What sets successful businesspeople apart from the pack? Access to capital, connections, timing and even luck certainly contributes.
But information is the key factor. I don't mean access to information; I'm talking about the way successful business people use information.
One such example is the September Hogs and Pigs Report. A lot of information about your future is contained within those pages.
Breeding herd numbers are still below year ago levels, but farrowing intentions are the key. Intentions can always change, but that means they can increase as well as decrease.
September/November farrowings are pegged for a 1.3 percent increase over 1999. The December/February period is set to be 3.4 percent higher. January/March intentions aren't part of the September report, but you should expect to see year-over-year growth when the December report comes.
Cheap corn is one reason why more sows will farrow. Another is that no one had to pour concrete to expand. Herds were cut back in 1998 and 1999, so there's extra space to fill.
Sow herds are more productive today. If you add only litter size growth (up 1.4 percent) to the September/November farrowing intentions, up 1.4 percent, you're looking at March/May slaughter that's 2.8 percent higher than in 2000. With current December/February farrowing intentions, hog slaughter next June/August could be up 4.8 percent.
What about fall 2001 Steve Meyer, ag economist for the National Pork Producers Council, says if you stick with a conservative 4.8 percent market hog growth projection from the yet unknown January/March farrowings, we could have 27.118 million market hogs come to market next fall. That would eclipse 1998's record 2.669 million. Commercial slaughter in 2001 could hit a record 102 million hogs.
Packing plant capacity still holds the trump card. Seaboard has the site for a new plant, but it won't be ready for next fall. Packers seemed to have massaged their systems and found a bit more capacity. Farmland's Crete, Neb., upgrade will add another 5,000 head per day. By next fall, daily capacity could be at 390,000, up from 380,000 now. But even at that rate, 2 million hogs per week is too many, and a 27.118-million head fall slaughter spells weekly kills of 2.1 million, notes Meyer.
Canadian hogs are still a factor. Market hogs are coming in at a slower rate, but still total nearly 2 million head a year. Meanwhile, Canadian feeder pigs entering the United States are exceeding 2 million head annually.
Canadian market hogs are tied to pre-arranged contracts. Once those run out, more of those hogs could stay home – 20 percent to 30 percent suspects Meyer.
However, the feeder pig situation reflects a changing business structure. More U.S. producers are finishing hogs of Canadian origin, and those hogs will be slaughtered here.
Cheap corn surfaces again in hog weights. Corn looks like it will remain cheap and that means weights will continue heavy, equaling more total pounds of pork.
Beef production will set a record this year, and declines may not occur until spring 2001. Regardless, there will be plenty of beef to compete with pork.
Boneless chicken breast demand is sluggish and the industry has overproduced. Next year, that industry could see it's first production decline in 28 years. But those folks don't want to risk losing market share. They will delay production cuts, so abundant supplies and low prices will compete with pork.
Other questions surround the U.S. economy and whether it will cool off. Will oil prices temper consumer spending? In terms of purchasing patterns, meat is the first to feel the pinch.
Exports remain positive, and large pork supplies and low prices help those sales. China offers tremendous potential, but there's still a lot of politics to work through. Progress there will be slow.
Of course there are lots of other facts and insights on this topic – finding information is typically not the problem. The important thing is to consider the many aspects of this market and use the information as a roadmap to make the decisions that can help your business succeed.