PP2013: Disease hits, growth continues
The biggest issue for the nation’s largest pork producers at this moment isn’t an international merger, but an international virus.
In May, a deadly viral disease never before seen in the U.S. broke in farrowing barns in Colorado, causing up to 100% mortality in newborn pigs. “I went in the barns and saw healthy pigs being born and 24 hours later, they were dead,” says Terry Holton, president and CEO of Seaboard Foods. “We hadn’t seen anything like it.”
The disease was identified as porcine epidemic diarrhea (PED), caused by a virus earlier reported in Europe and Asia. By summer, it had spread across the Midwest and into North Carolina.
The disease hit the Oklahoma operations of Prestage Farms in June. “For four weeks we lost 100% of baby pigs,” says Zack McCullen, vice president of swine production. “I’m scared to death of that virus. I’m worried about what happens when it cools off and winter comes.”
In August, Garland Farm Supply was hit hard by PED on the company’s sow farm near Plains, Kansas. “We are out in the middle of nowhere, but that didn’t matter,” says owner Alfred Smith. “We lost four weeks worth of pigs. It’s similar to TGE [transmissible gastroenteritis], but worse.”
No exact numbers exist for how many pigs have died from PED, but the National Pork Board says there are positive tests for the virus in 17 states, with most of the confirmed cases in Iowa and Oklahoma. There is no cure or vaccine yet. The disease is the top-of-mind topic for the nation’s largest producers this fall.
Sow numbers up; China is in
The annual Pork Powerhouses ranking by Successful Farming magazine, now in its 19th year, shows a growth of 132,600 sows by the largest 25 U.S. hog operations in 2013. This is more than twice the growth in 2012, when producers added 62,000 sows. More telling, 17 operations added sows this year, vs. nine in 2012.
The total number of sows owned or managed by the nation’s largest 25 producers, seven of whom are also pork packers, stands today at 3.18 million. That’s about 55% of the total U.S. breeding inventory reported by the USDA in September.
Smithfield Foods, at the top of the Pork Powerhouses list with 868,000 sows, dropped a bombshell on May 29 when it announced plans to sell to China-based Shuanghui International Holdings Limited. Smithfield shareholders would receive $34 in cash per share of common stock owned. On September 24, the shareholders approved the $4.7 billion acquisition by Shuanghui, making the transaction the biggest purchase of a U.S. company ever by a Chinese firm.