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Pork Expo: Profitable Hog Prices Raise Producers' Spirits

by 5m Editor
15 June 2004, at 12:00am

IOWA - The unexpected return of profitable markets this year has lifted the spirits of hog producers who are attending the Pork Expo's educational seminars and other events, all with links to the pork industry.

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During a commodity roundtable held Thursday afternoon, representatives of the pork, cattle, corn and soybean industries presented their views to media and Expo attendees on the need of working together for the common good.

Pam Johnson, with the National Corn Growers research and business development action team, said about 60% of the nation's corn production is used in domestic livestock and poultry production. In the state of Iowa, two-thirds of the corn grown is used for livestock production.

Curt Raash, director of the Iowa United Soybean Board, said the combined U.S. livestock and poultry industries remain the No. 1 customer of U.S. soymeal.

"Whatever hurts the livestock sector hurts the corn industry," Johnson said, and added that is important for the corn growers to work closely with the livestock industry in addressing various issues that arise.

Johnson also said that a coalition has been formed from among the commodity groups to help livestock and grain farmers alike to operate within the environmental rules to be good stewards and to be successful.

Craig Christensen, president of the National Pork Board, said U.S. livestock and grain producers are being challenged by a number of issues such as environmental regulations, so it is important for the various sectors to work together.

Steve Meyer, president of Paragon Economics and a consultant to the NPB, said the single largest factor or demand driver for pork this year has been the increased popularity of low-carbohydrate diets. Demand for all species except turkey has increased by about 5%, he said.

Meyer said a key challenge for the meat industries will be to find how it can capture this demand boost on a permanent basis. "Some will be lost over time, but the goal is to hang on to it as much as possible," he said.

Meyer also said there is very inelastic demand for meats in general, and there is the potential to overproduce.

Other issues include changes that have occurred over several years in farming operations. Where once most farms produced crops as well as livestock, and most farms faced the same issues of dealing with livestock waste, now most farms are specialized. The panelists said that now, a grain-only farm may neighbor a livestock operation, and there is more potential for problems to develop between the two.

Glen Rowe, region 5 vice president of the National Cattlemen's Beef Association, addressed the issue of how U.S. consumers reacted to the case of bovine spongiform encephalopathy, or mad-cow disease, in December. He said the finding had very little effect on consumption even in the first 30 days after the case was discovered and virtually none beyond that.

Rowe credited safeguard steps that have been in place long before the discovery, and consumers remained confident in the safety of U.S. beef. He also a few more cases of mad-cow disease might be found with the increased testing of cattle set to begin by the U.S. Department of Agriculture.

The panelists agreed that the various commodity groups must be prepared to address issues proactively and be honest and forthright with the public.

There is export growth potential for each of these commodities, the panelists said. Meyer considers Asia as the greatest region of opportunity due to the large population in China and due to improving economies in the Asian countries.

The panelists also agreed that the commodity checkoff programs are very important in order for each to move forward and in working together to expand sales. The checkoff programs, particularly for cattle and hogs/pork, have been under fire. Cases against the beef and pork checkoff programs have been sent to the U.S. Supreme Court.

Source: eFeedLink - 15th June 2004

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5m Editor