Sow Count Puzzling
Canada’s quarterly Hog Statistics Report, released last
week, confirmed expectations that the swine herd continues to shrink,
but the breeding herd reduction was smaller than I had expected given
the Canadian herd buyouts of 2009.
Stats Canada estimates that Canada’s herd numbered 11.63 million head
on Jan. 1, 5.5% smaller than last year’s 12.18 million head. The
largest Jan.1 swine herd was in 2006, when Canadian farms had 15.11
million head in inventory.
The reduction was relatively balanced, with eastern herds having 6.974
million head, 5.2% fewer than last year, and western herds having 4.836
million head, 3.6% fewer than last year. Inventories declined in all
of the major hog-producing provinces (Quebec and Ontario in the east and
Alberta, Saskatchewan and Manitoba in the west). The smallest decline
(1.9%) was in Manitoba and the largest decline (7.6%), interestingly,
was in Quebec, the province with the highest levels of government
support for producers.
Prices Stuck in a Range
Over the past 3-4 weeks, hog prices have been stuck in a
narrow range – hovering around $63-$66/cwt., carcass, or close to
$125-$130/head. Although this is much better than we have seen for quite
some time, producers are hoping we will get to a plain of $140/head or
During the third week of January, there was a huge run-up on pork cutout
values. Since then, values retraced and have stayed in a range of
$68-$70/cwt., carcass (see Figure 1, attached). When cutouts were close
to $80/cwt., carcass, we were starting to get some resistance and
packers started featuring items other than pork. The point was made that
while we had a quick run-up, we needed to take a breath and settle into
a range for a period of time. There are some favorable signs in the
chart. The pork cutout value over the last month has shown strength that
we have not seen since 2002 – with the possible exception of
Farm Income Up
USDA is forecasting that net farm income will increase to
$62 billion in 2010, up $6.7 billion or 11.8% from 2009. This is
projected to be the fifth highest income earned in U.S. agriculture.
USDA estimates that livestock receipts will increase $11.5 billion. Hog
receipts are estimated to increase as a 2.8% decline in pork production
is offset by a $3.77/cwt. increase in pork prices. USDA said, “Now
that the U.S. economy has stabilized and is showing signs of
improvement, consumers are expected to increase their consumption of
animal products, thus firming up market prices and improving the
earnings of livestock producers, led by dairy farmers and cattle
producers.” USDA estimates that direct payments to crop producers
will total $4.8 billion compared to $4.95 billion last year.
Countercyclical commodity payments are estimated to be $895 million
compared to $1.23 billion in 2009 – a 27% drop.
Fiscal Responsibility and Reform — President Barack Obama
established an 18-member Bipartisan National Commission on Fiscal
Responsibility and Reform. The commission is asked to put forward
proposals to “balance the budget, excluding interest payments on the
debt” by 2015. It will also examine the growth of entitlement
spending and the gap between the projected revenues and expenditures
over the long term. The commission is to make its recommendations by
Dec. 1. Senate and House leaders have agreed that Congress will vote on
the recommendations by the end of the year. Former Senator Alan Simpson
(R-WY) and Erskine Bowles, former chief of staff to President Bill
Clinton, will co-chair the commission.
Coalition Sounds Off On CBS Antibiotic Report
A pork industry coalition has responded to CBS Evening
News Anchor Katie Couric’s a two-part series on antibiotics in
The group sent a letter Friday to CBS News President Sean McManus which
stated: “We were extremely disappointed with CBS’s recent Evening
News story on antibiotic use in the livestock industry. The story lacked
any attempt at balance and largely accepted the arguments of opponents
of conventional agriculture that drugs are overused in livestock and are
a major cause of antibiotic resistance.
“In fact, antibiotics are given to livestock strategically, when
animals are sick, susceptible or exposed to illness. Modern livestock
production facilities provide animals with an environment designed to
keep them safe, healthy and comfortable. Also, there’s no proof that
antibiotic use on farms significantly increases resistant bacteria in
humans. Since antibiotics have been used in livestock for half a
century, if there was going to be an epidemic of resistance related to
antibiotic use in agriculture, it would have occurred by now. The fact
that it has not means that antibiotic use in animals is not a major risk
to human health.”
Feb. 24, 2010: National Swine Nutrition
Guide distributed and explained in Indianapolis, Indiana. The guide
consists of nutrition fact sheets, nutrient recommendation tables and
diet formulation and evaluation software and will be included with an
$80 conference registration or available for purchase separately for
March 4-6, 2010: Pork Forum, Kansas City, MO;
March 5, 2010: National Swine Nutrition Guide
distributed and explained in Sioux City, Iowa. The guide consists of
nutrition fact sheets, nutrient recommendation tables and diet
formulation and evaluation software and will be included with an $80
conference registration or available for purchase separately for $125.
LEADR — NPPC’s grassroots organization — trains
industry stakeholders to tell the story of U.S. pork. As a LEADR you
will help lawmakers understand how their decisions affect your business,
your family, your community and your ability to provide consumers with
safe, affordable and healthy pork.
Click here to learn
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