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NPPC Applauds Passage of Animal Drug Use Act

The National Pork Producers Council (NPPC) today praised Congress for approving legislation to reauthorize animal-drug review laws that will give pork producers access to products that safeguard animal and public health.

Last night, the House of Representatives overwhelmingly passed a bill to reauthorize for five years the Animal Drug User Fee Act (ADUFA) and the Animal Generic Drug User Fee Act (AGDUFA). The House took up the measure (S. 622) approved by unanimous consent in the Senate May 8.

“We want to commend the leadership on both sides of the aisle in the Senate and House for approving this important legislation,” says NPPC President Randy Spronk, a pork producer from Edgerton, MN. “The laws will help ensure that pork producers have access to products that keep our pigs healthy and our products safe and wholesome.”

First enacted in 2003, ADUFA and AGDUFA allow the U.S. Food and Drug Administration to collect fees from animal health companies for the review and approval of animal health products, including ones for farm animals and pets. The fees supplement the agency’s annual congressionally-approved appropriations and have enabled the Food and Drug Administration (FDA) to dramatically reduce its review time for new animal drugs, bringing medications to market more quickly while maintaining high standards for safety and effectiveness.

The legislation was approved without amendments. Opponents of modern livestock production had threatened to offer provisions to restrict from use in food animal production certain antibiotics and to require reporting of on-farm uses of animal health products. [FDA already collects antibiotics sales data, which a number of groups have misused in efforts to blame animal agriculture for the rise of antibiotic-resistant illnesses in people.]

“NPPC thanks Sens. [Tom] Harkin and [Lamar] Alexander and Reps. [John] Shimkus, [Fred] Upton, [Joe] Pitts and [Cory] Gardner for making sure this was a ‘clean’ bill,” Spronk says. “They understood that limiting our ability to keep our animals healthy and burdening producers with paperwork wasn’t going to help us produce safe food or add to the knowledge base about the important issue of antibiotic resistance.”

Since ADUFA and AGDUFA were signed into law, several new swine health products have come on the market, helping producers fight swine respiratory and other diseases. In the past five years, veterinarians and pet owners received more than a dozen new products to help pets live longer, healthier lives.

 

 

Latest Corn Planting Report Shows Shortfall

With USDA’s Crop Progress report showing that 91% of the corn crop was planted as of June 2, questions remain about whether planting delays will significantly reduce the number of acres that will be harvested this fall.

Daily Livestock Report (www.dailylivestockreport.com) authors Steve Meyer and Len Steiner point out that corn planted after June 1 increases the chances of lower yields.

In the latest USDA survey of the 18 key production states, Iowa reported 88% planted, Illinois 91%, Missouri 86%, Indiana 94%, Nebraska 99% and Ohio 98%. Wisconsin reported only 74% planted, while North Carolina reported 100% corn planted. Last year, in a severe drought year, all of the corn had been planted.

It is projected that Iowa still has about 1.7 million acres to plant, while Minnesota has another 1.2 million acres left to plant. In all, estimates indicate there are about 7.8 million acres of corn remaining to be planted, according to Meyer and Steiner’s report for June 4.

Some of those acres will likely be planted this week, but the pace could be slow due to the soggy conditions and expectations of more rain on the way.

Estimates vary on the outcome of corn planting, but some analysts suggest the total planted acres could be 3.5 million acres below the USDA May estimate of 97.3 million.

If yield estimates of 158 bu./acre remain, the reduction in acres alone would remove about 500 million bushels from the final corn crop production. However, despite this significant decline in planted acres, ending stocks still would end up at around 1.5 billion bushels.

And with generous USDA allowances for feed and residual use, a corn crop of about 13.6 billion bushels still would be big enough to push corn prices well below current lev

How will Smithfield Foods Sale Impact the U.S. Pork Industry?

How will Smithfield Foods Sale Impact the U.S. Pork Industry?

It was quite a shock, first due to its enormity and second due to its surprise.  When the largest company, by far, in any industry sells, it is news. When it sells to a foreign company, it is big news.  When the company is from China, it is really big news.  And when word of the transaction is successfully kept under wraps, it qualifies as shocking.  All of those descriptions apply to last week’s news that Smithfield Foods will be purchased by Henan Shuanghui of China. 

I’m reasonably well connected, and I know some people who are much better connected in the finance world than I am, but I haven’t talked to anyone who saw this coming.  The rumblings from Continental Grain, one of Smithfield’s largest stockholders, to break up the company to capture more value for shareholders, were certainly a pain in the neck for Smithfield management. Most thought that the pressure would cause changes, but sell to a foreign company?

Smithfield’s zeal for removing ractopamine from its company-owned farms has struck me as odd all spring.  Perhaps this explains it.   What better way to position the company positively for a Chinese suitor than to get as much of the product as you can in a position to serve that market?

Now that nearly a week has passed, we can look at this bombshell with a bit more detachment.  The reactions of a few U.S. lawmakers, anti-meat groups and food safety zealots were predictable.  After bashing the U.S. meat industry in general and the pork industry in particular, they now decry that a foreign firm would buy such an “important” U.S. company. 

I’m not sure why it is a surprise that someone else might find more value in Smithfield than do domestic investors given how those same groups have vilified the industry and the company at every opportunity.  These actions and the press coverage that have followed them have negatively impacted animal protein company values for many years, in my opinion. There is an absolutely certain way to prevent foreign companies or investors from buying U.S. companies:  Pay more for them!  If anyone wants this company to remain American-owned, gather up your pennies and put in a bid.  My guess is that Smithfield CEO Larry Pope and the other directors at Smithfield would be glad to talk to you provided you actually have that many pennies!

How will this affect the U.S. pork industry? First, it changes nothing in terms of industry structure.  Smithfield/Henan Shuanghui will have the exact same market share as did Smithfield Foods.  The total market share held by the top four or top eight firms will be the same after this sale is completed.  There will be exactly the same number of packer buyers in the U.S. market after the sale as there was before the sale.  If you want to argue that that number is too small, you can, but this sale doesn’t change it!

 

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Second, the amount of vertical integration in the U.S. pork industry does not change. There is simply someone else who owns Smithfield’s sows (970,000 or so) to go along with its eight packing plants. 

Third, I see no reason that this sale will compromise anything about the U.S. pork industry’s impeccable food safety record.  China’s situation is indeed abysmal, but this merger is not about bringing Chinese pork to the United States.  The purchase does not change the fact that the United States has a comparative advantage in pork production.  Larry Pope’s characterization of Chinese pork to the United States being the same as “shipping ice to Eskimos” is absolutely correct.  And the purchase does not change the fact that China has pretty much every swine disease known to man, including foot-and-mouth disease and classical swine fever – two biggies on the list of trade-restricting diseases.  We aren’t taking any pork from China that is not cooked, regardless of a Chinese company owning Smithfield or any other U.S. meat company.  Further, the acquisition is in the United States and will remain here. Smithfield’s operations, even if owned by a Chinese firm, will still be subject to U.S. laws, regulations, inspections, etc. 

Fourth, I see no risks to long-term food supply or costs as a result of this merger, provided laws and regulations do not preclude U.S. pork producers and processors from growing.  If all of Smithfield’s production eventually goes to China, prices will rise and other producers will capitalize on them by increasing output.  The same holds for packers.  And should Shuanghui decide that every Smithfield pig should be exported as a half-carcass instead of value-added product, other U.S. processors will expand processing to go along with the expanded production in order to supply Americans with the value-added products we want.  Pork prices will rise only if input costs rise as a result of more hogs being raised – and input costs will rise only if production of inputs like grain, steel and cement do not rise.  Bottom line:  Let the markets work and we’ll be fine.

Two Key Questions

There are two legitimate questions:  Is it a bad thing that our largest pork company is owned by a foreign investor?  Is it worse since that investor is Chinese?  The latter question is probably politically incorrect, but it is a question nonetheless.  The answers to those must be arrived at collectively as a country.  This is really nothing new.  Many feared the Arabs were going to own the country in the ’70s.  Same for the Japanese in the ’80s.  They actually bought Pebble Beach!

Cooler heads appear to be prevailing.  That’s a good thing.  The deal is not done yet, though, as some other suitors have been rumored.  Let’s all take deep breaths and consider the facts,  unless, of course, a Chinese company makes a play for Pebble Beach or Augusta National.  Some things are indeed sacred.

Hog Profits Return But Planting Concerns Remain

While hog production has returned to profitability, delayed planting has producers fretting about whether hog production costs will drop as much as some had anticipated, according to a Purdue University Extension economist.

Hog production has returned to profitability as hog prices rallied from the mid-$50s per live hundredweight in March to the low $70s today. Moderation in feed prices after the USDA’s March Grain Stocks report was released in late March also helped reduce costs of production with second- quarter costs averaging about $67 per live hundredweight compared to an estimated $70 in the first quarter. Delayed planting that is raising concerns about fewer planted acres and reduced yields has most recently sent corn and soybean meal prices trending to the upside.

“Looking back, the drought of 2012 caused large losses for pork producers due to high feed prices,” Chris Hurt says. “Losses from spring 2012 to spring 2013 averaged about $23 per head. This was the most severe period of pork producer losses since the financial collapse and recession in late 2008 and 2009.

“Hog prices for the third quarter are expected to average $67, which is similar to the second-quarter average. Currently, costs are expected to be at about the same level with breakeven conditions prevailing. As a reminder, breakeven means all costs are covered, including full depreciation and family labor. This means that a hog operation can continue into the future with breakeven returns calculated in this manner,” he says.  

Prices for corn and soybean meal are expected to drop sharply into the late summer and fall as markets make the transition to new crop supplies, according to Hurt. Current forecasts are that fourth-quarter corn prices will be $1.25 per bushel lower than third-quarter prices and soybean meal prices will be $40 per ton lower. “That means costs will drop from about $67 per live hundredweight this summer, closer to $60 for the final quarter of the year,” Hurt says. “Hog prices are expected to be near the $60 level for the final quarter of 2013 and first quarter of 2014, thus continuing breakeven conditions.”

Hurt says that prospects for the entire year of 2014 have begun to come into focus, although the size of this summer’s crops can still have a strong influence on final outcomes, especially with regard to costs of production and to pork supplies in the second -half of 2014.

“USDA has made their first forecast for 2014 hog prices in a range from $56 to $60 per live hundredweight,” Hurt says. “That appears considerably lower than current lean-hog futures are suggesting, with an average for 2014 around $62 to $63. The primary difference is that USDA made their forecast in early May when they were anticipating very low corn and meal prices. In fact, the mid-point of the USDA 2013/14 marketing year U.S. corn price was $4.70 per bushel with high-protein Decatur meal prices of $300 per ton. In contrast, futures markets never were that low and currently are roughly $5.60 per bushel for corn and near $400 per ton for Decatur meal. These substantially higher feed costs would be expected to keep the pork industry from expanding and result in hog prices more in line with current lean-hog futures prices,” he says.

Hurt recommends that hog producers keep any expansion plans on hold awaiting better clarification of the size and prices for 2013 crops and the implications for hog production costs. “The size of those crops should be more transparent in another 60 days, although late-planting likely means that frost will also be a threat for much of the month of September. 

“In general, if corn prices stay below $6 per bushel, the pork industry will be able to survive another year of low-crop production,” Hurt says. “Corn prices above $6 would push the outlook back into losses. The opposite would be true of $5 or lower corn prices. Some expansion could be expected with low $5 corn prices and a more aggressive expansion would be expected with corn prices dropping below $5,” he says.

Expansion, if it occurs, is not expected until the fall, Hurt concludes. “Retention of additional gilts at that time to expand the herd means pork supplies would begin to increase late in the summer and fall of 2014,” he says. “For now, industry losses have come to an end, and pork producers are keeping a close eye on weather just like their crop-producer cousins.”

 

 

New Cause of Infectious Diarrhea Found

New Cause of Infectious Diarrhea Found

Diarrhea in pigs is common. Outbreaks of diarrhea can be caused by many different infectious agents as well as a host of noninfectious causes and risk factors. Accurately diagnosing the cause(s) of diarrhea by clinical examination is challenging because the characteristics of feces are not specific for a particular cause. More than one cause or risk factor may be present.

The list of infectious contributors is fairly long and has recently increased with introduction of a disease new to the United States. Known as porcine epidemic diarrhea (PED), this diarrhea is caused by a virus known as porcine epidemic diarrhea virus (PEDV). PEDV is closely related to the virus that causes Transmissible gastroenteritis (TGE).  Even though the two diseases are caused by similar viruses (coronavirus), the two viruses are not cross-protective. In other words, pigs exposed to one of the viruses will not become immune to the other.

TGE History, Cases

TGE has been endemic and feared in the United States for at least 70 years because it causes epidemics of diarrhea in all ages of susceptible pigs, with high mortality (up to 100%) in suckling pigs. TGE outbreaks are more common in the cold seasons in the United States (Figure 1), with a similar pattern of seasonal occurrence for every year for which there are records. This is because the virus is more rapidly deactivated by heat and ultraviolet radiation of summer.

Most TGE outbreaks in recent years have occurred in grow-finish pigs, presumably because of less stringent biosecurity. Outbreaks within sow farms that have very good biosecurity are relatively infrequent in recent years (personal observation).

Figure 2 illustrates the frequency of TGE cases detected by the Iowa State University Veterinary Diagnostic Laboratory (ISU VDL) over the past 17 months. The total cases detected in winter/spring of 2012 were fewer than expected from historical data, presumably because of the unusually mild winter a year ago.

The number of TGE cases detected in 2013 is very similar to the numbers expected in a “normal” year (Figure 1). Anecdotal reports from swine veterinarians in the Upper Midwest suggest that more TGE cases than usual occurred in grow-finish stages during the months of April and May, presumably because of the cooler weather experienced in those months.

 

PED Virus Identified

The ISU VDL was presented with several cases of TGE-like disease from sow farms in May 2013, which was unusual. Morbidity and mortality in sucking piglets were very high. Routine testing for TGE was negative, which quickly led to deeper investigation and the discovery of the PED virus in those herds.  Since PEDV was not previously found in the United States, the National Veterinary Services Laboratory (NVSL) provided the official confirmatory testing.

 

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In the weeks following the initial detection of PEDV, the frequency of detection of cases of TGE has decreased to nearly zero at ISU VDL, yet the number of cases in which PEDV is detected has increased (unpublished data). Several score of cases of PEDV have been detected in at least five states, usually from unrelated farms, and have been detected in both sow farms and grow-finish farms. The source (s) of introduction of PEDV to the United States are not known. Accurately predicting the future is impossible, but PEDV clearly has the potential to become very widespread if not rapidly identified and controlled.

PEDV vs. TGE

What’s the difference between PEDV and TGE at the farm level? Until we have reason (data) to believe differently, most consider the clinical signs, impact, spread of disease and control methods to be quite similar between the two diseases. However, PEDV has the potential to be more severe than TGE because all U.S. swine are susceptible, and there is no cross-protection with porcine respiratory coronavirus (PRCV) or TGE.

The diagnosis of PEDV and TGE is not particularly difficult when occurring alone and not complicated by other agents or factors. One expects an epidemic of diarrhea affecting all ages of pigs. Guidelines for diagnosis of porcine diarrhea can be found on the ISU VDL Web site:

http://vetmed.iastate.edu/vdpam/disease-topics/porcine-epidemic-diarrhea-ped-diagnostic-testing

If PEDV becomes endemic in herds or swine-producing areas, it will become less obvious clinically and, similar to TGE, an accurate diagnosis will require increasingly greater diligence in clinical observation and in proper sampling for diagnostic testing.  Tables 1 and Table 2 list some very basic considerations for laboratory submission.

Diagnostic Investigation

Properly executed sample collection and preservation should allow for accurate diagnosis of nearly all infectious agents involved in outbreaks of diarrhea. Working with their veterinarian, producers must be willing to allow sampling of acutely affected pigs and, if necessary, allow for euthanasia, necropsy and sample collection from acutely affected individual pigs with typical clinical signs.

The value of sacrificing one or two pigs for accurate diagnosis pales in comparison to the cost of an inaccurate diagnosis, inappropriate treatments, costs of veterinary service and diagnostic testing. While taking the time and effort to collect appropriate samples seems easy and obvious, personal experience would suggest that it could be improved in many situations. Also, providing basic information on laboratory submission forms (age, morbidity, mortality, clinical signs) is extremely valuable in conducting a cost-effective diagnostic investigation.

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Watch Quality of Remaining 2012 Corn Crop

 

The 2012 corn crop delivered many of the problems that were foreseen throughout last year’s growing season. Decreased yields, variable quality and mycotoxins have affected livestock production throughout North America. However, this crop may still be causing trouble as we dig deeper into the storage bins.

Alltech’s 37+ Program surveyed 329 samples from July 1 through Dec. 31, 2012. Only one percent of the samples analyzed were free of mycotoxin contamination; 94% were contaminated with two to 10 mycotoxins. In corn grain samples, 95% contained fumonisin and 48% contained deoxynivalenol or DON. In corn silage, 90% contained fumonisin and 84% contained DON. The distiller’s dried grains with solubles (DDGS) samples contained 100% of both fumonisin and DON. In all samples tested, aflatoxin was present in 18%.

“The ‘take home’ out of this data set is that the 2012 corn crop is widely contaminated with multiple mycotoxins that can decrease animal performance and health,” says Max Hawkins, Alltech Myctoxin Management Team.  “However, as aflatoxins’ allowable level in feed and its metabolite M1 in milk are legislated, its presence is not as widespread and is more regionalized.”

According to Hawkins, 37+ analyses conducted since Jan.1 have shown similar results but with an interesting new finding. The numbers of mycotoxins present are increasing.

“This increase in the total numbers of mycotoxins over time can be attributed to areas such as poor fermentation and inadequate packing or face management that can contribute to further mold growth and mycotoxin production,” Hawkins says.

At harvest time, it was recommended that mycotoxin- contaminated grain be dried to 14% moisture within 24 to 48 hours to stabilize mold growth and ensure adequate grain storage. By limiting mold growth, mycotoxin production can be stabilized, but any mycotoxins already present would remain.

According to Hawkins, as temperatures remained warm in the fall, many growers aerated the bins and discovered that the mold and mycotoxin levels increased rapidly.  As storage facilities have been emptied this spring, high levels of mycotoxins have been found in the lower levels of the facilities, where the fines and cracked kernels tend to concentrate.

Hawkins recommends these five tips for producers using the last of their 2012 crop:

 

  1.  Only run aeration fans during the coolest times of day or night. Hold grain at 50 degrees Fahrenheit or less and 14% moisture or less.
  2. Mold growth in storage is greater where there are leaks in facilities and where fines and damaged kernels are concentrated.
  3. The south side and tops of grain bins warm quicker as daytime temperatures begin to increase.
  4. New mold growth will increase temperature and moisture in surrounding grain.
  5. Continually monitor stored grain for temperature, moisture and mycotoxins.

 

 

 

 

 

Watch Quality of Remaining 2012 Corn Crop

The 2012 corn crop delivered many of the problems that were foreseen throughout last year’s growing season. Decreased yields, variable quality and mycotoxins have affected livestock production throughout North America. However, this crop may still be causing trouble as we dig deeper into the storage bins.

Alltech’s 37+ Program surveyed 329 samples from July 1 through Dec. 31, 2012. Only one percent of the samples analyzed were free of mycotoxin contamination; 94% were contaminated with two to 10 mycotoxins. In corn grain samples, 95% contained fumonisin and 48% contained deoxynivalenol or DON. In corn silage, 90% contained fumonisin and 84% contained DON. The distiller’s dried grains with solubles (DDGS) samples contained 100% of both fumonisin and DON. In all samples tested, aflatoxin was present in 18%.

“The ‘take home’ out of this data set is that the 2012 corn crop is widely contaminated with multiple mycotoxins that can decrease animal performance and health,” says Max Hawkins, Alltech Myctoxin Management Team.  “However, as aflatoxins’ allowable level in feed and its metabolite M1 in milk are legislated, its presence is not as widespread and is more regionalized.”

According to Hawkins, 37+ analyses conducted since Jan.1 have shown similar results but with an interesting new finding. The numbers of mycotoxins present are increasing.

“This increase in the total numbers of mycotoxins over time can be attributed to areas such as poor fermentation and inadequate packing or face management that can contribute to further mold growth and mycotoxin production,” Hawkins says.

At harvest time, it was recommended that mycotoxin- contaminated grain be dried to 14% moisture within 24 to 48 hours to stabilize mold growth and ensure adequate grain storage. By limiting mold growth, mycotoxin production can be stabilized, but any mycotoxins already present would remain.

According to Hawkins, as temperatures remained warm in the fall, many growers aerated the bins and discovered that the mold and mycotoxin levels increased rapidly.  As storage facilities have been emptied this spring, high levels of mycotoxins have been found in the lower levels of the facilities, where the fines and cracked kernels tend to concentrate.

Hawkins recommends these five tips for producers using the last of their 2012 crop:

  1.  Only run aeration fans during the coolest times of day or night. Hold grain at 50 degrees Fahrenheit or less and 14% moisture or less.
  2. Mold growth in storage is greater where there are leaks in facilities and where fines and damaged kernels are concentrated.
  3. The south side and tops of grain bins warm quicker as daytime temperatures begin to increase.
  4. New mold growth will increase temperature and moisture in surrounding grain.
  5. Continually monitor stored grain for temperature, moisture and mycotoxins.

 

 

Agriculture Calls for Comprehensive FTA with EU

A coalition of food and agricultural organizations are urging the administration to press the European Union (EU) to negotiate a “comprehensive free trade agreement, including addressing sanitary-phytosanitary (SPS) barriers."  In a letter to the U.S. Trade Representative, the coalition expressed concern with a resolution approved last month by the European Parliament that in negotiating the Transatlantic Trade and Investment Partnership (TTIP) with the United States, the EU should maintain the “precautionary principle” for SPS issues.

 

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Precautionary measures are implemented based on the mere identification of potential risk or worse on public perception and political considerations rather than on science-based risk assessments. The World Trade Organization requires member countries’ SPS measures to be based on scientific risk assessments.  The coalition said, “Precaution in the EU has become a pretext for import protectionism under the pretense of consumer safety.  Such non-science-based measures have become the most challenging barrier to U.S. food and agricultural exports to the EU.” 

Those signing the letter included the American Farm Bureau Federation, American Feed Industry Association, American Meat Institute, American Sheep Industry Association, American Soybean Association, National Cattlemen’s Beef Association, National Association of Wheat Growers, National Corn Growers Association, National Pork Producers Council, National Renderers Association and North American Meat Association.

USDA Export Forecast Reduced, But Still a Record

USDA lowered its forecast for agricultural exports for fiscal year 2013, from $142 billion to $139.5 billion, which is still a record.  Secretary of Agriculture Tom Vilsack said, “Today's report is promising news that keeps American agriculture on track to continue the strongest period of exports in our nation's history. Agricultural exports are an important part of our economy, supporting more than one million jobs.”  

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USDA’s forecast lowered corn exports from $8 billion to $6 billion from the February estimate.  The forecast for oilseeds and products is raised slightly and the forecast for cotton exports is $500 million higher. The forecast for livestock, poultry and dairy is unchanged from last quarter – a record $30.1 billion.  However, pork exports were lowered $300 million to $5.0 billion based on smaller volumes and lower prices.  This is a result of weaker demand in Asia and Mexico and the sanitary-phytosanitary barrier restrictions in Russia.  

OIE Upgrades U.S. BSE Risk Status

The World Organization for Animal Health (OIE) upgraded the risk status of U.S. cattle for bovine spongiform encephalopathy (BSE) from “controlled” to “negligible.”  This is the lowest risk level under the OIE code. 

Secretary of Agriculture Tom Vilsack said, “This is a significant achievement that has been many years in the making for the United States, American beef producers and businesses, and federal and state partners who work together to maintain a system of interlocking safeguards against BSE that protect our public and animal health.  This decision demonstrates OIE’s belief that both our surveillance for, and safeguards against, BSE are strong. U.S. beef and beef products are of the highest quality, wholesome and produced to the highest safety standards in the world.”

 

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