NPPC in town
WASHINGTON, D.C. / January 7, 1999 / -- National Pork Producers Council (NPPC) President Donna Reifschneider said today that Canadian officials have agreed to consider taking significant action to ease the U.S. packer bottleneck that has sent prices for live hogs to their lowest levels in history.
Reifschneider, along with NPPC CEO Al Tank and NPPC Trade Counsel Nick Giordano, held meetings in Toronto and Ottawa on Wednesday with Canadian pork and meat officials to drive home the point that the hog crisis was a North American problem and that a greater sense of urgency in Canada was necessary in order to find solutions that would benefit hog producers in both countries. Reifschneider, of Smithton, Ill., termed the discussions ``very frank,'' saying Canadian officials were told that the negative consequences of their continued inaction would be difficult to predict or control.
``On Dec. 7, when workers walked off the job at the Quality Meats plant in Ontario, U.S. hog prices were at about $20 per hundredweight and were heading upward,'' Reifschneider said. ``By Dec. 14, prices fell below $10 for the first time since 1955. The reason is clear. More hogs from Canada were coming to U.S. plants that were already stretched to their limit.''
There has been an estimated 37 percent increase in the number of hogs exported from Canada to the U.S. for slaughter in 1998, a total of 3.2 million.
In his testimony Tuesday, Jan. 5, before a group of Democratic Senators probing low livestock prices, Iowa State University economist John Lawrence testified that once packer capacity has been reached, each additional 100,000 hogs drives the price down by at least $9 per hundred- weight. Packer capacity in the United States was reached after Labor Day.
Reifschneider said Canadian officials agreed to examine a plan supported by USDA whereby hogs from certain northern states will be sent to plants in Western Canada where additional capacity exists. She added that under the plan, U.S. and Canadian government officials would devise a way to overcome the current exchange rate differential.
Also on Jan. 5, four pork producers accompanied four U.S. Senators to a meeting at the White House and had an opportunity to speak directly to President Clinton about possible solutions to the low price problem.
Jill Appell of Illinois, Bryan Jorgensen of South Dakota, Craig Christensen of Iowa and Phil Hardenburger of Nebraska, along with Sens. Bob Kerrey (D-NE), Tom Daschle (D-SD), Tim Johnson (D-SD) and Kent Conrad (D-ND), met with Clinton for about 20 minutes on Tuesday morning. The producers discussed the need for quick action on proposals like an immediate cash infusion, additional funding for the Farm Service Agency loan guarantee program and other measures to help pork producers survive the current crisis.
NPPC Proposal Would Send Market Hogs to Western Canada for Slaughter and Processing.
January 7, 1999 / According to this story, the bottleneck at U.S. hog slaughter plants that has depressed market prices could be ``profoundly'' eased by shipping live hogs from some U.S. states to western Canada for processing.
The National Pork Producers Council raised the proposal in talks on Wednesday with Canadian agriculture officials, according to Nick Giordano, the pork council's trade expert. The proposal, which also has the support of the U.S. Agriculture Department, would mean trucking hogs from U.S. northern Plains states to slaughter plants in Manitoba, Saskatchewan, Alberta and British Columbia that have unused capacity, he said.
The story went on to say that if animal disease regulatory issues are resolved, as many as 30,000 U.S. hogs could be shipped to the western provinces each week. According to Giordano, in the meeting, Canadian officials indicated a willingness to consider easing pseudorabies restrictions that would allow U.S. corn belt states that have not yet eradicated the disease to export hogs under a carefully-monitored program.
The plan, however, would require U.S. government financial assistance to American hog producers to compensate them for the Canadian currency exchange rate, he said.
The pork council has blamed a plunge in U.S. market prices paid to farmers on bottlenecks at U.S. slaughter houses, exacerbated by record numbers of Ontario hogs shipped across the border for processing. But several plants in western Canadian provinces have unused capacity that is closer to some U.S. states than to Ontario farmers, he said.
HELP OFFERED TO SASKATCHEWAN FARMERS FORCED TO KILL PIGLETS
Jan. 7/99
Western Producer
Ed White
Saskatoon newsroomAn animal welfare group in Saskatchewan has, according to this story, taken steps to try to ensure pigs die humanely. Adele Buettner, executive director of the Foundation for Animal Care Saskatchewan, was quoted as saying, "We want to make sure that animal welfare is given high regard," adding that the organization wants to make sure farmers know they can get help if needed. That way farmers won't feel compelled to do something drastic or reckless. The foundation has, according to this story, brought together a number of agencies to offer help. The Farm Stress Line has set up a livestock care service, which will provide advice from farmers to farmers. Producers will be able to ask about various methods of killing their animals, if they decide that is necessary. If a farmer decides he cannot kill his pigs himself, the Saskatchewan Society for the Prevention of Cruelty to Animals is, according to this story, offering to take the pigs and humanely kill them.
WSJ: CLINTON PLEDGES NEW AID FOR HOG FARMERS
Jan. 6/99
Dow Jones News
Bruce Ingersoll and Jeanne CummingsWASHINGTON -- The Clinton administration was cited as promising to seek several new ways to bail out hog farmers from their worst financial crisis in 50 years. One possibility is, according to this story, for the government to buy hogs now for delivery in the summer. The government also is considering plans to airlift many of the hogs it buys, as well as pork shipments as food assistance, to Central American nations trying to recover from Hurricane Mitch, and to slaughter some hogs for domestic meal programs if such pork would otherwise go to waste.
Hog producers met yesterday with President Clinton and other senior officials and came away somewhat buoyed by the administration's commitment to shore up pork prices and ease a growing cash and credit crunch in North Carolina, the Midwest and other hog-producing areas.
HOPE SHINES FROM HOG REPORT
January 5, 1999
AgAnswersCould the huge, price-depressing hog-slaughter trend in the United States be ending soon? Quite possibly, according to the latest USDA hog inventory report.
"This is welcome news for hog producers suffering the worst financial period since the great depression of the 1930s," says Purdue Extension agricultural economist Chris Hurt. "The industry had trimmed the size of the breeding herd on Dec. 1 by 4 percent, and even greater liquidation is expected this winter. This will drive pork supplies down by the fall of 1999."
Current depression-era prices, which are the immediate concern, could begin to rise slightly during the next several weeks as a result of the report's numbers, Hurt says. "The weight breakdowns from the report indicate that the number of pigs weighing 180 pounds and over were up 8 percent," he says. "Since the survey was completed around Dec. 1, most of those hogs were slaughtered in December or early January. The good news is that the 120- to 179-pound weight category was up by only 4 percent, indicating that the excessively high slaughter rates should moderate by no later than mid-January." Hurt adds that the February slaughter may be up by 2 percent, and slaughter for March, April, and May actually could be down--by 1 percent. The breeding herd declined throughout the Midwest, according to the USDA. It was down 2 percent in Indiana and 5 percent in Ohio. "Unfortunately, the western and southwestern states continue to show breeding herd increases, primarily because of sow units built earlier this year," Hurt says. Oklahoma's herd was up by 17 percent, Colorado, 13 percent; Texas up 7 percent; and Utah, 9 percent. Producers plan further farrowing cutbacks. Winter farrowing intentions were down 1 percent and spring intentions were down 7 percent. "If producers follow these plans, pork supplies will begin to drop in the late summer and fall," Hurt says.
There is concern, Hurt says, that the report didn't fully account for the huge slaughter in November and December. "USDA raised the size of last spring's pig crop, but not nearly enough to justify the November-December slaughter," he says. "The concern is that more sows were in the herd last spring than USDA has accounted for. If so, the USDA could have an undercount on the breeding herd.
"If the rate of increase in slaughter does not begin to slow by mid-January, the market will be forced to reject the data as a bad inventory count, and hog prices could remain in the teens for months." Pork supplies have been high enough to keep hog prices in the low to mid-$10 range, even in December, Hurt says.
"The dilemma was that supplies exceeded effective slaughter capacity and packers did not have to bid for hogs," he says. "There were so many hogs coming to market that packers could about name the price they would pay."
If January supplies drop to only 4 percent above year-ago levels, packers will need to begin to compete for the hog supply, Hurt says. That could lead to a quick price rebound of up to the low- to mid-$20s. He says February hog prices could push toward the higher $20s and the low $30s by March.
"First-quarter average prices at terminal markets may be near $29 per hundredweight," Hurt says. "Second-quarter prices are expected to average about $36, with prices in June in the high $30s. Summer prices are also expected to average in the higher $30s, with low $40s expected for the fourth quarter."
Hurt says most producers have at least four more months of losses before they get back to a break-even point. "Given the unimaginable losses of $50 to $70 per head in the past two months, cash flow is the number one priority for many."
Most producers will ask lenders for larger credit lines, Hurt says. Lenders, in turn, will ask for additional collateral to be pledged against these larger credit lines. Some grain-hog farms will have land to back larger loans; others will not.
"This could lead to what is called a 'liquidity crunch,' when lenders tighten their requirements for loans at the same time producers need greater borrowing capacity," Hurt says. "In these situations, lenders will make credit decisions on an individual basis. Most of those who cannot garner greater borrowing capacity will be forced to liquidate all, or a portion, of their herds."
Longer term price prospects are optimistic. Hurt says the breeding herd will likely continue to drop through much of 1999, providing sharply smaller pork supplies in 2000. World pork supplies will also be reduced, resulting in smaller imports and better export prospects. In addition, retail prices will be lower with more product moving. "The severity of the current losses will discourage expansion for years and may actually provide a longer period of sustained profits in 2000 and 2001," Hurt says.
PORK COUNCIL APPEALS FOR CALM AS FARMERS LEAVE PIGS AT HUMANE SOCIETY
Dec. 23/98
The Kitchener-Waterloo Record
LONDON -- The Ontario Pork Council was cited as urging calm in an industry experiencing record low prices as rumours swirled that some southwestern farmers have been gassing piglets they couldn't afford to house. As rumours of gassed piglets surfaced, reports of pig drop-offs in several cities prompted, according to these stories, an appeal Wednesday to 6,000 desperate hog farmers to end their growing public protests.Ontario Pork spokesman Keith Robbins, was quoted as saying, "I have heard some reports of that. It exemplifies the frustration and anxiety when every pig that goes through my barn is costing $130 to feed them through to market weight and I am getting $35 to $36 per pig boy you can understand the frustration there,'' adding that there was only one firm report of a truckload of pigs being shipped to the United States where they were refused by a processor.
Robbins was further quoted as saying, "The guy says, 'I can't take them, take them back,' '' adding that because of the law, the pigs couldn't return across the border so they were killed, he said.
To highlight their plight, some farmers have, according to these stories, resorted to dropping pigs off at a local humane society.
Meanwhile, federal Agriculture Minister Lyle Vanclief and U.S. Agriculture Secretary Dan Glickman were cited as saying on Wednesday that they are discussing the North America-wide shortage of hog slaughter capacity that has driven down prices.
The pork council was cited as saying that it expects 25 per cent of hog producers to be out of business by the end of February, when the first provincial bailout cheques are likely to arrive, but said Wednesday it wants a moratorium on farmer protests involving pigs.
Christian Science Monitor
Wednesday, December 23, 1998
Downturn puts Canada farmers in a bind
'Hog Hunt' Planned to Highlight Pork Producers Financial Plight
December 16, 1998 / UPI /
DES MOINES -- A group of southwest Iowa pork producers is, according to this story, inviting hunters to haul out their rifles and shoot hogs in a wooded area this week to highlight the plight of the American farmer. The pork producers are asking hunters for a "suggested donation" of $100 to participate in Hog Hunt '98. The idea surprised state officials, who were cited as saying that Iowa's hunting laws do not cover domestic animals. State agriculture official Jack Ratigan was quoted as telling today's Des Moines Register, "I've never heard of anything like this, but these are strange times." Farmers Gary and Jackie Muller were cited as saying that the idea came up while local pork producers discussed historically low hog prices.
Saskatchewan Pork Producers Offered Financial Help
December 16, 1998 - - / CP/ The Globe and Mail/ National Post /
The Saskatchewan government is, according to these stories, offering struggling hog farmers short-term loans until federal help arrives. Agriculture Minister Eric Upshall was cited as saying that the Government will lend farmers up to $40 a hog to tide them over until spring. The program also allows up to $10 a weanling. The money must be paid back at the government's borrowing cost of 5 per cent. The New Brunswick government also announced a plan yesterday to let farmers, especially those in the hog industry, get money through loans and loan guarantees. Agriculture Minister Stuart Jamieson was cited as saying that the program will tie in with a federal farm-aid package that won't kick in until spring.
HOG FARMERS OFFERED HELP
December 16, 1998 - - CP/ The Globe and Mail/ National Post
The Saskatchewan government is, according to these stories, offering struggling hog farmers short-termloans until federal help arrives. Agriculture Minister Eric Upshall was cited as saying that the government will lend farmers up to $40 a hog to tide them over until spring. The program also allows up to $10 a weanling. The money must be paid back at the government's borrowing cost of 5 per cent. The New Brunswick government also announced a plan yesterday to let farmers, especially those in the hog industry, get money through loans and loan guarantees. Agriculture Minister Stuart Jamieson was cited as saying that the program will tie in with a federal farm-aid package that won't kick in until spring.
December 14, 1998 - - - Reuters
LUGAR URGES WHITE HOUSE TO BUY MORE U.S. PORK
WASHINGTON -- The head of the Senate Agriculture Committee was cited asurging the Clinton Administration to help U.S. pork producers by buying more pork for the federal school lunch program, federal prisons and the military.Sen. Richard Lugar, an Indiana Republican, was cited as saying, in a letter to President Bill Clinton, that the extra purchases were badly needed by pig farmers who in some areas of the Midwest are facing the lowest prices since 1941, adding, "White House leadership and direction can be crucial in these matters and the situation of pork producers is dire enought to justify your personal involvement."
Cash prices for hogs in some areas have, according to this story, fallen under $9 per hundredweight, which means farmers cannot cover their costs of production. Pork products have been pouring into the U.S. market, and the nationwide slaughter of hogs hit a record 2.213 million head last week.
Lugar also wrote, according to this story, separate letters to Attorney General Janet Reno, Agriculture Secretary Dan Glickman, Defense Secretary William Cohen, and Veterans Affairs Secretary Togo West, urging pork buying for each department's programs.
UK Pig Farmers Warn of Desperate TimesDecember 9, 1998 / BBC Online / British pigs farmers have warned MPs on the House of Commons Agriculture Committee that their industry faces an unprecedented crisis. Pig producers are losing £6m every week and they say it is largely because they are having to produce pork to a higher standard than their competitors overseas.
The trouble is that British pig farmers are struggling to compete in an over-supplied market. Legislation coming into force next month will make it illegal for British pigs to be kept in stalls or on tethers. Nor can they be fed on meal containing any part of the pig. Instead farmers have to pay almost £3 for every pig they slaughter to have unused offal and bone disposed of.
Branstad: Investigate Pork IndustryDecember 8, 1998 / DES MOINES -- Governor Terry Branstad is the latest of a number of state politicians calling for an investigation into the pork industry. Branstad says there needs to be an investigation into why farmers get low prices for hogs... and why those low prices are NOT passed on to consumers at the market. Branstad's comments came yesterday during his weekly news conference at the statehouse.
The Globe And Mail
December 4, 1998
Vanclief, Martin collide over farm aid
Heather Scoffield
"Agriculture Minister Lyle Vanclief is facing friction from Finance Minister Paul Martin over the duration of the multimillion-dollar farm aid package that the Agriculture Minister is proposing," the Globe reports.The story claims cabinet supports an amount of $500 million for the first two years of a disaster relief program. It says however that "Martin is balking at setting aside such sums over the long term."
Financial Post
December 4, 1998
Farm bailout plan nearer
Ian Jack
"A farm bailout package that would cost the federal treasury hundreds of millions of dollars is a step closer after Lyle Vanclief agriculture minister won approval yesterday from a powerful cabinet committee," the Post reports. The article says "Mr. Vanclief went before the committee on economic and social affairs for the second time in two weeks to plead his case."Mr. Vanclief is reported to have promised an announcement by Christmas on funding which won't be available to farmers before spring.
National Post
December 3, 1998 - Editorial
Down on the farm
"In 1991 during the last greatest crisis we heard dire stories of the death of the family farm, the annihilation of rural Canada and an end to self sufficiency in food," the editorial states. "The farmers demanded billions in emergency aid. Ottawa shelled out $800 million and the farmers shut up," the writer claims.It is argued that pork producers should cover current losses with past profits.
"Taxpayers should not be expected to prop up the farm sector with new spending every time it runs into a downturn," the Post concludes.
Ottawa Citizen
December 2, 1998, CartoonFarmer: Sorry but I'm facing financial ruin and can't afford to buy feed anymore... so I'm going to have to let you starve to death.
Pig: I suppose that's marginally better than having your throat slit and hung on a meat hook.
* * * Ottawa Citizen
December 2, 1998, Editorial
Subsidized Squeals
The Citizen sympathizes with the plight of Canadian farmers competing with commodities which are subsidized by other governments. However it says our government must resist giving money to producers.The editorial terms the current Net Income Stabilization program "exceedingly generous." The writer argues Canadian hog farmers who recently enjoyed high prices made little use of NISA because they expected a bailout when times got tough.
National Post/ CP Wire
December 1, 1998
PIGGIES GO TO FOOD BANK
About 400 hogs have, according to this story, been donated to Toronto's Daily Bread Food Bank, where the meat will feed users until February.Paul Mistele, president of the Elgin Federation of Agriculture and organizer of the Donate-A-Hog program, was quoted as saying, "We'll be putting pork on their fork. We can't afford to sell the hogs so we're giving them to people."
ID:2077