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Babcock Genetics Releases Piglet Birth Weight Research

Babcock Genetics, Inc., a worldwide supplier of swine genetics, today released groundbreaking research showing the impact of individual piglet birth weight on profit margin. Individual piglet value was established by tracking mortality to the day it occurred.

 

“The goal of the unique research study was to determine the relationship between individual birth weight and the diminishing return of small pigs,” said Kevin Schleusner, vice president, Babcock Genetics. “The 10-year average profit per pig, according to Iowa State University, is $4.26 per pig.  The study focused on examining ways to increase that average profit per pig.”

 

Individual piglet birth weight was found to have the highest correlation with profit when compared to number of piglets born. Light weight piglets were shown to have a negative effect on profits.  “The study proves that light weight piglets recorded higher mortality rates, reduced meat quality, lower average daily gain and lower lean gain,” said Chad Bierman, Ph.D, geneticist, Babcock Genetics.  “Piglets born at light weights also showed poorer feed conversion when taken to suitable market weight.”

 

The collaborative research also determined that as litter size increases individual birth weights drop.  Larger litters produce more light weight piglets and smaller litters produce higher weight piglets. “As birth weight increases so does the amount of profit per pig,” said Darwin Kohler, DVM, Babcock Genetics.  “A litter size of ten, 3.6-lb. piglets will produce a higher profit margin than a litter size of 15, 3.25-lb. piglets.” 

 

The cost of treatments and inferior muscling in light weight piglets were also included in the study. Other relationship factors in the research were the cost of mortality and yardage associated with producing light weight pigs. A detailed research document will be published in the American Association of Swine Veterinarians abstracts. 

 

About Babcock Genetics, Inc.

Headquartered in Rochester, MN, Babcock Genetics, Inc. is a leading supplier of swine genetics to the commercial industry. By utilizing cutting edge research methods, superior swine genetics, and a closed herd system, Babcock supplies its customers with a genetic base with minimum disease risk, excellent reproductive performance, growth rate, feed efficiency and pork quality.

 

For more information, go to www.babcockgenetics.com.

PED Virus Complicates Margin Management

PED Virus Complicates Margin Management

As I was preparing to write this article, I was looking back at comments I made in the July Financial Preview. Oh how things can change is a short period of time. In July, margins for the next 12 months averaged $12 - $15 per head. Porcine epidemic diarrhea (PED) virus was just starting to make its presence felt and there was still a tremendous amount of uncertainty in the U.S. corn crop.

Fast forward to today and PED virus is on everyone’s mind on how to avoid being the next casualty, the U.S. corn crop is at a record 13.9-million bushels, which helped improve crush margins going forward.

Hog Margins & Margin Opportunity

Current hog margin crush is projected at $30 per head for the next 12 months. This is a tremendous opportunity for producers who have struggled through high feed prices in 2013. Current margins will allow producers to not only rebuild liquidity in their business but may spur future growth.

Typically in the past, producers I work with would be willing to take full advantage of this opportunity. However, I am having continuous conversations with producers about the proper level of coverage. With the onset of PED virus in the United States and with no suitable vaccine today that is the magic bullet, producers are starting to questions long-range plans for risk management.

To be sure, we still have more hogs hedged than at anytime during my career at AgStar, but producers are questioning what is the proper amount of risk management, especially for the deferred contracts.

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For those who work with packers using either delivery contracts or hedge with a packer, I would urge you to have an open dialog with your packer in the event your operation is impacted by PED virus. I know everyone understands the risk to deliver, however, if you do not have the pigs to deliver and cannot deliver, then you need a clear understanding of your obligations with the packer.

If you are a producer who has one source of weaned pigs, then your risk will be higher than a producer with several sources. For the pigs on the ground, there has been very little hesitation to take advantage of the incredible margins of over $40 per head for next summer. I would expect producers will continue to increase their exposure as hogs are placed into inventories. The question remains on the proper level of coverage for those deferred contracts. This depends on each individual’s liquidity and ability to source weaned pigs in the event of contracting PED virus in your pig source.

I have heard of current wean pig sales approaching $80 per head. If PED virus continues to spread, watch for weaned pigs to move even higher. The challenge to procure wean pigs will be compounded by the new COOL requirements that went into effect this past Saturday. The new requirements do not allow U.S. product and Canadian product to be packaged together and will need to be segregated for labeling.

Financial Position of Your Operation

The other anomaly we are seeing in operations is some added stress to operations in liquidity and owners’ equity ratio. This is purely a function of tremendously high inventory costs directly attributed to high feed costs in 2013 and aggressive hedge strategies implemented by producers.

With $4 to $5 corn now being fed, we fully expect inventory costs to fall by $25-$30 per head in 2014. As these costs fall and inventory is liquidated with profits, the liquidity position for your operation will improve. At the same time, hedge positions will be liquidated and your hedge line balance should be reduced providing additional relief. The one caveat would be the impact of PED virus.

Malakowsky has more than 16 years of experience with AgStar Financial Services. For more insights from Steve and the AgStar swine team, including their weekly video Hog Blog, visit www.AgStar.com.

If you’d like more information on AgStar’s Margin Manager Tool, check it out at www.AgStar.com/MarginManager.

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Big Producers Make up Pig Losses with Heavier Weights

Big Producers Make up Pig Losses with Heavier Weights

First, please accept the best wishes of the Meyer family and all of us here at Weekly Preview for a happy and safe Thanksgiving holiday to you and yours. There are so many things for which to be thankful. It’s a shame that we don’t stop to “count our blessings” more often, but let’s make sure to at least do so this week. High on my list is my long-standing relationship with National Hog Farmer. I’ve read this magazine since I was a teenager trying to learn about the animals I had chosen as my primary FFA project. I never dreamed I would one day contribute to the education and information mission of this great magazine. It has been an honor and an even greater honor that you would devote a few precious minutes to this column each week. Thank you.

As can be seen in Figure 1, it is pretty difficult to judge whether last week’s federally inspected slaughter total of 2.345 million head was a break from this fall’s “shortage” pattern or not, since it aligns with Thanksgiving week one year ago. We’ll have to wait for this week’s total and then compare the past two weeks to the same period last year before we know for certain. But my guess is that we are going to remain 50,000 to 70,000 head below the level I expected coming out of the report.

hog slaughter, nov 25

We have gotten a bit closer to those expected levels in recent weeks, and last week’s 0.45 pound reduction in the average weight of producer-sold barrows and gilts suggests that producers are getting a bit more current in their marketings now that cash prices have fallen. But “a bit more current” and “current” are two different things. Further, a normal level of currency is probably not in the cards this year. A coming “hole” in hog availability is driving Seaboard, Smithfield and other partially-integrated operations to make up for pig losses with higher weights that have pushed the average weight packer-owned hogs to 217 lb. the past two weeks. The non-integrated companies aren’t in that pickle yet. But it doesn’t look to me like anyone will be able to completely dodge the porcine epidemic diarrhea (PED) virus supply bullet.

Cattle Report Helps Pork

November’s Cattle On Feed report came in just about as expected and indicated significantly higher cattle placements than one year ago. Of course, October 2012 placements were the lowest for that month in years so it is little surprise that this year’s placements were higher. But feedlot inventories are still lagging year-ago levels by 5.7% indicating that fed cattle supplies will lag year-earlier levels well into 2014. And there simply are not very many feeder cattle available with heifer retention picking up. Our thoughts are that per capita beef supplies will decline 4-6%, year-on-year, in 2014, keeping beef prices VERY high and giving pork a real, though perhaps diminished by PED virus, opportunity to change some buying habits.

Frozen Meats Positive for Pork

October 31 stocks of frozen meat and poultry were virtually unchanged from one year ago and were down 3.1% from Sept. 31. Pork led the decline with frozen pork inventories declining 6.1% from last year and 0.2% from Sept. 30. The October decline is unusual and a reflection of lower-than-expected September slaughter. We expect stocks to grow in November but by a smaller-than-normal amount, leaving pork inventories at a good level once the fall run is over. Ham inventories remained larger than last year but were down 13% for the month. “Unclassified” and “Other” pork categories were the largest tonnage contributors to October’s year-on-year decline with butts and trimmings not far behind. Bellies inventories were up sharply from last year’s very low level.

USDA cold storage report

 

Chicken Concerns

Chicken stocks are a bit of a concern, with total chicken inventories being 8.2% larger than last year, and 6.3% larger than last month, just as the industry appears to be moving into full-fledged expansion. Breast meat inventories increased by 17.5% in October, suggesting some very competitive prices this fall.

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pork industry data

 

competing meats, Nov 25

Tracking PEDV in North Carolina

The Swine Health Monitoring Project at the University of Minnesota has provided an update on a study of lateral spread of porcine epidemic diarrhea (PED) virus, focusing on a preliminary report from North Carolina.

Some 155 PED virus positive sites in the state are participating as case farms in a larger cluster analysis to identify risk factors for lateral spread of the virus. The case farms are matched to two negative controls and given a biosecurity questionnaire to compare potential risk factors between cases and controls.

Data from the first 17/47 questionnaires include eight positive and nine negative sites that showed:

  • Positive sites had average herd size of 4,683 vs. 4,035 for negative sites.
  • Positive sites were in more dense regions than negative sites.
  • Positive sites had approximately double the frequency of feed truck deliveries compared to negative sites.
  • Positive sites had approximately double the frequency of trucks visiting to remove pigs of any age than negative sites.
  • There were 40% more farms in the positive group that had culls removed from the site in two weeks preceding infection.

Spatial analysis indicated that:

  • Cases immediately following previous infections occurred directionally at 20 degrees northeast on average.
  • Odds of being infected with PED virus were 8.4 times greater within one mile of an infection, 6.3 times greater if located within two miles of an infection, but no greater if within three miles.
  • Sites with sows and grow-finish pigs had the highest incidence of PED virus.
  • Site capacity was not significantly associated with PED virus.

Project coordinator is Dane Goede, a PhD graduate student at the University of Minnesota Veterinary Population Medicine. He can be reached at goed0051@umn.eddu.

NPPC Comments on FDA Animal Drug Sales Report

 

The National Pork Producers Council (NPPC) today submitted comments on the Food and Drug Administration’s (FDA) Antimicrobial Animal Drug Sales and Distribution Annual Summary Report Data Tables.

In its letter, NPPC indicated before releasing the report, FDA should provide background to allow proper interpretation of the data.

For its part, FDA makes the following points as to why it is difficult to make a comparison between the amount of antibiotics used in humans and that use in animals, including:

  • Milligram doses for different antibacterial drugs differ. Total weights across different antibacterial drug classes (and even to a lesser extent within classes) are therefore difficult to interpret.
  • Duration and dosage of antibacterial drug administration may also vary by indication and in general between the various animal species and humans.

“We encourage FDA to consider developing a similar Q&A to explain why it will be difficult to compare the amounts of antibiotics delivered in feed or water with those that are in an injectable dosage form, or used for different indications,” says Randy Spronk, NPPC president from Edgerton, MN.

To further minimize misinterpretations, as well as to better describe the utility of the data reported, NPPC would urge FDA to consider that the data will not provide a clear causal link between antibiotic use in animals and antibiotic resistance in human illness, the NPPC letter said.

To read more of NPPC’s letter to FDA, go to www.nppc.org.

 

   

 

 

 

Tariff-Free Access to U.S. Market & Trade Barriers

A coalition of agricultural and food organizations is urging Congress to establish criteria for revoking a country’s tariff-free access to the U.S. market if it fails to give U.S. products treatment consistent with international trade rules.  In a letter to Congress, the coalition reminded the congressional members that “barriers to U.S. exports in GSP (Generalized System of Preferences) beneficiary countries are widespread and are often in flagrant violation of international obligations.”  The coalition said, “The fact that these countries may maintain these restrictions on U.S. goods while benefitting from unilateral preferential treatment for their products in the U.S. market – and with little apparent concern about losing those tariff benefits – is clearly inconsistent with the intent of Congress, and we believe this must change.” 

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The Generalized System of Preferences (GSP) offers tariff-free treatment on many products from developing countries. Last year, 130 nations received such benefits on about 5,000 products shipped to the United States. The African Growth and Opportunity Act (AGOA) is similar to GSP. 

The coalition, led by the National Pork Producers Council, includes the American Feed Industry Association, American Meat Institute, Animal Health Institute, Corn Refiners Association, National Chicken Council, National Confectioners Association, National Milk Producers Federation, North American Equipment Dealers Association, North American Meat Association, Northwest Horticulture Council and USA Rice Federation.  

Value of Meat and Poultry Exports to Soybean Producers

The United Soybean Board recently updated its analysis of the “Value of Meat and Poultry Exports to Soybean Producers,” which was completed by World Perspectives, Inc.  The analysis estimates that combined beef, pork, broiler and turkey exports accounted for indirect exports of about 4.7 million metric tons of soybean meal in 2012. 

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Over the next 10 years, meat and poultry exports are projected to account for indirect exports of roughly 54.76 million metric tons of soybean meal.  This would represent consuming the equivalent of the meal from over 2.5 billion bushels of soybeans.  

RFS Hearing Dec. 5

The Environmental Protection Agency (EPA) will hold a public hearing on its proposed 2014 mandate for the Renewable Fuel Standard (RFS) program Dec. 5 at the Hyatt Regency Crystal City Hotel, Arlington, VA.

This Year’s Thanksgiving Meal Will Cost Less

The American Farm Bureau Federation (AFBF) released its annual survey on the cost of the Thanksgiving meal for a family of 10.  The informal price survey found the classic items on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $49.04, a 44-cent price decrease from last year’s average of $49.48. 

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The AFBF survey shopping list includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and beverages of coffee and milk, all in quantities sufficient to serve a family of 10 with leftovers. 

Pharmgate Receives Regulatory Approval for Deracin® 22% Granular, in Canada.

Pharmgate LLC of Ramsey, NJ, announces the approval of its flagship product, Deracin® 22% Granular Premix containing 22% chlortetracycline, by the Veterinary Drugs Directorate of Health Canada. As the majority-owned U.S. subsidiary of Jinhe Biotechnology, the largest manufacturer of chlortetracycline in the world, Pharmgate will become a significant supplier of branded chlortetracycline products in Canada.

This generic approval carries all important label claims for the drug across livestock and poultry species. Deracin 22% Granular Premix is a high-quality, free-flowing, and dust-free granule that is manufactured and formulated in the plant that has enjoyed a 20 year history of supplying FDA-compliant products.  

The product is supplied in 25kg bags and will be made available to feedmills and livestock producers in the coming months. It will be marketed by Pharmgate Animal Health, Pharmgate’s marketing joint venture in North America, alongside its first product offering, Aivlosin® (tylvalosin) Water Soluble Granules, which has received considerable support from the livestock community since its launch last year.

Colin Gray, CEO of Pharmgate commented, “This is another important step in the evolution of Jinhe/Pharmgate from the largest global supplier of high quality CTC to a fully integrated and recognized animal health company. We, in company with our partners and in utilizing Pharmgate’s significant supply chain, regulatory and marketing expertise look forward to building on this success in adding future complementary products over the next several years.”