constancy DescriptionThe US blabber and sloven culture attention includes closely 65,000 utmostms with combined annual receipts of $14 billion. The pig marketplace ranks 7th in commodities for the United States. ( husbandry: slovens) Major companies include Smithfield Foods, Tyson Foods, JBS Swift, and Cargill. The assiduity is super concentrated with all over 90% of application revenue generated by just 10% of farms. Smithfield Foods and Tyson Foods be the largest contributors by nation and processing n aboriginal half of the porc barrel barrel consumed in the US.
Industry demand is driven by interior(prenominal) and international trends in pork barrel consumption. The profitability of individual companies depends on efficient operations and reducing the spread of disease. Large companies befool advantages in vertically integrating operations from birthing to packaging and distribution. Small operations, typically family-owned farms, open fire compete effectively by specializing in a single stage of wild boar farming or procreation valetely treated zoologys. blabber and pig farms compete a fall uponst some separate broth, poultry, and fish operations.
The make pop national inventory of coppers and pigs (immature wild boars weighing less(prenominal)(prenominal) than 125 confiscates) is close to 60 jillion head. In 2007, the pork industry produced round 22 billion quid pro quos of pork, a keep pop up that has remained relatively flat for some(prenominal) years in injure of population gains. There be 694,000 grab farms containing an just of 871 fuzzs with the studyity of farms located in Iowa and North Carolina. The add up of US hog farms has fallen about 90% since the 1970s and 1980s ascribable to to a greater extent efficient industrial operations displacing small, typically family-run farms. Of US hog farms, 70% manage fewer than 100 hogs, as yet ac direct for just 1 percentage of total industry revenue. The average farm manages 900 pigs and hogs.
Pigs weigh from 10 to 20 pounds at the time they ar weaned. Young pigs, called eat oners, argon gathitherd into a nursery where they consume a uplifted-energy carry of soy sauce plant meal and maize whisky. Pigs typically gain three pounds for some(prenominal) pound of feed. Farmers come upon feeder pigs out of the nursery when they reach 50 to 60 pounds, usually around two to three months old. The final examination stage, called growing or finishing, is a four-month process of intense ply until the hog reaches 240 to 270 pounds, which is con positionred the ideal slaughter load. 400,000 hogs atomic number 18 transferred to slaughterho lend oneselfs cursory. 10% of US hogs be kept for facts of life and 5 to 10 percent be removed from inventory overimputable to death or disease.
Key inputs for the industry include lemon whiskey, soybeans, water, whey, and antibiotics. Feed inputs mint be in short depict due to weather and disceptation from separate non-feed harvests, much(prenominal) as biotechnology and human consumption. Hog farmers enter into contracts with forgetrs of edible corn whisky and soybean in an effort to in force(p) plenty of feed for the anticipated number of pigs and hogs.
Technology plays a critical role in the health of the hog farming industry, particularly as large farms shoot become highly efficient and automated. Genetic standardization of hog semen improves the likeliness of a lean, high-yield marketing hog and can raise the number of pigs per litter. Antibiotics speed growth and limit infectious disease outbreaks. skilful innovations in hog waste management can abase pollution spills and begin risks of chemical exposure to humans, fish, and other livestock.
pork is the most broadly consumed aggregate in the world write up for approximately 50% of the daily nubble protein in charge worldwide, averaging 51 pounds per person per year. In certain Asian and atomic number 63an countries, pork is even to a greater extent common. In Vietnam and Korea, pork accounts for 70% of daily center protein intake. The United States ranks as the second greatest consumer of pork, the threesome most consumed meat after beef and chicken. (Davis, Lin) A popular ad campaign touting pork as ?The Other washrag Meat? has tried to lure Americans away from turkey and chicken. Whether by campaigning or less expensive terms tags in comparison to beef, pork?s popularity has continually affixd over the last forty years. (Davis, Lin)Issue IdentificationIn recent months, the price corn, as salubrious other staples such as rice and wheat, have go up by 50% or more, pushing retail prices to levels spiritual domain before. Experts be pointing fingers and blame in all directions and to a physical body of factors. The forage crunch is due to poor harvests in Europe since 2005 and Australia?s ongoing drought that have, in a sense, created fluctuations in the pipeline of staple scintillas to world markets. The elevated demand for bio burns in reaction to the $100-per-barrel oil is diverting crops and the lift of China and India is crook them both into market- piteous grain hogs. Added to that is climate change and decline in untaught investment as a gross domestic product worldwide. This crisis is affecting people globally, especially hog farmers.
imputable to the massive prices of oil companies, biofuel and neutral spirits have become fuel picks. Projections show that in the future(a) year about 30% of corn forget go into biofuel. Because of the strong demand for jet-propelled plane fuel, corn prices have gone up, causing substantial fiscal freeinges for hog farmers. As the grain alcohol industry grows, so volition the demand for corn. With high prices, the giving medication has considered using ethyl alcohol?s byproduct as an alternative regimen source for the hogs.
Hog farmers who rely on corn feed, atomic number 18 veneer tough times. This is a real sensitive time in the pork industry, and concerns about the effects of input costs on the price of pork trouble more in the industry. Farmers cannot expire eagle-eyed term with the increasing feed prices. If something is not by dint of with(p) soon, ethanol threatens to deplete the corn supply that hog farmers count on to feed their livestock, which, in turn, feed many around the world.
Issue SignificanceIncreases in corn prices affect several stakeholders in the pork production industry. Those with the most legitimacy and urgency are identified below.
Owners ? Hog FarmersIn the United States, corn prices are go forth hog farmers with fewer returns. As a result, the industry is essay to keep from turning belly-up. corn is a demand-driven market and farmers whitethorn not be planting enough acres to supply demand. The worldwide demand for corn to feed livestock and pull in biofuel is putting enormous pressure on global supply. U.S. farmers are anticipate to plant less corn in the glide slope years, which means the supply shortage leave alone provided worsen. An 8% drop from last year is pass judgment.
It has been determined through vast research that a specific combination of corn and soybean meal is the most efficient feed for raising hogs, and feed has always been the greatest input expense, even before the face lifting in corn prices. Now that corn prices are at understand levels, farmers are forced to experiment with alternatives. Since hogs are exchange at market for content establish on weight down less alter percentages, experimenting with the nutriment of the hogs directly plays into the hail for which farmers provide be able to sell their hogs. Although estimating the actual corn use as feed to produce retail meat is a complicated calculation, it takes about 6.5 pounds of corn to produce 1 pound of pork. A well-grounded pig will generally gain about 1.5 to 1.8 pounds a day and will weigh up to 200-240 pounds when taken to market (Davis, Lin.) Since corn is now at record highs of more than $6 a bushel, ply hogs corn is cursorily becoming a profitless business.
A professor from the University of moment?s farming(a) Department said, ?It count ons like the nation?s hog producers will operate at a loss for a majority of 2008.? He traces the origins of the problem to a long run of profitable corn yields worldwide. In 2005 through early 2007, hog farmers were becoming increasingly profitable, in that respectby leading to an gain in the amount of hogs, which, in turn, pushed the prices of pork products down. Now, with the higher corn costs, the nation?s largest pork company, Smithfield Foods, has hog costs 20% over last year?s costs. This make up negatively impacts the company and limits the amount of hogs it can afford to feed.
On April 16, 2008, more than 200 farmers met in Mankato, Minnesota to discuss the financial wo(e) that high corn prices are inflicting on livestock producers. corn prices rose another 15 cents a bushel in the hours before the hog farmers settled in their seats. The soaring corn prices are increasing the price of feed and, as a result, pork producers are losing $30 to $40 per hog. Even as early as last October, farmers were losing money on every animal they sold. That is a significant development in Minnesota, where the merchandising of hogs brings in about $2 billion dollar bills a year. To elucidate matters worse for the hog farmers, high fuel prices have duplicate the cost of transporting pigs to the meatpacker.
And the problem does not stop in Minnesota. Canada is moved(p) by rising corn prices to a fault. A representative of hog producers in Canada claimed that, ?the Canadian government is paying farmers to slaughter breeding pigs to reduce herd sizes and prevent a complete infract of the Canadian hog industry.? This means Canadian bacon lovers will be affected greatly. As early as January of 2008, hog farmers could reassure that the rise of corn prices would bare poor returns within their industry.
?Traditionally, the summer markets are a little better,? says John Vaubel, a hog farmer from Mapleton, Minnesota. His hogs are not headed to market until summer of next year so he might get a better price for his animals. That is the kind of hope many of the hog farmers are carrying around with them in times like these.
ConsumersFarmers are now forced to pass on higher animal feed costs and thin their herd size, so consumers can expect to pay more for meat and pork.
On April 4, 2008, it was give tongue to in the Oregonian that, ? corn prices jumped to a record $6 a bushel, driven by an expected shortfall that will only add to Americans? growing grocery bill and farther squeeze ethanol producers.? (Jacobs) Long gone are the eld when going to the grocery store for corn meant paying $1 for 10 ears.
According to a study conducted by the go along Survey of Food Intakes by Individuals (CSFII), people of disappoint incomes, preponderantly from the Midwest and South, will be impacted the greatest by the rising cost of corn, the main ingredient in hog feed. In April, pork prices change magnitude an additional 2.5%, the third increase in the last 10 months. (USDA: CPI.)America, the richest nation in the world, holds dumbfounding numbers of impoverished. In 2007, 37 million Americans were at or below the official poverty level ? a total of 12.6 percent of the population. And in a nation that continues to become wealthier and more technologically advanced, this number is rising. There are 5 million more Americans who are now in poverty than there were in the year 2000. Estimates from the U.S. Department of agribusiness show that families in the bottom quartile are spending 32 cents of every dollar on sustenance. (?The distress?) Because hogs and chickens are being supply corn, and they are two of the most commonly consumed meat products in the nation, skyrocketing corn prices will doubly affect the average American, especially those of lower income. With these constraints, more families will be forced to look to tending from the government. The health of the average American is predicted to continue to decline as families are forced to buy less expensive and less nutritious meals. (?The Poverty?)Community ? Corn FarmersCorn affects many people, some very positively and some very negatively. As corn prices rise with the demand for ethanol, corn farmers are doing well and pocketing profits. Average income for farmers has change magnitude 10-15% over last year. According to Forbes.com, forecasts show commodity prices will push national net farm income to $92.3 billion in 2008, an increase of 4.1 percent from last year?s income of $88.7 billion. The average income over the last ten years is estimated at $61.1 billion. However, predictions designate farmers will plant 86 million acres of corn this year, a decrease of 8% from last year2007, when corn plantings were the highest since the 1940s.
regime ? USDAWith rising corn costs, the plyeral official government has finally taken steps to assistance the worsening industry. Earlier this month, the USDA announced it would secure $50 million of pork products to donate to small fry nutrition and other domestic food assistance programs. This purchase will move sows to market in an effort to move breeding stock off the market and alleviate the $2.1 billion loss the industry has faced over the last heptad months.
Potential ActionsPossible solutions for hog farmers could be to do nothing; look at alternate sources for feed; petition the federal government to provide emergency aid to provide needed cash flow; increase imports feeder pigs alternatively than keep an eye on stock breeder sows; lobby to remove tariffs on imported ethanol; or try to convince ethanol producers to move past corn based ethanol into cellulosic ethanol, produced from plant waste and non-food crops. To determine viability of these solutions, a more in depth analysis is required.
According to USDA Agricultural Baseline Projections on US Livestocks, if nothing is make pork production will decline through 2011 due to increased prices of corn-based feed but then will increase as the market readjusts with higher hog prices. Of course, this projection does not take into account the number of hog farms that will not be able to sustain themselves and will close down before the market readjustment. This projection withal does not take into account the affect on the US economy as imports of pork products, currently at near 2.2 billion pounds, or 10% of total pork production in the US. ( ranketwatch)Those farmers that are able to grow their own corn for feed are affected less by the shortage of corn and increased costs of feed. However, not all farmers are able to do so. Therefore, those farmers need to look into alternate food sources. Traditional feed consists mostly of corn for energy and soybean meal for protein. Pigs are versatile omnivores and are able to enjoy a wide diet of items such as pasture grasses and other ropy materials. Apparently, pigs can adjust rather quickly to changes in diet as well. If a pasture fed pig runs out of grasses to eat, it can quickly be switched over to feed without any negative effects to the digestive system. Even though they are single-stomached animals who typically require some grain in their diet, pigs? digestive systems are durable and flexible. A three-year study conducted by swine nutritionist Terry Prince of Auburn University concluded that up to 2/3 of a pig?s diet could be obtained through a well-managed pasture program as long as necessary vitamin and mineral supplements are included.
Economists estimate the industry mustiness reduce pork production by at to the utmost degree 10%, or 600,000 sows, to restore profitability. (AgriNews)With the reduction of sows in US farms, imports of feeder pigs (weaned young pigs weighing between 10-60 lbs) from Canada may help save the industry. It is less expensive to import the feeder pigs than to maintain sows for breeding at the current cost of feed. However, the Canadian pork industry is experiencing the same crisis as the US pork industry with increased feed prices so this may not be a sustainable long-term option.
US farmers could demand the federal government provide aid packages similar to that of the Canadian government. In February, the Canadian government declared a state of puckish economical hardship for hog producers. Emergency advances are available, up to $400,000 per eligible producer, based on anticipated production rather than current inventory. The first $100,000 of aid is interest free. ( food marketwire)Hog farmers could lobby the federal government to reduce the tariffs on imported ethanol. Some farmers sprightliness the ethanol tariff on imports, currently at 54 cents per gallon, limits the amount of imports and helps drive up the cost of corn. The tariff reduces alien competition and creates a greater demand on the US ethanol industry, using more corn and driving prices higher. However, representatives from the American Coalition of fermentation alcohol feel there is another side to the story. The US imported 700 million gallons of ethanol in 2007, which amounts to approximately 10% of the nation?s ethanol consumption. Eliminating the tariff may increase foreign imports and decrease US production by 7% but economists do not feel this would greatly affect the price of corn. In fact, it is estimated the price may only be reduced by a few cents per bushel. (Steil) At over $6 per bushel, this does not look like it would ecstasy much relief to the hog farmers. In addition, milieualists are also concerned that removing the tariff on foreign imports and opening the US market may advertize deforestation practices in other nations as farmers expand the production of sugar cane and other crops to make ethanol.
A slight twist to the last alternative would be to encourage the ethanol industry to switch from corn-based ethanol to cellulosic ethanol. According to Michael Kanellos, an investigator and advocate for green alternatives, corn is the grain most impacted by biofuels as approximately 30% of the US production of corn goes to ethanol production. Cellulosic ethanol can lessen the demand for grains as the processes uses a variety of materials such as wood chips, widows weeds and miscanthus (perennial grasses native to Africa and southern Asia), human waste, and even carbon laden garbage such as tires.
the hog industry is integral to the nation?s economic and physical health, and a solution or solutions must be uncovered. As corn prices continue to skyrocket, hog farmers must seek out alternative foods which will yield the same healthy pigs they were able to produce with corn and soybean meal.
Recommendations / ImplicationsFarmers have neer had to find alternative food for their livestock. They have always fed their livestock on corn and soybean feed because it has been an chinchy way to blubberten the hogs and force them to grow to market weight as quickly as possible. However, due to rising corn and other grain costs, farmers are looking for alternative sources of food to feed their livestock. Below is a look at the unfavourable affects and benefits from two different perspectives: their livestock and the consumer.
Coming up with the lowest cost solution is the most onerous factor when considering the use of alternative feeds. The farmer must take into account the amount of nutrients supplied by the deputisement feed as well as costs of the replacement feed such as voice of digestible energy and nutrients to the diet, special processing needs, and storage.
Oat and barley are the two closest grains comparable in performance and price to corn that can be added to pig feed to match nutrients against cost. Currently, the oat and barley markets are slower than the more fast moving products, making them sizeable buying opportunities for farmers. Barley and oats are high in grapheme yet have lower digestibleness than corn. Since protein is the most expensive ingredient in pig and hog feed, barley is ideal with its higher crude protein content. There have been several experiments proving that pig diets containing barley perform better than diets based only on corn or wheat. Pigs fed on oats have gained more weight on average than those fed corn.
One problem is that freshly harvested barley must be stored for at least four to six weeks before feeding to livestock. Certain compounds found in newly harvested barley have proven to be toxic to livestock and farmers have incurred losses attributable to this type of feed.
shop raise pigs yield meat that is tastier and more nutritious. A study conducted by the U.S. Department of Agriculture found that lean pork has the same amount of plump content as skinless chicken breast and offers good nutrients to the consumer such as protein, B-vitamins, zinc, potassium, and iron. Consuming lean protein food sources can also lead to weight loss.
Types of pasture include oats, alfalfa, and orchardgrass. In addition, turnips, kale, and beets are high in protein, highly digestible, and make an excellent pig pasture. If pastures are not available, feeding feedstuffs high in fiber is another possibility. Studies show that fibrous feeds and protein by-products can also be used. These feeds would include alfalfa hay, orchardgrass hay, grass silage, sunflower and soybean hulls, corncob meal, and beet pulp. Grains such as wheat, triticale, barley, and hulless barley can replace corn completely.
Pasture raised pigs encounter different striving factors and need different traits than confinement raised hogs. These traits include validity in extreme climate conditions, resistance to parasites, ability to forage, and good mothering characteristics.
A pig?s diet is a major influence in the meat quality. Maintaining the quality of pork meat is important because the amount of soft fat contained in the meat has a major impact on human health. Today, the consumer?s desire for healthier food requires farmers to consciously monitor their livestock?s diet. Soft fat is extremely oily and becomes moody more quickly, leading to a less desirable food for consumers. Soft fat content on meat is a major concern for meat processing companies, resulting in lower processing yields and reduced value of the pork. Recently, Tyson Foods, a major pork distributor and marketer, reported it anticipates losses of $600 million in 2008 due to high corn cost. Although studies show corn-soybean diets lead to good fat quality, adding barley and other grains to hog feed does increase their fat quality, color, and firmness.
Studies show consumers are willing to pay more for products that are produced in more sustainable or natural ways. Pasture raised pigs, promoted as ?organically? or ?naturally? raised may allow for higher prices in niche markets and provide farmers a way to offset feed costs.
While ethanol is driving up the crop prices and affecting the price of meat, cellulosic ethanol would not have this effect on the food market, farmers, or consumers because it does not put pressure on a food source. Pushing for more research and production into cellulosic ethanol will take the pressure off the corn market and avert the high pork prices passed on to the consumer. The farmer will not have to look for alternative feeding ingredients for its livestock.
As far as for our policy makers, their role in improving the environment and driving the corn costs down is heavily expected of them. The creation of the tax and credits available have many industries motiveing to participate in the research and development. Cellulose ethanol has several environmental benefits. Growing energy crops like switchgrass, wood chips, and weeds have important land, habitat, and soil conservation benefits. Producing energy from the residues in the forests, mills, and landfills avoids the release of methane into the atmosphere from decomposition of unused wood and agricultural wastes. Other benefits for all stakeholders include reduction in babys room gas emissions and quality of air improvements.
Although the benefits seem too good, there is a time lag that exists. Currently the structure of cellulose makes it difficult for enzymes to break cellulose down into simple sugars, ready for fermentation. look forers are works on making the new enzyme and manufacturing process faster, easier, and cheaper. The infrastructure is expected to take seven to ten years to build plot the government is promising to build the biorefineries without increasing the federal shortage with federal loans.
ConclusionWith ever-increasing corn prices as demand for corn rises, hog farmers must look at alternatives for pig feed if the pork industry is to sustain itself at the same levels it has in the past. Otherwise, lobbyists and governmental action groups must side with the farmers and against the ethanol industry to encourage other forms a green fuel production, thereby diminish the demand for corn and allowing the price of feed to return to levels more sustainable for the industry.
Works CitedAgricultural Baseline Projections: US Livestock, 2008-2017. USDA economic Research Service. (22 Apr 2008) 20 may 2008 usda.gov/briefing/baseline/livestock.htm>. Davis, dockage and Douglas Belkins. ?Food Inflation, Riots Spark Worries for World Leaders.? The Wall Street Journal. (14 Apr 2008) 21 may 2008 Davis, Christoper G., Lin, Biing-Hwan. ? agents Affecting U.S. Pork Consumption. Electronic Outlook incubate from the Economic Research Service. United States Department of Agriculture. (whitethorn 2005) 22 whitethorn 2008 Deutsch, Suzanne, Lorne McClinton. ?Omega-3 Pork Cities Health Benefits.? The Hog Farmer. (15 Nov 2006) 26 whitethorn 2008 ?Emergency Advances Now Available to Livestock Producers.? Marketwire. (23 May 2008) 24 May 2008 Kanellos, Michael. ?The Biofuel Factor in Rising Food Prices.? C-Net News.Com (15 Apr 2008) 30 Apr 2008 Rye, Clayton. ?Ethanol Detractors.? Agriculture Online. (24 May 2007) 22 May 2008 Schnepf, Randy. ?High Agricultural Commodity Prices: What Are The Issues?? Congressional Research Service. (6 May 2008) 26 May 2008
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