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Articles from 2020 In August

Alltech supports farmers with Iowa Derecho Devastation Relief Fund

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A damaged grain bin in central Iowa damaged by the derecho that swept through the region on Aug. 10.

In the aftermath of the derecho, the extreme weather event that devastated several communities across Iowa on Aug. 10, Alltech has established the Iowa Derecho Devastation Relief Fund to match donations dollar for dollar and provide goods and services to farmers and their local communities who have been directly impacted.

"This unexpected derecho caused significant destruction in the communities that our customers and colleagues call home," says Mark Lyons, president and CEO of Alltech. "Many now face flattened fields and grain bins, significant repair of fencing and much more in the midst of an already difficult year. We hope our Iowa Derecho Devastation Relief Fund provides a boost of support as Iowa's farming community demonstrates its resilience in recovery."

Alltech and Hubbard Feeds will be donating the funds raised to the Iowa Pork Producers Association, Iowa Cattlemen's Association and Iowa Corn Growers Association, who will ensure that these resources are utilized to aid the rural communities most in need of assistance. The companies are also donating equipment, including tractors and skid steers.

Donations are being collected through the Pearse Lyons ACE Foundation, Alltech’s 501(c)(3) non-profit. Alltech will match donations up to $25,000, and all contributions will go directly toward helping Iowa farmers and the surrounding communities impacted by the derecho. 

Source: Alltech, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

Elon Musk uses pigs to demo brain implants

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Whenever Elon Musk is mentioned in the media, my mind wanders to Space X, Tesla, underground tunnels for electric cars and the arrival of his newborn son, X Æ A-12 (now X Æ A-Xii). The last thing that comes to mind is pigs.

On Friday, the engineer, technology entrepreneur and philanthropist debuted his latest invention a new kind of implantable chip for the human brain in a pig named Gertrude.

During the live-streamed event, Musk demonstrated how Neuralink brain implants can be surgically added to live subjects, in this case a pig, without any detriment to their health. As Gertrude, who had the implant inserted two months prior, moved around her pen, Neuralink used the implant to read the pig's neural activity while she performed certain actions such as smelling, eating and walking. Musk explained whenever Gertrude touched something with her snout, it sent out neural spikes that were detected by the more than 1,000 electrodes in the implant.

Another pig named Dorothy was also on site. She previously had an implant, but it had been removed. Musk showed the pig was still thriving after the procedure.

Describing the technology as a "Fitbit in your skull with tiny wires," Musk says his company is now preparing to implant a Neuralink device in the first human subject "soon," pending further safety testing and regulatory approvals. Neuralink plans to roll out the technology first for paraplegic patients, but in typical "Musk-style," the industrial designer and now fifth-richest person in the world, raised the possibility that the implants could one day convert memories into computer code and then be downloaded into a new robot body.

During the event, Musk said, "the future is going to be weird." Indeed.

As my colleague Kevin Schulz commented, "interesting and scary all at the same time." I couldn't agree more.

Hog slaughter still below pre-COVID levels

Thinkstock Pig on a trailer

Hog prices are dismal. Through late-August the average carcass price for producer-sold hogs was $57.43 per hundredweight, down $13.23 from the year before. Negotiated barrow and gilt carcass prices were far lower, averaging only $41.77 per hundredweight, down $24.06 from last year.

The huge gap between negotiated prices and the average price for all producer sales shows the importance of having a marketing contract, especially one that includes cutout value or futures market prices in the formula.

Chart: Barrow and gilt prices, Iowa-southern Minnesota, carcass base price (Weekly)

Currently, the lean hog futures price average for September 2020 thru August 2021 is $64 per hundredweight. The futures market implies carcass hog prices will average $13 per hundredweight higher in 2021 than this year.

There are two main causes of this year's low hog prices. One is a huge supply of market hogs. Hog slaughter in 2020 is expected to be record high for the sixth consecutive year. The other cause for low hog prices is that COVID-19 has forced packers to scale back their slaughter schedules to protect their employees.

During March, daily hog slaughter exceeded 490,000 head 18 times and exceeded 500,000 four times. The smallest weekday slaughter during March was 487,172 head. During April and May weekday hog slaughter was under 400,000 head on 23 days and under 300,000 on five days.

Chart: Hog slaughter, federally inspected (weekly)

Hog slaughter is up 2.0% thus far in 2020. That is 5.2% less than indicated by the June pig report.

Will packers be able to handle the hog run coming this fall? It looks iffy. Since March, the biggest daily slaughter is 487,640 hogs. During the last third of 2019, daily hog slaughter exceeded 490,000 head 35 times.

Hog slaughter is usually low during the summer due to a shortage of hogs. That should not have been a problem this summer. If the June hog inventory was correct, over 2 million hogs were backed up on farms during April and May.

Packers had incentive to process all the hogs they could. Through mid-August, 2020 packer gross margins on producer-sold hogs averaged $42.16 per head, up 68.6% compared to $25 per head during the same period last year. Granted, packer operating costs were higher due to extra costs caused by COVID-19.

Chart: Actual and predicted change in hog slaughter (U.S. weekly federally inspected hog slaughter, 2019-20)

The next hogs and pigs inventory survey will be released on Sept. 24.

Given record hog slaughter, lower hog prices were expected, but that hasn't translated into lower retail pork prices. In the first seven months of 2020, retail pork prices have averaged 4.3% higher than in 2019. Grocery store pork prices have been above the year-ago level each month of 2020 and were record high in June. Lower hog prices and higher retail prices mean that the farm-to-retail margin has been way up this year. The farm-to-retail price spread averaged $3.301 per hundredweight during the first seven months of 2020. That was 11.4% higher than the same period last year.

International pork trade has had a big impact on the 2020 pork market. During the first half of 2020, U.S. pork production was up 2.1% and exports were up 27.4%. The first six months saw 27.5% of U.S. pork production exported. The big increase in exports was due to a whopping 355.6% increase in shipments to China. Chinese pork production is down because of African swine fever. During the first half of 2020, 32.5% of U.S. pork exports went to China, 19.2% to Mexico, 15.9% to Japan, 7.6% to South Korea, 7.1% to Canada and 17.7% to everybody else. U.S. pork exports to nations other than China were down 5.4%.

Chart: U.S. pork exports to major Asian markets, carcass weight (Monthly)

Through June, U.S. pork imports were down 12.3%. Imports from Canada were up 5.8%, but imports from the rest of the world were down 35.2%. January-June imports equaled 3.1% of U.S. pork production.

USDA World Agricultural Supply and Demand Estimates is forecasting much slower growth in pork exports during the second half of the year. For all of 2020, they think pork exports will be up 19.4%.

According to calculations by Lee Schulz at Iowa State University, the cost of production for May-July averaged between $60 and $61 per hundredweight of hog carcass. Cost of production is expected to decline slightly in the fourth quarter, then very slowly increase as we move through next year, with 2021 costs up 2% from this year.

Schulz's estimate of profits per hog marketed for May, June and July was, $10.95, -$23.30, -$21.55, respectively. May was the only month of the last nine with a profit. The futures market indicates that each remaining month in 2020 is likely to also have red ink, making 2020 the least profitable year since 2012.

However, the outlook is brighter for 2021. Futures prices imply that 2021 will be a profitable year, with modest red ink at the start and the end, but with solid profits in the second and third quarters. One of the reasons 2020 hog prices are so low is because of six consecutive years of record slaughter. One reason that hog inventory has kept growing for so long is because the futures market keeps indicating that "next year" will be profitable.

Chart: Iowa market hog profit, farrow-finish (Monthly)

Sow slaughter thus far in 2020 is up 11.7% compared to the same weeks last year. Sow slaughter has been above the year-earlier level each week of 2020, despite year-to-date imports of Canadian sows and boars being down 3.1%.

Chart: Sow slaughter, federally inspected (Weekly)

The Canadian swine herd was up 0.2% at the start of July. Their market hog inventory was up 0.1% and their breeding herd was up 1.5%. In comparison, on June 1 the U.S. swine herd was up 4.4% with the breeding herd down 0.9% and the market herd up 4.9%.

Source: Ron Plain, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. The opinions of this writer are not necessarily those of Farm Progress/Informa.

Father to son: Passion for pigs

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After graduating from the University of Missouri College of Veterinary Medicine in 2017, Matt Patterson joined his father, Steve, in the family business, Passion for Pigs Veterinary Service.

Growing up in northeast Missouri, Matt Patterson often tagged along when his father, Steve, made swine medicine calls: first helping by holding the blood tube box and later, the snare.

When the elder Patterson needed a hand at their boar stud facility, he was eager to jump right in; and whenever his father fielded calls from clients on herd health issues, Patterson was right there listening, as his dad advised new protocols to implement on-site.

"It's not an experience everybody gets to go through, so I consider myself pretty fortunate to be able to do that with him and now work with him," Patterson says.

However, Patterson admits it wasn't a guarantee he would end up back in the family business. In fact, when he headed off to Truman State University in 2009 to play basketball, his father encouraged him to look at other career options. The young Patterson shadowed a dentist and a physical therapist, but that type of medicine didn't pique his interest as much as large-animal. Instead, he decided to pursue a bachelor's degree in agriculture science before going on to the University of Missouri College of Veterinary Medicine.

Patterson made an effort to get exposure to not only mixed animal practices in Texas and Oklahoma, but also other pork production systems throughout the Midwest. He completed an internship with Carthage Veterinary Service in Illinois and spent time with veterinarians Randy Bush and John Baker in Indiana, as well as Jess Waddell in Nebraska. 

"I knew when I got out [of school] I wouldn't be going to their practices and working with them, but the veterinary community — especially those with swine focus — are open to share their challenges, successes and even failures," Patterson says.

Sounding boards near, far
After graduating in 2017, Patterson joined his father in the family business, Passion for Pigs Veterinary Service. The Shelbina, Mo.-based business is focused on swine veterinary, reproductive and show-pig services. 

From large, vertically integrated systems and independent producers to multiplier units and show pigs, Patterson pitches in each week wherever he is needed. While it can be challenging at times to work with his dad, Patterson also recognizes how lucky he is to have the opportunity.

"He's had strong relationships with a lot of these producers for years, so I'm always using him as my sounding board to exchange ideas back and forth, to get his input," Patterson says.

Patterson is also in communication with some of those veterinarians he worked with previously, as well as new faces. He's an active member of the University of Illinois College of Veterinary Medicine's Executive Veterinary Program and has been attending Boehringer Ingelheim's Swine Academy. 

During the last six months, Patterson has been working on an influenza A virus elimination program at a 2,400-head sow farm and has often reached out to his previous mentors for advice.

"We knew Carthage has had success with their IAV elimination protocol, so I reached out to Dr. Lower, Dr. Farkas and Dr. Johnson [all at Carthage] at times during the process. It was fun to implement and carry out with the farm team, having their buy-in and ending with successful elimination," Patterson says.

He says he doesn't see his father retiring anytime soon, and that is just fine by him.

"I definitely love and enjoy working with my dad, and I hope I can carry it on — the relationships that he's built over these last 30 years of practice has definitely presented a unique opportunity for us to continue building and growing into the future. I wouldn't want to do it with anyone else," Patterson says.

Swine’s Promising Next Generation is independently produced by National Hog Farmer and brought to you through the support of Boehringer Ingleheim.

EFSA launches 'Stop African swine fever' campaign

Plum Island Animal Disease Center APHIS has approved 11 National Animal Health Laboratory Network laboratories to test for ASF.

The European Food Safety Authority has begun a major campaign to raise awareness and help halt the spread of African swine fever in southeast Europe.

"Stop African swine fever" is aimed at countries that in 2019 EFSA identified as collectively comprising a "region of concern" because of their proximity to countries where ASF is present. These are Albania, Bosnia and Herzegovina, Croatia, Greece, Kosovo, Montenegro, North Macedonia, Serbia and Slovenia.

The campaign will complement the ongoing efforts of the European Commission and other international organizations to work towards the eradication of the disease in Europe.

ASF is a viral disease that affects domestic pigs and wild boar. The virus is harmless to humans but has caused significant economic disruption in many countries. There are currently no vaccines for ASF, so an outbreak can necessitate the slaughter of large numbers of farm-kept pigs in affected areas.

Objectives and audiences
The campaign aims to raise awareness and understanding of ASF in all nine countries. It is aimed at groups of people and individuals who come into contact with domestic pigs and wild boar, such as pig farmers and hunters. EFSA will also engage with veterinary organizations, hunting associations, farmers' groups, customs officers, border police, local governments, tourist operators and travelers.

Detect, prevent, report
Because an ASF outbreak can have such devastating effects, detection, prevention and reporting are essential if this disease is to be contained. These are the key words of the campaign. EFSA will be sharing factsheets, infographics, ready-to-use social media posts and other materials. 

Source: European Food Safety Authority, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

Farm Progress America, August 31, 2020

Max Armstrong takes a closer look at the H-2A program which allows a foreign national worker into the U.S. for temporary annual work. There was a concern earlier this year when the government announced it would suspend visa processing for Mexican workers. And the move brought concern for the food supply too. Max notes than more than 90% of H-2A workers come from Mexico.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Joe Readle/Getty Images News

This Week in Agribusiness, Aug. 29, 2020

Part 1

Max checks in with USDA Secretary Sonny Perdue about the recent weather impact on crops and resiliency of farmers.

Naomi Blohm, Total Farm Marketing, joins Mike Pearson to talk about the weather impact on markets this summer.

Part 2

Naomi Blohm is back with more marketing insight.

Chad Colby talks about the ram mount for tablets, as well as a wireless charger.

Part 3

Max visits with Matt Jungmann, Farm Progress show manager, about the Farm Progress Virtual Experience, and prep for the show.

Max reminisces about the Half Century of Progress show, and the friendships that play a role.

Part 4

Matt Nelson, Channel Seed agronomist, joins Max to talk about crops damaged in the derecho storm, and the impact that has on harvest and yield.

Greg Soulje is in with a weather forecast for the week.

Part 5

Greg Soulje is back with an extended weather outlook.

Part 6

There's a 1952 John Deere A in Max's Tractor Shed.

Mark Stock shares what's coming up on the auction block for Big Iron Auctions.

The FFA Chapter Tribute goes to Brooklyn FFA, Brooklyn, Mississippi.

Orion Samuelson talks about his two favorite presidents and leadership.

Part 7

Al Gustin reports on a safflower oil operation in North Dakota, talking to Larry White, safflower processor.

Max offers an update on the Farm Progress Virtual Experience.

Taiwan to lift restrictions on U.S. pork

iStock-Getty Images Plus/bedo Map of Taiwan

On Friday, Taiwanese President Tsai-Ing-wen said the territory would soon lift restrictions on U.S. pork and beef, paving the way for an eventual free trade agreement with America. Since 2007, Taiwan has denied market access to U.S. pork raised with ractopamine, despite an overwhelming body of scientific evidence that demonstrates the safety of the feed additive.

Ractopamine is widely used as a feed ingredient in global beef and pork production. It is approved for use in production by nearly 30 nations and by the CODEX Alimentarius, the international standard-setting organization. Imports of pork raised with ractopamine are accepted by 75 countries.

Although ractopamine use by hog farmers is not widespread, it is an option that is safe and acceptable. The National Pork Producers Council appreciates that Taiwan is indicating it will soon lift all non-tariff barriers to U.S. pork and is grateful for the work of the U.S. Trade Representative and the USDA to tear down barriers to U.S. pork exports all over the world.

NPPC will continue to defend the right of U.S. hog farmers to use production processes and products that are safe. NPPC opposes government mandates that, with no scientific backing, dictate production practices and unnecessarily increase food prices and inhibit consumer choice. 

Source: National Pork Producers Council, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.


These days there is an election being held every day on the trading floor, says senior market analyst David Bauer of Provimi. In this week’s episode of Feedstuffs Precision Pork, Bauer uses the recent post office situation as the perfect example of what he means by this. Many have been sowing the seeds that the U.S. postal service slowdowns were actual actions taken that have created dire problems. Others have said it was constructed election year propaganda aimed at selling a message in hopes of gaining emotional support for an agenda.

It is the same thing going on each day in our ag futures markets, says Bauer. In the grains industry, depending on whether you're a livestock feeder or a grain farmer and depending on the radio station or TV show that you listen to, the messages being sent by media outlets can easily play on the emotions of the audience. Knowing this, media looks to create the message that plays on that emotion. This is nothing new. But in times like these, Bauer cautions that such messages can easily get in the way of reality. The point to be made, he says is to is understand where information is coming from in these times of making risk management decisions. Realize that an election can be considered risk management.

When making production sales decisions and input purchase decisions, make sure you step back from the emotion, look at the entire picture and not get caught up in the contrived emotion of weather scares and crop conditions. Take the emotion out of it. It is late August and crops biologically die at this time of year. Has weather impacted crop condition, crop progress and yields? Absolutely. Are massive sales to China good? Absolutely. But remember it is China and we've been through these emotional runs before and they don't always end well, notes Bauer.

Situations like COVID, the hurricanes and others disaster in the past couple of weeks are doubling down the political pressures of bailouts and fingerpointing. Bauer says he has heard it said that geopolitical risks can be more damaging than wars and embargoes. So, when making risk management decisions always step back and understand why you're making the decision in the first place and always ask yourself if your decision is based on emotion or is it in the best interest of your business? Are you being reactive or are you working to be proactive? Or put another way, are you being margin focused or market focused?

These are uncertain times and it will pay dividends to be well-prepared. If you have questions on this week’s recap or want to discuss something not covered, feel free to ASK DAVE at Plan today for tomorrow’s success.

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