Another impact of US Ethanol policy?

I’ve been tracking USDA SEW and feeder pig pricing reports since 1999. Beginning in 2003 I’ve also been tracking both the source and destination of the pigs cited in the report (http://www.ams.usda.gov/mnreports/nw_ls255.txt). This morning I did some quick graphing and averaging to better understand the destination reporting.

For the years 2004-2009, 51% of the pigs in the report were destined to end up in Iowa facilities. From 2010 on-ward, this has shifted to 62% of the pigs are now destined for Iowa facilities. The major shift in destination (demand) occurred in the summer of 2009.

I’ve written before regarding the very strong demand in Iowa for pigs (both weaned and feeder) to grow to slaughter weight. Iowa producers had 31.9% of the kept for market inventory in the June 1, 2013 USDA Hogs and Pigs report.

I think one of the drivers of this increased demand is the growing impact of ethanol on grain production economics. As acres shift from historic corn/soybean rotations to a heavier balance of corn acres in response to profit potential, corn farmers have come to understand better the role livestock manure can play in improving their yield potential and reducing their reliance on inorganic fertilizer sources.

As an extension swine specialist in Nebraska, in the early 2000’s I was involved in many efforts to convince cash grain farmers than swine manure was a benefit, rather than a secondary source of nutrients that should be discounted. Today I’m aware of many grain producers who are actively seeking access to swine manure for its agronomic benefits.

Today we have an apparent excess finishing capacity in the Midwest, with many reports of barn owners seeking pig owners to fill sites later this summer and fall. At the same time there is a growing list of people (generally corn producers) seeking to have new facilities constructed on their sites so they can access the manure.

Manure has gone from a residual by-product of pork production that was ‘disposed of’ to being an important consideration in the economics of both pork production and corn production.

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