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Articles from 1998 In July

Testing Keeps Stud PRRS-Free

The 100-boar Genetipork boar stud at Morris, MN, is one of a few that is negative for PRRS (porcine reproductive and respiratory syndrome).

Keeping it that way requires a constant vigil, says Scott Dee, DVM, Swine Health Center at Morris. The veterinary clinic partners with Genetipork USA to raise and sell the company's breeding stock.

The stud was originally stocked in 1995 with PRRS-negative boars and Dee along with AI director Tom Spaeth figured using the PCR technology would be a good way to monitor that status.

PCR (polymerase chain reaction) is a molecular method for detection of the virus protein.

"In the past, it has been basically impossible to isolate the PRRS virus from semen," Dee says. "But with PCR, you are not undertaking virus isolation; you are detecting for the viral protein in the semen. It is a very sensitive assay that will allow you to detect very, very small quantities of the virus.

"Our thinking was if we monitor this herd on a monthly basis, using serology only, we might miss something that happens in between our testing periods," says Dee. "But if we conduct PCR testing on a weekly basis, then we've got a lot better chance of catching the virus."

Monday is heavy collection day at the stud, Spaeth says. A sample of each boar's semen is collected and the raw ejaculate is pooled to reduce cost (three collections each) and sent to the University of Minnesota for PCR analysis. Results are usually back in a day or so. (Each PCR test for PRRS costs $30.) "This way we can find out within 1-2 days should infection have taken place," points out Dee.

Tom Spaeth's wife, Joan, enters the testing results in a database for the veterinarians of potential customers to review. The stud has never found a semen sample PRRS positive.

Only two locations perform the PCR tests, the diagnostic laboratory at Minnesota (612-625-8787) and the South Dakota diagnostic laboratory (605-688-5171).

The National Pork Producers Council (NPPC) is organizing a group to look at the science behind general farm biosecurity practices, to see what additional research needs to be done.

Dave Pyburn, DVM, NPPC director of Veterinary Science, says the first order of business is to form an industrywide group. At their first meeting, they will discuss a literature review of current knowledge.

Second will be to determine the reasoning behind biosecurity practices.

>From that the group will develop and distribute educational and informational pieces about on-farm and transportational biosecurity.

Pyburn suggests the group will also look at the biosecurity of the national swine herd to determine what protocols are needed to keep foreign animal diseases out of the U.S.

Annual U.S. Hog Production: Headed For Trouble?

The wheels of expansion seem to be grinding inevitably forward. University of Missouri agricultural economist emeritus Glenn Grimes warns unless producers put on the brakes, the hog industry may drive itself into long-term depression.

A structure study by the University of Missouri and Iowa State University shows growth plans for every size hog producer from those marketing 1,000-2,000 hogs annually to those selling 500,000 head or more.

"In a way, we are a victim of our own success," observes Grimes. "The profitability of hogs has been so good, it's one of the reasons that we are attracting additional capital to the industry, increasing the competition and reducing the return per hog."

Projected Growth On average, growth plans for all size producers surveyed in the study for 1997-2000 is estimated at 37%, says Grimes. The biggest expansion plans of 110% during that period came from the 50,000-500,000-head marketed group. The group with the smallest expansion plans, 1,000-2,000-head marketed annually, only projects 10% growth in the next three years, points out Grimes.

The 50,000-head-plus group, which represented 36% of marketings in 1997, has grown from just 7% of marketings in 1988, says Grimes citing the 10-year review. There are 145 firms in that category, up from about 66 three years ago, making it the fastest-growing segment of the hog industry, says Grimes.

In contrast, the category of under 1,000-head marketed per year went from 32% of slaughter hogs sold in 1988 to 5% in '97.

Preliminary survey data shows just 18 producer-companies are raising 23-24% of the nation's hogs, notes Grimes.

In fact, he says, those large firms expand year in, year out, regardless of price, and are poised for more growth. "The probabilities are very high that a significant portion of the growth is already in place as the sows are in place for marketings through May 1999 now," states Grimes.

This is the first time since Grimes started plotting the survey data more than a decade ago that all size producers are showing potential growth at the same time.

He says he hopes his warning of impending over production will scare off enough producers from expansion so that prices can recover to a profitable level.

"We are hoping the information from this study will reduce these growth plans. However, the odds appear overwhelming for pork production to equal or exceed 1998 levels in both 1999 and 2000," observes Grimes.

Domestic hog slaughter reached 90 million (2 million head came from imports) in 1997. For 1998, Grimes projects 100 million head of hogs will be slaughtered in the U.S. That figure could reach 125-130 million head in the next couple of years if the rate of expansion planned is carried out.

Falling Prices Ahead Slaughter is running more than 10% ahead of last year as of mid-June. Grimes expects an increase in consumer demand due to population growth and continued growth in pork exports will swallow part of those increasing numbers. But most of the pressure will fall on market prices.

Based on that projection, Grimes suggests: "Make plans based on hog prices being in the $30s during much of the time, with some possibilities for some $20s for 1998, 1999 and 2000 - and pray for a miracle."

Those kinds of prices will block producer intentions from actually achieving the 37% overall growth in the industry from 1997 to 2000, stresses Grimes. A more likely scenario, he says, is that production will level off at '98 levels of around 100 million head of hogs slaughtered for the next few years. Average live hog price for '98 will be about $36-$38/cwt., he projects.

In 1998, live prices have been in the $30 range for much of the year, climbing back into the low to mid-$40s more recently. Prices are expected to stay in the $40s through the summer. Grimes observes the industry may have already seen the high price for the year.

Don't look to reported prices to find out what pork producers are actually receiving for their hogs, he explains. Since 1990, Grimes has analyzed the five-market average live hog price reported for barrows and gilts and compared it to the actual price received based on National Pork Board calculations.

"Notice, we have gone from about $2 below/cwt. to last year (when) producers received about 75 cents/cwt. above the five-market average," Grimes says. For the first four months of this year, producers are receiving $2.50/cwt. above that reported live price."

There are two reasons for the better prices. The five-market average price is for average 49-50% yielding hogs. Producers checking off their hogs are getting a better return because they have better-than-average cutting hogs. Also, packer contracts are providing more value than selling hogs on the open market, he reports.

Even with a contract and/or premium, hog prices will be mostly unprofitable for several years to come, notes Grimes. Eighty percent of producers surveyed said they would need $40/cwt. live price or better to stay in business until the year 2002, reports Grimes during a presentation at World Pork Expo in Des Moines, IA. And only 10% to 20% of producers reported they could breakeven if prices average less than $37/cwt. to the year 2002.

If that price average should come true, and Grimes says it is a possibility, there will be a major exodus of some fairly large producers.

"What we see as a high probability is a lot of concentration in the next three years," says Grimes. Units won't close. They will simply be bought out by other concerns. Grimes speculates it is likely that the 18 largest producer companies are most likely to snap up those that pull out.

But he emphasizes he doesn't see consolidation of the hog industry akin to what took place in the broiler industry a number of years back. Independent producers will survive as long as they play it tough and have access to a market. "We don't see the hog industry going the route of the broiler industry until independent producers lose their market."

But industry evolution will involve "a massive weeding out" of the very small producers marketing 1,000 head a year, says Grimes.

Crops El Ni"n"o isn't over, but it is definitely diminishing, says Elwyn Taylor, with Iowa State University (ISU). El Ni"n"o usually means good Midwest corn yields and his prediction is for an average of 130 bu./acre.

With feed prices the lowest in years, ISU's Bob Wisner advises locking in corn and soybean meal supplies now.

But there may be wisdom in waiting, also. Last year's corn crop of 9.3 billion bushels may be surpassed by this year's projected 10.259 billion crop. If that projection holds, corn prices could dip to $2.10/bu. cash market, $2.45 futures price.

For soybeans, Wisner forecasts domestic production of 2.7 million bushels. The seasonal average price will be $6.45/bu. for soybeans and $180-185/ton for soybean meal, says Wisner.

How Packer Contracts Affect Marketing

Integration and all the changes involved with it are finally upon the hog industry, states Jim Sigmon, Securities Corp. of Iowa in Cedar Rapids.

"Integration in the hog industry has been talked about for 30 years," he says. "In the last five years, we've actually put into effect the talk."

And with integration and the growth of large producers has come a huge change in marketing. Sigmon cites a report that 60% of all the hogs sold in Iowa are on packer contracts.

"The interior Iowa-Southern Minnesota hog market used to be the market for the whole country," he says. "I'm not saying that anymore. That market does not represent the large quantity of hogs sold in this country."

"Contracting is here to stay," he assures. Why? Contracts provide packers with a constant supply of a certain quality hog at hopefully the cheapest price possible.

When becoming involved in a contract, Sigmon says to remember, "Packers are buyers and they don't go out with the idea of paying more money." They shouldn't be judged harshly for that, however, because farmers are sellers and they don't go out to sell for less money either, he adds.

Price Discovery With a smaller, non-contract market to set prices, Sigmon is concerned about hog price discovery. "As the base hog market becomes thinner and thinner, what alternative pricing methods will be developed?" he asks.

Sigmon has a few suggestions, which he shared at World Pork Expo.

First, he suggests producers should look more for the 49-52% lean, which is more in line with the current market. Next, he thinks the industry will move to a pricing system based on meat prices. The Chicago Mercantile Exchange (CME) is reviewing a cutout value based on the six primal cuts: loin, butt, picnic, rib, ham, and belly. Sigmon believes a value like this may work for reporting hog prices in the future.

"And as time moves along, I think we should work out formulas using the proposed lean cutout value," he says. "However, this will be hard to accomplish betw een the packer and producer because it involves a packer margin."

Uniform Price Reports In addition, Sigmon says the hog reporting system needs uniformity. Right now, reports from many states are gathered and reported differently. Producers also need market reports that include hogs sold in packer contracts.

"I want to propose we get together with USDA and update that system," Sigmon suggests. "They need to agree on how the market is going to be reported. If we're going to have a national marketing system, then we're going to have to work under the same rules.

"And we've got to know what kind of contracts are out there," he adds. "We've got to know how many and what the costs of those contracts are going into the packer. We can still keep confidentiality."

Sigmon also suggests creating an oversight committee. "I feel very strongly there should be a committee of buyers and sellers - an oversight committee for USDA for market reporting." The committee would ensure uniformity and accuracy.

Sigmon does offer a warning about packer contracts. "I'm afraid we're setting up for another contract disaster somewhere in some of these contracts that are being developed," he says. "We already had a contract disaster in hedge-to-arrive.

"With these contracts that are unregulated and off-exchange with no uniformity, there's going to be some problems," he cautions. He believes more university studies on the effects of packer contracts are needed.

"Some form of packer contract will be necessary. But I don't believe you need to give all your chips to one packer."

Futures Market With his background in commodities, Sigmon supports using the Chicago Mercantile Exchange (CME) to lock in profits. The futures market remains a potential marketing tool for producers.

"The futures market is a regulated market, there for all to see," he says. "It is highly watched and highly regulated.

"The futures market has never been heavily used by hog producers compared to grain producers," he adds. "We do our work and try to educate them. But we still don't see many producers participating."

Why? Sigmon speculates that the hog depression of the 1980s affects hog producers risk-bearing attitude.

But risk brings opportunities, Sigmon likes to remind producers. "The more risks you have, the more rewards you have."

Hog Cycle The hog cycle looks strong and healthy, Sigmon says. It continues on its four-year course with two years of expansion and two years of contraction. If anything, he believes the cycle could lengthen to six years.

"We'll see high-priced hogs and low-priced hogs," he explains. "We're not going to change the economics of the business.

"Profit margins will become narrower on the average," he continues. "But there will still be opportunities to make some very good returns. And that's when we have to be in position to take advantage of those opportunities.

"So instead of hog producers talking about prices, they should be talking about profits and how much margin they can lock in," Sigmon states.

Sigmon suggests a producer take advantage of any time he or she can lock in a $10/head profit or more.

A good marketing plan can help a producer accomplish this. While each plan should fit an individual hog operation, Sigmon shows an example plan that would have worked for 1998:

* The cash hog high for 1998 expected in second quarter, May/June.

* Be ready to place hedges, either futures or puts, May/June.

* Look for normal summer rally by June.

Note: Sell up to 50% of yearly production by end of June. Sell another 25% during July/August period. Our range for 1998 is $35.50 to $42.00 cash and $49.50 to $55.50 lean.

Remote-Controlled Cart Removes Carcasses

A remote-controlled cart can help producers remove hog carcasses from buildings without the risk of personal injury.

Robert Spencer Enterprises displayed the Rite Weigh remote-controlled carcass cart. The cart is designed to help remove dead hogs and sows from pens, alleys, gestation stalls or farrowing crates. A remote-controlled winch is run by its own power source. The carcass cart is powered by a rechargeable marine battery.

A solid, trough bed is positioned on a welded, solid-rod frame to help ease loading and unloading, according to Robert Spencer. Three reclining positions are possible with the trough. The cart features pneumatic wheels, swivel casters and four-ply tires. It can be moved both backward and forward.

A four-point anchor system helps stabilize the unit for pulling. Craig Christensen and Lee Johnston asked what to do if there wasn't a crate, rafter or building support beam on which to anchor the cart. Spencer replied the cart can be pulled closer to the animal, and the animal helps stabilize the cart. Spencer says the cart can pull carcasses weighing up to 700 lb. The unit can pull animals at a 90 angle if necessary.

The Rite Way cart features 50 ft. of 71/432-in. aircraft cable with a choker-style cable end. The cable reels in at a rate of 15 ft./min.

Christensen asked about the likelihood of the unit tipping when a large animal is hoisted to the top of the trough. Spencer said the animal is pulled into alignment on the trough as the cable is reeling in. So by the time the animal's weight reaches the top of the cart, tipping is not a big concern.

The remote-controlled sow-size cart sells for $1,535. A manual version is available for $635, and a smaller cart for market hogs sells for $235.

Steve Hoff liked the cart because he says most potential problem areas seemed to have been accounted for by the solid, sturdy construction.

Richard Collins notes the cart could help reduce worker injury rates. "It can be a real problem if you are a 150-lb. person and you need to get a dead sow out of a crate," he relates. "This product could help make that task safer for producers and employees regardless of size."

(Circle Reply Card No. 102)

Monitor Tracks Feed Use

Easy Systems Inc. introduces the Feed Trak monitor to record feed disappearance. The product provides calculated measurement of feed delivered via shaft sensors or current flow of an auger motor.

One-, three- and seven-day averages of feed used can be provided without having to reset or restart the monitoring controls. Each Feed Trak unit will track two feed systems and give consumption readings for each.

"This monitor helps record drops in feed consumption, which could signal health problems," says Cam McCollough, Easy Systems Inc. business development manager.

An alarm or flashing light goes off when a bulk bin is running empty or has reached a specific re-order point.

The monitor can be mounted inside or outside the barn. Feed Trak has sealed connections.

Data from the monitor can be transferred to a computer.

Lee Johnston says a product such as this makes it easier to walk into a barn and monitor feed disappearance without having to climb on top of bins.

Steve Hoff asked if the monitor could deal with the challenge of measuring accurately when feed bridges in the bins. McCollough said Feed Trak has a difficult time measuring bridged feed, but an Easy Switch mounted in the bulk bin will prevent the Feed Trak from recording inaccurate information.

The cost of one Feed Trak unit is $850.

(Circle Reply Card No. 107)

Boar Stud Management Package

The BoarPro software package from Aero Computing, Ltd. is designed for artificial insemination (AI) labs.

The software makes it possible to store collection data and information about each boar. Users can record motility checks, in addition to information regarding the last five collections, for example, or even lifetime fertility/motility information.

The latest collection trends for each boar can be graphed. The number of boars on which information can be stored is limited only by the user's computer hard drive capacity. The program can be customized for a specific lab.

Customized semen tube labels can be printed with the program. BoarPro is Windows 3.1 and Windows 95 supported.

BoarPro costs $800. There is an optional $149 annual support fee, which includes one year of toll-free, call-in support and quarterly software updates.

The panel agreed this would be handy software for producers who are trying to manage a boar stud, but thought the support fee might be a bit steep.

(Circle Reply Card No. 104)

Retrofit Fluorescent Lights Without Rewiring

The Retroliter 240 CVP-W-Retro retrofit fluorescent swine housing light is available from Retrolite Corporation of America.

Forrest Tabor, Retrolite representative, says the Retroliter can be installed in existing facilities without requiring complete rewiring. Retroliter can be mounted up to 4 ft. from the original fixture, which is used as a power source. "This gives flexibility to move the light source away from obstructions that might block light," Tabor relates.

The fixture withstands normal pressure washing. Specially designed mounting brackets allow rigid fastening through the ceiling and into the truss.

According to Tabor, typical mounting on an 8-ft. ceiling is 16-ft. spacing on center between fixtures.

Two, 4-ft. fluorescent lamps provide 15-foot candles under the fixture in most swine facilities. (By way of comparison, one 100-watt lamp mounted on an eight-foot ceiling would equal 2.4-foot candles. Therefore, between six and seven 100-watt lamps would equal the foot candle output of one Retroliter lamp.) Tabor says ballast life is typically 12-15 years. The lamps have an average life of 20,000 hours.

Fixtures carry a two-year warranty. Ballasts are warrantied for three years.

The panel felt any product that allows producers to retrofit to existing facilities has definite advantages.

Steve Hoff asked if the Retroliter is Underwriter's Laboratory (UL) approved. Tabor said UL approval is pending. Hoff urges producers to be aware of the importance of the UL approval rating.

"Underwriter's Laboratory checks for moisture and corrosion points based on the gases that occur in the electrical fixture's environment," he explains. "You want to make sure you choose products that will safely stand up to the challenges that exist in your facilities."

The Retroliter basic model 240 CVP-W-Retro lights are available for $66-$70, depending on the quantity purchased.

(Circle Reply Card No. 106)

Dome Covers Manure Storage Tanks

The Geo Air-Dome from Summergreen Systems, Ltd., can be installed over existing manure storage tanks without having to empty the tank. The high-density, woven polyethylene dome comes in different sizes.

Daniel Lambert, president of Summergreen Systems, explains the process by which the dome is installed. "A precast concrete column is placed in the center of the tank using a crane," Lambert says. "From this concrete column, straps (5,000-lb. tensile strength) radiate out and are attached to the outside of the tank wall at 12-ft. to 14-ft.-on-center intervals by way of a winch with a brake mechanism." After the center column and straps are adjusted and aligned, the fabric is lifted by crane and is spread out over the support straps. It is secured around the outside tank wall by an aluminum channel and anchor system. Next, an access pump-out door, air-inlet port and manure-inlet port are installed.

The Geo-Air Dome is inflated by a 11/46-hp turbine blower system that generates 1 in. of water column pressure and costs $80 to $90/year to operate.

When a producer gets ready to agitate or pump out the manure tank, the fan is shut off, and the fabric settles down on the support straps. The removable access door allows for agitating and pumping. The 4 ft. x 5 ft. access door and frame weigh about 40 lb. and are constructed of aluminum and PVC. "Once you have completed your pump out, simply reinstall the pump-out door and turn on the fan," Lambert says.

There is a 10-year warranty on the dome system.

Most installations of the Canadian-developed domes have been in Ontario. Lambert says several Geo Air-Domes are being installed in Iowa this summer.

Hoff asked about installation time and costs. Lambert says the dome is priced at $80-$90/diameter foot. Installation costs an additional $7-$8/diameter foot, and includes crane rental.

Craig Christensen was concerned about the ease of patching any rips or tears that might develop in the dome. Lambert said repairs can be made by sewing or welding the tear. He said it is important to keep the dome inflated to help prevent wind damage.

Possible repair difficulty was an area the panel felt producers should consider.

(Circle Reply Card No. 109)

Pork Industry 'Dream Team' Evaluates New Products

Imagine having a chance to walk through the World Pork Expo trade show with some of the most qualified U.S. pork industry experts in their respective fields.

National Hog Farmer assembled just such a pork industry "dream team" at the recent 1998 World Pork Expo in Des Moines, IA.

The National Hog Farmer new product review panel included: Lee Johnston, extension swine specialist at the University of Minnesota's West Central Experiment Station, Morris, MN; Richard Collins, DVM, swine veterinarian at Dixon Veterinary Hospital, Dixon, IL; Craig Christensen, a pork producer from Ogden, IA; and Steve Hoff, agricultural engineer at Iowa State University.

The panelists evaluated a list of more than 70 new products nominated by manufacturers and trade show exhibitors.

What follows is a list of the eight products the panelists thought pork producers would find most interesting. The products are listed in no particular order.

If you would like more information about any of these products, circle the number on the reply card on page 43 and return it to National Hog Farmer.