President’s Message – January and February, 2000

PRESIDENT‘S MESSAGE

Nineteen-ninety-nine is now history. It was a year of rapid change in the ownership of pigs being produced in the United States. It was a year during which markets failed to attain profitable levels for most pork producers. For many, 1999 marked a change in pork production in the United States and the industry is changed forever. Without debating the pros and cons that these changes have wrought in the pork industry, it is important to assess the impact that they are likely to have on pork producers, swine practitioners, and our organization, the AASP.

The packer ownership of pigs is one factor that is new to the industry. Packer ownership has accelerated during 1999, particularly in the southeastern United States. Smithfield Foods of Virginia purchased Carroll’s Foods of North Carolina and Virginia. Later in 1999, letters of intent were signed for Smithfield Foods to purchase Murphy Farms of Rose Hill, North Carolina and Tyson Foods Swine Division in Springdale, Arkansas. These deals are due to close on January 2, 2000. Continental Grain/Premium Standard Farms, Seaboard Farms, Dogwood Farms (a division of Lundy Packing), and Hatfield Foods of Pennsylvania are included in this trend. Some Midwestern producers and packers have not experienced this trend, but the future remains uncertain. The question remains: will other packers follow the model of Smithfield Foods? A more favorable question for independent pork producers is: will packers in the Midwestern United States opt to coordinate their production needs using marketing contracts that are favorable for producer profitability? Some of the historical agreements have been good for producers, while others have not.

Consolidation of pork producers has resulted in fewer clients for swine practitioners to serve. This trend effects other suppliers of the pork industry. Feed and animal health companies are also consolidating. The net result is fewer suppliers to the industry. Some of these companies are developing strategies to target specific market segments, such as companion animals or cattle, in order to optimize net income. The impact upon the AASP is yet to be determined, but surveys conducted on members of AASP that do not renew their membership indicate that in most instances their swine clients are gone. A more thorough understanding of the impact won’t be known for awhile. Oftentimes, during the Annual Meeting of the AASP, some swine practitioners will register at the door. Many of these practitioners are employed in mixed animal practices. As their swine clientele diminishes, the AASP will not be their first choice for continuing education needs. Perhaps, after the AASP Annual Meeting in Indianapolis in March 2000 a further assessment of the trend will be possible.

Swine practitioners face other challenges. The Food and Drug Administration (FDA) Center for Veterinary Medicine (CVM) is nearing completion of their risk assessment studies. These studies are intended to answer questions regarding the risk of antibiotic use in animals and the development of resistance. These studies will be presented and evaluated at a series of meetings. Dr. Tom Burkgren and I attended one of these meetings in December 1999. In addition, the AASP, in conjunction with the National Pork Producers Council (NPPC), has contracted researchers at Iowa State University in the field of risk assessment to evaluate the FDA-CVM’s studies and conclusions. The results of these FDA studies will be used to implement the new guidelines for antibiotic approval. That document is entitled the "Framework Document for New Drug Approval." It had not appeared in the Federal Register at the time this message went to print, but it is expected sometime in the near future. The future approval of antibiotics for use in pigs will most likely have antibiotic resistance monitoring both pre- and post-approval. If a new antibiotic is approved –and once approved, a certain level of antibiotic resistance is determined — that drug could be deemed unsafe and withdrawn from the market. This uncertainty would stifle new drug development for use in food animals. This effect would please some individuals at the Centers for Disease Control (CDC) in Atlanta, Georgia. Their focus has been on limiting the use of human antibiotics in food animals. The CDC is not a regulatory agency; however, their agenda has been clear and they are exerting pressure on the scientists at FDA-CVM to restrict the approval of human antibiotics for use in food animals.

Nonetheless, there is reason for optimism. The AASP is positioned well for the future. The creation of a full-time office and an Executive Director has enhanced the credibility of the AASP with our key colleagues in the swine industry. Dr. Tom Burkgren has forged alliances with individuals at the NPPC, the American Veterinary Medical Association (AVMA), the FDA, the American Association of Bovine Practitioners (AABP), and other organizations. Dr. Burkgren has attended many of the key meetings at the FDA and CDC. He provides continuity on many topics that are important to AASP members. Our core mission is needed and valuable. The task for the future is to anticipate who the future members of AASP will be and how we will provide them with information in an effective and timely manner. Toward that end, a strategic planning session is planned for early in 2000 sometime after the 2000 Annual Meeting. Each district of AASP will be represented along with other specific individuals needed to participate in the session. Please provide your district director with any thoughts or ideas for the future.

— Alan Scheidt