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Articles from 2013 In September


Hogs and Pigs Report Held Some Surprises

Globe

Well, uh, let’s see.  That’s interesting.  And that, too.  How can that be?

I think that pretty well sums up the reactions of most observers upon the release of USDA’s quarterly Hogs and Pigs Report on Friday.  The key national numbers in the report are shown in Figure 1.  The yellow highlighted figure indicates a number below the range of analysts’ pre-report estimates.  Red highlights are for numbers above the range of pre-report estimates.

A few of the key pre-report expectations and the report numbers that correspond to them are:

·       Expectation:  The breeding herd would be larger by 1.5%.  Well, the herd is larger but, according to USDA, only slightly so at 5.814 million head.  That is just 0.4% more than last year and 1.1% SMALLER than the June 1 herd of 5.882 million head.  U.S. sow slaughter has been down 7.4% since the week ending July 6.  Adjusting for changes in imports from Canada does not change the number.  Gilt slaughter as a percentage of total barrow and gilt slaughter has averaged 49%.  That compares to 50% last year when feed costs were so high and 49.5%, on average, for the past 10 years.  The sow slaughter number – and record high sow prices – suggest more than 0.4% growth.  The gilt numbers add fuel to that fire as anything below about 49.5% is usually expansionary.

 

·       Expectation:  Porcine Epidemic Diarrhea (PED) virus has caused some major death losses and should impact the pig crop, under-50 lb. and, perhaps 50-119-lb. inventories.  I x-nay on all of those!  The June-August pig crop was pegged at a record-large (for the quarter) 30.21 million, 1.9% higher than last year’s then-record.  The under-50-lb.  inventory is up 0.9% and the 50-119-lb. is up 1.1%.  And what’s more, the average litter size was a record 10.33 pigs.  What about all of those preweaned pigs that died in Oklahoma and other places as a result of PED virus?  If 10.33 survived, what would the number have been without PED virus?  The 10.33 pigs per litter is 2% larger than last year.  The largest EVER year-on-year gain in litter size was 3.2%.  Did PED virus only kill 1.2% of the June-August pig crop?  That number looks reasonable but it would be working off of an extraordinarily large increase in litter size.  We don’t think that is likely with a pretty stable sow herd and falling feed costs.

 

·       Expectation:  Market herd numbers would be lower than one year ago.  Analysts expected the number of growing hogs to be nearly 2% lower than last year.  The U.S. Department of Agriculture (USDA) says the number was 62.546 million, 0.3% higher than last year.  And the distribution is a bit odd with 180 lb.-and-over category down 3.5% (very close to expectations) and the middle-weight categories up over 1%.

·       Expectation:  A larger breeding herd would put farrowing plans sharply higher than last year.   Sep.-Nov. and Dec.-Feb. intentions are higher but not nearly as high as a 1.5% larger breeding herd would have yielded.  The 100.4% and 100.9% of year-earlier levels for those two quarters, respectively, are actually very much in line with the 100.4% for the breeding herd.  All three are just lower than expected.

 

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So what do we make of these numbers?  First, they are the ones being traded today and until the point where they prove to be wrong.  Millions of dollars have been lost betting against USDA numbers, so be a contrarian at your own risk. 

That the numbers were a surprise is a given.  But today’s futures market declines of generally $1.00 to $1.50/cwt. for futures contracts through May suggest that traders aren’t completely buying them.  Differences of 2% and more relative to expectations usually cause limited price moves.

Figure 2 shows my expectations for weekly hog slaughter based on this report.  I have done some “fudging” to smooth the transition from recent lower-than-expected slaughter levels to the year-on-year increases suggested by the report.  My forecasts give me commercial slaughter of 30.616 million head in Q4, up 0.6% from last year and then quarterly year-on-year increases of 2.9%, 1.7% and 2% in quarters 1 through 3 of 2014.

Not surprisingly, those increases will put some pressure on hog prices but prices will remain well above forecast breakeven cost levels!  I have national net negotiated weighted average prices averaging $84 to $86 for the fourth quarter, $80 to $84 for Q1 2014 and then $84 to $88 in Q2 and $90 - $94 in Q3. 

 

 

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Developing a Test to Detect PED Virus Antibodies

Developing a Test to Detect PED Virus Antibodies

The first diagnosis of porcine epidemic diarrhea (PED) virus in the United States was confirmed in Iowa in mid-May 2013 by the National Veterinary Services Laboratories (NVSL) at Ames. The two tests to diagnose active infections (disease) that became immediately available were polymerase chain reaction (PCR) and immunohistochemistry (IHC).

The next step was to develop a diagnostic test that could detect antibodies to PED virus to determine if pigs were previously infected with this virus.

In late August 2013, the Iowa State University Veterinary Diagnostic Laboratory (ISUVDL) introduced an immunofluorescence assay (IFA) for detection of antibodies to PED virus. Development of the IFA test was the result of collaborative efforts of ISUVDL virologists ( K.J. Yoon, DVM; J.Q. Zhang, DVM; and their graduate students) and the financial support of the Iowa Pork Producers Association. This team successfully isolated and propagated PED virus in cell culture, which allowed the development of the IFA. 

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While this IFA is the first antibody test to be made available in the United States, efforts to develop and improve other types of antibody tests for PED virus are ongoing at ISUVDL as well as other laboratories.

Following are some of the frequently asked questions surrounding PED virus antibody testing at ISUVDL:

 

Q. We want to reduce the risk of new herd introductions to a sow farm being a source of PED virus. How should we test replacement stock while in isolation or prior to entry?

A. We recommend an approach that mirrors what many use today for porcine reproductive and respiratory syndrome (PRRS) surveillance testing, that is, using an agent detection test in combination with an antibody detection test. The agent detection testing tries to answer the question: “Is PED virus present in animals or the environment today?” whereas, the antibody testing tries to answer the question: “Have these pigs been previously infected with PED virus?”

To determine if PED virus is active or circulating in the population at the time of sampling, the PCR test is used. If PCR is positive, it suggests that the PED virus nucleic acid is present in feces, oral fluids or intestine – and that the PED virus infection is active or quite recent. However, a negative PCR test does not mean animals have never been exposed to the virus. Therefore, the IFA antibody test is conducted on serum samples and if positive, suggests the pigs have been infected with PED virus for at least two weeks and perhaps much longer.

The thought process behind this two-pronged testing approach is that if we are in the early stages of an infection (first 30 days of infection), most pigs will be shedding virus, which will be picked up by the PCR test.  If we are testing animals that are further removed from actual infection, then PCR results could be negative. However, the antibody response occurs 14-21 days after initial infection, so that animals in later stages of active infection or those previously infected should have detectable antibodies in their serum. The lag time from time of infection to first detectable antibody response by the IFA appears to be between two and three weeks, with all pigs experimentally infected being serologically positive by three weeks post-infection (Figure 1). 

Using these two diagnostic tools in combination should allow us to: 1. Detect very acute infections where an antibody response has not yet occurred; and 2. Detect an antibody response as a historical record to suggest the animals have encountered PED virus previously.

Q. Our sow farm broke with PED virus and we attempted to expose the entire farm to the virus via feedback techniques.  Why are we still experiencing individual litters with severe diarrhea?

A. One reason for inconsistent herd immunity may be that subpopulations of sows may be present that have low or no immunity to the PED virus, or perhaps were never infected. The PED virus IFA can be used in these instances to determine whether uniform PED virus exposure has occurred in all sows and gilts. This can be done by comparing the level of antibodies to PED virus in sows, which are farrowing litters that develop diarrhea and vomiting in those sows that raise unaffected litters.

At this time, we do not know if there will be a direct correlation between the IFA titer to PED virus and protective immunity.  Efforts are underway to develop a virus neutralization (VN) test, which detects antibodies that prevent the virus from replicating in intestinal lining cells.  This will be a better tool to evaluate actual protective immunity.

Q. Since the clinical signs of PED virus vary widely in weaned, grower and finisher pigs, how can we know if pigs have been infected with PED virus?

A. There are reports of extreme variability in severity of diarrhea in postweaned pigs. In some cases, the diarrhea is very mild and difficult to distinguish from other diseases (e.g. rotavirus, TGE, salmonellosis, ileitis, Brachyspira) by visual appraisal of clinical signs.

If pigs are not sampled and tested during acute stages of diarrhea, an infection with PED virus can easily be missed. Knowing the infection status of weaned pigs will be particularly important when introducing breeding stock or establishing transportation or manure removal schedules.

The PED virus IFA will detect antibodies in pigs at 14 – 21 days after infection (Figure 1). A positive test will confirm previous exposure to PED virus, which is particularly useful in later stages of infection when PCR testing may be negative.

 

Summary

Much of what we need to learn about PED virus will become apparent in the coming months. Many questions remain to be answered surrounding the epidemiology of the PED virus. 

Researchers at many diagnostic facilities continue to work diligently to come up with diagnostic tools that can beneficially aid veterinarians and producers in accurate diagnosis and provision of informative risk assessments.

One tool that may be useful is routine serologic surveillance testing for PED virus using IFA, particularly as a monitoring tool for assurance of PED virus-free status. 

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Grain Inventories Decline Significantly

Compared to 2012, inventories of corn and soybeans have dropped significantly as of Sept. 1, USDA’s National Agricultural Statistics Service (NASS) reported today.

There were 824 million bushels of old crop corn and 141 million bushels of old crop soybeans in storage. Corn and soybean stocks stored in all positions were down 17 percent from 2012, according to the quarterly Grain Stocks report.

On Sept. 1, there were 275 million bushels of corn stored on farms and 549 million bushels stored off the farm, down 12 and 19% from the prior year, respectively. The U.S. corn disappearance totaled 1.94 billion bushels during June-August, down from 2.16 billion bushels during the same period last year.

NASS reported that as of Sept.1, there were 39.6 million bushels of soybeans stored on the farm, up 3% from 2012, and 101 million bushels stored off the farm, down 23% from last September. The U.S. soybean disappearance during June-August totaled 294 million bushels, down 41% from the same period last year.

In addition to releasing the Grain Stocks report, NASS also released the Small Grains 2013 Summary, which included the final tallies for U.S. wheat, oats and other small grains. According to the report, in 2013 U.S. small grain farmers in some parts of the country were challenged with adverse weather conditions causing delays in planting and harvesting.

NASS reported growers harvested 45.2 million acres of wheat this year, down 8% from 2012. The levels of production and changes from 2012 by type are winter wheat, 1.53 billion bushels, down 7%; other spring wheat, 532 million bushels, down 2%; and Durum wheat, 61.5 million bushels, down 26%.

Oat production is estimated at 66.0 million bushels, up 3%  from 2012 but the third-lowest production on record, according to NASS. Harvested area, at 1.03 million acres, is slightly below last year and is the second-lowest acreage harvested for grain on record.

Due to delays in this year’s harvest, NASS will re-survey small grain growers in Montana and North Dakota. Operators will be asked to verify and update, if necessary, the acreage, yield, production and stock estimates for barley, oats, Durum wheat and other spring wheat.

When producers were surveyed earlier this month, there was significant unharvested acreage in these two states. As a result of this re-surveying effort, NASS may release updated estimates for small grains in its Nov. 8 Crop Production report.

All NASS reports are available online at www.nass.usda.gov.

 

Groups Urge Delay in COOL

A group of meat and livestock organizations opposed to the current USDA Country-of-Origin Labeling (COOL) rule are requesting that USDA delay enforcement of the rule until the WTO rules on compliance. 

 

In a letter sent to Secretary of Agriculture Tom Vilsack and USTR Ambassador Mike Froman, the group said, “It is likely that the resolution of the WTO dispute will result in AMS being forced to develop yet another COOL Rule in an attempt to meet the United States' WTO treaty obligations or seek amendments to the underlying statute. Such a result would mean that the entire meat supply chain will be in the same position in just a few years - devoting time and financial resources to bring themselves into compliance with another COOL Rule.” 

 

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Those signing the letter were the American Association of Meat Processors, American Meat Institute, National Cattlemen's Beef Association, National Grocers Association, National Pork Producers Council, North American Meat Association, and Southwest Meat Association. 

 

The National Farmers Union (NFU), a strong supporter of COOL, said, “NFU does not believe that any further delay is appropriate or warranted.  Consumers are entitled to enhanced information that will reduce the confusion about where the food they buy is from.  Similarly, many domestic producers of livestock have been seeking the ability to differentiate their product in the market by ensuring that its origin is clearly identified.  We have waited too long for meaningful country of origin labeling standards.  USDA should enforce the regulations as originally noticed."

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U.S., Canadian and Mexican Meat and Livestock Groups Appeal COOL

U.S., Canadian, and Mexican meat and livestock organizations filed their initial brief as part of an appeal of a September 11 decision by the U.S. District Court for the District of Columbia denying a motion for a preliminary injunction in a lawsuit to block implementation of the USDA’s final rule on country-of-origin labeling (COOL).  The organizations argue that the trial court incorrectly accepted the Agricultural Marketing Service’s (AMS) argument, which was inconsistent with rationale offered by AMS in the final rule, that the new final rule “is to correct misleading speech and prevent consumer deception” that purportedly occurred because of requirements AMS imposed in its 2009 version of the rule. 

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The group’s court brief stated, “Even putting aside the absurdity of a government agency referring to itself as an agent of ‘deception,’ the district court should have rejected AMS’s belated declaration because it was a plainly impermissible post hoc rationalization.  Yet the district court accepted it anyway,” the brief notes.”  Those filing the appeal included the American Association of Meat Processors, American Meat Institute, Canadian Cattlemen’s Association, Canadian Pork Council, National Cattlemen’s Beef Association, National Pork Producers Council, North American Meat Association, Southwest Meat Association and Mexico’s National Confederation of Livestock Organizations.

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Food Safety & Foodborne Illness Legislation Introduced

Senator Kirsten Gillibrand (D-NY) has introduced the “Safe Meat and Poultry Act” to reduce the number of foodborne outbreaks and update the meat and poultry inspection and consumer notification system.  According to the Centers for Disease Control & Prevention (CDC), one in six Americans will suffer from a foodborne illness every year.  Senator Gillibrand said, “This legislation contains practical measures to ensure no American gambles with their health when purchasing poultry or meat products.  Not only would we reduce foodborne illness, but we also strengthen our nation’s agriculture and food industry.” 

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The legislation would:

•           Create mandatory pathogen reduction performance standards and expand the authority of the USDA to regulate new pathogens, which will make progress toward targeting and reducing dangerous pathogens in the meat and poultry supply.

•           Improve consumer notification for recalls of contaminated products.

•           Provide whistleblower protection for government and private workers in the food industry to report public health issues and support a more resilient agriculture industry.

•           Provide better enforcement penalties, including criminal penalties for intentionally putting unsafe products in the marketplace, and escalating enforcement action for the few bad actors that have a repeated history of serious failures to ensure food safety. 

•           Safeguard our borders from unsafe or adulterated foreign meat and poultry products by ensuring regular international audits by the Food Safety & Inspection Service.

•           Increase the emphasis on prevention throughout the entire food safety system, including for pathogens, chemical residues and potential contamination. 

•           Improve consideration given to occupational health and safety to support a safe and sustainable environment in which wholesome products can be produced, inspected and passed.

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Farm Bill Expires at Midnight

Farm Bill Expires at Midnight

The farm bill expires at midnight tonight.  This past weekend the House of Representatives passed and sent to the Senate a resolution that would combine the House “farm-only” farm bill (HR 2642) with the Supplemental Nutrition Assistance Program (SNAP) bill (HR 3102).

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This should allow House Speaker John Boehner (R-OH) to name farm bill conferees and hopefully move to conference.  The Senate named its 12 conferees this summer.  This is all taking place as Congress tries to avoid a government shutdown and deal with the debt ceiling.

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NPPC Opposes Preferential Trade Agreements

NPPC Opposes Preferential Trade Agreements

The National Pork Producers Council (NPPC) is very concerned about unfair trade practices that exist in several countries and the extension of preferential trade policies with those nations.

For instance, the African Growth and Opportunity Act (AGOA) is a preferential trade program that provides beneficiary countries in Sub-Saharan Africa with access to the U.S. market; the program is set to expire in 2015. In June, the Obama Administration committed to extending the program before it lapses in 2015 but will review certain policies such as unfair trade practices of AGOA countries.

Although NPPC does not currently take a position on the extension of AGOA, U.S. pork producers are very concerned about renewing significant market access benefits to South Africa at the same time that South Africa has a de facto ban on U.S. pork. South Africa blocks U.S. pork exports based on unscientific and unjustified concern about porcine reproductive and respiratory syndrome (PRRS), pseudorabies (PRV) and trichinae.

 

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PRRS is not a food safety issue, and there is negligible risk of PRV and trichinae in the U.S. commercial herd.

NPPC reports that pork producers have similar concerns with Thailand and the Philippines, which benefit through the Generalized System of Preferences (GSP) program. GSP is a program designed to promote economic growth in the developing world and provides preferential duty-free treatment for thousands of products from a wide range of countries, including many least-developed/developing countries.

Thailand restricts U.S. pork imports through its non-science-based ban on the importation of pork produced using ractopamine, the reluctance of the Thai Department of Livestock and Development to grant import licenses for uncooked U.S. pork, and an inspection fee of five Baht per kilogram ($160 per metric ton) on imported pork compared with an inspection fee of only $15 on domestic pork.

NPPC says the Philippines has a history of using a number of non-tariff restrictions to limit pork imports; current barriers include the use of a World Trade Organization (WTO)-illegal reference price scheme and cold storage requirements that only apply to imported pork – not to domestic pork.

South Africa benefits from both AGOA and GSP.

NPPC questions whether South Africa, Thailand and the Philippines should be eligible for preferential trade benefits when U.S. pork exports are subject to unscientific and discriminatory trade barriers. GSP legislation expired on Aug. 1, and legislation has been introduced to renew the program through September 2015.

NPPC understands the benefits of trade preference programs not only for the beneficiary nation but also for U.S. consumers and businesses. But, in essence, these preferential arrangements are one-way free trade agreements – the United States takes much of the exports from the beneficiary nation at a zero tariff, while the United States typically faces myriad non-tariff measures, which limit or even block U.S. exports.

Much has been said about enforcement of U.S. rights in trade by this Congress and past congresses as well as by this administration and past administrations. With the lapse of GSP and the clock ticking on AGOA, the United States has an unprecedented opportunity to generate exports and create jobs by enforcing its trade rights. Many U.S. sectors stand to benefit, NPPC says. 

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Pork Foodservice Sales Are Sizzling

Pork Foodservice Sales Are Sizzling

Pork was the fastest-growing protein in the foodservice industry for the past two years, according to Technomic, Inc.’s 2013 Volumetric Assessment of Pork in Foodservice.


“We’re pleased to see such positive growth in foodservice, especially carnita meat, shoulder/butt and pulled pork,” says Stephen Gerike, director of foodservice marketing for the Pork Checkoff. “The volumetric study shows that foodservice operators are leveraging pork’s versatility.”

Total pork sold through foodservice outlets reached a record-breaking 9.25 billion pounds, up 462 million pounds from the previous 2011 survey. The 2.6% increase outpaced the total protein growth average of 0.8% and the 1.5% total growth of the foodservice industry itself.

 

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Since 2011, fresh pork has driven growth of the total pork category, increasing by 3.5% on an annual basis. Sales of processed pork grew 2.3%, largely driven by sales of ham, breakfast sausage and bacon.

America Still Loves Bacon
The study also showed that of the 24 pork product categories reviewed, 22 demonstrated positive growth in sales. On a per-pound basis, bacon grew the most between 2011 and 2013, up 102 million pounds.

Carnita meat, shoulder/butt and pulled pork grew the fastest by percent, with a compound annual growth rate of 8%, 6.6% and 6.4%, respectively. Ground pork, Canadian bacon, whole loin, Italian specialty meats and ribs also demonstrated notable growth.

“When it comes to the three major foodservice day parts – breakfast, lunch and dinner – pork is almost equally represented, but sales grew most aggressively in the areas of breakfast proteins and snacks,” Gerike said.

The Technomic, Inc. study reinforced results released by the USDA in August. As of July 31, frozen pork supplies held in inventory were down 3.5% from June 30.

Read the rest of this report at www.pork.org.

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HSUS Suffers Another Crushing Defeat in Pork Checkoff Lawsuit

The Other White Meat logo

In what is becoming an embarassment for the Humane Society of the United States (HSUS), a federal judge has dismissed another frivolous lawsuit that the animal activist group filed targeting the U.S. pork industry.

After spending significant amounts of donor dollars, the HSUS was dealt a significant loss in U.S. District Court on Wednesday. In what was considered to be a futile legal challenge and a very personal attack on U.S. pork producers, the federal judge dismissed a lawsuit filed by HSUS over the National Pork Board’s purchase of the “Pork, The Other White Meat” trademark from the National Pork Producers Council (NPPC) in 2006. The HSUS lawsuit was filed last year.

HSUS, which was joined in the suit by a lone Iowa pork producer (Harvey Dillenburg of Creston, IA) and the Iowa Citizens for Community Improvement, sued the U.S. Department of Agriculture (USDA) and Agriculture Secretary Tom Vilsack over approval of the trademark purchase and the Pork Board’s annual payments to NPPC.

HSUS argued that the sale and payments were unlawful since the Pork Board is prohibited from using checkoff dollars to influence legislation. The court dismissed the HSUS case, ruling that the plaintiffs lacked standing and that no one had suffered any injury from the agriculture secretary’s actions.

NPPC applauded the secretary of agriculture’s willingness to defend the case and pork producers across the country. The secretary’s actions should send a strong signal to HSUS supporters that frivolous lawsuits will not be tolerated and should not be pursued.

“If I were a donor to HSUS, I would be very disturbed that my money was wasted on yet another expensive lawsuit that had nothing to do with improving the welfare of farm animals,” says NPPC President Randy Spronk, a pork producer from Edgerton, MN. “This is clearly a vendetta against the U.S. pork industry by the leadership of HSUS, which has made their mission to permanently end animal agriculture very clear. It was frivolous and a waste of the taxpayers’ money and the court’s time. HSUS donors deserve better than that.”

For more information regarding the case of HUMANE SOCIETY OF THE UNITED STATES et al v. VILSACK, click here.