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·         Pork producers predict profits in 2013 despite potential pitfalls



Bearish factors weigh on hogs, while cattle climbs slightly

Livestock report


By Rich Nelson - Futures Magazine

January 30, 2013


Hogs: On top of the rains and snows that the upper Midwest saw in the past 16 hours, we have a sharp cool down in temperatures to deal with. Storm Lake, Iowa, is forecast for a low of minus 2 up ahead. This could keep cash hogs prices firm for the next day or so.


There are three things we must bring up that are not positive, though. 1) Any delayed marketings this week will be visiting the packing plant eventually. Next week we will have a larger kill. 2) Those hogs will be marketed, now at higher weights. 3) Russia announced a ban on U.S. pork and beef as of Feb 11. Last year they bought 273 million lbs. of U.S. pork, which came to 5% of the annual total. While some of that will be offset by lower competition from the EU, the trade is wary right now.


We can even point to the seasonal chart. Last year right about this time, cash hogs peaked for about 30 days. They pushed even lower in March and April but that was due to spring 2012 anomalies (U.S. pork exports and “pink slime”).


We will now shift our short-term viewpoint to one of undervalued February and April to now of correctly priced futures. Summer contracts are still seen with $102 peaks ($105 cash hog peak). Selling options, both calls and puts, is our focus…Rich Nelson


Cattle: Cash cattle traded in Texas at $125 Wednesday. That was $3 over last week’s Texas trade and $1 over last week’s ending Nebraska trades. Because this price was generally expected, it held little market impact...





DJ Cash-Hog Prices Seen Mostly Flat to Firm

Curt Thacker - DJ/ - Jan 31, 2013


--Packers are buying to fill weekend needs, adding to inventories for next week


--Saturday's slaughter projected from 95,000 to 100,000, still subject to change


--Wholesale-pork prices slip midweek but still up 1.8% from year-ago


The Midwest direct-hog markets Thursday are predicted to be mostly flat to firmer in a few locations as some packers need additional animals to fill their weekend slaughter schedules and all plants will be adding to their inventories for next week.


Transportation of livestock to processing plants was hampered in some areas of the western corn belt on Wednesday due to blowing snow which contributed to a reduced slaughter for the day estimated at 417,000 head.


Cold brisk winds in the northern portions of the western corn belt could limit selling interest for immediate shipment among producers there Thursday. Actual temperatures near zero degrees Fahrenheit and wind gusts of 15 to 25 miles per hour could cause producers to hold off selling for now rather than open the barn doors for loading and allowing the cold air to enter, livestock dealers and market managers said. But forecasts call for moderating temperatures and calmer conditions by the weekend and early next week.


Projections for Saturday's slaughter are from 95,000 to 100,000 head but remain subject to change since some packers that had disruptions either of the past two days may elect to make up at least part of the downtime. Thin to negative processing margins, however, might cause them to stick with their planned work schedules for the weekend rather than add hours.


Wholesale-pork prices on Wednesday fell $1.12 per hundredweight to $85.46 after hitting a 2 1/2-month high on Tuesday. The latest figure is still up 1.8% from a year ago...





DJ Live-Cattle Futures Called Higher on Tight Supplies; Hogs Flat

Kelsey Gee - DJ/


--Live-cattle futures called higher on tight supply view


--Feeder-cattle set to follow live-cattle futures higher


--Lean-hogs seen flat, with concerns about pork demand


U.S. live-cattle futures are expected to trade higher into the session's open, as traders build in estimates for a bullish federal supply report, due out Friday.


Live-cattle futures rose sharply Monday following a report by the U.S. Department of Agriculture that indicated sharply lower levels of slaughter-ready cattle than analysts expected. Ahead of this Friday's USDA cattle-inventory report, market watchers who "missed" on Monday likely took advantage of the midweek slide to revise to the upside their earlier estimates. February live cattle was recently seen up 0.15, or 0.1%, to $1.2815 a pound in electronic trade.


Feeder-cattle futures are set to follow live-cattle narrowly higher. January feeder cattle were recently up 0.35 cent to $1.4617 a pound, with deferred contracts currently higher.


Lean-hog futures are called flat, as cash prices have remained stagnant despite steadily rising margin prospects for packers, due to strong wholesale-pork prices. This has led to some concerns that demand for pork at the retail level could be softening...




Rabobank report: Q1 pork prices strong but demand is key


Pig Progress - Jan 31, 2013


According to a new Rabobank report on the global pork industry the rate of growth in pork demand is the key unknown for industry margins in 2013, and is highly dependent upon economic growth in the developing world.

Rabobank report: Q1 pork prices strong but demand is key


Pork prices in 2013 have started at historically strong levels but the Rabobank’s global Food & Agribusiness Research and Advisory team say that it anticipates some weakness in late Q1 and into Q2 due to pressures on production and limited growth in global consumption levels.


The bank forecasts that pork prices in 2013 will be impacted by swing factors including:

•    declines in European production due to sow pen regulations

•    China’s appetite for import, and

•    whether U.S. production will continue to expand despite the spike in feed costs.


Strong Chinese demand ahead of the Chinese New Year in February supported global pork prices early in 2013. However, bank analysts say, price movements in China will be a key indicator for the year as we move into Q2; Rabobank says global pork prices may come under slight pressure because production growth in China, the U.S., Brazil, and Russia is expected to be higher than global consumption growth.


Higher prices for pork are expected and necessary for 2013, as the drought in the US and Black Sea region last year has led to low inventories of feed crops, and adverse weather in pork-producing countries continues to limit production expansion. There is now no margin for error for world crop production, with pork production and pork pricing in the second half of 2013 highly dependent upon crop growing conditions. There is also uncertainty regarding the pace and magn itude of EU enforcement of the ban on sow crates, which Rabobank forecasts will reduce the sow herd, keeping EU pork prices high.


However, Rabobank predicts that global prices will be at a lower average level than previously forecast, since the expected consequence of higher feed costs - herd liquidation - has not occurred, as producers in the US have managed their risk by using futures contracts.


Rabobank analyst David Nelson said, “Despite the higher feed input costs, the U.S. swine breeding herd has modestly expanded and large scale farming continues to develop at a rapid pace in China, Russia and Brazil. There seems to be limited opportunity for a significant increase in pork prices, given this expansion. Chinese hog supplies appear to be sufficient, but recovery in the Chinese economy could stimulate demand growth.”





U.S. Meat Banned


The Moscow Times

31 January 2013 | Issue 5059


U.S. pork and beef will not be allowed into Russia as of Feb. 11, due to a ban on the drug ractopamine, which is fed to pigs and cattle to increase their muscle mass.


Chilled U.S. pork and beef will not be allowed as of Monday; frozen meat will be prohibited as of Feb. 11, the Federal Veterinary and Phytosanitary Inspection Service said in a statement.


Ractopamine is banned in 80 countries. (insert sentence about the date when US was warned by Russia about the ban) In 2010, Russia prohibited imports of U.S. chickens because they were cleaned with chlorine.


The Russian meat industry is concerned about rising prices due to the ban, Vedomosti reported Thursday.


Russian pork, for instance, costs three times more than American imports. Sixty to 70 percent of the meant used in Russia is imported, the daily said.


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Pork producers predict profits in 2013 despite potential pitfalls Community

Jan 28, 2013


Article for us guys with a finger in the hogs, profits haven't been the greatest, but not as bad as 1999, I think. Think it was 1999 when pork prices got so low, but my memeory isn't the best. Article is below;




Pork producers predict profits in 2013 despite potential pitfalls


The hog business is notorious for its ups and downs, but with some luck, 2013 might be an up year for Iowa’s 8,000-plus hog producers.


“Right now hogs are losing about $5 per head, but we hope that by summer things will be back to profits,” Bill Tentinger of Le Mars said at the Iowa Pork Producers Association’s annual Pork Congress this week at the Des Moines Convention Center. He finished his year as president of the association.


The pork industry is buttressed by strong exports, particularly to Asia. Demand for pork was strong through the Thanksgiving-Christmas holiday season and is expected to stay that way this year as beef producers face record-high prices.


“We expect more demand to drop from beef to pork this year,” Tentinger said.


Tentinger keeps 375 sows in Plymouth County. He cut his sow herd by about 40 animals last year as the drought raised feed costs. He is confident that the near feature for pork is strong enough for him to bring his herd back up above 400 animals for the 2013 farrowing (birthing) season.


Most of Tentinger’s fellow producers think the same way. Come drought or falling prices, Iowa’s nation-leading hog inventory numbers remained at a record 20 million through all of 2012 and likely will stay there in 2013, Tentinger said.


Feed costs are high, to be sure. A typical hog will eat nine to 10 bushels of corn during its six-month life to reach the requisite 270 pounds for slaughter. A decade ago, those 10 bushels would cost $300. Today they cost $700.


But that hasn’t deterred Tentinger and other Iowa producers.


“Iowa is the place to raise hogs,” he said. “Take Hawaii. They eat a lot of pork there, but they don’t have the corn, and with all the tourists, they don’t need or want a lot of hog production. Iowa needs the business.”


Iowa’s hogs generate $5 billion to $6 billion in sales and support a network of processing plants around the state, not to mention equipment manufacturers and seed-stock genetics companies.


Despite the hog industry’s long tradition of being a bulwark to Iowa’s economy, the industry has had its share of public relations problems in recent years.


In 2012, the issue of hog confinements came back to the front burner in many counties as producers expanded or modernized facilities built in the 1990s, a trend Tentinger said will continue this year.


Incoming association President Greg Lear, who runs a livestock feed company in Spencer, is well aware of the challenges the hog industry faces.


Besides the hog confinements, the major issue producers face is gestation crates used by four out of five hog producers. The crates house the sows that give birth to more than 35 million hogs annually in Iowa...