recent update seems to break portupgrade

[AN]

FreeBSD FBSD10 10.0-CURRENT FreeBSD 10.0-CURRENT #18 r240078: Mon Sep  3 
17:41:46 EDT 2012     root at FBSD10:/usr/obj/usr/src/sys/MYKERNEL  amd64

# cat /etc/make.conf
OVERRIDE_LINUX_BASE_PORT=f10
QT4_OPTIONS= QGTKSTYLE

# added by use.perl 2012-04-04 01:11:13
PERL_VERSION=5.14.2
MALLOC_PRODUCTION=yes
WITH_PKGNG=no

I just tried to do a portupgrade and received the following on the command 
line.  I compiled my system (world and ports from source).  Portupgrade 
worked earlier today before I upgraded to r240078.

# portupgrade -va
--->  Session started at: Mon, 03 Sep 2012 22:51:25 -0400
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
** Port directory not found: www/ff_nightly
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
"/usr/ports/Mk/bsd.openssl.mk", line 109: warning: "/usr/local/sbin/pkg 
which -qo /usr/local/lib/libcrypto.so" returned non-zero status
^C

Not sure what is going on, I guess it is related to pkg:

# whereis pkg
pkg: /usr/sbin/pkg /usr/local/man/man8/pkg.8.gz /usr/src/usr.sbin/pkg
[root at FBSD10 ~]# ls -l /usr/sbin/pkg
-r-xr-xr-x  1 root  wheel  16256 Sep  3 13:55 /usr/sbin/pkg

If I do not want to use pkg do I need an entry in /etc/src.conf?  How do 
you disable pkg?  How do I run portupgrade now?