Industry Issues and Outlook

Transcription

1 Industry Issues and Outlook Dr. Dean Koehler Nate Brown Brendan Corrigan Dr. Dean Koehler Research & product development 1

2 Vita Plus swine research DDGS Plasma Alternatives Crystalline Amino Acids Nucleotides Essential Oils Phytases Carbohydrase Enzymes Botanicals Flavors/Sweeteners Direct fed Microbials Yeast Products Highlights of what we ve learned Increased use of Crystalline AAs DDGS economics, impacts on yield & lean Improved nursery performance with yeast products/flavors/immunoglobulins No viable replacement for plasma immunoglobulins Phytase use for cost efficient release of Phos Cost effective AA sources for nursery diets 2

3 Current research efforts Research agreement with Dr. John Patience of Iowa State University Continue to fine tune nursery formulas based on ongoing research into amino acid sources, plasma immunoglobulins, phytases, etc. Through these efforts we developed a new, three track Starter Feeds product line New Swine Starter Feeds line ESP Easy Starting Pigs Complex diets with optimal levels of expensive starter ingredients HSP Hard Starting Pigs Designed to promote feed intake in less aggressive pigs CGI Compromised Gut Integrity Assist gut development and enhance immunity The GI tract is the largest immune organ in the body 3

4 What lies in the future? Nutrition x immunity interaction Continue to fine tune AA ratios for all production phases and optimize use of crystalline amino acids Improve nutrient absorption, performance & economics Diet complexity (performance & cost) Ongoing evaluation of enzymes, DFMs, nucelotides, essential oils (need consistent responses) Nate Brown Extreme During Extreme Markets? 4

5 It is widely understood that during times of high market prices and low to moderate feed prices, additional marginal income can be generate by increasing the sale weight of market hogs What are the dynamics during EXTREME market conditions? Bar Napkin Math Single Pig Packer A Pig Weight (Live lb) Carcass wt *Net Market Price (after premium, sort, etc) $/cwt Carc $ $ Revenue $/pig $ $ Feed Cost (50 lb to mkt wt) $/pig $ $ Margin over Feed Cost $/pig $ $ Net MOFC $/pig $

6 Bar Napkin Math Packer B Pig Weight (Live lb) Carcass wt *Net Market Price (after premium, sort, etc) $/cwt Carc $ $ Revenue $/pig $ $ Feed Cost (50 lb to mkt wt) $/pig $ $ Margin over Feed Cost $/pig $ $ Net MOFC $/pig $ (15.55) MOFC when looking at Load Avg Wt $ Packer $90/cwt hogs $ Packer $120 Hogs M O F C $ / p i g $ $ $ $ M O F C $ / p i g $ $ $ $ $ $ $ Load Avg Wt (Live lb) $ Load Avg Wt (Live lb) 6

7 MOFC when looking at Load Avg Wt $ $ Packer $90/cwt hogs $ $ Packer $120/cwt hogs M O F C $ $ $ M O F C $ $ $ $ / p i g $ $ $ $ / p i g $ $ $ $ $ $ Load Avg Wt (Live lb) $ Load Avg Wt (Live lb) For certain packer matrices during extreme conditions: Sort Loss be damned! (maybe) The price penalty applied to even the outer reaches of the grid do not appear to outweigh the revenue opportunity of adding additional pounds multiplied by an extremely high market price However. 7

8 Lots of questions, issues and costs related to marketing extremely heavy pigs Mortality while on feed Transport Mortality (DOA s) Feed conversions & Growth rates at very heavy weights Wear and tear on facilities (and people) Transport costs per pig (fewer pigs/load) Carcass performance/revenue at heavy weights Cost of additional days/space if a system wide decision is made Quantifying the costs of heavy market weights: Load Avg Weight Base MOFC/pig Live Hog Mortality Opportunity Cost/pig Relative to 250 Lb sell weight Transport Mortality Opportunity Cost/pig (DOA at plant) Condemn & Discount Opportunity Cost Additional Freight Cost Relative to 250 Net lb MOFC/pig Load Avg Weight 250< $ $ $ 0.13 $ 0.43 $ $ < $ $ 0.17 $ 0.20 $ 0.31 $ 0.07 $ $ $ 0.34 $ 0.14 $ 0.28 $ 0.12 $ $ $ 0.51 $ 0.23 $ 0.39 $ 0.14 $ $ $ 0.68 $ 0.30 $ 0.32 $ 0.17 $ $ $ 0.85 $ 0.45 $ 0.32 $ 0.20 $ $ $ 1.02 $ 0.57 $ 0.53 $ 0.24 $ $ $ 1.19 $ 0.65 $ 0.75 $ 0.29 $

9 Quantifying Revenue Opportunities $20.00 N e t R e v e n u e $ / p i g $10.00 $ $(10.00) $(20.00) $(30.00) $(40.00) $(50.00) $(60.00) Summary Lots of discussion about taking pigs heavier during these types of market conditions Appears to be additional profit opportunity in most cases to increase market weights Making a system wide decision requires analysis Be aware of additional costs associated with heavier pigs 9

10 Brendan Corrigan Vita Plus Strategies to Address PEDv Swine Industry Today PEDv, PEDv, PEDv and PRRS AFIA meeting two weeks ago and NPB, AFIA, AASV, Top 10 producers and feed suppliers discussed PEDv in Des Moines last week (what we know & don t know, research) How is Vita Plus managing its Feed Supply Chain? 10

11 Vita Plus Action Plan Foot traffic Swine team Delivery personnel Truck traffic Scheduling and downtime Change plastic boots for every feed bin!!! Washing and disinfecting (tires, wheels and undercarriage) Certified carriers only Vita Plus Action Plan Mill traffic Customer/employee designated areas (minimize cross traffic) Receiving pits COVERED until hopper slide is opened (signage) Vendors and ingredients Established Relationships (no least cost) Approval BEFORE ingredient received Requires label, MSDS, COA, load certificates Over 50% of ingredients on VP trucks 11

12 betagro removing PEDv Risk 20+ controlled/replicated trials with equal or better performance than animal plasma Decentralized production process reduces crosscontamination risk proprietary activation process destroys viruses High temperatures (329 F) Irradiation 15 kgy) for full pathogen inactivation All lots since April 2013 PCR neg for PEDv Vita Plus Philosophy Committed to YOUR interests Use science to justify decisions (no knee jerk reactions) Increased handling and production expenses are the COST of QUALITY! Our focus is to instill confidence, drive performance and improve profitability of our CUSTOMERS ifeeder 12