With a large-yielding corn crop expected this year, feed prices have been decreasing, which has turned around the outlook for hog profits.

“This year, the hog outlook is almost the opposite of what it was last year,” Hurt said. “Feed prices, especially corn, have been falling sharply. The hog outlook is profitable, so producers are more likely to be retaining or building the breeding herd and weights are expected to increase as producers hold on to market hogs longer to gain profits on every pound.”

The most recent hog numbers available from the U.S. Department of Agriculture showed that hog inventories are unchanged to somewhat larger compared to a year ago.

“Yet slaughter in recent weeks has been very low, seemingly indicating a divergence from USDA’s reading,” Hurt said.

Between mid-August and the end of September, slaughter rates dropped by an average of more than five per cent and weekly slaughter rates have been down anywhere from three to 10 per cent.

PEDV effect

One explanation for the perceived difference in USDA’s inventory numbers and slaughter rates could be related to animal deaths from the porcine epidemic diarrhea virus, or PEDV. The USDA doesn’t track PEDV deaths, so Hurt said those numbers aren’t known for certain and it could be several months before hog markets are able to sort out the effects of the virus.

Another explanation for seemingly low slaughter rates could be attributed to the way the industry and markets evaluate herd numbers with year-to-year comparisons. Hogs went to market at higher-than-normal rates in 2012 because high feed prices meant the cost of production was higher than producers could sustain.

“What is being viewed as a very low slaughter in recent weeks might be due to an aberration in the slaughter numbers a year ago,” Hurt said. “The unusually high slaughter in the late summer of 2012 was being driven by the drought. Record-high feed prices and large anticipated losses provided a grave outlook for the industry, and some producers began to adjust.”

Those adjustments included an increase in sow slaughter and, in some cases, total-herd liquidation a year ago. Now that the outlook has improved, breeding herd expansion has likely started and hogs are being held to higher weights. These factors mean that fewer animals are headed to market right now and prices have strengthened.

“Given low slaughter numbers, cash prices of hogs have been sharply higher than in the same period in 2012 when they averaged $55 per live hundredweight,” Hurt said. “With lower slaughter this year, they have averaged about $68 since mid-August.”

Higher cash hog prices combined with lower feed costs are the important drivers for a profitable outlook over the next 12 months. Hurt said eastern Corn Belt live-hog prices are expected to average in the mid-$60s in the final quarter of 2013 and the first quarter of 2014. Spring and summer prices are expected to move slightly higher.

With the cost of production estimated at $57 per hundredweight, Hurt said cash prices in the mid- to high $60s would mean profits of more than $20 per head.

“These profits will enable producers to recover losses of about the same amount in the past year due to the drought,” he said.

The post Falling feed prices to push hogs back to profitable: Purdue economist appeared first on Alberta Farmer Express.

Commercial broilers descend from about three lines of chickens, and poultry used in egg production come from only one specialized line

As concerns such as avian flu, animal welfare and consumer preferences impact the poultry industry, the reduced genetic diversity of commercial bird breeds increases their vulnerability and the industry’s ability to adapt, according to a genetics expert.

Purdue University animal sciences professor Bill Muir was part of an international research team that analyzed the genetic lines of commercial chickens used to produce meat and eggs around the world. Researchers found that commercial birds are missing more than half of the genetic diversity native to the species, possibly leaving them vulnerable to new diseases and raising questions about their long-term sustainability.

“Just what is missing is hard to determine,” Muir said. “But recent concerns over avian flu point to the need to ensure that even rare traits, such as those associated with disease resistance, are not totally missing in commercial flocks.”

He said it’s also important to preserve non-commercial breeds and wild birds for the purpose of safeguarding genetic diversity and that interbreeding additional species with commercial lines might help protect the industry.

Historically, chicken producers selected birds for breeding based on certain desirable traits. Size was important for broilers, while egg production was critical for layers. Despite the fact that there are hundreds of chicken breeds, Muir said today’s commercial broilers descend from about three lines of chickens, and poultry used in egg production come from only one specialized line.

The research team included government, university and industrial scientists who conducted the study using the recently sequenced chicken genome. Obtaining DNA from commercial birds, they identified the number of alleles found throughout. Alleles are the genes that pair up to produce specific traits such as eye colour. By comparing the commercial breeds with native and non-commercial birds, they found that commercial lines had lost up to 90 per cent of alleles in some cases.

“We suggest interbreeding some experimental commercial poultry lines with native or standard breeds as a backup plan, or ace in the hole, to help the industry meet future challenges, as traits such as disease resistance may be found among the rare alleles of other birds,” he said.

Muir said maintaining a healthy genetic reservoir in food-producing animals is crucial in order to protect the nutritional demands of a growing global society. Poultry is the leading meat consumed in the United States and in most other countries, with chicken meat production increasing by 436 per cent since 1970, he said.

Muir also is project co-leader in a $10 million international effort to test a breeding strategy called whole-genome selection that could be used to improve the accuracy and efficiency of breeding methods. He said companies could use this technique to select for important parts of the DNA of donor birds from the standard or ancestral breeds and integrate those into commercial lines without dragging bad DNA into industrial populations. The approach selects breeding poultry based on specific traits such as bone density, animal well-being, feed efficiency and disease resistance

The research, led by Hans Cheng of the U. S. Department of Agriculture, is in the online edition of the Proceedings of the National Academy of Sciences at http://www.pnas.org/papbyrecent.shtml.

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