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National Hog Farmer Weekly Preview
November 22, 2010
 
In this issue:
  Free Market System Isn't Always Favorable
  Now Not the Time for Costly Rules
  Fiscal Commission Calls for Cuts in Agriculture
  NPPC Charges GIPSA Lacks Authority for Rule

MARKET PREVIEW
Free Market System Isn't Always Favorable
A few months ago, I commented in this column that packer margins and producer prices have become positively related in recent years. That contrasts with pre-2000, when the two values were clearly negatively related – high packer margins were associated with low hog prices. I still think the positive relationship is a good thing, but the past six weeks has seen the reemergence of the negative relationship, and that has caused some conflicts for pork producers.

I’m looking forward to today’s deadline for submitting comments on GIPSA’s proposed rules that will have major impacts on livestock and poultry production and marketing practices. Many (and I think most) pork producers have fallen on the “Stay out of our markets and let us work this out!” side. Some of those same producers, however, have complained that packers are just making too much money at a time when producers are hurting.

Sorry, but you can’t have it both ways. Winston Churchill, apparently quoting an unknown author, once famously quipped, “It has been said that democracy is the worst form of government except for all the others that have been tried from time to time.” So it is, I think, with free markets. They don’t always treat us the way we like, or the way we think we deserve, but they are better than the alternatives.

FULL ARTICLE

FINANCIAL PREVIEW
Now Not the Time for Costly Rules
I am writing from an ag lenders’ perspective to express my concerns regarding the economic analysis for the proposed rule by the Grain Inspection, Packers and Stockyards Administration (GIPSA) on the marketing of livestock and poultry under the Packers and Stockyards Act.

For an organization that has a congressionally mandated purpose to strengthen America’s agricultural industry and revitalize rural communities, the United States Department of Agriculture’s (USDA) recent proposal to limit livestock marketing agreements is perplexing to those of us working in America’s agricultural industry. While the USDA argues that the rule will help the livestock industry, the reality is this policy could limit the availability of many common food products, increase consumer prices and cost tens of thousands of jobs across the country.

Now is not the time for costly rules. The livestock industry has seen historic volatility in recent years. In fact, the pork industry alone lost $6 billion in equity from 2008 to 2009, causing many pork producers nationwide to struggle to survive. Dramatic daily shifts in livestock market values make it difficult for producers to provide high-quality animals at affordable prices, and make it difficult for ag lenders to provide critical operating capital to these farmers.

FULL ARTICLE

LEGISLATIVE PREVIEW
Fiscal Commission Calls for Cuts in Agriculture
The co-chairmen of the National Commission on Fiscal Responsibility and Reform released their recommendations of what steps need to be taken on the federal deficit and for debt reduction. They made recommendations on discretionary spending cuts, tax reform, health care savings, social security adequacy and solvency and mandatory spending cuts. The following recommendations were made for agriculture: “Reduce farm subsidies by $3 billion per year by reducing direct payments and other subsidies, Conservation Security Program funding and funding for the Market Access Program.” The report also recommends that user fees be charged to meat and poultry processing facilities to finance food safety and inspection services. The co-chairs’ recommendations will be considered by the full commission and presented to Congress in December.

FULL ARTICLE

NEWS FLASH
NPPC Charges GIPSA Lacks Authority for Rule
A U.S. Department of Agriculture (USDA) agency lacked or exceeded its authority to promulgate a proposed rule on buying and selling hogs, says the National Pork Producers Council in comments filed Friday.

USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) also failed to support the need for the regulation with evidence of problems in the pork industry and didn’t consider its own studies showing that restricting contracts could harm the industry, NPPC said.

The GIPSA rule was issued June 22, 2010 and a public comment period on it ended today, Nov. 22, 2010. The rule, prompted by the 2008 farm bill, would amend the Packers and Stockyards Act (PSA), which regulates livestock and poultry contracts and marketing practices.

FULL ARTICLE

PORK INDUSTRY CALENDAR
Nov. 23-24, 2010:Pork Industry Symposium, Saskatoon Inn, Saskatoon, Saskatchewan for more information contact: Symposium Coordinator Kim Browne at (306) 244-7752 or info@saskpork.com or www.saskpork.com.

Nov. 30, 2010 : Annual Animal Welfare Symposium, Ohio Farm Bureau 4-H Center Columbus, OH for more information contact: Naomi Botheras at (614) 292-3776 or botheras.1@osu.edu or Candace Croney at (614) 292-0974 or croney.1@osu.edu or visit http://vet.osu.edu/preventive-medicine/AnimalWelfareSymposium



Dec. 3-4, 2010: International PRRS Symposium, downtown Marriott Hotel Chicago, IL for more information contact: www.prrssymposium.org.



Dec. 8, 2010: Workshop on Margins, Jefferson Auditorium, on Independence Avenue between 12th and 14th Streets, S.W. Washington, DC for more information contact: hagriculturalworkshops@usdoj.gov.



FULL ARTICLE
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The proposed USDA GIPSA ruling will impact contract terms, restrict marketing arrangements, create legal uncertainty and limit the ability to negotiate prices — a recipe for chaos for U.S. pork producers. Click here to send comments to GIPSA.


 BLUEPRINT

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.

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 MAGAZINE HIGHLIGHTS

The October 15 Blueprint edition of National Hog Farmer provides guidelines for building a sound replacement gilt program, including nutritional considerations to maximize genetic potential and the importance of an effective herd health management program. In addition, the issue offers a special section on screening replacement gilt candidates for skeletal and reproductive soundness. http://www.nationalhogfarmer.com.

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 POSTERS

FREE SELECTION GUIDES AND MANAGEMENT POSTERS
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 proposed USDA GIPSA ruling will have a significant impact on pork producers. From stifling industry innovation and flexibility to driving costs higher while pushing down prices, the effects will be far-reaching. NPPC encourages you to voice your concerns about the GIPSA rule click here — to send your comments.

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