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Producer Retirement Program Unveiled at Expo

This week’s World Pork Expo was far from a celebration of, or by, the nation’s pork industry. Old friendships were renewed, some business was transacted and knowledge was shared just as in the past. But the specter of a summer that will quite possibly bring no profits to already beleaguered producers hung heavy over the normally festive occasion. And there was little news to change the moods or the outlook.

The hottest topic in most conversations was the Producer Retirement Program (PRP) officially unveiled at Expo. PRP is an Iowa corporation with a one-member, one-vote structure like a cooperative. Organizers hope to raise $50 million that would then be parceled out on a bid basis to PRP members willing to remove sows from production for two years. The program is patterned after the Cooperatives Working Together (CWT) milk production buyouts of the past few years. All producers with sows are eligible to be members. Organizers have been talking to the nation’s largest sow owners for several weeks, but no membership or participation announcements have been made.

Legality
The first question regarding PRP is: “Is it legal?” The Sherman Anti-Trust Act prohibits sellers of products from colluding to increase prices – whether by price agreements or by restricting output. And it does not matter whether the sought-after price levels are reasonable. Price fixing is a per se (read that as “every time”) violation of the Sherman Act.

The exception to this rule is for agricultural cooperatives that meet the standards of the Capper-Volstead Act. Such co-ops (like CWT, which is a cooperative of individual dairy cooperatives) have limited immunity from anti-trust actions.

PRP is not, to my knowledge, a Capper-Volstead co-op, but organizers have apparently run their plan by federal authorities and been told that it is legal because it does not require assets to remain unused and sow owners can re-enter the business by simply paying back any money received from PRP. That makes sense, since the participating firms can still respond to market signals.

The second question is much more difficult to answer: “Will PRP be effective?” The characteristics that make the plan legal will also limit its effectiveness. If people getting out can easily get back into production, how will supplies be reduced and prices increase? But PRP has little choice on this issue as the plan must first meet legal requirements.

Another challenge is participation. Any effort like this faces a huge “free rider” problem where any individual will benefit even if they do not participate. Eliminating free riders is a primary benefit from having a mandatory pork checkoff. And beyond participation, in general, is the question of who is participating.

Key is Participation
Organizers have been talking to the nation’s largest sow owners for several weeks, but no membership or participation announcements have been made. I have to believe that the largest firms must participate if PRP has a chance. How does one get producers to pitch in $20/sow on 2.5 million sows if the big boys aren’t doing a lot of the pitching?

The big trick will be to convince Smithfield Foods to buy in when they have already cut 10% of their sows and the company is none too happy that others have not followed suit. Some don’t believe Smithfield actually made these reductions. I do because I have heard it from several different sources in the company. Employees talking the “company line” never surprise me, but getting the people I know to look me in the eye and lie would be, in my opinion, very difficult indeed. I know them and I don’t believe anyone could accomplish that feat.

To Learn More
The final challenge will be patience. If the PRP is effective, we will not see higher hog prices from this effort until at least nine months after the reduction begins. Nothing has started yet.

My biggest question is this: “Will PRP get any sows out of production that would not go out of production anyway, given the financial status of the industry and the latest blow to profits and cash flow?” The answer to that depends greatly upon how fast PRP can get underway. The level of financial stress is now very, very high and there are rumors of widespread sow reductions by some firms previously believed to be quite strong. For PRP to play a part, it must move fast.

I encourage producers to look at the facts for themselves and make up their own minds. You can find more information at www.producerretirementprogram.org/ You can also register at this site for one of four information webinars to be held Tuesday, June 9.



Click to view graphs.

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

Mycotoxin Testing Can Be Perplexing

The 2008 corn harvest was complicated by a wet growing season and wet harvest. Some corn was not adequately dried for long-term storage because of the cost of fuel to dry the corn. As a result, some corn was damaged in the field and some corn has continued to deteriorate in the bin.

Eleven of 94 (11%) cases submitted to the Iowa State Veterinary Diagnostic Laboratory (ISU VDL) from August 2008 through May 2009 had corn that contained a mycotoxin. Aflatoxin ranged from trace amounts up to 640 ppb (parts per billion), vomitoxin varied from 0.5 ppm (parts per million) up to 17 ppm, zearalenone varied from 1-38 ppm, zearalenol from 0-2 ppm, and T2 toxin varied from 0-0.6 ppm.

Vomitoxin (DON) and zearalenone are mycotoxins that are poorly tolerated by swine. DON can cause nearly complete feed refusal at high concentrations (> 5 ppm), and zearalenone is a hormonal toxin similar to the effects of estrogen, causing infertility in sows when fed at high concentrations (3-10 ppm or more). DON, T2 and DAS (diacetoxyscripenol) are all in the trichothecene class of mycotoxins and the effects can be additive.

In cases submitted to the ISU VDL where mycotoxins have been demonstrated, the most common clinical effects reported were decreased growth rates, some degree of feed refusal, vulvar swelling in prepuberal gilts, and decreased reproductive efficiency in females. Effects observed in swine are included in Table 1.

The same fungi that produce vomitoxin may also produce zearalenol and zearalenone. The presence of one indicates there is a high likelihood that the other mycotoxin is present as well.

Sampling is Critical
Sampling is the key to accurately determining the presence of mycotoxins in a feed sample. It is best to collect samples from moving grain to get a random sample. To achieve a more accurate estimate, it is critical that the collected grain sample be representative of an entire truckload or bin of grain. Grain and other particles, such as weed seeds, separate based on particle size and density as they flow and settle into a truck or bin. Smaller, denser material often may be found in the center of the truck or bin, and this is the material that is often higher in mycotoxin content. The probe is the only sampling method approved by the U.S. Department of Agriculture’s Grain Inspection Packers & Stockyards Administration for stationary lots. Multiple (5-10) probe samples are generally recommended to obtain the best representative samples.

DDGS Confounds Feed Quality
The addition of distiller’s dried grains with solubles (DDGS) to feed containing corn contaminated with fungi can complicate the mycotoxin picture. Mycotoxins are reported to be concentrated in DDGS as much as three times that of the original contaminated corn. Besides the potential for concentrated amounts of mycotoxin, DDGS are also a good substrate for fungal growth whereby additional mycotoxin may form before consumption.

The particle size of DDGS varies around 200-300 microns and this can contribute to bridging in bins. If bridging occurs and fungi are present, you can expect growth of fungi in the bin. Feed bins need to be periodically inspected for bridging, especially as the inclusion rate of DDGS increases. If buildup has occurred in feed bins and feeders, thorough cleaning and spraying 10% bleach on bin surfaces before refilling the bin is recommended to reduce fungal contamination. However, Clorox is not likely to destroy existing mycotoxins.

Sample with Care
Analyses for mycotoxins and fungi in feedstuffs are confusing. Spore counts are sometimes used to estimate overall feed quality but are not useful to estimate mycotoxin presence in feed or feedstuffs.

There are various mycotoxin test kits on the market. Some are extremely sensitive and will detect low levels of toxin that are not of concern. Positive results from test kits should be confirmed and quantified. Quantitative assays are preferred to help determine the biological risk (Table 2).

A variety of “mycotoxin binders” are marketed based on detection of low levels of mycotoxin. The value of these binders is questionable when mycotoxins are present at low levels, with the possible exception of aflatoxin. Aluminosilicates and other adsorption binders are effective against aflatoxins, but efficacy for vomitoxin, zearlenone and fumonisins is not well documented. The Veterinary Diagnostic Lab at Iowa State University performs these mycotoxin analyses on a confirmatory and quantitative basis. A 200-gram sample is suggested for submission after sub-sampling is performed.



Click to view graphs

Steve Ensley, DVM, PhD
Iowa State University Veterinary Diagnostic and Production Animal Medicine
sensley@iastate.edu

MCOOL and Processed Meats

Mandatory country-of-origin labeling (COOL) would be required for processed foods, including meats, that are inspected by the Food and Drug Administration (FDA), under proposed FDA food safety reform legislation by Congressmen Henry Waxman (D-CA) and John Dingell (D-MI). The “Food Safety Enhancement Act of 2009” would require food manufacturers to identify the country in which final processing occurred. The legislation would also require food manufacturers to identify the country-of-origin for all ingredients on their website. Mandatory COOL would also cover all produce.

FDA Food Safety Reform — The House Energy and Commerce Committee plans to consider the “Food Safety Enhancement Act of 2009,” a major Food & Drug Administration (FDA) food safety reform bill, this month. The legislation would grant FDA new authority and resources. The committee provided these highlights of the bill:

  • Creates an up-to-date registry for all food facilities serving American consumers; requires all facilities operating in the United States or importing food to the United States to register with the FDA annually.
  • Generates resources to support FDA oversight of food safety; requires registered facilities to pay an annual registration fee of $1,000 to generate revenue for food safety activities at FDA.
  • Increases inspections of food facilities; sets a minimum inspection frequency for all registered facilities. High-risk facilities would be inspected at least once every six to 18 months; low-risk facilities would be inspected at least once every 18 months to three years. Warehouses that store food would be inspected at least once every three to four years. Refusing, impeding or delaying an inspection is prohibited.
  • Improves traceability of food; enhances FDA’s ability to trace the origin of tainted food in the event of an outbreak of food-borne illness. FDA would be required to issue regulations that require food producers, manufacturers, processors, transporters, and holders to maintain the full pedigree of the origin and previous distribution history of the food, and to link that history with the subsequent distribution history of the food.
  • Enhances the safety of imported food; as an additional layer of protection, FDA can require food to be certified as meeting all U.S. food safety requirements by the government of the country from which the article originated or by certain qualified third parties.
  • Provides FDA new authority to issue mandatory recalls of tainted foods. Strengthens criminal penalties and establishes civil monetary penalties that FDA may impose on food facilities that fail to comply with safety requirements.
Congresswoman Jan Schakowsky (D-IL), during a hearing on the bill this week, stated that the Congress needs to consider banning the use of antibiotics for animals. This issue may be considered by the committee.

Congress Returns — Congress returned last week from its Memorial Day recess. It has a full agenda for the summer session. Major items will include fiscal year 2010 appropriation bills, health care reform, global climate change, FDA food safety reform, and the nomination of Judge Sonia Sotomayor to the Supreme Court.

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

Pig Soybean Allergies Studied at North Carolina

When it comes to allergies, pigs are not much different than people. Young piglets and other animals suffer from adverse reactions to soy, leading to a research project to understand the full impact of feeding soy.

In doing so, research funded by the United Soybean Board, National Pork Board and QUALISOY can uncover ways to improve U.S. soybean varieties and soybean meal.

Feeding soy-based rations to early weaned pigs has sometimes led to reduced feed intake and slower growth rates due to sensitivity to certain proteins in soybean meal. Reactions to proteins have been linked to the development of anti-soy protein antibodies and intestinal problems. One way to fix this may be to reduce or eliminate those reactive proteins. One mechanism to achieve this involves silencing genes that are coded for the problem proteins.

“The goal of this project was to develop a model system with which to study immune-mediated allergic responses to legume allergens,” reports Niels Nielsen, professor of crop science at North Carolina State University. “If we are successful in reducing the hypersensitivity in piglets, we could benefit the soybean industry by permitting higher inclusion rates for soybean meal in rations and reducing production expenses for swine producers.”

For more information, vist United Soybean.

Stress of Castration Increases with Age

Castration is stressful for newborn piglets, but three teams of researchers have concluded that the stress associated with handling appears to increase with the age of the pig.

That’s the finding of researchers at USDA’s Agricultural Research Service in Lubbock, TX; and the departments of animal science at the University of Missouri and the University of Tennessee.

The study was comprised of 90 pigs, nine to 13 pigs per treatment group.

The researchers found that during the first two hours after castration, 3-day-old pigs stood more than 6-, 9- or 12-day-old pigs.

Researchers observed a trend for castrated pigs to be less active than non-castrated pigs, but castration didn’t affect the time that pigs spent nursing, lying, standing or sitting. Also, no overall treatment effect was seen on pig growth performance at 24 or 48 hours post-treatment.

Researchers said cortisol levels were greater in castrated pigs than non-castrated pigs, but there was no overall effect of age at castration on cortisol concentrations. The hormone cortisol is secreted in higher levels in the body in response to stress.

Serum cortisol concentrations returned to baseline in all treatment groups 24 hours after castration. But at 48 hours post-castration, cortisol concentrations were higher in the 6-, 9- and 12-day-old pigs in both the castrated and non-castrated groups.

In conclusion, regardless of age, castration is stressful, but the stress associated with handling increases with the age of the pig.

Study Refutes Link Between Meat Consumption, Cancer

There is no connection between eating meat and developing breast cancer, according to a study by the National Institutes of Health and the American Association of Retired Persons.

The study examined 120,755 postmenopausal women who provided information about what they ate during 1995 and 1996, when the research took place.

The study, published in the International Journal of Cancer, also included detailed information about meat preparation methods.

During the eight years following the study period, 3,818 of the women developed breast cancer.

Leading researcher Geoffrey C. Kabat at Albert Einstein College in New York concluded the findings “do not support the hypothesis that a high intake of meat, red meat, processed meat, meat cooked at high temperatures or meat mutagens is associated with increased risk of breast cancer.”

Human-to-Pig Flu Transmission Likely

Expect to see more cases of humans transmitting the H1N1 flu strain to pigs, but that should not be cause for concern as swine are not severely affected by the virus, according to the World Organization for Animal Health (known as OIE).

On May 2, Canadian health officials reported that a swine herd in Alberta had caught the virus from a carpenter who had recently returned from Mexico, the suspected center of the flu outbreak that has spread to 46 nations.

“It is the only reported case of the virus being transmitted from a human to a pig in the world. We would not be surprised if we have other cases like this in other countries,” says OIE Director General Bernard Vallat.

“But it is not a problem because we know pigs are not a big player in the epidemiological spread of the disease,” he adds.

Vallat reiterates that flu viruses are known to easily circulate between species, especially when strains are mixed. The novel H1N1 virus features human, bird and pig components.

Pigs have long been considered a potential source for new and novel influenza viruses that infect humans, according to the U.S. Department of Agriculture’s Agricultural Research Service (ARS). Pigs have receptors on their cells that bind mammalian and avian influenza viruses, multiplying the odds that there will be an exchange of genetic segments o the virus.

ARS researchers tested serum samples from pigs previously infected with swine influenza virus (SIV) or vaccinated with commercial vaccines to determine if U.S. swine herds are susceptible to the new H1N1 influenza virus. Results suggest that previous immunity to swine flu may not protect pigs from the H1N1 flu virus currently circulating in people.

Also, importantly, current swine flu vaccines may not be effective against the new H1N1 flu virus.

The next step for ARS scientists is to test the efficacy of SIV vaccines in a pig vaccination challenge to find out if antibodies in vaccinated pigs correlate with protection against the new virus.

USDA Announces Six Animal ID Meetings

The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service has announced six sessions in June to discuss stakeholder concerns regarding the implementation of the National Animal Identification System (NAIS).

The meetings are scheduled for June 9 in Jefferson City, Mo; June 11 in Rapid City, SD; June 16 in Albuquerque, NM; June 18 in Riverside, CA; June 25 in Raleigh, NC; and June 27 in Jasper, FL. Each of the meetings are from 9 a.m. to 4 p.m.

Preregistration is not required, but participants are asked to preregister by e-mailing NAISSessions@aphis.usda.gov or by calling (301) 734-0799. In the subject line of the e-mail, include your name (or organization name) and the location of the meeting you plan to attend. If you plan to present comments at one of the meetings, include your name (or organization name) and address in the body of the message.

Those who don’t plan to attend can submit and view comments.

Up-to-date meeting information.

Pork Board Asks Industry for Pork Quality Program Support

The National Pork Board has adopted a resolution asking all U.S. pork producers to become certified in the Pork Quality Assurance (PQA) Plus program by June 30, 2010 and to achieve PQA Plus site status by Dec. 31, 2010.

The board is also requesting producers adopt the ethical principles the industry developed in 2008.

National Pork Board President Steve Weaver announced the board’s action at World Pork Expo (WPX) last week in Des Moines, IA.

The PQA program is part of the We Care initiative, and passage of the PQA resolution was designed to boost the overall program.

“We Care is important because it gives pork producers the opportunity to talk about what they do on their farms in terms of the ethical principles that guide them and the practices they employ,” says Weaver, a California pork producer. “That’s a conversation we want to have with as many people as we can.

“PQA Plus is important because it includes steps that allow us to demonstrate directly to our customers that we are raising animals and producing pork in a socially responsible way.”

Weaver adds that thousands of pork producers are already certified in PQA Plus and have had their operations site assessed. In May, the number of producers who have been certified in PQA Plus reached 30,000.

“I also encourage them to join the producers from across the United States who have pledged their support for We Care,” he says.

AgStar Financial Services and Tyson Foods Inc. both pledged financial support for the We Care program at WPX. The move was applauded by the National Pork Producers Council (NPPC), which partnered with the Pork Board in developing the program to help show producers are committed to caring for their animals, producing safe food, protecting the environment and public health and contributing to the communities where they live. PQA Plus provides guidelines on food safety and animal well-being.

AgStar Financial presented NPPC and the Pork Board $50,000 to develop and operate a Web site for the We Care initiative.

Tyson Foods donated $10,000 to conduct on-farm assessments. It also announced that it will require all of its hog suppliers to become PQA Plus-certified by June 30, 2010. Suppliers will need to have their operations assessed by Dec. 31, 2010.

Besides Tyson, Hormel Foods, Hatfield Quality Meats, JBS Swift, Farmer John, Independent Meats and others have announced hog suppliers must become PQA Plus-certified and conduct on-farm assessments.

“We are extremely appreciative of AgStar and Tyson for their public endorsement of the ‘We Care’ program,” says R.C. Hunt, chairman of the We Care Advisory Group and a Wilson, NC, pork producer. “Their support is vital, and we hope that other industry partners will join them in backing an initiative that shows the commitment that pork producers have to being conscientious in raising their animals, producing safe food and protecting the land, water and air.”

National Hog Farmer

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