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Ron Plain Professor of Agricultural Economics University of Missouri-Columbia http://web.missouri.edu/~plainr/

Swine Industry Outlook Worse than 1998?. Ron Plain Professor of Agricultural Economics University of Missouri-Columbia http://web.missouri.edu/~plainr/. Iowa Farrow to Finish Profits, 1965-2008.

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Ron Plain Professor of Agricultural Economics University of Missouri-Columbia http://web.missouri.edu/~plainr/

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  1. Swine Industry Outlook Worse than 1998? Ron Plain Professor of Agricultural Economics University of Missouri-Columbia http://web.missouri.edu/~plainr/

  2. Iowa Farrow to Finish Profits,1965-2008 1965-74: $10.04/head profit 1975-84: $14.22/head profit 1985-94: $10.51/head profit 1995-04: $ 0.52/head loss Source: John Lawrence, Iowa State University

  3. Iowa Farrow to Finish Profits, 1997-2009 Source: John Lawrence, Iowa State University

  4. Pig/Month Accumulated Profits, 1990-2009 Source: John Lawrence, Iowa State University

  5. Corn Milled for Ethanol Forecast % corn for ethanol: 2000-01: 6% 2005-06: 14% 2007-08: 23% 2008-09: 31% 2009-10: 34%

  6. Source: LMIC

  7. Weekly Corn & Ethanol Prices, 2007-09 Source: LMIC

  8. Weekly Gasoline & Corn Prices, 2007- 09 Source: U.S. Energy Information Administration

  9. Source: LMIC

  10. 2007 Renewable Fuels Mandate

  11. Ethanol Production, 1990-2016 mandated use actual production Beginning in 2015, the U.S. will annually use more corn to make ethanol than the U.S. produced in any year before 1971

  12. Recent EPA DecisionsU.S. corn ethanol has a worse impact on the environment than gasoline due to land use impact, i.e. more acres being croppedBrazilian sugarcane ethanol reduces GHG emissions by 64% compared to gasoline

  13. U.S. Average Corn Price, 1908-2008 Source: USDA/NASS

  14. U.S. Average Corn Price, 1908-2008 1942-1972 30 years Avg $1.26 1908-1942 35 years Avg $0.78 1973-2006 34 years Avg $2.37 Source: USDA/NASS

  15. U.S. Average Corn Price, 1908-2008 What’s the next level? 1973-2006 34 years Avg $2.37 1942-1972 30 years Avg $1.26 1908-1942 35 years Avg $0.78 The 1940s step raised corn price 62%; the 70s step 88%. A 75% step will take corn to $4.15/bu

  16. Northwest Iowa Prices, 2006-09 Source: LMIC

  17. DDGS Price as % of Corn Price, Northwest Iowa, 2006-09 Source: LMIC

  18. WDGS Price as % of DDGS Price, Northwest Iowa, 2006-08 Source: LMIC

  19. Impact on hogs

  20. Cost of Slaughter Hog ProductionIowa State University Calculations, 1987-2009 Source: John Lawrence, Iowa State University

  21. Hog Price & Cost, 1996-2008 2008 hog prices were $2.60 above the 13 year average 2008 production cost was $13.85 above the 13 year average

  22. Breakeven Hog Price & U.S. Corn PriceIowa State University Calculations, 1990-2008

  23. Production Efficiency Since 1930, the U.S. has reduced sow inventory by 42% and increased annual pork production by 245%

  24. Pigs Per Litter, 1930-2008USDA Hogs & Pigs Reports

  25. Litters Per Sow Per Year, 1930-2008

  26. Pigs Per Sow Per Year, 1930-2008USDA Hogs & Pigs Reports

  27. Average U.S. Hog Carcass Weight, 1930-2008

  28. Annual U.S. Pork Production Per Sow, 1930-2008 1930-80 growth rate: 2.027% 1980-07 growth rate: 2.793%

  29. Hog Cycle

  30. Annual U.S. Pork Production, 1930-2008 In 2008, U.S. pork production was 8.2% above trend

  31. U.S. Commercial Hog SlaughterQuarterly Data, 1970-2009

  32. Terminal Market Barrow & Gilt PriceQuarterly Data 1970-2009

  33. Hog Price FlexibilityQuarterly Data 1970-2009 % ch T Mkt B&G price / % ch com hog slt In 9 of last 19 quarters, price & slaughter moved in the same direction

  34. International Trade

  35. Source: USDA/FAS

  36. Forecast Change in Pork Production -----Percent Change----- Country 2007-08 2008-09 China +7.6% +5.5% E.U.-27 - 1.4% - 1.9% USA +6.4% - 2.5% Brazil +0.8% - 0.2% Russia +7.9% +4.1% Canada +1.4% +2.1% Vietnam +1.0% +0.0% Japan - 0.1% - 0.7% WORLD +4.0% +1.9% Source: USDA/FAS, April 2009

  37. Source: USDA/FAS

  38. Forecast Change in Pork Imports -----Percent Change----- Country 2007-08 2008-09 Japan + 4.7% - 2.1% Russia + 17.8% -28.8% Mexico + 18.6% -11.2% S. Korea - 3.8% - 7.0% U.S.A. - 14.1% + 1.1% Hong Kong + 14.6% - 0.3% China +117.2% -30.2% Canada + 14.0% + 5.1% Australia + 7.8% - 7.9% WORLD + 16.3% -13.3% Source: USDA/FAS, April 2009

  39. Source: USDA/FAS

  40. Forecast Change in Pork Exports -----Percent Change----- Country 2007-08 2008-09 U.S.A. +48.6% -13.2% E.U.-27 +33.4% -27.1% Canada + 9.3% + 1.9% Brazil - 14.4% - 2.4% China - 36.3% - 5.8% Chile - 4.1% - 8.5% Mexico +13.8% + 4.4% Australia - 11.1% + 4.2% Vietnam - 42.1% + 0.0% WORLD +18.9% -12.4% Source: USDA/FAS, April 2009

  41. 2008 was the 17th consecutive record year for U.S. pork exports

  42. Source: U.S. Meat Export Federation

  43. U.S. Pork Imports & Exports, 2000-2009

  44. U.S. Pork Production, Exports & Imports, million pounds, 2007 & 2008

  45. U.S. Pork Exports, 2008 Change From Year Ago Country 000 lbs Percent Japan 250,972 + 23.39% Mexico 222,617 + 49.32% Canada 54,712 + 14.88% China & HK 496,336 +139.79% S. Korea 32,113 + 12.12% Russia 185,757 + 76.03% Australia 31,125 + 40.33% TOTAL 1,527,132 + 48.62%

  46. U.S. Pork Exports, Jan-April 09 Change From Year Ago Country 000 lbs Percent Japan 36,048 + 8.45% Mexico 95,933 + 53.95% China & HK -221,626 - 64.18% Canada - 8,998 - 6.81% S. Korea - 4,730 - 3.92% Russia - 70,222 - 47.22% Australia 12,338 + 39.95% TOTAL -166,768 - 10.79%

  47. U.S. Pork Exports, 2005-2009

  48. Pork Exports & Frozen Pork, 2006-09

  49. 2008 hog imports were dn 6.6% compared to 2007

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