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News: 150 days from birth is the average time you need to sell your pigs for slaughter and it is about 85 kgs on average.
 
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mikey
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« Reply #360 on: October 07, 2010, 10:33:58 AM »

Hog Farming’s Positive Impact on Iowa Underscored
IOWA, US - A 10-year study recently completed by Iowa State University confirms what many farmers already know to be true: that farm families raising hogs in modern barns have a positive social and economic benefit on their neighborhoods and communities.



Dr Steve Sapp, ISU professor of sociology, and recent ISU graduate student Daniel Sundblad examined 99 Iowa communities — one in each county — and used both subjective and objective indicators to determine quality of life. Towns were selected if their population was below 10,000 residents, was not adjacent to a large city and relied mainly on agriculture for jobs and income.

Funded by USDA’s National Research Initiative, the study’s goal was to seek a better understanding of key factors regarding the effects of large-scale agriculture on the quality of life in the small, rural Iowa communities.

Measurements included total household income, income inequality, poverty, infant mortality and crime rates. Respondents also were surveyed about their attitudes toward community members and government and neighborhood services. The study also gauged people’s involvement in their community and the extent of “good neighboring.”

Dr Sapp says the study’s findings suggest a modest favorable effect of large-scale agriculture on quality of life in the 99 Iowa communities.

The research team went a step further by also analyzing the direct impact of hog production on local communities.

Titled Pork Production and the Quality of Neighboring in Rural Iowa: A Report to the Iowa Pork Producers Association, the study included such variables as trustworthiness, fairness, caring, citizenship, environmental trends, stewardship and expertise involving co-existing relationships between small-town residents and large-scale pork producers.

Dr Sapp says they found that the greater the scale of hog production in the county, the higher quality of life ratings from the community. For example, residents tended to rate their government services and community services higher with increases in the scale of agriculture in their county.

“Farmers have known for a long time that modern livestock production contributes not only economic advantages to the surrounding area, but also social benefits,” said Iowa Pork Producers Association President John Weber, a producer from Dysart. “This study demonstrated that communities can become more vibrant with the presence of livestock in the area.”

After living in Iowa for nearly 25 years, Dr Sapp says the study’s results reaffirmed what he anticipated would be a close connection between agriculture and quality of life in small, rural communities.

“I was expecting that there would be an overall favorable effect, and that is what we found,” Dr Sapp says.

He hopes to obtain funding to repeat the study in 2014 and continue to learn more about trends in the relationship between agriculture and rural communities’ quality of life.

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« Reply #361 on: October 19, 2010, 09:08:34 AM »

CME: YTD Pork Exports Higher; Beef Exports Lower
US - First today, a correction. In my item on Friday regarding GIPSA’s complaint against JBS Swift, I inadvertently referred to JBS United in one place. JBS United is an Indiana-based feed company that is in no way related to JBS Swift. JBS United has nothing to do with the GIPSA complaint. My apologies for getting my JBS’s mixed up, writes Steve Meyer.



US beef exports totaled nearly 200 million pounds carcass weight equivalent in August. Tha number is almost precisely 5 million lower than in July and was 19.6 per cent higher than in August 2009. The monthly shipments bring year-to-date beef exports to 1.468 billion pounds, 17.1 per cent higher than last year through 2009. The industry continues to recover from the December 2003 discovery of BSE but this year’s YTD exports through August are still 15 per cent lower than those of 2003.

Mexico remains the number one destination for US beef but shipments to Mexico remain well below one year ago. Mexico bought 44.9 million pounds of US beef in August, 7.2 per cent less than in August 2009. Year-to-date exports to Mexico are 25.7 per cent lower than in 2009, but that decline is the smallest since February. Japan continues to be the second largest market for US beef with August exports up 21 per cent from last year and year-to-date exports 21 per cent higher as well. Canada remains our number three beef export destination but growth there has been small, up only 7 per cent from last August and 2.3 per cent YTD. The fastest growing market for US beef is Russia, where YTD shipments have grown by over 10-fold. Of course, that huge number is primarily the result of VERY small exports in ‘09.


Pork exports in August totaled 302.2 million pounds carcass weight equivalent, 25 million pounds fewer than last month and 0.8 per cent lower than last year. Year-to-date, pork exports are still 4.5 per cent higher than in 2009. Japan was still the largest customer for US pork but the gap between Japan and Mexico narrowed significantly in August. August shipments to Japan were 0.7 per cent higher than last year. YTD exports to Japan are 1 per cent higher than last year through August. Year-to-date shipments to Mexico are 21.4 per cent larger than last year. Canada is a distant third on the rankings of US pork destinations but August shipments northward were 16 per cent higher than last year and YTD shipments are nearly 12 per cent higher.

Russia and Korea remain troublesome markets for US pork exporters. After Russian shipments increased quickly after resuming back in April and reached just over 25 million in May. But that growth did not last long and shipments to Russia amounted to only 9.2 million pounds in August, 36 per cent below last year. YTD shipments to Russia are 63 per cent lower than in 2009. Exports to Korea have fallen each month since April and are now 15 per cent lower than last year.

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« Reply #362 on: October 21, 2010, 09:37:32 AM »

CME: Will Hog Prices Follow the Five Year Pattern?
US - Hog futures edged lower on Monday, with the nearby December contract down 87.5 points to $68.025/cwt, write Steve Meyer and Len Steiner.



Most other hog contracts also lost ground on lack of any bullish news and lower cash hog prices. USDA reported the IA/MN hog carcass price at $62.99/cwt. (weighted average), almost a full $1/cwt. lower than the Friday price and the lowest cash market price since February. The bottom chart (see below) may be a bit too busy but we ask your indulgence. It basically shows a range between the highest and lowest prices since 1999 (the green shaded area) as well as the daily prices for the 2009, 2010 and the 2004-08 average. The point in all this is that lower prices in October and November are nothing new, they have happened in some of the best years (such as 2004) and also in the worst years (such as 2009).

At this point, futures indicate that the cash hog markets will likely follow the five year average pattern, with prices expected to bounce back a bit in December from current levels. This does not have to be the case, however. In 2004, hog prices dropped sharply from mid September to mid October, but then bounced back in November and early December. Will this year follow the five year pattern or will it be more like 2004?

Much will depend on what happens with ham prices in the next six weeks. So far packers have been unable to put enough money on hams and ham demand has only been adequate. Light hams usually do well at this time of year as retail features provide a boost to the market. Light hams also do well because their supply is limited. The industry is producing ever larger hogs, which means that getting a 17-20 pound or even a 20-23 pound ham is becoming increasingly difficult. Larger hams, which make up much of the volume in the ham market, are now trading at an 11 cent discount to lighter ones. This is not unusual at this time of year but it is on the high side of the range. We will need to see higher prices for heavy hams going into November in order to get a boost for the cutout.

Also negative for cash hog prices at this point is the surge in the number of hogs coming to market. A big reason for the high pork prices late July and August was the shortfall in hog supplies, which caught many buyers off guard. We have shown the top chart (see below) a few times in the past but it helps show the dynamic in the hog market at present. The red line shows a rolling seven day total of the daily hog slaughter. On Monday, hog slaughter was 422,000 head, about 7000 head larger than the previous Monday and only slightly lower than a year ago. The seven day total was 2.270 million head, only 0.7 per cent lower than a year ago. At the start of this month, the seven day total was running as much as 8 per cent below year ago levels, which helps explain the sudden break in the cash hog market. Why the surge in hog slaughter? Cash corn prices have jumped 16 per cent in the last two weeks and they are up 44 per cent since July. Producers seem anxious to accelerate sales as that additional pound suddenly became a lot more expensive.

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« Reply #363 on: October 22, 2010, 10:37:36 AM »

US Sows and Market Pigs in Decline (October 2010)
By Chris Harris, Senior Editor, ThePigSite. Our snapshot of the ongoing global pig industry trends as reported in October 2010 Whole Hog Brief. To read the full detailed analysis including all the commentary and graphical data, subscribe to the publication.

 Published monthly, Whole Hog Brief provides 10 pages of detailed analysis of global pig industry trends, summarising key data from all the major markets. If you need to keep up with global pig industry trends Whole Hog Brief is an invaluable tool.
Check out this month's contents
at the foot of the page
The number of hogs and pigs in the US has fallen by 2.6 per cent over the year, Whole Hog reports.

The breeding herd has fallen by 1.8 per cent and the total number of pigs on the market has dropped by 4.2 per cent.

Whole Hog says that the September US Hogs and Pigs Inventory shows a herd of 65 million and a breeding herd of 5.77 million.

In the UK, Whole Hog says that it has had its forecast for a change in the trend of the pig herd proved correct. The latest figures from Defra show a fourth consecutive increase in the size of the breeding herd. The herd has risen from 410,000 in 2008, to 421,000 in June last year and to 427,000 in June this year.

Whole Hog says that the significant figure is the rise in the number of gilts to 52,000.

The Polish Statistical Office has shown a 1.5 per cent rise in the breeding herd to 1.431 million head. The total herd was 14.87 million according to the latest census figure recorded by Whole Hog.


Global Pig Price Cycle Heads for Five-Year Peak
Whole Hog says that its global pig price cycle has moved past its previous peak, reached in May and June 2009.

It is now heading towards the high set in 2005 and Whole Hog believes this will be reached at the beginning of 2011.

Whole Hog predicts that with the global economy recovering prices could rise higher.

In Europe, Irish pig prices have moved up, despite the problems being suffered by the Irish economy.

Danish farmers have also seen gains and prices have also risen sharply in France in recent months.

Whole Hog says that in Europe, the drivers of herd size and availability of market pigs are dominant in determining pig prices.

US Exports Stutter but Growth Finally Arrives
The US has shown a two per cent rise in exports in the first seven month of this year. However, Whole Hog reports that exports in July this year were down by 3.3 per cent on July last year.

The US has seen growth in all its traditional markets except for South Korea where they fell by nearly 17 per cent in the period from January to July 2010.

For the Canadian export industry, the first seven months of the year have shown solid gain. Sales are up by 4.6 per cent, Whole Hog says.

Australian Market Gets a Taste for US Pork
Whole Hog reports that for the third month in a row, Australian slaughter numbers and meat production is up.

However, imports of pig meat have increased by 11.1 per cent year on year from July 2009 and exports have fallen by 10.1 per cent in the same period.

In Japan, Canada has grown its share of the market, while the Danish and US exporters are standing still. Overall, imports to Japan rose by four per cent in the first half of the year.

In South Korea, Whole Hog reports a decline in imports of 1.4 per cent in the period to August. The US has shown a drop of 12.2 per cent over the period, Canada 2.1 per cent and Denmark 14.5 per cent. In the month, South Korea imported 1.6 per cent less than a year ago.

October 2010


Chris Harris, Senior Editor

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« Reply #364 on: October 27, 2010, 06:46:02 AM »

2011 Forecast: Trade Higher on Broiler Meat and Beef Demand
US - Exports of broiler meat, beef and pork are all forecast to rise, according to the Livestock and Poultry: World Markets and Trade report from the USDA Foreign Agricultural Service.

 

Summary
Broiler Meat: Exports are forecast moderately higher. Both the United States and Brazil have ample supplies and market access to satisfy rising imports by Russia, the Middle East and a number of markets in Asia. The strongest import growth is expected in Russia where the United States, its leading supplier, is expected to fill the tariff rate quota.

Beef: Exports are forecast to rise, reversing the trend of recent years. Production expansion by South America and India is expected to more than offset declines in North America and Oceania. However, growth in world trade continues to be constrained by tight supplies and Sanitary/Phytosanitary (SPS) restrictions. Imports in a number of countries are forecast higher as domestic supplies are tight. Also, continued economic recovery is expected to bolster Asian imports.

Pork: Exports are forecast just short of the record set in 2008. More competitive US and Brazilian pork is expected to displace EU shipments, where rising costs of production result in lower exportable supplies. Global demand is expected to be slightly stronger with contracting Canadian production offset by larger imports and improving economic conditions stimulate Asian demand.


 
PORK AND SWINE: 2011 FORECAST OVERVIEW

Slight Growth in World Pork Production, Likely Tempered by Higher Feed Costs
World pork production is forecast to rise about two per cent to 103.4 million tons with China accounting for 80 per cent of the increase. Modest production gains are also expected in the United States and Brazil, as higher feed prices are expected to temper growth throughout the world.

 
China: Production is forecast to grow by thee per cent to a record 51.5 million tons. The vast majority of the growth is expected to come from large-scale operations, supported by government subsidies. Production in the first part of the year will likely be weaker than during the same period in 2010, as ongoing disease problems and the end of government sow subsidies are expected to result in lower sow stocks at the beginning of the year. Production is expected to pick up later in the year, but could be tempered by higher feed costs.

United States: Production is forecast up nearly two per cent to 10.2 million tons as high feed prices are expected to keep the growth in sow farrowing modest and dampen hog weights. However, strong demand for swine will likely result in a three per cent growth in imports from Canada.

Brazil: Production is forecast up three per cent to about 3.3 million tons, bolstered by strong domestic demand as pork prices are expected to remain competitive with beef. Although concerns remain about credit and the value of the Brazilian real, export optimism is helping support production plans.

EU: Production is virtually flat at 22.1 million tons as a result of rising feed and investment costs. Greater competition on the world pork market and easing domestic demand is forecast to pressure carcass and piglet prices. A large percentage of pig farms do not yet comply with the EU environmental and animal welfare requirements that will enter into force in 2013, likely raising sectoral costs.

Canada: Production is forecast two per cent lower at 1.7 million tons, as the downsizing of the Canadian industry continues. After a number of years of continued decline in swine inventories, pig production will remain at low levels. This will translate into lower meat production and a potentially tight market as domestic demand picks up. Nonetheless, given lower production, per capita consumption is expected to continue its five-year downward trend. However, producers are expected to have a difficult time taking advantage of higher pig prices and tight supplies due in part to limited financing for expansion and increasingly stringent environmental regulations. Additionally, higher feed costs could result in lower slaughter weights, potentially further reducing Canadian pork production.

World Pork Exports Flat as EU Loses Export Share to the United States and Brazil
The world export forecast is virtually flat, although significant shifts are expected to take place between major suppliers.

 
EU: Exports are forecast to drop nine per cent to 1.6 million tons as a result of increased competition, particularly from the United States and Brazil. In addition, domestic supplies are expected to fall due to shrinking margins from higher feed prices and EU legislation that requires additional investment.

United States: Exports are forecast five per cent higher at 2.1 million tons, with market share expanding in Asian markets (Japan, Hong Kong and South Korea) and greater Canadian imports. Mexico is expected to continue growing in importance, although at a slower rate than before.

China: Exports are forecast higher due to stronger demand from traditional markets, Hong Kong, Japan and Kyrgyzstan. Cooked pork products typically account for nearly half of the exports to those markets.

Brazil: Exports are expected to rebound slightly on stronger demand from Brazil’s major markets. While strategically focusing on new markets in Asia, such as China, the government has begun to advocate for access to the United States and Mexico.

Although the state of Santa Catarina, Brazil’s largest pork-producing state, has been recognised as free of Foot and Mouth Disease (FMD), pork processors have not yet been approved for export to the United States.

Modest Import Growth as Strong Global Demand Meets Limited Supplies
Imports are forecast higher based on significantly higher purchases by key North American and Asian markets, as well as modest growth in virtually all other markets.

Canada: Imports are forecast to rise 15 per cent to 230,000 tons on lower domestic production and greater consumer demand following the recession.

South Korea: Imports are forecast eight per cent higher to 410,000 tons in response to rising consumer demand. Improving economic conditions are expected to result in greater restaurant consumption, where imported pork is widely used. Greater imports paired with larger domestic production is expected to result in nearly one-third of a kilogram increase in per-capita pork consumption.

China: Imports are forecast up six per cent, yet will account for only one per cent of consumption and remain below the 2008 record.

United States: Imports are expected to be three per cent higher on tight supplies and stronger domestic demand.


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« Reply #365 on: October 28, 2010, 06:40:52 AM »

CME: Rapid Rise in Hog Weights a Hot Topic
US - Don’t expect any data from the recently-authorized mandatory wholesale pork price reporting system for about 2 years. That was the word from Livestock Market News Acting Branch Chief Mike Lynch on Monday at USDA’s Annual Data User’s Meeting in Chicago, according to Steve Meyer and Len Steiner.



Lynch said the mandated negotiated rule making process would likely take 18 months to complete since it involves more up-front time to select a committee of industry participants to craft the initial proposed rule. Allowing 4 to 6 months for the agency and packers to complete computer system changes and it may well be late 2012 before we see any of these prices and quantities actually published. At least a portion of the weekly pork export reporting depends on the quantity data reported under this system so the 2 year horizon applies there as well. Weekly pork export data representing actual product loadings may be available sooner since those data will not be provided by packers but will be gathered by FAS much as grain export data are now gathered.

We should have said more about this USDA meeting before the fact and would urge readers to look for the announcement of next year’s meeting if you a) use USDA data and b) have any concerns about it. The meeting is held in mid– to late-October, usually in Chicago and, in our opinion, is very worthwhile. USDA announces the specifics during the summer months and a link to information about this year’s meeting was prominent on NASS’s website. USDA has been holding the meetings for several years and, again in our opinions, has been reasonably responsive to the issues raised by data users. Proceedings from past meetings can be found here.

One topic of discussion among the analysts gathered at the Data Users Meeting was the rapid rise in hog weights over the past few weeks. The following chart shows weekly average weights of barrows and gilts for which prices are reported under the mandatory price reporting system. These data come from the HG-201 Prior Day Slaughtered Swine report and represent the average weights of, on average, about 95 per cent of all barrows and gilts slaughtered. The remaining 5 per cent of barrows and gilts are slaughtered in smaller plants that are not required to report to the MPR system.


A couple of things are noteworthy about the chart. First, this year’s increase since the first week of September is not all that unusual in either its magnitude or pace. The 2004- 2008 average increases by 5 pounds during that period where this year has seen weights increase by 6 pounds. The more important question is “What happens now?” Historically, weights have continued to increase at a slower pace through November when they peak at about 2 pounds more than the average for the third week of October. With feed prices rising, producers will try to reign in these weights but their ability to do so will be limited by packing plants that last week operated very near their weekly capacities.

The second interesting feature is that the real seasonal weight anomaly was LAST YEAR and the anomaly began in September. We and many others noted the counter-seasonal drop in hog weights last December but the lack of a seasonal increase earlier in 2009 indicates that producers were encountering troubles with last year’s corn quality much earlier that we once recognized.

Finally, last week’s increase was the smallest since the week of 4 September. Is it the first sign of a peaking of weights? One point does not a trend change make but this one, along with the historical seasonal pattern, suggests that these weight increases and their contribution to pork supplies may indeed be slowing.

The chart below shows a longer history of average hog slaughter weights. The data in this chart represent all hogs, including “off hogs” (ie. light barrows and gilts) and sows/boars. The slowing of weight increases in times of high feed costs is apparent in1989, 1996 and since the advent of federal biofuels policies in 2006. If the pattern of recent weeks holds, the estimated weights for the past two weeks will be revised upward by 2-3 pounds when final data are published this and next Thursday. Those revised weights could well be record-high but would still not mark a sharp break in the recent sideways trend in hog weights. Higher feed costs in 2011 will likely limit weight increases for the foreseeable future but Q1-2011 weights could be significantly higher than one year earlier due to the relatively low seasonal increase of Q4-2009 and resulting low Q1-2010 average weights.

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« Reply #366 on: October 30, 2010, 10:11:14 AM »

US and Canadian Hog Inventory Down Two Per Cent
US - This publication is a result of a joint effort by Statistics Canada and the USDA's National Agricultural Statistics Service (NASS) to release the total inventories of hogs, breeding, market hogs, sows farrowed and pig crop for both countries within one publication.

 

US and Canadian inventory of all hogs and pigs for September 2010 was 76.8 million head. This was down two per cent from September 2009 and down five per cent from September 2008. The breeding inventory, at 7.07 million head, was down two per cent from a year ago and down slightly from last quarter. Market hog inventory, at 69.8 million head, was down two per cent from last year but up one per cent from last quarter. The pig crop, at 35.5 million head, was down two per cent from 2009 and down four per cent from 2008. Sows farrowed during this period totaled 3.61 million head, down two per cent from 2009 and down six per cent from 2008.

US inventory of all hogs and pigs on 1 September 2010 was 65.0 million head. This was down three per cent from 1 September 2009 but up one per cent from 1 June 2010. The breeding inventory, at 5.77 million head, was down two per cent from last year and down slightly from the previous quarter. Market hog inventory, at 59.2 million head, was down three per cent from last year but up one per cent from last quarter. The pig crop, at 28.5 million head, was down one per cent from 2009 and down three per cent from 2008. Sows farrowed during this period totalled 2.91 million head, down two per cent from 2009 and down six per cent from 2008.

Canadian inventory of all hogs and pigs on 1 October 2010 was 11.9 million head. This was down one per cent from 1 October 2009 and down seven per cent from 1 October 2008. The breeding inventory, at 1.30 million head, was down four per cent from last year and down slightly from last quarter. Market hog inventory, at 10.6 million head, was down slightly from last year but up one per cent from last quarter. The pig crop, at 7.0 million head, was down five per cent from 2009 and down eight per cent from 2008. Sows farrowed during this period totaled 702,000 head, down five per cent from 2009 and down nine per cent from 2008.

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« Reply #367 on: November 06, 2010, 09:40:12 AM »

CME - Rise in Lean Hog Futures
Lean hog futures were generally higher on Wednesday (3 November) as market participants were buoyed by reports of improving cash pork prices and better packer demand for hogs in the coming days, write Steve Meyer and Len Steiner.



Hog and pork prices were hit hard in October as a combination of seasonally higher slaughter numbers, heavy hog carcass weights and the desire of producers to get ahead of weight gains created a short term glut of product.

The supply imbalance appears to have been normalized to a certain extent. Hog weights remain near all time record levels but they appear to have leveled off and they are actually down compared to late October.

Based on the MPR slaughter data (LM_HG201), hog carcass weights for Tuesday November 2 were 207.55 lb (dressed weight, wt. average). This is still about 3 pounds heavier than a year ago but lower than the 209+ carcasses we saw towards the end of last week. Hog slaughter this week is currently on track to be around 2.3 million head, about the same as a year ago. However, there are some reports that Saturday slaughter will be quite heavy so it is possible we may see a few more hogs coming through. The question that the market is grappling with is what happens with slaughter in December. We have speculated that producers accelerated marketings in October to account for the fast weight gains. Hog weights seasonally increase in October and November as hogs are fed better feed and enjoy cooler weather. This year, weather has been quite good and the significant difference in feed quality had a dramatic impact on hog feed intake. If this assessment is correct, then we should see a dip in marketings in late November and December. Markets continue to expect a bump in December with the nearby Dec LH contract at $66.725/cwt compared with cash IA/MN lean hog prices of $59.39/cwt. As the top chart shows, the spread between cutout values and cash hog prices currently is near the highs for the year, again not unusual for this time of year.

Packer margins should be quite good and if hog supplies tighten in the coming weeks, it is likely this will translate in higher hog prices for December and January. A big unknown at this time is the state of pork exports. We have noted that US beef exports this fall have increased sharply (weekly sales report) and private sources indicate that pork exports also are doing quite well. We noted in yesterday’s letter the impact that a weaker US currency is expected to have on grain exports and the same can also be said about meat products.


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« Reply #368 on: November 10, 2010, 09:04:13 AM »

, November 09, 2010   Weekly Roberts Report
US - Agricultural US Commodity Market Report by Mike Roberts, Commodity Marketing Agent, Virginia Tech.



Last week crop conditions in Argentina were very, very hot and tending to pressure the emerging crop. Two weeks ago soil moisture was adequate but hot, dry weather is wilting young plants that were germinating just a week ago. If this continues both corn and soybeans could suffer yield losses. Timely rains and forecasts for showers next week look to boost crop prospects in Brazil.

LEAN HOGS on the CME finished up on Monday. DEC’10LH futures finished at $67.150/cwt; up $0.200cwt. The FEB’11LH contract closed up $0.650/cwt at $74.175/cwt. The APR’11LH contract closed at $79.150/cwt; up $1.050/cwt. Lower corn prices, seasonal demand and steady cash prices were supportive. Rolling of long December positions by funds and profit taking kept the lid on. Funds rolled 3,000 lots near the end of trading while rolling nearly 10,000 contracts on the day. USDA put the average cash hog price at $77.17/cwt, up $0.03/cwt while cash hogs in Iowa and Minnesota were steady-to-firm. Fundamentally the US hog supply has stabilized and looks like supplies have peaked. Heavy hogs going to market are declining in number amid improved demand. Exports were supportive. According to HedgersEdge.com, the average packer margin was placed at a positive $28.45/hd based on the average buy of $45.14/cwt vs. the average breakeven of $55.45/cwt. The CME lean hog index was placed at 61.71¢/lb; down 0.32¢/lb.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. DEC’10 corn futures closed off 2.5¢/bu at $5.852/bu. The MAR’11 contract closed at $5.9924/bu; down 2.5¢/bu. The DEC’11 contract closed at $5.530/bu off 2.25¢/bu. Sporadic fund selling, profit taking, a firm US dollar, and weak export activity weighed on prices. Funds were selling and taking profits ahead of Tuesday’s USDA November crop report that will be released at 8:30 am EST. When the US dollar makes gains US commodities cost global importers more than in other countries so they turn away from US products. USDA put corn-inspected-for-export at 24.890 mi bu vs. expectations for 27-31 mi bu. Fundamentally US corn stocks are approaching 15-year lows. Cash corn was steady-to-firm in both the US Midwest and the Atlantic states. Funds sold nearly 2,000 lots. Futures have shot up over 80 per cent since June amid concerns that the US corn crop will not be large enough to meet strong global demand. The most recent survey shows that analysts expect a US crop of 12.545 mi bu with a yield of 154.4 bu/ac leaving corn ending stocks, on average, at 840 mi bu. Last October USDA put the US corn crop at 12.664 mi bu on a yield of 155.8 bu/ac with ending stocks at 902 mi bu. That news sent corn futures sharply higher. The US is the world’s largest producer of corn. The market is near the top end of nearby trading range on tighter balance sheet outlook. If possible it would be a good idea to advance some sales of the2011 and even the 2012 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) finished off on Monday. NOV’10 futures closed at $12.644/bu, down 9.0¢/bu. The MAR’11 contract closed at $12.832/bu; off 9.25¢/bu. NOV’11 soybean futures closed down 7.25¢/bu at $12.146/bu. Some long liquidation ahead of the USDA crop report, overbought chart signs, smaller-than-expected exports, and a firm US dollar pressured prices. Funds were squaring long positions even though there is fundamental strength in the US soybean crop. Funds sold about 4,000 lots taking profits on prices about 19 per cent higher than previous months. USDA put soybeans-inspected-for-export at 56.914 mi bu vs. expectations for 64-68 mi bu. Exports have been sizzling of late with China the biggest importer. Brazil showers were very helpful to the crop there while dry weather in the central regions of Argentina is hurting those soybeans there. Fundamentally USDA is expected to raise the estimate of US production but lower ending stocks on strong global demand for US soybeans. Average analysts’ place the US crop size3.426 bi bu on a yield of 44.6 bu/ac resulting in US ending stocks at 240 mi bu. It would be a good idea to advance some 2011 and 2012 soybeans sales.

WHEAT futures in Chicago (CBOT) finished up on Monday. The DEC’10 wheat contract closed at $7.362/bu; up 7.5¢/bu. JULY’11 futures finished up 8.0¢/bu at $8.104/bu. Concerns of dry weather threatening the US winter wheat crop, short covering ahead of the USDA crop report, and steady exports were supportive. Funds bought an estimated 4,000 lots. Analysts on average expect USDA to raise US wheat stocks by 2 mi bu. Exports held prices back somewhat. USDA put wheat-inspected-for-export at 15.539 mi bu vs. expectations for 19-21 mi bu. Dryness is seen as stressing the Australian wheat crop but expectations for showers later in the week held prices in check. Global stocks are getting tighter but there is still plenty of wheat in inventory. News reports spur fund buying. It would be a good idea to price 2011 and 2012 wheat now.

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« Reply #369 on: November 16, 2010, 09:38:54 AM »

Hog Production Moves from Profitable to Unprofitable
US - Hog production has gone from profitable to unprofitable in a big hurry, writes Ron Plain.

 
Ron Plain
Calculations by John Lawrence at Iowa State University estimate the typical Iowa slaughter hog was sold for a profit of $30.40 in September and for a loss of $3.67 in October. That is a drop of $34.07 per head, which is the largest month-to-month decline in the 46 years ISU economists have maintained this data series. Dr Lawrence estimates breakeven for barrows and gilts sold during October was $53.18/cwt live.

USDA is forecasting a new record for the average farm price of corn. Given futures market prices for corn and bean meal, the breakeven hog price is likely to reach $55/cwt on a live weight basis before the end of the year. USDA's latest forecast is that 2011 pork production will be up 1.5 per cent compared to this year, but down 1.9 per cent compared to 2009.

Hog slaughter totaled 2.32 million head this week, down 0.8 per cent from the week before, but up 1.1 per cent compared to the same week last year. Pork production is down 3.8 per cent for the year, but it has been above year-ago for each of the last five weeks.

The average carcass weight of barrows and gilts slaughtered the week ending October 30 was 205 pounds, up 1 pound from the week before, 5 pounds heavier than a year ago, and, for the second week in a row, the heaviest ever for this data series. Following three weeks of record highs, Iowa-Minnesota live weights for barrows and gilts last week averaged 275.9 pounds, up 4.6 pounds compared to a year earlier, but down 0.1 pound compared to the week before.

USDA's Thursday afternoon calculated pork cutout value was $76.17/cwt, down $1.03 from the previous Thursday. Loins and hams were lower; bellies and butts slightly higher.

Hog prices ended the week higher than last week. The national weighted average carcass price for negotiated hogs Friday morning was $61.83/cwt, up $2.68/cwt from the previous Friday. Regional average prices on Friday morning were: eastern corn belt $61.42, western corn belt $62.56 and Iowa-Minnesota $62.61/cwt. The top live hog price Friday at Sioux Falls was $49/cwt. The top at Zumbrota was $43 and Peoria's top was $41/cwt. The interior Missouri live top Friday was $43/cwt, down $1.25 from last Friday.

The December lean hog futures contract ended the week at $68.97/cwt, up $2.02 from the previous Friday. The February contract ended the week at $74.57/cwt and April settled at $77.95.

December corn futures ended the week at $5.34/bushel, down 54 cents from the previous Friday. March corn ended the week at $5.48 and July corn settled at $5.5525/bushel.

The December soybean meal contract ended the week at $339.70/ton, down $8.30 for the week.

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« Reply #370 on: November 30, 2010, 09:20:27 AM »

Higher Hog Prices Forecast by Purdue Economist
US - Hog producers have been feeling the bite of losses once again this fall, but Purdue University Extension economist Chris Hurt thinks there is reason for some optimism.



For starters, Professor Hurt says hog prices are probably at their seasonal lows in late November as consumers are buying their Thanksgiving turkey rather than pork. Second, he says lower corn and meal prices provide an opportunity to lock in feed prices at levels that were not available a few weeks ago.

Professor Hurt expects first quarter hog prices to average near 55 dollars per live hundredweight, with second and third quarter prices stretching to 62 and 61 dollars, respectively. Fourth-quarter prices are expected to drop to the mid-to-low 50's, according to BrownfieldAgNews.

Professor Hurt's estimated returns per head, by quarter, for 2011 are: minus four dollars in the first quarter; plus 14 dollars in the second quarter; plus 16 dollars in the third quarter; and plus one dollar in the fourth quarter, for a 2011 average near seven dollars per head.

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« Reply #371 on: December 01, 2010, 07:56:56 AM »

US Pork Outlook - November 2010
Next year, the US pork industry will struggle to adjust to expected higher feed costs, and output is expected to be 1.5 per cent above the 2010 level, according to the latest Livestock, Dairy, and Poultry Outlook from the USDA's Economic Research Service.

 

Summary
Higher hog weights and higher-than-expected pork cold stocks were factors in lower October hog and pork prices. Next year, the US pork industry will struggle to adjust to expected higher feed costs, with little attention given to expansion. Pork production next year is expected to be 1.5 per cent above the 2010 level. Lower third quarter exports are likely attributable to higher US pork prices.

Higher Hog Dressed Weights Pressure Prices
Prices of both hogs and pork declined sharply in October, as pork supplies increased with accelerating seasonal slaughter numbers and skyrocketing hog weights. The October price of live equivalent 51 to 52 per cent lean hogs was $52.14 per cwt. While more than 39 per cent higher than in October 2009, hog prices last month were 13.6 below prices in September, almost double the average six to seven per cent September- October drop-off seen in recent years. On the pork side, the wholesale carcass cut-out in October was $79.91, almost 45 per cent above a year earlier. But in recent years, the seasonal drop-off between the September and October cut-out has averaged between six to seven per cent. This year, however, the October cut-out fell almost 12 per cent below wholesale prices in September.

While prices of hogs and pork typically decline as hog slaughter numbers increase to their annual fourth-quarter-highs, 2010 prices of hogs and pork fell more sharply than in recent years. This could be due in part to two factors: first, on the supply side, live and dressed weights of hogs in October were much higher than expected. Second, on the demand side, prices of pork bellies peaked in mid-September and declined through October, pushing the USDA wholesale pork cut-out down. With respect to hog dressed weights, estimated average daily carcass weights in October 2010 were four pounds heavier than average daily weights a year ago and 5.3 pounds above the three-year average. Estimated carcass daily weights in October, which averaged 207 pounds for the month, were five pounds heavier than average federally inspected dressed weights in September. The figure below shows the wide positive October gap between estimated daily average carcass weights this year and 2009 and the 3-year average.



While it is impossible to pinpoint the cause(s) of heavier weights with precision, there is strong anecdotal evidence to suggest that feed quality and weather contributed to heavier animals in October. To the extent that last year’s corn crop was of poorer nutritional quality, switching to feeding with new-crop corn has probably accelerated weight gains that typically come about as the weather turns cooler in the fall. Thus, the switch to new-crop corn in hog rations combined with cooler temperatures likely created conditions that supported weight gains. On the flip-side however, heavier weights and resulting larger pork supplies probably contributed to lower pork and hog prices in October.

USDA lowered fourth-quarter prices of 51 to 52 per cent lean hogs to $50 to $52 per cwt, down from $53 to $55 per cwt last month. The fourth-quarter pork production forecast was increased 73 million pounds to 5.925 billion pounds, based on higher average dressed weights.

The major challenge – and source of uncertainty – for the US pork industry in moving forward is higher feed costs and how the US industry will adjust to them. Producer returns calculated with USDA forecasts of feed and hog prices show a decline from October, but still-positive returns through 2011. It is more than likely that 2011 will be a year in which the industry struggles to acclimatise to higher feed costs, without much attention to expansion. Minimally positive farrowings next year, along with higher dressed weights resulting from better nutritional values in new-crop corn, are expected to put commercial pork production next year at 22.6 billion pounds, an increase of 1.5 per cent over this year. The slightly higher production increase anticipated next year, compared with last month’s production forecast, is a result of higher expected average dressed weights offsetting slightly lowered forecasts of farrowings in 2011.

Third-Quarter-Pork Exports Slide
Third-quarter pork exports were 952 million pounds, down 5.4 per cent from the same period a year ago. With the exception of Canada, all major US export markets were year-over-year lower in third-quarter 2010. Lower exports are most likely attributable to elevated US pork prices in the July-September period. The wholesale cut-out averaged $88.94 per cwt, more than 56 per cent higher than the average wholesale price of $56.94 per cwt a year earlier. With a competitive US dollar vis-à-vis major trading partners, and with economic recovery proceeding in advance of the US economy’s growth rate in most parts of Asia, Mexico, Canada and Australia, high US prices appear to be a major factor explaining weaker third-quarter foreign purchases of US pork. The 15 largest foreign destinations for US pork in the third quarter are listed below.

Third quarter US pork imports were 13 per cent higher than a year earlier, at more than 237 million pounds. The largest foreign shipments came from Canada (13.2 per cent higher compared with a year ago) and from Denmark (0.3 per cent lower compared with the same period last year). Lower US production this year was likely an incentive for third-quarter imports.

Live swine imports were down only 2.5 per cent in the third quarter, at 1.479 million head, the lowest quarterly decline, in percentage terms, since swine imports turned lower in the second quarter of 2008. Lower imports of segregated early-weaned animals (weighing less than 7kg) and slaughter-ready animals offset year-over-year higher imports of feeder pigs (animals weighing between seven and 23kg) and breeding animals.


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« Reply #372 on: December 02, 2010, 08:47:42 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. DEC’10LH futures finished at $70.025/cwt; down $0.325cwt. The FEB’11LH contract closed down $0.925/cwt at $76.225/cwt. The APR’11LH contract closed at $80.800/cwt; off $0.575/cwt. The large premium to cash and a stronger US dollar seen as slowing exports weighed on prices. Packers were slow to buy on Monday due to stronger cash prices as a result of last week’s buying binge for the holidays. Spreaders sold February and bought December and April. USDA put the average cash pork price at $79.33/cwt; down $0.09/cwt. According to HedgersEdge.com, the average packer margin was raised $4.45/hd to a positive $25.50/hd based on the average buy of $47.55/cwt vs. the average breakeven of $56.83/cwt. The CME lean hog index was placed at 64.17 ¢ /lb; up 0.67 ¢ /lb.

CORN futures on the Chicago Board of Trade (CBOT) were up slightly on Monday. DEC’10 corn futures closed even with Friday’s close at $5.382/bu. The MAR’11 contract closed at $5.532; up0.25¢/bu. The DEC’11 contract closed at $5.100; up 3.0¢/bu. Good demand, and shrinking corn supplies were supportive while a stronger US dollar and lower than-expected exports held gains in check. USDA put corn-inspected-for-export at 23.877 mi bu vs. expectations for 24-27 mi bu. Export customers included Mexico and Russia which announced it was also buying Argentine corn. Even though demand remains strong, gains were limited by a lack of fresh fundamental news. Floor sources said traders were reducing exposure in the market with no new news. They also said that events in North Korea and Ireland, as well as ethanol issues hanging over the market left the pits less willing to take on more risk. US corn supplies as of August 31, 2011 are forecast at a 15-year low of 21 mi tonnes (826.7 mi bu). Funds sold an estimated 1,000 lots. It would be a good idea to price up to 50 per cent of the 2011 crop if you haven’t done so already.

SOYBEAN futures on the Chicago Board of Trade (CBOT) declined on Monday. JAN’11 futures closed at $12.350/bu, off 3.5¢/bu. The MAR’11 contract closed at $12.434/bu; down 3.5¢/bu. NOV’11 soybean futures closed down 0.5¢/bu at $11.580/bu. A firm US dollar and good crop weather in Brazil weighed on prices. Some technical selling and long liquidation was noted. The same world turmoil affecting corn was a factor in soybean prices on Monday. A higher US dollar pressures commodity prices as most raw materials are dollar-denominated, making it more expensive for foreign buyers to import from the US Chinese buying backed off previous expectations after driving soybean futures to 26-month highs earlier this month. USDA reported soybeans-inspected-for-export at 48.948 mi bu vs. expectations for 45-50 mi bu. Basis was steady-to-firm amid slow farmer selling. Basis refers to the relationship between cash prices in a local market and the trading level of national futures for that commodity. Basis reflects local market supply/demand factors: the availability of storage, production levels, consumption patterns, or transportation costs. Local buyers send their willingness/reluctance to buy cash commodities by strengthening/weakening the basis they offer, thereby regulating the flow of commodity from sellers. A weaker basis is one in which futures are gaining on cash markets while a stronger basis signals the cash market is gaining on futures prices. Funds sold an estimated 3,000 lots. It would be a good idea to get to 50 per cent priced in the 2011 crop and to have sold all 2010 soybeans.

WHEAT futures in Chicago (CBOT) finished up on Monday. The DEC’10 wheat contract closed at $6.502/bu; up 2.0¢/bu. JULY’11 futures finished up 3.75¢ /bu at $7.282/bu. Wheat was the strongest commodity on Monday. Exports and dry weather were supportive. USDA put wheat-inspected-for-export at 20.818 mi bu vs. 14-18 mi bu. Jordan tendered an offer for 100,000 tonnes (3.674 mi bu). Dry weather in the US Plains and heavy rains in southeast Australia were seen as slowing wheat supplies. Wheat cash prices were steady-to-firm as export basis bids for soft-red-winter-wheat gained as much as 5.0 ¢ /bu at the US Gulf market Monday. Funds bought an estimated 3,000 lots. It would be a good idea to price up to 65 per cent of the 2011 wheat crop
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« Reply #373 on: December 05, 2010, 11:25:29 AM »

CME: Hog and Steer By-Product (Drop) Values
US - Our last report focused on the impact that higher prices for beef at the wholesale level are having on live cattle prices, write Steve Meyer and Len Steiner.



But that is only part of the story since muscle cuts and grinding products make up only a portion of the live animal sold in the open market. By-product values, also known as drop values, account for a good portion of the value that packers derive from slaughtering livestock. Hides, offal, bones and all other such products are sold in the domestic and export markets. The latter is particularly important since particular items (hearts, livers, etc.) trade at a premium in world markets. Hide values also are important. The near death experience of the US auto industry in 2008 caused a sharp decline in demand for leather, which in turn directly impacted the value of cattle going to slaughter. Now that the auto industry has recovered, hide prices also have bounced back and so far in 2010, average hide prices are up some 80 per cent compared to 2009 levels.

The charts below show the ten year history in byproduct values for steers and hogs as well as the ratio of byproduct values to the value of the live animal.

 


In the case of hogs, we calculated an implied live hog price value based on the lean hog carcass IA/MN price and a 74 per cent yield. Live steer byproduct values are currently reported at $12.0/cwt., $2.4/cwt or 25 per cent higher than the comparable week a year ago. Live steer prices (USDA reported 5-day moving average) currently are trading some $17.6/cwt or 21.3 per cent higher than a year ago. But while by-product values for steer are currently trading near all time record highs, keep in mind that overall steer values are near record highs as well. Indeed, steer by-product values now account for about 12 per cent of the live steer prices, about the same as they were 10 years ago.

Hog by-product values also have trended higher although they remain below the all time records established in the summer of 2008. For the week ending 26 November, the pork by-product value was quoted at $4.58/cwt, 6 cents or 1.3 per cent lower than the comparable week a year ago. While byproduct values in steer have contributed about 1/6th of the overall gain in live steer prices, drop values in hogs have offered little help to the overall hog price. This helps explain to a certain extend why hog values have not appreciated as much even though prices for specific pork cuts remain well above year ago levels. The lack of gains in pork drop values will remain a concern for the pork complex going forward. Exports are clearly an issue as shipments of pork variety meats in period January - September were slightly lower than a year ago. Beef variety meat exports in the same time frame were up 15 per cent from 2009 levels.



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« Reply #374 on: December 10, 2010, 09:54:23 AM »

Pork Commentary: Iowa–Southern Minnesota Lean Average
US - In this week's Pork Commentary, Jim Long writes about the Iowa – Southern Minnesota lean hog market.
Jim Long is President &
CEO of Genesus Genetics.
Iowa – Southern Minnesota closed last Friday with an average lean average of $65.55 while the National 53 – 54 per cent leanCash USDA National Direct early weans and feeder pigs continue to gain strength. Last week cash early weans averaged $47.95 and 40 pound feeder pigs $57.26. These are strong prices when you consider the cash hog market is leading to $20 per head losses. The only way the prices jumped up to $5.00 per head higher last week is strong demand and restricted supply. With summer lean hog futures ranging from $87 - $89.50 it appears buyers don’t want to miss out! was $69.79. Considering the average lean hog is over 54 per cent the National Average is probably a good reflection of the market. The USDA pork cut – outs were 77.12 at the end of the week. Packers spread between the purchase price of hogs and the selling price of pork is still good but not as great as it was. With feed prices where they are we would estimate the average producer is losing about $20 per head farrow to finish. We believe that producers need 80 cents lean per pound with premiums for breakevens. February lean hog futures closed Friday at 76.575 cents per pound, with grade premiums February futures reflect an 80-cent per pound market. If futures reflect the future, it means mostly losing money until February at current costs.

Other Observations
There is no question hog weights are strong. The latest Iowa – Southern Minnesota is 275.16, a year ago 269.5. That 5.5 pound difference is adding more pork on the market and obviously pressuring prices lower. We expect weights will decline in the coming weeks. One thing we have noticed on our Genesus customer grade sheets as market weights have gone up is the ability to maintain strong lean meat percentages and grade premiums. Such a strong financial return and gross revenue per hog will in all likelihood encourage weights staying higher. The fact is some new modern genetics can stay lean at heavier weights and maintain good feed conversions.

Cash USDA National Direct early weans and feeder pigs continue to gain strength. Last week cash early weans averaged $47.95 and 40 pound feeder pigs $57.26. These are strong prices when you consider the cash hog market is leading to $20 per head losses. The only way the prices jumped up to $5.00 per head higher last week is strong demand and restricted supply. With summer lean hog futures ranging from $87 - $89.50 it appears buyers don’t want to miss out!

Cattle futures are showing strong optimism closing at $1.09 per pound, up over $100 per head in the last couple months. Higher cattle prices will help hog prices in the coming months.

Chicken suicide watch – After seeing several weeks of 6 – 7 per cent greater broiler egg sets. The latest data shows 2 per cent more egg sets. Is $5.00 corn finally sinking in?! We don’t need 14 million more chickens a week year over year as the chicken integrators were on pace for. As we said many times before last time $5.00 corn came along Pilgrim’s Pride the worlds largest chicken producer went broke. The hog industry has shown production restraint, the cattle industry the same hopefully, and the chicken industry manages to control their suicidal production impulse.

Corn Ethanol tax credits of 45 cents and tariffs of 54 cents are set to expire at the end of December. Full panic is setting in for the government free loaders in the ethanol industry. Consumer groups, environmentalists, former investor of climate change vice – president Gore, food companies, and of course livestock producers are lining up against these foolish subsidies that will cost the US treasury $7 billion a year plus the untold billions in higher food costs that in itself causes economic, social, and moral implications.

The reality driving up US food prices is a direct attack on the American Dream, American affluence, and the standard of living has been driven by agriculture productivity that allows US consumers to spend approximately 10 per cent of their disposal income on food. The 10 per cent is far less than any other country in the world. The 90 per cent remaining disposal income has driven the ability for American consumers to purchase homes, vehicles, educate their families, etc... Going forward higher spending on food caused by higher corn prices (ethanol) will delay the economic recovery as consumers have less disposal income for other items.

Now is your chance as a livestock producer to contact your congressman and senator to tell them what you think of Corn Ethanol. Lobbying works – calls from real people are very effective.


Author: Jim Long, President & CEO, Genesus Genetics
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