Tax man out of the loop
Sow operators who sell 14-day-old weaners and file their income tax on a cash basis may run into a little trouble with the federal tax man, warns Elora accountant Ed Mitakiewicz.He points to a 1990 federal interpretation of the feedlot business, IT-156R Feedlot Operators, which says that agents and brokers selling livestock, speculators who buy cattle and resell quickly for profit, and drovers assembling and preparing cattle for shipment are not considered to be farming because they haven't made "an appreciable contribution to the growth and maturity of livestock."
Mitakiewicz says that for an operation to be considered a farm, a feedlot must own cattle for 60 days, or put on 90 kg of gain per animal.
New pig nurseries likely don't fit the Revenue Canada definition of farming, but nursery operators should continue to file their tax returns as they have.
His firm, Collins, Barrow, has written a letter to Revenue Canada for clarification on how to handle these new operations which are out in the countryside.
Loops, where one producer raises piglets, another runs a nursery and a third puts out finished pigs are a relatively new phenomenon. "It takes Revenue Canada a while to catch up to what is going on out there," Mitakiewicz says.
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Export Target
U.S. producers have their hearts set on dominating the pork export market. In 1996, the U.S. moved into the Number Two spot on the pork export list, up from seventh spot in 1992. Denmark is Number One.National Pork Producers Council vice president Al Tank says the country's producers are willing to spend their way to the top.
In 1997, producers will spend US$4.4 million on foreign development programs, up 22 per cent from last year.
The news of U.S. export success brought groans from Ontario producers gathered at the Ontario Pork Producers Marketing Board annual meeting last month. Producers were told that the U.S. had five per cent of the Japanese market only three to four years ago, but now supplies up to 20 per cent of the market's demand.
Meanwhile, Canada's share, which once stood at 20 per cent, has plunged to less than six per cent.
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Who's Number One?
North Carolina's Myrtle Beach has long been the destination of choice for golfers seeking to escape the rigours of northern winters. But there's more than lost golf balls tucked away in the state's pristine countryside.The explosion of hog factory farming in the state has allowed it to lay claim to the title of Number One pig producing state, surpassing Iowa for the first time. The United States Department of Agriculture reported in January that North Carolina's pig production swelled to 4.16 million during the last quarter of 1996, up 16 per cent compared to the same period in 1995.
Meanwhile, Iowa pig production continues to head south. The state's pig crop totalled 4.03 million for the final quarter of 1996, down 14 per cent from a year earlier and the smallest production for the quarter since 1975.
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PIGS IN A POOL
It's official: the Saskatchewan Wheat Pool is anchored solidly in the pig business. In February, Sask Pool bought 29 per cent of Fletchers Fine Foods, which runs packing plants in Alberta, British Columbia and Oregon. The $24.7-million purchase is the second step in Sask Pool's hog strategy. It is currently in the process of setting up two 55,000-head production barn complexes in the province and wants to push the province's current pig production - one million - to three million annually by 2002.Fletchers has welcomed Sask Pool and its pig-producing potential with open arms. Fletchers is currently locked in a struggle to procure hogs with Alberta's other major hog producer, Gainers, recently purchased by Maple Leaf. The company doesn't have a plant in Saskatchewan, so all Sask Pool hog production will be shipped to Fletchers' Red Deer, Alta., plant.
Sask Pool chief executive officer Don Loewen says he expects Fletchers eventually to build a plant in Saskatchewan.
Ontario - 51st sow state?
With Ontario's packers running at 60-per-cent capacity, the need for pigs has never been more apparent.But the hog barn building boom of the last two years has yet to put more pigs in packing plants. A study conducted by Ontario agriculture ministry engineer Frank Kains shows that facilities to produce more than 90,000 weaner pigs were built in the province in 1996. One thousand barns capable of producing 95,000 market hogs were also built in the province last year. Despite all the concrete and lumber, Ontario's weekly market hog run, however, is still labouring in the 75,000 range.
Many of the new pig places have replaced retired facilities, but there are surely more pigs, and they're going somewhere - to the U.S., perhaps? It's no secret that thousands of weaners have been heading south weekly for finishing in the U.S. The outward migration has left many producers wondering whether Ontario is fast becoming a "sow state". The recent appearance of Purina Mills in Ontario has only fueled the speculation. The U.S. feed giant is offering producers a Chicago futures-based price, which ranges from C$42 to C$50 for an eight-pound pig. The company hopes to lock in 12,000 Ontario sows.
The deal could be a boon for hard-pressed weaner producers, but could cause many Ontario Segregated Early Weaning loops, which have sprung to life in the last few years, to go bust.
It's unlikely loop economics will be able to match the rich offers being peddled by Purina. With a hefty U.S. dollar and cheaper feeding costs in Iowa, the pigs' destination, local finishers will have a tough time procuring pigs to fill local barns.
Dave Hoogmoed, Purina's mid-America manager, told sister publication Farm & Country last month that Ontario producers will have to compete for Purina dollars against producers from other sow states, including North Carolina, Colorado and South Dakota, but was hesitant to say that the company will be interested in Ontario weaners three years from now. "There's always the possibility that the market adjusts," Hoogmoed said. For now, the deck is stacked against the Ontario finishing industry: higher feed, heating and building expenses require more capital, giving U.S. finishers an edge.
Producers are also being forced to deal with a growing backlash against pig facilities and the manure they produce. As one producer told Pork Producer, stateside weaner sales could be part of the manure solution - pigs that leave the province at two weeks of age produce a lot less slurry than the average market hog.
Costs for Ontario packers are higher, leading packing executives to claim they can't afford the extra dollars to keep pigs in the province.
Other U.S. corporations are courting Ontario weaner producers too, but have yet to show their cards. Whether Ontario becomes a sow state will likely depend on the Ontario packing fraternity's willingness to up the ante and pay more for local hogs.
Can Ontario packers afford to sit by until fair-weather buyers such as Purina head south for warmer climates?
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Gene mapping
Jerry Torrison, Pig Improvement Corporation (PIC), indicated population numbers are important in any breeding stock selection program. You are more likely to find a Michael Jordan in the population of a state than in the population of a high school. In the PIC breeding system, prospective breeding animals have their tails docked shortly after birth. The tail is put in a plastic bag, with pig I.D. The tail is frozen and eventually the DNA from the tail is examined to see if the animal is carrying the genes the breeders are selecting for. With this system, a pig can be retained or discarded as a potential breeding animal before weaning.In the future, there will be more rapid improvement in genetics based on marker-assisted selection. Pale, soft, exudative pork (PSE) can be eliminated, and genes for mothering ability, litter size, feed efficiency, meat quality, and drip loss can be selected from the gene make-up in the animal's DNA. Breeding stock selection will become considerably more sophisticated than it is today.
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Expanders in swine feeds
Feed expanders are an important advancement in milling technology, with the potential to further optimize pig performance. Dave Bates, with Shur Gain in St. Marys, explained the process.The blended formula moves from the mixer into the conditioning chamber. The cool mash is saturated with hot steam. In the expander process, significantly more steam is added, raising temperatures to 88 to 93 degrees C and the moisture to 17 to 18 per cent. The hot mash moves from the conditioner to the expander. The dry expander adds further heat through friction or mechanical shear, without adding further water. The temperature of the mix is increased above 100 degrees C.
The conditioning and expander process gelatinizes the starch and modifies the physical properties of the feed. Upon leaving the expander chamber, the heated mash "flashes off", losing 1.5 to two per cent moisture. The expanded material goes through a "wing crumbler" to break up the cake and then on the pellet mill to produce the desired pellet.
Expanded starter feeds have shown dramatic improvements in Europe for daily gain, feed intake, feed conversions and reduction of diarrhea. Results of Canadian trials will be available soon.
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Multiple-site production
In general, nursery pigs are gaining one pound per day and finishing hogs two pounds per day, according to Jerry Torrison, PIC. A disciplined approach to production is generating more profit. The economics to date are poorly defined. Weaning pigs at 14 days can eliminate many diseases transferred from the sow. Vaccination of the sow for viruses or bacteria that cause disease in the lactating sow is beneficial in reducing transmission from the sow to pig.Batching of pigs (usually no more than seven days variation) all-in, all-out by room, building, or site is required in the nursery and finishing.
Cleaning, disinfecting and other biosecurity measures are required to prevent disease transmissions. Single sex and phase feeding is practised in finishing operations.
The main advantage of the system is disease reduction and improved pig performance.
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Heating nursery units
Mark Armstrong tested a number of heating systems in a nursery. He found the cost of heat energy can be reduced with a radiant heat system. Electric forced air heat plus heat lamps and forced air gas heat plus hot water floors were more expensive. Of the systems evaluated, infrared tube heating appears to have the lowest installation and operating costs on average for nursery pigs.
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New computer program
Case Delange, University of Guelph, and Janice Murphy, Ontario Ministry of Agriculture, Food and Rural Affairs' office in Fergus, have developed a new computer program for grower-finisher pigs. Performance monitoring is based on feed intake and growth curves, determined by accurate measurements of body weight and feed intake over a 14-day period in various stages of growth. The program determines current levels of animal and financial performance. It will identify ways to improve performance and assist in daily management. For more details, contact Janice Murphy, OMAFRA Fergus, 1-800-265-8332.