced also by producers using the other purchase agreement contract which is tied to feed price or uses a window -type contract. Thirteen per cent of the hogs were marketed with this contract and 9 per cent of the hogs were marketed using the other market contract.

Barrow and gilt weights in Iowa-Minnesota for last week at 267 pounds were down 0.2 pound from a week earlier but up 6.6 pounds from a year earlier. For the week ending 22 August, barrow and gilt carcass weights were five pounds above a year earlier. This means that the good growing weather and delayed marketings have hogs backed up about 3 days from a year earlier.

Sow slaughter for only the third weak this year was above a year earlier for the week ending 15 August and stayed above for the week ending 22 August. Gilt slaughter for the week ending 22 August was large. Maybe we have started some faster decline in the breeding herd.

After a good move up in pork product cutout last week, the cutout Thursday afternoon at $53.69 per cwt was down $4.88 per cwt from seven days earlier. Hams moved sharply higher for the last ten days of August but could not hold the more than $22 per cwt strength and lost $13.48 per cwt of the gain by Thursday afternoon, 4 September.

Loins at $64.32 per cwt Thursday afternoon were down $1.77 per cwt, Boston butts at $56.45 per cwt were down $5.38 per cwt, hams at $48.17 per cwt were down $4.39 per cwt, and bellies at $62.13 per cwt were up $2.52 per cwt from a week earlier.

Cash live hog prices Friday morning were $1 per cwt higher to $2 per cwt lower compared to seven days earlier. Weighted average negotiated carcass prices Friday morning were $0.52-2.96 per cwt higher compared to a week earlier.

Top live prices Friday morning were: Peoria $25 per cwt, Zumbrota, Minnesota, $31 per cwt and interior Missouri $33.50 per cwt. Weighted average negotiated carcass prices Friday morning by area were: western Cornbelt $47.98 per cwt, eastern Cornbelt $45.09 per cwt, Iowa-Minnesota $49.86 per cwt and nation $47.29 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,256 thousand head, up 10.1 per cent from a year earlier.

Title: Re: American Hog News USDA
Post by: mikey on September 12, 2009, 07:43:53 AM
CME: H1N1 Influenza Not the Same as 'Swine Flu'
US - On Thursday, the US Secretary of Agriculture, Tom Vilsac, made a forceful statement to members of the media that they correctly portray the recent flu outbreak and stop using the misleading "swine flu" label, according to Len Steiner and Steve Meyer.



According to the USDA statement "Swine influenza has been present in the United States for over 80 years, but the 2009 pandemic H1N1 influenza virus now circulating among humans is not the same as "swine flu."

The 2009 pandemic H1N1 influenza currently circulating among humans is a "novel" flu strain, with a genetic makeup that is unique and has not been seen before in humans, birds or pigs.” The statement by the Secretary and then a conference call with various members of the media are welcome developments for the US pork industry.

Markets remain anxious about the outlook for pork sales this fall and renewed coverage of the seasonal flu outbreak side by side with pictures and videos of pigs clearly are damaging, and patently unfair. The statement by Secretary Vilsac was strong and left no doubts where USDA stands on this issue.

Unfortunately, most of the mainstream media does not go to USDA with regard to health and disease matters. Both the CDC and FDA websites continue to use the moniker “swine flu” when referring to the current influenza outbreak. When USDA was asked why other agencies continue to refer to the flu outbreak as "swine flu", the response is that they want the information to show up in search engine results when people look up the term "swine flu".

Will the USDA statement cause people to stop using the "swine flu" label? Not really but that is not the point, the point is to continue to bring up that the label has nothing to do with pigs and pork and hope that over time consumers get the message.

While the flu issue remains a short term factor for US pork demand, US beef demand has been negatively impacted this year not just by slow sales at foodservice but also weaker US beef exports. The most disappointing has been the Korean market, which was the focus of much debate last year.

Sales to Korea rose sharply in Q3 of last year as beef trade resumed. Since then, however, US beef exports to Korea have slowed down, negatively impacting overall beef exports. Weekly shipments of beef muscle cuts to Korea in August were on average 725 MT per week, compared to an average of 3031 MT last year, a 76 per cent decline. Part of the reason for the slower sales is that last year we saw a big rush of orders as Korean buyers were looking to fill the pipeline. Also, the currency has only recently begun to recover. As the bottom chart below shows, for much of this year the Korean won was much stronger vs. the Australian currency (the top supplier of imported beef). A weaker US dollar should be helpful but we have still some ways to go as the Won still is down some 15 per cent since 1 July 2008 vs. the US dollar.

Title: Re: American Hog News USDA
Post by: mikey on September 13, 2009, 06:52:33 AM
Weekly Review: Feeder Pig Prices Up
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Feeder pig prices this week at United Tel-o-auction were $4-6 per cwt higher than two weeks earlier. All weighed between 50-60 pounds and sold from $34-43 per cwt.

Nationally feeder pigs last week were $1-2 per head higher than a week earlier. The average price for 50-54 per cent lean, 10-pound pigs was $20.62 per head. The average price for 40-pound pigs, 50-54 per cent lean was $13.98 per head. The formula price for 10-pound pigs was $31.66 per head, and the formula price for 40-pound pigs was $39.06 per head. The spot market price for 10-pound pigs was $10.12 per head, and the spot price for 40-pound pigs was $14.22 per head. There were big time losses for pig producers selling on the spot market.

The weight of barrows and gilts in Iowa-Minnesota for the week ending September 5 at 267.4 pounds per head was up 0.4 pound from a week earlier and up eight pounds per head from a year earlier. The average weight of barrow and gilt carcasses under Federal Inspection for the week ending 29 August at 197 pounds per head was up five pounds per head from 12 months earlier.

Sow slaughter for the week ending 29 August was a little below a year earlier in actual numbers but when adjusted for the shrinkage in the sow herd it was 2.5 per cent above a year earlier. This is the third consecutive week with sow slaughter above a year earlier. Gilt and sow slaughter for the last few weeks suggest producers may have sped up the reduction in herd size.

Pork cutout this Thursday afternoon at $55.07 per cwt of carcass was up $1.38 per cwt from a week earlier. Loins at $72.96 per cwt were up $8.64 per cwt, Boston butts at $58.24 per cwt were up $1.79 per cwt, hams at $41.93 per cwt were down $6.24 per cwt and bellies at $66.08 were up $3.95 per cwt from seven days earlier.

The corn and bean crop continues to progress in good condition. This week's corn condition was rated as 69 per cent good to excellent, up eight points from last year. Soybeans rated 68 per cent good to excellent, up 11 points from last year. We will have the September estimate of corn and bean production in 2009 next week.

Live hog prices Friday morning were $0.75-3.00 higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $0.16 lower to 1.74 per cwt higher compared to seven days earlier.

The top live prices Friday morning were: Peoria $28 per cwt, Zumbrota, Minnesota, $32 per cwt and interior Missouri $34.25 per cwt. The weighted average negotiated carcass prices Friday morning by area were: western Cornbelt $49.76 per cwt, eastern Cornbelt $46.85 per cwt, Iowa-Minnesota $49.70 per cwt and nation $47.73 per cwt.

Slaughter this week under Federal Inspection at 2050 thousand head was down substantially because Labor Day was a different week this year than in 2008.




Title: Re: American Hog News USDA
Post by: mikey on September 15, 2009, 08:11:14 AM
July Pace Remains Sluggish for US Pork
US - January through July exports of US pork and beef are lagging behind last year’s pace amid a difficult global economic climate and lingering effects from the H1N1 influenza outbreak.

 

The most recent statistics released by USDA and compiled by the US Meat Export Federation (USMEF) show pork exports of 1.08 million metric tons (2.38 billion pounds) valued at $2.53 billion. While these totals are a respective 10 per cent and 9 per cent below last year’s record-shattering pace, they are still 53 per cent higher in volume and 48 per cent higher in value than in January-July 2007.

Mexico, Russia demand showing recovery, but exports hurt by China’s ban
Mexico has been a tremendous bright spot for US pork throughout 2009, but the surge in exports to Mexico suffered a setback recently during the H1N1 influenza outbreak. Through April, pork exports to Mexico were running 71 per cent above last year’s pace in terms of volume and were 62 per cent higher in value. The results for May, June and July have been roughly equal to 2008, however, leaving Mexico with totals of 287,687 metric tons (634.2 million pounds) valued at $426.5 million – which is 42 per cent higher than the 2008 volume and 23 per cent higher in value.

"Pork exports to Mexico are still having a terrific year," said USMEF Chairman Jon Caspers, a pork producer from Swaledale, Iowa. "But there’s no question that H1N1 caused a lot of economic disruption in Mexico and created a backlog in pork inventories. Hopefully we’re past the worst of that situation, and can move back toward the level of activity we saw earlier this year."

Japan remains the pacesetter for US pork in terms of value, reaching 259,451 metric tons (572 million pounds) valued at $944.1 million through July. While these results are only slightly above the 2008 volume, they exceed last year’s value by 11 per cent. Other markets showing significant improvement include Australia (up 22 per cent in volume and 21 per cent in value) and the Caribbean (up 42 per cent and 35 per cent, respectively).

Pork exports to China had already slowed significantly prior to the market closing in early May due to H1N1 influenza. Mr Caspers notes, however, that being essentially shut out of this market for the past four months is a setback the pork industry simply cannot afford.

"Our expectations for China were modest for this year, because we knew they would have much higher domestic production," he said. "But being shut off completely from the world’s largest pork-consuming market is a very serious blow for the industry."

There is no relationship between pork consumption and H1N1 influenza, and consumer attitudes toward pork appear to have recovered quickly despite the media’s persistent mislabeling of the virus as “swine flu." But Mr Caspers, who was in China last week for the World Pork Conference, said market research in China reveals that more consumer education is needed on this issue (see USMEF’s 3 September news release for more details).

"Across the entire globe, the pork industry cannot afford to have China’s consumers turning away from our product," he said. "Whether you are a pork producer in Iowa, Indiana, China or Chile, this is a very serious problem. Hopefully we can all work together to provide better information to China’s consumers and turn this situation around."

Pork exports to Russia are also down about 30 per cent compared to last year, due in part to state-specific, H1N1-related market closures in May and June. Exports have also slowed due to the continued delisting of many US pork plants by Russia. The good news, however, is that July pork exports to Russia – 19,625 metric tons (43.3 million pounds) valued at $43.1 million - nearly doubled in volume and more than doubled in value over the June 2009 totals.

US pork exports are also holding up fairly well in terms of per centage of total production. Pork and variety meat exports accounted for 22.8 per cent of January-July production, compared to 24.7 per cent during the same period last year. Muscle cut exports accounted for 18.3 per cent of production, compared to 21.5 per cent in January-July 2008.


 

Title: Re: American Hog News USDA
Post by: mikey on September 16, 2009, 08:53:12 AM
Market Preview: Exports Can’t Compete with 2008
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



July pork export data, released on Thursday by USDA’s Foreign Agricultural Service (product weight and value) and on Friday by USDA’s Economic Research Service (carcass weight equivalent), indicate that US pork exports for 2009 still suffer from the "older, smarter brother" syndrome with respect to 2008: They just are never going to measure up!

To illustrate that point, consider total pork exports for July in carcass weight equivalent – 355.6236 million pounds. That number is 13.2 per cent below last July’s 409.5 million pounds, but is 61.6 per cent higher than July 2007 exports. And the July 2007 total of 220 million pounds was just 5 million pounds below the largest July total in history. And I repeat: This year blew July 2007 away by over 60 per cent. It is only the comparison with the remarkable totals of 2008 that look bad. It’s hard to measure up to a smarter, older brother.

Figure 1 demonstrates the exceptional performance of US pork exports relative to any year other than 2008. As can be seen, the only months so far in 2009 that have been below the 2004-07 trend for pork exports are May and June. July was above that trend line by over 30 million pounds and was very near the polynomial trend line that best fits all monthly data since 1990. If not for the export spike of April –July 2008, we would be dancing in the streets over July exports!


My point is this: In spite of H1N1, a stronger dollar and a worldwide recession, US pork exports have performed well. That is a demonstration of the advantageous competitive position of the US pork industry. Though our business must get smaller to realize prices that exceed today’s new production cost realities, we will still be competitive in world pork markets and there will still be a viable US pork industry!

US exports in product weight terms, amounted to 267 million pounds in July, 12.5 per cent lower than last year. The value of July shipments was down only 17.6 per cent, reflecting lower US wholesale prices. Year-to-date, US pork exports are down 16.9 per cent in product weight and 12.9 per cent in value. Those numbers are keeping us on a pace to match the 2004-2007 trend levels but will be roughly 15 per cent below 2008 levels at year’s end.

Figure 2 shows year-to-date pork export quantities for the world and for key US pork markets. Shipments to Japan are down slightly (2.6 per cent) through July. In spite of a difficult May and June, exports to Mexico are still 33 per cent larger than in 2008 and on pace to set another record this year. Most other major markets are down for the year with China-Hong Kong, of course, showing the larges (69.9 per cent) decline.


Figure 3 shows year-to-date pork variety meat exports which have grown as consumers have looked for greater value. Total variety meat shipments are up 21.3 per cent in volume and 17.9 per cent in value through July. Mexico, our largest market for pork variety meats, has shown remarkable growth at +21.3 per cent in volume and 47.3 per cent in value. Even shipments to China-Hong Kong have grown this year and shipments of variety meats to Japan are over 80 per cent larger, making that country our third-largest variety meat market in 2009.


Russia and Korea, which have historically been our second- and third-largest variety meat markets are, no surprise, lagging the pace of 2008 sharply. Shipments to those two countries are down 48.1 and 48.9 per cent, respectively, while the values of those shipments are down 46 and 43.5 per cent, respectively.

Note that both the week-to-week and week-vs.-last year comparisons in this week’s Production and Price Summaries are odd due to Labor Day, which fell one week later this year. Federally inspected slaughter last week was almost identical to Labor Day week of 2008 but slaughter weights continue to drive pork production higher.

The industry continues to ask consumers to buy more pork than was expected, so lower prices should not come as a shock. The size of that decline, though, is still a surprise and must be attributed to softer demand, both here and abroad. Remember, demand is quantity and price. Consumers in the United States and other countries are taking the quantity but they are only doing so at lower prices.

Title: Re: American Hog News USDA
Post by: mikey on September 16, 2009, 08:55:01 AM
CME: An Awful Year for Pork Exports
US - US pork exports increased sharply in July from month-earlier levels as trade with Mexico continued to rebound from the damage inflicted by H1N1 influenza back in April and May, write Steve Meyer and Len Steiner.

Pork exports were still far below the levels of July 2008 but, as can be seen at right, were closer than at any time since March. Beef exports were slightly lower than in June and sharply below year-ago levels. Shipments to Japan were higher than in July 2008 but trade with Mexico and Canada were lower and shipments to Russia were down nearly 75 per cent.

Pork exports, of course, have looked awful this year because they have been compared to last year’s phenomenal summer performance. Recall that pork exports for all of 2008 were 49 per cent higher than the year before, establishing the 15th straight record for the industry and accounting for 20 per cent of total carcass-weight pork production. There was little hope that this year’s exports would reach those levels and they certainly have not. But July’s totals were impressive given the circumstances — and were 62 per cent larger than July 2007 export totals. We have argued all along that a reasonable goal for this year is to stay at or above the trend based on 2004-2007 data.


The following shows that July shipments were well above that trend and have put YTD 2009 exports 5.2 per cent above the trend as well. No one is happy with exports that are 19 per cent lower than last year but a bit of realism tells us that is not a terrible result when the longer term is considered.


Through July, the star market for US pork exports is — MEXICO at +35 per cent for the year. While recent months have not been as good as January-March, the rebound has been rapid and relatively large considering the hit that Mexican pork demand took in late April. Japan is virtually even with year-ago shipments at the end of March while China/Hong Kong is down 72 per cent and Russia is down 30 per cent for the year.

Title: Re: American Hog News USDA
Post by: mikey on September 17, 2009, 08:53:13 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME slipped on Monday. OCT’09LH futures finished down $1.525/cwt at $50.950/cwt. The DEC’09LH contract closed down $0.825/cwt at $49.000/cwt. Futures backed off gains over the Chinese/US trade flap over chickens and tires. The US claims China is dumping tires in the US market and China “found” where the US is dumping chickens in the Chinese market. Maybe we ought to trade US chickens instead of dollar bills for Chinese tires. We might even get a little better deal that way. USDA on Friday reported July pork exports at 355.6 mi lb, 55.8 mi lbs higher than June but 53.6 mi lbs behinds last year’s pace. Exports are on a roller coaster due to the H1N1 virus. The virus was found in Mexico and could limit exports even further. Lower corn prices were supportive while fund rolling long October positions into December futures late in trading pressured the October contract. The latest CME lean hog index was placed at $51.69; up $0.22. According to HedgersEdge.com the average pork plant margin was raised $2.40/head. This was based on the average buy of $36.98/cwt vs. the average breakeven price of $37.89/cwt. Knowing that cooler weather is coming and hog gains will be accelerated it might be a good idea to watch market hogs carefully and market when ready.

CORN futures on the Chicago Board of Trade (CBOT) were down on Monday. The SEPT’09 contract expired on Monday closing at $3.050/bu; off 9.5¢/bu. DEC’09 corn futures finished at $3.176/bu; down 2.0¢/bu. Good crop weather, a firmer US dollar, and a lower DOW put the lid on prices. Early yield reports are reported near 200 bu/acre. Forecasts for early frost in some places were supportive. Late Monday USDA reported 69 per cent of the US corn crop in good-to-excellent condition. The market expected this. Exports were healthy as USDA placed corn-inspected-for-export at 40.517 mi bu vs. expectations for between 38-40 mi bu. It was reported that Mexico bought 419,000 tonnes (16.495 mi bu) of US corn for delivery in ‘09/’10. However, floor sources said the market was getting jittery over the trade dispute between the US and China. Cash corn in the US Midwest were steady to firmer while opening cash bids for corn in the US Mid-Atlantic states ranged 2.0¢/bu – 6.0¢/bu lower on Monday. Funds sold over 2,300 contracts. Hopefully 70 per cent of the ’09 crop has been priced.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were mixed on Monday. The SEPT’09 contract closed off 59.5¢/bu at $9.250/bu. This contract lost $1.75/bu in two weeks. It expired today as many traders got out of the contract early in the session. The NOV’09 contract closed at $9.090/bu; up 6.0¢/bu. Late short-covering in the November contract was supportive. Positioning, good weather prospects, a firmer US dollar, and the trade tension between the US and China weighed on prices. Some places are reporting low threats for frost next week. This was price-supportive as the US soybean crop is behind normal in development due to late planting. The trade dispute between China and the US worried the market. The dispute is over chicken and automobile products. China has said they will restrict these imports after Washington put punitive sanctions on Chinese tire imports to the US last week. The soybean market is worried trade tension could spread to other markets. China is the world largest importer of US soybeans and this spat could significantly affect soybean exports. USDA placed soybeans-inspected-for-export at 10.247 mi bu vs. expectations for between 10-12 mi bu. China bought 6.04 mi bu of those inspected. So far so good. Cash soybeans in the US Midwest were steady to weak on Monday as early harvested soybeans began coming in, in places. Cash beans in the US Mid-Atlantic states were 16.0¢/bu – 20.0¢/bu higher for old crop beans and ranged 9.0¢/bu – 12.0¢/bu higher for new crop. Funds bought over 1,000 lots of soybean futures. Up to 70-80 per cent of the new crop should have been priced by now. If not, it might be a good idea to get priced. Don’t wait on $10.00 beans.

WHEAT futures in Chicago (CBOT) were down on Monday. SEPT’09 wheat futures finished down 10.75¢/bu at $4.310/bu coming of Friday’s technical bounce. The JULY’10 wheat contract closed at $4.970/bu; off 13.75¢/bu. A firm US dollar and the global glut of wheat stocks really are pressuring the wheat market. Hope you’re not waiting on $5.00 wheat to come back any time soon. Last week’s wheat inspected-for-export was over expectations. USDA placed that number at 21.505 mi bu vs. expectations for between 13-16 mi bu. Tragic weather events supported US wheat exports but that is expected to be of short duration as other countries bid away business with cheap wheat. Large speculators were net bears by 19,688 lots while funds sold more than 3,000 lots. Contracts have set fresh lows in the past few days. The Commodity Futures Trading Commission chairman, Gary Gensler told reporters on Monday that the CFTC will most likely take more steps to fix the convergence problem with US wheat and futures. The September contract was the second CBOT wheat contract to expire under new contract specs. Those included more delivery points, increased grain storage rates, and stricter vomitoxin rules. Even at that the premium to futures narrowed to roughly 70.0¢/bu compared to 83.0¢/bu for July ’10 futures and $2.00 a year ago. Millers, merchandisers, and exporters have complained for two years that the lack of convergence between CBOT wheat contracts and cash prices have signaled a “broken market” making hedging as a risk management tool obsolete for bank collateral. It would be a very good idea to get to 50 per cent sold in the 2010 crop.

Title: Re: American Hog News USDA
Post by: mikey on September 19, 2009, 07:39:43 AM
CME: Retail Pork Prices in August Lower
US - USDA’s Economic Research Service released its monthly estimates of average retail prices of meat and poultry in August on Wednesday, reports Steve Meyer and Len Steiner.



Prices of beef, chicken and turkey increase in August with broiler prices showing the largest gain at just 1.1 per cent. Turkey prices grew by slightly less during August while the all-fresh beef price which includes both Choice and Select grade product increased by 0.5 per cent from July. Pork prices declined by 0.8 per cent during the month.

The average retail prices for both beef and pork in August were lower than one year ago and that drop was significant (6.9 per cent) for beef. The retail pork price was 2.8 per cent lower according to USDA.

Turkey prices in August were 13.4 per cent higher than in August 2008 - a result that really is not a surprise given the size of turkey slaughter reductions this year. Total turkey slaughter is down 5.4 per cent YTD as of 29 August and several weeks this summer have seen slaughter totals that are 8-9 per cent lower than in the corresponding week last year.

Broiler prices showed a healthy year-on-year gain in August as well with whole broilers up 5.2 per cent and the composite broiler price gaining 1.6 per cent over last year. The broiler sector’s cutbacks have been consistent and, by broiler standards, very large. Broiler slaughter has been smaller in every non-holiday week of 2009 and YTD slaughter is 4.4 per cent lower than last year. YTD slaughter was lower than year-ago levels in early September in only one other year (2003) in our data set that runs back to 1988.


At what time of year is pork demand the strongest? We would bet that many would say summertime. Grilling, ribs, BLT sandwiches, hot dogs — all of those must push pork demand to its highest level of the year, right? Besides it shows up in prices which are, in "normal" years, at their peak in June and July. So it must be summer.

But the data say that that logic is wrong. The chart below shows monthly real per capita expenditures for pork at the retail level. This metric is computed using the exact same data as the demand indexes computed by the University of Missouri for all species and by Kansas State University for beef. The only difference is that those indexes use an assumed elasticity y where this metric implicitly uses the elasticity in the marketplace by using contemporaneous prices and quantities and, thus, whatever negative relationship exists between them at any point in time. It is clear that pork demand is actually strongest in the fall when pork disappearance is high and prices do not fall significantly. Summer months are just the opposite — per capita disappearance/consumption is low and prices do not rise significantly. One obvious possibility is that the ERS retail price series is too stable — and that is born out to some degree by the top graph. One would expect more variation given seasonal and cyclical swings in production.

Title: Re: American Hog News USDA
Post by: mikey on September 21, 2009, 09:49:43 AM
Weekly Review: Increase in 2009 Corn Yield
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
USDA increased the 2009 corn yield to 161.9 bushels per acre for September; the August estimate was 159.5 bushels per acre. If the September estimate holds, it will be the highest yield of record.

The higher yield pushed the 2009 estimated corn crop to 12.954 billion bushels, up from 12.761 billion bushels for the August estimate.

In September, USDA reduced the estimated corn price per bushel from $3.50 per bushel midpoint estimate in August to 3.35 per bushel midpoint estimate for the 2009-10 marketing year.

The September estimate of the 2009 soybean crop has the yield at 42.3 bushels per acre, up from 41.7 bushels per acre in August. This increased yield pushed the estimated bean crop for 2009 up to 3.245 billion bushels. The August estimate was 3.199 billion bushels. The 2009 soybean crop is expected to be a record-high crop.

The estimated price for soybean meal for the 2009-10 marketing year was lowered to $280 per ton midpoint estimate from $290 per ton in August.

These lower expected prices would reduce the cost of producing 100 pounds live weight of pork by about $0.50 per cwt.

Pork exports for July were down 13.1 per cent from last year; much better than in June when exports were down 35.7 per cent from 2008. The July pork exports were up 18.6 per cent from June.

Pork exports for January-July were down 19.3 per cent from 12 months earlier. Our exports to Japan for January-July were up 1.0, to Mexico up 34.5 per cent, to Canada down 7.3 per cent, to South Korea down 14.9 per cent, to Russia down 30.4 per cent, to Australia up 21.9 per cent to Taiwan up 7.3 per cent, to China and Hong Kong down 71.9 per cent and to other countries down 24 per cent.

Pork imports for January-July were down 3.6 per cent from 12 months earlier. Our imports from Canada were up 4.3 per cent, from Denmark down 7.7 per cent, from Mexico down 66.1 per cent, from Poland down 13.7 per cent, from Italy down 16.3 per cent and from other countries down 34.8 per cent from a year earlier.

Our net pork exports as a per cent of production for January-July of 2008 was 17.91 per cent. This declined to 14.23 per cent for January-July of 2009.

Our live hog imports for January-July of 2009 from Canada were down 32 per cent from the same period of 2008.

The futures market has rallied substantially recently. This market suggests a counter-seasonal price rally is possible and hopefully likely. Retail pork prices were down 0.8 per cent in August from July. There is a chance that retail prices will continue to decline in September.

Live barrow and gilt weights in Iowa-Minnesota at 268.9 pounds were up 1.5 pounds from a week earlier and up seven pounds from 12 months earlier. The bottom line is that there is an ample supply of market-ready hogs.

Gilt and sow slaughter data continues to indicate a modest reduction in the breeding herd. Sow slaughter for the four-week period ending 5 September was up 7.6 per cent from a year earlier and gilt slaughter for this period is above normal.

Pork product cutout this Thursday afternoon at $57.04 per cwt was up $1.97 per cwt from a week earlier.

Feeder pig prices last week nationally were $3-6 per head higher than a week earlier. The average price of 50-54 per cent lean 10-pound pigs was $22.06 per head, formula price pigs at $31.03 per head and negotiated price pigs at $13.16 per head. For 40-pound pigs, the average was $21.40 per head, formula price pigs at $43.81 per head, and negotiated price pigs at $20.62 per head.

Cash live prices Friday morning were $2-2.25 per cwt higher compared to a week earlier. Average negotiated carcass prices were $0.45-1.18 per cwt higher compared to seven days earlier.

The live prices were: Peoria $30.00 per cwt, Zumbrota, Minnesota, $34.00 per cwt and interior Missouri $36.50 per cwt. The weighted average negotiated carcass prices were: western Cornbelt $50.21 per cwt, eastern Cornbelt $47.88 per cwt, Iowa-Minnesota $50.20 per cwt and nation $48.91 per cwt.

Slaughter this week under Federal Inspection was estimated at 2310 thousand head, down 0.7 per cent from a year earlier.




Title: Re: American Hog News USDA
Post by: mikey on September 23, 2009, 07:59:25 AM
CME: Markets Wary of Hog Supply Outlook
US - Livestock futures pulled back on Monday as market participants found few bullish news in the USDA cattle on feed report and the weekly production numbers, write Steve Meyer and Len Steiner.



Markets remain wary of the outlook for hog supplies in Q4 and the weekly hog slaughter data did little to support nearby hog futures. USDA reported that hog slaughter for the week ending 19 September was 2.310 million head, 0.7 per cent lower than a year ago but still some 5.9 per cent higher than the five year average. This was the second largest slaughter week for this particular time of the year and when one accounts for the much heavier hog carcass weights, overall pork output for the week remained at record levels (for this time of year).


Total pork production for the week was 462.9 million pounds, 0.2 per cent higher than a year ago and 7.9 per cent higher than the five year average. USDA will publish the results of its quarterly survey of hog operations on 25 September and before the release we will provide a more detailed view of the market expectations for this report. Clearly key will be the pace of breeding herd liquidation and the impact that it has had on farrowings this summer.

It is important to note that sow slaughter only recently has edged above year ago levels so the liquidation picture remains more muddled that it was earlier in the year. The cold storage report also will be viewed carefully, especially given the expectation for another quarter of big pork supplies. Exports appear to be on the mend but they need to be excellent in order to absorb the seasonally large hog numbers.

Cattle supplies last week were below year ago levels, and this was due to a reduction in the number of all classes of cattle. Cow slaughter was lower for the week as the dairy herd retirement program is coming to an end.

Based on preliminary USDA data, total US cow and bull slaughter last week was 133,000 head, 6.3 per cent lower than a year ago. Steer and heifer slaughter was estimated at 515,000 head, 5.3 per cent lower than last year. Packers continue to limit the number of cattle they process, last week they had two days in which the number of cattle processed was less than 100,000 head. With feedlot supplies edging higher thanks to larger placements, packers could further lower their bids and pressure overall cattle prices in Q4.

Title: Re: American Hog News USDA
Post by: mikey on September 24, 2009, 09:34:40 AM
US Swine Economics Report
US - On 25 September, USDA will release the results of their latest survey of the US swine inventory, writes Ron Plain in his Swine Economics Report.

 
Ron Plain
My estimates are that the breeding herd is 1.8 per cent smaller than a year ago, the market hog inventory is 0.9 per cent smaller, and the total herd is 1.0 per cent smaller than on 1 September 2008.

Slaughter of barrows and gilts was down roughly 1.1 per cent during June-August due in part to a 29 per cent drop in slaughter hogs imports from Canada. Slaughter of US raised hogs was about 1 per cent higher than expected based on the June inventory report.

My estimates of the 1 September market hog inventory by weight groups are: 180 pounds and heavier 99.0 per cent, 120-179 pounds 99.0 per cent, 60-119 pounds 99.2 per cent, and under 60 pounds 99.0 per cent of a year earlier.

In their last inventory report, USDA predicted June-August farrowings would be 3.3 per cent smaller than a year earlier and September–November farrowings would be down 2.2 per cent. I’m estimating summer farrowings actually were down only 2.8 per cent and fall farrowings will be down 2.0 per cent. I’m forecasting winter farrowings to be down 3.0 per cent compared to December-February 2009. Despite a lot of red ink, 2009 sow slaughter has been low. December-February, sow slaughter was 7.4 per cent lower than a year earlier, March-May sow slaughter was down 15.2 per cent, and June-August was down 6.2 per cent compared to 12 months earlier.

I believe that mild weather resulted in pigs per litter being up 2.4 per cent this summer. My estimate is the June-August pig crop was 99.5 per cent of a year earlier. Feeder pig imports during June-August were 21 per cent below last summer’s level, so the light weight inventory should be down more than the pig crop.

My estimate of hogs in the 60-179 weight groups implies that fourth quarter hog slaughter will be 1-2 per cent below year-ago levels, if as expected the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $34/cwt ($43/cwt carcass) in the fourth quarter of 2009.

I expect hog slaughter during the first quarter of 2010 to be 1-2 per cent lower than the number slaughtered in January-March 2009. If so, expect first quarter 2010 hog prices to average close to $38/cwt on a live basis and $49/cwt on a carcass basis.




Title: Re: American Hog News USDA
Post by: mikey on September 25, 2009, 11:18:51 AM
CME: Overall Hog Inventories Expected to be Down
US - On Friday, 25 September, USDA will issue its quarterly update of the inventory of hogs and pigs in US operations, write Steve Meyer and Len Steiner in their DLR for 23 September.



The report will provide a gauge not only of current hog supplies but also estimates of hog and pork production in 2010. Based on a survey of analysts conducted by Reuters, the expectation is for overall hog inventories to be down 1.7 per cent from a year ago, with market hogs down by a similar amount and the breeding herd also down 2.7 per cent.

On the latter, there continues to be plenty of disagreement and this is reflected in the wide divergence of opinions. The current average of estimates indicates that the breeding stock as of 1 September is expected to e down by a similar amount as in the June survey (-2.7 per cent).


Those that hold a more bearish view of the market likely will point out that despite much talk, US producers continue to be reluctant to sharply cut back the production base, be this because of large sunk in investments, hopes for a rebound or lower grain prices in July and August. They also point to the fact that a significant number of sows during the recent increase in sow slaughter are Canadian animals rather than US stock. More bullish analysts, on the other hand, note that many producers had little choice but to liquidate, following a prolonged period (20 of 22 months) of losses.

One item that will also likely get much attention is the estimate for the pig crop in the June - August period. That estimate will be a function of both farrowings and pigs per litter. The average of analysts’ estimates indicates that the pig crop will be down 1.8 per cent from the previous year, a much needed reduction but likely smaller than those calling for a significant reduction had hoped for.

As we have noted many times before, the steady gains in productivity have offset much of the decline in sow numbers. Indeed, the pig crop may end up being even larger as pigs per litter in recent quarters have increased by more than 1.4 per cent (the current estimate for June - August). Overall, the estimates do not paint a very bullish picture for pork going forward.

Please refer to page 2 of the link to view a special CME notice regarding the daily price limit for bellies in Q4. The price limit for the upcoming quarter will be determined on the basis of the closing futures price on 30 September.



Title: Re: American Hog News USDA
Post by: mikey on September 27, 2009, 08:54:04 AM
Weekly Review: September Hogs and Pigs Report Bullish
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Cold storage stocks of pork at the end of August were down 4 per cent from the end of July but up 3 per cent from the end of August 2008. The cold storage stocks compared to July are down a little more than normal for 2001-2008. The cold storage stocks at the end of August were 1.2 per cent below the July 31 stocks.

The bad news is that cold storage stocks at the end of August were nearly 22 per cent above the 2001-2008 stocks. These are quite large stocks to be going into the heavy slaughter of fall and will be somewhat negative to prices.

Sow slaughter has increased recently and the last four weeks were up 1.9 per cent from last year after adjusting for herd size. Gilt slaughter for the four weeks ending September 12 was up substantially. This data supports the belief that producers speeded up the decline in the breeding herd starting in mid-August. Therefore, the September breeding herd will not likely show this increase in the rate of decline.

Feeder pig prices nationally have been substantially stronger with a $4-7-per-head gain last week following a good increase the previous week.

The prices nationally showed 10-pound pigs averaging $25.92 per head and 40-pound averages at $28.81 per head. The formula-priced pigs had 10-pound pigs at $33.72 per head and 40-pound pigs at $35.67 per head. Spot-priced pigs at 10 pounds were $19.67 per head and 40-pound pigs were at $27.53 per head.

United Tel-o-auction feeder pig prices this week were $5-7 per cwt above two weeks earlier. All of the United pigs weighed 50-60 pounds and sold from $41-48.50 per cwt.

Live barrow and gilt weights last week in Iowa-Minnesota were 0.7 pound lighter than a week earlier but 5.2 pounds heavier than a year earlier. For the week ending 12 September, barrow and gilt carcass weights were four pounds above 12 months earlier.

Pork cutout this week Thursday afternoon showed the cutout of 100 pounds of carcass at $53.63 per cwt, down $3.41 per cwt from last week. Loins at $69.66 per cwt were down $6.37 per cwt, Boston butts at $52.56 per cwt were down $5.68 per cwt, hams at $42.86 per cwt were down $4.47 per cwt and bellies at $67.83 per cwt were up $1.03 per cwt from seven days earlier.

Live hog prices Friday morning were $0.75 to $2.50 per cwt lower compared to a week earlier. Weighted average negotiated carcass prices were $0.41 to $1.43 per cwt lower compared to seven days earlier. The top live prices Friday morning were: Peoria $29.00 per cwt, Zumbrota, Minnesota, $32.00 per cwt and interior Missouri $35.75 per cwt. The weighted average negotiated carcass prices by area were: western Cornbelt $48.78 per cwt, eastern Cornbelt $47.47 per cwt, Iowa-Minnesota $48.78 per cwt and nation $48.12 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,346 thousand head, no change from a year earlier.

The trade expects the hogs and pigs crop report to show total hog numbers down 1.8 per cent, the breeding herd down 2.6 per cent and the market herd down 1.7 per cent. These numbers are a little friendlier than our estimates.

The September Hogs and Pigs report came in a little more bullish than the trade estimates. The kicker here is the recent Hogs and Pigs reports have been a little more bullish than the trade reports, but slaughter has run above most USDA report estimates.

Our quick estimate is for slaughter in the fourth quarter to be down 1.9 per cent and 51-52 per cent lean live hogs to be $32-35 per cwt. For the first quarter, our estimate is for slaughter to be down 3.7 per cent from last year and 51-52 per cent lean live hogs to be at $35-38 per cwt.

A more detailed report will be on the MU Ag Electronic Bulletin Board by noon, 28 September.

Title: Re: American Hog News USDA
Post by: mikey on September 27, 2009, 09:30:20 AM
USDA Quarterly Hogs and Pigs Report - September 2009
This quarter's quarterly Hogs and Pigs report from the USDA's National Agricultural Statistics Service (NASS).

 

Introduction
This document aims to pull together, in one place of reference, all the various information generated by the USDA Quarterly report. This document includes:

USDA Quarterly Report: September 2009
What It All Means - Expert Commentary
In The News - What The Media Says
Graph Data From The Report
Hog Inventories by State (external link - select State and navigate to file)
For a PRINTABLE VERSION of the full 24 page report in PDF format, including all the tabular data which is not shown in this article, please Click Here


USDA Quarterly Pigs and Hogs Report: September 2009
US Hog Inventory down Two Per Cent
US inventory of all hogs and pigs on 1 September 2009 was 66.6 million head. This was down 2 per cent from 1 September 2008 but up 1 per cent from 1 June 2009.

Breeding inventory, at 5.87 million head, was down 3 per cent from last year and down 2 per cent from the previous quarter. Market hog inventory, at 60.8 million head, was down 2 per cent from last year but up 1 per cent from last quarter.

The June-August 2009 pig crop, at 28.8 million head, was down 2 per cent from 2008 and down 1 per cent from 2007. Sows farrowing during this period totaled 2.97 million head, down 4 per cent from 2008 and down 5 per cent from 2007. The sows farrowed during this quarter represented 50 per cent of the breeding herd. The average pigs saved per litter was a record high 9.70 for the June-August 2009 period, compared to 9.51 last year. Pigs saved per litter by size of operation ranged from 7.40 for operations with 1-99 hogs and pigs to 9.80 for operations with more than 5,000 hogs and pigs.


US hog producers intend to have 2.94 million sows farrow during the September-November 2009 quarter, down 3 per cent from the actual farrowings during the same period in 2008, and down 8 per cent from 2007. Intended farrowings for December 2009-February 2010, at 2.93 million sows, are down 3 per cent from 2009 and down 5 per cent from 2008.

The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 46 per cent of the total US hog inventory, up from 43 per cent last year.

Revisions
All inventory and pig crop estimates for September 2008 through June 2009 were reviewed using slaughter, death loss and current import and export data. Based on this review, adjustments of less than one percent were made to the March 2009 and June 2009 total inventory. An adjustment of less than two percent was made to the December 2008-February 2009 pig crop.

Special Note
The market hogs and pigs weight groups will be changing beginning with the December 2009 Quarterly Hogs and Pigs release. The market weight group under 60 pounds will be changed to under 50 pounds, and the market weight group 60-119 pounds will be changed to 50-119 pounds. The 120-179 pounds and 180 pounds and over weight groups will remain the same. These changes align NASS market hogs and pigs weight groups more closely with international trade data. Statistics Canada is making similar changes to the Canadian market hogs and pigs categories. This will allow for a more uniform analysis of the US and Canadian hog inventories.

Estimates will be published in the December 2009 Quarterly Hogs and Pigs release for the new weight groups dating back to March of 2008 at the US and State level using slaughter data and current import and export data. These estimates will allow for historical analysis of the new weight groups and will provide a point of reference for proceeding quarters.

Title: Re: American Hog News USDA
Post by: mikey on September 29, 2009, 09:26:35 AM
Lifting of Funding Ban Could Help US Pork Producers
US - The National Pork Producers Council commended conferees on the agriculture appropriations bill, on text slated for the FY 2010 agriculture appropriations conference report regarding the use of appropriated funds by USDA with respect to potential imports of poultry products from China.



The conference agreement would allow USDA to use appropriated funds in FY 2010 to promulgate or implement a rule allowing imports of processed poultry or poultry products from China only after the Secretary of Agriculture notifies Congress that certain conditions have been met.

"We applaud the conferees for finding a path forward that will permit USDA to conduct a science-based risk assessment of Chinese processed poultry. It sends a strong signal to China that the US abides by its trade obligations and will base decisions about imports on sound science," said NPPC President Don Butler. "We expect China to do the same."

As the world’s biggest exporter of pork, the US pork industry has a compelling interest in making sure that foreign governments base their trade decisions on science. Last year, the industry exported nearly $5 billion of pork, including almost $690 million to China, the second largest destination.

In its efforts to move the process forward, NPPC was part of a coalition of agriculture and business organizations that urged the Congress to look closely at the issue. In August, NPPC issued a grassroots call to action, asking pork producers around the country to contact their members of Congress and urge them to find a science-based solution to the issue. And, at a critical point in the appropriations negotiations in mid-September, more than 130 pork producers came to Washington to meet with their congressional delegations on the issue.

"China is a very important market for the US pork industry," Mr Butler said. "Given the current economic state of our industry, with producers losing more than $21 per hog over the past two years, US pork exports to China are NPPC’s No. 1 trade priority."


 

Title: Re: American Hog News USDA
Post by: mikey on September 29, 2009, 09:28:22 AM
CME: US Swine Herd Continues to Decline
US - USDA’s quarterly Hogs and Pigs Report, released Friday afternoon, indicated that the US swine herd continues to shrink and that the pace of that reduction may have, as expected, increased in the June- August quarter, write Steve Meyer and Len Steiner in their Daily Livestock Report for 25 September.



The key numbers from the report along with the averages of analysts’ pre-report estimates appear in the table below.


Some highlights of the report are:

An increase in the rate of breeding herd liquidation. June’s quarterly report showed a breeding herd of 5.967 million head, 2.7 per cent lower than that of June 2008. The September 1 hers is estimated to be 5.874 million head, 3.1 per cent lower than on year ago. The June-August reduction is bad news and good news. The bad news is that this 1 June to 1 September decline of 93,000 head is small by historical standards. The last three liquidations of the US sow herd in 1995, 1999 and 2002 saw the herd drop by 210,000, 214,000 and 157,000, respectively, during the Jun-August quarter. The good news is that this 1 September estimate caught just the first three weeks of the higher sow slaughter that we have seen since CME Lean Hogs futures collapsed in July. That decline was arguably the clearest liquidation symbol yet to a sector badly in need of lower sow numbers given productivity increases and export disruptions. Therefore, a larger quarter-to-quarter and year-on-year reduction is very likely when the December count is taken — but don’t expect that reduction to be as large as past reductions either. The structure of this sector makes is very difficult to reduce numbers quickly.


The 180 lbs-and-over inventory, at 99.7 per cent of last year’s level. Slaughter thus far in September, when adjusted for fewer Canadian market hogs and one less weekday thus far this year, is almost identical to one year ago. That lends some credence to the report. The pre-report estimate of 99.0 per cent now appears low.


The 1 September breeding herd, June-August farrowings and June-August pig crop figures appear to fit well given the 2 per cent increase in litter size. The under-60-lb. inventory at 96.3 per cent looks about 1 per cent small relative to the pig crop even after considering that imports of Canadian pigs from mid-July through the end of August are nearly 300,000 head lower than one year ago.


Litter size keeps on growing — and growing at an unprecedented pace. As can be seen in the chart above, the rate of increase since June 2007 (which, by the way is almost precisely the time that vaccines for porcine circovirus (PCV) became available) is the best ever, averaging 2.1 per cent, year-over-year. The only period that gets close to that was December 1994 through September 1997, a period during which larger, generally more efficient farms were taking market share from smaller farms that were exiting the business. While some "weeding out the inefficient" is still being done, these recent gains are driven by excellent animal health and better genetics and management.
Title: Re: American Hog News USDA
Post by: mikey on September 29, 2009, 09:30:27 AM
Record High Pork Production for August
US - Commercial red meat production for the United States reached 4.08 billion pounds in August, down slightly from the 4.10 billion pounds produced in August 2008, according to the USDA's National Agricultural Statistics Service (NASS).

 

Pork production totaled 1.87 billion pounds, up four per cent from the previous year.

Hog kill totalled 9.34 million head, up one per cent from August 2008.

The average live weight was up seven pounds from the previous year, at 268 pounds.

January to August 2009 commercial red meat production was 32.5 billion pounds, down three per cent from 2008.

Accumulated pork production was down two per cent from last year.

August 2008 contained 21 weekdays (including no holidays) and five Saturdays.
August 2009 contained 21 weekdays (including no holidays) and five Saturdays.


Title: Re: American Hog News USDA
Post by: mikey on September 30, 2009, 09:28:28 AM
CME: Market Hog Imports Remarkably Stable
US - An alert reader pointed out to us this morning that the year-to-date data in Friday’s Production and Price Summary was out of date, write Steve Meyer and Len Steiner in their DLR for 28 September. Our bad for neglecting to update it.



The correct data for all four species are shown in the table below.

CORRECTED YEAR-TO-DATE DATA
Week Ending 9/27/2009
  Units Quantity Yr/Yr Pct
Change
FI Cattle Slaughter Thous. Head 24,286 -4.8%
FI Beef Production Million Lbs. 18,954 -3.8%
FI Hog Slaughter Thous. Head 81,914 -3.2%
FI Pork Production Million Lbs. 16,602 -2.0%
Young Chicken Slaughter Thous. Head 5,832 -4.4%
Chicken Production Million Lbs. 23,898 -4.7%
Turkey Slaughter Thous. Head 168.1 -5.1%
Turkey Production Million Lbs. 3786 -5.3%

Beyond domestic hog supplies, the other piece of the US hog and pork supply picture is, of course, imports of pigs from Canada. USDA’s Agricultural Marketing Service publishes data based on weekly tallies of Animal Plant Health Inspection Service border inspection data. The weekly data for 2007 through 2009 and the averages for 2003-2007 appear in the charts below. As can be seen, the numbers of market hogs and feeder pigs coming from Canada are down sharply this year (27 per cent and 71 per cent YTD, respectively) while imports of cull breeding animals are 3.6 per cent higher YTD.


Market hog imports have been remarkably stable at about 10,000 head per week since February. This volume of purchases is based on long-standing business relationship and contractual agreements. We expect imports to remain at this level for the foreseeable future provided the Canadian suppliers remain viable.

Feeder pig imports have generally trended downward at the same rate as last year but at a level about 30,000 per week lower than one year ago. As Canada’s breeding herd continues to shrink (Stats Canada’s 1 October inventory report will be release in mid- October), we expect this number to continue to fall at about the same rate that is has declined since March. That rate, though, depends on the specifics of Canada’s federal sow buyout program that was announced in August but whose specifics are not yet known.

That same program will also almost certainly decrease imports of Canadian cull sows — just as last year’s buyout did from July through September. Any reduction will boost sow prices n the US and provide more slaughter plant capacity for US sows, thus impacting the rate of US sow herd reductions.


Title: Re: American Hog News USDA
Post by: mikey on September 30, 2009, 09:30:45 AM
Market Preview: Hogs & Pigs Report Encouraging
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Friday’s USDA Hogs and Pigs report indicates the pace of breeding herd liquidation may be quickening, generally agreeing with pre-report estimates. Chicago Mercantile Exchange (CME) Group Lean Hogs futures responded by moving $0.50 to $1.05 higher in early trading on Monday, with the largest gain being in the April contract.

Figure 1 shows the key numbers from the report as well as the averages of analysts’ pre-report estimates and the differences between actual and estimated year-on-year percentages. Some key numbers and implications include:


The breeding herd of 5.874 million head is 3.1 per cent smaller than last year, marking an increase in the rate of reduction from 2.7 per cent in June. That’s good news – especially since this survey captured 1 September inventories, only three weeks into this period of higher sow slaughter. The bad news is the June-September reduction is much smaller than in past liquidations. I believe that reflects the fact that clear liquidation signals did not come until the late-July break in CME Lean Hogs futures. I expect to see a larger year-on-year breeding herd reduction in the December report – even if profit prospects improve some. The cold, hard truth is that many producers are out of cash with no source of funds to support their operations.


The market herd was 0.5 per cent smaller than expected. That should be mildly supportive to prices over the next few months, but note that the largest share of this shortfall is in the under-60 lb. category. Q4 slaughter is going to be very near the levels projected by the June report. As Figure 2 shows, I still have eight weeks with the federally inspected (FI) slaughter above 2.3 million head. That includes the past two weeks when actual FI slaughter has exceeded the forecast level by 0.3 per cent and 1 per cent, respectively. Readers should note that Figure 2 assumes that imports of Canadian market hogs will continue to be in the 10,000/week range, but imports of Canadian feeder pigs will continue to trend downward at about 30,000 head fewer than year-ago levels.

Average litter size grew by 2 per cent, year-on-year, for the fifth straight quarter, which keeps average litter size growth above 2 per cent since mid-2007, when circovirus vaccines first boosted productivity. There has been a lot of talk about sow retention, the resultant increases in sow herd average parity levels, and the impact that may have on productivity, although we’ve seen no damage yet. Two possible reasons come to mind. First, we may not have pushed average parity figures far enough to get a high proportion of Parity 6+ sows whose productivity drops significantly. Second, and I think more likely, the gilts we are bringing in are simply more productive due to genetic selection and proper development. This litter growth rate must slow down at some point, mustn’t it? Even if it does, I don’t expect any slowdown to be large. See Figure 3 for the new trend.

Farrowing intentions for the next two quarters are perfectly in line with the sow herd size in the 1 September report. It seems a bit curious, but those are the numbers! I fear that the intentions reported may turn out to be low for both quarters because we’ve just experienced the best summer for conception rates in memory. Some anecdotal evidence points to significant increases this summer, which suggests that the herd will produce more litters than normal this winter. That means more market hogs than we’d expect from these numbers from April through July or August. Producers should be ready to aggressively price hogs for Q2 and Q3 on any rallies in Lean Hog futures.
Record Low Breeding Herd
The 5.874 million breeding animals in this report breaks the old “low” of 5.947 million set in June 2004. At least it’s the lowest number I can find in any of our data going back to 1900 – and that comes from Professor Glenn Grimes, University of Minnesota, who knows much more about such things than I.

The lowest number Professor Grimes could find from 1900 onward was an inventory of 6.078 million “sows and gilts 6 months and older” in 1935. That number would exclude boars and selected younger gilts that would be included in today’s breeding herd number.

It also represents a US herd decimated by Great Depression consumption. In 1923, there were 69.304 million hogs and pigs in the United States, among which were 14.133 million sows and gilts 6 months old and older. By 1935, the US hogs and pigs count dropped to 39.066 million head and the sow/gilt number had dropped to the aforementioned 6.078 million. Tough times on the farm and in the economy drove us to eat the capital stock!

The most recent peak in the US breeding herd occurred in June 1979, when US producers had 10.368 million breeding animals. Commercial hog slaughter and production in 1980 were 96.074 million head and 16.617 billion pounds, respectively. Those numbers put slaughter per breeding animal at 9.267 head and average production per breeding animal at 1,602 lb., carcass weight.

The same measures in 2008 were 19.343 hogs slaughtered and 3,916 lb. of pork produced per June 2008 breeding animal. Even when one deducts the 8 per cent of those pigs and pounds that originated in Canada, today’s output per breeding animal is more than double the level of less that 30 year ago.

Title: Re: American Hog News USDA
Post by: mikey on October 01, 2009, 09:50:33 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME finished up again on Monday with the exception of the October contract. OCT’09LH futures finished down $0.075/cwt at $49.875/cwt and $0.275/cwt lower than last report. The October contract met resistance amid large numbers of heavy hogs coming to market. The DEC’09LH contract closed down $0.700/cwt at $49.725/cwt and $0.350/cwt higher than a week ago. Prices rallied on a technically defensive move by large speculators protecting long positions and last week’s USDA report showing a small drop in the herd size and increased fund buying. Weak export prospects and an endless supply of market hogs kept the lid on. USDA on Friday put the US hog herd down 2 per cent from last year at 66.626 mi head. The reproductive herd was placed at 5.874 mi head, down 3 per cent. However, the number of pigs per litter increased 102 per cent of a year ago. Pigs weighing 60 lbs or less showed a 96 per cent reduction in numbers. This was more than traders expected. USDA put the average pork price at $54.75/cwt; up $1.12/cwt but $2.04/cwt lower than a week ago. The latest CME lean hog index was placed at $52.43/lb, off $0.14/lb and $0.16/lb lower than last report. According to HedgersEdge.com the average pork plant margin was lowered $0.75/head to $6.30/head. This was based on the average buy of $36.28/cwt vs. the average breakeven price of $38.64/cwt.

CORN futures on the Chicago Board of Trade (CBOT) finished off on Monday. DEC’09 corn futures finished at $3.86/bu; up 4.75¢/bu and up 22.75¢/bu from last report. The MAY’09 contract closed at $3.602; up 4.75¢/bu. Trading continued sideways in a choppy pattern. Support came from gains in crude oil and wet weather delaying frost. Exports were neutral to bearish as USDA placed corn-inspected-for-export at 29.6 mi bu vs. 40.9 mi bu last week vs. 41.8 this time last year (-29 per cent of last year). The market seems to have factored in any frost scares. Funds bought over 4,000 contracts while large speculators trimmed 6,400 lots to 3,400 contracts. Cash corn bids were steady to weak in the US with those in the US Mid-Atlantic states coming in at 4.0¢/bu – 6.0¢/bu higher in many places. Several floor sources said they expect the corn market to plunge after Wednesday’s grain stocks report. Get up to 70 per cent of the ’09 crop sold if you haven’t already.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The NOV’09 contract closed at $9.194/bu; off 6.5¢/bu but 6.0¢/bu over last report. NOV’09 soybean futures closed at $8.936/bu; 12.75¢/bu lower than last Friday. Preliminary numbers from early harvesting are indicating very good yields. This combined with waning frost worries weighed on prices. Traders also expect USDA’s Wednesday grain report to show a slight decrease in use numbers. Prices remain in a consolidative range, trading sideways, with a bearish technical analysis bias. USDA confirmed a sale of 225,000 tonnes (8.3 mi bu) of US soybeans to China for later delivery. USDA reported soybeans-inspected-for-export at 7.427 mi bu. Cash soybean bids in the US Midwest were steady to firm while those in the US Mid-Atlantic states ranged 6.0¢/bu -14.0¢/bu lower. In long liquidation large speculators turned net bear for the week ended 9/22 by 846 lots decreasing bull positions by 9,790 contracts. Additionally, funds sold 2,000 lots. If you haven’t priced your crop it probably will pay to wait until harvest or store. The small carry does not justify any more sales at this time.

WHEAT futures in Chicago (CBOT) were up on Monday. DEC’09 futures closed at $4.556/bu; up 6.0¢/bu. The JULY’10 wheat contract closed at $5.052/bu; up 4.5¢/bu and 5.75+¢/bu cents higher than last Monday. Floor sources said things were ripe for a rebound from oversold conditions even though fundamentals did not support it. Also pressuring the market are expectations that USDA will raise its forecast for the ’09 US wheat crop by as much as 10 mi bu. This comes amid good wheat growing weather in Argentina. USDA placed wheat-inspected-for-export at 24 mi bu vs. expectations for between 18-23 mi bu. Egypt tendered for 55,000 – 60,000 tonnes (2.0-2.2 mi bu) of any-origin wheat while Iraq issued a tender for 100,000 tonnes (3.67 mi bu) of any-origin wheat. USDA said that the US spring wheat crop is 94 per cent harvested vs. the 5-year average of 98 per cent. Funds bought about 3,000 lots while large speculators cut net bear positions by almost 1,500 lots to 63,500 contracts. It might be a good idea to get up to 60 per cent of the ’10 crop priced at this time.



Title: Re: American Hog News USDA
Post by: mikey on October 02, 2009, 07:48:54 AM
NASDA Plans to Help Producers
US - The National Association of State Departments of Agriculture (NASDA) has put forward a plan to take extra dairy, pork and poultry supplies off the market to help producers.



The National Association of State Departments of Agriculture (NASDA) has put forward a plan to take extra dairy, pork and poultry supplies off the market, stabilising prices paid to producers while making more protein-rich foods available to food banks, school lunch programs and other food assistance programmes.

South East Farm Press reports that North Carolina Agriculture Commissioner, Steve Troxler, and his counterparts across the country have offered the federal government a new proposal to help struggling dairy, pork and poultry farmers.

The National Association of State Departments of Agriculture (NASDA) has put forward a plan to take extra dairy, pork and poultry supplies off the market, stabilizing prices paid to producers while making more protein-rich foods available to food banks, school lunch programmes and other food assistance programmes, Troxler said. The proposal grew out of discussions between Troxler and his colleagues before and during NASDA's annual meeting in Alabama. It is designed to use money previously authorised by Congress.

The proposal, known as 'Meat the Need', calls for the federal government to purchase cheese and other dairy products in up to three installments of 75 million pounds each over 120 days.

If the target price of $16 per hundredweight of milk – the cost of production – is reached before the second or third installment, the purchases would stop, Mr Troxler said. Likewise, the government would purchase up to three installments of 100 million pounds of pork products over 180 days until a target price of 49 cents per pound – the average cost of production – is reached. The plan also includes a one-time purchase of 100 million pounds of turkey.

"This is a bold solution that would allow the US Department of Agriculture to increase allocations to the Supplemental Nutrition Assistance Program, and beneficiaries would spend the new allocations on meat and possibly dairy products," Mr Troxler said. "These products would be available at grocery stores, and participants would be given separate electronic benefits transfer cards to purchase the products."

Mr Troxler said major action is needed quickly, reports South East Farm Press.

He said: "Dairy farmers across the country are suffering mightily. Bankruptcies and foreclosures are occurring at an alarming rate."

USDA has been buying pork but not nearly enough to do anything about the prices farmers receive, he said.

Mr Troxler said: "'Meat the Need' provides the impact the dairy and pork industries need. It is fiscally sound and is flexible enough to respond to changing market conditions."

Title: Re: American Hog News USDA
Post by: mikey on October 04, 2009, 10:49:56 PM
CME: Cull Sow Supply on US-Canadian Market to Rise
US - In Monday’s edition of DLR, we stated that the upcoming Canadian sow herd buyout program might decrease cull sow exports to the US as last year’s program did, write Steve Meyer and Len Steiner.



Anecdotal evidence we have received since that writing indicates that this year’s Canadian buyout program will not likely move culled sows to rendering but will instead buy the producer out of production for a specified time and stipulate that the sows will be sold on the cull sow market – much the same as the Cooperative Working Together US dairy herd buyouts have worked.

That, of course will INCREASE the supply of cull sows on the US-Canadian market during the prescribed liquidation period. Whether that will increase overall sow movement or simply supplant some US sows for a few weeks remains to be seen but we suspect it will be the latter unless sausage demand is particularly strong during the time period.

One good thing – it does not appear that Canadian producers are holding sows back right now, very likely because the Canadian program will be, as was last year’s, retroactive to some point earlier this year.



Title: Re: American Hog News USDA
Post by: mikey on October 04, 2009, 10:51:59 PM
Weekly Review: Hogs and Pigs Report Bullish
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
The September Hogs and Pigs report came in a little more bullish than the trade estimates. Total number of hogs and pigs was down 2.3 per cent, kept for breeding was down 3.1 per cent according to USDA, and the market inventory was down 2.2 per cent. The futures market responded by showing relatively small gains both Monday and Tuesday.

USDA revised upward their estimate of the number of litters farrowed during December to February 2009 by 1.5 per cent and the pig crop for those months by 1.6 per cent. This brought the June market hog inventory more in line with summer hog slaughters. USDA revised upward the 60 to 170 pound market inventories in June by 0.7 per cent in the September report.

In recent reports, the USDA has estimated the number a little below the trade estimate but actual marketings on average have been above trade estimates. We must remember the USDA estimates are based on a sample and the trade estimates are based on other statistics and opinions. Therefore, both estimates are subject to error. We certainly hope the USDA's September estimates are the correct ones.

Our domestic demand index for pork for January to August was up 3.9 per cent at the consumer level, but live hog demand was down 4.7 per cent for these eight months compared to a year earlier. The weaker live hog demand than consumer demand was due to the 20 per cent smaller exports in 2009 than 2008.

Pork product cutout this week on Thursday afternoon at $54.33 per cwt was up $0.70 per cwt from a week earlier. Loins at $68.51 per cwt were down $1.15 per cwt, Boston butts at $50.40 per cwt were down $2.16 per cwt, hams at $48.46 per cwt were up $5.60 per cwt and bellies at $66.36 per cwt were down $1.47 per cwt compared to seven days earlier.

Feeder pig prices were $3.00 to $6.00 per head higher again last week. This is the third consecutive week with good gains in feeder pig prices. The average price for 50 to 54 per cent lean 10-pound pigs was $25.89 per head. The average for 50 to 54 per cent lean 40-pound pigs was $28.30 per head. The formula price for 10-pound pigs was $33.12 per head, and the formula price for 40-pound pigs was $39.31 per head. The cash or negotiated price for 10-pound pigs was $23.29 per head and 40-pound pigs was $27.43 per head.

Live barrow and gilt weights in Iowa-Minnesota last week at 268.5 pounds were up 0.3 pound from a week earlier and up 3.9 pounds from a year earlier.

It is believed that a substantial portion of the heavier weights this summer has been due to the cooler than normal temperatures in July and August. If so, we will continue to get weights closer to a year earlier as we go through the fall but weights are likely to continue some above a year earlier.

Unless we can get substantial growth in demand for live hogs, the red ink being experienced by producers will likely continue on average through 2010.

Live hog prices Friday morning were $0.75 lower to $1 pet cwt higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $0.31-2.03 per cwt lower compared to seven days earlier.

The top live prices Friday morning were Peoria $30 per cwt, Zumbrota, Minnesota, $32 per cwt and interior Missouri $35 per cwt.

The weighted average negotiated carcass prices Friday morning by area were western Cornbelt $48.39 per cwt, eastern Cornbelt $45.44 per cwt, Iowa-Minnesota $48.47 per cwt and nation $46.09 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,329 thousand head, up 0.1 per cent from a year earlier.

Title: Re: American Hog News USDA
Post by: mikey on October 06, 2009, 09:33:58 AM
Monday, October 05, 2009
Signs of Hog Industry Recovery by Next Summer
US - The "first signs of the financial dawn" are starting to creep over the horizon in the US hog industry.



It won't happen overnight, but change for the better is on the way to the business, says AgricultureOnline. Namely, supplies are starting to dwindle further and demand - which could have "more positive implications for hog prices than reduced supply" - is looking stronger.

Overall, that means if hog farmers can dig in and make it through the next half year, next spring's thaw might be followed by a resurrection of profits for an industry that's really been hurting for a while now.

"The components of the dawning are coming from both supply and demand factors. Production in 2009 dropped only 2 per cent with prospects of only a 1-2 per cent drop in 2010. While these reductions are small, they are at least headed in the right direction," says Purdue University Extension economist Chris Hurt. "Improving demand will likely have more positive implications for hog prices than reduced supply."

That's because forthcoming signs will likely point to the official end of the recession soon. Though the effects of the downturn won't altogether dry up and blow away to reveal a suddenly robust economy, GDP numbers for the third quarter of 2009 are anticipated to be "positive," Professor Hurt says. This will eventually translate to a return to higher demand that took a hit when unemployment started climbing and consumer confidence started slumping.

Put that together with lower pork prices for consumers, and Hurt says consumer demand will likely gain steam further into the fall season. In addition, the export outlook is more bullish, making the world market more rife for an increase in US pork sales.

"Exports are expected to strengthen as well. World economic recovery is expected to have more upside potential than the US recovery," Professor Hurt says. "Current USDA forecasts are for pork exports to be up 9 per cent over the next 9 months compared to the same period a year earlier."

Months ago, the call went out to trim the US sow herd, and eventually, farmers took note. Now, efforts to cull the herd should start to see dividends in the marketplace, Professor Hurt says. Per-capita pork availability will gradually decline in the next 9 months and as that happens, more of the increase in prices consumers pay will make it back to the farmer.

"Lower pork supplies with lower retail prices will strengthen hog prices and result in a higher portion of the retail pork expenditures flowing back to producers," Professor Hurt adds. "Hog prices are expected to average in the high $30s on a liveweight basis for the final quarter of 2009. Prices are expected to rise to the low $40s this winter and then move into the mid-$40s for second quarter averages. Next summer's prices are expected to rise into the high $40s for an average and the low $50s for weekly highs."


 

Title: Re: American Hog News USDA
Post by: mikey on October 06, 2009, 09:35:42 AM
CME: Hog Slaughter This Week Slightly Higher
US - Lean hog carcass future for Q4 of this year continue to hover at a little under $50 per cwt, which implies $36.5 on a live basis and negative margins anyway you look at it, write Steve Meyer and Len Steiner.



Producers have to wait until late next spring before seeing any (potential) profits, and that is predicated on the assumption that we will see continued sow herd liquidation this fall and winter and productivity growth returns to trend levels.

Hog slaughter this week was slightly higher than a year ago but after accounting for much heavier hogs coming to market, total US pork production this week at 469.4 million pounds was 3.5 million pounds or 0.8 per cent higher than a year ago. It is the largest amount of pork produced in the first week of October, and a reason why the market is finding it so difficult to get any upward price momentum.

Ham prices tend to carry the market at this time of year but given the available supply, ham prices actually were down 5 per cent or more compared to the week before and they are currently 42-45 per cent lower than a year ago, a troubling sign for overall pork wholesale values in the short term.

Title: Re: American Hog News USDA
Post by: mikey on October 07, 2009, 10:48:19 AM
CME: Canadian Breeding Herd Reduction Slowed
US - The government of Canada announced on Friday the details for two programs to aid its beleaguered pork industry, write Steve Meyer and Len Steiner in their Daily Livestock Report for 5 October.



One is designed to keep producers with economically viable operations in business while the other is designed to provide an incentive for other producers to exit the business for at least three years.

The Hog Industry Loan Loss Reserve Program (HILLRP) will provide government loan guarantees based on “credible business plans, validated by lenders, demonstrating that the borrower has reasonable potential to repay the loans and maintain a viable agricultural operation.” The program will loan up to $85 per market hog, $30 per weaner (we think that means a 40-45 pound feeder pig) and $25 per iso-wean pigs (we are pretty confident that means a 10 to 12-pound pig). One kicker: Any loans issued under HILLRP must first be used to reimburse the government of Canada for any 2008-09 program payment advances. Our sources in Canada believe that the amount of participation in this portion of the government’s program may be limited due to a) the advance repayment feature which, in effect, removes the cash infusion for an operation and b) the long-term financial losses suffered by Canadian producers which has left questionable the ability of many to devise a “credible business plan” for long-term viability.

The Hog Farm Transition Program (HFTP) is a $C75 million initiative to help producers exit hog production for at least three years. Payment levels and the number of participants will be determined by a tender process. No details were provided but it appears, as we reported last week, to be much like the US dairy herd buyouts run by Cooperatives Working Together. The announcement says there will be a “series of tenders” whose precise dates and funding levels will be determined as the program progresses. HFTP is retroactive to April 1, 2009 so any producers who sold out entire sow barns since that date can submit a tender for payment. Participants must the be the owners of the pigs. If the pigs are in barns owned by someone other than the pig owner, the barn owner(s) must also agree to idle the facilities for three years following the depopulation of breeding animals.

We could find nothing in the materials from Agri-Food Canada or the Canadian Pork Council that specified how the culled animals would be disposed of. We still believe the culled animals will enter normal slaughter channels, thus increasing sow and boar supplies and possibly slowing the reduction of the US breeding herd. We will provide more information as soon as we have it.

As you can see from the graph below, the rate of reduction of Canada’s breeding herd (the fuscia or pink line) has slowed since October when the breeding herd was 8.9 per cent smaller that one year earlier. The 1 July inventory of 1.38 million head was 4.6 per cent lower than last year but we believe the rate of reduction has increased since that time. Canada’s herd fell by 28,700 had from July 1 through September 30, 2008. This year, Canadian commercial sow slaughter has been 3,627 head smaller than last. Last summer’s sow buyout program removed another 19,776 animals during that time period in 2008 and, obviously, has removed none this year. But exports of cull Canadian breeding animals to the US have been 42,911 head larger this year suggesting that the draw-down of Canada’s breeding herd during July-September will be about 20,000 head larger this year. That will put the 1 October herd near 1.32 million head.


The HFTP will cover some of those sows and add to the reductions going forward. It still appears that Canada’s breeding herd is heading for somewhere near 1.2 million head.

One of the drivers is once again the value of the Canadian dollar which has gained 20 per cent vs. the US dollar since it bottomed last March. That change reduces the amount of Canadian dollars received by Canadian producers regardless of where they sell their hogs but reduces only about half of Canadian producers’ production costs by a similar percentage — thus creating a profit squeeze for Canadian producers.



Title: Re: American Hog News USDA
Post by: mikey on October 07, 2009, 10:50:25 AM
Market Preview: Price Spreads Exacerbated
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Judging by some e-mails and phone calls I have received recently, it is time once again to discuss retail pork prices and price spreads. This topic always surfaces when hog prices fall sharply or remain low for an extended period of time – especially if retail pork prices don’t follow suit. The latter is virtually always the case!

Is it fair for producers to suffer and “middlemen” to make more money? No, not really. But neither is it fair for producers to profit during many past summers when margins for middlemen were reduced. That happens less frequently than does a decline in hog values, but just what is fair?

That’s a difficult question to answer, especially when we know far less about packers’, processors’ and retailers’ costs than we know about producers’ costs. That results in us judging gross profits, not net profits, as we should.

Here’s what we know about this situation is:

The USDA retail price series is notoriously “sticky downward,” which means that it very seldom shows a lower retail price and, when it does, that decline is small. One reason is that retail prices indeed rise and are more heavily impacted by general inflation than are farm-level or wholesale prices because they include more cost items (labor, transportation, packaging, real estate, etc.) that inflate. But this “stickiness” is also a fault of the data collected by the Bureau of Labor Statistics (BLS): They do not gather sales quantities. More units are sold at lower prices, but the lower prices are not more heavily weighted in the average because the BLS data gatherers do not know how much was sold at each price. This is especially a problem this year when widespread, heavy pork featuring by retailers has helped move unexpectedly large domestic supplies. USDA says that it will begin to capture scanner-based price and quantity information again this fall, so this problem may be addressed soon. Let’s hope so.


Farm-level demand is more inelastic than is wholesale-level demand and wholesale-level demand is more inelastic than retail-level demand. I know that sounds like econo-lad gobbledygook, but it is important. It means that a given change in supply causes farm prices to change more than wholesale prices and wholesale prices to change more than retail prices. There is no “right level” of elasticity. It’s sort of like gravity – it doesn’t matter whether you like it or not, it is what it is. But the implications are important: An increase in supply causes farm-level prices to drop by a higher percentage than does retail price, thus increasing the spread. That may be “unfair,” but I think not being able to fly like a bird is unfair, too, but on that issue and many others, it doesn’t matter what I think.


If the available supply is moving at price X, why should retailers charge anything less than price X? That is the situation now. July saw record-large domestic pork disappearance. June 2009 was the second largest June ever. I believe August and September will follow suit. Cold storage inventories are not burdensome and are actually declining. Why should retailers ask for less?


No dollar reaches a producer that does not pass through the coffers of a retailer or a foodservice outlet of some variety. Is there a better chance for a dollar to reach a producer if the total number of dollars is reduced? I don’t think so. While we may not like it when many of those dollars stay in the middlemen’s hands, the fact that the dollars are available – i.e., that consumers are willing to part with them to obtain pork products – is a good thing.


The less the industry must cut retail prices to keep product moving, the easier it will be to push wholesale and farm prices upward when supplies fall. Look at Figure 1. Notice that the space between the retail price and both the wholesale price and farm price is sort of an accordion – absorbing higher prices and capturing margin when upstream prices fall. When hog supplies fall – and they will eventually do so – a high retail price will allow wholesale and farm level prices to bounce back quickly. Otherwise, the entire price structure would have to be lifted, often over the objections of angry housewives and other meat buyers. That is a much more difficult task and will take longer to accomplish, thus slowing a return to farm-level profits.

So should we all be happy with wider price spreads? No. But we also need to realize why they occur and that the medicine needed to cure the “problem” may make things worse.

Everyone needs to make sure the downstream markets are competitive and, thus, provide incentives for firms at all levels to offer consumers the best value possible. Still, the current issue is too much pork on the market to command prices that will cover today’s much higher costs of production. Producers need to get to the task of reducing supplies if they want spreads to narrow and prices to improve.

Title: Re: American Hog News USDA
Post by: mikey on October 08, 2009, 08:34:01 AM
US Swine Economics Report
US - USDA’s latest survey of the US swine inventory said the market herd was down 2.2 per cent on 1 September and the breeding herd was down 3.1 per cent compared to 12 months earlier, writes Ron Plain in his latest Swine Economics Report.

 
Ron Plain
The total inventory of hogs was down 2.3 per cent. The inventory was a bit smaller than the average of trade forecasts. The breeding inventory was the smallest in over a century.

USDA said June-August farrowings were down 3.5 per cent and forecast both September-November farrowings and December-February farrowings to be down 3.1 per cent. Pre-release trade estimates put June-August farrowings at down 3.2 per cent, forecast September-November to be down 2.7 per cent and December-February down 3.1 per cent.

Pigs per litter in the June-August quarter averaged a record 9.7 head, up 2.0 per cent compared to a year earlier and the 24th consecutive quarter above year-ago levels. The last five quarters have averaged 2.36 per cent more pigs per litter, offsetting much of the decline in farrowings.

June-August slaughter of barrows and gilts was above the level predicted by the June report. So, USDA revised upward the number of litters farrowed last winter by 46,000 and raised the winter pig crop by 443,000 head compared to their June estimate.

USDA said the inventory of market hogs weighing 60-179 pounds was down 1.8 per cent on 1 September. If correct, daily hog slaughter during the fourth quarter should be down 1.8 per cent plus the drop in slaughter hogs imported from Canada. Look for carcass hog prices during October-December to average in the mid $40s.

USDA said the inventory of market hogs weighing less than 60 pounds was down 3.7 per cent on 1 September, implying hog slaughter during the first quarter of 2010 will be down 4 per cent or so given the downward trend in hog imports from Canada. I expect first quarter carcass hog prices to average in the low to mid $50s.

Hog producer have been lost over $4 billion in the last 7 quarters and are cutting production. The sow herd has averaged 2.8 per cent below year-earlier levels during the past year. But, because of more pigs per litter June-August hog slaughter was up 0.2 per cent compared to last year and due to heavier slaughter weights June-August pork production was up 2.3 per cent. The supply of pork on the market needs to be sharply reduced or a lot of hog producers will be facing bankruptcy.


Title: Re: American Hog News USDA
Post by: mikey on October 08, 2009, 08:35:53 AM
CME: Output Numbers Will Not Drive Feed Prices
US - Dow Jones’ monthly pre-report survey regarding Friday’s monthly Crop Production and World Agricultural Supply and Demand Estimates indicates that the old adage “A big crop gets bigger” is still alive and well among crop market analysts, write Steve Meyer and Len Steiner in their Daily Livestock Report for 6 October.



The ranges and average of the estimates for yield, production and 2010 carryout stocks for both corn and soybeans appear in the table below.


In all cases, analysts expect Friday’s numbers to be larger than USDA’s September estimates. The obvious reason for that is that we have largely dodged damaging frost problems with these late-maturing crops, keeping yield estimates high and thus driving production and carryout stocks higher as well.

These estimates, should they be accurate, would establish a number of new records. The estimated corn yield would be a new record, breaking the previous one of 160.4 bu/acre in 2004. The average estimated corn crop would be the second largest on record but 10 of the 23 surveyed analysts have this year’s crop pegged at larger than the record 13.038 billion bushels set in 2007. The average of analysts’ predicted soybean yields would also be a new record, eclipsing the old record of 42.7 bu/acre set in 2006. Every surveyed analyst is predicting a record-large soybean crop — which isn’t a big surprise considering predicted high yields and this year’s record number of soybean acres.

The average predicted 2010 corn carryout stocks, though, are hardly any larger than this year’s year-end stocks in spite of a 7.4 per cent predicted increase in the corn crop. The reason, of course, is higher usage. Ethanol production is forecast to use 525 million more bushels and 250 million more bushels are predicted to be exported this year. That number may be conservative given the continued decline in the US dollar — a major factor in today’s rally in CME Group Corn futures prices.

BUT EVEN THESE BIG OUTPUT NUMBERS WILL NOT DRIVE FEED COSTS SUBSTANTIALLY LOWER AND SHORT-CIRCUIT THE CURRENT DOWNSIZING OF THE US AND CANADIAN ANIMAL PROTEIN SECTORS. They help, but they will not get costs near pre-biofuels levels, thus necessitating lower animal protein supplies in order to drive prices higher. It could be worse, no doubt, and the entire sector is thankful for the good turn of the weather this summer. But many producers are still losing money and will have to exit or scale back output soon if they have not done so already.

Michigan’s egg and pork producers became the latest producer groups to enter into an agreement with the Humane Society of the United States (HSUS) to provide more room for hens and sows and avoid a ballot initiative in 2010. The move comes after efforts to codify various industry quality assurance programs as “standard practices”, make the Michigan Department of Agriculture the sole authority for animal health and well-being programs and authorize a state animal care advisory board became bogged down in the legislature. In addition, polling indicated that Michigan voters would pass a ballot initiative that banned layer cages and gestation stalls. We are sure the Michigan groups had observed the failures of campaigns in Arizona and California to ward off similar measures and, considering the economic straits of the livestock and poultry sectors at the moment, likely saw little need to throw scarce dollars at the issue. The agreement gives pork producers 10 years to phase out gestation stalls and allows stalls to be used for 7 days prior to farrowing (ie. giving birth), while the sow is nursing her litter and during breeding until sows are confirmed pregnant — usually 35 days or so past weaning. This last feature is critical in that it prevents fighting at a time when sows’ are at their weakest, having just nursed a large litter of pigs. In addition, it reduces stress until embryos are safely implanted into the uterine wall and thus increases litter size. In short — the prescribed use of stalls allows producers to capture much of the productivity benefits of full-time stalls even if they use group housing systems for the remainder of gestation. The ballot initiatives in Florida, Arizona and California, legislation in Oregon and the negotiated settlement in Colorado all allowed this practice — an important one if productivity is to remain high and costs are to remain low.



Title: Re: American Hog News USDA
Post by: mikey on October 08, 2009, 08:58:40 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME finished lower on Monday. OCT’09LH futures finished down $0.200/cwt at $49.050/cwt and $0.825/cwt lower than last report. The October contract will expire on October 14. The DEC’09LH contract closed down $0.950/cwt at $47.600/cwt and $2.125/cwt lower than a week ago. Prices were pressured by fund selling even though the market is technically oversold; spreading out of back months info forward months; and the continued weak condition in the live and retail hog market. Cash hogs were reported steady-to-weaker with live sales off $1.00/cwt. Pork production continues to contribute large pressure on prices with USDA reporting last week that 469.3 mi lbs were produced vs. 465.9 mi lbs this time last week. USDA on Friday estimated last week’s average hog weight at 270 lbs, compared to 268 a year ago. Record pork production was also recorded in August. USDA did estimate Monday’s processing at 433,000 head vs. 435,000 head last Monday. USDA put the average pork cutout at $53.80/cwt; off $0.53/cwt and $0.95/cwt lower than last report. The latest CME lean hog index was placed at $50.97/lb; off $0.27/lb and $1.46/lb lower than this time last week. The weaker tone to cash hogs was noted on ample supply. According to HedgersEdge.com the average pork plant margin was lowered $0.40/head from last week to positive $5.90/head. This was based on the average buy of $35.74/cwt vs. the average breakeven price of $37.94/cwt. Heavier hogs continue to be discounted by the packers.

CORN futures on the Chicago Board of Trade (CBOT) closed higher Monday. DEC’09 corn futures finished at $3.414/bu; up 8.0¢/bu but 44.75¢/bu under last report. The MAY’10 contract closed at $3.632; up 7.75¢/bu and 3.0¢/bu higher than last Monday. Weather worries over frost potential, a weaker US dollar, higher-than-expected exports, and chart signals for profits after last Friday’s sell off were supportive. A frost is forecast next weekend for the US Corn Belt and is expected to hurt immature corn there. USDA put the US corn crop at 57 per cent mature, harvest progress at 10 per cent, and corn in good-to-excellent condition at 70 per cent; up 2 points from last week. Traders expected USDA to report the US corn crop at 50 per cent mature and 10-12 per cent harvested. USDA put corn-inspected-for-export at 38.504 mi bu vs. expectations for 32-35 mi bu. US cash corn bids were mixed; weaker where harvest pressure was on and steady to firm where harvest is yet to begin. Cash corn in the US Mid-Atlantic states was steady to firm ranging from 3.0-7.0¢/bu higher. Funds bought 9,000 contracts while large speculators turned net bullish covering nearly 23,000 net short positions. Speculate with 30 per cent of the unsold ’09 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed mixed on Monday. NOV’09 soybean futures closed at $8.85/bu; even with last Friday’s close but 8.75¢/bu lower than a week ago. The MAR’10 soybean contract closed at $8.906/bu; off 4.5¢/bu. Expectations for colder weather and the rally in corn were supportive. USDA estimated the US crop 15 per cent harvested vs. the 5-year average of 36 per cent. USDA placed the US soybean crop at 67 per cent good-to-excellent condition. Exports were neutral with USDA reporting soybeans-inspected-for-export at 12.482 mi bu vs. expectations for 11-16 mi bu. Cash soybeans in the US Midwest ranged from weak to firm on mixed harvest reports. Cash bids for soybeans in the US Mid-Atlantic States were steady amid slow farmers selling. Large speculators changed from net bear to net bull covering 2,446 short positions. If the frost comes early enough it could pay to speculate with the remaining 30 per cent of the ’09 crop.

WHEAT futures in Chicago (CBOT) were steady on Monday. DEC’09 futures closed at $4.622/bu; up 1.5¢/bu and 10.75¢/bu higher than last report. The JULY’10 wheat contract closed at $4.864/bu; up 1.0¢/bu but 18.75+¢/bu cents lower than last Monday. Mild gains were made on this technical bounce after recent sharp declines. Exports were slightly bearish with USDA reporting 18.033 mi bu of wheat-inspected-for-export vs. expectations for 19-21 mi bu. Rains in the US Northern Plains were slowing harvest with USDA placing harvest at 97 per cent complete vs. 100 per cent for this time of year. Funds bought 1,000 contracts while large speculators covered 4,185 short positions. It is still a good idea to get up to 60 per cent of the ’10 crop priced at this time.

Title: Re: American Hog News USDA
Post by: mikey on October 09, 2009, 09:02:22 AM
Lawmakers Ask USDA to Help Pork Producers
US - Members of the US Senate and House have urged the US Department of Agriculture to lend assistance to US pork producers to help them out of a 2-year-old economic crisis. The National Pork Producers Council applauded the congressional request.



In separate letters sent to Agriculture Secretary Tom Vilsack, 24 senators and 63 representatives asked that USDA take the following actions to provide “much-needed emergency relief” to the US pork industry:

Purchase $100 million of pork with funds from the Section 32 program, which uses customs receipts to buy non-price-supported commodities for federal food-assistance programs.
Collaborate with other federal agencies to help address swine disease surveillance on farms, related diagnostic and vaccine development and swine industry support.
Work with the US Trade Representative to open export markets to US pork, particularly China, which continues to impose non-science-based restrictions on US pork since the outbreak of H1N1.
The congressional efforts, led by Al Franken, D-Minnesota, and Richard Burr, R-North Carolina, in the Senate and by Tim Walz, D-Minnesota, and Steve King, R-Iowa, in the House, were made to help pork producers deal with losses averaging $22.50 per hog since September 2007. Over the past two years, the US pork industry has lost more than $5 billion, and producers have lost more than 65 per cent of the equity in their operations.

“US pork producers are grateful to the members of Congress for seeking assistance for our industry,” said NPPC President Don Butler. “We particularly applaud the efforts of Senators Franken and Burr and Representatives Walz and King. They recognize that the US pork industry is a vital part of the US economy, providing hundreds of thousands of mostly rural jobs and providing consumers around the world with a safe, nutritious product.”

In mid-August, NPPC urged USDA to make three $50 million purchases of pork, using fiscal 2009, fiscal 2010 and Section 32 funds. USDA agreed in early September to buy $30 million of pork, using fiscal 2009 funds.




Title: Re: American Hog News USDA
Post by: mikey on October 09, 2009, 09:05:11 AM
CME: M-COOL a Legitimate Policy?
US - This week’s Daily Livestock Reports feel like “All Canada all the time” but there was more market-impacting news from north of the border yesterday, write Steve Meyer and Len Steiner in their Daily Livestock Report for 7 October.



The Government of Canada launched a formal World Trade Organization (WTO) trade dispute action over the US mandatory country-of-origin labeling (M-COOL) by requesting a formal WTO trade panel. The request is the second step in the WTO dispute settlement policy after two rounds of “consultations” failed to resolve the dispute.

At issue is the US requirement that many retail food products be labeled as to their origin. The original law was part of the 2002 Farm Bill but the program was delayed several times — primarily due to the efforts of US livestock and meat groups— before finally being enacted after several changes were made via the 2008 Farm Bill.

Canada’s objection deals specifically with the regulations regarding labels on meat products which they claim in a press release to be “...so onerous that they affect the ability of our cattle and hog exporters to compete fairly in the U.S market.”

Secretary of Agriculture Tom Vilsack and US Trade Representative Ron Kirk responded that they “... believe that our implementation of COOL provides information to consumer in a manner consistent with our [WTO] commitments.”

An interesting point in the US press release is this: “Countries have agreed since long before the existence of the WTO that country of origin labeling is a legitimate policy. It is common for other countries to require that good be labeled as to their origin.” That statement is true. But the real issue is in the debate over the US M-COOL law is the definition of “origin.” The past labeling to which Secretary Vilsack and Trade Rep Kirk refer generally applied to the country of final manufacture or the country of “substantial transformation.” A television manufactured in Japan using parts from China, Taiwan and Korea was labeled “Product of Japan” not “Product of Japan, China, Taiwan and Korea.” The M-COOL law has no such requirement. With the exception of cattle that are sometimes transshipped through Canada on their way to the continental US from Hawaii, if an animal has ever spent time outside of the US, product from that animal must carry the other country’s name on its label, even if most of it’s body weight was added in the US or the final processing is done in the US And that is the issue that the WTO panel must decide: Is this new, broader concept of origin legitimate under world trade rules?

The charts above show that monthly imports of feeder pigs and cattle and slaughter hogs and cattle began trending downward in early 2008 as US feeders and processors began to secure new sources of supply in anticipation of the law’s restrictions and costs commencing on September 30, 2008. The impact has clearly been greatest for Canadian market hogs, the imports of which are over 70 per cent lower so far in 2009. Feeder cattle imports have also reached their lowest levels since BSE-related import restrictions ended in 2005 and feeder pig imports continue to decline, partly due to M-COOL and partly due to the continuing downsizing of Canada’s swine breeding herd.

Title: Re: American Hog News USDA
Post by: mikey on October 11, 2009, 08:15:39 AM
Saturday, October 10, 2009
Weekly Review: Upward Spiral of Feeder Pig Prices
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Feeder pig prices continued their spiral upward again last week with pigs steady to $3 per head higher than a week earlier. Ten pound pigs are $10-11 per head higher than they were a month earlier.

The prices for 50-54 per cent lean 10 pound pigs last week averaged $28.36 per head, 50-54 per cent lean 40 pound pigs average $31.13 per head. Formula priced 10 pound pigs were $33.68 per head. Formula priced 40 pound pigs were $44.92 per head. Cash or negotiated price for 10 pound pigs was $25.05 per head and 40 pound cash priced hogs were $30.12 per head.

Pigs at United Tel-o-Auction this week were $1-5 per cwt above two weeks earlier. Pigs weighing 50-60 pounds sold from $42-52 per cwt, 60-70 pound sold from $41-42 per cwt and one group of 80 pound pigs sold for $36 per cwt.

If the reported retail pork prices are correct, the demand for pork at the consumer level was up 3.9 per cent for January-August. For this period consumer demand for beef was down two per cent, broiler down 3.4 per cent and turkey was up 5.6 per cent compared to the same period in 2008.

Demand for live hogs for the last eight months in 2009 was down 4.7 per cent and live fed cattle was down 8.5 per cent compared to a year earlier.

Live barrow and gilt weights last week in Iowa-Minnesota at 268.4 pounds per head were down 0.1 pound from a week earlier but up 2.5 pounds from a year earlier. Because at least a portion of the heavier weights this summer was due to cooler than normal weather, we are likely to continue to get weight closer to a year earlier as we go through the fall. Weights are likely to remain some above last year but that is not a given for sure.

For the week ending September 26, barrow and gilt carcass weights under Federal Inspection at 199 pounds per head were up three pounds from a year earlier.

Pork product cutout was pushed lower again this week with the cutout on Thursday afternoon at 52.87 per cwt of carcass down $1.46 per cwt from seven days earlier.

Loin prices at $67.24 per cwt down $1.27 per cwt, Boston butts at $56.04 per cwt up $5.36 per cwt, hams at $41.20 per cwt down $7.26 per cwt and bellies at $66.86 per cwt up $0.50 per cwt from a week earlier.

Live hog prices this Friday morning were steady compared to last week. Weighted average negotiated carcass prices this week were $0.25 lower to $1.29 per cwt higher compared to seven days earlier.

The live prices Friday morning were: Peoria $30 per cwt, Zumbrota, Minnesota, $32 per cwt, and interior Missouri $35 per cwt. The weighted average negotiated carcass prices by areas were: western Cornbelt, $48.14 per cwt, eastern Cornbelt, $46.73 per cwt, Iowa-Minnesota, $48.22 per cwt and nation, $47.09 per cwt.

Slaughter was big again this week under Federal Inspection at 2299 thousand head down 3.2 per cent from the same week in 2008.




Title: Re: American Hog News USDA
Post by: mikey on October 13, 2009, 07:34:50 AM
Monday, October 12, 2009Print This Page
Pork Production Keeps Rising, Prices Stabilizing
US - Increased pork production drove higher estimates for total meat production for 2009, as calculated by the USDA in its monthly World Agricultural Supply and Demand Estimates (WASDE) report. Growing levels of pork production more than offset cuts in beef and turkey production.



The higher pork production figures are due mainly to higher third-quarter slaughter and higher weights, due to favorable summer weather. Export figures, which were lowered from last month's report, were left unchanged in the October figures.

Meanwhile, price projections remained stable at $39.69 per hundredweight for barrows and gilts (national base, live equivalent, 51 percent to 52 percent lean). Last month, USDA's projection was between $39 and $40 per hundredweight for barrows and gilts, reports Meatingplace.com.

Looking ahead to 2010, however, USDA expects pork production to finally drop, as the Quarterly Hogs and Pigs report, released in September, indicated that producers plan to farrow fewer sows in 2009 and 2010. Also, fewer hogs are expected to be imported from Canada. Beef production in 2010 is expected to be higher, due to larger feedlot placement in 2009, but not enough to offset cuts in pork and turkey production for the year.

Still, 2010 price projections for barrows and gilts remained stable, with an expected range of between $43 and $46 per hundredweight, compared with $43-to-$47 per hundredweight estimated in last month's report.




Title: Re: American Hog News USDA
Post by: mikey on October 15, 2009, 09:43:25 AM
Southeast Asian Meat Buyers Meet with US Suppliers
US - Southeast Asia’s ASEAN region has emerged as a major destination for US pork and beef exports and captured the interest of a growing number of US suppliers.

 



Buyers, importers and distributors from the ASEAN region meet with US meat industry representativesRecently, the US Meat Export Federation (USMEF) brought US and ASEAN business contacts together for a Meet the Buyers conference in Denver.

US processors, traders and exporters saw the conference as a valuable opportunity to make business connections in a heavily populated region that holds great growth potential for US exports. Buyers, importers and distributors from the Philippines, Singapore, Thailand and Vietnam had the opportunity to meet face-to-face with these suppliers to discuss their product needs and share information about their markets. Prior to the Denver event, participants from the ASEAN region toured Cargill’s beef processing plant in Dodge City, Kansas, the National Beef processing plant in Liberal, Kansas, the Seaboard Foods pork plant in Guymon, Oklahoma, and the JBS beef plant in Greeley, Colorado.

In the attached audio segment, Imelda Ventus, purchasing manager for DOP Philippines, Inc., shares her thoughts on the conference and the other activities she experienced during her visit to the United States.

Craig Rempp, vice president of sales and marketing for LPB, Inc. in Earlham, Iowa, also found the event to be an exceptionally valuable opportunity. Founded in 2001, LPB is a family-owned custom pork processor that is looking to further expand its international presence and to deal more directly with its clientele in the ASEAN region.

You can listen to comments on USMEF's Meet the Buyers conference by clicking here.




Title: Re: American Hog News USDA
Post by: mikey on October 15, 2009, 09:46:35 AM
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME finished up on Monday with the exception of the October contract. OCT’09LH futures finished down $0.725/cwt at $50.125/cwt but $1.075/cwt higher than last report. The October contract will expire on October 14. The DEC’09LH contract closed up $1.050/cwt at $53.825/cwt but $6.225/cwt higher than a week ago. Fears that the large US hog supply has not disappeared still weighed on the market. However, fund buying on buy stops, spreading into December out of October and February, outside markets, up-trending commodities, and the weaker US dollar were all price supportive. USDA placed the average pork cutout last Thursday at $52.95/cwt; up $0.08/cwt and $0.85/cwt over last report. Pork was also caught up in the WTO complaint filed by Mexico and Canada over the COOL statute. Cash hogs were steady-to-weaker ranging from even to $0.50/cwt lower. The latest CME lean hog index was placed at $50.75/lb, up $0.05/lb but $0.22/lb lower than last Monday. According to HedgersEdge.com the average pork plant margin was lowered $2.20/head from last week to a positive $3.70/head. This was based on the average buy of $35.92/cwt vs. the average breakeven price of $37.31/cwt. Sell hogs when ready and it might not be a bad idea to contract for a few weeks’ feed needs in case the bad weather continues.

CORN futures on the Chicago Board of Trade (CBOT) surged higher on Monday. DEC’09 corn futures finished at $3.812/bu; up 19.0¢/bu and 39.75+¢/bu over last report. The MAY’10 contract closed at $4.010; up 18.0¢/bu and 37.75+¢/bu higher than last Monday. Futures soared after breaking resistance in the December ’09 contract at $3.76/bu. Trading was supported by the freeze last weekend that traders think harmed the US corn crop and prospects for more cold weather in the next few days. Bad weather is expected to slow harvest. Outside markets, crude oil, rising equities, a weaker US dollar, and funds acting upon technical buy-signals were also supportive. According to two floor sources the technical support should fade toward the middle of the week as the market corrects. Very few think we’re in for $4.00 corn as longs will most likely take cover. News that China would be stockpiling local corn is viewed as neutral. No exports were reported by USDA due to the national holiday. Funds bought about 10,000 lots on Monday as large speculators added to net bull positions. US cash corn bids in the Midwest were steady to weaker. Harvest delays are seen as supporting cash offers by merchandisers. Cash corn bids in the US Mid-Atlantic States were weaker; 2.0-5.0¢/bu lower in many places. As noted last week, speculate with 30 per cent of the unsold ’09 crop but now (hint) would be a good time to take advantage of some of these higher prices.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed higher on Monday. NOV’09 soybean futures closed at $9.990/bu; up 35.0¢/bu and $1.14/bu higher than a week ago. The MAR’10 soybean contract closed at $10.004/bu; up 32.5¢/bu and $1.098/bu over last report. Weather and the same outside market influence over corn supported beans. Disease concerns regarding the quality of the US soybean crop in the wet and humid south buoyed the market. Yield losses between 10-15 per cent are being reported due to quality problems. China also announced it would withhold soybean exports while stockpiling Chinese soybeans. Reenergized speculative fund buying renewed the flow of money into commodities and is seen as a hedge by funds against inflation amid a declining US dollar. Funds bought over 5,000 contracts while large speculators turned net bulls from net bears for the week ended last Tuesday. It could be wise to continue to speculate with the remaining 30 per cent of the ’09 crop.

WHEAT futures in Chicago (CBOT) were up on Monday. DEC’09 futures closed at $4.942/bu; up 26.25¢/bu and 32.0¢/bu higher than last report. The JULY’10 wheat contract closed at $5.400/bu; up 23.75¢/bu and 53.75¢/bu cents higher than last Monday. Weather, short covering, and outside markets (crude oil and the weaker US dollar) were supportive. Cold, wet weather in the northern US Plains is seen as a positive for US production. Argentina reported good wheat production weather as well. France lowered its 2009 wheat crop by 1 million tonnes (36.74 mi bu). Saudi Arabia bought 550,000 tonnes (20.2 mi bu) of Canadian hard wheat while Morocco’s state grain agency tendered for 200,000 tonnes (7.34 mi bu) of soft wheat from European origin. Fundamentals for wheat are still weak throughout the world supply. Funds bought about 3,000 contracts while large speculators increased net bear positions in CBOT wheat for the week ended last Tuesday. It is a good idea to get another 10 per cent of the ’10 crop priced taking you to 70 per cent priced at this time.

Title: Re: American Hog News USDA
Post by: mikey on October 16, 2009, 07:53:17 AM
CME: Carcass Weights Affecting Pork, Beef Supply
US - Beef and pork packers may be trying to limit the number of animals processed each week but some of the slaughter reduction has so far been offset by heavier animals coming to market, write Len Steiner and Steve Meyer in their Daily Livestock Report for 14 October.



In the case of hogs, carcass weights this year declined only briefly and for the most part were just a few pounds off the annual highs. This past summer temperatures across much of Iowa and other Midwest states with large hog operations were especially cool, which limited heat stress and allowed animals to put on more pounds than they usually do. Also, cooler weather during the summer tends to improve feed use both in hogs and cattle. Currently hog weights have held steady, which should be seen as positive for the hog market. We will have to a wait a couple more weeks as recent numbers are only preliminary estimates but the fact that weights have held steady likely indicates that producers are relatively current in their marketings. We should eventually see hog weights drift higher but the expectation is that in Q4 they will be very close to year ago levels.


In the case of fed cattle, carcass weights remain above year ago levels and we suspect that weights could move past the 870 pound mark at some point this month, which would be a new all time record. Feedlot marketings slowed down a bit in September and this may have contributed to the surge in steer weights that we saw last month. In the four September weeks, steer carcass weights were on average 866 lb./carcass, about 8 pounds heavier than a year ago. Overall cattle carcass weights in September (based on weekly numbers) were around 798 pounds compared to 790 pounds a year ago.


The increase in carcass weights does not impact only the supply of beef and pork coming to market, although that is the more immediate impact. Higher carcass weights tend to generate more trimmings. Beef and pork trim prices have been pressured lower this fall, in part due to the increase in the amount of fat on animals currently going to market.

And that is not just surface fat but also higher intramuscular far, significantly improving cattle grading this fall. The latest data available shows that about 63 per cent of cattle were grading choice (data is for August), compared to 59.3 per cent grading choice last year and a five year average of 57.7 per cent. Indeed, we have seen a significant increase in choice grading animals since last fall and in the process a narrowing of the spread between choice and select beef.



Title: Re: American Hog News USDA
Post by: mikey on October 19, 2009, 06:23:04 AM
US Pork Producers Slow to Liquidate
US - When 1998 and 1999 are mentioned to pork producers, they show visible signs of grief, explains Purdue University’s Chris Hurt, but losses for 2007 to present have been twice as much, yet there has not been near the liquidation.



The agricultural economist compares the equity lost during the two devastating periods to the pork industry, says Livestock Roundup.

“Using estimates of losses in the 1998 and 1999 disaster, a 10,000 head per year producer would have lost $213,000 during seven quarters, beginning in the first quarter of 1998,” Professor Hurt said. “In contrast, the first seven quarters of losses in the modern period, from the fourth quarter of 2007 through the second quarter of 2009, are estimated to accumulate to $315,000 for the 10,000 head per year producer.

“Unfortunately, forecasts predict losses to continue for three additional quarters, through the first quarter of 2010. This means total losses could rise to $396,000, making the downturn both longer and more severe than in 1998 and 1999.”

However, the amount of equity lost depends on the financial position of each producer, Professor Hurt said.

When comparing the two time periods, Professor Hurt noted that producers have been much slower to reduce the breeding herd this time.

“In the past two years, the US breeding herd has dropped by just 3 per cent,” he said. “But from mid-1998 to mid-2000, the breeding herd dropped 10 per cent.”

In trying to explain the slower rate of liquidation, Professor Hurt offers four possible reasons: feed costs, exports to China, industry structure and a long profitable period.

“This time the industry’s losses have primarily been related to much higher feed prices,” Professor Hurt explained. “Perhaps producers were not convinced that feed prices would remain high after their dramatic increase in late 2007.”

He also said there may have been a miss-reading of the pork export surge in the spring and early summer of 2008, which was primarily driven by China and a cheap dollar.

“That surge was the primary stimulus for live hog prices moving from $39 in March 2008, to $58 in May and to highs of more than $60 in August,” Professor Hurt said. “Prices that high meant $5 per bushel corn was not as big of a threat as earlier perceived and unfortunately this delayed breeding herd liquidation.”

Looking back, Professor Hurt said the export surge was a onetime unique event. Exports have returned to much lower, but more normal levels.

Another factor leading to slow downward herd adjustment could be industry structure, Professor Hurt said.

“The industry has never had to make such a large downward adjustment with such a concentrated set of producers,” he pointed out.

The final reason for the slow reduction, given the current string of losses, could be that the profits and net worth accumulated from 2000 until the final quarter of 2007 were large.

“Taking the hypothetical 10,000 head per year producer’s accumulated returns from the start of 1998, losses accumulated to $213,000 by the end of the third quarter of 1999,” Professor Hurt said. “But then the industry returned to overall profitability for a long run and by the third quarter of 2007, the farm had overcome the losses of 1998 and 1999 and accumulated $1.45 million of profits. So a farm that has been in continuous production since 1998, with losses near $400,000 on this downturn, could be operating from a high equity base.”

This means that it’s likely not all hog farms are in financial trouble, Professor Hurt said.

He pointed out the most vulnerable to the current financial losses are those operations that have started production in the last three years, have had large expansions in the past few years, or diverted earnings from 2000 to 2007 into assets such as stocks or residential housing that plunged in value.

In looking to the future, Professor Hurt said he expects modest losses this fall, with live hog prices averaging about $40 to $42 and all costs near $45. For winter, he expects hog prices to be in the low to mid $40 range with costs near $46.

“Profits may return in the spring of 2010, with prices rising to the higher $40s and costs remaining in the $46 to $47 range,” Professor Hurt said. “For all of 2010, I expect a modest profit of $2 to $5 per head.”

Title: Re: American Hog News USDA
Post by: mikey on October 20, 2009, 11:14:57 AM
Farmers Alter Practices for Food Safety Programmes
US - With food safety regulatory change on the horizon for US producers, Rabobank recently found that approximately 40 per cent of farmers have begun to alter their farming practices and methods.

 

According to a new Rabobank Farm & Ranch Survey, of those making changes, 64 per cent are keeping better records, which is the first step toward better food safety.

“US producers are aware that food safety issues are on the Obama administration’s agenda,” said Rabobank Food & Agribusiness Research and Advisory (FAR) Vice President Marieke de Rijke, who studies food safety issues. “They understand good record keeping will help keep them a step ahead of possible changes.”

In March, President Obama created the Food Safety Working Group to upgrade food safety laws, which govern the supply chain from gate to plate. With this in mind, US producers are beginning to take steps before new laws are in place.

After keeping better records, other changes included researching information about better food safety practices by subscribing to topical publications (32 per cent) or networking and meeting with other farmers (26 per cent). Additionally, farmers are beginning to make changes to facilities (23 per cent) and to processes (21 per cent).

“Food safety outbreaks are a real threat to the well-being of the public. In addition they negatively impact the involved sector – in terms of image and sales,” said de Rijke. “Our survey shows that farmers and ranchers understand that information is a critical step to keeping consumers safe, while ensuring future business for US producers.”

Methodology
The study was conducted to gauge farmers’ confidence among target farming regions in the United States. An independent survey company conducted 455 computer-assisted telephone interviews in the first half of August 2009. Farmers who owned or operated a farm grossing $250,000 or more in one of three US census regions – the Midwest, Southern and Western United States – were targeted.


Title: Re: American Hog News USDA
Post by: mikey on October 26, 2009, 06:49:18 AM
Groups Urge Congress to Aid Ailing Pork Industry
US - “There are many challenges facing the economic viability of the pork sector including higher input costs for feed and energy, an over-abundance of supply in the domestic market, weakening demand and international trade barriers,” said AMI Chairman and President and CEO of Seaboard Foods, Rod Brenneman, in testimony yesterday to the House Committee on Agriculture Subcommittee on Livestock, Dairy, and Poultry.



Mr Brenneman told the committee that prices paid for feed had doubled from 2006 to 2008, largely due to higher corn and soybean meal prices. “While there are various reasons for the increase in feed prices, certainly one of them has been the determined government policies to promote the use of corn for ethanol. This effort, while seeking a desirable goal which is to lower the US reliance on fossil fuels, has had an unfortunate, unintended consequence to the US meat industry and ultimately to consumers,” he said.

Mr Brenneman explained that from a supply side, the productivity of US hog producers has continued to increase and the long-term trend is approximately 1.5 per cent per year. Mr Brenneman said that the US pork industry was producing too much pork to match up with the demand that has been weakened, and that eventually, “we will need to ‘right size’ the industry by either a further reduction in supply, an increase in demand, or more likely, some of both.”

On the demand side, Mr Brenneman noted that there were several reasons for the current state of depressed prices. “Economic factors facing both domestic and foreign consumers in a recessionary period can be pointed to as one reason for low hog and pork prices and lower export demand,” he explained. “You can imagine the impact on prices when you combine an over-supply of pork with decreased demand and closed market access around the world,” he added.

Mr Brenneman told the committee that another reason for the drop in hog and pork prices was the outbreak of the novel H1N1 influenza. “Fueled by confusion between a public health and an animal health issue, swine prices dropped and consumers questioned the safety of the pork products they were eating; however, novel H1N1 is not a flu that was caused or spread by pig production nor is this virus transmitted to humans by consuming pork.” Those fears led to US pork being banned by 17 countries, including Russia and the fastest growing market for pork exports, China.

Mr Brenneman concluded by pointing out two areas he felt the committee should pursue immediately. First, the Secretary of Agriculture should immediately make available Section 32 funds for additional purchases of pork for various federal food programs with a maximum emphasis on purchasing meat from sows with the objective to reduce breeding stock to reduce hog numbers. Second, the US Trade Representative (USTR) should work to open export markets to US pork, particularly China, which continues to impose non-science-based restrictions on US pork since the outbreak of novel H1N1.

NPPC's Plea to Congress
The US pork industry has lost more than $5.3 billion since September 2007, with producers losing nearly $23 on each hog marketed since then, NPPC President Don Butler told the House Committee on Agriculture Subcommittee on Livestock, Dairy, and Poultry in testimony today.

Many factors have contributed to the economic crisis, including the unwarranted bans on US pork by some countries, citing fears of the H1N1 flu, Mr Butler pointed out. But the biggest reason, he said, has been high feed grain prices. Feed prices, which account for 60 per cent of the cost of raising a hog, have increased over the past two years mostly because of US biofuels policy.

Mr Butler asked Congress to:

Urge the US Department of Agriculture to make more purchases of pork for various federal food assistance programs. USDA recently bought $30 million of pork.
Reexamine a spending cap on USDA’s Section 32 program so the agency can meet the goals of the program. Congress implemented the cap as part of the 2008 Farm Bill.
Pressure US trading partners, particularly China and Russia, to eliminate their barriers to US pork imports.
Approve as soon as possible the pending free trade agreements with Colombia, Panama and South Korea, which would add greatly to pork producers’ bottom line.
Conduct a study of the economic impact on the livestock industry of an expansion of corn-ethanol production and usage. EPA is considering an increase in the amount of ethanol that must be blended into gasoline to 15 per cent from its current 10 per cent.
Support allowing the ethanol import tariff and federal blenders’ tax credit to expire.
Support regulations and legislation that promote pork producers’ ability to run their operations.
Oppose measures that would place on pork producers undue burdens and higher costs such as restrictions on access to capital and contract arrangements or prohibitions on production practices, including banning the use of certain animal health products.
“To stop producer foreclosures and bankruptcies and for us to continue providing consumers around the globe with the safest, most nutritious meat protein, we need to find a way out of this 2-year-old crisis,” Mr Butler said. “We are asking Congress and our government for some help.”




Title: Re: American Hog News USDA
Post by: mikey on October 26, 2009, 06:51:19 AM
CME: Overall Decline in Red Meat and Poultry Supplies
US - Steve Meyer and Len Steiner, in their Daily Livestock Report for 22 October, write that USDA yesterday released the results of its monthly cold storage survey.



The report was generally positive for the livestock and poultry complex as it showed continued declines in overall red meat and poultry supplies. Total beef, pork, chicken and turkey stocks were estimated at 2.218 billion pounds, - 6.1 per cent lower than a year ago but still + 1.7 per cent over the five year average. Below are some of the highlights from this report:


Pork: Total pork stocks as of 30 September were estimated at 531.9 million pounds, + 1.1 per cent higher than a year ago and still some + 14.9 per cent higher than the five year average. While overall supplies in cold storage are still high by historical standards, it was positive that stocks continued to move lower in September despite relatively large pork production levels. USDA monthly pork production data will become available on Friday but based on the weekly data, September pork output was up about 2 per cent compared to the record levels of a year ago. Despite the year over year increase in supplies, pork cold storage inventories did not increase from August levels. Seasonally pork inventories increase going into September, the five year average increase is about 28 million pounds. This year September pork inventories were up just 1.7 million pounds or 0.3 per cent from August. This implies good movement to domestic and export markets for the month and some pent up demand going into Q4. For details on individual items, please see page 2 of the link below.


Beef: Total beef stocks at the end of September were reported to be 434.1 million pounds, - 4.5 per cent lower than a year ago and - 6.8 per cent lower than the five year average. End users are going into the holiday season with less inventory than usual, clearly a response to the much lower than expected cattle prices for Q4. We suspect that some inventory building programs that have been popular in the past have been curtailed or eliminated. Also, imported beef entries have slowed down. This has likely limited the amount of imported beef, which is mostly frozen, in storage. Stocks of beef cuts were 65.1 million pounds, 16.1 per cent lower than a year ago.

Total broiler inventories were estimated to be 636.7 million pounds, down 16 per cent compared to 2008 and - 13.4 per cent vs. the 2004-08 average. The reduction in chicken stocks should be positive not just for broiler prices but the entire meat complex.


Title: Re: American Hog News USDA
Post by: mikey on October 27, 2009, 08:46:26 AM
Monday, October 26, 2009
Outlook ‘Cautiously Optimistic’ for US Agriculture
US - Speakers at Farm Bureau’s second annual commodity outlook conference, 15-16 October, in Albuquerque, New Mexico, painted a “cautiously optimistic” outlook for US agriculture, with crop and dairy producers likely faring better than livestock producers who will still face challenges in the year ahead.



Joe Glauber, the Agriculture Department’s chief economist, told the conference that grain and oilseed demand remains strong, and relatively low ending stocks means that markets still have the potential for some price volatility. For livestock, Dr Glauber does see price recovery, with higher prices forecasted for 2010.

“Farm income should improve in 2010 if input costs do not spike as they did in 2008,” Dr Glauber said. For 2009, net cash farm income is forecast to fall to an aggregate $68 billion in 2009 however, down a staggering $30 billion from a record $98 billion in 2008.

“Both crops and livestock were hit pretty hard this year,” Dr Glauber said.

All things considered, agriculture is weathering the current economic downturn “pretty darn well” thanks in a large part to exports, said Mike Dwyer, director of the trade and biofuels division of USDA’s Foreign Agricultural Service.

“For the last two years, exports accounted for 33 per cent of cash receipts for agriculture. Trade is a major driver of prosperity for farmers and ranchers,” Mr Dwyer said. “Agriculture and aviation are the only two industries in the United States that are net exporters.”

With most private economists forecasting a falling dollar in the year ahead, Mr Dwyer sees a rise in US farm exports, which makes the US more competitive overseas. For the long-term future, Dwyer said US agriculture needs to focus on exports to developing countries with an expanding middle-class population.

“The middle class in developing countries is where the action is going to be. Agriculture should be very optimistic about the long-term future. It all starts with demand, and demand is expected to improve in these developing countries,” Mr Dwyer said.

Scott Brown, a livestock and dairy economist with the Food and Agricultural Policy Research Institute at the University of Missouri, said times are tough for all livestock producers due to “dreadful demand at home, restaurants and abroad.” Poultry and hog producers are particularly hard hit.

For hogs, there is simply too much supply on the market. Sow numbers are down, but they need to come down even more, Dr Brown said. For chickens, the supply situation is in good shape; the problem is demand, particularly foodservice demand, because of the recession.

For dairy, the current situation is “very gloomy” with 2009 being the toughest year dairy farmers have ever faced, Dr Brown said. “The world market will have to improve for dairy prices to return to their peak. The domestic market won’t cover it, but the market is recovering. Dairy supplies must continue to decline in 2010. I see more improvement for dairy in 2010 than cattle or hogs.”

For corn and soybeans, Robert Wisner, an Extension economist with Iowa State University, said clearing weather will likely mean lower prices into early November, but moderate price strength into the winter for both crops due to strong exports and ethanol demand.

For wheat, strong domestic and international production has rebuilt inventories. “Buyers don’t feel a sense of urgency, so they are only buying enough to fill their immediate needs,” said Frayne Olson, a crops economist at North Dakota State University.

As for cotton, Carl Anderson, professor emeritus and Extension specialist with Texas A&M University, sees another challenging year for the industry. “Cotton is an export-driven market, and there will be greater market uncertainty,” Anderson said. “Producers, merchants and mill buyers face new strategies to better manage price risk.”

Summarizing the various speaker’s comments, Bob Young, chief economist for the American Farm Bureau Federation, said, “What I’ve heard leaves me cautiously optimistic. We have real, serious challenges in the hog and dairy sectors, challenges that will fundamentally alter the structure of the pork industry. The picture for crop producers comes in as ‘not bad,’ certainly not ‘great,’ more of a treading water situation if we can keep input costs under control this year. If we can get the general economy to turn around enough to bring the consumer back into the market, I think we’ll see some noticeable improvement in 2010 farm income.”


 

Title: Re: American Hog News USDA
Post by: mikey on October 27, 2009, 08:48:49 AM
Monday, October 26, 2009
Pork Production Sets Record High for September
US - Commercial red meat production for the United States totaled 4.26 billion pounds in September, down slightly from the 4.27 billion pounds produced in September 2008.

 

Pork production totaled 2.00 billion pounds, up 1 per cent from the previous year.

Hog kill totaled 9.94 million head, down slightly from September 2008.

The average live weight was up 4 pounds from the previous year, at 270 pounds.

Accumulated pork production was down 1 per cent from last year.

September 2008 contained 22 weekdays (including one holiday) and 4 Saturdays.
September 2009 contained 22 weekdays (including one holiday) and 4 Saturdays.

US Monthly
Title: Re: American Hog News USDA
Post by: mikey on October 29, 2009, 10:16:51 AM
Wednesday, October 28, 2009
CME: Wholesale Pork Market May Be Short-lived
US - Hog futures have been buoyed in recent days by a marked improvement in pork wholesale values, write Steve Meyer and Len Steiner in their Daily Livestock Report for 27 October.



The CME nearby lean hog contract closed on Tuesday afternoon at $55.425, 198 points higher than the previous trading session and currently at the highest point since 24 July. Most other lean hog contracts gained as well but much of the increase came in the front months as the recent improvement in hog cutout values provided some optimism that pork demand in Q4 may outperform earlier estimates. One item to look at when assessing pork demand into the holiday season is the price of hams, an item that traditionally helps carry pork cutout values at this time of year.

Ample pork supplies and weak export demand pressured ham values during much of last spring and summer (see chart above) and prices were below year ago and five year average levels for much of 2009. On Tuesday, however, USDA quoted 23-27# hams at $58/cwt, $6 higher than a year ago and only slightly below the five year average. Overall wholesale pork cutout have been steadily improving and they rose to $56.20/cwt on Tuesday, almost $1 higher than on Monday. Cutout values remain below year ago and five year average levels but they have been closing the gap in recent weeks.


There is always the possibility that the recent strength in the wholesale pork market may be short lived and prices could slump again once holiday demand begins to fizzle. The improvement in hams is welcome news but hog values will need to receive support from other carcass parts as well. Trim prices remain weak and pork loins continue to struggle amidst plentiful protein options in the retail case. On the other hand, one needs to consider some of the more longer term factors. Hog numbers have started to moderate and slaughter in the last four weeks has been about 100,000 head or 1 per cent lower than a year ago. Supplies are not exactly tight but as the chart to the right shows, pork production is currently running around 6 per cent over the 2003-07 average.


During the May - August period, weekly US hog production was on average up 12 per cent vs. the five year average. (Please note that in the second chart we purposefully took out 2008 as an outlier year and chose to compare to the five year average for 2003-07). The weak US dollar also provides reason for optimism that pork exports will remain strong going into 2010. The outlook for feed prices is a wild card. Corn futures are up compared to late August but they have declined in the last two trading sessions. More recent lower corn prices are not exactly supportive of higher hog prices but generally the outlook for feed is much more bullish than two months ago, and that could maintain the impetus for herd liquidation into 2010.



Title: Re: American Hog News USDA
Post by: mikey on October 29, 2009, 10:18:46 AM
Wednesday, October 28, 2009
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were higher on Monday. The DEC’09LH contract closed up $0.425/cwt at $54.450/cwt. FEB’10LH futures finished at $60.825/cwt; up $0.375/cwt. Cash hog prices were steady to weak. The US emergency declaration over the H1N1 flu didn’t seem to have any effect on prices. USDA on Friday reported the average pork cutout price at $55.35/cwt; up $0.65/cwt. The latest CME lean hog index was placed at $53.41/lb; up $0.30/lb. According to HedgersEdge.com the average pork plant margin was lowered $5.95/head from last week to a positive $2.60/head. This was based on the average buy of $38.10/cwt vs. the average breakeven price of $39.08/cwt.

CORN futures on the Chicago Board of Trade (CBOT) finished off on Monday. DEC’09 corn futures finished at $3.780/bu; down 19.75¢/bu. The MAY’10 contract closed at $3.986; off 18.75¢/bu. A firmer dollar hurting exports and outlook for better weather pressured prices. USDA reported corn-inspected for export at 23.996 mi bu vs. expectations between 30-35 mi bu. Cash bids in the US Midwest were firm amid slow farm sales. Cash bids in the US Mid-Atlantic States were steady-to-weak down 6¢/bu -9¢/bu cents in many places. Hopefully you got to 80 per cent sold on last week’s advice.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed lower on Monday. NOV’09 soybean futures closed at $9.860/bu; down 19.5¢/bu. The MAR’10 soybean contract closed at $9.882/bu; off 18.5¢/bu. Profit taking, a firmer dollar, and improved weather weighed on the market. Exports were supportive with USDA reporting soybeans-inspected-for-export at 43.778 mi bu vs. expectations between 37-42 mi bu. China announced it would be importing about the same amount of soybeans in November as they did in October. Cash bids for soybeans in the US Midwest were steady-to-weak amid spotty farmer sales depending upon where the elevator was located. Cash beans in the US Mid-Atlantic States were steady. Hopefully the ’09 crop got to 80 per cent sold on last week’s recommendations.

WHEAT futures in Chicago (CBOT) fell on Monday. DEC’09 futures closed at $5.270/bu; off 20.75¢/bu. The JULY’10 wheat contract closed at $5.670/bu; down 22.25¢/bu. Wheat followed corn and soybeans lower pressured by the same elements. However, the slow planting progress of the US soft red winter wheat crop was supportive. Exports were disappointing as USDA placed wheat-inspected-for-export at 14.336 mi bb vs. expectations for 15-20 mi bu. Philippine buyers spurned US wheat over Ukrainian wheat. If you haven’t done so already it is still a very good idea to get another 10 per cent of the ’10 crop priced taking you to 80 per cent priced at this time.





Title: Re: American Hog News USDA
Post by: mikey on November 02, 2009, 08:58:13 AM
Saturday, October 31, 2009
Weekly Review: Some Doubts About Consumer Demand
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Based on the available price data, pork demand at the consumer level continues to hold well for January-September with a four per cent gain in our demand index. Beef demand at the consumer level for this period was down 2.3 per cent.

Live hog demand for the first nine months of 2009 was down 3.6 per cent and live fed cattle demand was down 8.5 per cent. The weaker live hog demand than pork demand is due in part at least to smaller exports. The weaker fed cattle demand than beef demand due to at least two factors. Smaller exports and a very weak hotel and restaurant demand.

We doubt the consumer demand for pork is as strong as the data indicates compared to last year. We believe the retail price is too high as reported by the USDA. USDA includes the prices when pork is at a special lower price but the give the tonnage sold at the same level as regular prices. This is not what happens in the real world the tonnage sold is much higher with the price special. Given the same tonnage movement with both regular and special prices will give a average price that is higher than consumers are paying.

Having said all of this pork demand at the consumer level is probably as strong as or stronger than a year earlier with completely accurate data.

Weaner and feeder pig prices nationally last week were generally steady with a week earlier. Pigs 50-54 per cent lean 10 pounds sold for an average of $29.09 per head. Pigs weighing 40 pounds sold for an average of $35.50 per head. The formula price per pig for 10 pound pigs was $33.91 and the formula price for 40 pound pigs was $45.07 per head. The cash or spot price for 40 pound pigs was $33.65 per head.

The weight of barrow and gilts in Iowa-Minnesota last week at 269.9 pounds is up 0.8 pounds from a week earlier and up 3.7 pounds form a year earlier.

Pork product cutout this week for Thursday afternoon at $58.68 per cwt, up $3.98 per cwt from a week earlier. Loin prices at $65.00 per cwt, down $1.45 per cwt, Boston butts at $57.77 per cwt up $0.63, hams at $60.09 per cwt up $11.97 per cwt and bellies at $72.68 per cwt up $5.85 per cwt from seven days earlier.

Top live hog prices Friday morning were steady compared to last Friday. Weighted average negotiated carcass prices Friday morning were $0.28 - $0.72 per cwt higher compared to last week.

The top live prices Friday morning for select markets were: Peoria $30, Zumbrota, Minnesota $32 per cwt and interior Missouri $36.50 per cwt. The weighted average negotiated carcass prices Friday morning by area were: western Cornbelt $52.32 per cwt, eastern Cornbelt $49.20 per cwt, Iowa-Minnesota $52.34 per cwt and nation $50.42 per cwt.

Slaughter this week under Federal Inspection was estimated at 2294 thousand head down 3.6 per cent from a year earlier.




Title: Re: American Hog News USDA
Post by: mikey on November 02, 2009, 09:03:50 AM
CME: Positive News for US Meat Sector
US - Steve Meyer and Len Steiner report that the US meat sector received positive news (yes, that says “positive” for a change!) on two fronts today with reports that China will soon renew imports of US pork and Taiwan will soon ease restrictions on imports of US beef.

The news buoyed CME Group Lean Hogs futures, pushing prices to levels not seen since July. The Taiwan news did little to help CME Group Live Cattle and Feeder Cattle futures as all listed contracts fell — seemingly in spite of several positive developments.

US Trade Representative Ron Kirk and Secretary of Agriculture Tom Vilsack announced the Chinese decision in a morning press release. The decision to stop imports of US pork was made in May, supposedly due to concern about H1N1 influenza. That, of course, was a red herring as China was looking for leverage in a dispute over exports of cooked chicken to the US Those had been blocked by Congressional action in 2007 that prevented USDA from even doing a risk assessment of the proposed shipments. Congress reversed that action three weeks ago and, lo and behold, China is apparently no longer in fear of H1N1 influenza. Isn’t it interesting how that works?

China and its “Special Administrative Region” Hong Kong were major players in the surge of US exports last year. As can be seen in the chart below, the two destinations accounted for 30 per cent of US exports in June and averaged 17 per cent, about 3 times their historical share, for the entire year. While the H1N1-related blockage by China has hurt business this year, it should be noted that thinks were not exactly rollicking along before that early May announcement. Shipments through April were down 75 per cent for China and 54 per cent for Hong Kong. We had expected shipments to Hong Kong to grow sharply in the wake of China’s announcement as product was “back-doored” into Chinese markets. They did, in fact, increase but did not do so by anywhere near enough to make up for the loss of trade with China.


This is, no doubt, good news for the US pork industry but don’t expect 2008’s “happy days” to return. China has rebuilt a substantial part of the hog herd losses it suffered in 2005 and 2006 when “blue ear” disease, a major earthquake and two harsh winters caused large death losses. The Olympics are no more than a glorious memory so the world’s attention is not nearly as focused on China and their humming economy has slowed a bit. About the only factor that was in play last year that is again in play is the weak US dollar — but that has less impact in China than in other export customer countries since the renminbi is pegged to the US dollar. Its value only changes when China’s leaders want it to change — or are forced to change it. As can be seen in the following chart, the renminbi has remained constant visà- vis the dollar since mid-2008 after being allowed to gain about 17 per cent in value from July 2005 through July 2008. What will happen when it is someday allowed to float on world markets?

Title: Re: American Hog News USDA
Post by: mikey on November 03, 2009, 12:44:57 PM
CME: Another Tough Month for Meat, Poultry Sectors
US - October was another tough month for all of the major meat/ poultry species in terms of profits, write Steve Meyer and Len Steiner.



USDA’s monthly output-to-feed price ratios, released as part of the Agricultural Price report on Friday, showed a decline in the ratios for steers & heifers, hogs and broilers. Monthly data dating back to 1993 is shown in the graph below.


After climbing to 26.3 in September, its highest level in nearly 2 years, the steer & heifer-corn ratio fell by 2.6 points to 23.7 in October. The setback does not suggest a change in the general upward trend of the ratio. That trend dates back to some of the lowest observations on record during the summer of 2008 when corn prices reached record highs. The ratio remains short of levels that would suggest financial health for cattle feeders but the gap is narrowing due to lowercost feeder cattle reaching market weights.

The hog-corn ratio fell to 10.5 in October. That is 9.5 per cent lower than September’s ratio of 11.6. The October ratio is the lowest since January. Note that this ratio has generally followed the “hog cycle” in past years and usually had well –defined and short-lived bottoms. Not so this time as the ratio has languished hear 10 for two years.

The broiler-feed ratio declined by 7.3 per cent in October to 3.8, its lowest level since September ‘08. Note that the broiler-feed ratio uses 58 lbs. of corn and 42 lbs. of soybean meal as its feed component, reflecting the higher importance of soybean meal in chicken diets and production costs.

It is interesting to note that the broiler-feed ratio has shown the same cyclical turning points as the hog-corn ratio cycle since the mid-1990s. This correlation agrees with National Pork Board research that showed a much higher cross-price elasticity for pork and chicken at the retail level during those years. “Pork: The Other White Meat” apparently did move pork closer to chicken at retail.

CME Lean Hogs futures prices rose again, with the exception of the nearby December ‘09 and the October ‘10 contracts, on Friday. Several factors have been positive to Lean Hogs in recent weeks. First, pork cutout values have increased over $4/cwt over the past three weeks, including a gain of $1.73/cwt. or 3 per cent last week. FI hog slaughter has been 2.1 per cent below year-ago levels during those four weeks, very close (only 0.5 per cent below) to the levels expected from the September Hogs and Pigs Report. Pork demand appears to have picked up a bit with hams, bellies and trimmings all making nice gains last week. Some of that strength could be anticipation of renewed exports to Russia in the wake of a growing African swine fever outbreak that severely threatens Russia’s stated goal of becoming self-sufficient for pork by 2012. Most industry observers believe that was a long-shot to begin with, especially after oil prices fell last year. Higher oil prices and the renewed capital inflows they trigger for Russia had rekindled the self-sufficiency hope but this disease outbreak will be both damaging and difficult to control. The UN’s Food and Agricultural Organization (FAO) has warned that the disease could spread to the EU or China. The final factor that has helped Lean Hog prices was the rebalancing of commodity index funds to reduce positions in grains and hold more of other ag commodities, including hogs and cattle.




Title: Re: American Hog News USDA
Post by: mikey on November 04, 2009, 10:50:15 AM
Tuesday, November 03, 2009Print This Page
Market Preview: Pressures Ease Just a Little
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



There was a lot to be positive about in the pork industry the last week of October. I realize it is difficult to be optimistic when you are still losing $25 to $30/head. I also realize that positive news at this point could be as dangerous as it is welcome. But facts are facts, and we must recognize them.

Pork cutout values continued a rally that has been rather low on magnitude, but is now three weeks old (see Figure 1). The $1.73/cwt. increase last week was driven by increases in hams, bellies and trimmings, so it wasn’t just a one-trick pony. The increase puts this rally at over $4/cwt. during October – a month usually not known for product price rallies.


Slaughter levels have been very close to the levels expected from the September USDA Hogs and Pigs report and average slaughter weights actually got back to a level equal to year-earlier levels for the first time since the week of 28 March. Those two factors have led to much more manageable supplies.

In addition to higher cash pork prices, Chicago Mercantile Exchange (CME) futures markets are offering opportunities to lock in lower costs and higher revenues than just a few weeks ago. Lean Hog futures continued their rally this week with most contracts reaching their highest levels since late July.

And the news was good on the cost side of the ledger, too. Lower corn and soybean meal futures leave my cost estimates for November 2009 through December 2010 at an average of $66.28/cwt., carcass, $1.20 lower than two weeks ago.

Put those two together and the futures markets now suggest profits in six months of 2010 (see Figure 2). Average losses for November ’09 through December 2010 are back down to $2.70/cwt., or roughly $5/head – and that is if your production parameters are equal to those assumed by the Iowa State University (ISU) cost and returns estimates. Many producers have higher productivity and lower cost relationships than are suggested by these “average” numbers from ISU. Friday’s closing futures prices will actually mean profits for those producers.


Pork Export Potential Improving
And then there are exports, or at least the potential for exports. China’s announcement that it would resume imports of US pork was welcome news. It came three weeks after the US Congress reversed its de facto ban on USDA’s doing a risk assessment on Chinese cooked chicken imports. While a market of 1.3 billion people is always lucrative, we should not begin gearing up pork output just yet. China has rebuilt its breeding herd during the past two years and a spotlight as bright as that of the Olympic Games will not be shining on it anytime soon. In addition, China’s currency is pegged to the dollar, so the weakening US dollar will not have as much effect on exports to China as it does on exports to other countries. Good news? Yes. Does it mean a boon for exports in the short run? Probably not.

The other “potential export” development is the apparently worsening African Swine Fever outbreak in Russia. I’m not suggesting in the least that we should take joy in this situation -- just as we should not have (and I don’t think anyone did) take any joy in the pig death losses in China in 2006 and 2007. But it is a fact and the US can play a major role in getting meat protein to Russia’s people if this outbreak gets worse.

Futures Prices Can be “Your” Prices
So, our task is to decide which of these “potential” positives will come true. One certainty is that pork producers can make the “potential” prices of futures markets their actual prices simply by buying the ingredient futures (or call options on them) or selling the hogs futures (or put options on them). There are costs to doing that, of course, but those futures prices are more than pipe dreams. They can be your prices if you deem them acceptable and take action.

The futures-implied hog price for the week of 2 July 2010 is $72.39. The national weighted-average net negotiated price for that same week in 2009 was $58.08, which means the futures market is offering a year-on-year price increase of 24.6 per cent. My calculations using the September Hogs and Pigs report and expected changes in imports from Canada say that slaughter in early July will be 2.5 per cent lower than this past year. Those changes imply a price flexibility of nearly 10:1, where I usually use 3:1 to compute expected price changes from forecasted slaughter changes.

The bottom line is that current Lean Hog futures markets are apparently forecasting much higher demand in 2010. Stronger demand is indeed likely given the challenges we have had in 2009, but the magnitude implied by the futures markets appears to be very large.

Title: Re: American Hog News USDA
Post by: mikey on November 05, 2009, 09:42:02 AM
Wednesday, November 04, 2009Print This Page
Quick Recovery of US Pork Exports to Mexico
US - After a brief decline during the initial outbreak of H1N1 influenza, US pork exports to Mexico have rebounded quickly and impressively.

 

Since May, pork exports to Mexico have increased steadily and year-to-date (through August) they are exceeding last year’s pace by 38 per cent in volume and 17 per cent in value.

Chad Russell, USMEF regional director for Mexico, the Dominican Republic and Central America, comments on the consumer education and marketing efforts undertaken by USMEF to help restore consumer confidence in the safety of pork.

Gerardo Rodriquez, USMEF director of trade development for the region, adds his insights on targeted marketing techniques that are helping USMEF build a loyal retail customer base for US pork in Mexico.

You can listen to the audio clip of Chad Russell and Gerardo Rodriguez on US pork demand in Mexico by clicking here.



Title: Re: American Hog News USDA
Post by: mikey on November 05, 2009, 09:45:05 AM
Wednesday, November 04, 2009Print This Page
Pork Gets Support During National Pork Month
US - The Kroger Company, during October, partnered with US pork producers to promote the value of pork during National Pork Month. To support National Pork Month, Kroger, the nation's largest traditional supermarket retailer, is offering specials on fresh pork cuts at great prices throughout its family of stores through 7 November.



In addition to special prices The Kroger Company is offering a $1 coupon off any package of fresh pork at the point of sale and from meat department associates. The Kroger Company's marketing activities were integrated into a national fall marketing campaign by the National Pork Board, which promotes pork on behalf of all 70,000 US pork producers.

"Customers today are looking for affordable, nutritious options to create convenient meals at home and pork offers shoppers great variety and value," said Mark Van Buskirk, vice president of meat and seafood for Kroger.

Chris Novak, chief executive officer of the National Pork Board, applauds the Kroger promotion. "We are aware that the national recession has caused consumers to squeeze more value from their food budget. Pork has always been a great value, but Kroger's ability to extend that value through roughly 2,470 supermarkets during October is greatly appreciated by pork producers, who have been experiencing an extended period of economic distress. We have great retail partners across the country, but we are especially appreciative and fully supportive of Kroger's activities," Novak said. "We expect them to have a very positive impact."




Title: Re: American Hog News USDA
Post by: mikey on November 05, 2009, 09:46:43 AM
Wednesday, November 04, 2009Print This Page
Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



LEAN HOGS on the CME were higher on Monday. The DEC’09LH contract closed up $1.025/cwt at $57.725/cwt and $3.725/cwt over last week at this time. FEB’10LH futures finished at $64.600/cwt; up $1.000/cwt and $3.775/cwt higher than last report. Could the hard times be over? Even if they are, it will take some time for farmers to recover. Bull spreading and gains in the Dow-Jones and other commodities were supportive while heavier slaughter weights were problematic. In addition, expectations that China will soon announce intentions to lift restrictions on pork imports and pork-production troubles in other parts of the world were helpful for US pork prices. On Friday USDA put the average pork cutout at $58.17/cwt; down $0.51/cwt but $2.82/cwt over last report. The latest CME lean hog index was placed at $53.84/lb; down $0.01/lb but $0.43/lb higher than this time last week. Cash hog prices were steady. According to HedgersEdge.com, the average pork plant margin was raised $4.30/head from last week to a positive $6.90/head. This was based on the average buy of $38.61/cwt vs. the average breakeven price of $41.17/cwt.

CORN futures on the Chicago Board of Trade (CBOT) rallied on Monday. DEC’09 corn futures finished at $3.822/bu; up 16.25¢/bu and 4.25¢/bu higher than last Monday. The MAY’10 contract closed at $4.046; up 16.25¢/bu and 6.0¢/bu higher than last report. Late Monday USDA put the US corn crop at 25 per cent harvested vs. the 5-year average of 71 per cent. Exports had a bearish tone with USDA reporting 23.367 mi bu inspected for export vs. expectations for 16-32 mi bu. Supporting the market were news reports that the European Union commission in charge of grain approved three types of GMO corn for import and concerns over corn toxins developing in the US corn crop from wet weather. Cash bids for corn were weak on Monday amid expectations that harvest would gear up shortly. Funds bought about 11,000 contracts while large speculators registered net bull positions at 5,300 lots. Now is a good time to consider selling the rest of the ’09 corn crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. NOV’09 soybean futures closed at $9.974/bu; up 19.5¢/bu and 11.5¢/bu higher than this time last week. The MAR’10 soybean contract closed at $10.000/bu; up 25.0¢/bu and 11.75+¢/bu cents over last report. A weaker dollar and strong exports underpinned the market. USDA placed soybeans-inspected-for-export at 63.675 mi bu vs. estimates for 39-48 mi bu. Late Monday USDA put the amount of US soybeans harvested at 51 per cent vs. the 5-year average of 87 per cent this time of year. Cash soybean prices were weaker early Monday amid harvest pressure. Funds bought about 6,000 lots while large speculators cut net bull positions by 2,800 contracts. Hopefully 80 per cent of the ’09 crop has been sold. It might be a good idea to sell more on the rally.

WHEAT futures in Chicago (CBOT) closed higher on Monday. DEC’09 futures closed at $5.166/bu; up 22. 5¢/bu but 10.5¢/bu lower than a week ago. The JULY’10 wheat contract closed at $5.594/bu; up 22.25¢/bu but 7.75¢/bu lower than last report. Fund buying and a weaker dollar were supporting features, however, exports and the large global supply of wheat continued to pressure prices. USDA placed wheat-inspected-for-export at 11.933 mi bu vs. expectations for 15-18 mi bu. Funds bought 5,000 contracts while large speculators decreased net bear positions by 4,600 lots. Pricing would be advisable on these technical bounces.

Title: Re: American Hog News USDA
Post by: mikey on November 09, 2009, 01:06:50 AM
CME: Pork Demand Index Higher Than Last Year
US - Consumer-level demand for pork remained strong through September, according to the University of Missouri, report Steve Meyer and Len Steiner.



The index of pork demand gained 0.1 per cent relative to last year and stood 4 per cent higher at the end of February. The higher index means that retail prices have not had to be lowered as much as expected to move the larger quantities of pork that have been placed on the US market since the novel H1N1 influenza situation began in late April. In fact, monthly domestic pork disappearance in June, July and August 2009 were all among the top three in history for the respective month.


Beef demand continued in a difficult year, falling 0.3 per cent farther behing last year’s level. The beef demand index now stands 2.3 per cent lower than last year. Should it end the year at this level, the index will be at its lowest level since 1999.

Chicken demand remained lower than one year ago at – 2.9 per cent but gained 0.5 per cent on last year’s level in September. Chicken demand has improved relative to last year every month so far in 2009 but it began the year at such an abysmal level (-6.3 per cent as of April) that it had little place to go but up. The chicken situation was just the opposite of that faced by pork as retail chicken prices could not be improved enough even with unprecedented reductions in quantity supplied. And chicken prices are still nothing to shout about — as can be seen in the chart.


The biggest culprits relative to 2008 have been legs and leg quarters. Both of those got an apparent windfall in May and June, presumably as substitutes for pork in either domestic or export markets or both. But the surge of leg quarter prices from just under $0.40/lb. to over $0.50/lb lasted only until the end of June and prices have now plummeted to their lowest level ($32.71/cwt last week) since late last year. The leg quarter price pattern is reflected nearly perfectly in the composite price graph.


The good news about breast meat prices is that they have stayed very close to 2008 levels almost all of 2009. Of course, the bad news for breast prices is the same — they have stayed close to the levels of 2008 which were anywhere from $0.15 to $0.30/lb. lower than the average for the previous 5 years.


A healthy portion of the breast meat problem can be attributed to the softness of US foodservice demand since last year but supply played a factor as well. Dr. Paul Aho, noted poultry economist and president of Poultry Perspectives, Storrs, CT, points out that broiler breast meat yields have risen from roughly 15 per cent of live body weight in 1985 to over 22 per cent of live weight in 2009. Add even more weight for the basting (or pumping) done to most chicken breasts and one can see that supply is putting downward pressure on breast prices as well.

And that brings us to wings, the former dead-weight and now star of the chicken value show! Wing prices have exceeded boneless, skinless breast prices for almost all of 2009 and reached a record high nearly $1.67 per pound in mid-October. They are now both a large contributor and consistent contributor to chicken value. While US consumers have apparently passed on chicken breast sandwiches and thick steaks, it appears that a basket of wings and a beer for under $10 is still a great deal. How will that play out as the recession wanes?

Title: Re: American Hog News USDA
Post by: mikey on November 11, 2009, 08:56:35 AM
Tuesday, November 10, 2009Print This Page
Market Preview: 'Swine Flu' – Time to Move On
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



Something bad has happened to you. It wasn’t deserved and it wasn’t’ fair. The people who did it are callous and heartless (at least in regard to you), and lazy, or they would not have done it. But they did it. It’s over. It’s done. You can whine and wallow in self-pity and martyrdom or pick yourself up, dust yourself off and get on with life and the business of raising quality pork.

Yes, that’s easy for me to say and write about, but that makes it no less true. Swine flu (yes, I used the “s” word) is a done deal, but two truths are now clearly evident:

You are not going to change the name any more than you already have, and
It is pretty clear that the term “swine flu” is having very little impact now (see below).
So, the next time you hear some nimrod (fill in your own noun, if you like) say “swine flu” on television, count to 10, get your heart rate and blood pressure under control and put down any sharp object that may be in your hand. More importantly – think about a more productive way to channel the time and energy you would have spent blowing your lid.

Now, you may not like what I am saying here, and you may not totally agree, but in the back of your mind you probably also know that I am right – at least about this topic. It is simply time to let it go and get on with your business.

What has happened to pork producers in the United States, Mexico and Canada is not at all fair, certainly. And, it has hurt even more coming on the heels of the government driving up the cost of your two major inputs to the point that you have collectively lost $5 billion over a two-year p