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Articles from 2006 In May


Seasonality -- Help or Hindrance?

Seasonality is a never-ending fact of life for pork producers. Virtually everything that happens on a hog farm varies according to the time of year.

As an economist, I am most interested in seasonal price patterns. A good way to measure those is to compute monthly price indexes as shown in Figure 1. These indexes, computed by the Livestock Marketing Information Center (LMIC) of Lakewood, CO, show each month's price as a percentage of the annual average.

The method used by LMIC allows them to only publish indexes 12 months after the date in question, so they only update this series at the end of each calendar year. Indexes representing 1996-2005 will be published at the end of 2006, so we must still use the 1995-2004 indexes shown in Figure 1.

Indexes Help

Indexes are a good tool for seasonality because they keep the level of price at any given time from confounding our analysis. The four-year hog cycle can make a big difference in the level of price from year to year, but seasonal variation in any year may be about normal.

For example, the hog price for last week in our North American Pork Industry Data table (see attached) is about 10% lower than the price for the same week last year. But this year's price will probably have a seasonal relationship to prices at other times this year that may well be very normal. A seasonal index shows these time period-to-time period relationships regardless of the level of prices.

So how can this be used? The seasonal index graph says that May prices are usually about 110% of the annual average price. It also says that November prices are usually about 88% of the annual average. We can use last week's price and these two indexes to compute a "seasonally-expected" price for November as follows:

Seasonally-Expected November Price = May Price x November Index
May Index

Seasonally-Expected November Price = $64.84 x [0.88/1.10]
= $64.84 x 0.80
= $51.87

Does this always hold true? Of course not.

We are using the average index for all Novembers from 1995-2004. Actual indexes for November during those 10 years ranged from 0.67 (no doubt in 1998) to 1.06. Cyclical changes, competition from other meats, shifts in consumer preferences, and packing capacity restrictions -- all can cause variation.

Still, using historical seasonal price relationships are a good place to start when one considers prices into the future. They've been around a long time and are likely to be a factor for a long time to come.

Quarterly Variation

What causes such seasonality? The main driver is pig biology and seasonal supply variation. Pigs just don't breed well in hot weather. They don't eat well either, and that means they don't grow well. In addition, hot weather means we are using corn that has been stored for at least eight months and that sometimes confounds the feed intake problem.

Cooler weather seems to mean hog heaven. Pigs eat better, breed better.

All of these factors conspire to push hog supplies out of the summer months and into the fall -- and that pattern is not changing much at all. Figure 2 shows average quarterly hog slaughter by decade since the 1950s.

Quarterly variation changed dramatically from the '50s to the '60s, then shifted again, though less dramatically, in the '70s. The only real change since then was a change between the second and third quarters in the 1990s.

The shifts in the '50s, '60s and '70s were no doubt driven by the shift away from pasture farrowing. A move to more confined feeding and far more tightly controlled production systems in the '90s probably drove the Q2 to Q3 change. But regardless of what has happened, we still slaughter only 24% of the year's total hog supply in the second quarter and nearly 27% of it in the fourth quarter.

Is that really so bad? Good question.

If the seasonal pattern for consumer pork demand looks just like the lines in Figure 2, then no, it's not bad at all. Some empirical research suggests that pork demand is, in fact, higher in the fourth quarter of the year. But it's not that much higher and, thus, we usually build stocks even when prices are low near the end of each year.

Regardless of what consumer demand looks like, this seasonal variation causes some over-investment in slaughter facilities. They have to be large enough to handle the fourth quarter glut, and the idle capacity this investment creates becomes an economic negative for the other three quarters of the year. Thus, variation leaves pork prices higher than they would be if we could somehow just keep output steady.

But, in the end, we are finding that it is very difficult to fool Mother Nature.




Click to view graphs.

Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
e-mail: steve@paragoneconomics.com

Exports Remain a Bright Spot

U.S. pork exports continue to grow at a torrid pace this year -- much to the benefit of U.S. producers and packers. Commerce Department and USDA data released last week show total U.S. exports for March were 23% larger than last year. That number is right in line with January and February (+20% and +23%, respectively) and the entire year of 2005 (+22%). All of those numbers represent muscle meat shipments on a carcass weight equivalent basis.

Figure 1 shows exports by destination and one thing is clear: This year's excellent export performance has not been helped at all by trade with Japan. Shipments to our largest foreign customer have been lower than 2005 in each month thus far, and stood 7.8% lower for the year at the end of March.

That's bad news and good news. The bad news, of course, is that sales to Japan are down and we have to wonder why. For those who attribute recent strength of pork exports to Japan to their lack of U.S. beef, this downturn cannot be credited to the resumption of those exports since they were quite short-lived back in January. It is also not likely to be a currency issue, since the yen was basically steady near its most recent peak in mid-December through the end of March. It has actually strengthened since April 1 -- a development that bodes well for shipments from here forward.

I have argued for some time that the surge in business with Japan was more a function of avian influenza fears than of the lack of U.S. and Canadian beef. I can't prove that since the answer lies within the minds of Japanese consumers. However, there is anecdotal evidence that fears of chicken are waning, thus shifting some pork consumption back to chicken. U.S. chicken exports to Japan were 34% higher in March this year vs. March 2005, and year-to-date chicken exports to Japan are up 7.4%.

Readers should note, though, that our chicken exports to Japan so far in 2006 are only 6% as large as our pork exports. The -7.8% for pork and +7.4% for chicken represent vastly different actual amounts. One must always be careful with percentages!

The good news of the Japanese situation is that U.S. pork exports are becoming more and more diversified. The biggest volume growth in 2006 is to Mexico, the destination for nearly 37,000 metric tons more U.S. pork thus far this year. That represents an increase of over 38%, after only 1% growth in 2005. Other growth countries through March 31 are Russia (up 148%), Taiwan (up 72%), Korea (up 59%) and China-Hong Kong (up 50%).

Through March, Japan represents 31.7% of U.S. pork exports vs. 39.3% for 2005.

What's on the Horizon?
Export business is just one factor that has supported hog prices in recent weeks. Some stability in beef prices and very slight improvement in chicken prices have removed some of the negative sentiment in the meat complex. Rising cutout values resulted in some $50 live hog quotes this week and Chicago Mercantile Exchange (CME) Lean Hogs futures have held their late April gains and, in a few instances, most notably December, are challenging contract life highs.

Where will futures go now? Well, history says that they may well begin their seasonal decline. Figure 2 shows weekly futures prices since 1996. The small arrows are positioned on the second week of May for each year. They are also positioned in almost every case very near the seasonal high for futures.

Note that the arrows are pointing to a time when the nearby contract is June, and that contract trades for another 20 or so days before the bars represent the July contract. But in just about every case, July and then August futures prices are lower than were the June prices (and often significantly lower), even though they were nearly as high in mid-May of those years.

Will this year be the same? Good question, but remember that chicken companies have been producing a lot of product and their "cutback" announcements have basically been "we're not going to expand by quite as much as we had planned." Feedlot inventories remain record large and those cattle will definitely come to town at some point.

The recent rally has been good and has carried all contracts to potentially profitable levels depending, of course, on feed costs. Think about what the current margins would mean for your profit and loss statement come December.




Click to view graphs.

Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
e-mail: steve@paragoneconomics.com

The 2006 Masters of the Pork Industry

Wendell and Dell Murphy
Wendell and Dell Murphy

The 2007 Masters of the Pork Industry have been announced. Click to read all 10 profiles.

The Masters of the Pork Industry are a very special, hand-picked group of pork industry visionaries.

Their accomplishments, dedication and visions provide insight and some words of caution for those involved in the business of producing quality pork.

Herein, you will find the personal experiences and business philosophies of industry veterans at the top of their professions; and young, ambitious entrepreneurs destined to leave their mark on the dynamic pork industry.

They've shared some of the bumps and bruises, the victories and defeats, and, in some cases, the sources of inspiration that carried them forward in their pursuit of excellence.

Wendell & Dell Murphy

Dedication sustains Murphy Family Ventures.

Sit down for a visit with Wendell Murphy and his son, Dell, and some words will flow easily into the conversation — dedication, hard work, community, family.

Another word has crept into their daily vocabulary in recent years — diversification.

The story of Murphy Family Farms' phenomenal growth from feeding feeder pigs in dirt lots behind the mill at Register's Crossroads, N.C., to the world's largest pork production system is widely known. When the family business sold to Smithfield Foods in 2000, many thought the Murphy family's chapter on pork production had closed.

Not so. The Murphy's retained some of the family-owned farms with the understanding that they would raise hogs under contract for Smithfield Foods.

As 42-year-old Dell explains it: “Anything that goes in or on the pigs is the integrator's (Smithfield's) cost. The parts and pieces that don't go in or on the pig are generally the contract growers (Murphy's) responsibility.”

The current Murphy-owned farms provide Smithfield with 3-week-old or 10-week-old pigs, depending on the facility they come from, then raise them in finishing barns to about 270 lb.

“Each time they move, Murphy-Brown (the production arm of Smithfield Foods) pays a fee for our facilities and services, the same as occurred under the original Murphy Family Farms contract,” explains Wendell.

But the sale left the Murphy's without an infrastructure to support their farms. They formed Murphy Family Ventures to help fill that void.

Dell sees the services of the MFV swine production group as comparable to the Midwestern model of veterinary clinics and consultants assisting with management of pork production systems. “That's only done on a very small scale in North Carolina,” he explains. “We'd be interested in helping others add value to their systems and to utilize our production management services more efficiently.”

The MFV swine production group, which has grown to 625 employees, now manages nearly 150,000 sows, roughly 3.2 million feeder pigs and nearly 375,000 market hogs annually in North Carolina and Missouri.

“North America has all the sows it needs,” says Wendell. “So, we will update our existing production facilities as needed, and focus on diversifying our investments.”

Beyond hogs

Murphy Family Ventures provides support services to all businesses owned by the Murphy Family and others. MFV is currently comprised of eight divisions and about 800 employees. In addition to swine production services, MFV Support Services division provides management support to grain sales, hospitality services, golf and recreation, turkey production, land development (River Landing), portable storage (Pack-M) and investment management services.

While Wendell Murphy expanded the hog enterprise, his brother, Pete, concentrated on developing a private, gated community nestled on the banks of the Northeast Cape Fear River near Wallace, NC. Opened in 1996, River Landing boasts over 1,400 acres and features homesite options with prominent custom home builders offering multiple designs.

The meticulously planned community features walking and biking trails, a 36-hole Clyde Johnston-designed championship golf course, a tennis complex, junior Olympic-style swimming pool, regulation basketball and volleyball courts and an elaborate fitness center. Just outside the gate sits The Mad Boar Restaurant, an award-winning Holiday Inn Express & Suites and an upscale convenience market.

Dell assumed management of the land development division in late 2003. “We come from the commodity side of the hog business, where low cost is everything,” he explains. “To be flat honest, the amount of money we've spent on amenities — at one point, I thought we were out of our minds. But, without question, the quality and the marketing of what Uncle Pete originally set up has really made it successful. We have doubled sales each of the last three years.”

River Landing is located in Duplin County, the largest hog-producing county in the nation. Planned expansion will envelop an early Murphy Family Farms' pork production site, long since closed. “Never in the world would I have ever thought that property in rural Duplin County would sell like this,” admits Wendell.

Veering off in a totally different direction is MFV's Pack-M, a franchise under the parent company known as 1-800-PackRat. Pack-M deals in 12- or 16-ft. portable units that are delivered for on-site storage or removed to an environmentally controlled warehouse.

“When we started thinking about a new venture, that is not something I would have ever thought about,” admits Wendell. “But, around here, mini-warehouses are everywhere — and they're all full.”

MFV owns the franchise rights to 40 locations in the Southeast. Six locations are scheduled to open in 2006.

Reflections of ’98

The 4-5 years prior to the Smithfield sale were rough years.

“It was awful,” remembers Wendell. “We had always been so conservative. From the time we opened our feedmill in 1962 until 1998, we had never had a losing year.

“When you see yourself losing that much money, like in '98, I guess I became paranoid,” he continues. “It suddenly appeared to me that the packer-processors were trying to use that as an opportunity to drive the producers out of the business so they could integrate. Clearly, I was wrong about that.”

In truth, Murphy expected the hog industry to go the route of the poultry industry, so he had been negotiating with Smithfield Foods' Joe Luter, off-and-on, for a decade. “Every time we would get close to a deal, the complexities would make me uncomfortable and it would fall apart,” he says.

Murphy investigated building or buying a packing-processing facility, but by the late-'90s, getting a permit was impossible, and attempts to purchase a plant were exhausted.

“I felt like we needed to own a processing plant if we were going to own all of these hogs,” Wendell explains. “We wanted to hedge our bet on the downside of the market. It would have helped offset some of the losses on our live hogs in '98 and '99. If we'd been successful in doing that, we probably would not have sold Murphy Family Farms,” he says.

“I do want to dispel one notion, however, because there were a lot of people that probably thought we were in a distressed situation. That absolutely was not true,” he assures. “Yes, we had lost millions. But, we had made and saved millions, too. We were a strong company when we merged with Smithfield.”

Beaten down

“From the day we opened our milling business on Labor Day in 1962, with zero dollars in the bank, until February 1995, when the (Raleigh) News & Observer ran their so-called ‘Boss Hog’ series, nobody ever enjoyed their career like I did,” emphasizes Wendell. “My daddy, brother and brother-in-law were the labor force, the management, the financial officers. It was so much fun; you just can't imagine how much pleasure I got out of getting up and going to work every day.”

The Boss Hog articles focused on the supposed negative environmental impact of the substantial growth of hog production in North Carolina.

“When ‘Boss Hog’ came along, the pleasure went south,” he continues. “From 1995 until 2000, when the merger occurred, I spent almost zero time working and managing the business. I spent all of my time trying to deal with the political fallout that was coming as a result of that newspaper.

“When the News & Observer wrote the series, at first it was really painful. It was directed at the hog industry in general, but more specifically, it was directed at me. According to the series, I was the one who had served in the legislature and had gotten all of the laws passed that made it easier for farmers to raise hogs. And, I was responsible for all of the lagoons. Every hog that ever pooped in North Carolina was my responsibility!” he states.

For five years, Murphy withstood what seemed to be a daily barrage in the state's most influential newspaper. “In 1999, my craw was full, so I decided to go ahead with the merger. It was a conservative thing to do, but I had been beaten so hard by the News & Observer, and politically, that I just couldn't take it any longer. When we did the merger, it all went away,” Murphy says.

“I'm often asked, in hindsight, if it was the right thing to do,” he continues. “Financially, probably not. We probably would have made more money if we had kept the hogs, with the way the hog market's been the past several quarters. We probably would have made a lot more money than we got for the business. But, I'm pretty sure that I'm going to live longer. The fun was gone. So, yes, it was the right thing to do.”

Sustained by family values

Murphy family members profess to be conservative by nature, an attribute they inherited from family elder Holmes Murphy, a Depression-era survivor.

As Dell tells it, his grandfather's conservative values were impressed upon his father, and passed on to him. “I think that has been a major key to our family's success. It doesn't sound like a blessing, but in a way it has been. It makes you humble and appreciative.”

Another family attribute is a dedicated work ethic that has sustained the Murphys from the developmental years to the present. “The most important thing that my Dad taught me was to work, and to enjoy working. I think that was the greatest thing of all,” Wendell declares.

Also important was the emphasis Wendell's parents placed on education. “They made it clear, 12 grades were not it — you were going to college,” he notes. Holmes Murphy set aside an acre of tobacco for that purpose, and Wendell tended that acre. He treasures the education he gained at North Carolina State University as a result. Today, he serves as chair of the school's Board of Trustees.

Dell, too, credits his father for his work ethic. Outside the family, he recognizes Randy Stoecker, currently president of production operations for Murphy-Brown-West, and Jim Stocker, retired president of Murphy Family Farms.

“As the company grew and Dad was in the legislature, I was trying to get in the groove,” Dell explains. “They were my mentors — Jim from the conservative point of view, and Randy as a visionary. As the company grew, the support of such talented people as Jerry Godwin, and the scientific efforts of Terry Coffey, Jim Ludes and Jeff Turner, were invaluable.”

“We are proud that Smithfield Foods chose the Murphy Family Farms management team to manage their hog production assets nationwide,” adds Wendell.

“I try not to reinvent philosophy,” says Dell. “Everything that I learned from my Dad and Granddad is working: Treat people with respect; treat them like part of the family; and do things that are inconvenient at times, if that's what you need to do.”

Wendell reinforces the thought: “That's one thing I learned early on — if you're just going to do what's convenient, you're going to leave a lot of important things undone.”
by Dale Miller, Editor

Julie and Ken Maschhoff

The Maschhoffs

Building barns and people

The Maschhoffs emphasize the importance of respecting the people who work with them. Their focus on honesty and hard work has guided their success from a 2,400-sow system 10 years ago to their 100,000-sow business today, which has transformed the image of family pork production.

Even Ken Maschhoff, chief executive officer of The Maschhoffs, appears amazed at the exponential growth that the family-owned hog enterprise has experienced over the course of the last decade.

In 1996, Ken and his wife, Julie, along with partner and brother, Dave, were a competitively sized hog operation of 2,400 sows with a handful of employees and no contract pork production business. “We weren't working with anyone, and didn't start with our first production partner until December 1996,” recalls Ken.

Zoom forward 10 years, and all that has dramatically changed. There are 425 employees and 250 “production partners,” the preferred term for the company's contract hog growers.

The Maschhoffs own 100,000 sows and operate farrow-to-finish or wean-to-finish enterprises in seven states. This last January, they fully integrated the production team involved with the purchase of the 60,000-sow hog production division of Land O' Lakes (LOL), predominantly based in Iowa.

“It's been virtually a doubling of the operation every 18 months to two years,” observes Ken. The Maschhoffs built a 20,000-sq.-ft. office complex headquarters to house administrative staff at Carlyle, IL, two years ago. Workers recently began construction of a second, adjacent, 20,000-sq. ft. office building to provide additional space for existing staff and for future expansion in all departments.

Building philosophy

For Ken, the hog business and designing and constructing buildings has been in his blood from an early age.

Ken's parents, Wayne and Marlene, pushed young Ken and his brother Dave to focus on their farm chores after school. “I was running a tractor in the field 1-2 miles away from home when I was 7 years old,” says Ken. “Dad put seatbelts on the tractor and bolted a block of wood on the clutch so I could push the clutch in.”

By the time they were 8-10 years old, Ken and Dave used their Radio Flyer wagons to haul away the concrete forms they'd removed from under the slats on new hog buildings their father built.

As kids, they were both taught how to give baby pigs iron shots and dock tails as part of their farm chores, says Ken.

By the time they reached high school, Ken and several friends, including current company production coordinator Steve Quick, became fascinated with building hog barns and machine shops and constructed several for area farmers.

“I didn't really choose pig production as my first love. I really loved designing and building and creating buildings,” admits Ken. “I also liked designing levees, irrigation systems and pipelines, working with the U.S. Army Corps of Engineers.”

As a freshman in college, Ken designed an 857-ft.-long hog building that he and his friends actually constructed. The building continues to function as the hub of production at their home farm. Ken remained fascinated with designing hog barns, because the changing designs for feeding systems and waste removal, for instance, made the work challenging.

“I think hogs were almost the by-product of wanting to build — you had to put the hogs in there to make it pay for itself,” Ken says with a wry grin. Dave and Steve took care of the pigs while Ken kept busy with designing more buildings.

Crossroads points to hogs

In the late '70s and early '80s, the Maschhoff family came to a crossroads. “Land prices started to climb, and we had a choice to make — whether to expand the hog operation or to continue to grow the grain operation,” explains Ken. “We saw the returns in hogs, and it was really the only way Dave and I were going to be involved in the farm. As a result, our focus quickly became to be the best pork producers we could be.”

One key factor that set the Maschhoff hog operation apart from other independent systems, and truly gave it a chance to grow, was the fact that their parents turned over daily control of the operation early on to Ken and Dave, while they were still in their 20s.

At 150 sows, Ken and Dave became 50-50 partners in the hog operation with their parents. By 1991, when the operation reached 700 sows, Wayne and Marlene sold their half of the hog business to Ken and Dave.

Mentoring progress

Ken's parents and grandfather proved to be true mentors, “letting you make mistakes on your own, but also providing you the opportunity to have accomplishments that you could be proud of,” reflects Ken.

“They were humble in their approach, but you always knew where you stood,” he states.

They also instilled in Ken and Dave the importance of always doing the right thing. “Treat people fairly, whether they are growers, corn suppliers, packers, bankers or even lawyers who may want to sue you,” says Ken.

That caring attitude has been an integral part of building the Maschhoff team of employees and production partners.

Grow the business

Back in the mid-'90s, contract hog production was concentrated in the Southeast. Midwestern producers didn't favor the idea, because it was viewed as a sign of failure that you couldn't make it on your own, says Ken.

But setting up production partner contracts proved to be some of the best advice Ken and Dave ever got in the hog business.

“Production contracts provided a higher return on investment, by allowing us to grow our business faster. It allowed us to leverage our capital, our production knowledge and our human resources,” explains Ken.

It also showed that there were a large number of motivated producers who were willing to invest their capital and labor in growing the hog business along with The Maschhoffs.

Ken says he has found that same sincerity and passion for pigs to be true with all of the growers for the LOL production system.

That sincerity and motivation has been rewarding, and a pleasant surprise. “I think what amazes me the most is how easy it has been to motivate people, whether they have been employees or production partners, when everyone has the same values that you do. When people feel they are part of a team and have a responsibility to the team, it is easier to just bring out the best in what they do every day,” states Ken.

“When you set the bar high, everyone rises to the standards that you've established. I think because we are producers first and foremost, we have been able to establish credibility to show people how we can improve practices on farms,” adds Julie.

Put the pigs first

The Maschhoff way of production is based simply on putting the pigs first, declares Ken. Don't raise pigs to support a feed business, a veterinary service, a packing plant, a transportation firm or a construction company. Focus on the biology of the pig and let those support services complement the pig enterprise, he emphasizes.

To succeed, Ken's advice is to maintain a clear vision of why you are in the pig business.

Production concerns ahead

Ken and Julie envision two key issues in the near future that could greatly influence the profitability of hog production:

  • Market hogs are getting bigger, and packers are responding by strongly discounting producers who sell them heavy hogs because consumers shun large cuts of meat.

    Ken says this presents a huge barrier for producers looking for ways to cut cost of production. Genetic programs can build lean, 320-lb. market hogs, which would significantly lower those costs, he says.

  • Corn diverted to ethanol, and soybeans to biodiesel production, are popular with politicians and grain farmers.

But for hog farmers, it could spell the end of cheap feed and competitive production advantages over foreign producers. This, in turn, could eventually reduce U.S. meat exports and open the gates for foreign meat imports, warns Ken.

Future growth

The Maschhoffs are adding a 5,600-sow contract operation for a multiplication farm. But Ken says further growth of the hog production company will occur mainly by acquisition.

Growth internationally is another possibility, he says.

The Maschhoffs have also started to diversify their business outside hogs.

“As we look to grow our family business, we remain committed to our philosophy of being progressive in a family business culture. We are looking for opportunities to help rural families and rural communities prosper,” comments Julie.

Whatever The Maschhoffs choose to pursue, they will apply the same values that have worked for them in the past: work hard, respect others and produce a product you are passionate about.
by Joe Vansickle, Senior Editor

Bob Christensen

Bob Christensen

Pork producer; independent thinker

A self-professed non-traditional thinker, Bob Christensen has guided Sleepy Eye, Minn.-based Christensen Farms through three bold acquisitions and a partnership in the newest pork processing facility in North America.

Raised on a diversified cattle, hog and crop farm, Christensen's formal education ended with high school. Dubious about cattle and crops, he chose to focus on hogs. His “informal” education was kicked into high gear during a tour of North Carolina and Georgia pork operations in the mid-'80s, which he describes as “pivotal” in his early, hands-on education.

In a span of just over 20 years, the meager, yet optimistic company that began with two bred sows owned with his brother, Glen, has grown to rank Christensen Farms amongst the top five in the nation.

Through intensive study, observation and application of the principles that worked for others, Christensen recognized and grasped opportunities as they presented themselves.

“In the Midwest, you'd build a building this year and then another one next year, but the people's work processes and the pig flow never fit together very efficiently. When I saw what it was like to build a 1,200-sow farm all at once, to have things fit and flow, it was very striking to me how much you could change the way things would work.”

Christensen tends to mark time with pivotal moments in his life. “Substantial changes in the scope of the business have corresponded with times where the agriculture sectors — typically, in the swine sector, as well — were in periods of some chaos,” he says.

The farm crisis hit in 1985. Virtually no new capital assets were constructed for several years, and many of the confinement facilities in the Midwest sat empty. “Bankers weren't even willing to lend money on a group of feeder pigs,” he remembers.

As his non-traditional thinking kicked in, Christensen saw the vacant buildings as an opportunity, and began paying area farmers to finish pigs. “That worked so well, we quickly outstripped the availability of pigs, so we began purchasing pigs and placing them. That's what lead us into contract production,” he explains. “And, we learned how to move pigs a long distance without suffering any substantial production challenges.”

Soon, feeder pigs were more difficult to find, and more expensive. “We kept increasing our sow base, and by the late '80s, I could see the handwriting on the wall — if we didn't learn to create our own supply of pigs, this business was going to be too volatile,” he says.

Drawing on his knowledge of large buildings, tunnel ventilation and other Southeast standards, Christensen Farms built their first 1,200-sow farm in 1990. “We set ourselves up to create large groups of single-source, high-health pigs,” he says.

In the early '80s, the Christensens also took a non-traditional course for a southern Minnesota pork production system by constructing their own mill to handle their largest input cost — feed.

Growth by acquisition

A pivotal point for many producers came in the dismal months closing 1998 and early in 1999. “The whole industry was reeling with the shock of hogs under 25-30¢, then down to 10 cents,” he remembers.

Particularly hard hit was National Farms in Nebraska, struggling with inefficiencies, inadequate genetics and herd health issues. Christensen's evaluation of the assets was relatively simple: What is it today? What can we change? How fast can we change it? What will those changes mean?

“National Farms was a good, solid asset. It had some age to it, but it also had a well-trained, stable staff with a tremendous amount of pigmanship,” he explains. The herd health was not so good, however. “It was simpler to list the diseases they didn't have.”

Top on the list was the dreaded porcine reproductive and respiratory syndrome (PRRS). “We didn't want 15,000-20,000 sows in one location that were PRRS-naïve, so we populated it with PRRS-positive females,” he says. “We'd look at it differently today, but at that point, it was the right thing to do.”

Built as farrow-to-finish sites, any significant finishing activity was discontinued and many of the production processes were streamlined.

Purchased in late 1999, the firm also faced considerable litigation with neighbors, largely dealing with manure handling issues. “In most cases, if you go out and meet these people and understand what's happening, the requests of the vast majority were very legitimate — odor and how the effluent was being handled,” he says.

Manure management and handling practices were revamped, bringing more “simple awareness” to the process, he explains.

About two years later, always up for a challenge, Christensen took a look at another hog operation under duress — the much-maligned, 15,000-sow ValAdCo operation near Renville, Minn.

“It had a long history of difficulty with neighbors, to the point where the attorney general had been involved prior to our agreement to buy it,” he says.

Substantial changes were made with the waste handling — managing the lagoons better and differently.

“Today, a good share of the manure is going on the land operated by the people that were pretty upset with ValAdCo,” Christensen adds. “Most problems can be solved by standing back and determining, ‘what is the right thing to do?’ The solution is rarely the easiest or most economical, but it's an approach that has generally served us well.”

The most recent and sizeable acquisition occurred in 2004, with the purchase of Heartland Foods' pork production, which expanded Christensen Farms' sow count by about 40%.

“Unlike our prior two acquisitions, where there had been a tremendous amount of difficulties with neighbors and regulatory agencies, Heartland had a clean environmental record. It was a well-positioned asset base, but the industry had been through almost six years with very little profits,” he says.

Looking beyond that meager stretch, Christensen reminds: “Always remember, the cure for low prices is low prices. Eventually, it creates demand.

“I was optimistic about the market, but clearly not to the extent that we've experienced the last 10 quarters,” he adds. “I knew it was a system that could raise a high-quality product at a very right cost. Having gone through the previous acquisitions, I was comfortable that we could make some changes, very rapidly, to enhance the results of the asset base and the people there.”

From Christensen's high school graduation in 1980 to today, Christensen Farms has increased their sow herd over a thousand-fold, now holding at about 160,000 sows.

Then came Triumph

Christensen says candidly that joining the more integrated systems by investing in the packing side was not a high ambition.

“Honestly, given a blank sheet of paper and 100% freedom of choice, I really would not have gravitated that way. I really enjoy the live pig side,” he says.

“At the same time, when you look at the asset base here, we're 75-78% of the way towards completing the food chain. When you combine that with the volatility we experienced in '98 and '99, and the age of the processing assets out there, we needed to consider it.

“And, with the operating efficiencies and the advantages that come with a bare piece of land and building a plant correctly — in terms of product throughput, labor, quality of workplace, and most importantly, for food safety and lowest bacteria count — it's an opportunity that's awfully difficult to beat,” he adds.

The new Triumph Foods' plant, with a single-shift capacity of 1,000 hogs/hour, is capable of slaughtering about four million hogs annually.

“Our strategy with marketing has always been to stay fairly diversified,” explains Christensen. “Developing the Triumph Foods' plant in St. Joe is another marketing option to us, and many others. It changed our situation in terms of live supply-to-shackle space, which is extremely important to anyone in live production.

“I believe if you've got the pig ownership to match up to a new plant, it will be an extremely successful investment,” he continues. “But, to build a new plant and procure 4.5 million hogs on the open market — that is extremely risky.”

Success in business

Christensen credits many people from all facets of business for his ongoing education in the pork production and processing business. “I tapped into a lot of different places, then balanced what one expert said against another,” he says.

“As we transitioned to a hired workforce, we had to make sure the system was set up in a way that was executable by the people in the field. We sometimes find ourselves with the grandest plan, but we forget about the people and what they have to do, day-to-day, to make happen what we've decided should happen,” he cautions.

Christensen closes with this sage advice: “You clearly have to be on the leading edge; but first and foremost, you need to understand the difference between the leading edge and the bleeding edge. Sometimes that's a real fine line. Take the time to understand the cause and effect all the way through. Good times never last and bad times never last. Be proficient enough at what you do so that you're there towards the end.”
by Dale Miller, Editor

Ken Prusa

Ken Prusa

Food science and human nutrition focus

Ask Ken Prusa, professor in charge of the meat sensory evaluation unit in Iowa State University's Center for Designing Foods, what has pleased him most about the pork industry in the two decades he's studied pork quality and he'll say: “Attention to change.”

Then, he elaborates, “I'm pleased with:

“How fast producers have gone to leaner genetics;

“How the industry nearly eliminated PSE (pale, soft, exudative) pork in just 10 years;

“How packers have changed technology as far as chilling and slaughtering, and how quality-driven they've been; and

“How packers have adapted to what retailers want.”

“Pork has changed dramatically for the better,” he summarizes.

Why, then, has per-capita pork consumption remained relatively flat for over 40 years? Despite industry promotions and an ongoing array of new products, including pumped pork, consumption continues to languish around the 50-lb./person/year mark.

This opens the door for Prusa's argument that it's time for the industry to shift its focus from worrying about the quantity consumed to boosting the value of the pork sold.

Through his food science and human nutrition discipline, Prusa has spent 20 years working with producers, packers and grocers to deliver pork products that better meet consumer demand.

“Instead of looking at consumption trends, we might want to look at value trends,” he suggests.

Look to the east and west coast supermarkets, and to our best pork customer, Japan, for guidance. They often provide early trend indicators, he says.

On the coasts, the growth markets in meats are the “natural” and “organic” product segments.

“Some of the bigger retailers tell us they want a three-tiered program for pork — much like they have with beef and chicken,” he says.

“The first tier is commodity pork, which may include pumped product.

“The second tier is an all-natural product, which would not be pumped or contain any added ingredients. This is probably a minimum definition of ‘all-natural.’

“Their third level would probably be ‘organic.’

“Retailers want to attract all three consumer segments. They tell us our pork category needs help.”

Whether all-natural includes antibiotic-free is debatable. “That's another issue,” admits Prusa. “Whether it's sustainable at the farm level, I can't say, but at the store level, I think it's the real thing. There's a segment of the population that's willing to pay for it, and I think we just haven't tapped that segment.”

Quality matters

In recent years, packer/processors have attempted to improve the quality of the pork preparation and eating experience via pumping. Prusa estimates at least 50% of pork normally sold as fresh is enhanced this way.

“I wonder if we have reached that plateau,” he says. “We're starting to see some turnaround with some of the bigger retailers looking for a more natural product.”

Through his consumer and sensory panel work, the pumped product is commonly compared to higher pH (more tender) pork. “Although we do see tenderness and juiciness improvement with enhancement, some consumers are looking for natural alternatives. We can achieve this type of quality with higher-pH products.

“In some of the pumped (product) tests we've done, our sensory panelists tell us it doesn't taste like natural pork because it's salty. Depending on the product, some say it has a kind of phosphate-type aftertaste, and the texture is a little off,” Prusa explains.

“From the human nutrition side, the sodium level bothers us a little, too. People are reading more labels. Some don't want the added water or sodium. If you just have a commodity product and it's all injected, those people will go somewhere else.”

Prusa's quick to point out, however, there is great potential for increasing value through pH-selected and color-selected products.

“Measuring pH provides a darn good indicator of quality,” he assures. “If you look at two carcasses coming down the rail, one with a loin pH of 6.0 and the other with a pH of 5.5, the higher pH is higher quality, and should be worth more whether it goes to Japan or to your local retailer. It's just like the difference between No. 1 and No. 2 corn — we should be able to take advantage of that.”

Currently, a few packers are testing pH probes and gathering information on different genetic lines, feeding programs and housing methods. And, much has been learned about pre-slaughter animal handling and carcass chilling, which impacts pork quality.

Prusa admits there are a lot of things they don't understand about pH fluctuations, such as the influence of weather, handling, stunning and chilling methods. Still, he thinks packers will be able to measure pH consistently, at normal line speeds, within the next couple of years.

“Then it will be up to the packer to decide when they will include it in the buying grid,” he says.

His advice: “Ask your packer to take some pH samples on your hogs. Much as we did with leanness, we have to have a history on each producer. Select the best genetics to give you the highest quality pork.”

The tricky part is getting retailers to specially label and separate these “quality-selected products” from commodity pork, placing them next to the Certified Angus Beef, perhaps, or in the full-service meat case of high-end supermarkets.

Thankful for mentors

Prusa came to Iowa State University with little recognition in the pork industry. He submitted a grant proposal to the National Pork Producers Council to study the relationship of backfat to eating quality. Dubious about the study, NPPC said if he could find someone to sign off on the project, they'd fund it. When the late Lauren Christian did, it began a working relationship that buoyed Prusa's meat quality career. “Lauren got me started, and boy, what a great mentor to have,” he notes.

On the industry side, Prusa credits Len Huskey, a 40-year veteran with Swift & Co. who is currently in charge of quality assurance and heavily involved with research and development. “He's been invaluable in teaching us the industry ropes. He reins us in and reminds us, ‘we have to be able to process these things and get them through the plant,’” Prusa adds.
— by Dale Miller, Editor

Gene Leman

Gene Leman

Tyson Foods entrepreneur retires

For recently retired Gene Leman, his 41-year career in the meat packing industry has been all about building and working with the best teams and individuals to achieve the best results.

His achievements speak for themselves. At 63, Leman, of Dakota Dunes, SD, retired at the end of 2005 as senior group vice president of Tyson Fresh Meats Inc., a division of Tyson Foods.

In that role, he was responsible for overseeing the company's pork and beef business, which included livestock procurement, fresh meat production and fresh meat sales and marketing.

During his 25-year career with Tyson, and before that IBP (which was purchased by Tyson in 2001), Leman spearheaded a number of industry changes and company successes.

Joining IBP inc. in 1981, Leman started the Pork Group and successfully led the acquisition and remodeling effort of an idle packing plant in Storm Lake, Iowa, into one of the nation's most progressive, state-of-the art facilities.

Under Leman's leadership, IBP grew into the number one pork (and later beef) processor in the United States. That plant was one of seven modern IBP pork-processing construction projects that Leman supervised.

He also led the development of prepackaged or case-ready pork and beef branded products in 2000, which revolutionized the preparation and delivery of meat to retail outlets.

“For Tyson/IBP, case-ready sales have grown from zero in 2000 to well over a billion-dollar business with a tremendous number of fresh steaks, pork chops and pork tenderloins moving to Wal-Mart and other big stores,” reports Leman. Tyson ships 12-13 million lb. of case-ready meats each week to about 5-6 customers, of which Wal-Mart is the largest.

There are three main reasons for the huge success of case-ready products, according to Leman.

First, vacuum packaging provides leak-proof, sanitary product direct to store shelves.

Second, case-ready products provide uniformity of cuts at less labor cost.

Third, retailers have the latitude of stocking the quantity and cut of meat they want, adding convenience and the ability to keep shelves fully stocked throughout the week.

Potential growth of case-ready product sales is enormous, Leman predicts.

Leman also pioneered standardization of meat cutting at IBP, which greatly lowered costs and was soon adopted by other packing companies.

Leman began his career working in various capacities for Wilson & Co. He began as a meat plant trainee in Cedar Rapids, Iowa, in 1964, transferring to the sausage and canning department, then to a year in livestock relations. There he met Rolland “Pig” Paul and other producer mentors who were the founding fathers of the Iowa Pork Producers Association and the National Pork Producers Council.

Leman worked for Wilson's for 17 years, rising to the position of vice president of ham, bacon and the Pork Group at just 34 years of age.

Producer progress

As the meat industry advanced, so did the production side of the business. He says much credit for improved pork quality must go to the hog industry, which rapidly changed from outdoor operations to total confinement and improved genetics.

“We used to talk about an inch and a half of backfat; now we talk about half an inch. We used to talk about 50% lean hogs. Now we talk about 55-57% lean hogs.

“These differences, along with the consistency of the animals coming to our plants that is so much better now, has improved overall pork quality tremendously in the last 25 years,” asserts Leman.

Roots in agriculture

Leman has roots in pork production, growing up on the family's cattle and hog operation in Eureka, Ill., 15 miles east of Peoria.

He fondly recalls helping his family load truck after truck of cattle to be shipped to a Chicago packing plant. When the cattle waited days at the plant before finally being sold, his family decided to get rid of the cattle and focus on raising hogs. Brother Keith Leman remains on the family farm and raises about 20,000 hogs/year.

Like most farm parents, the Lemans expected their children to work their way through college. Gene attended the University of Illinois, where he majored in animal science.

To help support himself in his sophomore year, he went to work in the meat research laboratory at the university, where he was mentored by Burdette Breidenstein, head of the meats department; his assistant, Bob Kauffman, who led the University of Wisconsin in conducting pork quality research projects; and Bob Rust, a leader in meat research at Iowa State University.

“I really did work my way through school, cutting meat for three years and learning the trade. So when it came time to graduate, there was absolutely no question in my mind but to try to go into the meat business and make it a career.”

Leman remains a solid promoter of that career choice today. “There is so much opportunity for those who want to achieve, advance and make something of their lives. The meat industry provides a fabulous career.”

Leman may have retired from the meat business, but is actively pursuing other opportunities. He is serving as a consultant to Tyson Foods for a year, managing farmland he owns back home and is looking into small-business ownership. And he just joined the board of Swine Graphics, a pork production company in Webster City, Iowa, where his late brother, Al, worked, and where Al's widow, Loretta, is still employed.
by Joe Vansickle, Senior Editor

Robert

Robert “Bo” Manly

Career dedicated to livestock production and packing

Growing up in a Chicago suburb in the 1950s-60s, Premium Standard Farms' President Robert Manly's sole exposure to agriculture was limited to what few experiences he gleaned from car trips or read in books.

Expected to become a lawyer like his tax attorney father, Manly went to all the right schools. He attended prestigious Stanford University, where he received a Bachelor of Arts degree in economics and communication in 1975, followed by a masters of business administration degree from Harvard Business School in 1977.

While at Harvard, Manly met Professor Ray Goldberg, who some say coined the phrase “agribusiness,” and suddenly his interest in food production took seed.

That interest further blossomed when Manly took a summer job in Saudia Arabia between his first and second year of business school with Cook Industries, grain traders who were investigating the potential of worldwide food distribution into mainly third-world countries.

Energized by those endeavors, the Wilmette, Ill., native ventured out on a variety of agriculture-related job interviews after graduation from Harvard.

He landed a position with Kane-Miller of Terrytown, N.Y., the fastest-growing agribusiness conglomerate on the New York Stock Exchange at one time in the 1970s, explains Manly. They owned everything from poultry, pork and beef slaughter and processing plants to wine, cheese and vegetable enterprises.

After just one day on the job, the company shipped 24-year-old Manly to Council Bluffs, Iowa, to fix problems at a beef slaughter and fabricating plant.

That led to a position conducting hedging and commodity buying programs for a cattle feedyard in Arizona and California.

Later, Manly moved to IBP inc. in Dakota City, Neb., to become assistant to IBP President Robert Peterson.

Manly says that five years working with the likes of the late Peterson, Maurice McGill and Gene Leman (head of the Pork Group at IBP) was “an absolutely tremendous experience” in learning the ropes of the pork business.

A business associate at Manly's first job at Council Bluffs, who had returned to work at Smithfield Foods, helped recruit Manly to Smithfield Foods as executive vice president in 1986 to work under Joe Luter.

In that position, he was afforded a “tremendous amount of creative business license” to learn how diverse parts of the food business could be put together. In his 10-year career at the East Coast-based company, he recalls being assigned to everything that didn't fit in a precise slot. That ran the gamut from the startup hog operations throughout the U.S., to the design of a new packing plant, to their acquisition of a swine genetic company.

Back to the Midwest

Another business opportunity would lead Manly back to the Midwest.

An employment recruiter contacted him about a challenging job offer: to become the top official at Premium Standard Farms. Manly knew PSF was in financial difficulty in ‘96, and the Kansas City-based firm was entrenched in bankruptcy.

But once he visited with company officials about the restructuring process, and knew as president he would have the opportunity to oversee all decisions, Manly concluded the invitation offered an “intriguing opportunity that would take advantage of my expertise on both the packing plant side and the hog-growing side.”

One of the overriding principles misdirected at PSF, reveals Manly, was that there was “an assumption that if you build the world's best pig, the world will beat a path to your door and pay you a premium for it.”

He observes: “That's just not true. I have never been on a customer call in my 10 years at PSF, and had a customer ask me about the biggest boar stud in the world that we operate, or our proprietary genetics. They just don't care.”

What they do care about, and what PSF emphasizes, is that their pork products are safe and they can prove it.

In the last decade, PSF has embarked on a process-verified production program through the USDA's Agricultural Marketing Service that certifies and verifies to its customers, through an independent auditing process, that its products are safe and welfare friendly.

In the process, PSF has simplified its message to its customers — from explaining 10 detailed production steps to just five major elements that encompass safety and traceability.

Building pork product integrity meant harkening back to a basic business model that Manly learned from industry leaders Luter and Peterson.

Deliver consistent products of value to the consumer, says Peterson. But don't sit still. Seize opportunities to be different as long as you've got the right focus and end game, adds Luter.

PSF rebounds

In his 10-year tenure, Manly has guided a remarkable turnaround in PSF's fortunes.

“We are headed in the right direction. We've gone from a bankrupt company with a great concept in 1996, to a publicly traded company today with a very strong balance sheet and a unique business platform,” he stresses.

But to prosper in the years ahead, and follow Luter's mantra that a successful business never sits still, Manly looks to right PSF's ship, which he says is still imbalanced.

There is too much dependence on the live animal side. About 67% of its revenue is generated by hog production, centered in northern Missouri and in the hog belt of eastern North Carolina; and 33% comes from the packing side.

“I think 1998 and also 2002 taught us you can lose more on the livestock side than you can ever get back on the meat side. That imbalance as a publicly traded company creates volatility in our earnings that does not provide the greatest value to our shareholders.”

In Manly's estimation, “PSF needs to generate its revenue evenly from three areas: hog production, pork processing and value-added products.”

Whether it is in producing or packing interests, it's crucial to remember that the consumer controls PSF's destiny by what they want and what value they are willing to put on a product, he says.

Consumers in the United States have the luxury of choosing their purchases from a host of very cheap sources of protein, Manly points out. That competitive pressure turns value-added pork products into commodity items after only two to three years of shelf life, he notes.

Even case-ready pork products, which are continuing to grow in popularity, quickly turn into commodity products.

At the same time, those consumers, who don't understand agriculture, are increasingly moving to rural locations. That means producers must increasingly monitor the environment in which they raise their hogs, stresses Manly.

PSF spends an industry-high $2-3/cwt. of its cost of production in its northern Missouri operations alone in its waste treatment efforts to ensure the environment is protected.

Raising hogs on a large scale demands a large investment in technology, and Manly is committed to making improvements at PSF in air and water quality to preserve the environment.
by Joe Vansickle, Senior Editor

Steve Henry

Steve Henry, DVM

Practitioner revels in growth of profession

It would be hard to find a stronger booster for the American Association of Swine Veterinarians than Steve Henry, DVM, its president in 1981, and the first swine veterinarian never to have served on the AASV board prior to being elected president.

Henry has attended 36 consecutive AASV annual meetings, the top conference for swine practitioners. They come from around the world to learn about the latest technology, trade philosophies and find solutions to pork production problems.

Virtually no other organization so easily shares its problems and solutions on a myriad of production issues, he says.

As Henry notes, seldom does the group talk about the little things that go wrong in pork production — such as mummified pigs and bouts of pig diarrhea that were the focus of years past.

Now the talk has turned to fine-tuning production schemes, employee management, veterinary economics and ethics, and broader themes on tougher subjects like this year's thrust to eradicate porcine reproductive and respiratory syndrome.

“We are technologists who actually provide technology in a huge array of topics no one could have perceived,” observes 58-year-old Henry, who specializes in swine and population medicine at the Abilene (Kansas) Animal Hospital.

Swine veterinarians have retained their role as primary caregivers. But that role has gone far beyond dealing with microbes, encompassing the welfare and well-being of the animals, and specializing in areas such as reproduction and nutrition. Swine veterinarians now work for large integrators and in CEO-level positions.

Instead of shrinking to a dozen or so members by the mid-'90s, as was predicted by some early organizers, the AASV has flourished and grown, and now includes many international members, says Henry.

Some mentors to Henry during those early years were AASV leaders Ralph Vinson, DVM, of Illinois and the late Al Leman, DVM, of Iowa. Their guidance provided inspiration to Henry, but he stresses that his main mentors have been, and continue to be, the pork producers who continue to challenge him daily.

He is quick to praise those producers who have performed phenomenal feats: greatly reducing feed conversion ratios down to 2.5:1, efficiently recycling great quantities of manure into the soil and “peeling almost 40% of the fat off these pigs.”

Talk of misuse of chemicals, toxins and insecticides in pork production has simply disappeared, he adds.

Joining the ranks

Early on, there was some question whether Henry would join the ranks of the swine veterinary profession at all.

He was raised on a dairy farm in Kansas that was converted to hogs when he was 12 years old. His brother, Roy, remained at home on the family farm to raise the hogs. One sister left to work in nursing and the other became an audiologist.

Henry attended Kansas State University and received bachelors of science and veterinary medical degrees.

“I went to school with some interest in pigs, but actually was much more interested in neuromuscular physiology, and I was on a fellowship studying diseases of the muscles.

“I was going to return to school to get a doctorate degree, but got hungry and ended up taking a veterinary job in Macomb, Ill., where I practiced for four years,” recalls Henry.

He then returned to Kansas to be near his family, and joined the Abilene Animal Hospital, where he practiced a lot of small animal internal medicine and mixed animal work.

The partners in the Abilene veterinary clinic told him he should get used to that routine because there weren't any pigs in Kansas.

But the pig business started to grow, and he did something few others were willing to do: He sometimes drove 300-400 miles to get producers' business.

“We built our own swine practice focusing on troubleshooting and health. This led to more herd disease investigation and production medicine work, which evolved and grew with the industry,” Henry points out.

From that beginning, partner Lisa Tokach, DVM, joined the swine team at the clinic in the last decade, and the swine focus expanded to producers in Nebraska, Missouri, Oklahoma and internationally.

Henry beams as he refers to his work with producers in Chile. There is only one PRRS-infected herd left in the country of about 200,000 sows, and he expects that one will be cleaned up soon.

Henry has also spent about 20 years consulting for the Agriculture Department and the Food and Drug Administration in advisory roles on pharmaceutical issues, and served on drug and vaccine task force committees of the American Veterinary Medical Association.

In those positions, he has spoken eloquently and forcefully against the misuse and overuse of antibiotics and drugs in swine production.

Future survival

For producers/veterinarians to survive in the future, they will need to be technology adapters, astute money managers, and driven by the well-being of their animals and the demands of their customers, believes Henry.

“Successful people have been highly invested in animals, technology and knowledge of the industry to make it work,” he says.
by Joe Vansickle, Senior Editor

Mike Brumm

Michael Brumm

Practical pig research is his niche

Mike Brumm, a veteran University of Nebraska swine Extension specialist who recently retired to form a consulting business in Minnesota, really had just one goal in life: to be a farmer.

Brumm has virtually lived out that dream as a researcher and swine Extension specialist at the University of Nebraska-Concord Haskell Agricultural Laboratory.

“I've always wanted to be a farmer. We lived on a livestock-grain farm and moved to town (Osage, Iowa), where Dad bought a hog-buying station, when I was in the 8th grade.”

His dream began to take shape when he switched from his first job after graduate school, as an area livestock Extension agent with Oklahoma State University, to the current post at Nebraska.

“Since I have worked in Nebraska, I have been close to being a farmer without being one,” he says. “My life has been agriculture. That is the only thing I know and the only thing that I care to know.”

The Haskell research facility is in an isolated part of northeast Nebraska, just outside the city of Concord (population 160), and in an area that is home to over 50% of the state's pork production.

Haskell is an applied research station, meaning research is hands-on. With only one research technician on staff overseeing the wean-to-finish research barns a mile from the Haskell lab, Brumm not only maintains a research focus on management and housing of the postweaning pigs, he does his share of farm chores on weekends, holidays and the like.

“It has allowed me to think through some of the challenges that are involved in running a production unit. I doubt my science answers are any better. But it allows for that extra interpretation, because I can talk about broken waterlines, what to do when the pits plug or putting cable clamps on a curtain when the windchill is below zero, because I have been the one doing it,” states Brumm.

Brumm credits his service in the U.S. Army and carpentry work during summers between college studies with helping him complete his education and succeed in his job studying pig housing.

During college, he worked summers as an apprenticed carpenter for his uncle, who built everything from hog houses and pole barns to fancy homes.

In 1971, after graduation from Iowa State University with a degree in agricultural education, he was drafted in the U.S. Army during the Vietnam war. He was lucky enough to draw a stateside assignment at the William Beaumont Army Medical Center in El Paso, Texas, where he worked as a medical research laboratory technician.

“The only reason I went back to college was because of my Army experience,” Brumm explains. “I would never have gone into research had it not been for that experience.”

Following that two-year stint in the Army, he went to graduate school and received a masters degree in animal management in 1976 from Purdue University. “I was actually trained in waste management, looking at the impact of nutrition on manure composition because that was what Al Sutton did, and I was his first graduate student.”

After receiving his doctoral degree in swine nutrition from Purdue in 1978, Brumm latched onto the job in Oklahoma. The area was not much to his liking, partly because back then that part of Oklahoma was mainly comprised of hobby farms and was not a big pig state.

But there was a silver lining to that first job. “The good news was I got to work with Bill Luce (long-time Oklahoma State University swine specialist), who was a good mentor, a tremendous individual to work with. He was very, very good to me and remains a personal friend.”

At Nebraska, Brumm has also encountered some solid mentors, but university swine nutritionist Ernie Peo Jr. stood above the rest. “As a young faculty member, he guided me in so many ways. It didn't take me too long to understand that if I did a research project Ernie's way, it worked.”

Peo also provided a young Brumm with the best advice he ever got: “You've got to learn to bite your tongue once in a while, Mike,” Brumm recalls with a hint of a sheepish grin.

Research accomplishments

Brumm kept his nose to the grindstone, cranking out over 100 research experiments (some with multiple replications), during a 27-year career at Nebraska that draws to a close with his retirement this summer.

His research projects ranged from early work focusing on handling, feeding and managing commingled feeder pigs when he began in 1979, to work in the mid-'80s that focused on turning down the temperature in nurseries at night.

In fact, in a bit of déj224; vu, Brumm is part of a group that has received a grant from the National Pork Board to take a renewed look at that nursery pig work, because diets and weaning ages have changed drastically during the last 20 years.

That earlier work aimed to improve pig comfort. The latest work will focus on the pig, but also cast an eye toward energy savings.

Since the late '80s, Brumm has studied pig drinkers.

His first pig crowding studies began 15-20 years ago, and remains an issue today. He wonders if once researchers determine the proper economics of space, whether animal welfarists will demand more requirements beyond the science.

Brumm has completed a variety of wean-to-finish projects and quite a bit of work with Concord's agronomists determining the nutrient value of manure distributed onto cropland from swine lagoons.

PorkBridge Program

The Nebraska swine researcher speaks most fervently these days about PorkBridge, an Extension outreach tool he developed along with Don Levis of the University of Nebraska and Dale Ricker of Ohio State University.

PorkBridge's target audience is the people who are responsible for the daily care and feeding of pigs in nursery and grow-finish facilities.

PorkBridge allows these stockmen to gain production knowledge without leaving the farm. PorkBridge consists of a CD with speaker presentation and support material, and a toll-free telephone bridge.

For 2006-07, the program will reach producers, advisors and allied industry in 12 states, says Brumm.

Future challenges

As proud as Brumm is of his educational accomplishments, he is most proud of his family: wife, Janet; three children in college; and Liz, their 16-year-old daughter.

Liz has cerebral palsy and requires special treatment and care beyond what the Brumm's can provide themselves.

That's why Brumm is retiring from the university at age 57, and his wife from a career as a librarian at Wayne State College at Wayne, Neb. They will move to North Mankato, Minn., where lifetime care for Liz is more comprehensive.

In hopes of retaining Brumm's position at the Concord research facility, the University of Nebraska has established the Haskell Ag Lab Swine Professorship Fund with a goal of $250,000. The Nebraska Pork Producers have chipped in $25,000 for this endowed professorship. For more details, contact Ann Bruntz at the university's Institute of Agriculture and Natural Resources at 402-472-0372 or email abruntz@foundation.Nebraska.edu.

Brumm's new venture, the Brumm Consultancy, will soon be up and running in Minnesota. Brumm hopes to continue much of the research and producer advisory endeavors he has focused on during his career.
by Joe Vansickle, Senior Editor

Stan Curtis

Stan Curtis

Animal scientist passionate about animal welfare

Professor Stanley Curtis may not make it to his office every day, but he still maintains a busy research agenda from his home, working with scientists spanning the globe to put farm animal welfare in a proper perspective.

Some animal scientists, behavioral researchers and animal-protection proponents find Curtis controversial because he doesn't see animal welfare their way.

Curtis is from the old school. He sees discontent leading to progress. His notions are grounded in science, not emotion. And he won't bow to any pressure to back off his performance axiom, because he thinks the objective approach to evaluate animal welfare is best for the swine industry.

In essence, the performance axiom says pig performance highly correlates with pig state of being. Performance also highly correlates with profit, making this a win-win situation for pigs and producers.

Curtis' focus — and the flash point for disagreement — is the development of a system to assess a pig's state of being. Critics argue that pigs have feelings and rights that must be considered. Curtis counters animal welfare must involve objective, measurable criteria and be based on performance standards, not environmental design standards.

The pork industry has asked the pig to meet increasing performance expectations. Curtis is pleased with what he sees as a return to emphasis on husbandry that will continue to improve welfare and productivity.

A love of animals

Born 64 years ago and growing up in northern Indiana on a small farm, Curtis came to love animals of all kinds, but especially pigs.

“I've always liked pigs, even though we also had sheep, a few dairy cows and even some geese,” he says.

He jokingly says that maybe that special fondness for pigs grew out of “fetal imprinting.” He explains his mother sat at ringside at the Indiana State Fair in 1941, pregnant with him, while his father showed the supreme grand champion sow.

All joking aside, Curtis admits he was always a serious student and knew he was going to college. In a small farming community like Culver, IN, the most educated person to associate with on the animal side was the local veterinarian.

But a counselor advised him to opt instead for medical school.

So Curtis trudged off to DePauw University (Greencastle, Ind.), spending two years wrapped up in studying zoology and chemistry.

He enjoyed that stint, but soon longed for involvement with livestock. Thrusting pre-med studies aside, he transferred to Purdue University, and graduated in 1964 with a degree in animal sciences, finishing at the top of his class.

His interest in animal environment was stirred by a course leading to a master's degree in environmental physiology from his alma mater in 1966.

After visiting several other universities Curtis received a PhD in environmental physiology from Purdue University in 1968.

His graduate research on temperature regulation in baby pigs also traced back to childhood.

“When I was growing up and we had baby pigs on the farm, we put them in a washtub and brought them into the house in winter and clipped their needle teeth and put iodine on their umbilical cords. We got them dry and warm and then put them back with the sows. We knew those little pigs shivered like mad and were prone to starve out and get crushed.”

During his first position at the University of Missouri, he gained an appreciation for monitoring animal performance when doing environmental physiology work.

There, he also became intrigued by the potential impact of air quality on swine respiratory diseases, following the work of noted Iowa State University veterinary researcher William Switzer, who encouraged Curtis.

Soon he moved to the University of Illinois, where he pioneered animal-environment research, first studying how ammonia in the air slows the clearance of bacteria from the respiratory tract and reduces growth in pigs in research which was funded by the National Pork Producers Council.

By 1976, the oil crisis coincided with the birth of hot nurseries, which Curtis did not favor.

Instead, he and his students pursued operant heating strategies, designing rooms with switches that pigs could push to receive heat, “so the pigs could tell us what they wanted.”

That pioneering strategy, which Curtis is returning to as fuel prices soar, indicated that nursery-age pigs preferred 80 degrees F during the day and 60 degrees F at night. This cycling led to drastic cuts in LP costs.

That research project also introduced Curtis to the study of pig behavior, for which he is noted. Even so, he believes behavioral scientists today carry that approach too far when they focus on behavior as the sole indicator of an animal's state of being.

Until pigs learn to talk, pig performance will remain the best indicator of animal well-being, Curtis argues.

Actually, researchers have started to learn what pigs have to say. Pigs have a certain cough vocalization when they start to get sick, says Curtis, and he is starting to work with a European scientist to find out what else pigs have to “say” about their welfare.

Among other pursuits

Curtis has left a legacy with the graduate and undergraduate students he has mentored over the years, who are working throughout the livestock industry today.

One example of a practically important finding by Curtis' group was that when an animal experiences several stressors at once, the total effect on performance precisely equals the sum of those individual effects.

Curtis also pioneered the study of the pig's mind while head of the Dairy and Animal Science Department at Pennsylvania State University during the 1990s. He and a student helped pigs learn how to play video games to get feed rewards — a first step in developing human-pig communication.

Because of the need for information on environmental management, and his knack for straightforward, entertaining speaking, Curtis has appeared before more than 800 audiences worldwide the past four decades.

Since 1998, Curtis has been an adjunct professor at the University of Illinois.

Besides his pig linguistics research, Curtis is working with Illinois colleagues to study swine environment, behavior, housing and management.

Other current collaborative studies include:

  • Applying the performance axiom to develop schemes for assessing state of being;

  • Evaluating and designing weigh-sort systems for hogs;

  • Evaluating facilities, crate-front gates and watering for sows; and

  • Consulting with several industry firms.

For all his accomplishments and awards over a 40-year career, including the 2001 Pork Industry Distinguished Service Award from the NPPC, Curtis remains a humble servant of the industry.

He observes: “No man is an island. I've always had excellent support from employers and the industry. I continue to enjoy wonderful working relationships with collaborators, especially former students.”
by Joe Vansickle, Senior Editor

Glenn Grimes, University of Missouri agricultural economist, passed away July 2, 2017, at the age of 94.

Glenn Grimes

Pork market prognosticator extraordinaire

Only one man can claim over a half century of market analysis in the U.S. pork industry — Glenn Grimes.

Grimes has achieved the title of professor emeritus at the University of Missouri, but a more fitting title might be “hog market analyst extraordinaire.”

His southern Missouri roots in a general purpose farming operation included cattle, sheep, goats, corn, wheat, oats and, of course, hogs — “But not very much of any of them,” he says.

It is perhaps this multi-layered farming background that prompted Grimes to take the advice of Farm Management Specialist Tom Brown when he said: “One thing you might want to think about is, rather than trying to be everything to everybody in livestock marketing in Missouri, just pick one segment and see how good you can get.”

At the time, Grimes, with a young family, had been struggling with a decision about whether to pursue a PhD. “Instead, I took my chances and started to focus on the pork industry and market outlook,” he says.

“On July 1, 2006, I will have headquartered out of Columbia, MO, for over 50 years, having been employed by the University of Missouri for 55 years,” he says proudly.

Grimes assumed the duties of a state Extension marketing specialist in 1956, providing price analysis and, later, market outlook projections for the cattle and hog industries.

His emphasis on the pork industry really took shape in the mid-'70s, when Jim Rhodes from the teaching and research faculty approached him about a USDA list of large hog producers.

“We'd been talking about the change in structure of the hog industry, and he asked if I'd be interested in assisting him with a study,” Grimes explains. “At least I had the good sense to say ‘yes.’”

Problem was, they didn't find very many big hog producers. A call from Gene Johnston, editor of Hog Farm Management (no longer published), got his attention. “You don't have anywhere near all of the large hog producers out there,” he said. Grimes replied: “I'm willing for you to prove that to me.”

A second industry structure study was conducted in 1975, and has been repeated every three years since.

Industry's biggest challenges

With a wealth of background, Grimes is a valuable pork industry consultant.

“In the short- to medium-term, over-production relative to the available market may be the biggest challenge the industry faces,” he says. “By the time we build the hog numbers up to 105-106 million, we'll have to see if demand can bail us out again.

“As we look at domestic demand, I'm convinced that we do not have good data on how many pounds of pork — or pork and water — that consumers are paying for. Practically all case-ready pork is pumped, so consumers are paying for about 10% more pounds than we're allocating with raw product from the carcass,” Grimes points out.

Whether pumped pork products are a good trend remains open to debate, but as Grimes notes: “We have to remember, not all people know how to prepare pork. The average person will probably end up with a superior product (using pumped pork) compared to pork in its natural state. Besides, we're at a point in the industry where the natural product may be too lean for the average consumer.”

Turning to the production side, he predicts finishing will continue to shift to where the feed is raised, while farrowing will migrate to less pig populated areas.

Considering the growth of farrowing in Oklahoma in the past decade, Grimes says, “If the industry grows, I would not rule out that Texas could grow quite a bit. The Dakotas are another possibility, but I'm not sure what energy costs will do to their ability to compete.”

And, Canada's influence is fraught with two variables — what happens with their government programs and Canadian currency relative to U.S. currency.

“For the first time in 10 years, Canadian hog numbers on Jan. 1, 2006 were below year-earlier levels,” Grimes notes. “I think the big shift in Canadian production has occurred. If you look at the last decade, 92% of the growth in the North American pig crop has been in Canada.”

Domestically, Grimes says, “The big change in concentration probably has already occurred, with 150 producers now responsible for 65% of the production. Economies of scale and productivity growth will keep the industry under pressure. Unless we can be bailed out by demand in some way, the next five years will not be as good as the last five years have been.

“We're not through concentrating, but we're going to see some relatively small producers for a long time,” he predicts. “Segmentation, such as catering to the ‘natural’ pork market, will probably provide opportunities for smaller producers.”

Consumer trends

“There are some interesting questions about trends in retail,” says Grimes. “Walmart looks like it will continue to grow and shift to Super Centers — those with grocery stores. So, as they restructure, their share of the meat industry will grow. With case-ready products, they can take out some costs.

“Wal-Mart's strategy of offering a fairly constant price — if it is used by the industry enough — will be a disaster, however. Because of the biological nature of the animals, we cannot produce the same number of hogs every week. The number of hogs that we slaughter in June is roughly 20% different than it is in November. Therefore, we cannot price them the same year 'round,” he says.

“We have an over-supply of shackle space — and it's shackle space that is hard to shut down,” notes Grimes. “I'm convinced that the pressures to run these big, efficient plants at a reasonable capacity is dominating packers' actions now. Even with 2-3 years of record numbers of hogs, packer demand has been strong.”

Packer sources tell Grimes the difference in variable costs between a 2,000-head/day plant and a 16,000-head/day plant is $10/head.

For producers tempted to join with a packing plant, he has this advice: “Unless you can be involved in one that kills 15,000 head/day, you'd better look at some other industry, first.”

Reflections of a veteran

With his many years of industry experience, two things occurred differently than Grimes visualized them:

“First, the growth away from the feed surprised me. And, even though we thought hog production would get large, we didn't visualize one producer with a little over 15 million hogs.”

His advice to young people interested in raising hogs is simple. “If you're located in the Corn Belt, where we're going to feed the hogs, take a look at contract production. If you have good enough records to know you're good at raising pigs — if you can produce pigs at $37/cwt. and cover all costs — I would say there's an opportunity for you, if you can survive the start-up period. And, remember, you have to be big enough to provide for your family. I would say that would be 500 sows, minimum.”

His closing thoughts about the industry: “I'd like to be here to see what it's like 25 years from now.” Grimes is currently 82.
by Dale Miller, Editor

Bob Christensen: Pork Producer; Independent Thinker

Christensen Farms logo
<p> <em>National Hog Farmer</em>&nbsp;recognized Bob Christensen as a 2006 Master of the Pork Industry. Christensen helped guided Sleepy Eye, MN-based Christensen Farms through three bold acquisitions on its way to becoming a pork industry leading operation.</p>

A self-professed non-traditional thinker, Bob Christensen has guided Sleepy Eye, MN-based Christensen Farms through three bold acquisitions and a partnership in the newest pork processing facility in North America.

Raised on a diversified cattle, hog and crop farm, Christensen's formal education ended with high school. Dubious about cattle and crops, he chose to focus on hogs. His “informal” education was kicked into high gear during a tour of North Carolina and Georgia pork operations in the mid-'80s, which he describes as “pivotal” in his early, hands-on education.

In a span of just over 20 years, the meager, yet optimistic company that began with two bred sows owned with his brother, Glen, has grown to rank Christensen Farms amongst the top five in the nation.

Through intensive study, observation and application of the principles that worked for others, Christensen recognized and grasped opportunities as they presented themselves.

“In the Midwest, you'd build a building this year and then another one next year, but the people's work processes and the pig flow never fit together very efficiently. When I saw what it was like to build a 1,200-sow farm all at once, to have things fit and flow, it was very striking to me how much you could change the way things would work.”

Christensen tends to mark time with pivotal moments in his life. “Substantial changes in the scope of the business have corresponded with times where the agriculture sectors — typically, in the swine sector, as well — were in periods of some chaos,” he says.

The farm crisis hit in 1985. Virtually no new capital assets were constructed for several years, and many of the confinement facilities in the Midwest sat empty. “Bankers weren't even willing to lend money on a group of feeder pigs,” he remembers.

As his non-traditional thinking kicked in, Christensen saw the vacant buildings as an opportunity, and began paying area farmers to finish pigs. “That worked so well, we quickly outstripped the availability of pigs, so we began purchasing pigs and placing them. That's what lead us into contract production,” he explains. “And, we learned how to move pigs a long distance without suffering any substantial production challenges.”

Soon, feeder pigs were more difficult to find, and more expensive. “We kept increasing our sow base, and by the late '80s, I could see the handwriting on the wall — if we didn't learn to create our own supply of pigs, this business was going to be too volatile,” he says.

Drawing on his knowledge of large buildings, tunnel ventilation and other Southeast standards, Christensen Farms built their first 1,200-sow farm in 1990. “We set ourselves up to create large groups of single-source, high-health pigs,” he says.

In the early '80s, the Christensens also took a non-traditional course for a southern Minnesota pork production system by constructing their own mill to handle their largest input cost — feed.

Growth by Acquisition

A pivotal point for many producers came in the dismal months closing 1998 and early in 1999. “The whole industry was reeling with the shock of hogs under 25-30¢, then down to 10 cents,” he remembers.

Particularly hard hit was National Farms in Nebraska, struggling with inefficiencies, inadequate genetics and herd health issues. Christensen's evaluation of the assets was relatively simple: What is it today? What can we change? How fast can we change it? What will those changes mean?

“National Farms was a good, solid asset. It had some age to it, but it also had a well-trained, stable staff with a tremendous amount of pigmanship,” he explains. The herd health was not so good, however. “It was simpler to list the diseases they didn't have.”

Top on the list was the dreaded porcine reproductive and respiratory syndrome (PRRS). “We didn't want 15,000-20,000 sows in one location that were PRRS-naïve, so we populated it with PRRS-positive females,” he says. “We'd look at it differently today, but at that point, it was the right thing to do.”

Built as farrow-to-finish sites, any significant finishing activity was discontinued and many of the production processes were streamlined.

Purchased in late 1999, the firm also faced considerable litigation with neighbors, largely dealing with manure handling issues. “In most cases, if you go out and meet these people and understand what's happening, the requests of the vast majority were very legitimate — odor and how the effluent was being handled,” he says.

Manure management and handling practices were revamped, bringing more “simple awareness” to the process, he explains.

About two years later, always up for a challenge, Christensen took a look at another hog operation under duress — the much-maligned, 15,000-sow ValAdCo operation near Renville, MN.

“It had a long history of difficulty with neighbors, to the point where the attorney general had been involved prior to our agreement to buy it,” he says.

Substantial changes were made with the waste handling — managing the lagoons better and differently.

“Today, a good share of the manure is going on the land operated by the people that were pretty upset with ValAdCo,” Christensen adds. “Most problems can be solved by standing back and determining, ‘what is the right thing to do?’ The solution is rarely the easiest or most economical, but it's an approach that has generally served us well.”

The most recent and sizeable acquisition occurred in 2004, with the purchase of Heartland Foods' pork production, which expanded Christensen Farms' sow count by about 40%.

“Unlike our prior two acquisitions, where there had been a tremendous amount of difficulties with neighbors and regulatory agencies, Heartland had a clean environmental record. It was a well-positioned asset base, but the industry had been through almost six years with very little profits,” he says.

Looking beyond that meager stretch, Christensen reminds: “Always remember, the cure for low prices is low prices. Eventually, it creates demand.

“I was optimistic about the market, but clearly not to the extent that we've experienced the last 10 quarters,” he adds. “I knew it was a system that could raise a high-quality product at a very right cost. Having gone through the previous acquisitions, I was comfortable that we could make some changes, very rapidly, to enhance the results of the asset base and the people there.”

From Christensen's high school graduation in 1980 to today, Christensen Farms has increased their sow herd over a thousand-fold, now holding at about 160,000 sows.

Then Came Triumph

Christensen says candidly that joining the more integrated systems by investing in the packing side was not a high ambition.

“Honestly, given a blank sheet of paper and 100% freedom of choice, I really would not have gravitated that way. I really enjoy the live pig side,” he says.

“At the same time, when you look at the asset base here, we're 75-78% of the way towards completing the food chain. When you combine that with the volatility we experienced in '98 and '99, and the age of the processing assets out there, we needed to consider it.

“And, with the operating efficiencies and the advantages that come with a bare piece of land and building a plant correctly — in terms of product throughput, labor, quality of workplace, and most importantly, for food safety and lowest bacteria count — it's an opportunity that's awfully difficult to beat,” he adds.

The new Triumph Foods' plant, with a single-shift capacity of 1,000 hogs/hour, is capable of slaughtering about four million hogs annually.

“Our strategy with marketing has always been to stay fairly diversified,” explains Christensen. “Developing the Triumph Foods' plant in St. Joe is another marketing option to us, and many others. It changed our situation in terms of live supply-to-shackle space, which is extremely important to anyone in live production.

“I believe if you've got the pig ownership to match up to a new plant, it will be an extremely successful investment,” he continues. “But, to build a new plant and procure 4.5 million hogs on the open market — that is extremely risky.”

Success in Business

Christensen credits many people from all facets of business for his ongoing education in the pork production and processing business. “I tapped into a lot of different places, then balanced what one expert said against another,” he says.

“As we transitioned to a hired workforce, we had to make sure the system was set up in a way that was executable by the people in the field. We sometimes find ourselves with the grandest plan, but we forget about the people and what they have to do, day-to-day, to make happen what we've decided should happen,” he cautions.

Christensen closes with this sage advice: “You clearly have to be on the leading edge; but first and foremost, you need to understand the difference between the leading edge and the bleeding edge. Sometimes that's a real fine line. Take the time to understand the cause and effect all the way through. Good times never last and bad times never last. Be proficient enough at what you do so that you're there towards the end.”

Hoosier State Embraces Hog Growth

Government officials in Indiana have said they want more pigs produced and fed out in the state — and several large hog production companies have accepted the challenge.

After decades of decline, Indiana's farming economy is on the verge of an upswing, fueled by seven initiatives designed to boost employment and revenue.

Those initiatives, developed by Indiana Gov. Mitch Daniels and his staff, range from forestry and bioenergy to improving food processing and diversity of production, to more involvement in federal farm and trade policy and doubling hog production.

Of those seven, bioenergy holds great promise. Ground has been broken on six ethanol plants, and another 4-6 plants will be built in the following year that will consume up to 35% of the state's annual corn crop.

The charge to double pork production in the nation's fifth-largest hog state is of special interest to Andy Miller, director of the state's new Department of Agriculture.

Miller, who was raised on a small farrow-to-finish hog operation near Waterloo in northeastern Indiana, worked for several years in the food-processing industry after achieving an agricultural economics degree from Purdue University.

“Indiana is a state that has been struggling,” he says. “It has traditionally been strongly aligned with the automobile industry.”

The decline of that industry and others has dampened the business climate and created a revenue shortfall, leaving the state virtually bankrupt, Miller reveals. “Indiana had slipped into the bottom tier of states for nearly every major economic category,” he says. “But Indiana has so many other natural assets, that as our governor campaigned, we can and should aim higher.”

Reaching for Recovery

Reviving a slumping hog industry is a key part of the expected resurgence. From 1980 to 2004, the number of hog farms took a nosedive, declining from 24,000 to 3,200. Much of the reduction can be traced to consolidation seen across the hog industry, comments Miller.

The state still boasts a robust hog industry. In 2004, hog returns accounted for 36% of total livestock receipts and 12% of total farm cash receipts of $738 million.

“Still, we found ourselves in a situation where hog production was down and about 50% of our corn was leaving the state with hardly any value added to it,” he explains. “We decided we couldn't continue to flounder and lose ground. We had to regain our footing.”

Miller lists three natural advantages that make Indiana a perfect place for livestock production:

  • Despite its losses, it still retains a lot of hog production and a lot of producers who know how to raise pigs;

  • Indiana is the crossroads of America. “This is a great place with the right agronomic inputs, and the right transportation infrastructure to do the producing;” and

  • The state has a great hog packing and processing industry that continues to grow. The three main plants include the Indiana Packers Corp. facility at Delphi, IN; the Tyson Foods plant at Logansport, IN; and the Swift plant at Louisville, KY, which fills the majority of its kill with hogs from Indiana and Ohio.

Those three packers purchase an estimated 30-40% of their hogs out of state. Miller responds: “We see no reason why those hogs can't be grown here. Our first line of defense is to hopefully get our own producers to expand and grow. Having said that, we are intrigued by out-of-state producers who want to come here and start operations and partner with existing producers.”

He adds: “The reason Indiana is so primed for this growth in livestock production is because it's possible to reach 67% of the U.S. population within 24 hours from Indiana, so what better place to build a perishable food business?”

Activities to Spur Growth

To help local communities embrace livestock production and to facilitate siting, the state government has begun the Economic Development Initiative, explains Miller. Staff help county officials strategize how agriculture fits into their local economies, he stresses.

At the same time, state officials are publicly espousing the values and economic impact of livestock production.

“We want them to know that we are committed and stand ready to help them, and most importantly, to let them know that we have very high standards as to the kind of producers we want. We want good-quality producers who are going to be good to their communities and environment, and have a long-term relationship with our state,” Miller stresses.

The agriculture director also offers his department's assistance in expediting the permitting process, which is carried out by the Indiana Department of Environmental Management (IDEM).

In addition, a comprehensive bill to pay for county and state roadways for the next 10 years was recently passed.

Atmosphere of Cooperation

The state agriculture department's willingness to work with producers has been a key reason why large swine production companies are expanding into Indiana.

Those companies, according to IDEM, include:

  • Natural Pork Production, a farrow-to-wean firm based in Harlan, IA;

  • Maxwell Foods (formerly Goldsboro Hog Farms), a farrow-to-finish integrated company based in Goldsboro, NC;

  • Coharie Farms, a farrow-to-finish production company based in Clinton, NC; and

  • Hatfield Quality Meats, a hog production and packing company based in Harrisburg, PA, and Hatfield, PA, respectively.

Most of the hog production growth is concentrated in Randolph and Wayne counties in east central Indiana.

IDEM Commissioner Thomas Easterly stresses the charge of his agency is to protect human health and the environment, and not to promote any business interests.

But he makes it clear where he stands on hog growth. “Some people from other states, including North Carolina, are proposing hog projects in Indiana. We think that is a good thing.”

And IDEM is backing up that support with an expedited permitting process, adds Dennis Lasiter, technical environmental specialist. The pace of approvals has almost doubled. Last year, 25 permits were issued for confined animal feeding operations (CAFOs), plus a number of modifications approved for existing operations. In the first quarter of 2006, IDEM has approved 19 CAFO permits, 11 of which were for new farms, says Lasiter. All were approved for hog farms.

“We know there are a lot of projects that are still in the paper process, but haven't yet come in for application,” says Easterly. Companies are assembling tracts of land, getting approval from local officials and talking to neighbors about their proposed projects.

Indiana's CAFO rules were adopted in 1971. During the first 15 years, over 4,000 farms participated in the program. That number has shrunk to 2,400 farms, says Lasiter.

IDEM's regulatory authority is protecting water quality; the state has no jurisdiction over odor and air quality.

The state has some water quality issues, which are in the process of being corrected, admits Easterly. But the deficiencies can be traced to sewage treatment systems in municipalities across the state, including Indianapolis, and not to impaired watersheds from livestock operations.

Permitting Process Improves

IDEM was extremely cautious when Natural Pork Production (NPP) proposed to take over a closed hog operation in 2003, says Mark Zaccone, manager of hog businesses for NPPII, which operates farrow-to-wean operations in Iowa, Minnesota, Indiana, Ohio and Texas.

The approval process took longer than expected, but IDEM had every reason to proceed cautiously, he says. NPP took over the defunct Pohlman Hog Farms at Crawfordsville, IN, which had its license to farm revoked by the state due to a number of environmental infractions.

The hog operation sat empty for about nine months, including three months when significant repairs and renovations were made. It was converted from a 3,000-sow, farrow-to-finish operation to a 9,800-sow, farrow-to-wean system with an off-site gilt developer.

During that changeover, NPP officials mounted a major public relations campaign, says Zaccone. A philosophy that had its roots back in Iowa, NPP met with the press, neighbors and local officials.

“We had some neighbors who really didn't want to have anything to do with us at all, and were very adamant about it,” recalls Mike Davis, new NPP farm manager.

But NPP's efforts quickly turned things around. “They were pleased to see a change and someone to keep the operation running,” he notes.

One major obstacle was Friends of Sugar Creek, a local citizen's environmental group that had a big hand in closing down the previous owner. Zaccone says NPP took a strong stance with the group, meeting with them and buying testing equipment so they could check nearby Sugar Creek for runoff and pollution. NPP got a clean bill of health and the group has not contacted NPP since.

Manure application has definitely changed at the farm, says Davis. Manure is flushed out to a pump-out station that also features several manure-holding tanks. From there it flows to a lagoon and out through an underground pipeline that spans the 2,080 acres that NPPII leases, fitted with outlets for a drag hose system. Flow meters have been added to the drag hose system to monitor any change in pressure, which could signal a leak.

Four contractors with Neier Waste Control, Amo, IN, monitor the annual manure application process. One employee observes the concrete-lined lagoon, one monitors the drag-line system, one is posted at the pump-out station and the other drives the tractor pulling the drag hoses. The farm produces 13-15 million gallons of manure annually.

Last fall, for the first time in 20 years, area neighbors, possibly feeling the pinch of rising fertilizer and energy costs, took some of the farm's manure.

Zaccone says NPP has recently received approval for two other building and use permits in Indiana. One is for a 11,200-sow, farrow-to-wean production site in Wayne County near Richmond on the Ohio border. The second permit, at Colfax, IN, 20 minutes north of the Crawfordsville site, is for converting a 13,000-head finishing site to a 4,800-sow, farrow-to-wean system. Plans are to have both systems in operation by next summer.

In making the applications, Zaccone noticed a positive change with the new state government in the past year. “The governor and his staff have been very supportive of the hog industry. They are practicing what they preach, and we applaud that and are thankful we are getting that type of support.”

Zaccone says the permitting process seems to be running smoother at IDEM. The agency is approving permits in an average of 40 days.

Supporting the Pork Initiative

David Hardin of Avon, IN, is president of the Indiana Pork Advocacy Coalition, a voluntary group of 160 producers who are funded through the National Pork Producers Council Strategic Investment Program, which focuses on regulatory and legislative affairs impacting the pork industry.

Hardin returned to the family's 600-sow, two-site, farrow-to-finish hog operation just three years ago, after working in financial recordkeeping with United Feeds (now JBS United) and with R.J. O'Brien at the Chicago Board of Trade.

He wants to stay on the farm and see it grow, and views the state's Doubling Pork Initiative as one way to secure his future.

“We in the coalition saw some advantages to what the governor was proposing, because we felt it created an environment that allowed us to do business and raise quality pork,” says Hardin.

But he says some widely held misconceptions still exist about the initiative. The doubling pork process is to take place over about 20 years (2025), not in five years, as some have stated.

The state lost about a third of what it produced in the early 1980s, and the goal is to get production back to those levels, states Hardin.

The coalition is working with state officials to help implement the initiative and foster research on technology to help mitigate odors and prevent overloading of phosphorus in the soils.

Hardin encourages grain farmers to support the livestock initiative in their communities, and realize that one of the best end uses for their crops is through livestock feeding.

Ethanol Use Concerns

Hardin and other Hoosiers have expressed concerns that the state's planned buildup of ethanol production will dilute the availability of corn for livestock feed.

“Your feedstock for ethanol and your feedstock for hogs is the same thing — corn,” says Hardin. “We need to make sure we have a good policy of how renewable fuels will work with livestock production, so we don't compete too much for the same product.”

Agriculture Director Miller says he does not share the concern being voiced around the state that growth in livestock will result in running out of corn.

“The last thing we should be worrying about is running out of corn,” he says. The country is sitting on huge carryover supplies of corn, and biotechnology is expected to cause corn production to mushroom in a few years.

“The latest prediction is that we will see average corn yields in this state go from 145 bu./acre to 170 by the year 2010,” he says.

Finally, Miller reiterates that Indiana is shipping 50% of its corn production out of state. “I'd say let's keep it here,” he says, to raise livestock locally.

Packer Keeping it Home

Indiana Packers Corp. (IPC) believes in keeping it local. Despite the dramatic drop in the state's hog production, the Delphi, IN-based, Japanese-owned plant buys 70-80% of its hogs from Indiana and Ohio.

“Indiana Packers has defined its procurement trade area of support to the eastern Corn Belt,” explains Dave Murray, vice president of livestock procurement. “In general, we do not solicit hogs west of the Mississippi, nor do we solicit from the Southeast or from Canada.”

IPC's slaughter capacity is 14,000 head/day, says Ed Nelson, company president. Current building expansion will bring that up to 16,000 head/day by the end of 2007 at the double-shift plant. Boning and packaging capabilities are also being enhanced.

Nelson says IPC supports the Doubling Pork Initiative, but stresses IPC's expansion is in direct response to growing domestic and export demand for the Indiana Kitchen line of processed pork products.

The expansion will increase the workforce from 1,500 to 1,800, and enable IPC to further pursue niche pork markets, envisioned as one area of potential growth for Indiana's smaller pork producers.

“We go after companies that require something special, something that is a little out of the mainstream,” says Nelson.

IPC is a good fit for Indiana's burgeoning hog industry, and is a good neighbor in the community. “We work very hard to keep the plant environment as neat and clean as possible,” emphasizes Nelson. IPC just received an award from the American Meat Institute and the National Safety Council for being one of the safest meat packing plants in the country.

Farmer-Owned Lender in Middle of Hog Boom

The Muncie office of Farm Credit Services of Mid-America is well positioned for Indiana's emerging boom in hog production.

Much of the expected growth is centered in the east central counties serviced by two financial services officers at the Muncie location.

Mike Reed covers the counties of Delaware, Randolph and Jay, while Randall Coffman handles the counties of Henry, Wayne and Union.

Large hog integrators that are setting up sow units in the area will be financed through their own lending institutions. But many of those integrators are banking on local contract growers to seek out their own funding sources for land and/or building loans.

That's where Farm Credit enters the picture.

Chief Credit Officer Jim Garrison heads up Farm Credit's central office in Louisville, KY, serving Indiana, Ohio, Kentucky and Tennessee.

“We certainly see livestock as a critical component of agriculture, and we are very well-positioned with underwriting programs including the use of financial guarantees, to extend a wide offering to support producers who want to become part of the livestock industry,” he says.

The growth of the integrator component offers a more stable opportunity for contract growers because they don't have the production and market risks typical of livestock production, says Garrison.

Contract production will give many young Hoosiers the chance to return to the farm, explains Reed. To facilitate that, Farm Credit in many cases has extended the terms on these types of loans by two years, from 10 to 12 years.

A recent change has also reduced the level of equity needed by these young farmers to secure loans, based on the financial strength of some of these integrators, Reed continues.

“A common scenario is if Dad is willing to deed off a portion of land for the son to be able to have these facilities, then we can meet loan standards to that young farmer, and in return, Dad gets the manure. With the increasing cost of fertilizer, that gets Dad interested, too,” says Reed.

Reed says while building costs are indeed up over two years ago, builders are buying components in volume that are keeping the increases down to about 10-15%. With the improved structural quality of buildings, plus updating and maintenance, they will last about 20 years, reports Garrison.

Farm Credit loans have two other positive features, says Reed. First, loans are set at fixed rates that are locked in. Second, after a loan is finalized, if prime loan rates decline next year, Farm Credit will convert farmers to the lower rate without going through the hassle and expense of refinancing.

“Because we are very highly capitalized, we have been able to offer that plan so that essentially our fixed rate becomes a capped rate, and if a person wants to convert to the lower rate, they can,” says Reed.

Loan rates on the contract hog barns in east central Indiana have been running under 7%. The average-sized loan for a standard, 4,000-head set of wean-to-finish buildings, if you finance 100% of the cost, is running $725,000-$750,000, says Reed.

Producer Experience

Terry and Sherri Finnerty teamed up with Jeff and sister Jill Knisely to put up two, 4,000-head wean-to-finish barns at Dunkirk, IN, for Coharie Farms of North Carolina.

Their basic contract is for seven years. The couples are paid on a per-pig space. In turn, they provide all the daily care and housing for the pigs, while the owners provide feed and veterinary care and marketing.

The couples weren't raised on the farm and also purchased a tract of land for the barns. They feel the contract is fair and they are happy to have a job that provides flexibility and helps maintain their rural lifestyle.

Production, Economics in Indiana

Indiana's hog inventory has declined 32% from 4.6 million head in 1980 to 3.2 million in 2004, but the number of hogs marketed has barely changed during a similar period, from 6.8 million head in 1980 to 6.7 million head in 2003, according to a study from Purdue University (www.inpork.org).

Indiana's hog inventory as a share of the U.S. inventory increased between 1980 and 1991 from 7% to 8%, but fell back to 5% by 2004.

Indiana's pig crop declined 32% between 1994 and 2004, equivalent to a loss of 2.3 million hogs since 1994, says Chris Hurt, Purdue University agricultural economist.

During the same time, there was an increase in pigs brought into the state for finishing, says Hurt. Those numbers were up 1.3 million, so when you take both of those two factors into account, the state's decline in production was about 12% for the overall number of pigs that were born and finished in the state, he notes.

By size, in 2004, 87% of all Indiana hog operations had fewer than 2,000 head; farms with 2,500 head represented 10% of all operations and 3% of operations had more than 5,000 head.

The Purdue study shows hog production is a statewide industry, but has been concentrated in the north central counties of Carroll, Clinton, Decatur and Montgomery, which ranked in the top 100 hog-producing counties nationwide in the 2002 U.S. Census of Agriculture.

Hog receipts represent 12% of the state's total cash farm receipts.

That translates into an estimated $44 million of personal income and $3 billion in gross state product and jobs for more than 13,000 people.

At A Glance…

  • The pork industry in Indiana employs more than 13,000 people.

  • The pork industry in Indiana generates an estimated $44 million of personal income and $3 billion in gross state product.

  • Hog receipts represent 12% of the state's total cash farm receipts.

  • Indiana had 3,200 hog farms with 3.2 million hogs and pigs in inventory in 2004.

  • Indiana ranks as the fifth-largest hog state.

2006 WORLD PORK EXPO Preview

The 18th annual World Pork Expo offers new events and activities, the best and brightest of the worldwide pork industry and fun for one and all.

The annual event, hosted by the National Pork Producers Council (NPPC), is June 8-10 at the Iowa State Fairgrounds in Des Moines, IA.

An estimated 500 exhibitors will be on hand to display a wide array of products and services.

National Hog Farmer is co-sponsoring, along with NPPC, the show's first Pork Industry Job Fair and Career Center, June 8 and 9 in the Varied Industries Building.

New this year is the Johnsonville Big Taste Grill and Brat Fry from 11 a.m. to 1 p.m. each day. Weighing in at 53,000 lb., the Big Taste Grill has the capacity to cook more than 750 brats at a time — approximately 2,500 an hour.

A variety of educational seminars June 8 and 9 will cover successful ileitis control, nutritional strategies to improve intake and gut health, nutritional management in wean-to-finish vs. conventional units and how weaning age influences feeding and management programs.

The Marketing Center will highlight PigChamp benchmarking, marketing and software information at the Varied Industries Building.

New this year, the Environmental Information Center, in the Varied Industries Building, will address updates on federal rules on confined animal feeding operations, new concepts and feeding practices to manage environmental impact, use of phytase in feeding, economics and impact on manure application and air quality issues.

Also new for 2006 is the Animal ID Alley, held all three days of the show in the Cattle Barn. It features the latest in identification practices and products to help producers stay abreast of changes in ID technology.

The Junior National Swine Show is June 8-10 in the Swine Barn, and an eight-breed World Pork Expo Swine Show and Sale is June 9-10 at the Swine Barn and Sheep Barn.

The Great Pork BarbeQlossal features the nation's best bar-b-quers lining the streets of the fairgrounds, competing for a record $39,000 in prize money.

Regular admission to World Pork Expo is $8 at the gate for adults, $5 in advance.

WPX Events and Times

A full slate of events and more can be accessed at www.worldpork.org.

Trade Show

Thursday/Friday 8 a.m. — 5 p.m.
Saturday 8 a.m. — noon
Varied Industries Building, Cattle Barn and Outdoors (southwest of Varied Industries Building)

World Pork Expo is the world's largest pork-specific trade show.

Pork Checkoff Activities

Come celebrate 20 years of progress with the Pork Checkoff. Following are a few highlights:

  • Pork producers are invited to the Pork Checkoff Hospitality Tent in front of the Grandstands to learn how their checkoff is working on critical issues. Pork Checkoff staff will be on hand. Enjoy free food and daily prizes.

  • The Pork Checkoff will be releasing: An updated worker safety program in English as well as a new Spanish version;

  • The Production Series distance learning compact disc and the Managers Series distance learning CD;

  • A custom application tool, which will allow producers to customize certain distance learning CDs to fit their operations; and

  • A group of decision tools on CD that combines current distance learning courses and new courses onto one CD.

  • The new Pork Opportunity Cuts. Sampling will take place at the hospitality tent and in front of the BarbeQlossal.

Educational Seminars

Cattle Barn Sales Arena

Free educational seminars will be presented as follows:

Thursday, June 9
10 a.m.: Topics to be determined.
1 p.m.: Successsful Ileitis Control — Don Walter, Boehringer Ingelheim Vetmedica, Inc.

2 p.m.: Understanding the Role of Co-Factors in Porcine Coronavirus-Related Disease Breaks — John Kolb, Boehringer Ingelheim Vetmedica, Inc.

Friday, June 10
10 a.m.: Consequences of Insufficient Water and Feed Intake at Weaning — Chad Risley, Feed Additives Division, Lucta USA, Inc.

10:30 a.m.: Nutritional Strategies to Improve Intake, Gut Health and Performance — James E. Pettigrew, University of Illinois.

11 a.m.: Nutritional Management in Wean-to-Finish and Conventional Units — Samuel Baidoo, University of Minnesota.

11:30 a.m.: Weaning Age and How it Influences Feeding and Management Programs — John Patience, Prairie Swine Centre, Saskatoon, Canada.

1 p.m.: To be determined.

Environmental Info Center

Varied Industries Building, Meeting Room D

Thursday, June 9
10 a.m.: Update on CAFO Rules — Tom Hebert, C&M Capitolink, LLC.

11 a.m.: How Does the Conservation Security Program Fit with Pork? — Dennis Pate, Validus.

1 p.m.: New Concepts to Manage the Environmental Impact of Your Operation — Mike Williams, North Carolina State University.

1:45 p.m.: Managing Your Feed Program to Lessen the Environmental Impact — Mike Tokach, Kansas State University.

Friday June 10
9 a.m.: The Use of Phytase in Swine Feed: Economics and Impact on Manure Application to Cropland — Michael Brumm, University of Nebraska.

9:45 a.m.: Sampling Techniques for Measuring Sludge and Nutrient Accumulation in Lagoons — Charles Fulhage, University of Missouri.

10:45 a.m.: Air Quality Issues: Ammonia, Odors and Regulations — Wendy Powers, Iowa State University.

1 p.m.: To be determined.

Pork Industry Job Fair and Career Center

Varied Industries Building, Meeting Room B

Thursday, 1 p.m. to 4 p.m. and Friday, 9 a.m. to noon

The World Pork Expo Job Fair and Career Center will help applicants find quality job opportunities.

Contests and Competitions

Eight Breed Swine Shows and Sales, Swine and Sheep Barns

Purebred Berkshire, Chester White, Duroc, Hampshire, Landrace, Poland China, Spotted and Yorkshire boars and gilts are featured.

Friday, June 9
Ring A

7:30 a.m.: Yorkshire Show

Followed by Landrace Show

Followed by Duroc Show

Followed by Hampshire Show

Ring B

9 a.m.: Berkshire Show

Followed by Spotted Show

Followed by Chester White Show

Followed by Poland China Show

Saturday, June 10
Ring A

9 a.m.: Yorkshire Sale

Followed by Landrace Sale

Followed by Duroc Sale

Followed by Hampshire Sale

Ring B

10 a.m.: Berkshire Sale

Followed by Spotted Sale

Followed by Chester White Sale

Followed by Poland China Sale

World Pork Expo Junior National Swine Show

Swine Barn

The Junior National Swine Show draws young showmen from across the country.

Wednesday, June 7

2 p.m.: Crossbred Barrow Show

4:30 p.m.: Purebred Barrow Show

Thursday, June 8

Showmanship Contest

1 p.m.: Purebred Gilt Show

Followed by the Crossbred Breeding Gilt Show

Friday June 9

10 a.m.: Swine Judging Contest

18th Annual PigCasso Art Show, Cattle Barn

Cattle Barn, Main Entrance

Pig images in a variety of media will be on display at the PigCasso Art Show. This unique, traditional show features artists from around the country.

Official World Pork Expo
Merchandise Shop, Varied Industries Building, south foyer

Exclusive World Pork Expo apparel and merchandise…for everyone!

International Visitors Center

Cattle Barn

Specially designated area for international visitors to register and find information they need to navigate World Pork Expo.

Animal ID Alley

Cattle Barn

The new Animal ID Alley will feature the latest in identification practices and products to help producers stay ahead of the curve with the issues surrounding traceability and food safety.

World Pork Open Clay Shooting Target Championship

Thursday, June 8, noon
New Pioneer Gun Club, Waukee, IA

This event features a five-person team shootout. To reserve your spot, visit the World Pork Expo Web site www.worldpork.org for a registration form, or call National Pork Producers Council at (515) 278-8012.

11th Annual World Pork Open 2006
Golf Outing

Friday, June 9, 8:30 a.m., registration and free range balls; 9:30 a.m., shotgun start
Briarwood Golf Course, Ankeny, IA

A World Pork Expo favorite! Reservations are being accepted for the first 144 golfers. Cost is a $125 contribution per golfer. Sign up as a foursome or register individually. Registration forms are available at www.worldpork.org.

MusicFest

Friday, June 9, 3-8 p.m.

This year's entertainment will be held on the Grand Concourse, featuring Exile, whose number one hit, “Kiss You All Over,” topped the pop charts in the 1970s. After crossing over to country in the 1980s, Exile charted another 10 number one hits, and continues to be a crowd favorite. Headliners The Grass Roots will perform their long string of hits from the '60s and '70s, including “Midnight Confessions,” “Temptation Eyes” and “Sooner or Later.”

The Great Pork BarbeQlossal

Saturday, June 10, judging starts at 11 a.m.; prizes will be awarded at 3:30 p.m.
Fairgrounds Grand Concourse

Some of the nation's best barbecuers will vie for $39,000 in cash prizes and national competition points. Contestants will bring their custom-made grills and sauces to compete in the categories of whole hog, ribs, loin and shoulder and showmanship.

Pig Races

Thursday/Friday/Saturday, Northeast Corner
Cattle Barn

Racing pigs will hoof around a sawdust track at blazing speeds. Fun for the entire family.

Cruisin' with the Hogs — Iron Warriors

Saturday, June 10
Fairgrounds Grand Concourse

Don't miss the fun as 150 Harley Davidson motorcycles arrive at the fairgrounds and parade up the grand concourse for judging and awards. Cruisin' with the Hogs is a fundraiser for the Iron Warriors of central Iowa, a group comprised of active duty and retired police officers, fire fighters and other public safety officers. The cruise begins at approximately 10 a.m. and takes a 60-mile scenic trip before arriving at World Pork Expo. To join the ride, visit www.worldpork.org for registration information.

World Pork Expo Farm Toy Show

Thursday/Friday/Saturday
Location: Cattle Barn

National Farm Toy Museum, Dyersville, IA, will hold the Third Annual World Pork Expo Farm Toy Show and Sale, featuring the third edition World Pork Expo commemorative toy tractor. Check out more than 100 tables of exhibitors displaying and selling farm toys and memorabilia.

North Carolina Focus On Fine-Tuning

In the mid-'90s, the rapidly expanding North Carolina pork industry climbed from seventh in the nation in pork production to second — a position they've since held.

In those two decades, the industry transitioned through three basic phases:

  1. Rapid growth/transition: Contract production was adopted on a broad scale from the late '80s to the mid-'90s; many independent producers joined the ranks. The state's breeding herd stabilized at about one million sows, with annual production currently standing at over 18 million pigs. Concerns over lagoon sprayfield manure management systems escalated in the late-'90s, and expansion came to a screeching halt in 1997, when the legislature passed a moratorium on construction of any new hog facilities. The moratorium has been extended several times, the latest to Sept. 1, 2007.

  2. Consolidation/stabilization: From 1998 to about 2000, pig ownership and real estate changed hands; Smithfield Foods' purchase of Murphy Family Farms, Carroll's Foods and Browns of Carolina in 1999 was the most remarkable transaction, making them the largest pork producer in the world, with over 800,000 sows in the United States today.

  3. Refinement/efficiency: This current stage is focused on fine-tuning production methods and the structure of various systems. Some contract production is being reorganized.

Terry Coffey, president of production operations for Murphy-Brown East, was professor and researcher at North Carolina State University (NCSU) during the state's early growth years. He joined Murphy Family Farms in 1991.

“Clearly, in the late '80s — early '90s, the total focus was on growth; it was an emerging industry that really defined the organized and integrated industry in the United States,” he says.

“As we built farms one after another, we had the opportunity to constantly implement the newest technology. We modified farm layouts, changed from having boars on farms to total artificial insemination, improved ventilation systems, and so on,” he recalls. “Today, we're focusing on refining and upgrading our operations and production methods to ensure we remain competitive.”

Coffey and others from various facets of the industry have provided a cross-section of thoughts and predictions about the state of the North Carolina pork industry. Some recurring themes soon become apparent:

  • Consolidation of some of the state's largest production systems has greatly reduced inefficiencies of crisscrossing feed trucks and pig haulers, and likely improved disease control efforts.

  • Current sow herd productivity outstrips available finishing space; 3-4 million pigs born in the state are finished elsewhere and much has been learned about moving young pigs long distances.

  • The state's packing capacity is fully utilized.

  • The price of corn remains 50-60 cents higher than Midwest prices.

  • The state's building moratorium has stabilized production and the workforce.

  • Remodeling and updating is prevalent as the state's infrastructure ages.

  • Management personnel are chipping away at production inefficiencies and dealing with a couple of pesky diseases.

  • Concerns about lagoon-sprayfield manure handling technology have calmed down as knowledge about their use and a near-spotless management record is reinforced.

  • The general public, more importantly the state's political leadership, appears to have gained a greater appreciation for the economic contributions, taxes and jobs the pork industry provides (see sidebar).

  • A handful of producers are sending more pigs to the Midwest for finishing; a couple will build sow units to help match pork production to the capacity of newly purchased mills.

That's a snapshot of the North Carolina pork industry. But, digging deeper, the following thoughts outline the current status and provide a vision of what's to come.

Moratorium Pros, Cons

In hindsight, many in the industry openly admit the building moratorium has been good for the industry.

“When we stopped the period of rapid growth and building new, we had a chance to stabilize other important support aspects of our business,” Coffey acknowledges.

For example, a more experienced and committed workforce is in place. Training programs have been refined and standardized.

If the moratorium were lifted, it is doubtful that any expansion would occur, because hog finishing is effectively aligned with the packing capacity in the state.

Commissioner of Agriculture Steve Troxler agrees. “We probably have the number of hog farms that we're going to have, so we need to concentrate on maintaining that and making sure that it remains a profitable industry,” he says. “We need to keep preaching the economic and job benefits that hogs provide in North Carolina. It's a $2 billion industry, and like agriculture in general, offers one of the biggest multiplier effects you can get in the economy.”

Richard Eason, CEO and president of Cape Fear Farm Credit, headquartered in Fayetteville, concurs. With over $400 million of their loan portfolios dedicated to pork production, Eason says producers are focused on upgrading and remodeling. A few are attempting to expand through acquisition of existing contracts and facilities.

“Without any new buildings, your only growth opportunity is to buy an operation that already exists,” Eason explains. “That's certainly had an impact on the value of facilities.”

“Pork production has been a great, great thing for eastern North Carolina — a region that desperately needed an economic shot in the arm,” he continues. “So many of these farmers were on the edge of bankruptcy, and this industry turned that around.”

The moratorium disrupted the business plan of Maxwell Foods' hog division (previously known as Goldsboro Hog Farms), co-managed by Bob and Ted Ivey.

“When the moratorium hit, we had permits for the sow and nursery phases, but we were short permits and contract growers for the finishing phase,” explains Bob Ivey.

Consequently, the firm has been selling 250,000 feeder pigs a year — mostly destined for the Midwest. “We believe it's not a good business plan to be selling feeder pigs, because it's usually less profitable than finishing them,” adds Ted.

“There's no real reason to have a moratorium,” Bob Ivey continues. “The setbacks and rules safeguard where facilities are located. And, no consideration is being given to the innovations that have improved management of the lagoon-sprayfield manure management systems. Water control devices and bowl drinkers, for example, reduce water usage by at least 25-30% over nipple waterers. Most every hog in North Carolina receives phytase in the feed, which reduces phosphorus coming out of the pig by 25%. Most are using more amino acids to reduce nitrogen output significantly. And, all of the standards that the lagoon sprayfields were built upon were basically for a hog with a feed conversion around 3:1, which, industry-wide, has moved down to 2.65-2.70:1.

“The industry should probably do a better job of telling their story and get more credit for the things we have done,” he adds.

Having rounded out production flows from breeding through nursery for Maxwell Foods' 76,000 sows in North Carolina, the Iveys' search to find contract finishers for excess feeder pigs carried them to Indiana, where the governor has made it clear that more livestock production is welcome.

“The people in Indiana were very good to work with; the farmers very progressive,” notes Ivey. “Many of the crop farmers want to diversify with livestock, so they can bring a son or daughter into the farming operation.”

In the interim, Maxwell Foods purchased a 4,000-ton/week feedmill in Hagerstown, IN, with ample capacity to feed the surplus pigs from North Carolina, plus the planned production from an additional 15,000 sows. The newly formed Maxwell Foods of Indiana will take possession of the mill on June 1.

A shortcoming in the moratorium most often mentioned is the inability to relocate comparable production to more appropriate sites.

“In the absence of the moratorium, there would be an opportunity to close out less efficient, more environmentally sensitive farms and build better facilities, in better locations, without increasing overall production,” notes NCSU Swine Extension Specialist Todd See.

“I think the entire U.S. pork industry will be challenged over time, because of restrictions on growth of new facilities,” Coffey says. “We will all have to get better at operating what we have versus having the luxury of building new, pristine facilities, if we are to remain competitive on a worldwide basis.”

Tackling Inefficiencies

When See joined the state Extension staff 14 years ago, the pork industry was a flurry of activity. Smithfield Foods' new packing plant in Bladen County was going full bore. “There were finishing sites opening on a weekly basis; sow farms were going in everywhere; everybody was signing up contract growers and building farms,” he remembers.

“The moratorium helped slow things down, and it's given everybody time to react in a scientific, unbiased and viable manner. After a period of growth, growth, growth, they're focused on making the system work more efficiently, more cost effectively, more profitably. It's really helped everyone focus on their core business and do a better job in all aspects of their business, including the environment,” See says.

“Early on, there was movement of contract growers and employees amongst the companies, especially employees. That's lessened and stabilized as the industry matured,” he adds.

Recent good markets and the expiration of contracts the past couple of years has intensified contract grower activities again.

“With the moratorium, every pig space that's in good shape in this state will get utilized. Contract farmers are still trying to determine their long-range plans,” See explains. “They have to buy or lease existing facilities if they want to grow.”

Smithfield Foods reorganized the Murphy Family Farms-Carroll Foods-Browns of Carolina acquisition under the management umbrella of Murphy-Brown in 2000.

“Some of the impacts have been positive, because it has fostered some coordination,” See says. “Hog production is extremely dense in the eastern part of the state. Companies with feedmills and plants were crisscrossing each other. Through Murphy-Brown, they were able to minimize the overlap. Logistically, it removed some of the inefficiencies in the systems.”

Lagoons, Sprayfields & Politics

The recently released results of a five-year, $17.3 million study to identify effective waste management alternatives essentially reported that, of the technologies tested, no “economically feasible” alternatives currently exist to lagoon-sprayfield technologies used predominantly in the state. (See “Five Technologies Rise to the Surface,” National Hog Farmer, March 15, 2006).

“Ultimately, the legislature will have to decide (whether to lift the moratorium), but the research shows that the lagoon-sprayfield system is still an environmentally safe and economically feasible system,” See explains.

Don Butler, director of government relations and public affairs at Murphy-Brown, Warsaw, NC, agrees. “If you look at the state's own records, the environmental compliance record of hog farmers is excellent — and it gets better every year.

“There are several reasons for that good record,” he continues. “Everyone understands how important it is. If you screw up, it can cost you personally, but it's also a black eye to the industry.

“Since 2002, there have been a total of 60 discharges from the 2,400 permitted livestock operations in the state. By comparison, the 1,400 permitted, non-agricultural operations (municipalities, other industrial systems) have had over 6,000 spills. That's a hundred times more spills and discharges, according to the state's own records,” Butler explains.

“The public doesn't understand that the more mechanical a system is, the more opportunity and risk there is that something will break or fail,” he continues. “I think farmers in this state will continue to use lagoons and sprayfields, and they will find ways to improve them.”

“Even over the course of the moratorium, the lagoon-sprayfield type of system has been heralded as a big benefit to our small towns and communities, which have installed these types of systems because they can't afford a sewage treatment plant. There's a double standard here,” adds See.

Bob Ivey reinforces the irony: “The city of Mt. Olive condemned the facilities of one of our growers so they could use it for sprayfield application from their sewage processing system.”

Cooperative Spirit

Non-residents of North Carolina may be surprised to learn the degree of cooperation that exists among the state's pork producers.

As production grew, the stages of production, pig flow and siting were coordinated. Producers consulted with packers to ensure shackle space was available.

Butler, who joined Carroll's Foods in 1991, offers this example: “I know the major players in the region got together and agreed, voluntarily, on a set of siting setback requirements before there were state rules. They said, ‘it's in all of our best interests not to site a sow farm within a mile of another sow farm, or a finishing barn within a half mile of another finishing barn.’ It may not have the force of law, but they all signed it. I've seen it,” he declares.

“Some of our guys who are expanding in the Midwest are taking the same model to packers and others, because their commitments help ensure their growth,” See says.

“I would describe us as friendly competitors. When we face a common challenge, we work on it together,” says Butler. “There's a spirit of camaraderie and jointly held responsibility.”

The cooperative spirit has served producers with disease management, although the concentration of pigs in a few counties is both a curse and a blessing.

“One of our greatest obstacles is the herd health challenge,” says R.B. “Butch” Baker, DVM, at NCSU's College of Veterinary Medicine. “But one of our greatest advantages is that we have a relatively small number of decision makers who can make major decisions. We have the opportunity to make very decisive, quick decisions, and then have a unified effort in implementing them,” Baker continues.

“Yes, we're a competitive industry,” agrees See. “But they will pull together pretty quickly on these issues for the common good. We experienced that with pseudorabies. When everybody decided it was time to clean it up, it got cleaned up.”

Given a little technological help, Baker believes porcine reproductive and respiratory syndrome (PRRS) may be the next eradication candidate. The disease has been difficult to control, partially because pig density and constant pig movement increases the odds of biosecurity breakdowns. Nonetheless, he says: “I think we will see North Carolina become the first state where PRRS will be eradicated.”

Less certain is the means to check outbreaks of the puzzling porcine circovirus-associated disease (PCVAD). Outbreaks have been spotty, with no apparent rhyme or reason.

“Certainly, any kind of emerging disease hits the radar screen pretty quickly in North Carolina, because we've got large numbers of pigs to watch it go through. That's particularly true of the circovirus-related syndromes we're seeing now,” Baker says.

“It's still in a relatively small number of herds and finishing sites. It's unusual in that pigs are affected or unaffected — even in the same pens. A lot of pigs don't get sick or show clinical signs, but those that do are gravely ill,” he adds.

Baker suspects PCVAD is a multi-factorial disease with several viruses or bacterial infections associated with a “switch-like” effect seen in finishing barns. “The big questions are — how fast will it spread, will the vaccines work and how much is this disease going to affect industry productivity?” he says.

Feedgrain Deficits

Commissioner Troxler acknowledges the state's negative balance for corn and soybean meal, but he reminds: “We've been in the deficit situation for a long time, and yet the hog industry has thrived. Looking at the United States and world supply of grains, we've evidently been very efficient at moving these stocks where they need to be.”

Troxler doesn't see the expansion of ethanol or biodiesel production as a huge threat to feedstocks. “If we get into renewable fuels in a big way, we will achieve a balance because we're not at full (crop) production capacity in this country,” he says. “If the price of corn and soybeans does rise, I think we will see more planting of those crops. I think the market will take care of that very nicely.”

Swine nutritionist David Funderburke, with Cape Fear Consulting, Warsaw, NC, sees the feed supply similarly. Within his North Carolina client base, several operations in the 20,000 to 30,000-sow range purchase much of their yearly grain needs locally at harvest, store it and then truck it to their mills as needed. “This practice makes them as cost-effective as the larger systems that rely on rail delivery,” he notes.

Funderburke agrees that renewable fuels will compete for corn, but it doesn't concern him greatly. “As long as government support programs stay in place, there should be plenty of corn.”

The nutritionist says one of the biggest nutritional challenges on any given day may simply be “getting the right feed, delivered to the right tank, put in front of the right animal, for each stage of production.”

Future Challenges

Deborah Johnson, CEO of the North Carolina Pork Council (NCPC), says “dynamic” describes the industry in her state.

“If you look what the producers in this state have done, you see a progressive, innovative group of people. That's not going to change because of the moratorium or if we can't use lagoon-sprayfields someday. I don't think you could replicate what we've got in North Carolina somewhere else.”

The lagoon-sprayfield issue may not go away, but management and compliance rates have improved markedly in the past five years, according to Tommy Stevens, NCPC director of environmental services and retired director of the state's division of water quality.

“Producers don't want to change just for the sake of changing,” he says. “They wonder if the environment will really be better off if they switch to other manure management technologies. Whenever the hurricane season opens up, concerns rise. It's something that we will always have to deal with.”

See agrees: “Even though it's been discussed for over a decade, some people still don't understand that the lagoon-sprayfield technology is a contained treatment system that can only be land-applied in an agronomic fashion.”

If a better technology is found, See says producers will jump on board. “You can look at anything in the industry in this state; technology adoption happens when it's beneficial and economically feasible.”

Momentarily setting aside a decision on lagoon-sprayfields, animal welfare tops most lists of future challenges.

“The issues that concern me most, going forward, are other kinds of threats to the industry — like the animal rights/animal welfare issue. It's huge,” says Butler. “Not just for North Carolina, but for agriculture in general, and livestock production in particular.”

Most production systems are beginning to study various housing and management alternatives. “The remodeling and upgrading will be a gradual process,” he notes.

Baker agrees: “It's an issue that might have bigger, long-term effects on how we do business than all others.” The newest buildings in the state are 8-9 years old, while some are 20-25 years old.

“Our infrastructure is not worn out, so it's not time to start over,” says Baker. “But, a lot of our buildings are ready to be remodeled. If we just knew which direction to go, it would make the transition a little easier. We might be positioned to alter our infrastructure a little better than the Midwest in that regard,” he adds.

“There's more than one business model, and all of them can work,” Butler adds. “I think there's enough room in this business for everyone — but you have to be good, efficient and a good businessperson to survive. If you are all of those things, you can still do OK in this business.”

North Carolina Pork Industry At A Glance

The impact of pork production, packing and processing on the economy of North Carolina is substantial, according to a report released by Kelly Zering, agricultural economist at North Carolina State University. Citing data from the North Carolina Department of Agriculture & Consumer Services for 2004, the most recent available, he offered these highlights:

Hog Production/Marketing

  • 18,633,000 pigs marketed, (about one-fourth of all farm receipts) which represents about 19% of pigs produced in the United States, valued at $2,078,800,000.

Jobs & People

  • 8,283 full-time jobs in hog production.

  • $808 million in value-added income for pork producers annually (Value-added estimate is calculated by multiplying the 1993 value ($398 million) by 2.03. The 2004 figure represents a 103% increase in value of production.)

  • $500 million in current asset value in hog buildings and equipment (est. $1,400/sow). More than $1 billion invested in hog buildings and equipment since 1988.

  • $3.7 million in property tax revenue annually (estimated, 2005).

Indirect Effects of Hog Production

  • $633 million in value-added income (Indirect effects of hog production in 2004 were calculated by multiplying the changes in direct income and employment by their respective multipliers minus 1, and adding those impacts to the 1993 indirect values).

  • 16,374 full-time jobs in wholesale and retail, services, other agricultural manufacturing, transportation, etc.

Pork Packing and Processing (direct and indirect effects)

  • $420 million in direct, value-added income (Packing and processing direct impacts are calculated as 1993 impacts multiplied by 1.8678, reflecting the 86.78% increase in pounds slaughtered).

  • 10,910 fulltime jobs; direct effects.

  • $355 million in indirect and induced value-added income (Indirect effects of pork packing and processing in 2004 were calculated by multiplying the changes in direct income and employment by their respective multipliers minus 1, and adding those impacts to 1993 indirect values).

  • 10,847 fulltime jobs in North Carolina wholesale and retail trade, services, other agriculture, manufacturing and transportation.

Combined Effects — Hog Production and Pork Packing & Processing

  • $6.7 billion in sales.

  • $2.21 billion in value-added income (Value-added income refers to payroll (wages, salaries), profits, return on capital invested and taxes).

  • 46,414 full-time jobs.

Japan Adopts New Residue Limits

U.S. pork producers should be able to satisfy new requirements.

The Japanese Ministry of Health, Labor and Welfare has set new maximum residue levels for veterinary drugs used in food production, including pork products.

Pork producers are advised to take any steps needed to abide by these changes which are effective May 29.

“Japan is a valuable export market for U.S. pork producers, representing 45% of all United States pork exports at a value of $1.070 billion. It is important that U.S. pork producers take this issue seriously,” says Phil Seng, chief executive officer of the U.S. Meat Export Federation.

“The United States cannot afford to lose this essential market, and unfortunately, just one out-of-compliance animal could put this strategic market at risk,” cautions Seng.

U.S. pork producers are required to adhere to animal health product withdrawal standards determined by the U.S. Food and Drug Administration. Following product label guidelines should also satisfy most of the new Japanese policies.

But producers are advised to take the following steps to ensure their animal health product use fits the new regulations:

  • Contact your packer and find out if your hogs are destined for export to Japan, and therefore are affected by these new regulations.

  • Visit the Pork Checkoff's Web site, www.pork.org, to determine if medications used in your operation have withdrawal periods impacted by the new standards.

  • Contact your herd veterinarian to discuss changes in your herd health program if your use of animal health products is impacted.

Producers are also advised to work with their veterinarian regarding product choices in the finisher phase and to develop appropriate treatment choices, according to the Pork Board.

Producers may also want to review two Pork Checkoff programs: Pork Quality Assurance and Take Care — Use Antibiotics Responsibly. These materials can be accessed on the Internet at www.pork.org. or through the Pork Checkoff Producer Service Center at 800-456-7675.

Pork Academy Program

Pork Academy provides hog producers with in-depth seminars to help them stay competitive in the pork industry. The program is June 7 at the downtown Des Moines Marriott Hotel (515-245-5500), just prior to World Pork Expo.

Registration on-site is $150 and includes lunch, refreshment breaks and all materials. The Pork Checkoff-funded program runs from 9 a.m. to 5:30 p.m.

There are three concurrent sessions:

  • Session I covers swine health, reproduction and marketing;

  • Session II features animal care and behavior, business and financial management and swine nutrition; and

  • Session III looks at environmental management, production and management systems and human resource management.

For more information, contact the National Pork Board at 800-456-7675 or check the Internet at www.pork.org.

USDA to Launch Swine Study

The U.S. Department of Agriculture's (USDA) National Animal Health Monitoring System (NAHMS) is conducting its fourth national study of U.S. swine health.

From July 1 through Aug. 15, USDA representatives will be visiting hog producers to begin the first phase of Swine 2006.

Data will be collected from producers in 17 states who account for 94% of the nation's pork production.

The survey has six objectives:

  • Describe management practices used throughout production;

  • Determine prevalence and risk factors for pathogens in nursery and grow-finish;

  • Review vaccination and antibiotic-use practices;

  • Assess the prevalence of nonambulatory swine and risk factors;

  • Target practices that reduce manure nutrient content; and

  • Provide an overview of changes in U.S. swine management and health from 1990-2006.

Optional tests collect blood samples to estimate the prevalence of porcine reproductive and respiratory syndrome in the national swine herd.

A second optional blood test estimates the prevalence of swine flu, looking at new and traditional strains in unvaccinated swine.

A third testing option collects fecal samples to estimate the prevalence of salmonella and campylobacter.

Survey and testing work concludes in early 2007. Results help define industry management practices, help guide university and private research and help conduct economic analyses.

More information can be obtained by calling USDA, NAHMS, in Fort Collins, CO, at (970) 494-7000; e-mailing NAHMSweb@aphis.usda.gov or going to the NAHMS Web site: http://nahms.aphis.usda.gov.

2006 World Pork Expo New Product Tour

National Hog Farmer is again offering readers and attendees of World Pork Expo an opportunity to preview their favorite new product or service from the slate of 30 nominations featured in the following pages.

ACCO Showmaster Nutrition Program ACCO Feeds

The ACCO Feeds Showmaster nutrition program was designed for the show pig category. The Showmaster program includes a complete line of products with winning formulas from start to finish. The program includes special diets for show pigs, breeding sows and boars, along with nutritional supplements to provide the perfect finish. Showmaster Premium Show Feeds deliver advanced carbohydrate technology. Carbohydrates make up roughly two-thirds of the show pig's diet.

Learn more at
www.showmasterfeeds.com
call 952-984-1861
Present at
World Pork Expo Jr. National

Clear Advantage Water Purification Technology Aerotech

The Clear Advantage water purification system helps provide pure oxygenated water to your animals. Ozonated water will improve the health of the animals, which translates into more livestock to market, lower feed cost, better heat resistance, improved weight gain and medication efficiency. Each Clear Advantage system is specifically designed for your application.

Learn more at
www.clearadvwater.com and
www.aerotech-inc.com
call 888-779-9200, fax 517-676-7078
Visit Booth No. 147

Weight On The Fly A.T. Ferrell Company, Inc.

The Weight On The Fly (WOF) is a simple and accurate continuous-flow weighing, mixing and proportioning unit with computer interface capabilities. The WOF is designed to store a number of selected swine rations that are available for instantaneous weighing and metering into a continuous stream of ingredients. If the product needs to be ground, the ingredients can flow from the WOF into a hammer mill or roller mill.

Learn more at
www.atferrell.com
call 800-248-8318, ext. 41,
or 260-824-3400, fax 260-824-5463,
email info@atferrell.com
Visit Booth No. 759

INTAK Ad-Lib Lactation Feeding System Automated Production Systems (AP)

The INTAK Ad-Lib Lactation Feeding System from AP provides an economical and efficient way to upgrade most existing farrowing crates to on-demand feeding. The system makes fresh feed available to the sow 24 hours per day, increasing feed intake while decreasing feed waste. Production benefits include increased litter weights and improved sow condition and breed-back. The INTAK System can be fully automated with a Chain-Disk feed delivery system saving time and labor cost.

Learn more at
www.automatedproduction.com
call 217-226-4449, fax 217-226-3540
Visit the Booth in Block 200.

Seamless Summit Flooring Canarm/BSM Ltd.

Canarm/BSM introduces the new Seamless Summit Flooring for nursery facilities. The slat design reduces installation costs and makes cleaning easier. The slats measure 2-ft. × 4-ft. and are manufactured with 100% virgin material for additional strength and durability. The Seamless Summit slat features a unique Seamless Joining System with a capped-over seam for easier and faster cleaning. The V-shaped ribs and light color facilitate early disease detection and helps brighten the room. The Seamless Summit floor is designed for pigs up to 100 lb.

Learn more at
www.canarm.com and
www.bsmagri.com, call 613-342-5424
fax 1-800-263-4598
Visit Booth No. 625 VI.

Cargill Animal Nutrition Cargill, Inc.

Several new nutrients were added to the Cargill nutrient portfolio for custom nutrition solutions. Cargill's scientists challenged traditional energy metabolism paradigms. They developed a new way to formulate diets based upon net energy for young pigs, heat of digestion for growing hogs and/or the Ideal Carbohydrate TM balance. This new approach supports more precise gains, more pig comfort and more efficient production for today's pork producer.

Learn more at
www.cargillanimalnutrition.com
call 952-984-1861
Visit Display 672

Halo Feed System Control Controltech Corporation

The Halo Feed System Control provides a reliable means of controlling a feed delivery system. Existing hopper level switch and proximity switch feed controls can be notoriously unreliable, causing feed outages. The Halo Feed System Control uses infrared sensing technology that is better-suited for a livestock environment. The Halo Feed System Control also features timing and alarm functions required to operate a feed delivery system.

Learn more at
www.controltechonline.com
call 866-532-3793
email
eric@controltechonline.com
Visit the Booth in Block 246

Creep Flooring Double Dragon Industries

DDI pioneered a high-quality, durable, easy-to-install hog flooring and support structure. The distinctive characteristic of this flooring is simple installation requiring no fasteners. The support structure and flooring are both produced in a simple, one-piece design constructed of metal bar stock with a hot-dipped, galvanized coating. The support structure and flooring underside use a rod design to offer fewer corners and flat areas for manure build-up, as well as creating an interlocking mesh between the two structures to eliminate the need for fasteners.

Call DDI at 563-557-0385
email
smerrik@ddicorp.com
Visit the Booth No. 4911

Eventherm TH 4-20 Weatherproof Thermostat Double Dragon Industries

A thermally comfortable pig is vital for both productivity and disease control. The new Eventherm TH 4-20 Weatherproof Thermostat from DDI integrates a novel, stainless steel sensor cover between the wall and the thermostat's stainless steel sensing spiral. This ground-breaking feature shields the sensor from considering the temperature of the wall structure, without restricting the room airflow necessary for the sensor to maintain accurate readings. The sensor cover feature allows the thermostat to respond more precisely to changes in room temperature and helps maintain a more desirable temperature.

Call DDI at 563-557-0385
email
smerrik@ddicorp.com
Visit the Booth No. 4911

MiniDos Dosmatic USA, Inc.

The new MiniDos Professional series of non-electric, water-driven, proportional injectors provides higher operating pressure, higher flows, and reduced pressure loss. A built-in mixing chamber leads to improved mixing. The MiniDos offers an optional remote injection feature.

Learn more at
www.dosmatic.com
call 972-245-9765
Visit Booth No. 611

DuPont Biosecurity Kit Engineered with Excellence DuPont Animal Health Services

DuPont Biosecurity Kit is a new product offering engineered by DuPont's experts in safety to provide personal protection and proven efficacy for the farm environment.

This new offering incorporates the following innovations:

The world's premier disinfectant, Virkon® S Disinfectant and Virucide, which is effective against 65 strains of virus including PRRS, PCV2 and TGE.

DuPont Tyvek® coveralls and DuPont RelyOn Antiseptic Hand Wipes.

Learn more at
www.ahs.dupont.com
Call 1-888-243-4608 or 302-892-7575
Visit Booth No. 545 VI

Integrator Pro Easy Automation, Inc.

Integrator Pro is designed for pork producers looking for an easy link between their growers and the toll mills, while still maintaining feed budget information. Integrator Pro includes modules specifically designed for each end of the pork production business. Feed Order Pro allows growers to easily and efficiently order feed and enter animal movements in a web-based system, PDA or via a touch-tone phone. The Grower Contracts module focuses on the maintenance of contracts between the integrator and each grower. The central system to Integrator Pro includes feed budgeting and group information to ensure proper feed deliveries. Toll Mill Pro is designed to allow each toll mill to retrieve their orders electronically, enter price lists, and record actual weights while ensuring proper formulation and pricing.

Learn more at
www.easy-automation.com
call 507-728-8214
fax 507-728-8215
Visit Booth No. 769

Bantam Ultrasound Mobile Waist Pouch E.I. Medical Imaging

The Mobile Waist Pouch for the Bantam Real-Time Ultrasound Scanner offers better weight distribution for carrying the 30-oz. scanner via a padded, breathable and ventilated waist belt. The new adjustable pouch is made of the highest-quality fabric, is user friendly and features secure snaps. The clear plastic top prevents fluid and particles from entering the electronics while allowing the user an easy view and access to the controls.

Learn more at
www.eimedical.com
call 866-365-6596
Visit Booth No. 126

InSite Monitor Glasses E.I. Medical Imaging

E.I. Medical Imaging offers the new InSite Digital Monitor Glasses for the Bantam Real-Time Ultrasound Scanner. The InSite Digital Monitor Glasses offer a hands-free, fully adjustable monitor to make early pregnancy diagnosis and backfat scanning more comfortable and efficient for the ultrasound user. The user can easily adjust for eye width, brightness, contrast and focus. InSite glasses eliminate neck and back strain associated with viewing a monitor screen. They allow scanning without glare from bright light and sunshine.

Learn more at
www.eimedical.com
call 866-365-6596
Visit Booth No. 126

Farnam LTS Tag Recorder Farnam Companies, Inc.

The Palm®-based LTS Tag Recorder is a rugged RFID reader and data accumulator designed for a variety of livestock identification applications. With its user-definable software interface, it can be customized for a host of environments and applications. The Farnam LTS Tag Recorder has an IP67 rating, and can stand up to the harshest environments. This allows the Farnam LTS to be used instead of vulnerable laptops and standard PDAs that are susceptible to water and dust ingress, as well as physical damage. Retrieve data from the reader easily with the included software. Once uploaded, data can be modified using Microsoft Excel or almost any other management program.

Learn more at
www.farnamlts.com
call 800-511-4744
Visit Booth No. 2811

New Z Hog Tags With Laser Printing Farnam Companies, Inc.

The Farnam New Z Hog Tag is a one-piece ear tag designed for use on swine over four months of age. The tags can now be decorated using laser marking. This provides virtually limitless graphic possibilities, including numbers, logos and barcodes. Laser marking also ensures information won't fade over time. Identifying both individual animals as well as group lots allows for immediate identification and faster access to records. A patented, self-piercing tip means clean, precise incisions and helps prevent infection and disease transfer.

Learn more at
www.farnamlts.com
call 800-511-4744
Visit Booth No. 2811

Farm SeRVey Executive Dashboard Software FBS Systems, Inc.

Farm SeRVey Executive Dashboard software allows pork managers to monitor Key Performance Indicators inside and outside their organizations from a wide variety of data sources, including accounting and production software, spreadsheets, facility monitoring systems and web sites. Views such as graphs, tables, gauges and maps, can be customized by the user and are automatically updated as underlying data change. Farm SeRVey provides a concise, real-time control center for any decision maker currently overloaded with data.

Learn more at
www.fbssystems.com,
call 800-437-7638, ext. 101
Visit Booth No. 765 VI

Super Sorter Scales K & L Technical Services LTD.

Sort feeder pigs with the same efficiency as the larger animals. A new weaner insert for the Super Sorter Scales, as well as a new, one-way gate, allow the producer to sort the heaviest pigs or the smallest pigs off from the group. Many producers over-stock their barns as weaners. Then they must sort to make barns more uniform. The new Super Sorter Scales take many hours of back-breaking labor out of the picture and leaves pigs stress-free and uniform.

Learn more at
www.supersorter.com
call 515-3310-0007
Visit Booth No. 2320 and 2321

OptiPhos JBS United, Inc

OptiPhos is a new phytase product developed and offered for sale by JBS United, Inc. OptiPhos releases two times as much phosphorus from feed grain in pigs than competitive phytase products. This results in an enhanced diet for the pig, as inorganic phosphorus is replaced with energy from corn and/or soybeans. In addition, OptiPhos benefits the environment by significantly reducing phosphorus levels in manure. A study conducted with The Maschhoffs, Inc., released in March 2006, showed phosphorus excretion in manure was reduced by 45% when using OptiPhos.

Learn more at
www.jbsunited.com
call 800-503-6288
Visit Booth No. 556

A.I. Handycope Kane Enterprises, Inc.

The A.I. Handycope is a high-powered, portable, microscope designed for use as a fast and reliable test kit for fertility screening in artificial insemination applications. Use the Handycope to select the healthiest, most active sperm samples for efficient artificial insemination and a high rate of successful pregnancy. The instrument is easy to handle and use. A high-powered LED light guarantees clear and bright images, even at night or in dark working environments. The A.I. Handycope is powered by a lithium battery and can be carried anywhere it is needed.

Learn more at
www.ag-tek.com
call 800-336-8577
fax 800-582-7786
Visit Booth No. 2603 CB

AGRO - JET Medical International Technologies

Jet Injection is a state of the art, safe, fast, reliable, accurate and simple way to inject medicine. The injected medication disperses in a mist or spray effect as it enters the dermal, subcutaneous or the intramuscular tissue. The minute fluid particles of medication are then in close contact with the absorbent tissue. The rate of absorption increases as the surface area to which the medication is exposed increases. The small penetration point results in reduced trauma to the site.

Learn more at
www.mitcanada.ca
call 514-339-9355
Visit Booth No. 336

Bio-Burn Incinerator Team Ag Division/Metal Plessis, Inc.

Protect your investment and avoid contamination. Stop paying for carcass pick-up and disposal. Control the safety of your stock and profit. The Bio-Burn Incinerator from the Team Ag Division of Metal Plessis, Inc. is biosafe, economical and easy to operate.

Learn more at
www.go-teamag.com
call 819-362-2221,
fax 819-362-6974
email
info@go-storm.com
Visit Booth No. 2105 CB

BinTrac Novonix Corporation

The BinTrac monitor from Novonix Corporation uses a direct-contact sensing technology for continuous bin-level measurement. It uses three or more sensor cables to register the depth of feed in the bin. The signals from all sensor cables are averaged to minimize errors from voids within the feed. The feed level is then computed and displayed on the monitor's LED bar graph. The BinTrac system is not affected by dust, temperature changes, ice or feed density. The monitor can track up to four bins at one time.

Learn more at
www.novonix.com
call 507-344-8005
fax 507-344-8009
Visit Booth No. 735

MicroZone Novonix Corporation

MicroZone is the automatic lamp and mat heating controller from Novonix Corporation. It is compact, rugged and easy to use. It works with the MicroZone Power Modulator to achieve 25-45% lower electrical costs, fewer preweaning deaths, longer equipment life and reduced labor costs. The controller has its own temperature sensor to monitor the piglets' environment. Power modulators automatically regulate power to the heaters from 0 to 100% to compensate for changes in room temperature and animal needs.

Learn more at
www.novonix.com,
call 507-344-8005
fax 507-344-8009
Visit Booth No. 735

DRAXXIN (tulathromycin) Injectable Solution Pfizer Animal Health

Pfizer Animal Health introduces DRAXXIN, a novel antimicrobial from a new triamilide class. It provides rapid, extensive and prolonged lung tissue concentrations and delivers one-dose, full-course treatment against complex SRD. It has been researched and has proven effective against key bacterial pathogens that cause complex swine respiratory disease such as Actinobacillus pleuropneumoniae, Pasteurella multocida, Bordatella bronchiseptica and Haemophilus parasuis.

Learn more at
www.pfizerpork.com
or www.draxxin.com
call 1-888-DRAXXIN
Visit Booth No. 162 VI

PigCHAMP RFID Instant Data System PigCHAMP

The new PigCHAMP RFID (Radio Frequency Identification) Instant Data System allows pork producers to quickly and accurately identify animals for data collection. Data is then easily uploaded into the producer's PigCHAMP record-keeping software systems. By using special RFID ear tags, the rugged, handheld computer can quickly identify the animal accurately so production information is easily entered. This not only saves time, but also eliminates the risk of mis-identification, a major cause of corrupt data.

Learn more at
www.pigchamp.com
call 866-774-4242
Visit Booth No. 574

Nuflor Oral 2.3% Concentrate Solution Schering-Plough Animal Health Corporation

Schering-Plough Animal Health Corporation introduces Nuflor Oral 2.3% Concentrate Solution, the broadest spectrum oral antibiotic available for the treatment of several major causes of swine respiratory disease. Nuflor Oral 2.3% Concentrate Solution contains florfenicol, a novel, fast-acting, long-lasting antibiotic developed by Schering-Plough. The new solution is labeled for the treatment of swine respiratory disease associated with Actinobacillus pleuropneumoniae, Pasteurella multocida, Salmonella choleraesuis and Streptococcus suis Type 2.

Learn more at
www.spah.com/usa
908-473-3336
Visit Booth No. 35

Automatic Gestation System (AGS) Schick Enterprises

Schick Enterprises has developed a large-pen Automatic Gestation System (AGS). AGS is the first, large-pen system of its kind on the market. A group of as many as 150 sows can be managed and fed with the system. AGS uses RFID tags to enable the system to process animals in seconds, leading to very fast through-put. Trickle Feeding Stations allow all sows to eat at the same time, virtually eliminating sow aggression while also keeping the dominant sows from over-eating. All management capabilities are performed through a web-based interface.

Learn more at
www.schickenterprises.com
call 610-683-9645
Visit Booth No. 746

GrowTRAC Val-Co

GrowTRAC is a complete, wireless monitoring service that extends the capabilities of your existing controllers. GrowTRAC allows producers to connect, monitor and improve production from a single, web-based software solution. Intelligent Alarms report high energy costs, equipment failures and environmental thresholds. Predictive Diagnostics report disease risk, underweight animals, low feed levels and low fuel tanks. Receive notifications with Escalation on a personal computer, the web, via email, text message or via satellite, cell phone or land phone.

Learn more at
www.GrowTRAC.com,
call 800-998-2526
email
sales@valcompanies.com
Visit Booth No. 658 VI

Welbourne Fountains Welbourne Innovations, Inc.

Welbourne Fountains are water fountains with a patented float-operated valve. The fountain design reduces water, medication, waste-removal, energy and labor costs. The fountains deliver an ample supply of water to accommodate two animals drinking at once and operate at any pressure. Welbourne's self-cleaning fountains improve sanitation.

Learn more at
www.welbourne.org
call 217-370-3433
Visit Booth No. 224 S&R Resources, LLC, or Booth No. 615 Trojan Specialty Products.

500 Years and Counting

Who in the pork industry would you most like to interview?

Would you pick the most successful pork producer you know? A specialist in your chosen field? Perhaps a scholar or a company executive in a discipline you'd like to know more about? A young entrepreneur? A pork industry veteran?

Start a list. We did.

It wasn't a short list. But we narrowed it down a bit and set out to conduct the series of interviews that are presented in a brand new feature that we call “The MASTERS of the Pork Industry” (see page 10).

We traveled to eight states, conducted 10 interviews with 12 remarkable people. One interview included a husband-wife team, another a father and son partnership.

We launched into the interviews by collecting information on each person's rich heritage. Some were raised on a hog farm; others were not.

We dug deep into their respective specialty areas — pork production, pork packers, swine veterinary services, meat quality, animal welfare, market outlook/industry analysis and Extension services.

Each of these Masters has spent the better part of their careers in pursuit of excellence in their chosen segment of the pork industry.

We asked each to tell us about their life/career mentors; then, we closed the interview by asking: “What is the best advice you've ever received?”

Their very thoughtful comments were inspirational and noteworthy. What a wealth of knowledge we have tapped into.

Years of Wisdom

After we compiled this information, I began to wonder how many total years of experience these people had logged in the pork industry, so I took a rough tally. With some allowance for their formative years, the dozen participants comprised a grand total of nearly 500 years of experience in the pork industry! Remarkable.

One of those interviewed claimed “fetal imprinting” had likely influenced his choice of career paths. His mother, late in her pregnancy, had sat patiently on the sidelines of the showring at the Indiana State Fair as his father competed in the championship drive of the 1941 swine show. I credited him for 64 years.

Not many in the industry have more knowledge and history to share than Glenn Grimes, hog market prognosticator, extraordinaire. I asked Glenn what advice he would give a young person interested in a career raising hogs. Here's his response:

“If you're located in the Corn Belt, where we're going to feed the hogs, take a look at contract production. If you have good enough records to know you're good at raising pigs — if you can produce pigs at $37/cwt. and cover all costs — I would say there's an opportunity for you, if you can survive the start-up period. And, remember, you have to be big enough to provide for your family. I would say that would be 500 sows, minimum.”

My favorite and most profound piece of advice was shared by Wendell Murphy, a man who built a small pasture feedlot into the largest family-owned pork production system in the world. Mr. Murphy said: “One thing I learned early on — if you're just going to do what's convenient, you're going to leave a lot of important things undone.”

Surely, he is right.

Is it any wonder that one of the things I enjoy most about my job is being able to sit down and visit with folks from all facets of the pork industry? There's a wealth of knowledge and wisdom tucked away in their life experiences, just waiting to be tapped and shared.

That's one of the greatest and most remarkable attributes that separate our industry from many others — this sharing of ideas, knowledge and aspirations.

We hope you find value and inspiration in the thoughts of these veterans, young entrepreneurs and visionaries.

Hoosier-Tar Heel Connection

We've also taken a slightly different tactic in our traditional state-of-the-industry reporting, opting to narrow our focus to just two states — North Carolina and Indiana.

North Carolina, the second-largest pork-producing state, was selected because producers there have undergone tremendous environmental scrutiny while operating under a moratorium that has disallowed the construction of any new hog buildings since 1997.

Indiana, the fifth-largest hog state, was chosen because of the governor's initiative to categorically increase pork production.

Certainly not lost in our selections is the obvious link between the states. Newly weaned pigs by the truckloads are shuttled daily from the Tar Heel state to the Hoosier state for finishing, where corn and packing are plentiful.

Interviews with individuals from various facets of the pork industries in those respective states revealed some new philosophies, clarified some ongoing challenges, and offered a glimpse into their futures.