SwineCast 0372

SwineCast 0372 Show Notes:

  • Presentation on the unsustainability of current U.S. fiscal policy from the American Farm Bureau Federation Convention...  The Deficit Wakeup Tour

U.S. Pork Exports Are Setting Up for a Tough Time in 2009 but Cross Your Fingers

     We are facing the first year-over-year decline in net exports since the U.S. industry became a net exporter in the mid 1990s.  Even with the potential prospect of fewer total pigs slaughtered in the U.S. in 2009, due to a potential decline in both U.S. production and imports of weaned pigs and finished animals from Canada, 2009 seems to be setting up to be a very tough year.  Here are the reasons for caution and why the spring futures prices may fall to meet the slogging cash prices.

     First, we now know that all of the major countries which are key importers of U.S. pork are facing substantial declines in GDP, declining land and home values, increased unemployment and in one case, the potential descent into political chaos. 

Here is All You Need to Know About MCOOL

     According to the USDA talking points released yesterday (1/12/2009) regarding the final estimates for implementing country of origin labeling:

1. The first year implementation costs for directly affected firms is estimated to be 2.629 billion dollars.

2. Costs per firm are estimated to be $370 for each producer, $48,219 for intermediaries, and $254,685 for each retailer.

3. The estimated cost in higher food prices and reduced food production in the tenth year after implementation is 211.9 million dollars.

     Now for the benefits expected:

     "The expected benefits from the implementation of this rule are difficult to quantify.  The Agency's conclusion remains unchanged, which is that the economic benefits will be small and will accrue mainly to those consumers who desire country of origin information." 

2009 and Beyond Part II

     Worldwide demand for natural resouces, value-added food items and consumer goods is down sharply as a dramatic slowdown of the world's largest economies continues.  The contraction phase of this worldwide recession is still underway at the beginning of 2009 and will likely continue well into at least the first quarter. 

     One of the reasons it is hard to predict when the recession will bottom out is that there are most likely still "land-mines" of hidden corruption yet to be exposed and absorbed as losses by the remaining productive sectors.  These losses occur in business processes and supply chains that are linked, so that a kind of domino effect or snowballing contraction must take place before the full impact of each phase of the slowdown is fully realized.  This takes time and tends to come in waves, as tipping points are finally breeched.

2009 and Beyond: The New Strategic Environment, Part 1

     Sometimes its hard to tell if recent events, like the generalized global economic meltdown, cast a shadow that is a vapor and will burn off as the sun comes out again, or whether they are a harbinger of a more persistent, new strategic environment in the global market and political system.

     There is certainly a feeling in the air that some substantial things have changed but time will tell if they are persistent or even fully realized.  Some of the things which form the emerging global situation that U.S. agricultural will operate in include:

Swine Industry Update for beginning of year

Mark Greenwood
January 2009

SwineCast 0366 for December 22 2008

SwineCast 0366 Show Notes:

Swine Industry Update: I must be dreaming

Mark Greenwood
November 2008

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