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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 #225 on: September 05, 2009, 07:19:33 AM »

Major USDA Purchase Boosts Pork Producers
US - Embattled pork producers who have seen a stream of losses for two years learned Thursday that the US Department of Agriculture would buy $30 million worth of pork immediately.



"Every little bit helps, and we appreciate it," said Howard Hill, president of Iowa Select Farms, which finishes about 3 million hogs in confinements in Iowa. "But this by itself won't bring us back to profitability. It's been a bloodbath out there."

Pork producers thought they would have to wait until after 1 October, the beginning of the federal fiscal year, for another federal purchase of pork. Agriculture Secretary Tom Vilsack had said last month that no money was available this fiscal year.

"Iowa's hog farmers and their families have struggled as the price of pork has fallen steadily the past two years," said US Rep. Leonard Boswell, a member of the House Agriculture Committee and chairman of the general farm commodities and risk management subcommittee. "I applaud the USDA's planned pork purchases as one more step to getting Iowa's pork producers back on their feet."

Don Butler, National Pork Producers Council president, said, "The action by USDA to buy additional pork will benefit America's pork producers, the US economy and the people who benefit from government food programs. NPPC is extremely grateful to Secretary Vilsack for recognizing the plight of our producers and for taking action to help them."

The USDA will buy the pork for food and nutrition initiatives, such as school breakfast and lunch programs. More money could be available during the next fiscal year.

The purchase falls short of the $50 million that the National Pork Producers Council, along with Iowa Governor Chet Culver and eight other governors, requested last month.

"I applaud and thank Secretary Vilsack and President Obama for responding to the challenges farmers are facing," Governor Culver said. "Today's decision by USDA is a great step forward in providing much-needed help to pork producers in Iowa and across the nation."

The USDA already had spent $62 million on pork in the last year to try to shore up hog markets, reports DesMoinesRegister.com.

Hog prices have fallen from almost $1 per pound a year ago on futures markets to under 50 cents per pound because of oversupply, loss of some exports in the world economic downturn, and the slump in demand after the H1N1 flu virus scare arose in late April. Fresh publicity about what has commonly been called swine flu, accompanying the opening of schools and the need to protect students, further stoked market fears.

Nonetheless, pork prices rose by 1 cent per pound to 50 cents on the October contract at the Chicago Mercantile Exchange Thursday. Longer-term contracts for delivery next spring and summer show prices at 68 cents per pound.

Iowa is the nation's largest hog producer, with an inventory of 19 million animals. The state accounts for about 23 per cent of US pork production, and hog sales put $4 billion to $5 billion into Iowa's economy annually.

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« Reply #226 on: September 05, 2009, 07:35:40 AM »

US Vets Respond to Report into Intensive Production
US - The American Veterinary Medical Association's CEO, Dr Ron DeHaven talks about the Pew Commission's report and the AVMA's response, calling the report 'flawed and unscientific'.



In the spring of 2008, the Pew Commission on Industrial Farm Production issued the report Putting Meat on the Table: Industrial Farm Animal Production in America. Considering the importance of the US food system and the ramifications of minor or major proposed modifications, the American Veterinary Medical Association (AVMA) believes it is crucial to closely and carefully examine the Commission's research and methodology and the implications of the report.

The AVMA's analysis of the Pew Commission's report found several areas of concern, beginning with the technical assemblage of academics to research and review the report. The Pew Commission purports to have utilised a process that melds the thoughts of top academics and diverse stakeholders into its grandiose examination of food animal production. However, AVMA says the Pew Commission's process for gaining technical expertise in the technical reports was biased and did not incorporate the findings and suggestions of a significant number of participating academicians. AVMA cautions readers that we found disparities within the report, potentially due to the lack of incorporation of differing interpretations and conclusions offered by subject matter experts.

In terms of the report's meat and bones, the AVMA identified the points addressing antimicrobial resistance, the environment and animal welfare as the most pertinent to veterinary medicine. While it believes there is value in some of the recommendations offered by the Pew Commission, AVMA asserts that many of the Commission's sub-points have significant shortfalls and lack in comprehensive idea development or in how the Commission would execute a new plan or program.

Both in substance and in approach, therefore, AVMA says the Pew report contains significant flaws and major dalliances from both science and reality. These mis-steps lead to dangerous and under-informed recommendations about the nature of the food system – and shocking recommendations for interventions that are scarcely commensurate with risk. The report is, in many ways, a prolonged narrative designed to romanticise the small, independent farmer, while vilifying larger operations, based simply upon their size.

The suggestions presented in the following analysis of the Pew Commission's report offer thoughtful insight into what the AVMA asserts are critical research and programmatic needs as next steps in promoting the optimal health and welfare of our nation's animals and people. AVMA re-states its belief that it is imperative to base decisions on evidence and research that is grounded in the basic principles of scientific inquiry. By disregarding these elementary guidelines of thought, the Pew Commission's report is based on what is possible, rather than what is probable. The following analysis cautions against the propagation of these untruths, which could easily scare the American public and, ultimately, compromise the safety of our nation's food supply.


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« Reply #227 on: September 06, 2009, 07:46:20 AM »

Weekly Review: Opportunity Offered by Futures Market
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

The average loss for all independent producers of hogs for the period of October 2007 through July 2009 has been $16.98 per hog. This is a lower value than we had been using because of a misunderstanding of the price used by John Lawrence who produces the best data available as to profits or losses for producing hogs.

We have no information as to the losses of packers who slaughtered their own hogs. Assuming that packers used the futures market at the rate of independent producers, the losses for the total industry for October 2007 through July 2009 would amount to 3.592 billion dollars, down from 4.565 billion calculated earlier.

The losses in 1998 and 1999 amounted to $4.454 billion dollars. However, we are not through losing money for the current period with a high probability of losses for another 10 or 11 months than included in the October 2007 through July 2009 period. This cycle will be the biggest losses for hog production in a cycle in my working experience.

The futures market has offered the opportunity for much lower losses in the October 2007 through July 2009 period with the average loss of $6.10 per head for producers who market by using the other market formula contract used by packers. The price paid by this contract is determined by the futures market.

The total losses have been reduced also by producers using the other purchase agreement contract which is tied to feed price or uses a window -type contract. Thirteen per cent of the hogs were marketed with this contract and 9 per cent of the hogs were marketed using the other market contract.

Barrow and gilt weights in Iowa-Minnesota for last week at 267 pounds were down 0.2 pound from a week earlier but up 6.6 pounds from a year earlier. For the week ending 22 August, barrow and gilt carcass weights were five pounds above a year earlier. This means that the good growing weather and delayed marketings have hogs backed up about 3 days from a year earlier.

Sow slaughter for only the third weak this year was above a year earlier for the week ending 15 August and stayed above for the week ending 22 August. Gilt slaughter for the week ending 22 August was large. Maybe we have started some faster decline in the breeding herd.

After a good move up in pork product cutout last week, the cutout Thursday afternoon at $53.69 per cwt was down $4.88 per cwt from seven days earlier. Hams moved sharply higher for the last ten days of August but could not hold the more than $22 per cwt strength and lost $13.48 per cwt of the gain by Thursday afternoon, 4 September.

Loins at $64.32 per cwt Thursday afternoon were down $1.77 per cwt, Boston butts at $56.45 per cwt were down $5.38 per cwt, hams at $48.17 per cwt were down $4.39 per cwt, and bellies at $62.13 per cwt were up $2.52 per cwt from a week earlier.

Cash live hog prices Friday morning were $1 per cwt higher to $2 per cwt lower compared to seven days earlier. Weighted average negotiated carcass prices Friday morning were $0.52-2.96 per cwt higher compared to a week earlier.

Top live prices Friday morning were: Peoria $25 per cwt, Zumbrota, Minnesota, $31 per cwt and interior Missouri $33.50 per cwt. Weighted average negotiated carcass prices Friday morning by area were: western Cornbelt $47.98 per cwt, eastern Cornbelt $45.09 per cwt, Iowa-Minnesota $49.86 per cwt and nation $47.29 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,256 thousand head, up 10.1 per cent from a year earlier.

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« Reply #228 on: September 12, 2009, 07:43:53 AM »

CME: H1N1 Influenza Not the Same as 'Swine Flu'
US - On Thursday, the US Secretary of Agriculture, Tom Vilsac, made a forceful statement to members of the media that they correctly portray the recent flu outbreak and stop using the misleading "swine flu" label, according to Len Steiner and Steve Meyer.



According to the USDA statement "Swine influenza has been present in the United States for over 80 years, but the 2009 pandemic H1N1 influenza virus now circulating among humans is not the same as "swine flu."

The 2009 pandemic H1N1 influenza currently circulating among humans is a "novel" flu strain, with a genetic makeup that is unique and has not been seen before in humans, birds or pigs.” The statement by the Secretary and then a conference call with various members of the media are welcome developments for the US pork industry.

Markets remain anxious about the outlook for pork sales this fall and renewed coverage of the seasonal flu outbreak side by side with pictures and videos of pigs clearly are damaging, and patently unfair. The statement by Secretary Vilsac was strong and left no doubts where USDA stands on this issue.

Unfortunately, most of the mainstream media does not go to USDA with regard to health and disease matters. Both the CDC and FDA websites continue to use the moniker “swine flu” when referring to the current influenza outbreak. When USDA was asked why other agencies continue to refer to the flu outbreak as "swine flu", the response is that they want the information to show up in search engine results when people look up the term "swine flu".

Will the USDA statement cause people to stop using the "swine flu" label? Not really but that is not the point, the point is to continue to bring up that the label has nothing to do with pigs and pork and hope that over time consumers get the message.

While the flu issue remains a short term factor for US pork demand, US beef demand has been negatively impacted this year not just by slow sales at foodservice but also weaker US beef exports. The most disappointing has been the Korean market, which was the focus of much debate last year.

Sales to Korea rose sharply in Q3 of last year as beef trade resumed. Since then, however, US beef exports to Korea have slowed down, negatively impacting overall beef exports. Weekly shipments of beef muscle cuts to Korea in August were on average 725 MT per week, compared to an average of 3031 MT last year, a 76 per cent decline. Part of the reason for the slower sales is that last year we saw a big rush of orders as Korean buyers were looking to fill the pipeline. Also, the currency has only recently begun to recover. As the bottom chart below shows, for much of this year the Korean won was much stronger vs. the Australian currency (the top supplier of imported beef). A weaker US dollar should be helpful but we have still some ways to go as the Won still is down some 15 per cent since 1 July 2008 vs. the US dollar.

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« Reply #229 on: September 13, 2009, 06:52:33 AM »

Weekly Review: Feeder Pig Prices Up
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Feeder pig prices this week at United Tel-o-auction were $4-6 per cwt higher than two weeks earlier. All weighed between 50-60 pounds and sold from $34-43 per cwt.

Nationally feeder pigs last week were $1-2 per head higher than a week earlier. The average price for 50-54 per cent lean, 10-pound pigs was $20.62 per head. The average price for 40-pound pigs, 50-54 per cent lean was $13.98 per head. The formula price for 10-pound pigs was $31.66 per head, and the formula price for 40-pound pigs was $39.06 per head. The spot market price for 10-pound pigs was $10.12 per head, and the spot price for 40-pound pigs was $14.22 per head. There were big time losses for pig producers selling on the spot market.

The weight of barrows and gilts in Iowa-Minnesota for the week ending September 5 at 267.4 pounds per head was up 0.4 pound from a week earlier and up eight pounds per head from a year earlier. The average weight of barrow and gilt carcasses under Federal Inspection for the week ending 29 August at 197 pounds per head was up five pounds per head from 12 months earlier.

Sow slaughter for the week ending 29 August was a little below a year earlier in actual numbers but when adjusted for the shrinkage in the sow herd it was 2.5 per cent above a year earlier. This is the third consecutive week with sow slaughter above a year earlier. Gilt and sow slaughter for the last few weeks suggest producers may have sped up the reduction in herd size.

Pork cutout this Thursday afternoon at $55.07 per cwt of carcass was up $1.38 per cwt from a week earlier. Loins at $72.96 per cwt were up $8.64 per cwt, Boston butts at $58.24 per cwt were up $1.79 per cwt, hams at $41.93 per cwt were down $6.24 per cwt and bellies at $66.08 were up $3.95 per cwt from seven days earlier.

The corn and bean crop continues to progress in good condition. This week's corn condition was rated as 69 per cent good to excellent, up eight points from last year. Soybeans rated 68 per cent good to excellent, up 11 points from last year. We will have the September estimate of corn and bean production in 2009 next week.

Live hog prices Friday morning were $0.75-3.00 higher compared to a week earlier. Weighted average negotiated carcass prices Friday morning were $0.16 lower to 1.74 per cwt higher compared to seven days earlier.

The top live prices Friday morning were: Peoria $28 per cwt, Zumbrota, Minnesota, $32 per cwt and interior Missouri $34.25 per cwt. The weighted average negotiated carcass prices Friday morning by area were: western Cornbelt $49.76 per cwt, eastern Cornbelt $46.85 per cwt, Iowa-Minnesota $49.70 per cwt and nation $47.73 per cwt.

Slaughter this week under Federal Inspection at 2050 thousand head was down substantially because Labor Day was a different week this year than in 2008.




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« Reply #230 on: September 15, 2009, 08:11:14 AM »

July Pace Remains Sluggish for US Pork
US - January through July exports of US pork and beef are lagging behind last year’s pace amid a difficult global economic climate and lingering effects from the H1N1 influenza outbreak.

 

The most recent statistics released by USDA and compiled by the US Meat Export Federation (USMEF) show pork exports of 1.08 million metric tons (2.38 billion pounds) valued at $2.53 billion. While these totals are a respective 10 per cent and 9 per cent below last year’s record-shattering pace, they are still 53 per cent higher in volume and 48 per cent higher in value than in January-July 2007.

Mexico, Russia demand showing recovery, but exports hurt by China’s ban
Mexico has been a tremendous bright spot for US pork throughout 2009, but the surge in exports to Mexico suffered a setback recently during the H1N1 influenza outbreak. Through April, pork exports to Mexico were running 71 per cent above last year’s pace in terms of volume and were 62 per cent higher in value. The results for May, June and July have been roughly equal to 2008, however, leaving Mexico with totals of 287,687 metric tons (634.2 million pounds) valued at $426.5 million – which is 42 per cent higher than the 2008 volume and 23 per cent higher in value.

"Pork exports to Mexico are still having a terrific year," said USMEF Chairman Jon Caspers, a pork producer from Swaledale, Iowa. "But there’s no question that H1N1 caused a lot of economic disruption in Mexico and created a backlog in pork inventories. Hopefully we’re past the worst of that situation, and can move back toward the level of activity we saw earlier this year."

Japan remains the pacesetter for US pork in terms of value, reaching 259,451 metric tons (572 million pounds) valued at $944.1 million through July. While these results are only slightly above the 2008 volume, they exceed last year’s value by 11 per cent. Other markets showing significant improvement include Australia (up 22 per cent in volume and 21 per cent in value) and the Caribbean (up 42 per cent and 35 per cent, respectively).

Pork exports to China had already slowed significantly prior to the market closing in early May due to H1N1 influenza. Mr Caspers notes, however, that being essentially shut out of this market for the past four months is a setback the pork industry simply cannot afford.

"Our expectations for China were modest for this year, because we knew they would have much higher domestic production," he said. "But being shut off completely from the world’s largest pork-consuming market is a very serious blow for the industry."

There is no relationship between pork consumption and H1N1 influenza, and consumer attitudes toward pork appear to have recovered quickly despite the media’s persistent mislabeling of the virus as “swine flu." But Mr Caspers, who was in China last week for the World Pork Conference, said market research in China reveals that more consumer education is needed on this issue (see USMEF’s 3 September news release for more details).

"Across the entire globe, the pork industry cannot afford to have China’s consumers turning away from our product," he said. "Whether you are a pork producer in Iowa, Indiana, China or Chile, this is a very serious problem. Hopefully we can all work together to provide better information to China’s consumers and turn this situation around."

Pork exports to Russia are also down about 30 per cent compared to last year, due in part to state-specific, H1N1-related market closures in May and June. Exports have also slowed due to the continued delisting of many US pork plants by Russia. The good news, however, is that July pork exports to Russia – 19,625 metric tons (43.3 million pounds) valued at $43.1 million - nearly doubled in volume and more than doubled in value over the June 2009 totals.

US pork exports are also holding up fairly well in terms of per centage of total production. Pork and variety meat exports accounted for 22.8 per cent of January-July production, compared to 24.7 per cent during the same period last year. Muscle cut exports accounted for 18.3 per cent of production, compared to 21.5 per cent in January-July 2008.


 

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« Reply #231 on: September 16, 2009, 08:53:12 AM »

Market Preview: Exports Can’t Compete with 2008
US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.



July pork export data, released on Thursday by USDA’s Foreign Agricultural Service (product weight and value) and on Friday by USDA’s Economic Research Service (carcass weight equivalent), indicate that US pork exports for 2009 still suffer from the "older, smarter brother" syndrome with respect to 2008: They just are never going to measure up!

To illustrate that point, consider total pork exports for July in carcass weight equivalent – 355.6236 million pounds. That number is 13.2 per cent below last July’s 409.5 million pounds, but is 61.6 per cent higher than July 2007 exports. And the July 2007 total of 220 million pounds was just 5 million pounds below the largest July total in history. And I repeat: This year blew July 2007 away by over 60 per cent. It is only the comparison with the remarkable totals of 2008 that look bad. It’s hard to measure up to a smarter, older brother.

Figure 1 demonstrates the exceptional performance of US pork exports relative to any year other than 2008. As can be seen, the only months so far in 2009 that have been below the 2004-07 trend for pork exports are May and June. July was above that trend line by over 30 million pounds and was very near the polynomial trend line that best fits all monthly data since 1990. If not for the export spike of April –July 2008, we would be dancing in the streets over July exports!


My point is this: In spite of H1N1, a stronger dollar and a worldwide recession, US pork exports have performed well. That is a demonstration of the advantageous competitive position of the US pork industry. Though our business must get smaller to realize prices that exceed today’s new production cost realities, we will still be competitive in world pork markets and there will still be a viable US pork industry!

US exports in product weight terms, amounted to 267 million pounds in July, 12.5 per cent lower than last year. The value of July shipments was down only 17.6 per cent, reflecting lower US wholesale prices. Year-to-date, US pork exports are down 16.9 per cent in product weight and 12.9 per cent in value. Those numbers are keeping us on a pace to match the 2004-2007 trend levels but will be roughly 15 per cent below 2008 levels at year’s end.

Figure 2 shows year-to-date pork export quantities for the world and for key US pork markets. Shipments to Japan are down slightly (2.6 per cent) through July. In spite of a difficult May and June, exports to Mexico are still 33 per cent larger than in 2008 and on pace to set another record this year. Most other major markets are down for the year with China-Hong Kong, of course, showing the larges (69.9 per cent) decline.


Figure 3 shows year-to-date pork variety meat exports which have grown as consumers have looked for greater value. Total variety meat shipments are up 21.3 per cent in volume and 17.9 per cent in value through July. Mexico, our largest market for pork variety meats, has shown remarkable growth at +21.3 per cent in volume and 47.3 per cent in value. Even shipments to China-Hong Kong have grown this year and shipments of variety meats to Japan are over 80 per cent larger, making that country our third-largest variety meat market in 2009.


Russia and Korea, which have historically been our second- and third-largest variety meat markets are, no surprise, lagging the pace of 2008 sharply. Shipments to those two countries are down 48.1 and 48.9 per cent, respectively, while the values of those shipments are down 46 and 43.5 per cent, respectively.

Note that both the week-to-week and week-vs.-last year comparisons in this week’s Production and Price Summaries are odd due to Labor Day, which fell one week later this year. Federally inspected slaughter last week was almost identical to Labor Day week of 2008 but slaughter weights continue to drive pork production higher.

The industry continues to ask consumers to buy more pork than was expected, so lower prices should not come as a shock. The size of that decline, though, is still a surprise and must be attributed to softer demand, both here and abroad. Remember, demand is quantity and price. Consumers in the United States and other countries are taking the quantity but they are only doing so at lower prices.

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« Reply #232 on: September 16, 2009, 08:55:01 AM »

CME: An Awful Year for Pork Exports
US - US pork exports increased sharply in July from month-earlier levels as trade with Mexico continued to rebound from the damage inflicted by H1N1 influenza back in April and May, write Steve Meyer and Len Steiner.

Pork exports were still far below the levels of July 2008 but, as can be seen at right, were closer than at any time since March. Beef exports were slightly lower than in June and sharply below year-ago levels. Shipments to Japan were higher than in July 2008 but trade with Mexico and Canada were lower and shipments to Russia were down nearly 75 per cent.

Pork exports, of course, have looked awful this year because they have been compared to last year’s phenomenal summer performance. Recall that pork exports for all of 2008 were 49 per cent higher than the year before, establishing the 15th straight record for the industry and accounting for 20 per cent of total carcass-weight pork production. There was little hope that this year’s exports would reach those levels and they certainly have not. But July’s totals were impressive given the circumstances — and were 62 per cent larger than July 2007 export totals. We have argued all along that a reasonable goal for this year is to stay at or above the trend based on 2004-2007 data.


The following shows that July shipments were well above that trend and have put YTD 2009 exports 5.2 per cent above the trend as well. No one is happy with exports that are 19 per cent lower than last year but a bit of realism tells us that is not a terrible result when the longer term is considered.


Through July, the star market for US pork exports is — MEXICO at +35 per cent for the year. While recent months have not been as good as January-March, the rebound has been rapid and relatively large considering the hit that Mexican pork demand took in late April. Japan is virtually even with year-ago shipments at the end of March while China/Hong Kong is down 72 per cent and Russia is down 30 per cent for the year.

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« Reply #233 on: September 17, 2009, 08:53:13 AM »

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



LEAN HOGS on the CME slipped on Monday. OCT’09LH futures finished down $1.525/cwt at $50.950/cwt. The DEC’09LH contract closed down $0.825/cwt at $49.000/cwt. Futures backed off gains over the Chinese/US trade flap over chickens and tires. The US claims China is dumping tires in the US market and China “found” where the US is dumping chickens in the Chinese market. Maybe we ought to trade US chickens instead of dollar bills for Chinese tires. We might even get a little better deal that way. USDA on Friday reported July pork exports at 355.6 mi lb, 55.8 mi lbs higher than June but 53.6 mi lbs behinds last year’s pace. Exports are on a roller coaster due to the H1N1 virus. The virus was found in Mexico and could limit exports even further. Lower corn prices were supportive while fund rolling long October positions into December futures late in trading pressured the October contract. The latest CME lean hog index was placed at $51.69; up $0.22. According to HedgersEdge.com the average pork plant margin was raised $2.40/head. This was based on the average buy of $36.98/cwt vs. the average breakeven price of $37.89/cwt. Knowing that cooler weather is coming and hog gains will be accelerated it might be a good idea to watch market hogs carefully and market when ready.

CORN futures on the Chicago Board of Trade (CBOT) were down on Monday. The SEPT’09 contract expired on Monday closing at $3.050/bu; off 9.5¢/bu. DEC’09 corn futures finished at $3.176/bu; down 2.0¢/bu. Good crop weather, a firmer US dollar, and a lower DOW put the lid on prices. Early yield reports are reported near 200 bu/acre. Forecasts for early frost in some places were supportive. Late Monday USDA reported 69 per cent of the US corn crop in good-to-excellent condition. The market expected this. Exports were healthy as USDA placed corn-inspected-for-export at 40.517 mi bu vs. expectations for between 38-40 mi bu. It was reported that Mexico bought 419,000 tonnes (16.495 mi bu) of US corn for delivery in ‘09/’10. However, floor sources said the market was getting jittery over the trade dispute between the US and China. Cash corn in the US Midwest were steady to firmer while opening cash bids for corn in the US Mid-Atlantic states ranged 2.0¢/bu – 6.0¢/bu lower on Monday. Funds sold over 2,300 contracts. Hopefully 70 per cent of the ’09 crop has been priced.

SOYBEAN futures on the Chicago Board of Trade (CBOT) were mixed on Monday. The SEPT’09 contract closed off 59.5¢/bu at $9.250/bu. This contract lost $1.75/bu in two weeks. It expired today as many traders got out of the contract early in the session. The NOV’09 contract closed at $9.090/bu; up 6.0¢/bu. Late short-covering in the November contract was supportive. Positioning, good weather prospects, a firmer US dollar, and the trade tension between the US and China weighed on prices. Some places are reporting low threats for frost next week. This was price-supportive as the US soybean crop is behind normal in development due to late planting. The trade dispute between China and the US worried the market. The dispute is over chicken and automobile products. China has said they will restrict these imports after Washington put punitive sanctions on Chinese tire imports to the US last week. The soybean market is worried trade tension could spread to other markets. China is the world largest importer of US soybeans and this spat could significantly affect soybean exports. USDA placed soybeans-inspected-for-export at 10.247 mi bu vs. expectations for between 10-12 mi bu. China bought 6.04 mi bu of those inspected. So far so good. Cash soybeans in the US Midwest were steady to weak on Monday as early harvested soybeans began coming in, in places. Cash beans in the US Mid-Atlantic states were 16.0¢/bu – 20.0¢/bu higher for old crop beans and ranged 9.0¢/bu – 12.0¢/bu higher for new crop. Funds bought over 1,000 lots of soybean futures. Up to 70-80 per cent of the new crop should have been priced by now. If not, it might be a good idea to get priced. Don’t wait on $10.00 beans.

WHEAT futures in Chicago (CBOT) were down on Monday. SEPT’09 wheat futures finished down 10.75¢/bu at $4.310/bu coming of Friday’s technical bounce. The JULY’10 wheat contract closed at $4.970/bu; off 13.75¢/bu. A firm US dollar and the global glut of wheat stocks really are pressuring the wheat market. Hope you’re not waiting on $5.00 wheat to come back any time soon. Last week’s wheat inspected-for-export was over expectations. USDA placed that number at 21.505 mi bu vs. expectations for between 13-16 mi bu. Tragic weather events supported US wheat exports but that is expected to be of short duration as other countries bid away business with cheap wheat. Large speculators were net bears by 19,688 lots while funds sold more than 3,000 lots. Contracts have set fresh lows in the past few days. The Commodity Futures Trading Commission chairman, Gary Gensler told reporters on Monday that the CFTC will most likely take more steps to fix the convergence problem with US wheat and futures. The September contract was the second CBOT wheat contract to expire under new contract specs. Those included more delivery points, increased grain storage rates, and stricter vomitoxin rules. Even at that the premium to futures narrowed to roughly 70.0¢/bu compared to 83.0¢/bu for July ’10 futures and $2.00 a year ago. Millers, merchandisers, and exporters have complained for two years that the lack of convergence between CBOT wheat contracts and cash prices have signaled a “broken market” making hedging as a risk management tool obsolete for bank collateral. It would be a very good idea to get to 50 per cent sold in the 2010 crop.

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« Reply #234 on: September 19, 2009, 07:39:43 AM »

CME: Retail Pork Prices in August Lower
US - USDA’s Economic Research Service released its monthly estimates of average retail prices of meat and poultry in August on Wednesday, reports Steve Meyer and Len Steiner.



Prices of beef, chicken and turkey increase in August with broiler prices showing the largest gain at just 1.1 per cent. Turkey prices grew by slightly less during August while the all-fresh beef price which includes both Choice and Select grade product increased by 0.5 per cent from July. Pork prices declined by 0.8 per cent during the month.

The average retail prices for both beef and pork in August were lower than one year ago and that drop was significant (6.9 per cent) for beef. The retail pork price was 2.8 per cent lower according to USDA.

Turkey prices in August were 13.4 per cent higher than in August 2008 - a result that really is not a surprise given the size of turkey slaughter reductions this year. Total turkey slaughter is down 5.4 per cent YTD as of 29 August and several weeks this summer have seen slaughter totals that are 8-9 per cent lower than in the corresponding week last year.

Broiler prices showed a healthy year-on-year gain in August as well with whole broilers up 5.2 per cent and the composite broiler price gaining 1.6 per cent over last year. The broiler sector’s cutbacks have been consistent and, by broiler standards, very large. Broiler slaughter has been smaller in every non-holiday week of 2009 and YTD slaughter is 4.4 per cent lower than last year. YTD slaughter was lower than year-ago levels in early September in only one other year (2003) in our data set that runs back to 1988.


At what time of year is pork demand the strongest? We would bet that many would say summertime. Grilling, ribs, BLT sandwiches, hot dogs — all of those must push pork demand to its highest level of the year, right? Besides it shows up in prices which are, in "normal" years, at their peak in June and July. So it must be summer.

But the data say that that logic is wrong. The chart below shows monthly real per capita expenditures for pork at the retail level. This metric is computed using the exact same data as the demand indexes computed by the University of Missouri for all species and by Kansas State University for beef. The only difference is that those indexes use an assumed elasticity y where this metric implicitly uses the elasticity in the marketplace by using contemporaneous prices and quantities and, thus, whatever negative relationship exists between them at any point in time. It is clear that pork demand is actually strongest in the fall when pork disappearance is high and prices do not fall significantly. Summer months are just the opposite — per capita disappearance/consumption is low and prices do not rise significantly. One obvious possibility is that the ERS retail price series is too stable — and that is born out to some degree by the top graph. One would expect more variation given seasonal and cyclical swings in production.

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« Reply #235 on: September 21, 2009, 09:49:43 AM »

Weekly Review: Increase in 2009 Corn Yield
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
USDA increased the 2009 corn yield to 161.9 bushels per acre for September; the August estimate was 159.5 bushels per acre. If the September estimate holds, it will be the highest yield of record.

The higher yield pushed the 2009 estimated corn crop to 12.954 billion bushels, up from 12.761 billion bushels for the August estimate.

In September, USDA reduced the estimated corn price per bushel from $3.50 per bushel midpoint estimate in August to 3.35 per bushel midpoint estimate for the 2009-10 marketing year.

The September estimate of the 2009 soybean crop has the yield at 42.3 bushels per acre, up from 41.7 bushels per acre in August. This increased yield pushed the estimated bean crop for 2009 up to 3.245 billion bushels. The August estimate was 3.199 billion bushels. The 2009 soybean crop is expected to be a record-high crop.

The estimated price for soybean meal for the 2009-10 marketing year was lowered to $280 per ton midpoint estimate from $290 per ton in August.

These lower expected prices would reduce the cost of producing 100 pounds live weight of pork by about $0.50 per cwt.

Pork exports for July were down 13.1 per cent from last year; much better than in June when exports were down 35.7 per cent from 2008. The July pork exports were up 18.6 per cent from June.

Pork exports for January-July were down 19.3 per cent from 12 months earlier. Our exports to Japan for January-July were up 1.0, to Mexico up 34.5 per cent, to Canada down 7.3 per cent, to South Korea down 14.9 per cent, to Russia down 30.4 per cent, to Australia up 21.9 per cent to Taiwan up 7.3 per cent, to China and Hong Kong down 71.9 per cent and to other countries down 24 per cent.

Pork imports for January-July were down 3.6 per cent from 12 months earlier. Our imports from Canada were up 4.3 per cent, from Denmark down 7.7 per cent, from Mexico down 66.1 per cent, from Poland down 13.7 per cent, from Italy down 16.3 per cent and from other countries down 34.8 per cent from a year earlier.

Our net pork exports as a per cent of production for January-July of 2008 was 17.91 per cent. This declined to 14.23 per cent for January-July of 2009.

Our live hog imports for January-July of 2009 from Canada were down 32 per cent from the same period of 2008.

The futures market has rallied substantially recently. This market suggests a counter-seasonal price rally is possible and hopefully likely. Retail pork prices were down 0.8 per cent in August from July. There is a chance that retail prices will continue to decline in September.

Live barrow and gilt weights in Iowa-Minnesota at 268.9 pounds were up 1.5 pounds from a week earlier and up seven pounds from 12 months earlier. The bottom line is that there is an ample supply of market-ready hogs.

Gilt and sow slaughter data continues to indicate a modest reduction in the breeding herd. Sow slaughter for the four-week period ending 5 September was up 7.6 per cent from a year earlier and gilt slaughter for this period is above normal.

Pork product cutout this Thursday afternoon at $57.04 per cwt was up $1.97 per cwt from a week earlier.

Feeder pig prices last week nationally were $3-6 per head higher than a week earlier. The average price of 50-54 per cent lean 10-pound pigs was $22.06 per head, formula price pigs at $31.03 per head and negotiated price pigs at $13.16 per head. For 40-pound pigs, the average was $21.40 per head, formula price pigs at $43.81 per head, and negotiated price pigs at $20.62 per head.

Cash live prices Friday morning were $2-2.25 per cwt higher compared to a week earlier. Average negotiated carcass prices were $0.45-1.18 per cwt higher compared to seven days earlier.

The live prices were: Peoria $30.00 per cwt, Zumbrota, Minnesota, $34.00 per cwt and interior Missouri $36.50 per cwt. The weighted average negotiated carcass prices were: western Cornbelt $50.21 per cwt, eastern Cornbelt $47.88 per cwt, Iowa-Minnesota $50.20 per cwt and nation $48.91 per cwt.

Slaughter this week under Federal Inspection was estimated at 2310 thousand head, down 0.7 per cent from a year earlier.




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« Reply #236 on: September 23, 2009, 07:59:25 AM »

CME: Markets Wary of Hog Supply Outlook
US - Livestock futures pulled back on Monday as market participants found few bullish news in the USDA cattle on feed report and the weekly production numbers, write Steve Meyer and Len Steiner.



Markets remain wary of the outlook for hog supplies in Q4 and the weekly hog slaughter data did little to support nearby hog futures. USDA reported that hog slaughter for the week ending 19 September was 2.310 million head, 0.7 per cent lower than a year ago but still some 5.9 per cent higher than the five year average. This was the second largest slaughter week for this particular time of the year and when one accounts for the much heavier hog carcass weights, overall pork output for the week remained at record levels (for this time of year).


Total pork production for the week was 462.9 million pounds, 0.2 per cent higher than a year ago and 7.9 per cent higher than the five year average. USDA will publish the results of its quarterly survey of hog operations on 25 September and before the release we will provide a more detailed view of the market expectations for this report. Clearly key will be the pace of breeding herd liquidation and the impact that it has had on farrowings this summer.

It is important to note that sow slaughter only recently has edged above year ago levels so the liquidation picture remains more muddled that it was earlier in the year. The cold storage report also will be viewed carefully, especially given the expectation for another quarter of big pork supplies. Exports appear to be on the mend but they need to be excellent in order to absorb the seasonally large hog numbers.

Cattle supplies last week were below year ago levels, and this was due to a reduction in the number of all classes of cattle. Cow slaughter was lower for the week as the dairy herd retirement program is coming to an end.

Based on preliminary USDA data, total US cow and bull slaughter last week was 133,000 head, 6.3 per cent lower than a year ago. Steer and heifer slaughter was estimated at 515,000 head, 5.3 per cent lower than last year. Packers continue to limit the number of cattle they process, last week they had two days in which the number of cattle processed was less than 100,000 head. With feedlot supplies edging higher thanks to larger placements, packers could further lower their bids and pressure overall cattle prices in Q4.

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« Reply #237 on: September 24, 2009, 09:34:40 AM »

US Swine Economics Report
US - On 25 September, USDA will release the results of their latest survey of the US swine inventory, writes Ron Plain in his Swine Economics Report.

 
Ron Plain
My estimates are that the breeding herd is 1.8 per cent smaller than a year ago, the market hog inventory is 0.9 per cent smaller, and the total herd is 1.0 per cent smaller than on 1 September 2008.

Slaughter of barrows and gilts was down roughly 1.1 per cent during June-August due in part to a 29 per cent drop in slaughter hogs imports from Canada. Slaughter of US raised hogs was about 1 per cent higher than expected based on the June inventory report.

My estimates of the 1 September market hog inventory by weight groups are: 180 pounds and heavier 99.0 per cent, 120-179 pounds 99.0 per cent, 60-119 pounds 99.2 per cent, and under 60 pounds 99.0 per cent of a year earlier.

In their last inventory report, USDA predicted June-August farrowings would be 3.3 per cent smaller than a year earlier and September–November farrowings would be down 2.2 per cent. I’m estimating summer farrowings actually were down only 2.8 per cent and fall farrowings will be down 2.0 per cent. I’m forecasting winter farrowings to be down 3.0 per cent compared to December-February 2009. Despite a lot of red ink, 2009 sow slaughter has been low. December-February, sow slaughter was 7.4 per cent lower than a year earlier, March-May sow slaughter was down 15.2 per cent, and June-August was down 6.2 per cent compared to 12 months earlier.

I believe that mild weather resulted in pigs per litter being up 2.4 per cent this summer. My estimate is the June-August pig crop was 99.5 per cent of a year earlier. Feeder pig imports during June-August were 21 per cent below last summer’s level, so the light weight inventory should be down more than the pig crop.

My estimate of hogs in the 60-179 weight groups implies that fourth quarter hog slaughter will be 1-2 per cent below year-ago levels, if as expected the inflow of slaughter hogs from Canada continues to be down. I expect live hog prices to average close to $34/cwt ($43/cwt carcass) in the fourth quarter of 2009.

I expect hog slaughter during the first quarter of 2010 to be 1-2 per cent lower than the number slaughtered in January-March 2009. If so, expect first quarter 2010 hog prices to average close to $38/cwt on a live basis and $49/cwt on a carcass basis.




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« Reply #238 on: September 25, 2009, 11:18:51 AM »

CME: Overall Hog Inventories Expected to be Down
US - On Friday, 25 September, USDA will issue its quarterly update of the inventory of hogs and pigs in US operations, write Steve Meyer and Len Steiner in their DLR for 23 September.



The report will provide a gauge not only of current hog supplies but also estimates of hog and pork production in 2010. Based on a survey of analysts conducted by Reuters, the expectation is for overall hog inventories to be down 1.7 per cent from a year ago, with market hogs down by a similar amount and the breeding herd also down 2.7 per cent.

On the latter, there continues to be plenty of disagreement and this is reflected in the wide divergence of opinions. The current average of estimates indicates that the breeding stock as of 1 September is expected to e down by a similar amount as in the June survey (-2.7 per cent).


Those that hold a more bearish view of the market likely will point out that despite much talk, US producers continue to be reluctant to sharply cut back the production base, be this because of large sunk in investments, hopes for a rebound or lower grain prices in July and August. They also point to the fact that a significant number of sows during the recent increase in sow slaughter are Canadian animals rather than US stock. More bullish analysts, on the other hand, note that many producers had little choice but to liquidate, following a prolonged period (20 of 22 months) of losses.

One item that will also likely get much attention is the estimate for the pig crop in the June - August period. That estimate will be a function of both farrowings and pigs per litter. The average of analysts’ estimates indicates that the pig crop will be down 1.8 per cent from the previous year, a much needed reduction but likely smaller than those calling for a significant reduction had hoped for.

As we have noted many times before, the steady gains in productivity have offset much of the decline in sow numbers. Indeed, the pig crop may end up being even larger as pigs per litter in recent quarters have increased by more than 1.4 per cent (the current estimate for June - August). Overall, the estimates do not paint a very bullish picture for pork going forward.

Please refer to page 2 of the link to view a special CME notice regarding the daily price limit for bellies in Q4. The price limit for the upcoming quarter will be determined on the basis of the closing futures price on 30 September.



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« Reply #239 on: September 27, 2009, 08:54:04 AM »

Weekly Review: September Hogs and Pigs Report Bullish
US - Weekly review of the US hog industry, written by Glenn Grimes and Ron Plain.

 
Ron Plain
Cold storage stocks of pork at the end of August were down 4 per cent from the end of July but up 3 per cent from the end of August 2008. The cold storage stocks compared to July are down a little more than normal for 2001-2008. The cold storage stocks at the end of August were 1.2 per cent below the July 31 stocks.

The bad news is that cold storage stocks at the end of August were nearly 22 per cent above the 2001-2008 stocks. These are quite large stocks to be going into the heavy slaughter of fall and will be somewhat negative to prices.

Sow slaughter has increased recently and the last four weeks were up 1.9 per cent from last year after adjusting for herd size. Gilt slaughter for the four weeks ending September 12 was up substantially. This data supports the belief that producers speeded up the decline in the breeding herd starting in mid-August. Therefore, the September breeding herd will not likely show this increase in the rate of decline.

Feeder pig prices nationally have been substantially stronger with a $4-7-per-head gain last week following a good increase the previous week.

The prices nationally showed 10-pound pigs averaging $25.92 per head and 40-pound averages at $28.81 per head. The formula-priced pigs had 10-pound pigs at $33.72 per head and 40-pound pigs at $35.67 per head. Spot-priced pigs at 10 pounds were $19.67 per head and 40-pound pigs were at $27.53 per head.

United Tel-o-auction feeder pig prices this week were $5-7 per cwt above two weeks earlier. All of the United pigs weighed 50-60 pounds and sold from $41-48.50 per cwt.

Live barrow and gilt weights last week in Iowa-Minnesota were 0.7 pound lighter than a week earlier but 5.2 pounds heavier than a year earlier. For the week ending 12 September, barrow and gilt carcass weights were four pounds above 12 months earlier.

Pork cutout this week Thursday afternoon showed the cutout of 100 pounds of carcass at $53.63 per cwt, down $3.41 per cwt from last week. Loins at $69.66 per cwt were down $6.37 per cwt, Boston butts at $52.56 per cwt were down $5.68 per cwt, hams at $42.86 per cwt were down $4.47 per cwt and bellies at $67.83 per cwt were up $1.03 per cwt from seven days earlier.

Live hog prices Friday morning were $0.75 to $2.50 per cwt lower compared to a week earlier. Weighted average negotiated carcass prices were $0.41 to $1.43 per cwt lower compared to seven days earlier. The top live prices Friday morning were: Peoria $29.00 per cwt, Zumbrota, Minnesota, $32.00 per cwt and interior Missouri $35.75 per cwt. The weighted average negotiated carcass prices by area were: western Cornbelt $48.78 per cwt, eastern Cornbelt $47.47 per cwt, Iowa-Minnesota $48.78 per cwt and nation $48.12 per cwt.

Slaughter this week under Federal Inspection was estimated at 2,346 thousand head, no change from a year earlier.

The trade expects the hogs and pigs crop report to show total hog numbers down 1.8 per cent, the breeding herd down 2.6 per cent and the market herd down 1.7 per cent. These numbers are a little friendlier than our estimates.

The September Hogs and Pigs report came in a little more bullish than the trade estimates. The kicker here is the recent Hogs and Pigs reports have been a little more bullish than the trade reports, but slaughter has run above most USDA report estimates.

Our quick estimate is for slaughter in the fourth quarter to be down 1.9 per cent and 51-52 per cent lean live hogs to be $32-35 per cwt. For the first quarter, our estimate is for slaughter to be down 3.7 per cent from last year and 51-52 per cent lean live hogs to be at $35-38 per cwt.

A more detailed report will be on the MU Ag Electronic Bulletin Board by noon, 28 September.

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