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China Suspends Some U.S. Pork Imports
Manure Isn't What it Used to Be
- August issue:
Focus on Animal Welfare
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Dale Miller, Editor,
National Hog Farmer
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Canada's inventory of hogs and pigs continues to shrink.
Statistics Canada's quarterly Hog Statistics report, released last
week, indicates that the Canadian sow herd continues to decline slowly
and that the large death losses of 2005 and 2006 have abated somewhat.
I am confident that the latter occurrence is largely due to wider
availability and use of circovirus vaccines.
Figure 1 shows the year-over-year percentage change in the United
States, Canadian and combined breeding herds. Note that the 1% decline
for July 1 breeding animal inventories represents the smallest
year-over-year decline for the Canadian breeding herd since the fourth
quarter of 2005.
The declining reductions in the Canadian herd suggest more stability,
but that may be an illusion for two reasons. First, the Canadian dollar
continues to creep closer and closer to par with the U.S. dollar. It
was $0.95US last week and the stronger it gets, the more it hurts
Canadian producers and packers. Second, mandatory country-of-origin
labeling (MCOOL) is a certainty and it will put pressure on Canadian
weaned pig and market hog prices. That will be a help to Canadian
packers in the short run, but will exert new economic pressure on
Readers should note that Statistics Canada made some major revisions to
some past data in order to square it with last year's Canadian Census of
Agriculture. The revisions went all the way back to the first quarter
of 2003. It doesn't appear that they changed the year-over-year numbers
much, but the raw numbers are definitely different.
Canadian producers farrowed 1.2% fewer sows in April-June 2007 than they
did during the same period in 2006. The second quarter pig crop, at
8.597 million pigs, was only 0.5% smaller than last year. Canadian
producers plan to farrow 1.5% more litters than they did in 2006 in the
third quarter and 1.1% fewer litters than last year in the fourth
Deaths and condemnations were 21% smaller this quarter vs. one year ago
and were the lowest since the third quarter of 2003.
The July report also included information regarding the number and size
of hog farms in Canada. Those data indicated that the rate of
consolidation since 2001 has been more rapid in Canada than in the
United States. Canada had 11,497 hog farms in 2006, 25.7% fewer than
in 2001. The number of hog operations in the United States fell by
19.2% during that period. The average Canadian farm grew by 45% from
2001 to 2006, when the average inventory was 1,308 head. The average
U.S. farm grew by 28.6% to 948 head during that same period.
Variability Spurs Wild Ride
It has been a wild ride for pork packer margins recently -- as can be
seen in Figure 2. The normal implication is to expect a wild ride for
hog prices and that could well be the case here. But a source of this
recent volatility is variability in the cutout value (See Figure 3).
It's not often that we see that kind of bouncing around and I have to
attribute it to the rumors regarding potential shipments to China. They
are still playing hardball, apparently, but several sources report
orders are being placed. Packers are talking to producers about
removing ractopamine from feeding programs in order to provide more
product that is acceptable to Chinese buyers this fall.
There have been a number of articles appear in the past week that claim
to know of large numbers of pigs dying in China. The articles in the
New York Times, Wall Street Journal and an online scientific
journal point to large losses, underestimates by government officials
and, most telling to us economists, an 85% increase in Chinese pig
prices. The Chinese government will not allow tissue samples to be
sent to international agencies, leading some to believe that the
problems are due to more than just a virulent strain of porcine
reproductive and respiratory syndrome (PRRS). PRRS would not harm
China's export status, but the active presence of classical swine fever,
foot-and-mouth disease or some other trade-impacting disease certainly
Click to view graphs.
Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
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Note When Selecting Replacement Gilts
In the most recent issue of National Hog Farmer
(Aug. 15, 2007, "Parity Distribution Will Affect Your Bottom Line," p.
32-33), Ken Stalder wrote about the potential role of parity
distribution on a herd's bottom line. In his data summary, he noted a
trend in herd productivity with respect to average parity, average
parity of farrowed sows and average parity of culled sows.
Specifically, these averages went up with increased rank in pigs
Let's consider some additional implications of parity distribution on
both herd productivity and system productivity. Specifically, for
established herds with high sow replacement rates, the effects of parity
distribution are not limited to only sow herd performance parameters.
George Foxcroft of the University of Alberta discussed some of these
implications at the 2007 Banff Pork Seminar.
First, it is well recognized that the total birth weight of first parity
offspring is, on average, less than subsequent litters. This reality is
attributed to the smaller uterine capacity of gilts. As well, during
gestation (i.e., days 25-90), piglets are developing all the muscle
fibers that they will have for the rest of their lives. When piglets
are overcrowded during development, they develop fewer total muscle
fibers. In turn, these pigs' potential for lifetime lean gain is
reduced. Therefore, overcrowding during the gestation phase contributes
to variation at the end of finishing.
Second, for herds producing replacement females (including those using
internal replacement programs), the first parity offspring have an
additional consequence. All of the primordial follicles (potential
future eggs) that a female will have for her lifetime are established on
the gilt's ovaries by the time she is about 7 weeks of age. Smaller
gilt piglets develop fewer primordial follicles -- even if they catch up
in weight by the time they are selected for the breeding herd.
In other words, a gilt's birth weight is inversely related to her
lifetime average litter size. Therefore, replacement females derived
from gilt litters are at an overall productivity disadvantage compared
to their later-litter sisters.
Because of the nature of our recordkeeping systems, it is easy to
consider only relationships within a given phase of production (i.e.,
sow herd, grow-finish). However, in a biological system, such as pig
production, there are no "islands."
Stephanie Rutten-Ramos, DVM
University of Minnesota
Editor's Note: For all your agricultural news, markets and
commentaries, go to www.farms.com.
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Increased RFS for Ethanol
Various organizations and companies sent a letter to
Speaker of the House Nancy Pelosi (D-CA) urging her to oppose any effort
to increase the Renewable Fuels Standard (RFS) for ethanol. The letter
states, "New fuel sources offer the potential to eliminate our
dependence on foreign oil while contributing to the long-term stability
of our nation and its rural economies; however, as we seek to implement
policy that will move us toward accomplishing this objective, it is
absolutely essential that Congress carefully weigh the impact of such
actions, especially with regards to the use of corn for fuel." Those
signing the letter were American Beverage Association, American Frozen
Foods Company, American Meat Institute, Del Monte Foods Company, General
Mills, Grocery Manufacturers/Food Products Association, National
Association of Convenience Stores, National Cattlemen's Beef
Association, National Chicken Council, National Confectioners
Association, National Pork Producers Council, National Restaurant
Association, National Turkey Federation, Nestle USA, Inc., PepsiCo,
Inc., United Egg Association and United Egg Producers. The National
Cattlemen's Beef Association in a letter to Congress said, "Mandating
additional corn-based ethanol production will only serve to exacerbate
an already difficult situation for cattle producers across the country."
COOL and Small Businesses -- The chairwoman of the House of
Representatives Small Business Committee, Nydia Velazquez (D-NY), wrote
Secretary of Agriculture Mike Johanns urging USDA when considering its
final rule to implement mandatory country-of-origin labeling (MCOOL) to
ensure that small businesses are not burdened with unnecessary
recordkeeping requirements. Velazquez's letter stated, "USDA has been
flexible in allowing the use of routine recordkeeping requirements for
seafood. I urge the agency to be similarly flexible in this respect and
others when crafting the final rule for meat, produce and peanuts so as
not to overburden small businesses with excessive recordkeeping
USMEF Sees Bright Future for Pork Exports -- The U.S. Meat
Export Federation (USMEF) expects the United States to "dominate" the
global market for pork exports during the next 10 years. This is based
on the latest reports from the Agricultural Outlook by the Food and
Agricultural Organization of the United Nations (FAO) and the
Organization for Economic Cooperation and Development (OECD). USMEF
believes the United States share of global pork exports will be nearly
30% by 2016. According to USMEF, "U.S. pork exports have grown from
just 7% of production in 2000 to more than 15% today, and are projected
to account for 20% of production in 2016."
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Pork Industry Calendar
Aug. 28, 2007: 17th Annual
Swine Conference sponsored by Carthage (IL) Veterinary Service (CVS),
Ltd., Western Illinois University, Macomb, IL; contact: CVS by phone
(217) 357-2811, fax (217) 357-6665, e-mail email@example.com or log onto www.hogvet.com.
Aug. 28-29: Manure Management Clinic, Field Extension
Education Lab, Ames, IA; contact: Angela Rieck-Hinz, Iowa State
University, at (515) 294-9590 or log onto www.aep.iastate.edu/feel/manure.html.
Click here to get National Hog Farmer's
complete pork industry calendar.
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