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National Hog Farmer Weekly Preview
January 3, 2011
In this issue:
  Historic Costs Likely to Temper 2011 Hog Profits
  PRRS Activity Picks Up
  GIPSA Economic Analysis Queries Filed
  Nutrition Facts Panels to Appear on Products

Historic Costs Likely to Temper 2011 Hog Profits
As we launch into a new year, it is clear that 2011 will indeed be a challenge. While the obvious watchword is “costs,” there could indeed be other bumps in the road ahead. Our encounter with the H1N1 influenza virus and the poor quality corn in the 2009 harvest are good examples. But positive occurrences happen, too. Good quality corn in 2010 and attending to pig supply issues are in our favor. Bottom line: “stuff happens” and this year will be no different.

First things first – the one factor that we can see pretty clearly at present is that cost minimization will be a challenge. Figure 1 shows forecast costs and prices based on Chicago Mercantile Exchange (CME) Group Lean Hogs, corn and soybean meal futures at the market’s close on Monday, Jan. 3. In spite of what may well be record-high hog prices (at least for the annual average), the year, at present, promises to be only a bit better than breakeven for the average Iowa farrow-to-finish operations represented by the Iowa State University estimated costs and returns series.

The cost estimates for 2011 are truly historic. The current forecast for hogs that will be sold in July 2011 is for costs to average $84.14/cwt., carcass weight, assuming purchases of cash corn and soybean meal and no successful cost mitigation from using futures, options, contracts, etc. That is over $3/cwt. higher than the highest actual cost estimate on record, $80.87/cwt., carcass, for hogs sold in August 2008. In fact, Monday’s futures markets say that hogs sold from May through year-end (2011) will all cost more to produce than those previous record-high hogs.


PRRS Activity Picks Up
By all accounts, there has been a lot of PRRS activity in U.S. swine farms this fall and early winter. Our molecular genetics laboratory has been busy with frequent requests for sequencing PRRS (porcine reproductive and respiratory syndrome) virus from diagnostic cases we have received. There have also been frequent requests to quantify the amount of virus present in diagnostic samples, which has led to some interesting observations that will be discussed later.

Identifying Strains
PRRS virus sequences are compared against other PRRS strains of interest, based on a history of a particular virus in the farm or region, or for other reasons to make a comparison. In order to put some sort of name on a virus, laboratories provide an RFLP cut pattern number based on the sequence of a portion of the virus genome. RFLP stands for “restriction fragment length polymorphism,” which is a method developed in 1996 to distinguish field viruses from vaccine viruses. The procedure involves using three enzymes to cut the virus gene into segments and then comparing viruses based on the size of the fragments produced, depending on where the virus gene was snipped apart by the enzymes.


GIPSA Economic Analysis Queries Filed
A number of senators have written Secretary of Agriculture Tom Vilsack regarding his recent announcement that USDA will be conducting a cost-benefit analysis (CBA) of the proposed Grain Inspection and Packers and Stockyards Administration (GIPSA) rule regarding livestock and poultry marketing. The senators said, “We are hopeful that USDA is now on the path to conducting a thorough, comprehensive CBA, which will provide the kind of information that is necessary to understand the potential consequences of the rule.” The senators raised a number of questions regarding the analysis:

• To what extent will USDA’s chief economist (OCE) be involved?

• To what extent will the Office of Information and Regulatory Affairs be involved?

• Will the cost-benefit analysis be subject to external peer review, ensuring objectivity?

• What is the scope of the cost-benefit analysis that will be conducted?

• Could the rule actually lead to decreased competition and fewer options for American producers to market their livestock?

The letter also said, “Given the significance of the potential impacts of the proposed rule on livestock and poultry producers, processors and consumers, it is essential that we proceed with the best information we can, including a thorough and comprehensive CBA conducted by the OCE, aided by an impartial, external peer review.” Those signing the letter included Senators Mike Johanns (R-NE), Saxby Chambliss (R-GA), Pat Roberts (R-KS), Mike Crapo (R-ID), Jim Risch (R-ID), Thad Cochran (R-MS), and Dick Lugar (R-IN).


Nutrition Facts Panels to Appear on Products
The U.S. Department of Agriculture’s Food Safety and Inspection Service is making important nutritional information readily available to consumers on 40 of the most popular cuts of meat and poultry products.

A new rule specifies that packages of ground or chopped meat and poultry will feature nutrition fact panels on their labels. Also, whole, raw cuts of meat and poultry will feature nutrition fact panels either on package labels or available for consumers at the point-of-purchase.

“More and more, busy American families want nutrition information that they can quickly and easily understand,” says Agriculture Secretary Tom Vilsack. “We need to do all we can to provide nutrition labels that will help consumers make informed decisions. The USDA and the Department of Health and Human Services work hard to provide the Dietary Guidelines for Americans every five years, and now consumers will have another tool to help them follow these guidelines.”


Jan. 19-20, 2011: Minnesota Pork Congress, Minneapolis Convention Center, Minneapolis, MN; for more information contact: Minnesota Pork Producers Association by phone (507) 345-8814, e-mail or go online

Jan. 25-27, 2011: Iowa Pork Producers Association Annual Meeting and Iowa Pork Congress, Iowa Events Center, Des Moines, IA; for exhibitor information, contact Doug Fricke by e-mail: or call (515) 225-7675; for seminar information, contact Tyler Bettin by e-mail: or call (515) 225-7675.

Jan. 31, Feb. 7 and 14, 2011: Employee Management Workshop for Agricultural Operations (three-part workshop), Hardin County Extension Office, Iowa Falls, IA; for more information contact: Russ Euken, extension livestock specialist by phone (641) 923-2856 or e-mail or Mark Storlie, swine field specialist, by phone (563) 425-3331 or e-mail



The October 15 Blueprint edition of National Hog Farmer provides guidelines for building a sound replacement gilt program, including nutritional considerations to maximize genetic potential and the importance of an effective herd health management program. In addition, the issue offers a special section on screening replacement gilt candidates for skeletal and reproductive soundness.

When two leaders come together, expect great things to happen. One-dose protection from wean to finish. That’s Ingelvac® CircoFLEX-MycoFLEX™. The only circovirus and Mycoplasma vaccines USDA-approved for mixing. The result? A true dose of confidence from two powerful leaders. Call Boehringer Ingelheim at 1-800-325-9167 or click here for more information.


The Dec. 15 edition of National Hog Farmer features our annual roundup of swine research conducted at universities in the United States and Canada this past year. Presented in six primary categories – swine health, nutrition, meat quality, manure management, genetics, animal welfare – you will find reports from 23 trials. Those and additional research reports are posted at .



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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