Brumm Speaks Out

Last fall I departed from my weekly blog about pigs to share with readers the decision my wife and I were making regarding placement of Elizabeth in a group home. This week I want to depart once again to share with you how this process is coming along.

Liz has been living in a group home with 2 other girls for 4 weeks now, and appears to be adapting very well. So well in fact that when we return her to her residence after a visit to our home, she immediately tells us to leave.

The staff at the home have been very good in learning how to work with Liz, and in turn Liz has been very good at testing their patience and creativity. The staff are all relatively young females with lots of energy who don’t like to sit around, so they are always doing something with the girls that live in the home. In the 4 weeks that she has been in the home, Liz has gone clothes shopping, bowling, shopping, petting animals at Pet Expo, shopping at the mall, shopping at WalMart, etc. Needless to say Liz loves it.

What made me really realize how different our life has become without Liz in the home occurred this morning. When Liz was living with us, the school bus was at our door at 7:10 am. This meant I had to always have the driveway wheelchair clean by 7 am. At 3:30 pm another round of shoveling was necessary in order to get the wheel chair up the driveway and into the house when she returned home. While I still shoveled snow this morning prior to 7 am, it was with a different sense of urgency and attention to detail.

Jan and I want to thank all of you who have sent us notes, or otherwise communicated your cares, concerns and best wishes. So far it does appear that we have made the right decision regarding Liz’s future.

Last week Smithfield announced the permanent closure of the John Morrell slaughter plant in Sioux City, Iowa. At both the Minnesota Pork Congress and the Iowa Pork Congress, the Manitoba Pork Producers had a booth where they were interacting with producers on a variety of topics, including the impact of MCOOL on their industry.

Both the Mexican and Canadian governments have filed a claim against the US in the World Trade Organization. Many expect a full hearing on this claim later this spring, with a ruling sometime this summer or fall.

In the mean time, the number of Canadian born feeder pigs that are coming to the US has dropped dramatically. In 2007, 6.77 Canadian feeder pigs (pigs weighing less than 55 kg) came across the border to US finishing sites. In 2009, this number dropped to 5.1 million pigs and it appears the number will be even smaller in 2010.

The vast majority of these pigs go to Iowa and southern Minnesota sites. This concentration of Canadian feeder pigs in the region will continue as Tyson is the only major packer which has continued to sign purchase agreements with owners of Canadian born pigs. The best information that I can locate suggests that Iowa is the final destination for over 60% of all Canadian born feeder pigs, with another 20+% going to Minnesota, and 4-5% going to both Nebraska and South Dakota.

Prior to MCOOL, the John Morrell plants in Sioux City and Sioux Falls killed a large number of Canadian born and raised pigs. In 2007, there were 2.60 million slaughter barrows and gilts imported into US slaughter plants. This number dropped to only 550 thousand barrows and gilts in 2009. This change in slaughter barrow and gilt imports represents approximately 2% of our yearly kill.

The Sioux City John Morrell plant had an estimated capacity of 14,000 pigs/day when killing on a double shift. This amounts to about 3.5 million head per year capacity so the loss in Canadian born pigs is more than this plants estimated capacity. As the number of Canadian pigs declined, along with the very recent reduction in the US born pigs available for slaughter beginning this spring, pressure on the packing industry to match capacity with supply had to be an issue. Whether the closing was Sioux City or some other location, it appears that market forces are working to match capacity with supply.

For the short term, the closure of the Sioux City plant won’t have much of an impact on prices due to the expected decline in pig numbers. Steve Meyer of Paragon Economics, Inc. estimates that the US slaughter capacity is currently in the range of 431,000 hd/day when corrected for the plant closure. As the US industry works to regain the equity it lost the past 2 years, it doesn’t appear to me that we will have slaughter numbers approaching this capacity for several years.

Another winter storm is predicted for this weekend in the upper Midwest. By now, many producers are getting tired of winter. Between the very cold temperatures for the first few weeks of this year and the continued snow and ice accumulation, it has been a long winter.

A few weeks ago I wrote about reports of several roofs collapsing on production facilities in Minnesota after the Christmas day storm. At the Minnesota Pork Congress, I talked with several company representatives who were aware of additional barn roofs that have failed since that storm in Iowa and Minnesota.

One of the big unknowns at this time is whether there are common factors in the roof failures. Are there certain structure designs or installations that are more at risk of failure? For example, are 100 ft wide double wide wean-finish barns more at risk than 80 ft wide barns? Are double wide barns more at risk than single wide barns? Does the type or location of ridge vents (when considered relative to barn orientation to wind) alter snow loading enough to be a factor? Are older barns more at risk than newer barns?

At the 2009 Minnesota Pork Congress, Dr Dwaine Bundy, emeritus professor of Ag Engineering from Iowa State University gave an excellent presentation about some of these issues. His slides are available at http://www.mnpork.com/producers/seminars.php

In a effort to help extension ag engineers better understand the problem this winter I am using this weeks blog to ask for readers help. If you had a roof collapse, or know of a specific facility that had a roof failure this winter, please reply to this blog with some of the above information, including location of the barn. Your response will not be posted as all responses to this blog must be approved by me for posting. Rather than replying to the blog you may also contact the ag engineers directly with reports of failures.

I will pull together these responses and forward them to Dr Larry Jacobson at the University of Minnesota (jacob007@umn.edu), Dr Jay Harmon at Iowa State University (jharmon@iastate.edu), Dr Steve Pohl at South Dakota State University (stephen.pohl@sdstate.edu) and Dr Rick Stowell at the University of Nebraska (rstowell@unlnotes.unl.edu). Together, this group will try and identify whether there are any patterns to these failures and what barn owners can do to reduce the risk of a future failure.

It may be that this group comes up with no common factors. On the other hand, they may be able to develop a list of conditions such as ridge ventilators installed in a specific pattern or direction relative to the storm or an age estimate of risk or something else that increases the risk of a catastrophic snow load on the roof.

This afternoon I had the opportunity to participate in a webinar sponsored by AgStar on the topic of world trade and the pork industry. The presenter was Brett Stuart from globalagritrends.com.

A couple of items in the presentation and resulting discussion caught my attention. First, Brett presented UN/FAO data that suggested that by the year 2030, total food production in the world will need to increase by 40% to keep up with population growth, with growth up by 70% by the year 2050. At the same time, total land use for agriculture is predicted to increase only 13% worldwide.

A second trend that Brett shared with the group is the 9% decline in US per capita meat (beef, pork and poultry) consumption in the past 3 years. Some of this is most likely due to the recession’s impact, but some is also due to the move by many younger Americans to a vegetarian or vegan lifestyle.

In 2009, between 20 and 25% of all of the pork produced in the US was exported. Because of the weak US dollar, and our very efficient production system, US pork is the low cost leader in pork exports (sort of like WalMart for grocery store sales).

My question this week is – if US per capita meat consumption continues to decline, what kind of ‘social license’ will producers need to be able to continue as a leading export country? If US consumers eat less meat, will those with social agendas (such as HSUS, Peta, etc.) put in place enough restrictions on our production abilities that we are no longer world leaders?

One only has to look back at England’s rapid decline to see how fast this can occur. In the 1970’s and early 80’s, England was the country the world went to when looking for new technology. Today, their industry is only 54% as large as it was 20 years ago. English produced pork in the meat case is more expensive than product from Denmark, Germany or other EU-27 sources. England went from the position of being a net exporter to becoming a major importer of pork in less than 20 years.

I’m writing today’s blog from a motel room at one of the casino’s in Council Bluffs, Iowa where I’m waiting for roads in southwest Minnesota to open.

Another winter storm is raging in the Midwest, meaning another week of disruptions to feed deliveries and deliveries of pigs to slaughter plants. We had several loads of pigs from our research barns delayed until next week. I’m sure many of you reading this blog are having similar problems.

As a result of the Christmas storm, we lost the roofs on at least 5 hog barns and 5 poultry barns in Minnesota. In most cases, snow drifting and unequal weight loads on rafters were the cause. Today’s new snow and more drifting will add to the stress on rafters.

In conversations with 2 structural engineers, there are 2 problems with the snow loads. One is the risk of immediate failure of the rafter due to the unequal loading on the roof, which is what happen on Christmas weekend. The other concern is long term fatigue of the structural members due to the snow loads.

If you live in the upper Midwest, engineers advise that you take a look at the snow loads on your roofs. If it looks ‘deep’, they advise you figure out ways to remove some or all of the snow load relatively soon. In the case of barns in southern Minnesota, producers on may sites have been up on roofs with shovels and other devices to get the snow off the roofs. I heard of one case at a sow unit where they took a snow blower up on the roof.

In all cases, if you are up on the roof, use caution. What some were doing for safety was to push snow from the upper levels off the roof, leaving some along the edge. The reasoning was that some snow along the roof edge would slow/stop a fall from the roof in the case of slippage.

The rafters and supporting bracing of roof members in our facilities were designed by structural engineers to carry a specified snow load. The problem with high winds is that the snow load isn’t uniformly distributed on the roof members, meaning there are points on the roof where the load is more than they were designed to bear. So far the only solution that I’ve been able to identify is to clean the roofs, almost always by hand.

Could be a long winter.

The USDA Quarterly Hogs and Pigs report will be released at 2 pm this afternoon. Everyone is looking for a continued decrease in the US breeding herd and smaller numbers in all weight categories in the kept for market inventory. Assuming these expectations are met, Dr Ron Plain at the University of Missouri is predicting 2^nd quarter hog prices in 2010 to be in the $67-70 range for carcass prices. While not wildly profitable, this price will stop the severe erosion of equity that has occurred the past 2 years for many producers.

The past few days I’ve been looking at the European pork industry in preparation for a series of talks in the next few months, and it is interesting to see how they compare to the US industry for such things as cost of production and production challenges.

According to the USDA Foreign Ag Service, 43% of the world meat consumption is pork, with beef at 27%, boiler at 23%, lamb and goat at 5% and turkey at 2%. This suggests that the long term demand for pork is very good and the prospects of continued international trade being important to our profitability will continue.

The Eu-27 countries (formerly called the European Common Union) lead the world in pork consumption. In 2007, they averaged 94.2 lb (carcass wt) of pork per capita. This compares to 65.8 lb per capita consumption in Canada and 65.6 lb US consumption.

The largest producer of pork in Europe is Germany. In 2008, they slaughtered 54.8 million pigs, just under 50% of what was slaughtered in the US. Their industry is becoming very much like the industry of the Midwest – fewer sows and more imports of weaned pigs.

In 2009, Denmark will export approximately 7.2 million weaned pigs, primarily to Germany. This is a 38% increase over 2008 and represents a major change in the Danish industry. As a result of the increased exports of weaned pigs, the Danes have closed one slaughter plant and will export over 1 million pigs for slaughter in other countries (primarily Germany).

To put the Danish export number in perspective, 2008 was the peak year for importation of Canadian feeder pigs when US producers imported 6.77 million pigs. It appears that the final importation number for 2009 will be in the range of 5.2 million, a considerable reduction.

The biggest challenge EU-27 pork producers face are the various mandates that they must adhere to in their production processes. The Dutch face the biggest challenges due to the limits on land availability for manure application. One recent economic study suggested that the production right to grow pigs (think of it as a quota) is currently priced at $290 per fattening space and $790 per sow place. This means if a producer wants to grow, they must buy a production right from another producer who will quit or reduce production by a given amount. This production right expense is in addition to all of the other mandatory expenses including such expenses as no antimicrobials in diets, control of ammonia discharge into the atmosphere, etc.

The total expense for compulsory measures in 2007 was estimated to add $13 per cwt carcass weight to the cost of production for Dutch producers with this expense growning to $17 per cwt carcass by 2013. In 2013 the compulsory measures expense will be an estimated $8 per cwt carcass in Denmark and $7 per cwt carcass in Germany.

Next to China, the EU-27 member countries are second largest pork producers in the world. However, when you consider the challenges they face in increased cost of production from such items as mandatory production practices, one can be safe is stating that their producers will not be a position to compete against US and Canadian producers in the world market.

While many argue that the whims of the export buyer are part of the reason we had such high financial losses the past 2 years, one can’t argue with the fact that the world is coming to our door to buy our product. Our future is clearly tied to the world’s preference for pork as the meat of choice. It’s nice to see that those that have survived the past 2 years may be in a position to once again enjoy the financial rewards of this position.

Two weeks ago I spent 2 days in northeast Nebraska making site visits and doing producer meetings. My visit began the day after the ‘big storm’ and snow drifts were up to the eaves of the buildings on the 2 sites I stopped at. As I write this week’s blog, another storm is forming in the southwest, with the governor of South Dakota already declaring an emergency situation in advance of the storm.

While too late for these storms, it is a good time to think about your emergency preparedness plan for your production site(s). I know many of you have an emergency plan as part of your environmental permit. This plan often involves details on how you will deal with manure spills, lagoon or dike failures, etc.

What about your plan for electricity failures? In the event a heavy snow or ice takes down electric lines servicing your facility, are you prepared? While we all like to think yes, the reality is that I continually run across sites where an electric system failure will result in a major hardship.

Let’s start with the alarm system at the site. Is there a telephone signal to the alarm? Sounds like an obvious question, but I have been on sites where a grower or owner says they didn’t know there was no phone signal until something happened, or they went to use the fax machine and had no signal. Do you test the alarm on a routine basis to be sure it dials out, and do those on the calling tree know what to do when the call comes?

While we all talk about suffocation as a cause of death in the event of power failure, the real cause is most often heat. Today’s market weight pigs are producing over 850 btu/hr of heat in a combination of sensible heat (air temperature) and latent heat (heat involved in evaporating moisture). In the event of a power failure at a site, you have about 30 minutes to begin the process of heat removal for market weight pigs unless your barn has curtain sides that leak a lot in windy conditions. For smaller pigs, you have about 1 hour before conditions begin to approach those that cause death.

For those with on-site standby generators, have you verified that the transfer switch works? What about fuel quality? This past week I learned of a site that lost pigs 2 days after the power went out when the fuel filter gradually plugged on the generator due to old fuel in the tank.

For those that use a tractor driven generator at a site and the site is remote from where the tractor is housed, how long to drive to the site and connect the generator? If you are alone, how will you return from the site if you have to leave the tractor hooked to the generator?

For those with curtain sided barns, in the event of a power outage, the curtain should drop. The good news, pigs won’t die from heat. The bad news, they will drop even in a blizzard. Some producers uncouple the automatic drops on the north/west curtains in very cold weather. If this is done, be sure the curtain on the remaining sidewall can drop at least 2 feet. On a 50 ft wide facility, opening one curtain only 1 foot may not remove enough heat from the facility to prevent pig death loss if you can’t get to the site in less than 1 hour.

On Monday of this week I received an email from an 11 year old niece. In it she asked for my support of her efforts to help the less fortunate in the world. Included in the email was a link to a website that gave a list of 10 actions youth can take to help combat world hunger. While there were many worthwhile activities in the list of actions, number 1 on the list was ‘become a vegetarian’.

Obviously I don’t agree with this action. I replied to my niece with a short note on why animal agriculture is part of the solution to world hunger, rather than the cause of world hunger. Her reply back – I hadn’t thought about that.

My niece is a very caring young person who is developing into an individual who will make a difference in people’s lives in the future. However, the ready access to mis-information that she readily accepted as ‘good’ for humanity is something that we should all be concerned with.

Fortunately for my niece (at least in my opinion), I had ready access to information that broadened her horizon. How many youth around the world are making life changing decisions such as vegetarianism based on what they believe to be good causes?

In the case of the email linkage my niece sent me, I tracked down the source. It was part of a website in Australia that promote vegetarianism, and cleverly hid the message as among a long list of behaviors and actions that few would disagree with.

The National Pork Board is very active in the effort to educate consumers (including youth) on the role of animal agriculture and pork production in the world economy. However, increasingly it will be up to each of us to take every opportunity, such as I did with my niece, to educate people one-on-one about what we do and how we do it.

All of us need to become familiar with the role of animal agriculture in feeding the world so that at every opportunity we can make one more young consumer say – I hadn’t thought about that!

Winter has arrived in southern Minnesota, and with the coming of winter the realization that propane expenses will be increasing. While every production facility tries to keep the facility set point as low as possible (approaching the lower critical temperature), there are numerous other ways that propane can be wasted in production facilities.

This past week I was working with a production system at their farrowing sites. One of the unit managers said he had turned down the variable out-put furnaces in his farrowing rooms for more even heating. However, when he finished washing a room, the furnace ran almost 100% of the time during the Thanksgiving break. His question was – do I need to turn up the furnace output so it doesn’t run so long?

After further questioning, it was determined that each farrowing room had a 100,000 btu furnace installed. When the variable output valve was turned down, output now is in the range of 60-65,000 btu. Each farrowing room is equipped with an 18” variable speed fan for stage 1 ventilation. The particular fan installed in this facility is rated at 4,440 cfm when operated at 0.05” static pressure. Assuming the controller is configured correctly for this fan (correct motor curve selected), when set at 50% minimum speed, this fan is ventilating at approximately 2,200 cfm. With 24 crates in each farrowing room, this is 92 cfm/crate, well above the Midwest Plan Service recommended minimum rate of 20 cfm/crate.

When the room was empty, the unit employees kept the minimum ventilation fan operating to dry out the room prior to placement of females into the crates. Assuming a 68F shut off point for the room furnace, 45F outside air temperature and 2,200 cfm of fan exhaust, the heat loss estimate from the farrowing room due to the operation of this fan becomes:

= 1.1 btu/hr/cfm/F  x  2,200 cfm  x (68F – 45F)

=  55,660 btu/hr

Since each gallon of propane equals approximately 92,000 btu, the operation of the minimum ventilation fan was consuming 0.61 gal of propane per hour.

With the furnace output at approximately 60,000 btu/hr, the furnace had to run 93% of the time to keep up with the heat loss from the ventilation fan. The issue in this case was not furnace sizing but rather operation of a ventilation fan in an empty room.

At $1.50/gal for propane, leaving the ventilation fan operate in the empty room cost $22/day.

How many times have you done something similar in your facilities?

As frequent readers of the blog are aware, I have an interest in the structure of the pig industry world wide. Such things as what countries are major producers of pork, trends in their production numbers, etc. The US is the world’s second largest country producing pork, with China 4-5x larger than the US in production. We are all aware of the impact of Chinese trade on our markets, with the recent decision of Chinese authorities to reopen their borders to US pork products welcomed by all.

In terms of being a supplier to world trade, China is not a concern, as they consume almost 100% of the pork they produce, with few plants in the country able to certify to world sanitary standards. However, Canada and the European Union are major suppliers of product to most of our foreign markets.

This past week I have been looking at the pork production numbers from the European Union members. If you are interested in delving further into the following numbers or have an interest in other European Union statistics, both ag and non-ag, you can go to the following website:

http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home

The EU requires member countries to report/estimate livestock inventories every November/December. The following table has the total pig inventories of the 6 countries in the EU with the largest inventories of pigs. To give me a point of reference, I also added the December 1 numbers from Iowa for each year in the table.

While we often hear about pork production in Denmark, they rank number 5 in the EU, and are an industry in a state of flux. Germany has the most pigs, and increasingly, these pigs are being born in Denmark and shipped to Germany as weaned pigs (sounds just like the Canadian and US situation doesn’t it). Spain has shown consistent growth over the 8 year period in the graph and is now a close second in inventory.

The pig numbers in Poland have taken a sharp down turn in the past 2 years, so much so that they now have less pigs than France. Their 2008 inventory is only 75% of the 2002 peak or 76% of the 2006 inventory. France, Denmark and the Netherlands have all shown steady to slowly declining inventories over the 8 year period.

I included Iowa inventory numbers in the table as a reference point. If Iowa were a member of the EU, it would be the 3^rd largest pig producer. In the world of pig production, Iowa would rank as the 5^th largest country, behind China, US, Germany and Spain. On December 1, 2008, Iowa had 29.6% of all pigs in the US herd.