Supply volatility to continue
[3 November 2010] Bunge, the world’s largest agricultural traders, said the shortfalls fueling the grain prices will continue into the next year as global food demand continues to rise. Chief executive officer Alberto Weisser said the slim cushion between supply and demand, and associated price volatility, was likely to continue. “There will be tightness in supply probably in the whole of next year.” He said this after releasing the company’s third quarter results. Bunge posted an increase of 40% in profits year-on-year to USD 2.26 per share.

Washington Dairy Goat Herd Part
of Summer Philippine Export

By Tim King 

Kim and Tony Puzio, of My-Enchanted-Acres near Snohomish, Washington, recently played a small part in a large project to export live dairy goats from the United States to the Philippines, during the summer of 2010. The Puzios have a herd of nearly 40 registered Nubians that are on DHIA milk test. They also do linear appraisal annually and participate in ADGA shows throughout the Pacific Northwest. When the annual National ADGA show is in the western states, they attend and have had prominent placing does at that level as well. Their Nubian dairy goat herd came into being when their children were young and in 4-H. Though the children are grown, the Puzio's continue to raise dairy goats and horses, with attention to top quality and improving bloodlines.

"We focus on producing animals that show well but can also milk well because, after all, they are dairy goats," Kim Puzio said. "I hate to say the goats are a hobby because this is our life now. Hopefully, when we retire from our regular jobs, the goats will become our regular job. Our dream is to open a Grade A dairy."

Although the Puzios have raised dairy goats for over 20 years, they have never before been involved in an export project until this year.

"We received a call in May from a gentleman from the livestock export company," she said. "The next day he and some gentlemen from the Philippines, who were apparently representing different regions of the country, came out to our farm."

The livestock export company handling the export deal was AM-CAN, Inc., Bloomington, Illinois. AM-CAN is owned by Effingham Embree, who said he has 39 years of experience exporting live animals and equipment from the U.S. to Latin America, Asia, Africa, and Europe.


Offspring of Tony and Kim Puzio's Nubian buck, My-Enchanted-Acres Discover, were selected for Philippine export, presumably because of top quality milk and show genetics.
 

"They were on a buying spree," Puzio said. "They contacted quite a few of us in the Pacific Northwest. They were looking for Nubian, Alpine, Saanen, and Toggenburg does and breeding bucks between five and 24 months of age."

The buyers were interested in the overall health, pedigree, and registration of the goats the Puzios, and others, had for sale.

"They were looking for sturdy and healthy animals," she said. "They wanted real hardy stock that could stand not only the transportation but being over in a different climate."

There were other requirements as well. The goats had to be registered with the ADGA, had to have been disbudded (no horns), and had to be proven disease free.

"We showed them the tattoos and the papers," Puzio said. "At that time they were documenting who the sire to the animal was. When they were looking at the lineage I believe they were looking at whether does out of a particular sire were good milk producers. I got the idea that they were going to put these goats into commercial dairy goat dairies to help with milk production and to build up the genetics in the Philippines."

The Filipinos were also interested in the farming practices at My-Enchanted-Acres and toured the farm, taking notice of management practices.

"There were four Filipinos from four different regions of the country," Puzio said. "I believe one was a farmer himself and the other three were representatives of farmers from their regions. They were fascinated with the way we were set up. They were interested in how we pen our animals and how our hay feeding system is set up. They also wanted to know how and why we separate our bucks from our does."

Ultimately, the buyers selected three goats from the Puzio's herd, one buck and two does. The sire of the does was My-Enchanted-Acres Discover, a prolific sire who has two permanent Grand Champion daughters and many offspring with star milker awards from ADGA and DHIR milk testing programs. After selections were made, instructions for disease testing, quarantine requirements, and delivery plans were outlined. Payment for the animals was to be made upon delivery to the shipping facility.

"They gave my husband a list of tests that we had to run," Puzio said. "We had never heard of some of the diseases but this is what the Philippine government wanted. Our vet had to draw the blood. The vet labeled two tubes with the registration number and the tattoos and sent it to two different labs. Later, they sent me an email saying all the animals were negative for all the diseases so we were ready to go."

Even the Puzio Nubians were ready for the next step in their adventure; there was a long wait for shipping construction to be completed for their journey across the ocean.

"I believe there were 1,100 animals signed up for this shipment," Puzio said. "Once all the testing was done, the money was released from the Philippine government, and the pen construction that would hold all the animals in the cargo planes was started. It was a long wait for that. We were under the impression it would be weeks, but it was actually months. It was more than two and a half months that we had to hold our three goats in quarantine."

Finally, in early August, the Puzios were told to take their three goats to a livestock facility in Roy, Washington. "We got the call saying to have them at this facility at 6:45 on Saturday morning," Puzio. "We loaded them into our little truck and my husband took them. When he got there, there were a thousand animals there that had been transported from all over the country, some from as far away as Florida and Texas. They looked good. It was obvious there was plenty of feed and water on board the semis they were hauled in. Upon arrival to the Seattle (Roy) area they were unloaded to an outstanding facility with more fresh water and feed. We were quite impressed with the care the animals were given."

All that was left was for the Puzios to get paid.

"My husband signed off on the papers and got a check," Puzio said. "The goats were shipped out of Sea-Tac (airport) on Monday morning."

Puzio said the price they received for the goats would have been fair if AM-CAN had delivered on its promise to ship the goats by mid-June.

"A few of us thought that by the time the animals were actually sent it may not have been worth it because of the quarantine and the extra feed," she said. "But I would do it again. I felt good knowing our goats were well cared for and going to do the job they were bred to do. I felt like we were helping a country out. That made it worthwhile. It was better than selling them to somebody down the street and not knowing what would happen to them."

The AM-CAN export to the Philippines is part of a larger Filipino effort to improve small ruminant genetics in that country, according to the Australian embassy in Manila, Philippines. Late in the last decade the embassy assisted with an export from Australia, to the Philippines, of 3,000 Anglo-Nubian and Saanen goats.

"The imported goats will be primarily used for cross-breeding to increase meat production and to capitalize on the rising demand for goat milk," the Australian embassy representative said. "The Anglo-Nubian and Saanen dairy goat breeds are farmed for their higher milk production capacity and adaptability to tropical environments."

In 2007 the Philippine goat herd was estimated to be approximately four million goats, the representative said. Canada has also been involved in goat exports to the Philippines.

 

PCV2: Genetic Variation and Newly Emerging Genotypes in China
Researchers at Harbin PCV2 have discovered that porcine circovirus type 2 (PCV2) found in China is constantly undergoing genetic variation. Furthermore, both the predominant strain and the Cap protein (the main structural protein of PCV2) have changed over recent years.


Chang M. Liu and colleagues at the Harbin Veterinary Research Institute of Chinese Academy of Agricultural Sciences have published a paper on genetic variation and newly emerging genotypes of PCV2 in China in Virology Journal.

Porcine circovirus type 2 (PCV2), the causative agent of post-weaning multisystemic wasting syndrome (PMWS), is a serious economic problem for the swine industry in China, they explain. In this study, they investigated the genetic variation of PCV2 in China using strains isolated from 2004-2008. Viruses were isolated from samples collected from pigs with multi-systemic lesions and clinical signs of PMWS from different regions of China, and the genomes of these viruses were sequenced. The assembled sequences were used to define the genotypes of these strains; PCR-RFLP methodology was used to distinguish isolates and capture ELISA was used to demonstrate the antigenic changes resulted from ORF2 gene mutation of the isolates.

Results
The researchers identified 19 PCV2 isolates, including four newly emerging PCV2 mutant strains. The 19 isolates were designated into three genotypes (PCV2a, PCV2b and PCV2d). PCV2d represented a novel genotype and a shift from PCV2a to PCV2b as the predominant genotype in China was identified.

This is the first report of 1766 nt PCV2 harbouring a base deletion at other new different positions.

Amino acid sequence analysis identified two novel ORF2 mutations (resulting in ORF2 sequences 705 and 708nt in length) in three deletion strains (1766 nt) and one strain with a genome 1767 nt in length.

This is the first finding of two amino acids elongation of the ORF2-encoded Cap protein in PCV2 strains anywhere in the world. The isolates were distinguished into different genotypes by PCR-RFLP methodology and antigenic changes were present in Cap protein of mutation isolates by capture ELISA.

Conclusions
The Harbin scientists say their study provides evidence that PCV2 is undergoing constant genetic variation and that the predominant strain in China as well as the antigenic situation has changed in recent years. Furthermore, the PCR-RFLP method presented here may be useful for the differential identification of PCV2 strains in future studies.

Reference
Long J. Guo, Yue H. Lu, Yan W. Wei, Li P. Huang and Chang M. Liu. 2010. Porcine circovirus type 2 (PCV2): genetic variation and newly emerging genotypes in China. Virology Journal, 7:273. doi:10.1186/1743-422X-7-273

Low Stress is Key to Optimum Breeding Performance
UK - Removing stress factors in gilts and sows is key to good reproductive performance. That was a clear message from Dutch pig expert Dr Nicoline Soede at last week's Two-Tonne Sow (2TS) Focus on Breeding events, organised by BPEX.

 
English pig producers were keen to hear what it is that helps the Dutch industry achieve an average 27 pigs weaned per sow per year. They took the chance to quiz Dr Soede and her colleagues Professor Bas Kemp and Dr Hanneke Feitsma on many aspects of reproductive management.

Dr Soede emphasised that one of the most important factors for successful insemination timing and establishing pregnancy is to minimise stress and focus on 'animal-directed' management.

Professor Kemp explained the delicate balance between under- and over-feeding during early lactation and gave clear advice on the different requirements of sows and gilts.

The importance of close attention to detail was highlighted by Dr Hanneke Feitsma, as she shared her knowledge on current and future AI technologies.

There were 190 attendees between the two events, held in Wetherby and Milton Keynes.

Producer Simon Watchorn said afterwards: "It was one of the best events I've been to and the most I've ever learned. I'll be reviewing whether there are things I can change on my own unit."

Look out for more advice and information from the conference at the special web site [click here] in the next few weeks. Also check for local meetings on the events pages, where there will be more discussion of these topics.

Professor Bas Kemp and Dr Nicoline Soede are both from the Animal Science Department at Wageningen University and Dr Hanneke Feitsma is from IPG Netherlands.

Pork Commentary: Bullish US/Canadian Inventory Report
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
We haven’t had much good news the last few weeks in the hog industry with prices under challenge and a spike in feed prices. Last week some welcome news came with the combined USA – Canada Swine Inventory Report. USA – Canada breeding herd at 7.07 million down 2 per cent from a year ago, and market hog inventory at 69.8 million was down 2 per cent from last year. The pig crop was down 2 per cent as well as sows farrowed. The bottom line is 2 per cent less sows, 2 per cent less market hogs, 2 per cent less farrowings, and 2 per cent less pigs born. All in all 2 per cent less everything. This is bullish as we move forward. This summer we had hogs in the mid 80’s. It is hard to believe 2 per cent less won’t result in even stronger prices as we go forward.

Canada Hogs on Farms
Quarterly Report (thousands of head)
YEAR The Downward Trend Continues All Market Hogs
2005 1619 13585
2006 1582 13317
2007 1543 12816
2008 1417 11327
2009 1349 10605
2010 1298 10555

The Canadian Swine Industry continues to contract with breeding herd down 51,000 from last year and 321,000 lower than five years ago (-20 per cent). The Canadian market hog inventory is down year over year 50,000 while its dropped 3 million in the last five years (-24 per cent).

Canada’s hog producers have been hit hard by a higher Canadian dollar, country of origin labeling, and the general financial situation all hog producers have faced over the last five years in North America. The current par dollar Canada has with the US coupled with current hog prices and feed costs will in our opinion lead to a further contraction of Canada’s hog industry. Some producers will come to the conclusion that having hogs is not having fun.

Other Items
The USDA cut – outs were 73.68 last Thursday. The National Base price 53 – 54 per cent lean hogs were $65.78 the same day. We have seen a $30.00 per head price drop in the last three weeks. Prices keep declining – where’s the bottom? We believe in the next ten days.


Chicken producers are doing their part to limit meat protein production? Egg sets up 10 million a week, chick placements up 10 million (+7 per cent) year over year. Maybe they know something nobody else knows. $5.00 plus corn and expand chicken production? The last time the chicken genius’ tried this the largest company Pilgrim Pride went broke. Chicken prices are 80 cents per pound, last year they were 72 cents. Time will tell how all this plays out but it appears the poultry companies are playing a game of chicken with each other. Probably one of them will crash.


Hog slaughter weights have exploded hitting record levels. New crop corn has pushed growth and it’s been extraordinary. The Iowa – Minnesota live weights released last week averaged 275.3 pounds, the week before they were 274 pounds, a year ago 269.9 pounds. Year over year 5.4 pounds heavier, this year these larger carcasses are putting more pork on the market and pushing hog prices lower. Packers have the hammer – lots of hogs, lots of heavy hogs and producers calling them to sell. The old adage ‘who’s calling who’ is reflected in the $30.00 per head price decline in the last three weeks.


National Direct Cash Early Weans averaged $37.90 last week and 40 pound feeder pigs $50.71. High feed prices have pushed these prices lower over the last few weeks. The good news for small pig sellers is the space pendulum is going in their favor. The seasonal of small pig supply is for it to begin to contract just as finisher space opens up seasonally with the boost of new crop corn. Therefore fewer pigs available will be being chased by a greater number of finishing spaces.
Summary
The USA – Canada combined inventory 2 per cent less sows, 2 per cent less market hogs, 2 per cent less farrowings, and 2 per cent smaller pig crop. Everything is 2 per cent less. Tough hog markets currently but supply will decline seasonally year over year. Work through the next few weeks and prices will rebound.


Author: Jim Long, President & CEO, Genesus Genetics

Super Pea in the Making
AUSTRALIA - A new high yielding, disease resistant field pea released by Australia's Pork Cooperative Research Centre (CRC) for commercial sowing next year offers pork producers a reliable protein source.



Previously designated PRL131, the new variety, CRC Walana, is named after an aboriginal weapon, continuing the naming tradition of Yarrum and Maki, field pea varieties already released for Australia's northern region.



Steve Moore, University of Sydney, Bernard Hart, Waratah Seed Company grower member of Junee, NSW, Adrian Russell, Plant Research New Zealand and Dr Ray King, Pork CRC Program One Manager, at a trial site of the new field pea CRC Walana, formerly known as PRL131The Pork CRC has applied for Plant Breeders Rights for CRC Walana in Australia and has licensed Waratah Seed Company Ltd to market the variety.

According to Pork CRC Program One Manager, Dr Ray King, CRC Walana is resistant to powdery mildew and pea seed borne mosaic virus, has useful tolerance to bean leaf roll virus and is specifically suited to short season planting in northern NSW and southern Queensland.

"CRC Walana not only satisfies pork producers, but its large, spherical, white seed can also be eligible for lucrative human consumption and splitting markets," Dr King said.

In extensive field trials in northern NSW and south east Queensland, CRC Walana outyielded Yarrum and Maki, varieties recently released by The University of Sydney field pea breeding program and Plant Research New Zealand Ltd (PRNZL).

The original cross was by Adrian Russell of PRNZL and then selected for release by Steve Moore, University of Sydney, with funding from the Pork CRC, which supports the New Zealand and Narrabri, NSW-based field pea programs as part of its innovative and successful feed grain breeding programme.

The Pork CRC programme successfully released Maki in 2009 and recently released the triticale, Berkshire and the barley, Shepherd, also for northern Australia.

Dr King said the programme enhanced the commercial production of cereals and pulses with high yield, cost-effective agronomy and acceptable nutritional attributes for pigs.

"The Pork CRC is committed to identifying high yielding field pea varieties for northern and southern regions and encourages farmers to grow them for the Australian pork industry in these regions," Dr King added.

Seems to be a rash of goat deaths so far.We have lost 14 so far and counting.Goats are dead within 48 hours and seems to be some sort of cold or flu maybe.DA and vet claims its weather related but our goats are in confinement never outside in rainy weather.More females over males are dying and some are pregnant and seems to be more related to goats with boer blood in them in our cases.Did lose my pet white native female.Selling off a number of our other goats to lessen our losses.Hell of a way to end the year.Anyone else experiencing such losses??

One topic not talked about much in the Philippines is guard dogs.Yes one can import guard dogs from Australia for your goats and sheep but I have a proven and cheap method.Some years ago we took the Philippine native dog and turned them into very good goat guard dogs.My relatives all laughed at me and gambled that it would fail but I had the last laugh.In order for this to work you must take puppies just weaned from its mother.Place the puppies in with baby goats  and make sure you feed the puppies well,we feed ours 3 times a day with their own bowls.You will start to see the puppies and baby goats sleeping together and the puppies will imprint on the goats and as the puppies grow believe they are goats.Once the puppies grow into grown dogs they will protect the goats.I have found the females to be more aggressive over the males.We have one female that is really aggressive and has to be tied up when the DA and vets visit the farm or she will bite any and all strangers to the farm.Imprinting works well and is a cheap way for any producer to have goat/sheep guard dogs around their farm if it is done right.

Philippine food, farm exports down
[2 November 2010] Earnings from Philippine food and farm exports declined nearly 3.8% during the first eight months of the year, registering only USD 1.35 billion, said Philippine Chamber of Commerce and Industry Vice President for Agriculture Roberto Amores, who said the drop is due to increasing production costs. Exports of fruits and vegetables during the period fell by almost 19.4% to USD 399.9 million, however, marine and seafood exports posted gains of 1.3% to USD 335.8 million. Mr Amores said however, that food production next year will likely be affected by Typhoon Megi, which has wrought almost USD 250 million in damage to the farm sector.

IGC predicts tightening of world grains markets
[2 November 2010] The International Grain Council has said that world grains markets are expected to tighten in the 2010-11 season as consumption outpaces supply for the first time in four years. While wheat production is expected to hit 644 million metric tonnes, worsening prospects for corn crops in the U.S. and China are expected to lower world production. The IGC cut its estimates for 2010-11 world corn output to 814 million tonnes from a previous forecast of 824 million tonnes. Corn output from the U.S., is expected to total 323 million tonnes this season, said the IGC, cutting its previous forecast by 11 million tonnes. China is expected to produce 162 million tons this year, 3 million less than the IGC's September estimate.

Another corn facility to rise in Isabela
[1 November 2010] The Philippine government has scored a grant from South Korea that will be used in part to build another corn facility in Isabela Province, one of the main corn production areas in the Philippines. The USD 790,000 grant will be used to construct a new corn processing centre, two multi-purpose warehouses that will serve as machinery shed and grain storage, and a community centre for trainings and other project related activities. Earlier in October, the Philippines inaugurated a USD 11.6 million corn processing centre in Isabela that can process 200,000 tonnes of corn. The site for the new project has yet to be identified, however, a pilot area covering three hectares will be used for it.

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

 

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

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

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

Well,its not such a simple question,first of all,where or who is your market.Do you need permits,near a water source or not and all you can expect is really an average.If like me you are in a remote area then your costs will be higher than someone nearer a larger area.Wages can run you from P150-P200 per person per day and if they live at your farm then you are responsible for their room and board and any medical expences.This is only an average to give you some idea.

- financial start up-initial capital: P80,000. per sow needed for the 1st yr of operation of the farm, includes cost of the sow, feeds,meds, building and equipment.
      Building of equipment:  P 40T/sow
      Feeds: approx. P30/day/sow
      Gilts-7 mos old, costs approx. P9,500
      Boar costs approx, P20,000 - P30,000
      Medicines and vaccines: 3% of the total cost of feed


Like I said,average only.Best of luck with your venture.

Pork Commentary: New Corn and Seasonal Supply Surge
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
The hog prices in the USA and Canada continues to languish as compared to the high prices of two months ago. Last Friday Iowa – Minnesota averaged $64.28 lean per pound which is probably at least $20.00 per head below breakeven. Last week’s US marketing’s were 2.331 million, up slightly from the same week last year 2.323 million. It’s been a long time since weekly marketing’s have exceeded the previous year.

Other Observations
Hogs are growing fast. New crop corn has higher test weights, better protein, and probably less vomitoxin compared to last year’s crop. The explosion in growth is giving the power to the packers. The fast hog growth coupled with the usual seasonal increase in hog supply is leading producers to calling packers to move hogs to get space and keep hog flow’s reasonably current. The old line: “Who’s calling who?” is a very apt description. Producers are calling and in some cases pleading for packers to take their heavy hogs. Packers can help them out, but human nature encourages it being done at a discount. This leads to lower hog prices while USDA cut – outs remain at a level that facilitates strong margins for packers (last Thursday USDA cut – outs 76.76 per pound). The good news despite marketing’s of over 2.3 million pork demand is such that it allows wholesale pork prices to stay strong. As supply declines in the coming months expect a real cash price rebound.


The surge in feed prices the last few weeks has certainly put a huge dent in expectations for next summer’s hog supply. Summer lean hog futures hit life of contract highs last Friday. We expect to see further strength in 2011 summer and fall lean hog futures. Continued high feed prices will soon begin to affect 2012 hog supply not only in North America but the rest of the world.


Real paradox on corn supply and use. Price is real strong but there is so much corn piled throughout the Midwest it makes you wonder about actual supply – demand equations. What will corn exports be with $5.00 corn? How will corn ethanol producers cope with $5.00 corn and $80.00/barrel oil? Oil companies don’t produce ethanol. We never can figure out why they have any great incentive to sell ethanol in their retail chains. It was the CEO of Exxon who said he saw little future with what he called moonshine!
Think Tank Warns of Global Food Crisis
The Humboldt forum on food and agriculture is warning a food crisis could hit the world in ten years.

The Institute claims more than one billion people are malnourished, and 16,000 children die every day due to malnourished related disease.


Humboldt believes that sustained higher feed prices will not lead to food riots as in 2007 – 2008 but also to increased migration away from food – insecure regions of the world.


Humboldt’s premise is there must be re – investment in agricultural education and infrastructure in both developed and developing countries and farmers in the latter parts of the world must be given access to agricultural technology and bio technology.
Our Thoughts
People are starving and malnourished and we are burning our food making corn ethanol? I wouldn’t want to be a policy maker or secretary of agriculture trying to explain this insanity to a starving child. This year 35 – 60 per cent of the US corn crop will go into fuel to power vehicles.


We have travelled much of the globe selling Swine Genetics. We have observed the world needs technology. Genetics with better productivity for feed conversion, litter size, growth, carcass yields, and health are a necessity to feed on every growing world population. The spread in productivity between modern genetics and swine genetics of just a few years ago is not only financially challenging but just as importantly is not producing the food required.


The need for ever better agriculture technology is real. Research and Development costs for agriculture should not and cannot be financed by the private section. It’s an obligation and need of society to support SR+ED projects of universities, private sector, and government. To push to productivity levels needed for the future. Investments are required.

Author: Jim Long, President & CEO, Genesus Genetics 

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



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

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

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


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

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

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

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