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CME: Extreme Cold Temperatures Impacting Livestock Slaughter

09 January 2014

US - Extreme cold temperatures impacted livestock movements throughout the this week, impacting cattle and hog slaughter, write Steve Meyer and Len Steiner.

USDA’s estimated daily slaughter for cattle was only 110,000 head, down 20,000 (about 15 per cent ) from last week and 15,000 from last year. Hog slaughter was impacted even more with the daily estimate coming in at 323,000, 116,000 or 26 per cent lower than one week ago and 105,000 lower than one year ago. The difference in impact is primarily due to geography: A larger numbers and share of hog slaughter plants are located in the Cornbelt where temperatures were double digits below zero for much of Monday.

We know of only one hog plant that was closed on Monday but many operated on reduced schedules due to livestock availability. The cold will not have much impact on hog performance as a very high percentage of growing pigs are in climate-controlled buildings. The extreme cold would have a larger impact on cattle performance simply due to their being outside but very cold and dry is far better, in most cases, than cold and wet. With temperatures forecast to rise over the next few days, we expect much of Monday’s shortfalls to be made up with larger runs the rest of the week and on Saturday.

How will PEDv impact hog numbers in 2014? That remains a significant question as we begin the new year and one can find a lot of opinions and not many facts with which to answer the question. As we pointed out last week, it appears that USDA did pick up an impact in its December Hogs and Pigs Report. The average litter size for Sep-Nov was only 0.01 pigs larger than one year ago. That is the smallest year-on-year increase for U.S. litter sizes in more than a decade. In addition, the monthly average for litter size (or, more accurately, pigs saved per litter) fell from 10.38 in August to 10.28 in September and then 10.17 in October and 10.04 in November, The November figure is 0.12 pigs per litter smaller than one year ago and marks the first time since August 2003 in which a month’s average litter size has been smaller than one year earlier.

Further, note that the month-to-month decline in litter size was getting LARGER — at least through November. But the report contained some data that might help us at least envision the eventual impact of the disease. The top chart shows weekly positive PEDv submissions to vet diagnostic labs for the U.S. and the states with the five largest swine breeding herds. Note in particular the bold red line representing #5 Oklahoma. While Iowa saw an early surge in PEDv cases, anecdotal evidence indicates that most of those cases were in grow-finish farms where pigs are sickened and slowed a bit but where death losses are not large. The Oklahoma farms, though, were sow farms where death losses among baby pigs are near 100 per cent for about 3 weeks before immunity levels in pregnant sows are established and production returns, generally, to normal levels.

The bottom chart was brought to our attention by Roy Lee Lindsay, the Executive Director of the Oklahoma Pork Council and it shows a sharp drop in the number of pigs on Oklahoma farms in two weight categories in the December report — 180 lbs. and over and under 50 lbs. The decline for the 180+ inventory is 34 per cent vs. last year and 30 per cent vs. the Sep 1 number. The same comparisons for the <50 inventory are –30 per cent and –29 per cent . The Dec 1 180+ inventory would correspond well to the initial surge in PEDv cases back in May and June. The Dec 1 under-50 inventory drop corresponds to a more recent “mini-surge” in October and November.

So — what will the PEDv surges in North Carolina in September, Iowa and Minnesota in November and December and Illinois in December mean to hog numbers come March and beyond? Oklahoma had 420k breeding hogs on December 1. The other four states had 2.89 million — nearly 7 times as many. While the share infected may be lower in those states, the impact could still be huge.

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