Brumm Speaks Out

This past week I had an email asking for my thoughts on the future usage of DDGS in swine diets. This person has quite a few contacts in the grain and ethanol industry. The reason for his email was that it appears there is some concern about future usage rates of this co-product from the corn-based ethanol industry by US livestock producers.

As the feedlot industry continues to decline in size based on the number of cattle placements in feedlots and the on-going decline in the beef cow inventory, what will their long term usage rate of both wet and dry distillers grain look like? Is that market approaching a mature market usage rate?

One can ask the same questions about usage in the dairy industry. With the rapid collapse of milk and cheese prices the past 2 months, is the dairy industry at a stand-still in terms of growth? Has distiller grain usage plateaued in this industry?

In the swine industry, usage of DDGS (dried distillers grains with solubles) has skyrocketed in the past year. A majority of the growth was driven by high corn prices and relative availability of the product as new ethanol plants popped up seemingly in every corner of the corn belt.

The interest in usage of this co-product remains high. I just received the program for the Midwest Section of the American Society of Animal Science 2009 annual meeting scheduled for March 16-18 in Des Moines. There are several sessions of research abstracts scheduled dealing with use of this product in swine diets. Presenters will include graduate students and faculty from universities as well as swine production companies with private research sites and companies with enzymes and other additives to diets containing distillers grains.

One of the discussion points that many of the producers and production companies I work with bring up when we talk about use of DDGS in swine diets is the apparent improvement in overall gut health in their pig flows. There is very limited research data available to support a consistent claim of less enteric problems such as ulcers, etc. but I’m hearing about fewer death losses from ulcers, etc., even as we have decreased feed particle size. Some have even talked about adding a specification to their least-cost ration formulation program for grow-finish diets that specifies a minimum amount of DDGS. What the appropriate minimum amount should be is still open to discussion and research.

On the other hand, high inclusion levels, especially in late finishing diets, has been demonstrated to contribute to carcass quality issues. With bellies now a major contributor to total carcass value, anything that decreases their value is an immediate concern to packers.

When you put this all together, it appears that growth in the use of both wet and dry distillers grains in beef, dairy and swine diets will slow considerably in 2009. In the case of swine, there may be a new minimum demand as it relates to pig health, but there also appears to be a maximum demand until we resolve the carcass merit issues. At the same time, demand is an unknown for many of the new co-products that may be coming from some of the ethanol plants such as distillers grains that have the oil and/or other components removed at the ethanol plant.

Even with extreme low temperatures this past week, movement of slaughter weight pigs to slaughter plants continued. One obvious question, what about transit losses due to cold weather? I heard from a packer buyer in the upper midwest who reported no change in the number of deads in transit within their system versus last year. In fact, they were actually seeing a slight improvement in this category over last year.

The reason I began thinking about this is my memories of slaughter pig transport in the 1960-70’s. My family moved from the farm to ‘town’ in 1963 when my father bought a 50% interest in a hog buying station and livestock transport firm in Osage, Iowa. My father sold his share of the business in 1971. In 1968 I acquired a CDL and helped with transport of both hogs and cattle when I was home from college, etc. Prior to that date I spent quite a bit of time helping with various tasks around the station and riding along with loads of pigs and cattle.

I think many of us remember those days. It was not uncommon for a producer to bring 8-10 pigs to the buying station crowded in the back of a pickup. On cold days, some producers attempted to modify conditions in the pickup bed by adding some pieces of plywood to the stockrack on the pickup, but the top was open to wind, etc. It was not uncommon on very cold days to have several pigs arrive at the buying station with frost-bitten or even frozen ears. On occasion, we even suspected that the loin had begun to freeze where there was excessive wind across the back of the pigs during transport. Lame pigs as a result of transport conditions to the local buying station were a common occurrence.

Contrast that with how we transport pigs today. Even when producers transport pigs to a local buying station, they most often have an enclosed trailer that they tow with their pickup truck. In winter, they close up the ventilation holes to reduce drafts and heat loss. In the summer, they wet down the pigs and any sand used as a traction aid to assist the pigs in maintaining body temperatures.

A vast majority of the truckers who transport pigs to slaughter plants have been through the National Pork Board’s ‘Trucker Quality Assurance’ program. They take their responsiblity for animal welfare seriously and in cold weather add covers over the ventilation side panels of their trailers and increase the amount of saw dust and wood chip bedding in their trailers.

The next result – cold weather no longer is as large of a negative for pig welfare during pig transport as it was 30-40 years ago.

With the air temperature at -18F this morning, even I will admit it is cold out there. This past week I have had several calls and conversations with pig owners and growers on what can be done to tighten up curtain sided finishers. Several specifically asked about what can be done to help with the propane bill during placement in wean-finish curtain sided facilities in weather such as we’re experiencing in Minnesota this week.

One caller this week said their propane costs were averaging higher than $8 per pig placed in single stocked, 1200-head curtain sided rooms. This compares to an average LP bill of $0.50 per cwt of gain for all of 2007 for wean-finish facilities in a data set that I have access to. This amounts to $1.25 per pig. Even accounting for minimal propane usage during a summer fill and an increase in propane price over 2007, $8 per pig is a number that must be addressed.

In the next few months, I will be speaking at several state pork producer trade shows on the topic of ‘Managing Your Energy Expense’. In preparing for these presentations, the number one cause of higher than normal propane expense on the sites that I visit is management of the ventilation system. This includes how many fans are running when in minimum ventilation and the controller settings associated with minimum ventilation and furnace operation.

In addition to making corrections to ventilation controller settings, many producers are also considering temporary methods to tighten up their facilities to minimize the effects of wind on heat loss. A common method that many are using is to install ‘bubble-wrap’ between the bird netting and the north curtain. While ‘bubble-wrap’ has minimal insulation value, it does reduce many of the air leaks common to curtains, including end pocket leaks, and any small pin-holes that occur as curtains age.

When using materials such as ‘bubble-wrap’ or even just 6-mil plastic, keep in mind that you can make a facility too tight. If the emergency system in case of a power failure for the facility is magnetic curtain drops, there must be enough opening after tightening the facility that these can function. It’s helpful to remember that with a facility full of market weight pigs, in the event of a power outage, you’ve got less than 30 minutes to have emergency ventilation operating or death losses occur due to the rapid heat buildup in the facility. With growing pigs and in nurseries, you’ve got less than 1 hour before heat buildup begins to cause death loss.

Why such a short response time? It’s because rapidly growing pigs produce a large amount of heat. Published studies suggest that 200 pound pigs produce over 800 Btu/hr. Of  this, approximately 600-650 Btu are sensible heat (air temperature) and the remainder is latent heat (moisture added to the air). Thus, a 1200 head room full of market weight hogs generates approximately 800,000 Btu/hr of sensible heat. This is more heat that 3 250,000Btu furnaces operating continuously.

If you use ‘bubble-wrap’, I recommend that with small pigs in the facility, you can close up the north curtain fairly tight, as long as the south curtain can drop at least 1-2 ft for emergency heat relief. With big pigs in the facility, you need to have at least 2 ft of drop available along the south side, or one foot on both the north and south. Anything less than this and you are at risk of loosing pigs.

           On Tuesday afternoon, the USDA released the December 1 Hogs and Pigs report. While most look to the report for guidance on market price implications, I find the reports fascinating for their tales of the structure an location of the US production base.

            Iowa and southern Minnesota continue to grow in terms of inventory numbers, with all of the growth in the kept for market category. In the 2 year period from December 1, 2006 to December 1, 2008, the Iowa kept for market inventory grew by 2,520,000 head. If we use a 2400 wean-finish barn as a base, this is the equivalent to stocking 1045 new facilities with pigs. In the same time period, Minnesota added 510,000 pigs in the kept for market category, equivalent to stocking 212 new facilities. Anyone involved in pork production in Iowa and southern Minnesota can attest to the large numbers of new wean-finish facilities constructed in these states in the past 2 years.

            During this same time period, the US inventory in the kept for market category increased 3.792 million pigs. This means that 80% of the growth in the kept for market inventory in the past 2 years occurred in Iowa and Minnesota.

            The growth in the kept for market inventory of 3,030,000 head in 2 years for the Iowa and southern Minnesota region would rank them between Indiana and Nebraska in total inventory on the December 1, 2008 report. Iowa and Minnesota now have 42.1% of the kept for market inventory in the US. The 4-state western corn belt region of Iowa, Minnesota, Nebraska and South Dakota has 48.9% of the kept for market inventory.

            Both Iowa and Minnesota remain states that are net importers of pigs into their inventory, as evidenced by the disparity between their percentage of the US breeding herd and their percentage of the kept for market inventory. A primary source of pigs into this inventory has been Canadian feeder pigs, primarily from Manitoba. While the numbers for the final weeks of 2008 are not yet available, it appears that US producers will import approximately 6.8 million pigs weighing 110 lbs or less. In the coming months it will be very interesting to note the impact of COOL on these import numbers. With the large number of newer facilities added to the production base in the past 2 years, the demand for high quality pigs to fill existing facilities will become evident in feeder pig prices. I expect that Canadian pigs will continue to flow into facilities in the western corn belt, but the impact of COOL will be evident in the pricing of these pigs versus pigs of US origin.

For the same 2 year interval, the breeding inventory in both Iowa and Minnesota declined 10,000 head, further highlighting the growth in finishing inventories and net importing of pigs to fill finishing facilities in these states.

            Nebraska has long been thought of as a state that became a net exporter of weaned and feeder pigs to Iowa and southern Minnesota in the mid 1990s. In the latest USDA numbers, Nebraska had 6.08% of the breeding inventory and 4.92% of the kept for market numbers. Illinois is continuing it’s conversion to a state that is a net exporter of feeder pigs. In the latest report, the state had 8.06% of the US breeding inventory and only 6.37% of the kept for market inventory. This suggests that Illinois is now a larger net exporter of weaned pigs than Nebraska.