Monday, April 18, 2011
Japan’s Compound Feed and Livestock Production
JAPAN - Since the earthquake and subsequent tsunami struck Japan on 11 March, surrounding Japanese feed millers have stepped up to fulfill the demand in the affected area, the US Grains Council’s Tokyo office reports.


“With the flow of compound feed from outside areas, combined with feed produced in some of the mills in the Tohoku area which were capable of working, livestock farms in the Tohoku area could get roughly half of its normal demand during the month since the earthquake,” said Hiroko Sakashita, USGC associate director in Japan.

While livestock in the Tohoku area are on a significantly reduced feed ration, a livestock expert informed the Council that animals will survive but will experience some growth reductions. Once feed supplies recommence, producers will resume normal feed rations for production and shipment and animals will mature.

“We have not heard devastating reports in regards to animal losses at large cattle, swine and chicken farms,” reported Ms Sakashita. “The livestock population in the whole country was not significantly impacted. Therefore there will be no significant reductions in feed demand.”

This takes into consideration the livestock operations that were forced to evacuate due to their proximity of the Fukushima nuclear power plant.

“The animal population within a 20 kilometer (13 mile) radius of the power plant was not significant to the total Tohoku area,” she said.

Transportation costs and power outages remain a concern for feed millers in the mid to long term. Ports are recovering but it is not clear when a Panamax-size vessel will be accepted into the affected area.

Japanese feed manufacturers submitted a letter of request to the Ministry of Land, Infrastructure, Transport and Tourism, which administers the ports, in an effort to secure a stable supply of compound feed and feed ingredients. The appeal included radioactivity declaration of safety of those ports and early accessibility recovery for Panamax-size vessels.

For mills in Kashima, which account for 15 per cent of Japan’s total compound feed production, some have recovered in volume of production and shipment to the level of before the earthquake, with reduced variety of compound. As a whole, all feed mills in Kashima expect to resume full production in the latter part of April or beginning of May.

Monday, April 18, 2011
CME: Wheat Feeding, Impact on Corn Demand
US - The issue of wheat feeding and the potential impact on corn demand remains a hot topic in the marketplace and we received plenty of valuable input following our last report, write Steve Meyer and Len Steiner.


We thought we’d share some of that input and expand a bit on the issue.

Soft red winter wheat (SRW) planted acres are sharply higher. The attached chart gives you an idea of the spread of winter wheat. According to our calculations show total planted acres for 2011 at 7.948 million, 57 per cent higher than a year ago. Some other estimates we have seen are slightly different but we did a quick math of acres east of the Mississippi and this is likely close enough for this analysis. Total wheat acres in 2011 are 3.9 million acres higher and even though SRW accounts for just 19 per cent of acres planted with winter wheat, it will contribute about 74 per cent of the growth.

 

 
USDA noted in their latest WASDE report that “increased prospects for 2011 SRW wheat production and higher year-to-year corn plantings in the South reduce expected corn feed and residual disappearance during the second half of the 2010/11 corn marketing year.” The question everybody is asking is: Will hog and poultry producers replace high priced corn with wheat? There are logistical, economic and management considerations that will affect this decision.

Logistically, SRW wheat is relatively close to large poultry operations in the Southeast and transportation costs should not be significantly higher than for corn, indeed they may be lower in some cases. Also, there is SRW supply that could easily go into hog operations in the Southeast and even those in the Midwest. Basis (the difference between futures and local cash price) is an important consideration whenever doing a comparison of feed prices. Chicago futures may show one price level but that needs to be adjusted for the local price, which reflects availability, quality and transportation costs. In our view, the big issue with including wheat in a hog or poultry ration will be from a management perspective.

One of the downsides of having relatively low corn prices for the last three decades is that people get used to a set diet and there is relatively limited experience with other feeds, such as wheat. Can you feed wheat to pigs and broilers? Yes. We have seen some research which reference broiler diets with up to 80 per cent wheat1. Also, research has shown that “wheat can replace all the corn in diets fed to all categories of pigs.2” But, to include a new feed requires more than just replacing corn with wheat, it requires a change of the entire feeding regimen, the feed also needs to be handled differently and may require additional work. Finally, producers need to be sure how the feed change will affect meat attributes (fat color in broilers for instance).

Bottom line: We will likely see some wheat feeding, and those with experience will use more wheat than in other years but we think that this will not be as quick to implement as some may think and the eventual supply of wheat fed to hogs and poultry will likely be smaller than some expect.

Monday, April 18, 2011
Import One Pork Disease, Get the Second One Free?
NEW ZEALAND - Proposals by the Ministry of Agricultural and Fisheries (MAF) to relax import health standards for raw pork from the United States, Canada, Mexico and the European Union (EU), is like playing Russian roulette with the entire agricultural sector.


“Although MAF have stated that there is only a 1 in 1227 year risk of an outbreak of the Porcine Reproductive and Respiratory Syndrome (PRRS) from imported raw pork, this doesn’t account for other serious animal diseases carried in raw meat,” says John Hartnell, Federated Farmers biosecurity spokesperson.

"Take Bulgaria, which is a member of the EU. Bulgaria has been struggling to put down an outbreak of foot and mouth disease, which has infected pigs and other livestock and fresh outbreaks were confirmed only last week.

“The potential for not just PRRS but other diseases to be carried in raw pork is real. Pigs are one of the greatest risk vectors for ruminant diseases and we don’t want to import one disease and get a second one for free

“I’m sure MAF believes its calculations, but a disease doesn’t stop to check the calendar to see what year it is. ‘1 in a 1227 years’ could well be next year?

“After all, the odds of a standard ticket winning last weekend’s $34 million Powerball were 1 in 3.8 million but that didn’t stop two people from doing just that. MAF’s odds seem more numerology than science – a belief in the numbers and not what a trend maybe telling us.

“This is not a case of protectionism. We live for free trade but that does not mean unquestioning trade.

“What we're talking about is retail ready raw pork that can be delivered from the export carton straight to a supermarket’s shelf or to any food service outlet in the country. There is potential for raw meat to host exotic diseases.

“The move to relax import health standards for raw pork is the thin edge of the biosecurity wedge Especially when agreement has just been finalised, which will see New Zealand pork producers adopt world-leading animal welfare standards.

“This considerable investment will now be overshadowed by the increased risk that this industry now faces.

“As an island, we're still thankfully free of most exotic pests and diseases due to sound biosecurity. It’s time to put aside the calculator, open up our eyes and start matching activity with old fashioned common sense,” Mr Hartnell concluded.

Monday, April 18, 2011
US Pork Exports Positive for Hog Producers
US - Pork trade continues to be a positive for hog prices, writes Ron Plain.
 
Ron Plain
Pork exports during February were 7.2 per cent higher than 12 months earlier and pork imports were 7.2 per cent lower. The big growth markets for pork exports were South Korea, China, Russia and Japan. During the first two months of 2011, the US exported 20.6 per cent of our pork production while pork imports equaled only 3.4 per cent of production. A stronger world economy and a weakening dollar are two causes of these trade gains. Compared to a year earlier, the trade-weighted value of the dollar was down 4.6 per cent in February.

The year-over-year inflation rate for March was 2.7 per cent, the highest since December 2009. A rising inflation rate could lead to higher interest rates and slower economic growth. That would not be good for meat demand.

Hog prices ended the week slightly below last week’s record levels. The national weighted average carcass price for negotiated hogs Friday morning was $91.41/cwt, down 74 cents from the record set the previous week. The eastern corn belt averaged $91.32/cwt. The western corn belt averaged $91.52/cwt and Iowa-Minnesota had a $91.59 average price on the morning report. The top live hog price Friday at both Peoria and Zumbrota was $64/cwt. The interior Missouri live top Friday was $64.50/cwt, up 75 cents from the previous Friday.

USDA’s Thursday afternoon calculated pork cutout value was $96.00/cwt, up $1.72 from the previous Thursday with loins and hams higher. Prices for bellies and butts were lower this week. This morning’s average hog carcass price was 95.2 per cent of the pork cutout value. That is lower than the week before but high enough to put downward pressure on hog prices.

The live hog price continues to be high relative to the carcass price. On Thursday the average negotiated barrow and gilt purchase on a live weight basis was $74.60/cwt which was 81.8 per cent of the day’s average carcass price of $91.16/cwt.

Hog slaughter totaled 2.028 million head this week, down 2.0 per cent from the week before, but up 0.5 per cent compared to the same week last year.

The average carcass weight of barrows and gilts slaughtered the week ending 2 April was 206 pounds, unchanged from the previous week and 5 pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 273.3 pounds, down 0.4 pounds from the week before and up 3.1 pounds compared to a year earlier. This was the 30th consecutive week above year-earlier. Although year-to-date hog slaughter is down, pork production is up 1.0 per cent thus far in 2011.

The April lean hog futures contract ended the week at $102.42/cwt, up $1.45 from the previous Friday. The June contract ended the week at $101.07/cwt. July hogs settled at $101.12.

The May corn futures contract lost 26 cents this week to end at $7.42/bushel on Friday. September corn ended the week at $7.015.

Monday, April 18, 2011
Chief Vet Confirms Need for Modernisation
CHINA - The country's Chief Veterinary Officer has emphasised the tasks on development of the animal husbandry and veterinary services.


On 9 April, the first training course for the heads of animal husbandry bureaux of the rotational training programme for the heads of bureaus from major counties in terms of crop production, animal husbandry and fisheries was opened at the branch of the Central Agricultural Officials Education and Training Center at China Agricultural University. Yu Kangzhen, Chief Veterinary Officer of China, attended the opening ceremony and delivered a keynote presentation.

Mr Yu said that accelerating development of modern agriculture and transformation of the pattern of agricultural development was a major task in terms of the work on agriculture and rural economy during the Twelfth Five-Year Plan period. The key to transformation of the pattern of agricultural development was great efforts in development of specialised, standardised, large-scale and intensive agricultural production and operation.

Therefore, he said, it was necessary to give high priority to expansion of standardised large-scale animal farming in the process to transform the development pattern of animal husbandry; work hard at formulation of standards, demonstration, mechanism innovation and publicity; make breakthrough in difficult issues, such as manure disposal, farming records management and biosafety disposal of animals dying of diseases; and effectively strengthen the capacity for market supply of animal products, reduce the incidence of major animal diseases and improve the quality and safety of animal products.

Mr Yu stressed that it was important to intensify the efforts in animal health and veterinary administration during the Twelfth Five-Year Plan period.

He put forward the following priorities:

first, carry out effective prevention and control of major animal diseases to ensure no reemergence of major animal diseases, effective containment of further spread of zoonoses, timely prevention and control of exotic diseases and decisive response to animal disease emergencies


second, strengthen the supervision on safety of animals and animal products, especially intensify the disease inspection on farm and at the slaughterhouse to ensure no spread of animal diseases and enhance veterinary drug safety control and residue monitoring to prevent substandard animal products from being marketed, and


third, facilitate innovation in veterinary systems and mechanisms by improving the systems for veterinary administration, animal health supervision, prevention and control of animal diseases and some other aspects, accelerating development of the system for official veterinarians and licensed veterinarians, implementing the second-phase plan for the animal disease prevention system, and improving animal disease prevention institutions at the township and regional levels this year.

BPEX Export Bulletin - March/April 2011
The British Pig Executive's (BPEX) Export Bulletin for March/April 2011 reports pig industry trends from around the world, with the focus on the trade show, Alimentaria, which took place in Lisbon recently.
 

Portugal used to be a good market for British pork but Spanish pork now represents more than 95 per cent of fresh and frozen imports and the great majority of processed pork imports, although the UK still exports frozen sausages. Nonetheless, during Alimentaria in Lisbon recently, there was some good demand for pork ribs and offal from Angola, a country with strong links and a common language with Portugal and a major importer of EU meat. A green light is awaited from Defra regarding Angola but traders would still import the product as exporters’ risk as there seem to be a general agreement to allow EU meat in the country.

Denmark
Market
On the European market, fresh legs and loins are sold at increasing prices. As to shoulders and production meat, the trade is stable with unchanged prices. Exports to the British bacon market are fine with increasing prices for the April contracts. For markets outside the EU the situation remains unchanged meaning continuing good activity for the Asian markets in South Korea, Japan and China.
(Sources, Danish Crown, Tican, Danish Agriculture & Food Council)

Effects of the earthquake in Japan
Still it is difficult to evaluate the effects of the earthquake and the tsunami on imports of pork to Japan. Danish Crown was quick to report that there were no changes in the fine demand from Japan. In the US, the immediate reaction to the disasters in Japan was declining prices of pork futures due to American fear that a damaged Japanese infrastructure would prevent meat and other food products from reaching the consumers. Afterwards, the US future prices have adjusted and presently the US expect that Japan now and also on the longer term will need to increase its imports due to the catastrophe.
(Source, Markedsnyt for Svinekød)

Tulip invests in packaging lines
Investments in three new packaging lines ensure that the Tulip canning factory at Vejle has the lowest production costs in the entire group of companies. It is also a prerequisite for keeping jobs in Denmark in the long run, says head of factory, Keld Nielsen. The investments are necessary because the factory cannot keep up with the demand. Today, there are approximately 300 employees at the plant at Vejle, which exports to 83 countries including Japan, Korea, the US and the UK. The plan is to invest €8 million in the new packaging lines during 2011 and 2012. With a capacity of 360 packaged cans per minute, equivalent of 54 tonnes daily, one of the new lines replaces two old ones.
(Source, Vejle Amts Folkeblad)

Danish Slaughterhouses - payments Week 13
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week Euro 1.334
Unchanged Euro 1.334
Unchanged
Sows (Above 129.9 kg)
Difference to last week Euro 0,854
+0.027 Euro 0,854
+0.027
Boars (Above 109.9 kg)
Difference to last week Euro 0.721
+0.027 Euro 0.721
+0.027

France
Fleury-Michon
“The ham segment does not generate impulsive purchases,” claims Patrick Lerüe Head of Charcuterie marketing for Fleury-Michon (FM). The new brands developed by FM should improve the already excellent health of the cooked ham market in France (+3 per cent in volume and value last year compared with 2009). The ‘New fresh’ offer described in the BPEX report a month ago should respond to a demand for authenticity detected by the French leading group. Four ‘kingdoms’ have been re-marketed: hams from our countryside, hams from pigs reared in mountains, prepared hams and organic hams. The new packaging includes crystal trays, with 50 per cent less plastic but 63 per cent paper, with photographs of producers for countryside range, photos of mountains for the mountain range and photos of green countryside for the organic products. Fleury-Michon is the third contributor to multiple’s growth in value behind Nestlé and Procter & Gamble, the group will increase its activity in the charcuterie market and in the prepared meals sector. FM increased its market share of the self-service charcuterie market in value by 16.7 points with 10.7 per cent market share in front of Herta with 10.3 per cent market share and Madrange. Own brands represent 50.4 per cent of the market and hard discount own brands represent 6.9 per cent of this market. The new base line: ‘Obsessed with goodness’ will appear on all products, including prepared meals.

Pigs
They are enough slaughterings to cover needs, both in the export and the French market. With the beginning of spring, the prices of porkers should continue to rise. The increase in the cost of raw materials is always in the news. The cost of the feed is still very important for the breeders.

Piglets
No big changes in the market.

Cuts
Putting aside the normal monthly evolution of the prices of cuts, prices are increasing slightly. Besides, prices may increase if the nice weather settles for any length of time.

Pork prices RUNGIS week commencing 28 March 2011
Cut name Price range (Euro/Kg)
Back fat, rind-on 0.40
Trimmings 1.19
Leg 2.21
Loin including chump 2.93
Loin excluding chump 2.61
Belly extra without trimmings 1.67

Germany
Market
Due to unsatisfactory margins, abattoirs and deboning plants are currently reducing the production of pig meat. Regional promotions offer collars, loins and chops at very competitive prices. Pig meat for processing, however, is marketed at mostly stable prices and sales of ham remain stable thanks to continuous demand from Italy. With the weather being relatively warm already, hopes are set on the barbecue season to start early this year.

Rising consumption
According to the Federal Bureau of Statistics, meat consumption in Germany keeps increasing. On average, every German consumed 300g more meat in 2010 than in the previous year with pig meat and poultry accounting for the highest increase.
(Source, afz)

Pork Prices Hamburg Market Week commencing 28 March 2011
Cut Name Price Range (€ / kg)
Round cut leg 2.25/2.45
Leg (boneless, rindless max fat level 3mm) 3.25/3.40
Boneless Shoulder 2.40/2.60
Picnic Shoulder 2.25/2.45
Collar 2.45/2.60
Belly (bone in, ex-breast) 1.90/2.25
Sheet Boned Belly (rindless) 1.88/2.12
Jowl 1.05/1.20
Half Pig Carcasses U class. 1.92/2.02

Spain
Sánchez Alcaraz business increases by 28 per cent in 2010
The company from Toledo raised its turnover by 28 per cent in 2010 to €31.22 million, a figure double of 2004 turnover, the year before they started business with the German company, Abraham (owned by Bell Holding). The company’s growth is mainly due to the commercial arrangement with Abraham. Sánchez supplies whole pieces and processed ham in blocks, which are then sliced by Abraham. Most of the Spanish deliveries are distributed in Germany – in chains such as Aldi, Rewe and Lidl – and the rest in other European countries (Great Britain, Switzerland, Poland, Holland, etc). In 2010, these foreign expeditions accounted for a volume of 2,639t (2,551t of cured ham from white pigs and 88t of Iberian) compared with 1,856t sold in 2009, giving the company an export turnover of €16.96 million, a 52 per cent more than in 2009 (€11.17 million). Meanwhile, its business in the domestic market is estimated at €14.27 million.

Spanish government to complain at the Council of Ministers
The Government want to put pressure on France for a rapid cessation of French attacks on Spanish pork lorries.

Pork prices Barcelona Market Week Commencing 28 March 2011
Cut Name Price Range (€ / kg)
Carcases (secondary grade) 1,664/1,670
Gerona Loin Chops 2,43/2,46
Loin Eye Muscle 3,49/3,52
Spare Ribs 2,71/2,74
Fillets 5,83/5,86
Round Cut Legs 2,53/2,56
Cooked Ham 2,20/2,23
Rindless Picnic Shoulder 1,60/1,63
Belly 1,85/1,88
Smoked Belly with Spare Rib Section Cut off 2,28/2,31
Shoulder chap or Head Jowls 0,88/0,91
Back Fat, rindless 0,68/0,71

Portugal
The Portuguese pork sector
  2005 2009 Variation
05 – 09 (%)
Production 326,850 373,529 14,3
Imports 104,231 114,316 9,7
Exports 2,770 12,891 365,4
Consumption 428,311 474,954 -10,8

Pork meat production between 2005 and 2008 was very positive but in 2009, the production fell two per cent. There are great contrasts between different operators: some are highly specialised groups and others are small farms. The majority of the breeding farms are located in the regions that are close to large populations (Leiria area, Alto Alentejo, Alentejo Litoral). The degree of self-sufficiency in pork is estimated at 65 per cent, leaning more and more to the need for imports to supply the local market. The production of this kind of meat is highly integrated within the farms but not so much with the slaughterhouses where there is no relevant groups within the sector. Portugal is a country with a large number of quality meats and processed meats. According to the EU records, there are 32 protected geographical denominations for fresh meat and 36 for processed meat (sausages and cured pork meat). In addition, it should be mentioned that in the case of the Iberian pork’s production, the Quality Standard that protects these products also protects the meat and meat products made with raw materials from animals reared in Portuguese pastures.

Demand for pork and places of purchase
The consumption of pork has remained stable. Despite the growth recorded at the beginning of the past decade, has not exceeded 454,000t. This makes the consumption per capita quite stable and is estimated at 43kg per person per year. With regards to places of purchase, retail shops and traditional butchers are the most visited but gradually, sales from supermarkets and hypermarkets are gaining in importance. The main companies in the retail industry are: Soae (Continente, Modelo and Modelo Bonjour), Jeronimo Martins (Pingo Doce and Feira Nova), Grupo Os Mosqueteiros (Intermarché and Ecomarché), Auchan (Pao de Açucar and Jumbo) and Carrefour (Minipreço and Día). There are also other companies engaged in the distribution but specialised in the field of wholesellers, such as Makro and Recheio. There are large groups that own establishments known as ‘entrepostos’. These centres are dedicated to cutting and filleting meat (both for domestic and imported meats) and also serve as logistical points from which they distribute to other commercial supply chains.

Pork is winning market share
Pork consumption is winning against beef and, to a lesser extent, against chicken. Pork is less than half the price of beef in Portugal and just slightly above chicken prices. Pork penetration reached 85.2 per cent in 2010 helped by the low prices of the ever-expanding supermarket chains and cheap imports from Spain. It gained new consumers mainly in the middle and lower classes. The latter eat more meat and meat products than the Portuguese average.
(Source,Kantar).

Price deflation at an end
Food prices are already rising in Portugal following years of retail price deflation and retail price wars due to the general increase of commodity prices. According to analysts, this will not affect fresh food volumes in Portugal but non-food budgets will suffer. For memory, GDP is expected to fall by 0.9 per cent in 2011.
(Source, Kantar).

Who is winning the retail war?
Sonae-Continente wins on confidence, quality and fidelity. Pingo Doce–Jeronimo Martins on convenience and Intermarché with people most affected by the crisis with its low prices. In balance, Sonae is the winner. The combined market share of its two store brands, Continente and Modelo, is 29 per cent, ahead of its competitors Jeronimo Martins with 16.1 per cent and Intermarché with 9.7 per cent.
(Source, Distribuição Hoje).

Pork producers destocking
In Portugal pig producers faced with losses are cutting back their sow numbers. Recently, productivity has increased and, despite the lack of national statistics, the number of 24.5 piglets born alive per sow is now considered the Portuguese average. Producers’ organisations are looking at solutions to the crisis. Much of the blamed is put on supermarkets that are paying their bills at 90 or even 120 days.
(Source, Vida Rural).

Russia
Feed grain in circumvention of the exchange auctions
Vladimir Putin, Prime-Minister of Russia, has signed the resolution on the distribution of feed grain to the animal producers without participation in the exchange auctions. The document states that soft 5th grade wheat and barley will be sold throughout Russian Federation at the price level of $211 per ton (VAT included).
(Source, RBK)

Cherkizovo expects more federal budget subsidies in order to level down negative impact of grain price increase and to secure profitability
The largest meat producer in Russia foresees a difficult year due to increasing primary cost of the products, which cannot be fully compensated by the increase of the final price for the consumers. Mr Putin instructed the Ministry of Finances and the Ministry of Agriculture to take a decision regarding direct subsidy assistance to the producers of pork and poultry within 10 days. According to the information provided in different mass-media sources, it is foreseen that more than $440 million will be allocated to the pig and poultry industry. A similar mechanism of state support was implemented in 2008 when the grain prices significantly increased and Cherkizovo received $33 million from the federal budget.
(Source, Finam)

New outbreak of ASF in Leningrad region
An outbreak of African swine fever on a farm in the Leningrad region has been confirmed on 18 March by the National Research Institute for Veterinary Virology and Microbiology of Russia. Following this confirmation, the Estonian Veterinary and Food Department introduced the ban on the import of pig meat and the products derived from it from Russia.
(Source, meat.info)

Belarus
Belarus to lift temporary ban from the import of meat from Germany
The Ministry of Agriculture of Belarus announced that the ban on the import of pork and products derived from pig meat produced in Germany after 1 November 2011 has been lifted. The import of each batch of the these products should be accompanied by the negative results of the tests on the content of dioxin carried out by one of the certified laboratories in the EU. The temporary ban on the import of live animals for fattening and slaughtering, feed additives (exclusive of chemical and microbiological synthesis) and animal feed is still valid.
(Source, Infobaza.ru)

Sweden
New initiative from Scan Sweden
By adding rapeseeds to the feed, Swedish company, Scan produces pork with more omega-3 fatty acids and less saturated fat. Scan hopes that it will increase the demand for Swedish pork. In Finland, HK Scan researched in fat composition of pork after feeding with a crop closely related to rapeseed, and the result after 40 years of research is a higher proportion of omega-3 fatty acids and a lower proportion of saturated fat. Furthermore, a consumer survey showed that the meat was juicy, tender and easy to cook. So now Scan in co-operation with the Swedish pig producers will develop the rapeseed pig concept. The concept offers many health advantages, which Scan evaluates that the Swedish consumers demand. Scan and its suppliers want to establish competitive advantages that will strengthen and secure Swedish pork. Scan also wants to make its suppliers believe in the future, says Dennis Mattson of Scan. It is planned to produce 200,000 rapeseed-fed pigs.
(Source, Maskinbladet)

Japan
Japan likely to increase pork imports
In private discussions, Japanese operators have told BPEX that the nuclear incident had undermined confidence in Japanese food including pork and that this is likely to lead to higher imports. Meanwhile, domestic pork prices are soaring.

Taiwan
Foot and mouth outbreak
According to an unconfirmed US report, an outbreak of FMD has been detected in the country.
(Source, Pork Network Report)

April 2011

Wednesday, April 13, 2011
Pork Commentary: Corn Price Moves Even Higher
CANADA - This week's North American Pork Commentary from Jim Long.
 

This past week saw corn futures move higher with May corn a bushel closing at $7.68 up a $1.00 a bushel in the last 10 days. Using the benchmark that it takes approximately 10 bushels of corn to raise a hog in a farrow-to-finish system, this would equal a $10 per head increase in cost of production. Where does the corn price go from here, we have no idea.

Our observations would be these corn prices will encourage every nook and cranny of land in the Northern Hemisphere to be planted this year to some kind of grain. This will result in millions of more acres planted. At the same time, the higher grain price will at some point lead to less usage. Now we are reading of a commodity upturn that could last 30 years. That this time, it will be different. There have been commodity price swings forever, we expect no different in the future. There appears to be lots of speculated money in the grain market, when they get spooked. The market can run down as fast as it went up as the speculators head for the hills.

Hog market
The US hog market moved up last week with 53 to 54 per cent lean hogs averaging 92.31 at the end of the week up from a week ago's – 90.03 or a little over $4.00 per head improvement. May lean futures closed Friday at 100.97 meaning the futures market is expecting an increase of about $20 per head in the next four weeks. Let's hope so, with grain prices where they are break-evens are pushing toward 90 cent lean per pound.

Last week, the US marketed 2.069 million hogs, year to date 29.802 million, down 465,000 from year to date last year. Lean 53 to 54 per cent hogs were 75.35 a year ago. A true reflection of the strong pork demand we are having is the $30 per head more being received this year currently with supply down less than 1.5 per cent year to date.


USDA pork carcass cut–out values were $94.60 at the end of last week. At $94.60 cut–out and lean cash hogs at 92.71 packer margins have narrowed considerably in the last few weeks from the $10 spread they had. In our opinion, to reach $1.00 lean for hogs, USDA cut–outs have to increase nearly $10. To do that, we believe weekly US marketings have to be closer to two million a week. Hopefully, we will move there in the next few weeks.


Maybe the high cost of grain is finally pulling hog slaughter weights down. The latest Iowa–South Minnesota weights were 273.7 pounds up 3.5 pounds from a year ago. Though higher the spread at 3.5 pounds is the narrowest it has been for months year-over-year. It is a dilemma for producers as individually they can benefit financially from heavier hogs with more pounds of pork produced. On the flip side, lighter hogs throughout the industry would probably increase hog prices and profits higher than the benefits received from heavier hogs as less pork tonnage would raise hog prices. We expect the seasonal decline in weights will happen as it does every year.


The US dollar index relative to other countries has decreased from above 88 to about 75 in the last year a decline of almost 20 per cent. This is allowing for many foreign countries to purchase pork, beef, grain, oil, etc. at what for them are discounted prices. In turn, this is helping US pork exports demand. For example, the average foreign buyer who purchased pork at 80 cents US last year can pay almost US$1.00 this year and it costs them the same in their own currency. On corn, it helps the average foreigner's purchasing power nearly $1.00 per bushel.


Canadian swine producers are feeling the affect of a weaker US dollar. April two years ago, the Canadian dollar averaged 81.5 cents to the US dollar. Last Friday, the Canadian dollar closed at $104.49 up about 28 per cent in the two years. The Canadian swine market prices are mostly the US hog price less trucking so it has been in the past mostly discounted. With the Canadian dollar gaining strength, Canada's cost of production in US dollar terms has increased. This in itself will do more to damage the Canadian industry then US country of origin labelling (COOL), H1N1 (swine flu), US countervail etc. With the high cost of feed, stronger Canadian dollar and mostly negative market basis vis-àvis US hog prices we do not expect any expansion of Canada's breeding herd anytime soon.
Summary
Lean hog prices appear on track to get to a dollar lean in the coming weeks. Unfortunately, high grain prices will restrict profitability. Over the coming months, the lower US dollar will help maintain US pork exports while it in turn restricts Canada's pork industry. With current Cash cattle prices 30 cents per pound higher than the last three-year average for cattle (90 cents vs. $1.20), this will encourage domestic and international consumers of meat to look at pork as value option driving pork demand and strengthens hog prices.

World meat consumption is 46 per cent pork and in the coming months the demand for pork will increase as the global economy slowly improves. Price supportive.

Wednesday, April 13, 2011
Weekly Roberts Market Report
US - The story of the day continues to be centred on corn.

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

Lean hogs
Lean hogs on the CME finished up on Monday with the exception of the August 2011 contract. The APR'11LH contract closed at $93.250/cwt; up $0.100/cwt but $0.95/cwt lower than a week ago. AUG'11LH futures closed at $100.85/cwt; down $0.025/cwt and $3.25/cwt off from last report. Higher pork prices on faltering beef and talk of higher cash trade this week were supportive. Seasonal trend-strength in hog prices ahead of Memorial Day was seen as positive in the pits. Export markets were very supportive as Japan increased imports due to the disaster there and South Korea buys more amid herd reductions on reports of foot-and-mouth disease there limiting internal supply. Higher corn prices kept the lid on however hog prices. Cash processor demand was flat on Monday while they take a 'wait-and-see' attitude toward price movement. These same processors may have to bid up prices later in the week to fill processing lines. USDA put the pork cut-out at $94.28/cwt; up $0.32/cwt and $0.16/cwt higher than last week at this time. According to HedgersEdge.com, the average packer margin was at a positive $0.85/head based on the average buy of $67.82/cwt vs. the average break-even of $68.13/cwt. The latest CME lean hog index was placed at $91.23; up $0.20 and $2.62 over last report.

Corn
Futures on the Chicago Board of Trade (CBOT) finished up on Monday. The MAY'11 contract closed at $7.776 up 8.0 cents/bu and 17.5 cents/bu over last week at this time. The DEC'11 contract closed at $6.572; up 4.25 cents/bu and 11.75 cents/bu over last report. Dwindling US corn stocks continued to support corn futures. Unless corn exports slow the US is treading thin ice and may run the risk of depleting its corn supplies before harvest amid stocks at their lowest levels since the 1930s. Good corn planting weather has helped producers get off to their best start yet as intentions show farmers plan to plant the second largest area to corn since World War II. Everybody and his brother are planting corn or cotton. Tight local corn supplies have encouraged the Chinese government to sell more off-quality wheat from government reserves for livestock feed. Funds bought more corn positions raising net long positions to their highest levels in four weeks after last week's USDA stocks report. Funds continue to build long positions and if this keeps up any glitch in the corn supply will have a huge impact on prices. Fundamentally corn continues to show bullish strength.

Soybean
Futures on the Chicago Board of Trade (CBOT) finished fell on Monday. The MAY'11 contract closed at $13.684/bu; down 23.75 cents/bu and 15.75 cents/bu lower than last Monday. NOV'11 soybean futures closed off 15.75 cents/bu at $13.802/bu and 8.75 cents/bu lower than last report. Soybeans saw their largest decline in a month, sliding almost two per cent as South America reports a bumper crop harvest there and growing concerns that China may slow soybean imports. Early Monday, Chinese officials said it is highly likely that some cargoes of soybeans will be deferred or even cancelled due to poor crush margins. Barge basis for soybeans was steady to weak early Monday amid slow grain movements and slack demand. Lower crude oil futures put pressure on soybeans, particularly on the soybean oil contract. Fundamentally soybeans are looking more bearish.

Wheat
Futures in Chicago (CBOT) closed down on Monday with the exception of the nearby May contract. The MAY'11 wheat contract closed at $7.982/bu; up 0.75 cents/bu and 8.25 cents/bu over last report. JULY'11 futures finished down 0.5 cents/bu at $8.316/bu but 5.0 cents/bu higher than this time last week. Wheat prices were fairly firm on corn strength. However, prices were limited due to forecasts for rain in the US Plains. Profit taking also weighed on prices. China said last Tuesday it will sell another significant portion of state wheat reserves because quality problems. This is the second such sale for animal feed production amid tight local corn supplies. India is yet to decide whether it will allow exports of wheat this year. Fundamentally wheat has some strength. Weather markets will begin to weigh in.

Industry Concerned about Imported Disease
NEW ZEALAND - New Zealand Pork is deeply concerned about new Ministry of Agriculture & Forestry (MAF) standards issued today (13 April 2011) that relax biosecurity around imported pork.


New Zealand Pork says that not only could the lower standards undo the historic welfare code embraced by the industry in December, but also weaken New Zealand's biosecurity for the whole agricultural sector, according to Scoop.

The proposed relaxing of biosecurity standards could allow the exotic disease Porcine Reproductive and Respiratory Syndrome (PRRS) to enter New Zealand and infect local pigs – impacting the pig welfare transformation already underway throughout the country.

Pork imported to New Zealand from countries with PRRS must currently undergo treatment to deactivate the disease. Under the new proposals this requirement would be eliminated. This opens the door for transmission of the disease.

New Zealand Pork CEO, Sam McIvor, says: "New Zealand pork producers have committed to world-leading animal welfare standards and are extremely concerned about the risks from the proposed relaxing of biosecurity standards around imported pork.

"It just doesn't make sense to introduce pig welfare standards on one hand while putting them at risk of this imported, highly distressing disease on the other.

"Like many others in the economy our pork producers are doing it tough at present. The changes farmers are making do come at a cost. The last thing they need is to be undermined by the potential for new and exotic diseases introduced as a result of short-sighted legislation," he said.

Mr McIvor says the new MAF biosecurity standards would put New Zealand's overall biosecurity in jeopardy.

"There is real concern within the primary production sector about the precedent this sets for an increase in risk to New Zealand's biosecurity generally. The value of New Zealand's exports in world markets is due in large part to our world-class healthy production base. This message has been reinforced by industry in its submissions on the Biosecurity Law Reform Bill currently before Parliament.

"New Zealanders are concerned about animal welfare – why put this at risk?" Mr McIvor said, according to Scoop.

Wednesday, April 13, 2011
New Agreement Eases China–Brazil Beef, Poultry Trade
CHINA & BRAZIL - The Presidents of the two countries have hailed a new strategic partnership as key deals and agreements have been signed on products including chicken, beef and bovine embryos and semen.

 


China pledged to diversify its trade with Brazil and boost imports from South America's biggest economy, as Brazilian President Dilma Rousseff began her debut presidential trip outside Latin America yesterday (12 April), according to official sources.

President Hu Jintao and Rousseff signed a joint communique, which included China's pledge to diversify trade, after talks at the Great Hall of the People. Both President Hu and President Rousseff praised the strategic partnership of the two countries.

Both countries agreed to promote the registration of Brazil's poultry and beef companies and vowed to quicken procedures to add new products onto their import and export lists.

The products include gelatin, corn, tobacco leaf, bovine embryos and semen and fruit from Brazil as well as fruit from China.

The two countries also called for the Doha trade talks to produce comprehensive and balanced results that address the concerns of the world's least developed countries, Xinhua said.

The Doha talks have stalled repeatedly since their start. Some countries earlier identified 2011 as a 'window of opportunity' and a chance to secure an agreement.

China and Brazil agreed to work more closely on reforming international financial and monetary systems under the G20 framework, the communique said.

Under the communique, both countries called for increased supervision to avoid new crises while working toward global economic recovery.

Milk produced from high quality land will have higher mineral content.At the same time,it is known if the water supply is high in iron this can interfere with the calcium absorption of dairy animals.Magnesium is added to help the absorption of calcium in dairy animals along with humans.Dairy goats in general need, 1000 units of vitamin A,500 units of vitamin D and 3 units of vitamin E, per pound or 454 grams of grain or concentrates to remain in good health.

Something called Rumen Buffers are sometimes given to dairy animals to improve feed efficiency and increase milk production usually by about 3.5% for reasons of
-hot weather or heat stress
-fat depression occurs
-feeding high grain rations
-feeding predominantly corn silage as forage
-rations high in moisture
Temperature also plays an important role in milk production.Generally speaking,comfort zone for dairy goats is between 55 and 70 degress fahrenhert.Non sweating animals are much less sensitive to declining temperatures than to rising temperatures.Milk production,feed consumption and comfort are not  affected by temperatures between 0 and 55 degrees fahrenhert,but temperatures over 80 degrees fahrenhert can seriously reduce feed intake and milk output.It is not how to keep your goats warm in the rainy season but how to keep them cool in the dry season.

Most pneumonia problems with dairy goats can be traced to poor ventilation.Proper ventilation during the dry season may require moving 150-200 cubic feet of air per minute per animals to keep them comfortable and productive.

The producer is most likely to be concerned about milk quantity or availability while the consumer is more likely to be concerned about the taste or flavor.Your  customers, need to be aware that taste is often a result of feed changes as well as speed of cooling and does not necessarily indicate contamination.

World Agricultural Supply and Demand Estimates - April 2011
The forecast for 2011 red meat and poultry production is virtually unchanged from last month, according to the latest USDA World Agricultural Supply and Demand Estimates.

Wheat
US wheat ending stocks for 2010/11 are projected slightly lower this month reflecting a small increase in seed use. Higher planted area as reported in the 31 March Prospective Plantings raises projected seed use four million bushels. Small by-class changes are made for imports with Soft Red Winter (SRW) wheat raised five million bushels and Hard Red Spring and durum wheat together lowered an offsetting amount. The marketing-year average price received by producers is projected 10 US cents lower on each end of the range at $5.50 to $5.70 per bushel. Farm prices continue to be reported well below prevailing cash market bids indicating that farmers priced a substantial portion of this year’s crop well ahead of delivery.

Global 2010/11 wheat supplies are nearly unchanged as higher beginning stocks are mostly offset by lower world production. Production is lowered 1.3 million tons for Egypt as the latest reports indicate a sharp year-to-year drop in yields as unusual, early season heat affected pollination and reduced grain size. Production is raised 1.1 million tons for Iran on higher area.

Global wheat trade is projected higher with imports raised for Turkey, Indonesia, Morocco, Yemen, Egypt and Peru. Lower expected imports for Syria and Afghanistan are partly offsetting. Global exports are raised 1.1 million tons with 1.0-million-ton increases for both Australia and EU-27, and a 0.6-million-ton increase for Brazil. Exports are lowered 0.5 million tons each for Canada and Ukraine, 0.4 million tons for Pakistan and 0.3 million tons for Mexico.

Global 2010/11 wheat consumption is lowered 0.8 million tons reflecting small reductions in food, seed, and industrial use in a number of countries. Changes in wheat feeding are mostly offsetting with China raised 1.0 million tons and Pakistan and Egypt lowered 0.6 million and 0.4 million tons, respectively. Global ending stocks are projected 0.9 million tons higher.

Coarse Grains
US corn ending stocks are unchanged this month as a projected increase in corn use for ethanol is offset by a reduction in expected feed and residual use. Corn used to produce ethanol is raised 50 million bushels as strong blender incentives and positive ethanol producer margins continue to encourage expansion in ethanol production and use. Rising gasoline prices have pulled ethanol prices higher helping to offset increases in corn feedstock costs for ethanol producers.

US corn feed and residual use is lowered 50 million bushels as increased prospects for 2011 SRW wheat production and higher year-to-year corn plantings in the South reduce expected corn feed and residual disappearance during the second half of the 2010/11 corn marketing year. SRW wheat plantings are up sharply year-to-year with the 31 March Prospective Plantings report further increasing acreage in the SRW wheat states. A weighted average of early April crop conditions in the SRW states shows the highest percent of the crop in good-to-excellent condition in five years. Winter wheat conditions are especially favourable in Arkansas and North Carolina where wheat feeding is an alternative for poultry and hog producers. Cash and futures prices for SRW wheat have recently dropped below those for corn on a pound-for-pound basis creating opportunities for wheat to replace higher priced corn in feeding rations. Prospects for early new-crop corn usage ahead of September 1 are also increased with the largest intended southern corn plantings since 2007 and high expected summer corn prices.

Other 2010/11 US feed grain changes this month include higher feed and residual use and higher food, seed and industrial use for sorghum which boost expected domestic usage 15 million bushels. Sorghum exports, however, are projected 10 million bushels lower. Oats imports are raised slightly and feed and residual use is projected lowered leaving ending stocks up 18 million bushels. Price ranges for all the feed grains are narrowed five cents per bushel on each end. The season-average corn price is projected at $5.20 to $5.60 per bushel.

Global coarse grain supplies for 2010/11 are projected 6.3 million tons higher this month with a 1.8-million-ton increase in beginning stocks and a 4.5-million-ton increase in production. Higher corn and barley beginning stocks in Iran account for most of the increase in carry-in. Nearly half of the increase in coarse grain production reflects upward revisions to sorghum production in a number of Sub-Saharan African countries. Increases in millet production for countries in this same region add 1.4 million tons to global coarse grain output.

Global corn production is raised 1.2 million tons with the biggest increases for Brazil, Uganda and Paraguay. Production for Brazil is raised two million tons with higher reported area and yields for their primary summer crop and an increase in reported plantings for their winter crop. A 0.5-million-ton increase for Uganda corn is part of a number of revisions for African countries this month. Production for Paraguay is raised 0.4 million tons as favourable growing season weather boosted yields. Production is lowered 1.3 million tons for Indonesia and 0.5 million tons each for Egypt and South Africa.

Global 2010/11 corn trade is up slightly this month with imports raised 0.9 million tons for Indonesia and 0.5 million tons for China. The increase in expected China imports reflects the short-term decline in world corn prices in mid-March that created a buying opportunity for Chinese importers. No official confirmation of such purchases has yet been made. Corn imports are lowered 0.4 million tons for Canada based on the slow pace of US shipments to date. Corn exports are raised 1.5 million tons for Brazil and 0.3 million tons for Paraguay with increased production and supplies in both countries. Exports are lowered 0.5 million tons each for South Africa and Thailand. Global corn consumption is increased 3.1 million tons with increases in feeding for China, Brazil, and Thailand, and increased food, seed, and industrial use for China and for several African countries where corn is a food staple. Projected global corn ending stocks are lowered 0.7 million tons.

Rice
No changes are made on the supply side of the US 2010/11 rice supply and use balance sheets. On the use side, all rice domestic use and residual is estimated at 127.0 million cwt, still a record, but down 2.0 million from last month, but 4.4 million above 2009/10. All of the reduction is in long-grain rice now estimated at a near-record 99.0 million cwt.

Combined medium- and short-grain domestic use is unchanged at 28.0 million cwt. The changes in the 2010/11 domestic use and residual estimates are based largely on the March 1 Rice Stocks report released by the National Agricultural Statistics Service (NASS) on 31 March. NASS reported all rice stocks on a rough-equivalent basis at nearly 130.0 million cwt, up 17 per cent from a year earlier, and above trade expectations.

The all-rice 2010/11 export projection is unchanged at 116.0 million cwt; however, the rough-rice export projection is lowered 3.0 million to 39.0 million because of slower-than-expected sales and shipments to markets primarily in Central America. Conversely, the combined milled and brown rice export projection is raised 3.0 million cwt to 77.0 million (on rough-rice basis) due mostly to recent, large food-aid announcements. The 2010/11 long-grain export projection is raised 1.0 million cwt to 79.0 million, while the combined medium- and short-grain export projection is lowered the same amount to 37.0 million. The increase in the long-grain export projection is due mostly to an increase in the non-commercial portion of exports (virtually all long-grain rice) and the reduction in the combined medium- and short-grain export forecast is due to lower-than-expected exports to Taiwan. All rice ending stocks are projected at 54.8 million cwt, 2.0 million above last month, 18.1 million above the previous year, and the largest stocks since 1985/86. Long-grain and combined medium- and short-grain rice stocks are each raised 1.0 million cwt to 43.9 million and 9.4 million, respectively.

The combined medium- and short-grain 2010/11 price range is projected at $16.75 to $17.25 per cwt, up 50 cents on each end of the range from a month ago. The NASS February full-month combined medium- and short-grain rice price is up 60 cents from the February preliminary price. In addition, an unexpectedly large jump in the preliminary March farm price reported by NASS in Agricultural Prices at $20.30 per cwt is up 15 percent from the February full-month price. These two factors are largely responsible for the upward revision. The long-grain price range is projected at $11.05 to $11.55 per cwt, unchanged from last month. The rice by-class prices indicate an all rice season-average farm price for 2010/11 at $12.35 to $12.85 per cwt, up 10 cents per cwt on both ends of the range from a month ago.

Global 2010/11 rice production, imports and ending stocks are lowered from last month, while consumption is raised slightly. World rice production is reduced 0.8 million tons to 450.7 million based mostly on decreases for Indonesia, Iran, Laos, North Korea and Sri Lanka, which is partially offset by increases for Brazil and Colombia. Global imports for 2010/11 are lowered 0.8 million tons to 29.2 million due mostly to reductions for Malaysia, Madagascar, the Philippines and Thailand, which is partially offset by increases for some Sub-Saharan Africa markets. Additionally, global exports are lowered from last month owing to expected declines in shipments from mostly South American markets including Argentina, Peru and Uruguay. Global consumption is increased slightly based mostly on increases to a number of Sub-Saharan Africa markets. Global ending stocks are projected at 97.1 million tons, down 1.7 million from last month, but an increase of 3.3 million from 2009/10, and the largest stocks since 2002/03. The largest reductions in ending stocks occurred in Indonesia, the Philippines, and Thailand, which are partially offset by an increase for Brazil.

Oilseeds
US soybean exports for 2010/11 are projected down 10 million bushels from last month. The slower-than-expected shipment pace through March combined with increased export competition resulting from larger crops for Brazil and Paraguay leave US exports projected at 1.58 billion bushels. Although there are no changes in the US soybean meal supply and demand projections, the soybean crush is reduced 5.0 million bushels to 1.65 billion due to an increase in the meal extraction rate. Seed use is reduced to reflect plantings for 2011 reported in the 31 March Prospective Plantings report. Residual use is raised based on indications from the 31 March Grain Stocks report. US soybean ending stocks remain unchanged at 140 million bushels.

The US season-average soybean price range is projected at $11.25 to $11.75 per bushel, up 15 cents on the bottom and down 35 cents on the top of the range. Soybean meal prices are forecast at $340 to $360 per short ton, down $10 on the top of the range. The soybean oil price is projected at 53 to 55 cents per pound, up 1.5 cents on the bottom and down 0.5 cents on the top of the range.

Global oilseed production for 2010/11 is projected at 447 million tons, up 2.8 million tons from last month. Higher soybean, sunflowerseed and rapeseed production more than offsets lower cottonseed production. Global soybean production is increased 2.6 million tons to 261 million. Soybean production for Brazil is projected at a record 72.0 million tons, up two million from last month as ample moisture and favourable late-season weather in the southern states improved yield prospects. Soybean production for Paraguay is projected at 8.1 million tons, up 0.6 million, also based on higher yields. Global rapeseed production is raised 0.2 million tons to 58.6 million due to increased output in Russia. Global sunflowerseed production is projected higher as increased production in Argentina and Turkey more than offset reductions for India and Russia. Other changes include reduced cottonseed production for Pakistan and Turkey, and higher cottonseed production for Brazil. Malaysia palm oil production is reduced 0.5 million tons to 17.5 million due to lower-than-expected yields.

Global oilseed supplies and ending stocks for 2010/11 are projected higher this month while crush is reduced. Lower soybean crush, led by Argentina and China, is only partly offset by increased rapeseed crush, with the largest gains in Mexico, Pakistan, and United Arab Emirates. Global oilseed stocks are raised 2.5 million tons, with the largest gains for soybeans in Brazil and Argentina.

Livestock, Poultry and Dairy
The forecast for 2011 red meat and poultry production is virtually unchanged from last month as small increases in beef and pork production are largely offset by a slightly reduced forecast of broiler and turkey production. Beef production is forecast higher as higher cow and bull slaughter more than offsets slightly lower steer and heifer slaughter. Pork is forecast higher on slightly larger slaughter and higher-than-expected first quarter weights. Broiler and turkey production forecasts are reduced on moderating weight gains. The egg production forecast is reduced slightly as higher feed costs squeeze returns.

The forecast for beef exports for 2011 is raised from last month as the relatively weak dollar and economic growth in a number of countries support export growth. Conversely, the weakness in the US dollar and economic growth in other major importing countries will limit US beef imports. Thus, the forecast for beef imports is reduced from last month. The pork export forecast is unchanged from last month but imports are forecast slightly lower. Broiler exports are forecast lower on weaker expected demand.

Prices for livestock and poultry are raised from last month. Meat supplies remain tight and improving domestic demand and strength in red meat exports are supporting prices for livestock and poultry. Egg prices are forecast higher on the anticipated smaller production increase.

The milk production forecast for 2011 is reduced slightly from last month. Relatively high milk prices are being offset by high feed costs and only slight growth is expected in the herd for the remainder of the year. Fat-basis imports are lowered from last month but skim-solids imports are forecast higher. Both skim and fat-basis exports are raised largely on the strength of first-quarter butter, cheese and non-fat dry milk (NDM) sales.

Butter and cheese prices are forecast lower this month, reflecting recent price declines but NDM and whey price forecasts are raised. The Class III price forecast is lowered as the weaker cheese price more than offsets higher whey prices. The Class IV price forecast is raised as higher NDM prices more than offset the lower forecast butter price. The all-milk price is forecast to average $18.15 to $18.65 per cwt for 2011.

Thursday, April 07, 2011
Recent Successes & Future Challenges for Pig Sector
EU - Farmers' group, Copa-Cogeca, has highlighted measures taken to help improve the drastic situation in the EU pig meat sector, which were called for by Copa-Cogeca and proved successful, and outlined new measures to improve the long-term situation.


The move came after debates in Copa-Cogeca's Pig Meat Working Party. Chairman of Copa-Cogecas' Pig Meat Working Party, Mr Tavares, said: "In view of the crisis which has been hitting the EU pig meat sector since 2007, Copa-Cogeca has been working hard to ensure measures are introduced to relieve the crisis. Feed costs in particular increased sharply recently which hit producers hard as they account for between 60 and 65 per cent of total production costs and producers have been squeezed by high input costs and low prices.

"The EU Commission's decision to temporarily open private storage aid in February for pig meat, which was called for by Copa-Cogeca, helped to relieve the difficult market situation in the short term, as excess supplies were taken off the market. Prices picked up a bit in the main pig meat producing countries. The first meat will come out of storage in May and now we need to ensure that the stored meat will be exported once its put back on the market, in order to prevent prices from dropping again.

"I am also glad that the EU recently agreed on new EU rules to allow imports into the EU of animal feed with traces of unauthorised genetically modified materials up to a limit of 0.1 per cent. We worked hard to ensure this was introduced and it is a step in the right direction. Without it, feed prices would have risen further, costing EU farmers hundreds of millions of Euros.

"We also welcome the Commission's TSE road-map and new draft report by MEP Dagmar Roth- Behrendt which includes the proposal to lift the feed ban for non-ruminants, provided conditions in the TSE road-map, such as validated tests, are respected. We have been urging for this for sometime to reduce our dependence on imported soybean," Mr Tavares stressed.

Copa-Cogeca Secretary-General, Pekka Pesonen, said: "To improve the situation in the longer term, current tools to manage the pig meat market must be maintain and strengthened. Pig meat also needs to be promoted better in EU and non-EU markets. In addition, farmers positioning in the food chain needs to be reinforced, in view of the huge buying power of supermarkets. The EU must enforce existing legislation to prevent and penalise abusive situations and anti-competitive practices. An unfair commercial practices directive must be developed.

"Farmers must also be rewarded for their commitment to ensuring high environmental, welfare and food safety standards and this must be reflected in the final price. Imports must also meet the EU’s high standards. After all, a new study by Copa-Cogeca on an agreement in the trade liberalising talks between the EU and the Latin American Trade Bloc Mercosur shows it would have a devastating impact on the EU agriculture sector and cause a huge rise in pork imports which do not meet the EU's standards," Mr Pesonen warned.

Monday, April 11, 2011
USDA Raises Live Pig Price Forecast
US - In the April WASDE report, USDA raised their forecast of the average live price of 51 to 52 per cent lean barrows and gilts in 2011 by $2.50 per cwt to between $62 and $65 per cwt, writes Ron Plain in his latest Hog Outlook report.
 
Ron Plain
USDA is now predicting 2011 domestic per-capita pork consumption at 46.8 pounds per person, down 0.9 pound from last year, but 0.1 pound higher than their March estimate.

The federal government may 'shutdown' tonight, wrote Dr Plain last Friday (8 April). How disruptive this will be to livestock markets is unclear. During the shutdowns in late 1995, daily USDA reports on slaughter and prices continued. Hopefully, that will be the case this time, should a last minute agreement not be reached.

For the second week in a row, hog prices ended the week at record levels. The national weighted average carcass price for negotiated hogs Friday morning was $92.15/cwt, up $3.31 from the record set the previous week. The eastern corn belt averaged $92.70, also a record. Neither the western corn belt nor Iowa-Minnesota had enough sales Friday morning for a published price quote. The top live hog price Friday at Sioux Falls was $64/cwt. The top at Zumbrota was $62 and Peoria’s top was $60.50/cwt. The interior Missouri live top Friday was $63.75/cwt, up $3.00 from the previous Friday.

USDA's Thursday afternoon calculated pork cutout value was $94.28/cwt, down $1.11 from the previous Thursday with hams sharply lower. Loins, bellies and butts were higher.

This morning’s average hog carcass price was 98.3 per cent of the pork cut-out value. That is unsustainably high. Either hog prices are going to drop or cut-out is going to rise, or both.

The live hog price is very high relative to the carcass price. On Thursday, the average negotiated barrow and gilt purchase on a live weight basis was $73.38/cwt which was 81.1 per cent of the day's average carcass price of $90.42/cwt. This too will not last.

The average carcass weight of barrows and gilts slaughtered the week ending 26 March was 206 pounds, unchanged from the previous week and five pounds heavier than a year ago. Iowa-Minnesota live weights for barrows and gilts last week averaged 273.7 pounds, down 0.4 pounds from the week before and up 3.5 pounds compared to a year earlier. This was the 29th consecutive week above year-earlier.

Hog slaughter totalled 2.069 million head this week, down 2.8 per cent from the week before, but up 3.0 per cent from the same week last year, which was light because it began with Easter Monday.

The April lean hog futures contract ended the week at $93.15/cwt, down $1.07 from the previous Friday. The May contract ended the week at $100.97/cwt. June hogs settled at $100.65. July and August also closed slightly above $100/cwt.

The nearby corn futures contract (May) traded above $7.70 per bushel at times this week and settled at $7.68 on Friday. The old record for nearby corn was set on June 27, 2008 at $7.55/bushel for the July contract.

Monday, April 11, 2011
PorkFest in Full Swing
AUSTRALIA - Some of the country's best chefs together with major grocery retailers and more than 1200 butchers across the country have launched April’s International PorkFest to a hungry audience.


Consumers around the country are being encouraged to have a month-long love affair with pork by cooking up an international storm using different cuts and different cuisine styles, according to Australian Pork Ltd.

From schnitzel, Bolognese, lasagne, Aussie BBQ cutlets and ribs, Asian pork belly, hock, won tons or char sui to Latin pulled pork, tonkatsu, roasts with crackling or suckling pig, the meal ideas are endless considering pork is the most widely consumed meat on the planet.

April is a time when a flush of pigs conceived in the cooler post summer months boom onto the market. Australian Pork Limited (APL) is hoping the inaugural International PorkFest will be a great opportunity for consumers to ‘pig out’ and for the nation's pig farmers to make up some lost ground from the devastating effects of costly feed grain over the past years of drought, combined with the huge impost from losing 70 to 80 per cent of the bacon and ham market to subsidised imported pig meat that goes into local small goods production.

APL CEO, Andrew Spencer, said: "The International Festival of Pork celebrates a seasonal abundance of pork. There's plenty of it, it's excellent quality and affordably priced. April will be like going on a world tour while staying in Australia and having your porcine passport stamped in the most delicious way."

While Coles, Woolworths and local butchers showcase pork throughout the month, the PorkFest has also invaded the menus of hundreds clubs, pubs and restaurants across the country. Leading pub group ALH is right behind the PorkFest with 200 of its hotels expected to serve about 30,000 portions of pork cutlets by the end of April. While top restaurants such as Sydney's Bentley Restaurant and Bar, Flying Fish and Pendolino; Melbourne's Bluestone, Gingerboy and Pearl Restaurant and Bar; Brisbane's Ecco, Lurleen's, Azafran and Citron; Perth's Jackson’s Restaurant, Must Wine Bar and Restaurant and Clarke's of North Beach as well as Jolley's Boathouse Restaurant, Urban Bistro and The Wine Underground in Adelaide – they are all flying the pink flag.

Celebrity chefs Miguel Maestre (TVs Boy's Weekend and Aperitif Restaurant), Lauren Murdoch (Felix Restaurant and Bar), Nino Zoccali (Pendolino Restaurant) and Alvin Quah (TV's Masterchef) are the faces of the month-long festivities, letting consumers know how to cook their favourite cuts of pork using treasured family cultural recipes.

Whatever the cuisine, the style of cooking, the time of day or the occasion, April is the perfect time to put Australian Pork on your fork.