Market News is Rare, but Always Welcome
It was another good week for pork producers as hog prices
rose and corn prices fell slightly. While welcome, producers are still
losing nearly $20/head. At this point, we will take improvement where
we can find it.
Last week’s higher hog market was driven by a $2.50 increase in the
cutout value. The weekly average of $62.76/cwt., carcass, was the
second highest weekly observation of the year – second only to the
week of July 25 (see Figure 1), when packers had slowed chain speeds to
restore packer margins from their awful levels of the first half of the
Higher cutout values led to higher hog prices as well as the fall price
rally. We haven’t seen those four words strung together lately. Figure
2 demonstrates the rarity of a fall price rally. The only one of any
significance prior to this year happened in 2004, when prices approached
the high for the year in the first week of December and then plunged
over $15/cwt. by year’s end.
It may be difficult to sustain this rally since there usually is not a
single pork cut that can carry the cutout value higher this late in the
year. Last week’s cutout increase was driven, as would be expected
with Christmas at hand, by hams and not usually associated with
Christmas, spareribs, which went up $4.63/cwt.
Test Improves Detection
Infectious diseases remain the major constraint to
achieving the genetic potential of pigs in modern swine production. The
accurate diagnosis of disease and/or surveillance for infections usually
relies on diagnostic tests. Unfortunately, there are no perfect
diagnostic tests. No test will always correctly identify all truly
positive or truly negative samples.
Inaccurate test results can be a frustrating experience for producers
and veterinarians. A good example is the PRRS (porcine reproductive and
respiratory syndrome) ELISA (enzyme-linked immunosorbent assay) test
from IDEXX Laboratories commonly used to detect PRRS antibody. Some
herds have experienced a false positive rate of up to 3%, although 1% is
A false positive reported from a population that is expected to be
negative often leads to undesirable and expensive outcomes, including:
stopping the shipment of animals or semen; the expense and delay of
additional testing of those false positive samples with PCR (polymerase
chain reaction) or other serology tests; the expense of additional
sampling and testing to assure the population is negative; and the
heartburn, concern, and consternation on the part of producers, owners,
veterinarians and laboratory personnel in dealing with the problem.
Defining Accuracy of a Test
The accuracy of a test is usually defined in terms of sensitivity and
specificity. The sensitivity estimates how often the diagnostic test can
find its target when the target is present in an optimized specimen.
Said another way, sensitivity is the likelihood that the test will
identify a truly positive sample as positive by the test. A test that is
99% sensitive will miss one true positive (have one false negative) in
every 100 positive samples. This problem is commonly minimized by
testing a larger number of animals.
The other measure of accuracy is specificity, which estimates how often
a false positive test will occur by measuring how often a negative test
is truly negative. A test that is 99% specific will have one false
positive test (sample was actually negative) for every 100 tests of
truly negative samples. So in the case of PRRS ELISA, 98% specificity
means that one could expect two false positive animals in every group of
100 truly negative samples (or one false positive for every 50 truly
Delays Ethanol Decision
The Environmental Protection Agency (EPA) announced it
would delay its decision on Growth Energy’s petition to raise the
blend rate for ethanol in gasoline to 15% next June. EPA wants to review
the Department of Energy’s (DOE) ongoing study that will provide
critical data on the question of durability when E15 is used. The study
is expected to be completed by mid-June.
In a letter to Growth Energy, EPA stated that its engineering
assessments indicate that the “robust fuel, engine and emissions
control systems in new vehicles (likely 2001 and newer model years) will
likely be able to accommodate higher ethanol blends, such as E15.”
EPA also noted that increasing the blend wall to E15 is a “critical
issue” as the United States works toward long-term introduction of
more renewable fuels into the transportation sector.
According to Growth Energy, “This announcement is a strong signal that
we are preparing to move to E15, a measure that will create 136,000 new
U.S. jobs, cut greenhouse gas emissions, and lessen America’s
dependence on imported oil.”
The National Petrochemical and Refiners Association (NPRA) stated, “In
making this decision, EPA correctly recognizes that there is more study
and comprehensive testing to be done to ensure that higher ethanol
blends will be safer for consumers and not threaten the reliability of
their fuels or operation of their vehicles, engines and outdoor
equipment.” Growth Energy filed the petition with EPA in March of
Climate-Change Legislation Would Ruin Hog Production
change legislation would lead to higher grain prices and major cuts
production, witnesses indicated at hearings held late last week by the
House Agriculture Subcommittee on Conservation, Credit, Energy and
Research in Washington, D.C., according to a release from the National Pork Producers.
By 2050, hog slaughter would be 23% lower compared with baseline
levels, according to U.S. Department of Agriculture economist Joseph
Glauber. Fed beef slaughter would fall by almost 10% and milk production
by about 17%.
Those reductions would result from croplands being converted to
woodlands, which the legislation promotes as a way to help cut
Dec. 8, 2009: Pork Profit Seminars,
Nevada, MO; contact: Missouri Pork Association at (573) 445-8375.
Dec. 9, 2009: Pork Profit Seminars, Sedalia, MO;
contact: Missouri Pork Association at (573) 445-8375.
Dec. 10, 2009: Pork Profit Seminars, Mexico, Mo;
contact: Missouri Pork Association at (573) 445-8375.
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