Pork Commentary July 29, 2013 – Feed Costs Plummeting

Pork Commentary

Jim Long President – CEO Genesus Inc.

July 29, 2013 ________________________________________

Feed Costs Plummeting

This week we were looking at our Feed Costs.  Bottom-line at current Oct-Dec Input costs compared to our July our farrow to finish feed costs are going to drop $38.00 per head.  To get a pig to 55 lb. (25 kilos) will decrease $13.00 per head from July to Oct-Dec.  Huge difference. Cowboy Arithmetic $38.00 times 2 million hogs (USA) = about $80 million a week change in the United States industries costs.  The Chinese purchase of Smithfield, e.g. 15 million hogs a year times $38= almost $600 million feed savings.  Goes a long way to helping pay for the Smithfield Purchase, if it all plays out.

National Pork Industry Conference

A week ago we attended national Pork Industry Conference in Wisconsin.  Last week we wrote some observations, this week we have some more. Richard Raymond, M.D. gave some data on antibiotic and food safety animal production
    • Food borne illnesses from all causes down 23% from 1999-2009.
    • March 2013 CDC published – Food borne illness outbreaks from 1998-2008
    • 46% of outbreaks are attributed to produce with leafy greens leading the way at 22% of the overall total
      • Dairy                    14%
      • Fish                            6%
      • Meat & Poultry       22% (Same as leafy greens)
      Dr. Raymond broke down Antibiotic Numbers
        • FDA report on all antibiotics sold or distributed in 2011 for use in “food producing animals”
        • Ionophores 30% I 2012 (not used in human medicine at all)
        • Tetracycline 41.5% (of very limited use in human medicine with many better choices available)
        • NIR 12% (most not used in human medicine)
        • Cephalosporin 0.5% (of critical importance to human medicine and limited to therapeutic treatment in animals)
        • Summary – Dr. Raymond’s premise is food is getting safer.  About 80% of food borne illnesses are not meat-poultry related.  Over 80% of antibiotics used in livestock are not used at all or significantly in human medicine.  His thoughts are antibiotic use in agriculture has an extremely low risk for the general population and that the huge need for food to feed a growing middle class and up to 3 billion more people globally by 2050 cannot be achieved without the prudent utilization of antibiotics.

Code of Practice

Steve Weiss of Vast spoke on the proposed changes to Canada’s Code of Practice for Swine Production.  There were several comments throughout the conference by American Industry Participants on what was characterized as Canadian industry’s weak position with the Animal Welfare Lobby.

Proposed Changes

  • Gestating Sows – Pen Gestation after 28-35 days post breeding by July 2024
  • All new construction
  • Farrowing Crate Sizing July 2024
  • Boars – stand – turn around – lie comfortably July 2024
  • Weaner/Grower/Finisher Space Allowance
  • Elimination of Electric Prods
  • Tail docking of pigs > 7 days requires pain control
  • Euthanasia: Sedation required prior to CO2 euthanasia
  Our sense is most Canadian producers don’t understand and or know the proposed changes.  They are significant.  All will increase costs and you wonder if any are necessary.  If you are a Canadian producer you should review the information and proposed changes.  There is a comment period which you can participate. Draft Standards http://www.nfacc.ca/codes-of-practice/pigs Scientific Committee Report http://www.nfacc.ca/resources/codes-of-practice/pig/Pig_Scientists_Committee_report.pdf To submit comments https://www.surveymonkey.com/s/nfaccpigcode
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This post was written by Genesus