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Pork Exports Push Ahead

U.S. pork exports continued their upward spiral, with an increase of 41% in the first quarter of 2008, according to the U.S. Meat Export Federation (USMEF).

“We’re seeing continued strong performance in both sectors (pork and beef),” says Erin Daley, USMEF manager of research and analysis. “The weak U.S. dollar is certainly a factor, and gains are being made despite the growing shortage of shipping containers to take our exports to overseas markets.”

Pork exports for the first quarter totaled 807.7 million pounds, 39% above the first quarter of 2007. When combined with 193.2 million pounds of pork variety meats (up 54%), the U.S. pork industry sold 1 billion pounds valued at more than $1 billion to international markets.

March 2008 exports of 329.3 million pounds were second only to the monthly record set in February 2008.

Japan resumed its number 1 ranking as volume and value market leader for U.S. pork products, with exports up 11% in the first quarter: 233.2 million pounds sold for $336.6 million. March exports to Japan rose by 24% compared to 2007, setting a new monthly record at 90 million pounds.

At the same time, Japan’s pork imports from the European Union (EU) (primarily Denmark) fell 20%. Daley says this trend is expected to continue as Danish hog numbers have fallen 10.4% in April. Danish pork producers are losing about $72/hog slaughtered, mainly due to high feed prices, according to the European Market Survey.

U.S. pork exports to China and Hong Kong worth $170 million totaled 225.9 million pounds – 280% more than the first quarter of 2007. March exports were 61.1 million pounds, compared to 16.8 million pounds in March 2007, but down from the record 90.1 million pounds set in February 2008.

Chinese statistics indicate the United States was the largest pork supplier during the first quarter, followed by the European Union (primarily France and Denmark) and Canada.

U.S. quarterly pork exports to Mexico rebounded 3% from last year’s levels to 173.3 million lb., valued at $123 million, while quarterly shipments to Canada were 22% higher at 88.1 million pounds.

U.S. pork exports of 87.8 million pounds to Russia during the quarter soared 142% higher, including 15.8 million pounds of variety meat. At the same time, Russia banned pork imports from Canada, delisted a number of EU plants and, most recently, delisted four U.S. plants. Brazil’s exports to Russia declined 17%.

Sales of pork to South Korea rose 1% in the first quarter to 77.7 million pounds worth $72 million.

Another monthly record was set in U.S. pork exports with 10.1 million pounds shipped to the Asian countries of Philippines, Singapore and Vietnam, with 22.3 million pounds exported ($17.6 million) for the first quarter, an increase of 239%.

Exports to the EU increased 80% to 18.6 million pounds ($22 million), primarily destined for France, Germany and Britain.

Risk Management Webinars Offered

When asked if they were interested in an interactive, online educational series on risk management, pork producers responded with a resounding “yes.”

The Chicago Mercantile Exchange (CME), pork checkoff and state pork producer associations have banded together to develop a complimentary series of risk management webinars in May. The webinars provide direct access to industry professionals, including CME presenters.

“With today’s profitability challenges, producers are looking for any and all resources to help enhance their risk management,” says Mike Laughery, vice president of producer and industry relations for the National Pork Board. “These 2008 webinars offer a great opportunity to learn and ask questions.”

Producers can choose from the introductory or advanced tracks, based on their experience and educational needs. To view the complete schedule and register by May 16, log onto www.cmegroup.com/porkwebinars.

“Even if you’re busy in the field and can’t attend some of the interactive sessions, you can access them from the online archive at your convenience,” Laughery says.

Introductory Track webinar topics include:
· Futures and Options: The Basics, May 19;
· Introduction to Hedging, May 20;
· Developing a Marketing Plan, May 21; and
· Trading Tools and How to Get Started, May 22.
Advanced Track webinar topics include:
· The Roll of the Lender in Risk Management, May 27;
· Systematic Risk Management, May 28; and Advanced Hog Margin Management, May 29.

Farrowing Basics Program Planned

The University of Nebraska-Lincoln (UNL) is holding a Farrowing Basics program June 17-18 in the Animal Science Complex at the UNL East Campus.

The program provides a review of the basics of lactating sow and piglet care, according to Duane Reese, UNL Extension swine specialist.

Sows and litters will be available for teaching and hands-on experience. Practical ideas on how to improve efficiency of production will be emphasized.

Farrowing Basics registration is $100/person until June 3 and $125 until June 10, the last day that registrations will be accepted.

Registration includes lunches, refreshments and a notebook with reference materials.

For more information about this program, contact Duane Reese at (402) 472-6425 or e-mail dreese1@unl.edu.

Manure Entrepreneurs Aim To Turn Brown into Green

The 2008 Breimyer Seminar May 22 at the University of Missouri’s Reynolds Alumni Center focuses on turning manure, once known as waste, into something green.

Higher fertilizer prices have made manure a more valuable source of nutrients. Higher energy prices have made livestock manure a viable source of energy.

John Lory of the University of Missouri speaks on how high fuel, fertilizer and commodity prices affect manure management decisions.

Gary Oberdick of Platte City, MO, discusses swine manure composting.

Joe Burken of the University of Missouri-Rolla talks about manure digester developments, followed by pork producer Danny Kluthe of Dodge, NE, explaining manure management with methane digesters.

Ray Massey of the University of Missouri discusses carbon credits and manure.

Darrick Steen, Missouri Department of Natural Resources, covers environmental compliance considerations.

Marketing manure, funding options for a value-added business and developing a systems approach to manure utilization will also be covered by other speakers.

For more information, contact Joyce White at (573) 882-6533 or whitej@Missouri.edu or Laura McCann at (573) 882-1304.

Manure Handling Expo Planned for July 9

The continuing rise in chemical fertilizer prices may push crop farmers even more to use manure for their fertilization needs.

To help them better understand manure, the theme of the Great Lakes Manure Handling Expo is The Economics of Recycling. The program will include commercial field and educational demonstrations and sessions, and commercial vendor displays. The event is July 9 from 8:30 a.m. to 3:30 p.m. at the Molly Caren Agricultural Center in London, OH.

Educational sessions include:

  • Manure 101 – understanding how application rates and timing affect utilization of nutrients and maximizing the value of manure, presented by Robert Mullen, Ohio State University (OSU) soil fertility specialist.
  • Records: what, why and how? Understanding the value of good documentation of manure application can save time and money. Explaining how records help determine nutrient needs and provide essential evidence in the case of an accidental spill is Kevin Elder, Ohio Department of Agriculture.
  • Growing a management team: Good communication between producers and applicators is the key to a successful team. Providing key pieces of information that producers and applicators need to ask and tell each other is Bill Knapke, Cooper Farms of Ohio.
  • Safety concerns: Livestock facilities and other structures housing manure can create safety issues such as high emissions of gases or particulates. Explaining how to reduce these emissions and provide safety steps to follow is Dee Jepsen, OSU Extension state safety leader.

Case studies will also be presented covering using liquids on crops, brokering manure, environmental management and extending the application window.

Educational demonstrations cover calibration of manure handling equipment and application rates; best management practices of stockpiling manure; slurry seeding application; and maintaining and properly handling equipment to ensure safety.

To learn more, log onto http://ohio-environmental.org or contact Tami Combs at (614) 292-6625 or combs.155@osu.edu.

Studies Explore Ways to Turn Manure Gas into Fertilizer

Ohio State University (OSU) and University of Minnesota researchers have received a $599,836 U.S. Department of Agriculture National Research Initiative grant to study the feasibility of capturing and recycling ammonia emissions from manure to reapply as fertilizer.

“Large amounts of ammonia emissions from animal feeding operations have caused significant environmental and health concerns,” says Lingying Zhao, an OSU Extension specialist in agricultural air quality and bioenvironmental control. The Environmental Protection Agency estimates in 2002 that 2.4 million tons of ammonia were emitted into the air.

This project intends to offer livestock producers an innovative tool to reduce air emissions, while generating an alternative product to commercial nitrogen fertilizer.

The grant calls for developing a wet scrubber for trapping ammonia emissions from manure storage facilities and evaluating their performance in conversion into nitrogen fertilizer.

Zhao comments wet scrubber technology isn’t new – but this type of wet scrubber is. Most wet scrubbers for removing gaseous pollutants are known as packed towers in which vapors are absorbed by liquids over the surface of packing material.

“Packed towers, however, cause significant pressure drop and energy consumption and don’t operate well with agricultural ventilation fans, which normally move large amounts of air at lower pressures,” says Zhao. The technology isn’t feasible for large animal facilities.

Zhao and her colleagues have been focusing on a spray-type of wet scrubber that operates by capturing gas in water/acid liquid droplets normally sprayed in the device. The ammonia gas is transferred to the liquid via air being passed through, and then recycled.

A prototype scrubber has been developed in the lab to be tested in the field.

“From our results in the lab, we see the potential that the scrubber has on an animal farming operation,” says Zhao. “Scrubber technology is complex. What we want to do is create a small-scale scrubber applicable to a farm. If a composting facility generates approximately 100 tons of ammonia annually, and the scrubber is efficient, even at only 70% collection efficiency, 70 tons of ammonia can be collected and recycled for use on the farm.”

The three-year grant is part of USDA’s Cooperative State Research, Education and Extension Service air quality grants program. In all, USDA has awarded $5 million to 11 universities to conduct air quality projects aimed at developing and evaluating emission control technologies.

Ventilation Conference Set for June 24-25

Carthage (IL) Veterinary Service is hosting the 2nd Annual Basics of Swine Ventilation Workshop June 24 and 25 at the Hancock County Extension Center at Carthage, IL.

This one-day workshop is designed for both farrowing and wean-to-finish systems and includes classroom and hands-on training.

Hands-on training includes the basics of ventilation systems. There will be a demonstration of inlet velocity measurements, static pressure, interaction of static pressure and inlet velocity, etc.

The classroom training will include a discussion of the basics of curtain-sided barns, tunnel-ventilated barns, cooling systems including evaporative pads, drippers and misters.

The workshop starts at 9:30 a.m. and concludes around 4:30 p.m.

Registration is $40 and is limited to 50 people/day. For more information, contact Bethany Ludwig at (217) 357-2811 or bludwig@hogvet.com.

Boar Stud Conference To Address Industry Issues

National and international swine experts will present research and talk on industry issues at the third Midwest Boar Stud Managers Conference in St. Louis, Aug. 7-8.

“This conference allows people who specialize in managing boars to talk about their jobs and industry,” says Tim Safranski, University of Missouri Extension swine specialist. Registration is $175 by July 18 or $225 thereafter.

The conference, at the Doubletree Inn near the St. Louis airport, is held every four years and draws attendees from across the United States and abroad.

Safranski, conference coordinator, says this meeting fills an important void.

“There’s not enough research on boars, though it’s an important area,” he explains. “Typically, when we talk about breeding herd management, we’re talking about sows. But the boar stud industry is now specialized to the point where boars are housed separately, and not with sows. For those who manage boar studs, the work is much more specialized.”

Joe Zulovich, University of Missouri Extension livestock housing systems specialist, will talk on combined ventilation and cooling systems.

St. Peter, MN, swine veterinarian Darwin Reicks will present his research on air filtration systems.

“Making enough air move through the filters is one of the biggest challenges in the boar industry,” says Safranski. “Good air filtration is important for disease prevention.”

Other topics for discussion include automated semen-collection systems, boar semen freezing, factors affecting sperm production, boar training methods and effects on fertility of cytoplasmic droplets, a common sperm abnormality.

The conference will also offer concurrent sessions on introductory and advanced boar management topics.

The conference will also include a trade show and international experts.

George Foxcroft, swine reproductive physiologist, University of Alberta, will discuss how current stud methods and artificial insemination practices limit sow productivity.

Janice Bailey, an expert on semen preservation from Laval University in Quebec, will present the current status of boar semen freezing and its importance.

Learn more at http://bsmc.missouri.edu or contact Tim Safranski at (573) 884-7994 or at SafranskiT@Missouri.edu.

Hog Prices Just an Anomaly?

To use an appropriate porcine question: Will demand save our bacon?

When we look at the last two weeks, the answer could certainly be a resounding “Yes!” Why else would packers be aggressively chasing hogs when slaughter rates are so high? And why else would prices be near year-ago levels on year-to-date (YTD) slaughter that now stands 11.5% higher than one year ago?

Supply is way up. Prices are hardly below last year. Life is good – or at least better.

But can this hold? Can hog demand maintain the 8% increase we saw from January through March, as was pointed out by Professor Glenn Grimes at the University of Missouri? Will packer margins remain large enough, without pushing hog prices downward, to maintain the incentive to process 420,000-plus hogs/day? Will the normal seasonal break in beef prices put pork behind the eight ball in the retail meat counter this summer? Can broiler producers reduce supplies enough to drive near-record prices to new highs and, thus, support the entire meat complex? Is the recent rise in the U.S. dollar (the June U.S. Dollar Index reached its highest level since early March last week) a turning point?

So many questions; here’s my inadequate answer: “We’ll see.”

All of these variables have contributed to a remarkable run-up in cash hog prices. I want to believe that the worst is behind us and the predictions of $80-90 hogs this year, and upward for next year, are correct. I really do. And if you believe that prices efficiently and accurately reflect all of the information in the market, then you should probably buy into those forecasts. Those $70-plus bids this week may be here to stay, but I’m not a believer yet.

The reasons are simple: Large meat supplies. Huge pork supplies. More beef on the way – at least seasonally. Higher fuel prices this summer. And even if the hog prices remain higher, we still face substantial risk for feed prices since we have thus far put seed corn in the ground at a pace roughly commensurate with that once achieved by a Model A John Deere and a two-row planter! Corn at $7/bushel is still well within the realm of possibility.

What are you saying to your banker when he poses these questions:

  • “I understand you are losing money, but what are you doing to minimize your losses?

  • “How long will these losses last?”

  • “What is the extent of your cash needs until cash flows turn positive?”

Bankers do not want to shut good producers down. They did not go into banking in order to own hog farms or, especially, take care of hogs. They make little money by holding cash. They want people in business so those people will borrow money and pay interest.

What they do not want is a customer who is borrowing money, doesn’t have a plan or an idea of how to limit that borrowing and, therefore, doesn’t know how much will be needed before the banker can stop advancing funds. They probably feel the same way you would feel if your college son or daughter came to you with a large credit card bill and no way to pay it. You want to help, but without a plan, you would (or at least should!) say “No” because it is the best thing for everyone.

I have admonished producers for some time to have a plan in place to limit the upside risk in feed prices. Though the level at which that protection can be placed is much higher than it once was. Still, it’s a prudent idea.

“But those call premiums are just a rip-off and I’m cash poor as it is,” you say. True. But are you going to drop the insurance on all of your hog buildings this year because cash is tight? That’s a similar proposition and the chances of higher-priced corn are, at the moment, probably better than the chances of a fire or a tornado.

And while the level of coverage available on corn is not as good as it once was, the potential “ceiling” level for soybean meal has fallen pretty sharply. So the news is not all bad.

As for hogs, the average of the eight futures contracts to cover the next 12 months is, as of Friday morning, $75.77/cwt., carcass or $56.82/cwt., live. The average for the rest of this calendar year is $73.95 carcass, $55.47 live. History tells us that the summer futures are likely near their peak as they normally fall from May 10 onward. In fact, Tuesday’s break in Lean Hog futures could have marked the seasonal peak.

How would your financial situation be if you put a lid on feed costs at current levels and could lock in hog prices at $72-$73/cwt., carcass? That is available. Would the answers for your banker be good enough to keep him/her on board and keep you in the business until the good times return?




Click to view graphs.

Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
e-mail: steve@paragoneconomics.com

USDA Announces Major Pork Purchase

In response to pleas from pork industry leaders for assistance, the U.S. Department of Agriculture (USDA) has announced plans to purchase up to $50 million of pork products.

The products will be donated to child nutrition and other domestic food assistance programs.

“We provide food assistance to one in every five Americans,” says Agriculture Secretary Ed Schafer. “We are working to increase benefits due to rising food costs and to ensure we have full funding for our food assistance programs.”

USDA’s Agricultural Marketing Service (AMS) purchases a variety of high-quality food products each year for distribution by USDA’s Food and Nutrition Service for the national school lunch program, the school breakfast program, the summer foodservice program, the food distribution program on Indian reservations, the nutrition program for the elderly, the commodity supplemental food program and the emergency food assistance program.

AMS will be publicly asking for bids to supply the desired quantity and awarding contracts to responsible bidders.

Products will be USDA-graded or graded to ensure quality. Purchases will be comprised of products of 100% domestic origin.

More information on USDA programs is available at www.usda.gov.