Athens Review, Athens, Texas

Breaking News

In the News

September 26, 2012

VIDEO: Bacon, pork shortage expected for next year

CHICAGO — Hog farmers are slaughtering animals at the fastest pace since 2009 as a surge in feed costs spurs the biggest losses in 14 years, signaling smaller herds next year and a rebound in pork prices.

The 73.3 million hogs processed in eight months through August were the most in three years, U.S. Department of Agriculture data show. Pork supply will drop to the lowest per- capita since 1975 next year, the USDA estimates. Hog futures that fell more than any other commodity since June 30 may surge 39 percent in 12 months to as high as $1.055 a pound, based on the median of 12 analyst forecasts compiled by Bloomberg.

Crop damage from the worst U.S. drought since 1956 sent corn-feed prices surging to a record last month and may mean losses of about $44 a head for hog farmers in the fourth quarter, the most since 1998, Purdue University estimates. Two producers in Canada filed bankruptcy petitions this month. While the acceleration in slaughtering is boosting supply now, buyers including CKE Inc., the owner of Hardee's and Carl's Jr. fast- food chains, expect higher prices in 2013 as herds shrink and U.S. exports rise.

"We're going to see more consolidation in the industry," said Mark Greenwood, who oversees $1.4 billion of loans and leases to the hog business as a vice president at AgStar Financial Services Inc. in Mankato, Minn. "It's only going to get worse on the higher feed prices."

Futures on the Chicago Mercantile Exchange fell 20 percent since June 30, the biggest drop among 24 commodities tracked by the Standard & Poor's GSCI Spot Index, which rose 11 percent. The MSCI All-Country World Index of equities gained 7.7 percent this quarter and Treasuries returned 0.2 percent, a Bank of America Corp. index shows.

A pig eats 10 bushels of corn to reach a slaughter weight of about 270 pounds, the University of Missouri at Columbia estimates. Corn futures rose 47 percent since mid- June after the USDA predicted the drought will cut domestic output by 13 percent. Prices reached a record $8.49 a bushel in Chicago on Aug. 10.

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 in West Lafayette, Ind. That means farmers may earn about $151.20 for a 270- pound hog that cost about $195.18 to produce.

Hog farmers will see "huge amounts of red ink" in the fourth quarter, said Jim Robb, the director of the Livestock Marketing Information Center, which is funded by the industry, universities and government. Fewer sows will be kept for breeding, cutting output and tightening pork supply, he said. That will raise both wholesale and retail prices to records by the second half of 2013, Robb said.

Prices for now are retreating, with wholesale pork costs tracked by the USDA tumbling as much as 25 percent since June 25 to the lowest in almost two years on Sept. 19. Hog slaughtering climbed 2.8 percent in first eight months of the year, the most since 2009, when farmers sought to shrink herds amid weaker demand following the global recession and the outbreak of the H1N1 virus, known as swine flu.

The 12 percent drop in corn prices from a record last month, and the prospect of bigger harvests next year, may encourage some hog farmers to slow their herd reduction. Slaughter rates in the five weeks through Sept. 1 rose less than 5 percent from a year earlier. That may leave enough sows to accelerate production once feed costs have come down enough, Rachel J. Johnson, a USDA economist, wrote in a Sept. 18 report.

Meatpackers processed an estimated 79.735 million hogs in this year through Sept. 22, 2 percent more than a year earlier, government data show. Animals sold at slaughterhouses fell to 63.58 cents a pound on Sept. 14, the lowest since Nov. 26, 2010. Prices retreated 8.5 percent this year.

Lean-hog futures for July delivery are trading at 97.725 cents a pound, compared with 75.875 cents for this December, a sign traders are already anticipating fewer supplies next year. Per-capita pork supplies will shrink to 45.2 pounds next year, the lowest since 1975, the USDA estimates.

Hog producers are retaining fewer gilts, or young females that haven't had a litter yet, reducing the number available to replace older sows, said Rich Nelson, the chief strategist at Allendale Inc. in McHenry, Illinois, who has tracked the market for about 15 years.

Even with higher prices, pork will remain cheaper than beef, said John Nalivka, the president of Sterling Marketing Inc., an agricultural economic research and advisory company in Vale, Ore. Wholesale pork fell 8 percent to 78.34 cents a pound this year, as beef declined 1 percent to $1.9269 a pound, USDA data show.

"If you got sticker shock on pork, you'll have a heart attack when you look at beef," C. Larry Pope, the chief executive officer of Smithfield Foods Inc., the world's biggest pork processor, said on a conference call with analysts Sept. 4.

Bob Evans Farms Inc., the Columbus, Ohio-based restaurant chain, has seen a drop in sow costs as herds are liquidated, and expects prices to stay low until the culling stops, CFO Paul DeSantis said on a conference call with analysts Aug. 15. Once that is over, "prices tend to increase very rapidly," he said.

Big Sky Farms, the second-largest hog producer in Canada, went into receivership this month partly because of rising feed costs, said Neil Ketilson, the general manager of the Saskatchewan Pork Development Board. The company produces more than 1 million pigs a year, according to its website. Puratone Corp. sought protection from creditors on Sept. 12. The Niverville, Manitoba-based company markets more than 500,000 hogs per year, according to its website.

Brad Hennen, a hog producer in southwest Minnesota, is reducing the size of his business because costlier feed and declining prices for weaned pigs. While he generally markets as many as 15,000 pigs annually, he expects to sell no more than 6,000 this year.

"It could easily get worse than that," said Hennen, who has been raising hogs since 1987 and is based about 3.5 miles northeast of Ghent, Minn. "What can I do now to minimize my losses and still have a business for when the cash starts flowing again?"

               

       

1
Text Only
In the News
  • Realignment coming to Athens ISD

    The Athens Independent School District school board approved campus realignment Monday that will go into effect for the 2015-16 school year.

    July 29, 2014

  • Trial begins in case over Oklahoma City bombing

    The FBI has done a thorough search of its archives and found no evidence that more Oklahoma City bombing videos exist, federal attorneys told a judge on Monday during the first day of a trial that has rekindled long-dormant questions about whether others were involved in the devastating 1995 attack.

    July 28, 2014

  • Kendall Sanders.jpg Kendall Sanders charged with felony sexual assault, improper photography

    A University of Texas police spokeswoman says two Longhorns football players have been charged with felony sexual assault and their arrests are pending.

    July 24, 2014 1 Photo

  • Man gets 2nd death sentence in Dallas slaying

     A jury sentenced a Dallas man to death a second time Wednesday for the 1986 killing of a Dallas civil rights attorney and his wife.

    July 24, 2014

  • Texas woman sentenced to life in stepson's death

     A North Texas jury has sentenced a woman to life in prison for the 2011 starvation death of her 10-year-old stepson.

    July 23, 2014

  • Parsons Athens woman confesses to killing daughter

    Stacie Marie Parsons, 25, walked into the Athens Police Department at 8:46 a.m. Monday and confessed to killing her 4-year-old daughter.

    July 21, 2014 2 Photos

  • g000258000000000000f99cd4724578efa27c155fb3a1dcc7c68e3109e5.jpg Suspects sought in armed robberies in Corsicana

    Corsicana Police are looking for suspects in a pair of armed robberies the past week.

    July 17, 2014 1 Photo

  • Feds: Texas voting maps deliberately discriminated

     The U.S. Justice Department told judges Monday that Texas lawmakers carefully crafted electoral maps marginalizing minority voters despite the state's exploding Hispanic population in a deliberate effort to racially discriminate and protect conservative incumbents.

    July 14, 2014

  • Four children among six dead in suburban Houston shooting

      A father opened fire at a suburban Houston home Wednesday, killing four of his children as well as two adults who were with them, and critically wounding his 15-year-old daughter, authorities said.

    July 10, 2014

  • Corsicana firefighter killed in one-car crash

     An off-duty Corsicana fireman was killed and his two young sons were injured in a one-car crash on FM 709 north of Dawson Tuesday night.

    An off-duty Corsicana fireman was killed and his two young sons were injured in a one-car crash on FM 709 north of Dawson Tuesday night.

    Justice of the Peace Jackie Freeland identified the deceased fireman as Louis Lachney, 46. He was a Lieutenant with the Corsicana Fire Department.

    The crash was reported at 11:27 p.m. Tuesday and occurred  at a sharp curve in the roadway on FM 709 about two miles north of State Highway 31 near Dawson.

    DPS Sgt. Thomas Moore, supervisor at the crash site, said Lachney’s convertible Mazda was traveling north on FM 709 and failed to negotiate a sharp curve, leaving the roadway and overturning several times.

    Moore said Lachney and his two sons who were passengers in the car were all ejected from the vehicle. Moore said the three were apparently not wearing seat belts.

    The two injured boys walked to the roadway following the crash where they were discovered by a passing motorist, who notified law enforcement of the crash.

    Moore said the two boys were transported by air ambulance to a Dallas hospital. He said they were in serious but stable condition when transported from the crash site.

    DPS Trooper LaTonya Daniels is investigating the crash. Corsicana EMS, volunteer firefighters, and Navarro County Sheriff's Office deputies assisted at the crash site. - See more at: http://www.corsicanadailysun.com/local/x611407136/Corsicana-firefighter-killed-in-one-car-crash#sthash.cKzZVvbj.dpuf

    July 9, 2014

Biz Marquee
AP Video
Raw: Japanese Soldiers Storm Beach in Exercises Raw: Weapons Fire Hits UN School in Gaza Raw: Rocket Launches Into Space With Cargo Ship Broken Water Main Floods UCLA Two Women Narrowly Avoid Being Hit by Train In Virginia, the Rise of a New Space Coast New Sanctions on Key Sectors of Russian Economy Crayola Announces Family Attraction in Orlando US Ready to Slap New Sanctions on Russia Kerry: Not Worried About Israeli Criticism Boater Rescued From Edge of Kentucky Dam Girl Struck by Plane on Florida Beach Dies Rodents Rampant in Gardens Around Louvre House to Vote on Slimmed-down Bill for Border Looming Demand Could Undercut Flight Safety Raw: 2 Shells Hit Fuel Tank at Gaza Power Plant Raw: Massive Explosions From Airstrikes in Gaza Giant Ketchup Bottle Water Tower Up for Sale Easier Nuclear Construction Promises Fall Short Kerry: Humanitarian Cease-fire Efforts Continue