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Articles from 2019 In December

MIDDAY Midwest Digest, Dec. 31, 2019

Have you checked your stock investments? Numbers are up at the end of the year.

However, the farming economy has had a rough year. Because of that, a bill has been introduced to address mental health on the farm.

There might be a marijuana shortage in Illinois when it can be legally sold starting tomorrow.

Iowa Pork Congress to offer practical information, ideas for future

Kerns & Associates gives their economic outlook at the 2019 Iowa Pork Congress.

Midwest pig farmers who attend the 2020 Iowa Pork Congress on Jan. 22-23 will find a variety of educational seminar and training opportunities, along with more than 300 trade show exhibitors. All the events will take place at Hy-Vee Hall in the Community Choice Credit Union Convention Center in Des Moines.

"The seminars and presenters that are lined up will provide producers with practical information that can be put in place immediately, as well as outlooks and ideas that can help guide future decision-making for both pig farmers and pork stakeholders," says the president of the Iowa Pork Producers Association, Trent Thiele of Elma.

There will be five seminars on Jan. 22:

  • 9:30 a.m.: Nuisance case discussion with attorney Eldon McAfee of Brick Gentry Law Firm. McAfee has represented many Iowa livestock farmers in cases claiming nuisance. Moderator Drew Mogler will encourage those in the audience to ask questions they may have about this concern and what they might do proactively to head off similar lawsuits.
  • 10:45 a.m.: Andy Curliss of the North Carolina Pork Council will provide both a deep and broad look — citing specific instances — at how significant, coordinated advocacy is threatening animal agriculture. He will offer an unprecedented look at the ongoing attacks against the livestock industry and provide attendees with insights on how these attacks are being executed in strategy and tactics.
  • 12:45 p.m.: In late September, the USDA conducted an on-the-ground functional exercise to see how the reaction system would work if African swine fever was diagnosed in the United States. There were three swine farms in Iowa that participated in the exercise. Moderator Pam Zaabel will talk with them about what they learned regarding their own preparedness to respond, and what changes they are making now to their farm operations. Panelists include Heidi Vittetoe of JWV Pork, Washington County; Pete Thomas, Iowa Select Farms, and Ian Levis, Seaboard.
  • 2 p.m.: There are many different ventilation systems being used in today's swine barns. Moderator Jay Harmon of Iowa State University will discuss the types and benefits with people who manage those decisions or make recommendations daily. Panelists include: Ray Foerster, Smithfield Hog Production; Fernando Gomez, PIC; and Doug Owens, New Fashion Pork.
  • 3:15 p.m.: The economic outlook session is always a popular one as pig farmers hear about the details of factors that may impact producer profitability for the coming year. Economists Steve Meyer and Joe Kerns, both of Kerns and Associates, will outline both livestock and crop issues that can make a difference in profitability.

Also on Jan. 22, producers can choose to attend one of these certification training sessions:

  • 10 a.m.-12:30 p.m.: Pork Quality Assurance Plus Certification
  • 1-3 p.m.: Transport Quality Assurance Certification

There are also five seminars scheduled for Jan. 23:

  • 9:15 a.m.: Producers can learn more about what the foreign experience with ASF has been. Moderator Andrew Hennenfent, the emergency management coordinator at the Iowa Department of Agriculture and Land Stewardship, will discuss the topic with Todd Thurman of SwineTex Consulting who has experience in China; Ilia Zubtsov, a PIC technical consultant with experience in Russia; and Gary Flory of the Virginia Dept. of Environmental Quality who has done carcass consulting with multiple countries.
  • 10:30 a.m.: Risk management with contracts and insurance is a critical issue for producers whether they are faced with weather situations like floods or heavy snows, or disease threats. Moderator Colin Johnson of Iowa State University Extension will moderate a panel discussion on the tools you might use to protect yourself, your farm and your pigs. Panelists include: Matt Berger, Gislason & Hunter LLP; Chris Pudenz, Iowa State University; and Marty Pippett, Mark Crop Insurance.
  • 11:45 a.m.: For producers who want to explore alternatives to antibiotics, moderator Heather Fowler of the National Pork Board leads a discussion with researchers and veterinarians about options to use in swine production. Panelists include Nick Gabler, Iowa State University; Peter Schneider, Applegate; and a representative of Smithfield Hog Production.
  • 1 p.m.: Managing margins in the futures and options markets may help farmers control financial risks. Tim Hughes of CIH will talk about those tools.
  • 2 p.m.: If you are looking for ways to improve the longevity of pig buildings through maintenance, this session will provide information on how to get the most value and years from your building investment. Moderator Brian Blumhagen of New Modern Concepts leads a panel that includes John Boleyn, Hog Slat; Matt Cunningham, Premier Ag Systems; and a representative from Precision Structures.
  • 3 p.m.: As interest in using cover crops continues, there is also interest in learning about the use of manure in fields where cover crops are planted. Dan Anderson, Iowa State University, discusses with two farmers about their experiences. Those farmers are Steve Berger, Wellman, and Mark Schleisman, Lake City.

There will be one certification training session on Jan. 23:

  • 10 a.m.-12 p.m.: Confinement Site Manure Applicator Certification. Applicators should bring their manure applicator certification card to this session.

Pre-registration to attend the Iowa Pork Congress is available through Jan. 9. IPPA members can attend the trade show and conference at no cost by registering by that deadline at the Iowa Pork Congress site, or by using the form in the November issue of the Iowa Pork Producer magazine, or by calling 800-372-7675.

Non-IPPA members can save $5 off the normal $10 admission cost by registering by the Jan. 9 deadline.

Registrations will be accepted after the deadline, including through each day of the show, but the cost will be $10.

Source: Iowa Pork Producers Association, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

Pennsylvania swine industry on alert after Strep zoo discovery

iStock/Getty Images Close up of a pig peaking around an enclosure
TREATING STREP ZOO: USDA said that Streptococcus zooepidemicus bacteria are largely susceptible to antibiotics such as penicillins, amoxicillin, ampicillin and cephalosporins.

Streptococcus zooepidemicus, also known as Strep zoo, has been found in Pennsylvania after authorities identified the bacteria in a cull sow that died at an approved livestock market.

According to an alert from PennAg Industries, the Pennsylvania Department of Agriculture, in conjunction with USDA Veterinary Services, recently investigated the loss of a cull sow with heavy growth of Strep zoo. The alert states that the sow was in poor body condition and debilitated, and that it was consigned by a small livestock dealer-hauler along with four other sows in a similar state. 

The sow had apparently passed through a livestock dealer-hauler that had a recent spike in mortality in their holding facility. The dealer-hauler marketed surviving sows to a slaughter-only livestock auction.

The remaining sows were traced forward and shown to have gone to slaughter, according to the alert. In a letter to Pennsylvania Farm Show exhibitors, the ag department's Bureau of Animal Health and Diagnostic Services said that meat from the animals does not present a food safety risk if handled and prepared properly. The farm show begins this weekend and runs through next week in Harrisburg.

The holding facility where the sick sows came from is currently under quarantine for Strep zoo and diagnostic samples are pending.

Shannon Powers, spokeswoman for the Pennsylvania Department of Agriculture, said in an email that USDA was initially notified after the sow died. Federal authorities later notified the state ag department after beginning an investigation.

Testing was conducted at the Pennsylvania Veterinary Lab, and it was later revealed that the sows came from a farm in Snyder County, which is currently under quarantine.

The PennAg Industries alert said that the farm was gradually selling down its animals because the facility was run down and in need of repairs. The farm has 90 pigs. Three debilitated sows on the farm have been euthanized and diagnostic tests are pending. The rest will be moved to a slaughter facility with no possibility of diversion.

Powers said the department has no evidence that the disease is circulating in other commercial swine or in the show pig sector in Pennsylvania currently.

Dangerous disease

Strep zoo is zoonotic, meaning that it can transferred to and cause disease in humans, though it's rare.

It is not unusual to find Strep zoo in cat or dog shelters, and even in horses. But the fact that it has spread to pigs is concerning since this strain appears to be especially deadly.

In its November Emerging Risk Notice, USDA said that a high mortality event occurred in late September in a cull sow slaughter plant in Tennessee. The Food Safety and Inspection Service reported that more than 40% of 2,222 sows in the plant later tested positive for Streptococcus equi subspecies zooepidemicus (Strep zoo).

USDA reported that similar events may have occurred in other locations, including in a continuous-flow swine aggregating and buying station in Ohio that is epidemiologically linked to the event in Tennessee.

USDA said that high mortality rates in cull swine at holding facilities are unusual and that an investigation is ongoing to determine if Strep zoo is the single cause of the Tennessee deaths or if multiple factors are to blame.

Canadian authorities reported detections of Strep zoo in May as a result of swine die-offs in multiple locations.

The disease has been detected in an aggregating yard in Ohio and in slaughtering plants in Wisconsin, North Carolina and Florida. 

According to Swine Health Information Center, the bacteria found in the aggregating yards had been traced back to an ATTC strain that caused at least 300,000 pig deaths during an outbreak in China in the 1970s.

An Oct. 8 alert from the Iowa State University Veterinary Diagnostic Lab states that the lab had received only six reported isolations of the disease in the past 10 years. The rapid spread and progression of the disease in the aggregating yards and slaughtering plants suggests that much of the nation's pig herd had not previously been exposed to this strain of the disease, the report stated.

Humans and other animals can get Strep zoo by coming into contact with infected respiratory droplets and uterine exudates. Humans can also get the bacteria by drinking unpasteurized milk from sick animals with mastitis due to infection from Strep zoo, though disease, according to the alert, is rare.

On Dec. 23, the Pennsylvania Department of Agriculture designated Strep zoo as a dangerous transmissible disease in swine, giving the department authority to monitor the domestic animal population to determine the prevalence, incidence and location of transmissible disease of animals. 

Signs of disease

Clinical signs of the disease include sudden-onset lethargy, weakness, high fever and swift spread among pigs of highly varied sources, and rapidly escalating mortality approaching 30% to 50% among affected populations. 

The alert states that any Pennsylvania producer who suspects the disease in their herd should call 717-772-2852 and press option 1 to reach the veterinarian on call.  

Steps to prevent disease

PennAg Industries said that the basis of a biosecurity plan starts with establishing a distinct line of separation, which requires minimum biosecurity such as clean coveralls, clean boots, boot wash and a shower on the farm.  

Here are some steps to minimize risk from moving animals on and off the farm:

  • Pay close attention to how vehicles enter the farm, and load and unload livestock. The goal should be to never have the driver enter the facility; They should either remain in the truck or go no farther than their trailer. 
  • Require that only clean conveyances enter the farm to avoid the conveyance being a fomite to bring disease onto the farm. 
  • Farm staff should load cull animals up to but not entering the livestock trailer, and then clean and disinfect the loading chute. 
  • Exposure to direct sunlight has been shown to be beneficial as cultured Streptococcus equi has shown to survive less than 24 hours on wood, rubber and metal surfaces when in direct sunlight.

Possible treatments

USDA said that Strep zoo bacteria are largely susceptible to antibiotics such as penicillins, amoxicillin, ampicillin and cephalosporins.

Common cleaning and disinfecting procedures can inactivate the bacterium, though appropriate mechanical cleaning with disinfection should be incorporated, according to USDA.

Babies on board

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Transportation can be stressful for pigs of all ages, but data on how weaned piglets are affected by current transport practices are limited. Assuring that all pigs survive transport is important to the bottom line of all hog operations.

Assuming that healthy pigs are loaded onto the truck, if there is a relationship between a transport practice and increased mortality, it indicates a risk factor that could be reviewed for improvement.

The present study identified the risk of mortality (dead on arrival) for weaned piglets during transport increases as transport distance increases. This risk of mortality is further exacerbated when long-distance transport (more than 14 hours) occurs in temperature extremes, i.e., very cold to cold temperature conditions (below -10 degrees C to 5 degrees C), and the type of truck that is used (straight deck versus potbelly).

There is an interactive effect of distance and temperature, and truck type and temperature, on the risk for dead on arrival. This indicates that for such journeys to occur, improved climatic control of trucks needs to be achieved.

Researchers at the University of Saskatchewan, the Prairie Swine Centre Inc. and the University of Guelph collaborated on a study that took a retrospective analysis of industry transport records from shipments of weaned piglets transported by road originating in Canada.

The dataset provides insights into what are typical current transport practices, and what the impact of current transport practices on piglet mortality is.

National Hog Farmer/Ann Hessnhf-annhess-hauwabwala-12194002b.jpg

Hauwa Bwala, a University of Saskatchewan graduate student, presented a poster on the research project during the recent Pig Welfare Symposium in Minneapolis.

Through analyzing the effect of risk factors on the piglet transport, this work identifies areas that require industry focus to reduce piglet mortality and improve the welfare of pigs traveling by road.

There is little available knowledge on how commercial transport practices influence piglet welfare. Records of piglet mortality during transport are collected as a measure of importance to animal welfare and production.

Dataset analysis
The objective of this study was to identify risk factors for mortality in newly weaned piglets transported by road within Canada, by retrospective analysis of records from commercial shipments. 

A total of 6,692 transport records spanning a four-year period (2014-18) were collected from five companies: three hog production companies and two livestock transporters. Researchers looked at the effect distance had on piglets, dividing and classifying trips accordingly:

* less than 500 kilometers, "short,"  <6 hours

* 500 to 1,250 kilometers, "medium," >6-14 hours

* 1,250 to 2,500 kilometers, "long,"   >14-28 hours

* more than 2,500 kilometers, "very long," >28-36 hours

Ambient temperature was also categorized:

* below -10 degrees C, "very cold"

* -10 degrees C to 5 degrees C, "cold"

* 5 degrees C to 25 degrees C, "mild"

* Above 25 degrees C, "warm"

Researchers also looked at the how the piglet weight; trailer type, whether potbelly or straight deck; the eight trucking companies; and the 62 barns of origin played a role in the number of weaned pigs that were dead on arrival, using a mixed negative binomial model.

The average load size was 1,119 pigs, with a range from a minimum of 29 to a maximum of 3,433 pigs per load. The predicted number of DOA increased with increasing transport distance, and temperature interacted with distance to influence mortality.

The predicted DOA counts (piglet loss per trailer; mean ± standard error, P<0.05), for long transport in very cold temperatures were greater than for long transport in mild temperatures (7.30 ± 3.16, and 1.47 ± 0.55, respectively). The DOA counts for trips in potbelly trailers were greater in very cold (2.43 ± 1.02) and cold (1.33 ± 0.53) temperatures, compared to similar journeys in a straight deck trailer (very cold, 0.61 ± 0.29; cold, 0.11 ± 0.08).

There is an increased risk of DOA for weaned piglets as distance traveled increases. Risk of mortality is greater for long-distance transport in very cold temperatures than in mild temperatures, and under cold or very cold conditions in a potbelly trailer than in a straight deck.

Trailer design with climate-control capabilities is an area for focus, especially for long-distance journeys.

Based on the results of the retrospective analysis, long and very long trips experience mortality on 42% and 45% of loads, respectively, across seasons, with an average mortality of 0.135% (1.3 pigs per load).

During the very cold weather, data suggest mortality increases to approximately 0.7% (seven pigs per load) for long and very long trips.

This increase in mortality would result in lost revenue opportunity of $200 to $300 per load for pigs shipped during a very cold time frame and over a long distance.

Researchers: Hauwa Bwala, University of Saskatchewan graduate student; Jennifer A. Brown, Prairie Swine Centre; Terri L. O'Sullivan, University of Guelph; and Yolande M. Seddon, University of Saskatchewan. For more information, contact Bwala at

This project was financed by the Saskatchewan Agriculture Development Fund. The researchers thank the companies that supplied the data.

Does gilt total born predict future farm performance?

National Pork Board Gilts in a group housing pen

Just like last month the short answer is yes. Gilt total born is one of the key performance indicators for total farm performance. Why do we look at total born and not live born? All of the work we have done over the last several years has shown us that most stillborns can be saved by making some changes in management especially extending farrowing hour and having someone attending more sows farrowing. 

Last month we looked at gilt farrowing rate as a predictor of future farm performance. It was a very good indicator of future farm performance. Also gilt performance for total born is a good indicator, but not as good as farrowing rate.

We picked 588 farms with 1.110 million mated females in inventory. The farms had to be over 22 pigs weaned per mated female per year and the farms had to have farrowed through Parity 5 so we could look at retention. 

Table 1 shows the performance of all of the farms broke out by the Top 10%, the 10-30%, the 30-50%, 50-70% and the 70-100%. Remember that each breakout are averages for farms in that line, so Top 10% had total born average for all farms at 15.92. The farms ranged from 33.85 pigs weaned per mated female per year to 22.06 pigs weaned per mated female per year, with an average of 27.63. Total born ranged from 12.03 to 18.33 with an average of 15.09.

Swine Management Servicesnhf-sms-table1-1120..jpg

Chart 1 compares the gilt total born to the farm's pigs weaned per mated female per year. There is a lot of variation, but the trend line has a direct correlation to gilt total born. This it the same correlation we saw last month with the gilt farrowing rate. Both are very good indicators of future farm performance. Total born is not as strong of an indicator as gilt farrowing rate, but it is still a very good indicator.

Swine Management Servicesnhf-sms-chart1-1120.jpg

Chart 2 shows the importance of developing gilts properly, this includes proper diets, age, weight, crate breaking, recorded heat no services, boar exposure, flushing, selection for structural soundness, etc., to maximize gilt total born. The farms were summarized by gilt total born in half pig increments. Gilt total born directly affects lifetime performance as shown in Table 2. If a farm is dealing with a low total born making changes in gilt development is a long-term program, taking two to three years to get the maximum effect. 

Swine Management Servicesnhf-sms-chart2-1120.jpg

Table 2 summarized total born through 5 parities showing potential lifetime performance and also showing the minimum and maximum in each breakdown. The top 21 farms averaged 87.70 total born through 5 parities while the bottom 66 farms averaged 69.96 total born through 5 parities for a difference of 14.74 pigs or almost 3 pigs per parity. We also summarized the minimum, maximum and range for each breakdown. The range is very large within each breakdown going from 12.39 pig's variation for the 14.00 pig's breakdown to 14.59 to 17.87 pigs for the 13.50-13.99 pig breakdown.

Swine Management Servicesnhf-sms-table2-1120.jpg

Chart 3 shows gilt total born is not a good indicator for farrowing rate as the trend line is flat at all levels of gilt total born. 

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Chart 4 compares gilt total born to the farm's wean-to-first service interval. As gilt total born goes up wean-to-first service interval goes down. This make sense as the trend we have seen on farms with better gilt development, lactation feeding and extra feed from weaning to breeding have had a downward trend in wean-to-first service interval for the last several years.

Swine Management Servicesnhf-sms-chart4-1120.jpg

Chart 5 looks at gilt total born compared to retention to parity 4. The Swine Management Services' retention calculations looks at the females that farrowed as Parity 1 and stay in herd through Parity 4. This ignores the gilt fall-out because of the when farms enter their gilts, some farms enter gilts as early as 90 days pre-breeding and most farms enter gilts at breeding time. As total born goes up the retention rate goes down. 

Swine Management Servicesnhf-sms-chart5-1120.jpg

Where is your farm at on gilt development? As was mentioned in the last two articles, gilts are the key.  

Table 3 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.

Swine Management Servicesnhf-sms-table3-1120.jpg

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 for us to write columns about, contact Mark Rix or Ron Ketchem. We enjoy being a part of the NHF Daily team. Previous columns can be found at

Sources: Ron Ketchem and Mark Rix, Swine Management Services, who are solely responsible for the information provided, and wholly own the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

20 wishes for the U.S. pork industry in 2020

Sergey Peterman/Getty Images nhf-sergey-peterman-gettyImages-2020.jpg

Did you get everything your heart desired for Christmas? I know I did and then some from my generous family members.

However, I will still have to go out and do some shopping for myself. No one ever seems to take me seriously when I put things like sweats and socks or towels and toiletries on the list each year. I know I can easily go out and buy those things for myself. I just despise doing so. I'll probably just add that to my growing list of New Year's resolutions of things I can and need to do.

I wish it could be that easy with some of the wishes on U.S. pork producers' list this past year. While we had success in keeping African swine fever out of U.S. herds; will soon be back in business with Japan, Mexico, Canada and somewhat back with China; and gained extra funding for additional agricultural inspectors and members of the Beagle Brigade at our borders, we had some wishes that still need to be addressed. For some of those wishes to be fulfilled, red tape will need to be cut and more effort across the aisle; for others, it may have to come from heaven above.

From the National Pork Producers Council, the National Pork Board, the Swine Health Information Center and the American Association of Swine Veterinarians to the North American Meat Institute, U.S. Meat Export Federation, American Feed Industry Association and the USDA, and everyone in between, we have listened over the last year to your concerns, challenges, aspirations and visions for the future of the U.S. pork industry. And while we could have made this 2020 U.S. pork industry wish list much longer, we decided to narrow it down to the top 20 we have heard most often. We hope we have captured your sincere wishes for 2020.

  1. Keep the U.S. swine population ASF-free.
  2. Get unrestricted market access to the China market.
  3. Have optimal soil and weather conditions for the 2020 planting and growing season.
  4. See progress on getting a commercial DIVA (Differentiating Infected from Vaccinated) compatible vaccine.
  5. Establish a U.S.-based foot-and-mouth disease bank with an adequate supply for a timely response if warranted.
  6. Expand export opportunities in The Philippines, Vietnam, Thailand, Indonesia, etc.
  7. Move regulatory oversight of gene-edited livestock from the Food and Drug Administration to the USDA.
  8. Encourage more international travelers to be truthful and declare recent farm visits and prohibited products they are carrying.
  9. Urge Customs and Border Protection to be thorough in pulling passengers for secondary screenings at ports of entry.
  10. Find a solution for livestock agriculture's labor shortage.
  11. Get California's Proposition 12 off the books.
  12. Reauthorize the Livestock Mandatory Reporting Act.
  13. Should ASF or another foreign animal disease be diagnosed in the United States, a plan to assess and mitigate contamination within the feed supply chain.
  14. Maintain a level playing field with cell-cultured and plant-based meat.
  15. Find additional markets for record U.S. pork production.
  16. Halt the spread of wild boar in the United States.
  17. Encourage the top 14 pork producing states to perfect their ASF crisis response plans.
  18. Have science trump emotion in nuisance lawsuits against livestock operations.
  19. Spread the word to consumers, domestic and internationally, to gain a greater appreciation for the versatility of pork.
  20. Keep the U.S. swine population ASF-free.

MORNING Midwest Digest, Dec. 31, 2019

As the year ends, perhaps it's time to resolve to stay in touch with people better in 2020?

Many are concerned about the mental health of farmers, and a bill has been introduced to help address that.

Airports have major construction projects going on.

Not every state in america is growing. 

Farm Progress America, December 31, 2019

Max Armstrong continues his discussion about the China trade deal. While there's a lot of attention to soybeans and pork, he shares that another crop that could benefit is wheat. China has to boost its supplies of wheat while soybeans may not see the big bump due to the reduction in the country's swine herd. China will release its wheat quota, and no matter where the country buys the wheat it will change the global demand picture of the crop.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Willie Vogt

Diagnostician zeroes in on emerging diseases

Getty Images/iStockphoto Veterinarian checking pigs in pen in a barn

While African swine fever, classical swine fever and foot-and-mouth disease are grabbing the headlines, there are other emerging diseases that U.S. pig farmers should have on their radar. Fortunately, diagnosticians such as Phil Gauger have their eyes on the radar for the industry.

Gauger, associate professor and veterinary diagnostician at the Iowa State University Veterinary Diagnostic Laboratory, offers a quick history lesson that porcine epidemic diarrhea virus and Senecavirus presented as far as emerging diseases go in the U. S. swine industry.

“Everybody remembers PEDV in 2013, and the idea that we could have a transboundary disease emerge in the U.S. swine population as easy as it did,” he says. “We can only speculate on ways perhaps it could have gotten into the country, but it was never totally figured out at least to this time, and thatʼs a little bit unnerving.”

Recent emerging diseases
Senecavirus reemerged in the United States in 2016, “which is maybe more of the prototype emerging infectious disease because we know that it was present in the U.S. before,” he says, “and then for some reason, kind of out of nowhere, it started to rear its head again and seemed to emerge as something more pathogenic than what it was before.” However, these strains of Senecavirus were genetically similar to what was circulating in other countries suggesting a new strain of Seneca had emerged in the U.S. He adds that with the PED and Seneca experience combined brings a heightened awareness of potential emerging infectious diseases, “and just that feeling that our swine populations are vulnerable to these emerging diseases, especially from other geographic regions.”

So, what does to the U.S. swine industry need to be concerned about right now and in the near future?

“Actually, viruses that currently affect the U.S. swine industry and continue to genetically evolve could also be considered emerging infectious diseases. These include virulent strains of PRRSV, new genotypes of porcine circovirus and new strains of influenza that often spillover from humans into the swine population,” he says. In addition, there strains of highly pathogenic PRRSV and highly pathogenic Pseudorabies virus in other geographic locations outside of the U.S. that could present a threat to the U.S. swine industry as well.

According to Gauger, porcine circovirus type 3 is an example of a virus that has been gaining headlines as of late in the U.S. swine industry. “While we now know that PCV3 has been circulating in the U.S. and in swine across the world for many years,” he says, “as time has gone on, we have learned more and more about this virus and its role in causing clinical disease in pigs.”

Check out this video interview with Phil Gauger, as he further explains emerging diseases.

Neurological diseases that have gained interest in the U.S. swine industry include porcine Sapelovirus, porcine Astrovirus type 3 and Atypical Porcine Pestivirus “which was determined the cause of the clinical signs responsible for ʻshaker pig disease,ʼ.” However, Sapelovirus and astrovirus Type 3 have been more recently recognized as causing some neurologic disease including paralysis in pigs “that previously were not fully characterized in swine,” he says.

Another virus showing up, but as of yet needing further confirmation it may be a potential pathogen in pigs, include porcine sapovirus that has been “implicated as a cause of enteric disease or diarrhea in young pigs,” and the emergence of virulent strains of Streptococcus equi subspecies zooepidemicus. “Thatʼs an example of a bacteria that has been recently implicated in causing high mortality in pigs as well.”

With current molecular diagnostic processes, such as whole-genome sequencing “weʼre able to detect new or emerging viruses or bacteria that might be involved in a clinical scenario, but of course need further confirmation before they are considered a new or emerging pathogen we would be concerned about in the swine industry.”

Diagnostic technology on horizon
As diagnostic technology improves, Gauger says it may be possible to detect disease-causing bacteria and viruses that have been present but, “were previously unknown or just not recognized in the disease process,” he says. “With this new technology, thereʼs a level of discovery of potential emerging or new strains of viruses or bacteria that were previously undetected but not necessarily known to be implicated in clinical disease, and those are ones that would be under further investigation or requiring additional diagnostic evidence that itʼs involved in a disease process.”

Gauger throws caution into the equation if one looks to technology such as next-generation sequencing to answer all swine disease questions. “Detection alone doesnʼt mean an element of causation or that itʼs definitely involved in clinical disease,” he says. “Thereʼs much more that has to happen after detection of an emerging pathogen to implicate it in a disease process. This includes an investigation often at the farm level with additional samples from affected pigs, additional diagnostic testing, and experimental evidence that an emerging agent is definitely a cause of clinical disease.”

Supply, demand and price: Looking ahead to 2020

DedMityay/GettyImages nhf-dedmityay-gettyimages-2020.jpg

As 2019 closes out, hog producers are no doubt feeling better about the upcoming year compared to what is being left behind. To say this year was tumultuous for the industry is putting it mildly. 

Months of uncertainty with escalating confrontation between the United States and China has given way to a first phase trade agreement that could lead to significant increases in pork shipments among other agricultural commodities. Meanwhile, ratification of the U.S.-Mexico-Canada Agreement will restore favorable tariff treatment for U.S. trade across the borders and likewise be beneficial for U.S. pork demand. Furthermore, the new year will also usher in a return to preferential tariffs for agricultural exports to Japan where the U.S. lost ground to competitors after withdrawing from the Trans-Pacific Partnership. 

It has been said that the confrontation with China in particular has curtailed the ability of the U.S. to supply the country with a reliable and affordable supply of high quality pork as the nation has seen its own domestic swine herd devastated by African swine fever over the past year and a half. While their demand for pork from all origins including the U.S. will certainly help to support prices in the upcoming year, it is also important to keep in mind the supply situation and its impact on price.

In the December World Agricultural Supply and Demand Estimates report, USDA updated their projection for 2019 U.S. pork production to 27.708 billion pounds, up 74 million from the November estimate of 27.634 billion, and 406 million above their estimate back in June as hog and pork supplies in the second half of the year came in well above expectations. The current projection for 2020 U.S. pork production is 28.694 billion pounds, an increase of 3.6% over the current year and roughly in line with both the percentage increase in the Dec. 1 all Hogs & Pigs inventory year-over-year as well as the Sept.-Nov. pigs per litter from the latest quarterly inventory report at 103.02% and 103.07%, respectively. The percentage increase year-over-year in the heaviest weight hog categories continues to be larger than what would have been expected based on previous surveys, and this is something that market participants will continue tracking in the new year as we move into 2020. 

This brings up an important point. While the demand for pork is obviously quite strong, pork demand and hog demand are not the same thing. At the end of the day, producers' revenue and profit margin are ultimately determined by the price of hogs they are delivering. While this is obviously correlated to pork value, it is important to remember that they are different. 

Figure 1 shows the retail value of pork broken down by component going back to 1970. These include the farm, wholesale and retail shares of the total price. What you will notice is that the retail value or share now makes up a majority of the total retail pork price at around 60%, with both the farm and wholesale values comprising about another 20% each of the total pork value.  Another thing you will notice is that the retail value or share of the total price has gradually been increasing over time with the wholesale and especially the farm value shares declining since 1970.           

Commodity & Ingredient Hedging LLC/Chip Whalennhf-whalen-figure1-123019.jpg

USDA Economic Research Service.

Another way of thinking about this is that over time, the retailer has taken a larger share of the total pork dollar, with both the packers/processors and producers losing ground. There are a couple inflection points on the chart including 1998 and 2015 where the farm share lost ground relative to the preceding periods. These both corresponded to supply-side market shocks, although for different reasons as the former period concerned inadequate processing capacity relative to the market supply of hogs while the latter related to production losses resulting from porcine epidemic diarrhea virus. There has been much focus over the past few years on the strength in pork cutout value relative to negotiated cash hog prices. There is perhaps also a sense that much of the vertical integration we are now seeing in the industry may be in part a result of increasing retailer leverage.

The supply side of the market will definitely be a big influence over price in the coming year, even though the focus will obviously be on demand. In terms of demand, USDA is currently forecasting a 12.8% increase in exports for the coming year, with 804 million pounds of additional pork being shipped during 2020 compared to 2019. This forecast was also made with the assumption that existing tariffs would remain in place. Given expectations for China to remove tariffs on U.S. pork, some estimates are now as high as a 1.5 billion pound increase in exports, and that will likely be needed if prices are going to move significantly higher in the new year.

Even with the 800 million pound increase to projected 2020 exports, total pork use per capita is forecast essentially the same next year at 52.6 pounds versus 52.7 in 2019. Looking at the bigger picture of total red meat, and especially red meat together with poultry, per capita use in 2020 is projected at 225.6 pounds compared to 224.2 in 2019 and 219.5 in 2018. Given expectations for a dramatic expansion in the broiler industry, there will be no shortage of protein to consume in the domestic market. As a result, hog producers better hope that peace prevails on the trade front in the coming year. Anything indicative of either larger hog supplies and pork production, or lower export demand will not factor favorably on the price outlook as the domestic market will already be saturated with inventory. 

The economic landscape will also be important moving through 2020. Domestic demand has no doubt been aided by continued growth and historically low unemployment while inflation has held in check. While this outlook is forecast to continue for the foreseeable future, any signs of recession given the late stage of the business cycle would likewise not bode well for the market.

In terms of strategy, hog producer margins continue to look favorable into 2020, with positive returns projected through third quarter between the 75th and 87th percentiles of historical profitability over the past decade. While fourth quarter margins are not as strong, they are close to breakeven which is better than where spot margins for this current year's quarter are finishing out. With the price recovery we have seen over the past month in the hog market, option implied volatility has come down although it remains very high from a historical perspective. 

Perceived risk is still quite large in both directions, so producers need to weigh their comfort level to this potential exposure as they consider hedge strategies.  As an example, if ASF were to arrive in the U.S. and close off our export market, are you comfortable with the degree of protection you would have to significantly lower prices? On the other hand, if summer hog prices were to rise back above $100 or higher, are you OK with the percentage of your production that will be capped and the opportunity cost associated with that?  Everyone will have different answers to these questions, but it is a good exercise to take time considering as we begin the new year.         

For more help on evaluating specific strategy alternatives or to review your operation's risk profile, please feel free to contact us.   

There is a risk of loss in futures trading. Past performance is not indicative of future results.
Source: Chip Whalen of Commodity & Ingredient Hedging LLC, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.The opinions of this writer are not necessarily those of Farm Progress/Informa.