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Articles from 2020 In December


Farm Progress America, December 31, 2020

Max Armstrong continues his look at the economy ahead, with the help of CoBank. One area to keep an eye on is the Federal Reserve, which could impact the value of the dollar. Those economists offer insight into the range of factors that could show persistent weakness for the dollar, which can be good news for farm exports. The Fed worked hard to stabilize the economy when the pandemic hit in early 2020.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Federal Reserve

PPP changes in COVID relief bill offer more aid for farmers

Money Horizon

In the midst of the pandemic, the popular government’s response to small businesses in the Paycheck Protection Program got a needed boost of funds in the latest action by Congress to offer additional funds to meet the ongoing challenges of the coronavirus market impacts. Specifically, the bill provides $325 billion to support struggling businesses, including an additional $284 billion for PPP.

Those who signed up during the first round can again apply for new loans starting Jan. 1.

During the first round of PPP, which ran out of funds in August, those businesses in the farming, forestry and hunting sector received $8.18 billion, which is considerable since each year the average take home pay for the sector is $100 billion, explains Jackson Takach, chief economist at Farmer Mac. Dairy and miscellaneous crops (such as vegetables) were the highest users of PPP in the sector, and all regions benefited.

Of the estimated 2,000 agricultural banks, 85% participated in offering at least one PPP loan to a customer, compared to an 82% participation rate for all banks. The Farm Credit System delivered $1.4 billion in PPP loans, Takach adds.  

A recent American Business Association and Farmer Mac joint survey of ag bankers found that more than half of their borrowers inquired about PPP or the Coronavirus Food Assistance Program from their bankers. And although there was some initial confusion, the quick distribution of funds and utilization across all regions showed the strength of the loan program, Takach adds.

A major win in the update allows expenses paid by the PPP loan to be tax deductible in 2020 and streamlines forgiveness for loans under $150,000. Takach says allowing the tax forgiveness on any PPP loans taken out takes a “little bit of a load off” those in the agricultural sector who already as an industry tend to be very tax aware.

The legislation also clarifies the eligibility of sole proprietor farmers and ranchers for PPP to more fully facilitate the participation of farmers and ranchers in PPP. It also simplifies the loan forgiveness process for PPP loans up to $150,000 to help farmers, ranchers, rural businesses, and health care providers participating in PPP, as well as their commercial bank and Farm Credit System lenders. It also repeals the requirement of deducting an Economic Injury Disaster Loan Advance from the PPP forgiveness amount.

Takach says this will be a big help as the average size of the ag PPP loan was $84,000 to $85,000 and over 90% of all the PPP loans to ag producers were under $150,000. “I think this will offer a net benefit for those who were tapping into the PPP program and an easier path to loan forgiveness and not as much stress on the recordkeeping aspects,” he adds.

The final bill also helps ensure farmers, ranchers and rural communities have equal access to PPP loan funding through a set-aside for lenders with less than $10 billion in assets that includes rural commercial banks and Farm Credit institutions. It also creates a set-aside for very small businesses with 10 or fewer employees and for small businesses located in distressed areas.

It also clarifies that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan, effective as of the date of enactment of the CARES Act and applicable to subsequent PPP loans. This same tax treatment also applies to EIDL grants and certain loans and loan repayment assistance.

Guidance for PPP Act

Click on the links below for additional resources on PPP.

Farm Progress America, December 30, 2020

Max Armstrong reports on the challenges facing the livestock industry. With corn and soymeal prices rising, swine, beef and dairy producers could be challenged. Add in that China is rebuilding its hog inventory, which could slow meat imports into that big Asian market. Max shares that CoBank economists believe that the dairy industry could see a boost, turning to dried whey as a protein source, as China turns to more commercial-style pork production.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: alexsl/iStock/Getty Images News

Protein industry groups applaud new 2020-2025 guidelines

my plate-small.jpg

The 2020-2025 Dietary Guidelines for Americans, released Dec. 29 by the U.S. Department of Agriculture and the U.S. Department of Health and Human Services (HHS), were widely accepted and welcomed by groups in the animal protein sector.

Updated every five years, the guidelines serve as the foundation for federal nutrition policy and shape the recommendations found on USDA’s MyPlate. They also provides the public with tools needed to make informed decisions regarding food for their families. This edition marks the first time the guidelines provide recommendations by life stage, from birth through adulthood. 

The National Pork Board NPB) said the guidelines reaffirm the role of lean pork in a healthy diet and are consistent with the recommendation to include a variety of nutrient-dense proteins. Overall, the guidelines advise people to “follow a healthy dietary pattern” that consists primarily of vegetables, fruits, whole grains, lean meat and poultry, and low-fat dairy or fortified soy alternatives. The guidelines also advise limiting added sugars, saturated fats, sodium and alcoholic drinks and staying within recommended calorie limits. 

While fresh pork is respected by the scientific community as a nutritious source of lean protein, it continues to lag behind other proteins when it comes to consumer perceptions of being “good for me and my family” according to NPB, referencing an ongoing Checkoff-funded At Home Meat Tracker. In response, NPB said it is updating its approach to Human Nutrition Research and building a strategic pathway for pork nutrition that capitalizes on the latest research and opportunities that will ultimately help evolve perceptions for pork in a healthy diet and overall nutritional well-being.

The dairy industry also welcomed the new dietary guidelines.

The International Dairy Foods Assn. (IDFA), representing all segments in the U.S. dairy industry, applauded the release of the 2020-2025 Dietary Guidelines for Americans affirming that dairy products maintain their historically important role in federal nutrition recommendations, including recommending most Americans consume three servings of dairy each day.

These new recommendations make dairy foods an important part of a healthy diet for young children from 6 months to 24 months of age. From 12-23 months of age, they recommend “higher fat versions of dairy … compared to patterns for ages two and older,” including whole milk.

The guidelines also make a key recommendation to American adolescents and adults to consume more fat-free and low-fat dairy as part of a healthy diet. Dairy provides 11 essential nutrients; however, as the guidelines note, dairy is an under consumed food category. Increasing consumption of dairy will contribute to meeting recommended intakes of protein, calcium, phosphorous, magnesium and vitamins A and D, according the Dietary Guidelines Advisory Committee. The report points out that about 90% of the U.S. population does not meet dairy recommendations and concludes that, “Individuals should be encouraged to make shifts to increase the intake of vegetables, fruits, beans, whole grains, and dairy to move intakes of these under-consumed dietary components closer to recommendations.” 

 “The Dietary Guidelines confirm what the overwhelming body of science has been telling us for years—that dairy is one of the most nutritious foods available to people of all ages,” said Michael Dykes, D.V.M., president and CEO of IDFA. “

The federal nutrition guidance affirms the unrivaled nutritional contributions made by dairy foods and reminds Americans that a healthy diet includes three daily servings of dairy. Cow’s milk is a source of 11 essential nutrients and is also a major source of three of the four under-consumed nutrients of public health concern. 

“Dairy foods such as milk, cheese and yogurt offer essential nutrients that help nourish people throughout life,” said National Dairy Council (NDC) president Jean Ragalie-Carr, RDN, LDN, FAND. “At a time when affordable nutrition has never been more important to our nation, dairy foods, including lactose-free varieties, are a highly nutritious and accessible option that can help fill important nutrient gaps and support overall well-being. We’re pleased to see dairy consumption recommended for its contributions to healthy dietary patterns based on the scientific evidence.”

NDC noted that consistent evidence demonstrates that a healthy dietary pattern, which includes low-fat and fat-free dairy foods, is associated with beneficial outcomes for all-cause mortality, cardiovascular disease, overweight and obesity, type 2 diabetes, bone health, and certain types of cancer (breast and colorectal).

While the guidelines don’t include recommendations for sustainable food systems, the U.S. dairy community has commitments in place to advance environmental sustainability. Earlier this year, the Innovation Center for U.S. Dairy announced the 2050 Environmental Stewardship Goals, which include achieving carbon neutrality or better, optimizing water usage and improving water quality.

“All foods come with an environmental footprint and all sectors of food production can work to do better, including dairy,” said Krysta Harden, executive vice president of Global Environmental Strategy for Dairy Management Inc. “Today, U.S. dairy contributes about 2% of greenhouse gas emissions and collectively, from farm to retail, we are committed to being an environmental solution and leaving a positive footprint for future generations."

The National Cattlemen's Beef Assn. (NCBA) commended USDA and HHS for finalizing the 2020-2025 Dietary Guidelines for Americans (DGAs) and recognizing the role of lean beef in a healthy diet across all life stages and ages.

While there is no one-size-fits-all diet, “Beef is one of Americans' favorite foods, and science consistently shows lean beef can be the cornerstone in a variety of healthy diets," said NCBA president Marty Smith. "Now more than ever, the key to proper nutrition is giving people practical and realistic advice, to help create balanced diets that work for them – featuring foods they love, like beef, which pairs perfectly with other nutrient-rich foods.”

USDA, HHS release dietary guidelines for Americans, 2020-2025

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Nutrition in America took a major step forward today with the publication of Dietary Guidelines for Americans, 2020-2025. Jointly published by the U.S. Departments of Agriculture and Health and Human Services (HHS) every five years, the guidelines provide science-based recommendations designed to foster healthy dietary patterns for Americans of all ages – from birth through older adults. Importantly, this edition expands the guidance, for the first time including recommended healthy dietary patterns for infants and toddlers.

guidelines 2.png“At USDA and HHS, we work to serve the American people – to help every American thrive and live healthier lives through access to healthy foods and providing nutrition recommendations,” said U.S. Secretary of Agriculture Sonny Perdue. “With the release of the dietary guidelines, we have taken the very important step to provide nutrition guidance that can help all Americans lead healthier lives by making every bite count."

Dietary Guidelines for Americans is the nation’s trusted resource for evidence-based nutrition guidance. The guidelines are designed for use by healthcare professionals and policy makers for outreach to the general public and provide the nutritional foundation for federal nutrition programs. The dietary guidelines should not be considered clinical guidelines for the treatment of disease.

The science tells us that good nutrition leads to better health outcomes, and the new dietary guidelines use the best available evidence to give Americans the information they need to make healthy decisions for themselves and their families,” said HHS Secretary Alex Azar. “USDA and HHS have expanded this edition of the dietary guidelines to provide new guidance for infants, toddlers, and pregnant and breastfeeding women, helping all Americans to improve their health, no matter their age or life stage.”

As always, the new guidelines build on the previous editions and were informed by the scientific report developed by the Dietary Guidelines Advisory Committee, along with comments from the public and input from federal agencies. USDA and HHS thank the committee for their work and dedication over the last fifteen months, providing the departments with a comprehensive scientific review and proposal of overarching recommendations, a highly regarded step of critical importance in dietary guidelines development. USDA and HHS also made transparency a priority in this edition and appreciate the many public comments that were received throughout this process.

Today’s release provides the public with the most up-to-date evidence on dietary behaviors that promote health and may help prevent chronic disease. Steeped in scientific evidence, the key recommendations look similar to those of the past and address two topics that garnered much attention throughout the development of the guidelines – added sugars and alcoholic beverages. Dietary Guidelines for Americans, 2020-2025 carried forward the committee’s emphasis on limiting these dietary components, but did not include changes to quantitative recommendations, as there was not a preponderance of evidence in the material the committee reviewed to support specific changes, as required by law. As in previous editions, limited intake of these two food components is encouraged. In fact, this sentiment remains prominent throughout the policy document and complements the four overarching guidelines, which encourage Americans to “Make Every Bite Count” by:

  • Following a healthy dietary pattern at every life stage.
  • Customizing and enjoying nutrient-dense food and beverage choices to reflect personal preferences, cultural traditions, and budgetary considerations.
  • Focusing on meeting food group needs with nutrient-dense foods and beverages from five food groups – vegetables, fruits, grains, dairy and fortified soy alternatives, and proteins – and staying within calorie limits.
  • Limiting foods and beverages higher in added sugars, saturated fat, and sodium, and limiting alcoholic beverages.

For consumers, USDA’s MyPlate translates and packages these principles of dietary guidance for Americans in a way that is handy and accessible. To share these messages broadly, USDA offers the Start Simple with MyPlate campaign and a new MyPlate website to help individuals, families, and communities make healthy food choices that are easy, accessible, and affordable, in addition to helping prevent chronic disease.

For more information, please visit www.myplate.gov.

USDA encouraging hog producers to complete surveys

National Pork Board Hog farm barns pigs FDS operation.JPG

The National Agricultural Statistics Service (NASS) and its U.S. Department of Agriculture partner agencies are encouraging hog producers to complete their surveys in 2021. The data resulting from these surveys will be valuable to individual operations and the industry as they chart a course ahead, particularly after a challenging year, NASS said.

Producers may receive one or more of the following surveys in 2021:

  • Dec. 28, 2020 – April 23, 2021: Agricultural Resource Management Survey of costs and returns for hog producers, conducted with the USDA Economic Research Service. Sample size 2,080. Results available in July 2021.
  • June 2021: National Animal Health Monitoring System (NAHMS) Small Enterprise Study to monitor animal health and management practices of swine operations with fewer than 1,000 pigs. Conducted with the USDA Animal and Plant Health Inspection Service Veterinary Services. Due date July 30, 2021. Sample size of 5,880.
  • June 24, 2021: Feral Swine Survey to monitor damage to operations by feral swine. This year the target survey sample includes pork producers. Conducted with the USDA Animal and Plant Health Inspection Service's Wildlife Services. Sample size 15,067.
  • July 2021: National Animal Health Monitoring System (NAHMS) Large Enterprise Study to monitor the animal health and management practices of swine operations with more than 1,000 pigs. Conducted with the USDA Animal and Plant Health Inspection Service's Veterinary Services. Due date August 31, 2021. Sample size 2,518.
  • March, June, September, December 2021: "Hogs and Pigs" inventory, a quarterly survey conducted by the National Agricultural Statistics Service. Due dates, 15th of the month.  Sample size over 5,000. Results: quarterly "Hogs and Pigs" NASS reports on March 25, June 24, Sept. 24, Dec. 23, 2021.

Agricultural Resource Management Survey

According to NASS, hog and pig producers can expect to receive the Agricultural Resource Management Survey (ARMS) from the USDA after December 28, 2020. The questionnaire focuses on hog and pig production costs and returns. Producers will have until April 23, 2021 to complete this survey. This survey is extensive and will take a significant investment of time. 

To protect the health and safety of producers, partners, and employees, NASS has suspended in-person interviews. Survey respondents can complete the questionnaire and return it by mail, or complete it online here. Alternatively, a trained enumerator will follow up to collect the data by phone.

The survey will include questions about COVID-19 related impacts on production, loans or grant applications for swine operations, and loss of off-farm employment and unemployment compensation. Accurate information from producers helps inform future hog operation business decisions and livestock policy.

In addition to questions about swine operation costs and returns, this year’s survey asks about the following:

  • Changes in pig placements, particularly on contract finishing operations. These questions allow for examination of how the industry reacted to the spring reduction in slaughter volumes at the farm level. Tracking placements allows for a more complete picture of the industry’s adjustment and can help identify financial impacts on contract growers.
  • Whether an operation had to euthanize pigs and, if so, how many. Understanding the extent of euthanization can help individual operations and the hog industry plan for how we might better adjust to such emergencies in the future.
  • Compensation received for euthanized hogs. This question allows for examination of the impact of any compensation received for euthanized hogs from integrators or from government agencies. The survey’s information on compensation allows for a better understanding of financial impacts on producers.
  • Payments, grants, and loans under government programs designed to provide support to businesses affected by COVID-19.

 For more information about this survey, click here.

 

Farm Progress America, December 29, 2020

Max Armstrong continues his look at the outlook for 2021 from CoBank which reports that the impact of the pandemic will go on. Consumers will continue to eat at home more, which puts pressure on suppliers to the food service industry. The economists at CoBank share that continued rationalization of production will continue as the market adjusts.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Maksim Tkachenko/iStock/Getty Images Plus

USDA looks to end FDA turf war on gene-editing livestock oversight

PhonlamaiPhoto/iStock/Getty Images gene editing strand of DNA

USDA is contemplating taking on regulatory oversight of food animals genetically modified for agricultural purposes. This was previously handled by the Food and Drug Administration who treated genomic modifications as drugs and created significant roadblocks for U.S. companies looking to blaze a path for future disease-resistant and nutritionally enhanced livestock species.

In an advanced notice of proposed rulemaking, the Trump administration announced Dec. 21 its intention for USDA to have primary oversight over gene-edited livestock. Gene editing is seen by those in the industry as a promising new technology that can help farmers breed healthier, more resilient animals, and many within the industry have been asking for USDA to take on the regulatory oversight from FDA.

U.S. agriculture had been in a holding pattern, as USDA and the FDA were locked in a regulatory tug of war over authority on gene editing in livestock. Meanwhile, China, Brazil, Canada and other global competitors moved ahead in the race to pursue this technology.

Alison Van Eenennaam, extension specialist in animal biotechnology and genomics at the University of California-Davis department of animal science, has seen her research significantly stalled because of FDA’s long-time frame and approach to regulating animal biotechnology.

“This resulted in a lengthy, expensive and unpredictable approval process, and to date there have only been two food animal approvals, the AquAdvantage salmon and a knockout pig that was just approved,” says Van Eenennaam in response to USDA’s proposed notice. “A more predictable and streamlined regulatory approach for low-risk products, such as any genetic modification that is already known to occur in the gene pool of the species, would be welcome news for U.S. animal agriculture.”

Related: FDA approves first intentional genomic alteration pig

USDA’s advanced notice of proposed rulemaking will transition portions of FDA’s pre-existing animal biotechnology regulatory oversight to USDA. USDA will consult with FDA to ensure its reviews benefit from FDA’s expertise, while providing developers with a one-stop-shop for their products. “USDA looks forward to FDA experts participating in the development of our review process,” the agency says.

USDA is proposing to establish a flexible, forward-looking, risk-proportionate and science-based regulatory framework that provides a predictable pathway to commercialization and keeps pace with advances in science and technology for certain farm animals (cattle, sheep, goats, swine, horses, mules, or other equines, catfish, and poultry) developed using genetic engineering intended for agricultural purposes.

“Our livestock producers need all the tools in the toolbox to help protect against animal diseases and continue to meet the challenge of feeding everyone now and into the future. If we do not put these safe biotechnology advances to work here at home, our competitors in other nations will,” says Secretary of Agriculture Sonny Perdue.

Review process outlined

USDA’s proposed safety review would cover molecular characterization, animal health (including noninfectious, infectious, and zoonotic diseases), efficacy (for disease and pest resistance traits), environmental considerations, food safety evaluation of any expressed substance (including allergenicity and compositional analyses of key components) and food storage and processing.

USDA’s proposal would provide end-to-end regulatory oversight from pre-market reviews through post-market food safety monitoring of animals. USDA will continue to coordinate closely with the FDA to fulfill oversight responsibilities and provide the appropriate regulatory environment, ensuring the safety of products derived from new technologies, while fostering innovation at the same time.

Under the regulatory framework being contemplated, USDA would provide regulatory oversight from pre-market reviews through post-market food safety monitoring for certain farm animals developed using genetic engineering. USDA would promulgate regulations using the authorities granted to the Department through the Animal Health Protection Act, the Federal Meat Inspection Act (FMIA), and the Poultry Products Inspection Act. Pursuant to these authorities, the Animal and Plant Health Inspection Service would conduct a safety assessment of organisms developed using genetic engineering that may increase an animal’s susceptibility to pests or diseases of livestock, including zoonotic diseases, or ability to transmit the same.

The Food Safety and Inspection Service would conduct a pre-slaughter food safety assessment to ensure that the slaughter and processing of animals developed using genetic engineering would not result in a product that is unsound, unhealthful, unwholesome, or otherwise unfit for human food.

USDA’s rulemaking has a 60-day comment period.

Industry support

APHIS already has a review process in place for gene editing in plants, which can serve as a model for livestock. The proposal is the first step in this process, and the National Pork Producers Council says it looks forward to USDA and FDA promptly signing a formal agreement on the regulation of this promising new technology in livestock.

NPPC President Howard “AV” Roth, a pork producer from Wauzeka, Wisc., says, “FDA regulation of gene editing will result in an impractical, lengthy and expensive approval process. Thankfully, that is not the administration’s intended plan. This announcement represents a critical milestone to ensuring American agriculture maintains its global competitive edge.”

Whenever new technologies are introduced, consumer acceptance is critical. The U.S. pork industry is committed to transparency when using this technology in the future; there are currently no gene-edited pigs entering the food supply. The focus now is on establishing a regulatory framework that will not stifle innovation and drive use of this breakthrough technology overseas. “NPPC will always support the rights of consumers and hog farmers to have choice,” NPPC says.

Dana O'Brien, BIO executive vice president for food & agriculture, adds, “This system must also provide researchers and technology developers with clarity and predictability to foster scientific progress and restore investment in American innovation. Many of these discoveries are made possible by small and mid-sized companies based in rural communities, which provide jobs and help to boost our bioeconomy.”

O’Brien adds a modern U.S. regulatory system will pave the way for breakthroughs that can help prevent and respond to zoonotic diseases such as COVID-19, improve animal well-being, make farming and food systems more sustainable, protect the environment and bolster resilience to climate change.

“The new Food and Agriculture Climate Alliance, representing a broad spectrum of stakeholders in the agriculture, environmental, and food community, recognizes that improved animal genetics can help livestock adapt to a changing climate and contribute to reduced greenhouse gas emissions,” O’Brien adds.

National Association of State Departments of Agriculture CEO Dr. Barb Glenn was pleased to see USDA continue steps to reform the regulatory framework for agricultural biotechnology products.

"NASDA will submit comments in support of USDA’s announcement and provide recommendations to strengthen the ANPRM, highlighting the importance of scientifically-sound, risk-based regulation. Animal biotechnology provides producers with the necessary tools to meet increasing demand for U.S. meat and poultry products," Glenn says. "NASDA is ready and excited to work with our federal counterparts to establish the U.S. as a leader in international regulatory conservation and ensure our high-quality, safe food products remain competitive in the global marketplace."

‘Hogs and Pigs’ report bullish and bearish

DarcyMaulsby/iStock/Thinkstock hogs in finishing barn

The U.S. Department of Agriculture’s December “Hogs and Pigs” report had bullish market hog numbers and bearish farrowing numbers. USDA’s numbers were close to the average of trade estimates for all hogs and for market hog numbers. USDA was higher on sows farrowed and pig crop. The December 1 market hog inventory was smaller than a year ago for the first December since the PEDV struggles of 2013.

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The table below shows this year’s December 1 hog inventory as a percent of a year earlier both for the average of pre-release trade forecasts and for the USDA "Hogs and Pigs" survey.

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Coronavirus has disrupted much this year including the pork industry. COVID-19 in packing plant workers has restricted slaughter capacity causing hogs to back up on the farms.  With a hand full of exceptions, weekly slaughter weights have been up all year long. How to estimate the number of these backed up hogs has been a challenge for NASS.

Ron Plainbarrow gilt prices dec 20.png

The June “Hogs and Pigs” report estimated the 180-plus-pound market hog inventory at 14.687 million head, up 12.83% year over year. The actual hog slaughter for the five weeks beginning June 1 was only up 3.66%. The September report estimated the 180-plus-pound inventory at 14.169 million head, up 9.85% from the year before. The actual hog slaughter for the five weeks beginning September 1 was down 1.15%. The December report revised down the June 180-plus-pound group from up 12.83% to up 5.99% and revised down the September 180-plus-pound group from up 9.85% to up 1.32%.

The December report included other major revisions to previous estimates. USDA lowered the December 2019 market hog inventory by 820,000 head (1.13%), lowered the March 2020 market hog inventory by 1,450,000 head (2.035%), lowered the June 2020 market hog inventory by 2,270,000 head (3.097%), and the September 2020 market hog inventory by 665,000 head (0.913).

As would be expected given these inventory changes, USDA also lowered September-November 2019 pig crop by 746,000 head (2.06%), lowered the December-February pig crop by 989,000 head (2.847%), and lowered the March-May 2020 pig crop by 289,000 head (0.827).

As would be expected given the pig crop changes, USDA also lowered the September-November 2019 sows farrowed by 68,000 litters (2.08%), lowered the December-February sows farrowed by 90,000 litters (2.85%), and lowered March-May 2020 sows farrowed by 23,000 litters (0.725%).

There were small or no changes to pigs per litter. Pigs per litter has held fairly steady at 11.1 head, more or less, for the last seven quarters.

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USDA made no changes to past breeding herd estimates. One has to question the usefulness of the breeding herd inventory estimate when past sow farrowings are reduced but the past breeding herd is not reduced. USDA said the December breeding herd was down 3.0% year-over-year, but that September-November farrowings were only down 1%, and December-February farrowing intentions would be up 1.6% and March-May would be down 0.8%.

September-November farrowings was down 1% compared to the revised year-ago estimate but was down 3.1% compared to the unrevised year ago number.

Sow slaughter is consistent with the low farrowing intentions. Sow slaughter has been up every week thus far in 2020 except for four. During September-November sow slaughter was up 6%. Net of Canadian imports, slaughter of U.S. raised sows was up 7.6% or 50,000 head. Higher sow slaughter implies lower farrowings. 

Ron Plainsow slaughter dec 20.png

The market hog inventory by weight groups look encouraging. Only the 180-pound-plus group is larger than a year ago and then only by 1.2%. The under-50-pound group is down 1.4% and the September-November pig crop also was down 1.4%. These reductions imply reduced hog slaughter during March-May; but spring slaughter is unlikely to drop below the extremely low COVID-driven levels of last spring.

Hog slaughter has been far below the level indicated by the quarterly market hog inventory in the last three surveys. March-May slaughter was down 2.8868 million head; June-August was down 1.5576 million head; and Sept-Nov hog slaughter was down 2.3251 million head relative to the heavy weight inventories at the start of the quarter. Since it doesn’t appear that there is enough slaughter capacity to handle the surplus, the backlog may well last until spring.

First quarter 2020 hog slaughter was up year-over-year. Second quarter slaughter was sharply lower because of COVID slaughter capacity. Third quarter was up and fourth quarter was even.

The table below shows actual hog slaughter for 2020 and my forecast for 2021 hog slaughter. Commercial hog slaughter in 2020 should be a bit under 132 million head, up 1.5% from 2019’s record.  If USDA’s numbers are correct, production trends continue, and hogs are marketed on a timely basis, then 2021 hog slaughter is likely to be slightly over 135 million hogs, up 2.6% from 2020.

Ron Plainprojected commercial hog slaughter.png

Hog prices were extremely low during April-September 2020. Hopefully, prices will be much stronger this year.

Ron Plainbarrow gilt prices dec 20.png

 

Source: Ron Plain, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. The opinions of this writer are not necessarily those of Farm Progress/Informa.

QualiTech acquires Flavor Masters products from Origination

Qualitech (002).jpg

QualiTech, a leading provider of ingredients and solutions for the agriculture and food industries, announced Dec. 28 the acquisition of Origination, LLC (O2D) Flavor Masters brand products.

“This transaction fits perfectly with QualiTech’s position as a leading supplier of specialty products for the animal nutrition industry worldwide”, explained Mike Hodgens, President and CEO of QualiTech. “It brings additional scale to our animal nutrition business and will help drive QualiTech’s continued growth in the future.”

“This move makes complete sense for both of our companies and will allow Origination to put greater focus on our strategic product lines,” said Scott Schreiber, President of Origination. “We have worked with QualiTech over the years on various projects and have built a strong working relationship. When they approached us about the prospect of purchasing the Flavor Masters business, we welcomed the idea, and we are very pleased with the outcome.”

“Adding the Flavor Masters brand products to our existing Feedbuds line of premium flavors will further enhance our ability to serve our customers," said Altair Brondani, Sr. Commercial Director, QualiTech Animal Nutrition. “This expanded line gives our customers a broader set of flavor options, while supporting QualiTech’s strong portfolio of animal performance products, including SQM protected minerals, rumen-protected additives, specialty micronutrients, and gut health solutions.”

Founded in 1967, QualiTech is a privately held, global manufacturer of plant nutrition, animal nutrition and food ingredient products and services. For more than 50 years, QualiTech has developed new techniques to formulate specialized combinations of ingredients resulting in high-quality, cost-effective, innovative products. QualiTech is headquartered in Chaska, Minnesota.