Breeding Herd 2.4% Smaller
Statistics Canada released its estimate of July 1 pig
inventories last week, which reflect continuing reductions in Canada’s
pork sector. Total inventories amounted to 11.781 million head, 2.4%
lower than one year earlier. Canada’s market herd contracted by 2%
since last July and stood at 10.476 million head on July 1, 2010.
Canada’s breeding herd was 1.305 million head, 5% smaller this year
vs. last year.
Figure 1 shows the percentage changes for the United States, Canadian
and combined breeding herds. All are still far from returning to
year-on-year growth, but the chart does not tell the entire story.
The combined U.S. and Canadian breeding herd on June 1/July 1 was 7.093
million head – 29,200 larger than they were on March 1/April 1 (see
Figure 2). Most of that increase was due to an increase of 28,000 head
for the U.S. breeding herd, but the Canadian herd actually gained 1,200
head from April to July.
If March/April in fact marks the low point for the Can-U.S. breeding
herd, it would amount to an 8.9% reduction from the high water mark of
Sept/Oct ’07, when the combined herd reached 7.752 million head. Over
that time period, the U.S. herd has fallen by 7.3% and Canada’s has
declined by 15.6%. That is not the full extent of Canada’s
liquidation, however, since it actually began back in 2005. Canada’s
herd has shrunk by 20% since its peak in January 2005.
Wide Spread Between Cutout and Cash Hogs?
Hog prices continue to stay strong with cash prices
hovering over $80/cwt., carcass. Pork producers are making good profits
– in most cases over $25/head – allowing many in the industry to
begin to heal from a very long period of losses.
While producers are happy to see their balance sheets improve, I have
had several ask why there is such a wide spread between cash hogs and
cutout values? The key items to look at in Figure 1 are the dark blue
(2010) line vs. the light blue line. We are running quite a bit above
the historical level. I don’t have a good explanation of this market
spurt, but it has been interesting to observe the number of pigs sold on
the spot market the last couple of days. On Wednesday, Aug. 18, the
number of pigs sold on the spot market in the western Corn Belt was over
double the number of pigs sold through the spot markets over the past
month. The interesting thing is that cash hogs for Aug. 18 jumped over
$4.50/cwt., then the next day (Aug. 19) cash hogs were down at least
$1.19/cwt. from the prior day report.
The issue is there are too few pigs being sold on the spot market. I am
one lender who is stating – we need more pigs sold on the spot
Ethanol Options Addressed
Senator Jim Inhofe (R-OK) has introduced legislation that
would allow states to opt out of the corn ethanol portion of the
renewable fuel standard (RFS). Senator Inhofe said, “The fuel
blenders and gas station owners have no option but to sell
ethanol-blended gasoline, despite strong consumer demand for clear gas.
This bill will merely allow for fuel producers to respond to market
demands when and where consumers prefer clear gas. Right now, they
can’t do that.” The Renewable Fuels Association (RFA) responded by
saying the senator’s efforts would “raise the price of gasoline and
force America to use more imported oil.”
Expand Biofuels Market — Senator Tom Harkin (D-IA) is proposing
legislation to expand the biofuels market. His legislation would
require 50% of the vehicles manufactured for sale in the United States
to be flex-fuel capable by 2013, and 90% by 2015. The legislation would
also require major fuel distributors to install at least one blender
pump at more refueling stations, reaching 50% by 2019. Harkin’s
proposal provides for grants of up to 40% of the cost of installing
Justice Department Announce Workshop on Livestock Competition
The U.S. Department of Agriculture (USDA) and the
Department of Justice have announced the agenda for the fourth of five
public workshops. This session on competition and regulation in the
livestock sectors is slated for Aug. 27, 2010 at Ft. Collins, CO.
The workshop will be held in the main ballroom of the Lory Student
Center, Colorado State University and is free and open to the public. To
register, go to www.conferences.colostate.edu/LiveStockWorkshop.
The session will include several panels and three hours dedicated to
public testimony. Although focused on the cattle industry, presentations
will also be made by Clear Lake, IA, pork producer Chris Petersen and
Mark Greenwood, vice president, commercial lending, AgStar Financial
Services. Greenwood will speak during a panel to discuss trends in the
livestock industry, contracting, price transparency and the effects of
Aug. 24, 2010: “Doing Things Right:
Farming for the Future,” sponsored by the Coalition to Support
Iowa’s Farmers (CSIF), Best Western Starlite Village, Fort Dodge, IA
For more information contact: CSIF at (515) 225-5515 or email@example.com .
August 30-31, 2010: Joint Strategy Forum on Animal
Disease Traceability, Renaissance Denver Hotel, Denver, CO
For more information go to: www.animalagriculture.org or
August 31, 2010: 20th Annual Carthage Veterinary
Service, Ltd. Swine Conference, Western Illinois University, Macomb, IL
For more information contact: (217) 357-2811 or go to www.hogvet.com.
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
The Strategic Investment Program (SIP) is the primary source
of funds for the National Pork Producers Council. As an investor, you
will help NPPC fight for reasonable legislation and regulation, develop
revenue and market opportunities and protect livelihoods. SIP investors
have a voice in NPPC policy development.