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Weekly outlook

Hog market upturn

[OCT. 1, 2002]  URBANA — Hog producers are breathing a sigh of relief because, although they still face losses this fall and early winter, it appears that these will not be as severe as anticipated, said a Purdue University Extension marketing specialist.

"A return to break-even prices can be anticipated by early spring, with some positive returns by late spring and summer," said Chris Hurt. "If additional sow liquidation occurs this fall and winter, hog prices should be strong in the last half of 2003 and into 2004.

"For now, producers should calculate their variable or out-of-pocket costs and continue to produce hogs this fall, as long as they anticipate they can recover these variable costs. In general, most will continue to keep animals in inventory, but they should trim their least productive animals, keep market weights moderate and continue to evaluate their long-term strategies in this changing industry."

Hurt’s comments came as he reviewed the USDA’s September Quarterly Hogs and Pigs report, which showed the breeding herd to be down 1.7 percent as of Sept. 1, following a slightly higher inventory in June.

"The panic selling of sows and lightweight market hogs in July and August appears to have a silver lining, as the breeding herd has shifted into liquidation and market hog numbers will begin to decline later this fall," he said. "As a result, the fears of insufficient slaughter capacity and horribly depressed prices this fall have eased. Hog producers will still have losses to face in coming months, but they will not be nearly as large as was feared."

The decline in the breeding herd can be attributed to rapid liquidation of sows in July (up 20 percent), August (up 17 percent) and September (up 12 percent). During these three months, a total of 120,000 more sows were slaughtered as compared with the same period last year. Looking back to the spring, sow slaughter in the months of April, May and June was also 5 percent larger than during the same period last year, representing an additional 40,000 sows.

"Fewer sows meant that farrowings this past summer were much lower than anticipated," said Hurt. "In the June quarterly report, producers indicated they would farrow 2 percent more sows in the June-August period but actually reduced farrowings by 1.5 percent.

"As a result of the smaller summer farrowings, the inventory of market hogs was also much smaller than anticipated. The number of pigs that weighed 120 to 179 pounds, representing the bulk of October slaughter, was up 3 percent. But slaughter of market animals should begin to drop below year-earlier levels in November, as the 60- to 119-pound inventory was down modestly. The number of pigs that will come to market in December to February was down 1 percent."

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Hurt noted that producers indicated that they intend to continue to reduce sow farrowings, and thus market hog supplies, into 2003. Fall farrowing intentions were down 2.5 percent, and winter farrowing intentions were down 1 percent.

Marketing weights have also come down sharply and are expected to help moderate pork supplies during the next 12 months.

"The reason is high feed prices and low hog prices," said Hurt. "The transition to lower weights occurred in August. At the start of the month, slaughter weights were nearly 1 percent above the weights of the previous year but dropped below year-ago weights by the end of the month. Weights have moderated further in September, dropping as much as 2 percent below last year, likely because of advance marketing of market hogs.

"For the fall, weights are expected to remain slightly under those of last year but can be expected to increase with higher hog prices into the winter. For the next 12 months, weights may be up only about 0.4 percent."

Hurt indicated the hog price tone should improve immediately with prospects for less pork than had been anticipated. Still, pork production in the fourth quarter of 2002 and first quarter of 2003 will likely be nearly unchanged from production in the respective quarters in the previous year. However, by spring and summer, supplies are expected to drop by about 2 to 3 percent. For all of 2003, pork production should be down about 2 percent.

"Fall prices for 51 to 52 percent lean hogs are now expected to average in the $30 to $34 range," said Hurt. "This is a substantial improvement over the mid- to higher $20s discussed before the report. Prices should improve to the higher $30s in the winter and keep marching higher into the spring, when they are expected to average in the low $40s. Summer 2003 prices may reach the low to mid-$40s."

Because of the rapid liquidation, financial losses are not expected to be nearly as large as feared prior to the report. Total costs are currently estimated in the $39 to $41 range and have declined somewhat with moderation in corn and meal prices since the Sept. 12 USDA grain updates. Losses in the third quarter just completed are estimated at about

$20 per head but are expected to be somewhat larger for the last quarter of the year, at $22 per head.

"However, by winter, losses should be reduced to about $5 per head," said Hurt. "There is potential for a return to break-even prices by the spring and some profits by summer. Lower feed prices by the fall of 2003 could drop costs back into the higher $30s."

[U of I news release]

Aflatoxin guidelines
for livestock producers

[SEPT. 28, 2002]  URBANA — Some parts of Illinois are reporting moldy corn after a growing season marked by heat and stress. Livestock producers need to exercise caution if they are feeding corn possibly tainted by mold, said Michael Hutjens, University of Illinois Extension dairy specialist.

"Illinois toxicologists report that the moldy corn samples they are seeing appear to be Fumonsin and recommended that producers have tests conducted for aflatoxins, DON, zearlenone and fumonsins in representative samples of corn," he said. "The cost is $65 per sample to screen for four mycotoxins, while Fumonsin alone is $30."

Mycotoxin and Fumonsin contamination of corn fed to livestock can cause a number of problems. To avoid these, livestock producers should have grain tested before feeding and, if grain is found to be contaminated, strictly follow U.S. Food and Drug Administration guidelines for its use.

"Producers also need to remember that proper handling of damaged corn is critical, as additional growth and mycotoxin occurs if moisture, oxygen and warm temperatures exist during storage and handling of the damaged feed," said Hutjens.

Based on FDA guidelines, Gavin Meerdink, U of I Extension beef and feed safety veterinarian, recommends the following levels in feed: no more than 300 parts per billion (ppb) in corn fed to finishing beef cattle; 200 ppb for finishing (over 100 pounds) swine; 100 ppb for breeding beef cattle, breeding swine and mature poultry; and 20 ppb for other animal feeds.

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"Based on recommendations of U of I Extension veterinarians, dairy cattle diets should not contain more than 20 ppb in the total ration dry matter," said Hutjens. "This is not because of a health threat to the lactating cow; rather it is related to milk residues."

Hutjens said the aflatoxin is metabolized by the dairy cow and some can be excreted in the milk. Milk must be under the 0.5 ppb level, the maximum allowed by the FDA.

"In addition to losses from tainted milk, dairy producers also can see decreased feed intake by their cows, reduced rumen VFA production, increased liver damage, lowered reproductive efficiency and less milk yield," said Hutjens.

"All livestock producers need to be aware of these potential problems and exercise care in feed use of mold-damaged corn."

[U of I news release]

New Web tool can map and
analyze any part of Illinois

[SEPT. 27, 2002]  URBANA — Everyone, from farmers and natural resource experts to city planners and real estate agents, has an innovative new Web tool at their fingertips, thanks to the combined efforts of the University of Illinois, the Illinois Department of Natural Resources and other agencies.

The tool is the Resource Management Mapping Service, the RMMS, a new website that allows people to create maps of any area within Illinois in a matter of minutes.

"The uses for the RMMS website are as varied as the users," said Rick Farnsworth, natural resources economist with University of Illinois Extension. "State staff uses RMMS to track changes in natural resources and adapt management plans accordingly. And farmers visit the site to get a bird’s-eye view of production or calculate acreage needed for state and federal conservation programs."

"A long-distance runner once used the website to measure and map a marathon route," Farnsworth added. "In addition, real estate agents have used it to show prospective clients the area in which they hope to buy property."

"City planners also benefit," he said. "If a town wants to expand, they need information about the impact this growth will have. For instance, where will this growth occur in relation to the town’s existing boundaries? Will growth encroach on the state’s mandated buffer around public wells or protected habitat? They can start making decisions using the maps they create on this website."

"One of the key strengths of RMMS is that we have most of the data that is publicly available from state and federal agencies," Farnsworth noted. "Users can come to one site, locate the area of interest to them and create the maps they need."

Users can search by county, watershed, town or ZIP code, or they can draw rectangles on the map to zoom to an area they want to view, he said. Once there, they can choose a base layer on which to lay all other data layers. There are more than a dozen base layers, including cropland maps from 1998, 1999 and 2000 or aerial photographs taken in 1998 and 1999 that allow you to see the land in question.

After a base layer has been chosen, any number of other layers can be added. These include:

•  Resource layers, which identify county land, lakes, rivers, watersheds, wetlands and other natural resource features.

•  Administrative layers, which include various Department of Natural Resources districts, as well as townships, congressional and legislative districts.

•  Economic layers, such as state highways, county roads, wells and more.

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After choosing the layers you wish to see, simply hit the refresh button. One note of caution: Zoom in to the area you want to map before overlaying data. Most of the data sets are very large and take time to load. The smaller the area you choose, the less time you will spend waiting to view your map.

When users are finished, they can create their own log-in name and password, then load and save their map for future reference. Maps can also be printed or e-mailed to work associates, state agencies, family or friends.

According to Farnsworth, the next step for the RMMS site is to create decision tools based on the information available.

"During the first two years, our job was to collect data and make it available over the Web," he said. "Now we’re developing tools that will help agencies and the public assess the impacts of land use change on the state’s natural resources. Our partnership with IDNR and the other agencies is focusing university research on the state’s resource problems and providing the means in which it can be used shortly after it becomes available."

The Wetland Impact Review Tool, or WIRT, is the first of several such tools that will come online in 2003.

"When someone wants to change land use," said Farnsworth, "WIRT will alert the user to likely resource problems. Click on the WIRT tool, zoom in to the land in question and draw a line around it. Everything else is automatic. WIRT will give you a head’s-up on the presence of nearby wetlands, nature preserves, streams and flood zones, to name a few."

The RMMS website is funded by the Illinois Department of Natural Resources and the Illinois Council on Food and Agricultural Research, C-FAR. Farnsworth believes it is a noteworthy success story of cooperation that started with C-FAR members setting a high priority on better resource management of the state’s natural resources.

"C-FAR provided funds to collect data and build new partnerships between the university and the state of Illinois," said Farnsworth. "The end result will be a state-of-the-art system that IDNR and the public can use to protect the state’s soil, water, plant and animal resources."

The RMMS website is located at http://space1.itcs.uiuc.edu/website/rmms.

[University of Illinois press release]

Manure application goes high-tech

[SEPT. 26, 2002]  URBANA — The pick-a-gear-and-go method of manure application could soon be a thing of the past.

Ted Funk, University of Illinois agricultural engineer, is developing a high-tech, low-cost slurry applicator that will supply a predetermined, constant flow of manure that can be varied to provide a more precise application.

Traditionally, farmers have judged their rate of manure application by the speed of their tractor. Go slow and the application is heavy. Speed up and the application is light. Without the equipment necessary to measure application rates, farmers cannot accurately judge the amount of manure going onto their fields.

But ongoing concerns over pollution risks from field runoff have resulted in stricter government regulations, which are holding producers increasingly accountable for their manure management practices.

So Funk has adapted a pneumatic pinch valve to control slurry flow rates. The pinch valve is connected to a computer and adjusts automatically to changes in air pressure.

"We can measure the pressure differences in the liquid streams, and by that we can predict what the flow rates are," said Funk.

The valve, 6 inches in diameter to match the discharge pipes of most tanks, is also designed to prevent clogs in the system.

"It’s a wonderful valve, because you can’t clog it," said Funk.  "If it starts to clog, you just release valve pressure and it opens up."

A radar gun on the tractor senses how fast the equipment is going, and that information is fed into the computer. Then the flow rate to the valve adjusts accordingly.

"If we set our application rate at 5,000 gallons per acre, it will measure the field speed and keep it at 5,000 gallons, no matter how fast or how slow you drive," said Funk.

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The next level of development will incorporate the use of Global Positioning System technology.

"A GPS unit can sense when farmers are getting close to a stream or a well, someplace where they can’t legally apply manure," said Funk. "That information will shut the applicator off automatically."

More advanced GPS technology will use maps that already have calculations done based on field soil tests.

"How much manure should go to various parts of the field, based on the fertility of the field?" asked Funk. "Applying manure based on what the crop is going to need — that’s the gold standard."

Systems currently marketed that can control the rate of slurry applications cost as much as $30,000. Funk hopes to provide this technology at a more reasonable price for the small producer.

"Most farmers already have a slurry tank," Funk said. "We’re trying to develop a system for that farmer. We want to be able to tell him, ‘Here’s what you buy. Here’s how you put it together.’" Parts for the system should be on the order of $5,000.

Funk hopes to have the system up and running within a year. "We’re still working on getting some bugs out of the main hardware, but I think we have a good picture on how we control the system itself."

Top Air of Cincinnati, Ohio, has loaned the project a slurry tank and soil injection equipment. The research is funded by the Illinois Council on Food and Agricultural Research.

[U of I news release]

Use of ethanol byproducts as feed

[SEPT. 25, 2002]  URBANA — The rapid growth of the ethanol industry in the Midwest has had a spinoff benefit for the Illinois livestock industry — an increased quantity of potential feed, according to University of Illinois Extension specialists. Distillers’ grains are produced as byproducts of the fermentation of grain into alcohol. The grains are fed wet or dried and sold as a high-protein or energy grain feed.

"Historically, this product has not been used in swine diets because of the low protein quality, low amino acid digestibility, high fiber content and the nutrient variability among the sources," said Gilbert Hollis, U of I Extension swine specialist. "This left an image of an inferior ingredient for swine diets."

However, recent University of Minnesota research indicates that new ethanol plants are producing byproducts with higher nutrient content and digestibility than that listed in the 1998 National Research Council publication on swine nutrient requirements.

"Distillers’ grain should be positioned as a protein supplement in the rations of dairy cows," said Mike Hutjens, U of I dairy specialist. "Five pounds of dried distillers’ grain (DDG) or 10 pounds of wet distillers’ grain (WDG) is a ‘conservative’ upper limit. These levels could provide one-half of the supplemental protein, with the remaining half from soybean meal-based protein supplements."

According to Dan Faulkner, U of I Extension beef specialist, DDG or WDG can be fed as up to 30 percent of a beef cattle diet.

"Based on the energy content of distillers’ grain for beef cattle, DDG’s break-even price was reported at $94 a ton, and WDG with 45 percent dry matter was $47," he said.

For swine, Hollis said distillers’ grains have higher protein, fat and fiber content than corn due to the fermentation process removing the starch component.

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"Distillers’ byproducts do have several features that limit use in swine diets," he noted. "The high fiber content may cause diarrhea in young pigs. Distillers’ grains will have a lower metabolizable energy content due to less starch. The crude protein content is relatively high, but the amino acid profile is not well-balanced."

Hollis added that swine diets containing distillers’ dried grain with solubles need to be formulated on a digestible lysine and energy basis. Formulating the diet on a crude protein basis will result in a lysine deficiency and possibly a deficiency of other amino acids, which will reduce growth performance.

All three specialists noted there are a number of guidelines livestock producers need to follow when using distillers’ grains in feed.

Guidelines are available on the Web at http://il-traill.outreach.uiuc.edu/. Click on the PorkNet icon and then on the "DDGS Feeding" topic. Information about dairy and beef cattle feeding guidelines can also be found at that site. Click on the DairyNet icon and then search for "distillers." This will take users to a January report, "Distillers Grain Opportunities" by Hutjens.

[U of I news release]

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