Dealing With Risks in Today's Swine Industry

October - December 2002

David Stender , swine field specialist


Situation

Managing and minimizing risks are an increasingly important part of modern swine production. Last summer, risks were substantially higher because of the outbreak of Foot & Mouth Disease in England and the expansion phase of hog production, which in recent years have precipitated dramatic shifts in market hog prices.

Response

One-on-one discussions with several swine producers led to the development of a risk management seminar to address the needs of the day.
Dr. John Lawrence led a discussion regarding managing market risk including Swine Industry trends and outlook, a survey of producer intentions, and a close examination of new generation of packer marketing contracts. Defending against foreign swine disease was the topic presented by Dr. John Carr. He described plans to deal with FMD if the disease enters this country and the Bio-security producers' need as well as firewalls in place to reduce this risk. Dr Kris Kohl concluded the session with a talk to reduce the dead animal removal disease risk through the composting option, an economical disposal method of baby pigs, market swine and sows

Impact

Forty-five participants from many larger swine farms in the area attended. Most of these risks have been ongoing so an eight month follow-up survey was sent to the participants to determine if the session had ongoing impact to the participants. Survey return rate was 41%.

The results were as follows:
- 44% went ahead and used John Lawrence's marketing information in making marketing decisions.
-78% learned new information about composting.
-57% of those learning about composting have tried the technology on their operations
-Three quarters of those surveyed were looking into price insurance as a method Dr. Lawrence talked about in managing risk and two thirds reported the desire to know more about mandatory price reporting
-11% changed production practices because of the information.
-Most swine operations already have some bio-security measures in place because of the session, 22% have taken new steps to keep foreign diseases out and have changed their bio-security because of the information received from the session.

The producers were asked about the impact of this program in terms of the actual estimated value of the program to their operations. The response was $417.50 as the average economic value of this meeting to their operations. If you extrapolate this average value to the rest of the participants not responding to the survey, the value of the meeting estimated by participant after eight months of implementation would be about $18,000.

 

Page last updated: July 10, 2006
Page maintained by Linda Schultz, lschultz@iastate.edu