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Foods Announces Major Sow Herd Reduction
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Barns Don't Come with Owner's Manuals
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Stalls vs. Pens
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Gestation Housing Options
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Market Preview
Canadian
Report No Hit, Possibly a Miss
Last week's Canadian Hog Statistics report has been a
topic of discussion in many quarters this week. It appears that
virtually everyone, including Canadian producers and industry analysts,
believe that Statistics Canada has missed the count -- perhaps quite
badly -- on the high side. I hope that's the case and that the Canadian
data agency will do its best to revise the numbers if they are, in fact,
wrong. I doubt, however, that will happen before they issue the next
quarterly report in April.
I have talked to several people who believe that the Canadian herd was
down significantly more than the published 1.9% and that the real
reduction would result in fewer farrowings than were indicated in the
report. Larger reductions would no doubt fit better with the economic
situation in Canada and certainly would sit better with U.S. producers
who are seeing a flood of Canadian pigs into the U.S. market.
It is my impression that U.S. producers can accept that flood of pigs if
it is part of a liquidation and adjustment by Canadian producers.
Continuing large imports and little or no reduction in Canada's herd,
however, will begin to strain producers' patience quickly, especially if
government payments, loans and other assistance grow.
Meanwhile, USDA's Livestock Market News is struggling to acquire and
publish accurate data regarding imports of cull Canadian breeding
animals into the United States. Figure 1 shows the data as they stand
today. Last week, USDA tried a different categorization method that
resulted in cull breeding stock imports for the week being roughly
15,000 head as opposed to the 6,836 head shown in the graph. The
numbers for this year still defy logic and anecdotal evidence from sow
buyers in Canada. The data shown in Figure 1 indicate that imports of
cull breeding animals have been 11% smaller than one year ago thus far
in 2008.
The bottom line: We are currently flying blind on the size of the
Canadian breeding herd and the changes that are occurring. It appears
that data agencies on both sides of the border have provided us with
less than accurate information. That makes it very difficult, if not
impossible, to make optimal decisions. I hope all of the agencies
involved improve their efforts and their results and I urge producers to
give them a little time to do so.
Exports Shine
Lost amid my disappointment with the Canadian inventory numbers last
week was news that U.S. pork exports had indeed set another record in
2007! This marks the 16th straight year of record export volume for the
U.S. pork industry (see Figure 2).
This achievement was, perhaps, more satisfying than those of years past
since it was definitely in doubt as late as July. Exceptional
performance the second half of 2007, buoyed by surging shipments to
China and Hong Kong, pushed carcass equivalent shipments 4.8% higher for
the year. Product weight exports were 3.1% higher for the year and pork
by-product exports were 11.7% higher.
When it comes to hog demand, though, the more important data are the
values of exports, since it is dollars that speak in deriving demand
back upstream. The values of U.S. exports were higher than in 2006
virtually all year and closed the year 9.6% higher for pork and 6.1%
higher for pork variety meats.
The December data contained a couple of very interesting individual
observations (see Figure 3). Shipments of pork to China were 32.4
million pounds carcass weight (73%) smaller than in November. A portion
of that reduction was offset by 4.6 million pounds more product being
shipped to Hong Kong, but I think it serves as notice of how fickle the
Chinese market can be. While huge, the Chinese market is still subject
to considerable central control that may or may not behave according to
the normal forces of economics.
The data for Mexico was also interesting. Shipments to Mexico grew by 8
million pounds from November to December. And, December shipments were
within 10% of the 2006 levels for the first time since April. Exports
to Mexico were still quite disappointing, ending the year 26% smaller
than last year, but the December surge was encouraging.
Click to view graphs.
Steve R. Meyer, Ph.D.
Paragon Economics, Inc.
e-mail: steve@paragoneconomics.com
 Hermitage NGT
Hermitage NGT offers their North American clients:
- Breeding Stock (GGP/GP/Parent stock)
- Semen-fresh & frozen
- Closed herd breeding programs
- Genetic monitoring through the Hermitage BLUP recording system
Talk with our team of specialists in genetics, reproductive physiology,
nutrition, veterinary medicine, pig production management and A.I. to
design a program to allow you to take advantage of these exciting
genetics.
www.hermitagengt.com
Production Preview
Eight Principles
Driven by Quality Inputs
This week's column will conclude our discussion of the
eight principles of quality management in the pursuit of optimization.
While optimization is a worthy goal, attainment is nigh impossible in
the absence of a principled framework. As previously noted, the
principles of quality management provide guidance for improving
efficiency by eliminating waste -- both in the form of wasted product
(pigs) and resources (labor, feed, fuel, etc.).
The first three principles consider customer needs, organizational
leadership, and the value of people in the process. The fourth and
fifth principles address the importance of defined processes and system
management.
Principle six is continuous improvement. Organizations and farms need
to pursue improvements in order to attain and maintain their competitive
advantages. Continuous improvement may be pursued through any number of
routes, ranging from the use of a suggestion box, to the use of
consultants, to the use of highly structured programs, such as Six
Sigma.
The seventh principle is a factual approach to decision making. This is
important because all processes have inherent variation. No doubt, the
biological nature of the pig contributes to variation as well. However,
with all that variation, it becomes challenging to determine when real
changes occur. In other words, when do you need to act and when is it
better to do nothing?
Variation is classified according to its cause:
- Common cause variation is the normal variation of the
process, such as genetic variation within a group of pigs.
- Special cause variation is the result of an unusual circumstance
or event, such as the variation in growth rate due to a disease outbreak
or an increase in daily water usage due to a broken waterline.
- Systematic variation is variation that is predictable over time,
such as seasonal infertility or variations in growth rate associated
with hot weather or old-crop grain.
The use of data allows producers to identify real changes, including
potential causes and effects. Further, by understanding the types of
variation within production, a system can set realistic expectations for
performance.
The eighth principle is mutually beneficial supplier relationships. That
is, both the supplier and the customer benefit. As previously
discussed, pork production is characterized by both internal suppliers
(i.e., sow farms and nurseries) and external suppliers (i.e., feed
manufacturer). Anyone who works in a pig barn understands the
importance of quality inputs. After all, it's nearly impossible to
restore quality once it has been lost.
So, although the principles of quality management do not offer a direct
explanation of how to achieve optimization, it is reasonable to conclude
that sustained optimization would be elusive in their absence.
Stephanie Rutten-Ramos, DVM
University of Minnesota
rutt0011@umn.edu
Editor's Note: For all your agricultural news, markets and
commentaries, go to www.farms.com.
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Legislative Preview
Largest Beef
Recall in USDA History
USDA recalled 143 million pounds of frozen beef from
Westland/Hallmark Meat Company based in Chino, CA -- the largest meat
recall in U.S. history. USDA said the recall is the result of the
company not preventing ailing (downed) animals from entering the food
supply. An undercover investigation by the Humane Society of the United
States triggered the recall. Secretary of Agriculture Ed Schafer said,
"Hallmark/Westland did not consistently contact the Food Safety &
Inspection Service (FSIS) public health veterinarian in situations in
which cattle became non-ambulatory after passing ante-mortem inspection,
which is not compliant with FSIS regulations. Because the cattle did
not receive complete and proper inspection, FSIS has determined them to
be unfit for human food and the company is conducting a recall."
Caroline Smith DeWaal of the Center for Science in the Public Interest
said, "Consumers are losing confidence in USDA's ability to ensure the
meat they eat is safe. This recall is the result of a terrible failure
of the U.S. Department of Agriculture's mandate since 1906 to ensure
that sick animals are not slaughtered for human food. Once again, USDA
is in reactive mode -- taking steps to protect the public long after a
highly publicized animal welfare scandal." Congress is expected to hold
hearings on this recall, which will likely add to congressional efforts
to pass food safety legislation this year.
EPA Names Agriculture Advisory Committee -- Environmental
Protection Agency (EPA) Administrator Stephen Johnson announced the
appointment of 30 individuals to the new EPA Farm, Ranch and Rural
Communities Advisory Committee. Johnson said, "Through increased
cooperation with our agricultural partners, EPA is planting the seeds to
reap both environmental and economic benefits for the American people."
The committee will be asked to focus initially on:
- How EPA's policies and regulations on climate change and
renewable energy will affect the agricultural community.
- An environmental strategy for managing waste from livestock
operations that considers regulatory and voluntary approaches, and
provides tools for producers to attain superior environmental
performance.
- Development of a constructive approach to advancing sustainable
agriculture, protecting the environment and addressing communication
between environmental and agricultural interests.
Those named to the committee include: Martha Guzman Aceves, CA; James
Andrew, IA; Leonard Blackham, UT; Richard Bonanno, MA; Marion Long
Bowlan, PA; Garth Boyd, NC; Michael Brubaker, PA; Christine Chinn, MO;
Gary Cooper, OH; Otto Doering, IN; Robert G. Flocchini, CA; Thomas M.
Franklin, MD; Suzy Friedman, VA; Earl J. Garber, LA; Ralph Grossi, CA;
Karri M. Hammerstrom, CA; Michele Laur, Washington, DC; Tom McDonald,
TX; James R. Moseley, IN; Dave Nelson, IA; Martha L. Noble, Washington,
DC; Dawn R. Riley, KY; Clifford S. Snyder, AR; Jeff Tee, WA; Dennis H.
Treacy, VA; Teferi Tsegaye, AL; Jeffrey R. Vonk, SD; Jay Vroom, VA;
William F. Willard, MD; and G. Douglas Young, NY.
Producers and Industry Oppose Food Safety User Fees --
Twenty-nine producer and industry organizations sent a letter to
Congress opposing the administration's proposed $96 million in user fees
for meat and poultry food safety inspection. The organizations stated,
"These 'user fees' for government-mandated food safety inspection
programs represent an additional $96 million tax on consumers, livestock
and poultry producers and the meat, poultry and egg processing
industries." The letter went on to say, "...this proposal to transform
government-funded food safety inspection into an additional fee system
provides less accountability for the government to manage program costs,
results or efficiencies." Congress was also reminded that this user fee
would put meat and poultry products at a competitive disadvantage in the
domestic and international markets compared to imported food products
not subject to the user fees. Organizations signing the letter included
the American Meat Institute, American Farm Bureau Federation, Food
Marketing Institute, National Cattlemen's Beef Association, National
Chicken Council, National Grocers Association, National Pork Producers
Council, National Turkey Federation and United Egg Producers.
Farm Bill Negotiations Continue -- The Senate Agriculture
Committee last Friday evening proposed funding the new farm bill at
$12.3 billion over the baseline. Earlier the House Agriculture
Committee had suggested $6 billion over baseline, which now has been
withdrawn. Secretary of Agriculture Ed Schafer and Deputy Secretary
Chuck Conners, in a statement, said, "We are disappointed that the
Senate has not joined the House in proposing a package that seeks fiscal
discipline and real reform while providing a true safety net." Efforts
continue in reaching an agreement on the funding level for the farm
bill. Time is running short with the current farm bill expiring on
March 15.
P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.
Ingelvac CircoFLEX® vaccine makes it easier to protect pigs from
PCV2 as early as 3 weeks of age or older . It starts early and stays
late.
Call Boehringer Ingelheim at 1-800-325-9167.
Pork Industry Calendar
March 6-7, 2008: Swine Alternative Farrowing Training
Course, West Central Research and Outreach Center, Morris, MN; contact:
Mark Whitney at (507) 389-5541, whitn007@umn.edu or click on www.extension.umn.edu/swine.
March 6-8, 2008: Pork Industry Forum, Adam's Mark, St. Louis, MO;
contact: (515) 223-2600 or www.pork.org.
Click here to get National Hog Farmer's
complete pork industry calendar.
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