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National Hog Farmer Weekly Preview
January 24, 2011
 
In this issue:
  Beef and Chicken Supplies May Prop Up Pork Prices
  Will Consumers Pay More for Food?
  USDA Launches "BioPreferred" Product Label
  EPA Decision Raising Ethanol Blending Level Disappoints Producers

MARKET PREVIEW
Beef and 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 poultry business.

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.

FULL ARTICLE

FINANCIAL PREVIEW
Will 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.

FULL ARTICLE

LEGISLATIVE PREVIEW
USDA 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.

FULL ARTICLE

NEWS FLASH
EPA 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.

FULL ARTICLE

PORK INDUSTRY CALENDAR
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 reuken@iastate.edu or Mark Storlie, swine field specialist, by phone (563) 425-3331 or e-mail mstorlie@iastate.edu.

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: reuken@iastate.edu or Mark Storlie, swine field specialist by phone (563) 425-3331 or e-mail: mstorlie@iastate.edu.



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 reuken@iastate.edu or Mark Storlie, swine field specialist, by phone (563) 425-3331 or e-mail mstorlie@iastate.edu.



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 BLUEPRINT

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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NPPC and the National Pork Board have launched a program, We Care, to promote pork producers' commitment to responsible pork production. From animal care and the environment to food safety and quality, pork producers demonstrate best practices daily.
For more on continuing the tradition of doing what’s right, Click here


 MAGAZINE HIGHLIGHTS

The Dec. 15 edition of National Hog Farmer features our annual roundup of swine research conducted at universities in the United States and Canada this past year. Presented in six primary categories – swine health, nutrition, meat quality, manure management, genetics, animal welfare – you will find reports from 23 trials. Those and additional research reports are posted at http://www.nationalhogfarmer.com. .

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Nuflor® Type B delivers fast-acting power against swine respiratory disease without requiring a federal feed mill license.
To take advantage of this limited-time offer, click here


 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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