Brumm Speaks Out

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.