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Mexico’s Pork Buying Edges Closer to Japan’s
U.S. pork exports in October were 6% lower on a product
weight basis than those of October 2008. The decline in the most recent
month for which data are available is a bit of a disappointment, since
September had seen exports go to the positive side of the year-on-year
ledger for the first time since March. The October results put
year-to-date exports of pork cuts at 2.543 billion pounds, 14.1% below
last year’s record pace. Figure 1 contains year-to-date figures for
key U.S. and global markets.
Mexico remains the clear leader in terms of 2009 export trade, growing
33% vs. last year. Total shipments to Mexico through October were 586.4
million pounds. That holds Mexico as our second-largest pork market,
pulling the country within less than 160 million pounds behind Japan –
the closest that relationship has ever been at this time of year. Given
what I have heard about reductions in Mexico’s breeding herd since
last spring, I would not be surprised to see shipments to Mexico surpass
those to Japan in some months in 2010.
Mexico and Canada were the only major markets for U.S. pork that grew in
October compared to last year. Monthly shipments southward totaled 67.2
million pounds of pork cuts, 10.6% higher than in October 2008, while
29.4 million pounds went to Canada – a 4.1% increase over 2008.
China was dead even with last year’s total, while all other markets
were down. The good news is those percentage declines were smaller
across the board than the declines in September. Part of that “less
decrease” is due to comparing to October 2008 shipments that were
smaller than in previous months.
Value-Volume Differential
The value of October pork cut exports was $315 million, 19.6% lower than
last year. Even so, that number contains a positive as it implies that
per unit pricing improved in October since value was down only 5.5% more
than was volume. That value-volume differential was 18.3% in September
and 9.7% in August.
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Sow Herd
Reductions May Push Weaned Pig Averages Higher
The Swine Management Services (SMS) database is seeing an
artificial improvement in pigs weaned/mated female/year (PW/MF/Y). As
we updated the “all farms” database at the close of the third
quarter, we saw a 5-10% reduction in the number of females per farm and
fewer total sows. About 30 farms closed. However, with new farms added
to the SMS benchmarking database, the total number of farms increased.
When 10% of the sows are farrowed, weaned and then culled, a 5-10%
increase in the standardized PW/MF/Y may result. There are many ways to
calculate PW/MF/Y, so it is very important to review how your
recordkeeping program calculates this number.
An example of how a change in sow inventory affects PW/MF/Y: A
2,500-sow farm is weaning 120 sows (1,200 pigs/week) with a PW/MF/Y of
25.03. As the farm reduces the sow inventory by 10% over a 16-week
period, the farm continues to produce 1,200 pigs/week. After 16 weeks,
the sow inventory will drop to 2,250 sows, but the “average” sow
inventory over that 16-week period is 2,357 sows. This would calculate
to 26.54 PW/MF/Y, which is a 6% improvement with no more pigs out the
door. It will take a year after the sow inventory reduction starts for
this number to come back to 25.03 PW/MF/Y, assuming reproductive
performance holds steady.
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EPA to
Regulate Greenhouse Gases
EPA has declared greenhouse gasses (GHGs) a threat to
public health and the environment. The announcement covers emissions
from six greenhouse gases, including: carbon dioxide, methane, nitrous
oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.
EPA’s announcement is in response to the 2007 U.S. Supreme Court
decision that greenhouse gasses fit within the Clean Air Act definition
of air pollutants. According to EPA, “the findings do not in and of
themselves impose any emission reduction requirements, but rather allow
EPA to finalize the GHG standards proposed earlier this year for new
light-duty vehicles.” The American Farm Bureau Federation (AFBF)
said, “We firmly believe any regulations dealing with global warming
that could negatively affect our ability to produce food and fiber for
our nation and the world should come through the legislative process.
While more and more questions are being raised about the scientific
validity of global warming models, it is not the time to begin making
sweeping policy decisions based on the projections offered by those
climate models.” The American Meat Institute (AMI), stating it does
not support EPA’s announcement, said, “The final rule could expose
large sectors of the economy to significant corporate liability for
producing products that purportedly endanger health and welfare.”
Competition in the Food System — The Farm Foundation held a
conference concerning the economics of structural change and competition
in U.S. agriculture and food markets. The purpose of the conference was
to provide objective information and independent research on the
economics of structural changes and competition in the food system for
stakeholders, policy makers and regulators prior to the Department of
Justice and USDA competition workshops to be held next year. The
presentations are available on the Farm Foundation’s website: www.farmfoundation.org/webcontent/Food-System.
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Pfizer
Receives USDA Approval For First Pandemic H1N1 Vaccine
Pfizer Animal Health is the first biologics manufacturer
to develop, manufacture and receive approval from the U.S. Department
of Agriculture USDA) for its new H1N1
vaccine.
Pfizer’s swine influenza virus (SIV) vaccine, pH1N1 Killed Virus,
has been approved by USDA for vaccination of healthy swine, including
pregnant sows and gilts, 3 weeks of age and older against the SIV
subtype H1N1.
Earlier this year, the USDA provided a master seed of the pH1N1
(pandemic) strain to multiple manufacturing companies in anticipation
of potential transmission in swine herds. So far pork producers have
not detected widespread movement of the pH1N1 strain within swine
herds.
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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.
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