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Articles from 2016 In February


Buhler acquires Mill Technology Co.

To strengthen its North America Feed business, Buhler Inc. announced that it has acquired Mill Technology Co. (MTC), a manufacturer of innovative, heavy-duty hammermills and related products that are sold primarily into the feed, pet food, grain and oilseed processing sectors.

“This acquisition demonstrates Buhler’s strong commitment to the North American feed, grain and oilseed processing market, through investment in innovative technology that offers unique value,” Rene Steiner, president of Buhler North America, said.

The acquisition has closed, with immediate effect. The parties did not disclose further details of the transaction.

MTC was established in 1993 and is located in Starbuck, Minn. MTC is active in both domestic and international feed, grain, pet food, aqua feed, biomass, oilseed and other processing sectors. The company said its innovative Multimpact technology offers an expanded range of applications compared to conventional hammermills, particularly in the area of high-capacity fine grinding – a capability that complements Buhler’s portfolio.

“We now can offer a wider range of solutions to our customers," Steiner said.

This new line of hammermills will be rebranded under the Buhler name and manufactured in the U.S. at Buhler’s existing North American locations. Buhler said it will also invest to establish a Grinding Application Center at its Plymouth, Minn., location to enable application testing, closer customer interaction and future development.

Dunham to leave FDA/CVM for academia

Dr. Bernadette Dunham, director of the Center for Veterinary Medicine (CVM) at the U.S. Food & Drug Administration, announced Feb. 29 that she will leave the agency in April to participate in a One Health collaborative effort between the Milken Institute School of Public Health at the George Washington University and FDA.

Dunham joined the FDA in 2002 and has served as CVM’s center director since 2008. She earned her doctor of veterinary medicine from the Ontario Veterinary College at the University of Guelph in Ontario and a Ph.D. in cardiovascular physiology from Boston University in Boston, Mass. After completing her post-doctoral residency program in the department of pathology at the New York State College of Veterinary Medicine at Cornell University, she was the director of laboratory animal medicine and adjunct professor of pharmacology at the State University of New York Health Science Center in Syracuse, N.Y.

From academia, Dunham’s career brought her to Washington, D.C., where she was assistant director for the American Veterinary Medical Assn.'s (AVMA) Governmental Relations Division in Washington, D.C. In that position, which she held from 1995 to 2002, she participated in the formation and execution of AVMA policies, objectives and programs, with emphasis on federal legislation and regulatory issues.

FDA said it is grateful to Dunham for her 13 years of service and leadership and wishes her continued success as she returns to her academic roots. Her strong academic career and extensive government service provide an outstanding foundation for her new path, focusing on developing future leaders in animal health and the One Health approach to public health.

Tracey Forfa, J.D., who has served as CVM deputy director since 2008, will fulfill the role of acting center director while the agency conducts a nationwide search for a new leader of CVM. Forfa began her FDA career in 1993 on the regulations and policy staff at the Center for Biologics Evaluation & Research. She served as an associate ombudsman in the Office of the Chief Mediator and Ombudsman, FDA from 1996 to 2002. Forfa earned her juris doctorate at University of Baltimore School of Law and served as an appellate law clerk, working for judges on both the Court of Appeals and Court of Special Appeals in Maryland prior to coming to FDA.

Food prices would rise $14-24b without GMOs

Higher food prices, a significant boost in greenhouse gas emissions due to land use change and major losses of forest and pasture land would be some of the results if genetically modified organisms (GMOs) were banned in the U.S., according to a Purdue University study.

Wally Tyner, James and Lois Ackerman professor of agricultural economics; Farzad Taheripour, a research associate professor of agricultural economics, and Harry Mahaffey, an agricultural economics graduate student, wanted to know the significance of crop yield loss if genetically modified crops were banned from U.S. farm fields, as well as how that decision would trickle down to other parts of the economy. They presented their findings at the International Consortium on Applied Bioeconomy Research in Ravello, Italy, last year. The findings of the study, funded by the California Grain & Feed Assn., will be published in the journal AgBioForum this spring.

"This is not an argument to keep or lose GMOs," Tyner said. "It's just a simple question: What happens if they go away?"

The economists gathered data and found that 18 million farmers in 28 countries planted about 181 million hectares of GMO crops in 2014, about 40% of which were in the U.S.

They fed the data into the Purdue-­developed GTAP­BIO model, which has been used to examine economic consequences of changes to agricultural, energy, trade and environmental policies.

If all GMOs were eliminated in the U.S., the model shows corn yield declines of 11.2%, on average. Soybeans would lose 5.2% of their yields and cotton 18.6%. To make up for that loss, about 102,000 hectares of U.S. forest and pasture would have to be converted to cropland and 1.1 million hectares globally for the average case.

Greenhouse gas emissions increase significantly because with lower crop yields, more land is needed for agricultural production, and it must be converted from pasture and forest.

"In general, the land ­use change, the pasture and forest you need to convert to cropland to produce the amount of food that you need is greater than all of the land ­use change that we have previously estimated for the U.S. ethanol program," Tyner said.

In other words, the increase in greenhouse gas emissions that would come from banning GMOs in the U.S. would be greater than the amount needed to create enough land to meet federal mandates of about 15 billion gal. of biofuels.

"Some of the same groups that oppose GMOs want to reduce greenhouse gas emissions to reduce the potential for global warming," Tyner said. "The result we get is that you can't have it both ways. If you want to reduce greenhouse gas emissions in agriculture, an important tool to do that is with GMO traits."

With lower crop yields sans GMO traits, commodity prices rise. Corn prices would increase as much as 28% and soybeans as much as 22%, according to the study. Consumers could expect food prices to rise 1-2%, or $14 billion to $24 billion per year.

In the U.S., GMOs make up almost all of the corn (89%), soybeans (94%) and cotton (91%) planted each year. Some countries have already banned GMOs, have not adopted them as widely or are considering bans. Tyner and Taheripour said they will continue their research to understand how expansions and reductions of GMO crops worldwide could affect economies and the environment.

"If in the future we ban GMOs at the global scale, we lose lots of potential yield," Taheripour said. "If more countries adopt GMOs, their yields will be much higher."

Report on position limits calls for CFTC pause

The Energy & Environmental Markets Advisory Committee (EEMAC), an advisory committee of the Commodity Futures Trading Commission (CFTC), released a report recommending that the regulator abandon its plans to limit the number of futures contracts a trader can hold on certain commodities.

Adopted on an 8-1 vote, this report summarizes the EEMAC’s work in 2015, during which the EEMAC primarily considered CFTC’s proposal to impose additional federal position limits on 28 physical commodity derivatives. The report also contains a pointed dissent.

The report concludes that “CFTC should not finalize the position limits rule, as proposed,” and further provides four main recommendations to the commission to make any final rule more workable.”

In his opening statement of the meeting, CFTC commissioner Christopher Giancarlo said, “In light of the value destruction currently plaguing U.S. energy and commodity markets, I believe it would be imprudent for the CFTC to move forward with the current proposal without lessening its adverse impact on orderly risk management by America’s commodity and energy producers and the consumers they serve.”

The chairmen of both the House and Senate agriculture committees welcomed the move as each has jurisdiction over CFTC and has raised questions about the position limits rule.

“I want to commend the members of EEMAC for their work on this important report. The House Committee on Agriculture has heard many of these same concerns, and I firmly believe that Congress did not intend to harm end users' access to hedging tools with the enactment of Dodd-Frank (Wall Street Reform & Consumer Protection Act),” House Agriculture Committee chairman Michael Conaway (R., Texas) said. “The CFTC leadership needs to take a hard look at the report EEMAC produced and focus on responding to the real, substantive concerns raised by the very firms and end users who are engaged in those markets.”

Senate Agriculture Committee chairman Pat Roberts (R., Kan.) said, “The report explains that if the CFTC does not make substantial changes to their proposed position limits rule, it would undermine end users’ ability to perform their economic functions of risk management. I want to reiterate that end users did not cause the financial crisis and should not be regulated as if they did.”

The lone dissenter on the report was Tyson Slocum, energy program director of Public Citizen and member of the advisory committee. In a statement, he explained, “The 2010 Dodd-Frank Act clearly ordered the CFTC to establish position limits as a primary tool to combat the excessive speculation that had been harming consumers and hindering market integrity. While a federal court remanded the rule after a 2012 challenge by Wall Street trade associations, the re-proposed rule fully documents that excessive speculation has, indeed, been a major problem and that position limits offer an important cure to help protect consumers.”

However, Slocum added, “the majority report ignores this evidence and instead, without providing any new evidence to back up its claims, argues that speculative position limits are unneeded — that, if implemented, they would cause harm to the market and market participation and that for-profit exchanges – not public regulators – should instead apply flexible ‘position accountability regimes’ that would be developed, overseen and run by the for-profit exchanges.”

Riding out TPP roller coaster

President Barack Obama last week said he would send the Trans-Pacific Partnership (TPP) agreement to Congress for a vote later this year, and he is “cautiously optimistic” that the agreement will actually be considered and approved.

The TPP deal, which encompasses 40% of the world’s economy, would be a win for U.S. farmers by reducing tariffs and, even more important, addressing non-tariff barriers and creating a platform for other countries to join in the modern trade agreement. The 12 TPP member countries include some of fastest-growing middle classes, which will soon demand even more meat, dairy and eggs that are produced using grains.

The President’s comments are the latest in a roller coaster of encouraging and discouraging signs for the pact’s future in the U.S. Many congressional leaders have expressed skepticism, and political factors ahead of a U.S. presidential election and potential nomination of a new Supreme Court justice are complicating consideration of the already complex TPP agreement.

While speaking at a breakout session during the Agricultural Outlook Forum on Feb. 25, Jason Hafemeister, trade policy coordinator for the U.S. Department of Agriculture's Foreign Agricultural Service, said for agriculture, every sector benefits from bringing tariffs down and an improved competitive environment.

Many have wondered whether dairy, rice and now the pork industries will be supportive of the final deal once it comes up in Congress for a final vote. Hafemeister noted that, right now, many of these commodity sectors’ discussions are focused on not getting everything they wanted in terms of the TPP negotiations. The dairy industry, for example, wanted full access to Canada and Mexico but received only partial liberalization.

Hafemeister noted that, in the end, the groups will need to realize that the deal is better than the status quo. He said he is “highly confident” that when the vote comes up on Capitol Hill those groups will “advocate on their interests, not on their emotions, and that they’ll be supportive of this.”

He added, “Trade votes are tough, and we don’t have a lot of margin on these.”

Craig Thorn, partner at DTB Associates, also warned that there would be consequences more than just missing out on increased trade if the U.S. doesn’t ratify TPP and walks away. “If we turned down TPP, no one is going to negotiate with us. Not only will we lose out on economic opportunities during that period when it is sitting on the shelf, (but) our trade policy stays stagnated,” he said.

Many agricultural and business groups continue to push for the measure to be approved quickly so their members can begin reaping benefits from it.

The American Farm Bureau Federation made TPP a priority for its massive farmer fly-in to Capitol Hill held last week, releasing a study in conjunction with the event showing that the pact could boost annual net farm income in the U.S. by $4.4 billion.

TPP will also be front-and-center at the Commodity Classic event this week, which brings together the nation’s grower associations for corn, sorghum, soybean and wheat growers as well as sister organizations like the U.S. Grains Council that support market development around the world.

“While the timeline for TPP ratification within the United States still remains unclear, the Farm Bureau study is another sign of the benefits it would offer for farmers and agribusinesses including our members,” said USGC chairman Alan Tiemann, who farms in Nebraska. “As the most competitive producer of coarse grains, the best strategy that the U.S. industry can have is to remove market barriers and increase access to both new and existing customers.

“When that happens, through TPP or other trade agreements, the economics of U.S. production are so compelling that U.S. farmers win sales. TPP will clear the road for sales and for future market development that the Council specializes in.”

This agreement has the possibility to increase farm-prices for U.S. corn, soybeans and wheat as well, according to Farm Bureau.

Feed, other factors drive feed efficiency

Like so many things in pork production, feed efficiency is a multi-factorial outcome that's very much influenced by the pig’s diet and barn management. It is particularly critical given that feed represents between 55% and 65% of the total cost of production in modern systems.

At the American Association of Swine Veterinarians (AASV) meeting in New Orleans, La., Dr. John Patience of Iowa State University discussed various dietary and barn management factors and provided a checklist on improving feed efficiency at a practical level.

In doing so, Patience explained that due to its close association with feed costs, feed efficiency strongly influences financial returns. Actions taken to improve feed efficiency can, at times, inadvertently lead to financial losses rather than gains, he noted.

The fact is that single-minded actions taken to improve feed efficiency may affect other aspects of the enterprise, not the least of which is the cost of feed, Patience said.

Among his checklist items, and in an attempt to represent feed efficiency in financial terms, Patience noted the importance of:
1) Reduced feed wastage – A two percentage point reduction in feed wastage is worth about $1.44 per pig.

2) Reduced pig mortality – A one percentage improvement in growout mortality improves feed efficiency by about one point.

3) Ensuring that pigs start each fill with the correct diet – Feeding a leftover finishing diet from the previous fill is not acceptable.

4) Increased dietary energy concentration – It works almost every time, but it can increase feed cost per pound of gain.

5) Reduced particle size – Every 100 microns results in an improvement of about four points, which is about $1.20 per pig.

6) Pelleting – This improves feed conversion by about 5%, or approximately $3.90 per pig.

7) Proper feeding levels – Restriction is not recommended due to the impact on growth rate.

8) Optimized barn temperature; lower critical temperature – For 50 lb. pigs, it is approximately 75 degrees F, and for pigs over 150 lb., it is approximately 60 degrees F.
9) Optimized barn temperature; maximum desirable temperature – For 50 lb. pigs, it is approximately 90 degrees F, and for pigs at 200 lb., it is approximately 81 degrees F.
10) Euthanization in a timely manner.

11) Selection genotypes that offer feed conversion value while maintaining growth rate, carcass and meat quality.

12) Herd health – The biggest impact of porcine reproductive and respiratory syndrome occurs in the first four weeks after infection (single infection situation).

13) Improved sow productivity with higher average parity.

For more information on this topic, visit:  www.swinefeedefficiency.com

January egg production 5% lower

January egg production 5% lower

U.S. egg production totaled 8.15 billion during January 2016, a 5% decline from the same period from last year, according to the U.S. Department of Agriculture's latest “Chickens & Eggs” report. Total production included 7.01 billion table eggs and 1.14 billion hatching eggs, 1.05 billion of which were broiler-type and 89 million of which were egg-type.

Source: USDA NASS

The total number of layers during January 2016 averaged 351 million, 4% lower than last year. January egg production per 100 layers — at 2,323 eggs — was 1% lower than January 2015. All layers in the U.S. on Feb. 1, 2016, totaled 352 million, 4% lower than last year. Of the total 352 million layers, 293 million were producing table or market-type eggs, 54.8 million were producing broiler-type hatching eggs and 3.53 million were producing egg-type hatching eggs. The rate of lay per day on Feb. 1 averaged 74.8 eggs per 100 layers, down slightly from Feb. 1, 2015, USDA reported.

Egg-type chicks hatched

Egg-type chicks hatched during January 2016 increased 8% from January 2015 to 47.6 million. There were 16% more eggs in incubators — 47.1 million — on Feb. 1, 2016, than a year ago. Domestic placements of egg-type pullet chicks for future hatchery supply flocks by leading breeders totaled 148,000 during January 2016, a significant 45% decline from January 2015.

Broiler-type chicks hatched

Broiler-type chicks hatched during January 2016 totaled 799 million, a slight 1% increase from January 2015. Eggs in incubators totaled 649 million on Feb. 1, 2016, also 1% higher than a year ago. Leading breeders placed 6.73 million broiler-type pullet chicks for future domestic hatchery supply flocks during January 2016, a 3% decline from last year.

New cargo weight laws could impact shippers

New cargo weight laws could impact shippers

New rules scheduled to take effect in July of 2016 could adversely affect export cargo shippers. While it may primarily impact container cargoes, it could significantly affect livestock customers as well as some soybean exports directly — similar to the disruption experienced at West Coast ports during the labor dispute last year.

The rules will require shippers to verify the weight of cargo and containers for steamships and terminal operators before the containers are loaded onto vessels. The rules, which come from the U.N. International Maritime Organization, are intended to protect ships, their crews and their cargoes from overcapacity that can lead to ships capsizing.

At a recent hearing held by the Federal Maritime Commission in Washington, D.C., U.S. Coast Guard Admiral Paul Thompson told agricultural shippers and marine terminal and steamship line representatives that delaying the new rules is not a good option because it would send a message to foreign countries that goods can’t be safely loaded onto ships in America.

Representatives from the shipping community, including agricultural groups and agribusinesses, argued that a system for verifying cargo weight is already working in the U.S., and the new requirement will create unnecessary delays at U.S. ports.  The rule is aimed at countries that grossly overload containers, which hasn’t been an issue in the U.S. Furthermore, the requirements could put U.S. exports at a disadvantage to foreign competitors if countries such as Brazil do not enforce the rules to the same extent as the U.S.

Food price inflation expected to exceed 2015 level

Food price inflation expected to exceed 2015 level

Over the last decade, retail food price inflation in the U.S. has bounced around a bit, with yearly price increases ranging from 0.3% to 6.4%, according to the latest “Food Price Outlook" from the U.S. Department of Agriculture’s Economic Research Service.

Grocery store prices rose 4.2% in 2007 and 6.4% in 2008 — well above the 20-year annual average increase of 2.6%. Inflation during these years was largely due to a rapid increase in farm-level prices for rice, grains and oilseeds. The lower inflation rates of 0.5% in 2009 and 0.3% in 2010 reflected the Great Recession’s downward pressure on retail food price inflation. Prices again rose above the average in 2011 as grocery prices adjusted post-recession. From 2012 through 2015, food price inflation varied but stayed below average.

Despite high egg and beef prices in 2015, food price inflation, at 1.2%, was less than the 2.4% rise in 2014. USDA said lower prices for pork, fresh fruit and fats/oils helped ease overall food price inflation in 2015.

In 2016, USDA said it expects retail food prices to increase between 2% and 3%, with some variation among grocery subcategories. For instance, fresh fruit prices are expected to rise 2.5-3.5% in 2016, while egg prices are expected to decrease between 0.5% and 1.5%.

Corn, soybeans inch lower; wheat goes higher: Podcast

Corn and soybean futures were a little lower at midday Monday, but firm outside markets may be providing some support.

Weekly export inspections were about as expected, with corn and soybeans down from a week ago and wheat higher.

Bob Burgdorfer of Farm Futures reporting. Farm Futures is a sister publication of Feedstuffs.