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Articles from 2009 In September


RFD-TV Program Features Talks on Flu, Pork Economics

The latest on the novel H1N1 flu and the economic forecast for the pork industry will be the main topics of an hour-long program Oct. 12 on RFD-TV.

The program, sponsored by the Pork Checkoff, includes the opportunity for viewers to call in questions.

Long-time farm broadcaster Max Armstrong will serve as host for “RFD-Live: A Conversation About Pork,” which will air at 7 p.m. (Central Daylight Time).

Scheduled guests include: Steve Meyer, agricultural economist and president of Paragon Economics; Chris Novak, chief executive officer, National Pork Board; Paul Sundberg, DVM, vice president of science and technology at the National Pork Board; and Wathina Luthi, an Oklahoma pork producer.

“This is a tremendous opportunity for us to tell our story to both pork producers and to others throughout rural America,” Novak says.

“As we head into the typical flu season, we want consumers to understand that you cannot get the H1N1 flu from eating or handling pork. But we also want viewers to get a better understanding of what is happening within the pork industry. This is a tough time for pork producers. We want to tell consumers what producers already know: That not only is pork safe, nutritious and delicious, it also is an especially good value at your grocery store right now. This is a great time to be buying pork,” Novak says.

“We also look forward to being able to tell producers about all the measures the Pork Checkoff is taking to promote pork this fall. During the RFD-TV program, we will unveil our newest 30-second television commercial,” he adds.

RFD-TV can be viewed on the DISH network at channel 231 and on DirecTV channel 345. Viewers with cable television should consult their local listings guide.

For more information on checkoff-funded programs, call the Pork Checkoff Service Center at (800) 456-7675.

Herd Reductions Signal First Signs of Economic Recovery

Pork production losses are declining and herd reductions should result in a return to profits in the spring of 2010, according to Purdue University Extension Economist Chris Hurt.

“On the supply side, the USDA’s Sept. 25 Hogs and Pigs report revealed slightly larger reductions in the herd than had been expected. The breeding herd was down 3.1% over the past year compared to an anticipated 2.5%. The number of pigs weighing less than 60 lb. was down 3.7% compared to an anticipated 2.5% reduction. The market herd was down 0.7% more than pre-report guesses,” he says.

The breeding herd declined only 5% in the past two years, and that drop has been partially overshadowed by higher weaning rates and heavier market weights. The result was just a 2% drop in production in 2009, with predictions of only a 1-2% drop in 2010.

But improving demand may have more of an impact on hog prices than reduced supply.

“Many economists believe the recession is over. It is widely anticipated that gross domestic product numbers for the third quarter of 2009 will be positive, signaling the end of this long and deep recession. The U.S. estimate will be released on Oct. 29. While the recovery in the U.S. economy will be slow with unemployment staying high, positive growth numbers will tend to help consumers ‘free up’ spending on meat,” Hurt says.

Lower pork prices will also be positive for pork consumption this fall.

“In the first half of 2009, U.S. pork prices averaged $2.95 per retail pound compared to $2.87 in the first half of 2008. It was very difficult to sell larger U.S. pork supplies at higher prices early this year,” he says.

However, a pattern of lower retail pork prices is anticipated through the fall and winter of 2009.

“Lower pork supplies with lower retail prices should strengthen hog prices and result in a higher portion of the retail pork expenditures flowing back to producers,” Hurt says.

Look for pork exports to gain strength as well.

“World economic recovery is expected to have more upside potential than the U.S. recovery. In addition, the value of the U.S. dollar is expected to remain weak and will be another reason that foreign pork purchases could increase,” Hurt says. Agriculture Department forecasts are for pork exports to increase 9% over the next nine months compared to the same period a year ago.

“Just as the world economic slowdown helped plunge the animal industries into recession more quickly than the crops sector, the world economic recovery may help lift the animal industries out of recession more quickly than the crops sector,” Hurt suggests.

Some reduction in domestic production and improved exports will drop per capita pork availability in the United States by 3-4% in the coming nine months. This trend, along with lower U.S. retail pork prices, better incomes and improving consumer attitudes will provide the basis for strengthening hog prices.

Hog prices are expected to average in the high $30s on a live-weight basis for the final quarter of 2009. Prices are expected to rise to the low $40s this winter and then move into the mid-$40s for second-quarter averages. Next summer’s prices are expected to rise into the high $40s for an average and the low $50s for weekly highs,” Hurt predicts.

Declining input costs for corn, soybean meal and energy will help reduce losses this fall and winter. Cost of production estimates are $44-46/cwt. for this time period and $45-47/cwt. for the spring and summer of 2010.

“Given these costs and the hog price outlook, farrow-to-finish producers are expected to lose about $15/head this fall and $7/head in the winter. Margins would turn to small profits of about $2/head in the spring and $12/head in the summer. For all of 2010, current forecasts are for about $3/head of profits vs. losses of $22/head in 2009 and $17/head in 2008,” Hurt says.

Hogs & Pigs Report Cautiously Encouraging

Friday’s USDA Hogs and Pigs report indicates the pace of breeding herd liquidation may be quickening, generally agreeing with pre-report estimates. Chicago Mercantile Exchange (CME) Group Lean Hogs futures responded by moving $0.50 to $1.05 higher in early trading on Monday, with the largest gain being in the April contract.

Figure 1 shows the key numbers from the report as well as the averages of analysts’ pre-report estimates and the differences between actual and estimated year-on-year percentages. Some key numbers and implications include:

• The breeding herd of 5.874 million head is 3.1% smaller than last year, marking an increase in the rate of reduction from 2.7% in June. That’s good news – especially since this survey captured Sept.1 inventories, only three weeks into this period of higher sow slaughter. The bad news is the June-September reduction is much smaller than in past liquidations. I believe that reflects the fact that clear liquidation signals did not come until the late-July break in CME Lean Hogs futures. I expect to see a larger year-on-year breeding herd reduction in the December report – even if profit prospects improve some. The cold, hard truth is that many producers are out of cash with no source of funds to support their operations.

• The market herd was 0.5% smaller than expected. That should be mildly supportive to prices over the next few months, but note that the largest share of this shortfall is in the under-60 lb. category. Q4 slaughter is going to be very near the levels projected by the June report. As Figure 2 shows, I still have eight weeks with the federally inspected (FI) slaughter above 2.3 million head. That includes the past two weeks when actual FI slaughter has exceeded the forecast level by 0.3% and 1%, respectively. Readers should note that Figure 2 assumes that imports of Canadian market hogs will continue to be in the 10,000/week range, but imports of Canadian feeder pigs will continue to trend downward at about 30,000 head fewer than year-ago levels.

• Average litter size grew by 2%, year-on-year, for the fifth straight quarter, which keeps average litter size growth above 2% since mid-2007, when circovirus vaccines first boosted productivity. There has been a lot of talk about sow retention, the resultant increases in sow herd average parity levels, and the impact that may have on productivity, although we’ve seen no damage yet. Two possible reasons come to mind. First, we may not have pushed average parity figures far enough to get a high proportion of Parity 6+ sows whose productivity drops significantly. Second, and I think more likely, the gilts we are bringing in are simply more productive due to genetic selection and proper development. This litter growth rate must slow down at some point, mustn’t it? Even if it does, I don’t expect any slowdown to be large. See Figure 3 for the new trend.

• Farrowing intentions for the next two quarters are perfectly in line with the sow herd size in the Sept. 1 report. It seems a bit curious, but those are the numbers! I fear that the intentions reported may turn out to be low for both quarters because we’ve just experienced the best summer for conception rates in memory. Some anecdotal evidence points to significant increases this summer, which suggests that the herd will produce more litters than normal this winter. That means more market hogs than we’d expect from these numbers from April through July or August. Producers should be ready to aggressively price hogs for Q2 and Q3 on any rallies in Lean Hog futures. Record Low Breeding Herd
The 5.874 million breeding animals in this report breaks the old “low” of 5.947 million set in June 2004. At least it’s the lowest number I can find in any of our data going back to 1900 – and that comes from Professor Glenn Grimes, University of Minnesota, who knows much more about such things than I.

The lowest number Professor Grimes could find from 1900 onward was an inventory of 6.078 million “sows and gilts 6 months and older” in 1935. That number would exclude boars and selected younger gilts that would be included in today’s breeding herd number.

It also represents a U.S. herd decimated by Great Depression consumption. In 1923, there were 69.304 million hogs and pigs in the United States, among which were 14.133 million sows and gilts 6 months old and older. By 1935, the U.S. hogs and pigs count dropped to 39.066 million head and the sow/gilt number had dropped to the aforementioned 6.078 million. Tough times on the farm and in the economy drove us to eat the capital stock!

The most recent peak in the U.S. breeding herd occurred in June 1979, when U.S. producers had 10.368 million breeding animals. Commercial hog slaughter and production in 1980 were 96.074 million head and 16.617 billion pounds, respectively. Those numbers put slaughter per breeding animal at 9.267 head and average production per breeding animal at 1,602 lb., carcass weight.

The same measures in 2008 were 19.343 hogs slaughtered and 3,916 lb. of pork produced per June 2008 breeding animal. Even when one deducts the 8% of those pigs and pounds that originated in Canada, today’s output per breeding animal is more than double the level of less that 30 year ago.



Click to view graphs.

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

Productivity by Farm Size Deserves Another Look

We divided the Swine Management Services, LLC database into four groups:

• Under 1,000 mated females (141 farms); average size is 650 females;
• 1,000-1,999 mated females (130 farms); average size is 1,393 females;
• 2,000- 2,999 mated females (94 farms); average size is 2579 females, and
• Over 3,000 mated females (32); average size is 4,596 females. Criteria also required that farms had to be in production for over three years and weaning average had to be 22 pigs/mated female during the time period. From the 397 farms in the four groups, 619 farms (64%) qualified.

Table 1 (52-week averages) provides a breakdown of production numbers for the four group sizes and Table 2 is a breakdown of the Top 10% farms for the four group sizes. Pigs weaned/mated female/year (PW/MF/Y) has a narrow range, between farms sizes – just 24.45 to 24.67. However, if we focus on the Top 10% farms, the range between farm sizes widens – 26.84 to 29.02 pigs – with the farms under 1,000 mated females reporting the highest PW/MF/Y at 29.02.

Litters/mated female/year (L/MF/Y) shows very little variation between farm sizes (2.39 to 2.42). Keep in mind that this benchmark is affected by weaning age, wean-to-1st service interval, farrowing rate and farrowing interval. The Top 10% farms’ range varies slightly more at 2.43 to 2.51.

Weaning Age Effects
We have seen average weaning age increase on all farms in the Swine Management Services database over the past three years. However, when we look at weaning age by farm size, the increase is mostly in the smaller farms, which average 21.66 days. Farms with over 3,000 females had the lowest age-at-weaning average at 18.96 days, a difference of 2.7 days compared to the under 1,000-sow farms.

Wean-to-1st service interval for all farms varies from 6.59 to 6.95 days, while farrowing rate for all farms varies from 84.7% to 85.8%. Farrow-to-farrow interval for all farms varies from 144.6 to 145.7 days.

Of the four production parameters, only weaning age shows a large variation in the all farms averages. Focusing on the Top 10% by farm size, variation is larger and the advantage goes to the farms under 1,000 mated females. These farms have the highest PW/MF/Y at 29.02, the highest weaning age at 20.58 days, the highest L/MF/Y at 2.51, the highest farrowing rate at 90.8%, and the lowest wean-to-1st service interval at 5.89 days.

In addition, the under 1,000 mated female farms show a 4% improvement in farrowing rate over their average, females are cycling 0.87 days sooner after weaning, and their farrow-to-farrow interval is 1.8 days shorter due to improvements in farrowing rate, which improves litters/mated female from 2.40 to 2.51 litters. The other three Top 10% groups show higher farrowing rates by 2.7 to 3.8%, wean-to-1st service intervals of 0.22 to 0.57 days sooner, and farrow-to-farrow intervals shortened by 0.30 to 2.7 days.

The averages for the different sizes were closer than we expected. However, a review of the Top 10% production numbers shows the farms under 1,000 mated females are performing the best and the potential for 30 pigs/mated female/year is there.


Key Performance Indicators

Tables 3 and 4 (below) provide 52-week and 13-week rolling averages for key performance indicators (KPI) of breeding herd performance. These tables reflect the most current quarterly data available and are presented with each column. The KPI’s can be used as general guidelines to measure the productivity of your herd compared to the top 10% and top 25% of farms, the average performance for all farms, and the bottom 25% of farms in the SMS database.

If you have questions or comments about these columns, or if you have a specific performance measurement that you would like to see benchmarked in our database, please address them to: mark.rix@swinems.com or
ron.ketchem@swinems.com.

Mark Rix and Ron Ketchem
Swine Management Services LLC



Click to view graphs.

A Call for H1N1 Outreach

A number of agricultural organizations thanked the Food and Agriculture Organization (FAO) of the United Nations for its efforts to “clear up” public misinformation about the nature of the novel H1N1 influenza virus. In a letter to the FAO, the agricultural groups said, “The initial misnaming of the H1N1 virus as swine flu caused the North American pork industry to suffer significant losses. U.S. pork producers were losing just under $10 per head on April 24, the first day the H1N1 flu received wide media attention. That number soared to over $30 per head as consumer demand for pork fell and some U.S. trading partners closed their markets to U.S. pork despite the large body of evidence demonstrating that the virus is not transmitted through food. Even the U.S. beef and poultry industries, which weren't directly tied to H1N1, have suffered losses because export markets were closed in reaction to H1N1 in the United States.” Those signing the letter were the American Farm Bureau Federation, American Meat Institute, National Cattlemen’s Beef Association, National Chicken Council, National Meat Association, National Pork Board, National Pork Producers Council, National Turkey Federation, U.S. Meat Export Federation and the U.S.A. Poultry and Egg Export Council.

Greenhouse Gas Reporting Rule — The Environmental Protection Agency (EPA) has finalized a rule that will require companies that emit 25,000 metric tons or more of carbon dioxide equivalent per year to begin collecting greenhouse gas data under a new reporting system. The rule will go into effect on Jan. 1, 2010. According to EPA, “For the first time, we begin collecting data from the largest facilities in this country, ones that account for approximately 85% of the total U.S. emissions.” It estimated this rule will cover approximately 10,000 facilities. Food production facilities are exempt.

Congressmen Urge Resolution of Chinese Chicken Issue — Thirty-seven congressmen have written the House agricultural appropriations leadership urging them to resolve the issue concerning the importation of cooked poultry products from China. The House-passed fiscal year 2010 agricultural appropriations bill prohibits USDA from conducting risk assessments of cooked poultry products from China to determine their eligibility for export to the United States. The provision has been in place for two years and, as a result, the Chinese have filed a World Trade Organization (WTO) case against the United States. The letter said, “The provision is also preventing the United States from negotiating an agreement on U.S. beef exports to China, impedes restoring pork exports to China, and threatens existing poultry exports to China.” The Senate-passed appropriations bill would allow USDA to conduct risk assessments of Chinese plants wanting to export cooked poultry products to the United States. This will be a major issue for the House-Senate conference committee.

Agricultural Appropriations Conference — The House-Senate Conference Committee is expected to meet soon to work out the differences between the House and Senate passed 2010 fiscal year agricultural appropriations bills. Key issues to be resolved include animal identification (House provides zero funding and the Senate provides partial funding), importation of cooked Chinese poultry, and dairy support (Senate provides $350 million for dairy aid).

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.

Industry Groups Meet to Explore PRRS Eradication

Producer and veterinary members of a pork industry task force conferred at the Leman Swine Conference last week in St. Paul, MN, to explore setting a course for possible eradication of porcine reproductive and respiratory syndrome (PRRS).

Discussion of possible PRRS eradication dates back to 2005 when the board of directors of the American Association of Swine Veterinarians (AASV) adopted a position statement put forward by then association president Scott Dee, DVM, of the University of Minnesota establishing the eradication of the PRRS virus as a long-term goal of the association.

Success of individual herd eradication, coupled with the recent startup of a number of regional eradication programs, and the development of tools to assess the risk of reintroduction (PRRS Risk Assessment tool) and prevent reinfection (air filtration, biosecurity, PRRS-negative breeding stock) has renewed interest in pursuing strategies to eradicate the virus from the nation’s swine herds.

The next step says AASV President Rodney “Butch” Baker of Iowa State University is to take the new task force’s recommendations to the U.S. Animal Health Association for additional support and to consider the AASV’s suggestions for terminology to be used in a national eradication program.

To move toward eradication, one of the next steps involves improved communication of successful projects, which has led to elimination of the virus from individual herds, production systems and regions.

Veterinary Clinic Challenge: Eat Pork Each Night for a Week

To show support for a struggling U.S. pork industry, which has weathered two years of economic hardship and put some producers out of business, a northern Iowa swine veterinary consulting clinic has kicked off “Pork Week.”

Suidae Health & Production reminds that the recent misnaming of the novel H1N1 flu as “swine flu” has compounded the situation – making U.S. and foreign countries that import pork “fearful of eating this safe and healthy meat.”

The Algona, IA, clinic points out that the novel H1N1 flu virus hasn’t been detected in any U.S. swine herds, but if it were, pork would still be safe to eat.

“Studies have consistently proved what we already knew…flu virus is not transmissible by eating pork or pork products. We need to showcase pork for consumers and be proud of the nutritious, great-tasting product that our clients help to produce,” the news release said.

To support the pork industry, Suidae employees have agreed to eat pork every night for a week. The clinic is providing every employee with pork, a recipe, grocery list and suggested side dishes.

By promoting an evening meal, the Suidae clinic hopes to renew the interest in serving pork and to promote family values. Some of the recipes Suidae employees are enjoying during the week include: bacon/lettuce/tomato wraps, maple-pepper chops with sizzling applesauce, mushroom-stuffed pork burgers, spicy sausage spaghetti and barbecue pork sandwiches. Pork is a good buy because it is leaner than chicken breast, thanks to production improvements and changes in genetics, feed and management practices.

“With more than 8,000 hog farms, thousands of Iowans are making their living raising hogs,” the news release said. “Iowa is the top pork-producing state, with approximately 25 million hogs or more raised each year. That amounts to 27% or more of the nation’s hogs.”

In addition:

--The Iowa pork industry contributes nearly $12 billion to the Iowa economy every year.

--The Iowa pork industry creates more than 63,000 jobs for Iowans.

--Veterinarians, truck drivers, feed suppliers, equipment manufacturers, meat managers and others all work closely with pork producers.

“We can make a difference and we need to eat more pork,” the news release urged. “Challenge yourself and your family to eat pork every day for a week. Not only does pork taste great, but you can encourage more family time by preparing the meal together and sitting down around the table to enjoy it with each other. Together, we can make a difference!”

For more information about the pork industry, visit www.nppc.org, www.iowapork.org, and for terrific recipes, visit www.TheOtherWhiteMeat.com.

Leman Science Award Winner Announced

Laura Batista, DVM, of Quebec, Canada, has been named the recipient of the 2009 Allen D. Leman Science in Practice Award from the University of Minnesota College of Veterinary Medicine and Pfizer Animal Health.

Batista was honored for her contributions to swine health management and industry best practices.

“To be considered among this group of state-of-the-art veterinarians who have contributed so much to swine medicine around the world is an honor,” says Batista. “It tells me that I’ve been doing something right, but also that I must continue to improve my contributions to this industry.”

The award was established in 1994 to recognize significant achievements that contribute to the body of knowledge related to swine health and management. The honor is named in memory of swine industry leader Al Leman, DVM, a University of Minnesota veterinarian dedicated to the education of practicing veterinarians.

“Pfizer Animal Health is honored to recognize Dr. Laura Batista for her contributions to the swine industry worldwide,” says Steve Sornsen, DVM, director, U.S. Swine Veterinary Services, Pfizer Animal Health. “Her work over the last 25 years has profoundly benefitted our industry, and will continue to for years to come.”

Batista graduated from the Facultad de Medicina Veterinaria y Zootecnia de la Universidad Nacional Autonoma de Mexico in 1984. In 2003, she completed a doctorate degree from the University of Minnesota.

She has worked on disease management and record analysis to optimize swine productivity in Mexico, Latin America, Canada, United States and Europe.

Batista has served as director of research and development for swine health for the Centre de developpement du porc du Quebec in Canada. Batista and Asociados offers swine consulting service around the world.

She served as president of the Mexican Association of Swine Practitioners from 2007 through 2009.

Go to Pfizer Animal Health for more information on the award.

National Hog Farmer

Lallemand Acquires SA Bioproducts

Lallemand has acquired SA Bioproducts, located near Durbin, South Africa. SA Bioproducts produces lysine for the animal feed market and, in collaboration with Amino GmbH of Germany, supplies isoleucine for the human pharmaceutical market. This acquisition firmly establishes Lallemand’s position as a leading supplier to the human and animal feed markets in South Africa: Lallemand purchased Anchor Yeast in South Africa in 2006 and owns 50% of Vitec, an animal feed company in Johannesburg.

About Lallemand

Lallemand, Inc. is a privately owned Canadian company specialized in yeast, bacteria and yeast derivatives, for animal nutrition, baking, winemaking and pharmaceutical industries. Lallemand is the only major supplier of yeast and bacteria that is a primary producer of both.

Lallemand Animal Nutrition is dedicated to the development, production, and marketing of profitable, natural and differentiated solutions for animal nutrition and health. Our core products are live bacteria for probiotics and silage inoculants, specific yeast for probiotics, and high value yeast derivatives.

Lallemand is a major supplier of probiotics and silage inoculants in Europe, North America and Africa. We also have a growing presence in Asia and South America. More news from Lallemand Animal Nutrition can be seen on www.lallemandanimalnutrition.com

National Hog Farmer

Pioneer Expands Corn Drought Research Efforts

Manhattan, Kan., and Plainview, Texas, operations to focus on corn drought testing

DES MOINES, Iowa, Sept. 23, 2009 - Pioneer Hi-Bred, a DuPont business, announces the expansion of its corn drought research efforts in Manhattan, Kan., and Plainview, Texas, further strengthening the company's commitment to bringing better genetics and traits that meet specific challenges facing growers.

These locations, traditionally focused on sorghum, now will be expanded to include additional research for corn drought testing. The expanded facilities will allow Pioneer to establish managed stress environments, including needed irrigation systems. Both native and transgenic traits will be evaluated and characterized at these research facilities.

"While we all wish there was a magical gene for the development of drought-tolerant hybrids, the truth is drought is a complex issue with yearly variations in the timing and intensity of water deficit and high temperature stress," says Joe Keaschall, Pioneer corn research director. "That's why Pioneer is so committed to building upon its established leadership role in drought tolerance research and has expanded its operations to meet grower needs in this area."

At the Manhattan, Kan., facility, new yield test locations have been established specifically for targeted drought product development. In addition, additional infrastructure is being developed for future research.

For the Plainview, Texas, facility, a breeding nursery has been established with several thousand inbreds being evaluated. Also, limited irrigation sites have been established for targeted drought yield evaluation.

Growth in 2010 at both facilities will be dedicated to the Drought I and Drought II product development initiatives. More specifically, the Drought I initiative combines native drought genes with needed traits in the most elite adapted inbreds for drought-prone areas. The Drought II initiative is focused on transgenic gene evaluation and integration into the most elite and adapted germplasm. Herbicide, insect and disease resistance will continue to be key traits for industry-leading drought hybrids.

"The current and future research activities at the Manhattan and Plainview operations support Pioneer's goal of placing the right product on the right acre to maximize growers' productivity," Keaschall says.

The Manhattan, Kan., and Plainview, Texas, research activities will be combined with Pioneer's drought research efforts in Garden City, Kan.; LaSalle, Colo.; York, Neb.; Woodland, Calif.; and Viluco, Chile.

Pioneer Hi-Bred, a DuPont business, is the world's leading source of customized solutions for farmers, livestock producers and grain and oilseed processors. With headquarters in Des Moines, Iowa, Pioneer provides access to advanced plant genetics in nearly 70 countries.

DuPont is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.