of the Day: When to Lock in Profits?
If I told you that you could lock up a calendar year’s
production of market hogs and average $20/head profit for every one of
them, would you take it? There is no right answer to that question
because it depends on a lot of factors. Included in that list of
factors is your attitude toward risk, your financial position, the stage
of life that you are in (young people can take more risks because they
have more time to recover if it doesn’t pan out), the viewpoints of
other owners, and the profit opportunities that you could tap if you
free up time, energy, capital, whatever by making a decision now.
But that opportunity is at hand – or at least it was earlier this week
before USDA’s Acreage and Grain Stocks reports pushed corn prices
sharply higher. On Monday, my production model said that producers
could lock in corn, soybean meal and hogs to earn just over $22/head for
the remainder of 2010, $16.53/head for all of 2010, and $20.49 for July
2010 through June 2011. Those figures have deteriorated just a bit this
week – to $19.27, $14.85 and $19.15, respectively. The costs and
prices that result in those returns appear in Figure 1.
A savvy producer told me today that his company is very excited about
the margins being offered right now and will lock them in for a high
proportion of production. This guy is, I believe, somewhat risk averse,
but I also know that his viewpoint on risk got him through the past two
years relatively scot free.
of Weaning Age on Farm Productivity
We have been asked by several people to look into the
effect of weaning age on performance of breed-to-wean facilities. Since
we get data from over 20 different sow recordkeeping programs, there is
some question of the accuracy of what true average weaning age is
because record programs handle nurse sows, partial litter weaning and
crossfostering, differently. Each farm needs to review how their sow
record program calculates weaning age.
The trend in the industry has been to wean older pigs in an effort to
get larger pigs, which reduces the cost of early nursery diets, plus
pigs start faster when placed in wean-to-finish barns.
Chart 1, from the Swine management Services (SMS) benchmarking database,
shows weaning age trends over the last 5+ years. The average weaning
age increased from 18.2 days (January 2005) to 19.9 days (March 2009),
and has since leveled out at 19.6 days.
Antimicrobial Use Document Released
The Food and Drug Administration (FDA) recently released
the document, “Draft Guidance on the Judicious Use of Medically
Important Antimicrobials in Food-Producing Animals,” indicating a new
policy goal for the use of antibiotics for animals. The agency said,
“The overall weight of evidence available to date supports the
conclusion that using medically important antimicrobial drugs for
production or growth-enhancing purposes (i.e., non-therapeutic or
sub-therapeutic uses) in food-producing animals is not in the interest
of protecting and promoting the public health.” FDA had testified to
this affect last summer. The National Pork Producers Council commented,
“This guidance could eliminate certain antibiotics that are extremely
important to the health of animals. FDA didn’t present any science on
which to base this, yet it could have a tremendous negative impact on
animal health and, ultimately, the safety of food. As we know, healthy
animals produce safe food, and we need every available tool to protect
animal health.” The House Energy and Commerce Committee will hold a
hearing on July 15, regarding antibiotic usage in animals.
Congresswoman Louise Slaughter (D-NY) has introduced legislation, the
“Preservation of Antibiotics for Medical Treatment Act,” which would
ban use of antibiotics for animals except for treatment.
Legislation Would Lift Travel, Trade Restrictions to Cuba — The
House Agriculture Committee passed historic legislation that expands
U.S. agriculture trade with Cuba and allows Americans to travel to Cuba.
The “Travel Restriction Reform and Export Enhancement Act” restores
the original congressional intent of payment of cash in advance policy
for Cuba’s purchases of U.S. farm products and eliminates the need for
Cuba to use third-country banks to make payment to U.S. exporters.
Texas A&M University estimates that lifting the travel restrictions will
increase U.S. agricultural sales to Cuba in the long term by $336
million annually. The bill is strongly supported by the U.S. Chamber of
Commerce, American Farm Bureau Federation, National Farmers Union,
American Soybean Association, National Corn Growers Association,
National Association of Wheat Growers, USA Rice Federation and numerous
other agricultural organizations.
Towns in Iowa Thrive Near Large Farms
A study by Iowa State University (ISU) rural sociologists
suggests that small towns in Iowa benefit from the presence of large
“Our findings suggest there is a modest favorable effect of
large-scale agriculture on quality of life in the 99 Iowa communities we
studied,” says Steve Sapp, professor of sociology. “That’s not
especially surprising, given the close relationship between Iowa’s
rural communities and agriculture.”
Sapp conducted the studies with Daniel Sundblad, a recent ISU graduate
student who is now an assistant professor of sociology at Berry College
July 18-21, 2010: 21st International Pig
Veterinary Society Congress, Vancouver Convention and Exhibition Centre,
Vancouver, British Columbia, Canada;
For more information
contact: (604) 688-9655 ext. 2 or firstname.lastname@example.org
or go to http://www.ipvs2010.com/.
August 31, 2010: 20th Annual Carthage Veterinary
Service, Ltd. Swine Conference, Western Illinois University
For more information contact: (217) 357-2811 or go to www.hogvet.com.
August 31-Sep. 2, 2010: Feet First Sow Lameness
Symposium, Hilton Minneapolis
For more information contact: (612)-376-1000 or go
According to a head-to-head trial1,
LINCOMIX® (lincomycin) is equally as efficacious for
ileitis control at 40 g/T as Tylan® is at 100 g/T. That
means you’ll spend a whopping 40% less for comparable results. Contact
your veterinarian or your Pfizer Animal Health representative to learn
1. Data on file, Study Report No. 768-9690-0-CPC-97-002, Pfizer
NPPC works diligently to protect and promote the interests
of America’s pork producers who in turn provide safe, nutritious pork
to domestic and foreign markets, generating thousands of jobs and more
than $30 billion of gross national product to the U.S. economy.
Click here to see how NPPC is working for you.
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