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A Brief
Lesson in Pork Sales and Margins
The average retail pork price took a hit in November,
according to USDA. The November price of $2.818/lb. (retail) was
$0.062/lb. (2.2%) lower than in October and $0.185/lb. (6.2%) lower than
one year earlier. See Figure 1. When combined with lower estimated
domestic pork consumption in November, it appears that consumer-level
pork demand was perhaps the softest we have seen for an entire month in
2009.
That statement leaves room for the domestic demand impacts of H1N1 in
late April and early May. That episode was, for the most part, a
short-lived situation and the fact that it was spread over parts of two
months diminished its impact in these monthly data. National Pork Board
research indicates that domestic demand rebounded rather quickly for
most market sectors. An exception has been Hispanic markets where the
safety of pork is still not trusted by some consumers.
It should be noted that retail prices have fallen by 8.8 cents/lb. (4%)
since September, while hog and wholesale values have risen steadily.
The result has been a 6% decline in the estimated farm-to-retail
marketing margin (or price spread) since September. Farm and
farm-wholesale (i.e. packer/processor) shares have risen during this
time period.
An important point to keep in mind about the prices at the various
levels of the marketing chain is that there are significant time lags
involved in price transmission. The lower retail prices in October and
November are largely the result of lower wholesale prices in August and
September. Retailers, and to an even greater degree foodservice
operators, plan well into the future and often buy product well ahead of
the anticipated time of need, especially when running features. Lower
costs in August and September allowed retail prices to fall in October
and November. I think we will see higher retail prices for December and
beyond because the cost of product is now rising for retailers and
foodservice operators.
FULL ARTICLE
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Good
Riddance to 2009
That is the thought of many producers as they reflect on
2009 – a year likely to be remembered as one of the worst years,
financially, for the swine industry. Often, while talking with pork
producers and trying to make some sense of it all, inevitably one of us
would declare, “I have never seen this before,”
In late April, the swine industry was being associated with a human
influenza pandemic, which devastated hog prices at a time when we
normally would see prices improve. In August, cash hog prices slipped to
the lowest level seen since 1945. Then, in December, we saw cash prices
and pork cutout values at the high for the year. It was a year to expect
the unexpected. It also brought the swine industry to a point where it
has lost money for over two years straight – a situation that cannot
continue for much longer. We are at a point where the economics must
improve in 2010 for many pork producers to remain in business a year
from now.
Corn quality issues? I have been hearing numerous reports
throughout the United States that producers are dealing with moldy and
poor quality corn. Compounding the problem, if you are feeding corn
distillers grains, the mold content may be even higher, which may cause
more problems in swine diets. Pork producers are very creative. They
will find a way to work through these feed quality issues, but it will
come at a cost.
FULL ARTICLE
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Petition
Urges "Downer" Pigs Not Enter Food Supply
Farm Sanctuary, a farm animal protection organization, is
petitioning the administration to issue regulations to “put an end”
to the abuse to prevent “downer” animals from entering the food
supply. Farm Sanctuary said, “The abuse of living, breathing, feeling
pigs who (that) are too sick, injured and weak to stand is
incongruent with our values of mercy and compassion.” Also, they are
urging that USDA “extend legal protections to downed pigs and all farm
animals.” USDA testified a few years back that “fatigued” hogs to
do not pose a risk to the food supply.
Downed Animal and Food Safety Protection — Congressman Gary
Ackerman (D-NY) plans to reintroduce the “Downed Animal and Food
Safety Protection Act.” The proposed legislation would codify
existing USDA regulations that prevent downed cattle – sick, diseased
or injured cattle incapable of supporting their own body weight – from
entering the food supply and requires that these animals be humanely
euthanized. The legislation would close a loophole in the regulation
that permits the slaughter of downed calves for human consumption.
Senate Passes Health Care — The Senate passed one of President
Barack Obama’s major legislative initiatives, health care reform, on
Christmas Eve. The “Patient Protection and Affordable Care Act”
passed the Senate on a party line vote of 60-39. Democrats say the
bill provides comprehensive health reform, decreases the number of
uninsured, and increases access to affordable health care. The House and
Senate Republican leaders vowed to continue to fight this legislation,
which they say would increase premiums, cut Medicare benefits, and add
to the national debt. Now the bill goes to a conference committee to
resolve the differences between the House-passed version and the
Senate-passed version.
FULL ARTICLE
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North
Carolina Pigs Confirmed with Novel H1N1 Pandemic Flu Virus
North Carolina has become the fourth state with confirmed
cases of novel H1N1 flu in pigs.
A federal laboratory has verified the presence of the 2009 novel H1N1
flu virus in samples taken from pigs at two North Carolina farms.
Minnesota, Indiana and Illinois have previously reported cases of the
novel H1N1 virus in pigs.
The pigs in North Carolina have been under the care of a swine
veterinarian and have recovered from the illness. “The herd
veterinarian noticed signs of mild illness in the pigs and conducted
tests to determine the type,” reports State Veterinarian David
Marshall. “Confirmatory tests by the U.S. Department of
Agriculture’s National Veterinary Services Laboratory in Ames, IA,
indicated the virus was H1N1.
FULL ARTICLE
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Jan. 10-13, 2010: American Farm Bureau
Federation Convention and Annual Meeting, Washington State Convention &
Trade Center, Seattle, WA; contact: (202) 406-3600 or www.fb.org.
Jan. 27-28, 2010: Iowa Pork Congress, Iowa Events
Center, Des Moines, IA; contact: Iowa Pork Producers Association at
(515) 225-7675 or go to www.iowapork.org
Feb. 2, 2010: Swine
Profitability Conference, Forum Hall, Student Union, Kansas State
University, Manhattan, KS; contact: http://www.ksuswine.org.
FULL ARTICLE
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