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National Hog Farmer Weekly Preview
December 28, 2009
 
In this issue:
  A Brief Lesson in Pork Sales and Margins
  Good Riddance to 2009
  Petition Urges "Downer" Pigs Not Enter Food Supply
  North Carolina Pigs Confirmed with Novel H1N1 Pandemic Flu Virus

MARKET PREVIEW
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

FINANCIAL PREVIEW
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

LEGISLATIVE PREVIEW
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

NEWS FLASH
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

PORK INDUSTRY CALENDAR
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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 BLUEPRINT

BIOSECURITY SOLUTIONS
The news reports announcing the discovery of the H1N1 Flu Outbreak Virus on April 24, 2009 increased the urgency for proper biosecurity measures in hog operations. Producers continually face the challenge of managing the biosecurity of pigs, people, packages and pests as they redouble efforts to stave off costly swine diseases and retain their access to pork markets in this age of economic uncertainty. Click here for the complete Blueprint archive.

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 MAGAZINE HIGHLIGHTS

2009 Swine Research Review
Pigs in Bottom Nose Trailer Compartment Have More Stress, Lower Meat Quality Scores
Pigs hauled in the bottom nose compartment of a pot-belly trailer have much greater risk for higher levels of stress and poorer meat quality, according to a study at the Prairie Swine Centre in Saskatoon, Saskatchewan.
Higher Productivity Levels Tap Sows' Energy Reserves
Genetic selection for increased sow productivity, including number of pigs born alive, number weaned and litter weaning weight, has increased the demands for milk production during lactation. Without an increase in feed intake, lactating sows lose more body weight.
Low-Solubles Distillers Dried Grains Diets Improve Hog Carcass Fat Firmness
The rapid expansion of the U.S. ethanol industry has made dried distillers grains with solubles (DDGS) readily available for livestock feed. One challenge associated with DDGS feeding relates to soft fat that occurs in pork carcasses when high levels of DDGS are included in swine diets.

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 POSTERS

FREE SELECTION GUIDES AND MANAGEMENT POSTERS
National Hog Farmer offers 10 posters targeting key production areas, offering guidance in critical areas such as feet and leg soundness and reproduction traits soundness in replacement gilts. Others include pig anatomy, heat detection, sow condition, etc. All posters are in English. Select posters are translated to Spanish, Chinese and Japanese.

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Denagard® 10 gets pigs off to a fast start and keeps them healthy through the stresses of post-weaning, nursery and movement into the grow-finish unit, so they perform closer to their full potential. If you’re looking to achieve and maintain healthier pigs, call Novartis Animal Health at 1-800-843-3386 or visit www.livestock.novartis.com today.

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