Swine Industry Overview

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Swine Industry Overview
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What has changed?

• Pork Industry is very different than it was 25
  years ago.
• Americas changing diet helped to spark a
  transition in our industry a transition that
  continues today and into the future.

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Swine Industry Past

• Rural Demographics
• Diversified farms
• Mortgage lifters
• 1980 65,000 producers in Iowa raising an
  average of 200 hogs each
• 2006 56,000 producers in the U.S. raising a
  total of 100 million head

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Swine Industry Current

• 2006 4,500 producers in Iowa raising an average
  of 4400 hogs each
• Independent Production
• Pork Powerhouses
• 40 largest pork producers 2,775,741 sows in
  2002 (US inventory 5,815,000 sows)
• 5 largest pork producers gt1,400,000 sows
• Contract Production

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Swine Industry Current

• Intensive production
• Confinement
• Year-round
• Production Management
• Three site production
• Segregated early weaning
• Professional pork producer
• Extensive production

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Swine Industry Current

• Packers
• Consolidation
• Contracts
• Price protection
• Shackle space
• Pig ownership
• Slaughter capacity

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Swine Industry Current

• Allied industry
• Feed, equipment, financial services,
  pharmaceuticals, biologicals, veterinary services
• Fewer
• Local level
• Corporate consolidation
• Producers expect/demand expertise

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Swine Industry Current

• 2001 2003 unprofitability (on average)
• 2004-2007 very profitable (on average)
• 2008-2009 Major losses (liquidation)
• Annual US slaughter 100 million
• Rising exports (last 20 years)
• Net exporter since 1995
• Approximately 20 of all US pork is exported

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2008-2009

• On average, 1000 sows farrow to finish losses
  exceed 1 Million for an 18 month period ending
  June 2009
• Losses are projected to continue thru 2009
• Oil prices, ethanol, recession, H1N1 all created
  the perfect storm which could destroy the swine
  industry

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Swine Industry Current

• Swine Health Challenges
• Porcine reproductive respiratory syndrome (PRRS)
• Postweaning multisystemic wasting syndrome (PMWS)
  Now Porcine Circovirus Associated Disease
• Swine influenza
• Lawsonia intracellularis
• Mycoplasma
• Colibacillosis
• Erysipelas

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Swine Industry Future

• Profitability?
• Expansion
• Global market
• Consolidation? You can bet on it!
• Market access (shackle space)
• Access to capital
• Access to information

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Swine Industry Future

• Public perception
• Food safety
• Production issues
• Activist agenda
• Environmental
• Antimicrobial resistance
• Animal welfare
• Veterinary medical profession

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Science has helped us improve the pork of today.

• Since 1983, fat content of pork has been reduced
  31.
• Many pork cuts have less cholesterol than
  chicken.
• New 2006 USDA Study per 3 oz.
• Pork tenderloin 120 calories
• Skinless chicken breast 140 calories

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An On-Going Transition inthe Pork Industry

• New science, new technology and new management
  practices.
• Much of the science has come from land grant
  universities like Iowa State University and
  University of Nebraska.
• Weve applied the available science to produce
  lean, nutritious pork - efficiently.
• Pork The Other White Meat nutritious, healthy,
  tasty, and safe.

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Pork Production has changed

• Pork is produced in modern facilities
• Pork is produced by new management techniques
• Pork production is still a family business

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At approximately 6 months of age, the pigs are
moved out of the totally slatted finishing
facilities and will then be transported to a
harvest facility at approximately 270 pounds.
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The Benefits of Barns Temperature Control
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The Benefits of Barns Temperature Control
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Biosecurity For Our Operations
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The Most Powerful Tools in Changing our products
are

• Genetics - consistently breeding animals with the
  optimum traits.
• Nutrition - feeding herds a prescribed diet,
  controlling nutrients and proteins.
• Advancements in technologies
• Artificial insemination
• Building designs, management and ventilation
• Separation of production stages

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The Pork Industry and The Era of Specialization

• Specialization allows ever increasing operational
  efficiencies.
• Options
• Start to finish in one-operation
• Specialized operations
• Breeding/weaning
• Feeding to market weight
• Specialized markets -- especially for restaurants

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Continuous Improvement of our Operations

• Swine Welfare Assurance Program
• Pork Quality Assurance (PQA) Program
• Environmental Assurance program
• Take Care Antibiotic use program
• Trucker Quality Assurance Program
• Educational and Training Programs

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Farmers are the Original Recyclers

• Crops
• Grains/ hay/ forages
• Livestock pigs, cattle, sheep, goats
• Nutrients, Natural fertilizers

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Economic Impact of New 3,400 sow Farrow to Finish
operation

• 21 New Jobs
• 19 Indirect Jobs
• 1,000,000 in new income for workers and
  businesses

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Economic Impact

• 27,000 in new property taxes
• 65,000 in additional state tax revenues
• 60 billion Ag income in NC, 60 from livestock
  production

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Economic Development

• One-third of our industrys employees hold
  college degrees.
• Jobs pay competitive wages and benefits

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Issues Our Industry Faces

• Animal Welfare - Raising animals indoors is
  misunderstood.
• New studies conducted comparing different types
  of housing
• Environment - The treatment of waste is
  misunderstood.
• NC State research trials
• Present system meets state and federal guidelines
  and permits
• Farms are inspected twice yearly
• Odor Control- Challenging issue that we continue
  to study and make progress through management and
  technology

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Issues Our Industry Faces

• Ethanol fierce competition for feed (corn and
  energy)
• Bio-diesel competition for protein and fat
• Foreign Animal Disease if FMD breaks anywhere in
  the US, shut out the lights!
• World-wide recession (its bad here, but)
• H1N1 impact on consumption
• Anti-meat agenda affluence, activists and
  anthropomorphism

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Swine Industry Opportunities

• Swine medicine production
• Private practice
• Large systems
• Integrators
• Industry
• Research
• Academia
• Government

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Private Practice Salaries 2002/2005
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Average Reported Income-Private Practice-

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Swine Industry Opportunities

• Prepare to be the right one
• Go where there are pigs
• Understand the industry
• Anticipate clients wants and needs
• Meet or exceed clients expectations
• When appropriate, keep your clients in business

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Students - Current

• Journal of Swine Health and Production
• Annual Meeting
• Student Workshop
• Student Seminar Session
• e-Letter
• Directory
• Scholarships
• Financial support for swine externships
• AASV members economic survey