Brumm Speaks Out

This past week I gave 2 presentations that included a discussion of management for summer heat relief to different groups in Iowa and Illinois. At both locations, comments following the presentation reaffirmed what I’ve known for some time – producers and their advisors don’t fully understand how to keep pigs cool in hot weather.

The following bullet points are the basics of summer cooling of pigs:

• Pigs get hot and reduce performance at much lower temperatures than most producers and advisors expect. Recent data suggests that on partial slats, 132 pound pigs begin reducing feed intake when air temperature is 77 F. Consider this in light of the fact than many producers don’t believe in wetting pigs (they might get sick!) or don’t begin wetting until the upper 80’s.
• If stirring fans are used to assist in cooling pigs, they should be aimed so air moves over the pigs – not aimed so the air on the ceiling is moving. If aimed over pigs, they should be connected to a thermostat so they turn off in evening hours. I generally recommend these begin operating at +15 F over the controller set point.
• For curtain sided barns with no stir fans or incorrectly installed stir fans, set the wetting system so it begins operating at +18F above set point.
• For tunnel barns and curtain barns with fans on thermostats, you can begin wetting at 20-22F above the set point. The reason for the delay versus curtain barns is you know a draft is going over the pigs so evaporation will be more effective immediately.
• The ON time for wetting the pigs should not be over 2 minutes. The goal is to wet the pigs and then let them dry. Many producers make the mistake of thinking a longer ON time will be more effective in cooling. The most effective cooling is when pigs are drying during the OFF cycle.
• If you can’t get pigs in the far pens wet without excessive water in the first pens, consider replumbing your dripper/mister lines. Try taking the main feed to the middle of the barn and pressuring the dripper/mister lines in 2 directions. This will allow you to cut your ON time by as much as 50%.
• Begin with a 15 minute OFF time. Rewet the pigs when the cement slats under the pigs begin drying.
• Use large drop emitters or nozzles. Misters are not recommended. They are difficult to keep functioning in areas with poor water quality, and the fine mist is not as effective in wetting the pigs as large droplets. Your goal is wet pigs that dry off, not wet, cool air above the pigs!
• Target nozzle sizes and locations that wet no more than 60% of the pen area.
• In curtain barns consider hollow cone nozzles.
• In tunnel barns, consider flat fan nozzles that are positioned parallel to air flow.
• If the controller has the capability, consider programming it so no wetting of pigs occurs for a 6-8 hour period at night. This allows floors and equipment to dry.

State governments around the US are in the process of finalizing their budgets for the coming year(s). In all but 1 or 2 states, all recipients of state government funding are being told to do make do with less. This list of those doing with less include our land grant universities, a cornerstone of American Agriculture.

In the case of Minnesota, the Governor’s un-allotment process means $50 million less to the University of Minnesota. While I don’t have specifics on how much of this will have to come from the College of Agriculture, you can bet they will be asked for their fair share. In Nebraska, the cut to the Institute of Agriculture and Natural Resources is $1 million. Almost 50% of this cut will in the form of reduced state dollars to support technicians for agricultural scientists.

Two weeks ago I was part of a group pulled together by the National Pork Board and the National Pork Producers Council to address this issue of declining funding for agricultural research, teaching and research. One of the first presenters was Dr Bob Easter, current Dean of Agriculture at the University of Illinois.

Bob is well known to many of us as a leading swine nutrition researcher. He has now become a leading spokesperson for Colleges of Agriculture as they struggle with declining state and federal dollars to fund their missions of teaching, research and extension. Bob’s presentation was very effective in helping the group understand why agriculture (and pork production in our case) is changing so rapidly at land grant institutions.

Bob began his talk by reminding the group that as Dean of Agriculture, he is the CEO for a $150 million dollar per year business. As CEO, he is responsible for having his books balance at the end of the year. As state and federal funding for production research has declined, while costs of doing research have climbed, scientists are increasingly being asked to seek out grant funds to pay the bills. In fact, a key criteria in new hires is the ability to successfully write and obtain grants.

In the case of agriculture, there are few dollars available for such items as production research (pigs per pen, what type of drinkers, impacts of management on profits, etc). The main funding source for much of the scientific discovery process at public institutions in the US has become the science initiatives of the federal government (NSIF and NIH). In the round of economic stimulus funding of the Obama administration this spring these funding sources had added monies available while agricultural funding was largely ignored.

Given the financial squeeze being placed on Colleges of Agriculture by declining general support dollars, administrators by necessity have been hiring faculty that can compete for these new federal funds. In almost every instance, this means they are likely to have little or no farm experience or contacts with the agricultural production community. This does not mean they are not good scientists – it just means they won’t be able to respond to producers or allied industry phone calls. It also means the training of graduate students for many of the production system and allied industry openings is becoming more basic, and less hands-on as it relates to production agriculture.

Even the teaching of production agriculture is changing in response to this financial pressure. Bob related that in the early 1970’s, the college of agriculture received over $7 of state monies for every $1 of tuition income from students. Today they receive less than $1 for every dollar of tuition income. If Bob has a faculty member teaching a 3 credit course, he receives approximately $420 in tuition income for every student enrolled. If he offers a class that has only 10 students enrolled, this is only $4200 in income to cover salaries, and doing such things as turning on the lights, paying for custodial services, etc. Clearly not enough.

This leads to the question – what does the future of ag research, teaching and extension look like? Here the crystal ball gets somewhat fuzzier, but for sure production research will continue, but with almost all of it being done in the private sector by production companies. Witness my involvement as science director in a private research site, and the continued growth in the number of private sites for mid-large production systems. The missing link is this is information availability for the small-mid sized system that does not invest in research.

While the National Pork Board is investing checkoff dollars in research, the pool of monies they have available is limited, and in many instances faculty are discouraged from seeking these dollars because of the relatively small size of the grant versus NSIF or NIH grants.

Just as producers are asked to become more involved in their explanations to neighbors and local communities of their production practices, etc., they will have to become more involved in their state political processes if they want to impact this decline in ag research. With agriculture representing only 2% of the US population (maybe closer to 8-10% if we add in allied industry and processing), unless we repeatedly make our case to elected leadership, we stand no chance.

I had an interesting inquiry this morning asking how producers are reacting to the lack of profit and higher feed ingredient costs. Specifically, are they lowering diet quality to conserve cash?

This is interesting because many of you have learned thru experience that healthy pigs respond to better diets than you’ve ever fed in the past. With the widespread adoption of circovirus vaccines, we are now getting more pigs and healthier pigs. The many performance improvements in daily gain that we are all hearing about or experiencing are due in no small part to the improvements we’ve made in our diets, especially in terms of amino acid amounts and balance.

Now that many of you are struggling to be ‘the last man standing’, decisions on cash expenses are front and center. One obvious way to conserve cash is to lower the money spent on feed ingredients. If you grow your own corn and have corn already in inventory, I’m sure you are considering what to do about soybean meal purchases for the remainder of this crop year, especially if you don’t have your meal already booked for pricing. Cash meal is now as high as $444 per ton so it is very tempting to lower the amount in your diets.

I haven’t worked the economics of lower quality diets that result in poorer feed conversions, lower daily gains and possibly fatter pigs at slaughter, but before you make the decision to do so I urge you to run these numbers. You may be robbing Peter to pay Paul. While your per ton cost of feed will be lower, will your margin over feed cost get worse?

At the World Pork Expo in Des Moines, I talked with many of you about availability of DDGS. With the financial struggles of the ethanol industry, output of this feed ingredient has shrunk and both suppliers and buyers told me of very tight supplies. This is the time of year to pay close attention to your DDGS for quality.

In Iowa beginning last fall there were reports of corn quality issues associated with last years crop in terms of keeping it in condition thru the storage season. In the next months, much of the corn entering the ethanol market will be the last corn from bins as farmers empty bins in preparation for the 2009 crop. The risk of moldy corn entering the market channels increases, and the ethanol process will condense any mold byproducts such as fumonosin, vomotixon, etc. by a factor of 3 in the DDGS. What is your DDGS supplier (or ethanol plant) doing to monitor this and/or doing to screen grain at arrival at the plant?

While they cost money, binding agents added to diets can reduce the impact of the byproducts on pig performance. If I was involved with a farrowing site, I would be asking my nutrition advisor about use of these binders if there is any DDGS usage in gestation or lactation diets.

The most common question asked by every vendor and producer at the World Pork Expo was – ‘when will the pain end?’. It’s not fun being in the pork business right now, and the prospects don’t look promising for some time. While we don’t often think in terms of time-lines, the matings that are being completed now are the pigs that will go to market next April. Thus, we are already locked in on the supply side of the price equation through the fall lows and late winter markets.

The second most asked question was – ‘who is selling sows?’. In my discussions with several lenders at the Expo, the common theme was ‘what do I as a lender do with the production facilities if I stop financing a pig unit?’ Lenders are in a real bind. If they stop financing a unit, they are left with an asset that currently has almost no value.

The only value in a sow unit is to try and sell it as a producing entity. I am aware of several groups that have been looking at sow units that are for sale, and the only way they will even look at a unit is if it is operating. Evaluating a production unit while it is functioning makes it much easier to determine the status of the all of the equipment, the quality of the employees, etc. Buying a unit in production means the buyer has immediate income from sale of pigs, rather than having to finance a startup. Thus, lenders continue to finance losses in the hopes that they will eventually be able to get some return for the money they keep tossing into the pyre. However, many are getting close to admitting this type of lending can’t continue and admit they will have to close their financially weakest producers.

As to who is selling sows – the answer remains – not many! There was word of 2 production systems in Canada filing for bankruptcy at the end of May, and of a few systems in North Carolina seeking Chapter 11 or Chapter 12 protection in the US.

One of the hot points of discussion was the newly created Producer Retirement Program (http://www.producerretirementprogram.org/). This effort is modeled in the dairy buyout, where producers are self-financing a herd reduction program. I encourage readers to go to the web site to learn the details of this program. The group has scheduled a series of 4 webinars on Tuesday, June 9 for a full explanation of the program and to respond to the many producer questions that are being asked.

Will a producer financed retirement program be successful enough to change the supply side of the supply/demand equation? I don’t know, but as many others have stated, we need to try something to remove the stone wall that appears to have stopped liquidation efforts that should have begun last year.

One concern that many have – do we have the capacity to kill a larger number of sows? I don’t know the answer, but I suspect sow slaughter capacity will be an issue in coming months if we see an increase in sows coming to town. At Expo, several producers told me they already had to schedule sows 3 weeks in advance for slaughter.