Is Exchange Rate Pass-Through in Pork Meat Export Prices Constrained by the Supply of Live Hogs?

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The objectives of the article are twofold. First, a theoretical model that accounts for production and marketing lags is used to explain the pricing decisions of a firm that exports a processed good to two markets. The second objective is to measure Exchange Rate Pass-Through (ERPT) in pork meat export prices from three Canadian provinces (Ontario, Quebec, and Manitoba) to two destinations (United States and Japan) over the 1988–2003 period. The estimation results strongly support the hypothesis that predetermined supplies have a significant impact on export prices for two out
of three Canadian provinces. ERPT elasticity for Canadian exports to the United States is approximately in the range of −0.2 to −0.7. In the case of exports to Japan, the degree of misspecification involved with the standard ERPT
equation that only includes the Canadian dollar to yen exchange rate as well as a marginal cost proxy is quite large. The standard specification yields ERPT coefficients that are much smaller in absolute value than the ERPT coefficients found in the full system approach that includes predetermined hog supplies. Hence, failure to account for the dynamic nature of agricultural supply chains may result in significantly biased estimates of ERPT.

Mexico’s Changing Pork Industry: The Forces of Domestic and International Market Demand

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Once dominated by traditional and small-scale production
systems with little regulation, Mexico’s pork industry
now includes modern, vertically integrated production
systems and federal inspection of packing and processing
plants. Recent structural changes have resulted in three
distinct segments within the production and processing
sectors as the industry works to adjust to international and
domestic demand for better product quality, stricter sanitary
practices, and increased supplies yet continue to meet
the needs of low-income consumers. As the structural
changes continue, the industry faces several challenges that
will affect its ability to become both internationally and
domestically competitive. To meet these challenges, the
Mexican government is faced with decisions about implementing
and enforcing regulations and providing incentives
to encourage continued development and best serve
domestic consumers.

Hog Producers' Risk Management Attitudes and Desire for Additional Risk Management Education

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Hog producers in Indiana and Nebraska were surveyed about sources of risk, effectiveness of risk management strategies, and prior participation in and desire for additional risk management education. Ownership of hogs by the producer, size of operation, and age did have significant effects on ratings of both sources of risk and effectiveness of risk management strategies. Probit analysis found age, prior attendance, knowledge and prior use of the tool, level of integration, and concern about price and performance risk have significant effects on interest in further education about production contracts, futures and options, packer marketing contracts, and financial management.

Scale and Access Issues Affecting Smallholder Hog Producers in an Expanding Peri-Urban Market

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The study offers a new way of conceptualizing the problems that lead to the exclusion of
smallholders from live hog and pork markets, explaining why some smallholders participate
successfully, while others do not. Determinants are identified using limited-dependent variable
models based on the hypothesis that transaction costs, such as access to credit and market
information, affect market participation. The report also presents a contemporary approach to
measuring profit efficiency in hog production for the case of Southern Luzon, Philippines.
Although the findings of this study are specific to the Philippine context, many of the
issues confronted are common to the challenges of participation, upscaling processes, and
policy interventions across the developing world. The research has generated solid empirical
perspectives of the changing situation of poor smallholder producers in a high-value market
situation. IFPRI thus continues to examine the effect of mechanisms like contract farming on
collective action as a means of increasing smallholder participation in high-value markets,
particularly in developing countries in Asia and Africa, where small farms continue to dominate
the landscape.

Length of productive life of crossbred sows is affected by farm management, leg conformation, sow’s own prolificacy, sow’s origin parity and genetics

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The purpose of current study was to determine if the parity of the litter in which a female was born and the number of pigs within that same litter are associated with future length of productive life (LPL). An additional objective
of the study was to examine the associations of leg conformation, age at first farrowing, litter size at first farrowing, and age and backfat thickness at 100 kg on LPL in the Finnish crossbred (Landrace X Large White or Large
White X Landrace) population. The results indicate that farm X year interaction very clearly affects LPL. Thus, farm conditions and management are the first factors producers should examine if LPL problems exist within a pork operation. The results further indicated that gilts farrowing at an earlier age tended to remain in the herd for a greater amount of time when compared with gilts which farrowed their first litter at an older age. Additionally, first parity litter size was significantly associated with LPL. Lastly, sufficient genetic variation for LPL was observed such that it should be possible to improve LPL through traditional selection methodology in an efficient breeding programme.

The Transformation of Spain’s Pork Sector: Can It Continue?

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Unless otherwise stated, the term EU refers to the 15 member countries prior to the 2004 enlargement. Also, it is worth pointing out, that in general the pigmeat processing sector in the EU is much less concentrated than in the United States. One notable exception is in Ireland, where the sector is dominated by two firms. The largest exporters of pigmeat in the EU are Denmark and the Netherlands, whereas the largest importers are Germany and Italy. In 2002, pigmeat exports by Denmark and the Netherlands were almost three and two times larger, respectively, than Spain’s pigmeat exports, and pigmeat imports by Italy and Germany were about ten and eight times greater, respectively, than Spain’s pigmeat imports. Spain has achieved enviable success in modernizing and expanding its pork sector, but its producers and processors will need to continue along the path of rapid transformation to remain competitive.

Living High on the Hog: Factory Farms, Federal Policy, and the Structural Transformation of Swine Production

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Confined animal feeding operations (CAFOs), sometimes called factory farms or industrial animal operations, are defined by the Environmental Protection Agency (EPA) as livestock operations that do not sustain their own crops or other animal feed and that house more than 1,000 “animal units”—equivalent to 2,500 swine of 55 pounds or more. Hog CAFOs in particular have been widely criticized in the environmental, public health, and toxics literature. Main concerns include nutrient runoff from manure, which leads to water and soil contamination; particulate matter air pollution; and overwhelming odor. This study finds that after the passage of the 1996 Farm Bill, the average market price of hog feed was 26% lower than what the feed cost to produce. This decline brought operating costs for CAFOs down by 15%. The savings to CAFOs between 1997 and 2005 averaged $947 million per year, a 535% increase over the 1986-1996 period. Also drawing on data provided in two academic studies that assess the cost of alternative manure-management strategies, we find that the use of alternative technologies and/or the acquisition of more land to reduce over-application of manure would raise CAFOs’ operating costs by 2.4%-10.7%, depending on the strategy employed.
We conclude that in an economic climate of full-cost feed and with more stringent environmental regulation, CAFOs would see their operating costs rise by between 17.4% and 25.7%. According to USDA estimates, this could virtually eliminate the apparent cost advantage CAFOs have had over mid-sized diversified hog producers. With these added costs, CAFOs may have difficulty out-competing mid-sized, diversified hog producers purely on cost. It may well be shown that CAFOs’ apparent economies of scale have been less the result of efficiency than they are the result of government policies that have favored large-scale industrial animal production.

A source-differentiated analysis of U.S. meat demand

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Are exports a monotonic function of exchange rate volatility? Evidence from disaggregated pork exports

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The objective of this paper is twofold. First, a theoretical trade model accounting for production and marketing lags in agricultural supply chains is developed to analyse the effect of exchange rate volatility on the volume of trade. The second objective is to gauge to what extent trade flow responses to exchange rate/price volatility suggested by our theoretical framework are consistent with observed empirical responses. The theoretical model suggests that the
relationship between export price volatility and exports may be not monotonic, yet sensitive to changes in the parameters embodying risk preferences, the degree of volatility, and the mean export price.

The Changing Economics of U.S. Hog Production

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This report analyzes changes in the characteristics, production practices, and
production costs of U.S. hog operations over the past 15 years. The objective
is to emphasize economic relationships that have affected the size and
ownership structure of hog production and the impact of these changes on
industry productivity. It was found that while productivity gains can benefit consumers in terms of lower food
prices, structural changes that enable efficiency gains may also generate
environmental concerns. Increases in the scale of production resulting in
greater animal density may require operations to store manure in larger
lagoons/pits—creating concentrated levels of odor, ammonia emissions, and
the potential for larger manure spills. The concentration of hog manure
makes it more costly to use as fertilizer as more land is needed and transportation
costs to fields are greater. On the other hand, concentrating
manure sources in fewer locations potentially affects fewer people. Additionally,
greater concentration may make some manure treatment technologies
feasible (e.g., energy from biowaste, or processing into concentrated
fertilizer).