Vilsack: TPP tariff reductions good for US pork industry

The U.S. pork industry would gain from the tariff reductions outlined in the Trans-Pacific Partnership (TPP) trade agreement, U.S. Secretary of Agriculture Tom Vilsack said.
The TPP agreement was reached on October 5 by negotiators from the United States, Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Speaking during a national media call the day after the TPP agreement was reached, Vilsack said the agriculture industries in each state would gain from the provisions of TPP, specifically bringing attention to pork producing states.
“My home state of Iowa, for example, and North Carolina, they all need to know that 65 percent of tariffs on pork will be eliminated in Japan in 11 years or less, and nearly 80 percent in 16 years or less,” said Vilsack. “That market opportunity is going to open not only in Japan, but also in Malaysia and Vietnam where all tariffs will be reduced and eliminated.”
Those markets will be of increasing importance in coming years, Vilsack said, because of their growing population and a growing middle class which will be demanding more pork.
The full text of the TPP agreement will not be released for about 30 days as it is being reviewed by legal teams, Vilsack said.
Once released, the agreement will be subject to congressional approval.

Members sought for Pork Checkoff advisory committees

The National Pork Board is accepting applications through October 1 to fill positions on nine Pork Checkoff program advisory committees. The committee system provides in-depth analysis and oversight of specialized projects and programs, including the planning, budgeting, goal-setting and evaluation of Pork Checkoff programs.
“Serving on Pork Checkoff advisory committees is a great opportunity for producers to show their support of the industry,” said Bill Winkelman, vice president of producer services for the National Pork Board. “Committee members include industry professionals from diverse background and geographic regions, each committed to lending their expertise to the U.S. pork industry.”
Any pork producer or importer who has paid all checkoff assessments that are due, or is a representative of a producer or company that produces hogs and/or pigs, is eligible to serve on a Pork Checkoff advisory committee. Applications are being accepted for the following committees:

• Animal Science
• Animal Welfare
• Domestic Marketing
• Sustainability
• Pork Safety, Quality and Human Nutrition
• Producer and State Services
• Public Health and Producer Safety
• Swine Health
• International Trade

Committee members who volunteer their time to serve on an advisory committee can expect to meet one to three times a year. Application requests and questions can be directed to the National Pork Board by mail to: 1776 NW 114th St., Clive, Iowa 50325.

US swine producers prepare for VFD final rule implementation

Andrea Gantz
Dr. Ron Prestage, NPPC president, addresses the media at the 2015 World Pork Expo. 
The Food and Drug Administration’s (FDA) Veterinary Feed Directive (VFD) final rule took centerstage at the National Pork Producers Council’s (NPPC) opening press conference at the 2015 World Pork Expo. 
The final rule, announced June 2, provides the framework to promote the judicious use of antimicrobials in food-producing animals by eliminating the use of medically important antibiotics for growth promotion and bringing therapeutic treatment under veterinary oversight.
According to NPPC president Dr. Ron Prestage, the swine industry fully embraces the change.
“We recognize the need to protect the availability of medically important antibiotics for animal and human medicine,” says Dr. Ron Prestage, NPPC president, who notes the organization’s 16-year push to reduce antibiotic use in pork production. “I’ve said it before and I’ll say it again: Those of us working in agriculture will never win nor would it be prudent to point the finger at our human counterparts’ positions in an effort to defend our use of antibiotics.”
Under the VFD final rule, antibiotics that formerly held over-the-counter status will now require a veterinarian’s prescription before they can be used in animal feed and water. This action adds an additional 283 drugs to the VFD list. In addition, it will require additional veterinarian oversight and accountability as defined by the veterinarian-client-patient relationship (VCPR) criteria. The final rule will be implemented by the end of 2016.
Animal health remains a priority
Prestage points to yesterday’s “White House Forum on Antibiotic Stewardship," a gathering of more than 100 animal and health stakeholders hosted by the Obama administration, aimed at cooperatively tackling the global issue of antimicrobial resistance.
“No one questioned that as ethical caretakers of animals we have a moral obligation to treat animals if they’re sick,” Prestage reports. “The good news is they all recognized that we need to treat animals if they become ill.” 
He stresses that antimicrobial resistance is the “big issue” and wants pork industry customers to understand that safeguards are in place to ensure responsible antibiotic use in pig farming. 
NPPC promotes responsible antibiotic
The NPPC notes that the organizations efforts to curb the overuse of antibiotics began in 1999 with Pork Quality Assurance (PQA) Plus, a management education program run by Pork Checkoff “that emphasizes good management practices in the handling and use of animal health products, and encourages producers to review their approach to their herd’s health problems.”
The three-prong program focuses animal health, animal welfare and environmental stewardship.
“Within animal health, we focus on the appropriate and judicious use of antibiotics and that there needs to be an appropriate VCPR in order to make the appropriate decisions involving antibiotics,” says Prestage.  “It’s not the result of recent attention to antibiotics in food animals, this has been evolving for the last 16 years within the leadership of NPPC.” 
The World Pork Expo will be held in Des Moines, IA, June 3-5, 2015.
For more information, visit www.pork.org.

Pork outlook profitable, may benefit from avian flu

Despite a disappointing first quarter in 2015, Steve Meyer, Ph.D., forecasts a good outlook for pork in the rest of the year. 
“Avian influenza has not had an impact of any degree on the meat sector yet,” said Steve Meyer, Ph.D., vice president, pork analysis, Express Markets Inc. Analytics, at the National Pork Producers Council (NPPC) press conference at the 2015 World Pork Expo. “It’s had huge impacts on the egg sector. On the meat side, the only real thing that has happened is that we’ve lost about 2.5 percent of the turkeys. We are going to have some positive influence on ham prices as we go into the holidays, because there aren’t going to be as many turkeys available this fall."
Despite a disappointing first quarter, Meyer forecasts a good outlook for pork in the rest of 2015: “I think producers will be profitable, even on the cash market, for the rest of this year."
“We see robust growth in this herd,” said Meyer. “This corn crop and bean crop are about as normal as can be as far as planting time and conditions. Right now, my judgement is we are a decent rain in July and a decent rain in August away from having very large crops once again. Feed costs are going to be low. Everything points to expansion."
Concerns for the pork industry in the future, according to Meyer, are the rate of herd growth and what will happen to the porcine epidemic diarrhea (PED) virus in the winter of 2015-2016. 

Pork industry ready for required antibiotic use changes

The U.S. pork industry is prepared for changes that will be necessary because of the newly released Veterinary Feed Directive, industry leaders say. 
Consumers have never been more interested in food and agriculture than today, and one of those concerns is antibiotic use in livestock production, according to Chris Hodges, CEO of the National Pork Board. Speaking at Word Pork Expo on June 3 in Des Moines, Iowa, Hodges was part of a discussion on how pork producers have to prepare for the changes in antibiotic use mandated by the just-released Veterinary Feed Directive (VFD).
Watch a video live from World Pork Expo on how the National Pork Board is educating consumers about antibiotic use in the pork industry.
Hodges said antibiotic use in livestock production is not a new issue for NPPC. “We haven’t been standing still. What we’re talking about is improving pig health. Healthier pigs require fewer antibiotics.”
Dr. Jennifer Koeman, the National Pork Board director of producer and public health explained how the Veterinary Feed Directive will impact producers – especially small producers.

Jennifer Koeman of the National Pork Board addresses World Pork Expo attendees, while fellow NPB officials, from left, Jarrod Sutton, Chris Hodges and Brad Greenway look on. 
“Antibiotics are not going away, but how they are being used will change,” said Koeman. The 273 products added to the VFD list will require veterinarian directive for their use in feed. She said producers will have to be much more diligent in record keeping and will need to maintain a close relationship with a veterinarian. While large producers generally already have that relationship or even on-staff veterinarians, many small producers don’t have that existing relationship. Koeman said the VFD will go into effect at the end of 2016, so producers should start developing those relationships now.
Jarrod Sutton, the National Pork Board’s vice president of social responsibility, said the industry’s customers – meat retailers and food service companies – and the consumers are demanding higher standards and transparency.
“Our customers are on the front lines trying to answer these questions, with their focus on humane treatment, safe food, and low carbon footprint,” said Sutton. “We will be sharing this story in one-on-one meetings, at food shows, and talking about it more broadly with the consumer.” He said the National Pork Board’s goal is to instill confidence that the pork industry is ahead of the curve on this topic. 

USDA raises 2014 pork production forecast

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  Andrea Gantz

  U.S. pork production in 2014 will be higher than earlier projected, according to a new report from the USDA.

  From WATTAgNet:
  The United States Department of Agriculture (USDA) has raised its forecast for U.S. pork production in 2014 but has maintained its projections for pork production in 2015.
  In the USDA’s World Agricultural Supply and Demands Estimates (WASDE) report, released December 9, the agency called for 22.8 billion pounds of pork produced in 2014, up from its estimate of 22.68 billion pounds forecast in the November WASDE report.
  The reason for the increased forecast in pork production was that pig slaughtering numbers to date have been strong, the report stated.
  Looking forward to 2015, the USDA projected U.S. pork production would reach 23.63 billion pounds, the same estimate it gave in November for 2015 U.S. pork production.
  In 2013, 23.2 billion pounds of pork were produced in the United States.
  Total meat production estimates for 2014 were down slightly from the November report. The anticipated increased pork production was not enough to offset the projected decline in beef production.
  The December WASDE report also called for an increase in pork imports in 2014 amounting to 35 million pounds. However, the forecast for exports was reduced from its November estimate by 100 million pounds because relatively high prices are expected to encourage imports and limit sales opportunities.

PED virus spreads into Hawaii

Porcine epidemic diarrhea (PED) virus has spread into Hawaii, according to the state’s department of agriculture. The deadly swine virus has affected herds in 32 states to date, but this is the first time PED virus has gone outside of the continental states.
The Hawaii Department of Agriculture (HDOA) announced on November 20 it had issued a quarantine order stopping the movement of pigs on Oahu after an outbreak of PED virus, was confirmed on a farm in Waianae Valley. PED virus causes significant sickness in swine and causes high mortality in piglets.
The farm last week called HDOA’s Animal Disease Control Branch to report many cases of diarrhea among their swine. State veterinarians took samples from the farm and sent them to the Kansas State University (KSU) Veterinary Diagnostic Laboratory, which confirmed that the pigs had been infected with PED virus.


Quarantine ordered to contain PEDv outbreak
Acting State Veterinarian Dr. Isaac Maeda issued a quarantine order on the farm to contain the outbreak and also to stop the movement of pigs on the west side of Oahu. No swine shall be moved east past Nanakuli from Makaha, Waianae and Nanakuli Valley. The order also restricts movement of swine from Oahu to neighbor islands.
Disease control measures have been instituted on the farm, which has a total of about 150 pigs. About 25 percent of the pigs (mainly piglets) died. However, it appears that the remaining pigs are recovering and no deaths have occurred on the farm since the weekend. It is not known at this point how the virus may have come to Hawaii; however, the farm did not import any swine.
“Our current focus is to contain the virus and prevent its spread on Oahu,” said Maeda. “We will also survey other swine operations and try to determine if the virus has spread.”
PED virus was first confirmed in the U.S. in May 2013. To date, PED virus is estimated to have killed up to eight million young pigs.
In July 2014, HDOA increased swine import requirements to help prevent the entry of swine infected with PED virus into Hawaii. This included exclusion of swine from premises with PED virus and negative tests for PED virus prior to shipping.
Statewide there are about 230 pig farms – 70 of which are on Oahu. Most are small operations.

Forecasts for 2015 positive for poultry and swine producers

The record corn and soybean harvest in the U.S. this fall have led to dramatic reductions in rations for poultry and swine producers, and these lower feed costs will likely continue for several months.
Tim Brusnahan, vice president of consulting and principal, Richard A. Brock & Associates Inc., estimates the farm price for corn will be between $3.10-3.70 for the 2014-15 crop year. Speaking at WATTAgnet.com’s Grain and Meat Outlook Webinar, with his estimates for corn planting, production and use for the 2015-16 crop year, Brusnahan projects that the ending stocks for the 2014-15 and the 2015-16 crop years will be more than 2 billion bushels. With this 2 billion-bushel carryover, he estimates that the farm price for corn will remain well below $4 per bushel.
For soybeans, Brusnahan estimates that the farm price will be between $8.50-10.50 per bushel for the 2014-15 crop year and that bean prices will fall even lower to the $7.50-8.50 range for the 2015-16 crop year. Even with the expected decline in soybean price, Brusnahan said that expected returns for planting soybeans will be better than for corn, so acreage is expected to shift from corn to soybeans for the 2015-16 crop year.
Brusnahan said the end of the “bull market” for crops will likely result in some acreage being pulled out of grain and oilseed production. He said that about one-third of crop farmers in the five largest grain-producing states are under age 35 or over 65. He explained that young farmers (under 35) might not have the capital to make it through bear markets for grain and that older farmers (over 65) may just quit farming rather than try to struggle through a bear market.


Protein production to ramp up
Dr. Thomas Elam, economist, FarmEcon L.L.C. said the stage is set for expansion in the animal protein sector in 2015. Producers' financial results have improved, interest rates are still near historical lows, demand is strong, and feed costs should remain at or near current levels.
Export demand for animal protein has been very strong. Volume has been increasing even as prices have increased significantly throughout the past few years. In addition, cold storage stocks of meat and poultry have continued to drop this fall relative to the past few years.
Elam projects a 0.9 percent increase in total meat production in 2015. He projects that beef production will fall by 3 percent next year while pork production will remain virtually unchanged from this year. Broiler and turkey meat production are estimated to rise by 3.5 and 4.1 percent, respectively, according to Elam. He said that the impact of porcine epidemic diarrhea (PED) virus is the big wild card for pork production. If the U.S. swine industry is able to control PED virus, then production will begin to ramp up in 2015.
Elam predicts a slight drop in chicken prices in 2015 and a larger drop in turkey prices. He said that poultry prices will be supported by high beef prices.

US pork production to surpass beef production, says AFBF economist

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  Andrea Gantz

  Pig production in the United States is expected to surpass U.S. beef production, a Farm Bureau economist says.

  From WATTAgNet:
  Pork production in the United States will surpass U.S. beef production in 2015, says Bob Young, chief economist for the American Farm Bureau Federation (AFBF). If that prediction is realized, it will be the first time U.S. farmers will produce more pork than beef since the 1950s.
  U.S. cattle producers have been trimming down their numbers since the droughts of 2011 and 2012 hit rangelands for grazing and also pushed up feed costs. And as cattle prices increased, producers had a good reason to sell rather than keep them as breeding animals, according to Virginia Farm Bureau Federation Commodity Marketing Director Spencer Neale.
  The U.S. pork industry has also had to deal with high feed prices in recent years, and also dealt with herd losses from porcine epidemic diarrhea (PED) virus, which can have up to a 100 percent mortality rate in piglets. But with two PED virus vaccines now approved by the USDA and more industry vigilance to keep PED virus at bay, that problem is subsiding and pig numbers are beginning to rebound.
  Neale added that it also takes cattle producers longer to replenish their herds than it does pig producers, because cattle have longer gestation periods than pigs.

US pork board strategic plan focuses on people, pigs, planet

Following more than a year of planning and development, the National Pork Board on November 3 released its new strategic plan focused on anticipating and managing the changing world facing U.S. pork producers now and in the future. The plan, to be implemented starting in January 2015, will be in place through 2020 to guide the organization.
Rooted in collaboration between industry and supply chain partners, the new National Pork Board vision is to elevate U.S. pork as the global protein of choice by continuously and cooperatively working to do what’s right for people, pigs and the planet.
“It’s a plan sharply focused on a vision for the future of America’s pork producers. It defines in clear, customer-centered language a set of objectives focused on results,” said Dale Norton, Pork Checkoff president and a pork producer from Bronson, Michigan. “Our task force, which included pork producers and representatives from allied industries, defined a commitment to leverage industry and supply chain collaboration to achieve the vision.”
During 2014, the task force met several times, analyzing and discussing economic forecasts and research collected from pork producers, protein processors, foodservice operators, retailers and consumers. Unlike the previous strategic plan, this new effort is more customer-centric, with a commitment to transparency and continuous improvement.
“In the planning process, we connected with customers and consumers. We heard their desire to better understand and have dialogue about U.S. pig farming,” Norton said. “The resulting commitment to greater transparency and collaboration takes on a whole new focus and priority in this plan.”
The task force set three distinct goals to drive National Pork Board performance. The goals, supported by a total of 17 specific and measurable objectives, include:


• BuildConsumer Trust – Working collaborativelywith food chain partners, the National Pork Board will enhance consumertrust in modern pork production by promoting producer adoption of on-farmmanagement practices that reflect the industry’s ethical principles and bysharing its commitment to continuous improvement with consumers and keystakeholders.
• DriveSustainable Production –The National Pork Board will invest in research and producer educationprograms that enhance pork productivity and sustainability of porkproduction and deliver benefits to producers, their communities andconsumers.
• GrowConsumer Demand – Working in concert withfood chain partners, the National Pork Board will grow domestic andinternational consumer demand by focusing on pork’s improved nutrition,quality and sustainability.
Norton said the process also involved a thorough analysis of the domestic and global marketplace, including issues such as animal disease and welfare, food safety, nutrition, economics and the reputation of modern agriculture.
“Viewed collectively, the plan gives us a clear path for moving boldly from where we are now to where we want to be in the future,” Norton said. “We have our big-picture vision for the future and a collaborative blueprint for getting there together as an industry.”
Two additional priorities emerged during the planning task force’s meetings and discussions: clearly addressing the growing global need for pork and shaping the social responsibility commitment of the Pork Checkoff. Toward that end, the duties of two positions were expanded and elevated, with Becca Hendricks named as vice president of international marketing, and Jarrod Sutton named vice president of social responsibility.
“The concerns of our partners in both the international marketplace and the U.S. retail and foodservice arena need to be addressed,” said John Johnson, chief operating officer of the National Pork Board. “Food retailers’ growing interest in production practices and our pig farmers’ social license to operate have an increasing impact on the farm. While, as an industry, we perform well – anchored by our ethical principles – we are continuously striving to improve.”
The National Pork Board will make an increased effort over the next five years to demonstrate this improvement by sharing information with consumers and senior management of retail and foodservice companies, including directors of global supply chains and corporate sustainability officers.
“International markets continue to grow in their importance to the U.S. pork industry. Today, 28 percent of our pork production is marketed internationally,” Johnson said. “With rising incomes in the developing world and pork’s current position as the No. 1 source of animal protein worldwide, international trade requires a higher profile within our programs.”
“In the end, it’s all about helping ensure the long-term success of America’s hog farmers and their families,” Norton said. “This plan taps into the emotional connections consumers have with their food and fuels a fresh dialogue about modern pork production and continuous improvement for the benefit of people, pigs and the planet, while continuing pork’s role as the global animal protein of choice.”

Seaboard hopes to build hog finishing facility in Western Kansas

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  File photo

  Seaboard is filing paperwork in hopes of building its second hog finishing facility in Greeley County, Kansas.

  From WATTAgNet:
  Seaboard Foods has registered its intention to open a new hog finishing operation, Ladder Creek West, in Greeley County, Kansas. If approved, it would make Seaboard’s second hog finishing company in the county on the Colorado border.
  The operation is expected to have 110 buildings and would contain about 132,000 pigs. A filing with the Kansas Department of Health and Environment (KDHE) states that the waste from the operation would go into a lagoon for treatment, then be spread on fields.
  KDHE has yet to approve the facility. The company, based in Shawnee Mission, Kansas, will need to submit an application that includes engineering plans and nutrient management plans.
  If the project is approved, Seaboard would be able to house about 330,000 between the two facilities in Greeley County. Seaboard’s other finishing facility, which opened in 2010, is in the process of an expansion.
  Jack Arnold, a supervisor for Greeley County, said the new project would have both supporters and opponents in the county that is home to about 1,300 people. Supporters seem to favor the proposed project because of its job creating potential and the additional tax revenue it would bring in. Opponents include other farmers in the area, who are concerned about having to compete with Seaboard for water usage.

2014 US pork production forecast raised by USDA

The USDA has raised its projection for U.S. pork production in 2014, with the agency anticipating production of 22.8 billion pounds. The forecast was made in USDA’s World Agricultural Supply and Demand Estimates (WASDE) report, released on June 11.
The June WASDE figure reflects an increase from the projection it made in its May WASDE report, where 2014 pork production was forecast at 22.66 billion pounds. According to the report, U.S. pork production is forecast higher because of a combination of higher second-quarter slaughter and higher carcass weights for 2014.
The USDA’s June forecast for U.S. pork production in 2015 remained unchanged from its May projection of 23.3 billion pounds.

Positive economic outlook for US pork producers

The economic stars are aligning for U.S. pork producers in 2014, despite the challenges and supply problems caused by the porcine epidemic diarrhea (PED) virus epidemic that is severely impacting the industry. That's the opinion delivered by Steve Meyer of Paragon Economics at the World Pork Expo in Des Moines, Iowa, June 4.
The optimism is fed by current high pork prices and the downward shift in feed prices. Meyer said the current outlook for the U.S. corn crop is good, with rapid planting making up for late spring. "The percentage of corn planted is right where it should be for early June," said Meyer. "There is still the summer to get through without a drought, but with reasonable weather, I would look for harvest corn prices in the $4.20 to $4.15 range. A really good crop could take the price below $4." 
While corn prices are favorable, soybean prices have stayed high, and Meyer sees continued high worldwide demand and prices for soybeans and soybean meal this summer. 
Meyer said the improved feed situation is partially because there is 50 percent more corn produced outside of the U.S. than in 2007, and the same thing is now happening with soybeans. "There was consternation last year about us importing corn, but that's a positive thing," said Meyer. "Increased production in South America is going to help feed consumers in this country in certain situations." 
Meyer said high pork prices have been driven by demand. "Meat demand is good, despite the economy. Consumer preferences in meats has picked up in the last year. There have been changes in consumer viewpoint toward meat, and that is good for pork, chicken and beef."
Meyer said that while meat demand is up, chicken production has not risen this year and beef production is still down. All of that works in pork's favor. 
Meyer also touched on the impact of the PED virus epidemic. He said that so far the industry has been making up for the slaughter of fewer pigs with higher slaughter rates, but the number of head ready for slaughter will continue to drop through the summer, so supply could get tight. "The May slaughter rate was down 6 percent compared to previous year, and that number will drop all summer," said Meyer. 
As the number amount of losses to the PED virus has dropped in recent months, the slaughter numbers will climb in the fall, but Meyer said the sow herd is not growing right now, as producers are trying to figure out the long-term impact of the PED virus. 
"We haven't had good numbers for how many pigs we're losing to PEDv," said Meyer. He thinks the move to make it a reportable disease that will be tracked by the USDA will help the industry plan. He estimates that 7 million pigs have been lost to the PED virus since May of 2013.
"The industry could raise production by adding sows, but if they come up with a vaccine we will have oversupply," said Meyer. "So people are waiting to see what is going to happen."

Australian pork industry: US needs stricter PED virus protocols

A leader in the Australian pork industry has criticized the United States and praised Canada for their efforts to prevent the spread of porcine epidemic diarrhea (PED) virus. Darryl D’Souza, general manager of research and innovation forAustralian Pork Limited, says he believes that the U.S. biosecurity protocols have not been strict enough to limit the spread of the deadly virus.
PED virus, which can have up to a 100 percent mortality rate in piglets, has been detected in 30 states since being discovered in the U.S. in May 2013. In January 2014, PED virus was confirmed in Canada.
D’Souza indicated that reporting of PED virus could very well have helped the situation, reports ABC. U.S. officials have not made reporting the virus mandatory, although mandatory PED virus reporting is now being considered by the USDA.
"Very early on in the piece, the authorities (in the U.S.) deemed it not to be a notifiable disease and that in some ways prevented a possible collection of accurate data that may have even removed some of the preparedness," he said. "Canada, on the other hand, has taken a very different approach and has made it notifiable, so as soon as you have any symptoms, you have to report it. That allows the authorities to take the necessary precautions in terms of quarantining sites, preventing feed trucks going out, preventing movement of animals and things like that."

PED virus creates 2-year shortfall in US hog markets, report says

Porcine epidemic diarrhea (PED) virus is expected to have significant impacts on North American swine production and slaughter through 2015, according to a new report published by Rabobank.
In the report, published by the bank's Food & Agribusiness Research (FAR) and Advisory team, Rabobank says that PED virus has to date impacted about 60 percent of the U.S. breeding herd, 28 percent of the Mexican herd, and is beginning to develop in Canada.  If PED virus spreads in Canada and Mexico at the pace seen in the U.S., Rabobank says that North American hog slaughter could decline by nearly 18.5 million hogs over 2014 and 2015, or 12.5 percent relative to 2013 levels.  Overall U.S. pork production is anticipated to decline 6 to 7 percent in 2014, the most in more than 30 years.
"In the U.S., we see the outbreak of PEDv causing a significant shortfall in the availability of market hogs in 2014 - to the tune of 12.5 million hogs or 11 percent of annual slaughter," explained Rabobank Analyst William Sawyer. "Given the ever-rising number of PEDv cases reported, coupled with a six-month average lifecycle, the months of August through October are likely to be the tightest for processors, where slaughter could decline by 15-25 percent against 2013 levels. If the virus continues at its current rate, the shortfall to U.S. slaughter in 2014 could be as much as 15 million hogs."
The specific origin of PED virus in the U.S. has not been definitively identified but comparison of strains of PED virus in the U.S. have indicated a close relationship with strains in China. What is clear is that once the virus enters a region, it can spread quite easily and rapidly throughout an entire population. The most common avenue is on livestock and farm equipment that come into contact with hogs positive with PED virus or their feces.
In regard to productivity, 2014 will be a story of "the haves and have-nots" where hog producers who experienced mild cases of PED virus, or none at all, could realize margins of more than $60 per head, the highest calendar year average seen in Rabobank's 40-year record. Conversely, hog producers who have had difficulty eradicating the virus could suffer significant losses as the pain of the high fixed costs of modern hog production compounds prolonged periods of weak productivity.
Packers for the year to date have been in a "haves" position as the fear of possible stockouts have pushed pork cutout prices up much faster than hog prices. The gross margin for packers reached $63 per head, up from $37 this time last year.  Profitability is likely to wane in the spring and summer, as prices continue to climb, testing pork demand, and hog shortages force packers to idle plants.

Questions about pig losses to PED virus send hog futures soaring

Uncertainty surrounding total swine herd losses to porcine epidemic diarrhea virus (PED virus) has sent lean hog futures for spring and summer contracts to record-high levels, but it's possible the markets have overreacted, said Chris Hurt, Purdue Extension agricultural economist.
PED virus is a virus of swine that is fatal to nearly 100 percent of infected piglets that are less than two weeks old. There is no vaccination or treatment for the disease, which poses no threat to human health or food safety.
While PED virus can be devastating to individual swine herds, Hurt said it remains to be seen whether slaughter supplies will fall enough to warrant the $10 to $14 per-hundredweight surge in spring and summer futures prices over the past two weeks.
"So far this year the number of animals coming to market has been very close to the numbers indicated in the U.S. Department of Agriculture's December Hogs and Pigs report," he wrote in a weekly outlook report. "When adjusted for the number of slaughter days compared to last year, the slaughter count so far is down 0.5 percent. However, market weights have been higher by about 2.5 percent, thus causing total pork production to be up by about 2 percent."
According to Hurt, the futures market suggests that lean hog prices could average about $112 per hundredweight for the period of March through August. This compares with an average of $88 per hundredweight for the same time period last year.
If fear of low slaughter supply is the cause of the price jump, Hurt said it means traders expect hog slaughter supplies could be down by as much as 7-10 percent.
When compared with USDA's December inventory count, those numbers indicate that slaughter supplies for the second quarter of 2014 will be down only 0.5 percent. Third-quarter supplies will come primarily from winter farrowings, which is where the most uncertainty comes into play.
"Winter farrowing intentions were up 1.3 percent, but since (PED virus) kills baby pigs and is most prevalent in cold months, the number of pigs weaned per litter could be down sharply," Hurt said. "This is where no one knows for sure."
The USDA will provide an updated inventory report on March 28, which will provide information on the number of pigs that survived the winter.
If lean hog slaughter supplies end up dropping by only 3-4 percent instead of the larger losses markets might be expecting futures prices could come down.
The bigger question, Hurt said, is how PED virus will affect the financial well-being of the pork industry as a whole this year.
"The initial answer might be somewhat surprising," he said. "(PED virus) will likely increase economic returns for the U.S. industry."
Demand for pork tends to hold fairly steady, and consumers are slow to reduce their pork use even in short supply situations. According to Hurt, hog prices tend to increase by at least 2 percent for every 1 percent that the quantity drops.
"This means that total revenue in the industry will likely increase due to (PED virus) and more than offset the losses from the disease," he said.
The outcome for individual hog producers won't necessarily mirror that of the overall industry. Producers with herds severely affected by PED virus with more piglet deaths than the national average, could end up with net financial losses, Hurt said. High hog prices could offset pig losses for producers with an average number of piglet deaths.
"PED virus could actually be a financial windfall for producers who are able to avoid the disease," he said. "At the farm level, current futures markets are suggesting a live price for 2014 at a record high of $76 per hundredweight compared with $64 last year. This will provide record-high industry revenues and the highest profit per head since 2005." 

National Pork Industry Forum to be held March 6-8

Delegates from across the United States will gather March 6-8 in Kansas City for the annual National Pork Industry Forum.
The 15 producers who serve as members of the National Pork Board and Pork Checkoff staff leadership will hear directly from the 156-member National Pork Producers' Delegate Body appointed by U.S. Secretary of Agriculture Tom Vilsack. Each year the Pork Act Delegates confer, vote on resolutions and advisements, and provide valuable direction on the important issues facing pork producers and the industry. This year the delegates include 152 pork producers and four pork importers.
The theme for the annual pork forum --The Power of One: Many Producers United in a Common Goal -- was selected in reference to how the industry is taking proactive steps to join together in meeting the challenges facing the industry. From tackling concerns raised by the porcine epidemic diarrhea virus (PEDV) to responding to consumers seeking to learn how food is produced, thousands of individual farmers are doing their part to produce pork in a caring, responsible and professional manner.
"As an industry, we are stronger when we are united toward a greater common good," said Karen Richter, president of the National Pork Board and a producer from Montgomery, Minn. "Working together, we can make a collective difference in raising a single voice for all hog farmers. We'll demonstrate that clearly in Kansas City."
In advance of the annual meeting, members of the National Pork Board will also convene their March board meeting. The agenda for that meeting will include updates on 2014 plans to enhance pork demand, increase market opportunities, improve pork production practices and invest in research priorities.
Included on the 2014 Pork Forum agenda will be opportunities for pork producers to become trained in the pork industry's Pork Quality Assurance Plus (PQA Plus) certification process, as well as provide input into the Pork Checkoff's new strategic plan that is currently being developed.

NPPC focusing on Trans-Pacific Partnership as TPA bill introduced

The National Pork Producers Council applauded the January 9 introduction of congressional legislation to grant President Barack Obama Trade Promotion Authority (TPA) as a means to conclude a successful Pacific Rim trade deal.
The Obama administration is working now to finalize the Trans-Pacific Partnership (TPP), a regional trade negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global gross domestic product.
TPA, also known as "fast-track," allows the president to negotiate trade agreements based on strategic goals and objectives outlined in the legislation, with ongoing congressional oversight. Deals concluded under TPA are subject to congressional approval without amendments.
While passage of TPA is important to getting a TPP agreement - and future deals such as the U.S.-European Union Transatlantic Trade and Investment Partnership (TTIP) agreement - approved, NPPC pointed out that the even bigger issue is finalizing a comprehensive, high-standard TPP deal. And that means an agreement that includes Japan - the U.S. pork industry's No. 1 export market - with tariffs eliminated in all of its industry sectors, including agriculture.
Japan is demanding special treatment for its agriculture sector, including exclusion from the agreement or special protection of certain "sensitive" products.
In a December letter to U.S. Trade Representative Michael Froman, an NPPC-led coalition of agricultural groups pointed out that, if Japan is allowed to claim exceptions for sensitive products, other TPP countries inevitably will demand the right to do the same, and the TPP talks could unravel. Such an action, the coalition said, also would set a terrible precedent, affecting future trade agreements, including the TTIP.
"Getting TPA introduced and approved is an important step in the trade process, and we are supportive," said NPPC President Randy Spronk, a pork producer from Edgerton, Minn., "but our main focus will be making sure Japan eliminates farm tariffs at least as quickly as was done by South Korea in its trade deal with the U.S.
"We will oppose a TPP agreement in which tariffs on pork and other farm products are not quickly eliminated."

2013 US pork production forecast lowered in August report

The United States Department of Agriculture has backed off its estimates for U.S. pork production in 2013, according to the agency's World Agricultural Supply and Demand Estimates report released on August 13. U.S. pork production for 2013 was forecast at 23.39 billion pounds in the August report, dropping from the 23.4 billion pound projection made in July.
The agency cited a decline in slaughter during the third quarter of 2013 as the main reason for the decline.
Projections for 2013 pork ending stocks were unchanged from the July World Agricultural Supply and Demand Estimates report at 650 million pounds, as the number of U.S. pork exports forecast also declined in August.
The U.S. pork production forecast for 2014 did not change in the August report, with 24.1 billion pounds  of pork expected to be produced in the United States in 2014. 

Porcine epidemic diarrhea won't impact US pork prices until December

The presence of porcine epidemic diarrhea virus (PEDV) in the United States is not expected to affect pork prices until winter, industry experts say.
More than 300 cases have been confirmed in 16 states since its April discovery in the United States, infecting both sow and finishing operations. Because the disease can have a 100 percent mortality rate with piglets, the biggest financial impact of the disease will emerge in December when piglets lost in June would go to market. The affected pigs from finishing operations typically survive.
"It might be slowing slaughter down a little because those pigs that get sick won't grow for a few days, but I don't think there's been any immediate impact on pork prices," said Steve Meyer, president of Paragon Economics. "The impact will probably come in December."
Despite the number of confirmed cases, there is no measurable way to know how many pigs in the United States have been infected. Operators who detect PEDV are not required to report it to government agencies, so the only data available is from submitted tests, comments Meyer.
Based on the inconclusive data he has so far, Meyer expects slaughter of U.S. pigs to be reduced anywhere from 60,000 to 100,000 pigs a week in December, a 2 to 4 percent cut.  If that happens, he added, pork prices could go up anywhere from 4 to 12 percent.
Butch Baker, interim director of the Iowa Pork Industry Center, noticed pork prices increased around the time the virus was confirmed in the United States, but prices have since returned to expected levels. He, too, said prices won't change significantly until December.
Baker also did not expect PEDV to cause a decline in demand for pork or impact prices. Because it is only transmittable to pigs and does not affect food safety -- and the media so far has accurately spread that message -- it does not cause consumer worries like diseases that can infect humans.
PEDV containment is key
The number of reported PEDV cases are on the decline. On June 30, there were 19 new cases, Meyer said, compared to 47 new cases reported in each of the two previous weeks.
Meyer, however, cautions that may not be reflective of the situation. Because producers don't have to report cases, and now they better understand how to identify the virus, the number of existing cases could be going up or down.
How well the virus is controlled in upcoming months will be vital.
"If you have multiple weeks in a row without surviving piglets, that economic impact can be large when it gets into the breeding population," says Steve Moeller, Ohio State University swine extension specialist.
Moeller and Baker stress cleaning trucks of feces, and changing boots and clothing when moving from one pig herd to another to reduce the virus' spread.
Baker also believes medicines that can reduce the severity of PEDV could emerge.
"There are no PEDV vaccines, but some emergency vaccines are in the pipeline and could be on the market within weeks," he said.