Irish CSO Livestock Slaughterings February 2012
The number of pigs slaughtered in February 2012 was 11.5 per cent higher than in February 2011.
 

The number of cattle slaughtered in January-February 2012 was 2.7 per cent lower than the corresponding 2011 period.

Over the same period there was an increase of 9.0 per cent in sheep slaughterings and an increase of 12.1 per cent in pig slaughtering.

Comparing EU figures for the periods January to December 2010 and January to December 2011, Ireland showed a 9.3 per cent increase in pig slaughterings while of the major EU pig producing countries, Poland, Denmark, Spain and Germany recorded increases of 5.1 per cent, 3.8 per cent, 3.0 per cent and 1.7 per cent respectively.

During the same period France recorded a decrease of 0.5 per cent.

USDA GAIN: Mexico Livestock & Products Semi-annual
Mexico’s cattle inventories are falling as non-sensitive cattle are slaughtered or being exported due to long-term drought that is affecting the industry and driving up feed prices. The swine industry continues doing well; however, as the pig crop is greater than previously forecast. Imports of beef and pork meat are forecast to remain strong through 2012 as domestic production is not sufficient for demand and as imported product appeals to various segments of the population.



Commodities: Animal Numbers, Swine and Meat, Swine
Production:
The Post 2012 Mexican pork production forecast is 1.215 million metric tons (MMT), carcass weight equivalent (CWE), higher than the USDA forecast. This increase is driven by specific requirements from Mexican export markets, the incorporation of new breeding lines that are better able to adapt to the Mexican production system, and better farm management techniques. The Post 2011 pork production forecast has been increased slightly, as well, from the USDA estimate for the above mentioned reasons.

Traditionally, Mexican producers supply live swine for slaughter at a weight of 105 kilograms for the purpose of ensuring leaner meat carcasses. Beginning in 2011 and in 2012, however, some slaughter operations producing swine for export are holding hogs until they reach 120 kilograms. Additionally, better genetics in the breeding swine population are producing more live animals per litter and have resulted in hog herds that are able to gain the desired market weight in less than 180 days, which is the Mexican industry average. The United States’ recognition of Mexican States as free of classical swine fever (CSF) has been one of the key factors to opening foreign markets for Mexican pork. The new and additional market access that Mexico has gained and the demand for high quality pork products in Asian markets are other important factors that are encouraging higher production.

Nevertheless, the exceptional drought, mentioned previously, is affecting pork production profitability, as higher feed grain prices have stressed production. As in other producing countries, animal feed for pork is based on yellow corn and sorghum. Some northern Mexico producers, however, are feeding their hogs with white corn or wheat (if available due to temporal surpluses during Mexico’s growing seasons). In Mexico, feed represents approximately 64 percent of the production cost.

Consumption:
The Post 2012 pork consumption forecast is higher than the USDA forecast as purchasing power gains and demand, specifically, for hams and picnic remains strong. These are generally inexpensive cuts that can be consumed as deli meat by middle and upper income consumers. Moreover middle income consumers (a smaller fraction of the population) are shifting consumption habits from poultry and beef back to pork. The Post 2011 consumption estimate has been revised lower than the USDA estimate as higher pork prices encouraged consumers to consume less expensive animal proteins.

Trade:
Mexico’s imports consist of hams and mechanically deboned meat (MDM) for the preparation of sausages, deli hams, and other cold cuts. The Post 2012 pork import forecast remains the same as the USDA forecast (650,000 MT CWE). The Post 2011 revised pork import estimate of 594,000 MT (CWE) is lower than the USDA estimate as higher international pork prices and competing international demand increased prices so that lower-income consumers needed to switch to lesser expensive animal proteins.

Although Mexico is a net meat importer, it is expected that during 2012, exports of pork meat to Japan will continue. Industry sources report that they are able to receive greater profits by exporting higherquality cuts to overseas Asian markets. The United States represents a potential niche market for specialty pork cuts. This market could be attractive to Mexican pork producers, but producers would need to find a market for other parts of the carcass (e.g., head, legs, and shoulders). Mexico’s distribution channels for these products exist, but the material would be competing with current supplies and potentially force down margins.

Policy:
The GOM continues implementing a number of programs to support agricultural production. Among these, the Agricultura Por Contrato (Forward Contract Program) is of significant and special importance for the swine industry. Both crop producers and animal feeders are encouraged to contract for grain delivery through this Forward Contract Program. The GOM, specifically, SAGARPA, provides a subsidy towards the cost of hedging. The hedge along with the actual contract provides assurance for a set grain price for the animal producers. While the program is open to all producers, the larger and more sophisticated producers have shown a greater interest in participating in the program.

On October 21, 2011, the Secretariat of Economy (SE) published in the Diario Oficial (Federal Register) an announcement revoking the retaliatory import tariffs on 99 U.S. agricultural and industrial products. This elimination of tariffs was the second step in the cancelation of tariffs after signing a bilateral memorandum of understanding on July 6, 2011. The tariff on 2 harmonized tariff system (HTS) line items related to pork meat (HTS 0203.12.01 and 0203.22.01) was reduced to 0 percent with the October 21 announcement. (See GAIN Report MX1076 Mexico Eliminates Trucking Retaliation Tariffs)



Commodities: Animal Numbers, Cattle, Meat, Beef and Veal
Production:
The Post 2012 Mexican beef production forecast is 1.83 million metric tons (MMT), carcass weight equivalent (CWE), slightly lower than the USDA forecast as cattle continue to be slaughtered at slightly lower weights than prior years. Since late 2011, northern Mexican cattle feeders have started slaughtering cattle, including feeder calves and dairy cattle as a measure to cope with an exceptional long-term drought affecting most of the country. The cattle industry has been struggling with strong international grain demand during the last half of 2011 which generated tighter feed supplies and higher production costs. Thus, to cope with the lack of forage cattle, feeders were compelled to partially liquidate herds during the last quarter of 2011. This was accomplished through the slaughtering of nonsensitive (not for breeding) cattle and the continued export of calves to the United States and more recently to Turkey.

The development of Turkey as a new market destination for Mexican live cattle has raised concerns by the cattle feeders and packers as it could have a negative effect on meat production. During 2011, the export of calves to the United States, Turkey, and other established markets, reached 1.435 million head, slightly lower than the USDA estimate. Without a sharp, rapid and significant improvement in breeding to improve the efficiency of the calf crop, the export of calves could cause future limited availability of steers for slaughtering intended to supply the domestic beef market.

Consumption:
The Post 2012 beef consumption forecast anticipates consumption figures will be slightly lower than the USDA forecast. Beef prices are expected to increase as a result of tighter suppliers (i.e. increased Mexican beef exports and lower production volumes) and thus reduce domestic market demand in favor of other animal protein sources. Tighter supplies will affect lower-income households more than middle and upper income consumers (a smaller portion of the population) who will maintain or even be able to see a slight increase in their consumption levels. Middle and upper income consumers are reportedly increasing their purchases of imported beef as numerous news accounts have and government testing has found trace amounts of an unapproved compound in domestic product. As such, sources report they are altering consumption preferences and practices. The Post revised 2011 beef consumption estimate is increased from the USDA estimate due to increased purchasing power among all income groups and lower than anticipated exports.

Traditionally, most low to medium income households consume beef cuts known as “bistec” (muscle thin beefsteak). Demand for finer cuts is limited to upper-income consumers, a smaller segment of the population, and, as such, finer cuts are often available for export markets.

Trade:
The Post 2012 revised beef import forecast is 300,000 MT (CWE), which is higher than the USDA forecast. As indicated earlier, drought and increased Mexican beef exports are preventing the meat sector from keeping up with demand increases from specific sectors of the population. Moreover concerns regarding food quality and food safety have led middle and upper income consumers to purchase higher volumes of imported beef.

During 2011, Mexican industry members made a concerted effort to diversify export market destinations. As such, industry sources report Mexico is exporting beef to a number of developing economies. Additionally, Mexico continued exporting beef products to Japan, the United States, Russia, and Korea. Mexico’s meat processors and traders expect that these markets will purchase greater volumes of Mexican beef during 2012. Specifically, there is strong industry belief that Mexico will be able to increase exports to Japan as negotiations for an expanded tariff-rate quota and a lower duty volume on its beef exports were concluded recently. Mexican industry is also optimistic on exporting greater volumes to the United States as trade sources indicate that the drought and cattle herd reduction experienced in the southern United States is encouraging more purchases of Mexican beef.

Sources have stressed that the Mexican beef industry must develop added-value product exports to strengthen all aspects of the marketing chain. Sources indicate that this will allow producers to obtain greater profits. However, Mexico lacks sufficient grazing land for large herds and for animals closer to desirable market weights. As such, the export of live cattle is a trend that will likely continue for several years.

Policy:
On December 6, 2011, the Secretariat of Agriculture, Livestock, Rural Development, Fishery and Food (SAGARPA) National Service of Health, Food Safety, and Food Quality (SENASICA) Import and Export General Directorate announced that Mexico will only be accepting the latest version of the FSIS Letterhead Certificates that were agreed upon and included in various official communications with Post. If shipments are not accompanied with these new Letterhead Certificates they will likely be held up at the border until a new replacement certificate (also known as “in lieu of” certificate) can be issued. The Letterhead Certificates have been posted on USDA’s FSIS Export Library and the Spanish requirements are posted on SENASICA’s website under the Modulo de Consulta de Requisitos Zoosanitarios para la Importacion (MCRZI).

In order to support better herd management, SAGARPA is promoting a voluntary program called “Reliable Provider Free of Clenbuterol”. Currently, SAGARPA offers producers delivering cattle to Tipo Inspeccion Federal (TIF) establishments a subsidy of 220 pesos (approximately U.S. $16.40) per animal under this program. SAGARPA aims to discourage producers from using ß-agonists during the last stages of cattle production as the substances are not approved for livestock use in Mexico. The use is considered illegal and can be detected in random sampling programs conducted at TIF facilities as well as municipal slaughter houses. Industry and government sources have declared that 97 percent of the domestic meat supply is safe for human consumption.

Recently, Mexico removed beef feet and sweet breads from the list of banned U.S. products. However, a number of other products remain, including; ground beef, small intestines, weasand meat, and head meat. (NOTE: the additional market access for beef feet and sweet breads will not affect the Post or USDA Production, Supply, and Demand forecasts as these tables refer only to muscle meats and NOT variety meats nor offals).

Currently, many producers sell their calves at an early growth stage. Private sources are jointly working with government authorities to implement a new program called “Development of Suppliers”. The program offers training, financial support, and technical assistance to calf producers. Through this program producers would be eligible to obtain financing that should allow them to feed and sell animals at a higher weight and when they are ready for slaughter. Presumably, this should not affect forecasts as entities in the marketing channel were feeding out the animals. However, the policy change should allow greater producer returns and may provide added strength to rural agricultural production.

AHDB European Market Survey - 23 March 2012
Danish exports of fresh and frozen pork were five per cent higher in 2011 than the previous year at over 1.2 million tonnes.
 

Chinese pig prices fall back from record highs
China accounts for nearly half of global production and consumption of pig meat. It is largely self-sufficient but, given the scale of the industry, small changes in production can have a significant impact on price. During the summer of 2011, pig prices in China rose to record highs. Since then prices have fallen steadily, except for a small rise in the run up to the Spring Festival in January, and are now less than five per cent higher than their level a year ago. At their peak, in early September, the average pig price in China was just over 20 yuan per kg liveweight, equivalent to 196p per kg. By early March, the price had fallen to a little over 15 yuan (155p) per kg.


Pig meat is a staple food in China and its price makes an important contribution to the country’s Consumer Price Index (CPI). Food makes up around 30 per cent of the CPI basket and pig meat accounts for around a third of the food portion or 10 per cent of the total. Therefore, the rising prices during 2011 contributed to high levels of inflation, leading to government intervention to open up the import market (see EMS 12/06) and subsidise herd expansion. As a result, annual inflation fell below four per cent in February 2012, although meat prices were still 16 per cent higher than a year earlier, including a similar rise for pork.

The key reason for falling prices is the expansion of the Chinese pig herd as a result of improved profitability, government subsidies and warmer weather, which led to a lower incidence of disease outbreaks this winter. Breeding sow numbers have risen through most of the year and USDA estimates that they totalled 49.3 million head at the end of 2011, four per cent higher than a year earlier. As a result, pig meat production during 2012 is forecast to be four per cent higher than in 2011 at 51.6 million tonnes. The impact on imports is less clear but they are likely to be lower than in 2011. Increased production will probably mean that average prices during 2012 will be lower than in 2011, with one major processor predicting a fall of between 15 and 20 per cent.

The Chinese government has recently released its 12th five-year development plan for agriculture. The plan aims to increase Chinese pig meat production by six per cent by 2015. It also sets out goals to modernise the industry and improve productivity. The intention is to move away from China’s dependence on small ‘backyard’ producers, which cannot meet efficiency and sustainability requirements.

Contrast in Dutch and Danish pork exports
Danish exports of fresh and frozen pork were five per cent higher in 2011 than the previous year at over 1.2 million tonnes. This growth in exports mainly reflects a four per cent increase in Danish pork production over the same period and some increase in export demand, with the average export price up four per cent. Trade with other EU Member States increased by three per cent year on year; pork exports to Germany and Italy were up seven per cent and three per cent respectively. In contrast, shipments to the UK were five per cent lower. Danish exports to non-EU markets grew by ten per cent over the year but they still only accounted for 29 per cent of trade. Strong demand meant that shipments to China and South Korea grew tremendously year on year, counteracting falls in trade with Japan, Australia and the US.

In contrast, Dutch exports of fresh and frozen pork fell marginally in 2011, compared with 2010, despite a rise of two per cent in production. Trade with other EU Member States fell by four per cent year on year, whereas exports to non-EU markets increased by 20 per cent to make up 17 per cent of the total. Shipments to Germany and Italy fell significantly over the year, down by 25 per cent and 10 per cent respectively, as the Netherlands lost market share to Denmark. However, there was strong growth in trade with Poland, because of domestic shortages, and Spain. South Korea, Hong Kong and Russia were the main contributors to the rise in non-EU exports. The average export price increased six per cent year on year. By value, Dutch exports to non-EU markets increased by 30 per cent.

Danish exports of bacon were up by two per cent in 2011 compared with year earlier levels at 101,100 tonnes, with shipments to the UK, the main market, also up two per cent. Dutch bacon exports on the other hand fell by thirteen per cent to 114,000 tonnes, as exports to the UK decreased by 18 per cent over the year.

 


Danish live pig exports rose by two per cent between 2010 and 2011 to 8.9 million head. Weaner exports, which accounted for almost 95 per cent of all trade, increased by eight per cent over the year. There was strong demand for Danish weaners from Poland with exports increasing by 86 per cent year on year. This came as a result of a shortage of locally-bred pigs as many Polish breeders left the industry or switched to finishing. Weaner shipments to the main German market were little changed. However, slaughter pig exports to Germany, the dominant market, fell by 60 per cent.

Live exports (excluding breeding pigs due to an error with the data) from the Netherlands fell to 9.0 million head, down by over 17 per cent compared with 2010. Slaughter pigs saw the biggest fall in trade, with exports down 28 per cent year on year, on the back of considerable decreases in shipments to Germany and Hungary. Exports of weaners were down by six per cent, with falls in trade to Germany and Poland.

USDA Quarterly Hogs and Pigs Report - March 2012
The latest quarterly Hogs and Pigs report from the USDA's National Agricultural Statistics Service (NASS).

Introduction
USDA Quarterly Report: March 2012
What It All Means - Expert Commentary
In the News - What the Media Says
Graph Data from the Report
Hog Inventories by State (external link - select State and navigate to file)
For a PRINTABLE VERSION of the full 16-page report in PDF format, including all the tabular data that is not shown in this article, please click here

USDA Quarterly Pigs and Hogs Report: March 2012

United States Hog Inventory up 2 Percent
United States inventory of all hogs and pigs on March 1, 2012 was 64.9 million head. This was up 2 percent from March 1, 2011, but down 2 percent from December 1, 2011.

Breeding inventory, at 5.82 million head, was up 1 percent from last year, and up slightly from the previous quarter.

Market hog inventory, at 59.1 million head, was up 2 percent from last year, but down 2 percent from last quarter.

The December 2011-February 2012 pig crop, at 28.7 million head, was up 3 percent from 2011. Sows farrowing during this period totaled 2.88 million head, up 1 percent from 2011. The sows farrowed during this quarter represented 50 percent of the breeding herd. The average pigs saved per litter was a record high 9.97 for the December-February period, compared to 9.80 last year. Pigs saved per litter by size of operation ranged from 7.30 for operations with 1-99 hogs and pigs to 10.00 for operations with more than 5,000 hogs and pigs.

Quarterly Hogs and Pigs Inventory –
United States: March 1

United States hog producers intend to have 2.89 million sows farrow during the March-May 2012 quarter, down 1 percent from the actual farrowings during the same period in 2011, and down 1 percent from 2010. Intended farrowings for June-August 2012, at 2.88 million sows, are down 2 percent from 2011, and down 2 percent from 2010.

The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 47 percent of the total United States hog inventory, up from 46 percent last year.

Friday, March 30, 2012

Saha Farms Sees End to Korea Poultry Ban

THAILAND & SOUTH KOREA - Saha Farms Co, a leader in Thai poultry, expects the South Korean government to lift the ban on Thai frozen chicken imports by July.


Bangkok Post reports that the move should boost the value of Thai poultry exports to South Korea, which has maintained a ban on Thai products for eight years after bird flu broke out in Thailand in 2004.

Manoonsri Chotitawan, the president of Saha Farms, praised the private sector's participation in the roadshow to the country with the Thai government.

The company joined the roadshow in an attempt to urge South Korea to lift the ban, noting the Thai government has improved management to control the spread of bird flu since 2010.

Dr Chotitawan expects a decision by July.

Saha Farms exported 12,000 tonnes of cooked chicken to South Korea last year and expects to ship 15,000 tonnes this year out of total Thai exports of 420,000 tonnes a year.

Thailand recorded a trade deficit with South Korea, exporting agricultural products, electric circuits, computers and components while importing high-technology electrical machinery, steel and metal.

Two-way trade between Thailand and South Korea over the past five years (2008-12) has averaged US$10.47 billion a year.

Last year, it rose to $13.8 billion. The average trade deficit per year during the period was $3.43 billion.

Average imports per year from Korea are $6.96 billion, with 2011 imports totalling $9.1 billion, up by 14.1 per cent from 2010.

Average exports per year are $3.53 billion, with 2011 exports totalling $4.57 billion, up by 26.8 per cent from 2010.

Friday, March 30, 2012
 
Mexican Cattle Supplies Influenced by Drought

MEXICO - Mexico is in the midst of its worst drought in the last 70 years, with a considerable portion of the northern half of Mexico facing extreme or exceptional drought conditions, writes Meat and Livestock Australia (MLA).

As the dry conditions are expected to persist, Mexican cattle liquidation is anticipated to support domestic beef production, while suppressing beef imports into the market this year.

Mexico’s ministry of agriculture (SAGARPA) has forecast Mexican beef production in 2012 to decline two per cent year-on-year, but remain three per cent above the five-year average, at 1.77 million tonnes cwt. This lower production is expected alongside SAGARPA’s expectations of a near record number of live cattle exports in 2012, at 1.43 million head – mainly feeder cattle for the US.

While much of Mexico is either in a long- or short-term drought, and estimates of cattle losses are uncertain, the Mexican cattle herd (including the beef cow herd), was estimated at 20.1 million head as at 1 January 2012, the lowest since 1963 (USDA).

Beef imports into Mexico in 2011 declined 11 per cent year-on-year, to 186,922 tonnes swt, primarily due to a fall in volumes of chilled beef from the US (down nine per cent) and Canada (down 25 per cent) – the two largest imported beef suppliers in Mexico. Beef imports from Australia also fell 46 per cent in 2011, to 861 tonnes (Steiner Consulting).

In contrast, Mexican beef exports increased 45 per cent in 2011, to 104,431 tonnes swt, as a result of a surge in the chilled trade to the US (up 49 per cent) and frozen shipments to Russia (up 542 per cent). The US and Russia were the two largest export markets for Mexican beef in 2011.

The rise in Mexican beef exports to the US in 2011 was driven by a combination of factors, including increased supplies of Mexican beef, high beef prices in the US, and the relatively stronger US$ against the Mexican peso. Russia, while traditionally sourcing beef from Brazil and Argentina, has increased orders from Mexico (and other suppliers) amid the shortfall in South American supplies in recent years.

Mexican beef exports to Japan in 2011 declined 40 per cent year-on-year, to 16,732 tonnes swt. While Japan was Mexico’s third largest beef export market, Mexico remained a relatively small import supplier in Japan, with volumes accounting for three per cent of total Japanese beef imports in 2011.

Wednesday, March 28, 2012
Genesus Dominates National, Global Results
CANADA - The official results for all Canada 2011 purebred swine registrations were announced at Canada Swine Breeders Annual Meeting Toronto, 26 March 2012.
 

Genesus continues to dominant National and Global results. Genesus registered in 2011 15,471 boars and 45,379 gilts of Yorkshire, Landrace and Duroc, the largest number of registered swine in the world.

“Genesus is committed to producing genetically enhanced registered purebreds; we believe real purebreds are the surest way to maximize hybrid vigour which results in Genesus Customers Leading the industry in production results.” Jim Long President-CEO Genesus.

Canadian Livestock Records Corporation
Swine registrations by Number Registered, Owner at Birth and Sex from 01/01/2011 to 31/12/2011

Canadian Swine Breeders Association
Genetic Company Males Females Total
Apple Valley Farm 312 1399 1711
Bloomsbury Farm Ltd 610 1174 1784
Bodmin Ltd 1910 1866 3776
Danbred - - -
Design Swine Genetics 27 67 94
Fast Pigs Inc. - - -
Fermes Jacques Oullet Inc 179 200 379
Genesus Inc. 15471 45379 60850
Genetiporc - - -
JSR Genetics Ltd - 1 1
Hypor 675 331 1006
James S. Donaldson 363 696 1057
International Genetics PEI Ltd. 270 1292 1562
Novastar Genetics Inc. 214 1765 1979
Pembina Hog Farms 501 407 908
PIC - - -
Pyramid Pig Breeders 20 84 104
Sunterra Farms Ltd 994 1067 2061
Topigs 629 576 1205

Friday, March 30, 2012
Pork is Tops When Eating Out
UK - The popularity of pork is growing when people are eating out of the home with bacon leading the way.
 

New figures from NPD Group/Crest show that pig meat, including pork, bacon, sausages and ham, the most consumed red meat in the out-of-home market with 68.7 per cent of all red meat servings.

It also experienced the greatest increase in servings in 2011 compared with a year ago. The figures show total pig meat servings increased by 8.1.

In the main this growth was driven by bacon, which saw servings grow by 29.5 per cent and sausages, which grew by 21.3 per cent. Ham has also moved up the charts, by 11.7 per cent and pork saw an increase of 4.6 per cent.

BPEX foodservice trade manager, Tony Goodger, said: “Quality assured bacon is a fantastic ingredient for all types of menus. It’s hugely versatile and delivers a punch of flavour to dishes.

“Sausages made from quality assured pork also continue to be one of the most popular foods eaten out of home, appealing to both adults and children alike.

“Both are relatively low-cost proteins and, in the current climate when every penny counts, chefs are clearly recognising their profit potential.

“Pork has always represented good value for money in comparison with other meats, but now we’re starting to see more chefs buying whole pig carcases and experimenting with a wider range of cuts.”

Thursday, March 29, 2012
CME: Hog Inventories Expected to be Higher
US - The USDA Quarterly Hogs and Pigs report will be released on Friday at 3 PM EST and analysts expect overall inventories to be higher than the previous year, write Steve Meyer and Len Steiner.


The inventory of Hogs and Pigs as of March 1 is expected to be 1.7% higher than the previous year. If this increase materializes, it would represent an overall inventory of 64.766 million head, some 1.08 million head higher than the previous year but still shy of the all time record for this quarter, 67.2 million head in 2008. The size of the breeding herd is normally a key indicator in the report as market participants pay close attention to any effort by producers to expand operations.

In recent years, much of the increase in US pork production has come through productivity gains (more pigs per litter) and heavier hog carcass weights. Analysts expect the breeding herd to be up by 0.3% compared to the previous year, which calculates to an overall sow inventory of 5.805 million head. This implies only a very modest increase from the December count, which pegged the sow herd at 5.803 million head and 17,000 head larger than a year ago. These are very modest increases despite reports of generally positive producer margins. With corn prices expected to ease from the highs of last year, the expectation is for producers to slowly add a few more sows. Still there is plenty of uncertainty about the state of pork demand, especially export demand. Also, producers will likely wait to get a better sense of how the corn crop develops this year before making any significant commitments. The US pork industry has become increasingly dependent on exports for growth, they account for almost 22% of all pork produced, and with this reliance also comes a much greater degree of risk.

While modest, the higher breeding herd coupled with ongoing productivity improvements should boost the supply of pigs coming to market later this year and in 2013. Q4 supplies remain of particular concern, if not this year more likely in 2013. The survey of analysts indicated that they expect sow farrowings during Mar - May and Jun - Aug to be up 0.2% and 0.3%, respectively, in line with the growth in the sow herd. So far, pigs per litter have been growing at about 2%. The attached chart shows the growing gap between the number of sow farrowings, which have been about steady since late 2009 and the pig crop, which this year is expected to surpass the all time record levels of 2007. Even if we were to assume a pig per litter growth of around 1.6-1.7% in Mar - May and Jun - Aug, it would still translate into a pig crop of 1.8%, or about 29.7 million head, the highest ever.

There is some talk about the idea of free ranging the 45 day old chicken.45 day chickens are common throughout the country and easy to find stocks.The problem with the 45 day chicken is its fast growth rates and some means to retard its growth to 60-90 days grow out over 45 days.45 day chickens can in fact handle free range conditions but the commercial feeds must be restricted to once a day feeding in the late afternoons while the chicken is allowed to free range in the daylight hours.These chickens still need to be vaccinated and if grown to 90 days, taste better over their 45 days cousins.Can they actually breed?Not sure but one would need some means of hatching,native hens or incubator.An idea that has been floating around for some time now.

Wednesday, March 28, 2012

Quality Beef Premiums Continue to Grow

US - Beef feeders can look for continued payment of quality-grid premiums from packing plants, said a University of Missouri Extension economist.


“This only happens because they really need quality cattle,” said Scott Brown, an agricultural economist who follows the beef markets. “With high demand and short supplies of quality beef, packers are more willing to share.”
 
Brown’s advice for beef farmers seeking to capture quality-grid premiums: “Shoot for prime. That’s where the money is. Don’t stop at choice grade.
 
“Choice-select spreads are attractive at times, but prime premiums are more consistent over time,” Mr Brown continued. “Now, prime premiums are increasing faster.
 
“Top grid premiums of over $35 per hundredweight of prime-quality carcass are paid to help meet the demand for high-quality beef.” Mr Brown spoke at an educational event for members of the Missouri Beef Industry Council.
 
Mr Brown expects premiums for USDA prime quality grade beef to continue to rise as the economy recovers.
 
Demand comes from US consumers, but especially from global buyers. US beef producers should be excited about the continued opening of new trade agreements, such as one just confirmed with South Korea, Brown said.
 
Even in the recession, US consumers increased their shopping for choice and prime cuts, he said. “Consumers will pay for prime. They want a quality eating experience.”
 
Mr Brown said consumers pay for quality, and not just in beef. “Who would think we’d pay over $2 a cup for a Grande Starbucks coffee? We could make a cup of coffee at home for 15 or 20 cents.”
 
With rising demand and shrinking beef supply, consumers may face higher prices at the meat case.
 
“I don’t know if we will meet consumer price resistance,” Mr Brown said. “I’m not a great believer that higher meat prices cause demand destruction. Consumers send signals about the meat they want through prices.”
 
Brown said an early indicator of the general economic recovery came from the restaurant index, which gauges optimism of food-service operators.
 
“Restaurants took a real hit in 2009, in the depth of the recession,” Mr Brown said. “But the index grew by 1.1 per cent in the February report after a strong January. Sustained growth will show consumer confidence and create more demand pull.”
 
Producing prime calves doesn’t happen by chance, Mr Brown told farmers. Prime quality can be reached by using protocols developed at MU Thompson Farm. Dave Patterson, MU Extension beef specialist, has proven that prime becomes possible on a regular basis by using proven, high-accuracy AI sires.
 
Using timed artificial insemination results in uniform lots of calves sought by feed yards and packing plants. Buyers pay more for groups of uniform calves of the same quality.
 
“The Show-Me-Select Replacement Heifer Programme brought better genetics to the state of Missouri,” Mr Brown said. “It shows how to get high-quality calves. The program not only produces quality replacement heifers, but steer mates are worth more at the packing plant.”

Wednesday, March 28, 2012
Weekly Roberts Market Report


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



DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed up on Monday with the exception of the April 2012 contract. MAR’12DA futures closed at $15.64/cwt; up $0.01/cwt. The MAY’12DA contract closed at $15.34/cwt; up $0.23/cwt. JULY’12DA futures closed at $16.12/cwt; up $0.14/cwt. Spot Cheddar block and barrel markets were quit. USDA’s Livestock Slaughter report released last Friday showed dairy cow slaughter at 525,000 year-to-date; 12,000 head more than this time last year. USDA’s more recent Milk Production report showed the US dairy herd increased by 27,000 head for the same period. Despite greater slaughter, the dairy herd continues to expand. Fundamentals do not support recent price increases. Milk production is increasing on a weekly basis with no peak in view. Current strength is most likely the result of traders wanting to get out of recently established short positions due to cheese price movement. Prices for Class III futures were: 3 months out = $15.53/cwt ($0.06/cwt lower than last report); 6 months out = $15.81/cwt ($0.10/cwt under a week ago level); 9 months out = $16.09/cwt ($0.06/cwt less than this time last week); and 12 months out = $16.12/cwt ($0.04/cwt under a week ago).




The All Milk Price for 2012 has declined over $2/cwt from January through February.
 
LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) closed up on Monday with the exception of August 2012 and June 2013 contracts. The APR’12 contract finished at $124.550/cwt; up $0.050/cwt. JUNE’12LC futures closed at $121.100/cwt; even with Friday’s close. DEC’12LC futures closed at $130.075/cwt; up $0.200/cwt. According to pit sources cattle futures were mixed while traders took in last Friday’s bearish supply report and after the demise of a common ground-beef filler. Last Friday USDA showed a greater-than-expected number of cattle placed in feedlots coming off drought and dry grass from the southern Plains. The number of cattle marketed was lower than expected and also fundamentally negative for prices. On the other hand several pit sources thought this news was already factored into the market. Additionally, traders are trying to gauge the impact of the rapid phasing out of lean finely textured beef, which critics describe as “pink slime.” Many grocery store chains now say they won’t sell beef containing those trimmings. The American Meat Institute said Monday that it could take an additional 1.5 mi head of cattle to make up the difference in meat lost by phasing out those trimmings thereby fundamentally supporting the market even though in the near-term prices could be negatively affected. In a word, tight beef supplies could get even tighter. Cash cattle markets were slow on Monday but are expected to pick up later in the week since packers laid off buying last week. USDA on Monday put box beef prices at $191.74/cwt; down $0.91/cwt and $5.24/cwt lower than a week ago. According to HedgersEdge.com, the average packer margin was lowered $18.30/cwt to a negative $70.80/head based on the average buy of $126.55/cwt vs. the breakeven of $119.73/cwt. Late Monday, March 5, USDA put the 5-area average price at $126.60/cwt; $0.20/cwt over last report.
 


FEEDER CATTLE at the CME finished mixed on Monday. Nearbys were strong while deferreds were lower. APR’12FC futures finished at $152.550/cwt; up $0.125/cwt. The AUG’12FC contract closed $0.050/cwt lower at $156.100/cwt. Some profit taking occurred owing to recent news affecting live cattle fundamentals. The Oklahoma National Stockyard feeder cattle auction estimated receipts for Monday, 3/26/12 at 5,000 head compared to 7,502 last week and 7,940 a year ago. Compared to last week feeder steers and heifers were steady to $3/cwt higher. Stocker steers and steer calves $4-$8/cwt higher. Stocker heifers and heifer calves were $8-$10/cwt higher. Demand was moderate-to-good for feeders and very good for stockers and calves. The CME feeder cattle livestock index was placed at 154.21; up 0.16 and 0.37 over this time last week.

Wednesday, March 28, 2012
Efforts to Expand Economic Ties with Japan
CANADA - The Canadian pork industry welcomes the Canadian government’s efforts to expand economic ties with Japan and congratulates the two countries’ governments on the decision to negotiate a comprehensive economic partnership agreement to expand trade and investment.
 

“Pork exports from Canada to Japan have been a major success story and this has led to a strong trade relationship that has benefited both countries,” stated Canadian Pork Council’s Chair, Jean-Guy Vincent “The Canadian pork sector has a long history of trade with Japan that goes back more than 40 years, since the first shipment of pork left Canada for Japan.”

The Japanese market is extremely important for all Canadian pork industry stakeholders with sales in 2011 of 219,000 tonnes valued at $894 million. This represents approximately 20 per cent of total Canadian pork exports by volume but almost 28 per cent in value. The Canadian hog industry estimates that a successful economic agreement with Japan could increase Canadian pork exports to Japan by 20 per cent to well past $1 billion a year.

Canada is currently Japan’s third-largest supplier of pork, after the United States and the European Union. “There is certainly room to grow our sales to Japan,” added Mr Vincent, “and a trade liberalization agreement between our two nations will provide a big boost for that to happen.”

“The Japanese market is very demanding on the safety of products requiring a high level of food safety from importers,” said Mr Vincent. These requirements have enabled the Canadian pork industry to develop high quality food safety programs, such as the CQA Program, that have assisted the industry in accessing Japanese and other international pork markets.

Wednesday, March 28, 2012
Epigenetics: The Next Frontier in Livestock Genetics
GLOBAL - While controversial, epigenetics does appear to offer potentially significant value to livestock genetic programmes, say the Alberta Livestock and Meat Agency (ALMA) and GenomeAlberta.


Epigenetics is the study of heritable changes in gene expression and other genomic functions without altering the underlying DNA sequence.

Epigenetic studies show that not all genetic information is in the DNA sequence as a significant portion is found in modifications on the epigenome, particularly in DNA methylation (DNAm).

It makes sense that manipulating both DNA and methylation of the epigenomes could add significant value to overall livestock genetics efforts. What doesn’t make sense is that such has yet to be explored on any appreciable scale.

In the scientific article “Epigenetics: A New Challenge in the Post-Genomic Era of Livestock,” author Oscar Gonzalez- Recio, of the Departamento de Mejora Genética Animal, Instituto Nacional de Investigación y Tecnología Agraria y Alimentaria in Madrid, Spain, explains the significance in variations in methylation patterns between individuals, even, if not especially, between those that are genotypically identical and what that can mean to breeders and farmers.

The article explains the impact: “…the environment may affect the methylation pattern of up to three generations cohabiting under the same specific circumstances at a given time during pregnancy: the productive female, the fetus, and the fetus’ germ cells. Hence, what happens to an animal during its lifetime may have consequences in future generations.”

While epigenetics is increasingly popular in genetic studies of cancer and other human diseases, it has yet to gain much attention in livestock genetic studies although the potential benefits in veterinary medicine alone are enticing.

Mr Gonzalez- Recio explains in the article that: “Farms could use epigenetic information to reduce disease incidence and the use of antibiotics in animal production. Personalised medicine using methylation on DNA is currently carried out on cancer research in humans (Peedicayil, 2008; Gomez and Ingelman-Sundberg, 2009), and seems to be a promising strategy for veterinary medicine as well.”

While some farming operations may be unsettled at the thought that they may need to change the environment not only for the current animals' welfare but for future offspring three generations deep, they can likely see profits exceed the costs of doing so, according to Mr Gonzalez- Recio.

“For instance, animals with concentrate and uni-feed diet systems are expected to be differently methylated than animals in a less intensive system based on a pasture feeding systems. It will be important to detect what practices are associated to favourable methylation patterns that affect disease resistance and other economically important traits. Finding this missing causality would assist in rising animals under favourable circumstances and reduce unfavorable methylation patterns.”

Among those “other economically important traits” are likely to be higher profits for epigenetically "certified" livestock and genetic material sales and improved public relations that can lead to better acceptance of meat products and fewer incidents of animal activist protests.

Wednesday, March 28, 2012
Weekly Roberts Market Report
US - Drought in South America is seen as decreasing SA soybean output by up to 2 per cent while farmers in the US say they will plant more corn, writes Michael T. Roberts.

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

LEAN HOGS on the CME finished up on Monday with the exception of the nearby April ’12 contract. The APR’12LH contract closed at $84.875/cwt; down $0.150/cwt. MAY’12LH futures closed at $93.900/cwt; up $0.150/cwt. AUG’12LH futures finished $0.125/cwt higher at $93.625/cwt. A lack of fresh news as the market stabilized after losses on Friday encouraged the mixed market on Monday. The market has fallen sharply in the past month on sluggish demand and growing supplies shown in last Thursday’s cold storage report. Some pit sources consider the lean hog market oversold. Technical signs are near those levels. An oversold market is said to occur when the Relative Strength Index (RSI) is at or below 30. The RSI is a measure of market velocity. Cash hogs were reported flat to $1/cwt lower. Ample hog supplies and further declines in wholesale pork prices are weighing on cash prices. Heavier carcass weights due to excellent quality corn and unusually mild weather this winter contributed to increased pork output. Year-to-date US hog slaughter through last week was up 0.6 per cent and pork output was up 0.7 per cent from a year ago. On Monday USDA put the pork carcass value at $79.82; up $0.15/cwt but $2.47/cwt lower than a week ago. This is nearly 14.5 per cent lower than a year ago. According to HedgersEdge.com, the average packer margin was raised $1.85/hd to a negative $10.15/head based on the average buy of $60.74/cwt vs. the breakeven of $57.08/cwt. Late Monday The CME lean hog index was estimated at 85.77; down 0.78; and 2.21 lower than this time last week.

CORN futures on the Chicago Board of Trade (CBOT) closed down on Monday. The JULY’12 contract closed at $6.360/bu; down 8.5¢/bu. The DEC’12 contract closed at $5.532/bu; off 4.25¢/bu. After following soybeans higher most of the day Corn futures fell back on profit taking and some technical selling. Worries over an expected large crop and thoughts that corn plantings in the US could even go higher weighed on prices. USDA will publish the much anticipated Prospective Plantings report on Friday, March 30 and its World Agriculture Supply Demand Estimates (WASDE) and Crop Production reports on April 10. Large speculators increased net-bull positions to 311,712 contracts. Exports were bearish with USDA putting corn-inspected-for-export at 22.216 mi bu vs. trade estimates for 28-33 mi bu. Corn producers should consider pricing up to 50 per cent of the 2013 crop.

SOYBEAN futures on the Chicago Board of Trade (CBOT) closed up on Monday. The MAY’12 contract closed at $13.794/bu; up 13.75¢/bu. NOV’12 futures closed at $13.294/bu; up 7.0¢/bu. Soybeans reached fresh six-month highs on concerns of a smaller South American crop and expectations for small growth in US soybean plantings. Drought in South America is seen as decreasing SA soybean output by up to 2 per cent while farmers in the US say they will plant more corn. Exports were bullish with USDA putting soybeans-inspected-for-export at 24.913 mi bu vs. trade estimates of 20-29 mi bu. This is well ahead of the 13.2 mi bu needed to stay on pace with USDA’s 1.275 bi bu demand projection. Expectations for greater Chinese demand for US soybeans are also driving the futures rally. Basis for US soybeans at export terminals strengthened in anticipation of increased sales to China. Farm selling has slowed. Some spillover pressure from corn trimmed gains near the close. The carry in the May-to-July futures spread weakened representing a bullish commercial outlook. New-crop inverses continue to strengthen, indicating a longer-term bullish commercial outlook. Technically, the short-term trend turned up after the May contract posted a new high. Now is a very good time to price up to 40-50 per cent of the 2012 crop.

WHEAT futures in Chicago (CBOT) closed up on Monday. The MAy’12 contract closed at $6.594/bu; up 5.25¢/bu. JULY’12 wheat futures finished at $6.702/bu; up 5.75¢/bu. Wheat futures were supported by concerns for dry weather in Europe’s wheat belt and the risk of frost damage to the US winter wheat crop. Follow-through non-commercial short covering also supported the rally. Exports were bearish with USDA putting wheat-inspected-for-export at 15.358 mi bu vs. trade estimates for 23-28 mi bu. Export inspections were below the 15.4 mi bu needed to stay on track with USDA’s 1.0 bi bu projection. European wheat millings were up 1.5 per cent for the week ending March 23, 2012. Considering the weakening underpinnings now would be a very good time to sell up to 35 per cent of the 2012 crop.