Delegates to the board of directors of the National Pork Producers Council (NPPC) have adopted a policy resolution calling on the council to work with the U.S. Department of Agriculture Market News Service to develop a process to estimate a net price for hogs purchased on the cash, or negotiated, market.
Currently, producers can access only the cash price of hogs on the cash market as the net price, which includes discounts or premiums for quality, cannot be measured until after harvest.
Only about 5% of hogs are bought on the cash market, and many contracts covering the remainder of hogs sold are based on the cash price. Delegates said accessing the net price would be a more accurate, or "successful," cash price.
Delegates said USDA has more than 10 years of mandatory price reporting data that could easily determine a formula for reconciling cash and net prices at the time of the cash transaction.
Delegates also called on NPPC to work with Market News to improve volume in morning purchase reports by incorporating into those reports data from after 1 p.m. on the prior day that is now included in the prior day report.
Delegates said the prior day hogs are not really slaughtered until the current day, and their inclusion in the morning purchase report would not only increase volume but address confidentiality protection of packers through that volume.
Delegates also directed NPPC to work with packers to develop consistent auditing mechanisms and requirements for animal welfare audits. Delegates said, currently, packers may have different requirements, which increases the complexity for meeting welfare audits for producers wanting to market to multiple packers.
The resolutions were passed during the NPPC delegate session at the National Pork Forum in Orlando, Fla., March 8.