US hog supplies to drop, prices to increase in 2013

U.S. hog farmers have slaughtered 73.3 million hogs in the first eight months of 2012 (the most in three years) to help control costs in the wake of increased feed prices, leading to predictions of lowered pork supplies and increased prices in 2013, according to the U.S. Department of Agriculture.
Per-capita pork supplies are expected to drop to 45.2 pounds in 2013, the lowest since 1975, according to the USDA. Crop damage caused by the U.S. drought has led to record-high corn prices, and pig farmers expect to lose roughly $44 per head in the fourth quarter of 2012, the most since 1998. Many farmers are processing their herds early to avoid heavier losses later. Producers may receive about $56 per hundredweight for hogs in the fourth quarter, and the cost of production is estimated at about $72.29 per hundredweight, said Chris Hurt, an agricultural economist at Purdue University. That means farmers may earn $151.20 for a 270-pound hog that costs $195.18 to produce.
Lean-hog futures for July 2013 delivery are trading at 97.3 cents per pound compared with 74.65 cents for December 2012, a sign traders are already anticipating fewer supplies in 2013, say analysts.

US pork industry may face record losses in 2012

Oversupply, rapid sow liquidation and record feed prices could lead to losses of $60 per head for pork producers in the final quarter of 2012, according to Purdue University Extension Economist Chris Hurt.
Slaughter numbers since mid-August have been up 6 percent when only about 1 percent more hogs were expected. This has caused a $10-per-hundredweight drop in live prices since late July, with prices now in the low-$60s, said Hurt. The source of those extra hogs is probably related to some delayed marketings due to the summer heat, to a desire to sell pigs more quickly before prices drop moving into fall, and to high sow slaughter. Projected prices for the final quarter of 2012 are in the mid-$50s, but costs of production are expected to be above $75 per live hundredweight for the remainder of the year.

Losses are expected to continue into 2013, at $38 per head in the first quarter and $5 in the second quarter — total losses of around $4 billion for the U.S. industry. Hog production may return to profitability by mid-summer 2013, said Hurt, when meal prices begin to moderate, hog prices increase and the weather returns to normal.

Hog futures rise on increased demand

Hog futures are rising on increased demand and tight supplies, with October numbers reaching 91.7 cents per pound (up 0.3%) as of 9:50 a.m. CST on July 28.
Current spot-market hog prices hit a five-week high at 99.35 cents per pound on July 27, up 1.6%, while wholesale-pork prices increased 1% to $1.0234 per pound, the highest since October 1997. Overall, hog futures have gained 20% in the last year.

Chinese authorities predict high hog prices after August

Chinese authorities estimated the growth rate of hog prices will drop steadily after July and August, while hog prices are expected to remain relatively high due to high production costs.
On July 9, the State Statistical Bureau announced that June's food price was 14.4 points higher than the same time last year, resulting in a 4.26% increase in CPI. Pork prices grew 57%, which drove CPI up 1.37 points. The result indicates food prices continues to be the major force pushing up China’s CPI.
Pork prices soared in June, and authorities estimate food prices in July will be 0.7 points higher than in June and 14.2 points higher compared with the same period in 2010.

Manitoba Pork Council releases new industry sustainable-development plan

In response to three years of swine industry challenges that include low hog prices, high feed costs, a high-valued Canadian dollar, the H1N1 virus, the global recession and new product-labeling regulations, the Manitoba Pork Council has released a 54-page document, Embracing a Sustainable Future, which spells out 82 commitments designed to revitalize the industry.
The document focuses on nine key areas of concern identified by the council and industry producers: green farming practices, barn location, animal care, food safety, farm safety, research, trade, social responsibility and education and public awareness. "We are just beginning to emerge from several very challenging years when producers have struggled just to keep their farms afloat," said MPC Chairman Karl Kynoch. "We feel the need, now more than ever, to set a course that will ensure a bright future for pork production."
Among other things, the MPC hopes to encourage producers to phase out gestation stalls by 2025, invest in new technologies that minimize the release of methane gases from pig production facilities and commit to leading the effort to develop a practical system of traceability for pigs and pig farms within the next three years to help reduce losses in the event of a disease outbreak.

Guangzhou to close live pig wholesale markets

Southeastern China’s Guangzhou city will shut down live pig wholesale markets in 2010, in order to improve quality control on hog production, slaughtering and sales, according to a report from Southern Countryside Paper.
Under the new policy, live pigs will be transported from hog farms directly to large-scale slaughterhouses, skipping hog wholesale trade markets that cause difficulties in product traceability, the report said.

Group seeks to curb hog, poultry farm growth

According to reports, the Campaign for Family Farms and the Environment (CFFE) is asking the USDA, in a letter to Agriculture Secretary Vilsack, to halt direct and guaranteed loans to new or expanding hog and poultry farms. The letter contained 25,000 signatures and is in response to what the group views as overproduction.
Farmer and Missouri Rural Crisis Center member, Rhonda Perry, said on radio station KBIA, "We've got 547 million pounds of pork in cold storage, which is 25% higher than the five-year average, and I believe it's about 8% above last year's numbers."Presently the hog and poultry industries are experiencing historically low prices and oversupply conditions.
A similar loan hold was done in 1999 in response to the hog industry price crisis of that time.