MHP reports net income up in second quarter 2012

Ukraine's MHP S.A. reported a net income of US$122 million for the second quarter of 2012, an 83 percent increase over the same time in 2011 (US$67 million), according to the company's latest financial report.
The average chicken meat price in the second quarter increased by 4 percent compared to the first quarter of 2012 and by 25 percent — to UAH 17.48 (US$2.15) per kilogram of adjusted weight — compared to the second quarter of 2011. The volume of exported chicken in the second quarter grew, partially due to new business in Africa. As a result, MHP saw 30 percent growth in the first half of 2012 compared to the same period in 2011, to almost 200,000 metric tons of frozen chicken exported.
“The company has continued to perform strongly in results and operations in the first half of 2012," said Yuriy Kosyuk, CEO. "Poultry prices growth in the first half of 2012 was strong, as previously forecasted. As a result, we have delivered robust revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) growth in the poultry business segment, which greatly contributed to the company’s overall profitability."

Looking ahead, MHP plans to continue to expand its export markets and see strong demand, said Kosyuk.

Mexico announces import quotas for US eggs

Mexico's Economic Secretariat has announced the import quota for eggs from the U.S., setting it at 211,000 metric tons of fresh eggs for human consumption and 24,400 metric tons of fresh eggs for industrial purposes under a "0 percent" tariff rate quota, according to the U.S. Department of Agriculture's International Egg and Poultry Review.
The Secretariat justified the implementation of the quotas in response to an outbreak of avian influenza in the state of Jalisco that prompted an increase in egg prices. Shell egg imports to Mexico from the U.S. in 2011 reached 1.29 million dozen, down slightly from 2010's 1.37 million dozen. Imports in the January–June 2012 period have reached 754,782 dozen so far, up from 2011's 653,735 dozen.
For more information and statistics about U.S. eggs, see www.wattagnet.com/marketdata.html. 

Cargill to open China broiler plant in 2013

Cargill Inc. plans to open a US$250 million broiler production plant in Anhui province, China, by the middle of 2013, according to reports. The integrated facility will include a feed mill, farms, hatchery and processing plants, said Christopher Langholz, business unit leader for Cargill Animal Protein.
"We are doing the construction right now and hope to start by June or July next year," said Langholz. "We will raise 65 million birds a year and it will be one of the biggest integrated plants in China. There is a big trend going on. Just as 20 years ago you had in pork with modern technology and corporate people getting involved in production, now all that has started happening in chicken."

China's poultry industry has been expanding, will an annual growth at 5 to 6 percent due to increasing incomes.

US corn harvest accelerating due to early planting, drought

The U.S. corn harvest is accelerating due to early planting and the ongoing drought, both of which have hastened crop maturity, according to the government. Roughly 6 percent of the corn was harvested as of Aug. 26, compared to 4 percent the week of Aug. 19 and none during the same time in 2011.
About 26 percent of the total crop has been rated mature, said the U.S. Department of Agriculture, up from 16 percent the week of Aug. 19. Corn futures have risen 60 percent since mid-June, causing predictions of increased global food costs. “We started taking in corn on Aug. 17, the earliest ever,” said Scott Docherty, the general manager for Top Flight Grain Cooperative. “Farmers are harvesting early because many fear that the heat weakened the stalks and they don’t want to lose any more bushels.”
Nationwide, 22 percent of the corn crop is rated in good or excellent condition, down from 23 percent the week of Aug. 19 and 54 percent in 2011. On Aug. 21, 51 percent of the Midwest was still in a moderate to exceptional drought, down from 66 percent the week before.

Virginia becomes eighth state to call for ethanol mandate waiver

Governor Bob McDonnell of Virginia has petitioned the U.S. Environmental Protection Agency to grant a waiver from the ethanol quotas mandated by the federal Renewable Fuels Standard, making Virginia the eighth state to do so.
In a show of support, the National Chicken Council, National Turkey Federation and the Virginia Poultry Federation offered their praise for McDonnell’s petition. “I thank Governor McDonnell for his efforts to provide relief for Virginia’s chicken farmers and processors who have and continue to experience severe economic harm as a direct result of the federal ethanol mandate,” said National Chicken Council President Mike Brown. “Congress gave the EPA administrator the authority to act in a situation such as this to prevent a bad situation from becoming worse."
Texas, Georgia, New Mexico, Arkansas, North Carolina, Maryland and Delaware have also filed petitions. Other requests to waive the standard include calls to action from 156 U.S. House members, 34 U.S. Senators, poultry and livestock producers and the United Nations.

Sanderson Farms reports results for third quarter 2012

Sanderson Farms Inc. has reported a net income of $28.7 million for the third quarter of fiscal year 2012, up significantly from a net loss of $55.7 million in the third quarter of fiscal year 2011, according to the company's latest financial report.
The improved number reflected improved market conditions compared to 2011, said Joe F. Sanderson Jr., chairman and CEO. "Market prices for poultry products were higher than the third quarter of fiscal 2011, as the Georgia Dock whole bird price reached historic high prices during the quarter," he said. "These prices reflect steady retail grocery store demand and lower production. In addition, market prices for wings continued a strong counter seasonal upward trend. While retail grocery store demand has remained steady, food service demand remains sluggish, keeping the market price for boneless breast meat under pressure during the third quarter. Boneless breast meat prices have strengthened during August."

Challenges are still ahead, however. "Market prices for grain are at historic highs, and ongoing drought conditions across much of the country have created considerable uncertainty regarding this year's corn and soybean crops," said Sanderson. "While the quantity available and prices we will pay for grain during the coming months will ultimately depend on this year's final crop performance, prices are certain to be much higher than those paid for grain this fiscal year." Market prices for chicken will remain high, he said, but not high enough to offset input costs. Sanderson Farms has reduced egg sets by 2 percent across all divisions and plans to run its plants at 6 percent below capacity until market conditions improve. 

National Grange joins Farm Bill Now coalition

The National Grange has joined forces with more than 40 other agricultural organizations as part of the Farm Bill Now coalition, and plans to rally with coalition members on Capitol Hill in September to raise public awareness about the importance of passing the 2012 Farm Bill. Provisions of the 2008 Farm Bill are set to expire on Sept. 30.
The coalition brings together groups from all sectors of agriculture, including dairy, livestock, energy, commodity crops, specialty crops, farm cooperatives, financial groups, non-profits and more. "I'm so glad that despite differing opinions and legislative priorities, all of these groups could join together to fight for our much-needed Farm Bill," said National Grange President Ed Luttrell. "Everyone in the agricultural community has been frustrated by the lack of action in Congress to get American agriculture the resources it needs to keep operating, and it's time we voice that frustration."
The rally on Capitol Hill is set for Sept. 12. "Calling the Farm Bill the 'farm bill' suggests its impact is limited only to farms and to the rural areas to which they are so closely tied," said the National Grange. "It's really a jobs bill. A food bill. A conservation bill. A research bill. An energy bill. A trade bill. In other words, it's a bill that affects every American."

Brazil poultry industry calls for government assistance

Brazil's poultry industry is facing some of its strongest challenges ever due to inflated feed prices and lack of credit, and the Brazilian Poultry Union, UBABEF, is calling on the government and the public for help.
According to UBABEF, the price of soya on the home market has risen 80 percent over the last six months, while that of corn has increased by 40 percent. These two inputs alone account for 60 percent of its members’ production costs, and these numbers, combined with a lack of credit, have led to some producers taking the only option available to them — stopping production.
Poultry producers are now having to pay on delivery for feed grains, or even prior to delivery, when previously they enjoyed a 40-day payment period. Banks, both public and private, have been tightening credit and creating barriers to business for the sector. UBABEF said that 3.5 million jobs are at risk in the current climate, as are the positions of 16,000 families who form part of integrated operations. Francisco Turra, UBABEF president, has publicly called on the government and state-owned and private banks to intervene immediately to restore access to credit.

Supermarket price increases
Research carried out by the Sao Paulo poultry association has found that some supermarkets are taking advantage of the current high feed prices and increasing the prices they charge consumers without passing on any of this increase to producers. According to the study, in some cases, a tray of breast fillets is being sold at 120 percent more than that paid to producers, while whole chickens can be up to 139 percent more expensive. Turra has described the behavior as “unethical.” 

Astral Foods cuts jobs on reduced production, high grain prices

South African chicken producer Astral Foods has cut 150 jobs due to reduced production caused by high grain prices, according to the company. Further cutbacks and retrenchments are likely, said Astral Foods chief executive Chris Schutte.
Local grain prices reached a record in July due to the drought in the U.S. Midwest, and imports are at an all-time high, according to reports. Other poultry producers might have to cut jobs as companies struggled to pass expenses onto consumers, said the SA Poultry Association. “Some of them have already retrenched, but they are planning to retrench in the order of 3,000 people over the next month or so,” said association chief executive Kevin Lovell. “Disposable incomes are stretched...as much as we know we need to raise prices, we also know that the chances of being able to do that are rather limited.”

Bangladesh poultry farmers receiving waivers on bank loans

Bangladesh poultry farmers will receive interest waivers on their bank loans as part of the government's plan to revitalize the industry in the wake of ongoing avian influenza challenges, according to reports.
The waiver is part of an extension from the ministry of fisheries and livestock. "The foreign businessmen in Bangladesh's poultry industry are taking loan at 4–5 percent interest, while our businessmen pay 15–16 percent interest," said the ministry. "So, the foreigners are expanding business very fast and sending a significant amount of money abroad." The high domestic interest rates have caused price hikes in chicken and eggs.
Sector leaders said nearly 47 percent of local poultry farms have closed in the last one-and-a-half years due to spread of avian influenza. In that time, the number of poultry farms has dropped from 114,763 to 60,824. "After incurring massive losses during the last one-and-a-half years, none has the capacity to inject fresh money," said Convener of the Bangladesh Poultry Industry Coordination Committee Moshiur Rahman. "So, we immediately need rescheduling of our bank loans so that we can arrange new loans from banks."

Ghana poultry industry calls for reinstatement of National Poultry Council

Ghana's poultry farmers have called for the reinstatement of the country's National Poultry Council in the wake of increased production costs and imports, according to reports. The council was dissolved by the government in 2009.
Seven out of 12 hatcheries in Ghana have shut down, and the remaining five are performing under capacity, said National Chairman Kwadwo Asante. The poultry industry is in danger of collapse if the government doesn't demonstrate a commitment to its protection. “It's not profitable because the production is around 80 to 90 percent," said Asante. "So any slight challenge we face leads to the collapse of the business. That’s why we’re advocating the re-institution of the council. We have to sit down with the minister and look at ways of minimizing the challenges.”

Potential Marfrig sale gains interest of Tyson Foods, Blackstone Group

Brazil food company Marfrig Alimentos SA has made plans to sell a stake, gaining the interest of Blackstone Group LP and Tyson Foods Inc., according to reports.
Marfrig hopes to reduce some of the debt accrued after making 20 acquisitions in the last five years to keep pace with competitor Brasil Foods. Private equity units of JPMorgan Chase & Co. and Banco Bradesco SA are also interested in buying a shareholding in Marfrig or one of its units. Marfrig's shares rose 3.2 percent on the news, to 10.38 reais at 11:55 a.m. on Aug. 24 in Sao Paulo. “Marfrig is a well-managed company with good products; the only thing that is stopping the stock from rising is debt,” said Caue Pinheiro, an analyst at brokerage SLW Corretora. “That’s why a plan to reduce its leverage is welcome.”
Fitch Ratings Ltd. has recently revised its outlook for Marfrig, along with rivals JBS SA and Brasil Foods, from stable to negative.

Aramark to eliminate pork from gestation crate-bred animals

Aramark has announced that it plans to eliminate all pork from animals bred using gestation crates in its U.S. supply chain by 2017.
Aramark and the Humane Society of the United States have been collaborating to put in place a plan that would address gestation crate issues by working with the company’s suppliers to eliminate the utilization of crates within their supply chains. To meet this goal, Aramark has asked its primary pork suppliers to develop plans for reducing, and then eliminating, gestation crates. In addition, Aramark will begin immediately to require new supplier contracts for pork to provide a plan that addresses how they will phase out gestation creates to meet these goals.

International Poultry Expo marks 65 years of industry service

The International Poultry Expo is celebrating 65 years of tradeshow service to the poultry and egg industry.
Sponsored by U.S. Poultry & Egg Association, the first “poultry convention” was attended by 200 poultry men in Atlanta in 1948. Suppliers in the early years exhibited in the halls of the convention hotel. The first “poultry exposition” was held in January 1951. With approximately 2,000 attendees and 67 exhibiting companies, the exposition began its run of steadily growing and expanding year after year to become what is today’s annual International Poultry Expo.
Over the years, the International Poultry Expo has expanded to incorporate other areas of related production and processing. In 2007, the American Feed Industry Association signed an agreement to co-locate the International Feed Expo with the International Poultry Expo; and in 2013, the International Poultry Expo will expand even further with the addition of American Meat Institute’s International Meat Expo.
The International Production & Processing Expo is the new umbrella name for the three integrated tradeshows, and it will be one of the 50 largest tradeshows in the U.S. The entire tradeshow, which will be held Jan. 29–31, 2013, at the Georgia World Congress Center in Atlanta, Ga., is expected to include more than 1,000 exhibitors and 400,000 net square feet of exhibit space. The show is expected to bring over 25,000 industry leaders from over 100 countries.

China pork imports from US to rise 29 percent

China's pork imports from the U.S. will likely rise around 29 percent in 2012 despite high U.S. grain prices, on the heels of a 30 percent increase in the second half of 2011, according to the Beijing Orient Agribusiness Consultant Ltd. research firm.
The imports, around an estimated 620,000 tons, will account for less than 2 percent of China's annual pork consumption. China imported 480,000 tons of pork from the U.S. in 2011, according to Beijing Orient Agribusiness Consultant.

US poultry certified wholesome up in July

U.S. poultry certified wholesome during July (ready-to-cook weight) totaled 3.68 billion pounds, up 4 percent from the amount certified in July 2011, according to the U.S. Department of Agriculture's latest report. The June revised certified total came in at 3.67 billion pounds, down 5 percent from the June 2011 total.
The preliminary total live weight of all federally inspected poultry during July was 4.87 billion pounds, up 4 percent from 4.68 billion pounds in 2011. Young chickens inspected totaled 4.17 billion pounds, up 3 percent from July 2011 numbers. Mature chickens, at 68.9 million pounds, were down 6 percent from 2011; turkey inspections totaled 621 million pounds, up 10 percent; and ducks totaled 12.4 million pounds, up 4 percent, according to the USDA.
Young chickens slaughtered during July averaged 5.76 pounds per bird, down slightly from July 2011 numbers. The average live weight of mature chickens was 6.09 pounds per bird, up 2 percent from 2011, while turkeys slaughtered during July averaged 29.3 pounds per bird, up 1 percent from July 2011.

For more information and statistics on U.S. poultry, see www.wattagnet.com/marketdata.html.  

China feed production hits 80.5 million tons first half 2012

In the first half of 2012, China’s mixed and compound feed output reached 80.5575 million tons, according to data from a report, "Chinese Feed Industry Analysis and Investment Strategy Report 2013-2017."
Of that, 66 percent (53.1697 million tons) was made up of compound feed and the other 34 percent (27.3878 million) was made up of mixed feed. The report indicated that China’s production of compound feed in June was 11.77 percent (10.597 million tons) higher than in 2011. Analyzing province by province, Shandong province’s mixed feed output reached 7.606 million tons, increasing 18.40 percent over 2011's number and making up 14.31 percent of China’s total output. Following closely behind are Guangdong province, Liaoning province and Guangxi province, making up 9.27 percent, 8.34 percent and 7.52 percent of the total, respectively.

During China's 12th Five-year Plan Period, China is expected to see a steady growth of feed output, and by the end of that period, the total feed output is estimated to reach 200 million tons. Among all the output, compound feed will hit 168 million tons, concentrated feed will be at 26 million tons and pre-mix feed will reach 6 million tons, according to the report. There will be over 50 feed companies with an annual production capability of 500,000 tons, taking up 50 percent of the country’s total feed output.

U.S. Chicken industry may face challenges in fourth quarter

*The U.S. chicken industry will face challenges in the fourth quarter of 2012 due to ever-increasing grain prices caused by the drought, according to Koch Foods Inc. CEO Joseph Grendys, and the company's contracts in for 2013 will reflect the possibilities as adjustable clauses are written in for grain price fluctuations.
The last time the company sought quarterly adjustments was in 2008, said Grendys. “Costs have gone up so much due to the drought that the industry will be forced to get price increases of 10 to 15 percent across all product lines” for 2013 over this year, he said. Production in the industry as a whole declined in the first half of 2012 and rising feed costs continue to shrink margins.

Grendys said that while demand for Koch’s chicken products is “extremely strong,” uncertainty caused by the drought is leading his company to analyze its sales against the cost of raising chickens. The industry has reduced production costs over the last decade and can’t count on lower input costs in the future. He said the industry needs to be smart and focus on pricing if it wants to be profitable in 2013.

Tamil Nadu egg prices up eight times in four weeks

Wholesale egg prices in the Indian state of Tamil Nadu have increased eight times since July 21, according to the National Egg Coordination Committee, from the set minimum price of Rs 2.72 (US$0.05) per egg to the current Rs 3.25 (US$0.06) per egg.
The current price represents only the third time it has ever passed the Rs 3 mark. The increases are due to a renewed demand for eggs after the end of Shravan (the austere period; the fifth month of the Hindu year) in north India, or the end of Aadi in Tamil Nadu, said committee chairman P Selvaraj.

But in spite of the increases, farmers are still losing money, according to Tamil Nadu Poultry Farmers Association President R Nallathambi. "The price revision has only reduced the losses suffered by farmers," said Nallathambi. Since traders deduct 25–35 paise towards packing and handling charges, farmers get only around Rs 2.79–2.89 (US$0.05) per egg. "We are incurring losses, as the cost of production is Rs 2.95 per egg," he said.

Barclays to assume control of poultry group Doux

Bank Barclays will assume control of indebted poultry group Doux in mid-September, according to reports, acquiring an 80 percent stake in the company in exchange for forgiving debt of €140 million (US$175 million).
The plan, which received implicit backing from a French court on Aug. 1, will allow the bank to come up with a turnaround plan for Doux. "The transformation of Doux's Barclays debt into 80 percent of its capital should be implemented on Sept. 10," said Raymond Gouiffes of the CGT union.
In the meantime, a French commercial court has ordered the liquidation of Doux's fresh poultry operations, and the court is due to review the five offers made on Sept. 5.

Hong Kong to introduce new, more effective H5N1 poultry vaccine

*Hong Kong plans to introduce a new, more effective H5N1 poultry vaccine, Re-6, to its chicken farms before the end of 2012, according to Ko Wing-man, the city's secretary for food and health.
The vaccine has already been introduced on the mainland and has been successfully registered in Hong Kong.

The government has also adopted other measures to combat avian influenza, including vaccination at local farms, import control and stringent hygiene requirements at wholesale and retail markets, according to Ko. Hong Kong will increase surveillance ahead of the coming winter season, and surprise inspections will be conducted at poultry farms and pet bird shops.

New report looks at welfare and ‘entire’ male pigs

A new report published in London by the agriculture and science consultancy Farm Animal Initiative, “Entire Male Pig Production: Welfare Management Issues,” highlights a range of possible solutions to tackle welfare issues caused by entire males in commercial units.
These include selection of genetic lines with reduced aggressive tendencies, modification of housing environment to reduce the level of social contact, provision of manipulable materials which allow natural rooting behavior and temporary reduction of testosterone in male pigs through an Improvac welfare management program. It also outlines the problems caused by these animals in commercial units, including aggression and injury caused by sexual behavior, and considers some of the options for reducing their prevalence.
The report points out that while entire male pigs are capable of higher and leaner growth rates compared with females and castrates, when reared under commercial conditions they rarely reach this potential due to increased aggressive, sexual and social behavior and reduced feeding behavior. “Modern commercial pig systems put pigs in challenging social situations and can result in a range of abnormal, or normal but unwanted behaviors, leading to welfare concerns," said the report. "Rearing entire male pigs in these systems increases the challenges in terms of levels of aggressive, sexual and social behaviors for all pigs in the pens."
Injuries acquired through aggression and mounting include skin lesions, bruising and leg problems. Other problems include stress and pregnancies and subsequent slaughter of pregnant gilts. In general, aggressive behaviors are increased in entire male pigs during and after puberty, and are also increased during the mixing and moving of these animals. Studies have indicated that increased aggression is stimulated by testicular steroid hormones, and that these behaviors stimulate an increase in plasma testosterone, forming a positive feedback level between hormone levels and aggressive and sexual behavior.

“Rearing entire male pigs can give producers an advantage in terms of a potential growth rate advantage, and obliterates the need for painful castration procedures for the pigs," said report author Ruth Clements said. "However, rearing entire male pigs can present its own challenges which can leave producers unable to capitalize on any growth rate potential, and leave pigs exposed to other welfare problems resulting from aggressive and sexual behaviors.”
The report was commissioned by Pfizer.

PIC, Besun partner on China sow nucleus farm

Swine genetics company PIC, a division of Genus plc, has partnered with the Besun Food Group in the operation of a 4,250-sow nucleus farm in China’s Shaanxi province.
The joint venture will produce grandparent females to drive the expansion of Besun’s integrated pork production business and enhance PIC’s capacity to supply its signature genetics to other players emerging in the consolidation of China’s pig industry, according to the companies. Once fully operational, the herd will underpin the production of 10 million slaughter pigs per year. The new nucleus farm was recently completed and stocking is scheduled over the next nine months. PIC will manage the operation of the farm and the output will be used proportionally by the joint venture partners, with Besun using its proportion in its multiplication program and PIC’s share providing important additional volume to support its growing sales of breeding animals in China.
“China is a specific target area of growth for Genus, in both pigs and dairy, and the agreement with Besun is an important milestone on the strategic road map for PIC in the world’s largest pork market," said Nancy Jiang, general manager of Genus China. "We are delighted to be working with such an inspiring partner dedicated, as we are, to the stable supply of nutritious and safe pork, at the same time making more efficient use of valuable feed resources. This is a model we fully expect to replicate elsewhere in the country.”

Canada pork producers concerned over high feed prices

Canadian pork producers are raising concerns over increasing animal feed prices due to the continuing U.S. drought, saying that ethanol policies and low crop yields in the U.S. are causing grain prices to rise to the point where it may no longer be economical to have pigs.
“Grain is by far the largest cost component of raising pigs, and marketplace realities are such that pork producers cannot simply pass along added costs to buyers," said Canadian Pork Council Chair Jean Guy Vincent. "Margins become squeezed and producers need to either absorb heavy losses or, unfortunately, get out of business.” The council said global policies on ethanol mandates need to be re-evaluated if feed is to remain affordable in the current climate.
“The status quo is not sustainable for the hog industry," said Vincent. "Pork producers need to work with all members of the value chain to address short and long term issues. The recent market conditions and feed prices were unimaginable two months ago and producers should not have to decide between losing their farm or increasing their debt to pay for unsustainable feed costs."
A task group made up of producers and federal government officials has been established to review the situation and identify measures to assist the hog sector to manage through the latest challenge.

Pork producers council supports new provision of price reporting law

The National Pork Producers Council has said they support the release of a final rule to implement the wholesale pork reporting provision of the federal mandatory price reporting law, which requires meat packers to report price data to the U.S. Department of Agriculture’s Agricultural Marketing Service.
The rule outlines what information packers will be required to submit to the Agricultural Marketing Service, how the information should be submitted and other requirements. Packers will be required to submit the price of each sale, quantity and other characteristics, such as the type of sale, item description and destination of the product. The Agricultural Marketing Service will use the data to produce timely, meaningful market reports.

“America’s pork producers are grateful for the USDA’s cooperation in helping develop this valuable tool for pork producers since it is becoming increasingly common to sell hogs based on the cutout price,” said council President R.C. Hunt. “This important addition to the price reporting law allows for a more competitive market and will provide greater transparency in the livestock market.”

Nitrate a concern in drought-damaged corn fed to livestock

Drought-damaged corn plants, especially those heavily fertilized with nitrogen, can accumulate nitrate, making them dangerous for animals to consume, according to Tim Evans, an associate professor of veterinary pathobiology and toxicology section head at the Veterinary Medical Diagnostic Laboratory at the University of Missouri College of Veterinary Medicine.
In normal conditions, corn crops typically absorb nitrate into only the lower 12–18 inches of the stalk, which does not have to be fed to animals. However, during severe drought conditions, high concentrations of nitrate can accumulate in the upper portions of the stalk, which cattle and other livestock often eat, said Evans. "Eating plants with too much nitrate can cause damage to red blood cells, resulting in lethargy, miscarriage and even sudden death,” he said.

Farmers should test the nitrate levels of their crops and pastures before allowing their animals to eat any of the plants. “Missouri farmers should definitely contact their local MU Extension offices for help in the preliminary stages of testing the nitrate concentrations in their crops,” said Evans. “MU Extension workers have their boots on the ground all across the state and are truly a valuable resource for farmers who are worried about their crops and livestock.”

Pilgrim's rating outlook revised down on high feed costs

Standard & Poor's Rating Services has dropped its outlook on Pilgrim's Corp. from developing to negative, reflecting the risk that earnings may decline significantly by the fourth quarter of fiscal 2012 and into 2013 if pricing actions don't fully offset higher feed costs, according to the company.
"The outlook revision to negative reflects our concerns about the impact higher feed costs will have on Pilgrim's earnings, given the drought in the Midwestern states," said Standard & Poor's. "We believe the drought will lead to higher feed costs, which could pressure the company's operating performance during the next 12 months." The company said it believes Pilgrim's upcoming contract and pricing discussions with key customers will determine the company's ability to pass through price increases, but that it is anticipating weaker earnings overall in 2013. "Pilgrim's Pride's earnings have demonstrated a high degree of volatility and we expect this trend to continue for the company in the future," said Standard & Poor's.
JBS S.A., Brasil Foods S.A. and Marfrig Alimentos S.A. have also had their ratings dropped in recent days due to projected feed price increases.

Mexico begins phase two of bird flu poultry vaccination campaign

*The Mexican government has started phase two of its bird flu vaccination campaign in response to the country's H7N3 virus outbreak, which has so far resulted in the slaughter of nearly 11 million birds to prevent its spread.
Roughly 90 million doses of the vaccine will be used on poultry farms in the Los Altos region of the western state of Jalisco, where the virus was found. The first phase involved 88.3 million doses of the vaccine, according to the national food health, safety and quality service agency Senasica. Officials are also keeping 53 million doses of the vaccine and viral samples in reserve so production can be boosted if necessary.
Poultry distribution is expected to resume in August, with 5 million birds shipped monthly to the farms cleared by inspectors, said Senasica director Enrique Sanchez. Samples have been takes at 438 farms in the Los Altos region, and only 43 farms tested positive for H7N3. Additional tests conducted outside of Jalisco all came up negative, said officials.

US egg production reduced for 2013

The forecast for U.S. total domestic egg production in 2013 has been lowered by 100 million dozen to 7.5 billion dozen, down 2 percent from the 2012 forecast, according to the U.S. Department of Agriculture's latest report. The lower production, brought on by higher feed costs, is expected to result in higher domestic prices and lower exports in 2013.
In the first half of 2012, table egg production was 3.3 billion dozen, up 1.1 percent from the first half of 2011. However, production of hatching eggs fell by 3.7 percent compared with 2011 numbers. The decrease in hatching egg production was chiefly the result of the decline in broiler chicks needed for growout, according to the USDA. Hatching egg production in the first half of 2012 was 520 million dozen. Production of table eggs is expected to be down slightly in the second half of 2012 and through 2013. Production of hatching eggs, especially those from meat-type birds, is expected to be below 2011 levels in the second half of 2012 as broiler chick production declines.
Wholesale prices in the New York market for a dozen grade A large eggs in the second quarter averaged $0.98 per dozen, at the end of July. However, moving into August, prices have spiked to over $1.50 per dozen. Even with table egg production expected to be slightly higher in the second half of 2012, prices are expected to be stronger than in 2011 through the end of 2012. Wholesale prices in the New York market for a dozen Grade A large eggs are forecast to average $1.28–$1.32 for the third quarter of 2012 and average $1.31–$1.39 in the fourth quarter, according to the USDA's report.

For more information and statistics on U.S. eggs, see www.wattagnet.com/marketdata.html.  

Paraguay to approve Monsanto soybean seeds by year end

Paraguay expects to approve Monsanto's genetically modified Roundup Ready 2 soybean seeds in time for the 2012–2013 planting season in October in a bid to expand its presence in the global grains export market.
The country gathered 4.3 million metric tons of soy in the 2011–2012 season, a reduced number due to drought, but expects its yields to increase to 8 million metric tons with the addition of Monsanto's seeds, said Agriculture Ministry trade chief Santiago Bertoni. "With this step we will improve the technology balance between ourselves and other countries, improving our ability to compete," said Bertoni. "The 2013 harvest will include fields planted with these seeds."
Paraguay is currently fourth in global soy exports, behind the U.S., Brazil and Argentina.

House of Raeford convicted of violating Clean Water Act

North Carolina poultry processor House of Raeford Farms has been found guilty on 10 counts of violating the Clean Water Act, according to a federal jury.
The company was found not guilty on four other counts, and Plant Manager Gregory Steenblock was acquitted of all 14 charges brought against him.

House of Raeford allowed employees to send untreated wastewater, contaminated with blood, grease and other body parts from slaughtered turkeys, directly into the city of Raeford's wastewater treatment plant for 16 months, according to the Department of Justice. “Publicly owned wastewater treatment plants must be protected from companies that cut corners by discharging wastewater illegally,” said Maureen O’Mara, a special agent with the Environmental Protection Agency.
House of Raeford said it maintains that wastewater going into the sewer was effectively treated by the city's treatment plant. “The government repeatedly admitted during the trial that none of the materials it claimed went into the City of Raeford’s sewer system ever reached the environment,” said the company. “House of Raeford completed a $1.4 million upgrade to its wastewater pre-treatment system in September 2006 that solved the issues that led to the trial.”
House of Raeford faces a maximum fine of $500,000. Sentencing has been scheduled for Nov. 28.

Canada company researching antibiotics replacements in animal feed

Canadian biotechnology company Prairie Plant Systems Inc. is researching new technologies with the potential to replace antibiotics in animal feed, focusing on the health properties of plants such as mustard seeds, according to reports.
The first step in the company's goal, said CEO Brent Zettl, is to develop feed supplements that will stimulate an animal's immune system to resist infection. "The long-term goal of our research can have benefits for farmers and consumers alike," said Zettl.

Prairie Plant Systems is working in response to the movement that exists to stop using antibiotics in feed. “As soon as they use those antibiotics for chickens and pigs, when it comes time for human beings to rely on them to deal with infection the bugs that they were defending (against) have become resistant," said Zettl. "As a consequence it makes the antibiotics less effective for human beings. We are using those antibiotics after we have discovered them too soon in the food system." With better science, the company believes it can design antimicrobial, naturally occurring proteins. “If we tap into that, and have a seed promoting that, then it can essentially produce a healthy gut (in the animal),” said Zettl. “It would mitigate or displace the antibiotics used in feed.”
The federal government is investing about $101,000 into the project, which Zettl said will likely take about three years of research to determine viability. The project is funded under the $50 million Agricultural Innovation program.

Georgia governor latest to call for ethanol mandate waiver

Georgia Governor Nathan Deal has become the latest to petition the U.S. Environmental Protection Agency requesting that the Renewable Fuel Standard be waived in light of the current drought plaguing the Midwest.
The University of Georgia has reported that the state’s poultry producers are spending $1.4 million extra per day on corn due to the drought and the upward pressure on corn prices caused by the demand created by the Renewable Fuel Standard for ethanol. This translates to over $516 million per year if these market conditions continue, said Deal. “It is abundantly clear that substantial evidence exists now within the existing reports of the [U.S. Department of Agriculture] regarding expected crop yields and within private sector forecasts of crop yields that current and futures pricing of corn will result in severe economic harm in the poultry and livestock sectors,” he said. “It can also be reasonably projected that this harm will continue well into 2013, if not beyond 2013, and that the decreasing availability of stocks of grains will only be eased when a new crop season provides an abundance of supply.”
Deal is the fifth governor to request that the agency waive the Renewable Fuel Standard, joining the governors of Maryland, Delaware, North Carolina and Arkansas. His petition comes just a day after the Environmental Protection Agency said it is issuing a Federal Register notice opening a 30-day public comment period on waiving the Renewable Fuel Standard requirements. This statute provides the agency with 90 days in which to make a decision.

Turkey poultry, egg production up in June over 2011 numbers

The Turkish poultry industry slaughtered 94 million birds in June, according to the Turkish Statistical Institute, 2.4 percent lower than in the month of May but 7.7 percent higher than in June 2011.
The industry produced 157,406 tons of poultry meat during the month, 2.7 percent lower than in May but 8.5 percent higher than in June 2011. Egg production was 0.4 percent higher in comparison with May at 1.2 billion eggs, and 17.3 percent higher than June 2011 numbers, according to the institute.

China to release corn from state reserves

China is releasing corn and rice from state reserves to help offset inflation and stop imports as a result of global price increases due to the ongoing U.S. drought, according to reports.
Rationing is already in full force, and further measures may be needed, said Christopher Narayanan, head of agricultural commodities research at Societe Generale. While no numbers have been given, some traders are predicting around 2 million tons might be sold to help stabilize prices ahead of the harvest.

"It can help stabilize the market somewhat, but the volume is too small compared with the 10 million to 15 million tons of monthly consumption nationwide," said Xu Wenjie, an analyst with Zheshang Futures Co. China has become a significant corn importer in recent years, as domestic meat consumption increases.

Brazil poultry production down on high grain prices

Brazil's poultry meat production dropped 10 percent below the industry's average monthly output of 1.1 million metric tons in July, due to an increase in the cost of grains which account for 60 percent of poultry producers' expenses, according to Brazilian poultry association Ubabef.
Twenty of the association's 80 members, who range from small producers to large international exporters, are in financial difficulties because of the cost of feed, said Francisco Turra, head of Ubabef. "It's a crisis of the most serious kind in a sector that already works to very tight margins," he said. Prices members are paying for soy have risen 80 percent in the last six months, and 40 percent for corn.

Brasil Foods, JBS and Marfrig have all said they will raise their prices due to the higher cost of inputs. Fitch Ratings downgraded its outlook on all three companies on Aug 17.

Philippines poultry production up 5.5 percent in first half 2012

Philippines poultry production recorded exceptional growth of 5.5 percent in value for the first six months of 2012 when compared with January to June 2011, according to the country's Department of Agriculture.
Poultry production represented 13.9 percent of total agricultural output, with revenues of P81.3 billion (US$1.92 billion). Overall, the valuation of output by the agricultural sector grew by 1 percent in the first semester. A statement by Agriculture Secretary Proceso J. Alcala said the growth rate achieved by poultry compared with 1.5 percent for crop production (including 4.8 percent for corn) and 0.5 percent for other livestock. Total corn production in 2012 is forecast to reach a record of 7.46 million metric tons, up 7 percent from 2011's harvest.

Europe feed makers, farmers struggling with high grain costs

European animal feed makers are saying they have limited options when it comes to making substitutes to cope with rising global grain costs, and farmers dealing with increased feed costs say they may be forced to reduce their herds as meat prices fail to keep pace, according to reports.
Global corn and wheat prices rose 50 percent and soybeans roughly 20 percent in the six weeks to the end of July as the U.S. entered a drought that continues to present challenges. "The animals need energy, and I don't think that the carbohydrates they get from grains could be replaced with anything else," said Sam Millet, a researcher at the Belgium Institute for Agricultural and Fisheries Research. "I don't think we can grow plants with the same content of digestible energy as grains."
Grains usually account for more than 50 percent of animal feed formulas for poultry, pigs and cattle, and protein from oilseeds such as rapeseed and soybeans makes up another 25 percent. The rest consists of minerals and additives. Farmers are looking for ways to alter their formulas, but say they have little to work with. "The use of (byproducts) is limited and linked to availability," said John Brennan, director of research and development for animal nutrition at Nutreco. "In North America where we have growth of the ethanol industry, we have increased availability of distilled grains and we use it as feedstock." According to Brennan, the biggest savings have come from additives — mixes of vitamins, minerals, emulsifiers and some chemicals. "That's where the revolution is taking place," he said. Some blends have led to 10 percent cost savings for ruminants' feed, but savings for poultry and pig feed were much lower, said Brennan.
Farmers have said it's time to pass on the costs to consumers, or they risk having to shut down. "The price of feed has risen by more than the price of pork," said Christiane Lambert, vice president of France's largest farm union FNSEA. "The risk is that some of the producers will go out of business."

US turkey production dropped for 2013

The forecast for U.S. turkey meat production in 2013 was reduced by 135 million pounds to 5.8 billion pounds, a decline of 2.7 percent from 2012 numbers, in reaction to anticipated higher prices for turkey feed, according to the U.S. Department of Agriculture's latest report.
Turkey meat production during the first six months of 2012 was 2.9 billion pounds, 2.7 percent higher than in the same period in 2011. The increase in turkey meat production resulted from a higher number of birds slaughtered, up 1.6 percent, and an increase in live-weight at slaughter. Over the first six months of 2012, live turkey weights averaged 30.4 pounds, up 1 percent from the same period in 2011, according to the USDA.

The forecast for turkey meat production in the second half of 2012 is 3 billion pounds, up 3 percent from the same period in 2011. The increase is expected to come chiefly from a higher number of birds slaughtered, as average live weight at slaughter is expected to be slightly higher than in 2011.
With more birds slaughtered and an increase in turkey meat production, turkey stocks have expanded. At the end of June turkey stocks were up 7.6 percent from 2011 numbers to 547 million pounds. Stocks of both whole birds and turkey products were higher, with most of the growth attributed to larger stocks of turkey products, said the USDA. With higher production expected to continue in the second half of 2012, ending stocks for 2012 are forecast at 250 million pounds, up 18 percent from 2011.

Turkey exports
Turkey meat exports totaled 185 million pounds in the second quarter of 2012, an increase of 8 percent from the same period in 2011. Turkey products shipments have been steady throughout the first half of 2012, with first-quarter exports totaling 181 million pounds. Shipments to Mexico in the first half of 2012 have not been the fastest growing, but at 198 million pounds, they accounted for 54 percent of the total.
In June, turkey exports totaled 58.7 million pounds, 9.5 percent higher than in June 2012. Higher shipments to Canada, the Philippines, China and Mexico accounted for the bulk of the increase. As with other poultry products, the turkey export forecast for 2013 was lowered from its previous levels due to expected lower domestic production and higher prices, according to the USDA report. Exports in 2013 are expected to total 690 million pounds, down 40 million pounds from their previous forecast and 7 percent lower than the forecast for 2012.

US turkey eggs, poults up in July

U.S. turkey eggs in incubators on Aug. 1 totaled 28.7 million, up 1 percent from 2011 numbers but down 4 percent from the July 1, 2012 total of 29.8 million eggs, according to the latest U.S. Department of Agriculture report.
Turkey poults hatched during July totaled 25.6 million, up 3 percent from July 2011 numbers and up 2 percent from the June 2012 total of 25 million poults. The 25.2 million net poults placed during July were up 1 percent from the number placed during the same month in 2011. Net placements were also up 1 percent from the June 2012 total of 24.9 million, according to the USDA. 

Russia animal feed thefts responsible for African swine fever spread

Animal feed thefts in Russia may be responsible for a recent spread in African swine fever on industrial farms, according to food safety watchdog Rosselkhoznadzor.
Hog feed was stolen from industrial farms in two different Russian regions, and the bags used to carry the feed out may have come from private farms and helped spread the virus. Farm owners and veterinary officials should “pay extreme attention” to guards that work on farms, said Nikolai Vlasov, deputy head of Rosselkhoznadzor.

Roughly 76,000 pigs out of 800,000 in the Krasnodar region of southern Russia are infected with African swine fever and will be killed, said the region’s government. Governor Alexander Tkachev has declared a state of emergency in the area because of the virus.

Harrisvaccines develops H3N2v swine vaccine

Iowa-based Harrisvaccines has developed a vaccine for the H3N2 variant strain of swine flu and, using the company's patented RNA Particle technology, can produce the vaccine within four weeks without culturing the live virus.
Currently, the company has pending U.S. Department of Agriculture licensure for the technology. “We have the ability to produce a swine vaccine for the H3N2 variant strain and are prepared to work with federal officials to make it available should the situation warrant,” said D.L. Harris, DVM, Ph.D., founder and president of Harrisvaccines. “Our patented RNA Particle platform allows for rapid vaccine response to situations such as we saw in the 2009 pandemic H1N1 virus and today with the H3N2 variant strain that is crossing from pigs to humans.
"Our technology is so advanced that the USDA’s Center for Veterinary Biologics did not have a ‘box’ to put us in. Now that we have complied with all the necessary testing and paperwork, we are still waiting to be regulated and fully bring this technology to the market.”

Chicken conference to cover critical industry issues

The National Chicken Council’s 58th Annual Conference, October 10-11, in Washington, D.C., will feature speakers discussing pertinent legislative, regulatory, economic and business issues impacting the chicken industry. The conference offers an opportunity to gain a better understanding of the path forward for the industry given current, critical issues confronting chicken producers and processors. In addition to top senior executives from across the chicken industry, conference participants will also include allied industry representatives, government officials and trade news media.
Topics on the agenda for October 11 include international trade, foodservice’s success with chicken, the national economy, industry outlook and election insights.
The conference will take place at the Mandarin Oriental Hotel in Washington, D.C., and begins with a reception the evening of October 10. To register for the conference, go to www.nationalchickencouncil.org/conference/

Cherkizovo developing live-work-play agro-industrial campus

Cherkizovo Group is working with U.S.-based company M+A Global to build a $685 million agro-industrial project in the Lipetsk region of Russia, designed to be a "live-work-play" facility that employees can live and work on, all within the project boundaries.
When completed, the company estimates that there will be as many as 5,000 employees working on the 650-hectare site. The project will be completed in three phases, the first of which will include a feed mill and a processing facility. Construction has already begun on the feed mill complex, which will have a capacity of 90 metric tons per hour including storage facilities for 300,000 metric tons of grain and an oil processing facility. It is expected to take three-and-a-half to four years to complete all phases of the project. The processing plants are expected to be operational by 2013 and the entire campus fully functional by 2015.
As part of the master plan there are also employee housing facilities, daycare facilities, on-site medical facilities, a hotel and conference center, a technical school for training, a community center, a sports stadium and fields for recreational activities, administrative buildings, truck maintenance facilities and research and development facilities. Other amenities include retail, restaurants and park space. There are also plans for large-scale greenhouse facilities for growing assorted vegetables. The vegetables can be used for feeding the employees and can also be sold on the open market. 

US poultry, egg exports set records in first half 2012

U.S. poultry meat exports for the first half of 2012 set year-on-year records in both quantity and value, according to data released by the Foreign Agricultural Service, led by significant increases in shipments to Mexico, Russia and other key markets.
Exports of U.S. chicken, turkey and duck for January through June reached more than 1.9 million metric tons valued at $2.6 billion, increased 12 and 22 percent, respectively, from the same period in 2011. Total poultry meat exports in June were 323,034 tons valued at $427 million, up 8 and 15 percent, respectively, from June 2011. Export value was the highest ever recorded for June. June exports of broiler meat (excluding chicken paws) totaled 269,129 tons, 12 percent above the same time in 2011, while export value rose more than $340 million, up 25 percent year over year. Exports surged to key markets such as Russia, Cuba, Angola, Mexico, Kazakhstan and Ukraine, while shipments to Canada, Iraq, China and Afghanistan also showed significant growth, according to the Foreign Agricultural Service report.
Cumulative broiler exports (excluding paws) for the first half of 2012 rose by 13 percent to 1.6 million metric tons, while value increased by 28 percent to more than $2 billion compared to 2011 numbers, both of which are year-on-year records. First-half broiler exports to Mexico rose by 18 percent to 264,072 tons, while shipments to Russia grew by 164 percent to 130,542 tons. Exports to Cuba hit 80,421 tons, up 233 percent, while shipments to Angola were 79,498 tons, a climb of 39 percent. Exports to other important markets were Canada, 78,745 tons, up 21 percent; Taiwan, 67,851 tons, up 13 percent; Hong Kong, 65,869 tons, up 38 percent; Iraq (including transshipments via Turkey), 64,027 tons, up 7 percent; Kazakhstan, 54,030 tons, up more than five-fold year-on-year; and China, 39,547 tons, up 61 percent.

Egg Exports
June table eggs exports were about 10 million dozen valued at $8.1 million, climbing 67 and 54 percent, respectively, thanks to larger shipments to Hong Kong and Angola, said the Foreign Agricultural Service. First-half table egg exports hit 49.6 million dozen valued at $43.7 million, up 34 and 31 percent, respectively. Of the total, 79 percent or 39 million dozen were shipped to the top five export markets of Hong Kong, Canada, the U.A.E., the Bahamas and Angola.
Exports of processed egg products in June reached $11.3 million, up 20 percent over June 2011. Even though the export value to Japan decreased by 8 percent to $3.7 million, value of shipments to the EU increased by 42 percent to $3.7 million, largely because of the lingering egg deficit in the EU. Cumulative export value of egg products in the first half of 2012 were $70 million, up 19 percent year-on-year. Exports to EU-27 increased by 120 percent to $26.7 million, accounting for 38 percent of U.S. total exports worldwide. Exports to Japan decreased by 25 percent to $21.8 million, accounting for 31 percent of U.S. total exports worldwide. While export value to South Korea decreased 24 percent year-on-year, export value to Canada and Mexico increased by 14 and 121 percent, respectively.
Total egg exports (table eggs plus egg products in shell egg equivalents) for the first half of 2012 were 122 million dozen, with an export value of $102.7 million, up 10 and 11 percent from the same period in 2011, respectively. Both export quantity and export value set year-on-year records.
For more information and statistics on U.S. poultry and eggs, see www.wattagnet.com/marketdata.html. 

PIC opens great-grandparent pig breeding facility in China

*Pig breeding company PIC has opened a great-grandparent breeding facility in Yongshou County, Shanxi Province, China, in cooperation with Benxiang Group.
The project has a capacity of 4,500 breeding sows, according to PIC, and represents and investment of RMB 200 million. The facility currently has 2,800 starting sows and a biological facility that can slaughter 50,000 pigs per year. It will be able to offer 20,436 high-quality pigs and 32,032 piglets as merchandise every year. The project will provide opportunities for 300 farmers to enter the pig breeding industry, bringing them an average income increase of over RMB 2,090.

Poultry researcher Daniel L. Fletcher dies at age 63

Daniel L. Fletcher, internationally recognized poultry researcher, teacher, mentor and administrator, died July 16, 2012, at age 63.
He received B.S., M.S., and Ph.D. degrees from the University of Florida and joined the University of Georgia Department of Poultry Science as an assistant professor in 1977. He was promoted to associate professor in 1984 and full professor in 1990. While at the university, he received 11 awards for teaching and research from his department and college. He taught numerous courses at both the undergraduate and graduate levels and served as Graduate Coordinator for the Poultry Science Department.
His research on egg yolk and broiler skin color work led to improved analysis of egg yolk and broiler skin color and evaluation of pigment sources. His research on early rigor, antemortem stress and early processing factors has contributed to the understanding of the effects of production and processing methods on poultry meat color, texture, shelf life and overall quality. The research also addresses regulatory and animal welfare concerns in the poultry processing industry. Over one million dollars of research support and grants were awarded to support his work, which also led to the publication of 143 refereed journal articles and 292 abstracts, proceedings, invited papers and trade publications. Daniel was active in professional societies, serving on the editorial and review boards of nine journals and contributing to WATT PoultryUSA.
After 30 years of service to the University of Georgia, he became professor and department head of the Animal Science Department at the University of Connecticut. He was the recipient of the American Egg Board Research Award, Broiler Research Award, the Continental Grain Poultry Products Research Award, the Merck Award for Achievement in Poultry Science and he was elected a Fellow of the Poultry Science Association.
He did a sabbatical at Spelderholt Institute in the Netherlands, participated in European poultry symposia, and cooperated with the University of Bologna and the University of Helsinki. He received the University of Helsinki Medal and was elected into the International Poultry Hall of Fame in 2008.
Daniel was a devoted husband and father with an unforgettable sense of humor.

US broiler production revised down for 2013

With sharply higher prices expected for both corn and soybeans, the broiler meat production forecast was lowered for 2013, by 600 million pounds, to 36.5 billion pounds, according to the U.S. Department of Agriculture's latest report.
The production estimate for 2012 rose to 36.97 billion pounds due to a slightly higher preliminary estimate for the second quarter and an increase of 50 million pounds to the forecast for the third quarter. Broiler production is expected to be mixed in the second half of 2012, with lower production in the third quarter but higher production in the fourth quarter. Starting in the fourth quarter, sharp increases in feed grain prices and continued economic uncertainties in both the domestic and foreign sectors is expected to push broiler integrators into cutting production. Overall, the second half of 2012 is expected to see a total production of 18.5 billion pounds, slightly higher than in the same period in 2011, according to the USDA.
Broiler stocks in cold storage totaled 607 million pounds at the end of June, down 15 percent from 2011 numbers. Most categories of broiler stocks that are shown individually had strong declines compared with 2011, where stocks of whole birds were down 49 percent, breast meat down 33 percent, leg quarters down 27 percent and wings down 36 percent. These declines were countered partially by gains in cold storage holdings of legs (up 45 percent) and of the products included in the “other” category (up 7 percent). Cold storage stocks are expected to remain below year-earlier levels during the third quarter, but move slightly higher in fourth-quarter 2012 and remain higher on a year-over-year basis during 2013.
For more information and statistics on U.S. poultry, see www.wattagnet.com/marketdata.html. 

Poultry price increases inevitable in wake of global grain shortage

The current world grain shortage caused by the prolonged drought in the U.S., coupled with excessive rains in Northern Europe, is having a significant impact on poultry meat production worldwide, according to the International Poultry Council. High prices of feed grains in particular are pushing up the cost of producing commercial poultry, and poultry price increases are inevitable, says the council.
Companies will be forced to pass those increases on to consumers, and couple them with cuts in production. To mitigate some of this, governments should take whatever measures are available to prevent any further increases in grain prices. "Poultry meat has historically been the world’s cheapest large-scale source of animal protein, and has played a central role in providing consumers in poorer nations with access to protein," said the council. "Continued high grain prices threaten food security, especially in low-income countries."
The council also said that governmental policies that subsidize or encourage the production of renewable fuels from grains and cereals should be revised in order to avoid the risk of food shortages.

Pfizer subsidiary files to sell stake in animal health business

Pfizer Inc. subsidiary Zoetis Inc. has filed plans with the U.S. Securities and Exchange Commission to publicly sell up to 20 percent of its stock. Prior to completion of the offering, which is targeted for the first half of 2013, Pfizer will transfer its animal health business to Zoetis, according to reports.
"Our focus continues to be taking the actions that will generate the greatest after-tax value for our shareholders," said Chairman and CEO Ian Read. The number of shares to be offered and the price range for the offering have not yet been determined. J.P. Morgan, Bank of America Merrill Lynch and Morgan Stanley will act as the joint book-running managers for the proposed IPO.

COFCO group invests in 3.6 billion RMB pig program

The COFCO group has signed a 3.6-billion-RMB contract with Changling County, Jilin province to build a 2-million-pig industrialized facility.
The group plans to invest 3.6 billion RMB into the Changling plant project, which will cover 1,500 hectares. This project includes the construction of a pig breeding facility, a feed factory, a slaughterhouse, a processing plant and other industrial facilities. After this project reaches its projected scope, it will be able to produce 5 billion RMB worth of pigs; making a profit of 800 million RMB per year and being taxed 35 million RMB per year. This project will add 2,000 more jobs to the local area, bringing an additional 20,000 workers to the county’s pig industry. The county’s pig industry will send 1 million more pigs to the slaughter every year, as well as earning an additional profit of 500 million RMB, according to COFCO.
Changling county and COFCO have been engaged in business talks concerning this project since September 2011. In May 2012, COFCO signed an official agreement with the Songyuan City Government in Beijing, agreeing on the final contract for the project. 

Chia Tai Group begins work on egg breeder project

Chia Tai Poultry (Henan) Ltd. has begun work on an egg breeder project in Fangcheng County, Nanyang City of Henan province in China.
The project's groundbreaking is the first of a three-stage plan. The first investment amounted to 24.412 million RMB, which is being used to build two grandparent egg breeder facilities with a total scale of 12,000 sets, and one hatching facility that can produce around 746,000 parental chickens per year. The facility will be completed by the end of 2012, according to Chia Tai Poultry.
The second stage costs 62.09 million RMB and involves the construction of two 60,000-set parental egg breeder facilities and one hatching facility that can produce around 4.56 million sets of merchandise chickens per year. This facility will be completed by the end of 2013. The third stage's scale is similar to the second stage, and is planned to begin in the years 2014–2015.

Hog futures up after USDA announces pork purchase

U.S. hog futures rose by $1.70 per hundredweight for the October contract and $1.37 per hundredweight for the December contract after the U.S. Department of Agriculture announced its intent to purchase $100 million in pork products to help support farmers suffering through the current drought. The purchases will go to national food nutrition assistance programs like food banks.
A combination of oversupply and high feed prices due to drought has plagued producers, according to the industry. Hog prices have dropped 15 percent since the end of 2011 due to record production of hogs threatening to oversupply the market. Iowa, the nation’s largest hog producing state, has reported inventories of hogs at a record 20 million since late 2011, largely because of improved sow productivity.
Increased feed prices have only made things more difficult. “This purchase will help pork producers who are struggling with the effects of this severe drought, which has adversely affected much of the nation’s corn crop,” said National Pork Producers Council President R.C. Hunt. “In fact, many producers still face the prospect of severe losses because of record-high feed prices, which have gone up because of the drought." Some producers are choosing to send their sows to slaughter, rather than keeping them and paying the higher feed prices.
Pork prices have been bolstered since 2010 by strong exports, a trend that has continued through the first half of 2012, according to the U.S. Meat Export Federation, which reported pork exports up 13 percent in volume to 294,097 metric tons and 11 percent in value to $537.4 million through June.

China feed output from scaled companies reach 19.69 million tons

China’s scaled companies produced 19.69 million tons of feed in June, 11 percent higher than 2011's June numbers and 11.6 percent higher than May 2012 numbers, according to the country's Statistical Bureau.

In the first half of 2012, the industrial feed cumulative output was 98.99 million tons, 21.6 percent higher than the same time in 2011. Shandong, Guangdong, Liaoning, Henan, Guangxi, Hunan, Sichuan and Jiangsu are the eight provinces that produced the most feed in the first half of 2012, with an average of at least 5 million tons. Out of these, Shandong province’s output reached 13.23 million tons. Guangdong and Liaoning produced 9.29 million tons and 8 million tons, respectively. Of the eight provinces, Jiangsu’s output increased the most, at around 53.7 percent. Next was Guangxi at 30.8 percent, and Henan came third at a 23.1 percent increase. Sichuan had the smallest growth at 8.2 percent, according to the bureau.

Proper nutrition essential for long-term sow profitability

The stress of a gilt’s first litter can result in under-conditioning, which can affect the length of time it takes for the sow to return to estrus, and proper nutrition strategies are essential to prevent this lag time or a slump in future production, according to Mike Hemann, Great Lakes Region swine nutritionist for Purina Animal Nutrition LLC. Proper nutrition can also help to keep young sows in the herd longer.
Sow rations and feeding strategies should be created based on parity levels, said Hemann. If managing in groups, young gilts should be separated from older sows and fed accordingly when possible. “Profitability and overall success comes down to having a good parity structure within your sow herd,” he said. “The third parity is often your breakeven point so, after the second parity, the sow becomes profitable for the producer. It’s important to not have too many young gilts nor too many old sows in the herd to keep that balance between current profit and future profit potential.”
The herd should then be grouped and fed based on sow age and individual animal nutrient requirements based on a consistent and routine body condition scoring system. To prevent early burnout, younger gilts — or parity 1 females — should be fed nutrient-dense rations or provided with a top-dress when facility design challenges allow the producer to only feed one lactation ration. “[Parity 1] females require rations with a higher energy level and amino acid profile because they are limited on physical capacity for intake,” said Hemann. “When we get to an older group where the sows have a physical capacity for higher intake, we can drop those ration requirements to accommodate those higher intake-type sows.
“If we bring in properly conditioned gilts and feed them accordingly during the first parity, we can decrease the ‘sophomore slump’,” he said of the common lag seen in parity 2 sows. “Transitioning P1 gilts in good body condition allows us to bring them back as P2 sows that have the potential to produce a good amount of high-quality pigs in their second litter. Properly managed young sows also provide a base for future longevity in the herd."
The sows then become profitable in their third parity. “If we feed our young sows correctly, we’ll have the table set for profitable production in that third parity and beyond,” said Hemann.