Chicken Supplies May Prop Up Pork Prices
I usually don’t spend much time discussing the
Production and Price Summary tables that appear at the end of each
Market Preview column. Normally, I don’t see the need because I know
our readers are very capable of reading and comprehending the data.
However, this week’s Competing Meats table is both interesting and, I
think, enlightening in regards to what is going on in the meat and
Note that U.S. federally-inspected cattle slaughter last week was
630,000 head, 5.9% lower than one year ago. That marks the third week
this year in which U.S. cattle slaughter has been lower than one year
ago, in spite of cow slaughter being higher. Implication: Sharply
lower steer and heifer slaughter.
With weights very near year-ago levels, this reduction in slaughter
means that beef supplies are tightening in the United States and the
price impacts are dramatic. Fed cattle, though a bit lower than one
week ago, are near a record high. Last week’s Choice cutout value of
$172.52 is the fourth highest on record, leaving only one observation in
2008 and two in 2003’s post-Canadian-BSE market ($188 and $192)
between today’s market and a new record high.
Consumers Pay More for Food?
In the past two weeks, I have seen numerous articles
concerning higher food costs. The rise in commodity prices has made the
news and now the talk is that consumers are going to have to pay more
for food in the future. The average U. S. consumer spends 10% of their
disposable income on food. This statistic reinforces what has been truly
an amazing story: Blessed with tremendous resources, the American
farmers have the ability to produce an abundance of food, not only for
the United States, but for others throughout the world.
Higher feed costs have made it more challenging for the protein sector
to be profitable. In 2010, the average cost of most producers to produce
a 270-lb. market hogs was $140-$145. Going forward, with current feed
costs, that same animal will cost an additional $25 to produce. This,
alone, will cost the U.S. swine industry an additional $2.7- 2.8
billion. If these costs do not get passed onto consumers, there will be
less pork, and that, too, will push prices even higher. This is true not
only for pork, but for milk, beef, eggs, and broilers. In order to
recoup the additional costs, prices will have to increase 10-15%. Will
consumers be willing to buy the same amount of product at higher levels?
Time will tell.
Launches "BioPreferred" Product Label
USDA published a final rule to initiate a voluntary
product certification and labeling program for qualifying biobased
products. The new label will identify biobased products made from
renewable resources and promote the increased use and sale of the
products in the commercial marketplace. Products need only be 25%
biobased. USDA’s BioPreferred program has already designated
approximately 5,100 biobased products for preferred purchasing by
federal agencies. According to USDA, “The new label will make
identification of these products easier for federal buyers, and will
increase awareness of these high-value products in other markets.”
House Repeals Health Care — The House of Representatives
voted to repeal last year’s health care reform law by a party line
vote, with only three Democratic members voting for repeal. The House
Republican leadership said this was the first of its campaign promises
to be implemented. The bill now goes to the Senate where it is expected
to be defeated.
President Clinton to Speak at USDA Outlook Forum — Former
President Bill Clinton will be a featured speaker at USDA’s 2011
Agricultural Outlook Forum on Feb. 24. Clinton has established the
William J. Clinton Foundation with a mission to strengthen the capacity
of people in the United States and throughout the world to meet the
challenges of global interdependence. Senator Debbie Stabenow (D-MI),
new chairman of the Senate Agriculture Committee, will also address the
forum. For further information and to register, go to: www.usda.gov/oce/forum.
Decision Raising Ethanol Blending Level Disappoints Producers
The National Pork Producers Council (NPPC) has expressed
strong displeasure with the Obama administration’s decision to permit
more vehicles to use gasoline blended with 15% ethanol.
The Environmental Protection Agency (EPA) said Friday it would permit
the use of the higher blend rate, up from the current 10%, for model
year 2001 and newer automobiles.
“It’s very disappointing that the administration made this decision
given the rising price of corn and the lower estimate for this year’s
corn harvest that was recently announced,” says Randy Spronk, hog and
crop farmer from Edgerton, MN, member of the NPPC board of directors and
chairman of the council’s Environment Committee.
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 email@example.com or Mark Storlie,
swine field specialist, by phone (563) 425-3331 or e-mail firstname.lastname@example.org.
Feb. 1-2, 2011: Illinois Pork Expo, Peoria Civic
Center, Peoria, Ill; contact: Illinois Pork Producers Association at
(217) 529-3100 or go to www.ilpork.com.
Feb. 1, 8 and 15, 2011: Employee Management Workshop
for Agricultural Operations (three-part workshop), Amana Colonies
Clarion Inn, Williamsburg, IA; for more information contact: Russ
Euken, extension livestock specialist; by phone (641) 923-2856 or
e-mail: email@example.com or
Mark Storlie, swine field specialist by phone (563) 425-3331 or e-mail:
Feb. 1, 8 and 15, 2011: Employee Management
Workshop for Agricultural Operations (three-part workshop), Northeast
Iowa Community College Calmar, 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 email@example.com.
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