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National Hog Farmer Weekly Preview
March 29, 2010
In this issue:
  USDA Hogs & Pigs Report – Finally Some Good News
  Bullish Hogs & Pigs Report
  EQIP Funds Tapped for Child Nutrition Act
  Ohio Livestock Care Board Moves Forward

USDA Hogs & Pigs Report – Finally Some Good News
After two years in which about any light at the end of the tunnel turned out to be an oncoming freight train, pork producers have every right to be encouraged by the USDA’s quarterly Hogs and Pigs report issued last Friday.

The report indicates lower hog numbers across the board, relative to both last year (which we anticipated) and, more importantly, the market’s expectations going into the report. In fact, relative to the averages of analysts’ pre-report estimates, this was one of the most bullish reports in years. Just what the financial doctor ordered if you sell pigs!

Table 1 contains the key data from Friday’s report and readers can see from the right-most column that every number except one (the 180 lb. and over inventory) was smaller than analysts expected. It’s not that analysts are always right, but their pre-report opinions are meant to measure the changes that are already “in the market” – especially the futures market. These relatively large deviations imply strong Lean Hogs futures prices on Monday – most likely limit up at some point during the day. That conclusion applies more strongly to the deferred contracts where the impacts of a 2.4% smaller Dec-Feb pig crop might be more greatly felt.


Bullish Hogs & Pigs Report
The impact of the bad economic picture plaguing the hog industry for the last two years showed up in the USDA’s latest Hogs and Pigs report. Total sow numbers compared to a year ago were well below what the market was expecting. This is good news for many producers who were able to survive the extended market downturn and it looks like the economics for 2010 will be good. How good? It’s really too early to tell, but if you look at current cost of production and hog future prices, many producers have a chance to make $10-$15/head this year. This will certainly help heal the balance sheets of some producers.

Locking in a Profit Always Makes Sense – Many producers locked in some futures prices before the USDA report was issued and now wonder if they made the right decision. My response to them is this, “You locked in a profitable price and you will still have an opportunity to improve some margins on your open market hogs. And, having a better hog market should also improve your basis position concerning cash hogs.” The bottom line is this: you never go broke locking in a profit. Remember, when the market is going up, it is helping or improving your overall margin. You need to stick to your plan going forward because things can change quickly. The March Pig Crop report may also have given us better margin opportunities for the fourth quarter 2010 and the first quarter 2011 than earlier anticipated.


EQIP Funds Tapped for Child Nutrition Act
The Senate Agriculture Committee unanimously approved the “Healthy, Hunger-Free Kids Act of 2010,” which reauthorizes childhood nutrition programs (school breakfast, school lunch, summer feeding program, etc.). The legislation provides $4.5 billion in additional child nutrition program funding over the next 10 years. Part of the increased funding is the result of redirecting $2.2 billion from the Environmental Quality Incentives Program (EQIP) to help pay for the legislation. A number of members of the committee raised concerns about cutting EQIP funds. Chairwoman Blanche Lincoln (R-AR) said the proposal would only limit the growth in funding for EQIP and not cut producer payments. She pledged to work with committee members on the funding issue. The legislation invests in new initiatives to enroll more children in the national school breakfast and lunch programs. It increases the federal reimbursement rate for school lunches by 6 cents per meal, which will help schools meet new meal standards to provide children with healthier school meals. To help combat childhood obesity, the secretary of agriculture will be given the authority to establish national nutrition standards for all foods sold on the school campus throughout the school days. The bill also provides funding for schools to establish school gardens and to help schools source local foods. The bill also expands after-school meals for at-risk children, nationwide, to provide an after-school meal. Currently, communities are reimbursed for providing a snack. Secretary of Agriculture Tom Vilsack said, “The Senate's Healthy, Hunger-Free Kids Act is a significant step toward legislation that reduces hunger, improves the health of our children, and supports their academic achievement.”


Ohio Livestock Care Board Moves Forward
With passage of House Bill 414, the establishment of the nation’s first livestock care board, in Ohio, moves ahead with the governor expected to sign the authorizing legislation in the coming weeks.

“I applaud the legislature for its hard work in passing this important piece of legislation that will further strengthen Ohio agriculture, and I am excited to serve Ohioans in my new role as chairman of the Ohio Livestock Care Standards Board,” says Ohio Department of Agriculture Director Robert Boggs. “I am confident that creating comprehensive livestock care standards will not only assure better livestock care, but will also promote safe and affordable food, help prevent the outbreak of both animal and human diseases and will encourage local food production.”


March 31 - April 1, 2010: London Swine Conference at the London Convention Centre, London, Ontario, Canada.

Contact Information:
Linda Dillon - Ontario Ministry of Agriculture, Food and Rural Affairs, Box 159, Clinton, Ontario Canada, N0M 1L0
Tel.: 519-482-3333 Fax: 519-482-5031 Email: Web:

April 28-29, 2010: Animal Agriculture Alliance 9th Annual Stakeholders Summit, Westin at the Westin Arlington Gateway Hotel
Arlington, VA; For more information contact: (703) 562-5160 or

Our breeding technology is delivering what your operation demands, high production results across a wide range of environmental conditions. Count on the industry leader. Go to the trusted source.Click here for more information.


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.

NPPC conducts public-policy outreach on behalf of its 43 state associations, enhancing opportunities for the success of U.S. pork producers and stakeholders by establishing the pork industry as a consistent and responsible supplier of high-quality pork to domestic and world markets. Click here to learn more and support your industry.


This Month's Focus: Air Quality
Peeling Away the Layers of Pork's Carbon Footprint
Pork Checkoff's Life Cycle Assessment of greenhouse gas emissions is entering the final phase and the outcome will be a producer-friendly, greenhouse gas prediction tool.
Evaluating Biosecurity Risks During Feed Transport
Links in the feed processing and delivery chain identify disease prevention challenges and opportunities.
Food Safety Expert Counters Katie Couric's Claims
Key facts discount comments made on antibiotics segments aired last month.

Social Networking For Pork Industry Professionals National Hog Farmer content is available on Facebook, a social networking tool increasingly used by pork industry professionals. Interact with readers and editors, participate in discussions and keep up-to-date with industry happenings. Become a fan of National Hog Farmer!
National Hog Farmer is also on Twitter, a micro-blogging site that provides brief status updates on people, groups or organizations. Users can "follow" people or groups, including news organizations that they want to keep up-to-date with. Follow National Hog Farmer on Twitter!


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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Our breeding technology is delivering what your operation demands, high production results across a wide range of environmental conditions. Count on the industry leader. Go to the trusted source. Click here for more information.

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