Pork producers struggle through drought, sending more young female hogs than ever to slaughter

More female hogs than ever are being sent to slaughter because producers can't afford high feed prices caused by this summer's oppressive drought. Sows are building blocks of herds, so slaughtering them not only shrinks herds but expands the pork supply, sending prices plummeting, P.J. Huffstutter and Theopolis Waters of Reuters report. Producers are left to either use savings to survive, or sell herds and leave the business. (Photo by John Gress)

Just under 10 million head of hogs were sent to slaughter in August, the most ever for that month, according to data analyzed by Reuters. But, the U.S. Department of Agriculture in its quarterly inventory of hogs and pigs on Friday said the number increased slightly through Sept. 1. There were 67.5 million head, up 3 percent from June 1.

Still, large producers are "scouring the Midwest to snap up whatever feed they can find, or are sinking tens of millions of dollars into importing [feed] from Brazil," Huffstutter and Theopolis report.

Humane Society looks to Wall Street to prompt change in pig-production practices

The Humane Society of the United States has bought shares in four major financial services companies in a bid to use shareholder pressure to force two of the nation's largest pork producers to stop housing pregnant sows in gestation stalls. The animal rights group said that its small investment is large enough to introduce proposals during shareholder meetings. The group, reports P.J. Huffstutter of Reuters, has successfully used such shareholder advocacy in the past to pressure food and agriculture companies to change corporate buying habits and production practices. (Wikipedia photo)

"By not changing over to alternative animal housing, claims the group, Tyson Foods Inc. and Seaboard Foods are putting their lucrative contracts with these customers at risk," reports Huffstutter. "McDonald's, the nation's top hamburger chain by sales, vowed in May that its U.S. business would only buy pork from farmers and other sources that do not use gestation stalls for housing their pregnant sows by 2022. Such stalls are used to confine sows during the breeding and post-birth process."

Seeing little success from the producers, "the Humane Society decided to a less-direct route and press its case with Tyson investors: JP Morgan Chase, , the biggest U.S. commercial and investment bank by assets; BlackRock, the world's biggest asset manager; Jennison Associates, a subsidiary of Prudential Financial, the second-largest U.S. life insurer; and Ameriprise Financial, a financial services company," Huffstutter reports. Tyson told her in an email that it is committed to humane animal treatment at all stages of food production, and expects the same from those farmers who supply products to it. Seaboard, the nation's third-largest pork producer, could not be reached for comment. (Read more)

Pentagon to buy six-month advance supply of meat from struggling livestock producers, on Obama order

The Defense Logistics Agency is buying a six-month advanced meat supply, estimated at more than $100 million, for its Department of Defense customers by order of President Obama to give some relief to the drought-riddled livestock industry. The DLA asked its top three vendors to buy, store and distribute beef, pork, lamb, chicken and catfish.

The vendor Subsistence provided hundreds of millions of pounds of meat to the U.S. military and other DOD agency across the world in 2011, reports Rita Gabbett of Meatingplace. Subsistence officials are negotiating with prime vendors on storage and distribution fees, estimated to cost between $2.4 and $3.3 million.

Would Obama's order to Pentagon to buy more meat raise prices for producers? Analysts disagree

The Obama administration has ordered the Pentagon to buy more beef, pork and lamb to try and help ranchers through the severe drought, prompting the Defense Department to determine whether it can afford to buy more. The military buys millions of pounds of meat every year to feed troops around the world.

Some analysts say the move would only help Obama politically, but others say it could be an opportunity for the Pentagon to pay less for meat it will eventually need and can freeze. Drought has forced up the price of corn, which livestock producers use as supplemental feed, and since they aren't able to make livestock heavier faster, they are forced to sell sooner than usual, Jennifer Rizzo of CNN reports. This causes more meat to be available, making prices drop, which also reduces the profit that ranchers have available to buy feed. Rizzo reports the mandate to buy more meat is an attempt to raise prices by taking more meat off the market.

Iowa State University economist Bruce Babcock told Rizzo the impact of these purchases is suspect. "The purchase is delaying the day of reckoning because ... it will raise their prices somewhat now and it will allow them to purchase more feed, but that feed cost isn't going to go down for a year," Babcock said. The livestock industry has to shrink by reducing herd sizes in order to afford corn in the future, he said. American Farm Bureau Federation economist Bob Young told Rizzo that even though the purchase would only make a small dent in the market, the move will ultimately help ranchers. (Read more)

Vilsack warns drought will worsen, raise prices; organic stock get a double hit as pastures dry up

The worst drought in decades is getting worse and will mean higher food prices for consumers, Agriculture Secretary Tom Vilsack said at a briefing in the White House Press Room yesterday. He also said the suggestion of waivers from ethanol mandates on oil companies isn't necessary because it's not affecting the price of corn, as some farmers have suggested.

Vilsack said an additional 39 counties have been designated as primary natural disaster areas, raising the total to 1,297 in 29 states. Here is the list. Russ Blinch of Reuters reports. Vilsack urged Congress to work with the administration to improve aid to farmers, something the new Farm Bill could do. The House has stalled on voting on its version of the bill. Peter Baker of The New York Times reports. Vilsack said more than three-quarters of U.S. corn and soybean crops are in drought-affected areas, and more than one third of those are now rated poor to very poor.

Corn prices have risen to almost $8 a bushel, making it difficult for livestock producers to buy animal feed. This will likely cause the price of beef, poultry and pork to rise late this year or early next. Iowa Pork Producers Association President Bill Tentinger told The Gazette in Cedar Rapids that high corn prices would force many pork producers out of business, and the new Farm Bill would only help crop farmers, not livestock producers. Analysts predicted a 4 to 6 percent increase in beef prices pre-drought, but Hibah Yousuf of CNNMoney reports consumers could see 10 percent increases if the drought and high corn prices continue.

Meanwhile, Bob Meyer of Brownfield reports, "The drought presents a particular challenge for organic livestock and dairy producers. Organic standards require a portion of the ration to include pasture, and when pastures have dried up that is a problem. Another problem is while the price of conventional corn and soybeans hits record highs, the price of organic corn and soybeans is even higher." For Meyer's eight-minute audio interview with Harriet Behar, outreach coordinator for the Midwest Organic & Sustainable Education Service, click here.

Humane Society tells 51 pork producers it will sue, alleging failure to report environmental violations

The Humane Society of the United States plans to sue 51 pork producers in North Carolina, Iowa and Oklahoma for alleged unreported ammonia releases. The organization said it identified the producers "after months of research," and said they release hundreds of pounds of ammonia each day. The research methods used to determine this were not revealed.

HSUS is sending letters of notice to producers affiliated with the National Pork Producers Council, which represents the U.S. pork industry, Rod Smith of Feedstuffs reports. The groups acknowledged that some producers are "attentive" to animal welfare and environmental issues, but some of the wealthiest "apparently refuse to comply" with public health laws. NPPC said HSUS is not alleging environmental harm, but paperwork violations. (Read more)