Friday, March 27, 2015

Nebraska mulls bill to allow pork processors to own hogs

  • Andrea Gantz
    Nebraska is considering legislation that would make it legal for pork processors to own pigs in the state.
    From WATTAgNet:
    A law in Nebraska that prohibits processors from owning hogs in the state could be overturned if a bill proposed in the state’s legislature is passed.
    Since states like Iowa and South Dakota that border Nebraska allow corporations such as Smithfield Foods or Tyson Foods to cut costs by entering contracts with farmers to raise the animals that are owned by the companies, it puts Nebraska at a disadvantage, said Sen. Ken Schilz, who introduced the legislation. He adds that removing the ban on company-owned hogs could create opportunities for farmers in Nebraska that may not otherwise be there.
    “(Nebraska has) been in population decline for the last 50 years,” he said. “So we’d better start doing some things to entice people to come back.”
    The proposed legislation has its opponents, including the Center for Rural Affairs. Traci Bruckner, a spokesperson for the center, says Nebraska’s ban on packer ownership prevents companies from dominating the pork industry. Bruckner believes that if Nebraska swine producers enter contracts with corporations, they would give up control of the livestock, which is the most valuable part of the farm.
    “We think farmers should own livestock in the state, not packers,” said Bruckner. “If vertical integration was the answer, rural America would be a paradise, and it’s not.”
    But the bill also has its supporters, such as hog farmer Terry O’Neel. He says that Nebraska is losing out to other states that allow corporations to own hogs. O’Neel said that it bothers him that a lot of pigs being raised in Iowa are processed in Nebraska plants.
    “We’re missing out on that opportunity. I’ve seen what’s happened in Iowa. I’m seeing what’s happening in South Dakota. It seems like we’re becoming an island,” said O’Neel.

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Rabobank: 2015 global poultry industry outlook upbeat

    The global poultry industry outlook is upbeat, according to a quarterly report from Rabobank.
    From WATTAgNet:
    The outlook for the global poultry industry remains upbeat, but global trade is under pressure from outbreaks of avian influenza, according to Rabobank’s Global Poultry Industry report for the first quarter of 2015.
    In the report, the bank's Food & Agribusiness Research team says that pressure is being felt from the further spread of avian influenza across the globe, with new outbreaks in Asia, Europe and North America.
    "Avian flu is further spreading across the globe and could affect global trade streams, especially as the virus has moved further in Europe to Hungary, and in the U.S. to central states like Minnesota, Missouri and Arkansas," said Rabobank Animal Protein Analyst Nan-Dirk Mulder. "Joint global approaches, optimal biosecurity, and strong monitoring and compensation systems are necessary to stop the spread of the disease."
    Global outlook
    The margin outlook for the global poultry industry remains upbeat, with continuing bullish drivers like high beef prices, lower feed costs and relatively strong demand in most regions.
    However, the global poultry trade is under pressure from avian influenza outbreaks. The exchange rate volatility and turmoil in regions such as the Middle East and Eastern Europe, are leading to lower trade volumes, prices and shifts in trade streams.
    United States
    Rabobank says the poultry sector in the U.S. has a favorable outlook, but some uncertainties remain. The margins are expected to remain high in 2015. The biggest unknown in 2015 is industry expansion.
    The Brazilian poultry market began 2015 bullish despite export challenges, according to Rabobank. The lower oil price will hit the Middle East demand. Still, exports are expected to be strong in 2015, mostly driven by Asia. Margins will be supported by reduction of feed costs as well.
    The poultry industry in the European Union shows some recovery and although supply is currently tight, the outlook is threatened by ongoing avian influenza concerns and still closed export markets.
    Entering the first quarter of 2015, China has an ongoing struggle of oversupply due to avian influenza and food safety issues. As a consequence of human avian influenza cases reported, live bird markets were shut down. During the seasonal peak month, poultry retail prices remained flat.
    The Russian market remains very bullish on low supply. The outlook remains strong, with expected ongoing tight market conditions due to expensive, limited imported volumes and restrictions on growth.
    Other regions
    Mexico has ongoing avian influenza issues and lower pork prices will soften poultry meat consumption growth. Japan's poultry industry is still bullish despite ongoing avian influenza outbreaks.  In Thailand, the export position is supported by a strong Thai baht.

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Vietnamese firms wading into animal feed production sector

    Vietnamese firms are looking to enter the foreign-investor-dominated animal feed industry.
    From WATTAgNet:
    Vietnamese companies have begun to break out into animal feed production in recent years, hoping to take over a larger share of the market, which is dominated by foreign firms.
    Steel giant Hoa Phat Group launched its animal feed subsidiary on March 16, with annual capacity of 300,000 tons. Recently, Masan, An Giang Plant Protection Company and the Hung Vuong Seafood Corporation have entered the animal feed production sector.
    Data from the Viet Nam Animal Feed Association showed that 59 foreign-invested firms and joint ventures own half of the market share, while 180 domestic firms hold only 20 percent, and the remainder is made up by imports. CP and Cargill alone hold a combined market share of 30 percent.
    Because foreign-invested companies have dominated the animal feed sector, animal feed prices have increased 20 percent compared with the regional average price. Higher feed prices also are estimated to have caused trillions in damage to the economy, as animal feed accounts for 70 percent of the husbandry production value.
    To combat the domination of foreign-invested firms, the Minister of Agriculture and Rural Development Cao Duc Phat said the government aimed to create a healthy competitive environment and prevent the formation of monopolies.

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