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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.
FULL ARTICLE
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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.
FULL ARTICLE
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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.”
FULL ARTICLE
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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.
FULL ARTICLE
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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
www.usaha.org..
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.
August 31-Sep. 2, 2010: Feet First Sow Lameness
Symposium, Hilton Minneapolis
Minneapolis, MN
For more information contact: (612)-376-1000 or go
to www.zinpro.com/feetfirst.
FULL ARTICLE
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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.
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BLUEPRINT
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MAGAZINE HIGHLIGHTS
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more.
1. Data on file, Study Report No. 768-9690-0-CPC-97-002, Pfizer
Inc.
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