of the Vanishing Pigs
Where have all the pigs gone? Or better yet, were those
pigs ever really here? Those are the questions circulating through the
industry the past few weeks as federally inspected (FI) slaughter totals
fell far below the expected levels, then recovered somewhat last week
(see Figure 1). It appears to me that there are three possible answers
to the questions:
1. USDA simply overcounted the pigs in the March survey and
Hogs & Pigs report. That would be a real surprise since the March 1
inventories were already lower than most analysts expected. Some
categories were, in fact, much lower than expected. Could it be that
the numbers were still far too high? It’s always possible in a
process which involves inferring information for an entire population
from a statistical sample. USDA’s statisticians face their greatest
challenge in getting the numbers right when the industry is in some sort
of transition and 2009-2010 is such a period.
Profits – Finally
It’s been a long time coming, but the majority of the
pork producing units is making money.
The trend started in March and continues into April. Most producers are
receiving cash prices over $160/head. With breakevens around $135/head,
most producers will average close to $20 profit from an operational
standpoint. That is welcome relief for everyone involved in this
In talking to producers, they seem to fall into two camps – one
wondering when the other shoe will drop, the other thinking happy days
are here again. It’s important to remember that a year ago the
industry was being hit with the fallout of H1N1 influenza virus, which
had a crippling effect on hog prices for a good part of 2009. Barring
any major trade issue or something that would affect demand – export
or domestic – I think the pork supply is in good shape with where
demand is today.
Steps Taken Toward 2012 Farm Bill
The House Agriculture Committee kicked off the 2012 farm
bill discussions in a hearing with Secretary of Agriculture Tom Vilsack.
“This hearing is the first step in the process of writing the next
Farm Bill. A bill this large and that covers so many important issues
takes a lot of time and effort to get it right, and I am committed to a
process that is open, transparent, and bipartisan,” stated Chairman
Collin Peterson (D-MN), while reminding everyone that there will be no
new money for the next farm bill. Secretary of Agriculture Tom Vilsack
testified that the administration will work with the committee in
developing the new farm bill, provided it contains a safety net for
farmers and provision to help create better off-farm jobs in rural
America. This includes broadband internet services, renewable energy
and bio-fuels, regional food systems and supply chains, forest
restoration and private land conservation, and ecosystem market
incentives. Congressman Frank Lucas (R-OK), ranking member of the
committee, reminded the secretary of the importance of production
agriculture when writing the new farm bill. The Senate Agriculture
Committee is expected to begin its farm bill hearings early next
Remain Positive About Role of Pork Checkoff
Despite a relatively gloomy view of the industry late last
year, pork producers remained positive about the work being done through
their Pork Checkoff, according to a random survey of the National Pork
Board’s database. The survey was conducted of 550 producers last
A number of the questions in the survey have been asked each of the last
eight years. When producers were asked if they believe the industry is
moving in the right direction, 40% said right direction and 50% said
wrong direction. That wrong-direction number is the highest since the
63% of 2003. The highest right-direction number was 64% in 2006.
Producers are always asked their position on the Pork Checkoff and it
programs. In 2009, support was 77% and opposition was 13%; the 77%
support ties the all-time high from 2008.
April 28-29, 2010: Animal Agriculture
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