American Hog News USDA

[Mustang Sally Farm]

Monday, August 15, 2011
Beef, Pork Exports Close First Half with Solid Results
US - If the trend established in the first six months of the year holds up, US beef and pork exports are likely to set several new records in 2011 and each could eclipse the $5 billion mark for the first time ever.
 

According to statistics released by USDA and compiled by the US Meat Export Federation (USMEF), June beef exports achieved the second-highest value ever at $461.8 million. This was 23 per cent higher than June 2010, and has been surpassed only once – by the March 2011 value total of $475.2 million.

In terms of volume, June beef exports reached 111,362 metric tons – an increase of 15 per cent over June 2010. This brought the cumulative 2011 total to 620,851 metric tons valued at $2.55 billion, which was 25 per cent higher in volume and 40 per cent higher in value than last year's pace. For the first half of this year, beef exports equated to 13.8 per cent of total production with an export value of $192.42 per head of fed slaughter. The United States has also recaptured its position as the world's leading beef exporter, out-pacing Australia and Brazil.

June pork exports were slightly higher in volume (165,786 metric tons) than last year and six per cent higher in value ($451.2 million). This pushed first-half pork exports to 1.08 million metric tons valued at $2.81 billion – year-over-year increases of 14 per cent and 19 per cent, respectively. When compared to the all-time record year of 2008, the pace of this year's pork exports is six per cent higher in volume and 21 per cent higher in value. For the first half of this year, pork exports accounted for more than 27 per cent of total production with export value equal to $52.76 per head.

North American markets lead US beef exports but Asia remains very strong
Tremendous June results in Mexico and Canada firmly established their positions as the No. 1 and No. 2 markets for US beef. Demand for US beef in Mexico continues to rebound, as exports through June were eight per cent higher in volume (126,309 metric tons) and 25 per cent higher in value ($474.3 million) than in 2010. Canada was the value pacesetter in June with exports topping $96.6 million – a new monthly record. Cumulatively through June, exports to Canada were 23 per cent higher than last year in terms of volume (87,334 metric tons) and 44 per cent higher in value ($463.9 million).

June exports to Japan reached their highest monthly volume (17,626 metric tons) since 2003, pushing the 2011 total 50 per cent higher in volume (77,298 metric tons) and 54 per cent higher in value ($416.3 million). Other key Asian markets for US beef have cooled somewhat from the red-hot pace set earlier this year but the results remain very encouraging. Through June, exports to South Korea were 73 per cent higher in volume (86,890 metric tons) than last year and 69 per cent higher in value ($380.8 million). Hong Kong was up 82 per cent in volume (26,521 metric tons) and 109 per cent in value ($117.3 million).

Another sparkling growth region for US beef is Central and South America, where USMEF recently conducted a product showcase for US red meat, bringing US exporters to Panama City to meet with buyers from 11 different Latin American countries. To June, US beef exports to the region were 51 per cent higher in volume (12,795 metric tons) than last year and 71 per cent higher in value ($35.2 million), led by strong growth in Chile, Peru, Colombia and Guatemala.

Dan Halstrom, USMEF senior vice president for global marketing, commented: "The response we saw at the product showcase in Panama was very encouraging. What we saw there was a large contingent of buyers who weren't just window-shopping. They came to buy, and we expect this event will lead to new business relationships and new sales of US red meat."

Beef exports to the Middle East also continued to post strong growth, with volume (80,204 metric tons) up 38 per cent from last year and value ($153.7 million) running 51 per cent higher.

USMEF President and CEO, Philip Seng, said: "Heavy purchasing activity early in the year has led to high inventories in certain Asian markets, so it's not unexpected that we would see some cooling off of our beef exports to these countries. But this confirms the need for continued, aggressive promotion, so we can keep export growth to Asia strong throughout the year. It's also very encouraging to see exports performing so well in the Western Hemisphere and the Middle East."

Pork exports to Korea tremendous; Japan shows steady growth
South Korea has taken bold measures in recent months to deal with its dwindling pork supplies and rising prices, and US pork has been well-positioned to capitalise. With duty-free access on certain cuts and aggressive marketing programs firmly in place, US pork exports to Korea reached 122,880 metric tons valued at $301.5 million. This represented a 145 per cent increase in volume over the first half of last year, and nearly triple the value.

Coming off a record value year in 2010 of more than $1.6 billion, pork exports to Japan have increased another 10 per cent in volume (249,417 metric tons) and 13 per cent in value ($944.2 million) through the first half of this year. Exports to Canada have grown at a similar pace – achieving a 10 per cent increase in volume (97,204 metric tons) and 12 per cent growth in value ($335 million). The Hong Kong/China region – where access was limited in the early months of 2010 – was up 42 per cent in volume (173,462 metric tons) and 30 per cent in value ($260.5 million).

Mr Send added: "The situation in Korea stems from some unfortunate circumstances, as its hog herd has been devastated by foot-and-mouth disease. But it makes for an interesting case study for the remarkable growth we can achieve when we are not saddled with a 25 per cent tariff – something our members of Congress need to consider as they debate the Korea-US Free Trade Agreement. In addition, we've seen the market share for US pork increase versus our competition under comparable access conditions."

As for Japan, Mr Seng noted that this market continues to generate amazing returns for US pork producers. He remains hopeful that by December, the US will be challenging last year's record value – which is a mark many people would have said was unthinkable just a few years ago.

Mexico, the largest volume destination for US pork, saw exports fall by three per cent in volume (260,858 metric tons) and hold steady in value ($484.9 million) compared to last year. US ham and shoulder cuts were recently granted a tariff reduction (from 5.0 per cent to 2.5 per cent) as a result of a settlement in the NAFTA trucking dispute. These retaliatory tariffs are scheduled to be removed completely in the near future, which should help US pork regain momentum in Mexico.

Mr Seng explained: "Our pork results in Mexico are still solid but I will be very pleased when these retaliatory tariffs are completely behind us. Canada is our chief competitor in this market, and these tariffs severely reduced our advantage in terms of transportation costs."

Lamb export growth led by Mexico, Canada, Caribbean
US lamb exports grew by 59 per cent in volume (9,395 metric tons) and 31 per cent in value ($15.5 million) in the first half of 2011. Exports to the mainstay markets of Mexico, Canada and the Caribbean led the way, with strong growth also in Costa Rica, Guatemala and the United Arab Emirates.

Complete 2011 export statistics for US beef, pork and lamb are available online.

[Mustang Sally Farm]

CME: Price Concern as Hog Futures Drifting Lower
US - Hog futures have been drifting lower in recent days as market participants have become increasingly nervous about prospects for hog prices into the fall, write Steve Meyer and Len Steiner.


Seasonally, hog supplies increase as weather cools off (higher weights) and more hogs come to market.

But seasonality in hog prices in hardly a surprise. It was known to market participants all along and still they were willing to push October futures at almost $94/cwt.(8/2).

Since then, October futures have lost almost 700 points and there is plenty of fear that the recent pull-back in pork prices could herald a repeat of last year when pork cut-out dropped in the mid 70s by late October (see chart).

So what has changed since early August? Back then, bears were arguing that summer prices were inflated by the sudden surge in Chinese export demand. They thought Chinese purchases were temporary.

Also a factor that the authors noted repeatedly in this report was the sharp decline in hog weights. This further limited output and forced end users to bid up spot prices.

As those factors were rectified going into the fall, the expectation of bearish observers was that pork and hog prices would pull back by more than what futures were indicating at the time. Bulls, on the other hand, argued that pork export demand would continue to be a factor and keep prices at elevated levels through the end of the year.

High feed costs and limited feeder pig imports from Canada were also seen as a driver. And while $90+ hog prices would be unheard of for October, so were $106 hogs for early August and we surpassed those levels.

At this point, bears appear to be in the drivers seat as evidenced by the sharp drop in cash hog values.

On Wednesday (24 August), the IA/MN lean hog price (wt. avg.) was quoted at $95.18/cwt, still some $13/cwt higher than a year ago but $11/cwt lower than the annual peak in early August. One argument for the lower values are rising carcass weights.

However, USDA Mandatory Reporting system reported hog weights for Tuesday (23 August) at 199.17/lb per carcass, slightly lower than a year ago.

It is possible that packers are seeing a slow-down in export orders but that is only speculation at this point. One item that has been particularly negative for the pork cut-out are bellies.

The belly primal (which is 16 per cent of the cut-out) was quoted on Wednesday at $126.64/cwt, $26/cwt lower than just 10 days ago.

During the same period, the pork cut-out has declined from $109.45 (on 15 August) to $104.04 (on 24 August).

The drop in belly values has accounted for almost 80 per cent of the drop in the value of the cut-out.

What happens if/when demand for other primals, particularly loins, softens up after Labor Day?

Ham prices have been relatively weak to this point and they need to appreciate significantly to support the cut-out levels implied by October futures. Trim and drop credits can help you only so much.

[Mustang Sally Farm]

Friday, September 02, 2011Print
CME: Producers Hedge Feed Costs and Hog Prices
US - US pork producers have been, for the most part, sitting on their hands regarding expansion as they enjoyed record-high hog prices this year, write Steve Meyer and Len Steiner.


The reason, of course, has been concern over extremely high costs of production — concerns that have indeed been realized in the past week as both new-crop corn and new-crop soybean meal futures have hit contract life highs. Those increases as well as the expiration of the last of the summer Lean Hogs contracts on 12 August have put a decidedly negative tone to the outlook for pork producers for the next 12 months.

The chart below shows historic Iowa hog prices and costs of production as estimated by Iowa State University. The costs represent average Iowa farrow to finish operations and include a major adjustment to the production parameters beginning January 2010. That adjustment accounted for growing operations (basically going from a one-man business to a more modern 1200-sow farrow-to-finish organization) and changes to production efficiencies. It also put some feed cost weight on distillers dried grains with solubles (DDGS) to reflect the growing adoption of this ethanol by-product as a feed ingredient. The argument can be made that the weighting for DDGS is now too low as producers have used more and more of that product.


The chart also includes projections of costs and hog prices for the next 12 months and the picture is not pretty. Any 12-month-out projection had to get worse as this past summer progressed and record-high futures prices for June, July and August dropped out of the 12 month period and into the history portion of the chart. The prospect of a small average profit over the next 12 months, though, has turned into what appears to be substantial losses. The only profitable month on the chart is the month just completed. Returns are currently negative for every other month from now through July 2012 and the average loss over the time period is $14.60/hd.

Readers should note that yesterday’s warning that assuming hand-to-mouth cash transactions for packers lead to some potential discrepancies in estimated margins applies here as well. Many producers have done more hedging feed costs and hog prices this year than ever before. Some of that has been of their own making, some has been at the strong "urging" (and in some cases, requirement) of their lenders. Those producers likely had slightly LOWER returns than this model shows for this past summer since they would have sold fewer on the robust cash markets. But they likely have higher returns locked in for the coming year.

And we must add a warning that many very efficient hog operations achieve production efficiencies and capture economies of scale (even compared to the 1200-sow model) that put their costs $4 to $8/cwt. carcass ($8-$16/head) lower than this ISU model. So, while average Iowa farrow-to-finish operations face losses, these producers will be breaking even or, perhaps, earning small profits.

What does this mean for the breeding herd? We do ot think it is changing much. The drop in sow slaughter in July was more a function of weather than of a shift to expansion. Anecdotal evidence suggests that sow death losses spiked higher during the heat wave and producers were no doubt reticent to ship sows in those conditions when the prospect of transport losses was much higher. Sow slaughter has moved back above year-ago levels the last three weeks for which we have data (the latest being 14 August) and we suspect that the past two weeks will show further increases when they are published by USDA. Lower expected profits and $70/cwt.-plus sow prices — even $75/cwt.-plus prices last week — will get sows moving again. Does that mean the herd is contracting? We doubt it. These dimmed profit prospects are too new to be having a huge impact yet. Further, Missouri’s gilt data showed the percentage of gilts in the slaughter mix was near record low at 45.1 per cent last week. That series is pretty variable but the low number suggests that producers may be cashing in older sows and laying in new gilts at an even faster pace than in the past.

[Mustang Sally Farm]

Friday, September 09, 2011
CME: High Feed Costs Equal Lower Weight?
US - One impact of higher feed costs should be lower market weights for livestock and poultry, right? Steve Meyer and Len Steiner weigh up the choices.


That expected reaction on the part of feeders is predicated on the fact that animals convert feed progressively less efficiently as they get older.

Pigs will convert well under two pounds of feed to a pound of gain at young ages but may require three or more to put on a pound of gain as they near market weights of 260-300 pounds at six months or so of age.

One way to make the economics work with higher-priced feed is to sell the animals at lower weights as long as they are not so light that their price is docked by packers.

Packers, in general, do not like light animals at all since the plant and labor costs for processing a light animal are virtually the same as those of processing a heavier critter and, since premiums for light products are usually not large, sales from the lighter animal are lower.

Look at the three major species average weight performance, though, and you wonder if anyone has actually read the economic textbooks.

Only hog weights are lower than they were one year ago.

Further, average cattle weights are lower than last year only because cows have averaged nearly 20 pounds (3.2 per cent) less since 1 July.

Steers and heifers have been one per cent heavier than last year during that period.

The biggest “non-responder,” though, has been the broiler sector where average dressed weights continue to hover around 4.2 pounds, up 2.4 per cent from 2010.

They have gradually declined since late spring but the decline appears to us to be little more than a normal seasonal reduction. Will broiler weights continue to fall as broiler companies’ losses continue to mount? We certainly hope so.

[Mustang Sally Farm]

Friday, September 09, 2011
July Pork Exports Continue to Surge
US - July was another very strong month for US beef and pork exports, according to statistics released by USDA and compiled by the US Meat Export Federation (USMEF). Both are on pace to set new export value records in 2011 and to eclipse the $5 billion mark for the first time ever.
 

July pork exports totaled 169,547 metric tons valued at $480.06 million – an increase of 16 per cent in volume and 24 per cent in value. This pushed the 2011 total to 1.25 million metric tons valued at $3.3 billion – increases of 14 per cent and 20 per cent, respectively, over last year.

July exports equated to 28.7 per cent of production with a value of $59.35 per head, compared to 23.8 per cent and $45.95 in July 2010. For the year, pork exports equated to 27.3 per cent of production with a per head value of $53.63.

“July was another outstanding month for red meat exports, as we continued to expand the presence of US beef and pork throughout the world,” said USMEF President and CEO Philip Seng.

“This is a testament to the commitment US producers and exporters have made to the international markets. Despite market access restrictions, high tariffs and other trade barriers, the investments we are making in foreign markets are paying tremendous dividends. And this success couldn’t come at a better time, as it is adding jobs to the US economy and delivering much-needed returns to our farmers and ranchers. Those producers are dealing with high operating costs, adverse weather and many other significant challenges, and the export markets are clearly the best thing they have going in terms of profitability.”

Japan, Korea critical to steady growth in pork exports
With an impressive July performance of $157.6 million, US pork exports to Japan shot past the $1 billion mark for the seventh consecutive year. Coming off a record value year of more than $1.6 billion in 2010, exports to Japan were up 11 per cent in volume through July at 287,466 metric tons and up 14 per cent in value at just over $1.1 billion.

Exports to South Korea continued to surge as a wider range of US pork cuts continue to find success in Korea’s retail and foodservice sectors. Exports were up 144 per cent in volume through July at 136,359 metric tons and nearly tripled in value to $343.4 million.

Other highlights include:

While year-over-year exports to Mexico are down four per cent in volume and steady in value, it remains a critical market for US pork. Mexico is the leading volume destination for US pork at 300,234 metric tons so far this year and ranks second to Japan in value at $561 million. Mexico’s retaliatory duties on bone-in pork shoulders, hams and pork skins were cut in half earlier this summer with a compromise agreement on the NAFTA trucking dispute, but remain a hindrance to US exports. USMEF is hopeful that these duties will be removed entirely next month.


Exports to China through the first seven months of 2011, which were hindered in 2010 due to lingering restrictions related to A-H1N1 influenza, totaled 152,986 metric tons valued at $244.6 million. This is higher in volume and only slightly lower in value than the pace established in 2008, when pork exports to China reached an all-time high.


While widely known as a successful pork exporter, Chile also has a rapidly growing appetite for US pork. Exports to Chile in 2011 have climbed 186 per cent in volume (9,103 metric tons) and 138 per cent in value ($21.1 million) over last year. This helped exports to the Central and South America region grow by 19 per cent in volume (38,758 metric tons) and 32 per cent in value ($98.2 million) over last year.


Exports to the Oceania region so far this year increased 16 per cent in volume (45,921 metric tons) and 41 per cent in value ($146.7 million). Australia accounts for about 90 per cent of these totals, though exports to New Zealand have increased by more than 20 per cent in value to $11.6 million.

[Mustang Sally Farm]

Pork Commentary: US Exports Continue Record Pace
GLOBAL - This week's Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
US July exports totalled 169,549 metric tons valued at $480.06 US million – an increase of 16 per cent in volume and 24 per cent in value. This pushed the 2011 total to 1.25 million metric tons valued at $3.3 billion – increases of 14 per cent and 20 per cent, respectively, over last year.

You need to look no further than the export surge to see why US market hogs were $40 per head higher in July than last year. July pork exports were 28.7 per cent of US production, last year in July exports accounted for 23.8 per cent of total production – a five per cent increase with US total pork production basically the same year-over-year. The increase in exports reflects global pork demand while at the same time, the increase in exports cut US domestic pork supply. Bottom line: the export demand increase and lower domestic supply lead to $40 per head jump with static total pork production. Good news with corn at $7 per bushel.

We have over the last year talked of this scenario of flat US pork production, constant US domestic demand with strong global pork demand, says Mr Long. He believed it was the scenario for $1.00 lean hogs this summer, says Mr Long. Now what about the future?

As he looks at 2012, he sees little change in US pork production – maybe one per cent difference either way. US domestic demand will be relatively constant. American consumers in general have the disposable income to purchase all the meat they want. One major plus could be lower chicken and beef supply in 2012, leading both being more expensive. This could help pork cut-outs and hog market prices.

Strong pork exports are needed to keep hog prices high. Exports depend on each individual country's needs and where they have buying options. The following countries Genesus does business with and its first-hand knowledge from being on the ground that Mr Long makes the following observations.

Japan
US pork exports to Japan are at a record pace, up 14 per cent year to date at 1.1 billion. A few weeks ago, Genesus was told by Japanese hog producers they were receiving almost US$3 per lb. live weight. Most, if not all, Japan's feed needs are imported. The tsunami has cut some production, and we do not expect increased Japanese domestic supply. There is little reason to believe Japans pork exports will be lower in the next 12 months. The cheapest place for Japan to buy pork and that meets their health regulations are USA-Canada.

South Korea
Last November, Genesus predicted strong exports to South Korea after the company met with South Korean producers and understood the devastation of their foot and mouth disease. US pork exports to South Korea are triple year-to-date at $343.4 million. Market hog prices in South Korea are around US$2.50 per lb. live weight. Price is always a reflection of supply and demand. From what we can discern, South Koreans swine production will not recover in any major degree before the summer of 2012, says Mr Long. Consequently, he expects US pork exports there to stay strong to then and beyond.

Mexico
Mexican exports have been steady in value at US$561 million in the year to date. The recent decline of retaliatory duties because of US trucking regulations should be positive for enhanced US pork sales. Mexican hog producers are currently receiving approximately $40 per head more than US producers. With the drop in duties, US pork will become more competitive. Genesus sees no sign of Mexico hog production increase as high feed prices, tight credit and fear of US pork imports keeps market enthusiasm restrained.

China
Last week, China hog prices hit US$1.75 per lb. live weight! There is demand and obviously supply issues. US exports to China are $244 million for the year to date. Mr Long expects this pace will increase over the next months. Disease, small herd liquidation and high feed prices are factors that will keep supply low for several months.

Russia
The Russia government released swine inventory recently. Despite live weight hogs at US$1.35 per lb., the swine inventory did not increase over last year. Russia will continue to import large amounts of pork mostly from EU and some from Brazil. Whatever goes to Russia is not in other world markets competing with North America's pork.

European Union
EU has twice the swine production of USA-Canada. Europe's hog industry is in a degree of financial crisis. High feed prices and low margin is leading to decreased supply. Europe's pork supply for export is decreasing.

Brazil
Brazil is a major pork exporter. Brazil's market hogs are 56.26 US cents per lb. Producers are losing money. When you are losing money, you do not expand. Brazil's export supply will not be increasing in the next while, says Mr Long.

Summary – next 12 months
US–Canada swine production should be steady. US domestic pork demand should be steady with upside potential.

Japan, South Korea, Mexico and Russia are showing no signs of diminishing pork imports. US–Canada has supply, price and health. EU and Brazil, the two other major pork-exporting blocks, have decreasing supply and Brazil has export health issues. Genesus expects US hog prices will reflect the increase in global pork needs. Consequently, it expects US prices to track 10 per cent higher year-over-year.


Author: Jim Long, President & CEO, Genesus Genetics 

[Mustang Sally Farm]

Pork Commentary: Leaders Plead Case to Congress
US - Jim Long writes, "Last week, leaders from the US livestock and poultry industry met with the House of Representatives Ag Committee chaired by Rep. Thomas Rooney on the concerns about tight feed grain supply."


Jim Long is President &
CEO of Genesus Genetics.
Following are some of their comments.

Phillip Greene, Vice President – Foster Poultry Farms Fresno California – appearing on behalf of American Feed Industry Association.

Return agricultural commodity markets to operations driven by market demand by re working Federal energy policy to remove the mandated use of food commodities from the list of eligible feed stocks for federal assistance in bio energy development. Absent that, ensure there is mechanisms in place which require the Secretary of Agriculture to waive the RFS (Renewable Fuel Standard) in the event stocks – to – use ratios below a prescribed amount or prices hit specified levels.


Reinvent the CRP and government acreage – idling programmes to ensure such programmes do not provide an economic incentive take much–needed non–environmentally sensitive arable acres out of production.
Ted Seger President Farbest Foods Inc on behalf of National Turkey Federation comments:

Limited acreage expansion capability for corn production together with the expanded RFS (Renewable Fuel Standard) has driven net feed supplies and stocks available for uses other than ethanol to critically low levels. In light of the realities of grain supply and demand, Congress should re – evaluate the corn based RFS schedule for 2012 through 2015. A fair and balanced approach for the overall good of the US economy would give increased weight to food production and food security, and less weight to bio fuel production. The Volumetric Ethanol Excise Tax Credit (VEETC), or blender credit, is not required to support ethanol production and should simply go away at the end of the year.
"If we as a country are truly interested in reducing our dependence on foreign oil, then please tell me why the ethanol industry will be allowed to export nearly 1.0 billion gallons of ethanol. Why are the US taxpayers subsidizing another country’s dependence on oil?"

Michael Welch – President and CEO Harrison Poultry on behalf of the National Chicken Council:

Elimination of the Volumetric Ethanol Excise Tax Credit (VEETC) and import duty on ethanol.


Have a partial or full waiver of the Renewable Fuel Standards (RFS) by filing a legal challenge with the Environmental Protection Agency or have legislation passed to permit individual states to opt out of the federal ethanol mandate and/or legislation mandating a stocks to use trigger mechanism for the RFS.
Minimize or prohibit further government subsidies and federal grants funding the building and expansion of infrastructure that encourages the manufacturing, distribution, and selling of corn based ethanol.

Remove without penalty non environmentally sensitive cropland from the USDA’s Conservative Reserve Programme (CRP).
There were other speakers including Dairy, Beef, and Swine (NPPC), but the previous recommendations clearly pick up what the Congressional Committee heard over and over.

Our Summary from the Speakers
Mandated ethanol use using corn is dumb.
Stop subsidizing corn for ethanol in any which way possible
How dumb is it for American taxpayers to subsidize corn ethanol for export?
Stop paying farmers to keep cropland from having crops?
Any plan is good that cripples corn ethanol production. Allow individual state opt outs from mandates.
The different speakers were consistent. The only thing they left out was burning our food is INSANE!

Corn ethanol has created DDG’s - the cursed by product. With DDG’s and we quote NPPC testimony at the Congressional hearing:

"There are several issues with feeding DDG’s to pigs. They are inconsistent from ethanol plant to ethanol plant to ethanol plant, and even within a plant. There is variability in their nutrient content – protein, fat, and phosphorous. If the fermentation or drying process for DDG’s is changed or varies from batch to batch, it can have impact on the digestibility of nutrients. Additionally, corn can contain mycotoxins that are in some instances detrimental to pig performance. The presence of mycotoxins varies by growing season, location and environmental factors. Since the ethanol production process removes the starch (two thirds of the volume) from corn, DDG’s from mycotoxin – contaminated corn will have three times the level of mycotoxin that was present in the corn itself. Depending on the per centage of DDG’s fed and which toxins are present, pigs can experience multiple problems, including immune challenges, abortion, and feed refusal. This is a severe limit on the widespread use of DDG’s in gestation and lactation diets. (Corn ethanol ‘the gift that keeps on giving!’).

"As pigs are fed increasing levels of DDGs, the corn oil present (also three times the concentration as in corn grain) can increase the iodine value, leading to soft fat of the carcass. This can result in belly slicing problems and possible rancidity or shelf life issues. A higher per centage of DDGs in the diet can also have a negative effect on carcass weights, most likely because of the increased fiber content of the DDGs."

Couple DDGs with Genetic products that include Pietran (compared to Durocs) and you have high iodine levels. Soft fat rancidity or shelf life issues are not how we build domestic or export demand. Packers are now measuring iodine levels. Some are discounting high levels. Why? Product quality is important. It is no wonder the largest packer integrator uses almost exclusively Durocs?

Summary
Corn ethanol has driven our costs higher – DDGs have hurt our product quality when coupled with inferior Pietran Genetics. It is good to see all Livestock – Poultry groups united to fight the corn ethanol insanity. Let’s hope Congress is listening.


Author: Jim Long, President & CEO, Genesus Genetics 

[Mustang Sally Farm]

Weekly Roberts Market Report
US - While corn, wheat, feeder and live cattle closed up on Monday, dairy class futures closed down, writes Michael T. Roberts.

Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University

LEAN HOGS on the CME closed mixed on Monday. OCT’11LH futures closed at $88.500/cwt; down $0.30/cwt but $0.65/cwt over last report. The DEC’11LH contract closed at $83.000/cwt; off $0.725/cwt but $1.175/cwt over last report.

MAY’12LH futures closed at $95.500/cwt; up $0.500/cwt but $0.40/cwt lower than a week ago. Slowing momentum of near-term demand amid supportive signs encouraged volatility.

Seasonally hog prices should begin falling in October and November as producers expand production in the cooler weather. Supplies will begin to outpace demand from meat packers until fundamentals equalize.

Increased prices in beef could push consumers back to pork however. Late Monday USDA put the pork cutout at $97.8/cwt, down $0.03/cwt but $2.44/cwt over last report.

According to HedgersEdge.com, the average packer margin was raised $4.65/hd from last report to a positive $15.15/head based on the average buy of $64.89/cwt vs. the average breakeven of $70.53/cwt. The latest CME lean hog index was placed at $90.92; up $0.03 and $3.23 higher than this time last week.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The DEC’11 contract closed at $6.480/bu; up 9.5 ¢ /bu but 44.25 ¢ /bu lower than a week ago.

MAR’12 futures closed at $6.612/bu; up 9.25 ¢ /bu but 43.75 ¢ /bu lower than this time last week. The DEC’12 contract closed up 11.0 ¢ /bu at $5.894/bu but 28.25 ¢ /bu lower than a week ago.

Exports, oversold technicals, and higher cash corn prices were supportive. USDA put corn-inspected-for-export at 34.282 mi bu vs. expectations for 27- 31 mi bu.

Large speculators are leaving corn positions on a sinking economy and indications that farmers will plant more than 94 mi acres of corn next year, the most since World War II.

There may be some support near the end of the week as speculators buy back previously sold positions. Corn producers should probably hold off pricing any more corn at this time.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were mixed on Monday with deferreds beyond September 2012 down and nearbys up. NOV’11 soybean futures closed 19.5 ¢ /bu lower at $12.596/bu; 1.75 ¢ /bu up but 76.5 ¢ /bu over last report.

The MAR’12 contract closed at $12.780/bu; up 1.5 ¢ /bu but 67.0 ¢ /bu lower than a week ago. Exports were not supported with USDA putting soybeansinspected-for-export at 7.418 mi bu vs estimates of 10-12 mi bu.

Losses were pared after the market fell to 10-month lows on technical selling. Trading was brisk in volume of 180,000 contracts; 12 per cent over the previous 30-day average. It still looks like soybeans may become cheaper sooner rather than later.

WHEAT futures in Chicago (CBOT) finished up on Monday. The DEC’11 contract closed at $6.482/bu; up 7.5 ¢ /bu and 10.75 ¢ /bu higher than last report.

JULY’12 wheat futures finished at $7.042/bu; up 6.25 ¢ /bu but 35.0 ¢ /bu lower this time last week.

Exports were neutral with USDA putting wheatinspected-for-export at 21.605 mi bu vs estimates for 20-25 mi bu.

Short covering, oversold conditions, and dry conditions in the southern US plains were supportive. Wheat prices edged higher on sluggish buying. Pit sources said concerns over economic recession are held prices up. Global supplies show some signs of tightening. End users should consider pricing near-term needs.

[Mustang Sally Farm]

Monday, October 03, 2011
Hog Producers in Expansionary Mood
US - USDA’s September Hogs and Pigs report said the breeding herd was 0.6 per cent larger than a year ago and the market hog inventory was up 1 per cent compared to 1 September 1010, writes Ron Plain.
 
Ron Plain
Record hog prices this summer appear to have put some hog producers in an expansionary mood.

Litters farrowed during June-August were down 1.5 per cent, but because pigs per litter were up 2.2 per cent, the summer pig crop was up 0.7 per cent. USDA is predicting the number of sows to farrow this fall will be down 0.2 per cent and they predict December-February farrowings will be 0.5 per cent higher than a year earlier. If the number of sows that farrow this winter is above the year-ago level, it will be the first time since March-May 2008. I am predicting 2012 hog slaughter at 112 million head, up 1.6 per cent from this year.

USDA said the number of pigs weighing 180 pounds or more on September 1 was up 3.4 per cent. It looks like September hog slaughter will total about 3.7 per cent more than last year. The September survey put the inventory of hogs weighing 120 to 179 pounds at 100.7 per cent of last year, and the number of market hogs weighing less than 120 pounds at 100.4 per cent of last year.

All the key report numbers were higher than the average of the pre-release trade forecast, yet the futures market held steady to higher this week. Either this indicates traders don’t agree with the pre-release forecasts or are optimistic about meat demand. China appears to be buying a lot of US pork.

Today’s close for the October lean hog futures contract, $93.37/cwt, was up $4.58 from last Friday. The December lean hog futures contract settled at $87.80/cwt, up $4.08 from the previous Friday. February gained $3.66 this week to settle at $91.57/cwt.

The pork cutout value rose for the third week in a row. USDA’s Thursday afternoon calculated pork cutout value was $98.08/cwt, up 57 cents from the previous Thursday. Loins and butts were lower, hams and bellies were higher.

The national average negotiated carcass price for direct delivered hogs on the morning report today was $87.34/cwt, up $2.47 from last Friday. The Friday morning price report for the western corn belt was $90.65/cwt. Iowa-Minnesota averaged $90.68/cwt. Eastern corn belt barrows and gilts averaged $84.10/cwt of carcass, far below the western corn belt for the fourth week. Friday’s top live hog price at Peoria was $60/cwt. Zumbrota’s top was also $60/cwt. The top for interior Missouri live hogs was $63.75/cwt, unchanged from the previous Friday.

Hog slaughter totaled 2.25 million head this week, down 1.7 per cent from last week, but up 4.7 per cent compared to the same week last year. Barrow and gilt carcass weights for the week ending 17 September averaged 199 pounds, unchanged from the week before and unchanged from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 270 pounds, up 1.6 pounds from the week before and up 0.2 pounds compared to the same week last year. This is the first week Iowa-Minnesota weights have been above the year-earlier level since May.

[Mustang Sally Farm]

Wednesday, October 05, 2011
Weekly Roberts Market Report
US - Corn futures on the Chicago Board of Trade (CBOT) finished mixed on Monday (3 October), while dairy class futures on the Chicago Mercantile Exchange (CME) closed down, writes Michael T. Roberts.

Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University

CORN futures on the Chicago Board of Trade (CBOT) finished mixed on Monday. The DEC’11 contract closed at $5.924/bu; even with last Friday’s close but 56.75 ¢ /bu lower than a week ago. MAR’12 futures closed at $6.060/bu; up 0.25 ¢ /bu but 55.25 ¢ /bu lower than this time last week.

The DEC’12 contract closed down 3.25 ¢ /bu at $5.624/bu and 27.0 ¢ /bu lower than a week ago. The contract limit expanded to 60.0 ¢ /bu on Monday after the limit down trading last Friday.

News that China is expected to triple corn purchases offset bearish exports numbers. USDA put corn-inspected-for-export at 28.443 mi bu vs. estimates for 30-35 mi bu.

Even though large funds reduced long holdings in CBOT corn on Monday it should be noted that they have held long positions for the last four consecutive weeks.

This should prove price supportive later on. Put options would make a good price floor mechanism. However, upside potential may be in the offing.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed mostly down on Monday with the exception of the May 2012 and the July 2012 contracts. NOV’11 soybean futures closed 1.5 ¢ /bu lower at $11.774/bu; and 82.25 ¢ /bu under last report.

The MAR’12 contract closed at $11.980/bu; down 0.25 ¢ /bu and 80.0 ¢ /bu lower than a week ago. Friday’s extended sell-off was encouraged by a firm US dollar. More large funds sold contracts but are still net bullish.

Selling was triggered by forecasts for good harvest weather. In addition, Brazil’s 2011/12 soybean crop is forecast to be a record 75.2 mi tonnes (2.763 bi bu).

USDA late Monday put soybeans-inspected- for-export at 10.599 mi bu vs. estimates of nine to 14 mi bu. Price floors implemented by Put options might be a very good consideration at this time.

WHEAT futures in Chicago (CBOT) finished up on Monday. The DEC’11 contract closed at $6.194/bu; up 10.25 ¢ /bu but 28.75 ¢ /bu lower than last report.

JULY’12 wheat futures finis hed at $7.6.926/bu; up 16.0 ¢ /bu but 11.75 ¢ /bu lower this time last week. Fund buying was supportive.

Late Monday USDA put wheat-inspected- for-export at 22.079 mi bu vs. estimates for 22-27 mi bu. Global wheat supplies are ample and look to be that way for a while.

LEAN HOGS on the CME closed down on Monday with the exception of the October 2012 futures contract. OCT’11LH futures closed at $93.125/cwt; down $0.25/cwt but $4.625/cwt over last report.

The DEC’11LH contract closed at $86.800/cwt; off $0.725/cwt but $3.800/cwt over last report. MAY’12LH futures closed at $96.50/cwt; down $0.750/cwt but $1.00/cwt higher than a week ago.

Recent gains may be offset later this week by profit taking on weak cash hog prices. USDA on Monday put the cash pork price at $98.32/cwt; up $0.26/cwt but $0.52/cwt over last report.

Traders took profits as stronger-thanexpected pork exports rallied hog futures through a time of year when seasonal prices are normally in a period of decline. A broad sell-off in stocks also weighed on prices.

According to HedgersEdge.com, the average packer margin was lowered $3.75/hd from last report to a positive $11.35/head based on the average buy of $64.89/cwt vs. the average breakeven of $70.53/cwt. The latest CME lean hog index was placed at $91.30; up $0.22 and $0.38 higher than this time last week.

[Mustang Sally Farm]

Wednesday, October 12, 2011
Weekly Roberts Market Report
US - Corn, soybean and wheat futures all finished up on Monday, whilst dairy futures finished down, writes Michael T. Roberts.

Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University

LEAN HOGS on the CME finished mixed on Monday with nearby’s down and deferreds up. OCT’11LH futures closed at $93.025/cwt; down $1.650/cwt and $0.100/cwt lower than last report.

The DEC’11LH contract closed at $87.750/cwt; off $1.650/cwt but $0.950/cwt over last report. MAY’12LH futures closed at $98.350/cwt; up $0.250/cwt and $1.850/cwt higher than a week ago.

Nearby contracts fell nearly two per cent on falling cash hog prices due to softening demand. Retailers are backing off fresh pork at current prices.

Bearish seasonality is also an influence; however, futures were supported by Chinese demand for US pork after the 2007 disease outbreak decimated herds in that country.

According to HedgersEdge.com, the average packer margin was lowered $9.35/hd from last report to a positive $2.00/head based on the average buy of $69.64/cwt vs. the average breakeven of $70.39/cwt.

CORN futures on the Chicago Board of Trade (CBOT) closed up on Monday in light volume. The DEC’11 contract closed at $6.050/bu; up 5.0 ¢ /bu and 12.75 ¢ /bu over a week ago.

MAR’12 futures closed at $6.174/bu; up 4.75 ¢ /bu and 11.5 ¢ /bu higher than this time last week. The DEC’12 contract closed up 4.25 ¢ /bu at $5.722/bu and 9.75 ¢ /bu higher than a week ago.

Futures were supported by a weak dollar, firm outside markets, and oversold conditions. The US dollar index decreased 1.6 per cent making US corn a better buy for importers. Some upside potential exists on technical chart signals.

The market is waiting on USDA’s release of its World Agriculture Supply Demand Estimate (WASDE) due out at 8:30 am on Wednesday, 10/12/11. Corn prices have firm upside potential.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. Trading volume was up nearly 19 per cent from the most recent 30-day average. USDA’s WASDE report will fuel trading on Wednesday. NOV’11 soybean futures closed 19.25 ¢ /bu higher at $11.774/bu; even with this time last week.

The MAR’12 contract closed at $11.976/bu; up 18.25 ¢ /bu but 0.5 ¢ /bu lower than a week ago. Futures closed in a broad rally on news that France and Germany will be coming up with a plan to contain the monetary crisis developing in Europe.

A lower US dollar was supportive. As of last Friday large funds decreased net bull positions by nearly 17,000 contracts.

WHEAT futures in Chicago (CBOT) finished up on Monday in light volume. The DEC’11 contract closed at $6.114/bu; up 4.0 ¢ /bu but 0.75 ¢ /bu lower than last report.

JULY’12 wheat futures finished at $6.830/bu; up 2.0 ¢ /bu but 9.75 ¢ /bu lower than this time last week. Volume was light, placed at 50,500 contracts. This was well below the 30-day average of 74,720 lots and the three-quarter average of 102,572 contracts.

Wheat futures were supported by a weaker US dollar. Markets closed well below session highs as traders locked in profits. Traders will wait to see what is in the USDA WASDE report due out Wednesday morning.

[Mustang Sally Farm]

, October 17, 2011
August Pork Exports Soar to New Heights
US - August was another outstanding month for US pork and beef exports, according to statistics released by USDA and compiled by the US Meat Export Federation (USMEF).
 

Pork exports reached their highest monthly volume of the year at 186,068 metric tons, and the second-highest value total of all time at $531.2 million. Both pork and beef exports are on pace to set new value records in 2011 and to eclipse the $5 billion mark for the first time ever.

Pork exports surge in Asia, Canada, Russia, Southern Hemisphere markets
August pork exports were 27 per cent higher than a year ago in terms of volume and 44 per cent higher in value (surpassed only by the record $553.6 million, set in March 2011). This performance pushed year-to-date exports to nearly 1.44 million metric tons valued at $3.82 billion – an increase of 16 per cent in volume and 23 per cent in value over last year’s pace. August exports equated to 27.3 per cent of production with a value of $56.27 per head, compared to 22.4 per cent and $40.87 in August 2010. For the year, pork exports equated to 27.3 per cent of production with a per head value of $53.98.

August exports to Japan, the leading value market for US pork, were 28 per cent higher than a year ago in volume (40,887 metric tons) and 37 per cent higher in value ($168.4 million). For the year, exports to Japan were 13 per cent ahead of last year’s record pace in terms of volume (328,353 metric tons) and 16 per cent higher in value ($1.27 billion).

South Korea continues to be a bright spot for US pork as August exports more than doubled last year’s volume total (10,268 metric tons) and more than tripled the value ($31.2 million). For the year, exports to Korea were 142 per cent higher in volume (146,627 metric tons) and 192 per cent higher in value ($374.5 million). These totals have already set new full-year records for Korea, topping the previous highs set in 2008 of 133,532 metric tons valued at $284 million.

Exports to China also continued to surge, with a record August volume (35,636 metric tons) pushing this year’s volume up 336 per cent (188,622 metric tons) to go along with a 237 per cent increase in value ($316.8 million). Exports to Canada were up 9 per cent in volume (131,004 metric tons) and 14 per cent in value ($464.2 million). August export volume to Russia was the second-highest of the year at 8,213 metric tons. Though export volume to Russia (49,143 metric tons) was down about 12 per cent for the year, value was up 22 per cent to $149.4 million. Another market showing exceptional growth was Australia, up 18 per cent for the year in volume (45,865 metric tons) and 39 per cent in value to $147.4 million (less than $1 million short of the full-year value record established last year). Exports to Central-South America were up 22 per cent to 44,980 metric tons with volume up 33 per cent to $113.4 million. Existing trade agreements have assisted exports to this region and ratification of the Colombia and Panama FTAs will foster further growth.

Mexico continues to be the top volume destination for US pork at 344,875 metric tons – down 3 per cent from last year’s record pace. August volume of 44,641 metric tons was steady with last year but up 13 per cent from July, and the value of August’s exports to Mexico rose more than 10 per cent. For the year, export value to Mexico was up 2 per cent to just under $654 million.

"It is gratifying to see US pork exports performing so well in key Asian markets and in so many countries across the globe," said USMEF President and CEO Philip Seng, who has just returned from the World Pork Conference in Bonn, Germany. "Many regions of the world are facing very tight pork supplies and exports from many pork-producing countries are stagnant. The efficiency and resourcefulness of US producers have allowed our industry to fill this need, and through aggressive campaigns such as the global pork butt initiative we are moving a wider range of cuts than ever in overseas markets. This has solidified our position as the world’s leading pork exporter."

[Mustang Sally Farm]

Wednesday, October 19, 2011P
Weekly Roberts Market Report
US - Dairy and live cattle futures finished up on Monday whereas soybean finished down and corn and wheat futures finished mixed, writes Michael T. Roberts.

Michael T. Roberts
Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University

LEAN HOGS on the CME closed up on Monday with the exception of the May 2012 and June 2012 contracts. The DEC’11LH contract closed at $90.700/cwt; up $0.625/cwt and $2.950/cwt over last report.

MAY’12LH futures closed at $98.900/cwt; off $0.200/cwt but $o.550/cwt higher than a week ago. Hog futures were supported by news that Congress had passed free trade agreements with Panama, Colombia, and South Korea. Pit sources agree that these agreements hold a lot of promise for increased exports.

USDA on Monday put the lean hog carcass price at $99.06; up $0.35. According to HedgersEdge.com, the average packer margin was raised $4.35/hd from last report to a positive $6.35/head based on the average buy of $68.80/cwt vs. the average breakeven of $71.17/cwt.

CORN futures on the Chicago Board of Trade (CBOT) finished mixed on Monday. The DEC’11 contract closed at $6.404/bu; up 0.5 ¢ /bu and 35.5 ¢ /bu over a week ago.

MAR’12 futures closed at $6.512/bu; down 0.25 ¢ /bu but 33.75 ¢ /bu higher than this time last week. The DEC’12 contract closed up 1.5 ¢ /bu at $6.032/bu and 31.0 ¢ /bu higher than a week ago.

A firm US dollar kept prices stable, and chart resistance kept prices in check. Late Monday USDA put the US corn harvest at 47 per cent complete vs. the five-year average of 41 per cent for this time of year.

Export news lagged. USDA on Monday said it wouldn’t release corn-inspected-for-export numbers until Tuesday 10/18. Industry estimates range from 30 to 38 mi bu. USDA last week reduced supply / demand estimates by 64 mi bu due to reduced planted and harvested acres; 91.9 mi ac and 83.9 mi ac respectively.

Yield estimates remained unchanged at 148.1 bu/ac. U.S. corn use was reduced by 50 mi bu. Total US corn production was put at 12.433 bi bu. Ending stocks were placed at 8.6 mi bu, an increase of 194 mi bu from the September 2011 estimate.

Corn prices show downward price trend in the short run as funds and large speculators take profits on short covering and long-liquidation.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed down on Monday. NOV’11 soybean futures closed 17.0 ¢ /bu lower at $12.530/bu but 75.75 ¢ /bu over a week ago.

The MAR’12 contract closed at $12.676/bu; off 18.0 ¢ /bu but 70.0 ¢ /bu higher than this time last week. News that the troublesome kudzu bug that eats kudzu, as well as soybeans, is invading southern soybean fields was supportive.

University of Georgia researchers say the voracious pest is adaptable and is spreading both north and west. A firm dollar, higher crude oil, short covering, and long liquidation in profit taking weighed on prices. Lack of confirmation that China purchased large quantities of US soybeans also contributed to Monday’s price weakness.

USDA placed the US soybean harvest at 69 per cent vs. the five-year average of 61 per cent and 81 per cent this time last year.

Showers this week should slow the US soybean harvest. Analysts expect soybean exports to come in at 35-40 mi bu. USDA will publish those figures on Tuesday, 11/18. Last week USDA reduced harvested US soybean acres 0.1 mi ac to 73.7 mi ac and also reduced the US yield estimate for soybeans to 41.5 mi bu/ac.

This resulted in an estimate of 3.060 bi bu; 25 mi bu less than the September forecast. Ending stocks were reduced five mi bu to 160 mi bu. Technical signals show upside potential and those should materialise if export news is positive from China.

WHEAT futures in Chicago (CBOT) closed mixed on Monday. The DEC’11 contract closed at $6.242/bu; up 1.5 ¢ /bu and 12.75 ¢ /bu higher than last report.

JULY’12 wheat futures finished at $6.966/bu; down 0.5 ¢ /bu but 13.75 ¢ /bu higher than this time last week. Forecasts for dry weather were supportive.

A firm US dollar limited prices. Export estimates ranged from 16-21 mi bu. USDA’s export report normally released on Monday’s at 11:00 am EST was delayed until Tuesday. There is upside potential in the short run.

[Mustang Sally Farm]

Friday, November 11, 2011
China, Mexico Help Drive Torrid Red Meat Export Pace
US - Led by a record-breaking month for pork exports to China and the continued rebound of beef exports to Mexico, 2011 remains on pace to set new annual records for the value of beef, pork and lamb exports, according to statistics released by the USDA and compiled by the US Meat Export Federation (USMEF).
 

September results show pork exports up 23.6 per cent in volume and 40.5 per cent in value from last year while beef exports rose 27.3 per cent in volume and 35.9 per cent in value. Not to be left out, US lamb exports soared 113 per cent in volume over September of 2010 while the value of those exports jumped 83.9 per cent.

"This year has presented opportunities for the US red meat industry to expand exports, and the industry has worked aggressively to capitalize on those opportunities," said Philip Seng, USMEF president and CEO. "The premiums that international buyers pay for US beef, pork and lamb are critical to the bottom line of US producers."

On the pork side of the industry, September exports equated to 26 per cent of total US pork and pork variety meat production and those exports were valued at $56 per head – solid increases from September 2010 totals of 22 per cent of production and $40.87 per head.

For beef, September exports accounted for 14.4 per cent of total beef and beef variety meat production and $212.64 in value per head of fed cattle, up from 11 per cent of production and $151 in value per head last year.

Like their beef and lamb counterparts, pork exports remain on a record-setting pace and, like beef, are on track to eclipse $5 billion in value for the year for the first time on record. For the month, the US exported 183,495 metric tons of pork valued at $537.6 million, which trails only March of 2011 as the second-highest monthly export value on record.

For the year, the US has exported more than 1.6 million metric tons of pork valued at nearly $4.4 billion, increases of 16 per cent and 25 per cent, respectively, over the first nine months of 2010.

Pork exports were led by China/Hong Kong, which bought 47,180 metric tons of product, up 64 per cent from last year. The 39,020 metric tons purchased by China was a new monthly record, up 92 per cent from last year. The value of the exports to China/Hong Kong was $101.7 million, a 129 per cent jump from last year.

Japan remains the leader in value of US pork exports. September’s totals were 38,689 metric tons valued at $166.2 million, increases of 23 per cent in volume and 32 per cent in value over last year.

Mexico continues to be the volume leader in pork, importing 41,666 metric tons (7 per cent increase) valued at $87 million (18 per cent increase).

Pork exports to South Korea grew 82.3 per cent in volume and 153.6 per cent in value versus year-ago levels, although the pace has slowed somewhat from earlier in the year.

Japan and South Korea are two of the markets that USMEF has aggressively targeted in a campaign to raise the visibility of the US pork butt, a cut identified by US exporters as one that has been undervalued.

"We are seeing a very positive response in Japan and Korea, as well as the Caribbean, China, Singapore and some other markets where we’ve worked with the food service and retail sectors to help educate them on the taste and value of the pork butt," said Mr Seng. "Since the pork butt is one of the top two or three cuts we export to these markets, raising the value of those exports is important for returning higher values to producers."

Canada was another positive market for US pork in September, reaching record-large volumes (20,034 metric tons) valued at $75.6 million, increases of 31 per cent in volume and 42.3 per cent in value.

[Mustang Sally Farm]

Monday, November 14, 2011
US and Canada Producing More Pigs Per Litter
US & CANADA - Canada's 1 October swine inventory survey said their swine herd was up 0.9 per cent. The number of sows and bred gilts was up 0.2 per cent. Their inventory of market hogs was up one per cent, writes Ron Plain in his Hog Outlook report for 11 November.
 
Ron Plain
The Canadian survey said there were 1.7 per cent fewer sows farrowed in Canada in July-September than a year ago. They predicted October-December farrowings would be down 0.9 per cent and January-March farrowing down 0.4 per cent.

Like the US, Canadian hog producers are producing more pigs per litter. Although the number of litters farrowed in the third quarter was down 1.7 per cent, the pig crop was a small fraction higher than last year.

USDA's November supply and demand estimates raised the forecast of 2012 barrow prices on a live weight basis by $1 to $63-68/cwt.

USDA is forecasting 2012 pork production will be up 1.7 per cent but total red meat and poultry production is expected to be down 1.6 per cent.

The pork cutout was lower again this week. USDA's Thursday afternoon calculated cutout value was $90.80/cwt, down $2.73 from the previous Thursday. Loins, butts, hams and bellies were all lower.

Hog prices also dropped this week. The national average negotiated carcass price for direct delivered hogs on the morning report today was $81.99/cwt, down $4.07 from last Friday. The Friday morning price report for the western corn belt was $81.84/cwt and for Iowa-Minnesota was $81.83/cwt. Eastern corn belt hogs averaged $82.64 this morning. Friday's top live hog price at Peoria was $57/cwt. Zumbrota's top was $60/cwt. The top for interior Missouri live hogs was $60.75/cwt, down $1.50 from the previous Friday.

Hog slaughter totaled 2.293 million head this week, down 2.3 per cent from the week before and down 0.9 per cent compared to the same week last year.

Barrow and gilt carcass weights for the week ending 29 October averaged 204 pounds, up 1 pound from the week before and down one pound from a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 274.7 pounds, up 1.2 pounds from the week before but down 1.2 pounds compared to last year.

Friday's close for the December lean hog futures contract, $86.45/cwt, was down 40 cents from last Friday. The February lean hog futures contract settled at $87.75/cwt, down $2.35 from the previous Friday. April lost $2.10 this week to settle at $91.05/cwt.

The seasonal trend is for lower hog prices until early December.