National Hog Farmer is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Propane Shortage Challenges Pork Producers

The Minneapolis Star Tribune newspaper recently reported on the impact the propane shortage is having on Minnesota livestock producers. The paper quoted David Preisler, executive director of the Minnesota Pork Producers Association, as he explained that some of the state’s pork producers have been told by suppliers that they do not know when their next propane shipment will be arriving. As pork producers in cold-weather climates are well-aware, the problem is not limited to Minnesota.

The National Pork Producers Council (NPPC) is concerned for U.S. pork producers because in some regions of the country, distributors are rationing supplies. The National Propane Gas Association indicated that Minnesota, Missouri and Wisconsin have been particularly hard hit, but that spot shortages have occurred through the Midwest, Northeast and Southwest. Because most customers receive their propane by truck, the U.S. Department of Transportation recently issued emergency orders for 10 Midwestern and 12 Northeastern states, suspending the limits on the amount of time truck drivers can spend on the road.

The U.S. Energy Information Administration (USEIA) released a report last week on the propane supply situation. The report said that the onset of severely cold weather in recent weeks led to the extremely tight Midwestern propane supplies. According to the USEIA, the high propane prices in the Midwest are the result of both increased demand for crop drying in November and increased demand for space heating in the current cold weather.

A late-2013 corn harvest, along with cold, wet weather, resulted in strong demand for propane needed for drying corn (See graph above). For the week ending November 1, 2013, Midwest propane inventories dropped more than 2 million barrels, the largest single-week stock draw in any November since 1993. This demand prompted a strong upward price response, and propane at the Conway, KS, terminal moved to a 3-cent-per-gallon (gal) premium over Mont Belvieu, TX, during the first week of November, the first such premium in almost three years, according to report.

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Preview newsletter and get the latest news delivered right to your inbox every week!

After the harvest, logistical problems prevented the region from fully replenishing inventories before the onset of winter. The Upper Midwest is supplied with propane by pipelines (Mid-American and ONEOK) flowing north from Conway (home to 30% of the nation's propane storage), the Cochin Pipeline coming south from Canada, and from rail deliveries. The Cochin Pipeline, which delivers ethane and propane from Canada to the Upper Midwest, was out of service for maintenance from late November to December 20 and unavailable to deliver supplies. Rail transportation disruptions, both due to weather and other factors, curtailed deliveries from Mont Belvieu and Conway, as well as from Canada (See Figure below).

 

The most recent cold weather increased space-heating demand at a time when markets were already tight. As demand outpaced supply, inventories dropped further, by 1.5 million barrels and 1.2 million barrels for the weeks ending Dec. 6 and Jan. 3, respectively. Since the week ending Oct.11, Midwest propane inventory levels have dropped by 12.8 million barrels, compared with a drop of 7.3 million barrels for the previous five-year average for that period. By January 21, prices at Conway had vaulted to a 95-cent/gal premium to Mont Belvieu.

Strong demand surges, low inventories, and supply challenges have led several Midwest states to implement emergency measures to provide propane to heating customers, including suspensions of limitations on hours of service for propane-delivery truck drivers.

From early 2010 until November 2013, propane prices at Mont Belvieu, the nation's largest propane storage and market hub, have been higher than at Conway by as much as 30 cents/gal, prompting propane supplies to flow south on newly expanded southbound pipelines. High demand from the local petrochemicals industry and access to the global propane market via expanded HGL export capacity supported higher Mont Belvieu prices and encouraged propane from the Rockies (PADD 4) and elsewhere in the Midwest to flow south.

Read the U.S. Energy Information Administration report here. Visit the Star Tribune website here.

You might also like:

WASDE Report Suggests 2014 Could be a Banner Year for Pork Producers

It's All About PEDV in Pork Producer Circles

Mark Greenwood Receives Distinguished Service Award.

Mark Greenwood
<p>Mark Greenwood,&nbsp;Senior Vice President, AgStar Financial Services.</p>

National Hog Farmer contributing editor Mark Greenwood, Senior Vice President, AgStar Financial Services, was recently presented with the 2014 Minnesota Pork Board (MPB) Distinguished Service Award.

“As an international leader in the swine industry, Greenwood’s commitment and service to pork producers make him most deserving of the Minnesota Pork Board’s 2014 Distinguished Service Award,” MPB said in a news release about the award.

Born and raised on a hog farm in Southern Minnesota, Greenwood has worked in the swine industry his entire life.

“I love the swine industry and the people that work in it,” said Greenwood.  “Pork producers are some of the nicest people I have ever met and I consider them part of my extended family.”

Greenwood works closely with pork producers helping them understand industry trends, evolving animal care standards and the critical role risk management plays in today’s pork industry. “We do our best to make sure our clients are successful,” said Greenwood.

In 2005, he was named as one of National Hog Farmer’s Visionaries of the US Pork Industry. Greenwood’s knowledge and passion for the swine industry is known world-wide. He has had the opportunity to speak in South America, Europe and Canada about pork,  providing insight on where the industry is and what producers need to do to continue to be successful in the long term. He has also been quoted in numerous national and local publications and has given testimony to the U.S. House of Representatives Subcommittee on Agriculture about “The Economic Conditions facing the Pork Industry.” His enthusiasm for the swine industry is undeniable.

“Mark is very passionate about the pork industry and truly wants to find solutions for swine producers to succeed in the business,” said Dale Holmgren, AgStar Board of Directors and pork producer.

The swine industry also sees Greenwood as a valuable resource. He has spoken at Minnesota, Iowa, Illinois, Ohio and North Carolina Pork Congresses numerous times and at the World Pork Expo. “I am proud to be associated with where the industry is at today,” said Greenwood. “Seeing how far we have come and how successful our producers are today, makes me thankful to be a part of this industry.”

Greenwood also serves on the Government Relations Committee for the National Pork Producers Council, is a member of Pork Alliance and serves on the Feed Availability Taskforce for the National Pork Board.

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Preview newsletter and get the latest news delivered right to your inbox every week!

“Minnesota pork producers are some of the best in the world, because they are willing to share insight on what they are doing to help others get better,” said Greenwood.

It is easy to see the love and dedication that Mark has for the swine industry. He has written many articles and has done numerous interviews promoting pigs and producers. In 2013, he wrote an article entitled “A lead lender’s view of the pork industry,” for Benchmark.farms.com and has provided interviews for Fox News and Bloomberg.com.

Greenwood continues to serve as a resource for the swine industry. “I know all of the contributions and personal sacrifices he has made for this industry,” said Janet Basballe of AgStar, but to Greenwood it’s not a sacrifice. “I believe in giving back to the community as much as possible,” he said. “I would not be where I am today if it was not for the swine industry.”

Greenwood contributes to the National Hog Farmer Weekly Preview newsletter by writing and coordinating a Financial Preview column each month.

You might also like:

It's All About PEDV in Pork Producer Circles

 

University of Minnesota Develops First U.S. PEDV Surveillance Test for Swine Industry

The University of Minnesota College of Veterinary Medicine has developed a second porcine epidemic diarrhea virus (PEDV) diagnostic test to help stem the spread of the virus currently threatening North American swine populations.
 
The test is the first announced United States PEDV swine herd surveillance test and brings PEDV diagnostic testing up to swine industry disease monitoring standards. This past summer, the University of Minnesota’s College of Veterinary Medicine developed a PEDV diagnostic test that detected the presence of the virus. The second test announced today can detect evidence of the virus, and is a very precise tool to detect a history of exposure to the virus.
 
If one pig has been exposed to PEDV, all animals around it are at risk. The new test will allow swine industry to identify which pigs have been exposed to PEDV and act accordingly, even if animals have not shown symptoms of the disease.
 
Efforts to develop this test began in July 2013, shortly after the first test was developed. The test was developed as part of a dual-pronged approach to controlling the spread of PEDV.   
 
PEDV is characterized by acute diarrhea and vomiting in pigs. PEDV outbreaks can wipe out an average of 50 percent of young swine at newly affected farms. PEDV poses no risk to other animal or human health and no risk to food safety. The virus has been confirmed in 23 U.S. states and Canada so far and continues to spread quickly. Latest figures put pig mortality from PEDV at an estimated 3 million pigs nationwide. There is no known effective vaccine or treatment for the virus at this time.
 
To help combat the economic and animal welfare losses caused by PEDV diagnosis and spread, the University of Minnesota is making the newly developed diagnostic enzyme-linked immunosorbent assay (ELISA) herd surveillance test available to the swine industry.  The fully-validated test is available immediately at the University of Minnesota Veterinary Diagnostic Laboratory. Cost is less than $15 per serum sample submitted.
 
“We understand PEDV can result in significant health and financial blows, even putting farmers at risk of bankruptcy,” said Michael Murtaugh, Ph.D., an expert in swine disease eradication at the University of Minnesota College of Veterinary Medicine. “We’re committed to providing the industry with ongoing science-driven solutions to this major problem. The swine industry has asked for our help and we will continue putting in additional hours until the problem is solved.”
 
When coupled with the University of Minnesota’s rapid detection test, which can detect actively infected animals within 24 hours of sample submission, both immediate and long-term herd health can now be monitored in a comparable manner to monitoring for the well-established porcine reproductive and respiratory syndrome (PRRS) virus.
 
“The disease has already affected several hundred farms in Minnesota,” said David Preisler, executive director of the Minnesota Pork Board. “This test is very important because accurate, fast diagnostics are the best starting point to give veterinarians the best information to work with their farmer clients. This new test is a great next step in helping farmers manage this disease.”
 
Funding for this research was provided by the Minnesota Rapid Agricultural Response Fund, National Pork Board and Zoetis, Inc.
 
Learn more:


About the College of Veterinary Medicine
The University of Minnesota College of Veterinary Medicine improves the health and well-being of animals and people by providing high-quality veterinary training, conducting leading-edge research, and delivering innovative veterinary services.
 
About the National Pork Board
The National Pork Board has responsibility for Pork Checkoff-funded research, promotion and consumer information projects and for communicating with pork producers and the public. The Pork Checkoff funds national and state programs in advertising, consumer information, retail and food service marketing, export market promotion, production improvement, technology, swine health, pork safety and environmental management. For information on Pork Checkoff-funded programs visit www.pork.org.
 
About Zoetis
Zoetis (zō-EH-tis) is a leading animal health company, dedicated to supporting its customers and their businesses. Building on a 60-year history as the animal health business of Pfizer, Zoetis discovers, develops, manufactures and markets veterinary vaccines and medicines, with a focus on both farm and companion animals. For more information on the company, visit www.zoetis.com.

 

It’s All About PEDV in Pork Producer Circles

It’s All About PEDV in Pork Producer Circles

PEDV, PEDV, PEDV – It seems when it comes to every discussion or call lately with anyone involved in the swine industry it all starts with porcine epidemic diarrhea virus (PEDV). This disease is top of mind with any producer. The extraordinary measures that producers are using in terms of biosecurity or trying to figure out how they potentially got PEDV into their operation are unprecedented. PEDV can make even the best producers humble with a break, and we have seen this occur throughout the U.S. We have a lot to learn about this disease and what we can do to stop the spread of this disease going forward.

How much will PEDV affect Pork Supply for 2014? It is still too early to tell and we are still seeing breaks occur. In our opinion you will see the effects of PEDV in the southeast part of the U.S. in numbers from March through May. In the Midwest it will start in May since the breaks started occurring in the Midwest in November and it is still continuing because PEDV is still breaking. In terms of overall numbers, we could see an impact of 3-4%, but in terms of overall supply it could only be 1-2% because of higher slaughter weights. (See Figure 1). Since October of last year we have been at least 5 lb. heavier per hog sold. This will increase pork supply back by 2%. The summer of 2014 will be interesting to watch – last summer we did not have a lot of hot days, so weights did not drop as much as they would normally. If we have a hot summer in 2014, weights will be challenged to be 2-3% higher than a year ago.

So How High Can Hog Prices Go?  Great question and the answer I will give is I have no idea. If you look at corn prices at $4.25 and summer hogs at a $100 we have a good opportunity to have very good profits for 2014. In looking at current economics for January, most producers are still losing money. The profit is yet to come. Taking some coverage for the spring and summer and locking up profits makes sense. If you are optimistic and think prices could go even higher than where the board is at today, consider using an option strategy. We are at potential margins that are as good as we have ever seen.

Risk Management and PEDV We have had a lot of discussions with producers on risk management with the issue of PEDV. This is not an easy decision. If all of a sudden your unit breaks and you have coverage on the board where you have no pigs because of a PEDV break, you could be in a bad spot. What we have tried to do is communicate with our clients and discuss their individual situation with them and then discuss what they believe is the best plan for their business. Ultimately, it is still their decision. However, with PEDV going beyond six months there is more risk.

Thank You to Minnesota Pork – On a personal note I want to thank Minnesota Pork for honoring me with the Distinguished Service Award. It was a great night for my family and the people that I work with at AgStar. The first thing I thought was how fortunate I have been to be associated and able to work with some of the nicest people anywhere. They are a dedicated and a passionate group of people. The last thing I thought was that we still have a lot of work to do. There are issues every day that are challenging the industry. We all need to keep working on making sure we keep the U.S. pork industry the best in the world.

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Preview newsletter and get the latest news delivered right to your inbox every week!

You might also like:

Mark Greenwood Receives Distinguished Service Award

PEDV Breaks Out in Canada

 

WASDE Report Suggests 2014 Could be a Banner Year for Pork Producers

Groups Urge Congress to Keep COOL

Ninety-seven agriculture, rural, labor and faith-based organizations are asking the farm bill conference committee to reject any changes to the current Country-of-Origin Labeling (COOL) requirements.  The groups said in a letter to the conferees that proposed changes being floated would fail to “remedy the critique of the WTO dispute panels because it would perpetuate consumer deception.” 

 

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Preview newsletter and get the latest news delivered right to your inbox every week!

 

They also said, “The powerful meatpacker and poultry industry lobby have tried to delay and derail these rules since they were first included in the 2002 Farm Bill and again in the 2008 Farm Bill.”  Those signing the letter included Center for Rural affairs, Consumer Federation of America, Food & Water Watch, International Brotherhood of Teamsters, National Farmers Union, and R-CALF USA.  COOL continues to be an issue to be determined by the farm bill conference.

Senators Urge Support for the Future of Biofuels

A group of thirty Senators led by Senators Dick Durbin (D-IL), Chuck Grassley (R-IA), Al Franken (D-MN), John Thune (R-SD), and Amy Klobuchar (D-MN) have asked EPA to support the future of biofuels and revise its proposed waiver of the Renewable Fuel Standard (RFS). 

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Preview newsletter and get the latest news delivered right to your inbox every week!

In a letter to EPA, the Senators stated their concerns regarding the proposed EPA rule to cut the RFS and the impact it would have on energy security, environment, and economic growth, especially in rural communities.  The Senators said, “Congress passed the RFS to increase the amount of renewable fuel utilized in our nation’s fuel supply.  The Administration’s proposal is a significant step backward - undermining the goal of increasing biofuels production as a domestic alternative to foreign consumption.  Further, the proposed waiver places at risk both the environmental benefits from ongoing development of advanced biofuels and rural America’s economic future.”

RFS Comments Due

Ethanol plant

Public comments on the Environmental Protection Agency’s (EPA) proposed rule to cut the Renewable Fuels Standard (RFS) are due on January 28. 

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Preview newsletter and get the latest news delivered right to your inbox every week!

Last year EPA proposed cutting the RFS by lowering the requirements for renewable fuels blended in gasoline for 2014 from 18.15 billion gallons specified in the 2007 RFS legislatin to 15.21 billion gallons.  The proposal also cuts the corn ethanol requirements form 14.4 billion gallons to just over 13.0 billion gallons which is lower than the 13.8 billion gallons requirement for the year.

You might also like:

Murphy Brown Partners to Turn Manure Into Electricity

PEDV Lateral Spread Study Results Released

Nutrient Research Center Website Unveiled

Explaining FDA’s Antibiotic Phase Out in Livestock

Explaining FDA’s Antibiotic Phase Out in Livestock

Recently, you may have heard something about the Food and Drug Administration (FDA) making a new announcement regarding antibiotic use in livestock production.  Officially the agency that regulates the use of antibiotics said:  

“The U.S. Food and Drug Administration today is implementing a plan to help phase out the use of medically important antimicrobials in food animals for food production purposes, such as to enhance growth or improve feed efficiency. The plan would also phase in veterinary oversight of the remaining appropriate therapeutic uses of such drugs.” 

 

What Does This Policy Mean?

Is FDA throwing farmers under the bus?  Is this the end of antibiotic use on the farm?  Thankfully, not. FDA has been moving forward with this process (Guidance 209 and 213) since 2012.  In April 2012, FDA released these “draft documents” and asked the public to provide comments.

This release then opened multiple rounds of meetings, discussions and maybe some heated arguments.  All of the animal agriculture groups and pharmaceutical and production companies have been deliberating about antibiotic use in livestock production ever since this announcement was made. Actually, those groups have been deliberating since before April 2012.

For its part, the governing process is slow and deliberate. But it is one of the great fruits of a healthy democracy.

As you know, there are many political and foodie factions that have a strong misunderstanding about how to raise a pork chop, and they feel their practices should be adopted by all.  The rulemaking process attempts to keep a rational discussion going between groups in opposition and hopefully brings about a balanced solution in the end.

 

Essence of FDA’s Final Action

Lucky for you responsible pork producers, the FDA process is a great help to you. Essentially, it says “use your tools well, don’t waste your ammo, have good veterinary oversight, and keep good records.” All of these points look much like your PQA manual don’t they? The great thing about this action is each of you pork producers will be able to proudly say, “I am a conventional farmer who uses NO GROWTH-PROMOTING ANTIBIOTICS!” (or antibiotics which are medically important in human medicine).

Recall the reason this issue has arisen is the possible risk that farmers are encouraging the selection of bacteria resistant to antibiotics. The concern is those bacteria might infect humans and those humans would fail to recover when treated with an antibiotic similar to what you used in your pigs. So obviously if the antibiotic is one you use in pigs, but which doctors do not use in people, the risk should be minimal.  Thankfully, this is the approach FDA has taken.

 

Back to the Drawing Board

With this new policy in place, drug companies are going back to the drawing board and finding the medically important ways and bacteria to which their products apply.

For example, brand X may currently have an FDA- approved label claim, which says “for increased weight gain.” Now they need to go back and see if there are specific bacteria or diseases where the brand may apply.

Believe it or not, FDA does care about the animals’ health. Many who work in the federal agency are highly qualified veterinarians, many who were in practice.  They understand the importance of having effective antibiotics at the ready when infections arrive.

One of my favorite parts in the FDA Guidance 209 is:

“Principle: The use of medically important antimicrobial drugs in food-producing animals should be limited to those uses that are considered necessary for assuring animal health.

 

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Wrap Up newsletter and get the latest news delivered right to your inbox every week!

 

“In light of the risk that antimicrobial resistance poses to public health, FDA believes the use of medically important antimicrobial drugs in food-producing animals for production purposes (e.g., to promote growth or improve feed efficiency) represents an injudicious use of these important drugs. Production uses are not directed at any specifically identified disease, but rather are expressly indicated and used for the purpose of enhancing the production of animal-derived products.

In contrast, FDA considers uses that are associated with the treatment, control or prevention of specific diseases, including administration through feed and water, to be uses that are necessary for assuring the health of food-producing animals.”

This last sentence is something you will NOT find in the regulatory documents of many countries worldwide. Most “developing” countries are moving away from any antibiotic of any kind, unless the pigs are falling over dead.

But FDA has charted a strong path for keeping our animals healthy.  The latest Guidance 213 is showing the drug companies how to chart the course.

 

FDA Critics of Voluntary Policy

Now some of the so-called “consumer groups” criticize FDA for making the policy “voluntary,” even though it is actually not so.

Why do I say voluntary is not voluntary in this situation?  First is personal experience. In February 2008, I began a political appointment as deputy undersecretary for Food Safety in the U.S Department of Agriculture (USDA). We were in charge of all USDA meat inspections. It turned out that a processor of cull dairy cows in California (Hallmark-Westland) was harvesting downer cows, without USDA inspection – a big problem.

Therefore, we needed to implement a recall. Based on the employee interviews, we estimated that about two years of production (150 million pounds of beef) needed to be returned and destroyed.  At least 20 million pounds were in the school lunch program (whew).  So how does a government regulator approach this problem?

Of course, we can go to judges and get a warrant and lawyers to argue the situation, but fortunately, USDA usually just asks the company to recall, voluntarily. So, in one day, with two phone calls to company lawyers, we implemented the largest meat recall in U.S. history.

The second reason voluntary is effective is what I might call a pragmatic relationship. The drug companies are totally dependent upon FDA to get their products to the marketplace. There is no other way. So say for example they discover a great new product that makes pigs fly and guarantees profit. They must go through an incredibly difficult and expensive approval process, always.

They must sit down with some bespectacled FDA scientist to implement the approval process for their new drugs or drugs currently in use for growth promotion only. This scientist happens to ask, “So how is the relabeling approval process going for your growth-promoting product, brand X?” Cue uncomfortable, silence. So, obviously, it isn’t going to happen that a company would be uncooperative with FDA.

 

Veterinary Oversight

As far as veterinary oversight goes, FDA wants to increase it. As many of you know, currently many of the commonly used antibiotics are available over the counter. As an extra precautionary measure, FDA wants to make some medicines “veterinary directed” instead of over the counter.

So how will this affect you? The bottom line is the same as mentioned above – for you responsible pork producers who are using antibiotics the correct way, the increased oversight will just reinforce the good practices you are already using and at the same time give comfort to the concerned public about the healthy pork chops that they are buying.

Many of this concern about antibiotics has been started by the public, so this is a way to continue doing what you’re doing well and also put them at ease – a win-win situation. 

In summary, FDA has implemented a method which will help all producers to hold their heads high. You are doing your very best for the pigs and for the public.

You might also like:

Murphy Brown Partners to Turn Manure Into Electricity

PEDV Lateral Spread Study Results Released

Nutrient Research Center Website Unveiled

 

Photo Review of the 2014 Iowa Pork Congress

<p>National Hog Farmer Marketing Director Heather Rossow had a big smile for 2014 Iowa Pork Congress attendees visiting the National Hog Farmer booth.</p>

The 42nd Iowa Pork Congress was held in Des Moines, IA, Jan. 22-23, 2014. The event attracted an estimated 5,000 pork producers and allied industry professionals from around the Midwest.  Nearly 300 companies displayed their products and services as part of the tradeshow. Seminars and events targeted pork industry enthusiasts of all ages.

PEDV Breaks Out in Canada

PEDV Breaks Out in Canada

In spite of ramped up biosecurity measures and heightened disease prevention vigilance, the Canadian Swine Health Board announced yesterday that porcine epidemic diarrhea virus (PEDV) has been confirmed in Canada.

Reuters news reports indicate that the disease has been identified in two Canadian locations.

Like what you’re reading? Subscribe to the National Hog Farmer Weekly Wrap Up newsletter and get the latest news delivered right to your inbox every week!

According to Reuters, the Ontario government is investigating a hog farm in the province's Middlesex County after a laboratory test confirmed the virus was present. The announcement was made by Greg Douglas, DVM, Ontario's chief veterinary officer, at a news conference this week. Middlesex County is in southern Ontario.

Separately, one of Canada's biggest pork processors, Olymel LP, said tests also confirmed the virus at an unloading dock of its Saint-Esprit slaughter facility northeast of Montreal, Quebec.

Read the Reuters story here. Visit the Canadian Swine Health Board website here.

You might also like:

Murphy Brown Partners to Turn Manure Into Electricity

PEDV Lateral Spread Study Results Released

Nutrient Research Center Website Unveiled