Swine Grist - Spring 2022 by Grand Valley Fortifiers

Swine Grist

A PERIODIC NEWSLETTER PRODUCED BY GRAND VALLEY FORTIFIERS VOLUME 24, ISSUE 1 | SPRING 2022

Dear Friends, As we headed into April 2022, two years after the pandemic related restrictions began to impact many aspects of our lives, it was heartening to witness the lifting of restrictions province by province and seeing daily activities moving back towards some assemblance of pre-COVID normal. This being said, Agri-Business and the economy in general seems to be moving further and further afield from pre-pandemic norms. For the foreseeable future, gone are the days of cheap commodities, cheap fuel, cheap food and historically low interest rates. With all of the supply restrictions, interruptions and delays of many inputs in many industries, we have moved from “just in time” inventories to rapidly expanding “just in case” inventories with as much focus needed on order fulfilment as it is on cost of ingredients. Accordingly, this issue of the Grand Valley Swine Grist discusses the importance of feed efficiency and mindful feed budgeting (per pig), the ever-changing market for feed ingredients, the regulations surrounding them and ways to maximize farmgate revenue to offset expensive farm inputs. Truly harnessing on-farm technology and the data that comes from it will be a key driver of profitability as margins tighten in the days ahead. As discussed in previous Grand Valley Swine Grists, we have a growing list of data analytics tools like Profit Finder™ that over fifty swine producers across Canada are using to help maximize their hog shipment revenue. This is just one of our On Farm Business Intelligence tools that GVF has developed to help maximize the profitability of our customers operations. We trust that you will benefit from an idea or perspective that is shared in the articles below and allow one of our Swine Specialists or Nutritionists to discuss them further with you.

Sincerely, Ian Ross, President & CEO

UNDERSTANDING PERFORMANCE OVER COST

by: VICTORIA SEIP Livestock Business Intelligence Manager, Grand Valley Fortifiers

s both the hog and commodity markets continue to show great volatility and variability, feed budgeting is extremely important to make sure we minimize feed cost and maximize performance of our animals. We continue to see rising feed prices, which has made us alter what we are feeding in order to maximize on ingredients and efficiency. Efficiency is key because as long as hogs are not backlogged, feed conversion is more important than ever. What I mean by this is the less feed we have to put into the animal to achieve the best possible gain, the more we will save on the use of expensive commodities. The purpose of this trial was to feed a “standard” budget we would see in commercial production fed by our customers across the country and compare that to a budget that would ideally save at least $1 per pig in the nursery. The following trial was conducted side-by-side with small pigs of the weaning group sorted into one room. The feed budget can be found in Table 1. The pigs were weighed at weaning, 14-days, 35-days and the completion of the trial. The results based on the various days spent in the nursery can be seen in Table 2. These results show the effects of feeding a less costly budget based on the amount of starter (BioSure Respond) and transition feed (BioForce 180) compared to a more recommended practice with more starter and transition feed. Although the Cost Saving’s budget achieved its goal of being less costly on a feed cost per pig and cost per kg gain GRAND VALLEY FORTIFIERS PO Box 726 Cambridge ON N1R 5W6 1-800-567-4400 grandvalley.com

basis, the overall weight gain, ADG, FCR and margin over feed was less efficient than our standard budget. So, the big question is, what does this really mean? Table 1: Feed Budget Compared Side By Side

Feed Budget (kg/pig)

Standard

Cost Savings

BioSure™ Respond

1.5

0.5

Balance

BioForce® 180 BioForce® Piglet 32

* Small room of pigs received 0.5 kg more Respond ** Meds in the feed were CT *** Commodities included corn, soybean meal, and bakery

In a situation where health and management are very good, there may be a way to reduce feed cost by simplifying the budget by feeding less of these first two feeds. However, it is extremely important to recognize the impact it may have on the overall picture of raising a nursery pig. With almost 1 kg difference in end weight, that generally represents three days to market at the end of the finishing period. Assuming that the finishing animal is eating approximately 3.5 kg/day of the last stage feed, this has an implication on the overall bottom line for the farm as well - not only fewer days but additional feed cost. Before looking at simplifying the budget by feeding less of the first two phases, I would recommend you discuss this with your (GVF/FNL) Swine Specialist.

There are several aspects to consider: • Are you willing to give up gain at the end of the nursery in order to reduce feed cost? • What is your weaning weight? This will play a big part in starting your early weans off on the right foot. • On average, how is performance overall? Are your pigs hard to start on solid feed? What is the health status? These will play an important part in how simple a budget can go because we need to make sure we support the growth and efficiency of the pigs to the best of our ability.

Table 2: Performance at Various Timepoints on Trial

Program Performance Comparison Standard

Cost Savings

# Pigs Start

200

199

# Pigs End

200

197

Overall Livability (%)

100

Start Weight (kg)

6.91

6.80

14-Day Weight (kg)

11.40

11.13

35-Day Weight (kg)

25.32

24.17

43-Day Weight (kg)

32.63

31.68

14-Day ADG (g/d)

321

304

35-Day ADG (g/d)

526

494

43-Day ADG (g/d)

598

575

14-Day FCR

1.05

1.06

35-Day FCR

1.35

1.40

43-Day FCR

1.42

1.44

14-Day Feed Cost/Pig($)

5.26

4.09

35-Day Feed Cost/Pig($)

16.08

14.43

43-Day Feed Cost/Pig($)

22.29

20.46

14-Day Cost/kg Gain ($/kg)

1.17

0.95

35-Day Cost/kg Gain ($/kg)

0.87

0.83

43-Day Cost/kg Gain ($/kg)

0.87

0.83

Overall MOF ($)*

54.87

53.86

*Margin Over Feed = ($3 * Weight Gain) - Feed Cost

We can help reduce feed cost per pig by reviewing budgets which may become dependent on market conditions and a change of goals. We can also further discuss how this may impact herd performance and pig flow. For any questions on this trial or about nursery budgets, I would be happy to help you and answer any questions you may have for helping to increase efficiency and positively affect the bottom line for your farm: victoriaseip@grandvalley.com n

WELCOME TOM REIDY: NEW MANAGER OF MONOGASTRIC NUTRITION

e are very pleased to share the news and announce the hiring of Tom Reidy for the position of Manager of Monogastric Nutrition with the GVF group of companies. In this position, Tom will be responsible for providing strategic leadership to the monogastric nutrition team across Canada and will oversee operations within the department, ensuring the best nutritional support is provided to our customers. Tom brings over 20 years of poultry and swine nutrition, sales, and operations experience in both commercial complete feed and premix sectors. Graduating from the University of Guelph with a Masters in Poultry Nutrition, Tom spent the early days of his career in Livestock Nutrition and Pharma Sales Representative positions. He worked at Commercial Feed Mills for the last 13 years in operations, nutrition, and business management. Tom currently lives in Bornholm, Ontario, with his family. Tom joined the GVF group on Monday March 21st 2022, and will be based out of Cambridge, Ontario. We are excited to have Tom join the team and look forward to introducing him to our customers. Please join us in welcoming Tom Reidy to the GVF group of companies! n

UNDERSTANDING THE MARKETS

by: BRIAN GONDER VP & COO, GVF group of companies

n late 2021, price increases affected the Feed and Nutrition market as products all around the world became affected by increased demand, trucking shortages, and COVID-19 shutdowns. It is uncommon to experience so many cost pressures at one time so we will attempt to explain the factors we are witnessing and why we continue to face the fallout of these uncertain times. Over the past year and a half, the market has experienced many different dynamics: From a world-wide pandemic, to natural disasters in BC, to environment shutdowns in China (due to New Years and Olympics), to a war in Europe. Below are a few of the main factors that we have seen affect the market over the past several months. We hope this helps to provide clarify on the difficult supply chain situation we are facing globally.

Phosphates – China’s export ban

Phosphates have and will continue to see increases in market prices due to China’s ban on phosphate exports through June 1, 2022. As we get close to planting season, the demand will continue to increase and will also cause prices to swell. Dical suppliers around the world have been put on ingredient allocation, which has pressured feed and premix companies. Urea, a phosphate-based product, has also seen increases and will

Swine Grist continue to react to the ebbs and flows of the phosphate market. The upcoming planting season, and uncertain Global Soybean Meal and Wheat supplies are adding to the pressure over the next few months.

Russia and Ukraine

The war between Russia and Ukraine continues and concerns continue to grow regarding oil and crop supplies for the later part of this year. Together, Russia and Ukraine supply 26% of the world’s corn and 28% of the world’s wheat production. As sanctions continue to build against Russia, oil supply continues to tighten causing increased prices on all Vegetable oil-based products. Crude oil has recently hit a 10-year high, directly affecting the cost of specific products, while also increasing product costs as transportation costs continue to increase due to fuel surcharges and driver shortages.

As you are all aware, today’s Global Supply chain is ever-changing and challenging however, the purchasing team at Grand Valley Fortifiers remains committed to sourcing ingredients as economically as possible so that we can continue to provide nutritional solutions for you, our valued producers. n

AN IMPORTANT NEW ROLE ESTABLISHED: DIRECTOR, REGULATORY COMPLIANCE AND QUALITY MANAGEMENT

Shipping containers and trucking prices increase

Increases in oil prices, have impacted the cost of deliveries to our customers and the materials arriving to our plants and warehouses. Over the past several months, we have seen shipping containers and trucking prices increase three-to-four-fold as the demand for products continues to increase. Currently in North America, there are 153 loads waiting to be shipped for every one load shipped. Many of these increases have been due to port backups and natural disasters. With Chinese New Year, and the Beijing Olympics behind us, there is a more hopeful tone that the supply chain will improve over the coming summer months. China has recently re-implemented a Zero Tolerance for COVID cases and in late March, Shanghai has gone into full lock-down. Unfortunately, this may cause a lag of returning to a more normal supply and port situation.

Inflation – Everything from key ingredients to water bottles

Across Canada, we have seen inflation affect almost all products and services. Canada’s consumer price index for 2021 was over 5% for the first time since 1991. Many products throughout different industries have increased by 5,10, 15 or even 20%. We are working to continue to limit these increases however, they are affecting all aspects of the supply chain.

Amino Acids

There is uncertainty and disparity on multiple amino products as we look at pricing and availability for upcoming months. As methionine is heavily linked to crude oil prices, methionine prices have risen and settled higher due to high oil prices stemming from Russia’s invasion of Ukraine. Interestingly, lysine has begun to soften as factories have reopened after the Olympics and Chinese New Year. As a by-product of corn, it will be important to watch corn prices over the upcoming months to determine whether Russia and Ukraine have successful planting seasons.

he Canadian feed industry is going through a multitude of changes as our federal feed regulations are being revamped for the first time since 1983. This revamp is a modernization of the feed regulations designed to reflect new information that has been discovered regarding animal nutrition. With Gazette II predicted to come out in the fall of this year we are anticipating the new regulations taking effect late this year. In tandem with the new harmonization of the Feed Regulations by the Canadian Food Inspection Agency (CFIA), the Animal Nutrition Association of Canada (ANAC), the Canadian livestock feed industry’s trade association, has launched their update of Feed Assure V4, the nationally recognized HACCP program for our feed industry. This latest version has some key areas of change, including an increased focus on biosecurity, feed defense/feed fraud and crisis management, risk assessment (particularly with ingredient approval) and increased standards. These new standards for Assure will come into effect in 2023. Additionally, at the producer level, a new national program, The Canadian Pork Excellence (CPE) program has been launched. The transition deadline to the CPE is December 31, 2023. This means that all producers must have completed a full validation on the CPE program before January 1, 2024. This program will replace the Canadian Quality Assurance (CQA) program, which covers traceability (Pig TRACE), food safety (Pig SAFE) and animal care (PigCARE). With all these areas of significant change in regulation and enforcement, Grand Valley Fortifiers decided it would be prudent to create a new position of Director, Regulatory Compliance and Quality Management to provide oversight and guidance of these important standards across the GVF group. We are pleased to announce that Bruce Schumann, previous lead of our Monogastric Nutrition team, has accepted and transitioned into this new role. Bruce has been with the GVF group of companies for over 22 years and brings a wealth of experience to this position. Initially, Bruce became GVF’s HACCP coordinator and led his team through their first Feed Assure certification back in 2001. He has served on the ANAC steering committees including the development of heavy metal guidelines for

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ingredients used in the Canadian feed industry and was invited by the CFIA to help develop an establishment-based risk assessment model in the feed sector in 2019. Bruce has been responsible for our Organic Certification though both the Canadian Organic Standards (COS) and the National Organic Program (USDA/FDA) and served as an advocate for our producers in the scientific review of the Canadian Organic Standards, particularly revolving around phytase and amino acid usage in organic production. Bruce has assisted industry partners in attaining commercial feed mill status with the CFIA including writing policies and procedures for their mills to ensure their compliance with the Feeds Regulations as well as the Canadian Ractopamine-Free Pork Certification Program. He has gained organic certification for commercial feed mills as well as making them compliant and getting approvals for national method of production claims such as Raised Without Antibiotics (RWA), Vegetable Grain Fed (VGF) and No animal By-Products (NAB) programs. Bruce was responsible for the original development and oversight of operation manuals, nutritional programs, audit checklists, audits and protocols for RWA/VGF/NAB and omega-3 claims back in 2008 when method of production claims were first launched by the Label and Registration Unit with the CFIA. In this new position, Bruce will be overseeing new regulatory and Feed Assure V4 compliance, overseeing our Feed Assure coordinators, developing a national Quality Assurance/Quality Control program, and working on corporate social responsibilities including emerging issues with our producers, animal welfare, safety concerns and biosecurity as well as product registrations and exploring added value market opportunities for our customers. We are thankful to have Bruce Schumann step into this important role and encourage you to reach out to him with any questions. n

SLAUGHTER REDUCTION CAPACITY CHALLENGES: WHERE WE GO FROM HERE

by: RON GUNSON Business Development Manager, Grand Valley Fortifiers

lymel’s recent announcement to cut Quebec slaughter by 1,250,000 head has been a major blow to central and eastern pork producers. Originally, Olymel had planned to achieve a 1,250,000 total reduction by cutting 750,000 from Quebec and 500,000 from Ontario. The Quebec Producer Board (Les Éleveurs de porcs) disputed this decision by Olymel and requested a hearing with the Quebec marketing regulatory body (La Regie des marchés agricoles et agroalimentaires du Québec). La Regie ruled in December to adjust Olymel’s cuts as follows – 530,000 less from Quebec and 720,000 less from Ontario. La Regie’s decision means that instead of a reduction of 10,000 per week from Ontario to Quebec, it will now be 14-15,000 per week. Certainly, the news of the Olymel’s huge reduction in harvesting hogs is a great concern for the entire Eastern Canada swine industry. With these challenges of reduced capacity in Ontario & Quebec, there appears to be more of an appetite for hogs stateside, as well as from Maple Leaf Foods in Brandon, Manitoba. With the current war in the Ukraine, and plant labour issues still a challenge, some land-based producers may consider selling their corn instead of feeding it through hogs. When making a decision like this, there are some important things to consider including, whether a producer is in pork production for the long term, and if a succession plan has been put in place. If the producer is land-based, has good health & production, this is a storm we encourage them to weather. There are options available if producers are still looking for a home for their hogs. Ontario Pork Marketing Divi-

sion has secured block deals with a few US Processors in the Eastern corn-belt, as well as a large block deal to Maple Leaf Foods in Brandon. In speaking with Blair Cressman at Ontario Pork, it sounds like US processors are now shuffling market hogs from the eastern corn-belt into the Midwest (Iowa, Minnesota, South Dakota) to fill gaps in hog supply. Along with a new USDA pilot program to allow some US processors to operate at faster line speeds, this is opening opportunities for Ontario hogs to move south. There is also strong demand for weaner and feeder pigs from the US if this is an option for your operation. If a producer is looking to sell hogs either on the spot market or as part of a longer-term agreement, we recommend they contact Blair Cressman at Ontario Pork directly (226-749-4262), or through one of the local Ontario brokers (Zantingh, Werden, Global). At the time of writing, Lean Hog Summer Futures are exceeding $114 USD per 100 lb, as you can see in the chart below. However, with the market volitility that we’re witnessing in recent days, the price two weeks prior had reached well above $120. n

Thought for the Day Challenging days draw us closer to God. We are all living in challenging days, some more so than others. In this passage Paul reminds us that followers of Christ are not promised a blissful life but rather hardship and trial, which in turn draw us closer to God who has not promised to shield us from it but to carry us through it. Be encouraged as we enter spring 2022, God is in control. Romans 5:1-5 - NIV “1Therefore, since we have been justified through faith, we have peace with God through our Lord Jesus Christ,2through whom we have gained access by faith into this grace in which we now stand. And we rejoice in the hope of the glory of God. 3Not only so, but we also rejoice in our sufferings, because we know that suffering produces perseverance; 4perseverance, character; and character, hope. 5 And hope does not disappoint us, because God has poured out his love into our hearts by the Holy Spirit, whom he has given us.” “Paul tells us that in the future we will become, but until then we must overcome. This means we will experience difficulties that help us grow. We rejoice in suffering not because we like pain or deny its tragedy, but because we know God is using life’s difficulties and Satan’s attacks to build our character. The problems that we run into will develop our perseverance – which in turn will strengthen our character, deepen our trust in God, and give us greater confidence about the future.” 5: 3,4 commentary - NIV Life Application Bible published by Tyndale House Publishers