Click here to watch an interview with Randry Sprink at WPX as he takes on feed availiabity.
“Livestock finds itself in a very precarious position,” said Michael Formica, chief environmental counsel for the National Pork Producers Council, at a World Pork Expo press conference.
The short-term concern is whether adequate feed-grain supplies will be available to livestock and poultry producers late this summer before new-crop harvest gets underway. “We will see regional issues regarding the physical availability of feed,” said Neil Dierks, NPPC’s chief executive officer.
The long-term concern is whether this year’s delayed spring planting will extend feed-grain, particularly corn, supply problems in to 2012. “If we don’t have a record crop we could have shortages again next year,” Formica said.
“We’ve been very open about the feed availability issue,” Dierks said. NPPC and other pork industry personnel have been advising producers since January to ensure physical feed supplies are secured for July, August and September.
USDA’s estimate puts the corn carryover at about 724 million bushels, which translates to a 16-day or 17-day supply. “That’s very close to drying up the pipeline,” Formica said.
"The carry-over has been lowered all the time, now to historical lows, and what that's done is put a real emphasis on this year's crop production," said Dough Wolf, NPPC president.
In its March report, USDA projected 92.2 million acres of corn would be planted this year, but given spring weather and extended planting delays, final acreage will fall short. Estimates of 89 million to 91 million planted corn acres are starting to surface.
"That (92 million) would have given us an even carryover with this year but we all know that's not going to happen," Wolf said. "With flooding and deadlines we know there will be some that will not be planted."
Randy Spronk, vice president of NPPC, reported on lost acres due to flooding, including 2 million crop acres in North Dakota, 600,000 in Missouri, 500,000 in Mississippi. Louisiana has reported 3 million acres are flooded, but that’s not specific to cropland.
Regarding the potential corn and soybean impact, Steve Meyer, Paragon Economics, said “I’ve heard just due to the Missouri River flooding it could reduce new-crop corn by 400,000 bushels and soybeans by 350,000 bushels.”
“We are continuing to work with the administration and Congress to tweak the supply options,” Formica said. Among those efforts is trying to get USDA to release 4.4 million acres from the Conservation Reserve Program this year, and another 6.5 million next year. NPPC approached USDA Secretary Tom Vilsack with a similar proposal in March, but it did not progress.
NPPC is involved in a livestock task force that’s working with USDA to find other solutions. Just this week, NPPC’s Board approved action for the council to go to USDA to request that USDA waive the prevented planting restrictions tied to crop insurance programs. While planting corn is no longer an option for such acres, milo, winter wheat, soybeans and other feed grains could be, which would help alleviate the overall feed demand pressures.
Depending on how the long-term feed availability outlook materializes with new-crop corn, Wolf said it could trigger more cuts in sow numbers.
"All indications are that we're going to have tight supplies at the end of this summer, but if there is a significant reduction in available corn, there will be even tighter supplies in 2012," he said.