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Articles from 2009 In May


National Hog Farmer

BIVI Swine Veterinarians Complete Executive Veterinary Program

ST. JOSEPH, Mo. (May 28, 2009) – Boehringer Ingelheim Vetmedica, Inc., (BIVI) announces Drs. Keith Bretey, Erin Johnson, Jeff Okones and Brian Payne, all professional service veterinarians for the company’s swine division, completed the Executive Veterinary Program (EVP) for Swine Health and Production program at the University of Illinois.

The program, offered through the University of Illinois College of Veterinary Medicine, is a two-year continuing education program designed to enhance the business, communication and planning skills of busy animal health professionals. The program consists of ten two-day interactive educational modules focused on swine health management. Module topics cover essential aspects of swine production and health maintenance to enhance the management, consultation and problem-solving skills of veterinarians.

“Our veterinarians are devoted to providing the best clinical service and information to our customers. Keith, Erin, Jeff and Brian’s participation in this program demonstrates our continuing dedication at Boehringer Ingelheim to improving the swine health practices in the industry,” says Tyler Holck, associate director of swine professional services for BIVI.

More than 35 veterinarians from 12 states completed the program this April. The award-winning program uses nationally-recognized experts from academia and industry to deliver relevant knowledge. The program has more than 200 graduates since its inception in 1991.

Boehringer Ingelheim Vetmedica, Inc. (St. Joseph, MO), is a subsidiary of Boehringer Ingelheim Corporation based in Ridgefield, CT and a member of the Boehringer Ingelheim group of companies.

The Boehringer Ingelheim group is one of the world’s 20 leading pharmaceutical companies. Headquartered in Ingelheim, Germany, it operates globally with 138 affiliates in 47 countries and approximately 41,300 employees. Since it was founded in 1885, the family-owned company has been committed to researching, developing, manufacturing and marketing novel products of high therapeutic value for human and veterinary medicine.

In 2008, Boehringer Ingelheim posted net sales of US $17 billion (11.6 billion euro) while spending approximately one-fifth of net sales in its largest business segment, Prescription Medicines, on research and development.

For more information, please visit: www.bi-vetmedica.com.

Hog Producers Sink Into More Red Ink

The H1N1 flu crisis and rising feed prices have combined to sink the pork industry in red ink, dating back to the fall of 2007.

“While recovery in hog prices is expected as the world tries to return to more normal consumption, the financial stress may be nearing a breaking point for some producers,” suggests Chris Hurt, Purdue University agricultural economist.

Hog prices were set to rise in April 2009, only to be derailed by the April 24 announcement of a human flu outbreak that the media wrongly dubbed “swine flu.”

“Lean carcass values closed at $61 on April 24, but just seven trading days later, prices dropped by $10,” Hurt says.

World health organizations were fairly quick in responding to this misnamed disease threat. But significant damage had been done to the pork industry. The most lasting damage could be to the export market, which has been absorbing a record 20% of production, he says.

The drop in exports and the uncertainty of consumers at grocery stores and restaurants combined to produce a logjam of pork in the wholesale market. Wholesale prices dropped about 7%, but live hog prices dipped by 17%.

For a few days in mid-May, carcass prices actually moved higher than their April 24 benchmark.

“But these prices were viewed as too optimistic. As of May 22, carcass prices were down 8% from April 24,” Hurt notes.

Rising feed prices have added another threat to profitability. From April 24 to May 22, corn futures rose by $.45/bu. and July soybean meal futures climbed by $57/ton.

“On April 24, hog producers were losing about $4/head. Now that number is about $25/head,” Hurt says.

The depressed hog economy has weakened most everyone in the industry and added more uncertainty to the future than usual, he says.

Hurt expects U.S. consumers to return to more normal pork buying patterns, but foreign buyers may take longer to return to normal buying patterns.
Production costs are expected to exceed hog prices through the first quarter of 2010, he predicts.

Hurt has forecasted prices to average in the low $50s in the third quarter, then drop to the mid-to-high $40s to finish out the year. Prices are expected to reach the mid-$50s during the spring and summer of 2010.

“With current futures prices for corn and soybean meal, the cost of producing pork is estimated at about $50/head and moving higher to about $52/head this summer,” Hurt says.

“Losses for the last half of this year are estimated at $7/head. For the entire year, losses would be $12/head, compared with $17/head in 2008,” he notes.

National Hog Farmer

Forquer Joins Motomco as Territory Manager for Eastern U.S.

ron.jpg MADISON, WI – Ron Forquer joined Motomco's technical sales team in May as Territory Manager for the Eastern United States where he represents Motomco’s rodent control products to distributors and integrators/producers in a 15-state area.

Forquer provides sales and technical product support to Motomco distributors, their representatives and farm store dealers. He represents Motomco at producer/integrator association shows in his territory and works closely with producers/integrators conducting on-site visits and giving technical advice on setting up comprehensive rodent control programs.

Forquer’s professional career encompasses more than a decade of sales management in the pest control industry. With a B.S. degree in Public Health from the University of the Cumberland’s in Williamsburg, KY, Forquer entered the pest control industry as a sales manager for Rollins/Orkin. From 1999 to 2008, he created and implemented sales and service strategies for the pest control company’s branch locations in North Carolina and Kentucky. His training of new managers and sales teams, as well as his hands-on experience conducting property inspections, earned him the top sales representative award in Raleigh for 2008.

Forquer also worked as a sales manager for Saltra, Inc., a mosquito misting company servicing the equine and livestock industry in North and South Carolina, prior to joining Motomco.

A U.S. Marine Corp veteran, Forquer also holds licenses for pest control and public safety from North Carolina, as well as certification in pest management from Purdue University, wood destroying organisms from Texas A&M, and from the American Institute of Baking.

Based in the Raleigh, NC area, Forquer services Motomco accounts in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and West Virginia.

Understanding the Measures of Pork Demand

One of University of Missouri Professor Glenn Grimes’ innovations in explaining markets to pork producers is the demand index – a measure of year-to-year change in demand. The index is simple, elegant, theoretically correct and widely used. The beef industry even adopted the demand index as a monitoring device several years ago, with economists at Kansas Sate University providing the computations on a quarterly and annual basis.

The index measures the movement of the demand curve for a commodity. Demand is not consumption – it is the set of quantities that consumers are willing and able to purchase at alternative prices. A line like “D,” in Figure 1, represents a demand curve or function. To measure the change in demand from D to D’, Professor Grimes performs a few calculations.

  • First, he measures the percentage change in per capita consumption, here represented by (Q2-Q1)/Q2. It is a positive number in this diagram, but it could be negative.
  • Next, he computes the expected change in price by using the percentage change in consumption and an estimate of the elasticity of demand. An elasticity is simply an economics measurement of the responsiveness of one variable to another. The formula is:
    Elasticity of Demand = Percentage change in quantity consumed
    Percentage change in price

    Estimates of the elasticity of pork demand range from about -0.65 to -0.90. Professor Grimes uses three elasticities in his calculations (-0.67, -0.75 and -0.90) to demonstrate any sensitivity there may be to this key assumption. Substituting the elasticity and the percentage change in consumption into the formula above, one can solve for the expected percentage change in price – depicted by the move from P1 to PE in Figure 1.
  • Finally, the actual percentage change in price ((P*-P1)/P1 in Figure 1) is computed and compared to the expected change. The difference is attributable to a shift of the demand curve from D1 to D2.
Note that this calculation uses per capita consumption and deflated prices. That means it understates total pork demand since it does not account for population growth; it measures the demand change for a fixed population. We don’t get “credit” for population growth since we don’t have much to do with that. Similarly, it does not allow price inflation to be interpreted as an increase in demand.

In addition, the calculation says nothing about why demand may be changing. It is simply a descriptive metric that says “demand moved by this much.” The shift could be caused by a change in beef or chicken prices, prompting consumers to move to or away from pork. It could be caused by a change in consumers’ income levels or an expenditure decision. It could be caused by changing consumer preferences for flavors or concerns about health attributes, or even irrational fears about influenza, for example. If your goal is to answer the question, “Why has demand moved?”, this metric is not sufficient. But it is very useful for simply monitoring what is happening to pork demand.

So now that you understand the demand index, I’m going to change it.

Figure 2 shows annual consumer-level demand indexes for pork and an alternative measurement, real per capita pork expenditures or RPCE. It is computed simply as:
RPCE = Per capita consumption X Retail pork price
Consumer Price Index

Note that it uses three of the same variables used in the index calculations: per capita consumption, retail pork price and the Consumer Price Index (CPI ). Those are the same data used to compute percentage changes in quantity and real price for the demand index calculations.

The only thing missing from the RPCE calculations is the elasticity of demand – but it is actually there, as well, since the negative relationship between price and quantity represented by the demand curves in Figure 1 determine the price based on how much people consume. So the only real difference between the two demand measures is that the index uses an elasticity estimate, while RPCE implicitly uses the actual elasticity by using both the price and quantity for a given time period.

The proof of their similarity is in the results. Over time, the two measures are correlated to the tune of 0.983, meaning that 98.3% of the variation of one can be explained by the other.

If you see real per capita consumption or RPCE being used to describe pork demand, realize that the numbers have changed but the measurement is still comparable and consistent. It is only a tweak to Professor Grimes’ contribution to our understanding of markets.

See Associated Figure




Click to view graphs.

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

AI Technicians' Impact on Farrowing Rate

There are three main variables that impact the success of a mating/service – the sow (gilt), semen quality and the capabilities of the person responsible for artificial insemination – the AI technician. We will focus on the AI technician this week.

Farrowing rate is one of the Key Performance Indicators (KPI’s) used in the Swine Management Services’ (SMS) database. It also has one of the flattest KPI bell curves (Chart 1) in the database.

Because the AI technician is one third of the mating variables, we need to look into more detail at the different variables that affect the AI technician, such as: breeding experience, level of training, personality traits (patience, detailed and routine oriented, organized, laid back, good at documentation reviewing records, reliable, observant, etc.).

To evaluate each AI technician, you need very detailed records, including sow/gilts identification, semen batch code or number, insemination technicians name or number, and time of insemination (military time).

Chart 2, Farrowing Rate by Technician, shows results on five different technicians, based on them doing the first and second matings or just the first, second or third mating. The data shows Technician #2 and #3 are very good breeders with farrowing rate at approximately 85% with very consistent numbers whether they do the first and second, or just the first, second or third mating. Technician #5, with a farrowing rate of 75% on first and second matings and first mating, improves to 78% when doing the second and third matings. This technician probably has problems determining when the female is in heat, so additional coaching is probably needed.

Chart 3 breaks farrowing rate down by technician, by parity of female bred. The chart shows Parity 0’s (green column) farrowing rate of 82%+ for technician 6, 7 and 8, while technicians 9 and 10 have farrowing rates of 70%+ for gilts. The farm management needs to provide some retraining on gilt breeding or make sure gilts are getting bred by Technician 6, 7, or 8. Some technicians are better at breeding older females than gilts.

Chart 4 breaks breeding down by the day of week the first insemination took place. Technician 1 does a very good job of breeding during the week, but struggles with breeding on Saturday and Sunday. Technician 5 shows the highest farrowing rates for sows bred Sunday to Thursday, with a 16% drop for sows bred on Friday. Unless you have detailed records about each mating, you will not be able to find problems areas, such as who needs training or why your farrowing rate is not where it should be.

Ideas for improving the farrowing rate:

  • Develop written Standard Operating Procedures (SOP’s) for the breeding area with details on how females are to be bred.
  • Keep detailed breeding information on each technician and review the results periodically, breaking down farrowing rate by parity, by day of the week, by hour of day, and by matings sequence.
  • Develop a profile of personality traits for your top breeders and develop SOP’s accordingly.
  • Make sure the insemination crew is healthy when breeding females. If a technician shows up at the farm sick, you should send him/her home.
  • Train all technicians on the proper breeding technique, sow stimulation, storage and handling of semen, heat detection methods and animal husbandry skills.
Remember that a 4% improvement in farrowing rate can produce 1.35 more pigs /sow/year.

Key Performance Indicators

Tables 1 and 2 (below) provide 52-week and 13-week rolling averages for key performance indicators (KPI) of breeding herd performance. These tables reflect the most current quarterly data available and are presented with each column. The KPI’s can be used as general guidelines to measure the productivity of your herd compared to the top 10% and top 25% of farms, the average performance for all farms, and the bottom 25% of farms in the SMS database.

If you have questions or comments about these columns, or if you have a specific performance measurement that you would like to see benchmarked in our database, please address them to: mark.rix@swinems.com or ron.ketchem@swinems.com.



Click to view graphs.

Mark Rix and Ron Ketchem
Swine Management Services LLC

Climate Change Debate Continues

The House Energy and Commerce Committee is expected to pass the climate change bill before it recesses this week for Memorial Day. The bill is to cut greenhouse gas emissions 17% by 2020 (from 2005 levels), implement a renewable electricity standard for states, and mandate various improvements in efficiency. The Republican members on the committee have stated their strong objections to the bill and have been offering numerous amendments. The bill will now be referred to eight other House committees, including the House Agriculture Committee, for consideration. The American Farm Bureau Federation, in a letter to members of the House Energy and Commerce Committee, stated its opposition to the bill, noting it “ignores the complex needs of a very diverse U.S. agricultural industry.” We are a long way from the finish line on this legislation in the House, let along the Senate.

Indirect Land Use — A bipartisan group of 44 congressmen introduced legislation, “The Renewable Fuel Standard (RFS) Improvement Act,” to eliminate the requirement that the Environmental Protection Agency (EPA) consider indirect land use when calculating the greenhouse gas emissions associated with advanced biofuels. There is great concern of the negative effect indirect land use would have on the domestic biofuels industry. Congressman Collin Peterson (D-MN), chairman of the House Agriculture Committee, said, “The unreasonable restrictions placed on the biofuels industry in the 2007 Energy Bill were never debated by Congress, and I’ve spent the past two years trying to undo the damage that we’re seeing now that EPA has published the proposed regulations that will make it impossible to meet the RFS. In order to ensure that a clean, homegrown biofuels industry will succeed in the United States, we need to have federal energy policies that are flexible, practical, and innovative.”

E15 Comment Deadline Extended — The Environmental Protection Agency (EPA) announced that it is extending the comment period by 60 days on a waiver application requesting an increase in the amount of ethanol blended into a gallon of gasoline to up to 15%. The new deadline for comments is July 20, 2009.

Antibiotics — The House Energy and Commerce Committee is expected to consider food safety legislation this summer. Even though the legislation will focus on the Food and Drug Administration (FDA), indications are that efforts will be made to include limitations on the use of antibiotics for livestock production during consideration of the bill. Earlier this year, legislation, the “Preservation of Antibiotics for Medical Treatment Act (PAMTA),” was introduced, which would phase out the non-therapeutic use of medically important antibiotics in livestock.

Another Canadian BSE Case — The Canadian Food Inspection Agency (CFIA) announced it has confirmed bovine spongiform encephalopathy (BSE) in an 80-month-old dairy cow from Alberta. CFIA stated that no part of the carcass entered the human food or animal feed systems.

Memorial Day Recess — Congress will be out next week for its Memorial Day recess. When Congress returns, appropriation bills will be a priority. The House Appropriations subcommittee on agriculture is expected to address USDA’s fiscal year 2010 appropriations during the third week of June.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.

Pork Industry Repeats Support for Animal ID

The pork industry still supports a mandatory national identification system, according to David Kempen, Poteet, TX, pork producer who spoke at a U.S. Department of Agriculture (USDA) listening session held recently in Austin, TX.

“Until animal identification is made mandatory and all premises are registered, it will never have the intended effects of improving the animal health infrastructure, aiding in the control and eradication of highly contagious foreign and domestic animal diseases and, ultimately, protecting the U.S. livestock industry, its producers, processors and hundreds of related businesses and more than a half million mostly rural jobs for Americans,” he said.

Speaking on behalf of the National Pork Producers Council and Texas Pork Producers Association, Kempen addressed these concerns about USDA’s National Animal Identification System (NAIS):

--The cost of the NAIS would be minimal and would far outweigh the cost of not having the ability to quickly identify, control and eradicate an animal disease.

--The infrastructure and operating costs of the NAIS should be funded through federal funding.

--As far as data privacy, no data would be required by such a system that is not currently available through a telephone directory, farm records required by USDA’s Farm Services Agency or state and local permits.

--There is no increased liability from program participation.

--States need more funding to register premises.

--Recording and reporting all animal movements is too rigorous, too expensive and not necessary to achieve program goals.

In 1988, the U.S. pork industry established a swine ID system used to help eradicate pseudorabies from commercial swine herds.

Since that time, the system has been improved and made consistent with the NAIS. More than 54,000 or 80% of swine premises are registered.

Premises registration data includes the physical location of a farm, a contact phone number and other publicly available information.

National Hog Farmer

Farm Works Unveils New Website

farm-works-website-pic.jpgHamilton, IN - May 19, 2009 - Farm Works Software, the leader in agricultural management software, has revamped its website - www.farmworks.com.

The most notable change in the Farm Works website is the contemporary design and user-friendly layout. Customers can quickly navigate through products and view updated thumbnails of intriguing features. The support area includes an overhaul in tutorials, detailed manuals, FAQs, and discussion boards. Customers with older versions can use the "Feature Finder" tool to gain more information about new features with screen shots. Enhancements in placing orders include a shopping cart, a purchase wizard, the order history finder, and even greater security.

Dealers will also experience advantages of the new website. Once logged in, dealers will find printable product brochures, graphics, pricing, policies, and important news about upcoming events. Purchasing has been streamlined to accommodate dealer pricing levels when placing orders on-line. Dealers can also share ideas and experiences by using the dealer discussion groups.

"Better software product navigation and more support options will enable our customers to have access to information quicker and easier," says Brian Stark, marketing manager of Farm Works. "We look forward to sharing our new technology and hearing feedback from all who visit the website."

Thank you,

Brian Stark

Marketing Manager

Farm Works Software

P.O. Box 250

Hamilton, IN 46742

Sales: 800-225-2848

Support: 260-488-3492

E-mail: brian@farmworks.com

Web: www.farmworks.com

National Hog Farmer

Alltech Announces Young Scientist Winners

Lexington, KENTUCKY – As part of its commitment to furthering scientific education, global animal health and nutrition company Alltech has presented the 4th annual Alltech Young Scientist Award to Tung M. Che and Fan Liu during Alltech’s 25th International Animal Health and Nutrition Symposium in Lexington, Kentucky, USA.

Tung M. Che, a doctoral student at the University of Illinois at Urbana-Champaign, Illinois who submitted a paper examining the Effects of mannan oligosaccharide on immune function and disease resistance in pigs is the overall graduate winner of the competition.

Fan Liu of Nanjing Agricultural University, Nanjing, China who submitted a paper on HSP70 as a new biomarker in the development and evaluation of anti-stress feed additives is the overall winner in the undergraduate category.

“This year’s Alltech Young Scientist Award program was a very close competition which attracted many high caliber young scientists” said Dr. Pearse Lyons, president and founder of Alltech. “At a time when we need the brightest young minds in the world to engage in scientific study, I am delighted to present this prestigious award to such talented young students.”

Tung M. Che and Fan Liu will be awarded prizes of $10,000 and $5,000 respectively.

Tung M. Che holds a degree in animal science from Nong Lam University, Ho Chi Minh City, Vietnam and a masters degree in animal nutrition from Universiti Putra Malaysia in Malaysia. In 2005, Tung M. Che left his native Vietnam to pursue a Ph.D. programme in the area of swine nutrition at the University of Illinois. Tung M. Che has published extensively and in 2004 co-authored a book entitled “Husbandry Techniques for Aquatic Birds”. Professionally, he has worked as both a teaching and research assistant on university based projects and as a consultant for a number of private swine production farms in Vietnam. His areas of interest include: pig and poultry production; dietary factors on animal health and performance; and nutrigenomics/nutritional immunology.

Twenty four year old Fan Liu comes from Shijiazhuang City, Hebei Province, China. He is currently studying for a degree in animal science at Nanjing Agricultural University. Scientifically, his interests include reproductive and molecular nutrition. When he graduates, Fan Liu intends to pursue a Ph.D. in animal nutrition.

Each student who entered the competition was required to submit a scientific paper of 3,000-5,000 words on a topic involving Alltech's natural solutions to animal health challenges. Out of the 1,800 entries received, eight regional semi-finalists were invited to the USA for the international phase of the competition where they presented their papers to a panel of judges.

The Alltech Young Scientist Program provides a forum for undergraduate and graduate students throughout the world to interact with one of the leading players in the animal feed industry while strengthening their academic portfolios.

Students interested in participating in the 2010 Alltech Young Scientist Award competition should visit www.alltechyoungscientist.com to register, review a list of suggested paper topics and submit their paper.

National Hog Farmer

AEM joins forces with FFA to advance agricultural industry careers development

The Association of Equipment Manufacturers (AEM) and the National FFA Organization announce a new agreement to promote awareness of the importance of agricultural education and agricultural career opportunities. The AEM/FFA agreement covers activities of FFA as well as its partner groups: National Postsecondary Agricultural Student Organization (PAS) and National Association of Agricultural Educators (NAAE).

AEM is a longtime supporter of FFA-related programs. The association is expanding its participation in conjunction with growth of its workforce development initiatives for the off-road equipment industry. “The practical, hands-on efforts of students and educators active in FFA, PAS and NAAE will have a long-lasting, beneficial effect on the continued vitality of agriculture. AEM and its member companies are proud to lend support that assures the strength of the agricultural community not only in America but also globally,” stated Charlie O’Brien, AEM’s vice president of agricultural services.

Ryan Tate, FFA senior regional director, noted that enhanced liaison with the manufacturing community through AEM helps FFA better fulfill its mission of preparing students for leadership, personal growth and career success. “There are many rewarding careers related to the manufacture, repair and maintenance of agricultural equipment, and AEM’s active involvement gives students and educators a close-up look at the real-world opportunities available.”

Under the new agreement, AEM will co-sponsor the FFA Agricultural Mechanics Energy Systems Proficiency Award (with New Holland) and co-sponsor the PAS Agricultural Machinery Service Technician Award (with John Deere and GM Powertrain).

The FFA award recognizes student achievement in Supervised Agricultural Experience (SAE) programs involving the adjustment, repair and maintenance of agricultural power systems, including mechanical, electrical, chemical, wind, solar and/or water power. The PAS award recognizes the proficiency of agricultural machinery service technicians in areas including engines, power trains, hydraulics, electrical, air conditioning, and monitoring and accessories.

AEM will also provide agricultural career development training to the future workforce through national FFA and NAAE convention workshops and exhibits, NAAE professional development webinars and PAS Career Planning/Career Program Area (CPA) input.

FFA offers a wide range of agricultural education activities for students in grades 7-12 through programs at the local, state and national levels. While 30 percent of FFA participants come from farming communities, 70 percent are from rural non-farm, urban and suburban areas.

PAS focuses on postsecondary agricultural education outreach, and it is one of 10 career and technical student organizations approved by the U.S. Department of Education as an integral component of career and technical education. NAAE members are educators that advise and teach students in agricultural programs.

“FFA and AEM share a dedication to the future of American agriculture, which our new partnership will enhance by developing a superior workforce in the essential careers related to food, fiber, fuel and natural resources,” stated FFA’s Tate.

“FFA is an ideal partner because of its proven track record of educational programs in the agricultural arena. It has a longstanding reputation of connecting with youth that we admire and want to support,” noted David Bannister, AEM’s workforce development manager. For more information, contact Bannister at 414-274-0657, email dbannister@aem.org.