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National Hog Farmer Weekly Preview
January 23, 2012
 
In this issue:
  Meat and Poultry Demand Struggles Continue
  Can Pork Producers Handle Prosperity Without Expanding?
  Legislation Offered to Reduce Corn Used for Ethanol
  NPPC Files Comments on EPA's CAFO Rule

MARKET PREVIEW
Meat and Poultry Demand Struggles Continue
By Steve Meyer, Paragon Economics, Inc., Des Moines, IA

Meat and poultry demand continued to struggle in the second half of 2011, but still stands a chance of being higher for the year. Figure 1 shows annual demand indexes for pork, beef and chicken from 1970 through 2011. The data through 2010 are for calendar years, while the 2011 observation covers December 2010 through November 2011, the last month for which complete data are available. I use the 12-month period to capture the full gamut of seasonal variation in that last observation. Using a year-to-date figure would omit part of that variation which, in most instances, is quite important.

Through November, pork demand had fared better than either of its major competitors, gaining 1.2% from the same period 12 months before. The pork index of 92 says that pork demand is 8% lower than it was in the index’s base period of 1985. Note that all three indexes equal 100 in that year.

Both beef and chicken demand remain on the positive side of the ledger, but just barely so. That is especially true of chicken, which was only 0.3% higher for the December-November period. These struggles continue the pattern of recent years after the demand index for chicken grew from 94.9 in 1982 to 146.2 in 2005. That 23-year period saw 18 positive years vs. only five negative years.

FULL ARTICLE

FINANCIAL PREVIEW
Can Pork Producers Handle Prosperity Without Expanding?
By Mark Greenwood, AgStar Financial Services, Mankato, MN

I am asked this question by many people. The December 2011 USDA Hog and Pigs report did not show any real expansion. In our view, hog numbers will be about 1 to 1½% higher this year. Almost the entire increase will be accomplished through productivity gains, not through sow expansion. The concern I have is, in the past, when we’ve made money for a period of time, we have had a tendency to expand numbers. The industry has shown very good restraint in the past few months. It will be interesting to see if it continues. Higher feed prices and volatility in the global marketplace have probably helped curb thoughts of expansion. As balance sheets continue to improve, the urge to expand will increase. This trend will be worth watching in 2012.

Investing Profits
Every day, producers ask us where they should invest the money they’ve made. Many have balance sheets that would allow them to expand. The question I pose to them is this: “Where can you put capital to make your business more valuable?” Following are some alternatives to expanding the sow herd:

FULL ARTICLE

LEGISLATIVE PREVIEW
Legislation Offered to Reduce Corn Used for Ethanol
By P. Scott Shearer, Bockorny Group, Washington DC

Congressman Pete Olson (R-TX) has introduced the “Domestic Alternative Fuels Act,” which would expand the eligibility requirements within the Renewable Fuels Standard (RFS) to allow ethanol from alternative feedstocks (coal, natural gas, etc.) to compete with corn-based ethanol. His goal is to reduce the amount of corn used to produce ethanol. Congressman Olson said, “It’s long past time for Congress to address the failed RFS. The RFS focus on corn ethanol has translated into higher feed costs for livestock producers and higher food costs for working families. While Congress considers eliminating the RFS altogether, we should in the meantime allow greater participation and competition under the program.” Those supporting the legislation are the National Cattlemen’s Beef Association, National Chicken Council and the Grocery Manufacturers Association. The RFS was passed in 2005 to reduce the United States’ dependence on fossil fuels.

FULL ARTICLE

NEWS FLASH
NPPC Files Comments on EPA's CAFO Rule
By Joe Vansickle, Senior Editor

The National Pork Producers Council (NPPC) on Thursday joined nearly 90 agricultural organizations in filing two sets of comments with the U.S. Environmental Protection Agency (EPA) on the Concentrated Animal Feeding Operation (CAFO) Reporting Rule.

The first set of comments was signed by a coalition of 88 national, state and local agricultural groups. The second set of comments was filed on behalf of NPPC and the American Farm Bureau Federation and concerned the various legal issues the organizations have with the rule and challenges the rule would face if finalized.

FULL ARTICLE

PORK INDUSTRY CALENDAR
January 25-26: The Iowa Pork Producers Association (IPPA) will hold the 2012 Iowa Pork Congress Jan. 25 and 26 at the Iowa Events Center in Des Moines

February 2-3: For the third year in a row, the North Carolina Pork Conference, hosted by the North Carolina Pork Council (NCPC), will be held in conjunction with the Southern Farm Show at the North Carolina State Fairgrounds in Raleigh on Feb. 2-3, 2012. A block of rooms is reserved at the Raleigh Marriott Crabtree Valley for the conference; call (800) 228-9290 or (919) 781-7000.

February 8-9: The Missouri Pork Expo kicks off Feb. 8 with a talk on Global Markets, Domestic Impact by Joseph Kerns of International Agribusiness Group, LLC, Ames, IA. For more information, contact MPA by phone at (573) 445-8375, e-mail Angela@mopork.com or visit www.mopork.com.

March 19-21: Annual meeting of the Midwestern Sections of the American Dairy Science Association and the American Society of Animal Science, Hy-Vee Hall and Veterans Memorial, Des Moines, IA. For more information contact: http://adsa.asas.org/midwest/2012.asp.



FULL ARTICLE
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NPPC works diligently to protect and promote the interests of America’s pork producers who in turn provide safe, nutritious pork to domestic and foreign markets, generating thousands of jobs and more than $30 billion of gross national product to the U.S. economy. Click here to see how NPPC is working for you.


 BLUEPRINT

The October 15, 2011 Blueprint edition of National Hog Farmer tackles the new industry target of 30 pigs/sow/year (P/S/Y). As producers strive to achieve the lofty milestone, new challenges and new debates arise. With the push to increase reproductive efficiency, the health and dietary demands on sows becomes increasingly important, the impact on pig flow and facilities is magnified, and the bar to capture full genetic potential is raised. This special edition and more is posted at www.nationalhogfarmer.com.

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The 3FLEX™ combination package contains the only circovirus, Mycoplasma and PRRS vaccines USDA-approved to be mixed and administered as a single shot for pigs three weeks of age or older.

 MAGAZINE HIGHLIGHTS

The December 15, 2011 edition of National Hog Farmer features over 20 research reports including sows’ response to several grouping options; alternative biofilter media to improve energy efficiency and reduce emissions; how blast chilling inhibits pork tenderness; the impact of fatty acids in gestation diets; energy-saving alternatives for facilities; and the impact of a modified-live virus vaccine on PRRS shedding. Those articles and more are posted at 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 Strategic Investment Program (SIP) is the primary source of funds for the National Pork Producers Council. As an investor, you will help NPPC fight for reasonable legislation and regulation, develop revenue and market opportunities and protect livelihoods. SIP investors have a voice in NPPC policy development. Learn more.

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