Hog numbers - and price - trend up
By KEVIN SIMPSON
This could be a bumpy ride for pork producers. In 1998, hog slaughter is expected to rise to nearly nine per cent over 1997 levels. Farrowing intentions have been running at about seven per cent over last year and pigs per litter have been growing by about two per cent, for a combined production increase of nine per cent. Hogs for market next September are forecasted to be at 5.863 million head, seven per cent higher than the previous record set in September, 1994.In the third quarter of 1997, small operations of less than 99 head produced 7.5 head per litter while large operations (more than 2,000 head) were farrowing 8.9 pigs per litter. The drive to larger and fewer producers will fuel the two per cent annual growth in pigs per litter.
Poultry production is expected to increase by four to five per cent in 1998 as well. Both poultry and pork production are responding to relatively profitable prices over the last two years and the prospects for lower feed prices from now until 1999.
In contrast, beef production is expected to drop by two per cent in 1998.
Demand
Exports to Japan have not expanded in 1997 as much as expected. Although removal of the Japanese tariff, as well as Taiwan's disease problems, were positive for North American exports, Japan's domestic hog producers increased production and shifted from industrial "frozen" use to consumer "fresh" production.However, current lower prices will encourage increased exports to Russia, Mexico and Hong Kong. These countries are expected to respond positively to attractive prices for middle-valued cuts and trimmings.
Exports for 1997 are expected to be 12 per cent higher than 1996. Frozen pork exports to the European Union are up since the Netherlands cut production due to the cholera problems it experienced in 1997.
The recent financial liquidity crisis in Asia has the trade concerned that meat exports will suffer. Asian countries are the biggest foreign buyers of U.S. poultry, beef and pork. Without a doubt, cash and futures markets are feeling the effects of these concerns, and perhaps some concern that the crisis could spread to China, Russia and Japan. These bearish demand concerns are surfacing at a poor time, as we enter a prolonged expansion of pork and poultry supplies.
Three-year price cycle
Late November and early December is seasonally the time of highest marketings and lowest price. As I pointed out in the last issue of Pork Producer, the fourth quarter of 1997 also coincided with a price cycle three years in duration. This analysis helped to forecast the current low price of US$45 liveweight or US$62 to US$65 per cwt. lean carcass.The current price structure, with cash lean hog carcasses at $63, February and April lower at US$60.25 and US$57.25 respectively and June 1998 at US$65.25, is bound to stimulate long-term demand. These prices are 13 to 20 per cent cheaper than pork prices at the beginning of 1997. I feel abundant supply and attractive pricing in the coming months will compel retailers to market pork aggressively through 1998.
The average price rebound coming out of the last eight cycle lows (between 1974 and 1994) has been a 24-per-cent price gain in the first four weeks of the bottom. Within two to four months, prices have increased 25 to 88 per cent over the prices seen in the trough of the cycle.
Using these projections as a guide, in my opinion February 1998 lean hogs are an attractive sale on rallies to US$70, April 1998 at US$65 and June 1998 at US$80.
Kevin Simpson is a futures and options broker for Midland Walwyn. 1-888- 417-4459. The views expressed are those of the author and not necessarily those of Midland Walwyn Capital Inc. The information contained in this report was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete.
Manure composting project clears air
Ridgetown experiment could be a window on the future of nutrient management
By TOM BUTTON
Here's a fact that most non-farmers - and a lot of farmers - don't know. The strongest smells in pig manure don't come from the pigs at all: They come from bacteria.By switching to composting instead of traditional tank storage, a farmer can change the kind of bacteria in manure and virtually eliminate the smells.
It also looks as if its possible to convert the manure into a solid form that will optimize its value and market as a fertilizer and soil amendment.
Scientists at Ridgetown College have built a $150,000 test composter on the campus and expect to start getting results this spring that will show whether composting could be the way of the future for large commercial farms.
"Let's face it...our most severe problems with swine production are actually manure problems," says Ron Fleming, manure specialist at the college. Fleming believes that if composting can quell the complaints over manure smells, pork producers will have a better and unfettered chance to keep producing pork.
Tom Smith, president of Global Earth Products, is betting that composting will also soothe environmental fears, especially for pork producers with acreage limitations. Smith, former chairman of the Ontario pork marketing board, hopes to pelletize the composted manure so it could be easily exported off pork farms and sold to cash croppers and even home gardeners.
The key to the process is air, Fleming says. In a typical manure tank, oxygen quickly disappears and bacteria called anaerobic (i.e. without air) start breaking down the organic material. It's these bacteria, Fleming says, that give off the hydrogen sulphide and two dozen other gases that create offensive smells.
In a composting scenario, by contrast, there's enough air in the manure to allow aerobic (i.e. with air) bacteria to break down the organic material. Instead of odorous gases, these bacteria produce inoffensive carbon dioxide and water.
To make composting work, what's needed are a source of the carbon and a way to get air into the manure. At Ridgetown, the carbon will come from straw that will be generously mixed with the manure in three channels, each measuring seven feet wide by six feet high and 50 feet long.
Air will be jetted in from the bottom of the piles. A mechanical turner will mix the manure and straw, producing odour-free compost within three to four weeks.
The pilot-scale Ridgetown project can handle manure from 190 market hogs, and while it cost about $150,000 to build, much of the investment went into the specialized design for testing.
Table One shows that composting has the financial potential to do a bit better than break-even, but Fleming cautions that the numbers may vary widely between farms. The table is based on a hypothetical cost of $30 per tonne for straw and an equal value for sale of the compost. The chart also assumes that the farmer with the conventional system is getting $4.30 of nutrient value per tonne of manure: Farms with high soil test scores would get considerably less.
The chart also ignores the conversion cost for farmers with liquid systems.
For many pork producers, however, the hardest numbers to calculate are the costs of conflicts with neighbours and township councils over odours, and the long-term costs of high soil nutrient levels and the risks of groundwater pollution.
By DON STONEMAN
When the registration for Micro-Aid comes up for renewal next year, its maker, Jeffrey Currah, Papillon Distributors Processing, Innerkip, expects the enzyme extract will pass with flying colours.But other manufacturers involved in the direct-fed microbial industry are not as optimistic.
Microbials, also known as probiotics, include enzymes, yeasts and live bacteria that are fed to livestock to enhance feed digestion, general heath, or reduce manure odours. All direct-fed microbials sold legally in this country must be registered with Agriculture Canada.
Their makers expect to find it harder to get label claims cleared by the federal government and may have to pay for expensive studies to prove that the product does what the label says it does. If they can't pay for the studies, they must change the label or discontinue sales.
Peer-reviewed papers from university professors published in recognized scientific journals no longer meet requirements. Agriculture Canada's Food Inspection Agency wants to see and analyze the raw data.
Some manufacturers consider the efficacy studies to be nonsense.
Alun Baker, Nutritional Feed Additives, Fergus, says it will cost between $20,000 and $30,000 per product to meet the federal demands. "It's so damn frustrating," says Baker. It's not clear before registration is granted if a product's sales will ever return the kind of investment that is necessary, he says.
David Craig, Craigcrest Holsteins, Arthur, began feeding probiotics to his cows seven years ago. Now he sells to others, including pig farmers. He gets his products from Baker, who imports ingredients from Chris Hanson, in Wisconsin, the largest microbial maker in the world.
A treatment for baby pigs costs 19 cents, Craig says. The paste, with a live yeast and three enzymes, is squirted into the newborn's mouth at the same time it gets an iron shot. The treatment reduces the chances of e. coli and salmonella scours, he says.
"The market has come to us," says Craig; all of his sales are by word of mouth, and he also sells products overseas.
"Research doesn't tell us everything", he says.
"If the product is doing the job it is supposed to do, why do we need research? It's far too costly. Who do I pass it on to? The farmer."
For some people in the swine industry, the jury is still out on probiotics. Tim Blackwell, swine disease specialist with the Ontario agriculture ministry in Fergus, says some farmers swear that probiotics improve the health of their herds and other farmers fail to get an effect.
Blackwell hasn't been able to detect a pattern in farms that experience either success or failure with probiotics.
There is no certainty that these products will work, says Blackwell, while a particular antibiotic is likely to have an effect on diseased pigs.
On the positive side, they are relatively inexpensive to add to feeds. Farmers can see for themselves if they work, Blackwell says.
Still, direct-fed microbials have gone mainstream in recent years, with companies like Masterfeed adding them to pig rations.
Masterfeed uses microbials obtained from Alltech, in Kentucky. John Bowman, of Baden, Swine Business Manager, says the products are designed to work in two ways. One Masterfeed product puts friendly bacteria into the pigs' guts to prevent the propagation of harmful bacteria that can erode the intestine's lining, reducing a pig's ability to absorb nutrients. Another product, a polysaccharide, binds harmful bacteria into the manure so that they are eliminated.
Lynne Underhill, feed evaluation officer, Canadian Food Inspection Agency, is eager to crack down on unregistered products. Registered products will have either an identification number from the food inspection agency or a registration number from Health Canada.
Inspectors are in the field reviewing labels, Underhill says, and products are checked at the border for registration numbers. "Customs officials know that if it is a viable microbial product it should be registered," she says.
There are differences between selling probiotics in the U.S. and in Canada. Here, the government stresses both safety and efficacy. In the U.S., there is just a food safety review.
Baker thinks the American emphasis on safety is more important than the Canadian stress on efficacy, and that farmers should feel insulted by the federal approach. The federal government treats the farmer "as if he had a hat pushed back on his head and a straw in each corner of his mouth," says Baker.
A Well-Fed Boar Is A Prolific Boar
By DON STONEMAN
A well-fed boar is a, well, a loving boar.While nutritionists have always looked for better ways to feed pigs, it's only in the last couple of years that they've looked at the nutritional requirements of the herd sire, says Andrew Pharazyn, Woodstock-based swine nutritionist for Archer Daniel Midlands.
Even the National Research Council (NRC) standards almost ignore boar nutrition. "It mentions a little on zinc deficiency, that's about it," says Pharazyn.
But he expects new NRC recommendations to be released in the spring will encourage feeding more protein and energy.
Research from Holland shows that well-fed boars produce nearly twice as many sperm cells as boars fed to NRC recommendations. The increase in fertility becomes apparent seven weeks after improving feed nutrition.
A study at the University of Nebraska in 1994 indicates that libido is impaired in boars fed low-energy diets, Pharazyn says. Further studies show no difference in the motility of sperm cells regardless of the diet. Well-fed boars produced more sperm, although the concentration was lower in the ejaculate because the overall ejaculate volume increases even more.
Breeders running AI studs should take note of this, Pharazyn says. "If your bottom line is number of doses," a boar on an NRC diet would produce 13 doses, while a boar getting more protein and energy would produce 16 to 18 doses in the same period of time.
He says smaller boars should be fed to gain about 400 grams per day up to 150 kg of body weight. After that, feeding should be geared to gains of 200 grams per day.
There's still more research needed on the effects of calcium and phosphorus in boar feeds, he says. And there's been nothing done on micro minerals comparable to work on sows and growing pigs.
Pharazyn says studies that show vitamin E added to boar diets in the summer maintains their libido intact in spite of the heat.
Levamisole - the one-cent solution
A pig wormer that has been used to stimulate immune systems in cancer and AIDS patients has done the same thing for pigs. It can add an extra $2 per pig to the bottom line on some farms, according to University of Guelph researcher Dr. Cate Dewey.Levamisole, which producers have used for decades, only costs about one cent per pig at the low levels used in Dewey's recent study, but savings in feed and overhead can really add up. The work was carried out with an $18,000 grant from Ontario Pork.
As Table One shows, treated pigs gained more from birth to weaning at 14 to 16 days than control pigs. Pigs given a single injection at birth gained more at seven weeks of age than controls. Pigs given an injection at birth and another at weaning gained more as well.
Dewey concludes the treatment is best suited to herds with significant health problems and for poor-doing pigs. "You get the most effect in an animal with a suppressed immune system," she explains.
Dewey can't see any drawbacks for producers who want to try the idea. However, she has one caveat.
"If they use the wormer dose, they might as well be injecting water." Dewey found best results were achieved by injecting the product chilled at 2.5 mg per kg. subcutaneously in the fold of the skin behind the hind leg.
Some may find the labour of subcutaneous injections a nuisance. The need to weigh each pig to calculate the required dose means labour will eat into any cash advantage realized on some farms.
Dewey has received further pork board funding to see if less demanding intra-muscular injections will work as well. She is also testing a uniform dose rather than one calculated for an individual pig's body weight.-RI