A workshop organized by Canadian Centre for Swine ... · Quantity versus Quality Quality Quantity Niche 2003 Future 9 Components of Quality Fat: lean ratio ... May need to tattoo

A workshop organized by Canadian Centre for Swine Improvement In collaboration with Ontario Pork and Ontario Swine Improvement

June 17, 2003

Stratford

Genetics for Swine Production - What’s in it for the producer?

Program 9:00 Registration and Coffee 10:00 Opening Remarks 10:15 Genetic Improvement - The Packer’s Perspective

Dr. John Webb, Director, Genetics and Science, Maple Leaf Foods Inc. 10:40 Identification and Traceability of Canadian Hogs

Eric Aubin, Hog Production Analyst, Canadian Pork Council (CPC) 11:05 Quebec Swine Industry – Round Table

Pierre Falardeau, General Manager, Centre de développement du porc du Québec inc. (CDPQ)

11:30 Genetic selection for a Kinder Gentler Pig (KGP)

Dr. William Muir, Professor, Purdue University, USA 12:00 Lunch break 13:00 Trading in the Current Environment

Mark MacConnell, Senior Partner, Hogan & Hartson LLP, Washington, DC, USA 13:45 The Big Hog Cycle – What goes down must go up

John Bancroft, Swine Grower-Finisher Specialist, Ontario Ministry of Agriculture and Food

14:10 “Tools of the Trade” Program

Rob Gribble, Commercial Swine Specialist, Ontario Swine Improvement (OSI) 14:35 Coffee break 14:45 Feeding to Maximize Your Grid

Janice Murphy, Swine Nutritionist, Ontario Ministry of Agriculture and Food 15:10 Value of Cross-Breeding and Genetic Improvement for the Producer

Brian Sullivan, General Manager, Canadian Centre for Swine Improvement (CCSI) 15:35 General discussion 15:45 Closing remarks and Award Presentation

1

Genetic ImprovementThe packer’s perspective

John Webb

Genetics for SwineProduction

17 June 2003

2

The Power of Genetics

Worth $400 million per year

60% improvement in lean growth rate

last 30 years

3

How can genetics help the industry to compete?

What’s in it for the producer?

4

Competing for the future

z Value for money

z Quality

z Uniformity

z Human Health and safety

z Animal Welfare

z Environmental care

z Traceability

5

Competing for the future

z Value for money

z Quality

z Uniformity

z Human Health and safety

z Animal Welfare

z Environmental care

z Traceability

6

Role of Genetics

Quality

2

7

Meat Quality

Meeting the Customer’s expectation:

What IS the expectation?

How is it changing?

8

Quantity versus Quality

Quality

Quantity

Niche

2003

Future

9

Components of Quality

Fat: lean ratio

Joint distribution

Intramuscular fat

Intermuscular fat

Muscle & fat colour

Fat composition

Bacteriology

Waterholding

PSE and DFD

Muscle pH

Fibre size

Tenderness

Juiciness

Flavour

10

11

Marbling Standards

12

Choice of Breeds

Quality

Lean tissue growth rate

LW, LR

Duroc

Pietrain

Meishan

Berkshire

3

13

Meishan

14

Selection within Lines

Dam Lines Sire Lines

( A x B ) ( C x D )

Reproduction

lean growth

Lean growth

meat quality

X

A B C DSlaughter Pigs

(Four Lines)

15

Revolution in Genetics

z Faster genetic change

z Wider choice of traits

Knowledge of DNA

16

PSE

z Halothane vapour test 1979

z DNA test 1991

z Not yet eliminated!

The halothane gene

17

Bulk Halothane Test

Third Wave AgBio, Madison WI

Pooled samples

Single Test

Gene Copies

18

Quality markers (Bidanel & Rothschild, 2002)

4

19

Effect of Single Genes on Quality

Single Genes are NOT the answer

•

•

•

••

••••

••

•• •••

•

•• •

••••

• •

•

•

••

•

•

• • •

•

••

•

•••

•

•

•

••

•

••

•

••

•

•••

•

•

Non-geneticvariation

Genetics30%

Single genes 6%(20% of genetic)

20

Gene Technology

z Marker gene

z Gene maps

z Candidate genes

z Functional genomics

z HAL gene

21

Functional Genomics

Quantitative Trait Nucleotide (QTN)

A

T

A

T

C

G

Single nucleotidepolymorphism SNP

CG TC

C AG G

Gene 10000 bases

22

Follistatin Control

Follistatin : Myostatin Inhibitor

23

Combining Technologies

Meishan32 pigs per year

Myostatin Knockout1

Knockouts:äandrostenoneäskatole

2

3Gender control semen sexing

100% entire males : no taint

30% more efficient ? 24

Nutritional Effects on Quality

Vitamin E

Selenium

Sugar

Sodium oxalate

Vitamin C

Magnesium

Tryptophan

Creatine

Chromium

Conjugated linoleic acid

Betaine

Carnitine

5

25

Nutritional Effects on Quality

Vitamin E

Selenium

Sugar

Sodium oxalate

Vitamin C

Magnesium

Tryptophan

Creatine

Chromium

Conjugated linoleic acid

Betaine

Carnitine

26

Transport & Handling

StunningLoading

Truck

UnloadingRace

Resting

27

Maintaining Your Competitive Edge

Uniformity

28

Cloning% of Variation in Meat Quality

Cloned

70%

100

50

0

Today

Genetic

Non-Genetic

Meat Quality : Heritability 30%

29

Differentiated Product ?

% of populationAI

Genetic Merit

30

Causes of Variation

Feed intake:

Sex difference:

Nurseries

Over-stocking

Pig Health

Temperature

Ventilation

Split-sex feeding

Semen sexing

6

31

The Reward System

z Value of saleable product

z Meat quality

z Uniformity

What we want:

z Low fat

z Carcass weight

What we pay for:

32

Targets

Meat Colour

Joint Weight

- $10

- $5

Base+ $10

33

Vertical Coordination

20 - 30%

increased

recovery

of value

Retail

Distribution

Processing

Slaughter

Production

Feed

Genetics

34

Maple Leaf Pork Value Chain

n GAP Genetically Advanced Pigs

n Elite Swine Inc.

n Shur-Gain and Landmark Feeds

n Maple Leaf Pork

n Maple Leaf Consumer Foods

n Maple Leaf Foods International

n Rothsay Rendering

l Vertical Coordination Group

35

Vertical Coordination

- $1

+ $2

- $10

+ $1

- $2

Nil

+ $20

Genetics

Feed

Production

Slaughter

Processing

Distribution

Retail

Example: a nichemarket for high fat

Netincrease invalue = $10

36

Maintaining Your Competitive Edge

Traceability

7

37

The Need for Traceability

z Concern over food safety

z Marketing the ‘Canada’ brand

z Zoning for animal disease (eg. FMD)

z Drug residues

z Recall for contamination

z Protection against bioterrorism

z Quality control

38

z FarmäEar tags, tattoosäTranspondersäAntibodies

z PlantäBar codes - paper, plasticäMolecular markersäQuantum dotsäStereophotographyäSmart trays

Tracing Methods

39

DNA Complements Live Animal Tracking

In-plant Tracking

Cutting, Processing

Live Animal Tracking

Breeder, Finisher,

Transport, Slaughter

Post-plant Tracking

Distributor, Food Service,Supermarket, Consumer

DNA

DNA

Immediate Benefits

z Tracking fromplant

and consumer tofarm

z Verification oflive animal

tracking

40

Mother

A B C D E

M

M

P

P

Father

A B C D E

Offspring

M

P

DNA Tracing via the Mother

41Tells the farm and date of birth

Mother

A B C D E

M

M

P

P

Father

A B C D E

Offspring

M

P

DNA Match

DNA Tracing via the Mother

42

SNP or “Snip”

A C C T A G

A C C A A G

Pig 1

Pig 2

Single base unit change in DNA sequence

200 - 300 SNPs will be required

Single Nucleotide Polymorphism (SNP)The Key to DNA Traceability

8

43

Likely DNA Typing Costs

z Cost of DNA typing one mother (dam): $ 35.00

z Cost per slaughter pig: $ 0.50(@ $70 piglets per dam)

z Replacement dams typed on entry to herd

z 8 months before first progeny slaughtered

z Large economies of scale (large batches)

z Cost of high-speed SNP analysis will drop dramatically to 2 cents pergene or $6.00 per dam (10 cents per slaughter pig)

44

Science Base

Information

Knowledge

AcademiaIndustry

Add Value

Research

45

z Payment system to reward value

Value of genetics to the packer

z Set clear performance targets

z Share rewards: vertical coordination

z Traceability: live animal and meat

z Intramuscular fat

z Marbling & water holding

z Fundamental knowledge

46

Genetics for the Packer

Thank you

John Webb

[email protected]

1

Identification and Traceability of Canadian hogs

Eric AubinCanadian Pork Council

Concerns

Important investments from producers in:BiosecurityQuality assurance program

Proactive in:Developing auditable animal welfare guidelinesDeveloping a national Environmental Management System Standard

Stakes

Foreign animal disease outbreakImpact of an FMD outbreak: $13-45 billion

Food safety issueE.g., BSE crisis

Image of the industry

Needs

National traceability systemMandate given by the CPC Board of Directors in July 2002 to the CPC in coordinating its development

Our goals

Help minimize the impacts of a foreign animal disease outbreak or a food safety crisis

Reducing the response timeCompatible with other traceability systems (e.g., packers)Helping to zone Canada and meeting our trading partners’ expectations

Our goals

To reinforce our export and domestic market access by:

Responding to the growing desire of consumers to know the origin of their food;Eradicating domestic animal diseases;Responding to the development of traceability systems developed by pork-exporting countriesSupporting our CQA

2

Our goals

Improve the competitiveness of our industry

Improving the genetics of our swine herd

Zoning

Administrative process undertaken on a national scale to demonstrate areas of disease containment and exclusion;Purpose: to limit the breadth and duration of trade embargos, which accompany serious disease incursions

Zoning

On-going discussion to create a control point at the Ontario-Manitoba border

Would allow for the creation of 2 zonesWould reduce the impact of a foreign animal disease outbreakRecognized as a viable first step

The means to achieve our goals

Determine data collection and transfer requirementsNational swine slaughter databaseGeo-referencing all livestock premises and determine livestock identification number scheme


Determine the guidelines of live animal tracking and identification methods for the national system

pilot studies for lot and individual identification and traceability methods


Consultation with stakeholdersInform the Canadian pork producers and abattoirs about the national traceability SystemDevelopment and implementation of a regulation

18 months to enable a regulationReadjustments

3

National Swine Slaughter Database

From 60-80% of Canadian hogs would remain under the same ownership throughout their lifetimeHence, the last farm or ownership is also the farm of origin in these casesWill invite packers to send information on hogs received to a national database

National Swine Slaughter Database

Need to develop:A legal confidentiality agreementAn agreement from farmers to release data

Early action to improve our foreign animal disease preparednessWould not replace a full traceability system

Geo-referencing all livestock premises

Need to know where the livestock buildings are, and their contentThe small farms are not captured under Statistics Canada definition

Unidentified farms can be vectors of diseasesExplore the need for a mandatory farm registry

Geo-referencing all livestock premises

On-going activity led by OPPMB;The CPC will seek funding for the geo-referencing of all swine premises in the countryFuture development of a national premise identification number scheme

Tracking live animal movements

Very few traceability systems for swine have been developed

Countries of the EUWork plan developed in the US

March 17 and 18 conferenceOverview of systems developed


Most of identification and traceability systems developed for the beef industryImportant differences with the swine sector:

Cost of ID versus value of animalLife durationMay need to tattoo piglets at weaningRetention rateExtent of live animal movements

4


Difficult to transpose a system to Canadian conditions;Pilot studies will be conducted

Test the cost and effectiveness of identification and traceability means

AAFC will support financially the conduct of the pilot studies

Delay from APF implementation


Input from packersLook at other benefits from traceability

Improve health managementAddress recallsAddress country-of-origin labelling

Non-automated permanent identification means

Non-automated permanent identification mean chosen

Shoulder slap tattooGrowing, finishing site

Ordinary tagPneumatic shoulder tattooShoulder slap tattoo

Nursery site

Ordinary tagManual ear tattoo

Farrowing site

Identification meanPremise

Pilot studies - phases

Preparatory phase (months 1 and 2)On-farm evaluation phase (months 3 to 15)Abattoir evaluation phase (months 9 to 15)Analysis, simulations and discussion (months 16 to 19)Reports (months 20 and 21)

Pilot studies scenarios

Permanent non-automated identification means:

4 scenarios with various combinationsPermanent automated identification means:

2 scenarios of the following will be chosen:Half-duplexFull-duplexAnti-collision

5

Pilot studies scenarios

Allocation an identification number to a group of pigs

1 scenario will test lot identificationManual or electronic manifestTest lot integrity

www.cpc-ccp.com/health.htm

QUEBEC SWINE INDUSTRY

ROUND TABLEROUND TABLE

HISTORYHISTORY

Started in 1990 under the umbrella of Started in 1990 under the umbrella of Quebec Agriculture, Fisheries and Food Quebec Agriculture, Fisheries and Food

MinistryMinistry

TABLE FILIÈRE PORCINE DU QUÉBECTABLE FILIÈRE PORCINE DU QUÉBEC

The idea was to bring 20 people involvedThe idea was to bring 20 people involvedin the in the swineswine industry to discuss on industry to discuss on

common issuescommon issues


MEMBERSMEMBERS

!! ProductionProduction!! Abattoir and further processingAbattoir and further processing!! Services : institution and distributionServices : institution and distribution

37 37 decision makersdecision makers


!! Pierre Falardeau, Chairman Pierre Falardeau, Chairman (CDPQ)(CDPQ)

!! Edouard AsnongEdouard Asnong, Vice, Vice--president president (FPPQ)(FPPQ)

!! Johanne GodboutJohanne Godbout, Secretary , Secretary (MAPAQ)(MAPAQ)


SEPQ

FPPQ

CVC

CFQ

CDPQ

AQINAC CPI

CIPQ

Olymel

CSN

SOBEYS

GREPA

MAPAQ

Direction Council2 meetings / year

General Assembly34 members

2 meetings / year


MEMBERSHIPMEMBERSHIP

250 $ / year / member250 $ / year / memberto pay meeting expensesto pay meeting expenses


PRODUCTIONPRODUCTION

!! CFQCFQ !! AQINACAQINAC


ABATTOIR AND FURTHER ABATTOIR AND FURTHER PROCESSINGPROCESSING

!! BrochuBrochu--LafleurLafleur!! ATrahanATrahan

TransformationTransformation!! Viandes Viandes

KamouraskaKamouraska

!! AgromexAgromex!! Charcuterie La Charcuterie La

Tour EiffelTour Eiffel!! Aliments Aliments JolibecJolibec!! Les Aliments Les Aliments

NorthamNorthamTABLE FILIÈRE PORCINE DU QUÉBECTABLE FILIÈRE PORCINE DU QUÉBEC

SERVICESSERVICES


GROCERY DISTRIBUTORSGROCERY DISTRIBUTORS

!! SOBEYSSOBEYS


UNIONSUNIONS


UNIVERSITIESUNIVERSITIES


MMISSIONISSION

To assure the continuous reputation of theTo assure the continuous reputation of theagriagri--food pork sector on the market by food pork sector on the market by fostering synergistic efforts between fostering synergistic efforts between various segments of the industry in a various segments of the industry in a common goal to respond to consumers and common goal to respond to consumers and the society concerning food safety, the society concerning food safety, environment, product quality, farming environment, product quality, farming conditions and economic fallconditions and economic fall--backsbacks


REASONS OF THE SUCCESS !REASONS OF THE SUCCESS !!! Support of the Québec GovernmentSupport of the Québec Government

(Secretary(Secretary -- Coordinator)Coordinator)!! Single desk marketingSingle desk marketing!! Issues that have a commercial/financial Issues that have a commercial/financial

impactimpact!! Good will of the members to work together Good will of the members to work together

on industry issueson industry issues!! Vertical coordination targeted on industry Vertical coordination targeted on industry

competitivenesscompetitiveness


10 YEARS OF ACHIEVEMENT !10 YEARS OF ACHIEVEMENT !

!! Ideal carcass projectIdeal carcass project!! CPICPI!! Butcher educationButcher education!! Farm quality insuranceFarm quality insurance!! EnvironmentEnvironment!! EducationEducation!! ResearchResearch


20012001--2004 2004 STRATEGIC PLANSTRATEGIC PLAN

!! Food safetyFood safety!! Environmental managementEnvironmental management!! Market developmentMarket development!! Competitiveness of the industryCompetitiveness of the industry!! Mobilization of the Round Table Mobilization of the Round Table

participantsparticipants


FOOD SAFETYFOOD SAFETY

Objectives Objectives !! Assure safety of the Quebec pork and Assure safety of the Quebec pork and

maintain consumer’s confidencemaintain consumer’s confidence!! Prepare to face eventual requirements Prepare to face eventual requirements

concerning feeding of hogsconcerning feeding of hogs


FOOD SAFETYFOOD SAFETY

ObjectivesObjectives!! Be ahead in achieving Be ahead in achieving tratraceceabilityability!! Prevent development of diseases and Prevent development of diseases and

outbreaks of epidemicsoutbreaks of epidemics


ENVIRONMENTAL MANAGEMENTENVIRONMENTAL MANAGEMENT

ObjectivesObjectives!! To see that a legislation concerning To see that a legislation concerning

manure management and disposal is manure management and disposal is based on real values of the components, based on real values of the components, so that the swine production sector can so that the swine production sector can adapt rapidly to the technology to really adapt rapidly to the technology to really restrain rejectionsrestrain rejections



ObjectivesObjectives!! To set up anTo set up an agriagri--environmental environmental

validation program with aims of both validation program with aims of both farm origin pollution reduction and farm origin pollution reduction and odour reductionodour reduction

!! To submit hog production to ecology To submit hog production to ecology principalsprincipals



ObjectivesObjectives!! To coTo co--operate in the development of a operate in the development of a

Canadian hog farmCanadian hog farm agriagri--environmental environmental certification program and to ensure its certification program and to ensure its implementation in Québecimplementation in Québec

!! To foster the development of some To foster the development of some alternatives to manure spreadingalternatives to manure spreading


MARKET DEVELOPMENTMARKET DEVELOPMENT

ObjectivesObjectives!! To identify various markets and their To identify various markets and their

needsneeds!! To make sure that the Quebec Pork To make sure that the Quebec Pork

Round Table (Round Table (FilièreFilière) responds to the ) responds to the needs of the target marketsneeds of the target markets


MARKET DEVELOPMENTMARKET DEVELOPMENT

ObjectivesObjectives!! To assure to target markets in coTo assure to target markets in co--

operation with Canadian organizations operation with Canadian organizations and government authoritiesand government authorities


COMPETITIVENESS OF THE COMPETITIVENESS OF THE INDUSTRYINDUSTRY

ObjectivesObjectives!! To assure the measurement of gains in To assure the measurement of gains in

the productivity of the production and the productivity of the production and processing sectorsprocessing sectors

!! To enhance the value and to promote To enhance the value and to promote employment in the entire Quebec swine employment in the entire Quebec swine industryindustry



ObjectivesObjectives!! To make sure that training (initial and To make sure that training (initial and

continuing) is well adopted and responds continuing) is well adopted and responds to the needs of qualified labour in every to the needs of qualified labour in every segment of the swine industry, including segment of the swine industry, including production, processing, distribution and production, processing, distribution and servicesservices



ObjectivesObjectives!! To watch markets and the legislation To watch markets and the legislation

related to eventual requirements related to eventual requirements concerning animal welfareconcerning animal welfare


MOBILIZATION OF THE ROUND MOBILIZATION OF THE ROUND TABLE PARTICIPANTSTABLE PARTICIPANTS

ObjectivesObjectives!! To promote, with all natural and To promote, with all natural and

potential partners, the relevant need of potential partners, the relevant need of the participation in the work of the the participation in the work of the Round TableRound Table


MOBILIZATION OF THE ROUND MOBILIZATION OF THE ROUND TABLE PARTICIPANTSTABLE PARTICIPANTS

ObjectivesObjectives!! To enhance the value of the porkTo enhance the value of the pork agriagri--

food sector, especially in regard to food sector, especially in regard to product quality, the professions and product quality, the professions and production techniques, from the farm to production techniques, from the farm to the tablethe table


QUESTIONS ?QUESTIONS ?


1

1

Canadian Centre for Swine Improvement

Trading in the Current EnvironmentMark S. McConnellHogan & Hartson

June 17, 2003

2

Regulatory and Political Controls on US Market

Access• U.S. Political Context• Three controls on market access:

– Antidumping/Countervailing duty (AD/CVD)

– Country of origin labeling (COOL)– Bioterrorism response

3

U.S. Political Context

• Agriculture and food market access affected by broader political trends

• AD/CVD – Statute in place, regulators driven by client industries

• Bioterrorism –– Politics broader than agriculture – anti-terror– U.S. agriculture and food industry also unhappy– “Not on my watch” regulatory mentality

• COOL – closest to being classic commodity politics, but even here many U.S. agriculture and food groups opposed

4

Control # 1: Antidumping / Countervailing Duty

5

Market Access: AD/CVD

• What is at stake• A weapon for US interests• Warning signs

6

Example

• BCHH in Late September 2001• Antidumping Duty Margin 50.75%• Post 50% deposits on millions of annual trade• Call customers: prices go up 50%• Three days to understand how the rate was

calculated• Unwound over 6 months: immediate

reduction to 33.95% for math error; final rate at 18.04% correcting legal error; finally won case with negative injury vote April 2, 2002

2

7

Costs and Risks• Costs of the Process

– Investigation is 4 separate proceedings totaling 1 year

• Legal Fees• Accounting Fees• Management time – questionnaires, strategy, customer

relations– Administrative reviews annually

• Risks– Retroactive assessment – do not know at the time

of entry what the duties will be – Assessment as much as two years after entry

8

Concept of “Dumping”

• Selling a product in the United States at a price below “normal value” -- that producer’s 1. price in the country of origin (“home market”),2. price in a third market, or 3. cost of production

• The difference between the “normal value” and the price in the U.S. market is the dumping margin

• Must be coupled with a finding of injury to lead to an AD order

9

Antidumping as a Weapon

• Everybody dumps – both the importers and the Americans

• But dumping by both parties is not compared – only import dumping is offset

• Traps in the calculation create dumping margins for normal commercial behavior

10

Fully Allocated Costs Over the Economic Cycle

Profitable

Economically Sound, But Dumping

Economically Unsound

Variable Cost

Total Fixed and Variable Cost

Price

11

Antidumping as a Weapon

• Everybody dumps – both the importers and the Americans

• But dumping by both parties is not compared – only import dumping is offset

• Traps in the calculation create dumping margins for normal commercial behavior

• Byrd Amendment as a revenue incentive

12

Byrd Amendment• Revenues from antidumping duties distributed to U.S.

interests supporting the case• Huge incentive to bring and support cases• 2002 distributions announced Feb 14:

– AK Steel: $2.5 mm, S4 from Mexico– du Pont: $7.1 mm, Aramid Fiber from Netherlands– Torrington: $25.2 mm, Bearings from Germany– Timken: $ 9.8 mm, Bearings from Germany– Candle-Lite $31.1 mm, Candles from China

• Total 2002 revenues: $314 mm• WTO has found Byrd Amendment violates Dumping

Code• US has said it will implement WTO decision• BUT – Byrd on the books for now

3

13

Concept of Subsidy

• Financial contribution by or on behalf of the government

• That confers a benefit• That is contingent on export, or• Specific to an enterprise, industry or

group of industries• Must be coupled with a finding of injury

to lead to a CVD order

14

Countervailing Duty as a Weapon

• In agriculture, many commodities in Canada and the US get domestic support that meets these conditions

• But subsidies are not compared – duties are imposed on subsidized imports even if domestic competitors also subsidized

• Possible end of the WTO peace clause –“green box” subsidies countervailable

• 2004: the “Year of Three Problems” for Canadian agriculture?

15

How do you defend yourself?

• Is it a political process?– Softwood Lumber: yes– Other: yes in structure, less so in execution

• See it coming and get ready

16



• See it coming and get ready– Economic conditions – more cases in weak

economy

17

010

20

3040

50

6070

80

90

1989 1992 1995 1998 2001

AD Initiations

Weak U.S. Economy and AD Investigations

18




economy– Price and import levels – injury

determination

4

19




economy– Price and import levels – injury

determination– Client industries

20

Client Industries vs. Canada

Oct 2002Oct 2002Wheat

Feb 1983PotatoesNov 1984Live SwineJuly 1985July 1984RaspberriesMay 1986May 1986Cut FlowersJan 1989Pork

Mar 1997UHT MilkNov 1998Nov 1998Live Cattle

April 2001Tomatoes

CVDADProduct

21

Other Client Industries• Mushrooms• Peppers• Grapes• Asparagus• Apples and Juice• Honey

• Rice• Wine• Lamb Meat• Garlic• Cherries and Juice

22




economy– Price and import levels – injury determination– Client industries– Trade press threats and Congressional statements

23




economy– Price and import levels – injury determination– Client industries– Trade press threats and Congressional statements– CVD – expiration of the peace clause

24

Control # 2: Country of Origin Labeling

5

25

Politics• This is a control that is driven by agricultural

producers politics• An offshoot of other disputes

– Alleged increasing gap between retail and producer prices

– Alleged anticompetitive behavior by packers/processors

– Hint of anti-globalism movement• Led by farm populist groups

– R-CALF, National Farmers Union– Some mainstream groups joined: Farm Bureau– Fruit and vegetable support driven by California – Rep.

Mary Bono (R.-Calif)– Packers, some producer groups opposed -- National

Pork Producers Council opposed26

Politics: Most Competitive Senate Races, 2002

27

Legal Background of the Statute:Country of Origin Marking Under

the Customs Law

• Before the 2002 Act:– Most raw food products exempt: livestock,

carcasses, fish, vegetables, fruits, nuts– Well-established rules for determining

origin (over 60 years experience): there is ONE country of origin, and it is the country of last “substantial transformation”

– Where marking is required (e.g. food in retail containers), enforcement at the border by U.S. Customs

28

New Statutory Provisions• Change #1: Formerly exempt articles must be

marked– Muscle cuts or ground beef, lamb and pork – Fish– Perishable agricultural commodities sold in bulk– Peanuts– Why not chickens?

• Change #2: New and much stricter rules of origin – e.g., exclusively produced in the US, detailed labeling

of mixtures from different countries• Change # 3: Marking enforced at retail

– Why? Politics.– USDA Audit verification, not USCS border

enforcement

29

Implications for the Marketplace

• Compliance pressure will move up the chain

• Retailers will demand certifications• Processors and Marketers will demand

certifications

30


Retail Display

Processor

Marketer

Grower

Point ofEnforcement

6

31


• Compliance pressure will move up the chain• Retailers will demand certifications• Processors and Marketers will demand

certifications • Bottom line: Attempt to disfavor international

production (especially Canada) vs. 100% U.S. production. Will it happen?– Big headache for ALL international operations– Will 100% U.S. really be favored?

• Costs passed on to producers on both sides?• NPPC expects U.S. hog prices to fall –

– $10.22 per head added cost (10%)– Cut Canadian weaned pig prices $16.59 per head

32

What Products are Covered?: Whole Muscle Meats

• Whole muscle meats with added ingredients – e.g. Water-enhanced case ready steaks– Covered unless “identity” is changed

• Whole muscle meats that are an ingredient in processed food – e.g. Ready-to-cook beef Wellington– Not covered because “identity” has changed

• Whole muscle meats that are “materially changed”– Restructured steaks, corned beef briskets– Not covered because they are “functionally

different products”

33

What Products are Covered?: Ground Meats

• Added ingredients exclude the product– Extenders: Water, Cereal, Soy derivatives– Salt– Flavorings and seasonings– Spices

• Why is added ingredients rule different for ground meat? – USDA did not attempt to make general rules for

product definitions, but relied on prior definitions (FSIS Handbook, Perishable Agricultural Commodities Act)

– Approach inherently creates inconsistency –different acts have different purposes

34

Determination of Origin

• Statute– Strict 100% content rules for U.S. Origin– Little guidance for other origin determinations

• Case #1: Product enters U.S. during production -- Canadian feeder pig example– Clearly not U.S. under new rules – Canada opposes “Canadian” designation– Sec’y Veneman shot down on “North American”

35

Determination of Origin - II

• USDA Decision: Production Steps Labeled Separately– “Born in Canada, Raised and Slaughtered in the

United States”– Departure from traditional Customs approach of

determining on ONE country of origin– Hard to see another solution that meets the legal

and political constraints on USDA– Does NOT require separate process labeling for

production wholly outside the United States– Complex labeling means expense: tracking,

labeling, recordkeeping – falls particularly on Canada

36

Determination of Origin - III• Case #2: Mixed Products – ground beef from

many sources– Must list all countries of origin by order of weight– E.g., Product of Canada, United States and

Argentina– Very complex tracking problems if production

mix changes over time – retail store that grinds beef

– No indication that inventory methods (FIFO or LIFO) are acceptable

– American Meat Institute: “There is no comment or suggestion that we can provide to USDA to improve this guidance other than to start over”

7

37

Recordkeeping• Recordkeeping requirement imposed at all

levels of the chain– Cattlemen not successful in placing all

responsibility onto packers• Records must objectively document origin –

self-certification not sufficient– Location of facilities– Product tracking from port

• Retailers required to ensure that there is a verfiable audit trail– This will be passed up the chain– This will be a problem for Canadian operations

even if the law does not favor US operations38

Regulatory and Political Calendar

First good time for legislative change

Full year under mandatory system2005

Presidential Election –legislation unlikely

Create systems for Mandatory Program – enters effect in October

2004

Likely too early for significant legislative change; BSE complications

USDA finishing field hearings; final voluntary guidelines due in October

2003

39

Outlook for the Future• Legislation unlikely before 2005• Possible Canadian trade challenge

– Also 2005? Hard to bring it until Mandatory Program in effect

• Issue in Doha Round – Agreement to fix this could be part of US

concessions, but several years off• Get Ready

– The Mandatory Program probably will go into effect

– The market will favor those who can make compliance easier

40

Control # 3: Bioterrorism Response

41

Market Access: Bioterrorism Controls

• Public Health Security and Bioterrorism Preparedness and Response Act (Enacted June 12, 2002)

• U.S. Food and Drug Administration regulatory process underway

• Effective Date of New Controls: December 12, 2003

42

Provisions of the Statute

• Authority to FDA to detain food• Authority to FDA to debar persons from

importation of food• Registration of all food facilities• Recordkeeping and inspection• Prior notice of importation

8

43

Prior Notice of Importation: Partial Contents

• Identity of the food including:• FDA product code• Quantity, described from smallest package size to largest

container • Lot or code numbers

• Separate Notice for each item of food• Different sizes of packages are different items• Different manufacturers are different items

• Contact information for:• Manufacturer (with FDA registration number)• All growers, if known – may involve tracing back to the

farm (expressly NOT optional)• Importer • All carriers

44

Prior Notice of Importation: Timing

• Statute:– FDA to choose a time not more than 5 days

• Proposed Regulations:– By noon of calendar day prior to arrival– May update one time to change arrival information

no later than 2 hours prior to arrival• Not necessary if only up to 1 hour earlier or 3 hours later• Could build in delays if schedules change too much

– One amendment, no later than 2 hours prior to arrival, if reserved on original notice

• Amendment may not change identity of food, only clarify

• Amendments and updates must add grower information if known and not in original notice (intended to help Canadian and Mexican produce)

45

Bioterror Outlook

• No statutory change• Possible movement in regulations, but

muted incentive to accomodatecommercial concerns

• Program in place in 2004

46

Regulatory and Political Controls on US Market

Access• U.S. Political Context• Three controls on market access:

– Antidumping/Countervailing duty (AD/CVD)

– Country of origin labeling (COOL)– Bioterrorism

47

Canadian Centre for Swine Improvement

Trading in the Current EnvironmentMark S. McConnellHogan & Hartson

June 17, 2003

The Big Hog Cycle - What goes down, must go up? John Bancroft, OMAF Swine Grower-Finisher Specialist

Box 159, Clinton, ON N0M 1L0

What is the hog cycle? In theory, the hog cycle is four years in length. It is the interaction of the pig inventory, hog slaughter, and hog price. As the pig inventory grows, the number of hogs slaughtered increases and the price decreases. As the profitability decreases, marketing more sows and not keeping as many replacement gilts reduces the breeding herd. This creates a further increase in slaughter numbers. The graph below provides an example using United States (U.S.) data from January 1998 to December 2001 on a quarterly basis.

With the profitability in the industry in 1996 and 1997, the inventory of pigs started to increase and it peaked in the third quarter of 1998. The number of pigs slaughtered increased during 1998, peaking in the fourth quarter, resulting in the low price for the cycle. The U.S. breeding herd continued to decrease for eight quarters. Slaughter decreased on a year over year basis. Because of the decreasing slaughter and inventory, prices returned to profitable levels in 2000 and 2001. Again, slaughter and inventory numbers began to creep up in 2001. This led to another price cycle low in the fall of 2002. The various components that influence the hog market cycles are constantly changing and interacting. What about the interaction of price, inventory numbers and slaughter volume for both the United States and Canada? The graph below provides a picture of the relative percentage changes from one year to the next of these three items using the combined inventory numbers and slaughter volumes for United States

U.S. Quarterly Slaughter, Inventory & Price - 1998 to 2001

20

25

30

35

40

45

50

55

60

65

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

mill

ions

of h

ead

$0

$10

$20

$30

$40

$50

$60

$70

$80

$/cw

t.

Inventory Slaughter Price

and Canada. The slaughter is the combined hog slaughter of United States and Canada. For example, the percentage change shown for 2002 is 3.2% which means the combined slaughter was up 3.2% in 2002 compared to 2001. The price used is from various sources in the United States including the National Cost Price that is used for the Ontario Base Formula Price. For example, the percentage change shown for 2002 is –24.7% which means the price in 2002 was down 24.7% compared to the price in 2001. The inventory is the combined pig inventories of United States and Canada. The December 1 inventory was used for the United States and the January 1 inventory was used for Canada. For example, the inventory change shown for 2003 is 0% which means the combined inventories of December 1, 2002 for the U.S. and January 1, 2003 for Canada were the same as the combined inventories of December 1, 2001 for the U.S. and January 1, 2002 for Canada. The graph illustrates the change in the volatility of price versus the change in slaughter volumes that the industry has been experiencing in recent years compared to the early 1990’s. Is the 2003 market experiencing a similar transition year (small change in inventory numbers, slaughter volume and price) as it did in 1997, 1999 and 2001 between highs and lows?

Historically, the length of each hog cycle does vary. The underlying principal of the hog cycle is the lag time created by the biology of hogs. It takes approximately 10 months from the time a sow is bred to the time market hogs are available for slaughter. However, it is not just the biology, number of pigs, prices, and pork produced that impact on the length of a hog cycle and the swings in the numbers.

% Change from Previous Year

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

slaughter price inventory

What are some other items that impact on the hog cycle? Several items that have a direct or indirect impact on the hog cycle include: • Corn prices and the resulting impact on feed prices • Supply, demand and prices of competing meats (i.e. beef and chicken) • Pork wholesale and retail prices along with the farmer’s share of the retail price • Domestic and export demand for pork • Production efficiency (i.e. % of sows farrowing, pigs per sow, dressed weights of market pigs) • Production technologies • Changing consumer attitudes • Impact of unexpected events (i.e. disease out breaks, political decisions) • Industry demographics • Global competition How has the Ontario market hog price responded during the last two hog cycles and the start of the current cycle? The following graph is based on the hog cycles from 1994 to 1997, 1998 to 2001, and the current cycle which started in 2002. The weekly Ontario market hog prices ($/ckg, 100 index) are averaged on a quarterly basis. The price for the 6th quarter (the 2nd quarter of 2003) in the current cycle is preliminary. The graph shows the price lows being posted in the 4th quarters of 1994, 1998, and 2002.

Ontario Market Hog Quarterly Average Price ($/ckg, 100 index)

$75

$85

$95

$105

$115

$125

$135

$145

$155

$165

$175

$185

$195

$205

$215

$225

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

Table #1 below shows some of the statistics for the last two hog cycles and the current cycle. The figures for January 1994 to December 1997 and January 1998 to December 2001 are each based on 48 months of data. The current cycle starts in January 2002 and the data only represents what is available to date. Table #1 – Ontario Data 1994 to 1997 1998 to 2001 2002 to ?

Market Hog Price ($/ckg, 100 index) $169 $148 $140 Market Index 106.2 107.9 108.6

Dressed Weight (kg) 84.3 87.9 89.8 Market Hog Value ($/pig) $152 $141 $137

Canadian Dollar Value $0.7292 $0.6669 $0.6529 Corn (pickup price) $/tonne $161 $124 $147

Soybean Meal $/tonne $363 $305 $333 Prime Interest Rate 6.6% 6.6% 4.4%

Avg. Budgeted Cost of Production ($/ckg, 100 index) $161 $145 $153 Ontario Production Profile - % of Total Pigs Produced

Exported as Feeder Pigs 5% 13% 22% Exported as Market Pigs 12% 10% 6% Slaughtered in Canada 83% 76% 72% Pigs Produced per Sow 14.0 17.8

Canadian Pork Profile

% of Pork Produced Exported at End of Cycle 32% 39% Average Per Capita Pork Consumption (kg) 27 29

When making production and marketing decisions it is very important to consider both the hog price cycle and the seasonal hog price pattern. If both are indicating declining prices, the appropriate risk management tools can be considered. Current market impacts (i.e. rising Canadian dollar, Bovine Spongiform Encephalopathy situation in Canada, Country of Origin Labeling) need to be assessed to determine their impact on both the seasonal and long-term cycles. Understanding past hog cycles and knowing the results will come into play. Reading, understanding and following the market signs are the basis for making informed marketing and production decisions. References: Futrell, G., Grimes, G., and Mueller, A. 1989. Understanding Hog Production and Price Cycles,

Pork Industry Handbook, Iowa State University Lawrence, J. 2001, Lifecycle of a Hog Cycle, Iowa State University

http://www.econ.iastate.edu/faculty/lawrence/HOGS.htm Stearns, L. and Petry, T., 1996. Hog Market Cycles, North Dakota State University Extension

Service http://ndsuext.nodak.edu/extpubs/ansci/swine/ec1101w.htm

1

The Big Hog Cycle What goes down, must go up?

John BancroftOMAF Grower-Finisher Specialist

[email protected]

June 17, 2003, Stratford, ON“Genetics for Swine Production, What’s in it for the producer?”

Theoretical Four Year Hog CycleSource: Hog Market Cycles, http://ndsuext.nodak.edu/extpubs/ansci/swine/ec1101w.htm

Cycle Length Varies

• Corn prices and the resulting impact on feed prices • Supply, demand and prices of competing meats

(i.e. beef and chicken)• Pork wholesale and retail prices along with the

farmer’s share of the retail price• Domestic and export demand for pork• Production efficiency (i.e. % of sows farrowing,

pigs per sow, dressed weights of market pigs)

Cycle Length Varies

• Production technologies• Changing consumer attitudes & income• Impact of unexpected events (i.e. disease out

breaks, political decisions)• Industry demographics• Global competition

SowsBreeding / Gestation

Pig Cycle Sows

Farrow14 to 28 days

Feeder Pig25 to 30 kgs

Market Hog105 to 125 kgs

Processors Nursery 4 to 7 wks

Grow-Finish11 to 16 wks

115 days

7 days

Lifecycle of a Hog CycleJohn Lawrence, Iowa State http://www.econ.iastate.edu/faculty/lawrence/HOGS.htm

• After about a year of profits, breeding herd inventory begins to increase on a year-over-year comparison

• Eventually resulting in an increased slaughter level

• After about a year of losses, breeding herd slaughter increases on a year-over-year comparison which decreases the breeding herd

• Eventually resulting in a decreased slaughter level

2

U.S. Breeding Herd Liquidations

Year Month # of Quarters Cycle1983 Dec. 13 1984 to 19871988 Dec. 9 1988 to 19911992 Dec. 4 1992 to 19931994 Dec. 10 1994 to 19971998 Dec. 8 1998 to 20012002 Sept. ? 2002 to ?

U.S. Quarterly Breeding Herd (1,000 of Hd)

5,800

6,000

6,200

6,400

6,600

6,800

7,000

7,200

7,400

7,600

7,800

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

94 to 97 98 to 01 02 to ?

U.S. Quarterly Commercial Hog Slaughter (1,000 of Hd)

21,000

22,000

23,000

24,000

25,000

26,000

27,000

28,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

94 to 97 98 to 2001 2002 to ?

U.S. Quarterly Pork Production (millions of pounds)

4,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

• Percent of Sow Inventory Farrowing moved from the 42% range to the 46% range

• Pig Crop - pigs per sow moved from just below 8 pigs/sow to about 8.8 pigs/sow

• Dressed market weights moved from the mid 180’s to the mid 190’s plus (pounds)

U.S. Pork Production (millions of pounds)

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02

1.5% Average Yearly Growth

3

Pork Production & Profitabilityfrom Steve R. Meyer’s presentation at Ontario Pork Annual Meeting March 2003

• In those years after 1964 when pork production was below the 1.5% trend, Iowa hog producers averaged a profit of $16.48 per hog sold.

• In those years after 1964 when pork production was above the 1.5% trend, Iowa hog producers averaged a net loss of $0.22 per hog sold.

Production, Inventory, Price Graphs• Production is the quarterly pork production

in billions of pounds read from the left-hand axis

• Inventory is the quarterly pig inventory in millions of head read from the left-hand axis

• Price is US$ per cwt. (dressed basis) from the various prices series that Ontario has used over the years for formulas

U.S. Quarterly Pork Production, Inventory & Price - 1994 to 1997

40

45

50

55

60

65

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16$0

$10

$20

$30

$40

$50

$60

$70

$80

$90Production Inventory Price

U.S. Quarterly Pork Production, Inventory & Price - 1998 to 2001

40

45

50

55

60

65

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

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$80

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t.

Inventory Production Price

• Technology changes– 3 site production, phase feeding,

• Contract production and marketing– vertical integration and/or coordination

• Information Technology– records, production, health, marketing

• Specialization– production, labour, marketing, pig movement

• U.S. became a net exporter of pork – consistent growth of exports

U.S. Pork Retail Price (US$/pound)

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

$2.50

$2.75

$3.00

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03

4

U.S. Quarterly Pork Retail Prices (US$/pound)

$2.00

$2.10

$2.20

$2.30

$2.40

$2.50

$2.60

$2.70

$2.80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

94 to 97 98 to 2001 2002 to ?

% Farm Share of U.S. Pork Retail Price

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

Net Farm Share of the U.S. Pork Retail Price (US$/pound)

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

$1.10

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03

U.S. Pork Cutout Value (US$/cwt.)

$40

$45

$50

$55

$60

$65

$70

$75

$80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

• Animal Disease Problems– Foot & Mouth Disease Taiwan, Europe,Korea– BSE in Japan

• Consumer Preferences & Disposable Income– convenient, service, entertainment value

• Competing meats i.e. beef, chicken

U.S. Quarterly Pork Production, Inventory & Price - 2002 to ?

40

45

50

55

60

65

70

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16$0

$10

$20

$30

$40

$50

$60

$70

$80

$90Inventory Production Price

5

2002 and Beyond

• Inventory & Productivity • Trade Issues

– COOL, Currency Value, Russian Trade Quotas• Competing Meats • Consumer Preferences and Disposal Income

– changing demographics, health, knowledge• Foreign Animal Diseases• Food Safety/Traceability• Global Competition

% Change from Previous Year

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

slaughter price inventory

What happened in Ontario?Ontario Average Yearly Market Hog Prices ($/ckg, 100 index)

$120

$130

$140

$150

$160

$170

$180

$190

$200

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02

Ontario Market Hog Quarterly Average Price ($/ckg, 100 index)

$75

$85

$95

$105

$115

$125

$135

$145

$155

$165

$175

$185

$195

$205

$215

$225

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

Monthly Average Canadian $ Value versus One U.S. $ (1990 to 2003)

$0.60

$0.65

$0.70

$0.75

$0.80

$0.85

$0.90

90 91 92 93 94 95 96 97 98 99 00 01 02 03

Data Source: Noon Hour Rate, Bank of Canada, http://www.bankofcanada.ca/en/exchange.htm

Canadian Dollar Value

$0.60

$0.62

$0.64

$0.66

$0.68

$0.70

$0.72

$0.74

$0.76

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

6

Ontario Corn Price ($/tonne, farm pickup)

$80

$100

$120

$140

$160

$180

$200

$220

$240

$260

$280

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002 Prime Interest Rate

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1994 1998 2002

Actual & Futures Based Projected Monthly Ontario Prices for 2003

$100

$105

$110$115

$120$125

$130$135

$140

$145

$150$155

$160$165

$170

$175

($/c

kg, 1

00 in

dex)

2002 $152 $167 $157 $137 $136 $143 $159 $156 $112 $130 $121 $127

2003 $130 $140 $137 $135 $147 $160 $168 $164 $153 $141 $132 $127

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Projected Yearly Average - $145

Friday, June 13, 2003

Ontario Swine Improvement’s Tools of the Trade Program Rob Gribble

CCSI Genetics Seminar – June 2003 In June of 2002, OSI’s Tools of the Trade program was launched to assist commercial producers with the breeding, testing and selection of their on-farm gilt replacements. It is well known that disease is the single biggest threat to the economic viability of the Ontario Pork Industry. The Tools of the Trade program provides a much-needed service to commercial producers who have chosen not to allow live animal introductions into their herds for health reasons, but still want to maintain a high level of genetic merit in their sow herd. As the trend continues toward more “closed” commercial herds and this program grows in response, it is anticipated that the overall long-term genetic benefit of this program could potentially be as great as that of the OSIP program. This program is available to all commercial pork producers in Ontario. The Tools of the Trade program consists of the following services: Replacement Gilt Probing - qualified technicians provide backfat probing services for nucleus (sows used for within-herd gilt production) and commercial replacement gilts to assist in the selection of the most suitable gilt replacements. The technicians also provide recommendations on conformation (feet and legs, underlines, etc.) assessment to ensure that gilt replacements are structurally sound. All herds enrolled on the Tools of the Trade program use this service for replacement gilt selection. Pregnancy Testing - qualified technicians visit enrolled farms on a regular basis (generally every three weeks) to determine the pregnancy status of bred sows using real-time ultrasound equipment. The equipment permits the detection of the actual presence of embryos, not just fetal heartbeats or the presence of fluid in the reproductive tract. A report indicating the pregnancy status of each sow checked is left with the producer at the end of the visit. This program provides tremendous value to the producer since it allows determination of open (non-pregnant) sows much earlier than other methods, thereby decreasing the number of “non-productive” sow days which can cost in excess of $3.00 to $5.00 per sow per day. Sow Condition Probing - qualified technicians visit enrolled farms to determine the body condition of lactating and gestating sows. Ideally, sows are probed to determine backfat levels in early to mid-gestation so that any necessary dietary changes can be implemented prior to farrowing when condition levels are most critical. The actual backfat level of the sow is recorded along with recommendations regarding condition status (i.e. too thin, too fat, etc.). A full report and herd distribution summary is provided to the producer allowing them to make critical decisions (in consultation with their feed supplier if necessary) regarding feeding of individual sows to optimize their reproductive performance.

Grading Data Management - two times each year OSI staff analyze the enrolled farm’s grading information from Ontario Pork’s OINK database. A detailed written report outlining the following is provided:

• Trends in carcass weight, backfat and loin muscle depth and estimated lean yield in relation to historical farm and provincial averages

• Distribution and variability in carcass weight, backfat and loin muscle depth and estimated lean yield

• Suitability of current grid based on average carcass weight as well as backfat and loin muscle depths

• Recommendations regarding deviations in carcass weight, backfat and loin muscle depth and estimated lean yield

Annual Herd Consulting - once each year, OSI staff carry out a thorough review of the herds’ performance in the following areas:

• Parity Distribution • Farrowing Rate • Non-Productive Sow Days • Total Pigs Born • Pigs Born Alive • Pre-Weaning Mortality • Growth Rate • Feed Efficiency • Shipping Weight Range • Backfat Depth • Loin Muscle Depth • Loin Depth Target • Estimated Lean Yield

All of these parameters have a major impact on a herds’ profitability. A detailed written report as well as a summary outlining the herds’ strengths and opportunities in these key areas is provided as part of this service. An on-farm consultation to discuss the report is also provided to address further opportunities for improvement. Nucleus Herd Management - in order to assist commercial producers with their nucleus herd management, OSI manages the nucleus herd genetics and selects the semen that is needed to facilitate genetic improvement in the herd. This practice significantly reduces the genetic lag to commercial herds, sometimes by as much as 2 years. OSI provides the following services in nucleus herd management:

• Analysis of nucleus litter records for litter size and weight • Identification and record keeping systems for nucleus sows

• Selection strategies for replacement gilts (including the use of probe data on replacement gilt candidates)

• Planned mating recommendations (with semen choices made by OSI) Producers can elect to sign up for individual services or the entire program that combines all of the individual services as well as commercial and maternal semen delivered on a weekly basis. The cost of the Tools of the Trade program is based on the size of the sow herd, but even modest improvements brought about by the program can pay big dividends for producers. For example - If we assume that a regular effective pregnancy testing service reduces non-productive sow days by 20 days each year, the potential value per commercial sow is $100.00 per year. In a 500 sow operation, the savings due to pregnancy testing alone is $50,000.00. The grading data management service can identify significant opportunities to improve market hog returns with simple grid changes – often, a change to the optimum grid can net $1.50 to $2.00 more per hog. In a 500 sow operation, this can increase net returns by $15,000.00 to $20,000.00. This figure doesn’t even take into account the potential benefit that could be derived from improvements in the market hog population from using the best terminal line boars available from OSI’s A.I. unit. Using genetically-superior maternal semen from OSI’s A.I. unit could potentially reduce the “genetic lag” from the seedstock level to the commercial level by two years. Current estimates of the rate of genetic improvement in commercial sows due to OSI’s genetic improvement program are $37.40 per year. A two-year reduction in genetic lag would raise the genetic level of commercial herds by $74.80 ($37.40 per year x 2 years).

1

TOOLSTOOLS of the tradeof the trade

Commercial Pork ProductionCommercial Pork Production

Rob GribbleRob Gribble

Commercial Swine SpecialistCommercial Swine Specialist

For

TOOLS OF THE TRADETOOLS OF THE TRADE

TOTT was designed for the commercial producer who would TOTT was designed for the commercial producer who would like to have a gilt replacement program through the use of like to have a gilt replacement program through the use of a designed genetic mating plan.a designed genetic mating plan.

TOTT uses ultrasound to measure back fat and loin depth to TOTT uses ultrasound to measure back fat and loin depth to decrease variability across the sow herd.decrease variability across the sow herd.

Ultrasound is also used to detect pregnancy and decrease Ultrasound is also used to detect pregnancy and decrease open sow days.open sow days.

TOTT also has grading data management to determine what TOTT also has grading data management to determine what your market hogs are doing.your market hogs are doing.

TOTT on farm consulting for sow production as well as TOTT on farm consulting for sow production as well as management of the nucleus herd.management of the nucleus herd.

Commercial Gilt Breeding Commercial Gilt Breeding ProgramsPrograms

“Things you Need to Know To If“Things you Need to Know To If

You Want To Raise Your Own Gilts”You Want To Raise Your Own Gilts”

Cost is Less Than Cost is Less Than Purchased GiltsPurchased Gilts

Record Keeping, Record Keeping, Identification and Identification and Monitoring is More Monitoring is More Complicated Complicated

Gilts are more readily Gilts are more readily available and available and acclimatized to your acclimatized to your barnbarn

Need to Maintain a Need to Maintain a Small Nucleus of Sows Small Nucleus of Sows Specifically to Produce Specifically to Produce Herd ReplacementsHerd Replacements

No Health Risk No Health Risk Associated With Associated With Introduction of Live Introduction of Live AnimalsAnimals

Disadvantages of Disadvantages of Breeding Your Own Breeding Your Own ReplacementsReplacements

Advantages of Advantages of Breeding Your Own Breeding Your Own ReplacementsReplacements

Commercial Gilt Breeding Commercial Gilt Breeding ProgramsPrograms

Rule of ThumbRule of Thumb

1.1. Maintain a nucleus that is Maintain a nucleus that is 10% of the size of your 10% of the size of your herd (i.e. for a 200herd (i.e. for a 200--sow sow herd you will need 20 herd you will need 20 nucleus sows to produce nucleus sows to produce replacement gilts)replacement gilts)

2.2. Use the best Maternal Use the best Maternal semen available to produce semen available to produce animals you desireanimals you desire

3.3. Select the top 60% of Select the top 60% of replacements gilts available replacements gilts available (select 6 out 10 gilts (select 6 out 10 gilts available)available)

NonNon--Productive Sow Days Are Profit Productive Sow Days Are Profit RobbersRobbers

What Are NonWhat Are Non--Productive Sow Days?Productive Sow Days?

“any day that a sow or breeding gilt is not gestating or “any day that a sow or breeding gilt is not gestating or lactating”lactating”

Non-Productive Sow DaysCost As Much As

$3.00 to $5.00 Per Sow Per Day

NonNon--Productive Sow Days Are Productive Sow Days Are Profit RobbersProfit Robbers

Reduce Your “Open Sow Days” Reduce Your “Open Sow Days” –– Hire An Hire An OSI OSI Professional to Pregnancy Test Your SowsProfessional to Pregnancy Test Your Sows

We Are Conscientious of your herd health statusWe Are Conscientious of your herd health status

Use the most advanced Real Time Ultrasound technology to detectUse the most advanced Real Time Ultrasound technology to detectthe presence of embryosthe presence of embryos

Will provide a written detailed report of the status of all sowsWill provide a written detailed report of the status of all sows tested tested so that you can reso that you can re--breed and make the proper management breed and make the proper management decisionsdecisions

2

The Economic Benefit of Reducing The Economic Benefit of Reducing NonNon--Productive Sow DaysProductive Sow Days

Regular Pregnancy Testing Can Reduce Non-Productive Sow Days by 20 Days Each

Year (modest assumption)

This is a savings of $60.00 to $100.00 per sow per year

In a 500 sow operation, this amounts to $30,000.00 to $50,000.00 saved!

TAKE THE TEST !!TAKE THE TEST !!

Determine Your NonDetermine Your Non--Productive Productive Sow Days Today!!Sow Days Today!!

NPSD = 365 NPSD = 365 –– [(litters/female/year) x[(litters/female/year) x(gestation days + lactation days)](gestation days + lactation days)]

If your NPSD are greater than If your NPSD are greater than 5454, then you are losing a , then you are losing a lot of valuable time and money on “OPEN” sows lot of valuable time and money on “OPEN” sows –– give give

me a call.me a call.I’ll be happy to come out and demonstrate our pregnancy I’ll be happy to come out and demonstrate our pregnancy

testing servicetesting service

DATA MANAGEMENTDATA MANAGEMENT

““What You Don’t Know About Your What You Don’t Know About Your Operation Could Be Hurting You”Operation Could Be Hurting You”

Many Profit Opportunities May Be lost Because of Unknown or Many Profit Opportunities May Be lost Because of Unknown or Undetected Trends in Herd Production Levels Undetected Trends in Herd Production Levels -- LET LET OSIOSI

Help You Use Your Data More EffectivelyHelp You Use Your Data More Effectively

Do You Need Help Setting Target Production Levels for Your Do You Need Help Setting Target Production Levels for Your Herd? Are you Using an OnHerd? Are you Using an On--Farm Software Program But Farm Software Program But

Can’t Understand the Reports?Can’t Understand the Reports?

OSIOSI Can Help with Our Commercial Data Management ServiceCan Help with Our Commercial Data Management Service

Data Management is the Key to Effective Decision Making!!Data Management is the Key to Effective Decision Making!!

SOW CONDITIONINGSOW CONDITIONING

““It May Be Affecting Rebreeding Performance on It May Be Affecting Rebreeding Performance on Your Farm”Your Farm”

OSI’sOSI’s Sow Condition Probing Service is an effective Sow Condition Probing Service is an effective

management tool that allows you to customize your sow feedingmanagement tool that allows you to customize your sow feeding

program to achieve optimum sow condition levels. Better program to achieve optimum sow condition levels. Better

conditioned sows produce more pigs conditioned sows produce more pigs -- more often!!more often!!

REDUCING GENETIC LAG TO REDUCING GENETIC LAG TO COMMERCIAL FARMS COMMERCIAL FARMS

Breeding Your Own Replacement Gilts Using the Breeding Your Own Replacement Gilts Using the Best Maternal Semen Can Reduce Genetic Lag Best Maternal Semen Can Reduce Genetic Lag (from the (from the seedstockseedstock to the commercial level by to the commercial level by

up to 2 years)up to 2 years)

It is estimated that at the current rate of genetic It is estimated that at the current rate of genetic improvement, the value of commercial sows is improvement, the value of commercial sows is

increasing by $37.40 per yearincreasing by $37.40 per year

Reducing the “genetic lag” by 2 years would raise Reducing the “genetic lag” by 2 years would raise the genetic level of the commercial herd by the genetic level of the commercial herd by

$74.80$74.80


Do You Have a Lot of Do You Have a Lot of ThinThin or or FatFat Sows?Sows?

Are You Feeding Them All the Same?Are You Feeding Them All the Same?

Do You Have a Lot of Rebreeding Problems Do You Have a Lot of Rebreeding Problems With Sows?With Sows?

If You Answered “YES” to these questions, then you need to If You Answered “YES” to these questions, then you need to know the condition of your sows. know the condition of your sows. OSIOSI can help with our Sow can help with our Sow

Condition Probing Service!!Condition Probing Service!!

3


Sow Backfat Probing Takes the “Guesswork”Out of Sow Condition

Rule Of Thumb

Sows Should Have a Minimum of 17 to 19 mm of Fat at Farrowingand 16 mm of fat at rebreeding (gilts should have a minimum of

15 mm of fat at farrowing)

If Your Sows are Carrying More or Less Than This, Then You AreNot Achieving Maximum Reproductive Efficiency

OSI CONSULTING SERVICESOSI CONSULTING SERVICES

Providing Expert Advice & Assistance to Commercial Providing Expert Advice & Assistance to Commercial Pork ProducersPork Producers

-- Commercial Replacement Gilt Breeding ProgramsCommercial Replacement Gilt Breeding Programs

-- Artificial Insemination TechniquesArtificial Insemination Techniques

-- Evaluation of Grading DataEvaluation of Grading Data

How Much Do You KnowHow Much Do You KnowAbout Your Market Hogs?About Your Market Hogs?

OSI’sOSI’s Grading Data Evaluation Service Can Help You Learn Grading Data Evaluation Service Can Help You Learn More About the Quality of the Hogs You are ProducingMore About the Quality of the Hogs You are Producing

OSI CONSULTING SERVICESOSI CONSULTING SERVICESArtificial Insemination TechniquesArtificial Insemination Techniques

We offer courses during the year in various locations, as well aWe offer courses during the year in various locations, as well as On s On Farm demonstrations!Farm demonstrations!

Replacement Gilt ProgramsReplacement Gilt Programs

We can help you set up your nucleus and recommend the type of We can help you set up your nucleus and recommend the type of semen that will semen that will maximize maximize the genetic potential of your the genetic potential of your

replacement gilts. We can even help you develop selection replacement gilts. We can even help you develop selection guidelines that will ensure that you make the correct decisions guidelines that will ensure that you make the correct decisions

about which gilt to keep. We can also recommend ID and about which gilt to keep. We can also recommend ID and recording systems so that you can find replacement gilts when recording systems so that you can find replacement gilts when

you need them.you need them.

How Much Difference Can A Grid Make?How Much Difference Can A Grid Make?

Some genotypes are better suited to certain grids Some genotypes are better suited to certain grids -- in some cases in some cases the change to the correct grid could mean as much as the change to the correct grid could mean as much as $2 $2 -- $3 $3 moremore-- on 10,000 market hogs that’s $20,000 to $30,000 on 10,000 market hogs that’s $20,000 to $30,000

more per year!more per year!

Feeding to MAXIMIZEYour Grid

Janice MurphySwine Nutritionist


Producer Returns Depend on:Market priceIndex value of the carcass (+/-100)

lean yield (%)backfat thickness (mm)loin eye area (mm)

weight of the carcass (kg dressed weight)Current grading system:

favors lack of fat, rather than lean1 mm less fat depth = 7.5 mm more lean depth

no real assessment of pork quality

RULE #1 = Shipat correct weight!

Heavy Ontario Grid

RULE #2 =

Maximize lean!


Feeding for Optimum LeanWhen initiating a feeding program, producers should have 5 items in place:

clear goals, objectives and expectationswhat do you want to achieve maximum lean gain/day, efficiency of lean deposition, minimize backfat

system to monitor performance improvementsallows assessment and fine-tuning of feeding program

ensure accuracy, if mixing feed on-farmevaluation of the production environment

ability to control flow, environment, health status

knowledge of the genetic potential of the pigsJanice MurphySwine Nutritionist

Background Information


What is Lean? What is Fat?

Lean = musclecomposed of 75% water, 20% protein, 4% lipid

Fatcomposed of 88% lipid, 3% protein, 9% water

Fat deposition consumes approximately 4 times more energy than lean deposition

due to high water content of muscle


Basic PrinciplesCarcass quality = function of energy and amino acid supply and ratio between themAmino acid intake

largely determines rate of lean tissue growthEnergy intake

objective = provide just enough energy to maximize lean tissue gains

hard to do since large variation within and between genotypesin some genotypes, energy intake is never sufficient to reach lean growth potential


Basic PrinciplesIf the fastest growing pigs are also the fattest, unlikely that energy intake is limiting slight energy restriction in final finishing stage could improve carcass qualityAs lean gain potential improves, energy intake is more likely to limit lean gain

if there is no relationship between growth rate and carcass lean yield, energy intake likely limits lean tissue gain up to market weightpotential to increase gains by increasing energy density of ration (ie: adding fat)


Basic PrinciplesMaximum body protein deposition (Pdmax)is determined by the pig’s genetic potentialActual protein deposition is determined by:

protein intakeenergy intakemaximum protein deposition (Pdmax)

Stress can prevent pigs from expressing their true Pdmax

environmental stress - e.g. pig densityexposure to disease

Energy Intake and Lean GainNo other nutrients limit protein deposition

Energy Intake

Lean

Gai

n

Lean gain potential

Energy intake at which lean gain is

just reached

Extra lean gain per unit

extra energy intake Fat gain


Estimating Lean Growth Rates

Daily lean gain =[carcass weight* x % lean yield (grading slips)]-[start weight (25 kg) x 35% (est. lean yield)]÷days to market

* warm dressed carcass weight (kg) - 8 kgLean gain potential + feed intake determines type of diet that should be fed


Developing the Feeding ProgramAmino acid requirements can be established based on lean gain potential

low (300 g/day)medium (325 g/day)high (350 g/day)

Monitor feed intaketrack feed intake in pens, or groups of pens, over two week periods at intervals up to market weightdevelop feed intake curve


Matching Nutrient RequirementsMatching diet to nutrient requirements of pigMethods of matching requirements:

split-sex feedingbarrows eat more, grow faster, less efficient, etc. closely match energy and protein requirements

phase feeding tailor the ration to the nutrient requirements of the pig in a step-wise fashion as it grows1 phase 2 phase = $2/pigfinancial benefit halves with each step


The Phase Feeding Advantage

Body Weight (kg)

Die

t Nut

rient

Lev

el (%

)

Under-feeding

Over-feedingPhase 1

Phase 2

Phase 3

Requirement


Steps to Maximizing / Optimizing Carcass Lean Content

Choose pigs with high potential for lean gainMinimize environmental stresses (crowding and/or disease pressures)

sub-clinical disease can reduce lean by ~5%Meet requirements for essential nutrients (amino acids, vitamins, minerals) to allow expression of performance potential Establish optimum energy intake level


Carcass Modifiers

Future PossibilitiesConjugated Linoleic Acid (CLA)Ractopamine (PayleanTM)

Current PossibilitiesBetaineCarnitine


Conjugated Linoleic Acid (CLA)Commercially produced from sunflower oil

NOT currently approved for use in pig feedimproves feed conversionsignificantly increases lean percentagedecreases subcutaneous fatreasonable suggestion that CLA should provide

1.4% increase in percent lean0.10 improvement in feed efficiency

increased firmness of belly, improved water holding capacity, uniformity of colour, marblingresearch is ongoing to determine inclusion rates


Effect of CLA on Growth Performance and Carcass

Characteristics of Finishing Pigs

DietCLA Sunflower Oil

Change

ADG (kg/day)Feed Intake (kg/day)Feed EfficiencyTotal Lean (%)Total Subcutaneous Fat (%)

1.012.922.8961.820.6

1.013.083.0760.422.1

0-0.16-0.18+1.4-1.5

Source: Agriculture and Agri-Food Canada, Lacombe Research Centre


RactopamineRepartitioning agent

directs nutrients away from fat to increase lean depositionshift in nutrient requirementsphysiological demand of rapid growth means that the pig requires additional protein NOT currently approved for use in Canadain the US, ractopamine hydrochloride is approved for pigs as PayleanTM (Elanco)being fed at levels of 4.5 - 18 kg/tonne


PayleanTM in Late FinishingRations Control

(no Paylean)Step-Down(18–9–4.5)

Step-Up(4.5-9-18)

Constant(10.5 g/ton)

Hot carcassweight (lbs)

191.8 a 195.0 b 195.5 b 195.6b

Feed cost for 42days ($)

19.94 a 21.01 b 19.22 a 19.75 a

Premium/ cwtcarcass ($)

2.78 a 3.55 a 5.81 b 5.58 b

Premium/pig ($) 5.31 a 7.05 a 11.50 b 10.95 b

Value overcontrol ($/pig)

0.00 1.74 6.19 5.64

Source:Herr, C.T. et al. 2000. Optimal PayleanTM sequence when fed to late-finishing swine. http://www.ansc.purdue.edu/swine/porkpage/nutrient/paylean/OptimalPayleanSequence.html


BetaineRepartitioning agent

provitamin extracted from sugar beet molasses refining processtypically added to finishing rations at 1 - 2 kg/tonne for 30-40 days prior to slaughterresearch worldwide has yielded variable resultsbetaine supplementation during the finishing phase may improve carcass characteristics

most research results indicate an inconsistent positive effect on loin eye area, lean yield, backfat thickness, growth and performanceeffects are modest and variable


CarnitineRepartitioning agent

chemically producedmarketed as an aid to human athletic performanceresearch results from Kansas State University

decreased average backfat thicknessincreased

– loin muscle area– percent lean– percent muscle

KSU suggests adding 50 ppm carnitine to the growing/finishing ration for the greatest effectresearch is ongoing


Finding the Information You NeedAsk for help!

NutritionistFeed salespersonVeterinarianConsultant

Do it yourself!Notepad and calculatorSpreadsheetPorkMa$terOINK


PorkMa$ter http://www.aps.uoguelph.ca/~porkm/

Computerized performance monitoring system for grower-finisher pigs

based on feed intake and growth curves allows input of different grading grids

Can be used to:estimate profit in individual unitsestimate performance over entire grower-finisher phase or short body weight rangesestimate optimum shipping weightsassist in developing farm-specific feeding and management strategies


$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

102.5 105 107.5 110 112.5 115

6

4

2

Impact of Variation in Shipping WeightsMargin ($/pig)

Final Carcass Weight (kg)


Need Login and Password from Ontario Pork



Source: Doug Richards, 2003 London Swine Conference Proceedings


An Example


1 2 3 4 5 6 7 8 9Average 60 67.5 72.5 77.5 82.5 87.5 92.5 97.5 105 Total# % of total

1 66 0 0 3 8 6 8 1 0 0 26 1.12 63.05 2 5 30 115 201 136 26 2 1 518 21.13 60.7 3 4 29 170 468 357 90 19 4 1144 46.74 58.65 0 3 6 66 206 223 86 17 1 608 24.85 56.9 0 1 5 11 42 52 15 8 0 134 5.56 55.4 0 0 0 1 10 5 0 1 0 17 0.77 53 0 0 0 0 3 0 0 0 0 3 0.1

Total# 5 13 73 371 936 781 218 47 6 2450% of total 0.2 0.5 3.0 15.1 38.2 31.9 8.9 1.9 0.2

Averagecarcass weight (kg) 84.15carcass lean yield (%) 60.49

Weight Class

Yield Class

Heavier Market Weight?Example year-end summary from Ontario Pork -distribution of carcasses across grading grid (Current Ontario)

Avg dressed wt


Aiming for 92.5 kg?What happens to feed cost/pig?

table shows results as we change shipping weight (carcass weight) over different feed costscompare Weight Class 7 to Weight Class 5

@ $250/tonne = $11.25 more feed/pig

1 2 3 4 5 6 7 8 960 67.5 72.5 77.5 82.5 87.5 92.5 97.5 105

F:G 3.40 3.40 3.40 3.40 3.50 3.60 3.60 3.60 3.70150 -12.75 -9.56 -6.38 -3.19 0.00 3.38 6.75 10.13 13.59175 -14.88 -11.16 -7.44 -3.72 0.00 3.94 7.88 11.81 15.86200 -17.00 -12.75 -8.50 -4.25 0.00 4.50 9.00 13.50 18.13225 -19.13 -14.34 -9.56 -4.78 0.00 5.06 10.13 15.19 20.39250 -21.25 -15.94 -10.63 -5.31 0.00 5.63 11.25 16.88 22.66275 -23.38 -17.53 -11.69 -5.84 0.00 6.19 12.38 18.56 24.92

Weight Class

Feed Costs

($/metric tonne)


Aiming for 92.5 kg?What happens to total revenue?

table shows results as we change shipping weight (carcass weight) over different carcass prices

@ $160/ckg = $17.76 more revenue/pigpicture would change with different lean yield, grids, and premiums

Weight Class1 2 3 4 5 6 7 8 9

60 67.5 72.5 77.5 82.5 87.5 92.5 97.5 105100 -87.41 -59.66 -26.71 -11.26 0.00 6.43 11.10 3.00 -18.08120 -104.89 -71.59 -32.05 -13.51 0.00 7.71 13.32 3.60 -21.69

$/ckg 140 -122.37 -83.52 -37.39 -15.76 0.00 8.99 15.54 4.20 -25.31160 -139.85 -95.45 -42.73 -18.01 0.00 10.28 17.76 4.80 -28.92180 -157.33 -107.38 -48.07 -20.26 0.00 11.57 19.98 5.40 -32.54200 -174.81 -119.31 -53.41 -22.51 0.00 12.85 22.20 6.00 -36.15


Aiming for 92.5 kg?What happens to return over feed costs?

table shows results as we change shipping weight (carcass weight) over different carcass prices (feed @ $250/tonne)

@ $160/ckg = $6.51/pigbeyond Weight Class 7 and below 5 loss in revenue

Weight Class1 2 3 4 5 6 7 8 9

60 67.5 72.5 77.5 82.5 87.5 92.5 97.5 105100 -66.16 -43.72 -16.08 -5.94 0.00 0.80 -0.15 -13.88 -40.73120 -83.64 -55.65 -21.42 -8.20 0.00 2.08 2.07 -13.28 -44.35

$/ckg 140 -101.12 -67.58 -26.76 -10.45 0.00 3.37 4.29 -12.68 -47.96160 -118.60 -79.51 -32.11 -12.70 0.00 4.66 6.51 -12.08 -51.58180 -136.08 -91.44 -37.45 -14.95 0.00 5.94 8.73 -11.48 -55.19200 -153.56 -103.38 -42.79 -17.20 0.00 7.22 10.95 -10.88 -58.81


Where Do We Go From Here?

Genetics

Feeding Program

Weigh pigs


ConclusionsFeeding programs cannot increase performance beyond the pig’s genetic capacityBUT it should be designed to challenge the pig’s potential for lean gainDetermine the optimum nutrient density of the feed, based on feed intakeSupply all nutrients required to maximize lean gain potential… while optimizing profitabilityconsider feed costs and current market conditions


For More Information


Fergus Resource CentrePhone: (519) 846-3401

Fax: (519) 846-8178E-mail: [email protected]

1

Value of Cross-Breeding andGenetic Improvement for

the Producer

Brian SullivanCanadian Centre for Swine Improvement Inc.

The Canadian Pork Industry

• $2.2 billion in pork exports in 2001• $560 million more in live exports• 26 million hogs produced in 2001, a 70%

increase since 1991• Efficient production of high quality pork

gives Canada a competitive edge• Genetic improvement is the cornerstone

Getting the Most From Genetics

1. Use a good genetic source

2. Minimize genetic lag

3. Take advantage of cross-breeding

1. A Good Genetic Source

• Should have a history to demonstrate long-term genetic improvement

• Current genetic improvement program should be creditable and provide evidence of rapid progress

• A decent program will make commercial operations more efficient by at least $1.50 per hog every year ($15 per hog in 10 years)

2. Minimize Genetic Lag

• Every year behind costs $1.50 per hog• Five years is $7.50 per hog• Ten years is $15 per hog ($300/sow)

3. Advantage of Cross-Breeding

• Cross-bred sows and hogs have hybrid vigor• F1 sows are 20 to 30% more productive than

purebreds• Hybrid hogs survive better and grow faster• Parents must be different breeds to get full

advantage eg. York-Land sow, Duroc sire

2

Example of a Good ProgramCanadian Swine Improvement Program

• Effective selection since the 1970s• BLUP since mid-1980s, first in the world• 3 geneticists on staff nationally, supported by

Canadian PhDs from coast to coast• 9,000 nucleus sows (York, Landrace, Duroc)• 90,000 pigs tested per year• 125 breeders and companies across Canada

125 HERDS

9,400 NUCLEUS SOWS

Western Swine Testing Association

(WSTA)Ontario Swine Improvement Inc.

(OSI) Canadian Centre for Swine Improvement

(CCSI)

Centre de développement du porc du Québec

(CDPQ)

4,600 YORKSHIRE

3,000 LANDRACE

1,800 DUROC

The Canadian Swine Improvement Program

Atlantic Swine Centre (ASC)

2 herds

Genetic Improvement for GrowthDuroc X Yorkshire-Landrace Averages

150

155

160

165

170

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

days

to 1

00 k

g

Genetic Improvement for LeanDuroc X Yorkshire-Landrace Averages

10

11

12

13

14

15

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

back

fat a

t 100

kg

Genetic Improvement for Litter SizeYorkshire-Landrace Averages

9

9.2

9.4

9.6

9.8

10

10.2

10.4

10.6

10.8

11

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

num

ber b

orn

Value of Genetic Improvementsin Litter Size and Hog Performance

0

50

100

150

200

250

300

350

$ pe

r sow

per

yea

r

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

litter sizeperformance

Sows are about $300 per year more productive today than 10 years ago due togenetic improvements for growth, efficiency, lean yield, and litter size.

3

The Effect of Hybrid Vigor*

7.5%Post-weaning growth

+0.49 pigLitter size at weaning+13.35 kgLitter weight at 42 days

+0.24 pigLitter size at birthLitter heterosis (crossbred piglet)

+15.0 kgLitter weight at 42 days+0.84 pigLitter size at weaning+0.66 pigLitter size at birth

+3%Conception rateDam heterosis (crossbred sow)

Heterosis levelTrait

* The Genetics of the Pig, 1998

Effect of CrossbreedingP.E.I. Commercial Herds

8

9

10

11

12

13

1st 2nd 3rd 4thparity

num

ber

born

F1

Backcross or F2

Purebred

What’s in Your Sows?• F1 (2 separate breeds eg. York x Land):

maximum heterosis;

• Backcross or F2 (eg. gilts from York X F1):½ heterosis;

• 2 breed rotational (alternate York and Land)2/3 heterosis;

• “F1” from 2 synthetic lines:depends if same breeds used in both;

Genetic Improvementfor Commercial Producers

$162Total over 5 years

$32.48Total per year

$9.090.022Feed Conversion

$8.911.5Growth rate (days)

$3.610.14Lean yield (%)

$10.870.2Litter size (pigs)

$/sow/year*Current Genetic Gain per YearTraits

* Duroc sires, Yorkshire X Landrace sows, 20 pigs/sow/year

Benefits Due to Selection

• benefits are cumulative (added year after year);

• most benefits accrue through better production efficiency (reduction in costs);

• benefits from higher carcass value are comparatively smaller (increase in revenue).

Costs and Benefits From Selection and Crossbreeding

Example

• herd of 500 sows;• uses CSIP Duroc sires and York x Land sows;• value of weaned pig (minus cost): $30;• Benefits from maximum hybrid vigor: 1 extra

pig per litter, 10 days faster to market• Ignore other benefits to keep it simple• cost of replacing gilts (over market price): $140

4

Annual Benefits From Cross-breeding and 5 Years of Selection

$ 33,000

$ 27,000

$ 81,000

$141,000$282/sow

• crossbred females: 500 x 2.2 x $30/pig

• crossbred pigs: 10,000 pigs x 10 days x $0.27/day

• selection (CSIP data): 500 x $162/sow

• total

Annual costs and benefits for a producer with a 500 sow herd using F1 sows and

CSIP genetics after 5 years ($,000)

28 33

27

16

33

27

32

33

27

49

33

27

65

33

27

81

1 2 3 4 5year

cost of female replacements

benefits from selection

benefits from crossbred pigs

benefits from crossbred females

Cost of Compromise500 sow herd example

• Reduce genetic replacement costs by 50% eg. buy half as many F1s and keep some “F2”s using terminal Yorkshires

• Lose 1/3 of hybrid vigor =.3 pigs/litter, 3 days to market ($20,000)

• Increasing genetic lag ($5,000 in first year increasing to $16,000 in 5th year)

• In year 5, loss is $36,000 or $72/sow

Annual costs of compromise for a producer with a 500 sow herd using F1/F2 sows and

CSIP genetics after 5 years ($,000)

1414

22

18

11

25

22

18

23

29

22

18

36

32

22

18

50

35

22

18

65

36

1 2 3 4 5year

cost of female replacements

benefits from selection

benefits from crossbred pigs

benefits from crossbred females

Lost Benefit

Savings

Is This For Real?

• Look at Quebec example• CDPQ monitors large numbers of

commercial herds (180,000 sows in 2001)• Productivity improvements have been large

due to management improvements• Recent genetic improvements in litter size

are adding even more benefit

Commercial Trends in QuebecLitter Size*

8

8.5

9

9.5

10

10.5

11

11.5

1995 1996 1997 1998 1999 2000 2001 2002

born aliveweaned

*Source: CDPQ 2003

5

Commercial Trends in QuebecPigs per sow per year*

19

20

21

22

23

24

1995 1996 1997 1998 1999 2000 2001 2002

*Source: CDPQ 2003

Producing Your Own GiltsWhy?

• Biosecurity – a good reason• Save money – not a good reason

– It costs something to maintain and improve the nucleus

– It costs more if you don’t keep up to date ($1.50 per hog after 1 year, $3 after 2 years, …)

Producing Your Own GiltsOption 1: In-herd nucleus

• Maintain and improve your own nucleus• Breed purebred replacements

• Must become a breeder as well as a producer• Not practical for most producers

• Need a large number of purebreds, expertise and extra work – otherwise purebreds will not improve fast enough

Producing Your Own GiltsOption 2: In-Herd Multipliers

• For every 100 commercial sows, approximately 10 pure mulitplier sows

• Example, purchase Yorkshire purebreds and breed them to Landrace AI boars

• Must bring in new Yorkshire female replacements from time to time

Producing Your Own GiltsOption 3: Rotational Breeding

• For every 1000 commercial sows, approximately 100 mulitplier sows

• Select best commercial sows as mulitpliersand cross to Yorkshire AI sires

• Next generation, cross best sows to Landrace AI sires, then back to York, …

• Lose 1/3 of hybrid vigor in sows, but can reduce lag while keeping herd closed

What Boars (Semen) Should You Use?

• there is maximum heterosis on market pigs when the boars are of a different breed or breeds than those for your commercial sows (e.g. Duroc semen on York x Land sows);

• Heterosis affects litter size (+.5 weaned) and growth rate of market pigs (increase of about 7%);

6

Other BenefitsFrom Genetic Improvement

Some benefits are long-term or harder to quantify:- Meat quality;- Conformation/longevity;

Molecular vs quantitative genetics- Halothane gene;- RN gene;- Others.

What Can Genetic ImprovementDo for the Commercial Producer?• Good herd management (health, feeding, etc.) is

required to take full advantage of improved genetics;

• Genetic improvement is a slow but regular process: it does not “jump at you” like a disease outbreak or a big improvement in feeding, but it will put money in your pocket year after year;

• The benefits are substantially greater than the costs.

Conclusions

1. A good genetic source will increase profitability by at least $1.50 per hog or $30 per sow every year

Conclusions

2. Genetic improvement is cumulative, so it’s very important to keep up. Genetics that are 5 years behind cost you at least $7.50/hog or $150/sow every year.

Conclusions

3. Maximize the benefits of cross-breeding. If you are getting only 50%, it costs 15 to 20% in lost productivity, piglet survival and performance. This could be easily worth $50 per sow.

Genetics For the Producer

• Genetic improvement really works, but…you need to know where to get it and how to use it:– A good source– Minimum genetic lag– Maximum hybrid vigor

• Not taking advantage is very costly• You need it to stay competitive

Canadian Centre for Swine Improvement (CCSI)Central Experimental Farm, Building 54, Maple Drive, Ottawa, Ontario, Canada K1A 0C6

Tel: (613) 233-8872 Fax: (613) 233-8903, e.mail: [email protected], Internet:: http://www.ccsi.ca/

The Canadian SwineImprovement Program

Canadian Centre for Swine Improvement (CCSI)

The Canadian Swine Improvement Program provides participating breeders and breedingcompanies with a complete selection system that can be adapted to each organization’sfacilities and objectives, and has a proven track record for producing rapid geneticprogress. Some of the program’s features include the following:

! One of the largest genetic bases in the world (5,000 Yorkshire, 3,000 Landraceand 1,700 Duroc sows).

! First rate ultrasonic accreditation program to ensure accurate on-farm recording.

! Genetic evaluation system based on state of the art methodology to permitaccurate selection for growth rate, lean yield, loin eye area, feed efficiency andlitter size.

! Evaluation of genetic linkages across herds to facilitate the selection of geneticsfrom over 150 herds.

! On-line access to up-to-date genetic information on more than 2 million pigs, with100,000 new animals tested per year.

! A vast array of on-line technical information ranging from general advice onselection methods, to lists of top animals for each breed and trait, to specific herdstatistics for your eyes only (inbreeding, rate of genetic progress for economicallyimportant traits, planned matings, and more).

! Access to the expertise of four geneticists, with a combined experience of morethan 50 years in applied livestock selection, and to various specialists for keyareas of the program (ultrasonic measurements, commercial testing, carcass andmeat quality, etc...).

! Extensive research program to support new developments in traditional andmolecular genetics.

Genetic Evaluation Services


Estimated Breeding Values (EBVs)

! All genetic evaluations in the program are computed using BLUP (Best LinearUnbiased Prediction), the most accurate method known today. The CanadianSwine Improvement Program was the first in the world to make use of thistechnology for swine genetic evaluation on a large scale (starting in 1985).

! The data collected in each herd by an accredited technician is entered on a micro-computer, edited, and used immediately to compute on-farm EBVs. This way,selection can be done as soon as the pigs are probed.

! The data is also sent electronically to CCSI, via the regional centres, for themonthly computation of national EBVs. National EBVs are produced through ajoint analysis of the records collected in all herds on the program, for manygenerations.

! The computation of on-farm EBVs uses national EBVs for all parents, therefore on-farm and national EBVs are highly correlated ( r > 0.97). This means that on-farmEBVs can be used to rank animals from different herds, right after probing.

! The Canadian system combines three key elements for efficient geneticimprovement: speed (you can select pigs immediately after testing), accuracy (youknow the program uses the best genetic evaluation methods) and universality (youcan tell how good the pigs you select are compared to all other pigs in theprogram).

Selection of sire lines

! The program provides evaluations for various traits that are important for theselection of sire lines:

S growth rate - loin depthS lean yield - loin eye areaS backfat depth - feed efficiency

! Since separate EBVs (and their accuracy) are provided for each trait, selection canbe based on those traits that have the greatest value for you, your commercialclients and the packers that receive the market pigs.


Tel: (613) 233-8872 Fax: (613) 233-8903, e.mail: [email protected], Internet: http://www.ccsi.ca/

! If you wish to select for several traits at the same time, the most effective method isto build an economic index which uses EBVs and different economic weights foreach trait. To help you develop such an index, we have designed a computerprogram called “Breeding for Profit”. This program can also help you design yourown selection strategy and make improvements to your selection methods.

! If you prefer, you can use either one of two general purpose indices we publish forsire lines. The first one (the old index) gives slightly more emphasis to lean yieldthan to growth rate. The other one (the new index) gives more emphasis to growthrate and feed efficiency than to other traits.

Selection of dam lines

! For dam lines, EBVs are provided for litter size in addition to the sire line traits(growth rate, lean yield, loin depth, loin eye area, feed efficiency).

! Once again, EBVs are provided separately for each trait, so you can tailor theprogram to your own objectives. You can use “Breeding for Profit” to develop yourown economic index for dam lines, or you can use one of two general purpose damline indices. Both indices give about half the emphasis to selection for litter size.

The future

! Research is underway or planned so we can provide genetic evaluations forseveral new traits over the next one to three years:

S feed efficiency (residual component). Currently, EBVs for feed efficiency arebased on genetic correlations with production traits (growth rate and backfatthickness). These correlations account for the largest part of the geneticvariation in feed efficiency. However, additional genetic progress for feedefficiency can be made by measuring feed intake over a constant period ofweight gain. Feed efficiency EBVs which include this information are plannedfor 2001;

S new sow productivity traits (weaning to conception internal, survival rate,number weaned, weight of litter at weaning). Development of EBVs for thesetraits is planned for 2002;

S meat quality traits (pH, color, marbling). Development of EBVs for these traitsis planned for 2001;

S conformation (feet and legs, underline). Development of a recording programfor these traits is underway and the computation of corresponding EBVs isplanned for 2002.


Tel: (613) 233-8872 Fax: (613) 233-8903, e.mail: [email protected], Internet:: http://www.ccsi.ca/

Research and Development


The Canadian Swine Improvement Program relies on an extensive R&D network toensure continuous development of its products and services.

! The network includes researchers at CCSI, universities, federal governmentresearch centres and regional swine improvement centres.

! Technical decisions in the program are guided by the Genetics Committee, whichis composed of experts in the network and in participating breeding organizations.

! Research efforts are directed at new genetic evaluation methods, selectionstrategies, the optimum use of genetics by the commercial industry, and theintegration of molecular genetics into swine selection schemes.

! Some of these research projects are being carried out at CCSI with support fromthe federal government’s Industry Research Application Program (IRAP).

! Other projects will be carried out through collaborative research with organizationssuch as the University of Guelph or the federal research station at Lennoxville.

! Many organizations in the network undertake research in areas of value toCanadian Swine Improvement Program participants, including genetics, feeding,health, economics, etc... The results from this research are made available tousers by regional centres or by CCSI, and are integrated into the program.

Documents

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