Thursday, May 26, 2011
Pork Commentary: Road Trip to Russia
RUSSIA - The last week we spent in Russia we participated in the Livestock and Poultry exhibit VIV Moscow and we also toured some customer farms, writes Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
Our Observations
We thought Christmas had come early after we spoke to hog producers. Santa Claus arrived with Live Hogs $1.38 US live weight a lb. (85 rubles/kilo). Cost of production should be the same as the USA with similar feed costs. Who wouldn’t like making over $100 US per head.


Russia, a country of 145 million, is currently importing over 30 per cent of its domestic pork needs. Tariffs and Import Quotas lend strong support to hog prices.


We understand that approximately 50 per cent of Russia’s hog production is done by backyard farmers. These hogs are mostly consumed by the people producing them and few go into regulated slaughter plants. With market hogs around $300 a piece, its strong incentive for this type of production in a country where a worker makes less than $1000 per month.


One of the major issues of unregulated backyard swine production is the ongoing outbreaks of Africa Swine fever in Russia. The economic consequences of this disease are a major fear of commercial producers. Russia government officials are working diligently to stop Africa Swine Fever but with thousands of backyard open swine locations it’s nearly an impossible job.


VIV Moscow is a very large exhibition. Companies in the livestock and poultry industry attended from all over the world. There were dozens of companies from China in the equipment and feed ingredient business. You can see why China is successful exporting, they are aggressive. There were a handful of companies from North America. Sad in many ways to see so few. Russia is an ideal North American market. Similar climate and similar scale of projects. Genesus was the only North American Swine Genetic Company that participated.


The high profits in the swine industry and low interest Russia government loans are encouraging new sow barn construction. We spoke to several groups with plans for barn construction. Government officials we spoke to expect 800,000 new sow spaces built in the next several years. These new facilities are for expansion and the expected evolution from backyard production.


Last year Russia had a severe drought. In some areas yields were 35 per cent of norm. We saw hundreds of thousands of hectares (acres) of cropland in the Kuban region, 1,000 miles south of Moscow) an area many consider the breadbasket of Russia (between Caspian and Black sea). What we saw was excellent crops, wheat, corn, sunflower, and barley. If weather holds Russia’s crop production is back to normal.


We met with a high ranking official. He told us that there is over 40 million acres (20 million hectares) of potential cropland in Russia is not being used. With world grain prices as they are more and more of this land will come into production. Many tracts of land are being leased for forty nine years at $7 an acre. Once this land comes back into production it will be probably keep producing at the low land usage costs. Went by a Claas combine depot, must have been 150 combines there. Great place for John Deere, Case, Agco, etc. Russia needs equipment to crop farms.


Had a good trip from a personal and company perspective. Signed contracts for 12 planeloads of Genesus breeding stock. The demand for updated technology and management in Russia is paramount. Swine Genetics are a component needed to drive to rapid modernization.
Summary
Russia producers should be making $100 plus per head. There will be new sow barn construction. The crops we saw were excellent, with the high global prices encouraging maximum yields and more cropland coming into production.


Author: Jim Long, President & CEO, Genesus Genetics 

Friday, May 27, 2011
CME Daily Livestock Report
US - Reuters reported late Thursday (26 May) that the World Trade Organization has ruled against the US country-of-origin labelling (COOL) law that applies to, among other things, meat and chicken sold in retail stores, report Steve Meyer and Len Steiner.


The decision comes in response to a challenge filed in 2009 by Canada and Mexico that claimed that mandatory country-of-origin labeling (known as MCOOL) discriminates against foreign suppliers. The ruling was called “confidential” in the Reuters story which went on to state that a complete ruling would be issued later this year. The ruling may open the door to many more challenges of origin labeling laws around the world.

This ruling in no way means that MCOOL is dead. MCOOL is still the law of the land in the US and the WTO ruling does not change that law. It does, however, open the door for the complainants, Canada and Mexico, to eventually put punitive tariffs on US imports much the same way Mexico applied tariffs to a number of products coming from the US when a NAFTA panel found in its favor over US restrictions on Mexican trucks operating inside the US

MCOOL was originally passed as part of the 2002 Farm Bill. It was something of a consolation prize for a few Midwestern Senators who failed in their efforts to include a ban on packer ownership of livestock more than 14 days before slaughter in that piece of legislation. MCOOL was originally pushed by upper-Midwest cattle and beef groups who were upset about the number of cattle being imported from Canada and the practice of bringing Canadian beef carcasses into US processing plants and getting them graded with USDA quality and yield grades. MCOOL was generally supported by farm “activist” groups and those representing small farms. R-CALF USA was a leading proponent of MCOOL from the beginning. MCOOL was opposed by the National Cattleman’s Beef Association (NCBA) and the National Pork Producers Council (NPPC) as well as several other mainstream farm groups and virtually all packer and processor groups. Therein lies a bit of irony regarding potential punitive tariffs — US beef and pork are likely targets even though the primary groups representing US beef and pork production vehemently opposed MCOOL at virtually every turn.

After several delays and several changes, additions and clarifications in the 2008 Farm Bill, MCOOL was officially implemented on September 30, 2008. Imports of pigs from Canada have fallen from about 700,000 per month at that time to 450,000 to 500,000 per month now. Cattle imports from Canada have declined from around 150,000 per month in early 2008 to about 70,000 per month this year. The stronger Canadian dollar is also a key factor in these declines. Cattle imports from Mexico vary greatly from month to month but have shown no down-trend since MCOOL’s implementation. A chart of the monthly data appears on page 2.

 

Goats are one of those livestock that likes to eat different varities of grasses and forage feeds.Napier grass and para grass are 2 of them.Alaminos Goat Farm is having very good results with indigo.We like malunggay and mulberry,stylo,centro,ipil-ipil,rensonii,madre de cacao,flemingia,the list goes on.
some plants will be native to ypour area but some wil;l have to be introduced.Some forages will be used for their protein content while other are for roughage.In short,the different species you have available to your farem,the better for your goats.

USDA: World Agricultural Supply and Demand Estimates
According to the US Department of Agriculture, this report presents USDA’s initial assessment of US and world crop supply and demand prospects and US prices for the 2011/12 season. Projections reflect economic analysis, normal weather, trends, and judgment. Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative.


WHEAT
The 2011/12 outlook for US wheat is for reduced supplies with lower carryin and production than in 2010/11. Beginning stocks for 2011/12 are down 14 per cent from 2010/11, but remain the second highest in a decade. All-wheat production is projected at 2,043 million bushels, down 7 per cent from 2010/11. The survey-based forecast of winter wheat production is down 4 per cent, as lower expected harvested area and yields in Colorado, Kansas, Oklahoma, and Texas sharply reduce Hard Red Winter (HRW) wheat production. Partly offsetting is higher production of Soft Red Winter (SRW) wheat with a rebound in area and higher forecast yields. Spring wheat production is expected lower despite higher expected planted area for other spring wheat. A return to trend yields from record levels of the previous 2 years is expected to reduce durum and other spring wheat production. US wheat supplies for 2011/12 are projected at 2,992 million bushels, down 9 per cent from 2010/11.

Total US wheat use for 2011/12 is projected down 7 per cent as lower projected exports more than offset higher expected domestic use. Food use is projected at 945 million bushels, up 15 million from 2010/11 as flour extraction rates are expected to decline modestly from their historical highs during the past 3 years and consumption grows slightly driven by slowly rising population. Feed and residual use is projected at 220 million bushels, up 50 million from the 2010/11 projection as higher corn prices and a rebound in SRW production encourage more summer quarter wheat feeding.

US exports are projected at 1,050 million bushels, down 225 million from the 2010/11 projection. Export prospects are sharply diminished with reduced HRW production and increasing competition as Black Sea production and exports are projected to rebound. US ending stocks are expected to continue their decline from the recent high in 2009/10. At a projected 702 million bushels, 2011/12 ending stocks are expected down 137 million from 2010/11 and 274 million below 2009/10. The season-average farm price for all wheat is projected at a record $6.80 to $8.20 per bushel, compared with $5.65 for 2010/11.

Global wheat supplies for 2011/12 are projected 1 per cent higher as a projected 25.9-million-ton increase in foreign production more than offsets lower beginning stocks and the drop in US production. At the projected 669.6 million tons, global production for 2011/12 would be up 21.4 million from 2010/11. A sharp rebound in FSU-12 production, combined with larger expected crops in India, North Africa, Canada, and EU- 27 account for most of the increase in world wheat output for 2011/12.

Global wheat trade is expected higher in 2011/12 with world exports projected up 2 per cent to 127.3 million tons. Increased supplies in Russia, Ukraine, and Kazakhstan and a return to exporting are expected to increase competition for EU-27 and US wheat. A recovery in production and improved wheat quality in Canada is also expected to increase export competition. Global wheat consumption is projected up 8.4 million tons or 1 per cent with increased feeding and food use expected in 2011/12. Global ending stocks for 2011/12 are projected slightly lower on the year at 181.3 million tons, compared with 182.2 million for 2010/11.

COARSE GRAINS
Projected US feed grain supplies for 2011/12 are nearly unchanged from 2010/11 as record production is offset by the smallest beginning stocks in 15 years. Corn production for 2011/12 is projected at a record 13.5 billion bushels, up 1.1 billion from 2010/11 as a 4.0-million-acre increase in intended plantings and a recovery from last year’s weather-reduced yields boost expected output. The 2011/12 corn yield is projected at 158.7 bushels per acre, 3.0 bushels below the 1990-2010 trend reflecting the slow pace of planting progress through early May. The 2011/12 yield is expected to be the third highest on record. Corn supplies for 2011/12 are projected at 14.3 billion bushels. This is below the 2009/10 record of 14.8 billion bushels, but up 75 million from 2010/11, as a 5-million-bushel increase in 2010/11 imports and a 50-million-bushel reduction in 2010/11 exports boost current year carryout this month.

Total US corn use for 2011/12 is projected down 1 per cent from 2010/11. Corn use for ethanol is projected up 50 million bushels reflecting slow expected growth in gasoline consumption and continued export demand for ethanol in the coming year. Domestic corn feed and residual use is projected 50 million bushels lower than in 2010/11 reflecting increased availability of feed by-products from ethanol production and lower expected residual use as compared with the current year. US corn exports for 2011/12 are projected down 100 million bushels from 2010/11 with larger foreign corn supplies. US corn ending stocks for 2011/12 are projected at 900 million bushels, up 170 million from the current year projection. Stocks remain historically tight with stocks-to-use projected at 6.7 per cent compared with the current year projection of 5.4 per cent. The season-average farm price is projected at a record $5.50 to $6.50 per bushel compared with the 2010/11 forecast of $5.10 to $5.40 per bushel.

Global coarse grain production for 2011/12 is projected at a record 1,146.8 million tons, up 6 per cent from 2010/11. A 52.4-million-ton increase in global corn output to 867.7 million tons accounts for 84 per cent of the year-to-year increase in coarse grain production. Foreign corn production is projected up 25.5 million tons with the largest increases expected in Argentina, China, Russia, Mexico, and Ukraine. Global 2011/12 production is raised for barley, oats, and rye, mostly reflecting a recovery in production in Russia. World production for all three crops remains below recent highs as more attractive returns for corn and oilseeds limit area expansion in these traditional coarse grains. Global corn exports are projected higher for 2011/12 with increases for Argentina, Russia, and Ukraine more than offsetting reductions for the United States, Canada, and Brazil. Global corn consumption is projected at a record 860.8 million tons, up 22.2 million from 2010/11, with nearly all of the increase in foreign markets. World corn ending stocks for 2011/12 are projected at 129.1 million tons, up 7.0 million from 2010/11.

RICE
Projected smaller US 2011/12 total rice supplies, combined with a modest decline in total use, results in lower projected ending stocks. US rice production in 2011/12 is projected at 211.0 million cwt, 13 per cent below 2010/11. Planted area in 2011, based on the NASS Prospective Plantings report, is estimated at 3.02 million acres, down 17 per cent from 2010 and the smallest area since 2008. Harvested area is estimated at 3.0 million acres. Average rice yield is projected at 7,033 pounds per acre, up 5 per cent from the previous year’s crop, which was damaged by excessive summer heat. The projected yield is calculated from the 5-year Olympic average (2006/07-2010/11) by rice class. Imports for 2011/12 are projected at 18.0 million cwt, up 3 per cent from the previous year, but below the 2007/08 record.

US 2011/12 total rice use is projected at a 236.0 million cwt, 2 per cent below the previous year’s record level. US domestic and residual use is projected at a near-record 127.0 million, unchanged from 2010/11 as per capita use of rice has shown virtually no growth in recent years. Exports are projected at 109.0 million cwt, 5 per cent below revised 2010/11 exports. Despite an expected increase in global trade, competition for key markets will be keen as US and competitor supplies are expected to be large. US ending stocks in 2011/12 are projected at 48.6 million cwt, 13 per cent below the previous year. Ending stocks of long-grain and combined medium- and short-grain rice are 32.8 and 14.4 million cwt, respectively (unclassified broken rice totals 1.4 million cwt).

The average milling yield used for 2011/12 is 70.75 per cent. It is based on the 2007/08-2009/10 average milling rate calculated from data supplied by the USA Rice Federation in its monthly rice stocks reports. The 2010/11 market year is excluded from the calculation because milling yields are well below average, largely the result of unfavorable weather.

The US 2011/12 long-grain rice season-average farm price is projected at $11.00 to $12.00 per cwt compared to a revised $11.00 to $11.30 for the previous year. The combined medium- and short-grain price is projected at $15.00 to $16.00 per cwt, compared to a revised $16.85 to $17.15 for the year earlier. The 2011/12 all rice price is projected at $12.00 to $13.00 per cwt, compared to a revised $12.35 to $12.65 per cwt for 2010/11. Large domestic and global supplies and expected lower Asian prices will pressure US prices in 2011/12.

Global 2011/12 total supply and use are each projected to reach record levels at 554.9 and 458.7 million tons, respectively, resulting in a modest decline in world ending stocks. Global 2011/12 rice production is projected at a record 457.9 million tons, up 6.6 million or 1.5 per cent from 2010/11. Large crops are projected for most of Asia including record or near-record crops in Bangladesh, Burma, Cambodia, Indonesia, the Philippines, Thailand, and Vietnam. In contrast, rice crops in many Western Hemisphere nations including Argentina, Brazil, Peru, the United States, and Uruguay are forecast lower than the previous year. Global 2011/12 consumption (which includes residual) is projected at a record, led by increases for Bangladesh, Cambodia, China, Laos, Pakistan, Sri Lanka, and Thailand. Global exports in 2011/12 are projected at a marketing-year record 32.2 million tons, up 0.8 million from 2010/11 with increases expected for India, Pakistan, and Vietnam, while exports from the US, Cambodia, and Brazil are expected to decline. Larger imports are projected for Middle Eastern, Sub-Saharan Africa, and Western Hemisphere markets, although the expected increases are slight. Global ending stocks are expected to decline 0.9 million tons from 2010/11 to 96.2 million. The stocks-to-use ratio for 2011/12 is calculated at 21.0 per cent, down from last year's 21.6 per cent.

OILSEEDS
US oilseed production for 2011/12 is projected at 99.0 million tons, down 1 per cent from 2010/11. Reduced soybean production accounts for most of the decline, but sunflowerseed, canola, and peanut production are all projected below last year’s crops. Soybean production is projected at 3.285 billion bushels, down 44 million from the 2010 crop mostly due to lower harvested area. Soybean yields are projected at a trend level of 43.4 bushels per acre, down 0.1 bushels from 2010. Soybean supplies are projected at 3.47 billion bushels, down less than 1 per cent from 2010/11 as larger beginning stocks partly offset lower production. Soybean ending stocks for 2010/11 are projected at 170 million bushels, up 30 million from last month due to reduced exports.

Soybean crush for 2011/12 is projected at 1.655 billion bushels, up fractionally from 2010/11 as a lower extraction rate offsets reduced total soybean meal demand. Lower soybean meal export demand projected for 2011/12 is only partly offset by a small increase in domestic soybean meal use, leaving total soybean meal use down 1 per cent from 2010/11. Domestic soybean oil consumption is projected to increase 7 per cent mostly due to biodiesel production gains. Soybean oil used for biodiesel production is projected at 3.5 billion pounds, up 1 billion from 2010/11 reflecting a higher biodiesel use mandate.

With lower 2011/12 US soybean supplies and higher South American soybean supplies on hand this fall, US soybean exports are projected at 1.54 billion bushels, slightly below the 2010/11 level despite a projected increase in global import demand led by China. Ending stocks for 2011/12 are projected at 160 million bushels, down 10 million from 2010/11, leaving the stocks-to-use ratio at 4.8 per cent. The US season-average soybean price for 2011/12 is projected at $12.00 to $14.00 per bushel compared with $11.40 per bushel in 2010/11. Soybean meal prices are forecast at $350 to $380 per short ton, compared with $350 per ton for 2010/11. Soybean oil prices are projected at 56 to 60 cents per pound compared with 53.5 cents for 2010/11.

Global oilseed production for 2011/12 is projected at a record 459.2 million tons, up 2.2 per cent from 2010/11. Global soybean production is projected to increase less than 1 per cent to 263.3 million tons. The Argentina crop is projected at 53 million tons, up 3.5 million from 2010/11 crop based on a higher harvested area and yields. The Brazil soybean crop is projected at 72.5 million tons, down 0.5 million from the projected record 2010/11 crop. A 3 per cent increase in harvested area is more than offset by a return to trend yields. China soybean production is projected at 14.8 million tons, down 0.4 million from 2010/11 due to lower area and yields. Higher rapeseed production for Canada, Australia, China, and Ukraine more than offsets lower production for EU-27. For sunflowerseed, production gains for Russia, Ukraine, and EU-27 more than offset reduced production in Argentina. Led by gains in global oilseed production, 2011/12 WASDE-494-4 oilseed supplies are up 2.4 per cent from 2010/11. With global crush projected to increase 3.5 per cent, global oilseed stocks are projected to decline 1.5 million tons to 72.2 million.

Global protein meal consumption is projected to increase 3.6 per cent in 2011/12. Protein meal consumption is projected to increase 7.8 per cent in China, accounting for 54 per cent of global protein consumption gains. Global soybean exports are projected at 98.7 million tons, up 2.8 per cent from 2010/11. China soybean imports are projected at 58 million tons, up 3.5 million from 2010/11. Global vegetable oil consumption is projected to increase 3.5 per cent in 2011/12, led by increases for China, India.

SUGAR
Projected US sugar supply for fiscal year 2011/12 is down 5 per cent from 2010/11. Lower imports more than offset higher beginning stocks and production. Beet sugar production is unchanged and reflects trend yields, while cane sugar production increases with a rebound in Florida. Imports under the tariff rate quota (TRQ) reflect the minimum of US commitments to import raw and refined sugar and projected shortfall. The Secretary will establish the TRQ at a later date. Imports from Mexico are sharply lower due to reduced supplies and increased domestic use in Mexico. Total use is up less than 1 per cent. Mexico’s 2011/12 sugar supply is down 3 per cent with lower beginning stocks and imports more than offsetting higher production. Production is projected to increase due to improved cultivation of sugarcane in Mexico. Imports reflect mainly US exports. Domestic sugar consumption is up, reflecting flat demand for corn-based sweeteners in the soft drinks sector. Exports decline, assuming reasonable ending stocks. For 2010/11, the major change from a month ago is higher US imports following the announced increase in the TRQ and a stronger-than-expected pace of imports from Mexico.

COTTON
The US cotton projections for 2011/12 include lower supplies and offtake relative to last season, resulting in higher ending stocks. With beginning stocks sharply lower than 2010/11, production is projected at 18.0 million bales, reducing the total supply. Projected production is based on planted area from the March Prospective Plantings, combined with above-average abandonment and slightly belowaverage yields due to severe drought conditions in the Southwest. Domestic mill use is projected at 3.8 million bales, the same as 2010/11, while exports are reduced due to lower US supplies and increased foreign production. Ending stocks are projected at 2.5 million bales, 43 per cent above 2010/11, but still the second-lowest level since 1990/91. The forecast range for the average price received by producers is a record 95.0 to 115.0 cents per pound.

The initial world cotton projections for 2011/12 show a sharp increase in production to a record 124.7 million bales, with India, China, and Pakistan accounting for 70 per cent of the increase. A partial easing of supply constraints, combined with projected world economic growth, is anticipated to raise consumption 3.0 million bales, above the 3 preceding years but below the peak levels of 2006/07 and 2007/08. World trade is projected at 40 million bales, mainly reflecting higher import demand by China. World ending stocks are projected to rise to nearly 48 million bales, a 13-per cent increase from the beginning level; however, the stocks-to-consumption ratio of 40 per cent remains relatively tight.

For 2010/11, US production is virtually unchanged from last month, reflecting the final season estimate. Domestic mill use is raised 100,000 bales to 3.8 million, based on indications of higher-than-expected use from Farm Service Agency data. Exports are reduced 250,000 bales as the pace of export sales has fallen sharply over the past month. Ending stocks are now forecast at 1.75 million bales.

Estimated world production for 2010/11 is unchanged from last month, as an increase of 1.0 million bales for China is offset by a like decrease for India. World consumption is reduced, due mainly to reductions for India and Pakistan. China’s imports are lowered 1.5 million bales due to a recent fall-off in demand, which is partially offset by increased imports for Pakistan and Turkey. World ending stocks are raised nearly 1.0 million bales.

Wednesday, May 11, 2011
Agricultural Trade Reaches An All-Time High
GENERAL - Over the past year, agricultural trade has reached an all-time high, at least 12 per cent above the previous record set in 2008. The impact of the economic crisis led to a contraction of six per cent in 2009 but global agricultural exports rebounded by over 19 per cent last year.


The EU as well as the other top exporters all benefited from buoyant markets. Following the slump in 2009, the EU, the US and Brazil bounced back with over 20 per cent growth in exports, to reach record levels in 2010.

For the past three years, the EU and the US have been roughly neck and neck as the world's leading agri-food exporters.

In 2010 US exports reached an all-time high of €92 billion, just ahead of the EU's record €91 billion exports.

The EU remains by far the world's biggest importer with imports worth €83 billion in 2008-10, well ahead of the US. EU imports grew by nine per cent in 2010 though they remain five per cent below the peak of 2008.

US imports grew strongly by 17 per cent in 2010. China's meteoric growth in imports, surging by 47 per cent in 2010, means that it surpasses Japan as the third largest importer.

The EU's trade balance improved to the extent that it turned into a net exporter in 2010, for the first time since 2006. The €6 billion agricultural trade surplus is largely due to expansion in the value of exports, driven by stronger demand for final products, as the EU's trading partners came out of recession and higher prices for commodities and intermediate goods. Exchange rate fluctuations may also have contributed, given the weakening of the Euro against a number of major currencies in 2010.

The EU remains the biggest importer of agricultural products from developing countries, importing €59 billion worth of goods in 2008-10. This is far ahead of the US, Japan, Canada, Australia and New Zealand put together, whose combined imports from developing countries reached just €49 billion over this period.

The US reached a record agricultural trade surplus of €27 billion with the value of exports up by 24 per cent to an all time high. Brazil also saw record exports and growth of 23 per cent despite the strengthening of the Real against the US$, potentially damaging its competitiveness on global markets.

The recovery of the markets of some major importers is witnessed by the sharp growth in imports; Russia's imports rebounded by 26 per cent, despite continued market access restrictions for poultrymeat while China's imports surged by 47 per cent.

The prosperity of overseas markets is a key factor in determining opportunities for EU businesses. Trade growth now appears to be back on track after the exceptional decreases in 2009.

Tuesday, May 10, 2011
Pork Commentary: Corn Moves Lower
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
July corn has moved from $7.61 a bushel on 29 April to $6.86 a bushel 6 May that is a drop of 75 cents in a week. That is the right direction in our world, taking $7.50 per hog off swine cost of production. A drop of 10 per cent in July corn follows the downward trajectory of oil last week from over $1.10 a barrel to below $100. A couple of weeks ago we made the observation the corn market will follow oils trends, so far lock step. We expect corn will continue to follow oil price trend.

Hog Markets
At the end of last week US National Base 53 – 54 per cent cash lean hogs were 92.17 down 3.00 week over week. Prices are going in the wrong direction. It’s making producers jumpy with feed prices where there at not much of any profit in these prices.

Market hog numbers continue to decline with last week’s US numbers at 1.989 million head we expect going forward week up week of hog numbers fewer than 2 million will push up hog prices to $1.00 lean per pound.

Cash feeder pigs and early weans have come under price pressure, with cash early weans averaging $24.33 (18.00 – 33.00) and 40 pound feeder pigs $62.20 (50 – 54) both groups are down over $20.00 per head from recent highs. These price declines are a reflection of the cost of feed and lean hog future prices and market psychology. Prices of $24.35 for early weans will not encourage expansion.

Larry Pope CEO Smithfield
When the CEO of the worlds largest hog producer talks it’s time to listen. (One million sows). Below is an interview that appeared in the Wall Street Journal with Larry Pope CEO of Smithfield Foods Inc. (not many of us read the Wall Street Journal regularly). We believe it’s a producer’s well articulated assessment of where the hog industry is and our challenges. Read it, largest to smallest producers we have many of the same challenges.

By Mary Kissel

New York

Bobbie Jean Pope, the 81-year-old mother of C. Larry Pope of Newport News, Va., can't afford her bacon.

"I said, 'Mom, I'll get you some bacon.' And she goes, 'I can't afford y'all's meat anymore! Why is y'all's meat so expensive?' And I said, 'Mom, you ought to understand why it's expensive—it's 'cause our costs are so expensive.'"

Mr Pope is the chief executive officer of Smithfield Foods Inc., the world's largest pork processor and hog producer by volume. He doesn't mince words when it comes to rapidly rising food prices. The 56-year-old accountant by training has been in the business for more than three decades, and he warns that the higher costs may be here to stay.

Courtesy of? "I'm not going to say, 'a political policy,'" he tells me. (His senior vice president, a lawyer by training, sits close by, ready to "kick his leg" if his garrulous boss speaks too plainly.) But politics indeed plays a large role, as Congress subsidizes favorite industries and the Federal Reserve pursues an expansive monetary policy.

Ours is a timely chat, given the burst of food inflation the world is living through. Mr Pope is running a multibillion-dollar business in the midst of economic turmoil, and he has strong views about why prices are rising and what can be done about it.

The Southerner is an old hand when it comes to food. He graduated from William and Mary in 1975, spent a few years at an accountancy, then joined Smithfield and worked his way up the ranks. He's something of an evangelist about his trade: He boasts that Smithfield employs some 50,000 people, many of whom are high-school graduates and immigrants others would consider "hard to hire." It's a "good business" that "gives people a good start."

It's also a business under enormous strain. Some "60 to 70 per cent of the cost of raising a hog is tied up in the grains," Mr Pope explains. "The major ingredient is corn, and the secondary ingredient is soybean meal." Over the last several years, "the cost of corn has gone from a base of $2.40 a bushel to today at $7.40 a bushel, nearly triple what it was just a few years ago." Which means every product that uses corn has risen, too—including everything from "cereal to soft drinks" and more.

Inflation: An overview of the prices consumers really pay

What triggered the upswing? In part: ethanol. President George W. Bush "came forward with—what do you call?—the edict that we were going to mandate 36 billion gallons of alternative fuels" by 2022, of which corn-based ethanol is "a substantial part." Companies that blend ethanol into fuel get a $5 billion annual tax credit, and there's a tariff to keep foreign producers out of the US market. Now 40 per cent of the corn crop is "directed to ethanol, which equals the amount that's going into livestock food," Mr Pope calculates.

The rapidly depreciating dollar is also sparking inflation, although Mr Pope says that's a "hard" topic for him to discuss, trying to be diplomatic. But he doesn't deny that money is cheap. Investment bankers are throwing cash at the firm—a turnaround from 2008, when money was scarce—even though Mr Pope doesn't need it right now.

Rising prices are already squeezing food producers' "two to three percent" earnings margins. "Many of us had our costs hedged in the commodity markets and we all took on strident measures to control our cost structures," Mr Pope says. "In the case of Smithfield, we closed six processing plants and one slaughter plant. We also closed 15 per cent of all our live production business." But "once those measures are done, we have no choice but to pass those prices down" to consumers.

Now food price inflation is popping up across the country. A pound of sliced bacon costs $4.54 today versus $3.59 two years ago and $3.16 a decade ago, according to the Bureau of Labor Statistics. Ground beef is $2.72, up from $2.27 in 2009 and $1.74 in 2001. And it's not just Smithfield's products: "You eat eggs, you drink milk, you get a loaf of bread, and you get a pound of meat," he drawls. "Those are the four staples of what Americans eat in their diet. All of those are based on grains."

"Maybe to someone in the upper incomes it doesn't matter what the price of a pound of bacon is, or what the price of a ham, or the price of a pound of pork chops is," he says. "But for many of the customers we sell to, it really does matter." Workers can share cars when the price of oil rises, he quips, but "you can't share your food."

Mr Pope also worries about the impact on farmers, who are leveraging up operations to afford the ever-rising price of land and fertilizer that has resulted from the increased corn demand. "There are record prices for livestock but farmers are exiting the business!" he exclaims. "Why? Farmers know they won't make money."

Weather is a factor, too. "We've had the luxury for the last three years of extremely good corn crops, with high yields and good growing conditions. We are just one bad weather event away from potentially $10 corn, which once again is another 50 per cent increase in the input cost to our live production."

Mr Pope says companies are coping by increasing prices "substantially" or shrinking "what's in the package." "That's the alternative way of passing on price increases . . . 'cause we're all trying to reach price points with our customers in terms of what we can sell somethan' for." "You're ultimately going to buy less bacon. . . . We're going to sell pizzas with less pepperoni on 'em." (Mr Pope's team also laments the effect on beer prices.)

Not all companies will survive this economic whirlwind. Mr Pope recalls what happened the last time there was a surge in corn prices, in 2008: "The largest chicken processor in the United States, Pilgrim's Pride, filed for bankruptcy." They "couldn't raise prices, so their cost of production went up dramatically." Could it happen again? "It darn well could!" Mr Pope exclaims.

Food price inflation isn't a problem confined to America's shores. "This ethanol policy has impacted the world price of corn," Mr Pope says. The Mexican, Canadian and European industries have "shrunk dramatically. . . . We have an unsustainable meat protein production industry," he says. "We're built on a platform of costs, on a policy that doesn't make any sense!"

Nor does the science. The ethanol industry would supply only 4 per cent of the nation's annual energy needs even if it used 100 per cent of the corn crop. The Environmental Protection Agency has found ethanol production has a neutral to negative impact on the environment. "The subsidy has been out there since the 1970s," Mr Pope says. "If they can't make themselves into a viable economic model in 40 years, haven't we demonstrated that this is an industry that shouldn't exist?"

So what's the solution? First, Mr Pope says, get rid of the ethanol subsidies and the tariff. "I am in competition with the government and the oil industry," he says. "It's not fair." Smithfield's economists estimate corn prices would fall by a dollar a bushel if ethanol blending wasn't subsidized. "Even the announcement that it is going away would see the price of corn go down, which would translate very quickly into reduced meat prices in the meat case," he says.

He also advocates lifting regulatory and tax burdens on business. "I fundamentally don't understand the logic of corporate income taxes," he tells me. "If I have a 35 per cent tax, all I do is take that 35 per cent tax and I transfer it into the price of bacon and the price of pork chops."

Then there's the challenge of opening up export markets, which Mr Pope sees as a long-term opportunity for US agriculture. "This is a land-rich country, with rich soils, with the right kind of temperatures and the right kind of cultivation practices," he says. "We can raise livestock and compete with anybody in the world. That's how we can help the balance of payments." (Smithfield has European operations but has had a hard time cracking Asia, and especially China. "It's easy to invest," Mr Pope says, but "it's hard to make money" there thanks to rampant intellectual-property rights violations and other hazards.)

While Mr Pope waits to see how the politics of ethanol and trade play out, he's not standing still. He's assigned one of his senior executives the task of figuring out what else Smithfield could possibly feed hogs, other than corn. Could Mr Pope have envisioned setting up such an enterprise a few years ago? "Absolutely not" he says. "It's me trying to change our business model to adapt to the realities that I have to live in."

Mr Pope says the "losers" here "are the consumer, who's going to have to pay more for the product, and the livestock farmer who's going to have to buy high-priced grain that he can't afford because he's stretching his own lines of credit. The hog farmer . . . is in jeopardy of simply going out of business 'cause he doesn't have the cash liquidity to even pay for the corn to pay for the input to raise the hog. It's a dynamic that we can't sustain."

Ms Kissel is a member of The Journal's editorial board.


Author: Jim Long, President & CEO, Genesus Genetics 

Wednesday, May 11, 2011
First Shipment of Chilean Pork to China
CHILE - The first shipment of pork has been made from Chile to China, expanding Chile's existing Asian markets of South Korea and Japan.


The trade deal with China is the culmination of a long process of trade liberalisation that has been developed since 2004 by the Association of Pork Producers in Chile, ASPROCER, together with the Agricultural and Livestock Service, SAG, and the Ministry of Agriculture.

Minister of Agriculture, José Antonio Galilea, announced that six processing plants have been authorised to export pork to China, during his official visit to China and after meeting with the Director of Administration for Quality Supervision and Quarantine of the People's Republic of China (AQSIQ), Zhi Shuping, with whom he discussed the issues relating to the authorisation for the export of new agricultural products from Chile.

Minister Galilee said this first shipment was a milestone in the joint work developed by public and private sectors, opening new markets for domestic food.

"The completion of this post confirms that Chile has high safety and quality standards recognised worldwide, protected by the high standards in the industry, allowing us to meet all the demands of new markets," said Minister Galilee.

The first shipment is expected to arrive in China on 6 June.

Juan Ignacio Rios, general manager of the exporter Friosa, said: "The news of the opening up of the Chinese market has been awaited by all pig meat exporters. For Friosa to be the first to make a shipment to China is an honour, and was the result of hard work to keep our facilities to a high standard, in order to be prepared for all demanding markets."

The six plants in Chile are: Lo Miranda Ltda., Rosario Ltda., Las Pataguas Comercial MaxAgro Ltda , Coexsa S.A., Frigorifico O´Higgins SA and Friofort.

Disadvantages

•Bad habits or other problems? Any senior goat has picked up some habits along the way and some of them may be a challenge to resolve to an acceptable way of doing things. We run a primarily free-range herd. The concept of going out and finding their own food somewhere on our 280 acres can be a tough one to get across to some of the adult does we've acquired. Those who had spent their whole lives up to that point in small pens with neat little flakes of hay presented to them to eat often had a bit of an adjustment period.

•Alter herd dynamics. Adult goats coming from other herds will also have established their proper place in their old herd. Whether it had been at the very top or the very bottom, they (and the goats they are newly joining) will all have to sort out the new pecking order. This can be disruptive to the whole herd for some time.

•Transportation. Unless new goats for the herd are coming from very near-by there will be some possibly significant transportation costs to factor in to the acquisition decision.
There is also the very real concern about travel-related stress and productivity problems for goats associated with any significant transportation of them.


•Unknown potential. Pedigree forms and DHIR reports, and linear appraisal reviews for the dam and sire do provide some background on production of such animals, but the fact is that there are no guarantees. The (on-paper) ideal breeding of the century can as easily produce a dud as produce a winner. It's not possible to accurately predict the future performance of a young kid, despite the best genetics and nurturing, so any kid acquisition or breeding plan must be undertaken with the understanding that it may not work out in the end.

•Limited genetics. Unless set up and experienced in AI, breeding completely in-house will, obviously, result in a limited gene pool with which to work to accomplish goat replacement goals. Even with does from excellent and diverse genetic backgrounds and a number of unrelated bucks, the breeding combinations after a few generations become limited before the realm of linebreeding becomes a reality. Linebreeding (the practice of intentionally breeding closely related goats in the attempt to encourage the positive traits in their offspring while hoping not to encourage the negative ones) done poorly, can result in quickly diminishing returns for the breeder.
It is joked that the difference between "linebreeding" and "inbreeding" is in the results. If the result is good, it was linebreeding. If not, it was inbreeding.


•Pregnancy/birthing and rearing risks. While most dairy goat does are, as a rule, strong during pregnancy, good, easy kidders and caring mothers that doesn't mean that accidents and complications don't happen. It's not something one needs to obsess about but it is something to factor in when trying to get a balanced view of risks and costs when discussing goat replacements.
Ditto with all of the other potential difficulties while raising a kid to maturity. Bad things don't usually happen, but they can and the possibility needs to be considered and prepared for.


•Developmental risks. Let's face it. There are inherent risks in raising goat kids. While the risk of loss (depending on individual set-up and situation) is not likely to even approach the figures quoted earlier for the cow dairy industry, they are real and need to be accounted for. Between predation, accidents, kid illnesses and parasite problems some losses must be anticipated despite best management efforts and techniques.
There are additional risks when bringing in a kid from far away. Not only are there transport-related stresses to contend with, but there is a good chance that the kid will have no immunity or resistance to the parasites and strains of diseases she will encounter at her new home.


•Rearing costs. Feed: Sometimes a good deal can be found for buying a two-week old kid but that price is going to be offset to some extent by the cost of raising her. Every operation will manage and account for rearing differently. Here, we feed our kids only pure, fresh goat milk (not replacer) which, as cheese makers, has a minimum potential value to us of about $10 per gallon. That means that a kid drinking 40 oz. a day for 84 days (12 weeks) costs us about $260 in milk alone to get to weaning.

•Medical. Even assuming no serious injury or illness, there will still be some normal and routine medical expenses incurred with a new dry doe or doeling before she becomes productive. The biggest cost-saving opportunity for this set of expenses will be for those operations capable and willing to do most of the necessary procedures themselves, calling on their herd veterinarian only in the more challenging situations.
Some of the common procedures likely to be performed on a new goat include: disbudding, vaccination series, worming procedures etc. This list will vary depending on the goat's age, geographic location, and other factors.

Testing is another potential expense. If serious about properly managing the goat herd, it is necessary to make sure that they are as healthy as possible. This will likely mean screening new replacements for certain diseases/defects like CAE or G6S (a genetic defect which can be found in some Nubian goat lines), brucellosis and TB. This screening will require certain blood tests be run by qualified laboratory staffs.


•Other. Feed, housing, medical and labor/management costs right up until a doe's first freshening all contribute to the costs that should be examined.
Summarizing a few case studies
Several commercial dairy goat operators from across the country agreed to spend some of their precious time and energy discussing the subject of doe replacements with me. Their operations varied widely not only in location but in breed, size, scope, focus and underlying goals and philosophies. Here are some of their thoughts on the process:

Redwood Hills Farm and Creamery, California
Scot Bice, the farm manager for Redwood Hills described their cheese and yogurt operation for me. They carry between 350 to 400 head of free-range Alpines, Saanens, LaManchas and Nubians on their 10 acres at any given time with 150 to 200 of them on the milk line.

They internally replace about 40 does a year. The Redwood Hills Farm replacement herd starts at about 60 doeling kids annually. Mortality from birth to six weeks: 2-3%, mortality from six weeks to weaning at 10 weeks: 2%.

Following an evaluation after weaning there is some culling for defect/confirmation issues (around 2%) at which time the replacement herd is further reduced through sales of kids. They are currently planning on increasing the replacement doe herd size to provide greater depth which will result in higher cull rates largely due to space restrictions. They rarely bring in adults for replacements.

Kids are raised on heat treated colostrum followed by pasteurized milk or excess yogurt from the creamery.

Redwood Hills Farm likes the doelings to be at least one year old before breeding. Many will freshen at two years of age. Their breeding plan looks first at the size of the goat, then the age. Unlike many commercial operations, they do not necessarily breed all their does every year with some milking two or three years.

Bice said it costs them about $300 to raise a goat from birth until she enters production.

Briarwind, Minnesota
Jeanne Leger is an experienced, conscientious and successful breeder who is also, apparently, a sharp business person who keeps her eye on costs. Some breeders I spoke with had absolutely no idea what their doe replacement costs were but Jeanne was definitely not one of those. She was able to quickly provide me with her cull and mortality rates and then articulate her strategies and costs. The herd at Briarwind is predominately Saanen.

Leger figures replacement costs two ways: What will it cost to raise a doeling to go on-line, and what would it cost to purchase a good milking doe from a clean herd? She finds that it usually costs $250 to $300 for her to raise a doeling. About $75 of the cost is for the pasteurized milk with some quality calf milk replacer added before she weans at eight weeks.

She doesn't usually purchase outside does for her milking line but, in the past, has found that they have cost from $250 to $450. With purchased does she found that she could count on recouping the purchase cost up to $350 in the first year and in some years recoup the $450. Leger has found that the milk production usually drops after moving a doe in from another location but it does a lot better the second year.

Briarwind has a very low kid mortality rate. Leger may lose one or two kids out of 160 to 200 born in a given year. She generally keeps about 25 doe kids as future replacements a year.

Conclusion
Because of the number of variables between different goat operations there are no magic formulas to tell all of us the "One Way" to deal with our replacement doe needs.

The best we can each do is try to be aware of as many of the contributing factors and their associated costs as possible and look at each variable on its own merits and as it applies to our individual herds and management styles. With proper understanding of the underlying factors, we can then make well informed and, hopefully, profitable decisions.

Now, seeing those same little doelings frolicking, I can appreciate that there is much more at work to their being here than simply kids at play, but it doesn't take anything away from the pure joy of watching them cavort.

Doe replacement strategies
for working goat herds
Exploring hidden costs and various replacement strategies with emphasis on replacing dairy does in small commercial herds

By David Heininger 

While sitting out with our goats, watching the doe kids frolic and thinking about how they would soon be earning their keep as full-fledged members of our small commercial dairy herd, I began to think about the whole process of herd growth and doe replacements and wanted to learn more.

Most of this article applies to all small goat herds, though it is written primarily with production dairy herds in mind.

Why replace?
Everyone who has goats on more than a completely casual basis and who keeps them for more than a few years will have to deal with the reality of having to replace their animals periodically. There are dozens of reasons for needing, or wanting, to replace the goats in a herd and scores of considerations the well-informed herd manager will want to address along the way.

It doesn't matter if a breeder runs strings of pack goats, keeps goats primarily for showing and breeding, maintains a herd for their fine hair, or maybe (like us) has a small commercial dairy-from time to time those hard working goats will need to be replaced or augmented.

As much as many of us would like to simply keep each and every one of our goats forever, that is not a practical possibility. Even if possible, it probably would not be a wise move as we all certainly look to improve our herds in one way or another. Even in herds primarily geared towards a high rate of turnover-those where most of the herd is sold off soon after every breeding season (think meat goats), there will be a central or core main herd group that will need to be maintained and improved.

Goats leave the average herd under a variety of circumstances. If overall herd improvement is a goal, goats may be sold in order to upgrade genetics, or productivity. Animals may also leave the herd as the result of other culling criteria or death. To maintain the herd's strength and depth, suitable replacements will have to be sought out.

Herd-building is another good example of where new, fresh goats will need to be brought into a herd. While these aren't technically "replacement" does (they are usually called "expansion does") the processes and costs for bringing them into the herd is the same.

Herd replacement standards
I was unable to find any published statistics for goat dairy doe replacements but there is a lot of this type of data available for cow dairies and some for sheep as well. The published numbers, especially the culling rates and projected mortality figures, surprised me in being so high. In researching this article, I spoke with a number of other dairy goat farmers, none of whose mortality or goat replacement rates were anywhere near as severe as the ones published for cows. Despite their elevated values, the cow figures were still interesting in how they clearly showed the relationships between the major factors for replacement planning.

The cow dairy model
As David Mackenzie put it in his book Goat Husbandry (5th edition, ? Mrs. Josephine Gardner, Faber and Faber London, 1993) "...Providence has decreed that goats are very far from being miniature cows." In spite of that, here is how cow dairy people look at their replacement costs (adapted as best as possible for dairy goats).

In order to quantify the replacement needs of a particular herd, a number of factors have to be identified and examined.

Herd size
This is the basic building block to which all of the other factors relate. This is the number of milking does (or desired number in herd-building situations) one is trying to maintain.

Replacement ratio
How many does need to be replaced on an annual basis? All normal culls or deaths should be factored in.

This ties in directly to the overall condition of the herd, how long one keeps does in production, general health and productivity of the goats and their ages. An older herd will, naturally, have more expected deaths and retirements.

When herd building, if growing at a pre-determined rate, say 20% per annum, that number would be added to the loss rate to determine the corrected ratio.

If managing an aggressive herd improvement program, the cull rate might be quite high as stronger does are brought online, replacing their weaker predecessors quickly.

Replacement ratios from 30 to 35% are commonly used in the cow dairy industry. At that rate one would expect to replace their entire herd every three years. Large commercial goat dairies more commonly keep their goats a bit longer to about the age of six. Assuming an average first kidding age of 12 months, annual freshenings and keeping the goat until the end of her sixth year, the dairy would then expect six lactations from a doe before replacing her. This comes out to around a 17% replacement ratio (six lactations divided by 100). In other words, using these figures, a herd owner might plan to replace 17% of his or her herd every year-approximately one out of every six does.

Smaller, less intense operations, like ours, may keep does productive for several years longer, as long as they remain healthy and would, therefore, have a smaller replacement ratio.

Doe and kid mortality rate
Historic recorded kid and doeling mortality numbers for goats were unavailable to my research but several reference resources for cow dairies used the following calf and heifer mortality rates: 10-15% from birth to six weeks and an additional 5% after six weeks for a total of 20% mortality before the first calving. To me, these numbers sounded outrageously high. One experienced goat breeder I trust, thinks that an overall 2% mortality rate (mostly through accidents) is reasonable. I personally think anything approaching a 10% mortality rate in a modern goat herd is probably indicative of a very serious problem which needs to be addressed immediately.

Doeling cull rate
Some doelings will be culled for conformation before they are bred or later culled for failure to breed. A figure of 10% is often used in cows for this culling calculation and will vary greatly in goat operations depending on a multitude of management policies and decisions.

Replacement potential
The "replacement potential" for the goat herd is found in expected kidding rates for doelings minus the combination of mortality and culling rates. Again, there are not too many published numbers available for dairy goats (though the meat goat folks are apparently gathering some solid data to begin working with). If we look at cow dairies, we find that they work with numbers in the 25-28% range for replacement potential. In other words, a 100-cow dairy will expect to be able to produce 25 to 28 replacement heifers each year. You will notice the gap between this and the 30 to 35 they expect to need as discussed in the previous Replacement Ratio section. Further, these numbers were based on the assumption that each cow is bred every year, which is increasingly not the case these days.

Dairy goats, on the other hand, are generally bred every year and the averages lead us to expect two kids (one male and one female) from each doe giving a gross replacement potential of 100%. Factor in operator culling and mortality percentages and that will give a working replacement potential.

Example: 100% gross replacement potential minus 5% mortality, minus 20% cull rate equals 75% replacement potential. In other words, this example herd could expect to be able to replace 75% of its does from internal sources every year, if it wanted to.

Doe's age at first kidding and kidding intervals
Calving intervals are lengthening in the cow dairy industry as a whole, compounding their replacement stock difficulties. While I spoke with several goat breeders who commented on the odd goat or two who would provide decent milk for two seasons before needing to be freshened there was no indication that there is any industry-wide trend to encourage this practice. We'll continue assuming that annual freshening for each doe is the standard practice that will be used.

Age at first kidding is a hugely important factor that can significantly alter the end results of the replacement calculations. The age at first kidding doesn't effect the number of replacement kids one needs annually but it does effect the number of goats who must be in the replacement herd at any given time and, of course, the costs and risks to get each replacement doe to her first kidding. More time equals more money.

Interestingly enough, the decision on when to first breed a doeling is approached by most breeders somewhat arbitrarily, based on fiscal needs, personal preferences, or regional norms rather than on proven ideals. While opinions abound, I found little solid scientific data on the best breeding age for goats. This may be due to the distinct differences between breeds and even individual genetic lines or geographical regions.

The age of goats kept in the replacement herd, of course, translates into direct costs (feeding, housing and maintaining the additional goats for the additional time) as well as opportunity costs (the goat could have been in production earlier, making milk to sell and kids to sell or keep). Additional risks also attach during that additional time "fallow". An accident, illness or disease could take the doe before ever making a fiscal contribution to the herd operation.

The risks for breeding too early are of equal concern. Kidding complications can be expected from does bred much too young. One could lose the doe and kids during kidding, and with her, all of her potential-not just the one season's offspring missed by waiting another year. Competent medical and herd management advice and skills must all be brought together in making the best decision in any given circumstance.

Table 1 exemplifies some of the differences the application of this important management decision can make.

Summarizing the cow model
The point of all this is that there are dozens of inter-related factors, specific to each herd and management style, which need to be examined before intelligently determining the proper course for replacement strategy. It doesn't have to be the big, cumbersome process that it might sound like.

As a matter of fact, most breeders probably already know a close approximation of most of the values for the factors just discussed without having to initiate some great data-gathering process for their herd. Chances are, if a dairy goat herd is successful at all, replacement program numbers are already in use without much formal thought.

The above information was primarily provided as a management guide. Hopefully it gives those interested a place to start if they are just getting serious about replacement strategy.

Doe replacement methods
After determining the number of replacement does needed on an annual basis, the goat owner should determine how to obtain them.

There are two ways of obtaining replacement goats. First-to bring new goats into the herd from outside sources, or second-breed and raise them. The two strategies are different in approach, cost (or at least, cash-flow) and in application so we'll look at them individually.

Here's a brief comparison chart with some of the main considerations between the different methods. (See Table 2.)

Bringing new goats to the herd or raise your own?
The chart compares a few key criteria to help one decide whether to raise replacements from on-farm stock or bring in new goats. The weight given to each consideration will vary for each operation.

If the decision to bring in outside goats for your replacement needs is made, the first big consideration is, "How old do I want them to be?" Goats are available to purchase from just a few days old to seasoned, productive seniors. There are some distinct advantages to buying an adult doe in-milk but there are others in either buying a kid or rearing one of your own. The decision as to the best solution for a given situation lies in the herd needs and goals of the operation.

Let's look a little closer at some of the factors highlighted in the chart.

Advantages

•Quick productivity. If the home dairy is running short on milk now, the only replacement solution that makes sense is to bring in mature, proven milkers, in lactation, with a good continued production potential.

•Known quantity. Buying a mature, in-production goat will take a lot of the guesswork out of any buying decision. There will be no question of whether she will freshen, how her udder will come in, or if she will develop the proper dairy quality sought after. It will all be there for evaluation, up-front.

•Trained. Everybody has their own herd management style and their own set of expectations for their goat's behaviors and daily rhythms. It is, by far, easier to bring a new kid up to the way of working than it is to persuade a seasoned senior goat to follow.

•They are so darned cute. What can I say? I'm a complete sucker for a cute little goat kid. How can a value be put on being able to bond with a new herd member so that she thinks I am her family?

•Breeding costs. Obviously, if buying a doe from an outside source there are no breeding costs involved. That leaves the comparison between breeding on-property and off-property servicing of the doe.
Off-property breeding will likely entail transportation costs, servicing fees, and possibly health certificates, CAE or other test costs. There is also the risk of bringing in a disease to home herd. If boarding the doe with an off-property buck for breeding is necessary, the costs can really begin to add up.

It might seem like the costs for in-house goat replacements approach nil. A little prenatal care and some extra feed may be all there is to invest to get successfully through to the birthing day, right? Well, not necessarily. There is another big cost that is sometimes overlooked: The buck(s).

Most breeders keep several bucks on premise year-'round and, if we are to be fiscally accurate, the entire year's cost of keeping each buck needs to be allocated to the does he breeds and then down to the kids he sires. If breeding only a few does to a buck that has been kept for the last year, off-site servicing fees begin to seem very inexpensive by comparison.

A.I. expenses can be easily quantified and calculated for those breeders choosing that method for their does.

 

Friday, May 06, 2011Print This Page
Feed Additive Market Estimated at $19 Billion in 2016
GLOBAL - The worldwide animal feed additives market is estimated to reach US$18.7 billion in 2016, according to a new market report.


The report, Global Animal Feed Additives by Type, Livestock, Geography, Regulations Trends & Forecasts (2009-2016) from MarketsandMarkets (M&M) defines and segments the global animal feed additives market with analysis and forecasting of the global revenues for feed additives. It also identifies driving and restraining factors for the global feed additives market with analysis of trends, opportunities, and challenges.

The market is segmented and revenues are forecasted on the basis of major geographies such as North America, Europe, Asia, and Rest of the World (ROW).

Further market is segmented and revenues are forecasted on the basis of products such as antibiotics, amino acids, feed acidifiers, antioxidants.

The global feed additives industry has been in a higher growth trajectory from the last four years, according to the report. This growth is largely fuelled by the increasing meat consumption and rising concerns over meat quality and safety. Some of the major drivers of the global feed additives industry identified in this report are rise in global meat consumption, increasing awareness towards meat quality and safety, increasing mass production of meat, and recent livestock disease outbreaks. Major restraints identified in this report are regulatory structure and intervention, and rising raw material cost. Growth is particularly high in emerging countries such as China, India and Brazil due to increasing income levels and rising per capita meat consumption.

The report estimates the global feed additives market will reach $18.7 billion in 2016 with an expected CAGR of 3.8 per cent from 2011 to 2016. The Asian market is driving the sales and is expected to hold 28.5 per cent of the global market share in 2016. The Asian market is expected to have a high CAGR of 4.74 per cent due to increasing demand for meat products in the region, and rising domestic meat production. Europe is the leading market for feed additives, with 35 per cent share in 2011 resulting from higher regulatory concerns over meat quality and safety, and increasing per capita meat consumption. North America is the second largest market, with a share of 28.5 per cent in 2011; the US is the largest market with a share of more than 80 per cent.

Antibiotics is the leading demand generating product with a share of more than 27 per cent in 2011, followed by amino acid – 26.5 per cent share in the global feed additives market. The consumption of antibiotics is high due to increasing demand in Asian and Latin American regions to meet the high domestic and export demand for meat.

Scope of the report
This research report categorizes the global market for animal feed additives on the basis of product types, livestock, and geography; forecasting revenues, and analyzing trends in each of the following sub-markets:

on the basis of product types: antibiotics, feed acidifiers, amino acids, enzymes and vitamins
on the basis of materials: pork, sea food, cattle and poultry
on the basis of geography: North America (US and Canada), Europe (German, UK, France and Russia), Asia (China, India and Japan), and ROW (Brazil and Argentina)

Friday, May 06, 2011Print This Page
Weekly Roberts Report
US - Besides the death of Osama bin Laden, a major news story of note is the planned intentional flooding of farmland in Missouri by the US Corps of Engineers.

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

The Corp intends to intentionally break a Mississippi levee in southeastern MO to save farmland and people’s property from flooding in Illinois.

The action is tied up in federal courts. If given the go ahead, about 130,000 acres of prime farm land will be in jeopardy and 100 homes will be flooded. The Army Corps called the possible break of the levee necessary to ease rising waters near Cairo, a 2,800 resident town located at the confluence of the Ohio and the Mississippi.

Missouri residents have asked the US Supreme Court to halt the plan. Explosives have already been loaded in Kentucky and are now on site at the levee to be breached. The fear is that if the levees are not blown up, the water levels in Cairo will rise up to 60 feet over flood stage.

The question of insurance has been raised as well. Since the flooding will be man-made vs. a natural catastrophe, Missouri residents fear they won’t be covered. And last but not least, there are fears that the flooded farmland will become useless for many years to come as the flooding will remove top soil and leave sand/silt in its wake that could take a generation to clear resulting in heavy injury to the quality of the farmland for many years.

LEAN HOGS on the CME closed up on Monday. The JUNE’11 LH contract closed at $95.475/cwt; up $0.250/cwt but $3.050/cwt lower than a week ago. AUG’11LH futures closed at $97.575/cwt; down $0.350/cwt and $1.900/cwt lower than last report. Futures started higher fueled by higher cash hog prices on forecasts for lower hogs numbers over the next few weeks.

Seasonality strength in pork prices were also supportive. Hog/corn ratios show continued incentive to contract the hog supply. Ratios are calculated by Dow Jones using industry-accepted fob cash hog prices and cash corn prices from private sources. Historically ratios at or above 20-1 for hogs (live basis) have resulted in expansion of production, while a ratio of 15-1 or less has resulted in contraction.


USDA put the pork cutout at $93.31/cwt; up $1.55/cwt but $1.67/cwt lower than last report. According to HedgersEdge.com, the average packer margin was lowered $0.20/head to a negative $2.90/head based on the average buy of $68.24/cwt vs. the average breakeven of $67.17/cwt. The latest CME lean hog index was placed at $94.98; up $0.16 and $0.78 lower than last report.

CORN futures on the Chicago Board of Trade (CBOT) finished down on Monday with the exception of deferreds December 2012 and beyond. The MAY’11 contract closed at $7.306/bu; down 23.25¢/bu and 31.75¢/bu lower than last week at this time. The DEC’11 contract closed at $6.612/bu; off 8.25¢/bu and 20.25¢/bu lower than last report.

Profit taking and improved planting weather weighed on prices. A weaker U.S. dollar was supportive in that a weaker dollar makes U.S. commodities more of a bargain for buyers using other currencies. Funds were balancing books on falling oil prices on the news of Osama bin Laden’s death by selling commodities. Exports were neutral.

Nearby corn contracts fell; most fueled by ideas that fund liquidation and export demand will slow limiting corn prices at or near all-time highs. Reports show that producers are planting night and day in the U.S. Midwest on the improved weather. Midwest corn producers try to have their corn planted by mid-May as yields can decline by about a bushel/day/acre for every day farms plant after the optimal planting period.

USDA put corn plantings at 13 per cent complete as of Sunday, off last year’s pace of 66 per cent complete this time last year and under the five-year average pace of 40 per cent for this time of year.

Traders worked on the general assumptions of 16 per cent planting progress. Two floor sources said the general thinking now is that producers can still plant 92.2 mi acres (the 2nd largest since 1944) despite early weather delays … and … if the weather continues to cooperate. Weather continues to heavily influence speculative price action. Speculators remained net long in CBOT corn futures for the week ended April 26, 2011.

USDA put corn-inspected-for-export at 34.635 mi bu vs. expectations for 31-36 mi bu. On another note, commodities seem unaffected by fears that potential retaliatory attacks the death of Osama bin Laden will cause much of a difference in grain trading. The general consensus among traders is that Bin Laden’s death will increase long-term stability in the Middle East. Improved weather and farmer planting progress is putting the pressure on prices.

There is still bullish support fundamentally for corn futures.

SOYBEAN futures on the Chicago Board of Trade (CBOT) finished down on Monday. The MAY’11 contract closed at $13.902/bu; off 2.5¢/bu but 0.75¢/bu higher than last Monday. NOV’11 soybean futures closed 0.5¢/bu higher than last Friday’s close at $13.736/bu and 8.75¢/bu lower than last report. Fund buying was supportive with funds increasing net long positions by 17,097 contracts. Exports were not supportive. USDA put soybeans-inspected-for-export at 5.525 mi bu vs. expectations for 10-15 mi bu. Soybean prices did make a session high of $14/bu but lacked upside momentum to push through chart resistance. The seeding pace of soybeans is not having the same price negative effect on soybeans as seen in corn futures because they are less critical at this stage of planting season.

Fundamentally U.S. soybean ending stocks will be at a historical low point for 2011 but the commodity is still seen as overvalued globally. Despite the low carryout projections for the U.S. soybeans, global supplies are unchanged from a year ago.

Cash soybeans were steady-to-firm at elevators amid slow farmer selling. Brazil’s 2010-11 crop is 95 per cent harvested vs. 97 per cent harvested this time last year with the yield forecast raised to a record 72.66 mi tonnes (2.67 bi bu), up from 70.56 mi tonnes (2.59 bi bu). Brazil harvested 68.5 mi tonnes (2.52 bi bu) in 2009-10.

USDA is scheduled to publish its World Agriculture Supply/Demand Estimates (WASDE) report on May 11. It is expected that exports will for both corn and soybeans will be lowered.

WHEAT futures in Chicago (CBOT) closed lower on Monday. The MAY’11 wheat contract closed at $7.596/bu; down 9.5¢/bu and $1.355/bu lower than last report. JULY’11 futures finished up 9.5¢/bu at $7.916/bu and 69.755¢/bu under last week. Floor sources said today wheat could never get much going in the pits while waiting on news from the 3-day crop tour of Kansas which begins on Tuesday. Additionally, traders took profits on recent high prices but these were limited by spillover weakness in corn futures. Some support came on weather news noting winter storms in Canada over the weekend damaging wheat fields in Alberta, Saskatchewan, and Manitoba. Exports were supportive with USDA putting wheat-inspected-for-export at 36.394 mi bu vs. expectations for 31-33 mi bu. India on Monday put off a decision to lift a ban on wheat exports saying the government will first need to take a look at requirements for a food security law to increase subsidized grain sales.

High global prices have encouraged Argentinean farmers to plant more wheat in 2011-12. Wheat output is expected to increase 20 per cent there. A Beunos Aires official, Pablo Adreani, head of of Agripac consultancy said it is expected that an additional 500,000 hectares (1.2 mi acres) will be planted to wheat. Wheat output is expected to be around 18 mi tonnes (661.4 mi bu); an increase of around 11.5 per cent for the upcoming wheat season.

Weather markets will continue to be the main price feature for wheat.

DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed up on Monday. The MAY’11DA contract finished at $16.47/cwt; $0.06/cwt higher than last Friday’s close. JULY’11DA futures finished at $17.80/cwt; up $0.07/cwt over last report and $0.10/cwt higher than this time last week. Futures in the second half of the year show prices for the benchmark Class III futures contract average up $0.12/cwt.

The first half of 2012 looks like prices will be around $16.25/cwt; up $0.10/cwt. Support in the cheese market is providing support for Class III prices. Butter prices were steady with little volume or change. Cheddar production dropped in the first quarter of 2011 while other cheeses and butter were up strongly. Spot NDM saw no activity as traders wait for results from Tuesday’s GDT auction.

Cheddar production was down sharply for January-March 2011 while that of other cheeses remained strong. Last week, CWT accepted 5 bids to provide subsidies on exports of 844,000 lbs of cheese for delivery through July.

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) were off on Monday. The JUNE’11LC contract closed at $111.950/cwt, down $1.400/cwt. AUG’11LC futures closed at $114.525/cwt; down $1.175/cwt but $0.075/cwt over last report.

The DEC’11LC contract closed at $121.675/cwt; off $1.225/cwt but $0.375/cwt higher than this time last week. Profit taking, seasonality, and higher fuel prices continue to weigh on fat cattle futures. USDA put the choice cutout at $182.03/cwt; down $2.11/cwt and $4.46/cwt lower than this time last week.

Not enough cash sales were made to establish an adequate market but USDA put the 5-area-average at $116.76; $2.36/cwt lower than a week ago. The slowdown in slaughter last week was particularly bearish as it is seen as backing up cattle in feedlots when an increase in cattle reaching market weights is expected.

Futures selling increased near the close as funds bought August and sold June to move long positions to the deferred contract. According to HedgersEdge.com, the average packer margin was lowered $14.00/head to a negative $33.85/head based on the average buy of $117.55/cwt vs. the average breakeven of $114.84/cwt.

FEEDER CATTLE at the CME closed down on Monday with deferreds breaking even. The MAY’FC11 contract closed at $131.050/cwt; down $0.850/cwt but $1.075/cwt higher than a week ago.

The AUG’11FC contract settled at $134.825/cwt, down $1.125/cwt but $0.875/cwt over last report. Feeders were supported on lower grain prices. At the closely watched feeder cattle auction in Oklahoma City feeder steers were steady to 3.00/cwt over a week ago. Feeder numbers for Monday, May 2, 2011 were estimated at 8,200 head vs. 4,193 this time last week and 9,939 head this time a year ago. Cash feeders were $3/cwt higher while feeder heifers were steady-to-firm.

Stocker calves were $2.00/cwt higher amid good demand for feeders and weaned calves. The National Feeder & Stocker Cattle Summary for the week ended 4/29/2011 showed 172,400 head sold this week vs. 222,200 head last week, and 260,700 head this time last year. Feeders sold in direct trade were $1/cwt lower. Yearling feeder supplies are seen as tight for the next couple of months. The latest CME feeder cattle index was placed at $133.39; up $0.64 and $0.99 over last report.

Thursday, May 05, 2011Print This Page
Pork Price Fixing Alleged in Hong Kong
HONG KONG - Pork buyers allege that pork importers are fixing prices and manipulating the market manipulation.


The pork buyers' union has called on the government to open a live hog market to prevent monopolies from controlling pork prices, according to an official source.

The union, consisting of buyers and meat shops, yesterday (4 May) accused suppliers of jointly manipulating fresh hog supplies in order to reap huge profits.

Since 2007, live pigs have been imported daily from the mainland by three authorized suppliers: Ng Fung Hong Limited, Guangnan Hong Limited and Hong Kong Agriculture Special Zone Limited.

From January 2010 to March 2011, the average wholesale price of live pigs surged 40 per cent from HK$1,044 to HK$1,412 for 100 catties, causing retail fresh pork prices to jump from HK$28 a catty to HK$38, the union announced. [1 catty = 500g]

The union revealed that the price of wholesale live pigs on the mainland has been fixed at HK$1,200 for 100 catties, but the average wholesale price in Hong Kong stands at around HK$1,400, showing the suppliers are hustling big gains with large commissions and lower expenditures on staff.

Buyers alleged that the price hike was because of unstable supplies of live pigs transported to Hong Kong and the recent pork price fluctuations should be attributed to the 'three days normal and four days less' import pattern adopted by the suppliers and their artificial 'price-boosting' activities.

Kwan Kwok-wah, vice-chairman of the union, said: "We observed an abnormal practice of live pig supplies in the last six months. Sometimes, they import less and we have to bid higher because of limited supply. When the price gets higher, they import more the next day."

Because of unpredictable supplies of live pigs the following day, bidders are inclined to secure more stocks at higher prices, thus creating a sense of uncertainty in the market, explained Joe Chan Chi-wang, a member of the union.

Ng Kwok-ming, another member of the union, said: "Three suppliers act like they have some kind of prior agreement. Once one company imports less, the other two will follow suit."

Vice-Chairman Kwan asked: "Day-on-day differences are around 800 live pigs, how can that be possible?"

According to statistics of the Food and Environmental Hygiene Department, the average numbers of daily imported live pigs varied from 4,512 in January to 3,726 in February, the lowest figure in the past 12 months. The number rose to 3,942 in April.

The union said Hong Kong at least needs 4,600 to 4,800 pigs a day to meet the demand and to stabilize bidding price at HK$1,200 for 100 catties.

If the shortage continues, the union expects the retail pork price to increase to HK$42 a catty.

The union called upon the Ministry of Commerce to open the market to all Hong Kong buyers to obtain live pigs directly from mainland suppliers to ensure a stable supply.

Mr Kwan said some meat shop owners are experiencing difficulties at the moment. Raising retail prices will drive away customers; alternatively the shop owners are simply unable to afford the increased wholesale price, he said.

A meat shop owner, Mr Lee, said he has lost 20 per cent of his business in the last three months.

"More customers have opted to buy chilled or frozen meat because it is cheaper," he said, adding he is considering quitting his business.

On 4 May, a spokesman for the Food and Environmental Hygiene Department, however, responded that the import of live pigs maintained "sufficient", at about 4,000, during recent months.

The spokesman said the Ministry of Commerce had granted import licenses to two more suppliers in 2007, as a move to open the market, in addition to Ng Fung Hong, the original sole authorised supplier.

The spokesman added that food prices are formulated by the market and the price of live pigs is affected by soaring global food prices, increased demand for internal consumption on the mainland as well as the exchange rate of renminbi.

However, the government will assist the trade in enlarging the food supply channel in order to maintain reasonable food prices, the spokesman added.

United Kingdom Pig Meat Market Update - April 2011
James Park, senior economic analyst with AHDB Meat Services Economic and Policy Analysis Group, explains the latest trends in the UK and EU.
 

UK Prices
During the first two months of the year, the DAPP weakened whilst in a number of other EU markets prices were on an upward trend. However, since the beginning of March, the DAPP has shown small but steady increases week-on-week on the back of tightening supply rather than a significant increase in demand. In the week ended 19 March the DAPP rose for third consecutive week to average 135.6p per kg, up over half a penny compared with the previous week. Nevertheless, producer prices are around five per cent lower than what they were a year ago and are two per cent lower than the start of the year. Pig producers are currently losing an average of £22.00 (AHDB MI estimate) on every pig produced; with little sign of conditions improving as the volatility of feed prices likely to undermine any recovery in the DAPP.


Average carcass weights in the DAPP sample remained at around 80kg in the first three weeks of March, one kilo heavier than the year-earlier values. Probe measurements reduced to 11.1mm throughout March, indicating that heavier carcass weights are not having adverse affect on producing lean pigs.

The average weaner price has followed the movements in the finished pig market as the price has slowly crept up since the beginning of March. In week ended 26 March, the average price increased marginally on the previous week to £41 per head. There are reports of a tightening in the supply of weaners in the market place. However, prices continued to be significantly below year-earlier quotations. Similarly to pig market, the weaner trade continued to be affected by increased feed costs.

Following the dioxin crisis, the average reference price for weaners in the EU increased 25 per cent in the eight weeks to 13 March. However, in week ended 20 March, the EU average weaner price was 11 per cent lower than in the corresponding week a year ago.

Exchange Rates and Prices
European pig prices have strengthened throughout February and into the first three weeks of March as markets responded to the private storage aid (PSA). In week ended 20 March, the average EU pig meat reference price at €149.62 per 100kg was more than one per cent higher than the previous week and almost nine per cent higher than the beginning of the year.

Prices in almost all Member States were significantly higher compared with the start of the year as demand in key countries appeared to be strengthening, with the exception of the UK. Prices in Spain recorded the largest increase, up 23 per cent, while prices in the Netherlands rose by 11 per cent since the beginning of the year. Germany and France also recorded improvements in the prices quoted, both increased by 10 per cent during this period.

In contrast, UK was the only major producer to record a decline in price during this period. The price premium which the UK has over the European average dipped significantly from 16p per kg at the start of the year to one penny per kg in week ended 20 March. However, with the UK and EU reference price being closer to parity there should be less incentive for retailers to import cheaper product.


UK Slaughterings and Production
The February slaughter data for the UK suggests that the regional trends were similar to January and show increased slaughterings across all the regions. More than 767,000 clean pigs were slaughtered in the UK in February, nine per cent more than in the corresponding month last year.

Throughputs at abattoirs in England and Wales at 595,000 head were nine per cent higher year-on-year and accounted for 76 per cent of total UK throughputs. Similarly, throughputs in Northern Ireland and Scotland also increased by nine per cent to 123,000 head and 48,000 head, respectively.


During the first two months of the year, clean pig slaughterings in the UK were up by eight per cent to 1.7 million head. Combined with an increase in carcass weights and the increase in throughputs resulted in pig meat production recording a nine per cent rise year-on-year.

In the first quarter of 2011, sow cullings were 13 per cent higher than in the same period in 2010. This incorporates a period where sow prices dropped considerably as a result of the dioxin crisis which occurred in Europe in mid-January. However, prices recovered and increased 10 per cent in March, despite higher supplies, further encouraging pig producers to reduce their herd through better returns for their cull sows.

Total UK exports of fresh and frozen pork in January 2011 totalled almost 10,000 tonnes, down eight per cent year on year. Exports to other EU member states declined by nearly 16 per cent with the largest decline recorded in exports to Germany. Shipments to this primary destination fell by almost 47 per cent year on year, a combined result of the dioxin crisis and poor weather across Europe. Exports to the Netherlands also fell considerably, down 19 per cent compared with same period last year. In contrast, this fall was offset in volume terms by increased exports to Ireland which rose by 13 per cent year on year.

Imports of fresh and frozen pork were three per cent lower in January 2011 in comparison with same month last year. However, imports from Denmark were up 23 per cent, but there was a 19 per cent decline in shipments from the Netherlands. Reduced shipments from Ireland and Germany also contributed to the fall in imports during February.

Feed Prices
On 24 March, prices consolidated after two weeks of high volatility. With the USDA planting and stock report released on 31 March, attention turned to this key part of new-crop information.

According to the International Grains Council’s monthly global supply and demand updates, the global wheat production for 2011/12 is forecast at 673 million tonnes, up by 24 million tonnes in 2010/11, and global maize production for 2011/12 at 841 million tonnes up by 33 million tonnes in the previous season. However, these higher figures are not new to the market as expectations of larger crops remain after the period of higher prices. The USDA report released on 31 March will take greater precedence as it likely to contain information on US maize plantings which will be an important factor in determining the long-term market trends.


In Europe, MATIF wheat was trading at €225 per tonne on the afternoon of 24 March; €1 per tonne lower than that recorded on 21 March; nearby LIFFE wheat in the UK was trading at £194 per tonne some £0.85 per tonne higher than at close of 21 March, with November 2011 trading at £157 per tonne, down £2.25 per tonne from close of business on 21 March. US markets are especially quiet ahead of the publication of the USDA report. CBOT wheat was trading at $263.8 per tonne on the afternoon of Thursday 24 March, down from $264.9 at close on 21 March. CBOT maize was trading at $266.9 per tonne relatively unchanged from Monday’s close of $270 per tonne.

Late news on Friday 25 March involved the sale of one million tonnes of US maize to an unknown destination. Trade sources believe that the destination for the maize was China, which is likely to have an impact on trading at the start of the week commencing 27 March as China is not normally a significant importer of grain.

The nearby European rapeseed market has seen some support in the first half of the last week as the need to ration demand for the old-crop supported the May contract and unfavourable growing conditions in Europe kept the November contract firm. As of 24 March, May MATIF rapeseed had gained six Euros per tonne over the week to trade at €456 per tonne, whilst November 2011 MATIF rapeseed had kept firm trading between €418 per tonne and €419 per tonne over the week so far.

Consumption
Data for the four weeks to 20 March 2011 bucked the longer term trend for fresh and frozen meat and, in particular, the volume of pork purchases. In the four weeks to 20 March, three per cent less pork was purchased than in the same period last year. This was a result of fewer purchases, year on year, of pork loin and leg roasting joints. The reason behind the decline was a result of strong promotions by retailers in 2010. However, purchases of pork steaks were 19 per cent higher than a year ago while belly and chop purchases were also up, by three and six per cent, respectively.

The 12-week period is affected by similar circumstance, with pork volumes purchased down year-on-year with the average price being higher. However, the long term (52-week) period remains relatively strong with increased purchases of pork products.

Relative performance throughout 2011 at retail will be compared against 2010 where there had been strong growth in the pork market at consumer level.



April 2011

2011 Trade Forecast Update: Pork Higher; Beef and Broiler Meat Stable
Global pork output in 2011 has been increased to 52.5 million metric tonnes (MMT), up from the October 2010 estimate of 51.5MMT, according to the latest Livestock and Poultry World Markets and Trade report from USDA Foreign Agricultural Service.
 

Summary
Record global pork production is largely a function of efficiency gains in China, and higher slaughter weights in the EU, which are expected to more than offset the foot-and-mouth disease (FMD) related drop in South Korea. Expanded world trade is driven by strong demand from South Korea, China and the Ukraine.

World Pork Production Slightly Higher
Chinese production is raised slightly from October’s forecast, as high pork prices and stronger demand encourage expansion by modern, more efficient producers.

The EU is revised upward in line with higher than expected slaughter and weights. Restructuring in the hog industry is expected to accelerate, as the most inefficient farms and some backyard production leave the industry.

Historical revisions were made to the Russian swine and pork data. High feed prices and limited feed availability in late 2010 constrained previously forecast expansion.

South Korea is reduced by one-third – the lowest level in nearly 20 years – as a result of the worst FMD outbreak in the country’s history. The culling of 30 per cent of the swine herd, combined with the two- to three-month waiting period before restocking FMD-affected farms, will temporarily reduce the pig crop.

The US forecast is raised slightly due to higher expected slaughter and heavier weights.

World Imports Raised Mostly on South Korea
Shortages in South Korean domestic pork supplies are expected to be partially offset by a nearly 50 per cent jump in expected imports. To facilitate those imports and help curb rising prices, the Korean government created a special zero duty tariff-rate-quota (TRQ) for frozen pork bellies and other cuts. Even with larger imports however, pork consumption is expected to fall, as high prices cause consumers to shift to other meat proteins such as fish, poultry, and imported red meats.

China is raised as robust demand outpaces modest production gains.

Ukraine is revised upward in response to stronger demand.

World Exports up as the EU and the United States Capture Rising Asian Demand
EU is forecast significantly higher with strong demand from Asia and Russia. The EU will likely fill much of the Korean zero duty TRQ for frozen pork bellies, while expanded pork shipments to Russia are expected in place of live hogs for slaughter.

The forecast for the United States is unchanged although stronger shipments are expected in the first half of the year due to strong demand from South Korea and China. Along with the EU, US pork is expected to account for a portion of the Korean zero-duty TRQ for pork cuts given its readily available supplies and strong price competitiveness.

Toplines Hold a Lot of Weight

By Shelene Costello 

 
Dairy goats are usually, though not always, bred once a year to bring them into milk. They are then expected to hold that milk production for 10 months of the year. The weight of the full rumen and a pregnant body for several months of the year, which may get pretty heavy with multiple kids, needs a good strong topline to support it. Put on the expected capacious milky udder, and several more pounds are added to the body each day during lactation. Any weakness of the topline, especially in the loin area, may lead to break-down over time, leading to the conclusion that strength over the topline is a very, very important point of structure in the dairy goat. Breeders who expect any kind of longevity in their herds must understand how the components of the topline work, in order to evaluate their strength in each breeding program.

When I consider the topline, I usually look at the neck as the first point of topline consideration. How the neck is set and carried affects the way the whole back works. Necks in dairy goats are a necessary part of function. A good dairy goat needs a neck long enough to reach down to graze (no matter how tall or short the goat), and stretchy enough to reach up to higher set leaves and browse. A neck that is long, straight, somewhat elegant, set on and carried high is desirable as it adds to dairy character. A short thick neck usually comes with a shorter thicker body that lacks refinement and often is found on a goat that is putting more food into her body fat rather than into making milk. The length in the neck often carries back to the length of the topline, which in turn affects overall balance.

The next three parts to the topline can be memorized in descending order: the chine, the loin, and the rump. Each of these sections should be approximately one third of the length of the total topline, excluding the neck. The whole topline should be relatively level from shoulders to hips with a slight incline on the rump from hips to tail.

The chine is the area from behind the top of the shoulders, also known as the withers, to the end of the ribcage. The loin is the area from the end of the ribcage to the hips. The rump is the pelvic area, sometimes referred to as from hooks to pins (bones).

Ideally, the chine is level and strong, though in the interest of functionality, a chine with a bit of a dip behind the shoulders can still be functional in a long-lived and productive doe. The chine has a bit of support from the ribcage, because even though it adds weight, it also adds stability. Too tightly set shoulder blades or shoulder blades that are too far angled back can cause a dip in the chine, as can a neck which is set a bit low, when it is lifted up. Strength or weakness in this area is mostly genetically influenced, but condition of the goat can also be a factor.

The loin must be strong and well held up, with good lean muscling to help support it. I consider the loin to be rather like a suspension bridge holding up that wide barrel bridging from the chine and ribcage and connecting to the pelvis.

There will be variations from levelness that will stay sound, but the farther it deviates from ideal, the more weakness may show up over time. If the loin is weak and dips as a young kid, it tends to get worse as the goat ages and matures.

I have found that a roached topline, a rising up over the loin area, is stronger than one that sags. It is not as pretty as a level loin, but it can be functional and the main goal of breeding dairy goats, for me, is function first.

The rump should be long, wide, level from side to side with a slight slope from hips to tail to facilitate natural drainage of the body. Width through the rump is indicative of easy kidding, as discussed in the previous issue of Dairy Goat Journal in this structure series.

When considering what makes a goat strong and healthy, be sure to evaluate the neck, chine, loin, and rump, as putting all of these components together creates a topline that will hold up to rigors of eating plenty of food in order to produce lots of great tasting milk. Strong toplines are imperative in order for a dairy goat to be able to carry a lot of kids over time and stay sound doing it for at least 10 or more years.