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Articles from 2007 In August


Outlook Rosy for Future Of U.S. Pork Exports

The forecast that the United States, the world’s leading pork exporter, is expected to dominate the global pork market over the next decade, comes as no surprise to the U.S. Meat Export Federation (USMEF).

USMEF, based in Denver, CO, works diligently in international markets to increase demand for U.S. pork.

“Pork is the most widely consumed protein in the world, and U.S. pork has quality advantages that set it apart from the competition,” USMEF President and CEO Phil Seng says. “We communicate the U.S. pork story every day to importers, meat buyers and consumers, increasing awareness of U.S. pork’s nutritional value, safety and superior quality.”

The latest issue of Agricultural Outlook, produced each July by the Food and Agricultural Organization of the United Nations and the Organization for Economic Cooperation and Development, reports that the U.S. share of global pork exports will approach 30% by 2016. The report says one in every 3.4 lb. of pork traded in the world will come from the United States.

U.S. pork exports have set record sales the past 15 years, supporting growth in the industry, and this trend is expected to continue through the next decade. During the past 15 years, tremendous gains in efficiency resulting in a 55% increase in pork production per breeding animal have positioned the U.S. industry as the leading global supplier.

“Along with the U.S. pork industry, we realize this past success is not a time to rest on our laurels,” states Seng. “We must use the superior qualities of U.S. pork to our advantage to position it above the competition to continue export growth.”

The value of U.S. pork exports has grown from 7% of production in 2000 to more than 15% today, to projections of 20% of production in 2016.

“Consumers in South Korea, for example, can purchase U.S. pork at a lower cost than domestic product, but are not sacrificing product quality,” Seng says. “Export markets provide a higher return to U.S. pork producers on selected products than if those products were sold domestically.”

Fueling export growth has been the relative weakness of the U.S. dollar to other global pork competitors. The euro has been trading at record highs against the U.S. dollar, and similar situations exist with the Canadian dollar, Brazilian real and Chilean peso.

The EU-27 is projected to be the second-largest pork exporter, but Brazil is expected to surpass the European Union by 2016. The biggest variable for Brazil continues to be its disease status. Brazil still faces foot-and-mouth disease restrictions in Russia, its largest pork export market.

Eu-27 pork exports are expected to decline due to increased growth in domestic demand, rising feed and other input costs, costly environmental and animal welfare regulations and the relatively strong euro, according to USMEF.

Canadian pork exports in 2016 are expected to drop 2% vs. its 2006 export volume, with exports falling from 46% of production to 38% of production over the next 10 years. Canada’s share of global pork exports is forecasted to fall from 20% in 2006 to 15.6% in 2016, as the industry is buffeted by recent losses due to the strong Canadian dollar and high labor and feed costs.

In terms of pork imports, Japan is expected to remain the top pork importing country, accounting for a fourth of global pork imports.

“In Japan, we have been successful with our latest consumer campaign of making U.S. pork an everyday protein source,” says Seng. “This consumer education has helped position Japan as the top export market for U.S. pork.”

Smithfield Inks Trade Accord with China

Smithfield Foods, Inc. announced that it has entered into an agreement with a major Chinese trading company for the purchase of 60 million lb. of ractopamine-free pork for delivery by the end of December.

“We are very pleased to begin a business relationship with this trading company in the Chinese market,” says C. Larry Pope, president and chief executive officer.

“Although our agreement is modest, we believe there could be additional purchases and we are hopeful that this is the beginning of a longer-term and growing association. This is a milestone for Smithfield in terms of our business alliances in China and represents another step in our global expansion,” he adds.

With sales of $12 billion, Smithfield is the leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. For more information, visit the Smithfield Foods website.

China has delisted 11 U.S. pork plants over concerns about trace levels of ractopamine. The feed additive, Paylean, produced by Elanco Animal Health, contains ractopamine hydrochloride. Paylean has been approved for use in swine in 24 countries.

Economist Predicts Breakeven in Coming Months

The next 12 months looks like a breakeven proposition for pork producers, with continuing uncertainties in feed prices and export markets, especially with the potential for more Chinese pork purchases as disease pressures may reduce Chinese production.

That’s the forecast of Chris Hurt, Purdue University Extension marketing specialist.

“Somewhat surprisingly, the pork industry has not made supply adjustments in the face of higher feed prices,” he says. “In fact, pork producers have been modestly increasing the breeding herd and seem content to continue to do so.

“There seems to be two explanations. The first is that producers of both beef and poultry were quicker to drop production with rising feed prices to the extent that total meat and poultry supplies have been lower this year. Second, hog producers were operating at a profitable margin when higher corn prices hit. Rather than trim the size of the herd, hog producers have largely absorbed the higher feed prices in the form of reduced margins,” Hurt observes.

Pork production has increased 2% this year, but prices have been higher as a result of better domestic pork demand.

“The improved domestic demand probably is related to less competition from other meat and poultry as those industries adjusted to higher feed prices,” says Hurt. “As corn prices rose dramatically last fall and winter, the beef industry made some sharp adjustments.”

Those adjustments included sending fewer animals to feedlots and reducing market weights. The availability of beef this spring and summer dropped nearly 2%.

“Adjustments to high corn prices also came quickly for the broiler sector where production per person was down about 3% from last fall through summer,” says the Purdue analyst.

For the first half of 2007, per capita pork production rose nearly 1%, while per capita declines in beef and poultry supplies actually meant total meat and poultry supplies were down about 1%. This resulted in higher farm prices in the first half of the year with finished steer prices up 10%, hogs up 8%, broilers up 26% and eggs up 47%.

“Higher feed prices have resulted in margin compression for the pork industry, but not losses,” declares Hurt. “In the year prior to higher corn prices – fourth quarter of 2006, estimated margins were about $7/cwt. In the year following the run-up in feed prices, margins dropped to a positive $2/cwt., with most of the compression resulting from higher feed prices.

“The future outlook for the pork industry appears to be one of near breakeven prices overall. Per capita supplies of meat and poultry are expected to begin rising again with pork production to expand by about 3% over the next year,” he forecasts.

The total meat complex is predicted to grow in the fourth quarter and to continue growing into 2008.

“As a result, 51-52% lean live weight hogs are expected to average about $46 to $49 this fall and winter,” Hurt forecasts. “With current corn and meal prices, these hog prices are expected to be near breakeven to a slight loss. Price prospects for spring and summer of 2008 improve several dollars to the very high $40s and low $50s. But with somewhat higher anticipated feed costs, profit margins will still only be about breakeven to $2/cwt.”

USDA Conducts First Study Of Small-Enterprise Operations

This summer, USDA’s Animal and Plant Health Inspection Service’s National Animal Health Monitoring System (NAHMS) randomly surveyed small-enterprise hog operations (less than 100 pigs) in 31 states to learn more about health and management practices.

The study covered states considered at risk for exposure to feral swine and transmission of classical swine fever (CSF or hog cholera) and pseudorabies.

“Although the United States was declared free of CSF in 1978, the disease remains a threat to the U.S. pork industry, and is currently present in neighboring countries such as Cuba, Haiti, the Dominican Republic and Mexico,” the NAHMS report states.

The information gathered will provide a more complete understanding of small hog operations and the risk of introduction of these diseases. It will also help further clarify the risks and hazards presented by feral pigs, the role they play in disease transmission and how to minimize the threat they pose to domestic swine.

To learn more about the NAHMS study, call (970) 494-7000, e-mail NAHMS@aphis.usda.gov or log onto the NAHMS Web site.

USDA Announces Series of Natural Disaster Payments

The U.S. Department of Agriculture announced sign-up dates for the new Livestock Compensation Program, Livestock Indemnity Program and Crop Disaster Program to cover losses farmers suffered from natural disasters in recent years.

Eligible farmers and livestock producers can apply for benefits under the Livestock Compensation Program (LCP) and Livestock Indemnity Program (LIP) starting Sept. 10, 2007.

Eligible farmers can sign up for the Crop Disaster Program (CDP) starting Oct. 15, 2007 if they suffered substantial losses to their crops.

LCP compensates livestock producers for feed losses occurring between Jan. 1, 2005 and Feb. 28, 2007 due to a variety of natural disasters as determined by the Secretary of Agriculture. Producers incurring a loss in more than one of the three calendar years must choose only one year for which they want to apply for benefits.

LIP compensates livestock producers for livestock losses incurred between Jan. 1, 2005 and Feb. 28, 2007 that resulted from natural disasters, including losses due to blizzards as determined by the Secretary of Agriculture. Producers suffering losses in more than one of the three years must choose a single year for which they want to apply for benefits.

CDP provides benefits to farmers who suffered quantity and quality losses to 2005, 2006 or 2007 crops from natural disasters if the crop was planted before Feb. 28, 2007 or in the case of prevented plantings, for crops that would have been planted before Feb. 28, 2007. Producers who suffered losses in any of the three qualifying years must choose one year for which they wish to apply for benefits.

More information on LCP, LIP and CDP is available in a fact sheet titled, Agricultural Assistance Act of 2007, found on USDA’s Farm Service Agency Web site and click on Disaster Assistance Programs. USDA is developing individual fact sheets about these programs that will be posted online.

Purdue Launches CAFO Web Site

Purdue University has developed and launched a new Web site featuring scientific information about concentrated animal feeding operations (CAFOs) to help answer questions about CAFOs.

“We wanted to develop a source of information that is based on science, not sentiment,” reports Alan Grant, head of the Department of Animal Sciences. “We are excited because this Web site brings information from multiple disciplines together and is easy for people to access.”

The information is written for zoning boards, agricultural Extension educators, as well as citizens and farmers, and covers issues related to the environment, public health, social/economics and general information.

For instance, the information on the site can help a zoning board decide, based on facts and not emotion, whether to allow a CAFO to build within 5 miles of an elementary school, says Paul Ebner, Purdue Extension expert in animal science and Web site operator.

The site can be accessed at: http://www.ansc.purdue.edu/CAFO. For more information on the Purdue CAFO Web site, contact Ebner at (765) 494-4820 or pebner@purdue.edu.

California Livestock Farmers Target Greenhouse Gases

The California Climate Action Registry has created the Livestock Project Protocol, a guideline for creating high-quality greenhouse gas reduction projects by installing methane gas digesters on swine and dairy farms.

By capturing methane with a digester, farms can combust and destroy the gas and sell the reductions (offsets). Farms can also power their operations with the methane and cut energy bills.

“This protocol can be a positive incentive to help farmers protect the climate,” reports Paul Martin of the Western United Dairymen.

“Agriculturally based methane capture projects are an important source of emissions reductions while also providing farmers and California communities with local environmental benefits such as cleaner air and renewable energy,” explains Eron Bloomgarden, U.S. director of EcoSecurities.

The Livestock Management Protocol is available for public use and is published on the California Climate Action Registry Web site.

SowBridge Program Set for 2007-2008

The SowBridge Breeding Herd Education series is a new distance-learning program for pork producers offered through Iowa State University (ISU).

It’s modeled after the popular PorkBridge grow-finish series, combining electronic information viewed on computer with live oral presentations via phone by nationally known experts.

Ken Stalder, ISU animal science associate professor and Extension swine specialist, says the content of the programs will prove useful to producers.

“We’ve selected topics and speakers based on information from those associated with sow unit production, including new technology, research and management techniques related to breeding, gestation and farrowing management,” says Stalder.

SowBridge is a year long, subscription-only program. The week before each session, subscribers receive a CD containing that session’s presentation, along with information about accessing the live speaker presentation. Subscribers call a toll-free number to listen and interact with speakers. Cost for the 12 programs is $250 including access to one phone line. Each session starts at 11:30 CST and lasts for 45 minutes. Internet access is not required.

Stalder points out a single registration can be used to reach a number of people. “We encourage farm managers and owners to enroll in this program and invite several of their employees to take part over the noon break through use of a speakerphone and computer projector,” he says. “This program should also promote interaction within the group afterward, stimulating discussion on how subject matter presented during the session affects them and their operation.”

An informational brochure with subscription information is available on the Iowa Pork Industry Center Web site. Iowa residents who want more information can call Stalder at (800) 808-7675.

The SowBridge program is sponsored by the University of Nebraska, South Dakota State University, University of Minnesota, Iowa State University and Ohio State University.

Cromwell Takes Home Animal Nutrition Award

Gary Cromwell, professor in the Department of Animal/Food Sciences, University of Kentucky, was named the fourth winner of the Federation of Animal Science Societies/American Feed Industry Association New Frontiers in Animal Nutrition Award.

The award recognizes pioneering and innovative research relevant to animal nutrition that benefits mankind and the nutritional value of foods from animals.

Cromwell received the award at the opening session of the American Society of Animal Science annual meeting in San Antonio, TX, in early July.

Cromwell is the author of more than 1,000 publications including 153 refereed journal articles and 23 book chapters. He is renowned worldwide for more than 40 years of outstanding swine nutrition research and service to society.

Leman Swine Conference

The 2007 Leman Swine Conference is Sept. 15-18 at the RiverCentre in St. Paul, MN.

Preconference workshops on Sept. 15 cover reproduction and managing gene transfer; diagnostic sampling, testing and interpretation; analyzing production and financial data; and a Pork Quality Assurance-Plus Workshop.

Preconference workshops on Sept. 16 include tools for making economic decisions; swine disease eradication: new approaches to managing old problems; statistical analysis; and swine nutrition and dealing with the new realities of higher feed costs.

Keynote presentations Sept. 17 feature Scott Dee, DVM, University of Minnesota, with an update on area spread of porcine reproductive and respiratory syndrome, and Jeff Shaw of the University of Minnesota with a report on design and implementation of effective pay performance programs.

Keynote presentations Sept. 18 consist of Steve Dritz, DVM, Kansas State University, with a lecture on the science of pig production, and Joaquim Segales, DVM, University of Barcelona (Spain), with a discussion of porcine circovirus type 2.

For more details on the conference and how to register, call (612) 624-3434 or (800) 380-8636 or e-mail vop@umn.edu.