for Risk Management
Risk management, it seems, has always been viewed
favorably by pork producers. Problem is, it’s rarely practiced to any
A key reason, of course, is that hogs have generally been profitable –
especially for those whose cost of production is better than average.
You don’t get the name “mortgage lifters” without actually
generating the cash needed to pay off mortgages!
But it looks as though the future may require more risk management
action on the part of pork producers. The primary reason is there is
very little cash or equity to handle any future losses.
The severity of the industry’s cash/equity situation was driven home
again last week with the announcement that Coharie Farms of North
Carolina had sought bankruptcy protection as it liquidates its assets.
Coharie was founded by Nelson Waters and Lauch Faircloth in 1972.
Faircloth served as a U.S. senator from North Carolina in the 1990s. His
daughter, Ann, had been running the business for several years. Her
statement regarding the filing sounded like this (paraphrasing): “We
aren’t throwing any more of our money at this thing.” It’s
probably a position being contemplated by many pork producers these
The most recent Pork Powerhouse rankings from Successful Farming listed
Coharie as having 30,000 sows. I have heard reports that at least 9,000
of those sows would be purchased by other producers or contract growers
and never go out of production. My guess is that more will be added to
that number, making the net reduction in the U.S. sow herd closer to
15,000 vs. 30,000.
Livestock Loss Insurance Claims
The delayed fall harvest this year is adding pressure to
nutrient management work that is also an important task every fall. This
pressure can add risk to both people and pigs during nutrient
application. This isn’t news to anyone who has been stuck watching the
manure pits filling while the grain bins were not.
Safety practices for pit pumping have been outlined from multiple
sources, and two are listed here as references: www.extension.umn.edu/Swine/components/pdfs/PorkCast-PitPumpingGuidelines.pdf,
Unfortunately, we have a few instances every year in which small or
large groups of pigs are killed by pit gases in confinement buildings
during the agitation and pumping of manure storage pits.
From a diagnostic laboratory standpoint, we help veterinarians as they
prepare materials for insurance claims against losses that result from
ventilation failures or pit gas exposure by performing diagnostic tests
on samples submitted from affected pigs.
Animals No Cause for Alarm
The World Organization for Animal Health Office of
International Epizootics (OIE) said there is no evidence suggesting that
animals play any role in the spread of H1N1 virus to humans. Therefore,
the international trade of live pigs and other susceptible animal
species and/or their products should continue uninterrupted. OIE
Director General Bernard Vallat stated: “Pandemic H1N1 2009 virus
infections in pigs and other susceptible animals were assessed as
probable from the very first days after the virus was detected in
humans. So, it does not come as a surprise that notifications of
infection in new animal species are received; on the contrary, it
demonstrates animal disease surveillance is efficient and functioning to
the benefit of all.”
CDC Provides Guidance to Producers Concerning H1N1 — The
Centers for Disease Control and Prevention (CDC) has published interim
guidance for workers employed at swine farms to help prevent the spread
of influenza A viruses, including the novel H1N1 influenza virus. The
interim guidance provides information about recognizing the signs of
influenza in pigs, the steps to take to prevent the transmission of
influenza viruses from pigs to people and from people to pigs,
surveillance and monitoring of workers’ health, indentifying high-risk
groups, administering influenza antiviral drugs and vaccinating swine
Senate Environment Committee Passes Climate Change Bill — The
Senate Environment and Public Works Committee passed Senators Barbara
Boxer (D-CA) and John Kerry’s (D-MA) climate change bill, S. 1733,
which would require a 20% cut in emissions by 2020, compared to 2005
levels. The committee Republicans boycotted the mark-up because of
Chairwoman Boxer’s refusal for additional economic analysis of the
legislation. Under the rules of the Senate, the committee was not able
to consider any amendments to the bill because of the boycott. The bill
now awaits consideration by other committees, including agriculture and
Industry’s Losses Exceed Those of 1998-99 Disaster
U.S. pork producers have now lost more money than they
lost in the pork price disaster of 1998-99, says Ron Plain, University
of Missouri Extension livestock economist.
“Hog farmers are losing more money than they did in what they thought
was a once-a-lifetime crunch just a decade ago,” Plain says. He spoke
at the annual Swine Institute held in Columbia, MO, by the Missouri Pork
Association and the University of Missouri Commercial Agriculture team.
“From October 2007 to October 2009 the average hog was marketed at a
loss of $19.18/head,” Plain says. Farmers lost money raising hogs in
23 of the last 25 months.
Nov. 15-18, 2009: American Bankers
Association’s National Agricultural Bankers Conference, Grand Hyatt
San Antonio, San Antonio, TX; contact: Margot Mohsberg at (202)
Nov. 17-18, 2009: Saskatchewan Pork
Industry Symposium, Saskatoon Inn, Saskatoon, Saskatchewan; contact: email@example.com or www.saskpork.com.
Nov. 19, 2009: Kansas State University Swine
Industry Day, Alumni Center, Kansas State University,
Manhattan, KS; contact: Jim Nelssen at (785) 532-1251 or firstname.lastname@example.org or Lois Schreiner at
(785) 532-1267 or email@example.com.
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