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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.
FULL ARTICLE
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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.
FULL ARTICLE
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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.”
FULL ARTICLE
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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.”
FULL ARTICLE
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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: info@londonswineconference.ca Web: www.londonswineconference.ca
April 28-29, 2010: Animal Agriculture Alliance 9th
Annual Stakeholders Summit, Westin at the Westin Arlington Gateway
Hotel
Arlington, VA; For more information contact: www.animalagalliance.org (703) 562-5160 or summit@animalagalliance.org.
FULL ARTICLE
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