Farmscape News

Reduced Pork Production and Pork Inventories Improve Prices

Brad Marceniuk - Saskatchewan Ministry of Agriculture — Tue, 09 Mar 2010 00:00:00 GMT

Farmscape for March 9, 2010 (Episode 3379)

The Saskatchewan Ministry of Agriculture credits a 15 percent increase in live hog prices over the past month to reduced North American pork production and lower volumes of meat in cold storage.

U.S. weekly hog slaughter numbers over the six weeks that ended March 6th are down about two and a half percent from one year ago while Canada slaughter numbers over the five weeks that ended February 27th have been 1.7 percent higher than one year earlier.

Brad Marceniuk, a Livestock Economist with the Saskatchewan Ministry of Agriculture, says overall North American hog production has declined which has been positive for inventory levels and prices and we saw increased U.S. exports toward the end of 2009.

Clip-Brad Marceniuk-Saskatchewan Ministry of Agriculture:
North American hog prices have been trending upward over the last few weeks.

Current SPI index 100 hogs for Monday, March 8 actually are ranging in the 131 to 141 dollars per 100 kilograms.

In the U.S. the Iowa Minnesota price averaged 72.23 U.S. per 100 weight on Friday and that's an improvement of about 15 percent since early February.

Looking at the key factors, we've seen lower cold storage numbers and lower meat production.

Cold storage numbers of pork at the end of January were down about 18 percent from a year ago.

Pork stocks have actually been below about 500 million pounds over the last three months, their lowest levels that we've seen over the last two years.

Likewise total meat in U.S. cold storage at the end of January was well below year ago levels at about 1.856 billion pounds and that's well below levels that we've seen in the last two years also so a combination of lower pork in cold storage but overall lower meat in cold storage has been really positive for prices.

Marceniuk says factors to watch will be U.S. hog slaughter numbers, pork export demand and the value of the Canadian dollar.

He says further reductions in hog slaughter numbers will help improve hog prices but a noticeable improvement in North American pork exports is needed to see a large jump.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

AgriStability Companion Program Proposed to Insure Cost of Production

Murray Downing - Reston Grain and Oilseed Producer — Mon, 08 Mar 2010 00:00:00 GMT

Farmscape for March 8, 2010 (Episode 3378)

A Reston, Manitoba area grain and oilseed producer is calling on Canadian farmers and farm organizations to review and express their opinions on a proposed top up to the federal AgriStability program.

AgriStability Plus is being proposed as a voluntary whole farm companion program to AgriStability and is designed to provide a guaranteed 100 percent return on the cost of producing agricultural commodities.

Producers and farm organizations are being encouraged to review the proposal and provide their input.

Reston area grain and oilseed producer Murray Downing says the program would be underwritten by the federal government, it would voluntary and it would be available to all Canadian farmers.

Clip-Murray Downing-Reston Grain and Oilseed Producer:
This is a whole farm program that will want to be bankable and predictable.

It will be delivered by the federal government and who qualifies, if you're a producer in Canada you qualify.

Some of the conditions are, if your farm is eligible to have crop insurance like the grains and oilseeds you must carry crop insurance, you must be enrolled in AgriStability, then you have the option to buy this plus program but this plus program is an option.

If you think it's a benefit you can purchase it just like an insurance style program.

But here's the key point, producers are fully responsible for the premium.

What that means, if the government is not subsidizing a premium in any way, it's not countervailable and that's something that's very very important to the agriculture industry in Canada in general.

So the key thing is, if it's funded by the producer 100 percent, there's not countervail action that can be taken by another country.

Downing notes farmers in Canada have been pushing for a cost of production program for years.

He says the goal is to have a package ready to present to Canada's agriculture ministers when they meet in July to discuss business risk management programming so the time lines are fairly tight.

Additional information on AgriStability Plus can be accessed by visiting Manitoba Pork Council's web site at manitobapork.com.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Phosphorus-Based Livestock Manure Application Limits Fuel Interest in Low Cost Phosphorus Removal Technology

Joe Ackerman - University of Manitoba — Fri, 05 Mar 2010 00:00:00 GMT

Farmscape for March 5, 2010 (Episode 3377)

A new low cost technology for recovering phosphorus from liquid swine manure is expected to interest Manitoba farmers facing new phosphorus-based limits on the application of livestock manure fertilizer.

The University of Manitoba's Faculty of Agricultural and Food Sciences is participating in a project in which two 500-litre settling tanks are being used to recover magnesium ammonium phosphate, or struvite, from liquid hog manure for use as phosphorus fertilizer.

Ph.D. candidate Joe Ackerman explains phosphorus in its soluble form can combine with magnesium and ammonium to form a crystal that can be used as a slow release fertilizer.

Clip-Joe Ackerman-University of Manitoba:

This crystal dissolves slowly.

It's got ammonia in it as well as phosphate in it and magnesium is not a problem with most soils.

We set up a pilot scale reactor which was basically two 500 litre tanks and that was operated this summer pumping supernatant into it and dosing it and then collecting this precipitate that came out.

That was quite successful.

We were able to remove about 70 percent of total phosphate from the liquid that we ran through.

That's with the overnight settling.

We'd like to bring that time down.

The product, once it was dried down and analyzed, it came out as about six percent total phosphorus and a little more than six percent total nitrogen and about four percent potassium.

It's a reasonable fertilizer.

There's areas we'd like to perfect and develop though and that will be this coming summer.

Ackerman notes only a small portion of the phosphorus in liquid swine manure is in the soluble form but during anaerobic digestion the acidity increases causing more phosphorus to become soluble and available.

He says bench scale studies will evaluate the proportion of phosphorus that can be made soluble under anaerobic digestion.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Agriculture Minister Says Hog Industry Recovery Plan is Working

Gerry Ritz - Canada Minister of Agriculture and Agri-Food — Thu, 04 Mar 2010 00:00:00 GMT

Farmscape for March 4, 2010 (Episode 3376)

Canada's agriculture minister says federal programs designed to assist the Canadian pork industry as it recovers from three years of depressed prices are working.

Last August the federal government unveiled a three part plan to assist Canada's pork industry in recovering from a prolonged period of depressed prices brought on by high input costs, an over supply of hogs, the strong Canadian dollar, U.S. Country of Origin Labelling and the global recession.

The package includes funding for international pork marketing initiatives, access to interest bearing government backed loans and incentives to help struggling operations transition out of the industry.

Yesterday, following the delivery of the speech from the throne, Agriculture Minister Gerry Ritz told reporters the recovery plan is working.

Clip-Gerry Ritz-Canada Minister of Agriculture and Agri-Food:
As you know the economy world wide put a hold on a lot of red meat sales.

Certainly Canada was affected by that when we export a vast majority of our pork and beef.

Having said that we're starting to see some turn arounds, not necessarily U.S. bound but in some of the other markets that we've been able to tap.

We're just able to get pork back into China.

We think that's a tremendous step forward.

That's a 50 million dollar advantage that we have over the Americans and the Australians at this point, thanks in part to the great team that I have here at Ag Canada and the great product that we have to sell.

The application deadline for loans under the Hog Industry Loan Loss Reserve Program is March 26th and Agriculture and Agri-Food Canada has estimated 25 percent of Canadian production is now being financed under that program.

The fourth and final tender under the Hog Farm Transition Program, under which another 14 million dollars will be allocated to producers who agree to idle barns for a minimum of three years, is slated for March 10th.

Ritz says the economies of scale and market forces are starting to drive the situation back to a positive, we're seeing American buyers returning to Canada for feeder pigs and what was a 50 dollar pig they're now offering 70 dollars for.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Pork Producers Encouraged to Be Aware of HILLRP Application Deadline

Remi Lemoine - Farm Credit Canada — Wed, 03 Mar 2010 00:00:00 GMT

Farmscape for March 3, 2010 (Episode 3375)

Farm Credit Canada is encouraging producers considering participating in the federal Hog Industry Loan Loss Reserve Program to be aware of the application deadlines and not wait to the last minute to apply.

Last week the federal government announced the application deadline for loans under the Hog Industry Loan Loss Reserve Program has been extended to March 26th and Ottawa's share of the risk has been increased to 90 percent on loans used to repay advances received under the Advance Payments Program.

Farm Credit Canada senior vice president portfolio and credit risk Remi Lemoine says to date FCC has loaned out just over 115 million dollars under the program.

Clip-Remi Lemoine-Farm Credit Canada:
I think it's fair to says that the uptake in the program is below expectations.

I wouldn't say well well below but it's below expectations.

Some of the factors, as far as FCC goes, we had already done about 175 million in refinancing and that sort of thing before the program was announced and so I think we preempted the program a little bit.

We sort of did it without the program.

We had also done quite a few payment schedule adjustments in that period.

The program expectations are that the financial institutions would apply their normal due diligence around profitability.

That's the key factor.

Having said that, because the program loan loss reserve is in place, the financial institutions like FCC have worried less about things like the security for the loan and it's helped keep the interest rates down in the program as well.

Lemoine notes time lines were getting tight and causing some concern but the application deadline extension will allow producers a few more weeks to get their business plans in place and creditors an extra month to complete the paperwork.

He encourages those considering participating to be wary of the deadlines and not to leave applying to the last minute.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Hog Industry Loan Loss Reserve Program Uptake at 25 Percent

George Pikor - Agriculture and Agri-Food Canada — Tue, 02 Mar 2010 00:00:00 GMT

Farmscape for March 2, 2010 (Episode 3374)

Agriculture and Agri-Food Canada estimates 25 percent of Canadian pork production is now being funded by loans offered through the federal Hog Industry Loan Loss Reserve Program.

The Hog Industry Loan Loss Reserve Program is designed to allow pork producers to restructure existing debt and term out payments over a longer period.

Last week the federal government announced the application deadline has been extended from March 1st to March 26th and its share of the risk has been increased to 90 percent on loans used to repay advances received under the Advance Payments Program.

George Pikor, the special advisor Business Risk Management Programs with Agriculture and Agri-Food Canada, says it is hoped the changes will make the program more accessible to some producers.

Clip-George Pikor-Agriculture and Agri-Food Canada:
A portion of those loans, one of the requirements of the particular program was for producers to repay any APP Advance Programs Payment advances that were outstanding.

The rate for contribution was initially set at 70 percent.

Some have suggested that by increasing that to a 90 percent level that that might encourage more participation in the program.

Others have kind of indicated that they didn't think that would really change.

A number of financial institutions have said that's probably not likely going to change the likelihood of increasing the number of loans but I think Minister Ritz wanted to use what ever mechanism that he's had at hand that might be able to increase participation in this program and give access to producers.

He also made that change with the view that it may have some implication and help make loans available to some producers in certain areas with certain institutions.

Pikor acknowledges the start up has been slow but lately participation in the program has increased.

He estimates about 25 percent of production has been enrolled in the program.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Canadian Pork to Reappear Shortly in Chinese Grocery Stores

Jacques Pomerleau - Canada Pork International — Mon, 01 Mar 2010 00:00:00 GMT

Farmscape for March 1, 2010 (Episode 3373)

Canada Pork International expects Canadian pork to begin appearing in Chinese grocery stores shortly.

Last spring China banned the import of pork from H1N1 affected countries including Canadian provinces where the infection had been identified in swine herds however over the last few months all of Canada had been affected.

Last week agriculture minister Gerry Ritz announced an agreement that will allow the immediate resumption of Canadian pork exports to China.

Canada Pork International executive director Jacques Pomerleau says the agreement was the product of extensive negotiation.

Clip-Jacques Pomerleau-Canada Pork International:
The process involved a lot of discussions between the two governments, primarily the Canadian Food inspection Agency and the Import Veterinary Services of China also known as AQSIQ.

The Chinese authorities were looking for an assurance that there would be no link between the meat and the disease although the international institutions like WHO, WTO, OIE always made it very clear that the disease could not be transmitted through meat.

Still the Chinese authorities asked for that kind of assurance.

What's in the new certification?

The certificate basically outlines the fact that there were no clinical signs of H1N1 in the animals that were slaughtered for meat to be sold to China and also that the meat is handled in such a way that it's not conducive to transmit that disease in particular.

Pomerleau notes China is one of our top markets accounting for over 45 million dollars worth of Canadian pork purchases in 2008 and there is significant additional potential.

He says animals processed last week were already meeting the new specifications and meat from those animals will begin arriving by ship into China in the next three to four weeks.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

New Agreement Allows Resumption of Canadian Pork Exports to China

Gerry Ritz - Canada Minister of Agriculture and Agri-Food — Fri, 26 Feb 2010 00:00:00 GMT

Farmscape for February 26, 2010 (Episode 3372)

Canada's Agriculture Minister has announced the signing of an agreement that will allow the immediate resumption of the export of Canadian pork products into China.

Last spring China banned the import of pork products from H1N1 affected countries.

In December the ban on Canadian pork was lifted and since then Canadian and Chinese officials have been working to develop supplementary certification requirements and re-certify Canadian plants.

Yesterday in Paris, as part of his agricultural trade mission to the OIE and Organization of Economic Cooperation and Development, agriculture minister Gerry Ritz announced the signing of an agreement that will allow the flow of Canadian pork into China to resume.

Clip-Gerry Ritz-Canada Minister of Agriculture and Agri-Food:
I'm pleased to announce today that Canadian pork products will be back on Chinese grocery store shelves now that Canada has secured the first certification agreement to allow pork imports into China from an H1N1 affected country.

This week China agreed to supplementary certification requirements that will allow for the immediate export of pork from all provinces of Canada.

This agreement comes after many high level interventions including Prime Minister Stephen Harper's recent mission to China and significant negotiations that recognize OIE standards.

The dedicated efforts by our new Market Access Secretariat created just over one year ago can not be matched on this file.

When this issue first arose they immediately had boots on the ground and today we're seeing the results of their steadfast negotiation skills.

We're pleased to continue our strong and respectful working relationship with China.

Access to the Chinese pork market valued at some 45 million dollars is excellent news for Canadian pork producers and underlies the importance of recognizing fair science based standards in trade.

Ritz says Canada has the quality and consistency of supply China is looking for and he's confident that once Chinese consumers get a taste for Canada's top quality pork it will be tough for someone else to bump us out of the market.

For Farmscape.Ca. I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

HILLRP Changes Expected to Improve Program's Responsiveness

Jurgen Preugschas - Canadian Pork Council — Thu, 25 Feb 2010 00:00:00 GMT

Farmscape for February 25, 2010 (Episode 3371)

The Canadian Pork Council is hopeful changes announced this week to the Hog Industry Loan Loss Reserve Program will improve the program's responsiveness.

The Hog Industry Loan Loss Reserve Program is part of a comprehensive federal pork industry recovery plan and is designed to allow producers to restructure existing debt and term out payments over a longer period.

Earlier this week Agriculture and Agri-Food Canada announced the federal government is extending the application deadline from the 1st of March to the 26th of March and increasing its share of the risk to 90 percent on loans used to repay advances received under the Advance Payments Program.

Canadian Pork Council President Jurgen Preugschas says producers have been finding it difficult to get approved for loans but he's hoping the change will ease that difficulty.

Clip-Jurgen Preugschas-Canadian Pork Council:
We think of course that it should help somewhat if the financial institutions are prepared to lend the money because it reduces their risk even lower than it was before.

I would hope that some producers will get the loan now that they weren't going to get before but whether or not it's going to be successful will be determined by the financial institutions.

Certainly from a Canadian Pork Council standpoint we're disappointed.

We felt that this program was going to be effective in helping producers, those that wanted to continue in production.

With the uptake only being some 160 producers out of the eight thousand producers we have in Canada certainly tells me that the program has been anything but successful.

Preugschas says Ottawa's efforts to tweak the program are certainly appreciated and he's hopeful the financial institutions will see this as a positive and help more of our producers who are in financial distress.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Hog Market Outlook Impoves

Mark Ferguson - Sask Pork — Wed, 24 Feb 2010 00:00:00 GMT

Farmscape for February 24, 2010 (Episode 3370)

The Saskatchewan Pork Development Board reports the market outlook for hogs for the coming months is better than it's for the past three years.

Statistics Canada's Quarterly Hog Report, released last week, shows the Canadian breeding herd currently sits at 1.3 million head following a four percent decline in Canadian sow and bred gilt inventory numbers over the past year while the total number of hogs on farm fell by 4.5 percent to 11.6 million head.

Saskatchewan Pork Development Board industry and policy analyst Mark Ferguson notes, because Canadian hog prices are based on the U.S. market, the impact of the declines probably haven't been huge but every little bit makes a difference.

Clip-Mark Ferguson-Saskatchewan Pork Development Board:
We've seen sow inventories decrease and market inventories decrease over the part three years in response to what has been terrible market conditions.

Another factor that has influenced the decrease has been the Hog farm Transition program, the program where producers get paid to stay out of production, and they were able to bid get out.

On the flip side the market outlook is looking better than it ever has.

Feed wheat and barley prices have come down a lot since the harvest this last fall so feed prices are looking quite good right now.

Hog prices also are looking about as good as they ever have in the past three years.

You're able to lock in a good price for the summer and I think there will be a lot of producers looking at a positive margin beginning maybe as early as April.

That's something we haven't seen before and it's definitely positive.

You have to feel great for the producers out there.

Ferguson expects the breeding herd to continue to decrease over the coming months as those producers who have been accepted under the hog farm transition program carry through with their plans which will be a positive and he's hoping to see continued strong demand for pork and declines of pork in storage.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council

Corn DDGS Feeding Strategies Preserve Backfat Hardness and Belly Quality

Dr. Eduardo Beltranena - Alberta Agriculture and Rural Development — Tue, 23 Feb 2010 00:00:00 GMT

Farmscape for February 23, 2010 (Episode 3368)

An Alberta based feed research scientist is advising pork producers to withdraw corn DDGS from grower finisher diets two to three weeks prior to marketing to preserve backfat hardness and belly quality.

A dramatic increase in the use of grain for ethanol production has increased the availability and lowered the cost of corn dried distillers grain with solubles for use in livestock rations.

Dr. Eduardo Beltranena, a feed research scientist with Alberta Agriculture and Rural Development, says corn DDGS can be included in pig diets at up to 30 to 35 percent but if those high inclusion rates are maintained to close to market weight backfat hardness and belly quality can be reduced.

Clip-Dr. Eduardo Beltranena-Alberta Agriculture and Rural Development:
We did a study looking at the withdrawal rates of corn DDGS by feeding zero to 30 percent all the way through to market or by using a reduction from 30 to 20 and 20 to 10 and 10 to zero of corn DDGS out of the last two finisher diets.

With this product we saw pretty much identical growth rates and feed intake and feed conversion efficiency to feeding no DDGS, feeding 30 percent DDGS or implementing any of the withdrawal strategies out of finisher diets so weight gain, feed intake, feed conversion were the same, income over feed cost, feed cost, all that was the same.

By implementing the corn DDGS withdrawal strategies we expect to mitigate the negative effect that feeding high levels of corn DDGS will have on backfat hardness and the quality of the belly.

Dr. Beltranena notes there are benefits from feeding these products on loin quality but if the packer wants to maintain backfat hardness and belly quality corn DDGS will need to be removed from the diet two to three weeks prior to marketing.

For Farmscape.Ca, I'm Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork Council