Friday, April 19, 2024

Finding value for manure as fertilizer

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Editor’s note: Bijon Brown, Production Economist, Alberta Pork recently interviewed Trevor Wallace, Nutrient Management Specialist, Alberta Agriculture, Forestry and Rural Economic Development. Brown can be contacted at bijon.brown@albertapork.com. Wallace can be contacted at trevor.wallace@gov.ab.ca.

High fertilizer prices have created a renewed sense of interest in using hog manure to nourish crops. Knowledge is the key to putting manure to best use.

Brown: Since mid-2020, we’ve seen a significant rise in fertilizer prices. More recently, we’ve seen how transportation bottlenecks and China’s restriction of fertilizer exports have caused prices to soar. Do you think there is value in using hog manure as fertilizer for crops?

Wallace: Yes, definitely. Basically, all the nutrients that a crop needs can be found in manure to varying degrees. It’s not a perfect fertilizer, and there’s going to be shortfalls of nitrogen within the manure, but as a nutrient source, it’s a very good option for producers – especially the operations that have manure there. They’ve got to put it on the land somewhere, so it can be really targeted both on the landscape and towards the crop, to provide a very good value for that cost of application.

Brown: Is it expensive to test or sample manure?

Wallace: No. The sampling is relatively easy, and sometimes manure applicators can do it for you, but this can sometimes be a pain. Manure composition is variable, so that’s always a problem. On a drag line system with a pump, there’s often a spigot that we can open and take some manure out or use the transfer hose that we’re pumping. We take several samples and then try to keep it cool and get it to the lab, so that’s the bigger challenge than the cost.

Brown: What’s the best way to start this, and how can we value this manure? Is there a tool that can estimate the value of the manure?

Contrary to what some might think, it is possible to put a dollar value on manure through testing and analysis.

Wallace: Yes. There are a couple of different ways to do it, and we do have the ‘manure transportation calculator.’ The calculator allows you to put in the crops you want to grow, and it’s going to give you book values automatically, but you can put in your own values if you’ve had the analysis done.

When you put in your numbers, it spits out the economic benefit and the cost of using it. The calculator evaluates the cost over five years, so over that rotation, we’re going to account for nutrients that are released with time. Value comes in two ways: one of them is from the nutrients in the manure, and the other one’s from the nutrient needs in the crop.

Brown: What’s the best approach for getting consistent nutrient application?

Wallace: The traditional way is really good agitation – starting two to four hours before application. It costs money, but we’ve improved agitation with either multiple agitation pads in the lagoon or new technology, like a remote-controlled agitator that moves around and sucks up the content at the bottom. That’s one approach.

Another way is to take multiple samples from the lagoon at different times. The early material is mostly water, and the later material is going to be a higher percentage of solids. Another way yet uses a newer technology to sample the nitrogen content as the manure’s flowing from the tanker.

Brown: What are the benefits of applying the manure via direct injection versus surface application?

Wallace: Surface application is fast. You can do a large area quickly to reduce soil compaction, but the problem with surface application is the loss of that available nitrogen with solid manure, which has a lot more of the organic nitrogen and a smaller amount of the available nitrogen. With liquid manure, it’s fine. There’s a lot of nitrogen that can be lost depending how we handle it.

Injecting manure, rather than surface application, remains the preferred method. Among other reasons, less nitrogen is lost.

Brown: Should application be directly to the soil, to make the best use of nitrogen?

Wallace: Yes. It can still be broadcast, but the quicker we work it in, especially the liquid, the more nutrients or nitrogen being captured. The guys that are changing their system so they can spread during the season – into growing crop – are not spreading it when there’s a risk of loss, since most of our runoff’s in the spring. If we can get it in the ground in the fall, the organic stuff will start breaking down a bit, but crops use it better. A low broadcast or a pure injection helps with odour, and maybe the most important thing, it gets some of the equipment off the road, for safety reasons. 

Brown: Are there any other benefits we can get out of manure when it comes to soil quality? 

Wallace: Yes. Part of it comes from that organic portion, like the manure itself. We’re adding a food source for microbes. Solid manure can have a greater impact than the liquid. It’s adding the carbon and organic matter to the soil, which makes the ground more pliable and easier for crop growth. It granulates really nicely and helps with water infiltration, resists soil compaction and helps the plant roots.

Brown: Is there value to using manure for renewable energy?

Wallace: I’m torn on it. For this technology to work, it needs to be scalable and fit the size of the operation. The difficulty with this is that it is complex technology – it’s going to require expertise or extra labour. Many manures are not really high-energy producers. We can use the manure as a base in the mixture for something like an anaerobic digester, but the hog manure we did some research on was producing about 156 megajoules of energy per tonne. In the same quantity, poultry manure produces 3,200 megajoules, and coal is 22 to 32 gigajoules [22,000 to 32,000 megajoules].

Brown: Are there benefits to having knowledge in terms of how manure affects the environment?

Wallace: Yes. When we often talk about manure, we look at it as an economic benefit for the crop. It is a cost to get it out there, but whatever we can do to maximize the use of the nutrients that are in it helps offset that cost. When we start talking about losses due to gases in the air or runoff, the loss of value is either a loss in yield or just a pure loss of cost, because you paid to put it there, but now it’s gone.

Those nutrients do the exact same thing in water as they do on land. A very small amount of them have a huge impact in water, so when we start to lose nutrients because of runoff, we’re not capturing them in the field. That nitrogen or phosphorus can have a significant effect on the growth of algae, for example, which has a negative impact on water quality.

Brown: Do you have any best management tips that can help a farmer manage his use of manure?

Wallace: Knowing what’s in the manure is a great first step. It doesn’t matter if you start with book values, but knowing what you’re applying is important.

I’ve worked with a lot of producers who have figured out their application rate not because they know what’s in it, but they’ve done it so long and they’ve come up with a number that produces the crop they’re targeting, so they’ve figured it out that way, but getting to know the nutrient content through soil sampling is fundamental.

Knowing that nutrient profile really helps with taking advantage of all the nutrients that you’re applying or the nutrients that are in the field, because if they’re accumulating there, you’re not getting value from them. 

Producers in Alberta are encouraged to contact Wallace if they are interested in learning more about how to best use their manure. Producers outside of Alberta are encouraged to contact their local agronomist.

U.S. Lean Hog Futures Plummet

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August 22nd, 2022
Jim Long President-CEO Genesus Inc.

Last week saw lean hog futures plummet with the near-term months of October and December declining over $6.00. We have to say not sure why the big decline. Our observations:

  • Lean hog prices are strong, the National Lean hog price averaged $1.17 lb. last Friday. October futures closed 93¢ lb. The future traders are projecting that hogs will decline 24¢ lb. over the next few weeks. Seems like a huge drop to us.
  • A few weeks ago, Iowa – S. Minnesota average hog weights continued low at 275.7 lbs. compared to a year ago at 277.6 lbs. Reflecting to us a current inventory.
  • U.S. hog slaughter last week continued the trend of less hogs. 2,395,000 compared to 2,432,000 a year ago. Year to date U.S. hog harvest is down 3.5%. All indications are that hog supply will continue lower than a year ago.
  • USDA pork cut-out calculation was $1.17 lb. last Friday. Choice Beef cut-outs $2.64 lb. Pork a real value option compared to Beef should be demand supportive.
  • Whole Chicken prices continue to decline last week at $1.29 lb. a few weeks ago in the $1.60 lb. range. Chicken slaughter running 1-2% over a year ago. A year ago, the price was $1.04 lb.
  • We are not sure what lean hog futures will do in the near term. We wonder sometimes if futures price discovery is about as relevant to commercial pig production as show pigs. Time will tell but we expect October hogs will be selling stronger than Friday’s lean hog futures would indicate.

Europe

  • Spain the largest hog producer in Europe set a new record price for hogs last week at 1.71 Euros/kg (liveweight). Since January 20, when the national price was set at 1.02 Euros/kg the Spanish market has not had a week of decline. It’s been a steady rise.
  • Germany the second largest producer has also seen a jump in hog prices to 2 Euros/kg (carcass). At the end of January Germany was 1.2 Euros/kg. Germany’s prices suffered from pork export issues caused by ASF. Some believe the combination of hogs selling under the cost of production and new environmental – animal welfare regulations could have made Germany’s sow herd decline by 500,000 – 600,000 sows.
  • Denmark is also seeing a decline in pig inventory. The July 1st compared to last year inventory of slaughter pigs was down 991,000 (-8.2%) and the sow herd was down by 84,000 (-6.5%). At the end of February, the Danish slaughter price was 7.90 DKK/kg (46.6¢ U.S./lb.), last week it was 11.80 DKK/kg (70¢ U.S./lb.)

A factor that affects both European and U.S. competitiveness is the U.S. dollar to Euro exchange rate. Currently, they are at par 1 to 1. Not so long ago the Euro was 1.1 to 1.15 to the U.S. dollar. The current exchange rate of 1 to 1 helps European pork be more competitive in global markets but on the flip side has made feedstuffs mostly priced in U.S. dollars globally more expensive.

North America’s largest competitor in global pork exports is Europe. As Europe’s supply of pork continues to decline and prices continue to rise both Europe and North America will benefit from less pork driving prices.

Dead Sows

We have written several times about the continued increase in sow mortality reflected in USA sow data. Now at 14% plus average many systems are approaching 20% and beyond in the farms using the prolapse generating genetics of you all know who. 

Recently we heard a producer make the comment “Why as an industry do we accept sow mortality greater than pre-weaning mortality?” SMS – MetaFarms data systems calculated a dead sow is a lost opportunity of $1,000 each. Do the arithmetic on your own farm, what is each 1% worth? As Albert Einstein in a well-used quote said, “Insanity is doing the same thing over and over again and expecting a different result.”

Einstein wasn’t in swine production but we would expect he would have realized buying the same genetics over and over and continuing to have the same results of huge sow attrition would lead to a change.

U.S. Hog Weights Reflect Current Hog Inventory

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Pork Commentary – Jim Long President-CEO Genesus Inc.
August 15, 2022

U.S. Hog Weights Reflect Current Hog Inventory

The latest Iowa – Southern Minnesota weights are reflecting quite a current hog inventory. In the first part of May, the weights were averaging 289 lbs. Last year same time they averaged 284 lbs. In May we were 5 lbs. heavier year over year. The first week of August this year 275.6 lbs., a year ago 278.4 lbs. Now almost 3 lbs. lighter year over year. Since the first part of May an 8 lb. swing. A significant shift may be somewhat attributable to heat but we don’t believe that can be the whole answer. Hog prices have gone up on the National Price from just over $1.00 lb. in the first part of May to now being in the mid $1.20’s. This tells us Packers have chased hogs with higher prices to keep lines fuller. This aggressive purchasing has pulled hogs forward as producers take the benefit of higher prices. Despite the lower hog weights U.S. hog slaughter year to date is down 3.6%. Last week the U.S. slaughtered 70,000 head less than a year ago. The National hog price current average in the mid $1.20’s lb. compares to $1.05 lb. a year ago same time. A reflection of more demand and less supply. This bodes well going into the future.

Other Observations

Last week CNN breathlessly told a story that Beef demand was declining while consumers were driving up Chicken prices due to inflation pressures. We wonder where they get their information?

  • We observe Choice Beef carcasses are $2.63 lb. range. We haven’t seen the Beef carcass price move more than a few cents either way for weeks.
  • If consumers are driving up demand for Chicken as the CNN story goes, wouldn’t Chicken prices be going up? What we observe is the opposite. Since the end of June, the National Whole Chicken price has declined steadily from $1.65 lb. to a week ago averaging $1.32 lb. Not exactly a resounding sign of increased demand and higher prices as CNN was reporting. Some would call this Fake News.
  • If CNN was doing a complete story on consumer demand maybe they should point out U.S. Pork cut-outs have gone from $1.05 to $1.25 lb. in a few short weeks. Obviously, as consumers are being squeezed by inflation, they are not cutting back on Pork purchasing if the price has gone higher. Maybe less stories on fake meat and more on an industry that consumers actually buy from i.e., Pork. Might better reflect the reality of real American consumers, not the ones the vegan woke’s in media fantasize about. American meat and poultry consumption is projected at near 220 lb. per capita this year. Americans love meat protein.
China Price Update
Market Hogs liveweight35 lb. feeder pigs
April 412.54 RMB89¢ U.S. lb.413 RMB$65.04
August 821.6 RMB$1.44 U.S. lb.775 RMB$115.16

It doesn’t take an ag economist to observe the big price increase in market hogs and feeder pigs in China. Producers have gone from losing gobs of money to making good margins. All because of the massive sow herd liquidation caused by industry losses of over $60 billion U.S. We continue to believe China will be back in the Pork import market over the coming months. Giving continued price support in U.S. and European markets.

  • We are all aware of how strong Beef prices are currently. The question in our mind is how high will Beef prices go in 2023 if the USDA projection of 1.7 billion to 1.9 billion lbs. less is produced than in the last couple of years. About a 7% decline. In our opinion, the significantly higher Beef price will be tremendously supportive to hog and Pork prices as we note Americans pay for and like consuming meat.
  • Spain, the largest hog-producing country in Europe set a new record hog price last week of 1.70 Euro/kg. The hog price has gone up almost weekly since the end of January when it was 1.02 Euro/kg. In Spain, slaughter numbers are down significantly and weights are lower year over year. The specter of lower number of hogs in Europe as a whole continues. The liquidation of sows started mid-last year has not totally come home to roost.

Summary

  • China higher prices from fewer hogs.
  • Spain record hog prices. Europe even fewer hogs coming.
  • U.S. less Hogs – less Beef.
  • Global high feed prices will discourage any expansion near term.
  • China, Europe, USA less hogs now and into the next year. A scenario that should lead to very strong hog prices.

Random Observations on the Pork Industry 

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Pork Commentary – Jim Long President-CEO Genesus Inc.
August 8, 2022

  • U.S. lean hog prices continue very strong with the National lean hog prices averaging $124.43 lb. last Friday.
  • U.S. pork carcass cut-outs also are strong last Friday at $1.25 lb.
Cut-outPrice
Belly$2.17 lb.
Rib$1.46 lb.
Butt$1.29 lb.
Ham$1.17 lb.
Loin$1.05 lb.

As usual, the cuts with the most marbling (flavor) lead the way in value, consumers vote with their money. The legacy of pigs too lean can be seen in the Hams and Loins languishing in value. Half the carcass is in Hams and Loins, never a bad idea to improve their taste and subsequent value, this can only be done by increasing marbling. Cardboard tasting Loins-Hams are a cancer to our industry, stopping our ability to grow demand and consumption.

  • Beyond Meat (NASDAQ: BYND) is reported to have burned $1 billion in cash over the last twelve months. Not exactly going forward. Many of the plant-based fake meat products have poor taste or repugnant taste which is why they are failing. Taste matters. Of note U.S. per capita, red meat and poultry consumption are at historical highs. Vegans be damned.
  • Interest rates are climbing, putting up costs for all producers higher. It’s also affecting breakeven costs for existing and proposed new operations. Higher interest rates are affecting producers everywhere and will slow production.
  • We have been writing since last fall about the massive financial losses the China industry was encountering. We predicted a huge decrease in production. Hog prices have doubled in China since March lower hog numbers come through. Some in China are saying the breeding herd has decreased by 20% (-8 million sows). According to data from the China feed industry pig feed output in June of 9.45 million tons was down 12.4% from last June (over 1 million tonnes less meaning less corn-soybean needed).

We also have been expecting as pork supply drops in China pork imports will increase. A week ago, for that week U.S. sales to China were 16,770 tonnes (farmer arithmetic equivalent to 160,000 hogs). Year to date 116,706 mt. No one buys pork if there isn’t a market or demand. We expect to see increased sales of pork from North America and Europe. Every pound of pork that goes to China isn’t available for domestic use or other export markets. This will sustain and enhance hog prices.

Summary

  • U.S. lean hog prices and pork cut-outs are strong reflecting strong demand.
  • European prices such as in Spain at record levels.
  • China hog price $1.45 U.S. lb. liveweight – large U.S. sale for pork (16,000 mt) – both reflection of cut pork supply and stronger prices.

Our premise has been and continues that lower supplies in USA-Europe-China will lead to strong global hog prices.

At Genesus we believe that we are producing Genetics of pork that the consumer craves. It’s a better eating experience. Genesus – Jersey Red Duroc is the name of our World Leading Duroc. Attached is an interview of Spencer Long of Genesus and Jim Eadie of Swineweb discussing the Jersey Red Duroc.

Link to the video:

Driving closer to understanding transport distance impacts

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By Lexie Reed

Editor’s note: Lexie Reed is a food animal veterinarian based in Lethbridge, Alberta. She can be contacted at lexiereedvm@gmail.com.

Animal transport is one of the most prominent public-facing aspects of the livestock industry. Ensuring welfare has many benefits. But how much of a difference does distance make when it comes to weaner pigs?

The impact of transportation on animal health and welfare remains a hot-button issue for the livestock industry. All livestock systems require live animal transport at some point in the system. Further, transportation is the event in which the public is most likely to see and interact with animals in the food system.

The health and welfare effects of this commonplace event are not well understood in many food animal systems, including the practice of transporting weaner pigs. Federal transport regulations in Canada limit the transport time of pigs to 28 hours. These regulations are based mainly on research on market hogs, not weaner pigs, which differ physiologically.

New research, led by animal behaviour expert Jennifer Brown of Prairie Swine Centre, supported by Swine Innovation Porc, aims to assess the response of weaner pigs under Canadian commercial transport conditions. Brown, in collaboration with animal scientists at the University of Saskatchewan and University of Guelph, investigated physical and behavioural responses of weaners after short- and long-distance transportation.

Brown found that weaners subjected to long-distance transportation lost more of their body weight, experienced more dehydration and spent more time feeding, drinking and sitting after the journey than weaners transported short distances. However, weaners transported shorter distances had more muscle injuries and higher indicators of physiological stress, as evidenced by blood cortisol- and blood neutrophil-to-lymphocyte ratios.

Prairie Swine Centre’s research report states: “In conclusion, this study represents the first research in Canada on the effects of transport on weaner pig health and welfare. Differences in long-distance and short-distance transport were found, but neither treatment was identified as being better than the other.”

Better adaptation takes longer

Immediately upon arrival, long-distance piglets weighed less than those travelling short distances, but three days later, the weight gap had narrowed.

In this study, short-distance transportation was defined as less than three hours of duration. The piglets transported short distance were weaned at the same time they were shipped. Long-distance transportation was defined as being greater than 30 hours of duration, and in contrast, the piglets in this group were weaned several days before transportation occurred.

While it might at first seem counter-intuitive that the weaners transported a shorter distance had higher indicators of physiological stress and muscle injury, Brown believes that the weaning time, as well as adaption to transport, contributed to this difference.

“Short-distance piglets were weaned and transported at the same time, so their response post-transportation reflects acute stress,” said Brown. “Because long-distance weaners had a much greater transport time, they habituated to transport conditions and showed reduced levels of stress biomarkers on arrival compared to short-distance weaners. It appears that the long-distance weaners adapted reasonably well to transport, as they did not clearly show signs of chronic stress.”

While it is difficult to pinpoint exactly where acute stress turns into chronic stress, or where habituation occurs, Brown’s findings suggest that weaners may be adapting to transportation conditions during the added time in long-distance transport.

All pig transportation in Canada is mandated by the Health of Animals Regulations under the Health of Animals Act. Transporters and producers are held legally responsible under this legislation. Pig transportation is also regulated by the National Farm Animal Care Council’s (NFACC) Code of Practice for the Care and Handling of Pigs. While the pig code is not law, on-farm and transport quality assurance programs closely align with this standard. For more than 99 per cent of pigs raised in Canada, entering into abattoirs inspected by the Canadian Food Inspection Agency (CFIA), quality assurance guarantees are required.

To pass the Animal Care Assessment (ACA) section of the Canadian Quality Assurance (CQA) or the PigCARE component of the Canadian Pork Excellence (CPE) program, producers must meet the requirements within the code. As such, updates to the code are introduced only following consultation with animal welfare experts. Research such as this project by Brown is designed to eventually find its way into industry standards, which are adopted with public trust and the confidence of international trading partners in mind.

Pre-weaning prior to shipping may have positive effects

Greater allowances for weaning time and space, and trailer improvements, can all contribute to better welfare.

While still in the early stages of weaner transport research, Brown thinks this work could impact the industry in three ways. The first potential impact could be the separation of weaning and transportation events at the farm level.

“Especially for long transport, so that pigs are recovered to some extent from weaning and consuming feed before they are transported,” said Brown. “This would require that sow barns have nursery space to wean into.”

The other impacts concern trailers.

“These results could influence the use climate-controlled trailers, with forced ventilation or insulation, especially in extreme hot or cold temperatures,” said Brown. “The provision of feed, water and rest on trailers is another consideration.”

However, Brown cautions that more research would be required in this area before any of those changes could be applied. By further enhancing the industry’s understanding of weaner transportation, changes to these practices are almost inevitable, thanks to the support of scientists, veterinarians, government and other stakeholders.

Canadian packers celebrate centennial

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By Andrew Heck

Marie-Claude Bibeau, Minister, Agriculture and Agri-Food Canada and Kerry Towle, Chair, Canadian Meat Council (CMC) together at CMC’s 2022 annual general meeting (AGM) and 100th anniversary banquet.

The Canadian Meat Council (CMC) held its annual general meeting (AGM) in Ottawa in mid-June, along with a banquet to mark 100 years since the organization’s founding.

“Our centennial celebration is testament to the longstanding efforts of the Canadian meat industry to grow and prosper,” said Chris White, President & CEO, CMC. “Canadian meat packers have proven time and time again that we are here to defy expectations for a country our size compared to some of our international contemporaries.”

CMC represents about 90 to 95 per cent of all pork and beef processed in Canada, in addition to other red meats. These fresh and processed products originate from more than 200 facilities across the country, shipping product to more than 120 countries worldwide. CMC works with its processor members and associate members – such as food ingredient suppliers, packaging material suppliers, equipment manufacturers and service providers – to advocate for international trade and regulatory policy frameworks that protect food safety and market access, while also helping the industry stay collectively competitive domestically and globally.

When it comes to political decisions and livestock disease challenges at home or abroad, producers and packers alike can be deeply impacted. For the hog industry, the continued, uninhibited flow of pork from the abattoir to end-users is fundamental to the financial success of the sector. While the composition of the industry has changed over time, what has remained unchanged is its devotion to expanding business opportunities and focusing on providing safe and wholesome meat for consumers.

Canadian meat goes global

Exports of Canadian pork and beef increased five-fold in terms of volume and value between 1988 and 2021.

In the aftermath of the First World War, more than a dozen meatpacking firms gathered in Toronto, in 1919, to discuss the formation of a voluntary trade association, which would eventually become the ‘Industrial and Development Council of Canadian Meat Packers,’ in 1922, officially changing to the ‘Meat Packers’ Council of Canada,’ in 1952.

The organization was renamed the ‘Canadian Meat Council,’ in 1980, at which time major changes were afoot in the industry, with a focus on diversifying from mostly domestic markets to international ones. Domestic red meat consumption per capita had begun to fall, as a result of increasing food consumer choice and a shift to proteins like chicken. As a result, packers began to seek new markets for their goods. It was around this time that the integration of hog production and pork processing became a smart business decision for packers who were eager to secure hog supply for reliable volumes of pork.

In 1991, the Canadian Pork Council (CPC) and CMC came together to form Canada Pork International (now known simply as ‘Canada Pork’) – the definitive link in the value chain that brought together producers and packers.

“The value proposition for Verified Canadian Pork hinges on collaboration between those who raise hogs and those who process them,” said Trevor Sears, President & CEO, Canada Pork. “Whether we market pork to Canadians or our overseas partners, strength across the value chain is what makes quality assurance guarantees possible.”

Today, about half of hogs on-farm in Canada belong to producer-packer integrated systems, while independent producers continue to play an important role for all federal plants. In 2020, Canada exported more than 70 per cent of all pork produced in the country, primarily to China, Japan, the U.S. and Mexico, with large emerging markets in Vietnam and the Philippines. Considering all global pork traders, Canada ranks first among export-dependent jurisdictions in the world, followed by Chile, which ships away just over 60 per cent of its pork. The U.S., meanwhile, moves approximately 30 per cent of its pork out-of-country.

Looking forward at issues affecting trade and regulatory policy frameworks, the global rise of African Swine Fever (ASF) has characterized the pork industry narrative in recent years, which intimately affects hog producers as much as packers and others in the value chain.

Continued trade requires disease control

Canada Pork’s handbook covers a wide range of topics related to the federal pork processing system, responsible for all exports. Canadian pork processing standards are recognized as the best in the world, in line with jurisdictions like Europe, the U.S., Australia and New Zealand.

CMC consults with the Government of Canada closely on international trade agreements to ensure meat remains front-and-centre in negotiations. Better access for Canadian meat abroad demands consistency in standards at home. This includes mandatory preventive control programs and enforced outcome-based regulations in meat plants, all the way back to on-farm programs. When Canadian production standards align with international expectations, trade barriers are much easier to overcome.

Starting in 2018, with the spread of ASF in China, the establishment of zoning agreements became a priority for the industry, and today, agreements are in place with the U.S., U.K., European Union (E.U.), Singapore and Vietnam. An agreement with Japan remains a high priority, as Japanese officials prepare to visit Canadian farms, plants and labs in the coming months to perform audits. Should an agreement be struck with Japan, taking into account the other existing agreements, more than 40 per cent of Canadian pork exports would be theoretically secure, if ASF were to strike.

“Zoning is Canada’s best chance at ensuring business continuity in the event of ASF,” said Rick Bergmann, Chair, CPC. “The importance of these political decisions cannot be overstated, even as producers focus on day-to-day farm operations.” 

In alignment with other national stakeholders, CMC is concentrating on supporting ASF mitigation efforts, such as enhancing surveillance to avoid the entry of pork products from infected countries through various ports of entry, enhanced biosecurity at the farm and plant level, wild boar eradication, passive surveillance sampling at key sites, small-scale producer awareness and by examining cross-border transport vehicle traffic on industry biosecurity. As such, CMC is an active partner on Canada’s ASF Executive Management Board (EMB), which includes representation from industry stakeholders and government officials working to implement the Pan-Canadian Action Plan on ASF. To reinforce the organization’s commitment in this area, CMC has joined CPC and the Government of Canada to study how an ASF outbreak would impact the Canadian industry from an economic perspective.

In the event trade comes to a halt due to ASF, pork supplies already in cold storage, awaiting export, will need to stay put, with additional back-filled pork arriving until the supply of market hogs on-farm and in transport is finally siphoned off. This would quickly become a complicated situation, as the Canadian public is not equipped to absorb (consume) the surplus pork that will be left in the lurch. For the countries with which Canada has agreed on zoning, a necessary first step would be to wait until CFIA has successfully established primary control zones (areas where the virus is known to exist) before declaring the rest of the country free of ASF. At that point, trade may resume in areas outside of the primary control zones with partners who are confident in our industry’s efforts to stop the spread.

As CMC furthers its advocacy on cultivating new trade relationships and strengthening existing ones, it would seem to be the unanimous opinion that ASF prevention, rather than response, is the preferred course. But it does stand to reason that, the more zoning agreements we have with our valued trading partners, the less the damage might be if the inevitable occurs.

Labour shortage has a ripple effect

In 2020, three beef facilities in Alberta, representing more than three-quarters of Canadian beef slaughter capacity, were closed simultaneously due to COVID-19 outbreaks.

When COVID-19 struck Canada’s meatpacking plants, the beef and pork value chains were in for a shock. Several federally inspected pork and beef facilities experienced voluntary or mandatory shutdowns, due to COVID-19 cases among employees. CMC played a pivotal role – working with provincial and federal government officials and other stakeholders – to ensure plants were able to be up-and-running as soon as possible, with worker safety in mind.

On the whole, labour availability remains a major challenge for packers and producers. Last year, CMC reported more than 9,000 vacancies within Canadian packing plants, ultimately affecting livestock slaughter volume. Vacancies also reduce capacity for further processing, which limits packers’ ability to create value-added products, prompting them to sell primal cuts at a lower price than what more detailed cuts could fetch on the market. This is why CMC advocates very strongly for an enhanced Temporary Foreign Worker Program, in addition to extended opportunities for workers to become Canadian permanent residents or citizens, as newcomers are much likelier to stick with their jobs when opportunities for long-term employment are available.

As labour challenges continue to hamper all aspects of the industry, this reality affects domestic and global food security, which depend on stable food supply.

An industry hungry for excellence

Verified Canadian Pork ‘katarosu’ shoulder roast, specially made with the Japanese consumer in mind. When Costco Japan switched from U.S. to Canadian pork, in 2017, sales improved.

More than nine out of 10 Canadians still eat meat, and a growing affluent population in the developing world is seeking out meat more frequently as a dietary staple. This is great news for both producers and packers, so long as the industry can continue working toward the common goal of sustainability and progress.

Canada’s hog producers and pork packers, bolstered by the work of CMC, continue to prove to buyers that the Canadian red meat industry is poised to serve their needs for years to come, as it has done for the past century and even longer. The COVID-19 pandemic, political regime changes, economically protectionist ideologies and industry hurdles aside, much opportunity exists for Canadian red meat to thrive in spite of challenges.

U.S. Hog Prices Stay Strong

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Last week the U.S. National Carcass price averaged $122 lb. U.S. Pork Cut-outs closed Friday at $127.34 lb. reflecting good demand relative to supply. Other observations:

  • U.S. hog slaughter last week was 2,291,000, same week last year 2,313,000. Year to date U.S. slaughter is down 3.7%. Latest Iowa – S. Minnesota liveweights average 276.7 lbs. A year ago, same week 278.1 lbs. Lighter hogs year over year indicate a very current finishing inventory. This is positive in sustaining hog prices going into fall when seasonally hog prices decline.
  • Official June U.S. sow slaughter was 268,900, a year ago June was 269,100. Next to no difference. To the end of June U.S. sow slaughter is 70,000 less than a year ago. U.S. weekly sow slaughter is running current in the 60,000 head per week range. Last Friday 450-499 lb. sows averaged $76.17 with highs of 88¢. Last August sows averaged in the 300-499 lb. range were 85.38¢ lb. In our opinion sow slaughter in the 60,000 per week range indicates a breeding herd inventory with little change happening.
  • We have written over the last few months about the decline in Europe and the UK’s pig production. A recent report by Agriculture and Horticulture Development Board (AHDB) in regards to UK market highlights some of the following.
  • UK sow herd was 415,000 mid 2021 is now forecasted to be 350,000 now. A decline of 15%.
  • Expectation hog slaughter to be down 15% year over year second half of 2022.
  • Current UK hog prices are 193.09 GBX/kg – the highest ever recorded. Unfortunately, with high feed prices producers are still losing money. About £20 British pounds a market hog.
  • UK market and production levels going forward are in our opinion a snapshot of much of Europe. We expect European sow herd will decline 1 million sows from its numbers of 2021. Less hogs coming leads to even stronger prices.
  • European Commission just released slaughter data from January to April 2022 – 4 months. Year to date EU hog slaughter down 4.2% – tonnes of pork produced down 5%. Less hogs, less pork. No wonder hog prices have increased. We expect year over year monthly EU hog slaughter to move towards 10% lower.
  • The ability of Ukraine to get grain shipped through the Black Sea now that there is a deal with Russia still seems to have some doubts. We expect some degree of success, if it’s in Ukraine and Russia’s self-interest to get grain moving. Russia has huge grain crop. Ukraine has lots to move also. We expect the backed-up grain from last year’s crop and new crop will put pressure on global grain prices as it flows into marketplace.

Summary

U.S. hog prices stay strong with no sign of more pigs well into 2023. Europe prices at or near record levels with fewer hogs forecasted in the coming months. China prices have gained significantly (up $200 per head) since first of April. Less hogs in the U.S., Europe and China. Collectively 75% of world’s hog production. We expect World hog prices to be excellent in the coming months due to less supply.

Hog Prices Stay Strong

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U.S. National Price – $1.18 lb. carcass.

China 22.73 RMB/kg = $1.52 U.S. liveweight a lb. x 280 lb. pig = $425. Current China isowean $98.

Spain – highest price in their history at 1.68 Euros/kg liveweight up from 1.02 Euros/kg at the end of January = increase of over $120 per head.

U.S. – China – Spain all hitting high prices at the same time is a reflection of global decline in hog production.

Other Observations 

• China official inventory data indicates little or no liquidation. The price going from 85¢ lb. at the end of March to $1.52 lb. last week tells us there has been a huge collapse in production due to the financial losses in the billions. No one pays more than they have to.

• EU data shows Pork Production down 7% in latest month report – EU officials predicted 3%. We believe EU has liquidated about 10% of their sow herd.

• U.S. pork carcass cut-outs closed Friday at $125.74 lb. A sign of strong pork demand. Choice Beef carcass cut-outs are $2.68 lb. a reminder consumers will pay more for a better taste experience. Someday our industry will realize the holy grail of profitability is better tasting pork not some other production myths.

• The U.S. National price of $1.18 a lb. compares to $1.11 a lb. a year ago.

• September corn closed Friday at $5.64 a bushel. In mid-May September reached $7.78 a bushel. U.S. National avg cash corn closed Friday at $6.50 a bushel. In mid-June it was $8.00. Certainly, lower prices are positive for swine producers cost of production. Since mid-May the feed cost to finish a market hog compared to current has declined $20 per head. A significant amount.

• Last Friday a Turkish brokered deal was made with Russia and Ukraine to allow grain (wheat, corn, oilseeds) to be shipped from Black Sea ports. If successful this will put millions of tonnes of grain into world markets. Not only from Ukraine but it will facilitate Russian grain – fertilizer exports. Wheat dropped 47¢ a bushel on the news of the agreement. Wheat has declined $5.00 a bushel since mid-May. $12.68 to $7.59 last Friday. The lower wheat price helps Europe swine feed prices where wheat is used significantly more than North America.

• About a month ago 500-550 lb. U.S. sows were 50¢ lb. last week they averaged 70.2¢ lb. with highs of 83¢ lb. Sow slaughter the last few weeks has averaged over 60,000 head (other than July holiday week). Price hasn’t jumped from lack of sows in our opinion but demand

• PigCHAMP quarterly 2022 data from 273 farms indicates sow mortality continues to be high. Mean of 14.83%. The top 10% was 23.3%.

o   In 2017 the mean was 10.73%. The top 10% was 15.5%.

o   Seems the continued use of sows with leg, social and prolapse issues is continuing to lead to higher sow attrition. It’s a real cost when SMS – MetaFarms data indicates a dead sow has over a $1,000 per head loss. Farmer Arithmetic – sow mortality up 4%, 6 million sow inventory. An extra 240,000 dead sows a year in industry. Dead sows don’t produce pigs.

• Last week’s report had Iowa-S. Minnesota weights at 277.5 lbs. compared to 278.1 lbs. a year ago. First time in several months weights lower year over year. Tells us market hog sales very current.

Premise

U.S. – China – Europe down in production at same time has been our prediction. It appears this is correct. This will sustain strong hog prices.

U.S. inventory report in June indicated less pigs and sows from a year ago. That is our production until next summer. We believe at minimum prices the next twelve months will be the same as the last twelve months. Current Lean hog futures at a $1.00 next spring and summer are undervalued in our opinion. We currently have $1.18 national lean hog price average, why would it be any lower next year with less hogs in America, less hogs in China, less hogs in Europe? Its Farmer Arithmetic but we will bet it against the Algorithms. 

National Pork Industry Conference Report 

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  Last week we attended the National Pork Industry Conference (NPIC) in Wisconsin Dells, Wisconsin at the Kalahari Resort. Our Report:

• Attendance was around 900 with a cross section of industry and producers.

• Genesus was a major sponsor. Sunday night Genesus hosted a reception attended by many.

• We had the honor to speak at the conference. Last week’s commentary covered the subjects we presented.

• NPIC was well organized as usual. The NPIC team does a professional conference in conjunction with Kalahari.

• Many people bring their families to Kalahari as it is a facility geared to family entertainment.

• One of the subjects well covered by several speakers was sustainability. It seems to be a new catchphrase for green, environment, carbons etc. Have to say we aren’t sure what is the answer for this in the pig industry. To us sustainable is making sure business is going forward.

• One speaker highlighted – Beef has nearly 30 more times CO2 per calorie than pork. Seems we are significantly ahead of the beef industry in carbon emissions. A good step ahead on what is termed sustainable.

Source: The Economist

Source: The Economist

The speakers on the economics of the pork industry were generally optimistic on hog prices the next coming months as U.S. hog supply continues to be low. No concern near term of packing capacity. Exports challenged by stronger U.S. dollar making pork more expensive for importing countries. All speakers spoke of lower hog supply in China and the opportunities for pork exports in future. Where feed prices are going can be described as a wildcard.

• Last week in our presentation we discussed the recent survey analysis by Iowa State University on consumer acceptance of gene-edited foods. We had several people discuss with us after.

o   Iowa State is ag friendly 

o   Survey was 2,000 people across the U.S.

o   Quote from survey “Around 60% of the women in the survey said they would be unwilling to eat and purposely avoid gene-edited food.”

• To be clear we support technology we aren’t against Gene-Editing as a science. Our concern is if 60% of women say they won’t eat, purchase or purposely avoid the product, what does that do to pork demand and pricing? We believe it will destroy our pricing and demand.

• It doesn’t take much to up end a market. Paylean (Ractopamine) was used across America and it was legal. No consumer had any concern. Everyone was going merrily along with it with no issue. Then China said no to Ractopamine (Paylean). It effectively became banned as all the industry fell over itself to stop using it. A one buyer (China), product gone.

What happens when a buyer says no to gene-edited? Whether it be a country or major retailer or food service?

• At a prior NPIC a Vice President of McDonald’s told everyone there “Don’t expect us to explain Gene-Editing.” When the largest restaurant chain in the world and one certainly not with elitist cliental gives the warning, we should pay attention. Our point before we rush head first into a world of gene-editing, all of us genetic companies, packers, foodservice, retailers, consumers need to look at this. Is this going to destroy demand and prices for the whole pork industry. Not much point producing pork that 60% “of the women in the survey said they would be unwilling to eat and purposely avoid gene-edited food.”

It’s the elephant in the room which as an industry we seem to be approaching like an ostrich sticking our head in the sand.

• Anyone who reads the commentary regularly is aware of our disappointment with the NPPC for the lack of a fight to get the CFAP 1 top up payments which was worth millions of dollars for our industry. One that every other major commodity got paid as promised, but swine producers didn’t. Promise made but not kept. We had a premise that senior bureaucrats at NPPC needed to move on. We needed fresh blood to fight for producers. Recently there has been several senior bureaucrats leave from NPPC. Bryan Humphreys has been appointed new CEO. Bryan spoke at NPIC and he gave in our opinion a blueprint of a new regime engaged to fight for and with producers. Afterwards we had the opportunity to speak with Bryan. It was a good conversation. As an American pork producer, we told Bryan we believe in the need of the NPPC. We appreciate the energy and new direction he is bringing to NPPC. As a pork producer we will fight with him alongside other producers to move our industry forward.

China Update 

• In the first half of 2022, it is estimated that 14 Chinese publicly traded enterprises will lose more than 20 billion RMB ($3 billion U.S.). (These results do not include two of the biggest companies Wens and Zhengbang as they have not reported two quarters financials yet). These losses in the first 6 months of 2022 of $3 billion is on top of the over $6 billion lost in 2021. Let’s assume these 14 companies represent 15% of Chinese hog production. Pro rate the $9 billion lost by the 14 companies in 2021-2022 it would lead to an estimated $60 billion lost in the whole industry. Any wonder the China hog prices has increased every week due to fewer hogs over the last three months? Hog financial losses lead to less hogs. Always have and always will.

• We heard a report last week China has begun ordering pork from Canada and Europe. Not much from USA, but any pork leaving North America – Europe to China is positive for all exporting countries and price supporting.

China Prices
 U.S. Dollar
 Market Hogs – Liveweight lb.35 lb. Feeder Pigs
March 1885¢$59.60
June 3$1.09$98.70
July 8$1.50$115.60
July 15$1.54$120.18

The relentless week upon week of China Price increase continues.

Our premise has been for the first time in history – China, Europe and North America will be down in production at the same time or about 75% plus of world’s pork production. It appears the premise is true.

NPIC

Jim Long President & CEO of Genesus gives a presentation on World Markets
Spencer Long of Genesus gives a presentation on the Genesus Jersey Red Duroc

Responsible antimicrobial use reinforces public trust

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By Kurt Preugschas

Editor’s note: Kurt Preugschas is a swine veterinarian and owner of Precision Veterinary Services. He can be contacted at kurt@precisionvet.ca. The work featured in this article was initiated by Javier Bahamon, Quality Assurance and Production Manager, Alberta Pork. He can be contacted at javier.bahamon@albertapork.com.

Antimicrobials are sometimes necessary in hog production, but their use has come under the microscope in recent years, on account of limiting antimicrobial resistance.

Antimicrobials are natural or synthetic substances that can kill or block the growth of micro-organisms, including bacteria that can make livestock sick. Antimicrobials are a valuable tool for veterinarians and hog producers to support animal health, control diseases and ensure animal welfare is maintained.

While the positive effects of responsible antimicrobial use are known, the potentially harmful impacts to human health and the environment are being more closely considered these days by global authorities and stakeholders within the Canadian livestock industry. The ultimate concern with using antimicrobials in hog production is the development of antimicrobial resistance.

Starting in late 2017, Alberta Pork recruited Precision Veterinary Services to work with 20 Alberta hog producers – mostly farrow-to-finish operations – from all regions of the province on benchmarking their antimicrobial use. This project did not directly measure antimicrobial resistance, but it may be possible to extrapolate the notion that, the more antimicrobials are used, the more risk there is of developing antimicrobial resistance. While this relationship is not entirely straightforward in nature, measuring antimicrobial use can be a fairly simple way of monitoring and understanding the relative risks while making improvements.

Antimicrobial use trending downward

Use of Class 1 and 2 drugs decreased over the five-year study, while use of Class 3 and 4 drugs increased slightly.
In-feed antimicrobials are most-common.

Prior to conducting the study, we suspected that antimicrobial use varied greatly from one farm to the next. Following the completion of the study, that was confirmed. However, the underlying positive reality is that antimicrobial use has been trending mostly downward. Over the five years assessed, there was a 43 per cent decrease of antimicrobials administered via injection, an 18 per cent decrease of antimicrobials administered through water, but an 11 per cent increase in antimicrobials administered in-feed. Overall, that represents a 13 per cent total decrease, moving lower as time goes on.

Heath Canada considers Class 1 antimicrobials as having ‘very high importance’ for human health. The 78 per cent drop in their use over only a handful of years is encouraging. The results suggest that Class 1 drugs are primarily being replaced by Class 3 alternatives, which are much less important for human medicine.

In 2018, Heath Canada mandated that all Class 1, 2 and 3 drugs for any use would have prescription status, available only from veterinarians and pharmacies. An example of a Class 1 drug used in the swine industry is ceftiofur – a pharmaceutical that treats infections in pigs, including bacterial pneumonia caused by Streptococcus suis. Examples like these have raised the level of concern over causing antimicrobial resistance and antimicrobial pollution in the environment.

This downward trend of antimicrobial use in Alberta hog production aligns with the goals of the Global Leaders Group on Antimicrobial Resistance, which was formed two years ago to tackle the problem. The group includes politicians, researchers and private sector representation from across the world, meeting quarterly to advise on prioritized actions to address the matter. Alberta hog producers, it seems, are on the right track in this regard.

Antimicrobials add potentially avoidable costs

In many cases, the antimicrobial cost per sow was three times greater for high-use farms compared to low-use farms.
The average difference in antimicrobial cost per pig was more than $6 greater for high-use farms compared to low-use farms.

In today’s costly farming environment, anywhere money can be saved is a good thing for producers’ bottom lines. While proactive, up-front investments into herd management – such as the use of vaccines – cost more in the beginning, they can certainly pay off in the end. Antimicrobial use, on the other hand, is usually a reactive response to a problem that could ultimately be avoided or lessened.

Costing data collected as part of the study showed a considerable amount of savings for farms with low antimicrobial use. Given the assumption that 27 pigs are weaned per sow per year, a high-use farm with a 500-sow farrow-to-finish operation, as an example, could end up paying $80,000 more than a low-use farm of comparable size.

While hog prices are reaching their predictable summer peak, cost of production, likewise, is at an all-time high. Any advantage a producer can get is worth taking.

Biosecurity reduces the need for drugs

Automatic ventilation systems with ventilation curves can optimize the barn environment and reduce the need for antimicrobials.

Improving animal and human health, cleaning up the planet and saving money are all great, but how can antimicrobial use decline even more, from a practical perspective?

Biosecurity is fundamental to preventing livestock illness and disease in the first place. Internal biosecurity assessments were performed as part of this study to evaluate any correlation between the internal biosecurity practices of individual farms versus those farms’ levels of antimicrobial use.

In general, having a higher health status – less disease on-farm – is positive and reduces the need for antimicrobials to prevent negative animal welfare outcomes, but even lower health status farms – more disease on-farm – can still have low use rates. Interestingly, this study established no correlation between health status and the amount of antimicrobial use, meaning that management – not disease status – is a much larger factor in the equation.

When it comes to barn hygiene, most farms are doing a good job in the nursery and farrowing areas, but improved hygiene in the grower section was identified as the area with the most opportunity for reducing antimicrobial use. Ensuring ventilation curves are in place for all areas of the barn can help. Automated ventilation on its own is not enough, and, in fact, ventilation curves were observed as the difference between farms with high and low antimicrobial use.

Stabilizing a farm’s overall health is most critical for reducing the need for antimicrobials. Limiting the number of live animal entries into the barn and making simple changes such as not giving iron or antibiotics to piglets less than 24-hours-old can help further. This reinforces the value of producers working closely with their veterinarians to optimize disease prevention, control and treatment protocols.

Alberta hog producers continue to improve

Thanks to the cooperation of Alberta’s hog producers, the entire industry is benefitting from paying more attention to the judicious use of antimicrobials. Going forward, Alberta Pork is looking to secure additional funding to advance this research, with the hope of including even more producers and veterinarians. Similar studies from other parts of Canada are contributing to an even wider understanding of the issue, providing additional opportunities to collaborate and share knowledge.

From understanding how and how much antimicrobials are used on-farm, and by auditing internal biosecurity, farmers can not only operate their businesses cost-consciously but also work toward the noble goal of improving public trust in the industry, which supports everyone across the value chain, all the way down to domestic and international pork consumers.

An even better future for livestock health is within reach, as the industry commits to continual improvement in management practices for all aspects of production, including antimicrobial use.