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National Hog Farmer Weekly Preview
July 11, 2011
 
In this issue:
  Record-High Hog Prices Signal Shift in Industry Dynamics
  Tracking the Three-Year Improvement of Pigs Weaned/Female Farrowed
   U.S.-Mexico Resolve Trucking Dispute
  Mexican Tariff Drops by Half On U.S. Pork Shipments

MARKET PREVIEW
Record-High Hog Prices Signal Shift in Industry Dynamics
At the end of last week’s column, I mentioned that the good news regarding the corn crop (which hardly anyone, it appears, is believing) was made even better with the realization of record-high hog and pork prices the last week of June. Record-high hog prices were not a common occurrence in the past, but they seem to occur rather regularly these days. The reasons involve fundamental shifts in industry dynamics.

First, let’s take just a moment to enjoy and appreciate hogs prices over $100/cwt. on a carcass weight basis. Figure 1 shows the weighted average net price across all purchasing methods. It peaked out the week before last at $99.63/cwt., but remember that includes all of the pigs that were priced on formulas, including futures prices and feed- and cost-based prices. I use this price a lot because it represents the average cost of all market hogs to packers and, conversely, the average revenue for all market hogs sold by producers. The weighted average net price for “negotiated” market hogs that week was $104.16/cwt., carcass, significantly higher due to relatively tight hog supplies and the resulting leverage that creates in producers’ corners.

This all means that a pretty good number of pigs brought $200 or more over the past few weeks with some big, lean hogs netting as much as $230-$240. There may have even been a few that garnered $250! Those kinds of per-head prices used to be the realm of breeding stock and off-the-wall show pigs. While certainly not commonplace, they may be the harbinger of things to come.

FULL ARTICLE

PRODUCTION PREVIEW
Tracking the Three-Year Improvement of Pigs Weaned/Female Farrowed
The USDA Hogs and Pigs Report released the end of June showed pigs weaned per litter averaged 10.03 pigs for the March 1-May 31 quarter, a new reproductive performance high. South Dakota led with the highest average of 10.40 pigs, followed by Minnesota at 10.35 and Iowa, Nebraska and Missouri with a 10.30 pigs/litter average. Kansas ranked lowest with only 9.40 pigs/female farrowed.

We then compared the Swine Management Services, LLC (SMS) data compared to the USDA report. We broke the farm benchmarking database into two subsets:

• SMS consulting farms – 75 farms representing 184,800 sows, and

• SMS benchmarking farms – 636 farms with 1,072,000 sows.

The SMS consulting farms is a subset in which we do periodic review of production records and provide them with a written farm analysis report. This information is placed on our Web site with detailed reports, tables, graphs and charts. We do farm visits or telephone conference calls with the farm staff to go over the information and provide management ideas. The SMS benchmarking database would normally include these farms, but they were removed for this article.

FULL ARTICLE

LEGISLATIVE PREVIEW
U.S.-Mexico Resolve Trucking Dispute
The United States and Mexico signed an agreement resolving the cross-border, long-haul trucking dispute that has been going on for 16 years. As a result of the agreement, Mexico will suspend 50% of the tariffs applied to the 99 U.S. products subject to the current retaliatory measures. The other 50% of the tariffs will be suspended as soon as the first Mexican carrier is granted operating authority in the United States. The agreement will allow for carriers originating in Mexico and the United States to operate permanently in both countries after enrolling in a new program and complying with all of the safety procedures of each country. According to the administration, this dispute has cost U.S. businesses more than $2 billion and farm exports to Mexico of affected commodities were reduced by 27%. Secretary of Agriculture Tom Vilsack said, “We have an agreement that not only will ultimately eliminate punitive tariffs, but it also provides opportunities to increase U.S. exports to Mexico and helps to expand jobs on both sides of the border.”

FULL ARTICLE

NEWS FLASH
Mexican Tariff Drops by Half On U.S. Pork Shipments
On Friday, Mexican tariffs on more than $2.4 billion of U.S. goods, including a 5% duty on most U.S. pork going into Mexico, was reduced by 50%, following the signing last Wednesday of a joint trade agreement permitting Mexican trucks to haul goods into the United States.

The National Pork Producers Council led an agriculture coalition urging the United States to honor its trade obligations on trucking under the North American Free Trade Agreement (NAFTA).

NPPC called the move a “good first step.” When the first Mexican trucks carry product into the United States later this summer, the duties will be suspended, according to NPPC officials.

The NAFTA trucking provision was set to become effective in December 1995. But U.S. failure to abide by the deal led to a 2001 NAFTA dispute panel ruling that excluding Mexican trucks violated the United States obligations under the trade deal.

FULL ARTICLE

PORK INDUSTRY CALENDAR
July 16-19, 2011: American Veterinary Medical Association Annual Convention, America’s Center
downtown St. Louis, MO. For more information contact: https://www.avmaconvention.org.

July 19, 2011: The 2011 Lauren Christian Pork Chop Open, Veenker Memorial Golf Course, Ames, IA. For more information contact: Iowa Pork Industry Center at ipic@iasatte.edu or (515) 294-4103. The registration form is on the Iowa Pork Industry Center Web site, www.ipic.iastate.edu/events/LCPCObrochure11.pdf.

July 20, 2011: North American Manure Expo, Northeast Community College Ag Complex, Norfolk, NE. For more information contact: Expo Planning Co-Chairs Chris Henry at (402) 472-6529 or chenry1@unl.edu or Leslie Johnson at (402) 584-3818 or ljohnson13@unl.edu. Also see the website for more details www.manureexpo.org.

July 29, 2011: Fourth Annual Pork Lenders Meeting, Country Inn Suites, Mankato, MN. For more information contact: Minnesota Pork Board Assistant Executive Director Jeremy Geske at (800) 537-7675 or jeremy@mnpork.com.



FULL ARTICLE
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 BLUEPRINT

The April 15, 2011 Blueprint edition of National Hog Farmer offers details on creating stable herd health by developing a herd health profile, provides a review of basic immunology and gives details on how to select the right vaccine. The final article looks at efforts by a consortium of swine disease researchers to understand genetic disease resistance. www.nationalhogfarmer.com.

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 MAGAZINE HIGHLIGHTS

The June 15, 2011 edition of National Hog Farmer magazine focuses on the industry’s workforce with articles on how to build a farm culture, hire foreign workers and reverse turnover rates in a 90,000-sow system. A major feature looks at high feed costs and new waste management standards facing pork producers in North Carolina. Find these stories and more at www.nationalhogfarmer.com.

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NPPC conducts public-policy outreach on behalf of its 43 state associations, enhancing opportunities for the success of U.S. pork producers and stakeholders by establishing the pork industry as a consistent and responsible supplier of high-quality pork to domestic and world markets. Click here to learn more and support your industry.


 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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"Documented effects of Levucell® SB include the ability to improve digestive transit which in turn helps the sow get on feed quicker the first week of lactation and increases feed intake through lactation, which helps reduce sow weight loss and produces heavier piglets at weaning. Studies show sows fed Levucell SB have fewer days to estrus."

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