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National Hog Farmer Weekly Preview
August 30, 2010
In this issue:
  Cutout Values Keep on Breaking Records
  Actinobacillus suis Activity Persists
  Mexico Adds Tariffs to U.S. Pork Over Truck Access Issue
  HBO's ‘Temple Grandin’ Sweeps 2010 Emmys

Cutout Values Keep on Breaking Records
Another week, another record-high cutout value seems like no big deal. That’s the way it goes in this wonderful pork industry. Right?

That judgment is offered with tongue planted firmly in cheek, since it is indeed a big deal when our product can command such values from a marketplace that is anything but robust! The new weekly record is $94.99/cwt., breaking the old record that stood for exactly one week (See Figure 1).

The best part of this record week is that the entire increase got bid into the price of negotiated pigs (See Figure 2), and even pushed the weighted average across all pricing methods (Figure 3) back to the same level as in late July. Truth is, this week’s strength in hog prices was more influenced by last week’s cutout value run since it created incentives for packers to slaughter more hogs and thus chase hogs a bit.

Federally-inspected hog slaughter last week totaled 2.110 million head, 1.8% higher than the previous week, but 4.2% lower than last year. Though still significantly short of 2009 levels, last week’s run marks the first week since July 17 in which the number of hogs slaughtered in federally-inspected plants has exceeded the level suggested by the June Hogs and Pigs Report.

The cumulative shortfall relative to the predicted level since July 17 is 276,700 head and the question is, “Are those hogs still out there or were they never there in the first place?” As with most things, the answer will likely be some of both. But hot weather and the “bin bottoms” of an already poor quality corn crop lead me to think we will see the vast majority of these 277,000 critters in the weeks to come.

Their market impact will be heavily dependent on how far these animals get spread out. If 50,000 head/week make market weights over the next six weeks, it would add 2 to 2.5% to weekly slaughter totals. That kind of addition would make for a sharp seasonal drop-off – that is, if the pigs are actually still out there.

The normal seasonal pattern is for cash hogs to drop $10-$15/cwt. carcass from late August to October and $12-$18/cwt. carcass from late August to December. Those normal patterns would put October cash hogs in the $70-$75 range, and December hogs between $67 and $73. October and December Lean Hog futures were $74.83 and $72.58, respectively, on Friday. The average basis from the past three years would put cash hogs in Iowa-Minnesota at $71-$74 in October and just over $70 in the first half of December. The second half of December, which must be figured off the February contract, would be in the $67-$69 range. Futures appear to be accurately priced at this point relative to a normal seasonal pattern.


Actinobacillus suis Activity Persists
A little over two years ago, we commented on a general rise in the frequency of Actinobacillus suis (A. suis) isolation from our swine tissue submission cases, and wondered if it was related to the increased porcine circovirus type 2 (PCV2) activity (National Hog Farmer North American Preview, June 6, 2008). A. suis is a gram-negative bacteria that is present in essentially all swine herds. It can cause respiratory disease and lameness in older pigs and, infrequently, diarrhea in nursing piglets.

The main concern with Actinobacillus suis, however, is sudden deaths in finishing pigs and adult breeding animals due to bacterial septicemia. Losses tend to accumulate over time rather than as an acute episode, so this bacteria doesn’t garner the same degree of attention as other agents that result in large-scale disease outbreaks. The losses of older growing and breeding pigs can add up when A. suis activity increases.

The chart shown in Figure 1 illustrates the point that, at least for submissions to the Minnesota Veterinary Diagnostic Laboratory, the frequency of isolating A. suis from respiratory cases has not dropped off following the widespread use of porcine circovirus type 2 (PCV2) vaccine, but has held steady and may even be increasing slightly. Because we had associated the increased rate of A. suis isolation with PCV2 activity, it is somewhat surprising that A. suis recovery hasn’t dropped along with the incidence of circovirus disease. We will continue to monitor this over time.


Mexico Adds Tariffs to U.S. Pork Over Truck Access Issue
The Mexican government has added pork to the list of U.S. products against which it is retaliating for the failure of the United States to live up to its obligations under the North American Free Trade Agreement (NAFTA) to let Mexican trucks haul goods into the United States. The tariff rate on ham and shoulder cuts is 5% and on cooked skin pellets it is 20%. The new list also includes certain types of U.S. cheese, pistachios and a range of U.S. fruits and vegetables. The National Pork Producers Council (NPPC) said, “We are extremely disappointed that our top-volume export market has taken this action, but we’re more disappointed that the United States is not living up to its trade obligations. That failure not only has hurt dozens of U.S. industries economically, but it could prompt other countries to think twice about entering into trade deals with the United States. Our trading partners need assurance that the United States will live up to its trade obligations.” In March 2009, Congress failed to renew a pilot program that allowed a limited number of Mexican trucks to haul freight into the United States beyond a 25-mile commercial zone. In February 2001, a NAFTA dispute-settlement panel ruled that excluding Mexican trucks violated U.S. obligations under the trade deal. The ruling gave Mexico the right to retaliate against U.S. products, which it did in March 2009, placing higher tariffs on more than $2.4 billion of U.S. goods. The new list will raise the total estimated cost of the tariffs to $2.6 billion.

Senators Support Proposed GIPSA Rule — A group of 21 senators have written Secretary of Agriculture Tom Vilsack expressing their support for USDA’s proposed Grain Inspection, Packers and Stockyards Administration (GIPSA) rule regarding livestock and poultry marketing practices. Senator Tom Harkin (D-IA), originator of the letter, said, “Our action in the 2008 farm bill, along with this proposed rule, are designed to make clearer the protections and the prohibited actions under the Packers and Stockyards Act so that producers and growers receive fair, equitable, and nondiscriminatory treatment in marketing and contracting arrangements involving livestock and poultry.”


HBO's ‘Temple Grandin’ Sweeps 2010 Emmys
The HBO biographical movie “Temple Grandin,” about Colorado State University’s professor of animal science, well-known adult with autism and noted cattle and hog handling expert, won best picture and best actress honors for actress Clare Danes, who portrayed Grandin.

The film also won best supporting actress honors for Julie Ormond who portrayed Grandin’s mother, best supporting actor for David Strahaim who portrayed Grandin’s favorite teacher and best director for Mick Jackson.

The movie, which first aired February 2010, and continues to air on HBO, received 15 Emmy nominations in covering the life of Grandin, who has become a prominent author and speaker on autism.


August 30-31, 2010: Joint Strategy Forum on Animal Disease Traceability, Renaissance Denver Hotel, Denver, CO
For more information go to: 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

August 31-Sep. 2, 2010: Feet First Sow Lameness Symposium, Hilton Minneapolis
Minneapolis, MN
For more information contact: (612)-376-1000 or go to

U.S. pork producers must be able to compete in foreign markets without restrictive tariffs or sanitary barriers to trade. NPPC’s mission of gaining and expanding access to markets through free trade agreements is paramount to the continued success of the U.S. pork industry — click here to learn more.


As positive margins return to pork producers’ ledgers, owners and managers are recounting the hard lessons learned as they redouble efforts to improve risk management skills, measure and manage production variance with greater precision, and produce quality pork in a safe and sustainable manner. At the heart of the 50th edition in the Blueprint series, published April 15th, 2010, is a focus on new and improved pathways to profitability.



The August 15 edition of National Hog Farmer magazine focuses on swine care and housing. Feature stories include an Iowa farm’s vigilance to reduce preweaning mortalities by 5% in just six months, a trial studying free-access gestation stalls, high-tech screening of sows for lameness, and the reappearance of swine dysentery. These stories and more may be found at

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 more.
1. Data on file, Study Report No. 768-9690-0-CPC-97-002, Pfizer Inc.


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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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 Learn more.

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