Eye on Chicken, Lean Hog Futures
Aside from the always-present, yet unlikely, possibility
of a catastrophic occurrence, such as foot-and-mouth disease or some
unforeseen food safety issue with pork, my biggest concern for livestock
and poultry markets in 2011 has for some time been whether the chicken
companies would produce us all right out of a good year.
These outfits had understandably moved back into expansion mode in early
2010, as feed costs fell and the restaurant trade, though still far from
good, picked up a bit. Their difficulties with exports to Russia took
some luster off of 2010, but it was good enough to start the broiler
breeder flock growing again and push chicken output up by 2.5% for the
52 weeks that ended Jan. 1.
But the road to recovery and expansion became rocky for the broiler
companies just like it did for pork producers when grain prices began to
climb last summer. Figure 1, which comes courtesy of Karl Skold of
Westside Economics in Omaha, shows the steady decline of broiler margins
from mid-June onward. They became negative in mid-November.
My concern, of course, was that broiler companies may either see these
negative returns as temporary or may see them as just the price to pay
for market share. The former is obviously not the case, at least for
this grain marketing year. The latter sounds shaky as well, but it is
the mindset that dominated broiler companies for many years when broiler
demand and consumption were growing steadily. A “damn the
torpedoes” approach this year could be bloody indeed for the broiler
sector, but would also drive broiler prices lower and very likely put a
lid on the level of prices that might be achieved this year by pork and
Detection, AI Skills Impact Farrowing Rate
For this week’s column, we will focus on 22 farms where
the artificial insemination (AI) staff records key reproductive
performance indicators. This information was then run through two of
Swine Management Services’ (SMS) specialized reports – the In-Depth
Breeding Analysis Report and the Breeding Technician Report.
These reports look at farrowing rate by AI technician, semen batch code,
sow parity, number of matings, days-to-first estrus, days-to-estrus
return, day of the week bred, time of the day bred, lactation length,
etc. Data was run on the most current 52 weeks of breeding results to
ensure records were updated and all bred females had farrowed. Farms in
the database vary by size, genetic lines and geographical locations.
We will focus on farrowing rate by AI technician and
wean-to-first-service day by AI technician. We narrowed our analysis to
30 AI technicians who had over 500 services during the time period,
which represented a total of 98,792 services.
Safety Shifts FDA Focus to Prevention
President Barrack Obama signed into law the recently
passed Food & Drug Administration (FDA) Food Safety Reform bill. This
new law provides the most substantive changes to food safety laws since
the 1930s. FDA will now focus more on preventing contamination rather
than interceding after outbreaks. The Congressional Budget Office (CBO)
estimates an additional $1.4 billion will be needed by FDA over the next
five years to implement the law. Much of the new money is needed to
hire 2,000 additional inspectors to conduct more frequent inspections of
facilities. Congressman Jack Kingston (R-GA), likely chairman of the
House Agriculture Appropriations subcommittee, has expressed concerns
about the new law and additional funding. A spokesman for Congressman
Kingston said, “While no one wants anyone to get sick, and we all want
a safe food supply, the case just isn’t there right now for a $1.4
billion increase in spending.”
Health Care Repeal — The House Republican leadership has
announced the House of Representatives will conduct a vote this week to
repeal last year’s health care bill. The action is mostly symbolic,
since the vote to repeal will pass the House but fail in the Senate. It
is expected there will be numerous attempts this year by the Republican
leadership to modify and/or downsize last year’s health care bill or
limit funding for implementation. The Congressional Budget Office
(CBO) has estimated repealing the health care bill would raise the
national debt by $230 billion.
Overreach Threatens Agriculture
The U.S. Environmental Protection Agency (EPA) is locked
in a power grab that threatens the future of U.S. production
agriculture, fueled by poor congressional oversight that has allowed the
agency to contrive policies that lack both scientific peer review and
If left unchecked, the enormous costs will affect not only agriculture,
but consumers and taxpayers will also pay a big price, say Bryan Shaw,
chairman of the Texas Commission on Environmental Quality and Charles
Bronson, who served as Florida’s commissioner of agriculture from 2000
to 2010. They spoke at the American Farm Bureau Federation’s 92nd
annual meeting today in Atlanta, GA.
Shaw says EPA has devised its own requirements into the Clean Air Act,
“trying to be creative, making their own rules.” He predicts more
stringent air emission regulations proposed by the EPA for Texas will
set a threshold for most internal combustion engines used on farms and
ranches including relatively small machines with 20 hp.
Jan. 19-20, 2011: Minnesota Pork
Congress, Minneapolis Convention Center, Minneapolis, MN; for more
information contact: Minnesota Pork Producers Association by phone (507)
345-8814, e-mail MNPork@MNPork.com or go online http://www.mnpork.com/porkcongress/index.php.
Jan. 25-27, 2011: Iowa Pork Producers Association
Annual Meeting and Iowa Pork Congress, Iowa Events Center, Des Moines,
IA; for exhibitor information, contact Doug Fricke by e-mail: email@example.com or call
(515) 225-7675; for seminar information, contact Tyler Bettin by
or call (515) 225-7675.
Jan. 31, Feb. 7 and 14, 2011: Employee Management
Workshop for Agricultural Operations (three-part workshop), Hardin
County Extension Office, Iowa Falls, IA; for more information contact:
Russ Euken, extension livestock specialist by phone (641) 923-2856 or
e-mail firstname.lastname@example.org or
Mark Storlie, swine field specialist, by phone (563) 425-3331 or e-mail
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