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National Hog Farmer Weekly Preview
October 5, 2009
In this issue:
  Supply Crunch Exacerbates Price Spreads
  Diarrhea Investigation: Look for Infection
  Agreement Reached on Chinese Poultry Trade
  H1N1 Surveillance Program Shunned by Pork Producers

Supply Crunch Exacerbates Price Spreads
Judging by some e-mails and phone calls I have received recently, it is time once again to discuss retail pork prices and price spreads. This topic always surfaces when hog prices fall sharply or remain low for an extended period of time – especially if retail pork prices don’t follow suit. The latter is virtually always the case!

Is it fair for producers to suffer and “middlemen” to make more money? No, not really. But neither is it fair for producers to profit during many past summers when margins for middlemen were reduced. That happens less frequently than does a decline in hog values, but just what is fair?

That’s a difficult question to answer, especially when we know far less about packers’, processors’ and retailers’ costs than we know about producers’ costs. That results in us judging gross profits, not net profits, as we should.

Here’s what we know about this situation is:
    • The USDA retail price series is notoriously “sticky downward,” which means that it very seldom shows a lower retail price and, when it does, that decline is small. One reason is that retail prices indeed rise and are more heavily impacted by general inflation than are farm-level or wholesale prices because they include more cost items (labor, transportation, packaging, real estate, etc.) that inflate. But this “stickiness” is also a fault of the data collected by the Bureau of Labor Statistics (BLS): They do not gather sales quantities. More units are sold at lower prices, but the lower prices are not more heavily weighted in the average because the BLS data gatherers do not know how much was sold at each price. This is especially a problem this year when widespread, heavy pork featuring by retailers has helped move unexpectedly large domestic supplies. USDA says that it will begin to capture scanner-based price and quantity information again this fall, so this problem may be addressed soon. Let’s hope so.


Diarrhea Investigation: Look for Infection
Recently, several reports from Europe suggested a new disease threat to pig production as a syndrome of intractable diarrhea in suckling pigs. Up to 40% mortality was reported, with both the cause and the cure unknown.

As the diagnostic investigations unfolded, no consistent infectious causes of diarrhea were identified. The investigations were interesting, however, because of some of the implications from the analysis of risk factors. These included in no particular order: offspring of gilts or Parity 2 females; prolonged farrowing with later piglets at greater risk; greater variability in quantity of antibody transferred to the later-farrowed piglets; hyperprolificity of sows; excess milk/colostrum production; overuse of antibiotics and chilling. More will be discussed regarding these factors later.

Dealing with scours starts with looking for the infectious causes of the increased diarrhea or increased preweaning mortality.

The rate and frequency of diagnosis of E. coli numbers in suckling piglets at the Iowa State University Veterinary Diagnostic Laboratory (VDL) has not changed appreciably in the last six years.


Agreement Reached on Chinese Poultry Trade
An agreement was reached by the House-Senate agriculture appropriations committee that will allow imports of processed poultry or poultry products from China after USDA notifies Congress that certain conditions have been met. The agreement will allow USDA’s Food Safety and Inspection Service (FSIS) to conduct risk assessments needed to allow imports of cooked Chinese chicken products. USDA and the U.S. Trade Representative worked closely with the conference committee on the agreement. Secretary of Agriculture Tom Vilsack said, “We commend the conferees for reaching an agreement that protects food safety and public health in a manner consistent with our international obligations. The agreement reached by the conferees will maintain the safety of our food supply and ensure that America takes a leadership role in supporting a science- and rules-based trading system." U.S. Trade Representative Ron Kirk added, “The conferees have acted in Americans' best interests in two ways: by insisting on the safety of our food supply, and also by maintaining America's leadership in the rules-based global trading system." The National Pork Producers commented, “We applaud the conferees for finding a path forward that will permit USDA to conduct a science-based risk assessment of Chinese processed poultry. It sends a strong signal to China that the United States abides by its trade obligations and will base decisions about imports on sound science. We expect China to do the same.” Poultry products had become a major trade issue with China.


H1N1 Surveillance Program Shunned by Pork Producers
The U.S. Department of Agriculture (USDA) recently released a program designed to monitor and provide surveillance in swine herds carrying the novel H1N1 flu virus.

The catch was the program fails to provide pork producers with any assurances that if their herds become identified as infected, that packers will buy their hogs and retailers will sell the pork products.

“The reality is that USDA is willing to pay for testing samples if producers want to voluntarily participate, and as of today, almost nobody has elected to participate,” observes James Collins, DVM, head of the University of Minnesota Veterinary Diagnostic Laboratory (VDL).


Oct. 6-7, 2009: The Center for Food Integrity’s 2009 Food System Summit, Hilton Kansas City Airport Hotel, Kansas City, MO; contact: Jim Fallon at (816) 556-3129 or visit

Oct. 8-14, 2009: U.S. Animal Health Association Annual Meeting, Town and Country Hotel, San Diego, CA; contact for more information

Oct. 12, 2009: National Pork Board’s RFD-TV Show on the H1N1
outbreak and what it means to your operation, 7 p.m. central standard time; contact:

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The volatility of feed prices in recent years has heightened producers' awareness of the need for continual improvement in the efficiency of feed use. Click here for the complete Blueprint archive.

Our breeding technology is delivering what your operation demands, high production results across a wide range of environmental conditions. Count on the industry leader. Go to the trusted source.Click here for more information.


This month's focus: Manure Management
Paper Trail Documents Manure Application Practices
Iowa firm helps reinforce that pork producers are managing manure conscientiously.
Adapting to Smaller Margins
The pork industry has entered a new supply-and-demand paradigm, and cost-cutting measures may be needed to survive the current downturn.

Plus: 2009 Pork Industry Environmental Stewards
Pennsylvania, Minnesota, Iowa and North Carolina.

Ileitis immunity is as easy as turning on the water. Enterisol Ileitis protects your pigs with long-lasting immunity. It’s there when you need it and it takes the guesswork out of ileitis control. Now that’s what we call a liquid asset. Call Boehringer Ingelheim at 1-800-325-9167.Click here for more information.


National Hog Farmer offers 10 posters targeting key production areas, offering guidance in critical areas such as feet and leg soundness and reproduction traits soundness in replacement gilts. Others include pig anatomy, heat detection, sow condition, etc. All posters are in English. Select posters are translated to Spanish, Chinese and Japanese.


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