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Articles from 2006 In July


Lessons from Mandatory Price Reporting

One of the driving forces behind the Livestock Mandatory Reporting Act of 1999 was a desire of producers to know the prices that were being paid for hogs purchased by some means other than the daily spot or cash market. The suspicion was that there were many "sweetheart" deals in which packers were paying favored suppliers more money than was available to others.

I have to admit that I always had a problem with that suspicion. Packers are generally good businessmen and their job is to buy hogs for the lowest possible price. They do not pay anyone, favored or not, money that they do not have to pay. Generally, they only pay extra for value. While the people who work for packers are just like the rest of us, and many are very generous in their personal dealings, they are not benevolent benefactors in their work in procuring hogs.

Such suspicions were still a driver when the mandatory price reporting system was created. So, the question remains: What have the data taught us?

Figures 1 and 2 show daily prices for the four purchase classifications from Jan. 1, 2002 through June 30, 2006. Note that Figure 1 shows base price data while Figure 2 shows net prices, which include premiums and discounts.

These graphs appear just as I expected they would and they are really quite logical. Consider:

  • Base prices appear much more volatile from day-to-day than do net prices. At day's end, packers have to end up paying, on average, about the same amount for hogs. If they are priced too low, they simply do not get enough bought. If they are priced too high, they will find themselves uncompetitive at some point in selling pork. So, while the various base price bids vary, when we look at the average cost of each day's slaughter (a retrospective view because those hogs are purchased over several days), the prices are much more stable.

  • Risk managing contracts actually manage risk. The Negotiated and Swine or Pork Market Formula pricing mechanisms offer no risk protection. They result in the highest and lowest prices paid over time. The Other Purchase Agreement category includes window contracts and feed-cost based contracts that manage risk by eliminating highs and lows and tying price to costs, respectively. Finally, Other Market Formula prices are almost all based on Chicago Mercantile Exchange (CME) Lean Hogs Futures and thus reduce risk quite markedly.

  • The recent upside of the hog cycle has resulted in higher levels of all of these prices. Even the risk-limiting prices based on CME Lean Hogs Futures have averaged about $60 carcass ($45 live) since early 2004.

  • The average prices paid under these various methods reveal the "risk premiums" of producers. Other Market Formula prices, from January 2004 through the end of June, averaged $4.28/cwt. carcass lower than Negotiated prices. Other Purchase Arrangements reduced risk by a smaller amount and trailed Negotiated prices by $2.02/cwt. carcass. Interestingly, Swine and Pork Market Formula prices were $0.49/cwt. carcass higher than the Negotiated price. The likely reason for that premium is that these animals are committed to packers and thus reduce the packers' throughput risk. That means that packers pay a risk premium to producers for these hogs.



Click to view graph.

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

Sorting Out Slaughter Runs

Last week's big slaughter run (1.954 million head, 4.5% larger than one year ago) and this week's romping first three days (1.088 million head, 7.7% larger than the same three days last year) have us wondering if the expected increase in output, which has never shown up in USDA inventory reports, is finally upon us.

Figure 1 shows federally inspected (FI) slaughter levels vs. last year and expected levels for this year. After spending most of May and June at or below both last year's and expected levels, last week's run was among the largest positive year-over-year deviations of the year. Further, somewhat short supplies in May and June and the resulting lower market weights suggest that this surge is not due to hogs being backed up. We are now into the hogs in the 120-179-lb. inventory classification in the June Hogs and Pigs Report. That group was pegged at 0.5% larger than one year ago, yet we are getting these large slaughter runs.

What could be happening? Well, obviously, it could be a problem with the June report -- bad survey responses by producers or an undercount by USDA. I have had some reservations about the pace of this sow herd expansion and, even more so, the apparent reduction in productivity growth that the last few reports have suggested. Until now, there has been little evidence to call those factors into question, and I don't think we have enough evidence yet to draw any real conclusions.

Still, logic tells us that after 29 months of profits -- many of them big -- we should get more growth. Yes, I know that past expansions never had to overcome today's legal, environmental and social hurdles, but a lot of money has been made and pork producers have historically never been able to stand prosperity this long.

A second possibility is that the May-June "shortage" was not caused by death losses but by significant reductions in growth rates. That argument sounds plausible until you consider that, if USDA's June numbers were even close to correct, the effect would have to have manifested itself just since mid-May. We've heard talk of porcine circovirus-associated disease (PCVAD) problems in North Carolina and, to a lesser extent, in the Midwest since last winter. However, any slowdown should have had some effect before mid-May, maybe even early enough to show up in the March report.

The conclusion? I don't know yet. It will take some time to sort this out, but it still appears that we will see a seasonal increase in supplies and the concurrent seasonal decline in hog prices. Chicago Mercantile Exchange (CME) Lean Hog futures for October penetrated and closed below the 40-day moving average on Wednesday, while December penetrated the 40-day moving average but managed to close just above it. In early trading on Thursday, October is below both the 40- and 50-day moving averages, while December is below the 40- and barely above the 50-day moving averages. Many traders use the 40- and 50-day moving average as a trigger level for a key reversal.

And it is important to note that this break in the futures has not been driven by a real break in cash hogs. Cash has driven the futures market for most of the summer but, in spite of the large slaughter runs last week and this week, cash prices have held their ground at $69 or so quite well.

Capture the Rally
I have urged producers to sell this summer futures rally for some time and I still think that is a prudent move. Selling hogs in the black in October and December of the fourth year of a hog cycle is a pretty rare occurrence. Know what these prices mean in terms of return on capital and return on equity and take action when those numbers hit your targets.

By the way -- if you sell an equal number of hogs in each of the eight contracts now on the board for the next 12 months, your average futures price would be $62.03 as of Thursday morning. If you sell an equal number of hogs in each calendar month (and thus sell two month's worth in the October, December, February and April contracts), your average futures price would be $61.02. Those have historically been pretty good hog prices, but what will they be with $2.50+ corn?

Who's Selling the Sows?
I'm also scratching my head about the surge in U.S. sow slaughter over the past few months. Profits, profits, profits and we are slaughtering significantly more sows than last year. And it is not due to imports from Canada - those are up only 1%, year-to-date, and have actually been lower than last year for 11 of the past 12 weeks.

The most plausible explanation is that a number of operations are doing depops-repops while sow and market hog prices are still good and before an expected increase in feed prices. I know of a couple of operations doing that back in May, but have no firsthand knowledge of such during this most recent increase.

University of Missouri data show that gilt retention since late April has not been near large enough to offset this increase in sow slaughter. It is possible that the spring price dips (remember that some hogs were sold for losses back in April) and concern over fall markets may have driven part of this reduction. The end effect may well be even slower expansion than we have already seen -- and that could be very good for those who remain.




Click to view graph.

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

Food Safety, Animal Care Plan Unveiled

Pork Quality Assurance (PQA) and Swine Welfare Assurance Program (SWAP) are being rolled into one program that will include an assessment, certification of farm sites and random audits.

Increasing consumer interest in animal welfare prompted a broad-based coalition of industry groups to recommend a revised certification program for pork producers. The results were unveiled at World Pork Expo last month in Des Moines.

The Pork Industry Animal Care Coalition developed a food industry solution to provide consumers assurance that animals are cared for throughout the growing process, says Hugh Dorminy, former president of the National Pork Board, who championed the effort.

Answering the Challenge

“In January 2005, the Pork Board's board of directors passed a resolution challenging CEO Steve Murphy to develop a long-term sustainable solution to the animal welfare issue,” explains Dorminy.

Out of that challenge came the birth of the coalition, comprised of producers, packers, retailers and foodservice personnel. They formulated a five-year schedule for developing and rolling out a system that would be credible, workable and affordable for all segments of the pork chain, he comments.

Danita Rodibaugh, National Pork Board president, adds: “The initial discovery meeting made two things clear. First, demand for pork could suffer if consumer concerns on animal well-being were not addressed in a credible manner. Second, producer support would only be achieved if the solutions were practical and affordable.

“The coalition also agreed that no solution would ever satisfy animal agriculture opponents,” notes Rodibaugh. “The solution is aimed at answering the concerns of our consumers, not an activist agenda.”

Process of Development

Pork Quality Assurance Plus (PQA Plus), the Checkoff's revision of the current PQA program and the response to the coalition's recommendation, will take two years to develop. The formal program launch is scheduled during World Pork Expo, June 7-9, 2007 in Des Moines, IA. In the ensuing three years, all pork producers will have the opportunity to become certified in the voluntary program, explains Paul Sundberg, DVM, vice president of Science and Technology for the Pork Board.

Both PQA and SWAP education programs are being retooled, and animal care will become part of a broader, more visible focus within the new PQA Plus program, he states.

Producers interested in testing the program and sharing their results are invited to call the Pork Checkoff Service Center at (800) 456-7675.

The way the process will work, producers will be educated in the new program and an assessment of their production facilities will be performed. Once the assessment is completed, a site becomes PQA Plus-certified, and their names will go into a pool of possible sites to be audited. A stratified random sample will be used within a statistical sampling of farms that will be inspected and audited for animal care production practices, adds Sundberg. Unlike a typical random sampling scheme, the stratified procedure is weighted to ensure that a balanced cross-section of producers is sampled.

Those first audits will be paid for by Pork Checkoff funds, if the Agriculture Department agrees. If a producer has issues of noncompliance in the audit, their veterinarian or Extension educator will help correct problems. Producers pay for a corrective audit to be performed. If the producer can't or won't fix the lapse, the PQA Plus status for the site will be revoked.

Most packers currently require that hogs purchased be PQA Level III-certified to meet the needs of retail and foodservice suppliers. According to the Pork Board, over 100,000 producers are participating in the current PQA program, comprising nearly 70,000 hog farms.

Sundberg emphasizes that a producer's farm site will not be audited until after their assessment is completed. And if their PQA eligibility is about to expire, they should renew their three-year membership in the program.

PQA Plus will be an evolving program, says Dorminy. “The facility assessment will serve as an industry benchmark for all segments, and we will aggregate that data with areas in need of improvement. When we find those, we can retool the education assessment component so that improvement can occur.”

In the end, PQA Plus will make the whole educational process more seamless for the pork industry, notes Sundberg. “PQA is going to end up being more uniform in its application on the farm because of the additional training the current PQA educators will need due to the assessments and auditing process.”

It will become the pork chain's accepted foundation and baseline of animal care and food safety for the pork industry he says.

Group Forms Animal Welfare Business

Recognized authorities in animal husbandry, genetics, welfare science and veterinary medicine have joined to form Farm Animal Assessment Associates (FAAA).

The FAAA vision is to advance the welfare of farm animals by applying the best science available.

Charter members in the working group include animal scientists Stan Curtis, University of Illinois; John McGlone, Texas Tech University; Todd See, North Carolina State University; and swine veterinarian E. Wayne Johnson of Illinois.

“The FAAA credo is using science to bring value to the food chain by enhancing quality of life for livestock and poultry,” says Curtis. “The group is prompted by ethical concerns and public issues, but we are guided by objective evidence.”

“After all, in terms of animal welfare, science will be the basis of lasting resolution of these important issues,” relates McGlone.

The group will provide objective estimates of both benefits and costs of husbandry practices to optimize the welfare and utility of farm animals. Users can customize that approach to their needs.

“That flexibility makes the FAAA approach distinct. These models can accommodate each stakeholder client's special needs,” says See.

“The FAAA models are also flexible in that they can evolve over time along with our understanding of animal welfare,” notes Johnson. “And they can be applied either to improve animal welfare at one farm or across a commodity industry.”

For more information, visit the Web site at www.animalassessment.com or contact Curtis at securtis@animalassessment.com.

Pork Board Identifies Critical Issues

The National Pork Board has selected five critical issues to address during 2007, including:

  • The way the industry can positively impact the customer's and the consumer's purchase of pork.

  • The trust and image of the industry and its products.

  • The development of human capital.

  • The profitability and competitive advantage of U.S. pork.

  • The safeguard and expansion of international markets.

Operating principles identified included:

  • A focus on partnerships and alliances.
  • The effective transfer of knowledge and technology.
  • The early identification and management of issues.

After a series of meetings this summer and fall, the board will approve the final plan and budget submission to the U.S. Department of Agriculture at its November meeting.

The board also took action on a number of other items at its early June board meeting prior to World Pork Expo:

  • Agreed that the National Pork Board becomes a member of Grow America, a group of U.S. agricultural companies dedicated to improving agriculture's image.

  • Deferred action on a request that the board endorse 25×25, an organization dedicated to ensuring that 25% of U.S. energy needs come from renewable energy sources by 2025.

Pork Gateway Launched

A new, broad information resource for pork producers was rolled out at World Pork Expo.

Nearing its first anniversary, the U.S. Pork Center of Excellence (USPCE) announced a new information network focused on answering pork producers' questions and providing extensive information on all facets of pork production.

Dubbed the Pork Information Gateway (PIG), the Extension component of the USPCE is an interactive tool providing information on a wide range of subjects related to the production of pigs and pork, explains Director David Meisinger. “It's a web site that is all-virtual and dynamic.”

The PIG database includes nearly 200 new or revised fact sheets categorized in the format developed for the Pork Industry Handbook (PIH), produced by Purdue University. Through a cooperative agreement with the university, USPCE has recruited industry and Extension specialists to update fact sheets in 16 categories.

In addition, the database lists over 2,100 frequently asked questions about pork production, with answers provided by Extension specialists and advisory group members.

“Producers can submit their question and these experts will answer them,” Meisinger explains. These exchanges are posted as part of the ever-growing database.

The PIG also includes about 250 other references — pig-related books, seminar proceedings, a glossary of about 550 definitions, and a pig events section, which is under development.

Producers can log on to the site via www.usporkcenter.org, www.usporkcenter.com or www.porkgateway.com.

A new Pork Industry Handbook will be published annually, including current fact sheets. Copies of the 2007 edition will be available in October 2006 through Purdue University Extension. The hardcover volume (PIH-150) costs $90; the DVD (DVD-PIH-5) version is $45. The pair is available for $115. A 20% discount is available for orders received before Aug. 1, 2006. To order, call 1-888-398-4636 or e-mail: media.order@purdue.edu.

The entire contents of the Pork Industry Handbook are also posted on the USPCE web site, free to registrants.

Slim Budgets

The formation of the USPCE rose out of a series of workshops held in 2003, where university administrators recognized that budget constraints would require greater collaboration with other universities, government agencies and allied industry.

“The Pork Center of Excellence is all about partnerships and collaboration between universities, allied industries and pork producers,” explains Wendy Wintersteen, USPCE board chair and dean and director of the College of Agriculture at Iowa State University (ISU). “The goal of the center is to bring value to the pork industry by facilitating a coordinated effort in research and information distribution, so that we can help all producers bring value to their operations and the industry as a whole.”

The USPCE office is located at the National Swine and Information Center on the ISU campus in Ames.

The USDA Cooperative State Research and Education Service and the USDA Agricultural Research Service joined the National Pork Board in providing seed money for the center. In addition, 20 land grant universities pledged support through a funding formula based on the number of hogs marketed in their respective states. Several state pork producer organizations and the National Pork Producers Council also contributed. A 15-member board of directors governs the center.

Targeted Areas

The USPCE is focused on research, teaching and Extension.

The Extension portion of USPCE is the Pork Information Gateway.

The research segment will focus on air quality. The USPCE board considered 10 potential research themes. After objectively evaluating each in terms of the size of the challenge for pork producers, the amount of coordination needed and funding availability, air quality ranked highest.

“We've identified 19 institutions in the country, and 48 researchers, that do air quality research,” Meisinger says.

In the teaching area, USPCE plans to develop the concept and curriculum for a series of regional swine schools.

“Five years ago, there were 40 institutions in this country that taught swine production,” he notes. “We're now down to 20, and five of those have less than 10 students.”

Noting that budget restraints have hampered the filling of faculty positions necessary to maintain a comprehensive educational and research programs, Dean Wintersteen adds, “We want to get ahead of the consolidation curve and be very proactive in serving the industry.”

Economists Expect Profits to Slow

The pork industry has enjoyed 27 consecutive months of profits — but that winning streak may be coming to an end later this year.

Producers have to look back to the mid-1970s to find a longer period of profitability — when there were 33 consecutive months of positive returns.

It has certainly been a welcome respite after being buffeted by the historically low hog prices of 1998-99.

In fact, returns have been so profitable that Glenn Grimes, professor emeritus, University of Missouri, says financial leaders have told him that pork producer net worth is probably higher than it has ever been at any time in history.

Challenges Lie Ahead

That said, problems lie ahead for producers in two areas, Grimes reports in market outlook presentations at Pork Academy and at World Pork Expo in Des Moines, IA, last month.

“The problem we have now is we are growing faster than our demand growth,” says Grimes. “The pork industry is growing at 2.5% of production a year as far as efficiency is concerned, while demand is growing at a rate of 1.5% per year.”

Unfortunately, domestic demand for pork is relatively flat, and the outlook for growth is not very optimistic, adds Steve Meyer, president of Paragon Economics and a contributor to National Hog Farmer's weekly e-mail newsletter, North American Preview.

Meyer says the meat demand equation appears soft due to oversupply in all sectors.

USDA's 2006 forecast calls for 5.4% more beef, 3.1% more pork, 2.3% more chicken and 1.3% more turkey, resulting in consumers upping their total meat consumption of 240 lb./person/year by 3.1 lb. That meat glut is compounded by higher energy prices and rising interest rates, both reducing the amount of cash consumers can spend on meat.

Easter was tough for pork producers this year, as there were a couple of weeks when hogs sold for a loss. Large beef and chicken supplies and record-low chicken breast and leg prices really put a damper on pork demand this spring, Meyer points out.

A second problem is the change in the impact of supply on price, adds Grimes. Up until the mid-1990s, a 2-to-1 ratio applied — meaning that for every 1% increase in pork supply, there would be a 2% drop in the price of hogs.

That calculation has fluctuated wildly in the last 10 years, but it has averaged 5-6%, says Grimes. Therefore, “for every 1% increase in supply, there is a corresponding 5-6% change or drop in hog prices,” he says.

The level of U.S. pork production is becoming more stable, while market prices continue to be highly variable, as depicted in Figure 1.

And seasonal supply fluctuation is diminishing, but the level of fluctuation in prices is not, and is actually growing, he warns.

On top of those issues, preliminary estimates show that as of June 1, the U.S. breeding herd was up 1.8%, on top of a 1.4% projected increase on March 1, says Grimes. He says there are still reports of 175,000 to 250,000 sows being added to the industry in the next 12-18 months and, he emphasizes, that growth is not needed.

One plus to the production side, for the first time in a decade, is that Canada's sow inventory on April 1 was below a year earlier. If you combine current anticipated growth in the U.S. and Canadian pork industries, there is still just slight growth overall projected in sow inventories, Grimes notes.

Canada's sow herd reduction is due to much lower hog prices in 2006, the result of a strong Canadian dollar and weakening U.S. dollar, says Meyer. In 2002-2003, the U.S. dollar was worth about $1.60 Canadian. Since mid-April, the U.S. dollar is only worth about $1.15 Canadian.

Also, Canadian production has been buffeted much more severely by porcine circovirus-associated disease (PCVAD), he adds.

Exports Continue to Shine

A continuing bright spot for the industry is the amazing growth of pork exports. The United States exported 14% of its pork production for the first three months of this year, up 86% from the same period three years ago, and double the pork trade for the first quarter of 2002.

“The hog industry in 2006 is 15-16% larger than it would have been had the export market stayed at the 1986 level,” observes Grimes. “The United States went from being a net pork importer of over 7% in 1986-87 to over a 9% net exporter of pork in the first quarter of 2006.”

That milestone was achieved the first quarter of this year despite a 7% drop in pork exports to Japan, as the Asian country moved away a bit from pork to chicken, says Grimes.

But growth has been exceptional in other markets: Canada, up 9-10%; Mexico, up 38%; mainland China and Hong Kong, up about 50%; Taiwan, up 70%; South Korea, up 69%; the Caribbean, up about 30%; and Russia, up 148%.

Grimes and Meyer agree that bovine spongiform encephalopathy (BSE) concerns fueled some of that pork export growth earlier on, just as fears of the Asian flu are helping propel U.S. sales today.

Pork product and by-product export sales now represent about $25 of the value of a U.S. market hog, explains Grimes. Granted, other segments of the industry receive part of that benefit.

“But certainly it is an important part of the U.S. hog industry, and without it we would probably have 15% lower hog prices through the first five months of this year,” he estimates.

Live hog prices for April and May averaged $45/cwt. for southern Minnesota/northern Iowa markets, says Grimes. He predicts second quarter prices will average $46-47; third quarter, $42-45; and fourth quarter, $37-40.

Red ink will dominate hog prices in 2007, but there will be profitable periods as well, he says.

Meyers notes recent rallies in fall Chicago Mercantile Exchange Lean Hogs Futures prices offer some nice pricing opportunities that producers should seriously consider.

Grimes predicts that growing production losses in the United States, due to PCVAD, will mitigate some red ink for producers later this year. Several parts of the country are reporting performance and production losses, with death losses of up to 50% being reported in some North Carolina herds.

Corn Price Concerns Are Growing

In the next two years, the biggest variable for cost of production will be the price of corn, relates Meyer. The day of cheap corn may be over (Figure 2).

“We are heading pell-mell toward an ethanol world. It seems like every week there is an announcement of a 100-million-gallon plant being built somewhere. It's going to put a lot of pressure on our corn supplies.”

The result of the explosion in the ethanol industry is that the United States is building a usage base of 11-plus-billion bushels of corn/year — something corn growers have only achieved twice in history, he points out.

Should a drought occur — and there has not been a serious, widespread dry spell in this country since 1988 — Meyer is very concerned about the impact on livestock feeders, since mandated renewable fuel usage will force feeders and exporters to do all of the rationing of a short corn supply.

Nothing could take the fun out of raising $30 hogs faster than feeding them $6 corn, Meyer asserts.

Consumer Survey an Eye-Opener

A 2005 U.S. Department of Agriculture report of the meat-eating habits of some 20,000 American consumers surveyed during 1994-1998 provides some eye-opening findings.

The results were reported at the Pork Academy, preceding World Pork Expo in Des Moines, IA, by Ron Plain, University of Missouri Extension agricultural economist.

  • About 62% of the pork consumed is processed; ham is the leading type consumed.

  • Men consume much more pork per year than women, 65 lb. vs. 37 lb.

  • Americans eat more beef than pork, especially during ages 20-40; but past age 60, men eat more pork than beef.

  • Low-income Americans eat more pork/person than wealthy Americans, says Plain. Wealth brings a reduction in consumption of both pork and beef and a rise in consumption of seafood.

  • More pork is eaten at home, about 40 lb./year vs. about 8-9 lb./year consumed at restaurants.

  • As incomes rise, less pork is eaten at home and more pork is consumed in restaurants.

  • Black Americans eat significantly more pork than white Americans, 63 lb. vs. about 49 lb. on average.

  • Midwesterners eat the most pork of any region in the United States, at 58 lb., followed by southerners at 52 lb.

  • Americans are eating fewer meals in restaurants, opting for take-out or delivery services to save time.

  • Americans are eating more meat overall, estimated at 240 lb. in 2006. That is an increase of 64 lb./person compared to about 50 years ago. Per capita consumption of meat is rising a little more than a pound a year.

  • Pork consumption has stayed relatively flat at about 50 lb./person, whereas, chicken consumption has skyrocketed from about 18 lb. five decades ago to 88 lb./person today.

Please Be Careful Out There

Five feet tall and 120 lb. is no match for a 400-lb. sow.

Shortly before World Pork Expo, I received a telephone call from David Funderburke, swine nutritionist/consultant based in North Carolina, telling a harrowing story about a sow attacking an employee. “You should talk to her,” he said. “She will be at Expo.”

I did. The conversation still haunts me a bit, but her story is worth retelling.

Georgia Jenkins is petite. And, she's no newcomer to the hog business, having spent 14 years working in three different pork production systems in North Carolina. Currently, she is a production service manager at J.C. Howard Farms, rotating between sow farms, training employees and troubleshooting problems.

A Fateful Day

Jenkins had spent about a month in a 2,400-sow farm, trying to get a handle on a PRRS problem. One morning in early May, she was routinely monitoring the farrowing rooms. A sow, farrowing mummies, had backed out of her crate, but was returned without incident.

After lunch, Jenkins went back to check on the sow. She'd had three mummified pigs, but seemed to be straining. Attempting to assist the sow, she was unable to reach a pig through the butt bar, so she removed the rear gate.

“I've done this a zillion times,” she assures. “If a sow backs up, you just push on 'em and they get back up (into the crate).”

That's when it happened!

“When I took the gate out, she was on me just like a dog,” she remembers. “She knew how to get to me at the back of the crate.

“The first thing she bit was my hand. I was so shocked, I was trying to back away from her, but there wasn't much room, so I tripped and fell. She bit my leg and thigh. It was like when a dog grabs, they bite and shake their head. That's what she did. She kept biting everything she could bite. I couldn't get away from her; I thought, well, I'm going to die!”

Thinking there was no one to hear her screams, she screamed anyway. Luckily, a co-worker nearby heard her and rushed to help. “He grabbed me by the shoulders and pulled me up so I could jump into the crate,” she remembers. “He saved my life.”

But her leg was a mess — flesh and blood was mixed with urine and manure from the pen. Wasting no time, she was rushed to the emergency ward.

Normally, with an animal bite, the wound is left open. But since she had fallen into the manure and it was a gaping wound, the doctor wanted to suture it.

“He made the great call of doing everything in the OR (operating room), so he got all of the wounds cleaned out well. He kept me in the hospital for the night and gave me antibiotics intravenously,” she says, thankfully.

Seventeen stitches (counted and verified by her children), as well as 10 days of antibiotics and physical therapy to regain the strength in her hand and leg, put her back on the job within three weeks.

As she reflects on the traumatic experience, she reveals some apprehension, but she does so with a purpose — to remind others to keep their guard up when working with large animals.

“I believe it was a freak of nature, not a typical thing to have happen,” she says. “But I want to make people aware that it is a potential hazard and to not let their guards down.”

Settling into a reflective mood, she adds: “When I look back on it, I try to focus on all of the funny things that happened that day — the nurses poking their heads into the room, then quickly leaving because of the smell, the OR staff's many questions about the sow, my job.

“I really wish I could have physically gone back to work sooner. It's kind of like what they say about falling off a horse — you need to get right back on. Mentally, I'm still overly cautious.”

Still, there's no temptation to give up her hands-on swine management job. “I've always loved working with animals, and pigs are my thing,” she says, brightening again.

Safety First

I am reminded of the popular TV series in the '80s, Hill Street Blues, which opened each episode with head sergeant, Phil Estherhaus, conducting the morning roll call. After reviewing the day's unsolved cases and assignments on the street, the fatherly sergeant would close with this common plea: “Hey, let's be careful out there.”

That is the message that I, and a lucky woman in North Carolina, would like to leave you with — “Please, be careful out there.”

Ileitis Ranks as Costly Finishing Disease

Porcine proliferative enteropathy causes increased death loss and slower gains.

The finishing pig can be compared to a high-performance race car. We are constantly trying to fine-tune it with facilities, genetics and nutrition to maximize profits. But unlike a machine, the pig is a biological entity with significant variables, such as health, that often prevent it from fulfilling its potential.

One of the most costly late finishing diseases fitting this description is porcine proliferative enteropathy (ileitis). Groups of pigs often approach the finishing line, then get hit with ileitis, causing increased death loss and slower gains.

To make matters worse, each dead pig in late finishing incurs the maximum cost without the benefit of any return. In severe cases, it seems the wheels have fallen off and the most profitable group turns into a nightmarish finish.

Case Study No. 1

A farrow-to-finish farm finishes pigs off-site in two, 1,200-head, double-curtain-sided barns. The site is managed all in, all out (AIAO). The sow herd produces 600 pigs/week, so it takes four weeks of production to fill the site. The pigs are high-health, lean genetics, negative for porcine reproductive and respiratory syndrome (PRRS) and Mycoplasmal pneumonia.

The farm has a young sow herd with excellent performance. Closeouts have averaged 1.85 average daily gain, 2.65 feed efficiency and under 2% death loss.

One group and site were doing well with a 1% death loss and marketing the first load at 95 days into the finisher. However, three days after the first market load, the grower called to report three sudden deaths and 10-15 pigs with bloody diarrhea.

We were called to do postmortems and to inspect the barn. The postmortem showed acute ileitis with another 2-3% of the pigs showing clinical signs.

We had another load scheduled for market, so we moved the load-out date up a couple of days and marketed another load before treatment.

Then we started the barn on water-soluble tylosin and tylosin in the feed at 100g/ton. We also identified sick pigs and instructed the grower to inject them with tylosin.

Even though we were very aggressive with treatment, death loss was high, growth rate slowed, and medication expense was increased. Death loss exceeded 4% for the group and days to market were extended 10-14 days.

The farm quickly instituted feed antibiotic control protocols for the pigs already placed in the finisher, and started vaccinating pigs in the nursery with an oral ileitis vaccine. Since the vaccinated pigs have entered the finishers, clinical signs and death loss have stopped.

Case Study No. 2

This farm is a 2,500-sow, farrow-to-finish farm with off-site finishing managed AIAO by site. The herd has had several health challenges, with respiratory disease being the most significant. Finisher death loss for some groups has exceeded 6%.

Through some sow herd intervention to stabilize PRRS, and an effective vaccination and medication program, progress has reduced some finishers to 3-4% death loss.

It is interesting to note that the finishing groups with the higher death loss rarely experienced clinical ileitis. In healthier pigs we are seeing some late finisher death loss and some diarrhea due to ileitis.

We have added a pulse dose of tylosin to the finisher feed at 100 g./ton for seven days and 14 days at 40 g./ton, and we are satisfied with the response.

Case Study No. 3

We were called to a 1,000-head finishing site where pigs averaged 230 lb. Death loss had increased with no apparent clinical signs. Postmortems of two pigs indicated a thickened ileum (small intestine) but no signs of blood. This was a classic example of “garden hose gut” or chronic ileitis.

These pigs had one pulse dose of tylosin six weeks after the finisher was filled. We had limited interaction and information on this group.

Our recommendation was to either vaccinate the pigs prior to entering the finishing barn or treat more aggressively with antibiotics. Although the acute death loss was minimal, subclinical losses can be quite costly.

Summary

Ileitis can be a frustrating and depressing disease. It can rob you of profit in small bites or explode and almost devastate a finishing group.

Proper diagnosis and identification when the disease strikes is critical to a successful prevention program.

The oral vaccine has shown promise in preventing the problem if administered correctly. Antibiotics used at the correct time have also been effective.

Consult your veterinarian to determine the correct diagnosis and formulate the most cost-effective control program for your operation.

World Pork Expo Called Huge Success

The 18th annual event at the Iowa State Fairgrounds attracts a diverse crowd.

More than 31,000 people from across the nation and around the globe descended on Des Moines, IA, on June 8-10 to attend the top pork extravaganza sponsored by the National Pork Producers Council (NPPC).

Visitors sampled pork barbecue, visited the 1,000 exhibit booths of 450 companies, watched pig races and breeding stock and junior pig shows, participated in various educational seminars and listened to bands crooning out the oldies.

An estimated 2,300 international visitors from some 50 different countries made the trek to the Iowa State Fairgrounds.

“This World Pork Expo was a huge success,” says NPPC President Joy Philippi, a pork producer from Bruning, NE. “We had pork producers and swine industry representatives from across the country, and visitors from Canada, Mexico, Japan and dozens of other countries. This is the premiere event for our producers, an opportunity for us to showcase our industry and let producers know what NPPC is doing to keep our industry competitive.”

Agriculture Secretary Mike Johanns addressed NPPC's 2007 Farm Bill Policy Task Force; visited “ID Alley,” a USDA-NPPC booth where pork producers could register their premises; and spoke to NPPC Strategic Investment Program members at lunch.

NPPC Says EQIP Program a Bust

The Environmental Quality Incentives Program (EQIP) — the primary environmental assistance program for agriculture — has done little for pork producers, charges the National Pork Producers Council (NPPC).

Pork producers strongly supported the increased funding for EQIP that was included in the 2002 Farm Bill, and looked forward to using EQIP to help them adopt more environmental practices, says NPPC Environmental Committee Chairman Randy Spronk.

Despite that increase, “EQIP has made only a minimal contribution to pork producers' environmental efforts,” the Edgerton, MN, producer told the Senate Committee on Agriculture, Nutrition and Forestry in early June. “We think EQIP is missing a tremendous opportunity to have a dramatic effect on the environment by failing to work with producers who are ready to take their (environmental) performance to the next level.”

In 2003-2005, pork producers received just 3% of the EQIP cost-share assistance provided to all livestock producers, or $43 million of the $1.26 billion allocated.

NPPC is preparing a detailed review of EQIP's shortcomings.