WSVA Agribusiness

Drought outlook through July just published

Pilgrim's Pride losing more than a million dollars a day - Executives blame high feed prices, flawed farm policy

May 5 - Grain prices are dramatically higher than a year ago and the U.S. poultry industry is reeling from high feed prices.

Pilgrim's Pride Corporation reported on May 5 that it is losing more than a million dollars a day due to the situation. The biggest U.S. poultry processor said its net loss was $111.4 million for the quarter that ended March 29. This compared with a loss of $40.1 million for the same quarter a year earlier.

Corn prices in the first quarter of 2008 averaged 28 percent higher than a year earlier as U.S. mandates for ethanol led to record demand. Soybean meal prices increased more than 60 percent.

Pilgrim's Pride Chief Executive Officer J. Clinton Rivers said his company is reducing weekly chicken-processing capacity 5 percent to prevent further losses. The company also recently announced the closure of a processing plant in North Carolina and six distribution centers around the U.S.

Further facility closures are not out of the question. “We continue to evaluate our production facilities for potential mix changes, closure, sale and or consolidation in an effort to position the company for a return to profitability,'' Rivers said.

“The operating environment for chicken producers today is among the most difficult I have seen during my 27 years in the business,'' Rivers observed. “The federal government has helped spark a growing worldwide food crisis by mandating corn-based ethanol production at the expense of affordable food.”

Will food prices go higher in the U.S. later this year? "American consumers are only just beginning to feel the impact of sharply higher food prices,” Rivers said. “There will be much more to come as food producers fully pass along these higher input costs.''

Pilgrim's Pride surpassed Tyson as the world's biggest poultry processor when it bought Atlanta-based Gold Kist Inc. for about $1.1 billion in January 2007.

USDA: Value of poultry production up dramatically

April 29 - The United States Department of Agriculture is reporting that the total economic value of chicken broiler, egg, turkey, and non-broiler chicken production in the U.S. during 2007 was $31.8 billion, which is an increase of 24 percent over the 2006 total of $25. 8 billion.

During 2007, broilers accounted for the bulk of the total at $21.4 billion (approx. 67% of the total), while eggs made up $4.4 billion(around 21%). Turkeys accounted for 12% ($3.7 billion), and non-broiler chickens made up the remaining 1% at $50.7 million.

By category, the biggest increase was in egg production, with the value up 51% from 2006. Broiler production gained 21% on the year and turkey production for 2007 was 4% above 2006. Non-broiler chickens were down 6%.

The price per pound average for broilers came out at 43.6 cents per pound, compared to 36.3 cents a year ago. Egg value was 88.5 cents per dozen, compared to 58.2 cents the previous year. Turkey's were at 47.2 cents per pound, compared to 2006's average of 47.9 cents. Non-broiler chickens were down two tenths of a cent on the year at 5.6 cents per pound.

Wells may go dry this spring in Shenandoah County

April 23 - Officials in Shenandoah County are urging everyone to exercise great caution regarding the use of water from wells. Officials say rainfall and snow patterns for the past two to three years have not been favorable to significant groundwater recharge. Based on data from the United States Geological Survey (USGS) groundwater levels and stream flow are at all-time lows. Therefore, all wells are at great risk of either going dry or not being able to supply adequate water.

Most groundwater recharge in Shenandoah County occurs as the result of rain and snow during the late fall and winter. For example, normal rainfall from November through March for this area is about 13 inches whereas the total amount of water that evaporates from the surface and is used by plants for this same period is only about two inches. The excess either runs off into streams or soaks into the ground. Some of the water that soaks into the ground emerges via springs. A small portion percolates to deep groundwater. In most years, rainfall during the late spring and summer runs off to surface water, evaporates, or is used by plants. The county does not normally experience groundwater recharge in the summer.

In addition to groundwater, stream flow is at great risk. A significant portion of stream flow comes from groundwater. The remaining portion comes from recent rainfall (both runoff and rain that falls directly on the stream). This summer stream flow will likely be largely dependent on recent rainfall. This means that many streams might go dry more quickly than normal.

With the exception of Woodstock and Strasburg, all other residents and businesses (including the towns of New Market, Mt. Jackson, Edinburg, Toms Brook and the Bayse Sanitary Authority) in the county receive their water supply from wells.

The following is a brief list of water conservation tips:

- Check for leaks. A leaky faucet, toilet or pipe can waste thousands of gallons per year.

- Install water saving showerheads and faucet aerators.

- Sweep sidewalks and driveways instead of using a hose.

- When you have to replace a water-using appliance, be sure to install a water efficient model.

- Many homeowners are satisfied with their lawn appearance with no additional water. If you want to water your lawn, apply one to two inches of water during a single irrigation event and then do not water again for one week. Lawns should be watered at night or in the early morning.

- Turn off the tap while brushing your teeth. You probably only need the water in three short bursts – to rinse your toothbrush initially, to rinse it after use, and to rinse your mouth.

- Flush only when needed. Don’t use the toilet as a wastebasket.

- Only use dishwashers and washing machines when you have a full load. Water saving models will allow you to adjust the washer’s water level. Avoid Washing Vehicles unless necessary.

- Keep a container of drinking water in the refrigerator. This will save running the tap while waiting for the water to cool.

- Use soaker hoses, drip irrigation and mulch to conserve as much water as possible.

- Use rain barrels to catch roof runoff. Use this water for plants and for the garden. Make sure the barrels are secure to prevent pets and children from drowning.

Additional references on water saving tips can be found at the following web sites:

http://mwon.cas.psu.edu/Internal/30.htm

http://www.epa.gov/watersense/

http://www.wateruseitwisely.com/index.shtml

Hopefully, the region will receive significant rainfall over the next several months and both groundwater and stream flow concerns will be alleviated.

The future of the Virginia beef cattle industry

Dr. John B. Hall, Extension Beef Specialist, VA Tech offers his opinion on challenges and opportunities for Virginia cattle producers. More here>>

Producers concerned about illegally labeled milk

STAUNTON—Virginia dairy producers are concerned that consumers are being misled by certain label claims used to market milk.

Products labeled with such statements as "hormone-free" or "no hormones" are considered absence label claims, said John Beers, dairy services program supervisor for the Virginia Department of Agriculture and Consumer Services’ Office of Dairy and Foods. Right now the U.S. Food and Drug Administration doesn’t have any guidelines about the labels, but "a statement on a product saying ‘no hormones’ is illegal," Beers said.

"That statement is misleading, because all dairy products have naturally occurring hormones," and milk cannot be processed in a manner that renders it free of hormones, he explained.

He recently told a group of Virginia Farm Bureau dairy producers how to report suspected mislabeled product containers and point-of-sale materials to VDACS.

"We’ll check the plant’s permits, and if the product is labeled wrong, then the production plant will be notified and asked to remove the labels," Beers said.

The FDA already has sent warning letters to a handful of manufacturers of whole milk, reduced-fat milk and ice cream informing them that their products are misbranded because the labels contain false statements.

Prior to approving recombinant bovine Somatotropin, or rbST, in 1993 the FDA determined that the genetically engineered hormone is virtually identical to a cow’s natural milk-stimulating hormone, bST. Therefore, the FDA concluded, producers have no basis for claiming that milk from cows not treated with rbST is safer than milk from rbST-treated cows.

However, the agency says manufacturers who do not use milk from cows treated with rbST can label their products with that information. The FDA has issued guidelines that suggest those manufacturers use the statement "from cows not treated with rbST."

Pittsylvania County dairyman Tommy Motley said he doesn’t have a problem with manufacturers labeling their dairy products that way.

He said most dairy producers in Virginia have signed affidavits stating that their cows are not treated with rbST, and knowing that might make consumers feel better about buying their products.

2008 Custom-rate guide published for the Shenandoah Valley

Custom rates listed for making hay, plowing, planting and harvesting crops, shearing sheep, hauling livestock, spreading manure, applying fertilizer, building fence, and more.

click here for complete guide (pdf file) >>

South Korea agrees to accept U.S. beef

Washington, D.C. (April 18) – U.S. and Korean officials have agreed to a trade protocol that will allow the United States to resume exports of beef to South Korea.

“America’s cattle producers applaud the long-awaited reopening of the South Korean market to U.S. beef,” said Andy Groseta, Arizona cattleman and president of the National Cattlemen’s Beef Association (NCBA). “When I visited Korea in February, I saw first-hand how much Korean consumers want access to high-quality U.S. beef in their supermarkets and restaurants.”

Prior to December 2003, South Korea represented the third-largest market for U.S. beef and beef variety meat exports, valued annually at $815 million. In September 2006, Korea finally agreed to accept U.S. boneless beef from cattle less than 30 months of age. But this market reopening was never viable for U.S. beef producers because it excluded bone-in beef products, which are popular with Korean consumers.

Initially, the protocol will allow for the shipment of all U.S. beef products (boneless and bone-in beef, as well as variety meats) from animals under 30 months of age. Korea has agreed that this is a first step toward accepting all U.S. beef products from animals of all ages as directed by the World Organization for Animal Health (OIE) guidelines.

Gregg Doud, NCBA chief economist, says South Korea potentially represents a $1 billion market and could grow to be the United States’ top beef customer.

“The U.S. beef industry owes a huge debt of gratitude to President Bush and his administration, as well as our trade negotiators and members of Congress for this historic undertaking on the issue of Korean beef trade. It is thanks to their long-term cooperative efforts that we have such a fantastic agreement to announce today,” says Doud. “And the reason we have that kind of strong support in Washington, is because cattlemen really pulled together through their national organization to demand fair treatment in this critical market.”

Assuming trade resumes as planned, NCBA will ask Congress to consider, support and pass the long-awaited U.S.-South Korea Free Trade Agreement (FTA) as soon as possible.

“For U.S. beef trade, the Korean FTA could be could be the biggest and most important bilateral trade agreement in history,” says Doud.

New website helps sell Shenandoah Valley’s manure and compost

Verona - Harrisonburg-based Virginia Poultry Federation and the Shenandoah Resource Conservation and Development Council have launched a new website for marketing livestock manure and manure-based products. The website is found at www.valleyorganicresources.com and was developed by the Shenandoah RC&D Council’s Market Maker, Becky Barlow.

The purpose of the website is to provide a virtual marketplace for people buying and selling manure-based products, and to augment the Poultry Litter Hotline which Barlow has operated since January 2007. Visitors to the website will find lists containing contact information for growers with litter to sell, brokers who haul and spread litter, compost suppliers with compost to sell, and buyers interested in these products. To be listed as a buyer or seller, contact Barlow by calling the toll-free organic resources hotline: 1-800-418-0768.

The Market Maker position was created in November 2006 through the efforts of the Waste Solutions Forum, a diverse group of public and private stakeholders who work together to identify innovative and practical solutions to managing livestock and poultry manure in the Shenandoah Valley. The position was designed to complement ongoing efforts to support animal agriculture while improving water quality. It is funded by the National Fish and Wildlife Foundation.

In addition to serving as a marketplace for manure and compost, the Valley Organic Resources website contains links to information on the appropriate use of these products. In the future, the site will provide information on new products being developed from emerging waste-to-energy technologies, as well as announce events and workshops related to organic resources.

Pilgrim's Pride cuts back on chicken broiler production

April 14 - In its latest move to combat record feed costs, Pilgrim's Pride Corp., the nation's largest chicken processor, has announced that it will reduce weekly chicken processing by about 5 percent.

The Texas-based poultry company said the reduction started with egg sets earlier this month and would take full effect in June. The production cut will remain in effect until average industry margins return to more normalized levels.

The cut includes the impact of the closure of Pilgrim's Pride's Siler City, N.C., plant, which was announced in March. That closure represents about 2 percent of Pilgrim's Pride's total volume.

"We believe the cuts we are enacting will strike a better balance between production and demand and strengthen our competitive position," President and CEO Clint Rivers said in a statement.

Pilgrim's Pride is the fourth poultry processor in recent weeks to announce production cuts. Baldwin, Ga.-based Fieldale Farms; Siloam Springs, Ark.-based Simmons Foods; and Atlanta-based Cagle's Inc. have also decided to reduce production.

Entire cattle herd destroyed on West Virginia farm

April 4 - The West Virginia Department of Agriculture destroyed a herd of approximately 80 cattle exposed to rabies in Hampshire County on Thursday, April 3.

“The decision was made after it was determined a significant number of those exposed animals were showing symptoms days after three confirmed cases,” said West Virginia Commissioner of Agriculture Gus R. Douglass.

This is a serious health threat to the human and animal population and indicates the probability of additional rabid wildlife in the area.

There is little known about the incubation period and transmission of rabies in cattle. The possibility of cattle incubating the virus for months played a big part in the decision. The unusually high number of symptomatic cattle ruled out an extended quarantine for the herd.

Six people associated with the affected farm are undergoing post-exposure treatment as a precaution after being in close contact with the herd.

The animals were humanely euthanized by employees of the USDA’s Wildlife Services in cooperation with USDA/APHIS and WVDA. WVDA employees loaded the carcasses for delivery to a rendering plant.

None of the exposed herd will enter the food chain and all precautions to protect workers have been taken.

“This farmer did the right thing by notifying the proper authorities of a suspected rabies outbreak. I applaud him for preventing a serious disease situation for both humans and animals and encourage other producers to report livestock presenting unusual or possible neurological signs,” said Commissioner Douglass.

Dr. Danae Bixler with the state Department of Health and Human Resources said there is “no ongoing human risk from the situation,” and noted that rabies is only transmitted through direct contact with saliva from an infected animal.

A WVDHHR brochure says that wild animals should be avoided, especially those that are behaving abnormally, such as normally nocturnal animals seen in broad daylight. Raccoons, skunks, foxes, bats, dogs and cats are most susceptible to rabies, but any warm-blooded animal can be infected. Anyone bitten or scratched by a wild animal should wash the injury thoroughly with warm water and soap and see a physician immediately.