How do you straddle hogs and pigs? Ask the Greeks!
Posted in: Economics by admin on January 1, 2007 | No Comments
One objective of this study is to present the first known empirical application of the event induced trading strategy approach with respect to an agricultural commodity futures options market. The second objective of the study is to demonstrate a method for decomposing returns to a portfolio of options in such a manner that allows the researcher to distinguish between returns attributable to changes in volatility, changes in underlying futures prices, or any of
several other factors that affect options returns. The conclusion reached was that options markets could be inaccurately reflecting a combination of both futures price changes and volatility changes. The empirical evidence suggests that small but unidirectional price moves occurring in anticipation of the reports was also making a significant contribution to the long straddle returns.
Effect of environmental enrichment and breed line on the incidence of belly nosing in piglets weaned at 7 and 14 days-of-age
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Studies have repeatedly shown that belly nosing is the most common abnormal behaviours exhibited by early-weaned pigs, and as weaning age decreases, the incidence of belly nosing increases (Gonyou et al., 1998; Worobec et al., 1999). Furthermore, the effect of early weaning on behaviour persists well into the grow-finish phase of development (Gonyou et al., 1998; Worobec et al., 1999). Among members of the same litter and between litters, there is considerable variation in the incidence of belly nosing as well as in the amount of time it takes for the behaviour to commence following weaning (Fraser, 1978; Li and Gonyou, 2002). Li and Gonyou (2002) studied the temporal association of belly nosing with other behaviours in an attempt to identify the proximate cause of the behaviour. The authors found that the social environment can have a profound effect on the incidence of belly nosing, possibly explaining some of the variation in belly nosing observed between litters. Welfare concerns regarding the incidence of belly nosing in early-weaned pigs have reflected the environmental contribution to the development of the aberrant behaviour while the genetic component has not been researched beyond preliminary findings (Bench, 2005). The effect of enrichment and breed line on belly nosing in early-weaned pigs was investigated over two studies. In a preliminary study, 291 piglets were weaned at 7 days-of-age and observed over two consecutive days (pigs ranged from17 to 30 days-of-age at time of observation). Piglets were fed a liquid milk replacer diet for either 7 or 14 days following weaning. The pen environment was enriched by providing either an air-filled inner tube (Tube), rubber nipples in the feed trough (Nipple), or neither (Control). Pens were segregated by sex with 14–16 pigs per pen. Within pens, there were both Duroc and Yorkshire pigs. Instantaneous scan sampling by two observers was used to determine the incidence of belly nosing, belly sucking, and nosing and sucking other parts of the body. Yorkshire line pigs engaged in more belly sucking (3.97% versus 1.59%; P < 0.01), total sucking (4.30% versus 2.21%; P < 0.05), and belly-directed behaviour (9.2% versus 6.21%; P = 0.089) than did Duroc line pigs. Nipple enrichment effectively reduced the level of belly sucking, overall sucking and belly-directed behaviours in the Yorkshire line pigs, while Tube enrichment reduced other nosing and oral–nasal vices directed away from the belly in the Duroc line pigs. The second study investigated the effect of sire breed and sire within breed on the proportion of time early-weaned pigs spent belly nosing and belly sucking. Two hundred and forty-two crossbred pigs sired by Duroc (n = 120) and Large White (n = 122) boars were weaned at 14 days-of-age and observed at 18, 23, 28, 50, 63 and 91 days-of-age for belly nosing, belly sucking, other nosing and sucking, tail biting and other biting behaviours during the nursery and grow-finish phases of development. Continuous observations done live at 21 and 35 days-of-age were used to determine mean belly nosing and belly sucking bout durations. Pigs sired by Large White boars spent a greater proportion of time belly nosing (2.040%; P<0.01) and belly sucking (0.440%; P < 0.01) compared with pigs sired by Duroc boars (1.597% and 0.308%, respectively). In contrast, Duroc-sired pigs spent a greater proportion of time conducting other nosing (0.356%; P < 0.01) and other sucking (2.496%; P < 0.001) behaviours compared with Large White-sired pigs (0.173% and 2.063%, respectively). Individual sire also had a significant effect on belly nosing (P < 0.001), belly sucking (P < 0.001) and other sucking (P < 0.01) behaviours post-weaning. It was concluded that breed line differences might affect the incidence of nosing and sucking behaviours in early-weaned pigs, which may be reduced through the use of environmental enrichment tailored to the specific abnormal behaviours being performed.
EVALUATION OF CONTROL STRATEGIES FOR FOGGING SYSTEMS IN PIG FACILITIES
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Structural analysis and haplotype diversity in swine LEP and MC4R genes
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Knowledge about structural variation of candidate genes could be
important to improve breeding selection scheme and preserve genetic
variability in livestock species. Leptin (LEP) and melanocortin-4 receptor
(MC4R) genes are involved in the energetic pathway and are obvious
candidate genes for fatness. By sequencing LEP and MC4R genes in 72
pigs belonging to lean (Large White and Duroc), fat (Meishan and
Casertana) breeds and also Wild Boar, 98 polymorphic sites, of which
91 were novel, were found in the Leptin sequence while only the previously
described mutation was found in the MC4R gene. A total of 18
LEP haplotypes were observed and their distribution was unequal
among the breeds. The phylogenetic analysis showed two haplotype
branches distinguishing between lean and fat breeds.
Opportunities for Co-Product Utilization in Western Canada
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Overall, the markets of swine feed can be divided into two categories, the large volume, low margin diet market such as for grower-finisher pigs and the low volume, higher margin diet market such as for weaned pigs. For each category, specific sets of co-products will be used. The first category focuses more on the traditional market of co-(or by-) products from food or bio-processing. The second category will become an attractive market for the specific fractions created for feed purposes. This paper summarizes this vision and recent findings. The inclusion of co-products in feed will rapidly become economically attractive as the severity of grain shortage become evident. Initially, co-products will become attractive on a cost per tonne basis; their low inclusion rates should not hamper growth performance. Later on, when economics focus shifts more to cost per unit of productivity and less to maximization of growth performance, inclusion rates of these co-products might further increase. Starch fermentation and oil extraction results in these co-products being high in fibre and protein. Results of recent research using wheat DDGS (Widyaratne and Zijlstra 2007) and wheat millrun (Nortey et al. 2006) indicate that these co-products still provide valuable nutrients for swine, but also that their nutrient digestibility is reduced by fibre content. A range of processing techniques can be employed to fractionate crops. Overall, two groups exist, an up-front fractionation process allowing further processing of individual crop fractions and a process that involves the entire crop stock that separates one fraction the crop (as described before). Examples of the first group include dry milling and air classification, etc. Examples of the other group include current ethanol production procedures and oil extraction from canola. Dry separation techniques (dry milling/air classification) are particularly useful for the production of protein-rich fractions from non-oilseed legumes, such as field pea (Dijkstra et al. 2003). The advantages of dry over wet separation techniques are lower equipment and operational costs and the absence of effluents. However wet processing techniques usually result in fraction containing a higher protein or starch concentration. The feed use of value-added fractions further implies that not just the digestible nutrient content of these fractions should be described. Their functional properties relative to animal health, welfare, nutrient management, and pork quality must be considered but such benefits are not so tangible. Consideration of such benefits will ensure that their entire value and potential within commercial swine production can be reached. The rapid advancement of crop fractionation and the proliferation of processing facilities across North America will continue to drastically change the landscape for feedstuffs. In western Canada, the removal of transport subsidies provided a window of opportunity for the use of relatively abundant and affordable feed grains in the livestock industries. The emergence of the bio-fuel industry will place increasing pressure on the price and availability of feed grains, but should reduce the price pressure of protein-rich co-products. As a result, the use of these co-products is becoming rapidly more attractive. These co-products seem to fit now more often in the large volume low margin markets of grower-finisher pig feeds. Pork producers will have to explore these opportunities rapidly to remain competitive in the North America. The high-value crop fractions seem to fit the requirements of weaned pigs and in instances where specific functional attributes may enhance animal health, welfare, nutrient management or pork quality.
Where in the World to Grow Pigs? – Trends in U.S. Pork Production
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The United States and Canada have occupied premier positions as pork production locales for the past decade. Virtually nowhere else in the world has the combination of natural resources and know-how for pork production that exists in our two countries. Policy decisions and the changing world energy situation, however, are putting significant pressures on pork producers and processors in both countries; changing the future direction of both industries and causing us to re-think the two countries’ positions in the future world pork industry. This paper addresses several trends in the U.S. industry that are shaping it at present and that will continue to shape it in the future. The U.S. is expected to remain a major player in the world pork market but these forces could affect that position in coming years. Nothing is having a greater impact on current profitability and future plans than the growth of corn-based ethanol production in the U.S. Driven by higher oil prices, changes in oxygenating ingredients and widespread public support, the number of ethanol plants has expanded rapidly and continues to do so. These plants, not surprisingly, are generally located near major corn producing areas of the Midwest – the same place that the bulk of U.S. hog production is located. The demand for corn by ethanol plants is changing corn basis patterns drastically, driving up Iowa and Minnesota corn prices, and thus removing a major source of competitive advantage. As corn prices have risen, so have feed costs for U.S. pork producers. More than corn prices have driven the increase in feed costs. Soybean and soybean meal prices have risen as the soybean industry bids up prices in order to compete for crop acres. Higher feed prices and, now, lower hog prices have put an end to one of the most profitable periods in the history of the U.S. pork industry. However, consumer-level demand for pork in the U.S. has been more-or-less steady since the mid-1980s. 2006 marked the lowest level ever for the University of Missouri’s demand index but it rebounded some in 2007 and was 1.9% larger than in 2006 through August 2007. Export demand for U.S. pork remains strong even though productivity thus far in 2007 has been less than stellar. It appears likely that the U.S. will set its 16th straight record year for pork exports. U.S. productivity growth will resume over the next year or two. Much of the herd has now switched to later weaning and once that is accomplished, any true gains in sow productivity will be compared to the same production system one year earlier thus allowing the gain to show up in the data. In addition, circovirus vaccines are having the same “miraculous” impacts in the U.S. that they had in Canada and will thus begin to contribute greatly to productivity growth in terms of pigs reaching market weight and higher market weights as the number of light pigs is reduced. This has an impact on the U.S. hog cycle which can be traced back over 200 years, production changes being steadily and slightly positive over the past 3 years has made the hog cycle obsolete. Along with the demise of the hog cycle, is the presence of a highly inelastic hog demand that penalizes any large increases in output. The impacts of these trends on the U.S. climate for hog production is mixed. Environmental and social, small-farm pressure is still intense in many regions and serves to prohibit or at least significantly slow pork production expansion. Corn availability could well become an issue for industry expansion but many grain farmers are starting to question the wisdom of using corn for ethanol versus pigs simply due to the fact that ethanol doesn’t produce valuable crop nutrients in the form of manure. The pressure for more corn-on-corn production will enhance manure’s value and make pig feeding more attractive to many Midwestern grain operations. Whether the social climate will allow this production to happen remains to be seen. Things are changing but with change comes opportunity. It will be no different for the U.S. pork industry.








