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Reducing Variation In Finishing

Kansas State University research details nutrition and management steps to bolster efficiency and producer returns.

Over the last 15 years, pork producers have successfully adopted technologies to reduce weight variation, improve health and cut the cost of production in the finishing stage.

Those technologies have included single-sourcing pigs; all-in, all-out (AIAO) pig flow; multi-site production; split-sex feeding; standardized genetics; and wean-to-finish barns.

Today, producers have turned to different packer buying programs and lean premiums to improve returns.

But producers need to realize one simple fact, points out Joel DeRouchey, swine researcher at Kansas State University (KSU): the majority of the money they make on their hogs depends on selling weight.

“Regardless of where producers are selling their pigs, they need to make sure they are getting them to the weight that fits within the packer matrix, and not selling their pigs light,” he explains.

When continuous-flow production was common, producers would just roll light pigs back to the previous group, observes DeRouchey. But with AIAO production systems, and marketing groups over a set number of days, the light pigs have become much more burdensome when trying to close out a barn.

For producers facing the challenge of improving uniformity in market hogs, DeRouchey offers these suggestions:

  • Wean pigs older

    Typically, producers are moving to later weaning because it boosts pig performance and cuts production costs.

    “The one area that has not been talked about with later weaning is the reduction in whole-herd variation from increases in market weight,” he comments.

    Figure 1 shows the influence of weaning age, from 12 to 21 days, on variation in weight at 156 days after weaning. The graph illustrates as weaning age increases, the lines on the graph become higher and narrower. In other words, more pigs fall in a tighter weight window, DeRouchey states.

    “As we move to some of these higher weaning ages, it is certainly going to help in the finisher in terms of marketing, because of less total variation within that given population,” he adds.

    For producers sourcing pigs from sow units/co-ops, DeRouchey says be sure to ask suppliers about variation in weaning age. Ideally, weaned pigs should be in a very tight window of 19-22 days of age to minimize variability in growth.

  • Add fat to grow-finish diets

    In a recently completed research trial by KSU graduate student Chad Hastad, 1,176 pigs with 28 pigs/pen were individually weighed and placed in one of three weight groups: “light” (71.6 lb.); “heavy” (83.1 lb.); and “mixed” or unsorted (77.6 lb.). Pigs received either no fat or 6% choice white grease through to finish. In practical situations, 5 or 6% added fat is the maximum that should be used for bin and auger flowability, says DeRouchey.

    Adding fat to diets is known to improve average daily gain and feed efficiency. The goal of this trial was to find out if it paid to sort pigs into different weight groups to improve performance in the lightest pigs, thereby reducing whole-barn variation.

    Figure 2 bears out that the heavy pigs fed fat throughout the finishing period showed a 4-lb. improvement in performance (final weight of 271 lb.) vs. 267 lb. for the non-fat-fed heavy group.

    In contrast, the light group of pigs showed an improvement of 7 lb. from the non-fat to the fat-fed group.

    The mixed group of pigs improved by about 5 lb. when the untreated group was compared to the fat-treated group.

    But more importantly, the total weight variation of the entire group (Figure 2) was reduced by feeding fat to only the light pigs, as it improved their weight gain and brought their average weight closer to the average of the heavier pigs that were not fed fat.

    In the non-fat-fed groups, the heavy pigs finished 17 lb. heavier than the light pigs (267 lb. vs. 250.4 lb.) When fat was added to the finisher diets, the heavy group finished only about 13 lb. heavier than the light group, decreasing the whole-barn weight variance.

    When looking at returns based on sorting and fat level on margin over feed costs, as shown in Figure 3, there was an advantage of more than $2/pig when fat was added to the diets of light pigs. However, adding fat to heavy pigs' diets produced negative margins, and feeding fat to the mixed group of pigs was just about an economic wash.

    Based on these results, it may pay to divide finishers into light and heavy groups so that light pigs can be fed fat to improve whole-barn uniformity, provided that separate feeding systems are available.

    For this study, corn was $2.16/bu., soybean meal was $186.19/ton and fat was $13.34/cwt.

    When determining the economics of feeding fat, DeRouchey reminds that fat does increase the cost of the diet. But it provides a 2% improvement in feed-to-gain ratios for every 1% added fat. Average daily gain is increased 1% for every 1% added fat (on average).

    Added fat provides a 2% improvement in growth in the early grower, but no improvement in the late finisher (past about 175 lb.), says DeRouchey.

  • Don't shortchange pigs on amino acids late in finishing

    KSU studies on early and late finishing reveal that producers can't get by with shortchanging the level of amino acids late in finishing without hurting average daily gain and lean percentage.

Producers are able to get by, however, with limiting amino acid levels early in finishing, provided the pigs are compensated with levels at or above the norm in late finishing, he concludes.

Biofilter System Lowers Manure Load, Odor by 90%

Odor complaints from neighbors living downwind from hog barns may soon be a thing of the past.

Biosor, a biological filtration system perfected in Quebec, Canada and distributed by H2O Innovation, is designed to nearly eliminate odors and liquid effluent from hog barns. The system is particularly well suited for tightly closed confinement barns like those in Canada, the Midwest and Northern Plains.

Quebec Challenge

Pork production is a hot topic in Quebec, as many farms exceed the new, provincially mandated hog-per-acre ratio.

According to a Quebec government study, many hog farms are producing 120% more manure than they can spread on the land under the new regulations. Therefore, the industry was left with three options: reduce production, ship excess manure to non-surplus regions, or treat the manure to municipal waste standards.

In the early 1990's, the Quebec Center for Industrial Research (CRIQ) launched a $13 million project to develop viable biofiltration systems for heavily charged effluents, such as hog manure. Their target was to remove more than 90% of pollutants and nutrients in order to reduce the amount of manure spread on farmland to a strict minimum. A system had to have very low operation and maintenance costs and still achieve high performance standards for the processing of liquid waste and air vented from barns.

CRIQ came up with the Biosor system, an aerobic, organically-structured biofiltration system (Figure 1).

“I've seen various kinds of biofilters in Holland and England, and this is by far the best air cleanup system I have seen,” says Leonard S. Bull, professor of animal science and associate director of the Animal and Poultry Waste Management Center at North Carolina State University (NCSU).

“For hog facilities, where the odors coming from pit-ventilating systems are really serious problems, it seems to be a very logical application. Air quality is the next focus point that all animal agriculture must address, as highlighted by the new Environmental Protection Agency (EPA) monitoring program,” he states.

NCSU plans to install and test a Biosor system in an existing, full-scale hog operation in North Carolina in the near future (pending funding). By mid-2006, they hope to have a pilot scale operation running. H2O Innovation will be a partner in the project.

How It Works

The biofiltration process is quite simple and requires little attention. Separating the manure, so only the liquid and gaseous effluents pass through the biofilter, is one of the biggest challenges.

“Only the liquid portion of the waste is treated with the biofiltration system,” explains Elise Villeneuve, engineer with H2O Innovation. “The process is aerobic, which means it works with the oxygen in the air.” This organic bed is conducive for the right bacteria to develop. The natural resin in the bed fixes several pollutants and serves as a medium for microorganisms that digest the retained substances and break them down into carbon dioxide (CO2) and water (see Figure 2). “The biofilter uses a fixed-film biological process. Since it combines biological and physical processes, the system can deal with the variable manure loads produced by pigs as they grow. This is very important,” Villeneuve says.

“Normally, when you add a variable into a wastewater load, you need a fulltime operator for the treatment plant. With this biofiltration system, maintenance only takes a few hours every month. You just need to make sure the pump is in good working order and that the distribution system, the lines transporting the liquid manure to the biofilter, are washed out with a power jet. The media will last from five to eight years.”

Installation Issues

The method of separating the manure depends on the type of production, nursery or finishing, and the quantity of manure that needs to be treated. In some cases, separation can be done by decantation in a large tank. Other systems might require mechanical or physical and chemical separation.

In Quebec, several producers have converted existing manure storage tanks into biofilters, observes Bull. New facilities would require some sort of storage system, so those costs could be applied toward the biofilter and solid storage costs.

Bull suggests that walling off a section of an existing lagoon for the biofiltration process would be a relatively inexpensive option. Regardless, some costs will be incurred. But he reminds: “If we are dealing with air quality issues, it may allow you to stay in business.”

“Some Biosor biofilters are used exclusively for treating foul air,” points out Villeneuve. “Exhaust air from the hog barn is run through the filter and removes virtually all odors. In this case, keeping the filter clean and making sure the blower is in good working order is the only maintenance required.”

The peat moss and wood chip media utilized in Biosor, while available in huge quantities in Quebec, are hard to come by in some areas of the Unites States.

“We would need to come up with alternatives so the media wouldn't need to be shipped from Canada,” Bull notes. “Finding other local media that have the same proprietary components would need to be built into the research.”

Prototypes Tested

The first full-scale Biosor system, using a filtering media primarily consisting of peat moss and wood chips, was installed in 1997 in a 150-sow, farrow-to-finish facility in Ile d'Orleans, near Quebec City. The system was designed to treat 3,000 gal. of liquid manure/day and 2,500 cfm of foul air.

Preliminary findings were promising. The polluting load of the manure was reduced by 90% and the biofilters successfully deodorized 95% of the foul air.

Four subsequent hog barns and a dairy unit, outfitted with the system between 1999 and 2000, confirmed the initial findings. Owners of two barns aimed to solve odor problems, while the other three wanted to reduce land applications.

One test facility, a 1,200-sow unit operated by Purporc in St-Valerien in eastern Quebec, used an existing manure storage tank to separate the manure, and three Biosor filtration basins. This 10,000-sq. ft. system can effectively treat 9,000 gal. of liquid manure and up to 13,000 cfm of foul air daily. The effluent is discharged on farmland using an automated sprinkler irrigation system when weather permits.

The total investment was $425,000, with total annualized costs, including the initial investment, amortization, media renewal, maintenance, electricity, insurances and taxes, estimated at $95,000 ($15/1,000 lb. produced).

Jean-Paul Thériault, general manager of the Purdel cooperative, owners of Purporc, says that they are pleased with the results. In an age where barns face stiffer and stiffer opposition from various pressure groups, he says perhaps the most important benefit the Biosor system offers is ensuring their manure management practices are beyond reproach.

“Sure, there's a cost associated with using this technology,” Thériault says, “but we're hoping this will be seen as a value-added feature down the road.”

An installation at the Viaporc Inc.'s Cesy farm required a similar investment. Two Biosor biofilters were installed for their finishing facility of 35,000 piglets and 5,000 full-grown pigs in 2000.

The chemical separation of the manure is slowly being replaced by a more cost-efficient method of using a belt system running underneath the slats to separate solids from the liquid manure.

“We still have problems with ammonia, but we're making headway,” says Cécilien Berthiaume, Viaporc owner. “By 2007, our wastewater treatment should be fully operational, and we should be able to meet our goal to discharge the treated wastewater directly into a nearby stream for less than US$8.70/cubic meter.” (264 gal./cubic meter).

Not only has the system allowed them to increase their production capability from 5,400 piglets in 1999 to 35,000 without having to purchase additional land, they now meet the provinces' new land application norms — plus, they're eligible for Carbon credits under the Kyoto Treaty.

U.S. Pilot Project

Bull is talking with Hog Slat, Inc. to adapt the system to a 1,200-head building. “We're hoping to put one in the ground for around $150,000,” says Bull, assuming half of a lagoon is walled off for the biofilter. “There's a fairly sizeable margin of error with that figure, depending on material costs,” he adds.

Bull figures they could probably handle the lower volume ventilation rate in the winter with curtains down, but managing the higher summer ventilation rates would be more difficult.

“Obviously, you will have the most control in buildings that are entirely ventilated downward through the pits and whose sides do not open. With buildings that have curtain sides, and therefore diffuse ventilation, it will not be possible to capture all of the emissions. If the pits below the slats are ventilated, however, the concentrated odors and ammonia emissions will still be captured,” Bull says.

“There are a lot of things that need to be sorted out,” he continues. “Those are the reasons why the most logical and easiest installation locations in the United States would be in the upper Midwest, where facilities and ventilation systems are very similar to those in Quebec. Such installations could use the excellent scientific data from CRIQ without much, if any, modification. This would allow the process to start while we look at applications to other climatic zones and facility types.”

Five Technologies Rise to the Surface

The long-awaited, five-year, $17.3 million study to identify effective swine manure management alternatives is nearing completion.

North Carolina's pork industry experienced an unprecedented growth spurt beginning in the mid-'70s, with 2.7 million hogs, then culminating at about 10 million head when a building moratorium was enacted in 1997.

The production stalemate caused by the mandatory moratorium barred the building of new swine production facilities utilizing the anaerobic lagoon and spray-field technology, the low-cost manure storage and treatment system considered the standard in the state.

With the rapid growth came environmental, social and political scrutiny centered on water and air quality issues associated with hog density, and the traditional manure-handling methods on the state's approximately 2,000 production sites.

In the summer of 2000, the state's attorney general entered into agreements with the state's largest pork producer, Smithfield Foods, its subsidiaries, and Premium Standard Farms. Those companies funded a monumental effort to identify and develop environmentally superior technologies (EST) that could replace the popular lagoon-spray-field systems.

Smithfield Foods contributed $15 million, while Premium Standard Farms added $2.3 million to the research till. In March 2002, the state's attorney general accepted a third agreement with Frontline Farmers, a group of independent contract hog finishers who offered their facilities to develop and implement the ESTs selected.

C.M. (Mike) Williams, director of the Animal and Poultry Waste Management Center at North Carolina State University (NCSU), led the charge to select and evaluate 16 EST candidates.

The agreement also mandated “comprehensive determinations of economic feasibility.” Researchers targeted economic variables such as the projected 10-year annualized cost for each technology tested, projected revenues from by-products, cost-share monies and incentives, and the impact an EST may have on the competitiveness of the state's pork industry compared to those in other states.

Candidate ESTs were analyzed in two phases. The Phase 1 report, issued in July 2004, reviewed eight ESTs. Two met the environmental performance standards — the Super Soils on-farm liquid technology and Orbit HSAD (high solids, anaerobic digester).

A year later, the Phase 2 report was filed, singling out three additional technologies that met the technical performance criteria. They included the Super Soils-Compost System; Gasifier (Re-Cycle) system; and Biomass Energy Sustainable Technology (BEST) Idaho fluidized bed combustion system.

The latter three systems and the Orbit HSAD (high solids, anaerobic digester) system are for the treatment of solids only, which must be coupled with a system that treats the liquid components (urine, flushed water/manure slurry) of the waste stream.

The Super Soils-liquid system was the only liquid system that met technical performance criteria. Table 1 offers additional details about the five candidate ESTs.

Cost Comparison Basis

To establish the economic values mandated in the agreement, researchers used the projected costs of retrofitting an existing lagoon-spray-field system with the ESTs, including the impact the technology would have on the competitiveness of the state's pork industry.

The unit cost for this analysis is based on the cost/1,000 lb. steady state live weight (SSLW)/year, on a 10-year annualized basis. (Table 1).

“The annualized cost ($/1,000 lb. SSLW/year) is a pretty good way to think about these technologies, because it's a cost per unit of capacity,” explains Kelly Zering, NCSU agricultural economist and project team leader.

For example, the value assigned to one head of finishing capacity is 135 lb. SSLW. Therefore, 1,000 lb. of finishing capacity, divided by 135, is 7.4 head. A sow in a farrow-to-wean system is 433 lb., so 1,000 lb. SSLW equals 2.3 sows; a nursery pig is 30 lb., so 1,000 lb. SSLW represents 33.2 nursery pigs.

The baseline, annualized cost of the typical lagoon-spray-field system in North Carolina is $86.81 (Table 2). The annualized, incremental cost in this table reflects the additional cost a producer would be expected to incur each year for 10 years, over and above what they were spending with the lagoon-spray-field system, explains Zering. Those costs could be reduced if energy and/or by-products of the technology could be sold.

“In brief, the collective economic data indicates the projected additional costs of retrofitting existing lagoon-spray-field farms with candidate ESTs for a complete treatment system (liquid and solid treatment) ranges from $90 to over $400 per unit cost,” Williams says.

By comparison, a permitted lagoon-spray-field system would have cost about $85 (per unit cost) in 2004. That figure has become a target for the technology suppliers, but it is important to recognize that an annualized incremental cost of $85 would result in a predicted 12% reduction in the state's herd size, Williams says.

“The clear message from the industry and agri-business representation is that a 12% reduction is unacceptable,” he says. “However, I think it is unreasonable to expect that anything that may have a (negative) impact on herd size is, by default, economically infeasible. My position is, if you accept a target or recommendation as reasonable, then that can and should be pursued with a policy and a timeline that minimizes the impact on herd size.”

For Zering, the question begging an answer is: “How much can we ask North Carolina farmers to spend to retrofit, and what would be the impact on the industry if we do that?”

Williams says the long-term impact of adopting the ESTs that currently meet performance standards could result in a 12-50% reduction in North Carolina's pork output.

“The agreement states that the companies (Smithfield Foods, Premium Standard Farms) will adopt the technologies that are determined to be economically feasible,” says Williams. “It also states that the companies acknowledge that the costs may be higher than the existing spray-field technology, as well as gives them the right to dispute the findings.”

Following is a more detailed explanation of the five candidate ESTs:

One Liquid EST Named

Super Soils — Liquid: This solids separation/nitrification-denitrification/soluble phosphorus removal/solids processing system was tested on a 4,000-head finishing site with six naturally ventilated barns equipped with pit fans and a pit recharge system.

The liquid portion of this technology that met the EST standards processed approximately 10,000 gal. of wastewater/day. The liquid waste stream flows between tanks in a circulating loop undergoing denitrification (anaerobic process) in one tank and nitrification (aerobic process) through the use of concentrated nitrifying bacteria in a second tank. The treated wastewater is stored and used for recharging pits. A portion is further treated for soluble phosphorus removal and irrigated fertilizer application.

“The Super Soils process primarily treats the waste to remove the solids by chemical application, which lowers the solids as well as the phosphorus. The liquid is then processed through nitrification-denitrification. Biologically, ammonia is first under an aerobic treatment process, with oxygen added for conversion to nitrate. Then, in simplistic terms, in the anaerobic environment, the nitrate is converted to harmless nitrogen gas. The process is similar to a small municipal waste treatment system,” Williams explains.

“They successfully did two things with their liquid treatment, initially. First, when they took out the solids, their process dropped the nutrient phosphorus out, so that removed one environmental variable of concern. Second, their approach also killed the pathogenic bacteria, meeting another performance standard,” he says.

In the first-generation technology, the data shows they were getting close to 100% reduction in the established performance criteria.

Williams says the Super Soils-Liquid technology looks like a tank farm, where the lagoon is replaced by a series of tanks.

Basically, it's a conglomeration of different technologies from around the world. “They combined these technologies to operate at a lower cost than the high-energy, high-oxygen content used by municipalities, which would be very, very cost prohibitive in the pork industry,” he says.

Still, the cost of the system tested stands at nearly $400 annualized incremental cost (Table 2). “The Super Soils group, with their second-generation project, are proposing to get the cost down close to $100,” Williams says.

The Super Soils-Liquid technology must be coupled with some type of solid separation treatment.

Four Solid ESTs Surface

The EST standards were met by four solid treatment systems. Three were pilot-sized projects with solids managed off the farm on a separate site and costs projected to full-scale operation. A fourth, the compost technology, was operated full scale and proposed to be an on-farm system.

The four solids treatment technologies included:

Orbit HSAD: The main component of this technology is an enclosed, high-temperature (thermophilic) anaerobic digester, which converts the solids portion of the waste stream into methane and carbon dioxide (biogas). This biogas is used as an alternative energy source to generate electricity or heat.

“Orbit is a 100% enclosed steel tank centralized treatment system. After the manure stream has undergone the separation process, the solids/slurry, 25-30% solids, is delivered to the digester, which looks like a large shipping crate,” says Williams. “It is designed to be compartmentalized, making it easy to add or remove capacity pretty easily.”

Solids spend 15-21 days in the digester, depending on loading rates (quantity, time) and waste stream components. Approximately 75% of the organic carbon is converted to biogas, with the remainder producing an effluent sludge. This sludge and the remaining solid fraction are further processed to make a value-added liquid fertilizer, a soil amendment or compost.

“The Orbit HSAD system generates methane, so the key to its success will depend on the capability to get a reasonable return on the energy (i.e. electricity) that's developed, and the fate of the digestate (slurry) after the energy has been extracted,” says Williams.

Theoretically, the energy can be routed back into the grid as electricity, although the market often depends on location and energy demand in an area.

Using the “cost/1,000 lb. SSLW/year” metric, the amount is estimated at $373.22, but the cost will vary depending on the solids concentration delivered.

Realistically, this is not an on-farm system, so it may not be fair to use that metric, Zering notes. More likely, a “tipping fee” would be charged based on quantity and solids percentage delivered. Municipal waste processors commonly charge tipping fees. “The technology supplier says the cost will be considerably less than $373/1,000 lb. SSLW,” he says.

“Our position was, if the technology provider gave us information to show that there was a market for one or more of their products, and they could sell all they wanted for an established price, then we would include that in the analysis,” says the NCSU economist. “It's reasonable to assume that you could sell all of the electricity that you could produce from hog farms in North Carolina, but when it comes to selling the compost or some other product, then the market becomes more localized — and we need some data to support those economics.”

To better establish the breakeven costs of the solids treatment systems, Zering and his colleagues also developed a sensitivity analysis to determine the impact solids separation rates would have on the annualized incremental costs, using the cost/1,000 lb. SSLW metric (Table 3).

“The cost/dry ton treated/processed serves as an indication of the breakeven value necessary to fully cover the process. Because this is a ‘dry ton treated’ figure, the cost of separation is not included,” he explains.

Using the Orbit system as an example, the cost/dry ton treated is $872.15, at the highest rate operated in the experiment. If the slurry were delivered at 25% solids, the cost/wet ton would be one-fourth of that amount, or $218.04. “That would be the tipping fee if you wanted to hold net costs at zero,” Zering explains. The cost/dry ton does not account for any revenues generated from added-value products.”

When analyzing the solid separation technologies, Zering thinks the cost/dry ton treated is better than the cost/1,000 lb. SSLW, because the latter is so dependent on the type of solids separation available.

“Some technologies capture 15% of the solids, while others capture well above 50%, so the cost/1,000 lb. SSLW is so conditional,” he says.

Returning to Table 3, Zering notes the actual moisture content of the solids used in the test, and the cost calculated/dry ton treated. The three columns to the right show the costs/dry ton converted to cost/1,000 lb. SSLW/year at three solids separation rates (low, medium, high).

“If you only get 0.15 dry tons/1,000 lb. SSLW, then you get a low cost/1,000 lb. SSLW, because you're just not getting much solids to process,” he continues.

The medium separation rate (0.43) in Table 3 was used for the predicted annualized incremental costs presented in Table 2.

At the high separation rate, where most of the solids are separated out of the waste stream, the costs/1,000 lb. SSLW go up, because there are more solids to process.

“If you ever get to the point where you are generating revenues from the solids, those costs are offset. Then, the more efficient you are, the more revenue you get,” Zering notes. “That is why the cost/dry ton processed is the best way to think about what it costs for each of the solids treatment systems.”

For perspective, it is also important to remember that a complete manure management package would require both liquid and solids processing. Therefore, combining the Super Solids-Liquid technology costs with Orbit solids processing delivered at 25% solids, the total annualized incremental cost/1,000 lb. SSLW would be roughly $618/year. Zering says the total could be lowered because the Super Soils-liquid expenditure includes some land application costs for the solids.

Naturally, variable costs may differ in other parts of the country. These are North Carolina costs and should be used as a reference point only, Zering says.

Super Soils-Compost System: This composting facility is a centralized site that receives separated solids from a 4,360-head finishing facility. The Super Soils-Compost technology mixes separated solids from swine manure system flow with bulking materials, such as wood chips or cotton gin by-products, daily.

When the composting process is complete, the product is placed in curing piles and allowed to stabilize. The cured product can be used for fertilizers and other soil amendment products.

The breakeven on this technology is $194.56 on a dry ton basis (Table 3). In the cost comparison, using the $/1,000 lb. SSLW and a medium separation rate, the annualized cost is a favorable $83.27. But, again, this cost would have to be combined with a liquid processing technology.

Gasifier (Re-Cycle): This gasifier system was located at NCSU's Animal & Poultry Waste Management Center, and utilized a belt system to deliver the solids to be gasified. The belt system cost is not included in Table 3. Any solids delivery system could be used.

In the pilot-scale experiment, solids at 50% moisture were loaded into the gasifier daily, and heated to nearly 1,500° F. “The percent moisture matters, because it affects the amount of fuel required to gasify the solids. The drier, the better,” Williams says.

The gasification process produces by-products: carbon monoxide, carbon dioxide, methane and ash. The ash could be used as a feed supplement or as a fertilizer amendment. The waste heat produced from the gasification process could be captured and utilized.

“I think the gasifier approach is a very logical way to handle manure solids, because it reduces the volume dramatically; plus you get an energy product,” he says.

The annualized cost metric is $76.33/1,000 lb. SSLW, excluding use of the energy. The projected breakeven is $178.35/dry ton.

BEST-Idaho: The solids from two BEST test farms, 3,000- and 4,000-head finishers, respectively, were blended with turkey litter and trucked to a combustion facility in Coeur d' Alene, ID, for evaluation.

“To get the moisture content of the solids correct, it was blended with poultry litter,” Williams notes.

The combustion and emissions characteristics of the manure solids-litter mixture were evaluated in an atmospheric bubbling, fluidized bed system maintaining a bed temperature above 1,300° F.

“This technology also uses high-temperature combustion. The BEST-Idaho system, however, relies on an aerobic, fluid-on-vent combustion process. And like the anaerobic gasification process, this technology extracts energy from the solids, reducing the content to ash. The heat is captured to turn a turbine or generate steam to power a feedmill, an ethanol plant or a similar application.”

The breakeven on this technology, using the dry ton basis, is $597.38. In the cost comparison, using the $/1,000 lb. SSLW and a medium separation rate, the annualized cost is $255.68.

Closing Thoughts

Williams sees the multi-year project to identify environmentally superior technologies as an opportunity to answer some energy-dependence questions.

“This is an opportunity to take what has been demonstrated technically, and pursue over a reasonable amount of time some of the incentives that could be very favorable to pork producers who want to incorporate these technologies and provide energy by-products as a result,” says Williams. “I think government incentives will be critical to making these technologies work.

“Various sources of financial support, including cost-share programs, may be available in the future, with the most promising opportunities for technologies that generate energy,” he adds.

“These are technologies that people, are not familiar with,” Zering says. “I think we did the best we could to actually measure the costs to build and operate (these technologies).

“We think there is some new information about the cost to put these systems on the farm and operate them,” he continues. “It boils down to — how much capital will I have to come up with to finance, put in place and operate a system on a day-to-day basis?

“I think different parts of the country — different parts of the world — will utilize different combinations of treatments. In some places, water is very valuable, so they might not want to just allow it to evaporate or spray it on fields where it's not utilized by plants. In the Midwest, plant nutrients are very important. In other parts of the world, energy is more valuable, so capturing it and utilizing it will be the highest priority,” Zering concludes.

Editor's note: Phase 1 & 2 Technology Determination reports, technology descriptions and additional information generated through the “Development of Environmentally Superior Technologies for Swine Waste management” initiative can be found at:

ESTs Explained

An environmentally friendly technology (EST) is “any technology, or combination of technologies, that 1) is permittable by the appropriate government authority; 2) is determined to be technically, operationally and economically feasible for an identified category or categories of farms as described in the agreements; and 3) meets the following performance standards:

  • “Eliminates the discharge of animal waste to surface waters and groundwater through direct discharge, seepage or runoff;

  • “Substantially eliminates atmospheric emissions of ammonia;

  • #8220;Substantially eliminates the emission of odor that is detectable beyond the boundaries of the parcel or tract of land on which the swine farm is located;

  • “Substantially eliminates the release of disease transmission vectors and airborne pathogens; and

  • “Substantially eliminates nutrient and heavy metal contamination of soil and groundwater.”

Table 1: Comparison of Candidate Technologies, Experimental Conditions and Invoiced Costs
Technology Super Soils Liquid Orbit HSAD3 Super Soils Composting BEST Idaho Combustion Gasifier Re-Cycle
Pilot or Full Scale Full Pilot Full Pilot Pilot
Complete or Incomplete System Complete On-farm Incomplete Off-farm Complete Off-farm Incomplete Off-farm Incomplete Off-farm
Type of Farm Served Feeder-Finish N/A N/A N/A N/A
Capacity, head 4,360 N/A N/A N/A N/A
SSLW1 Capacity Served (lb.) 588,600 N/A N/A N/A N/A
% of Capacity Occupied During Experiment 85% N/A N/A N/A N/A
Solids Processing Rate N/A 660 - 2,200 lb./day @ ~25% DM4 68,750 lb./week @ 16.7% DM 739 lb./hr. @ 30 to 60% DM 18 to 30 lb./hr. @ 48 to 79% DM
Duration of Experiment 11 months 4 months 6.5 months 15 days 2 trials
Total Installed Cost (APWMC2 Invoices+Other) $1,041,621 $805,848 $210,663 Not Reported Not Reported
Type of Manure Removal Pit N/A N/A N/A N/A
Reported Volume of Barn Effluent/Day/1,000 lb. SSLW of Capacity 19.14 N/A N/A N/A N/A
1SSLW = steady state live weight
2APWMC = Animal & Poultry Waste Management Center, North Carolina State University
3HSAD = high solids, anaerobic digester
4DM = dry matter content
Table 2. Predicted Annualized Incremental Costs1 (Task 1) of the EST Candidate Technologies
Technology Annualized Cost1 ($/1,000 lb. SSLW/year)
Baseline (lagoon and spray-field) $86.81
On-Farm Complete Systems Annualized Incremental Cost1 ($/1,000 lb. SSLW/year)
Barham Farm4 $89.17
Environmental Technologies (Sustainable NC-Frontline Farmers)4 $136.70
Re-Cip4 Solids Separation Reciprocating Wetlands $143.21
Super Soils - Liquid $399.71
Separated Solids Treatment Systems (Add-On Technologies)2, 3 (assumes 0.43 dry tons of solids collected/1,000 lb. SSLW/year) Annualized Incremental Cost1 ($/1,000 lb. SSLW / year)
BEST Idaho (centralized fluidized bed combustion facility) $255.68
Gasifier (Re-Cycle) $76.33
Orbit High Solids Anaerobic Digester $373.22
Super Soils Composting Facility $83.27
1Annualized costs as shown in this table are calculated for a 4,320-head finishing farm using a pit-recharge system of manure removal and nitrogen-based land application to forages.
2The annualized incremental costs for the solids treatment technologies include the avoided cost of on-farm land application of solids. That is, ($/1,000 lbs. SSLW/yr.) = ($/dry ton technology cost - $/dry ton avoided land application cost)* (dry tons of solids/1,000 lbs. SSLW/yr.). By accounting for avoided land application costs, the incremental annualized costs for the solids treatment systems can be added directly to the incremental annualized costs for complete on-farm systems (which include the cost of land-applying solids).
3See separate technology reports for additional analysis of breakeven prices for product sales.
4Manure management technologies “on the bubble.”
Table 3. Sensitivity Analysis on Solids Treatment Systems: The Impact of Solids Separation Rate on Annualized Incremental Costs ($/1,000 lb. SSLW/year)
Technology Moisture Content of Solids1 (%) $/Dry Ton2 Treated/Processed Low Separation Rate3 Medium Separation Rate4 High Separation Rate5
(0.15 dry tons of solids/1,000 lb. SSLW/yr.) (0.43 dry tons of solids/1,000 lb. SSLW/yr.) (1.14 dry tons of solids/1,000 lb. SSLW/yr.)
$/1,000 lb. SSLW/yr.
BEST Idaho 70% $597.38 $89.31 $255.68 $680.42
Gasifier (Re-Cycle) 50% $178.35 $26.75 $76.33 $203.14
Orbit HSAD 70% $872.15 $130.82 $373.28 $993.38
Super Soils-Compost 83% $194.56 $29.18 $83.27 $221.60
Note: These costs are based on demonstrated performance and cost data (usually from pilot-scale or prototype systems). Solids treatment technology providers have proposed steps to reduce the costs of these systems in future generations of their technologies. All of these solids treatment technologies also have an associated proposed by-product revenue stream. If product revenue exceeds breakeven prices for solids treatment, the incremental cost of solids treatment could become negative; that is, a net revenue. See the Task 1 Final Reports for these technologies for detailed breakeven analyses, a discussion of potential revenue streams, and the costs and returns of proposed next-generation solids treatment systems.
Note: The numbers in boldface (medium separation rate) represent the numbers that are reported in the Task 1 summary table for solids treatment technologies.
1Moisture content of separated solids has a significant effect on the cost/dry ton of solids treatment systems. The costs reported in this table assume the moisture content that is listed in this column. Changing this assumption changes the predicted costs reported in this table.
2The costs in this column reflect the per-dry-ton technology cost minus the avoided per-dry-ton cost of on-farm land application of solids.
3Low separation rate corresponds to performance data collected from the BEST FAN + TFS separator as operated at Corbett Farm #1. Among the Environmentally Superior Technologies (EST) separators, the EKOKAN separator had the lowest modeled separation rate at 90 dry lb. of solids (0.045 dry tons)/1,000 lbs. SSLW/yr.
4Medium separation rate corresponds to performance data collected from the Environmental Technologies, Inc. separator as operated at Chuck Stokes Farm.
5High separation rate corresponds to performance data collected from the Super Soils separator as operated at Goshen Ridge Farm. Among the EST separators, the belt system had the highest modeled separation rate at 2,990 dry lb. of solids (1.495 dry tons)/1,000 lb. SSLW/yr.

Technologies ‘On the Bubble’

There are a few technologies that are very, very close to making the cut,” Williams emphasizes. A soon-to-be released Phase 3 report will contain recommendations to technology providers that are “on the bubble,” providing them an opportunity to make adjustments and be reconsidered.

One such technology, a covered, anaerobic lagoon that operates at ambient temperatures, was tested at the 4,000-sow, farrow-to-wean farm owned by Julian Barham, Zebulon, NC. “They met the criteria for all parameters, except the ammonia emissions,” Williams explains.

Another is the Environmental Technologies' closed-loop, liquid treatment system. “I consider them on the bubble because the economics are comparatively better, and they are very, very close on a couple of the environmental parameters,” he says.

Finally, the Re-Cip solids separation, reciprocating wetlands system shows promise. This technology, tested on a 2,000-head finishing unit, features cells or basins in which alternating anaerobic and aerobic conditions are created to remove nitrogen from the swine waste stream. “The economics, comparatively, are much better than the Phase 1 Super Soils technology,” Williams says. “The only environmental parameter that did not meet requirements was the pathogens, so they may be able to make adjustments for that.”

Three-Peat Projected For Hog Profits

Profits in 2006 will peak near $50 this summer, then slump to a low in the upper $30s in the fourth quarter, predicts University of Missouri agricultural economist Ron Plain.

Despite record levels of production in the United States, pork producers have continued to roll in the profits.

In fact, producers enjoyed 23 consecutive months of profits in 2004-2005, the longest continuous period of being in the black since 1989-1991.

Last year's hog slaughter of 103.6 million head was an all-time record, breaking the record set the previous year.

The Agriculture Department is projecting about a 2% growth in pork production in 2006, explains Plain. Market hog slaughter should reach a new high of 104.9 million head, an increase of 1.3% over last year.

He says even though production continues to soar, producer receipts should stay in the black for the third straight year.

In 2004, Plain calculates hog prices averaged $51.83/cwt. Last year, cash hogs rang in at $49.55/cwt.

For 2006, Plain foresees hog returns averaging $41-44/cwt. Prices for the three-year period are listed in Table 1.

With continued cheap feed placing production costs at $38-39/cwt., the hog industry will continue to stay modestly profitable, he says.

Unpredictable Years Ahead

Table 1. Iowa-Minnesota Live Hog Price Forecast
Negotiated Base Price/Cwt.
2004* 2005* 2006
Qtr 1 $43.55 $51.64 $40-43
Qtr 2 $53.93 $51.96 $45-48
Qtr 3 $56.10 $49.95 $41-44
Qtr 4 $53.78 $44.57 $37-40
Year $51.83 $49.55 $41-44
*actual price-prior day purchased

Plain suggests there are warning signs for less profitable times ahead:

  • Pork demand has softened as the high-protein, low-carbohydrate diet craze has faded. The pork industry will lose half of the demand gains it made with the food fad, he predicts. Glenn Grimes, professor emeritus at the University of Missouri, has plotted U.S. pork demand trends since 1970 (Figure 1).

  • The success of pork exports has been phenomenal, with the United States already recording its 15th-consecutive year in 2005 of record sales (see sidebar on p. 31).

    But animal health emergencies can quickly change that trade picture, says Plain, pointing to recent outbreaks of foot-and-mouth disease (FMD) in Brazil and Argentina, and the threat caused by the growing spread of avian influenza. When Taiwan broke with FMD a few years ago, their export market was destroyed, says Plain.

  • Gilt retention numbers for the last quarter of '05 exceeded sow death loss numbers, signaling the start of sow herd expansion.

  • The December Hogs and Pigs Report indicated the U.S. breeding herd increased by just 0.7%. “That figure is extremely small by historical standards, but is the largest annual increase since 2000,” reports Chris Hurt, Extension economist, Purdue University. The U.S. breeding herd has been operating in a narrow window of 5.9 to 6.1 million head.

    That relatively small expansion equals 42,000 sows. Surprisingly, that growth was centered in the eastern Corn Belt, which led the area in growth with an upsurge of 35,000 sows. Increases were seen in Indiana (20,000), Illinois (10,000), Ohio (10,000) and Wisconsin (5,000). Only Michigan recorded a drop of 10,000 sows.

    Hurt speculates it may be the start of resurgence of the U.S. breeding herd in the eastern Corn Belt. In 1990, that area had 27% of the breeding herd, before declining to only 17.2% in 2004.

  • Canada's $1.65/bu. duty on U.S. corn imports could easily signal a flood of feeder pig imports into the United States, remarks Steve Meyer, president of Paragon Economics. He authors the Market Preview section in North American Preview, the weekly e-newsletter published by National Hog Farmer.

  • The sudden growth in hog slaughter plants occurring over the next few years in North America will signal excess packing capacity, adds Meyer. When packing industry expansion occurred in 1996-97, hog expansion followed, and with it came some of the lowest hog prices ever recorded (1998-99), he warns.

Slow Hog Expansion

The reasons for slow hog industry expansion, in response to consecutive years of profits, include the difficulty of obtaining building permits and the cost of building construction.

But Plain says today's hog cycle puts producers in a unique position if they want to expand. In the past, when prices were low, producers cut sow herd numbers, leaving some buildings sitting empty, then bringing them back on line with the next round of profits.

That didn't happen in 2002-03, however, because pork producers who weathered the low prices kept their barns full.

When prices finally rebounded, it was due to growth in pork demand and exports, during a period of record hog slaughter, he explains.

“This time, if producers want to expand, there are no empty hog facilities to fill. This time, producers have to pour concrete — and that is a lot tougher proposition than simply restocking facilities,” stresses Plain.

Pork Exports Continue Surge

The U.S. pork industry has recorded its 15th- consecutive year of growth in pork exports in 2005, selling 1.27 million lb. of pork and pork variety meats worth more than $2.5 billion, according to the U.S. Meat Export Federation (USMEF).

Pork exports tallied $2.635 billion last year, more than a billion dollars more than the value of pork exports sold just two years ago, in 2003.

Pork sales to Japan — the number one destination for U.S. pork shipments — rose 13% in volume to 389,321 lb., and 11% in value to $1.088 billion.

After five successive, record-breaking years of sales, U.S. pork exports to the number two market, Mexico, fell 8% in volume (364, 637 lb.) and 9% in value ($513.5 million). Those figures still beat all other sales figures to Mexico except for 2004, say USMEF officials.

Sales to other major markets in 2005 were:
• Canada 143,639 lb., up ▸ 16%
• China/Hong Kong 101,481 lb., up ▸ 16%
• South Korea 79,042 lb., up ▸ 158%
• Russia 44,347 lb., up ▸ 48%
• Eastern Europe 32,798 lb., up ▸ 239%

Hog:Corn Ratio - Alive and Well

The hog-corn price ratio has been a useful measure of pork production profitability for many, many years. As such, it has also been a good predictor of pork production changes.

The critical level has historically been 20. When the ratio goes above 20, production will go above year-earlier levels 75-85 weeks later. Figure 1 shows this relationship over the past 17 years.

Note that I have adjusted the relationship during the 1996-1997 cycle when corn prices went to record levels, thus causing the ratio to be unusually low. Adjusting the time lag back to late 1995 when corn prices broke above year-earlier levels, however, shows that this hog-corn ratio vs. production increase episode was about the same length as the others.

So what do this graph and this relationship tell us about recent happenings in the pork industry?

First, it makes the good times of 2004 and 2005 quite clear. Not only did the ratio hit a record high (at least for the time period covered by this graph), but also it stayed above 25 since May 2004 and above 25 from mid-September 2004 through the week before Christmas 2005. It is hard to beat the combination of strong hog prices and low-priced grain.

Second, it is a very strange, profitable time in that production has been above year-earlier levels for 58 of the 75 weeks in this high-ratio episode. It is my opinion that record exports are the best explanation for this unusual occurrence. You're certainly welcome to your own theory. We've simply never seen either exports or hog-corn ratios like this so we have no way to test the relationship.

Third, it is likely that production will remain above year-earlier levels for some time now. While expansion has been small thus far, productivity growth will keep production up. The next USDA Quarterly Hogs and Pigs Report is due on March 31.

Finally, while the ratio reached its lowest level (21.1) since June 2004 the week of Feb. 2, I think it will rise for much of the remainder of 2006. Corn prices have risen, but they have done so basically in a seasonal manner. The normal seasonal pattern for hogs would say they would increase through June or July.

Risky Business?
What are the risks? Record numbers of cattle on feed, chicken production and corn production, as well as the rise in ethanol production will drive usage higher. Should weather problems arise, corn prices will rise to ration this crop and the next. The Corn Belt is dry at present.

The biggest risk for hog prices is a potential problem with exports. That's not likely, but it would have a very negative impact. An additional risk is imports of Canadian slaughter hogs and pork to claim a duty rebate on imported U.S. corn. Those imports will come in April and May, but the number that will cross the border remains the big question.

One thing is certain: The hog-corn ratio will fall, eventually.

Point of Clarification
In last week's newsletter, I made the following statement: "Beginning in 10 days, you will be able to sell spot-month futures contracts for five months."

The statement was apparently confusing to some readers and I apologize for that. All I meant was that Chicago Mercantile Exchange (CME) Lean Hogs futures contracts were available for each of the next five months, April through August. That is important because the basis is smaller and more predictable in a month that has its own contract. Basis in non-contract months (January, March, September, November) is generally wider and less predictable simply because traders don't care about cash markets or basis until the last two days of a contract's life.

Click to view graphs.

Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
e-mail: [email protected]

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Avian Influenza Becoming Widespread

The talk of the meat/poultry complex this week is about avian influenza H5N1. The disease is now moving rapidly across Europe and has been identified in several countries in Africa. It appears the disease will affect all of Europe and Asia, and control measures such as vaccination are now being employed to limit its impact.

The question I have been asked most often is, "What will happen if and when it hits here?" From what I know, the proper answer to that question is "when" not "if" it will strike the United States. In spite of the fact we are an ocean away from infected areas, this virus is going to be quite widespread, and modern mobility will almost certainly carry it to the Americas.

The answer regarding H5N1's market effects is, to me, dependent on one factor: consumer reaction.

If consumers react in fear of contracting the disease from chicken meat, chicken demand will fall, and pork, beef, turkey, seafood, etc., will fill the protein gap. Demand for those products will rise and prices will increase.

If consumers do not fear chicken meat, they will likely respond to larger domestic chicken supplies (all or most exports will be blocked at least momentarily and exports from some regions may be blocked for a longer period of time), and resulting lower domestic chicken prices, by buying more chicken, and thus reducing the demand for other proteins.

We have a model for this behavior: European and North American reactions to bovine spongiform encephalopathy (BSE). Europeans reacted to BSE by reducing beef consumption and increasing the use of other proteins. North American (especially Canadian) consumers did just the opposite -- they did not fear BSE, saw lower beef prices and took advantage of them, thus reducing demand for pork and other proteins and driving hog prices down.

There are good reasons for the different reactions. Europe's governments botched the BSE situation badly by withholding information and dragging their feet on taking action. Add that to Europeans' apparent general mistrust of their governments and one can understand the fearful reaction.

On the other hand, the governments of Canada and the United States were more open and above-board and reacted immediately and publicly to the BSE situations. In addition, Canadian and U.S. consumers had the benefit of knowing that Europe had seen no widespread epidemic of supposedly BSE-related new variant Creutzfeld-Jacob Disease (nvCJD). They thus reacted quite rationally to lower-priced product: "We'll buy more, thank you!"

So will North American consumers react the same way to avian influenza H5N1? They will have the same benefit of hindsight, but we don't yet know how the human side of H5N1 will play out in Europe. On the other hand, H5N1 doesn't have a multi-year incubation period, so any infections that come will be visible quickly, and thus have a more immediate impact on consumer behavior.

I don't know the answers but those are the kind of factors I will be watching over the next several months.

Roller-Coaster Hog Market Possible
The market result is likely to be high levels of volatility. That's not all bad since it probably means some peaks to go with the valleys. Getting from one to the other may be rather hard on the nerves, so get ready. Are you fond of roller coasters?

Figure 1 shows daily charts of Chicago Mercantile Exchange (CME) Lean Hogs futures for June, August, October and December as of Wednesday, March 1. After very tough sledding for all of December and January, all of those contracts had gotten within $2 of the contract life highs this week, and the technicals point to continued strength. Most or all of those summer contracts could get into the $70s if cash hogs continue to strengthen seasonally.

The fall contracts are back in the black for good producers and historic data tell us that they normally peak in April so producers should watch those as well.

Follow Futures Markets Closely
For the umpteenth time -- watch these futures markets closely and know what a given price means for your margins. Beginning in 10 days, you will be able to sell spot-month futures contracts for five months. During that time, you won't have to deal with the often-erratic behavior of basis in non-spot months.

Think of your decision process this way: Every day represents a buyer for all of the hogs you will produce over the next year. You can sell part or all of them or hope a higher-bidding buyer comes along. Wait long enough and you will have to put the inventory on "Blue Light Special" to the highest bidder in order to clear the space for new inventory. That may or may not be a good thing.

You didn't realize you were making the same decisions as the Wal-Mart or K-Mart manager, did you?

Click to view graphs.

Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
e-mail: [email protected]