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Pharmgate concludes merger with ProtaTek International

Pharmgate LLC announced today that it has successfully concluded its merger with ProtaTek International Inc., which will continue to operate as a wholly owned subsidiary. Former ProtaTek board members Roger Headrick and Shi-Jun Ma will be retained on the board of the company. Manufacturing, laboratory, regulatory, accounting and customer service functions will remain in St. Paul, Minn. The products will be sold and serviced under the Pharmgate Animal Health banner in the United States and Canada, and Pharmgate LLC in international markets.

ProtaTek currently markets a range of biologicals through a network of distributors, and has a pipeline of novel products that will be introduced globally over a number of years. This will significantly enhance Pharmgate’s expanding range of animal health solutions offered to its customers.

At the same time, the company has appointed Mary Jo Baarsch as vice president of Biologicals Operations, who will join the team in St. Paul. Baarsch has an extensive background in vaccine development and commercialization with multinational and boutique animal health and pharmaceutical companies. She holds a PhD from the University of Minnesota and an MBA from the Rensselaer Polytechnic Institute in Connecticut. She will also serve on the company board.

N.C. Department of Agriculture offers information hotline for farmers affected by Hurricane Matthew

The North Carolina Department of Agriculture and Consumer Services has activated its toll-free hotline to help farmers affected by Hurricane Matthew connect with resources that can assist with recovery. Farmers who have an agricultural emergency can call 866-645-9403.

“Hurricane Matthew has brought record-breaking floods and strong winds to a large part of North Carolina,” says Agriculture Commissioner Steve Troxler. “We expect impacts to farms to include power outages, damage to crops and agricultural buildings and animal health emergencies. We are prepared to work with our state and local partners to help our agricultural community in the storm’s aftermath.”

Parts of eastern North Carolina had already received heavy rains in late-September and had surplus soil moisture as of last Monday. Many crops, such as soybeans, cotton, peanuts and sweet potatoes, were still in the field. The earlier rain hampered farmers’ efforts to harvest before Hurricane Matthew affected the state.

Department officials will be conducting damage assessments in the coming days as it becomes safe to do so. However, several farmers in the eastern part of the state have posted photos on social media of fields under water.

Farmers can also find recovery resources on the department’s disaster web pages, www.ncagr.gov/disaster.

South Dakota farmer named America’s Pig Farmer of the Year

Brad Greenway 2016 Americarsquos Pig Farmer
<p>Brad Greenway, 2016 America&rsquo;s Pig Farmer</p>

The National Pork Board announced today that Brad Greenway, a pig farmer from Mitchell, S.D., has been named the 2016 America’s Pig Farmer of the Year by achieving the highest score from a third-party judging panel and online voting. The award recognizes a pig farmer who excels at raising pigs using the We Care ethical principles and who connects with today’s consumers about how pork is produced.

“We are pleased to have Brad represent America’s pig farmers. He embodies the very best in pig farming,” says Jan Archer, National Pork Board president and a pig farmer from Goldsboro, N.C. “It’s important that we share with today’s consumers how we raise their food in an ethical and transparent way. Brad’s interest in sharing his farm’s story — and putting a face on today’s pig farming — will help us reach this goal.”

Greenway has focused on doing what’s right for people, pigs and the planet on his family farm for the last 40 years. He and his wife, Peggy, own two wean-to-finish pig barns. They also raise beef cattle and grow corn, soybeans, wheat and alfalfa.

“I look forward to sharing my personal farm story with consumers to help them understand the care that goes into raising pigs today,” Greenway says. “I am proud of my industry and the hard work my fellow farmers put into producing safe, high-quality food, and in caring for animals and the environment every day.”

Greenway was named America’s Pig Farmer of the Year following a third-party audit of on-farm practices and conducting a series of written and oral interviews by subject-matter experts. He has achieved excellence in all aspects of pig farming, including animal care, environmental stewardship, employee work environment and outstanding community service.

The panel of expert judges met in early September with the four finalists. Members of the panel were Robin Ganzert, president and CEO of American Humane; Kari Underly, a third-generation butcher, author and principal of Range Inc., a meat marketing and education firm; Justin Ransom, senior director, supply chain management at McDonald’s USA; Jodi Sterle, an associate professor of animal science at Iowa State University; and Keith Schoettmer, the 2015 America’s Pig Farmer of the Year.

As a judging panel member, Ganzert says, “As an animal lover and the leader of the country’s first national humane organization, I am honored to be a judge for America’s Pig Farmer of the Year. American Humane celebrates all those, including our nation’s farmers, who care for animals and work hard to ensure they are treated humanely. Today, more than ever, it is important not only to point out where progress is needed, but to recognize when we get it right.”

To learn more about Greenway’s farm and the America’s Pig Farmer of the Year Award, visit AmericasPigFarmer.com.

Post-report observations and the prospects of what tomorrow brings

NHF_markethog_getty

By now, most of you have digested the September Hogs and Pigs report. I will touch on a few items but will not rehash the whole enchilada — and may be in a position of questioning what to do next. I will try to share our thoughts and provide a dusty road map of where we may be going.

A bearish report?

By all objective measures, the Hogs and Pigs report came in above the average analyst guess in nearly every category. That, by itself, is a bearish scenario — but take a look at the attached table that shows the close of futures the day of the report (remember, the report was out after the close so the Sept. 30 values represent pre-report values) compared to values going home on Oct. 7. We have higher values in nearly every contract, except the December where most of the bearish news was harbored.

What does it mean when you get a supportive trade after a bearish report? It would normally mean that the market “knows” something that is overriding the pre-report values. This knife cuts both ways as we have seen bearish reactions to bullish reports in various commodities and you would normally be well-served to heed the trade direction, not the USDA numbers. I am not implying that the USDA numbers are “wrong” at this point — I will offer a critique of the report later — I am simply suggesting that the trade had already incorporated bad news into the market before the report and that these numbers were not shocking enough to send us lower. Yet, at least.

We are up roughly $5 per head since the report with this forward string. Not bad considering the pall we went home with a week ago Friday. A small glimmer I must admit, but better than continuing the trek lower in values.

This general price trend fits in rather nicely to the chart below that indicates the biggest discrepancy in the published numbers versus expectations centered around the December timeframe. The weight breaks are at the bottom of the chart. Note the increased number of animals projected to come to the market compared to last year — the weakness in the December contract is consistent with this data. It will be incumbent on the packer community to continue to run hard through the end of the year to prevent a backup of animals.

Let’s unbundle this one just a little bit to see whether we believe the lack of follow-through to the downside (sans December) is substantiated or fiction.

August export data just came in showing the United States exported 11.4% more pork than we did in August a year ago. This represents a 3.2% increase from July. Not bad, but could be better. The fly in the ointment that prevents things from really getting rolling is the discrepancy between what you are feeling at the farm level and what the importers are seeing for prices.

The table below comes from the internet, not exactly the source of all reliable knowledge, and does not reference a source so I am couching my comments given the lack of validation right now. If true, it would indicate that our gains in pig inventories and sow numbers have been countered by losses in the European Union. This would be good news for the U.S. producer as the prospects for importers to turn to our shores would ostensibly improve.

Reasons for my hesitancy to embrace the potentially bullish news.

The recent Successful Farming article indicated the top 35 producers have added more than 120,000 sows year-over-year. I think this is very believable and my conversations with some of the people listed in the publication corroborate the data. How does this data square with the USDA report that shows roughly 35,000 sows added over the same timeframe? Something is awry. I have also chatted with the folks who would be responsible for the sow slaughter — if we added 120,000 and lost 80,000 then the USDA numbers could be believable — who have seen nothing of the such.

Below are a few charts from my friend Brett Stuart who does an excellent job of keeping abreast of export markets. The first chart represents the spread between the United States and the European Union on a live basis. It is probably reflective of what you already think. With the exception of the porcine epidemic diarrhea era, the United States generally enjoys a competitive advantage (the green bars above the equilibrium line) the vast majority of the time and our recent price compression on the live market side puts us right back in that mix.

The difference in the cutout value – what an importer would see as a price comparison – tells a different story. The same lack of competitiveness is seen during the PED era; that is no surprise. It is only recently, and by a thin margin, that the United States is again more attractive than the European Union when viewed from this perspective. Packer margins have been handsome and the spread between the live market and the cutout is second only to the disaster year of 1998. Once the United States has forfeited market share to an alternative supplier, it will likely take a sharper price incentive to win back the business.

Nowhere is this more evident than in the third graph that depicts Chinese imports and the U.S. share. Note, the promise of China importing pork is real and present. The European Union is taking the lion’s share of the business, in excess of 75%, while the United States remains a bit player. If we want to move the mountain of pork currently on us and on the horizon, the opportunity is present. If we reflect the pricing reality on the farm level to our importing partners, we have a chance to clear the decks.

A silver lining in this revenue compression atmosphere is that the price of corn and soybean meal have remained moderately priced. Our record crops have come at a good time for the pork producer; we could not have stomached high feed prices at the same time of low hog prices. The prospects for a 15 billion bushel corn crop and a 4 billion bushel bean crop will tax storage capacity which should keep basis wide, too.

Bottom line: we are going to experience some tough times in the pork industry. Probably not as bad as 1998 (thank God) and will not have high-priced feed to deal with, but it will likely get worse before it gets better. A peek at the Commitment of Traders report shows we are not well-hedged as an industry; there are still opportunities to keep the winter month economics as a flesh wound. I fear the reality of the fourth quarter may be tougher than even what the weak markets represented on the CME indicate today.

A few more farmers, fewer politicians

Republican presidential nominee Donald Trump (L) and Democratic presidential nominee former Secretary of State Hillary Clinton during the town hall debate at Washington University. Photo Credit: Getty Images/Scott Olson

America, and frankly other parts of the world, tuned into the second presidential debate last night to witness the next unbelievable moment. The 2016 presidential run is like a bizarre plot in a low-budget mini-series that you cannot turn off. You just keep watching. You fight the good judgment just to turn it off, and at the end, you will eventually declare that it is valuable time you will never get back. Unfortunately, this ultimate cliffhanger is still four weeks off when the final votes are tallied.

Honestly, this presidential election campaign season is one that will be talked about for years, but not in a good way. While the world record is being set for the number of insults two presidential candidates can exchange, the meat of the actual issues is yet to be discussed. That is the real tragedy, my friend, because many voters are left undecided.

Although the second debate was set in a town hall format, it still took 30 minutes to pass before Donald J. Trump and Hillary Clinton answered a legitimate question. Leading into the debate, America was promised 12 questions would be asked — half from the audience and rest from online. The mission of the night was to ask as many of those questions as possible. 

Judging from the thousands of questions submitted to the Open Debate Coalition, U.S. voters want to discuss genuine issues and not listen to a string of cheap shots and watch the candidates bob and weave. The moderators of the debate agreed to consider asking some of the most popular questions submitted with solid topics such as gun control, climate change and food policy.

Yet, agriculture — a leading driver of the U.S. economy — seems to be missing in cyberspace with those deleted emails or perhaps behind the border wall. Even though related topics such as trade has grabbed some mic time, the major issues shaping agriculture have remained untouched — possibly by design.

Who would want to get the hands that feed you upset?

Or maybe Clinton and Trump fear exactly what Toby Keith sings in his latest hit — the world would be a better place with a few more cowboys and cowgirls. A lot more boots and jeans and fewer suits and ties could make the nation great again. Perhaps, if the 2%, agriculturalists, that built this nation were brought back to the forefront, then the United States would have a little more grit and lot less politics. Think about it; straighter answers would be given, costs versus benefits analysis would become strong decision factors and yes — rock-hard science would win.

Instead, Monday morning we wake up to reality. The hopes were high but once again the build-up was more dramatic than the outcome. The debate ended with few questions answered.

Twitter claims 17 million tweets were sent about the Sunday night debate. Gauging from my twitter stream, those tweets were more about the slow moving train wreck presented before us than the topics voters should be addressing.

Conceivably, if we discuss the issues and stop retweeting the insults and airing them on the daily news then maybe the candidates would too. While I am guilty of getting caught up in the entertainment value of this campaign (but not a Twitter follower or retweeter of Clinton or Trump), it is time to get serious. We cannot control Clinton not wearing the American flag pin or Trump’s sniffing, but we can keep presenting the topics in a chance the politicians would follow the lead. 

3 takeaways from the debate

Still, on a positive note, a few subjects managed to squeak through the cracks. Here is my list of three takeaways from the second presidential debate.

Supreme Court: In February, the passing of Justice Antonin Scalia left a vacancy — yet to be filled — on the U.S. Supreme Court. The selection of Supreme Court justice is a powerful decision. The Supreme Court will make crucial decisions that could dramatically change the way we farm. Given the aging of the current Supreme Court, more appointments are to come.

If the decision is left to Clinton, she will appoint “Supreme Court justices who understand the way the world really works, who have real-life experience, and who have not just been in a big law firm.” Also, she states that she believes “the current court has gone in the wrong direction.”

Trump, on the other hand, says he will appoint “judges very much in the mold of Justice Scalia.” He also thinks it is important to select “people that will respect the Constitution of the United States.”

Energy: When asked about energy policy and the steps to meet the nation’s energy needs, the candidates responded in the following way.

Trump, clearly, states “We are killing — absolutely killing our energy business in this country.”  He says energy is under siege by the Obama administration, and the U.S. Environmental Protection Agency is killing energy companies, allowing foreign companies to purchase U.S. plants. Moreover, Trump recognizes the need for alternative energy but more than wind and solar. He is an opponent of new technology for clean coal and natural gas.

Clinton acknowledges for the first time the United States is energy-independent, and she will work hard to keep it that way. She states her energy policy is more comprehensive, and it includes fighting climate change. She supports “moving toward more clean, renewable energy as quickly as we can.”

Considerate ending: The last question of the night and no doubt the most-talked about moment of the debate was the simple questions from an audience member, Karl Becker, “name something you respect about your opponent.”

Clinton — “I respect his children. His children are incredibly able and devoted, and I think that says a lot about Donald.”

Trump — “She doesn’t quit. She doesn’t give up. I respect that. I tell it like it is. She’s a fighter.”

And on that closing note, once again, agriculture remains in suspense, hanging on for the next round of political rhetoric.

The entire transcript can be found here.

Batch farrowing interest grows with demand for larger groups of weaned pigs

Getty Images/Carsten Koall piglets at a feeder

Last month we revisited batch farrowing which continues to grow in numbers in the Swine Management Services data base from 13 farms in the column written Sept. 6, 2011, to 91 for the column last month (Table 3).

Why the large increase? We feel it is the demand for larger groups of weaned pigs to go into larger finisher sites and buildings. To deal with some of the health issues more producers want to empty a nursery, finisher or wean-to-finish site completely of all animals before cleaning and repopulating. Some producers are tired of mixing pigs’ sources to be able to fill the larger finisher sites that are available. With pig source farms having different health statuses it is becoming evening more difficult to mix sources of pigs.

If you do not know some of the batch farrowing options we have included Table 1 Batch Farrowing Production Summary. I was involved with putting some of these together back in the 1970s when hog producers wanted to get more organized farrowing pigs going from once or twice per year farrowing in A huts outside to more modern farrowing houses and nurseries. To get more return for their investment they wanted to farrow more times per year. As you see in Table 1, there are batch farrowings that use the facilities 13 times per year just like the weekly systems such as the 10/2 (1 weeks breed) and 5/4 (1 weeks breed). Today most of the batches are 5/4 (five batches of sows farrowing every four weeks) or 10/2 (10 batches of sows farrowing every two weeks). With either one of these, the average weaning age is about 18-19 days with a range of 15-22).

So producers wanting bigger pigs are going to 4/5 (four batches of sows farrowing every five weeks), that moves the pigs weaning age up to a range of 21-28 days with the average at 25. However, the turns per farrowing crate drop from 13 to 10 per year. That adds additional cost to every pig with higher facility cost and more feed to the sows in lactation.

What are some of the negatives of batch farrowing?

♦ Higher risk of lower production if something happens at breeding or farrowing time since several weeks of sows are breeding or farrowing together.

♦ Increased labor demands for two weeks out of every four to five.

♦ Limiting breeding period to less than one week.

♦ More sows to farrowing in a few days.

♦ No nurse sows to place extra pigs at farrowing on or fallback pigs.

♦ Problem with what to do with females that return to heat.

♦ More difficult to add replacement gilts to each batch.

Last month we looked at the data Tables 2 and 3 which were all farms (500) with weekly farrowings and Tables 4 and 5 which were batch. For this column we had added Charts 1-12 which show the large amount of variation in performance for several production numbers. The charts are set up with number of farms on the Y-axis and production numbers on the X-axis. The SMS number is the average for the 500 farms that are weekly and the system if the average for the 91 batch farms. The blue represents all the farms and the red at the bottom of some columns are the batch farms. If you look at the SMS and system (batch) averages there is not as much variation as you would have thought for some areas.

Chart 1 Pigs Weaned/Mated Female/Year shows SMS average at 26.80 pigs with the top 10% at 31.54 pigs versus system (batch) at 26.20 pigs with top 10% at 29.95 pigs. However, both has farms >22 pigs and >31. Chart 2 Total Born/Mated Female/Year showing both with farm with potential of 40-plus pigs with SMS average at 34.17 and system (batch) at 32.64 pigs. Even with batch farms weaning every two, four or five weeks, wean to first service interval days were very close with SMS at 6.22 days and system (batch) at 6.11 days which is shown in Chart 3, Wean to 1st Service Interval Days.

I did look back to the 2011 data and days to cycle were at 6.94 days for SMS and 7.96 days for system (batch). Back in 2011, more weaned sows were skipped to the next batch because they did not cycle in the seven-day window. With changes to how sows are fed in lactation both systems have dropped allowing more weaned sows to be bred by Day 7.

Chart 4 Farrowing Rate % has SMS average at 86.6% versus 11 years ago at 85.2% and system (batch) at 85.3% versus 11 years ago at 84.1%. In Chart 5 Born Alive/Female Farrowed shows SMS at 13.01 pigs and system (batch) at 12.66 pigs with top farms for both at 14.5+ pigs. Chart 6 Total Born/Female Farrowed shows a lot of variation starting with farms <11.5 pigs up to farms at >16.05 pigs. SMS averaged 14.31 and system (batch) at 13.84 pigs. Female Death Loss %, Chart 7, shows average for SMS at 8.5% and system (batch) at 9.3% with a lot of variation from farms for both at a low of <4.0% to several farms at >=14%. We have noticed in the large SMS database an increase in the number of farms with 12-plus% females death loss. Not a good trend line.

For piglet death loss look at Chart 8 Piglet Survival %, Chart 9 Stillborns/Female Farrowed and Chart 10 Pre-weaning Mortality %; piglet survival for SMS was at 80.1% versus system (batch) at 81.8%. Stillborns for SMS at 0.94 pigs and system at 0.91 pigs and pre-weaning mortality percent shows SMS at 13.4% and system (batch) at 11.6%. It appears that the batch systems are making some changes to save more pigs which probably means improved Day 1 pig care and extending hours someone is in farrowing on the heavy farrowing days.

Chart 11, Gilts Entered % (replacement rate), shows system (batch) having a higher number at 62.2% versus SMS at 54.9%. We know that more of the batch systems are culling more of the returns and late-cycling weaned sows to lower open sow days so they have to breed a few more gilts per group. With the help of products that control heat cycles it has become much easier to bring large groups of gilts into the breeding area to help make breeding targets. Chart 12, Parity of Inventory, confirms the higher replacement rate with SMS average at 2.53 litters and system (batch) at 2.31 litters.

We feel batch farrowing will continue to increase with larger farms on some of the systems that need large groups of pigs turning 2,500- and 5,000-sow farms into batch farrowing. There are a lot of positive reasons to switch to a batch farrowing system. If you are looking at switching to a batch farrowing system it is important that you put a plan together and make sure everyone knows what the new standard operating procedures are and that they follow the plan. We have seen numerous farms take a major step backwards in production for one to two quarters because they did not plan or did not implement their plan properly.

SMS Production Index
Table 6 provides the 52-week rolling averages for 11 production numbers represented in the SMS Production Index. The numbers are separated by 90-100%, the 70-90%, the 50-70%, the 30-50% and the 0-30% groups. We also included the 13-week, 26-week and 12-quarter averages. These numbers represent what we feel are the key production numbers to look at to evaluate the farm’s performance.

At SMS, our mission statement is to provide “Information solutions for the swine industry”. We feel with the creation of different SMS Benchmarking databases for all production areas we now have more detailed information to share with the swine industry. If your farm would like to be part of the SMS Benchmarking databases, or if you have suggestions on production areas to write columns about, contact us at mark.rix@swinems.com or ron.ketchem@swinems.com. We enjoy being a part of the National Hog Farmer Weekly Preview team. Previous Production Preview columns can be found at NationalHogFarmer.com.

Packers and Stockyard Act regs extended to online and video livestock auctions

Before leaving for its October recess, Congress passed legislation that extends Packers and Stockyards Act regulations to online and video auctions that charge commissions or fees.

The legislation will provide protection to producers who sell online and ensure the use of electronic payment methods.

The bill authorizes the use of modern electronic payment methods, including debit and credit cards and the Automated Clearing House payments system.

Current law authorizes only the use of checks and wire transfers to settle livestock sales. President Obama is expected to approve the bill.

FDA considering new definition of ‘healthy’ foods
The Food and Drug Administration is considering new regulations for foods labeled “healthy.” This is to update nutrition labels to reflect the latest scientific information regarding fats, vitamins and minerals important to consumers.

The FDA is asking for public input on what “healthy” should mean and how consumers understand the term on food labels. The Grocery Manufacturers Association says, “Food and beverage manufacturers are committed to providing consumers with the information they need to make informed product choices so we welcome FDA’s plans to modernize the definition and clarify the use of the term “healthy’ on food labels.”

Tax-deferred disaster accounts for farmers
The Farm Risk Abatement and Mitigation Election Act, introduced by Congressman Rick Crawford (R-AR), would allow producers to establish tax-deferred bank accounts, to incentivize them to save money for use in disasters instead of waiting on disaster declarations and waiting on the federal government for assistance.

Crawford says, “Farming is a risky business, and we don’t need to look any further than this past August for proof of that. From crop failure, changing markets, insect damage, unusual weather and natural disasters, producers’ livelihoods are threatened in many different ways.” The FRAME Act would give farmers the freedom to invest in a personal account dedicated to disaster relief. These accounts would work much like an IRA or Health Savings Accounts and would give farmers the option of investing. Producers would be eligible to contribute up to $50,000 per year to the account, deduct it from their income, and withdraw the money tax-free, with tax benefits capped at $250,000.

Contact your Congressman and Senators
Members of Congress will be traveling their states and districts for the next 29 days meeting with voters prior to the November election.

Now would be a perfect time to contact your Senators and Congressman and let them know issues that are critical to you including the importance of the Trans-Pacific Partnership to U.S. agriculture, Waters of the United States rule, tax policy, etc.

Samuelson Sez - October 8, 2016: My battery charging week


This Week in Agribusiness - October 8, 2016