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Weekly outlook
Pork problems
[JULY
16, 2002]
URBANA — The worst may be
yet to come for pork producers in 2002, said a Purdue University
Extension marketing specialist.
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"After disappointing prices during the
first half of 2002, the pork industry may still not have seen the
worst, as losses are expected to mount this fall and winter," said
Chris Hurt. "During the last half of 2002 and the first half of
2003, pork supplies are expected to be nearly 3 percent larger than
during the same period a year earlier.
"Large supplies will keep hog prices
depressed, while rising feed prices will increase costs. The period
of losses is expected to span from this fall until the late spring
of 2003."
Hurt’s comments came as he reviewed the
present and projected state of the hog industry in the wake of USDA
reports. The USDA’s June inventory report indicated that the
nation’s breeding herd was only slightly larger than one year ago,
but the market herd was up 2 percent. The largest numbers of market
hogs were at heavier weights.
"For example, the number of pigs which
will be ready for market in July were 4 percent greater, but those
that will be ready for market from August to November were only 1
percent greater," said Hurt. "The recent large rate of increase in
slaughter numbers should taper off into August, but market weights
are expected to continue to rise about 1 percent over the next
year."
The breeding herd seems to have grown
in the past year in some traditional family farm states, while
shrinking in some more corporate-oriented states. The breeding herd
was up a surprising 10 percent in Nebraska. Other increases were 7
percent in Illinois, 6 percent in Ohio and 1 percent in Iowa.
However, some Midwestern states had
decreases, including Indiana, down 6 percent; Missouri, down 3
percent; and Minnesota, down 2 percent. Two corporate-oriented
states reported fewer sow numbers. Colorado, which has seen sow
depopulation in recent reports, was down 12 percent and Oklahoma
producers took a break from expansion, posting a 3 percent decrease
in their breeding herd. Texas remained in strong expansion, with an
11 percent breeding herd rise.
"The larger-than-expected number of
hogs to come to market this year is a result of a larger expansion
in the breeding herd last year," said Hurt. "Pork producers
responded to a period of strong profits spanning from the spring of
2000 through the summer of 2001. During this period, estimated
profits averaged over $10 per live hundredweight, or about $27 per
head.
"Producers report a 2 percent increase
in sow farrowing intentions this summer and a 1 percent increase for
this fall."
[to top of second column in this
article]
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Live hog prices are expected to average
in the higher $30s this summer, with a plunge to the lower $30s as a
fourth quarter average. Lows could reach the higher $20s during some
weeks, most likely from mid-October through November, Hurt said.
"Prices are expected to average in a
range of $31 to $35 in the first quarter of 2003 and in the mid-$30s
during the second quarter," he noted. "Based on these hog price
projections and current futures prices for corn and soybean meal,
losses are expected to average about $20 per head this fall, $17 per
head in the winter, and $12 in the spring quarter of 2003.
"Unfortunately, there is a possibility
that losses could be larger."
Hurt noted that the increases in corn
and soybean meal prices this summer have already added about $2 per
live hundredweight to the costs of production, with current
estimates of about $39 per live hundredweight. Weather over the next
two months will largely determine whether feed prices continue to
move higher or abate. If the crop is severely damaged by dry
conditions this summer, hog production costs will be driven sharply
higher.
"With $3 per bushel corn futures and
$240 per ton soybean meal futures, costs of production would be
pushed to $44 per hundredweight," said Hurt. "Under this situation,
losses this fall would be extreme, averaging an estimated $34 per
head.
"Losses of this magnitude would cause
some additional liquidation of the breeding herd, further depressing
hog prices from current projections. Of course, weather could also
be benevolent and provide yields that approach normal."
Hurt recommended that producers
consider the possibility of sharply higher feed costs and evaluate
the use of call options for upside price protection. There are no
opportunities to lock in profitable hog returns at the current time,
so most will want to take a wait-and-see attitude with regard to
forward pricing hogs.
"Low hog
prices for this fall and winter have been well anticipated by the
futures market, and sometimes this means that prices will not be as
low as anticipated," said Hurt. "Those who cannot withstand, or are
unwilling to undertake, a nine-month period of losses should
evaluate the alternative of starting to liquidate or reduce their
herd size now."
[U of I
news release] |
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Crop suitability maps
available
[JULY
12, 2002]
URBANA — An Internet site featuring 414 different crops
and their suitability for Illinois soil and climate conditions is
now available from the Illinois State Water Survey. The site is
designed to help farmers identify and find information on crops that
they might like to grow.
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"This is a tool to
help growers determine what alternative crops they may want to
produce," said Steve Hollinger, research scientist with ISWS.
"Farmers can explore the site and find information on crops that
match the conditions in their area."
Initially, Hollinger
and Roger Bowen, an agronomist with ISWS, identified 986 different
plants from all over the world as potential alternative crops. They
then compared soil and climate requirements such as pH, drainage,
texture, temperature, precipitation, winter minimum soil temperature
and growing days to Illinois conditions and made maps for each
variable to show the relationship.
"We didn’t want to
enter any bias into it, otherwise there’s no way this would work,"
Bowen said. "We wanted to see what the numbers told us, what the
requirements actually were for each crop. For example, there are
areas in southern Illinois where cotton will grow, but we don’t
think of cotton as an Illinois crop. If we had been biased, we
wouldn’t have included cotton as a potential crop for Illinois."
Of the plants
included in the list of those suitable for Illinois, none of them
surprised the researchers even though many of the crops came from
other parts of the world.
"I can’t think of any
crops on the list that were really unexpected," Bowen said. "I think
it really points out how blessed we are with good soils in the state
of Illinois and how the climate fits the needs of many crops."
[to top of second column in this
article]
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The maps are
designed to be a starting point for farmers to find information.
The decision to grow the crop and the success of it once in the
field cannot be determined by this information alone.
"For us to be sure
these crops will grow here, much more research is needed," Hollinger
said. "We need to learn how the crop grows, the best way to grow it
and how to improve genetics that increase yields. We’ve opened the
door and, hopefully, there will be other people with the expertise
to get the ball rolling on those other factors."
Hollinger hopes to be
able to expand the maps to include the entire country. Creating the
maps and Web page for Illinois took about two years, most of which
was spent compiling the information into an applicable form. The
rest of country would take approximately one more year.
"Maps for the whole
country would make the information much more usable. If there is a
crop that is suitable for Illinois, it may be even more suitable for
some other area. Some places may be more competitive for a
particular crop, even though there are very few states that will
have as good of a competitive advantage as Illinois does."
The Illinois Council on Food and
Agricultural Research funded the project. The alternative crops site
can be seen at
www.sws.uiuc.edu/data/altcrops/.
[U
of I news release]
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Pesticide
container recycling available
[JULY
8, 2002] The
Illinois Department of Agriculture has arranged to offer free
pesticide container recycling again this summer. Sites will begin
recycling in July and continue through August. Collection sites will
accept only No. 2 high-density polyethylene plastic agricultural
containers that are clean and dry. Participants are also responsible
for properly rinsing them and removing all caps, labels, booklets
and foil seals.
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Collection sites in our immediate
area include Mason County Service Company at Easton on the afternoon of July 31
(contact Jim Kiel at 800-331-0548); Lincoln Land FS at Greenview on the morning
of Aug. 1 (contact Mark Millburg at 217-243-6561), AgLand FS at Lincoln on the
afternoon of Aug. 1 (contact Tim Bennett at 217-732-3113), and Williamsville Ag
Center at Williamsville on the morning of Aug. 2 (contact Brad Jones at
217-566-3383).
The collection program is a great
way to dispose of pesticide containers. It is a cooperative venture between the
Illinois Department of Agriculture, Growmark, the Illinois Fertilizer and
Chemical Association, Tri-Rinse, United Agri-Products, UAP Richter, the Illinois
Farm Bureau and University of Illinois Extension.
Insects everywhere
It seems like this summer we have
had an abundance of insect problems. The drier, warmer weather made us guess we
would probably have an abundance of problems. There are plenty of insects
wherever we look, whether it is around the home, in the garden or in the fields.
One of the more
common insects the past three weeks or so has been the leatherwing
beetle. It is also called a soldier beetle. These beetles look like
lightning bugs without the lights. They are actually beneficial, as
they eat other insects. When the numbers are as large as this year,
they usually seek an alternate food source — pollen. These beetles
have been very noticeable around linden and basswood trees the past
few weeks.
[to top of second column in this
article]
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[Photos provided by John Fulton]
[Leatherwing beetle]
[Japanese beetle]
Another insect that has been causing
havoc in the area is the Japanese beetle. It is beetle smaller than
a June bug but gold and green in color. It can cause severe damage
if beetle numbers are high. Control recommendations are generally to
spray with Sevin (carbaryl) insecticide. Treatments are more
effective in the morning or evening. Using diazinon insecticide
would also provide some control. The other side of the Japanese
beetle situation is that there is a grub stage, so control of the
grub in a month or so may be beneficial to your lawn and help reduce
next year’s adult population.
[John
Fulton]
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Special
baking contests
at state fair
[JULY
1, 2002]
Contestants are
invited to prepare gingerbread houses and Spam recipes to enter at the
Illinois State Fair in August.
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Awards will be given for the most creative
entries in the Brer Rabbit® Molasses Gingerbread House Contest at
the state fair. Both beginners and gingerbread house enthusiasts are
invited to compete for cash and prizes. In 2001, judges picked
winning entries ranging from traditional to elaborate, including a
castle, a detailed tree house with garden and another resembling the
"Old Woman in a Shoe." Any theme entry is welcome that uses Brer
Rabbit molasses and is up to a foot tall, wide and deep, base not
included. Entrants must also bake and enter one dozen gingerbread
cookies.
Winners are selected based on
appearance (50 percent), originality and creativity (40 percent),
and taste (10 percent). Creators are awarded $150 for first place,
$75 for second and $25 for third. People of any age may enter, with
one entry per person or group. Several people may work on one entry,
but one person represents the group.
[to top of second column in this
article]
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The Illinois State Fair will be one of
70 fairs hosting the Spam® Oven Roasted Turkey Contest. Using the
Spam turkey and up to nine other ingredients, contestants are to
create an original main dish, appetizer, casserole, stew, stir-fry,
salad sandwich or any other recipe. To focus on convenience, cooking
time may not exceed 30 minutes.
Judges select winners based on taste
appeal (40 percent), appearance (30 percent) and originality (30
percent). The three best entries win cash awards of $150, $50 and
$25, and first-place winners advance to national judging for a
$2,500 shopping spree and an all-expense-paid trip to Minneapolis.
To enter
either contest, contact the entry department at the Illinois State
Fair, 782-6661, by July 15. More details for the gingerbread contest
are on page 90, and those for the Spam contest are on page 86 of the
general premium book.
[News release]
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