Pinoyagribusiness

China Offers Potential New Export Market for Canadian Pork Producers

Farmscape Article 2609  October 5, 2007

 

Canadian pork producers are looking to China in hopes of developing new markets for their product while helping to ease a shortage of pork in that nation.

 

China is by far the world’s largest producer of pork, accounting for approximately half of the world’s total pork output. However China also accounts for about half of the world’s total pork consumption and the demand for pork continues to rise as Chinese consumers gain affluence.

 

CPC Fact Finding Mission Travels to China

Last month a delegation of Canadian pork producers traveled to China as part of a Canadian Pork Council (CPC) fact finding mission, to take part in the World Pork Congress in Nanjing and to learn more about the Chinese market.

 

CPC executive director Martin Rice explains it was a mission to find out what would give rise to China becoming a larger importer of pork cuts from Canada and other countries and the possibility of China becoming a greater competitor in the world pork market.

 

“We learned a lot about what influences the Chinese market, what opportunities are there, their desire to move forward and to feed their own people,” recalls CPC president Clare Schlegel.

He observes the Canadian and Chinese markets are vastly different.

 

“Their taste preferences are different than ours. They tend to use the entire pig. Their pig production system is also quite different that ours. It’s still concentrated in backyards — producers with between one and ten pigs.”

 

Small Farms Account for Bulk of Chinese Pork Output

Florian Possberg, President and CEO of Humbolt, Saskatchewan-based Big Sky Farms and a CPC delegate, points out farms with one or two and, in most cases, less than ten hogs per farm per year account for roughly 60 percent of total pork output.

 

“Keeping in mind that China produces roughly 50 percent of all the hogs in the world, that means three hogs out of ten in all of the world are produced in the back yards of China.”

 

Chinese Government Seeks to Increase Scale of Production

The Chinese government is encouraging the industrialization of its agricultural base and larger scale production.

Saskatchewan Pork Development Board (Sask Pork) producer services manager Harvey Wagner observes they have a growing element of larger farms with 400 and up to fifteen-hundred sow farrow to finish operations. They are also developing a number of farrowing units to supply feeder pigs out into the country.

Wagner, who was in China last month as part of a Canada-China Agriculture Development Program project intended to improve hog production and food safety in China, says, “Mostly the idea is to improve productivity and to improve the genetic background of the pigs.”

 

Ability to Expand Hampered by Combination of Challenges

However, as China works to expand its pork production to meet a growing domestic demand for pork the industry faces a number of challenges. Wagner observes one of the challenges is the genetic background of the local pigs. “While fairly tasty they don’t grow as fast and their lean yield isn’t very high so they’re trying to improve them with the leaner genotypes.”

 

Rice adds that China’s pork industry has also been hurt by the increased feed costs that have been seen worldwide over the last year. Additionally, they have had to manage a rapid outbreak of PRRS (Porcine Reproductive and Respiratory Syndrome) which claimed up to 20 percent of the Chinese pig population and resulted in pork prices that are roughly double those of one year ago.

 

Pork a Key Component of Chinese Food Basket

Schlegel points out, “In China, pork is 15 percent of their food basket. It’s very, very important. It’s one of nine different items that they actually look at as supporting national security so they are very concerned right now as pig prices and pork prices are relatively high for their consumers.”

 

Claude Vielfaure of La Broquerie, Manitoba-based Hytek Limited and a director with Manitoba Pork Council observes, “The amount of pork that is eaten in China is fairly amazing. Of the total meat consumption in China per capita, 65 percent of it is pork. And right now there’s a shortage of meat in China so there’s a big push to be able to get more meat in order to feed the people.”

 

China Targets Increased Meat Consumption

Schlegel notes the Chinese government is hoping to increase consumption of meat by its citizens by 30 grams a day and, if successful, that will obviously create tremendous demand for pork, for chicken and for other meats.

 

Possberg estimates that in the next ten years China will consume an extra 130 million hogs per year. He doubts whether they can produce that much more pork in an already concentrated industry in China. “That’s obviously a great opportunity for the rest of the world and we believe Canada can be a significant part of supplying that extra pork meat to Chinese consumers.”

He observes, “Chinese consumers are gaining in affluence and we could see it everywhere. There is construction everywhere. They’re building roads, factories and apartments and their rural economy is evolving as they become an industrial giant for all sectors of our industrial world. These people are going to consume more meat and pork is by far the largest segment of the meat industry in China.”

 

Short Term Opportunities Appealing

According to Rice some imports have already started to be contracted for. Although there has been no confirmation, some estimates indicate China will require as much as 400 thousand tonnes of pork within the next year or so.

 

“The short term would suggest there’s a good likelihood of some additional imports and not just imports of the usual product we sell to China which are organ meats such as kidneys and stomachs etcetera. They are looking at bringing in cuts of pork to supplement their domestic supply.”

 

Rice acknowledges China is expected to get its domestic production back up again. “We are not so convinced there will be a large import demand for pork to China after this period of high pork prices is overcome. But, looking at it in the longer run, we would definitely see opportunities for China, say five to ten years from now, to start becoming a more regular and larger pork importer.”

 

China Committed to Meeting Domestic Pork Demand

Schlegel concedes, “China is committed to feeding its own people so it may never be an extremely large market. But there is still a significant opportunity there, particularly for some of the cuts and some of the parts of the pig that we do not eat in Canada and North America, and there is a growing opportunity in the high end to for muscle cuts particularly in the bigger cities.”

 

“They are our fourth or fifth largest market at this point time and we certainly would like to increase that depending on their particular situation and demand."

 

Staff Farmscape.Ca

The Philippines should try and get a piece of the action,pork exports to China.Looks like everyone is craving a piece of the pie for themselves.China is fairly close.Would be nice to be able to export to the Chinese.

Where Will the Meat Come from in 2030
CANADA - The world’s population is increasing by 78 million each year, and by 2030, more than eight billion people will inhabit the Earth.



According to the United Nations, global agricultural capacity will be straining to feed this many inhabitants – and the problem will worsen as the world’s population reaches 10 billion by 2035.

A recent publication by the Canadian Cattlemen's Association claims there are three issues need to be addressed in conjunction with this expected increase in global population levels: protein consumption, the global supply of food and food safety. The consumption of protein is increasing rapidly in the developing world and within 10 years, the world will add one billion consumers of meat and meat products in countries such as China and India as well as other “emerging” nations.

Annual gains in the global food supply have recently declined from three to one percent. Increasing the global supply of food through the expansion of the cultivated land base may not be feasible – and could create environmental havoc in many regions of the world. A new “green revolution” is unlikely to solve the world’s food supply problems because additional production gains through chemistry or mechanization are forecast to be relatively small.

Food safety is an important international concern and most of the world has focussed its attention on livestock. The World Bank predicts that demand for animal products will double within 20 years – and developing countries will supply most of what is required. However, only about 20 percent of the countries of the world have the ability to respond effectively to health crises caused by animal disease. The Food and Agriculture Organization says that in a world without the capacity to deal with diseases in livestock destined for human consumption, a major crisis could occur within 10 years. With these three scenarios unfolding, what are the implications for Canada, a country that provides the world with over $24 billion in agricultural and food products each year?

Wheat, barley and livestock make up a large proportion of Canada’s agricultural and food exports. With its sizable land base and its high level of agricultural productivity, Canada has a competitive advantage over most other nations that produce and export agricultural products. Canadian producers, however, depend on substantial investments in research and development (R&D) in order to stay competitive. When the Canadian public invests in agricultural R&D, it receives a good return on its investment. Proof of that benefit is reflected in the growth in agricultural productivity over the last 40 years – with the agricultural sector outperforming both the manufacturing and business sectors of the Canadian economy.

Hard to Sustain
Recently, however, Canadian livestock producers have found it more and more difficult to sustain a competitive advantage over global competitors. One issue is the rapid increase in the cost of feed grains due to the recent development of the US and Canadian bioethanol sector. Senior research analysts at the George Morris Centre have warned that the Canadian plan for the development of bioethanol runs contrary to other agricultural initiatives and will not be positive for agriculture.

Canada has positioned itself as a meat exporting country. Converting Canadian feed grains into bioethanol instead of into meat and livestock makes little economic sense – especially when an increasing prosperous world can afford to pay higher prices for meat protein. In addition, this strategic adjustment is taking place at a time when Canada’s livestock producers are least able to adapt to change.

There is an opportunity for Canadian livestock producers to take advantage of the growth in global population levels, a tightening global food supply and an increasing demand for animal protein from emerging nations. In addition, Canadian livestock producers can meet these needs within a production system with high standards for food safety and the ability to respond quickly and effectively to livestock health emergencies.

Because this project is driven by developments in the manufacture of bioethanol from small grains, Strategic Vision Consulting Ltd. (SVC) has focussed on the development of wheat and barley as feed grains in western Canada. Forage issues, on the other hand, have a national focus.
 

Further Reading
 -

Where Will the Meat Come from in 2030
CANADA - The world’s population is increasing by 78 million each year, and by 2030, more than eight billion people will inhabit the Earth.



According to the United Nations, global agricultural capacity will be straining to feed this many inhabitants – and the problem will worsen as the world’s population reaches 10 billion by 2035.

A recent publication by the Canadian Cattlemen's Association claims there are three issues need to be addressed in conjunction with this expected increase in global population levels: protein consumption, the global supply of food and food safety. The consumption of protein is increasing rapidly in the developing world and within 10 years, the world will add one billion consumers of meat and meat products in countries such as China and India as well as other “emerging” nations.

Annual gains in the global food supply have recently declined from three to one percent. Increasing the global supply of food through the expansion of the cultivated land base may not be feasible – and could create environmental havoc in many regions of the world. A new “green revolution” is unlikely to solve the world’s food supply problems because additional production gains through chemistry or mechanization are forecast to be relatively small.

Food safety is an important international concern and most of the world has focussed its attention on livestock. The World Bank predicts that demand for animal products will double within 20 years – and developing countries will supply most of what is required. However, only about 20 percent of the countries of the world have the ability to respond effectively to health crises caused by animal disease. The Food and Agriculture Organization says that in a world without the capacity to deal with diseases in livestock destined for human consumption, a major crisis could occur within 10 years. With these three scenarios unfolding, what are the implications for Canada, a country that provides the world with over $24 billion in agricultural and food products each year?

Wheat, barley and livestock make up a large proportion of Canada’s agricultural and food exports. With its sizable land base and its high level of agricultural productivity, Canada has a competitive advantage over most other nations that produce and export agricultural products. Canadian producers, however, depend on substantial investments in research and development (R&D) in order to stay competitive. When the Canadian public invests in agricultural R&D, it receives a good return on its investment. Proof of that benefit is reflected in the growth in agricultural productivity over the last 40 years – with the agricultural sector outperforming both the manufacturing and business sectors of the Canadian economy.

Hard to Sustain
Recently, however, Canadian livestock producers have found it more and more difficult to sustain a competitive advantage over global competitors. One issue is the rapid increase in the cost of feed grains due to the recent development of the US and Canadian bioethanol sector. Senior research analysts at the George Morris Centre have warned that the Canadian plan for the development of bioethanol runs contrary to other agricultural initiatives and will not be positive for agriculture.

Canada has positioned itself as a meat exporting country. Converting Canadian feed grains into bioethanol instead of into meat and livestock makes little economic sense – especially when an increasing prosperous world can afford to pay higher prices for meat protein. In addition, this strategic adjustment is taking place at a time when Canada’s livestock producers are least able to adapt to change.

There is an opportunity for Canadian livestock producers to take advantage of the growth in global population levels, a tightening global food supply and an increasing demand for animal protein from emerging nations. In addition, Canadian livestock producers can meet these needs within a production system with high standards for food safety and the ability to respond quickly and effectively to livestock health emergencies.

Because this project is driven by developments in the manufacture of bioethanol from small grains, Strategic Vision Consulting Ltd. (SVC) has focussed on the development of wheat and barley as feed grains in western Canada. Forage issues, on the other hand, have a national focus.
 

Canadian Hog Statistics - February 2008
By Statistics Canada. Canadian hog inventories plunged during 2007 as a strong dollar and high feed costs challenged producers.


Hog Inventories: 1 January 2008
Hog industry under financial strain

 
According to the 2008 January Livestock Survey, there were 14.0 million hogs on farms at the first of the month, 897,000 fewer than the same date last year. This is down 6.0 per cent from the previous year and 2.4 per cent lower than October 1, 2007.

Prices for slaughter and export hogs, largely determined in the United States and adversely influenced by a strengthening Canadian dollar, weakened during the second half of the year. Although variable, feed grain prices have surged over 50 per cent in 2007.

The financial pressure on hog producers can be highlighted by examining the results of a calculation that divides the hog price by a feed cost. The higher the ratio, the better the situation is for hog producers. By November 2007, the Ontario hog-corn ratio was 9.9, well down from 22.4 the previous year and considerably lower than the 10-year average of 20.8. The hog-barley ratio in Alberta showed a similar plunge.

Hog inventories trend down
thousands of head
Farmers continued to export hogs to United States at a record pace, 9.9 million during 2007. This surpassed the previous record established in 2006. Over two-thirds of exported animals were younger hogs, called weaners, for feeding in the United States. As feeding costs are increasing, the weaner export market remains relatively attractive to Canadian farrowing producers.

Domestic slaughter has continued to decline after reaching a record high in 2004, consistent with soft domestic demand for pork, lower prices paid to producers and higher feeding costs. Hog slaughter dropped 2.4 per cent between 2006 and 2007.


Livestock statistics and Concepts
Concepts

Inventory levels of the various types of livestock intended for sale in Canada are measured at specific times throughout the year. Surveyed operations are requested to include all animals located on the farming operation, regardless of ownership. They are also asked to include animals owned but pastured on a community pasture, grazing co-op or public land. Producers are asked to exclude animals owned but kept on a farm, ranch or feedlot operated by someone else. Inventory levels are estimated for cattle, calves, pigs, sheep and lambs. Estimates are also produced for certain categories of animals on the basis of age, sex, weight and/or purpose i.e. breeding or slaughter.

Current information on livestock inventories and related statistics such as supply and disposition enable those active in the agricultural sector to observe and assess changes in the industry, measure performance and keep the agricultural community and general public informed of developments. The primary data users are federal and provincial governments, producer boards, farmers and farm organizations, private business, academic research institutions and students. Livestock data assists governments in formulating agricultural policies and developing programs. Farming organizations use statistics in developing recommendations for producers and governments. Farmers make increasing use of prices, production, and marketing statistics in planning their operations. In addition, these livestock statistics are used in the calculation of farm incomes and in the Canadian System of National Accounts for indicators such as gross domestic product.

Methods
To produce livestock estimates, there are actually 6 different survey occasions. All of the survey occasions collect data primarily using Computer Assisted Telephone Interviews (CATI) although there are special procedures in place for the very large or complex operations.

Two of the occasions are the January Livestock Survey and the July Livestock Survey. These are large-scale general livestock surveys collecting data on cattle, hogs, sheep and other livestock, referring to inventories at the 1st of the month. The probability samples include about 10,000 operations at 1 January, and about 18,000 operations at 1 July. These surveys collect data during a three-week period in the western provinces, Ontario and Quebec. Regardless of when operators respond, they are asked to report inventories as of 1 January or 1 July. The livestock survey results are released, following processing and analysis, approximately seven weeks after the reference date.

Hog inventories are the focus of two other survey occasions collecting estimates of pig numbers at 1 April and 1 October. This survey was initiated in 1998 as estimates from 1978 to 1997 were based solely on analytical tools. For the hog surveys, a sub-sample of the prior livestock survey is used. The probability samples are 2,500 at 1 April and 1 October and, similar to the livestock surveys, these CATI surveys cover the western provinces, Ontario and Quebec. Producers are requested to report their inventories as of the reference date, although the data are collected during a seven day period near or before that date. The hog survey results are normally released three to four weeks after the reference date.

The June and November Atlantic Surveys are used to produce estimates for that region. These surveys are multi-purpose collecting data, primarily inventories, on livestock including cattle, hogs and sheep in addition to collecting data related to the area, yield and production of the principal field crops. The probability samples are 1,300 in June and 2,200 in November with the data collected by telephone. The results are released at the same time as the livestock results. For reference points where surveys do not exist for the Atlantic region, analytical tools are used to produce the estimates.

Recently a new piece of information has been added to the cattle statistics allowing users a better understanding of the cattle industry. In essence, the total inventories are distributed, on the basis of survey results and sector level balance sheets, to a specific farm type. The two major categories are dairy and beef. The beef sector is then broken down to beef cattle on cow/calf and mixed beef and dairy operations; beef cattle on feeder, stocker/finish operations; and, beef cattle on feeding operations, which include feedlots.

To summarize, the livestock statistics are survey-based estimates. The survey relies on a list frame that is established every five years by the Census of Agriculture and updated to include new entrants, particularly large hog operations. The probability sample surveys are conducted by telephone. The survey results are analysed and corrected before the data are used to analyse the industry and fine-tune the estimates. The survey data are reviewed in a board environment before the commodity analyst works with the data primarily using supplydisposition analysis. The results of the industry analysis are reviewed by the board before being sent to the individual provinces. Once the data are finalised they are released to the public and published. The principal data released include inventories and summarized supply-disposition tables. The data also flow, via farm income estimates, to the Canadian System of National Accounts. In addition the data are used in the calculation of net farm income projections, produced by Agriculture and Agri-Food Canada in co-operation with Statistics Canada and the provinces.

Canada Sending Record Number of Hogs   
  Compiled By Staff   
  February 18, 2008   
 
 
  U.S. hog processors and feeders are seeing very heavy imports of hogs and feeder pigs from Canada. Department of Agriculture Outlook Board Chairman Gerry Bange says the amount of imports is high enough to have an impact on U.S. pork production numbers and prices.

"We're expecting about 10.8 million of those animals to come in this year, which would be a record number," Bange says. "Evidently the slaughter plants in Canada are having various difficulties associated with labor and inefficiencies because of the smaller size of their plants."

Profits for Canadian hog producers are getting smaller due to the fact they have to import more high-cost feed from the U.S., so Bange says we're seeing a lot of those animals coming to the United States, which is resulting in a bigger pork production number for the U.S.

USDA estimates U.S. pork output is 5% more than 2007 and Canadian hog inventory is 6% less than last year.

   

Pork Commentary: Is There Any Relief in Sight!
CANADA - The cash market remains dismal, writes Jim Long, President and CEO, Genesus Inc. Last Friday Iowa-Minnesota averaged 49.53 lean. With breakevens around $75.00 that works out to a $50.00 a head loss. With the Canada-USA slaughter hovering around 2.7 million head a week it translates industry wide into an equity evaporation of about $130 million a week.

 

Unfortunately, it seems money is disappearing faster than it ever came in. The only relief in sight is with lean hog futures which closed last Friday April 55.02, May 65.65, June 70.12. June futures show a $40 a head improvement but it has been a reality since last summer.

120 day out lean hog futures have indicated higher cash prices than what we have experienced during the actual marketing period. At some point this trend will reverse but it's the billion dollar question when.

Other Observations
Easter is upon us. Hams are 41¢ lb wholesale. Some retail stores are featuring ham at $1.49 lb. One store we were in advertised that $1.49 was a $1.50 lb saving from regular price. Good to see someone is making money. Ham is very inexpensive meat protein and hopefully this can increase demand.


Last week we talked to a company that manufactures plastic farrowing and nursery floors. Up until January they were quoting several new so-farrowing barns. Since then phones have gone dead. We expect most, if not all, contemplated new sow units in 2008 will not be built. It takes a ton of capital and courage to build now. Few, if any, have that right now. We also expect most contemplating expansion will look to buy existing units.


Question is who will buy units. Most in the industry are getting pounded by these prices. In the last two cycle lows a large segment of production had price and cost protection with packers, feed companies, etc. This time we see little of this type of risk management. The pain is getting directly to the producer. The only risk-limiting program is those growing their own feed which is still a significant portion of the industry (20-25%) but even that leads to opportunity loss. We are of the opinion that economic circumstances are cutting the sow herd. Many barns will have lower sow numbers as gilts are not entered. There are also producers exiting. When few, if any, new barns are being built, the net effect of entry-exit will be significantly less. Obviously the marketplace cannot handle the number of hogs we are producing and give our industry a profit. The only solution is less hogs. The pain to get to that profit is heart-wrenching.


Are we staring to pull weights down? Latest Iowa-Minnesota weights were 267.5 lbs. At the first of year 271.2. Short-term it will put more pork in the food chain, as we pull hogs ahead. At some point though, it will mean less pork which is positive for prices. You only kill them once.


Packers are doing okay. The spread between carcass and cut-outs is 7¢. They are making money but not getting rich. Give them credit. They are getting them dead and moving the pork. One of North America's greatest assets in the pork industry is the scale, efficiency, capital wherewithal and aggressiveness of our packers. A week ago we had Russian visitors in a new large plant. They marveled at the speed and scale of 3 seconds a hog. Packers like this are a big reason when the dust settles in the global market meat protein shake out; we are poised to capture more world market shares.


Bear Stearns was the 5th largest US investment bank a week ago. Its stock was $70.00 a share. It was announced now that JP Morgan Chase will buy Bear Stearns for $1.00 a share, a $7 billion write down. A run on the bank loans that were in the US housing market are blamed. Just as in 1998 no one could have predicted the loss of control of Murphy Farms, Carroll Foods, etc by their original owners. We are in trying times. No one knows the future. Who survives the pork industry meltdown? Stay tuned.
"Courage is not the absence of fear but rather the judgment that something else is more important than fear." -- Ambrose Redmoon

When Every Penny Counts" Scheduled for Alberta and Saskatchewan
CANADA - The Prairie Swine Centre is encouraging hog producers to consider adjusting their market weight targets as one way to maximize feed efficiency during a time of high feed costs and low hog prices, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The role of market weights in the profitability of hog production will be one of several areas examined, when the Prairie Swine Centre takes its "When Every Penny Counts" seminar series to Alberta and Saskatchewan.

The sessions look at animal nutrition, facilities engineering and design and energy consumption reduction strategies developed by the Prairie Swine Centre to help reduce pork production costs without spending additional dollars.

Centre President and CEO Dr. John Patience notes feed accounts for 50 to 75 percent of the cost of producing pork and, when hog prices and low and feed costs high, the ideal target market weight will be different than when feed is inexpensive and hog prices are strong.


Dr. John Patience-Prairie Swine Centre
The optimum weight that a producer would be aiming for will vary from farm to farm because different genetics will respond to market weight differently that other genetics.

That's number one.

Number two is as you can appreciate, when we go from a situation of a couple of years ago where market prices were relatively high and feed costs were very low, that would dictate that we probably feed our pigs to a heavier weight.

Where as right now, where market prices are very low and feed costs are very high, putting that extra weight on a pig is going to be very expensive.

That would probably suggest that we should be aiming for a much lighter pig.

In the case of our own operation, approximately a year ago, we were aiming for about a 97 kilogram carcass.

Then last fall we dropped that down to a 94 kilogram carcass.

At the first of the year we dropped it even further to about a 92 kilogram carcass all the while because the relationship between feed cost and market price has changed."

GM Livestock - A Market Reality and an Advantage
ONTARIO - Behind locked doors, past a shower, where humans are required to rinse, more than 25 pink pigs crowd into hay-covered pens at the University of Guelph in Ontario, Canada. They look like regular Yorkshire pigs, however, these pigs have been modified to carry a gene from an innocuous strain of E. coli that has been spliced with a protein from a mouse, writes Rebecca Clarren.


This added gene enables the animals to produce the enzyme phytase in their saliva. An enzyme that Guelph researchers, could solve one of the major environmental problems associated with industrial pig farms. Trademarked the 'Enviropig', these genetically modified pigs produce 60 percent less phosphorus in their manure than their conventional cousins.

Normal pigs can't break down phytate, a phosphorus-rich compound in their gut, explains a report on Salon.com. And, when manure lagoons on hog factories overflow or breach into nearby rivers or seep into groundwater, the high phosphorus content creates algae blooms, killing fish and other marine life.

Although these pigs been raised at Guelph for seven years, they haven't made it out of the lab. American and Canadian regulatory agencies have no regulations governing the keeping or management of genetically engineered animals'in the marketplace. However, a landmark law recently passed by the US Food and Drug Administration, means these little piggies may soon be headed to market.

Safety Endorsed
In January, the FDA declared that cloned animals and their progeny were safe to eat and it opened the door to genetic engineering.

"In my opinion, the FDA approved animal cloning only to open the door to genetic engineering of animals," said Jaydee Hanson of the Center for Food Safety, a Washington, DC, group.

The FDA reached the decision after reviewing hundreds of scientific studies that found no significant nutritional or toxicological differences in the composition of the meat or milk of cloned cows, pigs and goats from those of their more traditional brethren.

The decision is regarded as the first step to the regulation and commercialization of genetically engineered animals. It has critics but it also has supported, says the report.

Imports: Last year, according to data from the Philippine Bureau of Animal Industry (BAI), total pork imports increased by 43 per cent, mostly composed of pork rinds or skin and pork fats used by the meat processing industry. The Philippines imported about 32 per cent of its pork requirement from Canada and about 16 per cent from Germany. The United States supplied a little over 13 per cent (10,351 MT), mostly pork offals, fats and other unspecified pork cuts.

Thursday, April 10, 2008Print This Page
Cull Program Applications to be Available Monday
CANADA - Applications for the federal government's 50 million dollar Cull Breeding Swine Program will be made available beginning Monday, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Cull Breeding Swine Program was set up to reduce the national breeding herd to help deal with the economic hardship faced by Canadian swine producers as the result of low hog prices, escalating feed costs and the impact of the strong Canadian dollar.

To qualify producers must agree to depopulate at least one breeding barn and leave that barn empty of breeding stock for a minimum of three years.

Saskatchewan Pork development Board policy analyst Mark Ferguson says, at this point, it's unclear how strong the demand will be so producers should apply as early as possible.


Mark Ferguson-Saskatchewan Pork development Board
The federal government put a limit of 50 million dollars on the funding available for the program and, once that runs out, we've had the indication that there won't be anything else so the program is essentially on a first come first served basis and on Monday the 14 when the applications are available we would stress that producers get those applications in as soon as they can and we'll do our best to send them out to producers as soon as we have them.

We believe there'll be quite a few sows that will be part of the program that have already been marketed prior to the 14th of April but going forward we're just not sure.

The situation is changing daily given the market conditions.

And it just depends on what happens in the next month with prices and feed costs.

That will determine how many producers we have.

Ferguson notes Sask Pork is working with several provincially inspected plants and the Canadian Pork Council to organize slaughter options.

He says the goal is to line up one or two central slaughter facilities and there's also the option of on-farm euthanization for some producers.

He says, once the disposal options have been determined they'll be communicated to participating producers.

Government Proposes New Feed Rules for Biofuel Grains
OTTAWA — The Government of Canada is working hard for farmers and continuously exploring new and innovative possibilities for our producers.



To this end, the Canadian Food Inspection Agency (CFIA) is inviting public comments on the use of grains from ethanol production as livestock feed.

"This Government is continuously exploring new and innovative possibilities for producers,” said Gerry Ritz, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board.

"We are working closely with industry stakeholders to determine the best way to use fuel ethanol distillers’ grains as an effective, safe feed ingredient."

The production of fuel ethanol from grain (biofuels) has increased dramatically in Canada in recent years. Distillers’ grains resulting from production of alcoholic beverages are already an approved protein feed in livestock rations.

However, the manufacturing processes for fuel ethanol can differ from those for potable alcohol. As a result, distillers’ grains from the production of fuel ethanol are not approved as a feed ingredient.

The CFIA has developed a draft policy with the input of all stakeholders and is welcoming comments on this document until 1 April.

It is expected that a final version of the policy document will be published by the CFIA in the fall of 2008.

Maple Leaf Closes Plant in Expansion Plans
TORONTO - Canadian pig meat processing company Maple Leaf Foods is to go ahead with its double-shift programme at the value-added cut operations at its Brandon, Manitoba pork processing plant.



Maple Leaf is investing approximately C$50 million to support the expansion, which will start in June and be completed in September.

The pork processing giant said it will be increasing production at the plant from 75,000 to 86,000 hogs per week by the end of 2009 to consolidate all of its primary pork processing in Brandon.

The Company is investing approximately C$25 million to expand its Lagimodiere Road plant in Winnipeg to consolidate its ham boning operations in western Canada in one dedicated facility.

By the end of 2009, Maple Leaf will create more than 1100 new jobs at these facilities, supported by an investment of over $120 million. These initiatives are critical milestones in implementing the Company's new protein business model, including consolidating its primary pork processing at one scale facility, and producing high quality fresh pork products to support growth in its value-added meats and meals businesses.

As a result of these expansions, the Company will close its fresh pork operation located on Warman Road in Winnipeg, which currently processes carcasses received from Brandon into value-added pork products.

Maple Leaf expects to close the Warman Road plant by the end of September 2008 as it completes the ramp-up of the value-added cut operations in Brandon. The Warman Road facility employs approximately 650 people, who will be encouraged to apply for new jobs at the Lagimodiere Road and Brandon facilities, and will be provided financial and outplacement services to ease their transition to new employment.

"Manitoba is a major growth centre for our value-added meat processing operations," said Rick Young, President, Maple Leaf Consumer Foods.

"Through our C$120 million investment in the province, we are establishing highly efficient scale plants that are globally competitive, securing a strong future for the Manitoba pork industry, and creating ongoing growth opportunities in our value-added meat and meals businesses. We sincerely regret the impact on our employees at Warman Road, and will proactively support them to secure new employment at other Maple Leaf plants or in the local economy."

Pork Commentary: Carnage Continues But Ethanol Ideal is Over
US - Last week Jim Long reported that Spectrum, a Manitoba feed/ 20,000-sow production operation and genetic supplier Danbred were in receivership. Another Western Canadian production system was also in trouble and this week comes the sad news that Stomp Farms, a 25,000-sow system in Saskatchewan is also facing bankruptcy.

 

There are reports of other losses and the situation is dire.

Genesus has also taken calls from several readers about the liquidation of a 30,000-sow pork powerhouse in the US. We do not want to mention names until we get facts, but last week, we a pork powerhouse lawyer did speak to us regarding our inference about pork powerhouses that were teetering. The lawyer, however, did assure us that their ownership says everything will be okay. Perhaps we should have asked the lawyer if he wanted us to report to everyone that they were going to be good.

We do not want anyone to be hurt as we respect every entrepreneur who has put it on the line. The facts are that the carnage is here and we all know our only salvation is a decrease in hog supply and we are not reveling in other’s misery.

Liquidation Summary
All indications are that Canada has and is in the process to remove 150,000 plus sows. The government sow kill will start soon. This will cut sow slaughter as program sows will be rendered. This should support sow price and maintain sow kill capacity for US liquidation. Our estimate:

Canada

Atlantic Canada -10,000
Quebec -30,000
Ontario -50,000
Manitoba -20,000
Saskatchewan -25,000
Alberta -30,000
Total -165,000
An idea to correct the marketplace would be for the government of Saskatchewan to pull the plug on Big Sky (50,000 sows) and take the sow buyout. The new Saskatchewan government has announced their intention to sell shares (they own 69 per cent). This new government was never part of this socialist approach to agriculture. They would do a great service to all producers in Saskatchewan and Canada to take the sow buyout and exit our industry. One million pigs out of production from a money losing disaster would be a good thing.

USA and others
For the United States our Guess on Liquidation is as follows:

Smithfield 50,000 sows announced
Hormel 9,000 sows announced
Powerhouse (A) 30,000 in liquidation
Others 70,000 sow inventories in herds and liquidation
Total estimate 159,000
Mexico is likely to see a decrease of small herds - a reduction of 10 per cent of production is 100,000 plus sows.

North American Summary
We come up with a total of over 400,000 sows being eliminated. This should equal 6 million market hogs plus in North America. Last week, Iowa-Minnesota’s price closed at 56.48. A year ago the price was about 58¢. We marketed 10 per cent more hogs last week compared to a year ago. We have tremendous pork demand. A small decrease in supply will increase prices rapidly.

Other News
Korea

We were with Korean producers this week. The price of market hogs in South Korea is $1.20 US liveweight lb. It was 90¢ lb and has increased rapidly in the last few weeks. Why? South Korea’s sow herd was just over 900,000. There are estimates that the herd has liquidated by 100,000 to 200,000 head. Breakevens are around $1.20 lb US liveweight. Corn is $10.50 US bushel. There is no government support for hog farmers. Producers tell us the South Korean government wants to lower hog production for environmental and economic reasons. We asked if they thought their price was going to go higher. They said no. Imports from USA and Canada will fill void. More markets for North American Pork and that supports our price.

Europe
Last week, the European hog price was about 90¢ US liveweight lb. North America’s 48¢ US liveweight lb. You’d like to think that we can compete in the world markets with that price difference. Europe’s price has gained $50 a head in the last ten weeks. Why? We have read official European reports that Europe had decreased their sow herd by 5% (750,000 sows) by January 2008 and was still decreasing. 90¢ US lb and $8.50 US bushel corn is about a breakeven in Europe. The price has increased rapidly in Europe because the hogs are not there. Supply and demand. There is no magic.

Conclusions
We believe the hog price has bottomed in North America. Demand is excellent relative to supply. In the coming weeks, lower global pork supply will push our prices higher. Recently, the total meat supply of pork, beef, chicken and turkey has been weekly, year over year, 100 million pounds plus more than a year ago. We expect this difference will decrease as poultry producers are now beginning to cut back. Beef supply will decline and believe it or not we expect pork supply to be less of a percentage difference increase year over year.

Expect in the coming weeks a rapid decline in weights, as slaughter decreases. We expect a minimum appreciation of $40 per head in market hog value over the next 8 weeks.

Ethanol Insanity
The corn ethanol insanity has ruthlessly hammered livestock producers around the world. Swine production is decreasing. Swine prices are increasing. On another positive note, Time Magazine’s cover story this past week was a picture of a corn cob wrapped in money with the title ‘The Clean Energy Myth’. Its over! Like the Dot Com boom, when Time Magazine gets on the story it’s the kiss of death. Food inflation and now environmentalists are saying corn ethanol does not make sense. This will give cover to the politicians to take away the corn ethanol subsidies, tariffs and delay or suspend mandated ethanol utilization. Dot Com’s, sub-prime mortgages, corn ethanol. List of temporary phenomenon finished by reality.


 

Thursday, March 20, 2008Print This Page
A Science Based Approach Needed to Address Nutrient Loading
CANADA - Keystone Agricultural Producers is urging the Manitoba government to abandon its recently imposed moratoriums on swine barn expansion and adopt a science based approach to dealing with nutrient loading, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Following the release of the Manitoba Clean Environment Commission report on the environmental sustainability of the hog industry, the province imposed moratoriums on new or expanded hog barn construction in three regions.

Keystone Agricultural Producers, the Manitoba Chambers of Commerce and Manitoba Pork Council are partnering in an effort to have that decision reversed.

Although the CEC recommendations deal with nutrient management for all livestock industries, only the hog industry has been targeted with moratoriums.

KAP president Ian Wishart suggests existing regulations along with changes recommended by the CEC are adequate ensure the environment is protected.


Ian Wishart-Keystone Agricultural Producers
There is certainly a case for a few small regions in the province where there's been so much development already that there's actually more nutrients in that particular region than there is acres to deal with it and we looked at some specific recommendations to that, nutrient exporting and dealing with de-watering and that type of thing that the Clean Environment Commission did touch on.

Those areas are maybe a little unique but, by far, the vast majority of the province could deal with this on a site specific basis and, in fact, under the proposed regulations that are coming down from Water Stewardship on prosperous guidelines will be dealing with it on a site specific basis and managing both prosperous and nitrogen and showing the numbers to do that.

Certainly if you can't show your ability to manage those nutrients on your own operation or on land that you have spread agreements on, grain crop land in particular, you won't get permission to expand.

Wishart suggests singling out hog industry for restrictions on development but not other industries raises questions about the science behind the action.

He says you can generally explain a science based approach to farmers and get good cooperation but, if it's not science based it's pretty hard to get farmers to act and there's real science to support this specific ban.

Foreign Workers Help Ease Chronic Farm Labour Shortage
CANADA - The production manager with Sunterra Farms says that hiring foreign workers has proved an effective solution to the chronic labour shortage plaguing western Canada's agriculture sector, Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
A low unemployment rate in western Canada has made it increasingly difficult to attract workers.

To contend with that shortage Sunterra Farms has been recruiting foreign workers, primarily from Mexico and the Philippines, to fill all types of positions from entry level to highly skilled.

Mark Chambers says the process is relatively simple but it takes a considerable amount of time.


Mark Chambers-Sunterra Farms
The first process is to obtain authorization from Service Canada or HRSDC that you can hire a foreign worker and to make that application you have to show that you've tried to recruit from within Canada, you've done some advertising and submit your application and that process, just to get approval, can take up to about 32 weeks at this moment in time.

They're getting overloaded, there's a lot of people coming to Alberta.

We're like 100 thousand employees short in the province so everybody's looking for foreign labour.

The burden on Service Canada to process all of this paperwork is huge.

They just don't have the workforce to do it and it's getting things backed up.

That process to get that approval takes a long time.

Then, depending on which country we recruit from, if you to Mexico, once they've got LMO approval in Mexico, you can as quickly as six weeks get an employee on a work permit to come to Canada.

If you go to somewhere like the Philippines where there is more and more people from the Philippines applying to come through Canadian immigration there, that process can take up to six months.

It's not a quick fix.

It takes a long time and you've got to be ahead of the game all the time.

You've always got to be thinking about how many employees will I need in six months time because I've got to start the process now because it can take six months to a year to get someone.

Chambers stresses many people have the impression that hiring foreign workers is a quick cheap fix but that's not the case.

He notes pay scales are governed by Service Canada and are equal to what Canadians would be paid and there are additional recruiting costs but the process is extremely satisfying.

Hey slyfox there you go we are looking for people like you!you are highly skilled in this hog bizniz .

Desperate farmers to euthanize thousands of hogs
Larry Kusch, Canwest News Service 
Published: Friday, April 11, 2008

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Manitoba Pork Council

Andrew Dickson

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WINNIPEG -- Desperate Manitoba hog producers, suddenly unable to ship young pigs to the United States, are preparing to euthanize hundreds of thousands of animals over the next several months, the general manager of the Manitoba Pork Council said late Thursday.

Andrew Dickson said the farmers have "no choice in the matter" as U.S. farmers are breaking contracts to buy the three-week-old pigs because of worries over the impact of looming country-of-origin-labelling legislation in the United States, which is set to take effect in September.

"We'll have the animals brought to a central point. They'll be gassed with carbon dioxide in a special chamber and the animals will be taken in special containers to (the rendering plant in Winnipeg)," Dickson said.

Up to 25,000 pigs a week will be disposed of in this way - likely beginning late next week, he said.

"It's not the farmers' fault; they've bred and raised the animals in good faith because they had a contract (with U.S. buyers)," he said.

Some farmers have tried to give the piglets away to other Manitoba farmers, but without success. That's because producers who feed pigs to market weight - more than 200 pounds - are losing between $40 and $50 an animal due to of rock-bottom market prices and sky-high feed costs.

As little as two weeks ago, producers were selling weanlings to the U.S. for up to $40 a piece. But lately, the price has dropped to almost nothing - when there are buyers at all.

"This is dirty dealing by these American farmers (who are backing out of contracts to take the Manitoba piglets)," Dickson said.

Country-of-origin-labelling or COOL legislation will require food products such as pork to carry labelling indicating its country of origin. That has spooked U.S. retailers and meat packers, who are shying away from Canadian hogs at least until the rules are finalized.

Political attitudes on product labelling have hardened in the U.S. because of the contaminated pet food scare and other consumer issues that critics say have nothing to do with the pork industry.

Manitoba is the biggest shipper of weanling pigs to the United States among Canadian provinces, exporting 3.5 million to four million animals annually.

Tuesday, April 15, 2008Print This Page
Canadian Genetics Shipped to Expanding Russian Agri-Business
CANADA - Genesus has just completed the successful delivery of a Four Plane Shipment of swine genetics to Kuban AgroHolding of Krasnodar, Russia.

 
Kuban AgroHolding is a large agricultural complex with 70,000 hectares (173,000 acres) over 5,000 employees, 10 agrarian enterprises which include swine production and pork processing. Director General is Fyodor V. Druginin.

Genesus Swine Genetics has the largest registered purebred herd in the world and is Canada's premier source of excellent health and high performance swine genetics.

"Genesus thanks Kuban AgroHolding for its confidence in our genetics and people. We look forward to many years of cooperation. Russia is rapidly expanding its domestic pork production; Kuban AgroHolding will be a major producer and leader in technology adoption" said Jim Long, Genesus President-CEO.

AgroHolding Kuban is an expanding and diverse agri-business. It has pioneered such areas of farming as stocking and processing, retail, sunflower, soy, corn, and barley seed and other agriculturally-based innovative technologies.

Within four years the company has allocated over 2.2 billion rubles into investment programs, including 1.2 billion rubles on new machinery and equipment; over 60 million on modernization and development of livestock farming, 250 million rubles on seed farming, 300 million rubles on grain storage and processing, and over 300 million rubles on the enterprise expansion; by 2008, 3.3 billion rubles is to be invested to the company development.

It is currently planning the expansion of its in-house crop processing business, construction of a meat-processing plant and a diary. It also hopes to increase its production area to 70,000 hectares.


 

Hog producers await China ruling on Paylean
Alana Vannahme 4/17/2008 2:58:00 PM 
 
 

Related ItemsMore News by TopicLivestock   Canadian market access to China is expected to improve in the latter half of the year with Chinese officials expected to decide this summer whether or not to approve the use of the hog feed additive commonly marketed under the brand name Paylean, according to an Canadian pork industry official.

"Hopefully by July China will have reached some conclusion on this issue. They are conducting an import risk assessment and until that is done there is not a lot Canada can do except to wait for the results," said Jacques Pomerleau, executive director for Canada Pork International in Ottawa.

Paylean, which contains ractpopamine hydrochloride, improves the quality of meat cuts by directing nutrients away from fat deposition and toward lean deposition, thus increasing the amount of lean pork and high-value meat cuts in the carcass. It also increases production as lean is more efficient to produce than fat, meaning that pigs fed Paylean reach market weight in fewer days with less feed.

Paylean has been approved for use in 30 countries, including Canada and the U.S., but China has yet to give its approval for the use of the feed additive. The drug has been banned there since 2002.

In fact, its current zero-tolerance policy toward the additive resulted in several North American processing plants being delisted when their pork products were found to contain traces of it. Among the delisted plants are two Canadian companies, one of which is Maple Leaf's Brandon plant. Industry sources did not wish to name the second plant.

Canadian pork sales to China, in the meantime, have suffered considerably.

Martin Rice, executive director with the Canadian Pork Council (CPC) in Ottawa, said 18,000 tons of pork have been shipped to China and Hong Kong (viewed as a single market) in the first two months of 2008, an increase from the previous year's amount. The majority however, went to Hong Kong, whereas last year the bulk of the pork was shipped to mainland China. Exports to mainland China alone have declined roughly 30 per cent, Rice said, whereas in recent years exports had climbed steadily.

The main reason for the decline, he said, was the Paylean ban.

While less than half of the Canadian pork industry is believed to be using Paylean, the problem is augmented by the fact there are no records definitively showing who is and who is not using the feed additive, Rice explained.

Also, the plants which could reasonably guarantee Paylean-free pork because they own their own hogs, are not increasing their sales to China because they are not offered a price premium that would offset the costs incurred as a result of segregating pigs destined for that market from pigs fed Paylean, Rice said.

"Tyson Foods, for example, declined to discuss with China any further export shipments because they weren't really offering any kind of premium that would make it worth their while to go through the bother of separating their pigs and all that," he said.

Furthermore, plants may be unwilling to forego the considerable returns (C$2 to $3 per pig) that can result from Paylean use.

The Chinese market price for pork would have to increase in order to provide enough of an incentive to the plant, Rice said.

Pomerleau, meanwhile, is optimistic China will eventually allow the use of Paylean.

"I think we can be hopeful about the situation. There are new people in place in China and there is a new approach so I'm quite optimistic but these things take time. Some things just have to play themselves out and people have to do what they think is best," he said

In the event of a favourable outcome, Pomerleau believes there is excellent opportunity for Canada to increase its pork sales to China. Their pork supply is low this year and as incomes rise and the middle class expands, more Chinese households will have greater disposable income, he explained.

"The opportunities are there. If it weren't for the Paylean issue, we would be exporting a lot right now," Pomerleau said.

Rice also believes there will be increased opportunities in the coming years for Canadian exporters to sell higher-quality skeletal meat cuts to China, which currently buys mainly organs such as kidneys or stomachs. He noted that demand for value-added fresh, packaged pork products is growing as well.

 

Thursday, April 17, 2008Print This Page
Increased Ingredient Costs Threaten Manufacture of Food Products in Canada
CANADA - The Manitoba Food Processors Association warns the increasing cost of ingredients for processed food products threatens to drive the production of many of these products out of Canada, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Prices for most of the crops used to manufacture food products have seen some dramatic increases recently.

Manitoba Food Processors Association executive director Dave Shambrook says, while it's good to see higher returns coming back to producers, the higher ingredient costs are making it difficult for some of the small and medium sized processors.


Dave Shambrook-Manitoba Food Processors Association
In some cases companies will not be able to adjust and in some cases, the worst case scenario, they're closing the doors and getting out of the industry althogher.

That's always a part of the natural progression of things.

There's always evolution in all industries but what is also happening right now for many companies, they're saying we manufacture 10 or 20 or 30 or in some cases 50 and 100 different product lines.

There's some that aren't as profitable for us or there's some that with this new price structure we can't produce them here anymore profitably.

We let them go.

We shut down those production lines.

What's happening, you and I as a consumers again we still want those products and the grocery retailers need to have them on the shelf so where they're going is offshore and that's why we're seeing many more products coming into Canada and the United States that are manufactured in China or in India and it is a global society for sure but the long term implications are a little bit frightening for me, in terms of once these production capabilities are to move off shore, how likely are they to come back to Canada if pricing and such changes in the future.

Shambrook notes the quality of Canadian products are as high as anything in the world but, once the manufacture of these products move offshore, the ability to deal with food safety issues is much reduced, as evidenced by several food safety incidents that have been traced back to offshore products or ingredients over the past year.

Wednesday, April 16, 2008Print This Page
Tough Decisions Needed to Recover Increasing Costs
CANADA - Faced with uncertain future and the inability to recover record-high feed bills, Canadian hog farmers have no option but to slaughtering breeding stock and even young piglets to cut their losses and lift market prices.



Reports in the Vancouver Sun says that in Manitoba, farmers are working out contingency plans for the "extreme option" of euthanizing their piglets, said Karl Kynoch, a farmer and the chairman of the Manitoba Pork Council.

"It really goes against everything that a producer stands for," Kynoch said. "His mind-set for his whole life has been to raise food to supply people around the world ... and to care for animals in the best way possible."

Some have estimated that 25,000 piglets a week may have to be killed, but Kynoch said farmers are seeking alternatives.

"We're just making sure that we're prepared so that things don't get out of hand," he said, noting that some farmers may need a humane option if they are unable to pay for feed.

Meanwhile, Ottawa will pay hog farmers $50 million to shrink their adult breeding herd by about 10 per cent, or 150,000 animals.

But the president of the Canadian Pork Council warned the program may not be large enough to handle the rush for the exit.

Wednesday, April 16, 2008Print This Page
Study Identifies International Marketing Opportunities for Canadian Pork
CANADA - A study conducted by Canada Pork International has identified a range of opportunities for Canada to promote and expand the sale of its pork products on the international market, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
To identify potential international marketing opportunities Canada Pork International conducted a quality perception audit in its top markets.

The study focused on attributes that drive the decision to purchase meat, such as who has the best food safety system, the best meat color, the best marbling, the best price.

Technical programs and marketing services director Michael Young says distributors were asked about their perception of quality and where they get and profiles of the systems in each country were established to determine how well Canada is doing compared to its competitors.


Michael Young-Canada Pork International
It comes down to individual product attributes but it also comes down to food safety systems that go beyond the price so it's a combination of functional and emotional attributes that you can associate with the product.

For instance, Canada's world class food safety systems, Canada's on farm food safety systems, Canada's selection process, our genetics, our history, our ability to deliver what the customer wants.

These are all important but again, consumer selection changes.

It's a moving target from country to country.

If you're talking about Asia, they're looking for very thinly sliced meat that is a little darker than what we might see here and has a little more marbling because they appreciate the texture and the mouth feel of that.

If you go to a market like Australia, they're looking for further processed products that's turned into hams and bacon and things like that so they're looking for a whole different set of attributes so again it's a moving target and you have to look at it from market to market.

Young says the audit concluded that Canada is well represented in the markets but there is more to be done.

For example, he says, we know we have a world class food safety system and suggests we need to connect with the end users so they understand what they're getting.

News for Monday, April 21st, 2008

Hog producers getting out
Written by Jim Birchard


As the crisis in the Hog Industry worsens, a lot of producers are considering getting out of the business.

President of the Canadian Port Council, Clare Schlegel says there is a lot of interest in a 50 million dollar federal  Cull Breeding Swine Program that began last Monday.

The program will pay farmers 225 dollars per head to cull their breeding herds and empty their barns for three years.

Schlegel says with the high value of the Canadian Dollar, high price for feed and low prices for Hogs many producers want out and this government program is the chance for them to exit the business.

He says the high dollar means U.S. pork is cheaper and a lot of that is flooding the Canadian Market, hurting local producers.

Schlegel says the cull should reduce the hog population in Canada by about 10 per cent and hopefully that will help drive up the price of pork.

He also would like to see better labeling of meat so Canadians know they are supporting local farmers when they buy pork and not product from the U.S.

Schlegel says with the industry in such dire straits, this restructuring initiative is a good place to start on the road to a healthier competitive Canadian swine industry.


 

Tuesday, April 22, 2008Print This Page
Sow Liquidation-Weekly Slaughter-Storage Stocks to Determine Live Hog Prices
CANADA - A Saskatchewan livestock economist expects North American sow liquidation, weekly US hog slaughter numbers and global demand for North American pork to drive live hog prices heading into the summer and the fall, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
North American live hog prices started to rebound over the past two weeks but they remain below average. Friday's SPI price for index 100 hogs ranged from 110 to 120 dollars per 100 kilograms.

Brad Marceniuk, with the Saskatchewan Ministry of Agriculture, says key factors affecting hog prices include weekly US slaughter numbers and pork in cold storage.
Clip-Brad Marceniuk-Saskatchewan Ministry of Agriculture
US weekly hog slaughter numbers continue to be significantly higher year over year which has led to increased pork production.

Looking at the March USDA hogs and pigs report, US hog production has been increasing and year over year market and breeding herd inventory numbers are actually up.

Based on these numbers, without liquidation, US hog slaughter numbers could increase by about seven and a half million hogs in 2008 which is up almost seven percent from 2007.

Fourth quarter US hog slaughter numbers could also reach about 31 million head which is a new US record.

So the rate of North American sow liquidation resulting in lower pork production will be key in increasing hog prices.

While the demand for pork continues to remain strong, increased US hog production has resulted in more pork in cold storage.

US pork in cold storage has increased by about 30 percent since December and is actually 25 percent higher year over year.

Likewise we have also seen significant increases in poultry production and poultry in cold storage.

These combined increases have actually resulted in higher total meat in cold storage.

Marceniuk says, based on the lean hog futures, western Canadian index 100 hog prices could average in the mid 120s in the second quarter and the low 130s in the third quarter.

He suggests, before we get any big increases, we're going to need to see a big increase in demand for North American pork, primarily through the export market, or a large reduction in North American production.

Man. to process cull pork for food banks
FBC staff 4/23/2008 3:08:00 PM 
 
 

Related ItemsMore News by TopicLivestock   The Manitoba government will put up $500,000 to process ground pork from animals slaughtered through the new federal cull breeding swine program, for use by the province's food banks.

The pork will be distributed to Manitoba food banks through Winnipeg Harvest, the city food bank which also distributes to 50 rural food banks and two rural soup kitchens in the province.

Provincial funds could make available over 150,000 kg of pork products to the food banks and should support processing of approximately 5,000 surplus sows available through the federal cull program, Agriculture Minister Rosann Wowchuk said Wednesday.

"The significance of this donation will have impact for many low-income people in Manitoba," Winnipeg Harvest executive co-ordinator David Northcott said in the province's release.

Northcott said Winnipeg's soup kitchens currently provide about 2,400 hot meals per day and the organization distributes over 5,000 food hampers per week. Winnipeg Harvest, he predicted, could distribute 15.5 tons of pork sausage per month.

Winnipeg Harvest also pledged in-kind funding to haul the processed sausage to its distribution facility and has pledged to try to match some of the funds from the province through its various charitable organizations. That process could increase the amount of meat available, the agency said.

"The pig industry is currently experiencing serious financial pressures with the high cost of feed, large supplies of pork and the strong Canadian dollar," said Wowchuk. "While this is a short-term aid program, it does move prime pork from the farm to the tables of hungry Manitobans."

"We are very pleased that the provincial government has put forward the funds to help turn some of this meat into food for hungry Manitobans instead of going to rendering plants," Karl Kynoch, chairman of the Manitoba Pork Council, said in a separate release.

Hog producers have donated over 15,000 pounds of pork to rural and urban charities over the last two years, Kynoch noted, including sausages and roasts as well as about 65 carcasses per year from the annual Pork Quality Competition during Manitoba Hog and Poultry Days.

Manitoba's announcement Wednesday follows a similar pledge last week by the Saskatchewan government of $440,000 to process animals from the federal cull swine program for that province's food banks.

The $50 million federal cull program is meant to help the hog industry restructure by helping cut Canada's swine breeding herd (sows, boars and pregnant gilts) by about 10 per cent. The program opened April 14 for applications from hog farmers.

Qualifying producers, subject to application approval, will get $225 per breeding swine culled after April 14, and will get reimbursement for costs of slaughter and carcass disposal.

A payment of $225 per breeding swine less the selling price will be available for producers who sold animals from Nov. 1, 2007 until April 13 this year and can produce receipts and supporting documents.

Friday, April 25, 2008Print This Page
US and Canadian Hog Inventory Up Three Percent
US - This publication is a result of a joint effort by Statistics Canada and NASS to release the total hogs, breeding, market hogs, sows farrowed, and pig crop for both countries within one publication.

 

This information was requested by the US hog industry to provide producers additional information about potential hog supplies. U.S. inventory numbers were previously released on March 28, 2008.

US and Canadian inventory of all hogs and pigs for March 2008 was 78.9 million head. This was up 3 percent from March 2007 and up 5 percent from March 2006. The breeding inventory, at 7.64 million head, was down less than 1 percent from a year ago and last quarter. Market hog inventory, at 71.3 million head, was up 3 percent from last year but down 2 percent from last quarter. The pig crop, at 36.0 million head, was up 5 percent from 2007 and up 6 percent from 2006. Sows farrowed during this period totaled 3.86 million head, up 4 percent from last year.

US inventory of all hogs and pigs on March 1, 2008 was 65.9 million head. This was up 7 percent from March 1, 2007, but down 2 percent from December 1, 2007. The breeding inventory, at 6.14 million head, was up less than 1 percent from last year, but down slightly from the previous quarter. Market hog inventory, at 59.8 million head, was up 7 percent from last year, but down 2 percent from last quarter. The pig crop, at 28.1 million head, was up 6 percent from 2007 and up 9 percent from 2006. Sows farrowed during this period totaled 3.05 million head, up 5 percent from last year.

Canadian inventory of all hogs and pigs on April 1, 2008 was 13.0 million head. This was down 12 percent from April 1, 2007 and down 14 percent from April 1, 2006. The breeding inventory, at 1.50 million head, was down 5 percent from last year and down 2 percent from last quarter. Market hog inventory, at 11.5 million head, was down 13 percent from last year and down 6 percent from last quarter. The pig crop, at 7.95 million head, was down 1 percent from 2007 and down 4 percent from 2006. Sows farrowed during this period totaled 809,000 head, down 2 percent from last year.


 

Friday, April 25, 2008Print This Page
Producers Speak Out on Industry Crisis
CANADA - Times are tough and not likely to get better in the near-term. The crisis in the livestock industry is drawing together farmers to discuss and debate their future options and 250+ independent pork producers from the Midwest and Canada recently met in Mankato.



Speaking to Farmsnews-Iowa, Mitch Truebenbach, a hog producer and owner of Agri Swine Alliance Inc. organized the meeting and said he knows firsthand the troubles facing the livestock industry.

“As I talked and listened to people outside our industry I realized people don’t know of the high losses we are facing with no end in sight,” he said. “Everyone that is in the livestock industry is struggling with record high production costs, with feed costs at prices that we have never experienced — so collectively I am hoping we can come up with ideas that may help us through these trying times.”

Bob Taubert, a producer from Minnesota, spoke about the impact of biofuels on the livestock industry. The consensus, he said, is that we have a failed policy with ethanol. The livestock industry is in crisis because of several factors including worldwide economic impacts such as growth in China and India and their demands for goods and commodities, he said. Additionally, the weak U.S. dollar makes commodities more attractive worldwide.

Friday, April 25, 2008Print This Page
High Grain Costs Hit Maple Leaf
CANADA - Maple Leaf Foods has reported significant losses in hog production as grain prices increase in its report of the financial results for the first quarter of 2008.



The company said that eEarnings increased in core processed meat and meals business but margins declined in the bakery operations due to rising wheat prices.

Earnings from continuing operations before restructuring and other related costs ("Adjusted Operating Earnings") fell by 34 per cent to C$33.1 million for the quarter.
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"Our underlying operations, in particular the value-added meats and bakery businesses, are very well positioned and early successes in the Company's protein restructuring is building a solid base for higher earnings." 
Michael H. McCain, President and CEO, Maple Leaf Foods.
--------------------------------------------------------------------------------
 
Rapid wheat cost increases compressed margins in the Bakery Products group as price increases have not yet offset rising input costs.

Hog production losses also increased sharply as feed prices increased at a faster rate than hog prices, the company said.

It added that partly offsetting these effects, margins increased in the value-added meats business due to price increases and favorable markets, and early benefits of the Company's strategic repositioning of the Protein Group were realised.

Additional Support
Also included in earnings for the quarter were certain other items of note, including government support payments of C$8.4 million received as part of programs to assist the hog production industry, and initial costs of C$6.0 million related to consulting and systems conversions initiatives. Also during the quarter, the average Canadian dollar exchange rates were higher than last year as the Canadian dollar traded above parity before returning to current levels, negatively impacting earnings by approximately C$5.5 million.

Earnings per share from continuing operations before restructuring and other related costs ("Adjusted EPS") for the quarter was C$0.04, compared to C$0.12 last year.

"Operating earnings for the quarter were substantially impacted by continued increases in worldwide prices for wheat, grains and other commodities", said Michael H. McCain, President and CEO.

"These effects, while material, are temporary and are expected to reverse as markets stabilise; through a combination of price increases, some reduction in wheat prices as new crops come to market and livestock price increases as hog supplies tighten. We fully expect these to be difficult but transitory market conditions.
Well Positioned
"Our underlying operations, in particular the value-added meats and bakery businesses, are very well positioned and early successes in the Company's protein restructuring is building a solid base for higher earnings.

"We remain on track to realize our incremental earnings targets from these initiatives and continue to be very positive regarding the re-positioning and growth in our core business."
 

Monday, April 28, 2008Print This Page
Greater Attention Must be Paid to Animal Biosecurity
CANADA - The extension veterinarian for the state of North Dakota is calling for greater cross border dialogue to address issues related to animal biosecurity, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Beyond Borders, a regional animal agrosecurity conference slated for early June at Fargo, will bring together international experts to discuss wide ranging issues related to animal disease.

North Dakota State University extension veterinarian Dr. Charlie Stoltenow observes both countries have good systems but there can be lapses and disease outbreaks can occur.


Dr. Charlie Stoltenow-North Dakota State University
Each respective country, the United States and Canada have some pretty good response plans in place.

In the United States we deal with these every so often and so our government agencies, our federal and state agencies, our producer groups, they do understand.

However once you involve an international border things become very murky and things that we've learn from the United Kingdom and others is, to coin a football phrase, speed kills.

You have to deal with these incidents very quickly and very strong.

Diseases don't know international borders and our concern here is have there been discussions on what would happen, what type of capabilities are present, how do we respond to something on the international border because we will have to be united or we will fall together.

We know that, for instance, the Canadians have some certain capabilities that in the United States we are not as developed and the other is true also.

In the United States we have some capabilities and some assets available that the Canadians really don't have access to and we'd like to start these discussions.

Dr. Stoltenow warns, if we don't deal with an animal agrosecurity event on the international border it will be catastrophic to both countries.

Tuesday, April 29, 2008Print This Page
Consumers Seeking Familiar Foods Produced Closer to Home
CANADA - The Manitoba Food Processors Association says growing numbers of Canadian consumers are seeking out locally produced food products that they're familiar and feel comfortable with, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Surveys show greater numbers of Canadians are reading and understanding food labels and using the information on those labels to make purchasing decisions while seeking products produced closer to home.

Manitoba Food Processors Association executive director Dave Shambrook says what's really interesting is the number one reason behind the "Buy Local" movement is a desire to support local companies.


Dave Shambrook-Manitoba Food Processors Association
There's a recognition that we need to support our local businesses to have a stronger economy, a stronger community because it affects us all and that was a little surprising.

We know that's one of the first benefits that happens when more local products are introduced and sold into a market but that was a little bit surprising that it was the number one issue and it's a strong number one.

But, close behind that is the issue of food safety.

here is a strong perception by consumers that something that's been produced closer to home is a safer product.

I think, again, there's a recognition that Canadian food safety systems work, they work well, the industry is very responsible so food safety is certainly something that's driving this.

Another part of it is that consumers are looking for variety.

They are looking for things that they are comfortable with, things they've seen in the stores, things they know come from the local production community so to speak and that's a counter trend to, if you will, it's a global market.

We're interested in buying things from all over the world.

At the same time there's sort of this, let's get back to basics, let's get back to foods that we're comfortable with and familiar with.

Shambrook says more an more consumers are making purchasing decisions based on what they are reading and their understanding which encourages the manufacturers to make sure they are adhering to regulations and that their products are well packaged, promoted and merchandised.

Wednesday, April 30, 2008Print This Page
Prairieland Park Plans New Interactive Agricultural Display
CANADA - Saskatoon Prairieland Park plans to unveil a new interactive agricultural display as part of its annual summer fair in August, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Saskatoon Prairieland Park is a community-driven, nonprofit corporation which serves agriculture, industry, entertainment, education, sports, and culture.

To reintroduce agriculture to Saskatoon's summer fair, a series of interactive displays is being created.

Agriculture Manager Lori Cates says phase one will focus on the dairy, beef, pork and poultry sectors.


Lori Cates-Prairieland Park
Each exhibit will consist of touch screens, some computers, some hands on flip open boards so kids can interact with the station so it's not just go and read some text.

It will be very very hands on.

Each station or display will focus on different aspects with those commodity groups, the social impact of that group in Saskatchewan, economic impact, the nutritional information and the environmental impact of that commodity group in Saskatchewan.

We're going to talk about economics, we're going to talk about where are there jobs in agriculture now, we're going to talk about where their food comes from.

Our society is becoming more and more urban oriented given that a lot of people don't understand where their food comes from, how the animals are cared for.

We want to teach people that the food that's grown here in Saskatchewan is nutritious, is well looked after and that we have a thriving industry in agriculture here in Saskatchewan.

The displays will be introduced during the summer fair in August but will also be used at other events at Prairieland Park.

Cates estimates over a quarter million people could be exposed to the exhibit during a given year.

Thursday, May 01, 2008Print This Page
Cull Program Passes Halfway Point
CANADA - Canadian pork producers have already submitted applications to cover more than half of the 10 per cent target set by the Cull Breeding Swine Program.



The CAN$50 million program, funded by Agriculture and Agri-Food Canada, is being accepted as a necessary step in the industry's ongoing efforts to adjust to current market realities. More than 75,000 animals were committed to the program in the first two weeks.
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"The immediate surge of applications upon launch of the program is a clear indication of the financial stress and market pressures Canadian pork producers have been struggling with" 
Clare Schlegel, President, Canadian Pork Council.
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"The immediate surge of applications upon launch of the program is a clear indication of the financial stress and market pressures Canadian pork producers have been struggling with," says Clare Schlegel, president of the Canadian Pork Council. "We are pleased that the Federal government has provided assistance to adjust the size of our breeding herd in order to build a more robust industry long term."

Claims received to date indicate that two thirds of the animals eligible for the program were marketed prior to the program launch date. This shows producers were already trying to adjust to market conditions on their own. Meat from these animals was marketed through regular food channels.

Significant Action
Recent assistance from several provinces and private investors will allow a significant portion of the meat from animals culled after the April 14th launch date to be donated to food banks. "We are very pleased that much of the meat is destined to feed the hungry," says Schlegel. "While producers are suffering through a period when pork has little market value, this donated protein source will be greatly appreciated by the food banks and those individuals who rely on them."

Applications for the Cull Breeding Swine Program are available on the Canadian Pork Council website at www.cpc-ccp.com. Producers are also encouraged to contact the toll free line at 877-655-2567 to receive more information or assistance with the application process.

The Canadian Pork Council serves as the national voice for hog producers in Canada. The federation is composed of nine provincial pork industry associations and plays a leadership role in achieving and maintaining a dynamic and prosperous Canadian pork sector.

 

, May 01, 2008Print This Page
Canadians Cautioned to Expect Higher Food Prices
CANADA - The University of Guelph is cautioning consumers to expect higher prices for everything from corn flakes to pork chops in the coming months, Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Increased cost and reduced availability of food around the world, characterized by food riots in several countries and action to protect food security in others, have started to capture the attention of consumers.

Dr. Dave Sparling, the associate dean for research and graduate studies with the College of Management and Economics at the Univesity of Guelph, blames a combination of factors.


Dr. Dave Sparling-University of Guelph
We've got a lot higher production costs for food now.

Everybody looks at the rising gas prices and that affects farmers production, it affects the cost of processing food, the cost of moving food and costs are being pushed up from that direction.

Then things like fertilizer prices are going up so really it's costing more to produce food.

You've also got some new streams of demand coming on.

People are starting to turn corn for example into ethanol and that we haven't been doing before so that's putting a little more price pressure on grains.

Then there's a lot more demand for grains from China and India in particular because their economies are very active and very hot.

People are becoming better off in those countries and when people in developing nations become better off they tend to eat more who grains, more meat products and so there's even more new demand for grains.

So overall grain prices are going up and then, when grain prices go up, they start to push up the things that use grain, breads, pastas, meat, so on so we're seeing all of this happening.

Dr. Sparling notes Canada is a major food exporter so Canadians aren't experiencing any shortages and, because of the higher dollar and stiff retail competition, Canadians have not seen as much food inflation but he expects that to change in the coming months and certainly by the end of the year.

He says food prices in Canada will remain among the cheapest in the world but he expects food inflation to outpace general inflation over the next few years.

Thursday, May 01, 2008Print This Page
Alberta to Fund Pork for Food Banks
CANADA - Around $300,000 will be provided by Alberta's Provioncial government to process ground pork from animals slaughtered through the federal cull breeding swine program. The meat will go to the province's charity food banks.



The provincial funding, announced yesterday, will help pay to process cull sows from the program in cuts that can be used for further processing. The meat is destined for the Alberta Food Bank Network Association  - which will also help fund the project, says a report in Alberta's Farmer Express..

"This announcement is welcome news, as there is now the opportunity to have the pork products from culled animals be donated to Albertans in need, allowing some good to come out of the devastating crisis occurring in the hog industry," Alberta Pork policy and communications director Jodi Hesse said in the province's press release.

Alberta Pork will oversee the donation program, working with Sunterra Meats, Lucerne Foods and the Western Hog Exchange to process and transport the meat, the province said.

Federal Cull Breeding Reaches Half Way Point
CANADA - The Canadian Pork Council reports over half of the funding being offered under a federal program to reduce Canada's swine breeding herd has now been applied for, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Under the 50 million dollar Federal Cull Breeding Swine Program, officially launched April 14, swine producers who agree to depopulate breeding barns and leave them empty of breeding stock for a minimum of three years are eligible to receive 225 dollars per animal culled.

The program was developed in response to the depressed economic situation in the pork industry brought on by an over supply of hogs, escalating feed costs and a strong Canadian dollar and targets a ten percent reduction in the national breeding herd.

Canadian Pork Council executive Martin Rice reports interest among producers has been strong.


Martin Rice-Canadian Pork Council
We have seen actually more than the halfway point in terms of animals.

To the extent that we were looking at a ten percent program allowance, that's about 154 thousand breeding animals.

We've seen 78 thousand applied for.

That's slightly over half.

Certainly in the two Maritime provinces they have gone well beyond the ten percent of their herd that is applying to be eliminated.

I think in British Columbia and Quebec it would be perhaps lower participation at this point but there has been an increase in recent days in submissions from Quebec.

Ontario is by some margin the largest number of claims and the largest number of breeding stock that they would to have covered by the program.

Rice notes the program is already over halfway subscribed.

He recommends anyone with an interest in this program should get their applications in at their earliest opportunity.

Friday, May 02, 2008Print This Page
Commission to Analyse Long-Term Prospects
PRINCE EDWARD ISLAND - A new commission on the future of agriculture and agri-food in Prince Edward Island expects to draft a long-term vision for its agri-sector.


In a report for the Manitoba Co-operator, Agriculture Minister Neil LeClair said it was apparent that the current commodity model of production is not working for producers in this province.

"We need a unique Island approach to issues that are facing the agriculture sector nationally and globally," he said in a release. "We are in a unique position to succeed, and the new commission will help to define that approach."

The PEI commission, which is expected to produce a draft report by about Oct. 14 and a final report by 5 December is launched in the wake of the final report of a similar commission in Quebec in February.

The Quebec commission recommended a number of both sweeping and minor changes meant to encourage young people to enter the industry, spur diversification and development, and revamp provincial ag income supports.

The PEI commission, whose members have yet to be named, will be co-chaired by former provincial deputy ag minister Rory Francis and by ag economist Ed Tyrchniewicz, associate dean of the University of Manitoba's Asper School of Business.

Monday, May 05, 2008Print This Page
Manitoba Abbattoirs Interested in Culled Swine
CANADA - Manitoba Pork Council reports a strong interest among provincial abattoirs in processing the pork from the hogs slaughtered under a federal program to reduce the national breeding for use by food banks, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Under the Federal Cull Breeding Swine Program producers who agree to depopulate breeding barns for a minimum of three years are eligible to receive 225 dollars per culled animal but those animals may not go into the commercial food distribution chain.

A 500 thousand dollar contribution from the Manitoba government will allow some of the animals culled in Manitoba to be directed to use by the province's food banks.

Manitoba Pork Council producer services specialist Jeff Clark says interest among the provincial abattoirs in playing a role has been strong.


Jeff Clark-Manitoba Pork Council
In Manitoba, because we don't have large provincial abattoirs, our two federal plants aren't equipped to handle large sows at this point, so we've had to go to our smaller provincial abattoirs of which we have about 25.

We're looking at a model where we're going to have to distribute animals around the province.

Other provinces have had a central processing plant step forward willing to do the processing.

Again, here we'll have to distribute around to our smaller plants.

We've had some very strong interest from our provincial abattoirs and they've been very patient with waiting for this announcement.

I first contacted them at the beginning of April to gauge some of the interest out there.

There was significant interest but again we had to wait until confirmation of the funds from the province before we could actually move forward.

Winnipeg harvest has been following up with the provincial plants to negotiate price and scheduling etceteras so the interest is very strong.

Clark says having a food bank option has been critical for producers.

He notes producers have put a lot of care into raising their animals and they want to see those animals put to the best possible use.

Monday, May 05, 2008Print This Page
Biofuel Ethusiasm Problematic for Hog famers
CANADA - According to industry figures, when a hog farmer takes his hog to market, he suffers a loss of between $50 to $60 a hog, which, in a year's time, averages $300,000 to $360,000 in total net losses per farm.



"Our whole industry is in a crisis," says Jerry Gelderman, a Fraser Valley hog farmer and vice-chair of the B.C. Hog Marketing Commission.

He explains that in addition to normal price swings in pork markets, which currently are at a cyclical bottom, the strong Canadian dollar is also placing hardship on producers.

But the worst culprit, by far, according to the Province, is the use of wheat and corn to produce ethanol as an alternative to fossil fuels in motor vehicles. Gelderman says the cost to feed a hog over the five-month period from birth to market has increased by $38 over last year. That's a hike of about 50 per cent.

Costs for fuel, equipment, etc., are also increasing, but the price hog farmers now receive for their animals has fallen due to regular market forces. "We can usually adjust to the normal market cycles in our industry and to the higher Canadian dollar," Gelderman says.

"But the feed issue is now causing some farmers to get out of the business, and the only way we'll be able to adjust will be to pass these higher costs on to the consumer," he warns. "And it's government policies on ethanol that causes the most frustration," he adds.

It's not surprising, then, that many hog producers and others wonder why the federal and provincial governments actively push the use of food grains to produce ethanol when many non-food fibres such as wood waste (B.C.'s beetle-killed pine trees, for example) or even municipal garbage could be used.

Monday, May 05, 2008Print This Page
Hog Producers Pay to Wait
MANITOBA - The Winnipeg Free Press says: Manitoba's weanling pig producers are playing an expensive waiting game (it costs some of them thousands of dollars a week) while U.S. legislators put the finishing touches on this year's long-delayed American Farm Bill.



The province's hog industry has made plans for a mass euthanization of baby pigs, if that becomes necessary, but for now pig producers are managing to find a home for the animals, albeit at a tremendous cost.

Albert Bourrier, a partner in a hog farm south of Steinbach, said he's never sustained such high losses since he got into the business in 1984.

A few weeks ago, he was getting as little as $7 for a three-week-old weanling pig that costs anywhere from $36 to $42 to produce. Now, he's getting closer to $15 an animal.

"When you sell 800 a week, it's a big difference," Bourrier said Friday of the modest bump in price.

He and other hog farmers are hanging on every news report out of Washington tracking the progress of country of origin labelling legislation (COOL) expected to be part of the U.S. Farm Bill.

Uncertainty over the final wording of that legislation -- and how U.S. meat packers and retailers react to it -- has wreaked havoc with an export-dependent Manitoba hog industry that's already beset by high feed grain prices, a strong loonie and a general surplus of North American pigs.

The U.S. Congress has approved an extension until May 16 to ready the Farm Bill for President George Bush to sign. It would set out U.S. agricultural policy for the next five years.

Producers struggling to stay in business for the long haul see some optimism in distant hog futures markets that could see them recover most of their weanling production costs three or four months from now.

Others, have gone to great lengths to deal with the crisis.

View the Winnipeg Free Press story

Tuesday, May 06, 2008Print This Page
Weather and Direction of Feed Grain Prices Linked
CANADA - A Winnipeg grain market analyst says weather over the next few weeks will be critical in determining the direction of feed grain prices over the next six to nine months, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Although feed grain prices have not been as explosive as they were in 2007, prices remain strong with corn hovering near record highs and feed barley and feed wheat markets in Canada holding firm.

Informa Economics senior analyst Dave Reimann reports, because of the tight carryout situation in most feed markets, the trade is concerned with potential acreage and potential yields.


Dave Reimann-Informa Economics
We're seeing some change happening globally in some markets.

For instance wheat is starting to be harvested around the world.

That's putting a bit of pressure into the wheat markets that didn't exist in much of 2007 or over the winter.

Those markets are staring to come down and we will see more and more wheat harvest really kick into gear over the next few months.

As we get into May and June we'll start to see more harvesting going on in China and the U.S., in Europe.

As those harvests start to hit, we expect that wheat prices will drop a bit and some of that wheat will find it's way into the feed channels.

That will help to alleviate some of the upward pressure in things like corn or barley as an example.

But, until that really starts to make its way into the pipeline, it's difficult to break these markets very far.

Traders right now are probably guessing something in the area of around 154 to 155 bushels per acre average yield for corn but, if the bulk of the crop goes in really in the first week of June or something, then we probably won't be able to achieve those kinds of yields.

Reimann says, if we get a substantial amount of the crop seeded in the next two weeks in much of the U.S. corn belt, some of the stress will come out of the market and prices will tend to sag but, if planting falls well behind average, the market will want to build in more of a weather premium and we could see some explosive rallies heading into June and July... so the next four weeks will probably be key as to the long term direction of the feed complex.

Tuesday, May 06, 2008Print This Page
Pork Commentary: Canada’s Industry Downsizes
CANADA - This weeks North American Pork Commentary from Jim Long.

 

Low hog prices, high feed prices and the increase in the Canadian dollar have devastated the Canadian swine industry. Canada’s breeding herd has now decreased approximately 180,000 sows from its zenith. According to Statistics Canada on April 1st the year over year Canadian breeding herd decline was 72,000 (1570.7 to 1498.7). Now the Canadian government sow cull has been activated. As of the end of last week we understand there were just under 100,000 sows enrolled to be slaughtered. Our inside sourced tell us that approximately 150,000 will be the eventual casualties. Put the numbers together. It indicates that Canada will end up with over 300,000 less sows than at the peak of production. That’s a lot of empty buildings, less feed utilization, less added value but most importantly there are people involved. People without jobs, producers and owners who have seen their dreams dashed by the cruel reality of the commodity marketplace. Producing food (pork) under the cost of production might be good for consumers but it is devastating to producers.

There obviously will be less pork generated by Canada’s production system now and in the future. Canada’s market hog inventory on April 1st was 1.65 million head fewer than a year ago (13,158.3 – 11,501.6).

This drop in production is rapidly decreasing Canada’s pork export capacity. As fewer hogs go on feed in Canada, the United States supremacy as the world’s pork export champion magnifies.


Other Observations
2008 US sow slaughter has been consistently higher year over year. The latest number 73,000 per week. The US, we believe, is currently decreasing its sow herd 5,000 a week. There are next to no new sow barns being built. The plus/minus of sow inventory is mostly minus. Many sow units have fewer females as cash flow limit gilt retention and purchase. The price of sows is a reflection of the supply/demand. Last week some market hogs were bringing 60¢ live lb while heavy sows were 25¢ live lb. Usually there is a 10¢ lb spread. Now the huge number of sows coming to market is allowing sausage makers to buy at a very discounted price. They are paying 25¢ lb because that’s all they have to. Low sow prices are leading to sow retention rather than adding gilts. The breeding herd is getting older. This will lower productivity and lead to higher sow mortality in time, manifested by fewer potential market hogs.


Slaughter weights are falling fast – about one lb a week. This is despite the lack of hot or humid weather, hog growing conditions are excellent. One pound a week in weight decrease is pulling hogs ahead. Probably 5 to 7% a week. Might be over 100,000 head a week. You can only kill them once. How low weights will go with hot weather and $6.00 corn? Probably 250 lbs. Less hogs, less pork = higher prices. Pulling hogs ahead means this ‘dog is going to run out of chain.’


Got to love the wizard ag-economists that predicted four weeks ago $56.00 lean hog average for the balance of 2008. Check the futures. We got a $70 plus average to the end of the year. Hey, what’s $25 to $30 a head difference – unless you actually own hogs? Wonder sometimes if they can get across the road without traffic lights.


Corn-ethanol is in trouble. It’s being abandoned by the environmentalists. The states of Missouri and Texas are contemplating suspending mandated ethanol utilization. $6.00 corn is putting some corn ethanol processors in the red. Worldwide governments and agencies are questioning the social, political and economic implications. Food riots, hunger, starvation are all being associated with the corn ethanol insanity. We understand John McCain did not the Iowa caucuses because of his prior opposition to corn ethanol. Last week, in a bizarre and ludicrous statement, the head of the bio-fuel lobby said that corn ethanol had no effect on grain or food prices. DUH! Too bad cowboy - start looking for another job. Do the arithmetic, 99.5% of people eat ½ of 1% grow corn. Where do you think the politicians, environmentalists, consumers are going to point the finger? It’s over. It’s an election year. The higher corn price goes, the faster corn ethanol will be marginalized.


The corn growers that championed corn ethanol will rue the day. Livestock herds that are liquidating throughout the world cuts corn demand and utilization. It has been a plan to kill your customers. Someday you will want them back but they will be gone. Government policies that created tariffs, subsidies and mandates have distorted global food supply and pricing.


The Ontario Pork Producers Marketing Board (OPPMB), the official agency for all of Ontario’s hog marketings must be congratulated. Leadership is prevailing. After years of monopoly powers, hiring of their own police, top down management there is a breath of fresh air. Recently, the OPPMB General Manager left (the former Chief dog catcher at the Toronto Humane Society) after years of hostility with many leading producers. Hopefully this is a sign of reform. Canada and OntarioÂ’s hog industry is in transformation. When things are bad and restraint needed leaders know that flying first class is a symbol of privilege and entitlement not responsibility. Ontario has been devastated by lack of leadership in the past, the industry has downsized more than any other major hog producing area in Canada. For pro-Ontario producers’ sake OPPMB needs to find leadership with wisdom and knowledge. “People you would give money to buy you a used car.”
Summary
Looks like Canada will decrease 300,000 plus sows. The US will take out 200,000 before the dust settles. Mexico will be down 100,000. We believe 600,000 in total or about 10 million hogs of production capacity gone. We already have 70¢ lean plus hogs with US marketings over 2.2 million a week. Global pork demand for North American pork is unprecedented. The liquidation of the 600,000 sows has not decreased supply yet. It will come. Magnify this with decreasing of sows in just about everywhere in the world. We might be overly optimistic but we see continued price appreciation, at some point probably in 2009, we will see hog prices at levels that are incomprehensible. We all see how fast prices can rise. On March 21, Iowa-Minnesota was 48.89. By last Friday, May 2, it was 73.02 (6 weeks). A gain of $48.00 per head. We believe hogs will reach 80¢ lean in the coming weeks.



Author: Jim Long, President & CEO, Genesus Genetics 



To find out more about Genesus Genetics,
please take the time to visit their website at
www.genesus.net.

Tuesday, May 06, 2008Print This Page
Phase One of Revitalization Plan Launched
CANADA - Alberta’s pork industry, fighting an unprecedented financial crisis, is searching aggressively around the world and outside the pork industry in order to build a realistic plan for long-term revitalization.

 

“Our industry is in an immediate crisis and we continue to deal with that,” says Herman Simons, Alberta Pork chairman and Tees, Alberta pork producer. “But there is also a pressing need to move quickly in order to find new ways to lead the industry over the long term.

“For that reason, Alberta Pork is developing a plan of action for producers. The first report, called ‘The Way Forward,’ is a summary of findings from independent consultants who have studied models of success in pork industries around the world, as well as companies and industries that have faced similar circumstances and rose to the occasion. This summary of findings will form the basis for the long-term strategic plan.

“This strategy is about leading the industry in a new way, not simply managing the status quo, nor building on long-term financial support from government,” says Simons. “There is definitely not a ‘silver bullet’ or ‘one size fits all’ solution for pork producers who have individual needs and challenges. There are clearly no easy or simple solutions and we know that not all producers are going to survive.”

To develop the strategy, Alberta Pork retained Toma & Bouma Management Consultants and the George Morris Centre, who in turn consulted with appropriate resources both nationally and internationally.

The first pillar of this new revitalization strategy, a state of the union report on the Alberta pork industry, is now available to Alberta pork producers. That will be followed shortly by a final report, which will include specific recommendations for long-term changes to the industry in areas such as feed grains, marketing, and industry reorganization of the supply chain, says Simons.

“With other markets succeeding in pork, the consultants looked beyond the Canadian pork industry for models of success,” says Simons. “Five different pork value chains are examined, all of which are examples of well-organized and systematic approaches to production, processing and marketing.”

The consultants also studied industries and businesses outside the pork industry that have faced similar situations. “Those examples, which include forestry, Toyota, the wine industry and the New Zealand dairy industry, provide several guidelines,” says Simons. “Key among them is that to simply survive requires a competitive level of organizational efficiency and operational excellence. They also highlight how imperative it is to commit to a long-term vision and strategy.

“For the pork industry to succeed we need to learn from these guidelines and change our industry accordingly.”

A Special Report summary of the first 180-page report is being mailed to producers. A similar summary will be prepared in conjunction with the consultants’ final document. “This first publication, ‘The Way Forward’ report, is not the strategy itself,” says Simons. “Rather, it provides the background and in-depth understanding required to build a realistic plan to revitalize the industry. To find the solution, you first have to fully understand the problem.”

Wednesday, May 07, 2008Print This Page
Welcome News for Canadian Agriculture
CANADA - Farm Credit Canada says, overall, the recent softening of the value of the Canadian dollar is welcome news for Canadian farmers competing on the international market, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The value of the Canadian dollar has trended upward over the past several years peaking last November.

Over the past weeks the dollar has softened somewhat and some analysts are predicting it could slide to the low to mid 90 cent U.S. range by year's end.

Farm Credit Canada vice president prairie operations Mike Hoffort notes Canadian agriculture is export dependent and, as the value of the dollar increases, returns from exports decline so a softening of the dollar would be good news for agriculture.


Mike Hoffort-Farm Credit Canada
There's a number of factors and that's where the complexity of the whole agriculture sector comes into play that go beyond the dollar.

At this stage, and using the hog sector as an example, as much as the Canadian dollar was really a big story in the past 12 months in terms of when it was appreciating and the corresponding reduction in hog values, right now an equally important factor would be the price of feed.

So whether it's corn or those products that go into hogs, that's impacted some of that profitability and definitely comes into play there.

We've had historically high grain and oilseed prices r3ecently and even with the higher dollar, our grains and oilseed producers that have been able to get a good crop have done quite well.

On the other side, on the livestock side, the Canadian dollar appreciation combined with some of the increase in feed prices really took a lot of profitability out of that sector and actually some producers have been running some losses in recent months.

There's quite a number of different stories that take place depending on what your primary sector is and how you're structured.

Hoffort adds, if the dollar drops, the price of feed could drift up which could reduce profitability in the cattle and hog sectors.

However, overall, he believes we'd see improvements in profitability on Canadian farms if the dollar softens.

Thursday, May 08, 2008Print This Page
High Demand Pushes Up Live Hog Prices
CANADA - Despite continued high levels of production and high volumes of pork in storage live hog prices in western Canada have risen dramatically over the past few weeks, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Canadian hog slaughter numbers have increased by almost one percent compared to the same period a year ago while in the United States slaughter numbers have averaged over 2.2 million head per week over the past eight weeks, up about eight percent from a year ago.

Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture says, while slaughter numbers continue to be high, the current seasonal demand for pork and strong exports have pushed hog prices upward.


Brad Marceniuk-Saskatchewan Ministry of Agriculture
At the present time live hog demand in the United States is up about eight percent which is the main factor for increasing hog prices and we've also seen a big strong increase in pork exports in the world.

Based on lean hog futures prices index 100 hogs for western Canada could average in the upper 130's for the second quarter and could average in the mid 130's for the third quarter.

Live hog demand and strong pork exports will be key factors sustaining these current prices at these current high production levels.

The rate of North American sow liquidation and weekly U.S. hog slaughter numbers will continue to be important factors in stimulating higher pork prices and for sustaining longer term price improvements.

While demand has improved prices in the short term, production to date has not reduced significantly to signal if prices will remain strong at these levels into the fall.

Marceniuk notes stocks of beef in cold storage have been relatively unchanged but pork and poultry stocks have increased in the range of 30 percent year over year and, while storage stocks have not impacted live hog prices to a large degree in the short term, if these stocks remain high we could see price pressure into the third and fourth quarters.

However he notes we have seen some sow liquidation in Canada and the U. S. and, as we see more sow liquidation, we'll see reduced production which would help push prices up further in the longer term.

Monday, May 12, 2008Print This Page
APAS Calls for Change to Better Reflect Origin of Food Labelled "Product of Canada"
The Agricultural Producers Association of Saskatchewan is calling for changes to the definition, "Product of Canada" when labelling food to better reflect the origin of the food actually contained in the package, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Under existing federal legislation a food product qualifies as a Product of Canada if 51 percent of the cost of preparing that product for the market place is incurred in Canada.

Last week the House of Commons Standing Committee on Agriculture and Agri-Food completed a series of public hearings which examined the labelling of food products in Canada and will now prepare a report and provide recommendations for improvement to the federal government.

Agricultural Producers Association of Saskatchewan president Glen Blakley says we need to be able to inform our consumers that this product is actually grown in Canada under the stringent guidelines that Canadian farmers grow it under to allow consumers to make informed decisions on what they eat.

Clip-Glen Blakley-Agricultural Producers Association of Saskatchewan
I think the Canadian consumer definitely would support the Canadian producer but the challenge they have is they're being misled by the labelling, by the regulations and the guidelines in regards to the labeling and, if it says it's a product of Canada, then the product that's in the container should be grown in Canada and developed in Canada, processed in Canada.

It gets a little bit iffy in some situations where you might have a small amount of spices or something involved in the processing but if the largest percentage, 90-95 percent of the product, was grown in Canada then it should be labelled as such.

But something that's grown outside of Canada should be labelled to make the consumer aware that that's where it's grown also so they can make an informed and educated choice of what food they're actually eating and what they're buying in the supermarkets.

The Standing Committee on Agriculture and Agri-Food is expected to present its recommendations to the federal government early next month.

Wednesday, May 14, 2008Print This Page
Prairie Swine Centre Suspends Barn Operation
CANADA - PSC Elstow Research Farm Inc., a subsidiary company of Prairie Swine Centre Inc., will be suspending operations due to the unprecedented losses in the pork business.



The farm, a 600-sow farrow to finish barn designed to support research work in a commercial-style barn, opened in April 2000.

The mandate of the facility is to address the needs of the pork industry for research work using a size and scale typical of the commercial industry.

Research to address these needs will continue to be the focal point at the facilities of the parent company, Prairie Swine Centre.

The barn located at Elstow, Saskatchewan, and the associated feed mill, will wind down operations in an orderly fashion over the next few months in an effort to lessen the impact on employees, and the many stakeholders including pork producers, and agencies and companies that have counted on the farm to deliver practical and useful research results.

Dr. John Patience, President and CEO of PSC Elstow Research Farm, acknowledges the magnitude of the disappointment and distress this decision has on its employees, as well as on the staff at Prairie Swine Centre, and indeed on the broader Canadian pork industry.

"The fact that all pork farms in Canada and virtually every other pork producing nation in the world are being devastated by the current market conditions is little solace to the many people who have worked hard to operate the farm and have come to rely on the knowledge generated from the research conducted there.

"We have long-term confidence in the future of the Canadian pork industry as a favoured supplier to meet the growing demand for the world's most popular meat protein; however the particular circumstances of this barn make it unviable in the short-term. From the beginning, the strength of this business was its mirroring of real commercial production conditions. In the end, these parameters such as debt structure, the devaluation of the US dollar upon which Canadian pork prices depend, unprecedented increases in grain and protein meal prices and underestimating the impact of research functions on an operating farm has resulted in this business decision to suspend operations until conditions improve."

Dr. Patience concludes: "Although it is very sad to be temporarily losing the capacity of the Elstow facility, that barn and business design was the right thing to do when the facility was constructed. However, the barn’s operating costs and debt load predicts that it will be unprofitable for many months to come based on projected feed and pork prices."

The Prairie Swine Centre is a separate business entity and will continue its research, graduate student and technology transfer programs.

In spite of this setback, a new initiative started over two years ago is underway to complete a C$2 million renovation at the original barns located at Prairie Swine Centre. This redevelopment has been made possible with a grant from Agriculture and Agri-Food Canada and the province of Saskatchewan. These renovations reduce operating costs, making the farm a more competitive pork producer and will be opened in June 2008. Prairie Swine Centre Inc., located near Saskatoon, is a non-profit research corporation, and is recognized globally for its contributions to practical, applied science in pork production in the disciplines of nutrition, engineering and applied animal behaviour.

Wednesday, May 14, 2008Print This Page
Pork Commentry: Hog Prices Rocket Higher
CANADA - Hog prices rocketed to 78¢ lean in Iowa-Minnesota last Friday – up 5¢ lb from the previous Friday (+$10.00 per head), writes Jim Long.

 

On March 21, Iowa-Minnesota lean price was 48.89. Since then we have had the miracle of a $60.00 per head increase. With a Canada-USA weekly slaughter of 2.5 million, that’s a cash flow improvement of $150 million a week for the production sector. The latest Iowa-Minnesota average weights were 263.7. This is 4 lbs lower than a year ago and 0.9 lbs lower from the week before. No heat, no humidity – we are pulling hogs ahead. All factors are bullish for further price increases.

Other Observations
Last Friday, the USDA came out with a corn crop prediction of 12.7 billion bushels, down 7 percent from a year ago. Let’s hope weather gets better real soon. Rain seems to be hitting too many spots in the Corn Belt, delaying planting. This is leading to increased concern about total acreage and yield potential. The only good thing you can say about the weather is we are not having a drought.

If you look at Argentine and Brazil corn production, the USDA is projecting an increase of 6 million metric tones over the last crop year, while the Canada-Australia wheat crop combined is a projected 49 million metric tonnes versus 33.2 last crop (increase of approximately 16 million tonnes). We believe that the world’s high grain prices will lead to more acres planted and higher yields in every country. Statistics Canada, for example, has projected 64.97 million acres in 2008 in grain and oilseeds, a 4.2% increase over 2007 (+2.657 million acres). Some US data we have seen has projected an increase of 7 million acres in grains and oilseeds combined. Give farmers profits, they will plant more, fertilize more, herbicide more, etc. We expect, at the end of this crop year, the world will have produced the largest grain and oilseed crop in history, barring some major drought. At the same time, world meat protein production is decreasing, cutting grain and oilseed demand.

It appears that the Danish swine herd is declining. On April 1st, it was 11% lower than a year ago. A combination of low hog prices and high feed prices has lead to liquidation. There were approximately 15 million sows in the European Union in 2007. If the EU countries decline similar to Denmark, which we believe is plausible we could see 1.5 million sows liquidated (the same size as all of Canada’s production).

An EU decline of this magnitude will cut 25-30 million hogs from production. Last week, we read reports from Great Britain that speculated English prices could reach 2 pound sterling per kilo, $4.00 US per kilo, $1.81 US per lb. That would work, wouldn’t it? All of this is about supply relative to demand. Global pork meat availability is declining, hog prices are trending up globally. We are on the beginning of where prices could go. The higher feed prices go, the higher ultimately hog prices will be. $6.00 bushel corn is over $10.00 in some other countries. Prices ration supply. How high can prices go is directly related to the feed prices. $6.00 corn will probably make $1.10 - $1.20 lean hogs. $7.00 corn $1.20 to $1.30. No one knows for sure where this will end up. We got 80¢ lean hogs now, never before has a price this high been around breakeven. Breakeven prices and fear of $8.00 corn is going to lead to further sow liquidation.

Country of Origin Labeling – Some Canadian producers have benefited from COOL. Canadian producers who put hogs on feed in the United States have not been able to forward sell their market hogs over the last few months to packers. Packers have been afraid of COOL legislation. The big benefit for Canadian producers is because they could not sell ahead. They have to take cash bids. On Jan 4, May lean hog futures were 68.92, last Friday, 80.27. Canadian producers, because of COOL are ending up better off by at least $20 plus per head. Go figure.

Check out the Genesus Newsletter this week. We are proud of our customers’ results on Swine Management Services Yearly Benchmarking Summary. Genesus had 8 of top 10 herds out of 900,000 plus sows. Gratifying to see the huge efforts we do genetically being recognized in the marketplace.

Summary
Domestic and international breeding herd liquidation continues. Prices have increased $60.00 per head in seven weeks. We expect summer cash hogs have further upside. Beware of the fall; every year, seasonality leads to large marketings. Lean Hog Futures in October-December might not have much more upside. 2009, we will see $1.00 plus lean hogs.

Genesus Dominates Swine Management Services 2007 – 52 weeks Summary
Swine Management Services (SMS) of Fremont, Nebraska is the world’s swine benchmarking service. SMS 2007 data was benchmarked on 467 farms with 901,764 females.

Genesus once again dominated results, 8 of top 10 farms were Genesus, 12 of the top 15 Genesus. Genesus had the only two farms over 30.

2007 – 52 weeks
901,764 females
   SMS  GENESUS 
No. of Farms  467  44 
Top 10% Avg.  27.12  29.97 
Average All  22.94  2655 


SMS Total 467 Farms - Genesus 8 of Top 10
SMS 52 weeks
RANKING  FARM  P/S/Y 
GENESUS  SMS 
1  1  Camrose  31.12
2  2  Woodland  30.29 
3  5 Riverview  29.54 
4  6 New Haven North  29.43 
5  7 Fairhaven  29.22 
6  8  Milltown  29.03 
7  9  Suncrest  28.30 
8  10  New Haven South  28.10 

All genetic companies are represented in this database of 901,764 females.


Author: Jim Long, President & CEO, Genesus Genetics 

Thursday, May 15, 2008Print This Page
Manure Application More Economically Appealing
CANADA - The escalating costs of commercial fertilizers are making the application of livestock manure more economically attractive.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The cost of most of the main commercial fertilizers have shot up this spring.

Manitoba Livestock Manure Management Initiative executive director Brandy Street expects producers to begin looking at alternatives as commercial fertilizer prices continue to rise.


Brandy Street-Manitoba Livestock Manure Management Initiative
For the livestock producer or the mixed farmer manure is a by-product of livestock production so the cost of sourcing manure is zero but for the crop producer the cost of sourcing manure will depend on how far away the manure is and if it is free or if it comes at a cost.

In areas where the land base is very limited manure has been free but it may soon come at a cost if the price of commercial fertilizer continues to rise.

The most distinguishing differences between commercial fertilizer and manure costs is the cost of transportation and application.

Because manure is mostly water and it can be upwards of 90 percent in some cases, application will cost around one or two cents per gallon and that quickly adds up.

It can be 50 to 100 dollars per acre if you're applying 5000 gallons.

Commercial fertilizer can be applied at seeding meaning there are less passes over the land so you're saving money on fuel.

Some producers still choose to have commercial fertilizer applied after seeding and that will typically run them about six or seven dollars per acre.

Because commercial fertilizer prices have gone up significantly people are starting to put more value on manure and, if the demand for manure goes up, then you may see a greater chance of getting dollars back for manure by selling it.

Street indicates the most cost effective is for the mixed farmer to use manure to fertilize his own crops, but it's an advantage to the livestock producer to supply the crop farmer to manage the manure sustainable and to the crop farmer because he doesn't have to purchase commercial fertilizer.

Friday, May 16, 2008Print This Page
Federal Cull Program Moves to Phase II
CANADA - The federal cull program for breeding swine is moving into a second phase to spread out remaining funds across all provinces, reports Canadian Cattlemen.



The Canadian Pork Council, which operates the $50 million program, said Thursday that in this second phase, funds will go only to hog farmers in provinces that haven't yet met the target of cutting their breeding swine herd by 10 per cent from Jan. 1, 2008 levels.

As of Wednesday, the council reported, Ontario had committed 10.4 per cent of its breeding herd, Nova Scotia 46.9 per cent and Prince Edward Island 37.5 per cent during the first phase, in which applications had been accepted on a first-come, first-served basis, according to Canadian Cattlemen.

Under the cull program, qualifying hog farmers will get $225 per breeding swine culled after April 14 or $225 per animal culled between Nov. 1, 2007 and April 13, 2008 less the selling price received. The program also reimburses costs of euthanasia, further processing, rendering and disposal.

Tuesday, May 20, 2008Print This Page
Livestock Manure an Environmentally Friendly Fertilizer Option
CANADA - Research conducted in Saskatchewan has shown, when applied in balance according to manure nutrient analysis and soil testing, livestock manure is an environmentally friendly fertilizer option, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The University of Saskatchewan in collaboration with the Prairie Agricultural Machinery Institute and Agriculture and Agri-Food Canada has been conducting long and short term manure fertilizer trials at sites throughout Saskatchewan since the early 1990's.

Soil research scientist Dr. Jeff Schoenau says researchers have looked at several different aspects of the environmental impact of using manure fertilizer including nutrients, metals and salts and what it really comes down to is a matter of balance.


Dr. Jeff Schoenau-University of Saskatchewan
What we've found in these trials is that when you apply manure nutrients at a rate that is in balance with the crops requirement and removal over time that in fact you get maximum recovery of those manure nutrients, really no issues with buildup or loading in the soil and really no adverse effects on the physical condition of the soil either.

The organic matter, in soils of low organic matter, is of a benefit.

The thing to watch out for in some manure sources is the nitrogen to phosphorus balance.

If you're applying manure to meet all of the nitrogen and the manure is high in phosphorous you will end up over applying phosphorus year after year and you'll end up with some loading issues.

And it's under those circumstances, where you build up that available soluble phosphorus in the soil, that you can run into problems with water moving across that soil carrying the phosphorus into water bodies.

And that's why paying attention to the balance of all nutrients is important.

Dr. Schoenau suggests when applying manure that has a high phosphorus content relative to nitrogen you would apply that manure according to a phosphorus based recommendation and then look at supplementing with commercial nitrogen fertilizer.

Thursday, May 22, 2008Print This Page
Local Producers First To Enrich Pork with Omega3
ONTARIO - As the pork industry continues to face so many challenges, one area family is trying to put themselves at the top of the industry.



Paul and Rose Hill - who farm near Mitchell - are the first producers in Ontario to have Omega 3 and Organic Selenium enriched pork.

Rose says one day they sat down and decided they had to figure out what they were going to do to make their business profitable -- when this idea hit them.

They both took Omega3 supplements and thought if it could be in milk and eggs, why not in pork?

The Hills are now selling everything from chops, to sausages, to bacon out of their home -- all enriched with Omega 3 and Organic Selenium.

Saturday, May 24, 2008Print This Page
Swine Manure Cuts Fertilizer Costs and Produces High Quality High Yielding Crops
CANADA - Grain and oilseed growers are cutting their production costs by exercising the recycling option and using livestock manure to displace some of the commercial fertilizer normally applied to boost crop quality and yield.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
With strong prices for most crops, growers are anxious to maximize yields. However, dramatic increases in the cost of commercial fertilizer, especially nitrogen and phosphorus, have tempered that enthusiasm. Many growers are considering trimming application rates to save dollars while others are looking more favorably at using the nutrients contained in swine manure.

Bruce Dalgarno, who runs a grain and oilseed operation near Newdale, Manitoba, accesses liquid hog manure from a sow barn located on land adjacent to his. The sow barn operator covers the cost of hiring a custom applicator to apply the manure to land owned by Dalgarno and other neighbors according to the nutrient requirements of the crops to be planted.


Manure: Cost Effective But Requires Higher Management
“We pay a percentage of the nitrogen that’s put on and then he pays for the application cost so, in our instance, yea, we’re saving some money compared to commercial fertilizers,” says Dalgarno.

However, he points out, “You have a little bit more management that’s required.”

On Dalgarno’s farm the manure has to be applied in the fall. Attempts at spring application of manure were unsuccessful due problems with soil compaction.


Commercial Fertilizer offer Greater Flexibility than Manure Fertilizers
“Depending on mother nature,” Dalgarno observes there’s not a very big window for fall application. A lot depends on the availability of the custom applicator, where he is and how much work he has.

“If the hog producer doesn’t get there in the fall then you have a problem in the spring. You’ve got to go back and put commercial stuff on in the spring.”


Crop Rotation Considered Crucial
As well, Dalgarno notes, you have to know what crops will be planted on the manured field to allow the custom applicator to apply the correct amount of manure to meet the crop’s nutrient requirements.

Bryan Karwal, the Iowa Pork Producers Association District Five Director, feeds out about three groups of 1,500 to 1,800 head of feeder pigs each year on his operation located in southwestern Iowa. Most of the manure generated by the operation is used to fertilize crops grown by his brothers.

Depending on how much is needed, the liquid manure is injected into the soil in the spring and in the fall with most of it being applied to row crops and the rest applied to pasture land.


Manure Use Provides Cost Savings
“It definitely is a savings in fertilizer,” Karwal observes.

“If you had more gallons to put on then, of course, you could do more acres and it would be a larger saving.”

He concedes his operation isn’t large enough to justify tremendous numbers of acres but it’s a benefit to get the manure spread and it saves his brothers a little fertilizer.

“I think they cut back all of the P and K (phosphorus and potassium) on the corn and they may add just a little bit of nitrogen but not too terribly much. On some years they don’t need to.”

Sinnett Pork Farm at Leroy, Saskatchewan is a 2,600 sow farrow to finish operation which finishes half of the pigs it produces, generating around 6,000,000 gallons of manure per year. The manure is applied in the spring and in the fall using drag hose lines which can move the manure up to three and a half miles from the site.

General manager Jay McGrath explains, “Typically we try to put it on where we’re going to seed oilseeds. The rotation is a three year rotation which works good for our oilseed rotation as well because we have three years before we go back to that crop. Six thousand gallons an acre is what we’ve typically been going at and that seems to be working quite well.”


Manure and Soil Testing Key to Maintaining Proper Balance
Manure and soil analysis help ensure proper nutrient balances are maintained.

“We do soil samples and we also do samples per field of manure so, as they’re applying the manure, they’re collecting a sample for that particular field.”

The samples are then sent away for analysis.

Manure nutrient analysis and soil testing not only ensures the crops will have access to the nutrients they need. Testing also helps avoid the over application of certain nutrients.


Potential Phosphorus Loading Raises Environmental Concern
“The thing to watch out for in some manure sources is the nitrogen to phosphorus balance,” says Dr. Jeff Schoenau a soil research scientist with the Department of Soil Science at the University of Saskatchewan.

“If you’re applying manure to meet all of the nitrogen requirements and the manure is high in phosphorous you will end up over applying phosphorus year after year and you’ll end up with some loading issues. And it’s under those circumstances, where you build up that available soluble phosphorus in the soil, that you can run into problems with water moving across that soil carrying the phosphorus into water bodies. And that’s why paying attention to the balance of all nutrients is important.”

Brandy Street, the executive director of the Manitoba Livestock Manure Management Initiative (MLMMI) notes, “Like any system, when managed properly, you minimize the potential for problems but improper management techniques can lead to environmental risks.”

She explains, most of Manitoba soils are low to medium in phosphorus and will benefit from manure application but the risk of phosphorus loading has increased in areas of the province where livestock concentration is dense. In those livestock dense areas if manure is applied to meet nitrogen requirements of the crop, more phosphorus ends up being applied than the crop can remove and that results in a buildup of phosphorus and it could increase the risk of phosphorus loss to surface water. So for that reason the Manitoba government has introduced new regulations that will require, at high soil test phosphorus levels, manure application to be based on phosphorus removal by the crop.

Dalgarno uses a combination manure application and commercial fertilizer applications to address the environmental concerns.

“We try to do this application once every two years or once every three years so you’re doing commercial fertilizers in between. You’ve got to make sure that you’re not going to end up with a high level of one type of nutrient over the other,” he says.

“We’ve got two or three fields that are right close to the hog barn so they essentially do one field every year. You can rotate your crops on it accordingly.”


Manure Offers Results Equal to Commercial Fertilizer
As for the effectiveness of swine manure fertilizer compared to commercial fertilizer in terms of crop production, Dalgarno observed, “No difference in crop quality and yield.”

“We had applied some commercial fertilizers on that same field and had test strips and there really wasn’t any difference in build-up of nutrients. They (crops) had all used it according to what they should have so that worked out quite well,” he says.

“We’ve got a yield monitor on our combine and map the yield as we go across and there was no difference when we went across the area that had the commercial fertilizers applied compared to the manure that was applied,” he adds.

Dalgarno notes the economics will vary from farm to farm but he estimates displacing commercial fertilizer with hog manure saves dollars per acre on his farm.


More Manure Would Create Higher Cost Savings
McGrath agrees, “It’s very valuable. We could sell this to our neighbors but we want it because it’s good stuff.”

Sinnett Pork Farm actually buys as much manure from neighboring hog operations as possible in recognition of the value of it.

"We don't have enough manure to do all of our land. We have a fairly big size grain farm so it only does a portion of it."

Karwal says, in Iowa, the producer that is getting the manure usually pays for the hauling in exchange for the fertility value.

He notes, “There’s even some talk about possibly selling the hog manure because the price of fertilizer has gone up so much. It’s actually worth a little bit more than the hauling. I think the hauling probably is now running 45 to 50 dollars an acre for a full rate. It’s not cheap to haul it but then, your fertilizer is going to be over 100 dollars per acre.”


Livestock and Crop Partnerships Create Win Win Situation
Dalgarno considers the use of manure to fertilize crops to be a win win for the grain farmer and for the hog farmer. The hog producer is selling his weanlings out of the one end of the barn and he has another product, manure, coming out of the other end.

Monday, May 26, 2008Print This Page
Pork Revitalization Plan Presented to Producers
ALBERTA - The final draft report on the Alberta pork industry’s revitalization strategy is near completion and details will be presented to the province’s pork producers at two open industry meetings the week of May 26.
“This strategy is about leading our industry in a new way,” says Herman Simons, Alberta Pork chairman and Tees, Alta. pork producer. “It’s called ‘The Way Forward’ because our industry is in unprecedented distress and we believe that we need to develop new options if pork producers are to survive this distress and have sustained profitability in the future.”
"The Alberta Pork board has reviewed the draft document, but before we move through final approval, we wanted to give producers an opportunity for direct input. This will be important as we work together with industry stakeholders to implement this strategy." 
Herman Simons, Alberta Pork chairman and Tees, Alta. pork producer
The strategy was developed by Toma and Bouma Management Consultants and the George Morris Centre, who in turn consulted with appropriate resources both nationally and internationally. The first pillar of this broad analysis, a state-of-the-union report, has been completed and made available to producers. The report, entitled “The Way Forward, The Situation Assessment of the Alberta Pork Industry,” outlines the situation the industry faces and reviews developments from around the world as a basis for evaluating new options.

“The second pillar report, which is just being released, is the actual strategy for moving ahead with repositioning our product in the marketplace,” says Simons. “The Alberta Pork board has reviewed the draft document, but before we move through final approval, we wanted to give producers an opportunity for direct input. This will be important as we work together with industry stakeholders to implement this strategy.”

The strategy vision, he says, is a highly connected pork industry capable of delivering differentiated, high quality, safe pork products in a sustained manner, with the flexibility to respond to continually changing markets and market conditions. The strategy seeks to move the industry out of the highly competitive and unprofitable production of low-cost bulk pork products. Instead, the industry focus will be on producing high-value pork products in demand by consumers in domestic and global niche markets.

The repositioning strategy basically covers four areas, says Simons. First is to establish system integrity in production, processing and marketing to create a highly connected industry through proactively managed supply chains between the processing sector and producers.

Second is to develop new product marketing capability, the establishment of new business-to-business skill sets that develop long-term supply relationships with a set of targeted markets and customers.

Third is to address cost challenges by developing strategies to reduce the two major cost items facing pork production: feed grains and labour.

Finally, the goal is to create a favourable business environment, ensuring that the industry has the necessary public and private services, tools and instruments to successfully compete in a global meat industry.

“We realize this is not an easy path to the future for pork producers and that there are no simple solutions to our challenges,” says Simons. “However, the report has identified several strengths within our industry and we have confidence in the ability of our producers and processors to work toward capturing those in a realistic fashion.

“These meetings are another opportunity to hear directly from producers and industry. We will also be providing a summary overview of this report to all producers shortly, and welcome their comments at any time. Once the plan is accepted by our board we will work to develop operational and implementation details.”

Monday, May 26, 2008Print This Page
Public Input on Food Labelling in Canada
CANADA - The House of Commons Standing Committee on Agriculture and Agri-Food expects its report on the labelling of food products to form the basis of discussions aimed at revamping the definition, "Product of Canada," writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Earlier this month the House of Commons Standing Committee on Agriculture and Agri-Food completed public hearings which examined concerns related to the definition, "Product of Canada" in food labelling and it's scheduled to present its recommendations next week.

Meanwhile the Prime Minister has opened public consultations to gather input on planned changes to the definitions of "Product of Canada" and "Made in Canada."

Standing Committee chair James Bezan suggests, by focusing strictly on those two definitions, changes could be made within a matter of weeks after final decisions are made.


James Bezan-Standing Committee on Agriculture and Agri-Food
I think that we'll probably see things happen here over the next few months.

There's no doubt that we have to give industry time to adapt to the new guidelines and to changes their labels.

Definitely most of the fresh produce and red meats and even poultry products are already in compliance with any changes that are going to come into place because they are 100 percent Canadian.

The bigger concern is going to be what happens with processed food products and essentially how you deal with these imported concentrates of apple or orange juice coming from China or South America or India and then are reconstituted here and then are called "Product of Canada."

That is where it's going to take a little bit of time to allow industry to adapt their new labels and get them into place, as well as some of the other food processors that are making frozen dinners or pizzas and things along that nature.

Bezan notes Canadians can participate in the public consultations by logging onto the web site, healthycanadians.ca, which will be accessible until June 11.

 

Tuesday, May 27, 2008Print This Page
Stronger More Stable Hog Prices Projected
CANADA - The Manitoba Pork Marketing Co-op is projecting stronger more stable live hog prices heading toward the end of 2008, writes Bruce Cochrane.





Farm-Scape is sponsored by
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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Over the past five weeks live hog prices have increased by about 60 dollars per 100 kilograms.

Manitoba Pork Marketing Co-op general manager and CEO Perry Mohr credits the normal seasonal price increase combined with a tremendous increase in domestic demand as well as some phenomenal U.S. export numbers.


Perry Mohr-Manitoba Pork Marketing Co-op
One of the things that we're experiencing right now is we're actually experiencing a lull in demand and, again, this is typical.

It's not atypical.

We've actually seen the market fall back about five dollars per CKG (100 kilograms) and it could fall back another five dollars per CKG before we take what I would call another run-up in the market place.

We're going to have a dead cat bounce here coming pretty soon and that will see the market respond favorably again.

Key factors to look for are again the demand equation, both domestically and the export market.

We've got record supplies in cold storage in the United States.

We need to continue to see those numbers decline as we head through summer if we're going to see the prices supported.

We're seeing a strengthening of our Canadian dollar which is having a negative impact on prices.

That's a factor that we need to keep our eye on.

I believe slaughter numbers in the United States are probably going to get down to that 2.1, maybe just under 2.1 million head on a weekly basis.

We need those to remain in that area in order for us to sustain this recovery.

And, if I didn't mention already, I meant to mention we need those export markets to continue to gobble up large amounts of pork.

Mohr notes live hog prices typically peak in the summer before dropping off into the fall and winter but he's optimistic, once prices peak this summer, that they'll dip slightly before stabilizing for the rest of the year.

He says liquidations are continuing on both sides of the border so there's fewer producers producing fewer hogs.

Monday, June 09, 2008Print This Page
Welcoming Alberta’s Long-Term Livestock Strategy
ALBERTA - Alberta Pork, the organization representing pork producers in the province, says the recent announcement by Alberta Minister of Agriculture and Rural Development George Groeneveld of a long-term strategy and $356 million in funding support for the province’s livestock industry, is welcome news.

 

“This announcement provides critical financial and moral support for our province’s industry at a time when producers are hard hit,” says Herman Simons, Alberta Pork chairman and Tees, Alta. pork producer. “More importantly, it lays the groundwork for working together to build a more competitive industry in the longer term.”

The pork industry is already taking steps to rebuild for the future, says Simons. It has hired independent consultants to develop a pork industry revitalization strategy. That effort, led by management consultants Toma and Bouma and the agricultural think tank, the George Morris Centre, was introduced to pork producers at two industry meetings a week ago.

The Alberta pork revitalization strategy vision, he says, is a highly connected pork industry capable of delivering differentiated, high quality, safe pork products in a sustained manner, with the flexibility to respond to continually changing markets and market conditions. The goal is to move the industry out of the highly competitive and unprofitable production of low-cost bulk pork products. Instead, the industry focus will be on producing high-value pork products in demand by consumers in domestic and global niche markets.

“While we recognize there are many details yet to be worked out to implement the government’s new strategy, we are very supportive of the intent of the effort,” says Simons. “For example, the goal to build around eight specific priorities such as enhancing the value chain and refocusing efforts to achieve a sustainable and competitive livestock industry, is in keeping with our vision.”

“We’ve said we need to lead our industry in a new way,” says Simons. “Government has indicated it will work closely with the livestock industry to implement these changes and we welcome that spirit of working together as stakeholders to rebuild for a realistic future.

"Minister Groeneveld has also indicated these changes will not be easy but they are necessary and our organization agrees on both points,” he adds.

Tuesday, June 10, 2008Print This Page
Re-Examination of Food Security and Availability Urged
CANADA - The executive director of the Food Banks of Saskatchewan is calling on governments to re-examine the matter of food security, food availability and the cost of food, writes Bruce Cochrane.





Farm-Scape is sponsored by
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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Last week, in observance of National Hunger Awareness Day June 5, the Battlefords District Food and Resource Centre unveiled a Wall of Hunger as a visual demonstration of the estimated 11 hundred people who go hungry in the region each month.

National Hunger Awareness Day is an observance designed to draw attention to hunger in Canada.

Food Banks of Saskatchewan executive director Bill Hall notes world leaders are now recognizing and attempting to address the crisis of food and food availability and the one billion people at risk of hunger across the world.

Bill Hall-Food Banks of Saskatchewan
Although it's a global problem certainly it has its impact here in Canada also.

I think one of the things that we have to worry about is the price of fuel and fertilizer.

Certainly around the globe I think we've seen news reports where certain countries are now shutting off exports of their food.

They're hoarding it for themselves because of this danger of losing supply and those countries who depend on food imports can no longer afford them.

I think what we're going to see here in Canada is something similar amongst those people who have very limited resources to acquire food.

As food transportation costs go up, food prices will go up in the stores and they're going to have to look at their food budget and decide to maybe buy less quality food and perhaps less food so it's a great concern for us.

Hall believes it's time for governments to re-examine the whole issue of food security and the idea that food is a human right, that people deserve to have quality food at an affordable price that they can feed their families.

He says for awhile numbers were going down but, with increased rents, fuel costs and food prices in stores, there is a concern that if this trend continues there will be more people coming to food banks.

Wednesday, June 11, 2008Print This Page
Prairie Swine Centre's Sow Research Unit Open
SASKATCHEWAN - “Reducing costs and improving efficiency is the most important aspect of pork production today, and applies as much to the research community as it does to commercial pork producers,” notes Dr. John Patience, President of Prairie Swine Centre.



“This new sow barn embraces that important concept in design, equipment selection and operational procedures.” Examples of the efficiency aspect in design include replacing four buildings constructed in 1980 with one building. In consideration of equipment, high efficiency gas heaters in all rooms, a new high efficiency hot water heater, and in the farrowing rooms low wattage heat lamps will all lower the annual utility costs. Combined these factors should reduce energy consumption by 25-30%. The largest savings however will occur in the daily operations of the pig barn. By having automated feed delivery to all pens, and self feeders for all nursing sows, staffing will be much more efficient. The design of the equipment means less time opening gates, handling and moving animals at breeding. “In total this barn should be at least 30% more labour efficient that its predecessor” notes Dr. Patience.

“Shannon Meyers, General Manager of Fast Genetics and a member of the Board of Directors of Prairie Swine Centre reinforces the importance of being efficient, “the industry is cyclical and regularly goes through periods of profit and loss, only pork producers that know their costs and focus on efficiency will be there to participate when the good prices return. This barn will meet head-on the need to be efficient. It is important to note however that in improving our efficiency we did not have to give up on the unique features required for an effective research design.” The barn has the ability to simulate standard production practices as well as incorporating features such as free-access stalls (designed in Denmark) so that comparisons of various management systems used in the industry can be compared within this facility. Looking ahead, the barn incorporates the industry trend of accommodating practices such as increasing the age at weaning.

The construction of the new Sow Research Unit was made possible through a Wedge Funding Grant, a joint initiative of Agriculture and Agri-Food Canada and the Saskatchewan Ministry of Agriculture.

Participating in the Official Opening ceremonies at 1 pm today was Dr. Jim Basinger, Acting Associate Vice-President Research, University of Saskatchewan, Mr. Neil Ketilson, General Manager, Sask Pork, Mr. Shannon Meyers, and Dr. John Patience.

Saturday, June 14, 2008Print This Page
State-of-the-Art Sow Research Unit Officially Open
CANADA - The Prairie Swine Centre (PSC) officially opened its newly renovated sow research unit located at Floral, Saskatchewan on Tuesday (June 10) with an open house.





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Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Next week, following a fumigation, cleaning and final equipment check the first pigs will be moved in.

The Prairie Swine Centre is one of several University of Saskatchewan (U of S) research facilities. Its primary focus is animal nutrition, animal behaviour and engineering.

PSC Research Internationally Recognized
“The Prairie Swine Centre is highly regarded by the local and regional producers but, if you were to talk to anybody across Canada regarding the swine industry they'd recognize the importance of the Prairie Swine Centre to their own activities,” observes University of Saskatchewan acting associate vice president research Dr. Jim Basinger.

“Beyond the borders of Canada the swine industry is of global importance. Many countries have tremendously strong industries.”

He suggests it would not be unlikely to drop into any major centre around the world that is concerned with swine production and find that they would recognize not only the name of the organization but they would know some of the researchers who are involved in anything from animal nutrition to animal behavior.

The approximately $2 million upgrade replaced infrastructure constructed by the university more than 25 years ago.

The original facility, built in 1979, consisted of four main buildings including two 100 sow barns, a small 50 sow barn and a grow finish barn.

“Basically what we did was we undertook a complete replacement of our gestation, lactation and breeding areas and gilt development areas; consolidated what was previously in four barns into a single barn,” says Prairie Swine Centre outgoing president and CEO Dr. John Patience.

Cost Reduction and Enhanced Research Capabilities Drive Renovations
“The main reason was to lower our cost of operation,” says Dr. Patience. "The secondary objective was to enhance our sow research capability.”

“This is a project we started about three years ago, in terms of evaluating how we were going to be a more efficient research centre,” says acting president and CEO Lee Whittington.

It starts off by being a more efficient pork producer. We were looking for ways to reduce our cost of production. We looked at our 30 year old buildings and decided that there was a lot of new technology out there that we could incorporate.

Dr. Patience adds, putting into one barn what was previously done in four different barns immediately leads to huge improvements in labour efficiency and there are some energy efficiencies that should save money as well.

Improvements Expected to Ease Staff Workloads
PSC operations manager Brian Andres recalls the labour inefficiencies were so great, with staff running between barns, that it was felt something had to be done.

He explains, the old facility, including the grow finish barn, required a compliment of five people to run production, breeding, farrowing and nursery as well as grow finish. That number can be reduced by one and a half to two staff members because of the increased efficiencies.

As well, Andres says, there are eight semi-intensive rooms where animals are all fed by hand.

“These rooms have five pigs per pen, approximately 100 animals per room and those all have to be fed by hand. The automatic feed systems put in grow finish as well as the automatic feed systems throughout the new facility will greatly improve efficiencies.”

Whittington estimates, “That, in itself, is going to save hours and hours everyday probably reducing the overall labour bill by somewhere around 30 percent.”

As well, he notes, replacing four buildings built in 1980 with one brand new 2008 building that boasts more efficient heating and lighting is expected to reduce utility costs by 30 percent. He believes that represents a huge opportunity as utilities have jumped into number three spot overall in terms of costs of production for commercial pork producers.

Gestation Housing Complies with European Standards
The new facility has several other improvements.

Dr. Patience notes, while the breeding area is very much like any other conventional breeding area, the gestation area is quite a bit different employing walk in lock in stalls, or freedom stalls. “They allow the sow to walk into the crate and there's a mechanism that closes the gate behind her and then, when she's finished eating and wants to leave the stall, she just backs up against the gate and it opens up again.”

The stall system was developed in Denmark to meet European standards.

In Denmark legislation requires more space footage per sow than is standard in North America says Helena Echberg, the North American regional Manager with Egebjerg International.

“Our farrowing pen seems to be a little larger than the farrowing pens in North America.”

She notes group based housing has been researched in Denmark for the last 20 years and there have been a lot of different systems.

“One of the systems that is recommended and preferred by Danish farmers is the free access stall where the sow can walk in and out as she pleases.”

“That was one feature we really wanted because it's an excellent model,” says Dr. Patience.

“It's popular in Europe therefore we can suspect that, as group housing becomes more common in North America, it'll at least be a system that will be looked at and we'll have the benefit of years of research to see how the system really does work.”

European and North American Standards Moving Closer
Echberg foresees a time when European and North American standards will come closer together.

“Over the last year, especially, there has been a lot of changes in the production in North America and you see it's going toward the same standards that we have in Europe.”

She believes, as North Americans start to talk more about housing sows in groups, it is important to see how this technology can be adapted into the North American way of producing sows.

PSC Moves from Three Week to Four Week Weaning
In the farrowing rooms the biggest innovation is the switch from three week weaning to four week weaning.

Dr. Patience says that was under the advice of industry who said there's lots of units out there that are weaning at three weeks. They can do that kind of research but, with industry moving more and more to four week weaning, they thought we should move to four week weaning to undertake research to support that change.

Ongoing Research Key to Ongoing Economic Viability
Saskatchewan Pork Development Board general manager Neil Ketilson believes research is always important to everybody.

“You always have to stay ahead of the game rather than just trying to stay even.”

If you fail to do research, if you fail to invest in new infrastructure over time eventually you become stale. Other more competitive areas of the world will take over and you'll lose your competitive edge, he says.

Dr. Patience agrees, we have to be looking to the future.

“I've often said that, if people were to analyze pork industries around the world in different countries, those countries that years ago gave up on research dealing with economic efficiency and competitiveness are those industries that we now see going into decline.”

Tuesday, June 17, 2008Print This Page
Pork Commentary: Are We in the Swine Business or Grain Market?
CANADA - This weeks North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
It now feels that we are no longer in the hog business. We are now in the business of weatherman, rainfall gauging, grain trader and worrier. The huge rains hitting most of the U.S. Midwest are pushing corn and soybean prices to record highs. Hog cost of production continues to rise. There is much anxiety. Losses per head are in the neighborhood of $25.00. Spot early weans were trading last week either side of $6.00 each. It’s ugly. Is there any relief in sight? As usual (we can’t help it) we are looking for the pony in this manure pile.

European grain production is projected to increase 14% this crop year. Europe has planted almost 6 million more acres of crops this year compared to last. Crop yields are projected to increase 9% with total European grain output up 14%. Last year 255.8 million tonnes, this year 291.3 million tonnes. This increase will cut European needs for imports and should stabilize prices. A major commodity trader told us that they expect European grain would be cheaper than the US in the coming months.

High grain prices have increased grain production. Canada is planting 2.5 million more acres. Australia wheat output is expected to double. We had visitors from Russia this past week with 80,000 acres of crop land and they talked about their efforts to increase yields. A Canadian finance group we talked to told us that they financed almost one billion dollars of Canadian tractors, large air seeders, etc. for Russia in the last few months. Mexico’s corn production is expected to go from 20 last year to about 25 million tonnes. Point is, we expect world grain production is growing faster than is being calculated in supply/demand models.

We believe world livestock production is rapidly decreasing. In March, Japan’s compounded feed tonnage decreased 4.5% year over year; a decrease of about 250,000 tonnes. You do not need feed for livestock that doesn’t exist. We expect both weights and number of livestock will continue to drop, decreasing feed consumption. US chicken weights and supply are below a year ago. Cattle and hog weights are lower. We expect this trend to increase. More intense feeder management is and will cut feed usage. The following is USDA feed usage estimates:
Feed Usage
Million Metric Tonnes
  06/07   07/08   
World 635   660   
US 148   164   
Mexico 23.4   23.28   
Canada   19.45   19.14
Japan 14.88   14.27   
Russia 18.6   18.78   
China 105.36   106.32   

We expect feed utilization is decreasing at a faster rate than being estimated.

We live near the Ford plant that builds Lincoln Town Cars (large gas consumers). In May 2007, Ford sold 4,600 Lincoln Town Cars. This May, they sold 850. The marketplace is rapidly adjusting to high fuel prices, just as high feed prices will do likewise.

Oil is at the highest price in history. If there is a big price correction (who is not cutting consumption now?), corn ethanol will be quickly challenged to cover variable costs. Plants close? Corn demand cut? We are usually bullish, but when oil and corn are at the highest prices in history, the odds of staying there are not good. My father (a corn farmer) always told me, “If it’s too good to be true, it’s probably too good to be true.”

US pork exports for April were nearly twice as large as they were one year ago, leaving year to date exports 52% larger than last year. These exports are caused by demand. Buyers have increased consumption and/or decreased supply. The world is cutting meat production (less feed needed). Both trends will continue.

We had some points from a Genesus customer on the state of the industry. We wished to share them. They are articulated better than we can.

“For the first time in 20 to 30 years, pork producers who raise their own feed are at a strategic advantage that we have not had for a long time.”

“The complete cycle of corn-feed-manure is still a cost effective one. We know that no one wants to raise hogs for the manure, but right now ‘it’ is a huge side benefit. When you apply 4,500 gallons of finishing manure per acre, it provides you with $150-$190 worth of nutrients.
We all see high prices are pushing technology forward in grain production. You have to look no further than Monsanto and Pioneer to see where seed corn costs have gone. Technology in seed, herbicides, insecticides, fertilizer utilization, etc. is breaking new plateaus annually. Yields are increasing on trend lines. High prices and global demand for food is encouraging fast adaptation of new yield making technology.

In the swine industry, we expect much the same will happen globally. There are approximately 70 million sows in the world. Most are just pigs with little or no genetic development. As costs rise, the economic pressures to use new genetic technology will increase. Feed costs are making feed conversions ever so important. Pig productivity is like corn yields supreme. There is a difference globally of between 2,500 carcass lbs per sow of meat per year up to 7,200 carcass lbs per sow. The difference is huge. Limited global resources are going to force productivity maximization in the search for producer survival and profits.

Adoption of advanced swine genetics is going to accelerate. Some swine genetic companies that are at the frontier of productivity maximization have a golden future. Others that are not doing the research and development science to keep advancing will flounder. Today, we see four to five pigs per sow per year average between some genetic companies. Minimum $400 per sow lifetime difference. No producer can continue to start their day so far behind and survive. It’s too hard. Magnify the difference genetically with feed conversion, growth, livability, carcass quality and grade; we can see in the marketplace that some swine genetics breeding stock, even if they were free, are too expensive.

Technology adaptation is more important that ever for both survival and prosperity. Globally and domestically, just any pigs will not be competitive compared to the new advanced swine genetics. There are good swine genetic companies and jokers. There are choices. Most businesses, including yours, have destinies based on their decisions.


Author: Jim Long, President & CEO, Genesus Genetics 

MRSA superbug widespread in pigs
// 06 jun 2008

The antibiotic-resistant staph bacteria known as methicillin-resistant Staphylococcus aureus (MRSA) is widespread among both pigs and pig farmers in Canada, Natural news has reported.


A study published in the journal "Veterinary Microbiology," suggests that the livestock industry is a possible source of the disease.

Tests
Researchers examined 258 pigs on 20 farms in Ontario, and also tested the workers on those farms. They found that 45 percent of farms, 25 percent of pigs and 20 percent of farmers were infected with MRSA, which is substantially higher than the rate of infection in the general North American population.

Among the MRSA strains found on the pig farms was one that has commonly infected humans in Canada and one that has been associated with serious skin, breast and heart infections in Europe.

Antibiotic resistance
The study has added weight to claims that antibiotic use in livestock farming may have led to the development of antibiotic resistance in human diseases. Consumer health advocate Mike Adams said that commercial raising of livestock for food is fraught with the potential for microbiological disaster.

"When we raise pigs, cows, chickens or other animals in artificial, enclosed, indoor environments, we are practically begging to be threatened by out-of-control superbugs that breed in such conditions," Adams said.

Friday, June 27, 2008Print This Page
High Fuel Cost Stimulate Interest in Composting
CANADA - The Niverville, Manitoba base Puratone Corporation reports increasing fuel costs are stimulating new interest in composting for the disposal of livestock mortalities, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Biovator, developed by the Puratone Corporation, consists of a rotating four foot diameter drum that mixes livestock mortalities with wood shavings while introducing oxygen to speed up composting.

Shawn Compton, the sales and marketing manager with Puratone's Biovator Division, says the technology continues to generate interest.

Shawn Compton-Puratone Corporation
The Biovator was developed for the hog industry and, as we're all aware, the hog industry is in a bit of a downturn right now which has slowed a bit of the momentum on the switch over from other alternative methods of disposal.

However the larger integrators that are still out there are carefully examining their options.

The big driver right now is the price of fuel for incineration which a lot of producers are still doing.

That's really driving those producers to take a look at other alternatives and in-vessel composting is a very economical method when you compare it to the high fuel prices these days.

We actually had an interesting little study done in North Carolina.

It was an energy audit for the USDA, part of their renewable energy and energy efficiency program that was done by a professional engineer in the state of North Carolina.

It showed a 97 percent energy saving for in-vessel composting versus incineration.

The major energy component in the Biovator is the electrical use, which takes very little power to turn.

The major energy source for incineration is the fuel and, at the price of fuel these days it adds up quite substantially, so it puts a positive spin on the composting.

Compton adds the Biovator produces a useful nutrient rich pathogen free product that can be land applied.

He notes incineration produces ash, which can also be applied to the land but which contains no nutrient value.

Saturday, June 28, 2008Print This Page
Industry Embraces Certified Livestock Transport Training
CANADA - A relatively new training program for those involved in the transportation of livestock is being well accepted by Canada’s trucking and livestock industries.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Certified Livestock Transport (CLT) program was developed by Alberta Farm Animal Care (AFAC) in association with its sister animal care associations in Saskatchewan, Manitoba and Ontario for livestock transporters, shippers, and receivers.

The program was launched in May 2007 and has been promoted to livestock truckers across Canada.

“We have an advisory team that consists of industry, industry groups, government, bringing them all together and teaching truckers how to deal with animals,” says Mikki Shatosky, the Certified Livestock Transport program coordinator with AFAC.

Program Targets All Livestock Handlers
CLT instructor Ken McDonald, with Supreme Auction Services, adds, “The targeted group is basically both producers and commercial transporters of livestock.”

In April the Farm Animal Council of Saskatchewan (FACS) announced it would be providing trucking firms access to the program.

Livestock Transporters Face Increased Scrutiny
McDonald maintains, “Times have changed in the transportation business and we need to be very cognizant and very aware of the care of the animals in transport. The reality is important and the perception is important. It’s really time to take a look at these things and make sure that we’re on top of the issues and make sure the industry is looking after itself.”

“I think public scrutiny with animal handling has really come into the limelight,” observes Brian Heitman, the trucking manager with Cor Van Raay Farms.

He observes situations where various groups in the U.S. have recorded incidents that have occurred have increased the level of scrutiny on the whole industry.

“I don’t think in Canada we have a lot of issues but it’s always good to nip those issues before they occur.”

Southern Alberta Feedlot to Make CLT Certification Mandatory
Cor Van Raay Farms is one of several livestock operations that have adopted the Certified Livestock Transport program for training drivers. The southern Alberta company has set June 1, 2008 as the date by which all truckers hauling to or from its facilities will be required to be certified under the program.

Heitman notes, “There has been a lot of pressure in the industry to improve handling techniques and definitely here at Van Raay Farms we’re always striving to improve our techniques. That’s the biggest force of why we’ve decided to get on board with the CLT program.”

The training program consists of a package of modules. The core content covers the general transportation or relocation of livestock and then individual modules address issues to specific to beef, hogs, horses, sheep and poultry.

There are 58 trainers at this point and about 160 truckers have been trained under the program.

Content Focuses on Established Guidelines
Shatosky says the program promotes the guidelines developed by industry on the relocation of livestock. including cleaning and preparing trucks for livestock, pulling up to the docks, loading, unloading, helping the shippers and receivers load animals, the laws and regulations across Canada and going into the United States. It has information on crossing the border and re-entry back into Canada. Biosecurity is also covered in the program.

McDonald adds, “The new CFIA (Canadian Food Inspection Agency) regulations are looked at. We look at animals that are fit for transport and how to select them.”

He stresses the drivers have a say on which animals can be loaded and which can’t so it’s important that they’re aware of that. “We look at accidents involving animals, what’s the driver’s responsibility, how does he act and react in those situations? We look at loading densities, weather factors, loading facilities, that kind of thing,” he adds.

Once the course has been completed, there is a final examination that must be passed to receive certification. The exam is sent to AFAC in Calgary for grading and successful drivers are issued certificates and wallet size cards.

CLT Training Well Received
Shatosky says the program has been really well received. She believes the decision by Cor Van Raay Farms to make certification mandatory for delivering to its facilities is huge. “They see the benefit of the program, having the truckers [be] able to work with the livestock better and more humanely and quietly helps the whole loading, unloading, relocation process.”

McDonald agrees, the interest has been exceptional. “We have had some major carriers that are on the road to get all their drivers certified. I’ve trained individual carriers as well, people with one or two trucks and producers. I’ve had a broad spectrum and the interest has been excellent.”

Driver Experience Varies
The level of experience among new drivers will vary from company to company.

Heitman notes, “Most companies do set forth a standard of having three years experience, at least, driving a truck before handling livestock and I think that’s pretty much the norm that most livestock carriers are looking for.”

That and a willingness to learn more about safe handling techniques and safe handling of livestock, he says.

Heitman admits Cor Van Raay Farms has not yet noticed a significant change as a result of the training program. However he reasons, that’s because the number of certified drivers has not increased substantially so far and because Van Raay Farms’ in house drivers are already extremely experienced.

However, he observes, it has made the drivers more aware and stimulated more conversation about incidents and how to avoid them, especially with the new drivers that come on board.

McDonald stresses, “This is an industry led program.”

He believes, “It raises the professionalism of the drivers and it gives a standardization of the industry.”

Additional Support Available for Difficult Situations
In addition to the training, Shatosky adds, “There’s a whole support system that’s being set up. If truckers do have any questions or concerns they can call in to our 1-800 number which is 1-800-506-2273. If they have any concerns about the livestock they’re picking up or delivering, if they’re on the road and they’ve run into any problems, they can call this line. They will be directed to help or who ever answers the phone will be able to help them.”

For more information on the Certified Livestock Transport program, people are encouraged to contact their provincial animal care association. They can contact Ken McDonald directly at 1-306-695-0121 or they can visit SupremeAuctions.ca .

Wednesday, July 02, 2008Print This Page
Live Hog Prices Dependent on Sow Herd Reduction
CANADA - Rabobank International predicts the impact of efforts to reduce North American swine production will take some time to impact live hog prices, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Canadian Cull Breeding Swine program has reached just over the 100 thousand sow mark while sow slaughter numbers in the U.S. have been well above year ago figures for the first half of this year and are expected to accelerate.

Rabobank International executive director food and agribusiness research Fiona Boal says it'll take some time for those numbers to work themselves through the system.

Fiona Boal-Rabobank International
The catch phrase hogs, hogs and more hogs probably is still the best way to describe the industry at the moment unfortunately.

Many of your readers would have been waiting around on Friday afternoon to see the latest USDA hogs and pigs report which implied, in the U.S. anyway, that we'd have record slaughter levels right through to the end of 2008.

Based on my calculations that means U.S. production will be anywhere between about six and ten percent higher for the whole of 2008 compared to last year.

We've got a lot of hogs to still work through the system and, in the U.S. particularly, big supplies of meat and we really don't think that we're going to see any big reduction in production until about the middle of next year or maybe slightly before that but it's going to take awhile.

I think, just as the industry was quite slow to ramp up production when it was profitable, I think the same is the case in terms of reducing production.

It's actually a slow process and it takes you awhile to cut production in light of these high feed costs.

Boal says the meat industry has traditionally had to cut supply to induce higher prices and there is a time lag associated with that strategy but she's confident reducing supply will ultimately push up prices.

But she says, based on the futures prices, its difficult to see U.S. producers getting back to anything even close to profitability before the third quarter of next year.

Thursday, July 03, 2008Print This Page
KAP Encourages European Approach to Nutrient Loading Issues
CANADA - Keystone Agricultural Producers is encouraging the Manitoba government to look to Europe for strategies to address concerns related to nutrient loading issues on Lake Winnipeg, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Last month, as part of his trip to Warsaw for the International Federation of Agriculture biannual meeting, Keystone Agricultural Producers President Ian Wishart toured several Polish dairy and hog operations to learn more about the Europeans approach to dealing with nutrient loading.

Wishart notes the Europeans have considerable experience with nutrient loading and they've had good success in getting some of their river systems cleaned up in a fairly short time.

Ian Wishart-Keystone Agricultural Producers
Their approach is very much along the lines of what we've been talking about with our new regulations, the site specific nutrient management.

If you on your own farm can manage the nutrients generated by your own livestock operation and not build excessive levels in the soils then you can continue to do that.

They do have some issues around needing to incorporate in some areas right away.

They don't seem to put a high priority on that and that's certainly something that we've moved a lot further on than they have.

But we're just beginning to take the site specific nutrient management approach and they've been doing it in some countries in Europe in particular for going on 20 years.

Some of the approaches, they vary a little from country to country, some have worked better that others and that was a good opportunity to talk to some of the delegates from different countries and learn about the particular issues in their approach that may work for us or may not work for us.

It was quite interesting to draw some comparisons and to see the fact that they actually did have success.

Theirs were mostly river systems and smaller lakes of course but they did make significant improvements in the nutrient loading on those rivers and lakes in fairly short periods of time.

Wishart says the information gathered will be used to lobby the provincial government for a different approach to nutrient loading issues rather than a ban on hog industry expansion and perhaps to fine tune some of the nutrient management regulations.

Saturday, July 05, 2008Print This Page
Time Required to Improve Live Hog Prices
CANADA - Rabobank International predicts efforts to reduce North American swine production will take some time to begins to impact live hog prices.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
“The catch phrase hogs, hogs and more hogs probably is still the best way to describe the industry at the moment unfortunately,” observes Rabobank International executive director food and agribusiness research Fiona Boal.

Producers on both sides of the Canada-U.S. border are taking action to rein in production.

USDA Forecasts Continued Record U.S. Slaughter
Boal observes, the latest USDA Hogs and Pigs Report, issued June 27, implies the U.S. will see record slaughter numbers right through to the end of 2008. That means U.S. production will be anywhere from six to ten percent higher for 2008 compared to last year.

And she points out there are a lot of hogs to work through the system and large meat supplies, particularly in the U.S. She doesn’t foresee any large reduction in production before the middle of 2009.

“Just as the industry was quite slow to ramp up production when it was profitable,” she suggests. “I think the same is the case in terms of reducing production. It’s actually a slow process and it takes you awhile to cut production.”

Canadian Cull Swine Program Hits 100,000
Approximately 500 Canadian pork producers have applied funding under the federal Cull Breeding Swine program. Under that program producers who depopulate breeding barns and agree to leave them empty for three years qualify for payments of $225 per culled animal.

The number of animals applied for so far has passed the 100,000 mark, still well short of the targeted 150,000, or about 10 percent of the national sow herd.

Canadian Pork Council executive director Martin Rice reports heavy participation in the Atlantic area, particularly the Maritime provinces where participation has been well over 10 percent. Participation in Ontario has also been significantly higher than the targeted 10 percent envisioned for the country. Saskatchewan is at 10 percent. Alberta, Manitoba and Quebec are below 10 percent.

Producers Reluctant to Commit to Leaving Barns Empty
“At this point it doesn’t look like we will get applications that will fully utilize the program account,” says Rice.

He believes the key element that has discouraged participation is the obligation to leave the barn closed for three years. As well improved returns over the past few months through the commercial market have made the 225 dollar payout, with its conditions, less attractive.

He notes many producers are reducing their numbers without going through the program and without emptying entire barns or obligating themselves to leave space empty.

Smaller Producers Represent Highest Uptake
Manitoba Pork Council producer services specialist Jeff Clark recalls there was quick uptake in Manitoba when the program was launched April 14 but within two weeks the number of applicants started to taper off.

“In Manitoba we’ve actually been kind of slow to pick it up compared to some of the other provinces.”

Clark estimates applications have been received for 16,000 sows in Manitoba representing just over four percent of the province’s breeding herd. He notes applications have been received from across the province but most have come from operations with fewer than 300 sows.

“We do have close to about 73 applicants in Manitoba and of those about 15 are larger than a 300 sow operation, the majority being less than 300, 200, 100 in many cases.”

U.S. Herd Reduction Drives Up American Slaughter Numbers
Boal observes U.S. sow slaughter levels have been well above year ago levels for the first half of this year and are expected to accelerate further.

“I think many U.S. producers had been sitting back and waiting to see what the reaction of the Canadian industry would be to their dire financial situation. But now even those U.S. producers have started to commit to culling sows. In the U.S. we do know that some smaller operations are shutting down, particularly those diversified farms that can rely on grain revenue. And we do know that some of the larger producers are really getting very ruthless when it comes to cutting the bottom 10 percent of their herd.”

“Traditionally the meat industry has had to cut supply to induce higher prices and there is obviously that time lag associated with implementing that strategy,” Boal explains. “It’s not simply a matter of changing production tomorrow.”

Down the road, she anticipates a sizable cut in U.S. production although it will be off a very high base and a slow continuation of the sow liquidation in Canada.

She foresees bigger cuts in the U.S. given its share of the North American market while Canadian production will also fall but not as quickly.

Return to Profitability Still A Way Off
Boal is confident a point will be reached where, by forcing supplies lower, prices will equally be forced to increase. However, based on the futures prices, she doesn’t foresee anything resembling profitability in the U.S. before about the third quarter of next year.

“I think what we’re at at the moment is a situation where higher input prices have simply not been worked through the system. They haven’t gone through the supply chain but higher livestock prices and subsequently higher meat prices are coming.”

Consumer Demand Expected to be Key
Boal warns, “Hog producers should not underestimate the importance of export demand, particularly in the current market conditions.”

She says given the volume of meat, including beef and poultry in the global market today, hog prices have held up amazingly well. She expects exports to continue strong.

As well, she observes, U.S. consumers have been very resilient and surprisingly so.

“We have seen some trading down, among consumers shifting their protein expenditure away from beef to less expensive chicken and pork. Pork did very very well over the start of summer and has continued to feature quite heavily in a lot of retail outlets.”

North American Industry Holds Long Term Competitive Advantage
Boal remains confident in the North American hog industry’s long term ability to compete. She believes, because North America is still a net exporter of grain, its pork producers are actually in a much better position than many of their competitors.

She notes the European industry is finding it very tough and continues to contract with the Danish and Dutch industries in particular facing very difficult market conditions.

She notes, while Chinese production is recovering slowly, high feed costs are likely to restrict the size and the speed of the rebuilding of its sow herd, which bodes well for countries that are able to export to that market.

Boal observes, South America continues to be a formidable competitor to both Canada and the U.S. in some key export markets.

“We expect to see Brazil enter the Chinese market quite aggressively over the next couple of months now that a few of their plants have been given authorization to export.”

However, Boal concludes, “As hard as it might be for players in the North American market, they actually are still very very competitive compared to some of the other countries that produce pork.”

Wednesday, July 09, 2008Print This Page
Live Hog Prices Pressured by High US Slaughter
CANADA - The Saskatchewan Ministry of Agriculture reports continued high U.S. hog slaughter numbers and abundant supplies of meat in cold storage are keeping a lid on live hog prices, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
North American live hog prices have declined by about 10 dollars per 100 kilograms, or about five to seven percent, over the past month.

Livestock economist Brad Marceniuk observes, while Canadian production has declined, we've continued to see high U.S. hog slaughter numbers and large supplies of pork in cold storage and that has kept hog prices from the big increases we typically see during the summer.

Brad Marceniuk-Saskatchewan Ministry of Agriculture
In Canada hog production continues to decline as sow liquidation increases.

In the United States, based on the June quarterly hogs and pigs report, U.S. hog market inventories are actually up about 6.5 percent from June of last year while their breeding herd numbers are down only about one percent from last summer.

So the report was very negative leading many economists to estimate that fourth quarter U.S. hog slaughter numbers could be over 31 million head which really could test slaughter capacity and be negative for fourth quarter prices.

Canadian producers continue to lose significant amounts of money.

Feed costs have been the main reason.

While prices are a little bit below long term averages, feed costs have increased significantly over the last year and they're up about 40 percent from the same period a year ago.

United States hog producers are in a similar position, losing significant amounts of money.

Corn prices in the United States have and continue to increase which has really increased their feed costs also.

Marceniuk notes pork stocks declined in May from April but are still about 15 percent higher than year ago levels while meat stocks overall, also declined in May but are up about 18 percent from year earlier levels.

He says, while demand has kept prices relatively stable, fourth quarter U.S. hog slaughter numbers are expected to reach 31 million head which could test slaughter capacity and put further pressure prices.

Thursday, July 10, 2008Print This Page
Transport Program Welcomed in Canada
CANADA - Alberta Farm Animal Care reports the response to a new national livestock trucker training program has been exceptional, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Certified Livestock Transport program was launched in May 2007 and is being promoted to livestock truckers across Canada.

The program focuses on the relocation of livestock and includes information on cleaning the trucks, loading and unloading livestock, biosecurity, the laws and regulations across Canada and the United States pertaining to moving livestock and information on crossing the border and reentry into Canada.

Mikki Shatosky, the Certified Livestock Transport program coordinator with Alberta Farm Animal Care says the program has been really well received.

Mikki Shatosky-Alberta Farm Animal Care
The program was developed by industry, truck drivers, and by the Alberta Farm Animal Care and our sister groups across Canada for livestock transporters, shippers and receivers just to help them understand better how to handle livestock, how to move them safely and humanely.

The program is available across Canada.

It has different modules.

There's a core content that talks about the general transportation, relocation of livestock.

Then we have modules that break down into beef, hogs, horses, sheep and poultry.

It has been accepted really well across Canada.

We have 58 trainers right now and as of right now I believe we have about 160 truckers that are trained under the program.

Shatosky notes a support system is being set up that will allow truckers to address questions or concerns by calling a toll free number.

She says truckers who have concerns about the livestock they are picking up or delivering or who are on the road and have run into problems can call 1 800 506-2273 and whoever answers will be able to provide assistance or direct the caller to somebody who can to ensure the animals are being delivered humanely and are being dealt with properly.

Tuesday, July 22, 2008Print This Page
Higher Wheat Yields Key to Improvement
CANADA - Manitoba Pork Council says achieving higher wheat yields is key to improving the competitive position of Canadian livestock producers compared to their U.S. counterparts, writes Bruce Cochrane.





Farm-Scape is sponsored by
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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The start of the new crop year will see the elimination of kernel visual distinguishability as a registration criterion and grading tool for western Canadian wheat and the introduction of a new Canada Western General Purpose class.

Livestock producers are hoping the changes will allow development of higher yielding wheat varieties suited for livestock and ethanol production.

Manitoba Pork Council chair Karl Kynoch says, with feed grain and transportation costs on the rise, any yield improvements will help.

Karl Kynoch-Manitoba Pork Council
As you know the corn prices were going up and up and any of the corn that was coming in, it did get as high as eight dollars a bushel to bring corn in so that was getting very costly.

It was pushing the break even margins up very high on the hogs and producers were starting to hit heavier losses again.

The corn prices have dropped back a little bit but still there's a lot of nervousness in the industry of where these feed prices are going to go.

The first thing we're looking for is to get some high yields, to get some bushels there.

I know in the ethanol industry they're looking for starch and you always hear about the livestock industry looking for protein but we can add canola meal, we can add soy meal to adjust that protein around so we need to get some volume in there, need to get some bushels and reduce some of this freight cost on bringing the feed grains in.

So we're really looking forward to the breeders moving forward and getting some of these varieties moving and getting the higher yielding grains available for producers to use.

Kynoch concedes, while it will take time for the plant breeders to gear up their research to adjust to the changes, anytime we can increase yields, it will reduce the cost of bringing in feed for hogs.

He says the hog industry needs those higher yields now but he expects it to take two or three years to see some of the significant yield increases livestock producers are hoping for.

Is There an Optimum Production System?
This paper by Michael C. Brumm of Brumm Swine Consultancy is from a presentation given to the London Swine Conference in Ontario.

 

INTRODUCTION
Increasingly, the US and Canadian pork production industries are linked, both because of the linkages of costs for such inputs as feed grains and because of the large numbers of Canadian weaned pigs transported to US sites for growth to slaughter. Many Canadians have even taken to retaining ownership of weaned pigs in US facilities. This suggests that an ‘optimum’ production system now must include management of financial risks that include currency exchange rates.

As North American production reacts to the latest round of very high priced feed grains and a very weak US dollar, there are expectations that Canadian producers will be the ones who reduce their production capacity first. In the next round of profitable pork production, what will ‘optimum‘ production systems have in common?

IS THERE AN OPTIMUM SYSTEM FOR NORTH AMERICA?
The quick and easy answer to this question is no – there is no single optimum production system. The more appropriate question is – what do ‘optimum’ systems have in common? If we can answer this question, even partially, we then have to look at what direction the pork industry in North America is heading.

The North American System of Production
Notice that I begin by saying the pork industry in North America, not the industry in Canada or the industry in the United States. This past year has demonstrated to Canadian producers with harsh economic reality the complete linkages of the US and Canadian industries and the risks currency exchange rates add to this linkage. As market hog prices sank in response to record supplies in late fall and early winter of 2007-08, feed grain prices in both countries soared in response to increased demand. This demand is being driven by the large inventory of livestock in the US (feedlot cattle, pork and poultry), the rapid growth of the bio-fuels segment of the economy and the weak US dollar which is causing a very large export demand for US sourced feed grains.

Canadian producers have built an industry that is increasing linked to US production sites. Imports of Canadian born feeder pigs (defined by USDA as live pigs weighing <55 kg) have steadily increased in the past 9 years, reaching record numbers in 2007 (Figure 1). In 2007, 6.47 million feeder pigs entered US production systems from Canada. At 22 weaned pigs per sow per year, this represents the output of 294,000 females. Given that the October 1, 2007 sows and bred gilt inventory in Canada was 1,560,000 head, export of feeder pigs to US systems in 2007 accounted for almost 19% of all pigs weaned in Canada.

Figure 1 Weekly US imports of Canadian feeder pigs
(http://www.ams.usda.gov/mnreports/WA_LS637.TXT)
A combination of demand by US producers for feeder pigs and economic conditions in Canada is the driver of this importation demand. Demand in the US is being fueled further by the regulatory climate facing owners considering construction of new farrowing and growing facilities and the continued evolution of the US industry.

In many instances, wean-finish barns are being constructed by former farrow-finish producers who have sold off their breeding herd, but want to continue to have pigs as part of their agricultural production system, in part because swine manure is viewed as a valuable contributor to corn and soybean cropping systems.

For many finishers of pigs, the opportunity to participate as owners in large farrowing sites is limited, or the finisher perceives the risks as too large, or the finishers long term plan is to exit the swine industry at a future date. Thus, a demand was created for feeder pigs that are not tied to ownership of the breeding herd that generated the pigs.

By sourcing pigs from Canadian producers, these Midwest US producers avoid the long term financial commitment associated with ownership of sows in a production network while retaining pork production as a contributor to their economic well-being.

Recently, US cash grain farmers have been investing in pork production facilities with the intent of having access to large amounts of manure as a fertilizer resource. In many cases, the cash grain farmer owns the facility with a management firm hired to coordinate pig ownership and labor for daily pig care activities.

It is interesting to note how the changing regulatory process has directed the evolution of the production process. Over the past 10-15 years, regulation of pork production sites via zoning ordinances and pollution control permitting has been touted by opponents as one way that large production systems would be limited in scope. The regulatory process has imposed large costs to production systems of all sizes. Not only is the process of siting and constructing new facilities more complicated, but the record keeping requirements and the risks of noncompliance with pollution control permits are an on-going expense. The net result is that many small and even medium size operations in both Canada and the US have chosen to either not expand production or to quit production. The regulatory process has in fact favored large production sites/systems due to the ability to spread the regulatory costs over large numbers of pigs and the ability to be large enough to have one or more employees dedicated to meeting the regulatory paperwork and filings requirements.

In Iowa and southern Minnesota wean-finish sites are very often sized for capacities of 2400 pigs. This size is chosen in that it is just small enough to not require application for a state operating permit but is large enough to capture some of the economies of scale.

On the economic side, the exchange rate for the Canadian-US dollar was an early driving force linking Canadian and US production systems. In the late 1990’s and early in this century, the Canadian dollar traded as low as $.67US per $1CA. This meant that producers selling weaned pigs delivered to US buyers at $32/pig were receiving $47.75CA for these pigs, a strong incentive to expand farrowing. At the end of 2007, the exchange rate was $.98US per $1CA. The same $32 delivered price now returned only $32.65CA, a 32% drop in income just due to the change in exchange rate. On the other hand, the US producer pays $32US at all times since the Canadian pigs have been a relatively small segment of the US total industry, meaning they don’t warrant a major price differential.

What Will the Next Generation of Production Systems Look Like?
While current economic conditions don’t support investment in production facilities, at some point reinvestment in production facilities will occur. This reinvestment will be done with an eye towards producing pigs in an ‘optimum’ system. These ‘optimum’ systems will have production goals that were thought to be unattainable a few years ago (Table 1). The question then becomes - how do production systems attain these goals? The answer lies in how these systems apply the resources of females, facilities, people and dollars to the production process.

Table 1. Attainable production goals in 2008.
24 pigs sold to slaughter per female/year 
6500 pounds sold to slaughter/female/yr
1.7 lb/d daily gain wean-finish
>75 pounds of gain per ft2 of pen space wean-finish/yr 
<3.0 whole herd feed conversion farrow-finish 
<2.55 feed conversion wean-finish on mash diets with minimal added fat
<4% post weaning mortality
<4% lights and culls at slaughter

In the production process, the key component is people. While the industry talks about the ‘science’ of pork production, the best production systems put in place people who practice the ‘husbandry’ of pork production. Successful production systems have procedures in place to not only hire the right people, but they also spend considerable amounts of time and money on training and assessing these people.

The second component of successful production systems is the matching of facilities with the realities of pig flow. In the case of facilities, as discussed earlier, the trend in Iowa and Southern Minnesota (which have 40% of the US growing pig inventory) is to construct weanfinish facilities sized for 2400 pigs. Wean-finish facilities are now costing over $250/pig space when you add up the site development fees (site preparation, well, road, electricity, etc.), permitting fees (zoning hearings, permit application fees, etc.) and construction costs. The larger the facility, the lower the per pig costs of site development and permitting as these tend to be the same total dollars regardless of facility size. On the other hand, no state construction or operating permits are necessary for most sites as long as they contain fewer than 2500 pigs.

At one time there was considerable debate regarding the pros and cons of using nurseries and finishers versus using wean-finish facilities. The industry has made the clear choice with wean-finish as the preferred housing option. This choice has been driven in large part by lenders.

If lenders loan money to producers for construction of swine nurseries and finishers, they feel they have increased risks since there currently is very limited demand for swine nurseries. That is, if the lender is forced to assume a swine facility loan for a swine nursery, what are the options to generate enough monies to pay off the loan? Is there someone willing to place pigs in the nursery unit, either as a buyer of the facility or as a contract user of the facility? On the other hand, if the lender has to assume a swine facility loan for a wean-finish facility, the option to utilize the facility as a contract finisher is very attractive. The demand for contract finishing space in the upper Midwest remains very strong. Cash income is readily generated to pay off the debt.

Because of cost considerations, wean-finish barns are routinely overstocked, most often as a double-stock. The extra pigs are removed at 5-8 weeks post weaning. While different economic models exist, a common estimate is that double-stocking lowers the per pig facility expense by $3/pig or more versus single stocking. This means that the 2400 head wean-finish facility must source approximately 4800 pigs at the time of pig placement. To minimize age variation and the management issues associated with this variation, including ventilation and weaned pig diet budgeting, sites most often want to have the full complement of pigs delivered in less than a 2 week period. Minimizing age spread due to weaning to less than 2 weeks also limits the duration of marketing to slaughter, maximizing the utilization of the facility for gain.

This need for large numbers of weaned pigs with minimal variation in age is one of the driving forces in the sizing of farrowing sites. To deliver 4800 weaned pigs within 2 weeks to a wean-finish site requires pigs from 516 litters at 9.3 pigs weaned/litter. To get this many litters, one can either co-mingle pigs from a number of farrowing sites, or have a farrowing site that farrows 260 litters per week. In order to minimize health risks from PRRSV, PCVAD, swine influenza, etc. production systems are choosing to not co-mingle pigs whenever possible. This means the farrowing site needs to have approximately 6000 females, not counting replacement gilts. It turns out that a common size many systems are considering is 6500 female places which includes room for the replacement gilt inventory.

Batch farrowing is an option to these very large farrowing sites. Four 1500+ female sites that each farrow 260 females/week on a 4 week rotation achieve similar weaned pig numbers. Weaned pigs at any wean-finish site are limited to being sourced from 2 farrowing sites. As most large wean-finish facilities are comprised of 2 rooms, all pigs within one room are often from a single farrowing site, reducing the co-mingling of sources effect. Of course, batch farrowing carries with it the scheduling difficulties of females (re)cycling off-schedule, etc. and work loads that are very intense for 2 weeks and then relatively lax for 2 weeks. At least one production system in the US with a number of farrowing sites located relatively nearby rotates specialized production staff such as farrowing and breeding technicians between 4 sites on a weekly basis to address this challenge.

This evolution in size and scale is not recent (Key and McBride, 2007). In the late 1970’s and early 1980’s a common production system was the 100 sow farrow-finish producer. In this system, the basic unit of production was the 20 crate farrowing house. Often times, there was a 180 pig nursery associated with the farrowing house. The move to confinement finishing meant the addition of a 4-500 head continuous flow grower-finisher.

In many instances, in the late 1980’s and early 1990’s, the sows were sold with the producer seeking a source of weaned or feeder pigs to continue in pork production with existing facilities. As the benefits of all-in/all-out pig flow became recognized, this meant sourcing 4- 500 pigs with minimal age variation, preferably from a single source to minimize the risks of diseases due to co-mingling. This meant that the preferred sources for pigs were sites that farrowed 50 or more litters per week. This translated into farrowing sites with approximately 1200 females farrowing weekly, or sites with 350 females batch farrowing once every 4 weeks.

In the mid 90’s, the common investment in finishing facilities was a 1000 head facility, meaning it took 2 weeks to fill with weaned pigs from a 1250 female site or from 2 350 sow sites batch farrowing. This makes it very clear that the evolution of swine production facilities, especially as related to size, is clearly tied to the health benefits of all-in/all-out flows and minimal age differences. It is also clear that the sizes of today’s production facilities are a result of the first confinement facilities built to accommodate pig flows from 20-crate farrowing facilities.

Because of the large investments associated with both farrowing and growing pig sites, the swine industry has started to focus more attention to the impact of variation in pig numbers (as reflected in pigs weaned/week) on costs of production. It is one thing to plan production flows with spreadsheets and financial budgets for 260 litters of 9.3 pigs per litter per week. The reality is that pork production is a biological process with considerable potential for variation in the biological process. The ‘optimal’ production system puts in place people and production practices that minimize variation. These practices include information systems that serve not only to document what has happened but to also be useful in predicting future production variations.

The ‘optimum’ production system does not make decisions in a vacuum. The successful production system utilizes a team of advisors. Note that I said a team, not a series of individual advisors. It is important that the animal health advisor sit at the same table as the financial advisor, along with the legal advisor, nutritionist, etc. The complex interactions between production, finances and legal requirements means that all members of the team need to be informed about the impact their recommendation(s) have on other team member’s recommendations. All too often an advisor or consultant is brought into a production system or site and is forced to make a recommendation without having full knowledge of the limits to implementation of the recommendation or causes for the situation. Information sharing between members of the advisory team is critical to the success of the swine enterprise.

Also note that as public support for University and USDA research and extension outreach decreases in the US (Fuglie and Heisey, 2007), with a similar decline in related services for Canadian producers, access to new technology and information will become fee based. Increasingly producers will have to pay an advisor for information that is relative to a production need whereas this information was publicly available in the past via university research reports and extension specialists. Look for this trend of less public access to information to continue as politicians wrestle with budget deficits and an agricultural production system that is an ever smaller segment of the Canadian and US economy. This limit to public funding of information ultimately benefits those production systems which access information. This information access may be thru investment in specialized research facilities or it may be thru information sharing in peer-to-peer discussion groups.

CONCLUSIONS
The many factors that go into an ‘optimum’ production system often are only slightly related to individual pig performance. The economics of facility and site sizes, when combined with the growing number of regulatory requirements has meant that the ‘optimum’ production system is much larger than in the past. While production systems have added science-based information to their decision process, quality people involved in the daily care of pigs remains a key component of successful production.

LITERATURE CITED
Fuglie, K.O. and P.W. Heisey. 2007. Economic returns to public agricultural research. Economic Brief Number 10, United States Department of Agriculture, Economic Research Service. http://www.ers.usda.gov/publications/eb10/eb10.pdf. Accessed January 14, 2008.

Key, N. and W. McBride. 2007. The changing economics of U.S. hog production. ERR-52. United States Department of Agriculture, Economic Research Service. http://www.ers.usda.gov/Publications/ERR52/. Accessed January 14, 2008.

Tuesday, August 05, 2008Print This Page
Alberta Comes Up with Animal Protection Act
ALBERTA - The new Alberta Animal Health Strategy is set to be released for public consultation in August 2008. Contained within the strategy is an animal welfare component with several goals that will improve welfare of all animals in Alberta and increase the understanding among Albertan's of their responsibility for assuring animal welfare.

 

"There are many misunderstandings when it comes to the laws surrounding animal protection in Alberta," says Adrienne Herron, livestock welfare tech transfer specialist with Alberta Agriculture and Rural Development, Red Deer. "For example, many people believe that only the owner of an animal can be charged or considered responsible for the welfare of the animal. In Alberta, you don't have to be the owner of an animal to be charged under the Animal Protection Act (APA). The APA states that any person who fails to prevent an animal from being in distress can be charged."


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"All animals including wildlife, domestic and zoo animals in Alberta are covered by the APA. This means that both companion animals (pets) and livestock animals are protected by the APA." 
Adrienne Herron, livestock welfare tech transfer specialist with Alberta Agriculture and Rural Development, Red Deer
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Animal distress, in the APA is defined as animals not being provided with adequate food, water, veterinary treatment, reasonable protection from injurious heat or cold, or if an animal is injured, sick, in pain, suffering or abused, subjected to undue hardship, privation or neglect.

This definition does not include the possible distress caused by reasonable and generally accepted practices. Animals in distress that result from an activity carried on in accordance with the regulations or in accordance with reasonable and generally accepted practices of animal care, management, husbandry, hunting, fishing, trapping, pest control or slaughter are exempt from the APA.

Fines for APA convictions are serious. The maximum fine set out in the APA is for $20,000 and, if convicted, a prohibition order preventing the convicted person from owning animals could be issued.

"All animals including wildlife, domestic and zoo animals in Alberta are covered by the APA," says Herron. "This means that both companion animals (pets) and livestock animals are protected by the APA." Another way Alberta's animals are receiving better protection is in the form of a special dedicated prosecutor. Moira Vane with Alberta Agriculture and Rural Development's regulatory services has been named the lead prosecutor on all APA related charges.

Thursday, August 07, 2008Print This Page
Swine Budget Shows Loss of $30 per Pig
CANADA - The June 2008 budget figures compiled by John Bancroft, Swine Strategies Program Lead at the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) show average income of $138 per pig and costs of over $169.

Information provided courtesy Ontario Pork

 

The OMAFRA budget was calculated based on the estimated accumulated cost for a market hog sold in June 2008. The farrow-to-wean phase estimates the weaned pig costs for January 2008, the nursery phase estimates the feeder pig cost for March 2008 and the grow/finish period subsequently. All costs and income figures are in Canadian dollars.

Total costs for the farrow-to-wean, nursery and grow-finish phases were $35.90, $24.90 and $103.82, respectively, making a total of $169.23.

Feed costs accounted for $12.05, $13.77 and $78.16 for each phase, respectively. At $105.79 in total, feed constituted 62.5% of total costs.

Total variable cost per pig was $148.17, while fixed costs (depreciation, interest, tax and insurances) came to $21.06.

The income for a market pig weighing 92.03kg was $139.44, while total costs were $169.23, making a net loss per pig of $29.79.

Income ($/pig)
 Farrow to Wean Nursery Grow-Finish Farrow to Finish
Market Pig @ $138.54/ckg, 109.37 index, 92.03 kg $139.44


Variable Costs ($/pig)
Breeding Herd Feed @ 1,100 kg/sow $12.05   $13.20
Nursery Feed @ 32.6 kg/pig  $13.77  $14.43
Grower-Finisher Feed @251 kg/pig   $78.16 $78.16
Net Replacement Cost for Gilts $2.75   $3.01
Health $1.96 $3.16 $2.25 $7.70
Breeding ( A.I. & Supplies) $1.41   $1.54
Marketing   $3.56 $3.56
Utilities (Hydro, Gas) $1.96 $1.18 $1.64 $5.02
Miscellaneous $0.45 $0.15 $0.35 $1.00
Manure Disposal $0.83 $0.33 $1.13 $2.39
Repairs & Maintenance $0.70 $0.38 $1.13 $2.29
Labour $6.96 $1.96 $4.00 $13.67
Operating Loan Interest $0.44 $0.51 $1.17 $2.18
Total Variable Costs $29.50 $21.44 $93.39 $148.17




Fixed Costs ($/pig)
Depreciation $3.48 $1.88 $5.67 $11.44
Interest $2.23 $1.20 $3.63 $7.32
Taxes & Insurance $0.70 $0.38 $1.13 $2.29
Total Fixed Costs $6.40 $3.46 $10.43 $21.06




Summary of Costs ($/pig)
Feed $12.05 $13.77 $78.16 $105.79
Other Variable $17.45 $7.67 $15.23 $42.38
Fixed $6.40 $3.46 $10.43 $21.06
Total Variable & Fixed Costs $35.90 $24.90 $103.82 $169.23




Summary
Net Return Farrow to Finish ($/pig) -$29.79
Farrow to Weaned Pig Cost ($/pig) $35.90 
Farrow to Feeder Pig Costs ($/pig) $62.43 
Wean to Finish Costs ($/pig) $129.91 
Farrow to Finish Breakeven Price ($/ckg, 100 index) $168.13

Thursday, August 07, 2008Print This Page
Pork Commentary: Global Liquidations Drive Prices and US Exports
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
USDA Pork Cut-Outs at New Record High
Despite US hog slaughter of almost 2.1 million head last week (actual 2091.1), about 120,000 head more than the same week a year ago, the USDA pork cut-out hit a new record high of 88.23 lb. Phenomenal export demand is fueling prices that blow by any ag-economist’s predictions for pricing at these supply levels. Thank goodness! High feed prices are leaving little profit for producers even at prices hovering around 80¢ lean. It’s also good that packers have good margin so that they can build up their reserves to pay the prices that are coming from the lack of hogs in 2009.

Europe
Several European countries have released their mid-year breeding herd inventory numbers. To keep in perspective the EU-27 countries had 15.03 million sows at the beginning of 2008. This is almost double the sow inventory Canada, USA and Mexico combined. The just released European breeding herd results reflect the carnage caused by high global feed prices and hog prices that lead to large financial losses for most of the last twelve months.

Changes in Breeding Sow Numbers
% Annual Change
Denmark -8%
France -3%
Germany -5%
Hungary -13%
Ireland  -5.3%
Netherlands -6.5%
Poland -20%
Spain -8%

It is estimated that the total EU herd in 2008 was 9% smaller than in June 2007. Nine percent on 15 million sows is about 1.2 to 1.3 million fewer sows. The production capacity of over 20 million market hogs disappearing. Is there any wonder why US export demand is increasing? As Europe’s production drops, pork available for export declines. Europe’s domestic prices have also increased with market hogs bringing last week. We expect Europe’s prices will get stronger yet as supply falls further as the sow liquidation results in fewer hogs in the months ahead.

Last week we had visitors from Spain at Genesus. They told us market hogs are currently bringing $ 235 US @ 110kg. with cost of production at $ 225 US per head Everywhere we look fewer hogs on the horizon Korea, Japan, Mexico, Canada, Europe and USA. The only way to ration less supply is higher feed prices. US pork exports are taking market share everywhere. It’s cheaper. It’s available.

Liquidation in North America
Last week we read reports on slowed liquidation in North America. Maybe. Official June US sow slaughter was up 39,000 sows over last year. In our books that’s about 10,000 net sows out of the herd. That’s liquidation. Another factor is sows are so cheap compared to market hogs that many producers are hanging on to sows longer. Cash flow is king and buying gilts is a luxury to many. Net results – sows are being held (cutting sow slaughter) but gilts are going to slaughter.

Recent year over year gilt-barrow slaughter percentage data indicates 2% more gilts as a percentage of total marketings are going to slaughter. On a weekly basis we calculate 40,000 plus more gilts being marketed relative to a year ago. How accurate we are not sure, but the trend probably reflects cash flow need, holding sows (that are worth little) and lack of producer confidence. We will not be surprised if the US sow inventory is down 160,000 to 200,000 on Sept.1 compared to a year ago. That will result in 3 to 4 million fewer market hogs in 2009.

Feed
Just wonder where the economists are at that predicted $10.00 corn? Looks like its closer to $5.00. As global meat protein production declines, the corn producers who saw ethanol as their salvation will realize that they have been part of the destruction of their best customer base. Not smart business. US ag-secretary Schaefer’s decision not to allow opt out of set aside land was disappointing. The only thing for sure as land comes out of yearly commitments. US grain production will expand. A new administration, whether McCain or Obama in the US might see it differently before next year’s crop year.

Greenwood Calls for 10% Sow Herd Reduction
Recently at the National Pork Industry Conference held at Lake of the Ozarks, Missouri (A conference we went to once, but were banned from returning. Chalk it up to insecure competitors), Mark Greenwood, Ag Star’s Financial Services Vice-President of Agribusiness Capital spoke and called for:

A 10% reduction in the US sow herd.
The industry to reduce market weights.
Large systems must lead the way, with the top 30 producers publically sharing their intentions.
A viable long-term model will emerge - most likely this will be a farrow to finish model.
Mr. Greenwood’s idea that the industry should reduce the sow herd by 10% is noble. He is correct that the industry has lost 2 billion dollars in equity. Obviously supply management would work. We have 80¢ lean hogs now. Cut the sow herd 10% and we would expect $1.20 lean next summer easily when coupled with the declined total global meat supply. But, heck it’s not going to happen. No one is going to buy in until they have to. Everyone is doing the Black Bear scenario. I do not have to be the best producer (fastest) I just have to be ahead of the worst (slowest). It’s human nature.

All banks also have to take responsibility. They funded the expansion. They are accomplices to this current situation. They also want high hog prices quickly to cut their loan exposures. Banks’ worst nightmare is having to take over hog farms. It’s good in a way that there are not many who prosper in a low price scenario other than sausage makers and consumers.

Mr. Greenwood’s assessment that the top 30 producers should publically share their liquidation intentions is interesting. We expect it would mostly be organized head fakes and a game of chicken. Much like packers, many pronouncements on COOL

Yes, we are
No, we are not
Maybe
So the end of the day no one wants to give the competitor an advantage. Not going to happen. Most are private companies and have no legal obligation to reveal business plans. It’s the way it is and won’t change.

Mr. Greenwood’s belief that the long-term business model could be farrow to finish could be correct. We are not sure. We do not see that farrow to finish is necessarily more profitable. Losses per head, whether a small pig producer or f to f are relatively in balance. The issue is that many finishers do not want to have sows. They do not want the debt, responsibility, workload or production risk. They want the return and many want the manure. We expect small pigs will be $50 to $60 plus by January. The spot market always finds the real value. As prices recover, the finishers will pay the price as they always do. There could be more farrow to finish in the future but it takes more capital and with sow units more and more being placed out of the disease risk areas of the Corn Belt, the difficulty of ownership distance has become greater. Most early wean producers do not want to be farrow to finish unless they have to and as the market changes and prices for small pigs increase, the trend will reverse in our opinion. All smart finishers are currently lining up supply for the inevitable decline in production and higher prices that are coming.

 


Author: Jim Long, President & CEO, Genesus Genetics 

Friday, August 08, 2008Print This Page
Tightening of Corn Supplies Expected
CANADA - The Manitoba Corn Growers Association says less than ideal growing conditions and a strong demand from the ethanol industry could put pressure on supplies of corn for feed for the livestock industry this fall, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Over the past six months the price of corn has been extremely volatile.

Since last October the price of corn in Manitoba has gone from about four dollars a bushel to a high of about seven dollars a bushel this spring, fueled in part by a strong demand for ethanol, before backing off again to the five dollar a bushel range.

A combination of factors has contributed to the recent easing of the value of corn including lower crude oil prices, a reduction in the value of the Canadian dollar, the normal seasonal price slide in anticipation of the start of the harvest and the withdrawal of speculators from the market.

Manitoba Corn Growers Association president Murray Prichard says demand patterns for corn are changing.

Murray Prichard-Manitoba Corn Growers Association
There was a large demand for ethanol in the U.S. which corn has been used for.

Oil prices as you know have been very high and corn has followed that. Our end uses here have changed.

In the last year or so, we've got an ethanol plant in Minnedossa which has been buying a fair amount of Manitoba corn as of lately.

We had a little bit of a switch from relying totally on the livestock industry to now an ethanol industry that's picking up demand for our corn here locally.

Prichard suspects there could be a shortage of corn in Manitoba this fall for livestock producers.

He notes, in the past, we had seen a lot of U.S. corn coming into Canada because of the value of the dollar but that has slowed. He notes, locally, the corn is behind this year and while some of that corn will make it, some won't.

He says it'll all depend on whether or not we have an open fall.

Tuesday, August 12, 2008Print This Page
Pork Commentary: US Hog Prices Reach Record Highs
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
The Iowa-Minnesota lean price reached 88.89 last Friday (65¢ lb liveweight). Touching the highest price ever reached which was in the summer of 1990. It feels like a miracle. As an industry, we have been getting hammered by high feed prices and large hog supply for months with per head losses reaching $50.00.

Now, as global meat supply declines (as we have been predicting), pork export demand is surging. In the last 6 weeks we have gone from lean hog prices of 68.52 to 88.89, a gain of $40.00 per head. On the cost side, corn has come off $2.00 a bushel and soybean $3.00 a bushel. The cost of raising hogs has dropped $25.00 per head. $40.00 + $25.00 = $65.00 gain per head, all in six weeks.

Thank goodness because, this industry sure needed a break. The real good news is the amount of hogs we are going to market through the first part of 2009 has been biologically put in play. There will be fewer as sow liquidation in Canada, United States and Mexico will mean less hogs in the coming months. Almost 90 cent hogs now mean even higher prices with the smaller supply in 2009 (at current exchange rates).

Other Observations
U.S. sow slaughter was 72 thousand for the last week we have data. It is consistently running 10,000 more then the same weeks a year ago. We believe this indicates an approximate net decrease of 10,000 in the U.S. breeding herd per week.

Last week’s sow prices were 10¢ lb less than a year ago. Market hog prices were 10¢ lb higher than a year ago. A year over year 20¢ lb spread. Some are saying liquidation has stopped. If so, we would expect supply and demand would bring sows higher in price probably close to the 20¢ lb difference year over year. When heavy sows get to 10¢ lb under the market price, we will believe liquidation has stopped.

At the first part of July, feeder pigs were trading for $10.00 per head. Since then, lower feed costs and higher lean hog futures have increased the prices $30.00 per head. We expect feeder pigs to reach $80.00 to $90.00 per head in 2009.

We had some visitors from Russia this past week at Genesus. 110 kg (242 lb) liveweight market hogs are bringing $360 U.S. per head. $3.27 per kilo or $1.48 U.S. liveweight per lb only goes to show where prices can lead. Any wonder pork exports from the U.S. to Russia are strong.

One of our associates is moving feeder pigs 25 kg (55 lb) from Western Europe to Russia. They are costing Russian buyers 80 Euros ($120 U.S.) per head. Bet there is a lot of Canadian – U.S. producers who like to send pigs for that price.

Corn was $4.97 Friday, soy beans $11.97 price continue to come down. The crop has been getting rain and warm weather almost everywhere. We expect corn south of $4.00 a bushel in harvest.

Last week the European Union (E.U.) immediately suspended pig meat export refunds. The program had been subsidizing E.U. pork exports at 31.1 Euros per 100 kg of carcass ($46 U.S.). With E.U. a major global pork exporter, this subsidy cancellation will make U.S. – Canada pork even more competitive globally. This is price supportive for U.S. pork.

Iowa and Minnesota weights a week ago were 4.8 lbs per head – lighter than a year ago. Hogs have been pulled ahead.

The Canadian dollar closed Friday at 93.74¢ to the U.S. dollar – down from par a few weeks ago. This helps Canadian producers’ competitiveness. Canadian producers have not had much good news in the last year or so. Some good news was due.

U.S.chickens placed last week were down 3.5% year over year. Year to date chicken slaughter has been running 4.6% plus year over year; a big swing. High feed prices have cut chicken production. The chicken placed decrease is a 5.5 million per week decline. Lower chicken production cuts feed demand and supports hog prices.

Sure can see the greater competition in the Pig Software business. Once dominant Pig Champ had only 13 farms from Canada in those yearly production analyses. Significantly down and this probably reflects loss of market share to now numerous competitors. U.S. Pig Champs 2007 top 10% herds weaned per female was 24.10. Certainly indicates reaching 25 pigs is still a great accomplishment.

The U.S. government is not very friendly to U.S. livestock producers. The current administration has rejected the idea of allowing conservation set aside land be released early (15 million acres) to allow cropping. Then this last week, the Environmental Protection Agency (EPA) rejected the waiver request to lower mandated ethanol usage. It’s almost like it’s a conspiracy to destroy the livestock industry. The U.S. government is subsidizing ethanol production, protecting with tariffs and then limiting grain production. Not only is it hurting livestock producers, its also affecting the pocket book of every U.S. consumer with higher food prices, all in the pursuit of producing a product (corn ethanol) with little environmental support and little economic logic. The insanity of government. It doesn’t make common sense, but when government is involved, why would that be a consideration. Point is, if the government believed that corn ethanol was the solution for environmental and economic reasons, why would it not allow early release of set-aside land, then produce the largest crops in history? Beyond our comprehension.

Summary
Highest hog prices in history. Domestic and global pork and meat supply is declining. Hog prices have significant upside in 2009. The hole that has been put in everyone’s equity is beginning to be back filled.


Author: Jim Long, President & CEO, Genesus Genetics 

Higher Prices Push Western Hog Producers Closer to Profitability
CANADA - The Saskatchewan Ministry of Agriculture reports significant improvements in lives hog prices have moved western Canadian pork producers closer to profitability than they have been in the last year, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Saskatchewan Ministry of Agriculture released its monthly Hog Market Update for August earlier this week.

Livestock economist Brad Marceniuk says a strong increase in North American hog prices combined with a very large drop in the value of the Canadian dollar, about six cents over the past three weeks, has pushed Canadian hog prices upward significantly and, for the first time in over a year, western Canadian hog producers are close to break even.

Brad Marceniuk-Saskatchewan Ministry of Agriculture
Hog prices have really improved significantly over the last three weeks with western Canadian hog prices increasing by about 25 to 30 dollars per 100 kilograms or over 20 percent.

Strong demand for North American pork plus a large drop in the value of the Canadian dollar versus the US dollar has significantly increased Canadian hog prices.

Current SPI index 100 hogs for August 14 is ranging from about 163 to 173 dollars per 100 kilograms.

We expect to see continued higher US weekly hog slaughter numbers in the fourth quarter to record levels which will put downward pressure on hog prices.

We expect hog prices will decline.

The factors to significantly look for will be where the Canadian dollar does go in the fourth quarter and where will the new crop of grain go for feed prices.

Weekly US hog slaughter numbers and global demand for North American pork will still be key factors to look for over the coming months, for the rest of '08.

Mr Marceniuk notes total meat in US cold storage has increased from May to June of this year and is also higher than year ago totals.

However, he says, while pork in US cold storage is still higher than year over year numbers, strong demand for North American pork has allowed pork stocks in storage to continue to decline since April which has been very positive for pork prices.

Monday, August 18, 2008Print This Page
Sound Advice for Canadian Swine Producers
CANADA - Manitoba Agriculture Food and Rural Initiatives is advising swine producers to be aware of the risks associated with feeding grains that may have been contaminated by fusarium head blight, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Fusarium head blight is a fungal infection that mainly affects cereals and there have wide spread reports of infection in Manitoba's red spring wheat crops this year.

Business development specialist swine Robyn Harte notes the species common in Manitoba produces several mycotoxins that are of concern to swine producers including Zearalenone, which primarily affects reproductive performance.

Robyn Harte-Manitoba Agriculture Food and Rural Initiatives
In the case of gilts you're looking at quite low levels of three to five parts per million sometimes, causing things like the onset of an early estrus without any actual estrus.

In sows it can be as low as five to ten parts per million and you'll see reduced litter sizes, you'll see pseudo-pregnancies, so they won't actually be pregnant.

Abortions, you'll see a reduction the number of piglets but you'll also see a reduction in the weight of each piglet so therefore your whole litter rates are going to be lower.

Weak pigs are often born and you see a definite increase in the weaned to mating interval.

When the levels get over 30 to 60 parts per million you'll actually see far more in the way of abortions.

Boars are also negatively affected and that again is in that 30 to 60 parts per million range.

And you'll see a reduction the quality of the sperm, you'll see more abnormal sperm, you'll also see that they're not as aggressive or as eager to breed.

They just sort of lose their libido so there's a number of negative reproductive issues.

Harte recommends feed testing and avoiding contaminated grain or, in cases where toxins might be present, to mix the infected grain with clean grain to lower the toxin levels.

Wednesday, August 20, 2008Print This Page
CME: Canadian Hog Statistics - Some Highlights
US - CME's Daily Livestock Report for 19th August 2008.



Statistics Canada released on Tuesday its quarterly estimates of livestock numbers in Canada and the numbers, not surprisingly, were lower across the board. The graph below shows year-over-year comparisons of hog numbers in various weight classes and the breeding herd. It is somewhat of a surprise that the July declines were not larger than those found in April, especially for the breeding herd. Some highlights of the Hog Statistics report are:

Total hog inventories on July 1 were 12.965 million head, 11.6% lower than last year’s 14.69 million head. This year’s July inventory is the smallest in Canada since 2000. The largest portion of that decline was in the number of market animals, which declined 12.4% to 11.492 million head. As can be seen in the graph below, the inventory of pigs weighing 20 kg and more accounted for the largest percentage of this drop, a reflection of higher weaned pig and feeder pig exports to the U.S. in 2007 and through the first half of 2008

Canada’s swine breeding herd on July 1 numbered 1.493 million head, only 4.6% smaller than the level on July 1, 2007. That decline is a bit of a surprise given the government-sponsored buyout program and economic conditions that have led many observers to believe that the Canadian herd was headed for 1.1 to 1.2 million, roughly 25% below its peak in April 2005. These numbers suggest that the Canadian sow herd declined only 5,400 head in the second quarter when a program to remove 120,000 consigned sows was in full swing. The sow herd reduction program was retroactive to November so we don’t know exactly how many sows slaughtered through normal channels since November will be counted as part of the 120,000 head. Stats Canada reports that, as of August 9, just over 29,000 head had been slaughtered and sent to rendering instead of entering Canada’s food chain.
Some curious farrowing estimates. Keep in mind the change in the Canadian breeding herd (-4.6%) and then consider that April-June farrowings were estimated at 801,700 litters, down only 1% from last year and July-Sept farrowing intentions are for 800,800 litters to be farrowed — 0.8% MORE than last year. While we know that Canadian producers are efficient and that the exodus of 2010 farms (19% of the total) since last year has enhanced that efficiency, that many litters from so few sows does not seem probable.
An April-June pig crop of 8.65 million head. That number is 28,000 head or 0.3% lower than one year ago. It fits with April-June farrowings but, like the farrowings data cited above, does not fit well with the breeding herd data.
Hog farm numbers fell the most in Saskatchwan (-30%) and Alberta (- 24%), two provinces especially hard hit by high feed and transportation costs.

Monday, August 25, 2008Print This Page
Reason for Maple Leaf's Product Recall Confirmed
OTTAWA - The Public Health Agency of Canada and the Canadian Food Inspection Agency have received laboratory results from Health Canada that establish a link between meat products recalled by Maple Leaf Foods from their plant in Toronto and an outbreak of listeriosis in four provinces.



To date, 21 cases of listeriosis have been confirmed, and the same strain has been detected in four people who have died. A further 30 cases remain under investigation.

The investigation into the cause of the outbreak is complex. Results of genetic testing from three samples of the products recalled by Maple Leaf Foods show that two tested positive for the outbreak strain of listeria. Test results for the third product were a close match to the outbreak strain, but showed a slight variance. While these results are highly significant, and indicate that the investigation is on the right path, the investigation is not complete. Test results on additional food samples expected next week will advance the investigation further.

It would not have been possible to establish the link between the food samples and outbreak cases of listeriosis without the full cooperation of all parties involved, including provincial, territorial and local health units, federal departments and agencies, and Maple Leaf Foods. All parties are continuing to work together on the investigation.

Officials from the Public Health Agency and the Canadian Food Inspection Agency and health Canada held a technical briefing for members of the media on Sunday August 24, at 7:00 pm at the National Press Theatre, 150 Wellington, in Ottawa, to provide further details of the continuing investigation into further possible sources of the outbreak.

Because the onset of symptoms of listeriosis can occur up to 70 days after contaminated food is consumed, it is expected that the number of confirmed and suspected cases will continue to increase over the next several weeks. Up-to-date information on the number of cases in the outbreak is available on the website of the Public Health Agency of Canada.

Tuesday, August 26, 2008Print This Page
Hog Industry Turnaround Sooner Than Expected
MANITOBA - Manitoba hog producers are getting closer to and some are even past the point of profitability.



Tyler Fulton, director of risk management with Manitoba Pork Marketing, says that this may be attributed to soaring U.S. exports.

He notes these record prices are being set at a time when North American supplies are as high as they've ever been.

American exports are being driven by the decreased value of their dollar, reports Pembinavalley Online.

Mr Fullton also says it will be interesting to see how the industry acts when North American production numbers peak in October and November.

The turnaround has come much sooner than most analysts anticipated.

Low birth weight – no effect on pork quality
// 26 aug 2008

It has been reported that despite a low birth weight in piglets, the final pork quality is unaffected.


Research conducted by the Prairie Swine Centre in Canada suggests that while small birth weight piglets will grow slower than larger litter mates, the quality of the meat they produce will be the same.As litter size has become larger, average birth weight has become smaller and the number of small birth weight piglets has been on the increase.

Hundreds of piglets monitored
According to reports, to assess the impact of litter size and birth weight on the eating quality of the pork, scientists at the Prairie Swine Centre recorded the order of birth and the birth weights of about 12 hundred piglets.

Eating quality
The scientists monitored the piglets’ performance through to slaughter and had the meat from a representative sample tested for eating quality. Dr Denise Beaulieu, research scientist, has stated that work done in Germany has displayed that very small birth weight piglets have a different kind of muscle fibre at birth. Because of this scientists wanted to determine what effect that difference would have on the eating quality of the pork.

Related link:
Prairie Swine Centre   

Saturday, September 27, 2008Print This Page
Pork Producers Disappointed by Passage of Bill 17
CANADA - Despite the passage of legislation that will ban swine industry development in much of Manitoba, the province’s pork producers continue to hold out hope for some measure of flexibility.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
On Wednesday (September 25), although both the Manitoba Conservatives and the Manitoba Liberals voted against it, Bill 17 passed third reading in the Manitoba legislature, the last step before receiving royal assent, by a count of 36 for, 19 against.

The Environment Amendment Act establishes permanent moratoriums on the construction of new or the expansion of existing hog barns in three regions of the province, including southeastern Manitoba, the Red River Valley Special Management Area, including the Capital Region and the Interlake.


Rally Fails to Sway Vote
About 150 pork producers and their supporters turned out Wednesday afternoon to take part in a rally on the front steps of the legislature to protest the bill and to express support for the “Zero Percent Solution,” a proposed compromise amendment intended to ease the anticipated impact of the bill, one of several proposed amendments that had already been rejected earlier in the debate. Ultimately the bill was passed without amendments.

“That is a real tough situation that producers find themselves in,” says James Hofer, the chairman of Manitoba Pork Council’s research and environment committee and the barn manager with Starlite Colony at Starbuck, one of the operations within the designated area.

He describes the bill as another nail in the coffin and, for a lot of them, it might be the last one.


Failure to Recognize Farmers’ Efforts Frustrating
Starlite Colony has been a leader in terms of environmental responsibility.

“We have 400 day manure storage capacity, we file manure management plans and the advancements we’ve been able to make in terms of manure application and manure management are huge,” says Hofer.

He is bothered by the fact that the government fails to recognize the efforts that farmers are putting into what they are doing.


Small Family Farms Most at Risk
Manitoba Pork Council Chair Karl Kynoch fears Bill 17 is going to destroy a lot of the smaller farms.

“A lot of the smaller farms have lost their life savings out of this. A lot of the small ones will disappear.”

Although Kynoch doesn’t expect a huge shift in hog numbers, he believes the bill will push farms larger to justify meeting the new demands.

He expects the loss of a lot of family farms, which will eliminate opportunities for young people to start up.

“They need to be able to start small and that ability has now been taken away from those young producers.”

He concedes, damage from the bill has already been done.

He says he has already heard from producers who have said they will either have to shut down or move out of the province.


Bill Expected to Harm Rather than Help the Environment
“This Bill 17 is just misguided and wrong headed,” says Manitoba Liberal leader Dr. Jon Gerrard.

When you put a moratorium on the industry, you freeze the industry where it is instead of allowing it to grow, to innovate, to expand and to improve the way it addresses environmental issues and hog management issues, he says.

“What hog producers need is the ability to expand because, at the same time you expand you introduce new technology, you improve the way you look after the environment. By freezing things for much of the province, what’s going to happen is we’re going to have less ability to address environmental and animal husbandry issues. The reality is we should be moving forward instead of being frozen.”


Adopters of New Technology Offered Flexibility
“There will be some flexibility on the side of technology,” says Manitoba agriculture minister Rosann Wowchuk.

“If an individual is implementing a bio-digester or a separator then that will be considered as environmentally friendly and those kind of facilities will be able to proceed. They’ll still have to get a license to operate. We are also looking at other areas where there are small operators who might be able to join their operations together.”

Wowchuk adds, a transition fund that will be announced very shortly will help people adapt to this new law and meet the environmental requirements that will be required for them to continue operating.

Kynoch remains skeptical. He is puzzled by the government’s drive to promote anaerobic digestion.

“An anaerobic digester does nothing to remove phosphorus out of the end product. It actually makes it more concentrated,” he points out.

He remains convinced that Bill 17 is the wrong approach, which is why his organization developed the Zero Percent Solution, an alternative that would have imposed limits on the amount of manure nutrients that could be applied, banned winter spreading and required incorporation of manure within 48 hours of application, instead of a broad moratorium.

He believes the option of consolidating smaller farms will be especially challenging, particularly for those producers who are used to running their own operations and the different sizes of those operations will further complicate things.

“When they talk about operations joining, they’re talking about hauling manure to one central pit and this kind of thing. You start having to do extra handing of the manure. So, again, that’s an added cost. A lot of these operations, the smaller ones, have more than enough land base to deal with that nutrient already.”


Progress Being Made
Dr. Gerrard observes pork producers have made some very significant progress.

“It’s not perfect but, for example, almost all producers have moved to inject the manure into the land so it doesn’t run off into the waterways, we’ve got changes in looking after animals. There’s much less in the way of bacteria using so we have less problem with resistant strains and there’s changes coming in terms of how we house the animals.”

Wowchuk acknowledges, “If you look at the research that is being done, here at the Glenlea Centre, if you look at projects like anaerobic digesters, if you look at other projects such as separating the dry material from the liquid material there have been successful projects.”

However, she stresses, “Ultimately what we have to look at is the land base we have, how much nutrient can be put on it and how much can be sustainable. It has to be sustainable. The Clean Environment Commission has made recommendations on how we should be doing those things and those recommendations are being implemented.”

Kynoch points out, “The CEC did not recommend putting a moratorium on the hog industry. The government spent $750,000 doing a Clean Environment Commission review of our industry and has gone outside of those recommendations.”


Bill 17 Viewed as Anti-Farm Anti-Rural
Manitoba Conservative agriculture critic Ralph Eichler believes, “A very clear message has been sent by this government, they’re anti-farm.”

“They’re wanting to phase in regulations that are certainly detrimental to farming and the farming community and, as a result of that, send a message out to rural Manitoba that they don’t really care about rural Manitoba.”

Eichler stresses, “We all want clean water. Everybody agrees on that. How we get there is the real answer.”

He believes we need to rely on those people that have the expertise, the scientists the university people, the people that study this. He notes the experts made it clear during the public hearings, there is no need for a moratorium.


Producers Question Further Investment in Research
Hofer considers it unfortunate that it comes down to where a government essentially shuts down the industry without justifications behind it.

“As chair of research and environment committee on pork council the members are saying to me, what’s the use in spending another dollar on research when government does not listen to science any way.”

He finds it frustrating that a government which professes to have an open door policy would proceed with such legislation without due consultation with the industry that it will affect.


News Regulations Offer Room for Additional Flexibility
The process of developing regulations for the new act does offer some hope.

Kynoch says pork producers will want to be talking to government and hopefully have some input into these regulations.

“There are some good recommendations that have come out of the Clean Environment Commission report I think that we can deal with. There’s some that probably need some adjustment so we’re going to have to try and get talking with government and see what we can do moving forward to make sure the producers that are left can meet the new regulations that are coming down.”

Friday, November 14, 2008Print This Page
Factors Determining Hog Prices
CANADA - The Saskatchewan Ministry of Agriculture expects North American hog slaughter numbers, volumes of meat in cold storage and the value of the Canadian dollars to be key factors determining the value of Canadian live hogs heading toward the first quarter of 2009, writes Bruce Cochrane.





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The Saskatchewan Ministry of Agriculture's November Hog Market Update indicates North American hog prices have continued to decline through the fourth quarter of 2008.

Livestock economist Brad Marceniuk says, while Canadian hog prices have been declining this fall, the lower value of the Canadian dollar has tempered the declines so Canadian producers probably haven't felt the impact as much as American producers.

He says the key factors affecting price continue to be U.S. weekly hog slaughter numbers and meat in cold storage.

Brad Marceniuk-Saskatchewan Ministry of Agriculture
U.S. weekly hog slaughter numbers over the last eight weeks continue to be higher than over the same period a year ago and this has led to increased pork production.

While slaughter numbers were higher, we have actually started to see some signs in recent weeks that U.S. slaughter numbers may be leveling off and could start to decline later in the fourth quarter.

In Canada weekly hog slaughter numbers have been increasing over the last few weeks compared to the same period a year ago.

A combination of more hogs staying at home due to COOL and a decline in the value of the Canadian dollar making Canadian processors more competitive have helped increase slaughter numbers in Canada.

This trend should really continue to increase into 2009 depending on changes in the Canadian dollar and further changes around COOL.

Marceniuk notes, with increasing U.S. meat production in 2008 and a decline in U.S. demand for meat, meat in cold storage has increased, almost one percent month over month and almost nine percent year over year.

He says U.S. weekly hog slaughter numbers, demand for pork and U.S. storage stocks will be key factors to watch in the United States while in Canada producers will need to keep an eye on the value of the Canadian dollar and the effects of COOL on their marketings.

Monday, November 17, 2008Print This Page
Canadian Swine Industry Outlook Improved
CANADA - An agriculture consultant with Credit Union Central of Manitoba says the lower value of the Canadian dollar and reduced feed costs have been key to improving the situation for western Canadian swine producers, writes Bruce Cochrane.





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Live hog prices are projected to bottom out in western Canada during the fourth quarter of 2008 and start to rebound near the end of the quarter and into the first quarter of 2009.

Brad Magnusson, with Credit Union Central in Winnipeg, says the combination of rising feed costs, a par Canadian dollar, the fallout from U.S. Country of Origin Labelling and record U.S. weekly hog slaughter numbers has squeezed cash flows and caused a huge cash crunch for the swine industry.

Brad Magnusson-Credit Union Central of Manitoba
The drop of the Canadian dollar is tremendously important as we export a tremendous amount of both live and meat products to the United States.

Anytime that the dollar is going to be falling is going to be positive.

We are conscious of the fact though that we are an oil producing nation and we could ultimately see that Canadian dollar move back up slightly over time.

That's something to consider but it's absolutely paramount that the dollar stays as low as possible as an exporting meat nation.

From a feed perspective absolutely incredibly important as well.

The feed costs doubling essentially in a very short period of time absolutely was devastating to individual producers, particularly if they were buying corn out of the United States or even barley.

You can't make profitability when corn is at eight dollars and barley is at 4.50 or five dollars.

Magnusson stresses Credit Union Central of Manitoba believes the hog industry is still very stable in Manitoba.

He notes we have a tremendous number of producers with equity in their operations and in western Canada we have some of the best producers in the world a fact demonstrated by our productivity numbers, our pigs per sow sold per year, our weights and the demand from U.S. producers and the consumers wanting to buy our pork.

Thursday, November 27, 2008Print This Page
Producers Spurred to Re-Think Feeding Programs
CANADA - Researchers with the Prairie Swine Centre are encouraging swine producers to take a second look at their feeding programs in order to find additional cost savings, writes Bruce Cochrane.





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Feed is the single largest component of the cost of raising a pig to market weight, accounting for anywhere from 55 to 60 percent of the total cost of production.

Research scientist Dr. Denise Beaulieu says each change, for example looking at feeding budgets, looking at the energy concentration in the diets, looking at reducing the crude protein of the diet, may not appear significant but added up each incremental change can make a large difference.

Dr. Denise Beaulieu-Prairie Swine Centre
Producers for the last at least 24 months have been looking at their feeding programs to reduce costs so certainly they have implemented many of the practices that we would recommended.

However there are still opportunities out there.

For example we've done studies a few years ago that looked at current prices and it would still save to look at the energy content of your diet.

It would typically not pay to feed high energy diets that may maximize performance.

Overall producers need to re-evaluate their objectives.

Maximizing performance, maximizing growth of the pig is probably no longer the most economic objective.

They need to look at some way of maximizing net income from their entire farm.

For example reducing phosphorus in the diet or the use of a phytase enzyme may lower feed costs only slightly.

But, if that producer is paying extra to have phosphorous output in the manure spread onto fields, the cost savings then can be significant so the effect on diet alone is not the only thing to look at.

They have to look at it in terms of the total farm, in terms of the total net income of that farm.

Dr. Beaulieu stresses each feeding program needs to be evaluated in terms of the individual producers objectives and total farm system.

She says just looking at cost of feed alone is no longer enough to measure the change.

Friday, November 28, 2008Print This Page
Improved Hog Outlook Expected by Mid-2009
CANADA - Informa Economics says dramatic cuts in North American hog production combined with lower feed prices are improving the outlook for western Canadian pork producers, writes Bruce Cochrane.





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Low hog prices, high feed costs and the negative impact of a high value Canadian dollar have pressured Canadian pork producers.

Negative margins over the past 18 months in Saskatchewan have ranged from an estimated break even to 50 dollars per head resulting in about 100 million dollars in losses within the Saskatchewan swine industry.

Informa Economics vice president Dave Reimann says the middle half of 2009 looks much more promising.

Dave Reimann-Informa Economics
Assuming that the global economy doesn't go into a total free fall, I think that we should see a little more stability simply because the industry has done some pretty serious contracting here in the last 12 months and continues to do so.

It usually takes at least six to nine months for any of those sorts of moves to start to show up in markets so the middle of next year does look a little more promising.

Again, because of the more severe cutbacks on the Canadian production side, we hope that actually the recovery will be a little more dramatic here.

Going all the way to BSE on the cattle side, I think so far, Canadians over the last few years seem to be reacting faster.

I think ultimately that is a good thing because, in the long run, if we go on the faith that the economies in China, India and such, are still on a growth phase, there is some light at the end of this tunnel and regardless of how ugly things get here in the short term, looking forward down the road a couple years there is some reason to be optimistic.

If that's the case and we've repaired our situation here in Canada a little bit better I do think at least we're able to take advantage of it somewhat quicker.

Reimann suggests, long term, western Canada is in good shape because of the diversity of its feed grain supplies.

He notes high prices have prompted grain and oilseed producers to dramatically increase their production and that is resulting in lower feed costs.

TOPIGS Canada Purchases Maple Leaf Agri-Farms
CANADA - TOPIGS Canada Inc. has announced that it has completed the purchase of the swine genetics business operations and assets from Maple Leaf Agri-Farms.


"The swine genetics of Maple Leaf Agri-Farms combined with the existing activities of TOPIGS in Canada form a perfect basis for the future developments of our business in Canada," said Martin Bijl, CEO of Pigture Group. "With the purchase we expand our market share and acquire market knowledge that make it possible to grow further."

Under the terms of the sale agreement, TOPIGS Canada acquired Maple Leaf Agri-Farms' genetics business, including the assets of Lean Team International, a marketing arm of the genetics business, along with a nucleus farm located in Manitoba, Canada. The two companies have also formalized an agreement where TOPIGS Canada will supply genetics to Maple Leaf Agri Farms hog production operations.

"TOPIGS has a strong reputation as a world leader in swine genetics and we are pleased that the company recognized the value in our genetics business and our people," said Glen Gratton, VP MLAF Genetics. "Maple Leaf Agri-Farms is looking forward to drawing on TOPIGS global expertise and to building a strong working relationship as our genetics supplier for our hog production operations in Manitoba."

TOPIGS is world leader in pig genetics and with its subsidiaries, agents and distributors active in more than 30 countries. TOPIGS stands for superior genetics, knowledge, and reproduction technology in the field of pig genetics. Turn over of TOPIGS is more than one million gilts per year and over six million doses of semen. TOPIGS is part of Pigture Group and headquartered in Vught, the Netherlands. TOPIGS employs about 500 people worldwide and had sales of €73 million in 2007. TOPIGS exports world wide from its High Health SPF Nucleus farms in Saskatchwan, Canada.

Maple Leaf Agri-Farms is an independent operating company of Maple Leaf Foods Inc., a leading food processing company, headquartered in Toronto, Canada. Maple Leaf Foods employs approximately 23,500 people at its operations across Canada and in the United States, the United Kingdom and Asia. The Company had sales of $5.2 billion in 2007.

Monday, December 08, 2008Print This Page
Canada-US Pork Industry Relations Strong
CANADA - The chairman of Manitoba Pork Council says, despite the problems being created by Country of Origin Labelling, the relationship between Canadian and American hog producers remains strong, writes Bruce Cochrane.

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Last week the federal government officially requested formal consultations with the United States under the World Trade Organization dispute settling process over Country of Origin Labelling.

As a result of the new US food labelling laws, several American pork processors have stopped accepting Canadian origin pigs.

Manitoba Pork Council Chairman Karl Kynoch says a great deal of effort has gone into building an integrated Canadian and US pork industry and Country of Origin Labelling threatens to undermine that effort.

Karl Kynoch-Manitoba Pork Council
The relationship between the producers on both sides of the border, this hasn't strained that at all.

I think it's probably brought out more of the importance of needing to continue to work together and some producers have probably found out some of the benefits that were there that maybe they didn't realize before.

Again, I think when we have to go through these battles it probably brings the producers even closer together.

There's a lot of producers in the US that have always been opposed to COOL.

It's restricted their access to a very high health weanling and pigs that they had access to and again it's restricted the packer access to a lot of the animals direct for slaughter and that.

I would say industry, it's brought us a lot closer together and hopefully going forward that governments will try to work together to resolve some of this.

Kynoch considers Ottawa's request for formal consultations over the issue through the WTO dispute setting process to be significant.

He says Country of Origin Labelling has created problems on both sides of the border forcing the closure of barns in Canada and the US.

He believes the American government needs to recognize it's new labelling laws are trade restrictive and look at changes that will make the legislation more workable.

Tuesday, December 09, 2008Print This Page
Straw Based Sow Housing Increases Longevity
CANADA - Research conducted by the University of Manitoba indicates, from an animal welfare perspective, sows housed in groups on straw tend to out perform those housed in conventional slatted floor systems, writes Bruce Cochrane.


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Research at the University of Manitoba's National Centre for Livestock and the Environment is comparing sows housed in conventional slated floor facilities to those housed in groups on straw. The two groups use the same genetics and are managed similarly.

Animal science professor Dr. Laurie Connor says scientists are tracking longevity, joint health, lameness and body condition scores as well culling rates, litter sizes, born alives, deads and weaning weights.

Dr. Laurie Connor-University of Manitoba
We do tend to get a slightly larger litter size, similar born alives but slightly different in weaning numbers, weaning weights, slightly more from the group that have been from sows that have been on straw throughout all of gestation.

In terms of culling of the sows, in the conventional system more sows are culled within the same period of time, most often associated with leg problems, joint problems, not so much in terms of things like body condition.

We're able to keep the animals in very similar condition in the two facilities.

One of the problems, the most obvious from an economic standpoint, aside from having to replace more in the conventional barn is that we have to medicate more of those animals, the sows in particular, very often again associated with leg injuries, things associated with the complete slat floors in groups.

Dr. Connor says the straw based system requires straw and additional labour but those costs may be offset by reduced medication and culling costs.

She notes it is too early to make specific recommendations but further details of the work will be made public by early 2009.

Thursday, December 11, 2008Print This Page
Impacts of Gut Microflora and Probiotics
CANADA - More than 40 scientists and experts from different universities and research centers across North America and Europe gathered last month in Quebec City to participate in Institut Rosell-Lallemand’s Scientific Exchange.



With varying though complementary backgrounds ranging from neuroscience to gastroenterology to animal behavior, all shared a common interest in probiotic research and application.

The meeting focused on the intricate and complex relationship between the brain and the gut. New and exciting data were shared, contributing to establishing the interactions between this “brain-gut” axis and the gut microflora, as well as the potential of probiotic use.

At a time when modern farming practices represent an important source of stress factors for animals, affecting their performance, health and well-being, some promising behavioral studies were shared showing that probiotics can help to manage stress and influence behavior. This unique interdisciplinary meeting was a real platform for exchanging ideas and methodology. It allowed the participants to set new directions for future probiotic research and paved the way for new applications in both animal and human nutrition.

The brain, the gut and the bugs: a fascinating triangle
The idea of a brain–gut axis is not a new concept, the first scientific studies of the subject date back to the 1960s. The fact that communication works both ways and that the gut can talk to the brain is a more recent concept. Even more novel is the idea of looking at the role of the intestinal microflora, or microbiota, with the addition of probiotics, in this brain-gut cross-talk.

As explained by Professor Stephen Collins of McMaster University Medical Centre (Canada): “The intestinal microbiota has profound effects on host function and should be incorporated into a modern conceptualization of the gut-brain axis.” He added: “In this model, changes in brain responses, such as stress or anxiety, influence the physiology of the gut, altering the habitat for the microbiota. The microbiota, in turn, influences gut physiology and immunity at the gut mucosa level. Our recent data indicate that perturbation of the microbiota also influences behavior..”

Until now, probiotics had mostly been documented for their role in digestive health and functions: prevention of diarrhea or bloating, transit regulation, lactose intolerance…in human, and optimized feed efficiency and pathogen control in animal production. In recent years, scientists have also studied their interactions with the immune system. With their action on the gut microflora balance, probiotics could also affect the brain-gut axis, as confirmed during the seminar.

Effects of probiotics on behavior, stress and anxiety
More than ten different scientific studies were presented, showing how specific probiotic preparations play a role in animal behavior, their reaction to stress, anxiety, or memory formation post-infection.

For animals raised with modern production methods, stress is a recurrent issue, and probiotics are increasingly used as a natural solution to control pathogens development or to optimize performance. Several significant studies were presented showing how probiotics can also impact stress and behavior and be an ally to reduce the impact of stress in animal production.

During the session dedicated to monogastric animals, for instance, Dr Nicola Walker (Lallemand, Montreal), demonstrated that farrowing, an important stress event for sows and yet an extremely critical step of its production cycle, induced a dramatic change in the sows digestive microflora. She explained that:” In our study, we showed that the normal balance of the sow’s gut microflora was disturbed by farrowing. However, when the sows had received probiotic yeast Saccharomyces boulardii I-1079 for three weeks prior to farrowing, their microflora was less affected by this stress event, indicating a degree of stabilization.” She concluded that: “The probiotic yeast may help to stabilize the gut normal microflora during periods of stress, thus potentially reducing the proliferation of opportunistic pathogens and thereby leading to improved health and performance.” In another presentation by Dr Alex Bach, from IRTA, Barcelona (Spain), it was re-stated that ruminant-specific yeast S. cerevisiae I-1077 can help regularize feeding patterns in dairy cows.

Didier Desor, Professor of Behavioural and Cognitive Neurosciences at University Henri Poincaré in Nancy (France), presented a pre-clinical study with a probiotic preparation (Probio’Stick™ from Institut Rosell-Lallemand) which has already been shown to be effective in humans in reducing the gastro-intestinal symptoms linked to stress. Using a mouse model validated with Diazepam, it was shown that: “the probiotic was able to reduce signs of anxiety, displaying an “anxiolytic-like” effect. Such effect had not been previously described with probiotics.”

All probiotics are different
One of the evident conclusions that came from the numerous discussions during the seminar was the renewed certitude that all strains are different. The benefits exerted by a particular microbial strain or blend of strains cannot be extended to others. Some of the studies presented were conducted on different probiotic preparations and the outcomes were diverging. We are just beginning to comprehend the necessity of matching a probiotic with a state of health.

Looking to the future
During the round-table discussion, it came out loud and clear that experts from different disciplines in both human and animal health have a lot to learn from each other. Professor Phil Sherman, from the Hospital for Sick Children, University of Toronto (Canada), who chaired the discussion, concluded that: “the seminar was a great opportunity to build bridges, not only between the industry and academia but also between the different disciplines.” We are learning that nutrition, gut health and psychological health need, more and more, to be linked together. All the participants left with new ideas and concepts which will be exchanged through new collaborations and interactions

Friday, December 12, 2008Print This Page
High Quality Barley Available as Feed
CANADA - The Canadian Wheat Board reports there will be a large volume of excellent quality barley available this winter for feed, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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2008 saw a strong global production of barley.

Canadian Wheat Board barley marketing manager Lorelle Selinger says when making marketing decisions both buyers and sellers need to keep in mind there's a large volume of barley out there so prices are not likely to up.

Lorelle Selinger-Canadian Wheat Board
This past year western Canadian farmers experienced a good crop.

We had production numbers over 11 million tonnes in western Canada itself of barley, which is averaging over 60 bushels an acre throughout western Canada.

Of this a large proportion of it is selectable for malting.

Possibly up to four million tonnes are of that quality.

Likely, though, the malting program will not be that large.

The remainder of it will go into the feed market.

Quality wise, we've had a very good crop.

We got off to a bit of a rough start during harvest with some wet conditions and such but the late dry time during mid to late-September really finished things off nicely.

We had a very plump crop, heavy barley, very good quality.

Global production this year was very high.

In the EU and Russia combined they've produced over 19 million tonnes more than in past years.

Australia has finished with a bit larger crop than in past years.

They've had some quality issues over the last little while.

They experienced some drought conditions as well as some late rains which will take some of the barley in some of their malting regions and move it into the feed market as well.

Selinger says, while domestic prices have dropped, domestic values are still stronger than export values.

She notes, over the past month, prices in Lethbridge have dropped from about 190 dollars per tonne to 160 dollars or even below.

She says this is still higher than the export market and, as long as the domestic values remain stronger, it's unlikely a lot of barley will be exported as feed.

Tuesday, December 30, 2008Print This Page
Pork Commentary: Mexico Strikes Back
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
At the end of last week, Mexico delisted 39 US Pork Plants from having access to the Mexican Domestic Market. From all indications the delisting was a retaliation for US Country of Origin Labeling (COOL) which has caused severe hardship on the Mexican Feeder Cattle exports to the US. The US pork plant delisting came a week after Mexico had launched a complaint at the World Trade Organization against US Country of Origin Labeling. The Pork plant delisting will put extreme pressure on US hogs as Mexico is the United States’ number one market.

Last year, Mexico sold more than 870,000 head of live cattle to the US to be partly raised and then processed into meat. Mexico’s sales of live cattle have fallen far below that this year.

What we have is an escalation in trade issues. The US Country of Origin Labeling has caused hardship for livestock producers in both Canada and Mexico. Mexico has decided to retaliate. We understand Canada is pondering its move if there is no US compromise. Canada imports more agriculture products from the USA then vise versa. Unfortunately, when Government’s get involved in the marketplace it always seems to become market distorting and many times this is not for the good.

Hogs and Pigs Report
Tuesday, 30 December, the US Hogs and Pigs Report will be released. We expect much of the same attrition in the breeding herd and lower market inventory. We estimate the breeding herd will have declined 50 – 60,000 from September 01 and be down give or take 4 per cent year over year (about 225,000 – 250,000). We need a positive shot of news. Iowa – Minnesota last Friday was 49.13 lean and we suspect many farrow to finish producers have breakevens of 70 -75 cents lean currently. When you put the numbers together, losses are a per head basis of $35 - $50. Nasty! It’s been too long losing money and the equity hole is getting deeper.

The corn and soybean price unfortunately also seems to be gaining strength give or take $1.00 a bushel higher than the contract lows reached a few weeks ago. If there is an upside and we are reaching for these higher corn prices it will encourage spring plantings when coupled with lower fertilizer prices. Also, higher corn prices must be giving the corn ethanol plants (food burners) big indigestion on their breakevens.


Author: Jim Long, President & CEO, Genesus Genetics 

Monday, January 05, 2009Print This Page
Canada's Pork Producers Look Forward to 2009
CANADA - Canada's pork producers are bidding adieu to 2008 and looking forward to improved fortunes in 2009.





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Jurgen Preugschas, a Mayerthorpe, Alberta area producer and president of the Canadian Pork Council (CPC) recalls, producers struggled early in the year with the Canada-U.S. exchange rate, very high input costs and low prices paid for pork.

He acknowledges, while the situation did change somewhat toward the end of 2008 with the exchange rate falling back and input costs dropping, all factors added together made for a very difficult year.

2008 Outstanding as a Difficult Year
“I think 2008 will be remembered as one of the really outstanding awful years in the hog industry,” observes Florian Possberg, a Humboldt, Saskatchewan area producer and the Canadian Pork Council's representative on the Canada Pork International (CPI) board of directors.

Possberg describes 2008 as “an extremely challenging year for hog producers financially” as they had basically everything thrown at them.

“We bid 2008 adieu and look for better things in 2009.”

Preugschas notes initiatives have been introduced provincially to help ease the situation, such as the Alberta Livestock and Meat Strategy (ALMA) and, on the pork side nationally, there's the Pork Value Chain Roundtable.

The whole value chain, he explains, is working together to figure out what the new world might look like in terms of getting more value out of the end product and to ensure all of the players throughout the supply chain get a fair amount of money.

Global Sow Production Declines
Recent hog and pig reports in Canada, the US and around the world, have shown sow numbers have been reduced.

Preugschas observes, “In Canada, of course, we've had significant reductions in production and it's still taking place today as our producers are hurting. To a lesser degree there's been some reduction in the United States. Certainly in other parts of the world, as well, there's been significant reduction.”

He hopes that will translate into profitability in 2009 but, he concedes, with the economic crisis all bets are off in terms of trying to predict where exactly the situation will end up.

Possberg believes 2009 will have to be a profitable year for the hog industry.

“Our industry can not sustain another year of significant losses. Producers are just in a very weakened state and it's time for the turn around. The sooner the better.

Profitability Projected in 2009
“We are expecting a return to profitability, for sure, in the third or fourth quarters of this year,” says Preugschas.

“We're hopeful that it might even occur sooner. The hog producers are eternally optimistic and they feel it will eventually happen. We believe that we're getting close to that but there's a lot of factors that are beyond the control of the hog producers of this country and that's the challenge.”

He concedes further economic collapse could affect what people eat and that is very hard to predict this year.

Financial Crisis Tempers Expectations
Possberg agrees, the financial melt down is creating a great deal of uncertainty.

“There's an issue with trading meats internationally and we're a big exporter. We have to trade and so we do have to have a financial climate that facilitates trade,” he says.

CPC executive director Martin Rice notes, the economic melt down actually did spell some relief in the form of lower grain prices and the decline of the Canadian dollar below 80 cents US by the end of the year (2008).

He acknowledges, the world market is still facing a lot of economic uncertainty and a recession which is not good for meat prices generally so we're not seeing the strength in that meat sector that would have been expected by this point. While there's been some narrowing of the gap, the industry is still not back to profitability.

Financial Crisis Expected to Re-Invigorate WTO Negotiations
“The economic recession has put a lot more focus on keeping the world economy working.”

Rice believes that will require finishing the WTO negotiations.

“We would expect the new US administration will, on balance, be favourable to getting back into those discussions. We see it (restoration of growth in trade) as being a big part of the economic recovery for the world economy for the next couple of years.”

Rice admits in difficult times people do tend to become more protective of their own interests. However he believes there is a recognition of the strong interdependence in the world economy.

“There's going to be a lot of pressure to utilize that trade route to help get back to the economic recovery that we're all looking forward to.”

New US Food Labelling Rules Cause Continued Concern
Meanwhile, US Mandatory Country of Origin Labelling (COOL) also continues to create a great deal of uncertainty for the Canadian pork industry.

“That's front and foremost on hog producers' minds,” says Preugschas. “Two out of every three pigs that are born are exported either as pork or as live animals and that has a very big impact on us as the US is a major customer for our live animals.”

“There's a lot of guessing going on out there and we do hope, in the next little while, to see a US final rule come out,” says Rice.

He notes, “There's been a lot of representation made to the U.S. government to have that final rule reflect as much flexibility as possible so that Country of Origin Labelling doesn't unnecessarily interfere in the normal business practices that have evolved in the last ten years in the North American hog industry.”

Clarification of Rules Necessary
Possberg notes Canada and Mexico have challenged the new US labelling laws through the World trade Organization.

“What we need to know is what the business relationship will be in the US.”

None the less he remains convinced there will be a business based solution found.

“If the rules written for the enforcement of Country of Origin Labelling are such that a number of major packers will continue to source United States and Canadian hogs then the business can go forward with some certainty that there's going to be a reasonable market for the hogs at the end of the day.”

Possberg stresses, “There's negotiations at very high levels going on to help sort out and make sure rules that end up being enforced will be ones that allow business to continue to happen with as little disruption as possible. The challenge is we just don't have those rules yet and the sooner we get them sorted out the better.”

Possberg suggests, “The ironic thing is that there's probably 4,000,000 Canadian born hogs in the US that are at one stage or another of being finished and these hogs are going to go for slaughter there. The only question is how big a discount and how big a market disruption they're going to cause?”

Canadian Position Still Strong
Despite the challenges of 2008, Preugschas is convinced Canada has an industry that's lean and very good with the right fundamentals in place.

“It's a matter of working together as a total supply chain and with the assistance of consumers, especially Canadian consumers, that they buy Canadian pork to assist us through these difficult times so those jobs don't disappear from Canada.”

Tuesday, January 06, 2009Print This Page
Pork Commentary: Hog Supply Plummets
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
After a year and a half which Producers lost in excess of $20.00 per head, with the industry losing in excess of $3 billion, US hog supply according to the USDA quarterly hog and pigs report will plummet in mid April 2009. The USDA indicates that pig supply on the first of December was 21.297 million head for under 60 pound pigs (These hogs will go to market beginning in April), compared to a year ago when the hogs under 60 pounds inventory on the first of December was 22,545 million. That would be 1.250 million fewer under 60 pound pigs year over year. If we use 10 weeks of life for a pig to get to 60 pounds. That translates into 125,000 fewer market hogs a week for May, June compared to a year ago. Throw in all likelihood that imported Canadian Market Hog numbers will be at least 25,000 a week less than 2008 due to COOL and you get 150,000 less hogs a week. At least 6 per cent fewer hogs year over year. A huge decline when coupled with the continued decrease of poultry and beef production year over year.

For weeks we have seen the rapid rise of feeder pig and early wean pig prices. You need to look no further than the under 60 pound inventory to see the demand driver. Iowa, the main destination is down 620,000 head in the under 60 pound category year over year. That means 620,000 pig spaces in Iowa empty that had hogs a year ago. That is why the finishers are chasing pigs and pushing prices.

Breeding Herd
The U.S. Breeding Herd is down about 150,000 sows from a year ago. We are surprised by USDA report showing an appreciation of 20,000 sows on the first of December compared to the first of September. We do not believe the inventory grew. There are no new barns. There is nobody adding sows. A small decline we might find plausible. An increase - we don’t think so.

We expect (we have no facts) of the productivity gains we had in the recent past was possibly a function of an underestimated breeding herd. Maybe there was 50 – 100,000 more sows in prior months than ever were picked up in the inventory. As time has gone on these have been found which has made the breeding inventory decline seem less visible. We believe there is no way the US breeding inventory actually gained from September to December. We see no breeding herd expansion on the near horizon.

Counterbalance to Our Optimism
If you want a counter balance to our rapid price appreciation expectations due to the domestic and global supply decline in all meats the economists from the University of Missouri are predicting a lean hog price average of 61 – 66 cents in 2009. With farrow to finish breakevens of 71 – 75 cents a pound you will lose $10 - $25 per head. If you believe them you might as well get out of the business now. The tenured check off dollar fueled Chicken Little Sky are Falling Economists are alive and well. Our New Year’s Resolution is to be not too mean in the commentary (unless our livelihoods are at stake). Footnote Suggestion: Do not take predictions to your bank or use in cash flows.

Hog Prices
All the pigs have been born that are going to go to market before November 2009. There is next to nothing that will or can happen to alter this biological reality. 6 per cent fewer hogs will translate into hogs pushing past 90 cent lean. We had have US weekly marketings average the last few months over 2.35 million a week. In May 2009 we will be under 2 million, 350,000 less hogs a week. Less meat. Same number of consumers. We averaged 79 cents lean in May 2008. A 20 per cent price appreciation due to 6 per cent fewer hogs pushes prices over 90 cents lean (Missouri Economists predicted 64 – 69 AML).

Short term we see the hog price beginning to increase the second week of January and to follow a relentless increase into May of 35 cents lean improving your cash flow $70.00 per head from where it is now.

Another reason for optimism is the Iowa and Minnesota Live hog weights. Last week Iowa – Minnesota averaged 266.6 pounds. 4.5 pounds per hog lighter than last year’s 271.1 pounds. We have current market inventory. This is bullish.

Other Observations
A new website Pigcareers.com has been recently launched for swine industry related job opportunities. This week Genesus has an ad for a U.S. Midwest salesperson. Currently Pigcareers customs who wish to post an ad can do so free as a onetime introductory offer. We believe it is good for our industry that a dedicated swine industry careers site has been initiated.
European Union which 18 months ago had over 15 million sows continues to show liquidation. Last week Germany announced 140,000 fewer sows in inventory. Poland could be off 20 per cent in 2009 compared to 2007.
United Kingdom is predicted to be down 4 per cent in 2009. Last week one of our associates returned from the UK and reported the hog price was over $1.00 US per pound. UK producers are making a little money now but it had to be hard.
Russia last week agreed to doubling from 50 million to 100 million tonnes (2009) US pork imports at the low tariff rate. Bullish for US producers. We are not surprised Russian hog producers are getting over $1.30 US per pound. There is not enough Pork in Russia to meet the domestic consumption needs. At $1.30 US per pound Russian producers should be making lots of money and obviously some pork being imported is not hurting their fortunes. (Best situation: have the Russian Pork Import Permits).
Brazil last week reported a significant increase of corn in inventory. Less exports and less corn being fed to Brazil’s livestock and poultry was the reason given. US corn exports continue to lag USDA predictions by 10s of millions of bushels. You do not need to import corn if you do not have the livestock or poultry to feed it to. There is less meat coming in 2009 – domestically and globally.
As the US consumer decreases their frequency of visits to restaurants, we expect Pork will do better. A point of purchase in retail stores pork does well. We are weaker than chicken and beef in restaurants but pick up steam at the retail meat counter. This will hold demand. Pork farm to retail price spread is quite high. Currently, (demand positive) as pork supply declines in 2009 this will become price supportive for producer prices as retailers have room for our percent of margin to increase.
Summary
Fewer hogs and stronger prices are coming. Less chicken, less beef, and less pork are creating a scenario not seen for two generations. The global meat decline is a reality. Strong pork prices internationally are going to be a magnet to pull US pork and maintain exports. We all need it.

 
Author: Jim Long, President & CEO, Genesus Genetics 

Friday, January 09, 2009Print This Page
North American Live Hog Prices Expected to Rise
CANADA - The Saskatchewan Ministry of Agriculture predicts a return to profitability in the western Canadian swine sector by the middle of this year, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Over the last few days, following declines since mid-December, North American hog prices have started to increase.

Livestock economist Brad Marceniuk reports high weekly US hog slaughter numbers in December and increased pork in cold storage had pushed pork cutout values and hog prices lower but prices are expected to continue increasing into the first and second quarters of 2009.

Brad Marceniuk-Saskatchewan Ministry of Agriculture
Combined North American hog production in Canada and in the US have started to decline.

While Canadian pig crops have been declining over the last year, US pigs crops have actually started to decline here in the last quarter.

Last week USDA released their December Quarterly Hogs and Pigs Report.

The December breeding inventory and market inventory numbers were down from a year ago.

So, with the smaller breeding herd, sow farrowing numbers were down about six percent during the September to November quarter and are projected to be down 3.3 per cent in the next quarter which is the December to February 2009 quarter.

Based on the recent USDA pig crops and lower live hog imports from Canada, US hog slaughter numbers are expected to decrease by about three percent in the first quarter of 2009 and 6 per cent in the second quarter of 2009.

While these reductions should be positive on North American hog prices, projected reduced US pork exports during the first half of 2009 may limit some of these US price increases.

In regards to Canadian producers, they'll see a bigger benefit just because of the weaker Canadian dollar in 2009 versus the dollar that we've seen in 2008.

Marceniuk notes, while the global financial situation has resulted in lower feed and energy costs, hog prices have not declined as much as other commodities.

He suggests factors to watch will include US weekly hog slaughter numbers, US pork in cold storage and global demand for pork.

He says demand for pork may be a key factor, if the global economy does slow down and US pork exports are reduced.

Tuesday, January 20, 2009Print This Page
Working Group to Focus on Expanded Trade with India
CANADA - The federal government has announced the creation of a new working group to promote expanded trade in pork after signing new trade deals with India and Hong Kong, writes Bruce Cochrane.





Farm-Scape is sponsored by
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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Speaking to reporters, following his just completed trade missions to India and Hong Kong federal agriculture minister Gerry Ritz announced a series of trade agreements with both countries including a comprehensive memorandum of understanding with India covering a variety of products, expected to provide a framework to expand exports to India and resolve trade irritants quickly.

The creation of a pork industry working group comes in response to India's approval of the import Canadian swine genetics.

Ritz says the working group, builds on that announcement and will focus on opening the Indian market to Canadian pork even further.

Gerry Ritz-Canada Minister of Agriculture and Agri-Food
Certainly we'll have the Canadian Pork Council involved.

Jacques Pomerleau of the Canadian Pork Council was traveling with us.

He met with industry over there as well and was working on some of those details.

The working groups will be finalized within the next days and weeks.

In that specific case it's a working group with India so it will be to move a lot more product into India.

They're very excited about bringing in a lot of our pork genetics.

Of course they do raise hogs over there but not to the productivity and capacity that we do with our hogs.

We've got just much more superior genetics.

They're interested even in looking at our feed rations and how we do those types of things, the housing and so forth.

So the agreement that we signed goes beyond straight trade into innovation and science and genetics and all those types of things so it's a good well rounded memorandum, that will allow us to move a lot more product at a number of different levels.

Ritz says details of who will sit on the working group and how it will move forward will be determined over the next days and weeks.

He notes Canada already sells half a billion dollars in agricultural exports to India and there's room for exports to grow, as India's population increases and people there look for new products.

Tuesday, January 20, 2009Print This Page
Pork Commentary: Rough Week for Lean Hog Futures
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
Friday to Friday, February Lean Hog Futures dropped from 62.45 to 55.95, April 68.60 to 66.02. In May, 80.42 to 77.27. There is little market momentum. USDA Pork Cut–outs were 56.26 while Iowa – Minnesota’s lean hog price was 56.76. Packers are bleeding. They have negative margins. Producers are losing about $25.00 to $30.00 per head. Packers are probably minus $10.00 per head. Not much to be positive about. The war of attrition continues.

Is There a Pony in this Pile of Manure? We will never stop looking!!
Despite what the doomsayers have been predicting, November USA pork exports were up 20 per cent from 2007. January to November year over year has been up 61 per cent, a total of $4.5 billion worth. We expect 2009 USA pork exports to be very close to 2008. People want meat protein everywhere in the world. They will do without other things. It’s maybe simplistic but “People have to and want to eat.”


We believe the Cool legislation is manageable for our industry. Let’s hope some underemployed politicians do not make last minute changes that might handicap our industry.


The week of 10 January saw 60,000 fewer market hogs and culls sent to the USA from Canada year over year. There were 36,000 fewer small pigs. Combined, 96,000 less pigs from Canada. The sow liquidation in Canada has eliminated most of this supply – 96,000 fewer is price supportive, Big Time. We expect 90,000 fewer a week average going forward.


The USA slaughter last week was 2.325 million, down 3.9 per cent from last year’s 2.419 million. Year over year marketings will continue to be significantly lower in the coming weeks and months. In May we expect USA weekly marketings to be down 450,000 head from current levels.


Iowa – Minnesota lean price was around 47 cents a year ago. Last week Iowa – Minnesota was 57 cents. A $20.00 per head difference, still not good but an indication what lower supply can do to boost prices.


The latest weekly data has year over year USA pork production down 18 million pounds, beef production minus 18 million pounds, chicken minus 54 million, and turkey down 16 million pounds. Aggregate total of 106 million pounds. About 3,000 truck loads less total meat a week. We believe as we go forward the relentless decline of total meat supply week upon week is price supportive beyond comprehension. 1975 was the last year all meat sectors were down. That’s 34 years ago. We hazard a guess few if any of us have any firsthand experience of managing a business from 34 years ago. It’s unchartered waters for all.


The Tyson chicken division had stood steadfast in not cutting production in the face of industry cut – backs. Now, Tyson has announced they will cut back chicken production 5 per cent. Less chicken supports all meat prices. The USA chicken breeder inventory is the lowest in over a decade. Consequently, the industry will not be able to ramp up production quickly.


We all know Circo virus vaccine has worked. Major mortalities from it have been eliminated. Last year the industry had a production boost from its effectiveness. We do not expect that 2009 productivity will have the big jump that 2008 had. Some analysts have discounted the idea of 6 per cent less hogs in the May – June period, partially due to their belief in productivity gains. We believe Circo – virus vaccine lead to a one time gain in total productivity.
This coming week we will be at the Minnesota Pork Congress. The following week will be at the Iowa Pork Congress. Come visit us at the Genesus Exhibit. We also invite you to the Genesus Reception at the Holiday Inn downtown Wednesday from 5:00 pm to 8:00 pm. Details are available in the Genesus Newsletter below.

Summary
A packer called us last week and took dispute with our belief in 90 cents plus lean hogs coming this year. They are seeing tough margins, lots of supply and have concern for exports. Maybe they are right. We believe that weekly hog marketings will be 1.9 to 1.95 million in May – June. The packer agreed. There will be less chicken, less turkey, and less beef domestically and globally. High feed prices in 2008 have decimated all meat sectors. There are no factual indicators of declining pork exports. We are holding in our belief in 90 cent plus lean hogs.

We Want To Say
We all saw the plane on the Hudson River. The skill of the pilot was extraordinary. The truly special picture to us was the flotilla of boats that came to the rescue of their fellow citizens. As a Canadian, and a foreign observer, it captured for us the essence of America. Problem!! Do something about it. It was individuals who acted. They didn’t wait for instructions. They reacted with decisiveness. There was little time, they had a choice and they made a choice. Women and children first, no one left behind. They saved the passengers. A can do spirit that is the essence of America. Quote: “Let’s roll” – Todd Beamer, a passenger on doomed flight 93 as he and others moved to overcome the hijackers.



Author: Jim Long, President & CEO, Genesus Genetics 

Monday, January 26, 2009Print This Page
Canadian TOPIGS SPF Boars at Varkens K.I. Nederland
NETHERLANDS - On 25 December, TOPIGS and Varkens K.I. Nederland imported 124 boars from Canada.


These boars originate from the TOPIGS nucleus breeding farm in Saskatchewan, have the highest SPF status and belong to the absolute genetic top of the TOPIGS breeding stock.

The boars were imported from Canada via Luxemburg. The transport period, just before Christmas, was specifically chosen, as then hardly any fatteners are being transported to slaughterhouses. This minimises the risk of contact with pathogens during transport. The boars are currently under quarantine in Lienden (Gelderland) where they will be further reared and kept under veterinary surveillance.

Ninety-four of the 124 boars are from the Tempo line. These terminal boars will go to an SPF AI station of Varkens K.I. Nederland, which is also in Lienden. There they will be used for the production of sperm for the Dutch market.

The other boars are A line boars for sow breeding. After the quarantine period these animals will be transported to AIM Iberica, the Spanish sister company of Varkens K.I. Nederland. There they will be used to breed TOPIGS production sows in Spain.

Monday, January 26, 2009Print This Page
Improved Hog Prices Expected in 2009
CANADA - A US based agricultural economist predicts reduced North American pork production and lower input costs will result in improved hog prices in 2009, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The combination of an over supply of hogs, high input costs, and a strong Canadian dollar resulted in substantial losses for Canadian hog producers during 2008.

Dr Ron Plain, an agricultural economics professor with the University of Missouri-Columbia, told those on hand last week for the Banff Pork Seminar, reduced slaughter numbers and lower feed costs should result in improvement in 2009.

Dr. Ron Plain-University of Missouri-Columbia
If you look at 2008 hog prices really didn't do too badly.

We were about two dollars above the long term average last year.

The problem was cost of production.

It was 14 dollars above the long term average.

Feed has been very expensive on both sides of the border and, because of the bio-fuels industry, we've been using so much corn to make ethanol recently it's left a short supply for the livestock industry.

Our expectation is that, because of the weak economy, exports of corn out of the United States is projected to be down in the current year.

The livestock industry is cutting back so that feed demand for corn is down so we're looking at fairly moderate prices relative to last summer's peak.

Still four dollars corn doesn't really sound very cheap but it's lower than last summer.

Our expectation is that prices are likely to stay somewhere in the four to 4.50 dollar per bushel in the United States in the coming year.

I think is where we're likely to average and I assume probably something like that for Canadian corn.

Dr Plain forecasts losses in the first and fourth quarters of 2009 and profits in the second and third quarters.

He says we can feel fairly confident in a tightening supply of hogs as producers on both sides of the border reduce production but he acknowledges there is a lot of uncertainty around global demand for pork as a result of the recession.

Monday, January 26, 2009Print This Page
Producers Given More Time to Repay Cash Advances
CANADA - Cattle and hog producers facing hard financial times now have until September 30, 2010, to repay cash advances under the Advance Payment Program (APP).



The extension of the repayment deadline for livestock advances was announced yesterday by Agriculture Minister Gerry Ritz. In addition, the first $100,000 of each producer's advance will continue to be interest-free.

"Thousands of farmers across the country have taken advantage of APP loans and this extension will keep them in business and provide relief during the current credit crunch," said Minister Ritz. "This Government will continue to work with livestock producers and their organizations to address the issues facing the sector."

"This extension assists Canadian hog producers to cope with the current financial crisis," said Jurgen Preugschas, President of the Canadian Pork Council. "We are pleased that the Government recognizes the financial difficulties hog producers are experiencing in these tough economic times."

"This is the breathing room Canadian cattle producers need to put their bottom lines back into the black," said Brad Wildeman, President of the Canadian Cattlemen. "We are going to keep working with the Government as we continue to improve programs to make sure they work for Canadian producers."

The extension of the repayment deadline applies to regular and emergency loans taken by cattle and hog producers during the 2008-09 production period. The Stay of Default covers more than $450 million in advances to the livestock sector.

Producers can still apply for APP emergency advances until March 31, 2009. Regular APP advances will continue to be available. Beginning in April, producers who meet eligibility criteria will be able to apply for 2009-10 regular advances.

Improving cash flow to producers through APP and Targeted Advance Payments under AgriStability are just two of a number of measures being taken in response to challenges facing Canadian livestock producers. Minister Ritz has also been working hard developing new marketing opportunities around the world to help Canadian farmers weather the current economic uncertainty and strengthen export markets.

Tuesday, January 27, 2009Print This Page
Canada Eyes Pork Opportunities in Booming India
ONTARIO, CANADA - Canada Pork International (CPI), is pleased to have been invited to join the trade delegation that accompanied the Minister for Agriculture and Agri-Food Canada, Hon. Gerry Ritz, to India from January 12 to 14, 2009.



"We were able to learn from reliable Indian private sector sources that meat consumption is expected to double within the next ten years, if not earlier and that they have identified Canada as a preferred supplier of safe high quality pork" said Jacques Pomerleau, CPI Executive Director. He added that this confirmed CPI's previous assessment of the Indian market potential which could eventually represent a significant opportunity for Canadian pork once it gains full market access into India.

One objective of this ministerial mission to India was to stress the need to come to the conclusion of a mutually acceptable veterinary certificate that would allow Canadian pork products into India. CPI is satisfied that the negotiations have progressed as a result of this mission.

"Such missions are important to our industry as it needs to gain and maintain access to as many markets as possible, especially those that possess growth potential", said Edouard Asnong, President of CPI. He also indicated that the announcement by Minister Ritz on January 9, 2009 of an Agriculture and Agri-Food Market Access Secretariat has been well received by the industry as it clearly demonstrated the commitment of the Government of Canada in supporting our efforts to develop and diversify our export markets.

Canada Pork International is the export market development agency of the Canadian pork industry and its membership includes Canadian pork producers' organizations and pork packing, processing and trading companies.

Tuesday, January 27, 2009Print This Page
Producers Encouraged to Focus on Maximum Profits
CANADA - Canadian swine producers are being encouraged to focus on maximizing profits rather than productivity during tough economic times, writes Bruce Cochrane.





Farm-Scape is sponsored by
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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
"Bringing Back Profitability" was the theme of the 2009 Banff Pork Seminar, held last week in Banff, Alberta.

Rocky Morrill, with Fahler, Alberta based Peace Pork, says while hog producers are consistently being told higher productivity is better, that may not be the most effective target.

He stresses optimum production doesn't necessarily mean optimum profitability.

Rocky Morrill-Peace Pork
Basically there's a whole different concept of raising pigs when you're losing money and the production parameters that you would be looking at when you're making money.

Too often our research and our guidance is based on profitable times but, for the last three years, she's been very difficult and there has to be almost a paradigm shift on what you're looking at and look at the cost centres.

You've got to look at your fixed costs, you've got to look at your variable costs.

There is no really opportunistic profits.

If your were making 30 dollars a pig and you can make more pigs, well that's more 30 dollars.

The fact, when you're losing 40 or 50 dollars a pig, you really got to understand that fixed costs, yes production will dilute your fixed costs, but when your variable costs, feed fuel, all those things are so high it doesn't take much to shift that.

Most farmers aren't an economist.

They're just trying to go out and raise animals and this is a whole different game now.

You better understand your cost of production and how production affects it.

More production does not mean the cheapest production.

Morrill says the key questions is, how much do you want to expend trying to push for that optimum production at a time when you're losing substantial money?

He suggests producers need to examine the economics in everything and set targets based on their own individual situations not the recommendations of the consultants but understand, it's about economic targets not about production targets.

Tuesday, January 27, 2009Print This Page
Pork Industry Gets Tentative 'Thumbs Up'
CANADA - Pork producers and their industry counterparts, looking nervously at the next few months, got a tentative thumbs-up from two market watchers on prospects for profitability on both sides of the border.



They spoke at the Banff Pork Seminar, an annual seminar that brings together national and international speakers and delegates from around the world.



Grant LazarukGrant Lazaruk, the chief operating officer (COO) of Hytek Ltd., Canada's largest integrated producer of pork, says tackling production cost disadvantages such as high feed costs, transportation, labour and asset utilization may drive opportunities for cost reduction for the Canadian pork industry in spite of the global economic slowdown.

With demand steady, liquidation of supply is key to addressing rising feed costs, says Mr Lazaruk. Put simply, if costs rise by 30 percent, the price of pork will need to increase by the same amount. "In this case, it would require a reduction in supply of approximately seven to 10 percent to achieve this."

Managers should not underestimate the value of experienced, productive staff in keeping production costs down, says Mr Lazaruk. "A decrease in yield at the plant of one percent will decrease your revenue by two dollars a hog. Experienced staff directly impacts the cost per pig."

Keeping links in the pork value chain as close to each other as possible is key to reducing significant transportation costs, says Mr Lazaruk, and is a clear advantage of integrated management systems such as those used by Hytek. Finally, getting maximum value from every asset is crucial.

"We estimate that 12 to 15 per cent of hog production assets are underutilized. Processing facilities are being underutilized if they function only during a single shift. Even with down time for cleanup and repairs, a processing plant can be in operation for 16 hours a day."

Ultimately, Mr Lazaruk believes that pork, while not recession-proof, has a higher chance of survival and profitability in an economic slowdown than many other products simply because it's an affordable source of meat protein that people tend to eat at home. "The world economic recession has slowed down international markets for pork, but in the end we still must eat."



Ron PlainDr Ron Plain, a professor of ag economics with University of Missouri-Columbia and a frequent speaker to the Canadian pork industry, says his call is that the pork market of the near future will be marked by a decrease in Canadian hog exports, a decrease in US pork exports, weak domestic demand in both countries, "semi-high" feed costs, and a decrease in farrowings in response to all of the above.

"Financial losses, due in large part to high feed prices, have caused both US and Canadian hog producers to reduce the number of litters they are producing," says Dr Plain. "This has led to an expected 2.7 per cent decline in combined US and Canadian hog slaughter. This should lift 2009 hog prices closer to break-even levels."

One other factor is the continuing increase in productivity, says Dr Plain. Producers are continually improving the number of pigs produced per litter, which offsets part of the impact of reducing the number of litters farrowed, he says.

Although Dr Plain says producers can expect feed prices to remain high due in part to ongoing government support of ethanol in the US, he does not foresee them returning to the record-breaking highs seen in 2008. "Even if corn is four dollars a bushel, it's still awfully cheap compared to the seven dollar a bushel corn we had back in the summer."

Tuesday, January 27, 2009Print This Page
New Opportunities for Biofuels and Livestock Sector
CANADA - The Government of Canada is creating new economic opportunities in rural Canada by investing $6 million in the Feed Opportunities from the BioFuels Industries (FOBI) research network that will work to develop and harness new market opportunities in the ethanol and livestock sectors.



"Our Government wants to help farmers succeed, and a big part of that success depends on Canadian farmers being able to access new and value-added markets," said Saskatoon-Humboldt Member of Parliament Brad Trost who announced the investment on behalf of Agriculture Minister Gerry Ritz. "This initiative will result in new markets, which will help our livestock sector improve their bottom line and boost our economy."

Led by the University of Saskatchewan, the FOBI network is a multidisciplinary initiative composed of private, public and academic members from the University of Alberta, the University of Calgary, Alberta Agriculture and Rural Development, Feedlot Health Management Services Ltd., Prairie Swine Centre Inc. and the Saskatchewan Research Council. The FOBI network will focus on creating higher quality livestock feed from ethanol waste, also known as co-products or distillers grains. The research will explore the integration of livestock production and wheat-based ethanol production, and focus on creating new co-products and new markets for existing co-products and Canadian farmers.

"This collaborative research network led by the University of Saskatchewan Feeds Innovation Institute will help make Western Canada an international leader in feeds research and commercialization, improve both livestock and bio-fuels production, and provide tremendous new training opportunities for more than 30 students and other research personnel," said Karen Chad, University of Saskatchewan Acting Vice-President Research.

Funding for this project is being provided through Agriculture and Agri-Food Canada's Agricultural Bioproducts Innovation Program (ABIP), a federal funding program designed to integrate Canada's talent from universities, industry and government in order to stimulate creativity, leverage resources, reduce costs and accelerate progress towards commercialization of bioproducts and bioprocesses.

Thursday, February 05, 2009Print This Page
Producers Advised to Connect with Consumers
CANADA - A Washington based communications strategist is encouraging livestock producers to harness some of the same strategies used by animal rights activists to get their message out, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Production agriculture has increasingly become the target of animals rights activists who have been extremely successful in bringing about legislative restrictions on livestock producers.

Dan Murphy, a communications specialist with Outsource Marketing, told those on hand for the 2009 Manitoba Swine Seminar livestock producers need to take a page out of their book and adopt some of the same game plan these opponents of agriculture are so gifted at using.

Dan Murphy-Outsource Marketing
They are very skilled at finding the hot buttons to press, whether it's pictures of a poor little puppy abused in some puppy mill or whether it's a baby pig trying to squeeze through the bars of his metal cage.

These groups are very good at knowing how to connect emotionally with things people get upset about and things people care about in terms of animal welfare and in terms of environmental protection.

What I would suggest is that producers find ways to take some of these issues that matter to people, whether it's the environment, whether it's food safety, whether it's economic viability for the rural parts of this country and the States as well and find ways to talk about how their business contributes in a positive way to those issues that people are concerned about.

You care about the environment, you need to understand how livestock producers can be stewards not just of the animals but of the land, the water shed, the soil, things that ultimately contribute to a positive impact on the environment that the average consumer feels very strongly about.

Murphy stresses the livestock industry needs to connect with the public on an emotional level and then talk about the science and the research.

He says, until you make that emotional connection, the science wont make a difference.

 

Friday, February 06, 2009Print This Page
Shortage of Feed Cause for Anxiety in Canada
CANADA - Research conducted at the George Morris Centre, in Guelph, Ontario, shows the US "green" policy of increasing ethanol production could cause hog feed prices to skyrocket.



The report says a catastrophe is shaping up and could lead to a decline in Canada's pork exports, at a time when Canadian hog production is striving to keep up with global markets.

The report also talks about how Canada has failed to recognise the close relationship between livestock and feed grains whilst deciding on policies concerning both sectors.

At present, more ethanol is derived from corn and grains (although the US is coming up with ways to implement its plans to produce cellulosic ethanol). The Canadian capital and other provinces in the country have been working to drive up the use of ethanol in conventional fuels and also boost biodiesel consumption. In 2008, a new regulation was introduced wherein conventional diesel was to contain at least 2 per cent of biodiesel.

According to Canadian news agency, Business Edge, Jacques Pomerleau, executive director of Ottawa-based Canada Pork International, notes the exchange rate and access to international markets will present the two biggest challenges to Canadian pork exports in 2009.

Canadian pork producers are put in a position of disadvantage because US pork rates determine Canada's prices. The US's plans to boost ethanol production through loans, tax cuts and government subsidies does not help with the matter. This impacts both hog and grain sectors immensely.

Currently, both segments are wallowing in the benefits of the low US dollar. But the gains are only short-term and they must both cooperate for the industries to be sustainable.

Friday, February 06, 2009Print This Page
Considering Risk Management Strategies Key
CANADA - The vice-president of live procurement with Maple Leaf Foods reports the recent economic turmoil has increased the level of interest in the use of the various risk management tools, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
To manage risk swine producers can open a trading account with a broker and trade hog futures on the Chicago Board of Trade or currency futures or trade currency futures through their bank or they can use a forward contracting program where the basis, the currency and the hog price are all locked in.

Maple Leaf vice-president live procurement John Carney told those on hand for the 2009 Manitoba Swine Seminar, while this is a tool that may not be used all of the time, it's a tool producers should consider if and when they want to use it.

John Carney-Maple Leaf Foods
I think it starts with understanding your cost of production and your business objectives and those will change over time.

Producers, as we all know, have been through a very difficult time and for some right now it may simply be survival and trying to make it through some challenging markets.

I would say that it starts with having a clear idea what your objectives are and then assessing what are the risks your facing, primarily in currency, in hog price or protein and in feed prices, determining with your cost of production what price that you would like to lock your production in at if the price is available to do so.

But I think the focus more and more is on hedging a margin or a net return per hog as opposed to simply the price.

In other words looking at the feed as well as the hog price.

Carney notes, because there are many programs offered, it's difficult to know exactly how many producers are using risk management programs but participation in the programs offered by Maple Leaf is the highest that it's been in a number of years.

Monday, February 09, 2009Print This Page
Expectations as a Result of Pork Export Market
CANADA - The Saskatchewan Ministry of Agriculture expects the export market for pork to play a key role in setting live hog prices during 2009, writes Bruce Cochrane.





Farm-Scape is sponsored by
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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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During 2008 US pork exports increased by over 70 per cent from 2007 driven by large increases in exports to Russia, Hong Kong and China, pushing the US share of the global market to about 40 per cent, compared to the European Union at about 24 per cent, Canada at about 17 per cent and Brazil at about 11 per cent.

Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture told those on hand last week for the 2009 Manitoba Swine Symposium, the volume of pork in cold storage remains a concern.

Brad Marceniuk-Saskatchewan Ministry of Agriculture
When we look at the total meat stocks in cold storage in the US we've seen a big jump from 2007 to 2008 on how much meat is in cold storage.

Stocks have increased to over 2.2 billion pounds in the last few months.

While we look at production for 2009 it looks like total production of pork, beef and poultry will be down in the United States in 2009 and we should start to reduce this cold storage number hopefully over the next couple of months.

The one concern here, as we move into '09, now that the US dollar has increased in value, will their exports be as strong in '09 as in '08?

If their exports do decline significantly we could have more pork in storage in here North America which could put pressure on prices in '09.

It will be interesting to see, though, if we do have a recession over the year if more people will be at home and will people start to eat more pork?

Marceniuk points out North American per capita consumption has fallen by about six kilograms per person since 1998 reducing the importance of the domestic market and increasing the importance of the export market.

He notes exports increased to Japan in 2008, there was a large increase in exports to China and Korea and Russia have also been important markets for Canada.

Tuesday, February 10, 2009Print This Page
Improved Pork Outlook Projected for 2009-2010
CANADA - The general manager of the Manitoba Pork Council is optimistic that live hog prices have bottomed out and have started the slow climb back, writes Bruce Cochrane.





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Over the past couple of years western Canadian pork producers have faced increasing feed costs, the sudden rise of the Canadian dollar and the continuing burden of dealing with government on issues like environmental control, trade and so on.

Manitoba Pork Council general manager Andrew Dickson says pork producers have used a variety of strategies to survive and, while we've probably hit the low of the low, it's going to be a slow crawl back.

Andrew Dickson-Manitoba Pork Council
A number of older operations have closed their doors simply because they feel that they're not competitive in terms of being as productive as some of their neighbors.

Producers continue to improve their productivity each year by one, two, three per cent.

They're a lot more careful about things like feed costs and managing them more.

In terms of use of things like antibiotics and feed additives and that sort of thing, producers are watching those very carefully in terms of trying to avoid expenditures where they can.

And, from a good husbandry perspective they've been looking at new techniques in how to manage the disease problem in their barns and in some cases they've made staff adjustments.

Some of the staff in some of these commercial operations are having to work longer hours and with more responsibilities.

Some managers are now working in the barns themselves directly where as in the past they might have spent more time managing other parts of the business.

Mr Dickson says producers have lost money for the last three years but 2009 will hopefully be a period of at least breaking even and then hopefully we can get into 2010 and make back some money and pay off the accumulated debt producers have incurred.

He says the outlook is better, pointing out, even in an economic recession people still eat.

 

Wednesday, February 11, 2009Print This Page
Opportunities for North American Pork Producers
CANADA - The president and CEO of Genesus Genetics is confident Russia will provide an excellent opportunity for North American pork exporters over the next three to four years, writes Bruce Cochrane.





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With the fall of communism the Russian business model collapsed, farming operations when bankrupt, livestock was slaughtered and agricultural infrastructure was destroyed.

In 1992 all of the pork consumed in Russia was produced in the Soviet Union but today 30 per cent is imported, primarily from North America, the European Union and Brazil.

Genesus president and CEO Jim Long points out last year Russia was number four export market, it's a high priced opportunity for people to move all different types of products and they buy all types of cuts not just the cheap cuts.

Jim Long-Genesus Genetics
Right now chicken is increasing quite a bit, pork is expanding.

The Russian cattle inventory has decreased every year for the last 13 years.

They prefer pork.

A slaughter hog in Russia right now is about three dollars US a kilogram or 300 US dollars a market hog so the Russian pork domestically is almost triple what it is in Canada.

The importers are able to buy pork cheaper in Canada, they take it there, they pay tariffs or they arrange to get the pork across the border.

Most Russians we speak to believe that the Russian per capita consumption of pork will move to the European Union average which is 40 kilograms.

Our numbers are telling us that they're at about 17 to 19 kilograms.

To get to 40 kilograms times their population is another 60 million hogs a year.

Mr Long notes, while the Russians are planning on expanding pork production, the size of the infrastructure they will have to put in place is huge and it's going to take a number of years.

In the interim he's confident that market will hold and we'll have opportunities to export pork from North America and Canada to Russia.

Thursday, February 12, 2009Print This Page
Reduced Weight Variation Key to Increased Profits
CANADA - A US based agricultural economist suggests reducing weight variation as pigs grow toward market weight is the most effective way to maximize profitability in the swine barn, writes Bruce Cochrane.





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Weight variation among pigs is a natural biological occurrence that begins at birth and multiplies as the pigs grow and can result in discounts when pigs that are either too heavy or too light reach the packing plant.

Dr. Dennis Dipietre, an economist with Columbia, Missouri based Knowledge Ventures, says many commonly accepted practices add to that variation so, when pigs achieve typical market weights, there's often a spread of about 100 pounds between the smallest and the largest.

Dr. Dennis Dipietre-Knowledge Ventures
If we look at particular practices that cause problems, we know for instance and are correcting that we've driven lactation length much too low.

We did that to try to get the of pigs volume up but, when you separate a pig at 17-18 days from the sow, not only do you do damage to the pig but you also damage reproductive future performance of the sow.

So certainly moving lactation length up to 21 to 23 days is beginning to be a common practice now.

Some of the other things that are just the typical fumbles that we sometimes make on the farm, we have more feed-out events than some producers really realize or water-out events.

Those kinds of stressers to pigs create more variation in grow, especially among the weaker pigs.

I don't mean the five or ten out of a thousand in a building that are obviously sick.

I mean the 300 lightest pigs in a thousand head barn are going to be hurt probably by this much more than the 300 more robust heavier ones.

Dr. Dipietre says his data shows that reducing variation by as much as 30 per cent can add as much as five dollars per head in net return.

Friday, February 13, 2009Print This Page
Backlog of Hogs Expected to be Cleared Up
CANADA - Maple Leaf Consumer Foods estimates it will take about three weeks to clear up a backlog of hogs that resulted from a series of road closures earlier in the week, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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Monday morning most of the roads in southern Manitoba had been closed as a result of freezing rain.

Maple Leaf director of procurement for western Canada Jason Manness says the highest concentration of freezing rain was in southeastern Manitoba, from where the Brandon plant sources a significant volume of hogs, resulting in low volumes of movement Monday and Tuesday from certain areas of Manitoba and Saskatchewan.

Jason Manness-Maple Leaf Consumer Foods
On Monday, Tuesday, Wednesday we were running at probably just around 50 percent capacity of the Brandon plant and so one full shift was impacted throughout those three days.

We are now back to full two shift capacity here on Thursday as well as forecast to do that Friday.

We are also, to help assist with the reduced capacity earlier in the week, planning a Saturday one shift processing for this Saturday so that's already lined up and ready to go.

We're trying to help accommodate the reduced capacity earlier in the week because of the weather.

We'll do our best over the next two to three weeks to get everybody cleaned up in the country, fill the sales commitments that we have to our customers.

It'll take probably two to three weeks to make that happen.

Unfortunately next week we have a holiday, or fortunately for the people that want a holiday it's good but for this business we have a holiday next Monday, Louis Riel Day, which will then compound a little bit and therefore it'll take at least two or three weeks to catch up the volume that we missed this week.

Mr Manness says, while it's difficult to put a dollar value on these types disruptions, they result in additional costs to everyone in the production chain from the producer right through to the consumer.

 

Wednesday, February 18, 2009Print This Page
US Hog Finishing Capacity Moved to Saskatchewan
CANADA - La Broquerie, Manitoba based Hytek Limited has announced it will move approximately 40 thousand swine finishing spaces from the United States to Saskatchewan, writes Bruce Cochrane.





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Hytek has purchased four finishing barns in Leroy, Saskatchewan, each capable of accommodating about ten thousand pigs ranging from 50 to 60 pounds up 260 pound marketing weight.

Hytek vice president of production and genetics Claude Vielfaure says the production facilities are being populated now and will supply finished hogs for the company's Neepawa pork processing plant.

Claude Vielfaure-Hytek Limited
Essentially, since our purchase of Springhill Farms last year, a year ago, we are looking to bring back more of our US destination pigs to Canada so we're able to process them in our Springhill plant.

These animals will be coming from our sow barns in Manitoba.

Again, those pigs from those sow barns were being sold in the US so now we're going to take those pigs from those sow barns and move them directly to these Leroy barns and finish them there and then take the market hogs and bring them back to our Neepawa plant.

We are killing approximately 900 thousand pigs a year at Springhill farms now and, once we finish our wastewater plant which hopefully will be done by the spring 2010, we'll be able to bring capacity up 1.4 million pigs a year.

Mr Vielfaure says the market hogs will be processed into fresh and frozen pork products for sale domestically and around the world.

He notes demands are different depending on where the pork is sold with the domestic market looking for the back ribs, the loins, the hams and so on where as the Asian markets are looking for the legs, the heads and other parts of the pig that we don't normally eat in North America.

 

Tuesday, February 24, 2009Print This Page
Welfare Groups Accuse Canada of Misleading Claims
CANADA - Six national animal welfare groups have come together to denounce statements made by the Canadian government to European counterparts about the protection afforded to livestock animals in Canada.



Prior to meetings in mid-January, the Canadian delegation distributed documents to European Members of Parliament claiming that "Canada is committed to, and has a long history of setting humane standards for animal welfare."

"From Malaysia to Great Britain, from South Africa to the Philippines, advancements are being made in the field of animal welfare. In Canada animals are still not protected from basic acts of cruelty," said Olivier Bonnet, Country Director for the International Fund for Animal Welfare, "Canada has been recognized as a leader in many fields but has not demonstrated the capacity in the foreseeable future to take animal protection and animal welfare seriously."

"Nowhere are the words "animal welfare" even mentioned in Canada's new $1.3 billion five-year agricultural policy, Growing Forward Framework Agreement. That's a clear indicator of lack of interest in farm animal welfare by the federal government," said Stephanie Brown, Director for the Canadian Coalition for Farm Animals.

"Canada is one of the worst places in the industrialized world for animals," said Rebecca Aldworth, Director of Humane Society International/Canada. "Our outdated animal protection laws facilitate serious abuses of animals. From the beating and shooting of seal pups to the proliferation of puppy mills, to the mass force-feeding of geese and ducks to the widespread use of leghold traps--millions of animals are routinely subjected to extreme cruelty in Canada."

"Canada is still in the dark ages when it comes to animal welfare. Most Canadians believe animals should be treated humanely, so it's time our laws reflected that fact", said Robert Laidlaw, Director of Zoocheck Canada Inc.

Wednesday, February 25, 2009Print This Page
Phosphorus Availability Varies According to Source
CANADA - Research conducted at the University of Manitoba has confirmed the availability of phosphorus for loss into the environment varies according the source of that phosphorus, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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To learn more about how phosphorus reacts in the soil and assess potential for run-off losses scientists with the University of Manitoba compared the environmental availability of phosphorus from monoammonium phosphate fertilizer, four sources of liquid swine manure and four sources of solid beef cattle manure under simulated extreme run-off conditions on disturbed coarse textured gavelly soil and fine to medium textured soil.

Soil science professor Dr. Don Flaten reports phosphorus applied as commercial fertilizer was most highly available, followed by liquid swine manure followed by solid beef cattle manure.

Dr. Don Flaten-University of Manitoba
Commercial or synthetic fertilizer like 11-52-0 is the most soluble and stays the most soluble even after it's been incubated in the soil for a six week period before run-off.

Next would come the liquid manure from the pigs barns and then would come the solid cattle manure.

That ranking is important in terms of being careful how we manage each of those nutrient sources.

Thank goodness we put our phosphate fertilizer in the commercial form underneath the soil surface next to the seed after snow-melt.

Actually it's not very much of a threat of running off if it's put on in that way and that's a good thing.

A lot of our liquid manure is injected or incorporated under the soil surface so it's not much of a threat and, in fact, the solid beef cattle manure which was the least prone to run-off, that actually worked out in some ways quite nicely because it's also the most difficult source of nutrient to incorporate and, in fact, it's almost impossible to inject.

So the results showed that commercial fertilizer, liquid pig manure, solid beef cattle manure, they sort of follow that sequence in terms of environmental availability.

Dr. Flaten notes no crops were grown in this experiment so follow-up work could involve looking at the availability of phosphorus for uptake by crops.

 

Friday, February 27, 2009Print This Page
Support for Cattle and Hog Producers Announced
CANADA - Saskatchewan's agriculture minister has announced a 71 million dollar program to assist the province's cattle and hog producers and called on the federal government to provide additional support, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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The Saskatchewan Cattle and Hog Support Program offers 40 dollars per head for beef breeding cows and bred heifers owned as of 1 January 2009 and C$20 per market hog sold and C$10 per head for iso-weans, weanlings and feeder hogs produced between 1 July 2008 and 31 January 2009.

Provincial agriculture minister Bob Bjornerud says a national approach would be preferred but requests for federal involvement have gone unanswered and other provinces have announced programs prompting Saskatchewan to come to the table with its share of support.

Bob Bjornerud-Saskatchewan Agriculture Minister
We have been pushing the federal government to provide increased support to the cattle and hog industry and we have had two specific asks of the federal government, first to provide immediate financial support for the cattle and hog producers and second to immediately change agri-stability to make it more effectively address the current situation facing our producers,

The federal budget announced a month ago today contains significant support for the auto sector in Ontario, and yet the concerns of livestock producers were largely ignored.

I took our concerns recently to the ag ministers meeting in Ottawa.

Unfortunately we were unable to secure any support at that meeting.

Now we are hearing the federal government is considering further support for the auto industry.

It's an industry in trouble and needs support but so do our cattle and hog producers in Saskatchewan.

We are extremely disappointed the federal government has not done something more meaningful for our cattle and hog producers at this time.

Mr Bjornerud says the province will continue to work toward a national solution and is urging the federal government to top-up this program with its 60 per cent share, or to provide some other form of meaningful support.

Wednesday, February 25, 2009Print This Page
Pork Commentary: 90 Cent Lean Hogs?
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
This past week we had numerous phone calls and emails concerning our position that there will be 90 cent lean hogs this year (June). These are fair questions. Many if not all producers are worried about their financial position and future. We do not write our views without thought and consideration of the implications. It becomes a responsibility, and maybe a burden. When producers say ‘We read you every week and we keep going because of what you say.’ In some ways it would be easier to run with the pack of economists who just use the lean hog futures as their crystal ball. Right or wrong, we won’t use that as a crutch.

Why do we see 90 cent hogs coming?
The latest Canada – USA swine inventory indicates there were fewer pigs in the lightest weight category. These pigs will begin to come to market at the end of April. We expect USA slaughter to drop year over year 150 – 200,000 per week. In May, 2008, the price averaged 79.59 lean. Show us anywhere in history where production decline this large did not lead to prices significantly higher year over year. We challenge anyone to find it – we can’t!


Last February we averaged 58.72 lean, March 54.04, and April, 62.41. Prices did not explode until May (79.59). At this time last year we were aggressive in expected spring price appreciation. A good friend called and told us to be careful. We were wrong. We were way out of line of what others were predicting. We appreciated the concern but we believe what we believe. Prices exploded!


What about pork exports? The global economy is in crisis – exports will suffer. We look at the countries hog prices that import pork. Domestic hog prices are a reflection of demand and domestic consumer buying power.
Current Hog Prices 
CHINA 84 cent US/pound Live weight
KOREA $1.35 US/pound Live weight
RUSSIA $1.30 US/pound Live weight
JAPAN $2.10 US/pound Live weight
MEXICO 79 cent US/pound Live weight
AUSTRALIA 90 cent US/pound Live weight

These are the major USA importing pork countries and these prices are converted to USA dollars and still the prices remain high despite an average appreciation of 20 per cent by the USA dollar in the last year. Pretty good prices aren’t they? Not exactly price collapse. They reflect each country’s domestic supply and demand. None of these countries citizen’s have the buying power of USA consumers of which 92 per cent of Americans have jobs. We believe our packers have the ability, the capital, the wherewithal to keep pushing pork into these countries with our hugely competitive price points and cost of production advantage.

We are told the Chinese producers are expanding. They probably are. They have expanded on average, 20 million hogs in production a year for the last decade. They also have 1.3 billion people. China still has major swine disease problems. Half of their pigs are in backyards. We do not believe anyone has a real clue how many hogs there are in China. How do you count 200 million pigs in backyards? Prices tell us supply. Sure, China’s prices have declined but 84 cents USA per pound live weight tells us there is no over supply and demand there. They do market about 2 million hogs a day. It’s a huge market – but even if they only imported 1 per cent of their production it is 5 million hogs a year of pork supply.


We also hear about the huge burden of pork in storage. Last Friday the USDA cold storage report came out. Pork in storage was 595 million pounds, up 20 million pounds from last year. The USDA estimates the USA will produce approximately 92 billion pounds of poultry and meat in 2009. 20 million pounds extra pork in storage is about 2/100’s of 1 per cent meat in storage. It’s a Red Herring issue by the Bears.
What about recession hurting pork demand?
It is agreed by most that the last 2 major recessions were in 1973-1975 and 1981-1982. In the Financial Post a week ago there was a chart measuring the severity of our current recession to the previous two cited.

USA Recession Comparisons
  Real GDP Industrial Production Unemployment Inflation 30 Year Mortgage Misery Index
Current -1.1 -6.1 7.6 -0.1 5.2 7.6
1981-1982 -2.7 -9.9 10.8 +14.6 18.5 22.0
1973-1975 -3.1 -13 9.0 +12.2 12.2 19.9
***Misery index - pain of economic crisis. Adds the unemployment rate and the inflation rate 2008-2009.

It would appear to us that the current recession by these measurements is no worse than 1973-1975 or 1981-1982. In all likelihood the perception of the deepness of the current recession is magnified by the internet and 24 hour news channels. In 1973-1975, there were 3 USA T.V. networks with a 30 minute newscast daily and no internet. In 1981-1982, there was no internet and it was just the beginning of cable news. In this recession we are inundated with wall to wall bad news 24/7. Hard to stay positive.

What’s this got to do with the hog market? In the last two major recessions the hog price reached historical highs.

USA Live Hog Market Average
1975 47.10 Previous historical high price to 1973-1973 recession. 23.60 in 1947
1982 52.60 Previous historical high prior to 1981-1982 recession. 47.10 in 1975

In the last two major recessions hog prices reached new highs. Obviously, demand was excellent compared to pork supply. There was a recession but people continued to want pork and pay for it in the face of declines in GDP, Industrial Production, Employment, and increases in inflation, interest rates and misery index. History repeats itself. We expect new historical price highs this summer. All the people who say demand will decrease -- we ask why? Show us the history to back up your premise. Maybe consumers won’t go to restaurants, maybe they won’t buy a new car, but don’t bet against a meat eating society maintaining consumption. The facts are the facts. 90 cent lean hogs are coming. Warn the retailers!!

1975 when lean hog prices reached a new historical price plateau is also the last time USA poultry, beef, and pork had year over year declines all at the same time. It is going to happen in 2008, 33 years later. Not exactly Haley’s comet but not far off in the time between events.


USA cattle on February Feed Report released last Friday.
Thousand Head
  2008 2009   
Feb 1 cattle on feed 11,966 11,288 -6%

We have a Continental Market. The Canada – USA cattle inventory 1 January.

Thousand Head
2008 2009
109,930 107,671

Over 2 million fewer cattle – the lowest inventory since the 1960s. Less is not more.

On a side note – We understand USA dairy producers are in a world of hurt. Milk is 11 cents, cost of production is 16 cents. We understand the average milk cow is losing about $4.00 per day. The USA dairy cow herd is just above 9 million head. 9 million x $4.00 x 30 days in a month = about $1 billion a month in losses. The USA hog industry would have to lose $100 per head to lose a billion in a month! Hogs have been bad. Dairy is in a freefall. Thank goodness there is not much meat on a dairy cow.


What about European pork production? About the same time we hit lower hog production this spring the one million plus sows that have been removed in Europe will decrease their supply. Less for export. Higher hog prices. Price supportive.


Poultry is down year to date about 70 million lbs a week. It will stay down because the breeder flocks have been cut back approximately 5 per cent. Until the breeder flocks expand it is difficult to have more poultry.
Summary
Less poultry, less beef, less pork all at the same time. Not since 1975. In 1975, the year hogs price set new historical highs. 1975, in the midst of a major recession. We have given many of our reasons, we obviously could be wrong but we are convinced 90 cent lean hogs are on the way despite June lean hog futures below 75 cents. We have our reasons it is not wishful thinking.


Author: Jim Long, President & CEO, Genesus Genetics 

Monday, March 02, 2009Print This Page
Less Post-Weaning Diarrhoea with Raw Potato Starch
CANADA - Feeding weaners a diet containing seven per cent raw potato starch reduced scouring but had no effect of performance, according to researchers at the University of Manitoba.



Bhandari and colleagues at the University of Manitoba evaluated the effect of raw potato starch (RPS) on growth performance, post-weaning diarrhoea and gastrointestinal microbial populations in weaned piglets.

Eighty-four piglets were weaned at 17 ± 2 days of age with an average bodyweight of 6.0 ± 0.9 kg. Pigs were blocked by bodyweight and assigned to one of four diets in a randomised complete block design with seven replicate pens per diet and three pigs per pen. Treatments were:

a positive control (PC) containing an antibiotic
a negative control (NC) with no RPS and no antibiotic
NC + 7 per cent RPS (7% RPS) and
NC + 14 per cent RPS (14% RPS).
Diets were based on corn, wheat and soybean meal and formulated to meet NRC (1998) recommendations. The average daily gain, average daily feed intake and gain:feed ratio were determined weekly. Faecal consistency scoring was determined daily. After week 3, one pig with a bodyweight closest to the pen mean was killed to evaluate ileal and colonic mucosal-attached Escherichia coli and lactic acid bacteria, as well as digesta pH, volatile fatty acids and and ammonia-nitrogen concentrations. The DNA was extracted from ileum and colon digesta and used for molecular microbial evaluations using terminal-RFLP analysis of 16S rDNA genes.

Average daily gain for week 1 was greater (P<0.01) for the PC diet but diet had no effect on average daily gain during week 3.

Average daily feed intake did not differ among treatments during the first two weeks, and it was lowest for the 7 per cent RPS diet during wee 3.

The NC diet had a greater (P<0.05) faecal consistency score during week 1 than other treatments but diet had no effect on the score during weeks 2 and 3.

Diets had no effect on the colon lactic acid bacterial counts. However, the PC diet had decreased (P<0.05) colon E. coli counts than other treatments.

Ileum and colon digesta pH and total volatile fatty acid concentrations did not differ among treatments. Pigs fed with 7 and 14 per cent RPS diets had greater (P<0.05) ileum ammonia-nitrogen concentration than pigs fed with other diets.

There was more diarrhoea (P<0.05) in the 14% RPS than 7% RPS and control treatments at day 21. This difference correlated with a decline (P<0.05) in microbial diversity in the colon.

The researchers concluded that 7 per cent RPS can be used to prevent post-weaning diarrhoea in weaned piglets but there are no effects on growth performance.

Reference
Bhandari, S.K, C.M. Nyachoti and D.O. Krause. 2009. Raw potato starch in weaned pig diets and its influence on post weaning scours and the molecular microbial ecology of the digestive tract. J. Anim Sci. 2009. 87:984-993. doi:10.2527/jas.2007-0747.

, March 03, 2009Print This Page
Gov't Responds to Saskatchewan Livestock Program
CANADA - The Canadian government has delivered more than C$1 billion to Saskatchewan pig producers over the last two years, according to Agriculture Minister, Gerry Ritz.



Mr Ritz said: "The Government of Saskatchewan raised this scheme at the federal-provincial meeting last month – every other province soundly rejected it. This kind of program cannot go forward without support from provincial governments."

He also added that other provinces rejected the scheme for good reason. Federal funding for this type of program would likely result in retaliation from trading partners, he said.

"The livestock industry has worked hard to open international markets and that hard work would be completely undone. Producers from Saskatchewan and across Canada could lose more money as markets slam shut than they would get from this kind of handout," Mr Ritz said.

"The Government of Canada is working hard for struggling livestock producers by making sure they have the cash flow they need to weather the current economic storms and by opening marketing opportunities around the world," he said.

Wednesday, March 04, 2009Print This Page
New Hog Assembly Yard Being Planned
CANADA - Manitoba Pork Marketing Co-op expects to begin the construction of a new hog assembly yard near Stonewall this spring, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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Until July 2008, when Manitoba Pork Marketing decommissioned its Marion Street assembly yard, hogs were assembled in Winnipeg.

The cooperative currently operates assembly yards at Neepawa and New Bothwell and is planning a third facility in the Stonewall area around the Perimeter Highway and Number 6 highway at Winnipeg Livestock.

Co-op CEO Perry Mohr recalls there were half a dozen packing plants in Winnipeg 25 years ago but now there are none and Brandon has become hog central.

Perry Mohr-Manitoba Pork Marketing
There is a void that needs to be filled in this Winnipeg area.

We've presently got producers that are hauling their pigs all the way from the Interlake area down into New Bothwell to be assembled so they're paying freight to go to New Bothwell and then they're paying freight from New Bothwell to other destinations as well and in some cases they're back-tracking.

We also have participated in the sow assembly business for as long as I have been involved in the industry.

The volumes are certainly large enough.

It's also a revenue opportunity and a service opportunity for the co-op.

If you look at that particular area there's a Hutterite demographic there that's quite densely populated with Hutterites and we're hoping to capture some of the cull market as well with that facility out at Stonewall.

Mohr says the co-op received engineered blueprints last week, the work is being tendered now and delegates will make a final decision on the project the their annual meeting in April.

He hopes to see construction in begin in the spring and the facility fully operational by mid-summer.

Thursday, March 05, 2009Print This Page
Animal Rights Activists May Mislead Consumers
CANADA - A Washington, D.C. based communications specialist warns the growing disconnection of the urban population from the farm leaves the majority vulnerable to the strategies used by animal rights activists, writes Bruce Cochrane.





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Production agriculture has become the target of animals rights activists who have been extremely successful in capturing the attention of the public and bringing about legislative restrictions on livestock producers.

Dan Murphy, a communications specialist with Outsource Marketing, says we now have a population where the majority of people are disconnected from what goes on in producing our food and are more easily swayed by myth, misconception and misinformation.

Dan Murphy-Outsource Marketing
Most people have never been to a hog production facility, never been to a feed lot, never understood what it takes to manage farm animals and food animals efficiently.

It's easy to use visual images, pirated underground videos and other tools that these activist groups are so good at getting to create the idea that production agriculture is one giant circle of abuse, that animals are mistreated from birth through death.

When the images are so graphic and so powerful to people who don't have the background in what life is like on a farm, it's very easy for them to buy into this myth that, if you care about animals, you need to stop eating meat, you need to put a stop to the production of livestock and you need to change the way you think about production agriculture.

Murphy suggests farmers need to adopt some of the same strategies these opponents of agriculture have been so gifted at using.

He says dealing with consumers on an emotional level will open the door to talk about the science but, until you connect with something people care about, all of the science in the world wont make a dent in how people perceive and how they think about production agriculture.

Monday, March 09, 2009Print This Page
Canada to Re-Instate WTO Challenge to COOL
CANADA - The federal agriculture minister says Canada is prepared to resurrect its World Trade Organization challenge to US Mandatory Country of Origin Labelling rules once such action becomes necessary, writes Bruce Cochrane.





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Following the mid-January release of the final rule for US Mandatory Country of Origin Labelling the government of Canada shelved its request for formal consultations with the US over the legislation under the World Trade Organization dispute setting mechanism.

In the wake of United States agriculture secretary Tom Vilsack's subsequent request for additional voluntary labelling measures, that go beyond the requirements outlined in the final rule, several Canadian agricultural organizations have called on Ottawa to re-initiate that challenge.

Agriculture minister Gerry Ritz acknowledges comments regarding additional "voluntary labelling" are causing uncertainty and concern for livestock industries on both sides of the border.

Gerry Ritz-Canadian Agriculture Minister
What we've asked industry to do is give us some quantifiable results showing where contracts have been denied, they haven't been fulfilled.

We're starting to see huge differentials, more so than historical differentials in the value of Canadian beef as opposed to US beef.

There is always some but we're seeing that scale widen.

We are starting to get quite a number of those types of things happening.

Of course here in Manitoba it's all about weanling pork and we're seeing those results.

We are in, as I said, constant contact with Vilsack's office.

I know my office was in discussions with his, I am lining up face to face meetings with secretary Vilsack just as soon as I can possibly get away from a minority government situation as we have and will continue discussions.

At the same time we are more than ready to move forward with the WTO challenge to the next steps.

Mr Ritz says the agriculture secretary's request for voluntary labelling measures is causing more anxiety than even he thought it might.

He notes, having said that, Canada's challenge is idling at the curb waiting to go and will move forward when the time is right

Tuesday, March 10, 2009Print This Page
Multiple Labels Appearing in US Grocery Stores
CANADA - A three state survey has shown a variety of Country of Origin Labels are appearing on pork and beef products in US grocery stores in response to new US Mandatory Country of Origin Labelling regulations, writes Bruce Cochrane.





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To assess the response of US meat packers and retailers to new US Mandatory Country of Origin Labelling, representatives of Manitoba Pork Council visited five grocery stores in Minnesota, South Dakota and North Dakota to see what labels are being used and to survey US Consumers.

Manitoba Pork Council Chairman Karl Kynoch reports the five stores that were checked were carrying a variety of labels.

Karl Kynoch-Manitoba Pork Council
Out of the five major stores we did find labels that said product of US

There was strait product of the US both in pork and beef and then in the pork also there was labels that said product of US and Canada and then in the beef side they had labels there that also said product of US Canada Mexico.
So the one thing we found out is that all three labels are showing up in the stores in the US so that was very interesting to see that the majority of packers are actually already doing the joint labelling.

But at the same time when we were in the stores, we kind of hung around to see some of the consumers that were shopping for the product and one of the questions that we asked consumers when we saw them was what do they base their buying decisions on.

And basically number one was price.

They're looking for price.

They're also looking for a dependable company.

If they were comfortable buying Hormel product, they kind of stuck with that.

Also quality was another thing that came up.

But the one thing that did not come up from all of the consumers that we talked to was the country that the product comes from.

When we would prompt them about that, about the only thing they would say is, well yea I guess that's important but, when we talked to them about Canada, there was not one consumer that had any concern with product coming out of Canada.

Mr Kynoch says, while it appears the stores have no problem carrying Canadian product, at the end of the day it will depend on whether the stores want to continue to carry it and whether the packers want to continue to use two or three different labels.

Tuesday, March 10, 2009Print This Page
New Production Technologies Improve DDGS Quality
CANADA - Researchers with the University of Manitoba are finding new technologies for producing ethanol from grain results in higher quality co-products, writes Bruce Cochrane.


University news is a Wonderworks Canada Production courtesy of the Faculty of Agriculture and Food Sciences at the University of Manitoba.
Visit us at www.universitynews.org 
A multi-disciplinary research effort at the University of Manitoba is developing new lines of winter wheat, assessing the value of those lines in producing ethanol and evaluating the co-products for use in swine, poultry and cattle rations and in human food.

Dr. Karin Wittenberg, the associate dean of research with the University of Manitoba's Faculty of Agricultural and Food Sciences, reports distillers dried grains with solubles, the co-product of ethanol production, contains high levels of protein, fibre, minerals and vitamins and can be an excellent feed or food ingredient.

Dr. Karin Wittenberg-Dr. Karin Wittenberg
The distillers dried grains that are the co-product have fairly high protein levels, they have a fairly good amino acid profile, they have the same fibres, oils, minerals and vitamins except in a more concentrated form than in the existing grain and so they provide excellent opportunity to supplement diets for animals.

Dried distillers grains have been around forever.

Distilleries which basically all take starches, whether it's from corn or wheat or rye, to produce various alcohols have these co-products.

What's different today is that we have newer processing technologies being used in our plants, in many ways better processing technologies from the perspective of the quality of the dried distillers grains that are being produced and so we have more opportunities today to utilize these co-products in animal diets than in years gone by and we're really just trying to optimize that.

Dr. Wittenberg says researchers are finding the nutritional value of these new generation co-products are superior to what was being produced at some of the older plants in western Canada.

Friday, March 13, 2009Print This Page
Lost Access to Pigs Threatens US Industries
CANADA - US pork producers who rely on Canadian origin pigs fear their industry and their livelihoods will be devastated if they lose access to those pigs, writes Bruce Cochrane.





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Calls for additional measures that go beyond those required by the final rule for Mandatory Country of Origin Labelling, scheduled to take effect 16 March, have heightened fears that US processing plants will no longer kill Canadian origin pigs.

Jim Lynott, with Premier Swine at Hawarden, Iowa, runs about 20 thousand finishing spaces under contract with Saskatchewan based Big Sky Farms.

He says, in excess of two thousand finishing buildings in southwest Minnesota and western Iowa currently handle Canadian pigs and will be left empty if they lose access to those pigs.

Jim Lynott-Premier Swine
Domestic production of weanling pigs and feeder pigs is far below what would be necessary to fill all of the barns that are currently being utilized by Canadian pigs.

As we go forward here I'm sure there will be a kill-out period of six months where these pigs will be marketed away at what ever value can be gotten out of them.

Past that point, we'll have a lot of buildings standing empty which probably the most concerning thing to a lot of people in the particular area that we are in because of the fact that Canadian pigs are such an important part of the hog business in northwest Iowa, southwest Minnesota.

With barns standing empty, a lot of folks out here that are highly leveraged against these barns, there will be a number of them that will turn the barns back over their lenders, forced sales that will greatly devalue these barns.

It could be as devastating here to the swine industry as what the housing debacle in this country has been to the home lenders.

Lynott is confident there are enough US packing plants willing to accept Canadian origin pigs under the law as it currently stands to allow business to continue.

He says the additional voluntary measures are what need to be shelved.

Tuesday, March 17, 2009Print This Page
Reduced Access to Pigs Threatens US Pork Exports
CANADA - A Minnesota-based pork industry service company fears the loss of access to Canadian born pigs by US producers will disrupt American pork exports, according to Bruce Cochrane.





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The Final Rule for US Mandatory Country of Origin Labelling (M-COOL) took effect yesterday, however Agriculture Secretary Tom Vilsack has requested additional voluntary labelling measures.

Jesse Hooge, the director of business development with Worthington , Minnesota based ProPig says US packers are already not happy about having to provide multiple labels and additional regulations could make them decide to go with US born and raised only.

Jesse Hooge-ProPig
We have a large number of barns that we are contracted to that we're bringing pigs into from Canadian customers and there's a real risk that once we bring these pigs into these barns that there isn't going to be a place to market the animals.

Country of origin Labelling has essentially restricted what the packers are willing to do in regards to taking whether it be an A label pig or a B label pig or a C label pig.

From the packing capacity side of things, I think the number is eight per cent of the kill capacity comes from Canada currently.

We've seen a drastic reduction in the production as it is in our area, whether it be local farrowers being out of business or the number of open barns that were being filled by Canadian producers coming down.

With the industry where it is and our export business being strong, I personally believe are going to be at risk of whether or not they can fulfill contracts and be able to keep their export market to where it is.

A lot of the hope for the future in this who thing has come from our export markets and the realization that we are a world economy and that the US has become a primary producer of pork for the world.

Mr Hooge believes the current law offer flexibility and will allow the opportunity for pigs from Canada to be raised in the United States, slaughtered and marketed.

He says something needs to be done in regards to further voluntary actions.

Wednesday, March 18, 2009Print This Page
Canadian Pork Plant Approved to Export to EU
CANADA - The Canadian Pork Council is applauding approval of a Quebec based hog slaughter and pork cutting facility as Canada’s first integrated pork processing plant to be granted approval for the export of pork products to the European Union, writes Bruce Cochrane.





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Quebec based Les Aliments Lucyporc has become the first Canadian pork processor to have an integrated pork processing plant granted approval for the export of pork products to the European Union under a veterinary protocol signed a couple of years ago which outlines conditions for the two to ship pork into each other's jurisdictions.

Canadian Pork Council executive director Martin Rice notes the EU represents a market of 500 million people.

Martin Rice-Canadian Pork Council
With Country of Origin Labelling we've been really confronted with serious uncertainty over the United States as the market that we've had over decades being our primary market.

Country of Origin Labelling is causing the US processors to doubt whether they can buy Canadian pigs.

Some have said they won't, some have been ready to take them, but at a discount.

While we are not giving up entirely on that trade, there's definitely been a serious dent in what has been, under NAFTA, an open trade situation so we really do need export alternatives.

We have tremendously lessened our dependence on the US for our pork exports over the years.

We once exported probably 80 per cent of our pork to the United States.

Now that's down to well under 40 per cent, even close to 30.

However we do have this large number of pigs that are currently exported to the US and, if we are going to be able to keep them at home, give economic alternative for those pigs to be finished in Canada, we're going to need additional export markets.

In addition we've been importing pork from the European Union for many years so I think it's just important to have a more equitable trade relationship than what we're used to.

Mr Rice is confident other Canadian plants will be approved for exporting pork to the EU.

Thursday, March 19, 2009Print This Page
Canadian Gov't Improves Program for Hog Farmers
CANADA - The Government of Canada is extending its support for hog farmers who have downsized their herds to cope with tough economic times.



Federal Agriculture Minister Gerry Ritz yesterday announced that the time period covered by the Cull Breeding Swine Program has been extended, which will provide more assistance to farmers.

"This Government continues to work with Canadian pork producers to make sure they can weather this global economic storm," said Minister Ritz. "Some pork producers made tough business decisions to reduce their herds before this program started. We're changing the program to make sure those producers get the support they deserve."

"This Government will always stand up for Canadian pork producers, especially when they are going through difficult times," said the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture). "When producers ask us to improve programs, we will continue to work with them to make the changes they need."

The $50 million Cull Breeding Swine Program was announced in February 2008, with the objective of reducing the national breeding herd size by up to 10 per cent.

According to Msnbc, key components of the program are as follows:

Producers are eligible to receive a per head payment for each animal slaughtered, as well as reimbursement for slaughter and disposal costs.


Producers must agree to empty at least one barn, and not to restock for a three year period.


Animals must be slaughtered in a humane manner and disposed of in compliance with jurisdictional environmental requirements.
Originally, claims for culled breeding swine were covered between 1 November 2007 and 30 November 2008. The initial date has now been changed to include breeding swine culled between 1 August 2007 and 31 October 2007. Producers have until 30 June to make claims for breeding swine culled during this period. The program is delivered by the Canadian Pork Council.

Friday, March 20, 2009Print This Page
Looking to Europe for New Export Opportunities
CANADA - Canada Pork International is hoping the approval of a Quebec based pork processor to export products to the European Union will create interest among other companies in targeting that market, writes Bruce Cochrane.





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Earlier this week Montreal based Lucyporc's Yamachiche, Quebec hog slaughter and pork cutting plant was granted approval to export pork products to the European Union.

Canada Pork International assistant executive director Martin Lavoie says, while the approval process had been in place, it became less onerous with the 2005 signing of an equivalency agreement between Canada and the EU which allows the two regions to recognize each others pork processing facilities.

Martin Lavoie-Canada Pork International
Plants that want to export to the EU have to meet Canadian standards plus a series of additional conditions to export to the EU.

Among them the main one is to have no carton in the cutting room.

There is also the use of plastic skids instead of wood skids in the plan, actually in the area where the meat is exposed.

Since Ractopamine has been allowed in Canada, any company that is interested in exporting to the European Union has to get the "Paylean Free" segregation protocol.

I think that, with some potential opening with the WTO negotiations, the future is brighter than it was before.

If you look at our competitors, it's just in the last two years that the US and Chile have made significant use of the TRQ's (Tariff Rate Quotas) available in Europe.

Mr Lavoie notes the EU is a huge high value market.

He says hopefully, in the future, we'll see interest among other Canadian companies in targeting the European Union.

Monday, March 23, 2009Print This Page
Extension of Cull Breeding Swine Program Applauded
CANADA - The Canadian Pork Council is applauding a three month extension of the retroactive portion of the Federal Cull Breeding Swine Program, writes Bruce Cochrane.





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The Cull Breeding Swine Program, which targeted a ten per cent reduction of the national breeding herd, offered payments to producers who agreed to depopulate barns and leave them empty of breeding stock for a minimum of three years.

Originally animals culled between 1 November 2007 and 30 November 2008 were eligible but last week agriculture minister Gerry Ritz announced the retroactive portion is being extended to also include breeding swine culled between 1 August 2007 and 31 October 2007.

Canadian Pork Council public relations manager Gary Stordy says the extension will help those who began their culls early.

Gary Stordy-Canadian Pork Council
During the roll-out of this particular program we received feedback from producers from across Canada that they actually started reducing their herd size prior to the start date of 1 November.

The reason for that is we are a fairly large nation with pork production across Canada and, in some areas of Canada, they were feeling the economic impacts a lot earlier than other regions.

So we did put in a request to the minister about just background and some of the information we were receiving and he accepted and followed through and worked hard to have this particular program made retroactive to 1 August 2007 so it will help out a number of producers who have reduced their herd size prior to the original program.

Mr Stordy expects revised program details and application forms to be available within the next month and he encourages producers to begin assembling the information, such as shipping manifests, billings and payment receipts that will need to accompany the applications.

Tuesday, March 31, 2009Print This Page
Ottawa Commits Funding to Fight Swine Disease
CANADA - The federal government has unveiled phase two of national initiative to help pork producers combat disease and provide stability for Canada's swine sector, writes Bruce Cochrane.





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In the fall of 2007 Ottawa unveiled plans for a multi-phase program to help hog producers deal with disease, particularly Porcine Circovirus Associated Diseases.

Phase one, which is nearing completion, included the creation of a program to assist in the identification and mitigation of PCVAD to help off-set some of the costs of diagnostic fees and vaccines.

Phase two was unveiled yesterday.

Parliamentary secretary for agriculture Pierre Lemieux says this initiative shows Canada takes animal health very seriously.

Pierre Lemieux-Government of Canada
We're talking about 76 million dollars rolled out in three phases. We've already delivered 25 million dollars which was a great help to our pork producers.

It basically halved the cost of administering the necessary vaccine to their pork herds.

Now that we're moving into phase two, we're announcing 40 million dollars over two years to basically develop and implement biosecurity best management practices.

That's a lot of words but what we want to do is basically study and understand better how the circovirus is showing up in these swine herds, what kind of things can be done to mitigate the spread, to mitigate the risk and what sorts of best practices can we implement and can pork producers implement to help prevent against the spreading of the circovirus.

It would be financially beneficial to pork producers if they did not have to vaccinate their herds at all.

So this is looking at ways to basically diminish the impact of the circovirus.

Lemieux says the Conservative government has a solid track record of listening to farmers and delivering real solutions and that's what's happening here.

Tuesday, March 31, 2009Print This Page
Gov't Helps Farmers by Investing in Health of Hogs
CANADA - The Government of Canada is helping hog farmers by investing in an initiative to combat disease and provide stability for the sector.



Parliamentary Secretary for Agriculture Pierre Lemieux and MP Gary Schellenberger (Perth-Wellington) yesterday announced a federal investment in the hog industry to develop and implement biosecurity best management practices, research projects and long-term disease risk management solutions.

"Canada’s hog industry has been severely affected by diseases, but I’m proud to say this Conservative Government has shown strong support for the sector in addressing this serious issue," said Mr. Lemieux, who made the announcement on behalf of Federal Agriculture Minister Gerry Ritz.

"Over the next few years, hog farmers in this great riding and across Canada will benefit from healthier herds and a more competitive and profitable industry," said Mr. Schellenberger. "These are the types of smart investments our Government is making that will help the industry come out of these difficult economic times stronger than ever."

In order to assist the hog industry in addressing mid- to long-term aspects of disease risk management, phase two of this $76 million four-year initiative, that was announced in August 2007, will see nearly $40 million invested in the following activities:

Creation of a national standard of biosecurity best management practices for the hog industry targeting the containment or eradication of Porcine Circovirus Associated Diseases (PCVAD);
Research projects and coordination of the reporting of research related to PCVAD and other emerging diseases within the Canadian hog herd; and
Establishment of long-term risk management solutions for the hog industry.
"I would like to thank Minister Gerry Ritz for his commitment to address swine health issues and working in partnership with our industry," said Canadian Swine Health Board Chair Florian Possberg. "The Canadian hog sector was dramatically impacted by Porcine Circovirus Associated Diseases; this initiative will serve to further improve the capability of the industry to react swiftly to emerging animal health challenges."

Phase two follows a very successful phase one, which is nearing completion and included the creation of the Circovirus Inoculation Program (CIP). Through CIP, eligible producers received financial assistance towards the identification and mitigation of PCVAD to help off-set some of the costs of diagnostic fees and vaccines.

The federal government has worked closely with the hog industry through the Canadian Pork Council and the veterinary community to develop the program details for these initiatives.

"For our producers, there is the ever-present threat of foreign animal disease outbreak and present-day animal health challenges and today’s announcement responds to the urgent need to make sure the right tools are available to keep diseases from affecting the Canadian swine population," said Jurgen Preugschas, Chair of the Canadian Pork Council.

Thursday, April 02, 2009Print This Page
Boosting Agri-food Profitabilty and Innovation
CANADA - Ontario's agri-food sector will be more innovative, responsive and profitable as a result of a five-year, up to $300-million investment by Ontario and the Government of Canada under Growing Forward.



The Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, and the Honourable Leona Dombrowsky, Ontario Minister of Agriculture, Food and Rural Affairs, today announced new Growing Forward programs for the sector. The federal-provincial agreement outlining details of the program in Ontario has been signed.

Industry participants were consulted extensively on which programs should be available under the Growing Forward initiative in Ontario. As a result, programming focuses on two areas: Best Practices and Innovation and Science. Best Practices helps improve performance in four key areas: environment and climate change; food safety and traceability; business development; and biosecurity. Innovation and science programs will encourage and support ongoing research and the commercialization of research.

"I am very proud we have reached an agreement with Ontario. For Ontario producers, this is truly a momentous occasion. Growing Forward programs will deliver real results for farmers and their families and place greater emphasis on profitability and innovation," said Gerry Ritz, Federal Minister of Agriculture and Agri-Food.

"Growing Forward reflects the needs of our agri-food industry. It puts emphasis on building a profitable sector through investment in innovation, a flexible approach to meet individual business needs and more partnerships with industry," Leona Dombrowsky, Ontario Minister of Agriculture, Food and Rural Affairs, said.

Friday, April 03, 2009Print This Page
Canadian Government Ignores Animal Welfare
OTTAWA, CANADA - A report released today by the Canadian Federation of Humane Societies (CFHS) illustrates just how far behind Canada is of countries like Australia, New Zealand, the United Kingdom and the European Union.



All of these jurisdictions have invested millions of dollars in recent years to address animal welfare. In stark contrast, "Agriculture and Agri-Food Canada (AAFC) launches a five-year plan that basically ignores farm animal welfare", says the welfare group.

"The Minister of Agriculture has shown no interest in taking any leadership on animal welfare in Canada", states Shelagh MacDonald, CFHS Program Director. "It's rather unbelievable that the Canadian government is so out of step with the rest of the world on this issue. Throughout the Growing Forward consultation process, animal welfare has been ignored, resulting in a framework that includes no provision, strategy nor plan to fund animal welfare."

Other countries have comprehensive animal welfare strategies specifically aimed at ensuring high standards of animal welfare. They also have permanent and state-funded animal welfare advisory committees that provide counsel to government.

The Canadian government funded the formation and first two years of operation of the National Farm Animal Care Council (NFACC), which provides a national coordinated approach promoting responsible farm animal care in Canada. But it has refused to provide even $100,000 per year to support this rather modest animal care initiative.

Recently, the Canadian Veterinary Medical Association (CVMA) urged Agriculture Minister Gerry Ritz and his government to take action on NFACC funding.

"At a minimum, the Canadian government needs to provide sustainable funding for NFACC through the Growing Forward initiative," explains Dr. Terry Whiting, Chair, CVMA Animal Welfare Committee. "This would aid in further development of livestock Codes of Practice and enhance Canadian livestock welfare."

There are also increasing market and trade implications of animal welfare around the world and Canada will be left behind if our government doesn't take action now.

"Canadians have repeatedly shown that they care about the welfare of animals", stated Ms. MacDonald. "They should be appalled to learn that Canada lags so far behind many other countries and that our Agriculture Minister has no plans to remedy this."

Friday, April 03, 2009Print This Page
Research: DDGS Offers Potential in Swine Rations
CANADA - Research underway at the University of Manitoba suggests dried distillers grains with solubles have the potential to play an important role in swine nutrition, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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Scientists with the University of Manitoba are evaluating lines of winter wheat from plant development to end use for ethanol production and complimentary cattle, swine and poultry feeding operations.

As part of the project dried distillers grain with solubles samples from different ethanol processing plants are being evaluated for nutrient composition and availability in animal diets and assessed in feeding trials.

Dr. Martin Nyachoti, who is overseeing the swine research, says characterizing the digestibility of nutrients and making that data available will allow nutritionists to formulate rations more accurately.

Dr. Martin Nyachoti-University of Manitoba
When you ferment grains to produce ethanol, you tend to concentrate some of the nutrients that are contained in these grains so that you tend to have an increase in the magnitude of three times what the levels were in the original grains.

For example they have fairly high levels of phosphorus and that phosphorus, we think that it's a lot more available than it is in the original grains.

So they are likely to become a very good source of phosphorus in the diets.

They also have very high levels of protein and the amino acids that are critical for proper performance of pigs so we think that it will also make a significant contribution to the protein content and they may also be a good source of energy in swine rations.

But we need to look at that, particularly considering that DDGS, they do also have very high levels of fibre compared to the original grains.

Dr. Nyachoti explains fibre dilutes the nutritive value of ingredients so, for example, DDGS can not be fed in high amounts to very young pigs because they will not be able to extract the nutrients efficiently.

Monday, April 06, 2009Print This Page
Input on Action to Prevent Swine Disease
CANADA - The Western College of Veterinary Medicine in Saskatoon is encouraging swine producers to consider their priorities as the pork industry plans action to step up the defense again swine disease, writes Bruce Cochrane.





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Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
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Last week Ottawa unveiled a two year 40 million dollar initiative that will include creating national standards for biosecurity best management, research related to porcine circovirus associated diseases and other emerging diseases and establishing long-term risk management strategies.

A national conference is also being planned for July to outline strategy.

Western College of Veterinary Medicine associate professor Dr. John Harding says producers need to be thinking about what questions they want answered.

Dr. John Harding-Western College of Veterinary Medicine
Obviously 40 million dollars is a lot of money.

The two year time frame is extremely tight and, if we don't have a clear focus on what we want to accomplish with the money, then we risk it really being spent frivolously on things without long term benefit for the industry.

I think in anticipation of this meeting July where we hope that strategic priorities will determined, I think we need a good understanding of what research is being done today at the industry as well as where we truly need to focus in the future.

What we are hoping is that the 40 million does not get spent specifically on circovirus because we have it under control for the most part in the industry with the use of vaccine but we want to make sure we have a much longer term vision and that we have end points that are measurable and truly something to be proud of after the money is spent.

Dr. Harding says, whether the result of intensification or the normal evolution of pathogens, we can anticipate new novel diseases will emerge.

He believes we have to prepare for new disease threats and have researchers in place to get on top of them before they spread throughout the industry.

Tuesday, April 14, 2009Print This Page
Pork Commentary: Now or Never for Market Move
CANADA - This weeks North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
It's approaching 15 April and if there is going to be a major market move it better be soon. We expect this week and coming weeks the Iowa - Southern Minnesota lean price will increase an average of $4-5 a week. Last Friday Iowa - Minnesota averaged $54.67. Our position on hog supply appears to be line as last week the USA marketed 2.129 million down 135,000 head (-5 per cent) from the same week a year ago. We expect an approximate 5 per cent decline year over year in marketings to continue through the summer.

Other Observations
The number of Hogs and Pigs coming from Canada to the USA is way down year to date, down almost one million head. Now a new dynamic is getting in play – feed costs. Canadian Producers who finish in both Canada and the USA are telling us there was a $10.00 per head feed cost advantage to finish in the USA six months ago. Now the pendulum has swung and now there is about a $15.00 per head feed finishing advantage in Western Canada compared to the USA. This obviously will encourage small pigs to stay in Canada.


USA Pork Exports were down 8.2 per cent in February from February a year ago. The December, January, and February average is down 3 per cent from a year ago. February pork exports are up in Japan 17.1 per cent, Mexico 53.4 per cent, Taiwan 126.8 per cent, and Australia 77.4 per cent. Pork exports are down to Canada -10.2 per cent, E.U.27 -67.3 per cent, China -68.6 per cent, Korea -17.7 per cent, and Russia -37.8 per cent. We expect USA pork exports will be slightly lower than a year ago, going forward. Obviously with lower pork production there will be less pork to export. High hog prices in the rest of the world will continue to push pork into their countries.


Canadian Packers are benefitting by a lower Canadian dollar in their cost structure. A decrease of relative cost competitiveness of 25 per cent (exchange rate change) compared to USA packers is embodying then to be more aggressiveness in World Export markets. USA Country Of Origin Labeling and overall costs are keeping pigs in Canada which will make Canada shackles full. At the end of 2009 we expect the USA’s decrease in pork exports will be significantly balanced by Canada’s increase in pork exports. A cause and effect of USA Country Of Origin Labeling.


We do not get much sense of new sow units being planned for construction in 2009(there are some that are being finished that were started in 2008). The economics of the hog industry is brutal. Losses continue with Iowa – Minnesota at 54.67 last Friday we expect many are losing in the $30 per head range. It’s a war of attrition. We believe the industry in Canada – USA is losing net 6-7000 sows per week as producers cut back, quit, or are forced out.


Try to get funding for a new sow unit will be really, really hard. Equity levels needed will be significant. In our estimation, part of the damage to our industry goes beyond the $20 - $30 per head losses we have experienced. The other aspect is the decrease in value on barns and equipment. Sow units are selling or are being valued at a big discount to new. Which is obviously a reflection of their capacity or lack of to make positive returns. If 7.5 million Canada – USA sows of capacity has decreased by $500 per sow. That’s $3.75 billion in lowered market value. It’s one of the reasons producers hang on. There is no exit strategy that works. You’re either dead (out of business), or alive (in business). To find a buyer for your sow farm is near impossible at anything but a huge discount. So for most of us it means soldier on. We have little choices. As one producer explained, it’s the Black Bear Theory. It goes like this, “You and I are in the woods. We come upon a Black Bear. Bear chases us. I don’t have to run faster than the bear. I just have to run faster than you.” Welcome to the Darwinian world of hog production.
Summary
We are optimistic in the near future as we see rapid hog price appreciation coming. USA pork production will be down year over 20 million pounds per week (it was last week). USA chicks placed a week ago were down 14 million chicks from a year ago. USA cattle on feed down 5 per cent. There will be less of all meats, the last time that poultry, beef, and pork were down was during the recession of 1975. In 1975 hogs averaged 47.10 liveweight and prior to the 1973-1975 recession the highest price USA hogs ever achieved for a year was $24.80 average. It was over forty years ago that all meat protein sources were down at one time. We are in mostly unchartered waters. We believe the dynamics of less total meat availability and the pull of global meat demand will push lean hog prices to profitable levels by mid – May. It is soon.


Author: Jim Long, President & CEO, Genesus Genetics 

Thursday, April 23, 2009Print This Page
Substantial Run-Up in Hog Prices Projected
CANADA - The Manitoba Pork Marketing Cooperative is predicting a substantial run-up in live hog prices over the next few weeks, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Over the past two to three years a combination of factors ranging from excess hog numbers to high feed costs to the high Canadian dollar followed by the global economic melt down and US Country of Origin Labelling have eroded the profitability of Canadian pork producers.

Manitoba Pork Marketing Co-op CEO Perry Mohr says the stars have been lining up for a significant increase as hog supplies decline heading toward summer.

Perry Mohr-Manitoba Pork Marketing Cooperative
The world economic challenges have probably influenced the up-side potential of that run-up but we do expect, probably over the course of the next three to four weeks, to see hog prices jump anywhere from 20 to 40 dollars 100 kilograms maybe even for a week or two, compared to where we are today, it might be 50 dollars per 100 kilograms higher.

What are the factors involved with that?

Quite honestly reduced hog supply in the United States.

The reduction has been exacerbated by the fact that there's fewer Canadian butcher hogs and fewer Canadian weanlings going down there.

The Canadian dollar has relaxed.

It's been bouncing between 79 and 81 cents for the last little while.

That's going to add 20 to 25 dollars to the equation as compared to where it was a year ago when it was a buck or 1.10 or par.

We've had some good things happen.

Just from a cost of production standpoint we've seen feed prices lowered considerably.

Of course that could change depending on planting conditions etceteras.

I think hog producers will get into some profitable months this summer.

How long it will last, I'm hoping it'll last into September and I'm hoping when we typically see hog prices go down in the fall that they won't go down as far as they typically do.

Mr Mohr says, after three years of negative returns, producers need a sustained period of profitability.

Wednesday, April 22, 2009Print This Page
Pork Commentary: Hog Markets on Launching Pads?
CANADA - This weeks North American Pork Commentary from Jim Long.
Jim Long is President &
CEO of Genesus Genetics.
Friday to Friday, the Iowa – Minnesota lean hog price went from $54.61 to $59.61, up $5.00. That would be an increase of about $10.00 per head in one week. It’s what we need – the hog price has to start rolling. We expect the price to relentlessly move higher in the coming weeks.

USA Pork Exports Up?
February USA pork export were up year over year. 4.7 per cent in value. Good for supply of demand isn’t it. The total value of the USA pork exports in February were valued at $368.2 million. Pork plus variety meat exports of 158,471 metric tonnes (349.3 million pounds) was 57 per cent higher than February two years ago. Isn’t it interesting the doom sayers who have continually told us pork exports will drop significantly due to the lack of demand because of the global recession. Thankfully, they continue to be wrong. We have repeatedly expressed the opinion that USA pork exports would hold close to a year ago. We have based this on the higher price of hogs – up to 200 per cent higher, we see in most countries that import pork. We expect pork exports to hold relative to a year ago as liquidation in other parts of the world ( Mexico, European Union, Brazil, Australia, Japan, South Korea, etc...) will continue to keep their domestic hog prices high an pull in USA pork.

Total Meat and Poultry
We remain optimistic that we are going to see hog prices appreciably higher than the current lean hog futures indicate. One of the reasons is the decline in all meats and poultry production in the USA.

Latest Weekly Data (million Pounds)
  2009 2008 Difference
Pork 434.9 453.2 -18.3
Beef 473.1 500.3 -27.2
Chicken 844.9 925.5 -80.6
Turkey 132.2 136.6 -4.4
Total 1,885.1 2,015.6 -130.5

130.5 million pounds less meat and poultry per week than a year ago. That’s about 3,500 tractor trailers of meat protein. Give or take a line back to back of tractor trailers 40 miles long. That’s a lot of meat! The last year beef, pork, chicken, and turkey production was down year over year at the same time was 1975. 49 years ago. The hog price in 1975 set a record high (1975 was also a time of economic recession).

We are in unchartered waters. Global hog prices remain high. USA pork exports remain good (higher in February than the year before). All poultry and meat supply is down. The only way to ration limited supply is higher prices. Hang on, we believe the market is on the launching pad.

Eagle Creek Grand Opening


Mike Van Schepdael, V.P. and Jim Long, President-CEO of Genesus present an Award to Evergreen - Eagle Creek for weaning over 30 pigs per sow per year in 2008.

Nedap Feeding StationsWe had the honor to speak at the open house of a new Genesus multiplier last week. The new facility built in Manitoba by Evergreen Colony – a twenty year Genesus customer is called Eagle Creek. The new Eagle Creek facility in our estimation is one of the most advanced swine facilities in the world.

Author: Jim Long, President & CEO, Genesus Genetics 

Tuesday, April 28, 2009Print This Page
Vigilance Advocated for Protection Against Swine Flu
CANADA - The Western College of Veterinary Medicine is calling for vigilance to minimize the risk of Canada's swine herd becoming infected by a human form swine flu, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
An outbreak of an H1N1 strain of swine influenza A in humans, which has spread throughout Mexico, is being blamed for over 100 deaths.

Cases have also been reported in the United States and Canada resulting in mild illness.

Western College of Veterinary Medicine Associate Professor Dr. John Harding says ironically, while we call it swine flu, this particular strain is not affecting pigs at this time but pigs are susceptible so veterinarians and producers must be vigilant in trying to prevent herds from being infected.

Dr. John Harding-Western College of Veterinary Medicine
Symptoms in humans are typical of the seasonal flues that may come, aches and pains, fever respiratory disease so anybody with those symptoms particularly if they've been in Mexico or have contact with other infected people need to be contacting their physician as soon as they possibly can.

In pigs it's also a respiratory disease.

Pigs will develop a fever.

We're not so sure about the aches and pains that humans would see but certainly we can see very severe clinical signs which is more typical of the classic H1N1 or we could see just more very subtle clinical signs, a few pigs coughing in a barn which is almost difficult to diagnose and distinguish from other pneumonias so I think producers need to be very vigilant that, if they see changes in the respiratory disease status on their farms, then they need to be calling their veterinarian.

Dr. Harding stresses pork is safe to consume for two reasons, we don't see high levels of influenza in meat or meat products and if you handle and cook your pork carefully and properly there is absolutely no risk.

Wednesday, April 29, 2009Print This Page
US and Canadian Hog Inventory Down Four Per Cent
US - This publication is a result of a joint effort by Statistics Canada and NASS to release the total hogs, breeding, market hogs, sows farrowed, and pig crop for both countries within one publication.

 

US and Canadian inventory of all hogs and pigs for March 2009 was 77.3 million head. This was down 4 per cent from March 2008 but up 1 per cent from March 2007. The breeding inventory, at 7.39 million head, was down 4 per cent from a year ago and down 1 per cent from last quarter. Market hog inventory, at 69.9 million head, was down 4 per cent from last year and down 2 per cent from last quarter. The pig crop, at 35.6 million head, was down 2 per cent from 2008 but up 3 per cent from 2007. Sows farrowed during this period totaled 3.73 million head, down 4 per cent from last year.

US inventory of all hogs and pigs on 1 March 2009 was 65.4 million head. This was down 3 per cent from 1 March 2008 and down 2 per cent from 1 December 2008. The breeding inventory, at 6.01 million head, was down 3 per cent from last year and down 1 per cent from the previous quarter. Market hog inventory, at 59.4 million head, was down 3 per cent from last year and down 2 per cent from last quarter. The pig crop, at 28.2 million head, was down 1 per cent from 2008 but up 7 per cent from 2007. Sows farrowed during this period totaled 2.98 million head, down 3 per cent from last year.

Canadian inventory of all hogs and pigs on 1 April 2009 was 11.9 million head. This was down 9 per cent from 1 April 2008 and down 19 per cent from 1 April 2007. The breeding inventory, at 1.38 million head, was down 6 per cent from last year and down 1 per cent from last quarter. Market hog inventory, at 10.5 million head, was down 9 per cent from last year and down 3 per cent from last quarter. The pig crop, at 7.37 million head, was down 7 per cent from 2008 and down 8 per cent from 2007. Sows farrowed during this period totaled 750,400 head, down 7 per cent from last year.

Thursday, April 30, 2009Print This Page
Maple Leaf Sees Sales Rise
Canadian meat processor Maple Leaf Foods saw sales for the first quarter increase by 6.3 per cent to C$1.3 billion compared to C$1.2 billion last year



This the company said reflected price increases and the benefit of favourable foreign currency changes on fresh meat sales.

Earnings from operations before restructuring and other related costs and other income and expenses fell by 4.5 per cent to C$31.6 million compared to C$33.1 million last year, as significant declines in packaged meat earnings were mitigated by benefits from the restructuring of pork processing and hog production operations and price increases across the bakery business.

"Results in the first quarter were overshadowed by depressed margins in our packaged meat operations, as we continue to recover from the major product recall last year," said Michael H. McCain, President and CEO.

"While volumes improved, which was our first priority, margins will take longer to restore. Our bakery businesses have largely rebounded from the commodity impacts of last year, and our protein restructuring is yielding ongoing benefits.

"Although we are in the midst of a deep global recession, our product portfolio delivers good value at reasonable prices. As our business has stabilised, we are now focused on sustaining the volume recovery, improving margins and realizing higher growth rates in our core categories."

Adjusted Operating Earnings in the Meat Products Group fell to C$11.4 million in the first quarter of 2009 compared to C$25.0 million last year.

Margins in packaged meat products were significantly lower than last year due to the impact of volume recovery efforts following last year’s product recall.

Higher raw material costs and the effect of foreign exchange on raw material costs could not be passed on in this environment of business recovery, and significant promotional costs were incurred to support volume recovery objectives.

Over the next several months, the Maple Leaf management will be implementing actions to restore margins, including appropriate price action, reducing internal costs and resuming more normalized investment in promotions.

In response to the economic recession, marketing and innovation activities are focused on shifting the product mix to offer consumers a greater variety of value propositions.

Earnings from fresh pork operations improved significantly in the first quarter, as the benefits from double shifting the pork processing plant in Brandon, Manitoba, the consolidation of ham boning operations and the closure of less efficient plants were realised

. A weaker Canadian dollar resulted in higher sales prices for fresh pork and increased earnings from international sales. In the first quarter, the Company announced that due to difficult credit markets, it has suspended actively marketing its pork processing business in Burlington, Ontario.

The sale process for this business is expected to resume when credit markets stabilise and an appropriate sale value can be realised. The business is profitable and contributed to cash flow and earnings for the quarter. Earnings from the Company’s poultry operations were consistent with last year.

Adjusted Operating Earnings for the Agribusiness Group in the first quarter of 2009 increased to C$2.1 million from a loss of C$2.8 million last year.

Results for the first quarter last year included $8.4 million in government support.

While earnings from by-products recycling operations were consistent with last year, results in hog production improved significantly due to lower production following the sale or exit of non-core operations in Ontario and Alberta.

Restructuring and simplification of the core operations in Manitoba resulted in operational improvements such as lower cycle times and improved feed efficiency and hog quality.


 

OTTAWA —  Pigs on a Canadian farm have been infected with the new swine flu virus — apparently by a farm worker back from Mexico — and are under quarantine, officials said Saturday. It is the first known case of pigs having the virus.

But officials quickly urged caution. Swine flu regularly causes outbreaks in pigs and the pigs do not pose a food safety risk, Dr. Brian Evans, executive vice president with the Canadian Food Inspection Agency, told a news conference.

The officials said the pigs in the province of Alberta were thought to be infected by a Canadian farm worker who recently visited Mexico and got sick after returning to Canada.

The traveler has recovered, and the estimated 200 sickened pigs are recovering as well, officials said. No pigs have died, and officials said they don't think the flu has spread beyond the farm.

Normally, detecting influenza in pigs would not generate a response from food safety officials, but the current circumstances are different with the international flu outbreak, Evans said.

"The chance that these pigs could transfer virus to a person is remote," he said, adding that he would have no issue eating pork from the infected pigs.

U.S. Agriculture Secretary Tom Vilsack said Canada has taken the necessary precautions to prevent the spread of the disease. He said there have been no reports of the virus in U.S. pigs and noted the sick Canadian swine have been quarantined.

The World Health Organization has insisted there is no evidence that pigs are passing the virus to humans, or that eating pork products poses an infection risk.

The U.N.'s Food and Agriculture and World Health Organization, along with the WTO and the World Organization for Animal Health, issued a joint statement Saturday saying there's no justification for any anti-pork trade measures as a result of the swine flu epidemic since there is no evidence the virus is spread by food.

The statement was the most emphatic yet from the United Nations and other agencies on the issue.

The statement came after major American pork importers like Russia and China banned pork products from certain U.S. states as the new swine flu spread. Indonesia, Ukraine and the Philippines and Serbia have banned certain pork products from the entire country.

Canadian officials called such measures unwarranted.

The pigs in Alberta were thought to be infected by a farm worker who returned from Mexico on April 12 and began working on the farm two days later. Officials noticed the pigs had flu-like symptoms April 24, Evans said.

Approximately 10 percent of the 2,200 pigs on the farm have been infected, Evans said.

Officials said the pigs were likely infected in the same manner as humans worldwide, and that the virus is acting no differently in the pigs than other swine flu viruses.

"Whatever virus these pigs were exposed to is behaving in that exact manner as those we regularly see circulating in North America and in swine herds in virtually every nation around the world," Evans said.

According to the U.S. Centers for Disease Control and Prevention, studies have shown that swine flu is common throughout pig populations worldwide, with 25 percent of animals showing antibody evidence of infection.

The new virus has shown no signs of mutation when passing from human to pig, Evans said.

 

Pork Commentary: Flu Damage
CANADA - This weeks North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
The wizards decided to term it swine flu. Talk about getting a punch in the stomach. Our industry pounded for two plus years by negative margins with our losses significantly enhanced by government subsidies making corn ethanol. Now we get further government harassment. The total failure of government authorities to provide leadership in the naming of this flu is criminal. They controlled the name but despite no evidence that the 2009 influenza has anything to do with swine. They allowed it to be used until it was too late. The damage to the markets have been swift with hogs dropping $20.00 per head last week. In our opinion, if there is stimulus money to bail out banks and car companies from their own stupidity and greed, it would be more than justified to financially compensate swine producers for their losses attributed to the 2009 flu. It’s about fairness. The NPPC in our opinion should be full throttle at Ag – Secretary Vilsack, Senators Harkin and Grassly et al. The USA government has proven it will help foreign bond holders, foreign shareholders in banks, and support unions to buy car companies. Maybe it’s time to financially support American hog producers.

The hysterical news reports if not so damaging would be hilarious! 35,000 Americans die of the flu per year, about 100 per day, 150 Americans die in vehicle crashes per day. Any sense of proportion has been lost. The meat puppets that read nightly news have little sense of what is relevant. Came from Pigs? Anyone of them wonder why it appears out of the 500,000 workers in the North American Swine Industry, not one is sick from pigs? Too simple for these simpletons. The only good thing it appears flu is Y2K. Remember all computers were going to stop on 1 January 2000. Billions were getting spent by some, none by others. The only difference: 2 January, money spent - money gone! The meat puppets quickly moved on their next contrived crisis. 24/7 news channels need new crisis’s like addicts need crack cocaine. They can’t live without them.

Last Wednesday, we were in Chicago O’Hare Airport. CNN was on the TVs in the waiting area yammering about the 2009 flu. Of course we were watching as our livelihood is in play. After a while we looked around and realized of the 34 people who were in position to watch the two televisions we were the only ones watching. Why? We don’t know. Maybe the crying wolf of crisis after crisis has numbed people from paying attention. Maybe the old song 99 channels and nothing on is true. We were watching because it’s our livelihood on the line. It’s personal. If it was sheep flu we’d pay less attention like the others. If our premise is true, if this story gets over quick with no more dead people to fuel the news, the markets will recover. As they say “no news is good news.

1976 Flu
In 1976 there was a major swine flu scare in the United States. History tells us it was a fiasco. Sound familiar?

History tells us one soldier died in Fort Dix New Jersey in February 1976. President Ford then announced soon after a $135 million plan to inoculate every man, woman, and child in the United States. There was fear of a 1918 like pandemic (sound familiar).

Drug companies swiftly stepped up to make the vaccines (follow the money trail). The drug companies demanded and received immunity from civil suits that might rise from complications. And arise they did! Within months, a spike in cases of paralysis from Gillian – Barre Syndrome was reported including 25 deaths. The cases were quickly pinned on the vaccine and the USA government spent $90 billion settling lawsuits. Drug companies were scot free!

In all 45 million Americans received the vaccines. 25 presumably died from the vaccine. In the end there was one death from the flu – the soldier in Fort Dix, and a couple hundred got sick.

A lot of noise and money in the end spent about nothing. Do we ever learn?!

Of note on the hog prices in February 1976 the USA averaged 47.70 liveweight. January had been 46.60.

1976
January 46.60
February 47.70
March 45.80
April 47.10
May 48.90

Hog prices held in 1976 during the flu scare and showed no long term damage. The big difference in 2009 is we now depend on export market access. Let’s hope WTO regulations are honored as there is no health danger in pork exports.


Author: Jim Long, President & CEO, Genesus Genetics 

DDGS Scores Well in Canadian Swine Rations
CANADA - Feeding high levels of distiller's dried grains with solubles (DDGS) is not only proving to reduce feed costs for Canadian swine producers, but is also lending to "excellent" growth performance, according to Eduardo Beltranena, research scientist with Alberta Agriculture and Rural Development.



Mr Beltranena is the leading researcher for a collaborative study, sponsored partly by the US Grains Council, which is currently in the second phase of determining the impact on growth performance and pork quality with the inclusion of high levels of DDGS in the diet.

Though the project is not complete, he reported "no concern whatsoever" in the growth performance of the pigs when fed 30 per cent DDGS. "Growth performance during the trial was excellent. Feed cost at the time this trial ran was so high that 100 grams more feed per pound gained represented $2.40 extra feed cost per hog marketed," he said.

While pork producers are concerned with cutting feed costs, which account for 70 per cent of the overall cost of production, the processors maintain a strong focus on the quality of the meat. The researchers determined the duration of the dietary inclusion level of DDGS prior to market weight to avoid undesirable effects on pork and fat quality.

Mr Beltranena said these withdrawal rates are imperative to the producer and processor in order to maintain the quality of product the consumer demands. "Our results showed that feeding 30 per cent corn DDGS and implementing a withdrawal strategy did not affect neither hog growth performance, feed cost per hog, income over feed cost nor cost per pound gained.

However, the rate of withdrawal of corn DDGS out of the finishing diets improved carcass dressing per cent and estimated carcass pork yield," he said. The study, now in its final stage, will assist the Council in broadening the market for the abundant co-product of US ethanol production.

Canada has consistently been the second-largest market for US DDGS at 771,797 metric tons in 2008, a 142 per cent increase from 2007. As of 28 February 2009, 206,817 metric tons of US DDGS have been exported to Canada.

Pork Commentary: Hard to be Optimistic
CANADA - This week's North American Pork Commentary from Jim Long.
 
This is a tough time for our industry, and we are having a hard time finding reasons for optimism. Week upon week of production losses of $20 to $30 per head is getting us phone calls and emails asking us to say when it will get better. We have no answer. The collapse of pork demand triggered by H1N1 is pounding us into submission.

Some Observations
National Pork Producers Council, National Pork Board and Canadian Pork Council have mostly been ineffective in getting in the media’s face on continuing to call this swine flu rather than the official name of H1N1. The negative branding of swine has been devastating. Why they haven’t threatened media groups with legal action is beyond us. $50 million a year in check off to build a brand and defend our honor is not getting us much push. This is a time when a single national voice should be heard and not be mostly silent. They should be going to the President, Prime Minister, Cabinet, and Legislators. They should lead, not look like a deer in the headlights. This is the time our collective producers funded bodies need to perform. The industry is losing billions – real action is needed.


We have heard reports that sows are backing up as liquidation intensifies and also of piggy sows going to market. The run is on. Everyday production capacity decreases. It’s sad when we realize that everyday families have their dreams squashed of having a sustainable hog producer. The corn ethanol boon doogle and H1N1, two situations out of every producer’s control and issues manufactured by government policy and or inaction continue to devastate the entrepreneurs of our business.


One family that fought the fight and appeared to have lost the battle is Stomp Family Farms of Saskatchewan. At one time they had over 20,000 sows, they are now in reported liquidation. One more family’s dream crushed by our industry circumstances. How many more must it hurt when they look across the countryside in Saskatchewan at Big Sky Farms, the largest government owned hog farm in the world. Big Sky gets to back stopped totally by the government treasury, while it still benefits from special designed government subsidies unique to Saskatchewan. Now the Government of Saskatchewan through Big Sky will own over half the sows in the Province. One of the best parts of the Big Sky story is that its chairman is a renowned ag- economist Larry Martin. Always quick to tell farmers how they should operate during his tenure at the University of Guelph. It is interesting to see what happens when the lecturen – teacher -philosopher gets the bottom line responsibility. We wouldn’t doubt if actual operations income (before subsidies) of Big Sky will be some of the worst in our industry. Note to the Government of Saskatchewan: Close down Big Sky. Governments should not own hog farms and compete with family farms. It’s immoral and against all free enterprise principles that you were elected on.


The USDA just lowered the estimated 2010 pork production from 22.62 billion pounds to 22.05 billion pounds. They are predicting an average price in 2010 of 48 – 51 cents per pound live weight. About breakeven – We expect 2010 continual pork production capacity is dealing faster than the USDA can calculate. 2009 USDA is projecting 22.75 billion pounds.


China also is being hit with lower hog prices. A year ago now China’s hog price was about $1.20 US live weight per pound (19 yuan). Currently, it is 63 cents live weight per pound (9.75 yuan). Corn currently is 1.66 yuan per kilogram or about $6.75 US per bushel. Chinese producers are currently losing $14 - $29 US per head. They do have lots of pigs though. China National Development and Reform Commission estimates 50 million sows and 454 million head in inventory. Current supply and price scenarios in China do not appear to provide much in short term opportunities for North American pork exports.


Hog weights are about 5 pounds heavier than they were a year ago. Some of this is backed up hogs, but we also believe that cool weather has been excellent for growth. It’s a combination of both – not only backed up hogs.


Reports say the average crop farmer in Iowa has 9 per cent debt. If he has hogs this allows great staying power. Many crop farmers have the equity to last in hogs a long time. They could be the last man standing when the market recovers.
Summary
We are all marooned on the island surrounded by shark infested waters. There is no easy exit strategy. You are alive in the business or you are gone. Few if any buyers are available. You run until you are broke. You shut down and have a next worthless facility. Billions were invested in industry buildings that have little value today. Depreciation is an accountant’s game real value is in the marketplace. The real estate marketplace for swine buildings is dismal. Bankers don’t want to know their worth today. Bankers are as scared as anyone. Their jobs are on the line in a dismal labor market. They hope we have cash flow and don’t force them to make hard decisions. We saw that at the World Pork Expo and some of them were weak kneed. It’s a tough time. We will recover. We have a resilient industry and product. Pork is the number one meat in the world for consumption. H1N1 will pass. It’s a mild flu. The survivors will be tougher and wiser then in almost any industry. Our intentions are to be here. Like you, there is no quit in our gene pool.


Author: Jim Long, President & CEO, Genesus Genetics 

Rally to Discuss Pork Industry Crisis Planned
CANADA - Manitoba Pork Council says it'll take a concerted effort on the part of pork industry stakeholders and government to come up with the solutions necessary to address the economic crisis facing Canada's swine industry, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Manitoba Pork Council has slated a pork industry meeting for Monday in Morris to allow producers, industry stakeholders and Manitoba and federal government representatives to discuss the economic situation facing pork producers and possible solutions.

Council Chair Karl Kynoch says the price of meat is so low that producers are losing about 40 dollars on every hog they raise.

Karl Kynoch-Manitoba Pork Council
The pork industry right now here is basically on the brink of collapse.

Some of the producers in the industry, they're about to lose everything here right now going forward as prices have really bottomed out.

We're going to see a lot of job losses and in turn this is going to affect a lot of small communities.

On top of that there's going to be a huge effect with the feed companies, with the trucking industry and with the veterinarians.

All of these industries are going to suffer just due to the crisis that the hog industry is going through.

So we need to make sure that we have government involved and we need to have producers involved.

This has to be a very united front between both industry and government to try to see what we can do to make this industry viable again.

We've approached government with a short term plan and some long term but government is really looking to us for some long term plans and that's what we're always trying to put together.

How can we show them where we'll be in a year from now?

That's a real challenge when you're dealing with a live commodity, it's a perishable commodity that's being sold on the world market.

Hopefully at this meeting government can bring us some ideas, maybe producers can bring us some ideas but we really have to work together as both industry and government to get out of this mess.

The rally will begin with a pork barbecue at the Southern Manitoba Convention Centre in Morris Monday at 5:30 p.m. and the meeting will begin at 7:00 p.m..

Mr Kynoch encourages everyone that makes a living from the pork industry, whether it's barn operators, employees or industry partners

Daily Hog Report
Have this report emailed to youBookmark this pageSlaughter Date: Friday, June 12th, 2009. (updated for Friday and Monday)
 
Iowa/Minnesota Daily Direct hog prices
Weighted ave. base price (49-50% lean, live equiv)   - US$41.74/cwt
Packer premium for 51-52% lean hog              - US$1.75/cwt
Value of a 250 lb hog (2.5xUS$43.49)   - US$108.72/hog
                               
Manitoba Equivalent Hog Price Calculation:
U.S. dollar   - $1.1177
Value of a 250 lb hog in Canadian dollars   - C$121.51/hog ,"lets say if the PR peso was worth 40 CDN,then a 250 lb hog or 113.6 kg would be worth approx. P4,860. pesos." ON CONTRACT not SPOT or FARMGATE.Just thought I would through this in to show you the differences between the 2 countries.
     
Manitoba Index of a 51-52% lean hog (est.)   - 110
Average carcass weight of 250 lb hog (est.)     - 200 lb
 
Manitoba Equivalent Hog Price for hogs f.o.b. Iowa plant:
Index 100 (dressed, excl. freight/fees*/shrink)   - C$55.23/cwt OR
    - C$121.77/100Kg
 
* Est. freight/fees Wpg. to Sioux Falls, S.D.   - C$9.50/100kg
Equivalent price last week, June 5th          - C$120.07/100kg
Average price: week of June 8th – 12th     - C$120.08/100kg


note:cwt is weight,every 100 pounds or 45.4 kilos.
 
 

Canada Gains Meat Market Access to Mongolia
OTTAWA, CANADA - Canadian farmers and exporters now have new market opportunities in Mongolia for beef, cattle and swine and their products. Federal Agriculture Minister Gerry Ritz made the announcement today after meeting with Mongolia's Minister for Food, Agriculture and Light Industry, the Honourable Tunjin Badamjunai.



"Market by market, commodity by commodity, this Government is making sure Canadian farmers have every opportunity to reach customers around the world," said Minister Ritz. "Today's announcement is an important development in relations between our two countries, and opens doors to many new exports and opportunities in agricultural cooperation."

"The Government's decision to open a new Embassy in Ulaanbataar last year is already paying dividends," said International Trade Minister Stockwell Day, who met with Minister Badamjunai on Monday to discuss further trade cooperation. "We are the second largest foreign investor in Mongolia and our existing strong commercial relationship in the mining sector is broadening into real opportunities for Canada's agricultural producers."

The recent approval of several Canadian Food Inspection Agency export certificates demonstrates once again the appetite for our safe, high quality products on international markets. Canadian agriculture and food products that can be exported to Mongolia are: live cattle, live swine, ovine/caprine genetics (sheep/goats), bovine genetics, porcine semen, day old chicks and hatching eggs, and meat products, including all beef and beef products.

Minister Ritz met his Mongolian counterpart in Ottawa today to discuss agriculture cooperation and trade opportunities between the two countries. As part of this mission, Minister Badamjunai and his governmental and business delegation will also travel to Saskatchewan, a province with which Mongolia has a close agricultural relationship.

Air Filtration: Efforts to Control PRRS Advanced
CANADA - A Minnesota-based swine veterinarian says new developments in air filtration are among the key advances in the battle against Porcine Reproductive and Respiratory Syndrome (PRRS) in swine herds, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Resulting in an estimated 560 million dollars in losses to the US swine industry each year Porcine Reproductive and Respiratory Syndrome is considered be the most expensive disease affecting swine.

Dr. Scott Dee, with the Swine Disease Eradication Centre at the University of Minnesota, notes, over the past two years major advances have been made in sampling oral fluids to determine a herd's PRRS status, in tools for coordinating areas such as GIS, in new ways to use existing vaccines and in ways to prevent disease spread with filtration.

Dr. Scott Dee-University of Minnesota
The big problem we've had to deal with is area spread of the virus.

That's the virus moving from farm to farm.

For along time we've known we can clean it up from a farm but when a farm gets re-infected with a new virus it's very disappointing and very economically devastating.

Our work with air filtration, I think, has been one of the important steps forward in understanding how to protect farms so they can clean themselves up and they can remain free of infection even if they live in very dense regions of their country.

I think that's going to be an important advancement.

We have to test that more, we have to assess its sustainability, we have to evaluate its cost benefit but I think over time it's going to prove to be one of the important factors in herd to herd biosecurity.

That will propel the industry very quickly once people understand the cost benefit of air filtration combined with these other tools that have been so important in the last few years.

Despite the pessimism Dr. Dee is convinced PRRS can be eradicated.

He says it may take 20 years or more to get it done and researchers will need to move slowly and carefully but we've got important tools that we didn't have a couple of years ago.

H1N1 Virulence Typical of Seasonal Flu
CANADA - The Western College of Veterinary Medicine reports, although the window of infection appears different, the virulence of the H1N1 flu appears typical of normal seasonal flus, writes Bruce Cochrane
 
Earlier this month the World Health Organization raised the influenza pandemic alert in relation to the H1N1 flu from phase 5 to phase 6, recognizing the world is now in the earliest days of an influenza pandemic.

Dr. John Harding, an associate professor with the Western College of Veterinary Medicine in Saskatoon stresses a pandemic doesn't necessarily mean devastating mortality but rather reflects the number of countries and proportion of population infected.

Dr. John Harding-Western College of Veterinary Medicine
Conditions are much different today in 2009 than they were in 1918, just different social issues, end of the war, lack of penicillin, lack of hospital facilities so I really, in my opinion, don't think we'll ever see mortality like our forefathers saw back in 1918.

It is world-wide, there's no question, a growing number of people are infected with it but it remains really just a flu of more typical seasonal virulence.

The one characteristic which is different with this is that we're now seeing mortality extend beyond the traditional flu season.

That may indicate the strain is somewhat different but it also could be explained by just difference in the timing of the outbreak.

Typically flu season starts in the fall and runs for about six months through to the spring on a seasonal basis.

This particular H1N1 started in April and by rights we would see a normal six month course of infection so it should take us into the fall.

It'll be interesting to watch this over the summer to see whether it gets worse and again see whether things continue in the fall or whether this strain peters out in the fall and the next seasonal flu comes in.

Dr. Harding concedes it's too early to say but scientists will be watching with interest.

Pork Commentary: Hog Markets Continue to Languish
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
Hog markets continue to languish. Producers continue to lose money and faith. The H1N1 issue, high feed prices, market access, and domestic and global economic issues continue to drag down our industry. On that happy note:

Some Observations:
Last week we were watching CNN. Kitty Pilgrim (nice name) was interviewing two virologists about H1N1. Of course all the time she called it the swine flu and the caption was swine flu. She did her best to get the two experts to talk about dire consequences of H1N1. They on the other hand would not take the bait, both saying it was a mild flu. The best part was when Kitty breathlessly asked what about the fall, we won’t know until then how bad H1N1 (she called swine flu) will be. We had to laugh both virologists said and agreed its fall – winter conditions in the Southern Hemisphere now. Australia, and South America have H1N1. If it’s going to get worse in the fall – winter conditions they will see it now. So far – so good.


The CME Meat Report last week explained very well our current price situation. We have about the same amount of pork last year but we have a decline in Russia, China, and Mexico exports mostly triggered by H1N1 issues. Consequently, about 7 per cent more meat is available than would have been expected. 7 per cent is a significant amount in a commodity business. The inelasticity in supply – demand rations explains the 20 cents lean plus low we are seeing compared to what would have been expected.


Retail price of pork is about the same as a year ago. Pork cut outs about 20 cents a pound less than a year ago. Retailers for all intents and purposes don’t care about producers just their bottom line. As one person told us, meetings with retailers are nice – they listen to our concerns, nod and smile and go back to maximizing prices in their stores. If there is one positive from this it is that despite retail prices that have stayed up, pork is moving domestically relatively well considering the increase in pork supplies. So despite how bad we feel about our industry, it’s good to note America’s consumers continue to pay strong prices for our products. We are producing something consumers want. That is long term positive.


Small pig numbers from Canada to US continue to decline with five weeks in a row below 100,000 per week (first time consistently under 100,000). As liquidation continues in Canada there will be less little pigs in the future.


Smithfield Foods is by far the largest hog producer in the world. They did not get that big without knowing the business. Last week Smithfield released their financial results. On the pork production (packing – processing) they made in operations $395 million for the year. On the hog production side for the fiscal year, Smithfield lost $521 million. Smithfield has give or take one million sows. About 1/6th of USA hog production. If Smithfield is a barometer of our industry, the $521 million loss times 6 would be a total hog industry deficit of $3 billion. Not much if you say it fast! Simple arithmetic about 6 million sows, $3 billion loss = $500 per sow loss or about $25 -$30 per head. In line from what we figured has happened.


One of the factors in the direction of our industry has been the equity of land based grain growing producers. Many can have pigs as long as they want. Case in point: Canada’s total farm assets are $317.7 billion – total farm liabilities $53.2 billion = Total Canada Farm Equity of $264.5 billion. Relative to any industry agriculture equity ratios are massive. Many producers can have hogs through any down turn.


Hog prices remain strong in Europe. Germany had 1.456 Euros per kilo; Spain had 1.560 Euros per kilo. That calculates 92 – 97 cents US per lean pound. European supplies are down, a consequence of 1.5 million sows leaving Europe’s production base.
Shoot the Messenger
Last week had several hostile e-mails from paid employees of pork organizations. They were outraged by our comments on their overall ineffective response to H1N1 and its portrayal in the media as swine flu. We had to laugh. Have they got nothing better things to do than to respond to us! If they were as aggressive going after the meat puppets that talk on television and continually refer to swine flu, the case would be closed. Of course all negative e-mails we received were from pork organization employees who don’t own hogs. No one who owns hogs came to any pork organizations defense. Look in the mirror cowboys – your stakeholders did not jump to defend your honor! Case closed. You have been mostly useless. Shooting the messenger is a sign of organizational failure.

It appears to us, US breeding herd liquidation is increasing. Smithfield is intending to ship about 27,000 sows from its Dalhart Texas operation. Overall sow slaughter is increasing while there are many reports of sows backing up. We have even heard of unconfirmed reports that Big Sky Farms – the world’s largest government owned hog operation is sending more sows to market. The US producer program that was attempted to buy out sows with a $20 per head fee has failed. Few have $20 per sow to contribute. We expect further liquidation in the coming months. We expect the US breeding herd has liquidated 50 – 70,000 since 1 March when the June Hogs and Pigs Report is released.


Lots of empty finishing barns in the mid – west. Less Canadian pigs and less American pigs make empty barns. One owner of a hog management company told us last week there are more empty barns than ever. Barn space has dropped to $25.00 per head. $4.00 in $4.00 out. Feed companies who made keep full contracts are sucking air paying for empty space and not selling feed. All in all not real pretty. The only upside is at some point empty barns mean less hogs. It can’t be soon enough. We are in a world of hurt.
Summary
The scenario is setting up – less hogs in the future. There are less sows every day. No new sow barns are getting built. Domestic pork demand is decent, we need export markets to open up and improve. We all know profitability will come back. Hog prices are in the lower 5 per cent of historical ranges. My grandfather told me “when everybody is selling, it’s time to buy!”


Author: Jim Long, President & CEO, Genesus Genetics 

Cash Vital in Surviving Economic Crisis
CANADA - A director with the Saskatchewan Pork Development Board says the pork industry has reached a crisis point where some method needs to be found to get cash into the hands of producers.
 
An estimated 500 to 600 pork producers and industry stakeholders gathered Monday night in Morris, Manitoba to discuss the economic challenges facing their industry, explore options and interact with MLAs and MPs.

Sask Pork director Ross Johnson observes, while the Saskatchewan government has shown a lot of support by putting extra dollars into producer's hands, the federal response has been nil and he's been disappointed in the action Ottawa hasn't taken.

Ross Johnson-Saskatchewan Pork Development Board
The situation is actually dire right now from a cash flow point of view.

We're in a situation where we've got feed issues, we've got H1N1 issues, we've got issues that are related to the dollar and it's cumulative losses over a couple of years now and it's just coming to a crisis point now.

Options are both short term and long term.

Obviously cash is king.

We have to find methods of getting cash into producers hands.

What's the best methodology for that, obviously I think the avenues that the government has wanted to use through the current programs is not working and I think we need to come up with some other methods, whether we modify the current programs or we look for some ad-hoc payments but cash is king and we have to get cash into the producers' hands.

Mr Johnson suggests programs are needed that will allow producers to get out without walking away with just the shirts on their backs, we have to find ways to make the industry viable for those producers that remain and people in the general public need to realize the contributions the pork industry makes both to the economy and in supplying pork to the human food chain.

Super-Heated Steam Improves Drying of DDGS
CANADA - A researcher with the University of Manitoba says superheated steam can be used to improve the safety and effectiveness of drying dried distillers grains with solubles, writes Bruce Cochrane.
 
Earlier this month, Dr Stefan Cenkowski, a biosystems engineering professor with the University of Manitoba's Faculty of Agricultural and Food Sciences, delivered keynote addresses to two food processing conferences in Poland.

Dr Cenkowski, who is investigating the use of super-heated steam in food processing, says that when used instead of hot air drying to dry the co-products of ethanol production, super-heated steam reduces environmental impact, improves drying efficiency, reduces energy consumption and eliminates the risk of fire or explosion.

Dr Stefan Cenkowski-University of Manitoba
Companies that produce ethanol need to dry spent grain at the end and spent grain is dried in drum dryers which rotate and the wet material is introduced inside but it takes about two minutes only for that material to pass through the drier and the temperature of the air which is used in this process is in the range of 600 degrees Celsius plus and it frequently happens that the drum can catch on fire because of the overheating.

Then the way to stop fire is to flood the drier with water so you can see that this drier will be eliminated for a couple of days, maybe even longer.

When you use steam for that purpose there's no risk of catching on fire because you don't have oxygen, you just have water.

Dr Cenkowski adds, while ethanol production concentrates proteins, fats and fibres in the dried distillers grains, it also concentrates any mycotoxin that might be present.

He says, while hot air drying has no effect on these compounds, the use of super-heated steam reduced the amount of mycotoxins by as much as 50 per cent.

Pork Commentary: June Pigs and Hogs Report
CANADA - This week's North American Pork Commentary from Jim Long.

The USDA June Hogs and Pigs Report had no surprises. The USA has fewer sows and fewer pigs, but is it good enough for a bounce in this market? In the last year and a half, the US breeding herd has declined from 6.233 million to 5.967 million, that is a drop of 266,000 while Canada has decreased at least 90,000 according to Stats Canada. In total, the last year and a half there has been a USA–Canada breeding herd decline of 350,000. It's a lot but some claim we need to remove a further 300,000. If this is correct the pain to get there will be brutal.

The June US market hog inventory is down from a year ago two per cent or about 1.1 million head. If things were normal, this would be positive. Last year in the 3rd quarter, prices averaged 57 cents per pound difference with no more hogs. H1N1, export market challenges and the domestic – global commodity have obviously had a big effect on demand loss.

The National Pork Industry Conference will take place on 19 to 22 July 2009 at Tan-Tar-A Resort, Lake of the Ozarks, Osage Beach, Missouri (two miles West of Hwy. 54 on SR. KK). For further information, click here. Genesus is a Cooperating Sponsor.

Other Observations
The US marketed 2.032 million hogs last week – down from last year's 2.140 (five per cent). When we look at daily lean weights it appeared the US slaughter weights last week were about two pounds lower than the previous week. The first hot weather of the year is having its effect. We believe hogs were pulled ahead in the last few weeks due to cool weather and despite heavier slaughter weights. Hot weather will cut tonnage. A year ago the market jumped 15 cents a pound from now until the first part of August. Few expected that jump. Markets move when most least expect.

Last week, we attended the Ontario Pork Congress. The annual Ontario Trade Show. Ontario has approximately 370,000 sows. Only a couple of producers have over 10,000 sows. Many are family producers farrow to finish feeding their own grain. The mood was what you would expect – virtually no optimism. There is liquidation in Ontario. We understand some banks are squeezing even producers that have kept up their loan payments. Lots of hog farms are for sale but values are being discounted. If a market moves when bullish – bearish sentiment is extreme one way or the other. The negative is maxed. We have hit the low.

Canadian Broadcasting Corporation out to destroy the hog industry?
The publicly funded Canadian Broadcasting Corporation continues to use swine flu instead of the official name H1N1. Read the letter below. We think this is a reflection of the overall insensitivity to the swine industry by several media outlets. The letter is a response to pork industry participant Dave Riachwho gave it to us. Maybe our pork organizations believe this type of twisted logic is acceptable. When we have pointed out their organizations lameness on doing something about media they attacked us. Read the article if you want to send your opinion to CBC. The e-mail addresses are: ssgai@tcc.on.ca and ombudsman@cbc.ca. Tell them your opinion. Fight for our industry. The condescending attitude that changing the name would be confusing is typical of media arrogance. Note the listed US media outlets group CBC uses to justify its ignorance.

Dear Mr. Riach:

Thank you for your email of June 3 addressed to Vince Carlin, CBC Ombudsman. Since CBC Radio falls in my remit, perhaps I can reply.

You wrote to draw our attention to a news story you heard that morning at 6:30am on CBC Radio in London. The story referred to 'swine flu' when in fact it is 'H1N1', you wrote. You added that the use of the term 'swine flu' is causing 'undue hardship' in the Canadian swine industry and suggested that its continued use was both irresponsible and a manipulation of public opinion. While I sincerely regret you are disappointed in CBC, I must tell you – and I do so with respect – that I do not agree CBC news is either irresponsible or manipulative.

We are continuing to use the term 'swine flu' for two reasons: clarity and accuracy. Let me explain. A little over a month ago now (April 30), the World Health Organization in Geneva announced it would stop using the term 'swine flu' and instead refer to the infection as 'influenza A (H1N1)'. It said the change came after pork producers and the UN food agency expressed concerns that the term was misleading consumers and needlessly causing countries to slaughter pigs.

Our senior journalists discussed it at some length, but after weeks of almost daily reports about swine flu, we felt changing the name at that point could be confusing. Particularly in anxious and emotional times, it is our goal and responsibility to Canadians to be as clear as possible in all our reports. Adding to the potential confusion, influenza A (H1N1) already exists. It is the virus that caused the 1918 Spanish flu pandemic and in a milder version still circulates most years. One expert pointed out that by using the same name, public health professionals and researchers would be left without a way to distinguish between a garden-variety flu sub-type and one that may trigger the next pandemic

It is also our responsibility to be accurate. Experts around the world said it is called swine flu because six of the eight genetic segments of the virus are purely swine flu (the other two are bird flu and human flu but are said to have lived in swine for the last decade). Scientifically, they said, calling the virus swine flu was both accurate and in keeping with accepted nomenclature of influenza.

For those reasons – along with, among others, The New York Times, The Washington Post, The Associated Press, The Times, the BBC and other Canadian broadcasters – CBC News will continue to use the term 'swine flu'. We will also continue to evaluate that decision in light of further developments.

I should emphasize, however, that we fully understand that we also have an obligation to continue to point out in our reports that eating pork cannot in any fashion lead to a flu infection. Although I think Canadians are now largely aware that is the case, during April and early May, CBC News repeatedly included that information in broadcast news stories.

Thank you again for your e–mail. I appreciate hearing your comments. While I realize my reply may not have changed your mind, at least I hope I have reassured you that this is a matter we have given some thought to and take seriously.

It is also my responsibility to inform you that if you are not satisfied with this response, you may wish to submit the matter for review by the CBC Ombudsman. The Office of the Ombudsman, and independent and impartial body reporting directly to the President, is responsible for evaluating program compliance with the CBC's journalistic policies. The Ombudsman may be reached by mail at the address below, or by fax at (416)205-2825, or by e-mail at ombudsman@cbc.ca.

Yours sincerely,
Esther Enkin
Executive Editor
CBC News
Box 500 Station 'A'
Toronto Ontario
M5W 1E6
cc. Vince Carlin, CBC Ombudsman


Author: Jim Long, President & CEO, Genesus Genetics 

Pork Producer Issues Appeal to Consumers
CANADA - An Ontario pork producer is urging the Canadian public to think about where they want the pork they eat to come from and to ask their grocers where it comes from, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The Canadian pork industry is entering its fourth year of non profitability resulting from high feed costs, the strong dollar, reduced access to credit, US Country of Origin Labelling and H1N1.

Southwestern Ontario pork producer Teresa Van Raay has written an open letter to all Canadian Consumers who eat which outlines the situation facing her and her fellow pork producers and appeals to consumers to consider the origin of their food.

She says sometimes it takes a crisis for people to stand up and be heard and the pork industry is at that critical point.

Teresa Van Raay-Ontario Pork Producer
What I ask of the consumers is to ask for Canadian pork, choose the "Buy Canadian" label.

If they're unable to read where it comes from to ask where the product is coming from.

Asking for truth in labelling to help our consumers make an educated choice and it's easy enough as long as the imported products follow the regulations and that the retailers do this at the grocery counter.

We just need to ask.

When we buy Canadian you know what you're buying.

Canadian has very high standards, we have a lot of protocols in place with regard to feeding and animal care and transporting animals, environment and very high food safety and quality standards.

There's a lot of economic connections to agriculture.

It's not just the farmer.

It's seed companies, the vets, genetic companies, the farm equipment dealers, retailers and that's just to mention a couple in there.

Ms Van Raay points out the pork industry represents 70 thousand jobs in Canada and it generates 7.7 billion dollars in economic activity, 2.1 billion in wages alone.

Herd Health Key to Edge in Global Pork Markets
CANADA - The chair of the Canadian Swine Health Board says, despite the economic challenges, the health status of the Canadian swine herd gives the Canadian pork industry an edge in the global market place, writes Bruce Cochrane.

The forum is being held to help lay the ground work for developing a national strategy for dealing with emerging swine diseases, for identifying research priorities and for improving biosecurity on Canadian farms and will bring together pork industry stakeholders, practicing swine veterinarians, government representatives and producers to discuss disease issues.

Board chair Florian Possberg says we have significant resources in Canada for dealing with research, biosecurity and risk mitigation but we don't always coordinate them as well as we should and this forum will provide an opportunity to do that.

Florian Possberg-Canadian Swine Health Board
Canada does have a very sophisticated system for food safety and I don't think it's any accident that CFIA, our monitoring agency, is able to find avian, beef and pork diseases that no one else can.

That's just speaking to the level of efficiency that they have.

What we need to do though is to be more proactive with that information, we need to understand what our risks are and most of all we need to coordinate all levels of the industry from government to practicing veterinarians to producers to make sure that we get the best value for our industry that we possibly can.

Mr Possberg says, even though our industry is suffering great pain and loss economically, we do know that if we can have an edge in the health of our herd and the health of our pigs it really does give us an edge in the future of the global industry.

Pork Commentary: Market Struggles Continue
CANADA - This week's North American Pork Commentary from Jim Long.

We keep losing money. It is no fun. Attrition is wearing us all out. July hog prices under 60 cent lean, no one saw this coming. Early weans under $10.00. The result is there will be less hogs, the combination of the corn ethanol insanity, H1N1 (swine flu), all tied to a global financial meltdown is a Molotov cocktail of destruction for our industry. It is destroying many good families destiny.

Some other Observations
Finally we got some break on slaughter weights. Iowa-Minnesota barrow and gilts dropped 3.6 pounds week over week (268.7 to 265.1). The first hot weather and weights dropped. The weight drop, despite 100,000 fewer market hogs for the week compared to a year ago. Less hogs, big weight drop. Positive if we have more empty finish barns than a year ago. Weights and numbers should come down.


USA sow slaughter was just over 65,000 for the week according to the latest data. That is a liquidation number in our opinion.


Reports in Canada indicate a possible Government program to fund sow purchases. Possibly better than the previous program with greater funding. Participants have to leave barns empty. Too bad the USA Government can’t figure out similar programs. They seem to figure out how to subsidize corn ethanol, and car companies. In the end, all the money goes to the creditors. We are surprised the US banks don’t lobby hard for this. Last week there was a rally in Toronto at the legislature of approximately 300 producers looking for Government support for the industry. We understand that no Ontario Pork Marketing Board representatives attended. This shows their insensitivity and disconnect from reality. One rally attendee told us it was Friday afternoon and Pork Board employees don’t work Friday’s in the summer. It is sad when they collect $7 million plus a year to represent Ontario’s producers and they are mostly useless. We deserve better.


Pork exports need to get better. We expect ham exports to Mexico will be improving. Slaughter hogs are currently about 18 peso per kilogram in Mexico or about 60 cents US live weight per pound. This is a reflection of restored confidence by Mexican consumers in pork and their economy after H1N1 (swine flu) debacle. More pork will go to Mexico now and in the future.


Memo to the Saskatchewan Government: If Canada’s Federal Government offers sow buyout, use it for Big (Fat) Sky Farms – the world’s largest government owned hog farm. No government should own hogs in a free enterprise system. It is immoral and damaging to taxpaying family owned hog farms. You don’t need to own 50,000 sows, there are enough hogs in Canada. Save the taxpayers of your province from the sinkhole created by your socialist predecessors.


Corn dropped about 40 cents per bushel last week. That is positive. Amazing that all the wizards of prediction were out almost 3 million acres compared to what the USDA came out with last Tuesday. Livestock obviously benefits from cheaper corn. All we need is $40.00 oil and let’s watch corn ethanol producers bleed like us.


Jackson’s death has taken over the media. Swine flu has dropped to the back burner for the talking heads. Too bad it takes someone’s death to give us a break.


As we write we are in the Chicago airport on our way to Russia. We will report next week our observations. Fortunately, Russia has decided to open up more US states and Canadian provinces for imported pork. This can’t be soon enough.
Summary
Slaughter weights are dropping fast, slaughter numbers are coming down. The pain has been widespread. We need lower production, domestic and export demand. It will come. The billion dollar question is when. Probably when no one expects!!


Author: Jim Long, President & CEO, Genesus Genetics 

New Flu Virus Detected in Pig Farm Workers
CANADA - A new type of flu virus has been confirmed in two hog farm workers in western Canada's Saskatchewan province, health officials said yesterday.



The virus was found when the workers were undergoing tests for A/H1N1 flu virus after they showed mild flu-like symptoms about two weeks ago, according to Moira McKinnon, the province's chief medical health officer.

Lab results revealed something different and unusual. Further examination determined that a new strain of flu had emerged, he said.

Mr McKinnon stressed that the virus was considered not pandemic and has been named "non-pandemic influenza A virus." The virus may have been a "one-off" event, he said, noting that laboratories have not come across any other examples of the strain detected.

"These events do happen, and they do happen occasionally," Mr McKinnon told reporters at a news conference in provincial capital Regina. "In the current heightened scenario, we've picked this one up. It will probably not transmit. It will probably go no further than it's gone already."

The two workers have totally recovered. A third worker may have also contracted the same new strain and is under test.

It is not clear how the workers came to contract the new virus, but they had not been outside of the country.

Mr McKinnon said that workers associated with the barns, which are located in eastern Saskatchewan, will be administered general flu shots. It was believed that the current seasonal influenza immunization would be effective against the new strain.

Saskatchewan's chief veterinarian Dr. Greg Douglas said there is no sign that pigs have been infected by the new flu. But bio-security measures include requiring workers to shower before entering barns, and monitoring the health of all workers have been put in place.


 

Alberta Pork Producers Plan Industry Crisis Rally
ALBERTA, CANADA - Alberta pork producers that continue to face devastating financial losses and a country-wide collapse of their industry are planning a producer industry crisis rally in Calgary on Friday, 10 July, to push their plight to governments and the general public.

 

The event is also timed to bring the pork dilemma to the forefront of federal and provincial governments on what is at stake if the producer liquidity crisis is not addressed immediately. The Meeting of Federal, Provincial, Territorial Ministers of Agriculture is slated for 9 July 2009 in Ontario.

"We have asked Alberta Minister of Agriculture and Rural Development, George Groeneveld to bring the issue of financial support for the pork industry to this meeting," says Paul Hodgman of Alberta Pork, the organization representing pork producers in the province. "The Minister’s office has also been asked to provide a first-hand report at the Friday pork rally to let our producers and the public know the results of their deliberations."

The reality is the current financial losses leave no time for pondering responses, says Mr Hodgman. Pork producers have faced continuous losses for three years due to a high Canadian dollar and skyrocketing feed grain prices, factors out of producers’ control. There was hope of returning profits this spring but this hope was wiped out with the announcement of influenza A H1N1.

The rally will be held on the grounds of the McDougall Centre in downtown Calgary from 11:30 a.m. to 1:30 p.m. Alberta Pork is prepared to serve 3,000 pork on a bun sandwiches from noon until 1:30 p.m. Anyone interested in showing support is welcome to attend.

"We hope to bring as many producers and others in the industry as possible from across the province out to emphasize the seriousness of our situation," says Mr Hodgman. "We are inviting the public from Calgary or anywhere else in the province to come out to enjoy lunch and show support for our Alberta pork industry."

Alberta is on the brink of losing its hog industry. The industry has already been reduced to less than 450 producers from 1,500 producers only five years ago; there has been a reduction of more than one million market hogs produced in the province. This rally will give the industry and the public the opportunity to demonstrate the need for our food to be grown locally, instead of relying on imported pork products from other countries which are currently on the rise.

"Alberta pork products ensure that consumers have continued confidence in the safety and quality of pork produced at home," says Mr Hodgman. "We encourage consumers to keep pork in mind as they shop at the grocery store and ask for Canadian produced pork."

Straw Based Sow Housing Offers Economic Benefits
CANADA - Research conducted at the National Centre for Livestock and the Environment indicates the switch from conventional slatted concrete floors to straw based group housing of sows offers certain economic advantages, writes Bruce Cochrane.

Animal welfare regulations originating in Europe have prompted several North American pork processors to voluntarily start phasing in programs under which they'll only source hogs raised in group housing.

A multidisciplinary team of scientists working out of the National Centre for Livestock and the Environment is comparing the feed consumption, conditioning and reproductive efficiency of groups of breeding sows housed on conventional partially slated floors to those housed on straw.

Dr. Gary Johnson, an associate professor with the University of Manitoba's Faculty of Agricultural and Food Sciences is evaluating the economics.

He says straw based housing is physically much easier on the animal.

Dr. Gary Johnson-University of Manitoba
So far we're finding that the partially slatted concrete floors definitely put a physical stress on the animal.

When we look at the research data from the two barns we see that there is more culling earlier for physical reasons in the conventional barn over the alternative barn where there's straw based.

It looks like, just looking at the barns and this still very preliminary, that the profitability is higher in the alternative barn than it is in the conventional barn.

Now we have to be somewhat careful with that because we need to expand that profitability to take into account that we have a different manure handling system between the two barns and that changes how you apply manure on the field, it changes your cost of handling the manure itself at the barn and so we need to start taking that into account and we haven't done that yet.

Dr. Johnson says it appears some of these welfare measures could potentially increase profitability so incorporating them into the design of new facilities may have a positive effect rather than a negative effect on both productivity and profitability.

Producers Await Govt Response to Recovery Plan
CANADA - Canada's pork producers are hoping for a timely response to the their request for government support for the implementation of a Canadian Hog Industry Strategic Transition Plan, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
A request for government support for a hog industry transition plan was one of the top agenda items when Canada's federal, provincial and territorial Ministers of Agriculture met last week in Niagara-on-the-Lake, Ontario.

The plan, developed by the Canadian Pork Council, calls for refinancing of existing loans under the Advance Payment Program and access to a second draw under that program, a special H1N1 loan plan to address losses resulting directly from public response to the infection and establishment of a hog farm transition payment program.

CPC President Jurgen Preugschas says federal agriculture minister Gerry Ritz has assured him that government is looking at the proposal seriously and he is hopeful cabinet will approve some sort of a program in the near future.

Jurgen Preugschas-Canadian Pork Council
Producers are on the edge.

As we speak the melt-down is beginning so the need of getting the money to our producers immediately is critical.

Producers are going out of business as we speak so it's critical.

Timeliness is the number one issue right now.

As for the H1N1, when it broke, as you know the prices for our pigs North America wide collapsed and they have not recovered as we speak.

We estimate that we're some 50 dollars per pig below what we could have expected if H1N1 would not have hit the industry.

Preugschas suggests we have to remember that pork is the preferred protein around the world and all of the studies indicate an increased pork consumption in the future.

He says, with North America accounting for about 50 percent of the world trade in pork, the long term outlook is relatively bright for the Canadian industry.

Pork Commentary: Market Struggles Continue
CANADA - This week's North American Pork Commentary from Jim Long.
 
We keep losing money. It is no fun. Attrition is wearing us all out. July hog prices under 60 cent lean, no one saw this coming. Early weans under $10.00. The result is there will be less hogs, the combination of the corn ethanol insanity, H1N1 (swine flu), all tied to a global financial meltdown is a Molotov cocktail of destruction for our industry. It is destroying many good families destiny.

Some other Observations
Finally we got some break on slaughter weights. Iowa-Minnesota barrow and gilts dropped 3.6 pounds week over week (268.7 to 265.1). The first hot weather and weights dropped. The weight drop, despite 100,000 fewer market hogs for the week compared to a year ago. Less hogs, big weight drop. Positive if we have more empty finish barns than a year ago. Weights and numbers should come down.


USA sow slaughter was just over 65,000 for the week according to the latest data. That is a liquidation number in our opinion.


Reports in Canada indicate a possible Government program to fund sow purchases. Possibly better than the previous program with greater funding. Participants have to leave barns empty. Too bad the USA Government can’t figure out similar programs. They seem to figure out how to subsidize corn ethanol, and car companies. In the end, all the money goes to the creditors. We are surprised the US banks don’t lobby hard for this. Last week there was a rally in Toronto at the legislature of approximately 300 producers looking for Government support for the industry. We understand that no Ontario Pork Marketing Board representatives attended. This shows their insensitivity and disconnect from reality. One rally attendee told us it was Friday afternoon and Pork Board employees don’t work Friday’s in the summer. It is sad when they collect $7 million plus a year to represent Ontario’s producers and they are mostly useless. We deserve better.


Pork exports need to get better. We expect ham exports to Mexico will be improving. Slaughter hogs are currently about 18 peso per kilogram in Mexico or about 60 cents US live weight per pound. This is a reflection of restored confidence by Mexican consumers in pork and their economy after H1N1 (swine flu) debacle. More pork will go to Mexico now and in the future.


Memo to the Saskatchewan Government: If Canada’s Federal Government offers sow buyout, use it for Big (Fat) Sky Farms – the world’s largest government owned hog farm. No government should own hogs in a free enterprise system. It is immoral and damaging to taxpaying family owned hog farms. You don’t need to own 50,000 sows, there are enough hogs in Canada. Save the taxpayers of your province from the sinkhole created by your socialist predecessors.


Corn dropped about 40 cents per bushel last week. That is positive. Amazing that all the wizards of prediction were out almost 3 million acres compared to what the USDA came out with last Tuesday. Livestock obviously benefits from cheaper corn. All we need is $40.00 oil and let’s watch corn ethanol producers bleed like us.


Jackson’s death has taken over the media. Swine flu has dropped to the back burner for the talking heads. Too bad it takes someone’s death to give us a break.


As we write we are in the Chicago airport on our way to Russia. We will report next week our observations. Fortunately, Russia has decided to open up more US states and Canadian provinces for imported pork. This can’t be soon enough.
Summary
Slaughter weights are dropping fast, slaughter numbers are coming down. The pain has been widespread. We need lower production, domestic and export demand. It will come. The billion dollar question is when. Probably when no one expects!!


Author: Jim Long, President & CEO, Genesus Genetics 

Coordinated Approach to Addressing Disease Urged
CANADA - An associate professor with Western College of Veterinary Medicine in Saskatoon suggests the pork industry's experience with PCVAD has demonstrated the need for a coordinated approach to dealing with new animal disease threats, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Although new vaccines have largely brought Porcine Circovirus Associated Disease under control, devastating losses from the mid-1990s to mid-2000s have prompted the Canadian swine industry to reexamine strategies for dealing with new and emerging disease threats.

Dr. John Harding says there's a number of things we can do.

Dr. John Harding-Western College of Veterinary Medicine
Certainly there needs to be very good on-farm and regional surveillance and there needs to be a network of surveillance teams or some sort of national collaborative way that we can respond to new disease threats that may be out there.

I think the labs need to work together and closely with producers and their veterinarians and we need to talk and collaborate across the country.

I think thirdly what we need is a group of individuals that could respond in the event of a new emerging disease and I'm not thinking on foreign animal diseases because we've got a federal government that will respond in those but, for new diseases that just don't fit the clinical picture, I think we need a group of individuals that can get out and mobilize themselves and have good laboratory back-up that they could go to the farm, do an investigation.

They're rapidly mobilized to either diagnose it as something that we know of or embark on a trail of this is something new and hence be able to communicate that back to the leaders of the swine industry who really need to know it most.

Dr. Harding suggests, when the standard diagnostics fail to identify the cause of high rates of mortality, we may be dealing with a completely new virus, a new strain of virus or a combination of pathogens.

He says we need to keep one foot in the box looking at the regular stuff and one foot out of the box keeping in mind there may be other things out there.

Research: Pigs Raised in Large Groups Handle Easier
CANADA - Bruce Cochrane writes that research conducted at the Prairie Swine Centre indicates pigs raised in large groups are much easier to handle than those raised in small groups.
Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork
 
Researchers at the Prairie Swine Centre in Floral, Saskatchewan have been studying the behavior of pigs raised in large groups for the past seven to eight years.

That work and reports from industry indicate during shipment pigs raised in large groups handle differently than those raised in small groups so a study was conducted to evaluate the ease of loading and the effect of transportation on meat quality.

Dr. Harold Gonyou, a research scientist in ethology, says several hundred pigs were involved, 240 of which were used for data collection, with half raised in groups of 16 to 20 and half raised in groups of 240.

Dr. Harold Gonyou-Prairie Swine Centre
There were some differences in terms of how they handled being loaded.

They both responded to stress.

We would see similar kinds of physiological response among the animals but the animals from the large groups loaded faster.

We reduced our loading time by about a third for loading those pigs.

In both groups we loaded groups of four pigs at once and measured how long it took them to go up the ramp and onto the truck.

We found that we used about the same amount of force moving each group of pigs.

There was a little difference in terms of their heat stress or their response that you would in terms of breathing and red skin et cetera.

We saw less of that within the pigs that came from the large groups.

Dr. Gonyou observes pigs raised in large groups are more willing to investigate and travel and they interact with other pigs better than those raised in small groups.

He says reports have suggested the meat from pigs raised in large groups is better than from pigs raised in small groups but this study did not show that and there have been suggestions death losses during transport will be less among pigs raised in small groups but this study was not large enough to assess that.

Pork Commentary: National Pork Industry Conference Report
CANADA - This week's North American Pork Commentary from Jim Long.
 
You did not have to look much beyond the agenda of the National Pork Industry Conference to see an industry if not in retreat at least one that is playing in defence rather than attack.

Agenda

Euthanasia (not sure pig or producer)
Sow housing (group versus stalls)
Meat safety
Corn Ethanol (government moonshine)
Bankers and financing challenges (running out of money)
Whistle blowers for policies (PETA infiltrators)
Environment (cap and trade)
Animal welfare (PETA, HSUS)
Washington Administration (lack of government support for livestock)
Risk Management (code for trying to limit losses)
Profit picture (lack of)
Swine Flu (H1N1) or (CNN disease)
Cooperating Sponsor
To start we wish to commend the Graham- Shields Strategic Forums for organizing an excellently run conference. They can’t help it that we have an industry that one senior packer executive characterized as "the worst ever for producers." About 600 people representing 60 per cent plus of the USA industry attended.

Observations
There was a banker panel. Mark Greenwood from Ag Star recommended the liquidation of 500,000 to one million more sows in Canada – USA to get the industry profitable. Take home message to us: we are on our own, cash is king. Don’t expect help from banks. They don’t want to foreclose on farms as they worried what they would do with them. We never thought producers would be made to feel sorry for bankers. It was enough to make a statue cry.


From what we can determine from discussions producers on average have lost about 65 per cent of equity in the last two years. 65 per cent of producers outside of bank covenants with about 20 per cent really outside covenants. It's ugly.


The banker panel encouraged the idea of group liquidation and group market organization. We are not sure if it was socialistic but we had a sense that when we were in Russia there is more free enterprise than the borderline collusion that was being proposed. All a waste of time. We are an industry of thousands of individuals or groups making individual decisions. It is not going to change. When the story of organized chicken liquidation is put forward the story fails to mention the largest USA chicken producer Pilgrim Pride went broke. That’s not exactly planned supply management. You run out of cash, you liquidate. It is not complicated. We are afraid it’s like the Bruce Willis movie "Last Man Standing" keep shooting until the end.


The tone and atmosphere of the conference was negative. People who own hogs are scared. They have lost money and all are looking for hope. In our opinion there was little said at the conference that would send people home enthused and positive. The brutal facts of the market place compared by topic upon topic of industry challenges were in the most part disheartening.


One positive we picked up talking to producers from all across North America was the general belief that the corn and soybean crop is in good shape and lower corn prices below $3.00 per bushel are helping out losses. There is no fear of crop failure or suddenly higher grain prices.


John Ferrell, Deputy Under Secretary for Marketing and Regulatory USDA spoke and took questions. He has a great career in politics. When asked about the Corn Ethanol effect on livestock the convoluted non – answer was classic. Politics as usual. He probably couldn’t wait to get back to the cocoon of Washington as fast as he could. As he said they have a lot of meetings in D.C. Unfortunately, Mr. Ferrell did not come across as a champion of US livestock production.


We met with several members of the National Pork Board. We have to give them credit; they are prepared to be engaged. They face a huge challenge with the huge losses – producers are encountering. We hope they can step up and provide leadership for our reeling industry. They have the mandate and the funding.


On a self serving note, we are really happy. A week ago, a Genesus customer, Good Hope (we like customers with positive farm names) received the award from Canada’s largest meat packer Maple Leaf Foods for having the highest lean meat percentages for 12 months at Canada’s largest plant located in Brandon Manitoba which processes give or take 4.43 million head per year.
Good Hope’s Championship Results:
Average carcass weight: 93.21 Kgs (257 lbs live weight)
Average back fat: 14.6mm (.57 inches)
Average Loin Depth: 63.5mm (2.48 inches)
Average lean meat percentage: 62.38 per cent

Genesus Purebred Duroc boars bred to Genesus F1 Landrace/Yorkshire females generated the winning numbers. No PayLean was fed to Good Hope’s hogs. Genesus delivers more pigs and better pigs. Congratulation Good Hope!

Summary
The National Pork Industry Conference reiterated the negative attitude we sense throughout the industry. There is little optimism; there is little faith in the future. Attrition of the sow herd continues. There is mostly doom and gloom.

Markets are driven by supply – demand and psychology. There is little to boost market from psychology. Swine flu (H1N1) continues to be used in the media. The reputation of our industry name being associated with death is not a demand driver. Pork meat sales have to overcome the first objection "will pork kill our customers" they certainly start in a hole. It is a huge negative to price enhancement and market momentum.

One disappointment we had at the conference was the lack of positive solutions. It’s supply/demand. Supply is being cut. The America we believe in is one of optimism. Offence versus retreat. If you want to increase demand, you have to sell. Add salesmen, advertising, and a market that pushes demand. Sitting around wringing your hands feeling sorry for yourself waiting for the phone to ring doesn’t work. The pork industry we thought we knew was aggressive. We travelled the world. There is no better place in the world to raise hogs and process pork. We have the people, knowledge, scale, feed, land, genetics, capital, packers, and logistic ability to compete economically with any swine industry in the world. We have huge advantages. We know it is tough. We are all losing money but let’s rather than think smaller think the American way. Sell, sell, sell! Push back into export markets. Work on developing more food service demand. It’s not just supply but demand. A small percentage increase in exports or domestic demand coupled with smaller supply is price enhancing. The contraction proponents as the only solution are defeatist. They have no vision other than retreat. We need to push and sell. It’s not only supply. Offense not defense! Forward not retreat!

"Damn the torpedoes full speed ahead!" That’s the America we know.

Good Hope Farms with No.1 Award in the Canadian Pork Industry
Maple Leaf Foods, Canada’s Largest Meat Company, at their annual producer banquet on July 15th 2009 recognized long time Genesus Customer, Good Hope Farms with No.1 Award in the Canadian Pork Industry:

BEST CARCASS for a Calendar year at Maple Leaf

BEST CARCASS out of 4.43 million market hogs that Maple Leaf processes per year at there Brandon Manitoba Plant.

Genesus Congratulates Good Hope Farms for these award winning results.

Genesus Duroc Boars and f1 Yorkshire/Landrace Females generated this winning data.


Author: Jim Long, President & CEO, Genesus Genetics 

Management of Pandemic H1N1 in Swine Herds
CANADA - The Canadian Food Inspection Agency (CFIA), in collaboration with stakeholders, trading partners, and the public and animal health communities, has refined its approach to managing cases of the pandemic H1N1 2009 virus in swine.



This approach is consistent with the recommendations of the World Organisation for Animal Health (OIE), and is based on research and observations made since the virus was first detected in swine, which indicate:

There is no food safety risk associated with the virus;
There is no evidence at this time that animals are playing a significant role in the spread of the virus in the general human population; and,
The virus does not behave any differently in pigs from other influenza viruses commonly detected in swine herds.
Based on this knowledge and information, the CFIA will not quarantine herds. Affected animals will be managed using the same veterinary management and biosecurity practices employed for other swine influenza viruses. This includes limiting opportunities for virus to spread to susceptible animals. Canada’s slaughter system contains multiple inspection points to ensure that only healthy animals enter the food supply.

All herds in which the virus is detected will be monitored to verify that infected animals recover. In addition, surveillance for the presence of H1N1 in swine will continue, to detect any changes in how the virus affects swine and to identify any changes in the structure of the virus. Producers are encouraged to reinforce biosecurity measures at their facilities.

This approach is supported by Provincial and Territorial authorities and the Public Health Agency of Canada.

US Must Match Canadian Swine Reductions
CANADA - The Saskatchewan Pork Development Board says reductions in Canadian pork production will have to matched in the United States to have any impact on North American live hog prices, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
With the cost of pork production running at about 1.65 per kilogram and hog prices in the range of 1.15 to 1.20 per kilogram Saskatchewan's pork producers are losing 45 to 50 dollars per pig at time of year when they would normally expect to be making money.

Sask Pork chair Joe Kleinsasser says we obviously need less pork but producers are involved in the biggest game of chicken you've ever seen with everybody waiting for the other guy to blink.

Joe Kleinsasser-Saskatchewan Pork Development Board
Statistics indicate that the Canadian sow herd has declined six per cent this year from last year and nearly 12 per cent since 2007.

The United States breeding herd has declined by less than four per cent so that's a third of the per centage cut in Canada and yet the NPPC is blaming Canadian production for what ever's not going good down there.

Obviously no matter how many pigs we cut down here really doesn't mean anything when you consider that the state of Iowa produces more pigs than the entire country of Canada.

So the production cuts have to come in the United States for it to mean anything.

I think what has happened up to this point is that increased production efficiency has pretty much negated the sow slaughter but we're probably from here on in going to see that it's picking up to the point where not even productiin efficiency gains can compensate for that and that's is where we need to get to.

Unfortunatly nobody wants to cut down but right now there's too many pigs in North America and that's the long and the short of it.

Mr Kleinsasser points out summer is usually the most profitable part of the year for pork producers but there's just not a big enough demand for all of the pork that's out there.

He says the scary part is there is generally downward trend in prices heading into the fourth quarter.

Pork Commentary: National Pork Industry Conference Report
CANADA - This week's North American Pork Commentary from Jim Long.

You did not have to look much beyond the agenda of the National Pork Industry Conference to see an industry if not in retreat at least one that is playing in defence rather than attack.

Agenda

Euthanasia (not sure pig or producer)
Sow housing (group versus stalls)
Meat safety
Corn Ethanol (government moonshine)
Bankers and financing challenges (running out of money)
Whistle blowers for policies (PETA infiltrators)
Environment (cap and trade)
Animal welfare (PETA, HSUS)
Washington Administration (lack of government support for livestock)
Risk Management (code for trying to limit losses)
Profit picture (lack of)
Swine Flu (H1N1) or (CNN disease)
Cooperating Sponsor
To start we wish to commend the Graham- Shields Strategic Forums for organizing an excellently run conference. They can’t help it that we have an industry that one senior packer executive characterized as "the worst ever for producers." About 600 people representing 60 per cent plus of the USA industry attended.

Observations
There was a banker panel. Mark Greenwood from Ag Star recommended the liquidation of 500,000 to one million more sows in Canada – USA to get the industry profitable. Take home message to us: we are on our own, cash is king. Don’t expect help from banks. They don’t want to foreclose on farms as they worried what they would do with them. We never thought producers would be made to feel sorry for bankers. It was enough to make a statue cry.


From what we can determine from discussions producers on average have lost about 65 per cent of equity in the last two years. 65 per cent of producers outside of bank covenants with about 20 per cent really outside covenants. It's ugly.


The banker panel encouraged the idea of group liquidation and group market organization. We are not sure if it was socialistic but we had a sense that when we were in Russia there is more free enterprise than the borderline collusion that was being proposed. All a waste of time. We are an industry of thousands of individuals or groups making individual decisions. It is not going to change. When the story of organized chicken liquidation is put forward the story fails to mention the largest USA chicken producer Pilgrim Pride went broke. That’s not exactly planned supply management. You run out of cash, you liquidate. It is not complicated. We are afraid it’s like the Bruce Willis movie "Last Man Standing" keep shooting until the end.


The tone and atmosphere of the conference was negative. People who own hogs are scared. They have lost money and all are looking for hope. In our opinion there was little said at the conference that would send people home enthused and positive. The brutal facts of the market place compared by topic upon topic of industry challenges were in the most part disheartening.


One positive we picked up talking to producers from all across North America was the general belief that the corn and soybean crop is in good shape and lower corn prices below $3.00 per bushel are helping out losses. There is no fear of crop failure or suddenly higher grain prices.


John Ferrell, Deputy Under Secretary for Marketing and Regulatory USDA spoke and took questions. He has a great career in politics. When asked about the Corn Ethanol effect on livestock the convoluted non – answer was classic. Politics as usual. He probably couldn’t wait to get back to the cocoon of Washington as fast as he could. As he said they have a lot of meetings in D.C. Unfortunately, Mr. Ferrell did not come across as a champion of US livestock production.


We met with several members of the National Pork Board. We have to give them credit; they are prepared to be engaged. They face a huge challenge with the huge losses – producers are encountering. We hope they can step up and provide leadership for our reeling industry. They have the mandate and the funding.


On a self serving note, we are really happy. A week ago, a Genesus customer, Good Hope (we like customers with positive farm names) received the award from Canada’s largest meat packer Maple Leaf Foods for having the highest lean meat percentages for 12 months at Canada’s largest plant located in Brandon Manitoba which processes give or take 4.43 million head per year.
Good Hope’s Championship Results:
Average carcass weight: 93.21 Kgs (257 lbs live weight)
Average back fat: 14.6mm (.57 inches)
Average Loin Depth: 63.5mm (2.48 inches)
Average lean meat percentage: 62.38 per cent

Genesus Purebred Duroc boars bred to Genesus F1 Landrace/Yorkshire females generated the winning numbers. No PayLean was fed to Good Hope’s hogs. Genesus delivers more pigs and better pigs. Congratulation Good Hope!

Summary
The National Pork Industry Conference reiterated the negative attitude we sense throughout the industry. There is little optimism; there is little faith in the future. Attrition of the sow herd continues. There is mostly doom and gloom.

Markets are driven by supply – demand and psychology. There is little to boost market from psychology. Swine flu (H1N1) continues to be used in the media. The reputation of our industry name being associated with death is not a demand driver. Pork meat sales have to overcome the first objection "will pork kill our customers" they certainly start in a hole. It is a huge negative to price enhancement and market momentum.

One disappointment we had at the conference was the lack of positive solutions. It’s supply/demand. Supply is being cut. The America we believe in is one of optimism. Offence versus retreat. If you want to increase demand, you have to sell. Add salesmen, advertising, and a market that pushes demand. Sitting around wringing your hands feeling sorry for yourself waiting for the phone to ring doesn’t work. The pork industry we thought we knew was aggressive. We travelled the world. There is no better place in the world to raise hogs and process pork. We have the people, knowledge, scale, feed, land, genetics, capital, packers, and logistic ability to compete economically with any swine industry in the world. We have huge advantages. We know it is tough. We are all losing money but let’s rather than think smaller think the American way. Sell, sell, sell! Push back into export markets. Work on developing more food service demand. It’s not just supply but demand. A small percentage increase in exports or domestic demand coupled with smaller supply is price enhancing. The contraction proponents as the only solution are defeatist. They have no vision other than retreat. We need to push and sell. It’s not only supply. Offense not defense! Forward not retreat!

"Damn the torpedoes full speed ahead!" That’s the America we know.

Good Hope Farms with No.1 Award in the Canadian Pork Industry
Maple Leaf Foods, Canada’s Largest Meat Company, at their annual producer banquet on July 15th 2009 recognized long time Genesus Customer, Good Hope Farms with No.1 Award in the Canadian Pork Industry:

BEST CARCASS for a Calendar year at Maple Leaf

BEST CARCASS out of 4.43 million market hogs that Maple Leaf processes per year at there Brandon Manitoba Plant.

Genesus Congratulates Good Hope Farms for these award winning results.

Genesus Duroc Boars and f1 Yorkshire/Landrace Females generated this winning data.


Author: Jim Long, President & CEO, Genesus Genetics 

Study to Influence Pen Configuration and Group Size
CANADA - Research conducted at the Prairie Swine Centre is expected to assist hog producers in deciding penning configurations and group sizes, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
A study conducted at the Prairie Swine Centre at Floral, Saskatchewan has confirmed pigs raised in large groups handle much easier than those raised in small groups.

During the study pigs raised in groups of approximately 240 loaded about 30 percent faster than pigs raised in groups of 16 to 20 and exhibited lower signs of stress such as labored breathing and redness.

Dr. Harold Gonyou, a research scientist in ethology, expects the findings to be of value to producers deciding how to raise their pigs.

Dr. Harold Gonyou-Prairie Swine Centre
Certainly one of the things that we've had people ask us about is how easy is it to handle these pigs from large groups?

They're concerned that just getting them out of the pen et cetera will be more difficult.

What we found was that that's not really the case and that they do move easily down the hallway and up to the point of going up the ramp.

It first of all says you're not going to have more problems with pigs from large groups and, in fact, you'll probably have less.

The pigs simply have different experiences in their life and they're more willing to investigate and to travel.

I think that the pigs in the large group certainly have a different social pattern.

They interact with other pigs much better than do pigs that come from small groups.

There's no aggression et cetera when they meet with other pigs and I think part of that also relates probably to the fact that they're exploring that large pen as well.

They're used to walking longer distances and traveling more and just getting to know a larger space whereas pigs from the small group are from a very restricted area and I think there may be a bit of fear when they leave their pen.

Dr. Gonyou notes additional studies are looking the handling and transport of pigs going to market and researchers are looking at designing facilities to make them low stress which would be advantageous to all pigs but especially pigs from the larger groups.

Pork Production Versus Consumer Demands
"With the high production costs in Canada, what can we do to build a long term competitive industry?" asked Mario Lapierre of Génétiporc Inc. at the London Swine Conference 2009.


Introduction
The Canadian pork industry has been challenged for the last three years. Producer margins have been negative during the last three years. This crisis is not limited to pork producers; processor margins have been largely negative for the past three years.

The crisis is due to the convergence of different factors:

the rapid rise of the Canadian dollar
rapid rise of input costs – notably feed grains
production increase all around the world, and
the lack of processor competitiveness in Canada.
In global terms, Canada is a relatively small player ranking sixth in terms of pork production behind China, EU-27, US, Brazil and Russia. But Canada’s industry is considerably more dependent on the export market with our reliance growing from 35.4 per cent of production exported in 1999 to 55.8 per cent in 2007.

Furthermore, USDA estimates the 2007 Canadian pig crop at 31,832 million head with 10,032 million (31.53 per cent) exported to US as early wean, feeder and slaughter hogs (Ron Plain, Global Price and Production Forecast, Banff Pork Seminar 2009). Of total production, the needs for Canadian customers are not more than 9.6356 million, which means around 70 per cent of pigs born in Canada are produced for export markets.

Our industry is very dependent on Canadian exchange rate and export market.

With the production cost we have in Canada, what can we do to build a long term competitive industry?

Do you know what the customer wants and can we produce it at the best price?

Different Market Trends: Niche Terms and Attributes
Niche terms and attributes: what do they really mean?
Some of the niche terminology used to describe alternative or specialty meat product attributes today are better understood than others. Some terms have consistent meaning from person to person. Others may mean different things to different people.

Labelling requirements can be broad. So if you’re looking for specific niche attributes, check the label to see if they’re listed. That, along with a basic understanding of USDA production/labelling requirements, will help you get what you’re looking for.

Some of the popular attributes in the market today include:

Locally Grown – One of the more easily understood terms and without USDA guidelines attached, although what defines “local” may vary from one person to another. For some it may represent a drive to a farmer’s market, for others it may be a broader geographic region. The reasons why people support locally grown products (i.e. keep money in the community, know where food comes from, support agriculture) may influence their definition.

Free-Range – Also referred to as "pasture raised, free roaming and raised outdoors." The USDA standard to make this claim for pork is that hogs have had continuous access to pasture for at least 80 per cent of their production cycle.

No Antibiotics Used, Raised without Antibiotics – "No antibiotics added" on the label means that the animals were raised without using antibiotics and that documentation has been provided to USDA demonstrating this.

Natural – Pork products that meet compliance with USDA Natural Standards which means the product contains no artificial ingredients or added color and is only minimally processed. The label must explain the use of the term natural (such as no added colorings or artificial ingredients; minimally processed).

Naturally Raised – There is currently no USDA standard for making a "naturally raised" claim on pork products, and definitions may vary from one naturally raised pork product to another. Attributes that may contribute to a hog being "naturally raised" might include raised without antibiotics, growth promotants or animal by-products in the feed, use of deep straw bedding, raised outdoors, etc. These attributes will likely be stated on packaging or in marketing materials.

Organic – Pork products that meet compliance with USDA Organic Standards. This involves an entire process in which synthetic inputs into all phases of animal production, meat processing and handling are prohibited. Labelling rules have been established by the USDA for products claiming to be organic and include four categories.

 
 
100 per cent organic – Products produced exclusively using organic methods as defined by the USDA. Can carry the USDA organic certification seal.

Organic – 95 per cent or greater of the ingredients (by weight, excluding water and salt) are organically produced with the remaining five percent of ingredients on the National List of Allowed Synthetic and Prohibited Non-Synthetic Substances. Can carry the USDA organic certification seal.

Made with organic – 70-95 per cent of the ingredients are organically produced and would be displayed on the principle display panel as "Made with organic [specific ingredient(s)]."

Less than 70 per cent organic – These products have the option to include "X per cent organic" on the information panel and only need to list organic ingredients on the ingredient statement.

For more information on the National Organic Program, click here.

Breed Specific – Just as there are breed-specific beef products like Certified Angus Beef, there are breed-specific pork products. Sometimes referred to as heirloom or heritage breeds, examples in the marketplace today include Berkshire (also knows as Kurobuta meaning "black pig"), Duroc, and Tamworth.



Figure 1. How important are the following labels/phrases when selecting foods and beverages? (The Hartman Group Inc. study)

Natural and Certified humane overtakes in terms of importance when making a product purchase.
What Can We Do as an Industry to Supply Those Market Trends
There are two ways we can do to get out of the actual crisis is to reduce our cost of production and add value to our products.

duBreton Model of Production
Breton Foods Canada has developed during the last 20 years an integrated approach. Breton Foods Canada is first a pork producer who invests in R & D to build a sustainable model where we reduce cost of production and develop value-added products.

 


What we are doing to reduce the cost of production?
Our genetic division, Genetiporc, has developed genetics lines that are more prolific, faster growing and more efficient for feed conversion. But also because of our close relationship with the processing plant all our lines have to meet the standards for meat quality.

Genetiporc has the biggest portfolio of pure breed line and can adapt their products depending on the market place. It has developed over the years the largest pureline portfolio in the industry. Each breed has is own strengths and we believe that we must understand them to best utilise them. First, quality basic ingredients are always important in the success of any recipe, and our genetic team has understood that perfectly. Among other things, Genetiporc’s pureline portfolio is the ingredient of our successful genetic program.


Industry health leader
In the early 1980’s, health was not a concern for genetic suppliers. Mass vaccinations were common and there was almost no information available on the costs incurred by diseases. It was only after Genetiporc was founded in 1984 and provided the first assessments on the economic impact of major diseases on swine production that the industry began to seriously examine the problem.

Genetiporc’s health programme has been designed to minimise production cost for commercial farms. Creating and maintaining a production network free of primary diseases and their associated economic impact has guided Genetiporc’s efforts since its very foundation. The rigorous application of strict biosecurity measures constitutes a fundamental priority. Genetiporc’s team has developed a biosecurity “reflex” that has become second nature.

Hands-on approach
Buying breeding stock with exceptional health status:

facilitates the animal quarantine process
prevents the introduction of new pathogens, and
prevents the introduction of new strains of an existing pathogen into the herd
Maintaining a herd’s exceptional health status:

enhances feed conversion ability and growth rates
reduces expenses for medication and care
streamlines work processes and decreases task time, and
increases percentage of marketed pigs
Unparalleled health status

Rigorous biosecurity protocols, and
PRRS & Mycoplasma naïve network for over 20 years
Integrated R&D
As an integrated group, "We do what we sell":
The company’s vertical integration ensures that development is aligned with the increasingly specific needs of consumers and producers. It uses ties between nutrition, production, genetics and slaughtering at Genetiporc to capture value at each step of the production chain.

Be the more efficient pork producer:
Genetiporc will always keep exploring new ways to make improvements at every level of the production chain. By doing this, Genetiporc is representing the most efficient option for the producer.

Integrated company benefits
Partnership in genetics:
Exchange germplasm and technology with large innovative breeding companies worldwide Through strategic business partnerships Genetiporc is giving access to its customer to the best worldwide genetics available in the industry.

Develop common product adapted to customer needs:
Leverage strengths from each company and build a more efficient unparalleled product for the customer.


 

 

 

 

 

Pork Commentary: If Misery Loves Company, We Have Lots of Friends
CANADA - This week's North American Pork Commentary from Jim Long
The implosion in our industry continues. Prices continue to plummet with little optimism in the market place. If misery loves company – we’ve got it covered. Hourly, we hear of producers trying to stay afloat. Has it ever been worse? Probably not!

Other Observations
Usually at this time of year finisher barns are all full. Every old relic of a barn has hogs. Some barns are double stocked. If ever finisher barn inventory is reaching its zenith – it's this time of year. Not this year. Lots of barns are empty. Finisher barn contract prices are dropping to $25.00 per head space. A true reflection of supply and demand.

This summer there is no question it has been cooler than normal. Crops in many parts of the continent are two weeks behind maturation. The same reason crops are behind is why hogs are growing faster over the last nine weeks (June–July). What if hogs are four days ahead of a year ago due to growth rate? Four days is about one million hogs of growth. If somehow we had marketed one million less hogs over the last couple of months, what would that have done to the prices and market psychology other than push them up. What is the growth in your own barns? Have they ever been better in the summer?

There is more empty finisher space than a year ago. There is no debate, this is despite heavier hogs. If hogs were four pounds lighter, that would be about 600,000 more empty spaces. How many empty or not full finishers where you live? You only kill them once. One of these days the dog is going to hit the end of the chain. This is not soon enough for many.

Packers are making money now. That's good. Not long ago, packers and producers were losing money. We need to have a packing industry that can pay us. Packers need to have the cash flow to be aggressive marketers of our product domestically and internationally. Packers who are making money also have the confidence to own product and be hopefully less apt to dump product which just weakens the whole pork sector.

Mexico
We just returned from Mexico. Hog prices are 65 cents U.S. a pound live weight. Producers are making money. High feed prices over the last 15 months and then the swine debacle has cut Mexico's sow herd. A couple of years ago Mexico's sow herd was estimated to be one million sows. (There are no official statistics.) Now, some industry observers estimate that the Mexican inventory at 650,000 sows – a decrease of 35 per cent or 350,000 sows. That's probably why hogs in Mexico are 19.5 peso a kilo (65 cents US liveweight per pound) despite a US market $50.00 per head less and an open border for pork imports.

The decrease in sows has not hit fully the market place. As an industry for the most part, we market hogs from a sow inventory ten months prior to market hog shipment (biology). As sow inventories decrease there is a lag time. Mexico like Canada and the United States will have less hogs in the future. It sometimes baffles us why people forget the ten month lag. Sows do not just leave and all their offspring disappear.

Swine flu hit the Mexican market hard. For the first two to three weeks after the swine flu break, there was virtually no market for hogs as consumers stopped buying pork. Demand has started to recover but some packers are still running 50 per cent of capacity. Sixty-five65 cent hogs are a reflection of lack of supply versus demand. It would be our opinion as the H1N1 (unfortunately termed swine flu) threat diminishes pork demand in Mexico – and everywhere else will increase while supply declines. 65 cents now in Mexico. There is a lot of upside to Mexico's domestic prices and more pork export opportunities for US and Canada Packers.

Andean Countries
Before Mexico we attended Agroexpo, a trade show in Bogota, Colombia. There were visitors from the Andean countries of Colombia, Venezuela and Ecuador.

Colombian producers are making about $15 to $20 per head (65 cents U.S. per pound). There has been liquidation, swine flu has been a factor. High feed prices also impacted the industry. Poor pork demand. There is little advanced genetics in the country. Health regulations have kept the country behind genetically. The isolationist policy on swine genetics due to health barriers is keeping producers cost of production higher and globally less competitive.

In Venezuela, producers are making about $30 to $40 per head. Since swine flu, all pork and live hogs from other countries are banned. In the last year, there had been liquidation of the sow herd due to high feed prices and general economic issues. The surviving producers are currently in a profitable position. The trade bar seems bizarre when a government based on socialistic principles of ensuring a higher standard of living for the working class is not trying to improve industry productivity and meat protein availability for domestic consumption. It sounds like a contradiction to us.

Good Hope Farms with No.1 Award in the Canadian Pork Industry
Maple Leaf Foods, Canada's largest meat company, at their annual producer banquet on 15 July 2009, recognised long time Genesus customer, Good Hope Farms with No. 1 Award in the Canadian Pork Industry.

Best Carcass for a Calendar Year at Maple Leaf Foods means Best Carcass out of 4.43 million market hogs that Maple Leaf processes per year at their Brandon Manitoba Plant.

Good Hope Farms results obtained for 12 months (2008-2009):

Average carcass weight: 93.21 kgs (257 lbs livewt)
Average backfat: 14.6 mm (0.57 inches)
Average loin depth: 63.5 mm (2.48 inches)
Average lean meat percentage: 62.38 per cent
(No Paylean was used, although available)

Genesus congratulates Good Hope Farms for these Award winning results. Genesus Duroc boars and F1 Yorkshire/Landrace females generated this winning data. Genesus continues to set record setting results with the world's most productive genetic programme.


Author: Jim Long, President & CEO, Genesus Genetics 

Canadian Beef and Pork Penetrate Panama Market
GENERAL - Canadian beef exports will have access to Panama for the first time since 2003. Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, and Federal Agriculture Minister, Gerry Ritz, yesterday confirmed that Panama has approved Canada's meat inspection system and lifted the ban on Canadian beef imposed in 2003 because of bovine spongiform encephalopathy (BSE).



"The Government of Canada continues to fight for farmers by opening and re-opening markets abroad," said Minister Ritz. "I'm pleased to see that Panama recognizes that Canada produces safe, high quality beef and pork products and I encourage all countries in Latin America to open their doors."

"This is an important development in relations between our two countries," said Minister Day. "The opening of this market for Canadian beef creates opportunities that will make a difference to the bottom line for Canadian producers. It also shows this Government is committed to fighting for full access and fair treatment worldwide for Canadian business."

Approving Canada's meat inspection system and granting of access to Canada is important because it gives exporters the ability to ship beef and pork from all federally-registered Canadian meat establishments.

Prime Minister Stephen Harper met yesterday in Panama City with Panamanian President Ricardo Martinelli.

Canada and Panama concluded negotiations on a comprehensive Free Trade Agreement covering goods, services and investment, among other areas. Parallel accords on labour cooperation and the environment were also negotiated.

Expanded Herd Reduction Forecast for Fall Quarter
CANADA - Des Moines, Iowa based Paragon Economics is projecting deeper cuts to the North American sow herd as producers respond to increased feed costs and the recent large sell-off of lean hog futures, writes Bruce Cochrane.
 

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
North American hog producers have faced prolonged losses resulting primarily from a run-up in corn and soybean prices that began in 2006 and escalated in the fall of 2007 adding anywhere from 25 to 30 per cent to production costs while a strong Canadian dollar has intensified the losses in Canada.

Paragon Economics President Dr. Steve Meyer observes production has not gone down as much as the losses would dictate.

Dr. Steve Meyer-Paragon Economics
I think we're going to probably pull this breeding herd down 10 to 12 per cent from the level it was in October of 2007.

Canada has largely accomplished their share of that thing.

I think they're going to do a little bit more.

They're at 1.38 million.

I think they're going to go down into the 1.2s, I don't know if they'll get all the way to 1.2 million.

That means that the US herd needs to come down by somewhere around 400 thousand head from the 5.9 million that we had in June so we still have to cut back six to seven per cent here.

I think the Canadian herd is going to continue to decline for at least another year and the total that we need, I think, in North America is somewhere in the 6.8 range which is down from well up into the seven million range just a couple of years ago.

Dr. Meyer notes up until the last three weeks, especially in the United States, most of the reduction of the breeding herd, about two to three per cent over the past six quarters, has been made up for by increased productivity.

However he observes there are anecdotal reports that indicate more sows have moving to market over the last two to three weeks in response to higher feed costs and the sell-off of lean hog futures and he expects a much more sizable reduction as we move into September and into the fall quarter.

Pork Commentary: Is There Any Floor to this Market?
CANADA - This week's North American Pork Commentary from Jim Long.
 
Cash and Lean Hog Futures Collapsed last week
Friday, 7 August
Iowa - Minnesota 48.21
August Futures 48.80
October Futures 44.90
December Futures 44.05

If the Lean Hog Futures are a reflection of where cash will be this late summer, fall and early winter looks like a $40.00 per head loss for the next six months. That would multiply to a further $2.5 billion in losses in our industry (Canada – USA 2.5 million hogs marketed a week x 40 x 26 weeks = $2.5 billion). According to the NPPC, since September 2007 the USA pork industry has lost nearly $4.4 billion with producers losing an average of $21.37 per pig over the past 21 months. Any way you cut it what has happened and what could happen is an aggregate, production loss of $6.5 - $8.0 billion. If it all plays out we are going to have a lot less sows six months from now. Example: $2.5 million dollars or a loss of $1000 per sow the staying power of many producers is at the breaking point.

Other Observations
Gilt slaughter data from the University of Missouri does indicate that the per centage of total slaughter accounted for by gilts remains high, averaging 50 per cent since May 1 that is 0.5 per cent higher than the average for the time period over the last 10 years. A gilt per centage of 49.2 to 49.4 are about equilibrium. Some arithmetic. 2 million market hogs a week - .5 per cent decrease in gilt retention are 10,000 fewer gilts a week being retained. A .8 per cent decrease is 16,000 fewer gilts a week being retained. The 3 months since May 1st could be 120,000 to 200,000 fewer gilts retained. A definite sign of liquidation.


The small pig US cash market has collapsed. Last week weaned pigs were $1 - $17.00 that is an average of $11.02. 40 pound feeder pigs $10 -$30 that is an average of $23.16. On the August 7th DTN feeder pig livestock margin calculation a 40 pound feeder pig would have to be bought for 9 cents to breakeven finishing them for December delivery. How ugly is that!?


Retailers in June averaged $2.954 per pound for pork – that’s up 2.1 cents per pound from last June but hogs averaged $40 per head less this June compared to last. On one side it’s a huge positive that despite H1N1 and lower pork exports the retailers were able to enhance their prices while selling more pork. It’s a reflection of positive demand from the consumers. On the other hand, it totally ticks us off that we have friends and customers losing their farms while retailers fill their pockets like greedy pigs prospering on other people’s misery. So much for vertical co – operation. It’s raw Darwin business. Dog eat dog. Our one hope is the high retail price gives us the ability to push prices up quickly when hog supply drops and exports pick up.
$50 million in pork purchases for government feeding programs.
Remove the spending cap for additional purchases
Push China to open up for more pork imports (H1N1).
This letter is a reflection of the state of our industry.


Hog weights are up significantly. On the other hand the last two months have been uniquely cool. The same reason corn is behind in maturation is why hogs have grown faster. No one knows for sure the total equation of weight versus weather but we do know you only harvest them once. We expect hog numbers and weights to moderate as weather becomes more seasonal.


The world's largest Government owned swine farm, Big Sky reportedly is liquidating 8 - 10,000 sows. (approximately 50,000 down to 40,000). Note to Saskatchewan Government: keep going, do yourself and every independent producer a favor - get totally out! Government hog farms are an oxymoron.
Summary
Last week's price implosion and dismal future prospects has triggered a day of reckoning. We hear of decisions to liquidate. Sow packers are filling up. We know gilt retention is down. It is really tough, it's a crisis, but we believe survivors will be rewarded.


Author: Jim Long, President & CEO, Genesus Genetics 

Canadian Govt Supports Hog Industry Restructuring
CANADA - The Government of Canada is delivering a comprehensive restructuring plan for pork producers by investing in key marketing initiatives to get more customers buying Canadian pork, providing government-backed credit to help viable operations weather the current economic uncertainty and helping struggling operations to transition out of the industry.



"We know Canadian hog producers can become profitable again, but we have to face tough realities to make our pork industry lean and competitive," said Agriculture Minister Gerry Ritz. "Some operations simply aren't viable any more and we are going to help them transition out of the industry and reduce production. Some operations need access to credit to weather the current economic storm and we are providing government-backed loans to help them restructure. Farmers want to make their living in the marketplace and we're investing in marketing to find new customers for Canadian pork and make our pork industry successful for the long term."

The new initiatives announced on Saturday (15 August) include:

An International Pork Marketing Fund of $17 million for market research, promotion and access initiatives to find new customers for Canadian pork products.


Long-term loans with government-backed credit that financial institutions can offer to allow viable hog operations to restructure their businesses. These long-term loans will be provided at market rates. Producers with sound business plans will be able to access short-term credit for operating costs such as feed and payroll.


A Hog Farm Transition Program to allow producers to tender bids for the amount of funding they need to transition out of the hog industry and cease hog production for at least three years. This program will invest up to $75 million to gradually reduce production and oversupply issues.
Agriculture and Agri-Food Canada officials are working closely with the pork industry and financial institutions to finalize program details. These new initiatives respect Canada's commitments made under international trade agreements and ensure Canadian pork producers will continue to have access to market opportunities around the world.

"We're standing with Canadian pork producers as they restructure and streamline the industry to adjust to new market realities," said National Revenue Minister Jean-Pierre Blackburn, who also serves as Minister of State for Agriculture. "These investments will rebuild the Canadian pork industry for the long term and we will continue to work with pork producers as they restructure their operations."

CPC Pleased with Government's Commitment
Canadian pork producers are pleased to see the federal government’s commitment to the hog industry through the launch of the above programs.

"The impact of the world pandemic caused by the H1N1 virus has delayed the prospects for price recovery in hog markets. This is the latest blow to an industry that has faced serious challenges over the past few years, including high feed costs, high exchange rates and US public policies," says Jurgen Preugschas, Chair of the Canadian Pork Council (CPC). "The industry has responded through dramatic re-structuring and a commitment to a Strategic Transition Plan. Today, the government is lending a hand."

The International Pork Marketing Fund, the third program, will build a strong foundation for the future of the industry by helping to drive demand for Canadian hog and pork products with Canada’s international trading partners.

"CPC will continue to work closely with Agriculture and Agri-Food Canada and will continue to respect our working relationships with the international community," says Mr Preugschas. "As the transition plan is implemented, a leaner, greener and more innovative industry will emerge – one that is prepared to capitalize on both domestic and international opportunities."


 

Pork Industry Restructuring Package Trade Neutral
CANADA - The chair of Manitoba Pork Council says there was a considerable amount of effort to ensure a Canadian pork industry restructuring package would not have negative trade implications, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
This past weekend the federal government unveiled a restructuring plan for Canadian pork producers which includes interest bearing government backed credit, incentives to help struggling operations transition out of the industry and funding for international pork marketing initiatives.

Manitoba Pork Council chair Karl Kynoch says the government was careful to minimize trade implications.

Karl Kynoch-Manitoba Pork Council
We've had a lot of threats come out of the US about a package or assistance coming to the industry but, you know what, this package that has come forward is nothing different than is actually being offered to the producers in the US.

We've basically been offered a loans program.

Most of the money has been offered in some sort of form of loans, just backing up at the banks a little bit, so basically everything that comes out of there will have to be paid back by producers.

The other part of it, which I would imagine our American counterparts will be very happy with, but there's another 75 million been offered to help some producers exit the industry and actually close down their barns.

The one thing that's different about this is before we had a sow buy-out program but this time it's being offered to the weanling barns, the feeder barns and the sow barns so it's being offered to the industry as a whole and that should be very positive with our U.S. counterparts.

They've also put 17 million dollars towards developing more export markets around the world and that's very important because here in Canada we're very reliant on export markets around the world.

What we need to do is really concentrate, for example, in Japan, China, some of these export markets and diversify some of the interests from the US to other markets which also goes a long ways into helping reduce the risk of trade action and that but, again, this industry is very heavily dependent on exports.

Mr Kynoch says the weekend announcement provides an indication to producers of what will be available as they make some tough decisions.

He expects further details to be ironed out over the coming month and further announcements in September.

Restructuring Package Expected to be Beneficial
CANADA - The Saskatchewan Pork Development Board expects the benefits of a federal pork industry restructuring plan to spin throughout the provincial economy, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
This past weekend the federal government unveiled a pork industry restructuring plan which will include government backed credit, incentives to help struggling operations transition out of the industry and funding for international pork market development.

Sask Pork general manager Neil Ketilson says historically pork production in Saskatchewan has been profitable but a combination of factors over the past two to three years, including the high value of the Canadian dollar, high feed costs fueled by competition from the ethanol industry and higher transportation costs due to the loss of the Mitchell's plant have made it challenging for producers to make ends meet.

Neil Ketilson-Saskatchewan Pork Development Board
Pork production has been a very profitable business over the last number of years.

If you look at back over the last 10, 15, 20 years there's an awful lot of people that have made their livelihoods and done very well out of the business.

We have about a 300 million dollar business in the province just with the sale of pork plus all the indirect kinds of economic activities that surround it, the feedmills, the veterinarians, the transportation services, a whole host of other things, so if you consider the spin-off of all of those things we are very significant to the agricultural economy.

I guess the other part of it is that we are very very important to a lot of the grain farmers out there in terms of a market for feed grains.

We traditionally are a long ways from markets for grains and therefor, anytime you can value add grains into a livestock product, we can do well and historically there's been very good profitability in the business.

Mr Ketilson says Saskatchewan's pork producers are adjusting to the new realities and, over time, he's convinced the challenges will work themselves out and the industry will become profitable again.

Ethanol Undermines Canada Hog Farm Rescue
CANADA - Canada's rescue plan for the hog industry will fail to work because the government continues to support ethanol production, the industry's rival for feed grain supplies, a report by an independent farm research centre said on Wednesday.



The Canadian government said on Saturday it will pay some farmers to stop raising hogs and offer loans to help others restructure. Canada's hog industry is in crisis, with high feed prices, a buoyant Canadian dollar, fears about H1N1 flu and a US food labelling law making pig farming unprofitable.

A mandate from the Canadian government, starting next year, that oil companies must market fuel with 5 per cent renewable content, has spurred rapid expansion of ethanol production. That's driving up prices of corn and feed wheat, from which ethanol is produced and which farmers feed to cattle and pigs.

"Rarely have two elements of Canadian public policy been so profoundly at odds with one another," the report from the George Morris Centre said. "...There is something singularly perverse about giving false hope and setting an industry up to fail."

About 1.7 billion litres (0.45 million gallons) of Canadian ethanol production exists or is planned, owned by companies like Husky Energy, Iogen Corp and Suncor.

Ethanol development in Canada will force farmers to import feed, which will become more expensive relative to US feed costs, said Al Mussell, the report's co-author, in an interview.

"The pork segment should see the grain-based ethanol industry for the menace it is," the report said.

American hog farmers are also struggling and blame ethanol expansion in part, reports Reuters.

But the Canadian industry is more vulnerable to higher feed prices because corn is a relatively small crop in Canada, while the US exports it, Mr Mussell said.

The government's aid package won the support of two of Canada's biggest farm groups, the Canadian Pork Council and Canadian Federation of Agriculture, which said the loans will give farmers time to regroup. Lower hog production is also seen as a way to support prices.

Long Term Outlook for Pork Consumption Bright
CANADA - A US-based agricultural economist is confident, despite the current economic squeeze, the long term outlook for North American pork production remains positive, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Fueled by high feed costs due to increased competition for corn from the ethanol industry, low hog prices due to an over-supply, the global recession and the impact of the H1N1 flu, the North American hog industry is facing its worst economic squeeze ever

University of Missouri agricultural economics professor Dr Ron Plain notes US producers have lost money in 20 of the past 22 months and losses in the Canadian industry have continued even longer.

Dr Ron Plain-University of Missouri
Pork is quality meat and people like it.

If we look at long term, for the last 70 year or so, there's about a one and half per cent per year growth rate in demand for pork and so with time a growing world population and, in general, a wealthier population means that we need to grow our industry both in the US and Canada and supply that growing demand.

Long term one of the key things is this whole issue of competitive position in the world and I think North American hog industry long term is a place that's going to gain market share.

The portion of the world's pork produced here in the US and Canada is likely to increase.

I think we're in a cost competitive position and still a regulatory competitive position to places like the European Union.

Certainly hog producers in both of our countries are losing an enormous amount of money and unfortunately a number of them won't survive the current situation but long term our plentiful supply of feed grain and our environmental situation puts us in a pretty good shape once we get through the current economic problems.

Dr Plain acknowledges the weak economy worldwide is hurting the pork industry right now but if we can turn that around and generate some improvement, that will certainly help.

Canadian Hog Statistics - Second Quarter 2009
Canadian producers had 6.7 cent per fewer pigs on farm on 1 July 2008 than a year previously, and the breeding herd was down 4.6 per cent, according to the latest quarterly report from Statistics Canada. The combination of US COOL regulations and perceptions of the H1N1 virus caused the number of pigs exported from Canada to drop by more than one-third for the first half year of 2009 compared to the same period in 2008.


Highlights
Canadian hog producers had an estimated 12.1 million hogs on their farms, down 6.7 per cent from 1 July 2008. The Canadian breeding herd, mainly sows and gilts, declined 4.6 per cent to almost 1.4 million head during the last year.

During the first two quarters of 2009, hog producers nationally exported an estimated 3.3 million hogs, down 34.6 per cent from same period last year. New Country of Origin Labelling (COOL) regulations in the United States have constrained market access, and the perception of the H1N1 virus has also had a negative impact on markets.

Analysis
Livestock statistics as of 1 July 2009
As of 1 July 2009, the number of hogs on Canadian farms was down from the same date a year earlier.

Table 1. Hog inventories on 1 July (thousand head)
  2008 2009
CANADA 12,980 12,105
Atlantic 187 148
Quebec 4,075 3,870
Ontario 3,237 3,101
Manitoba 2,720 2,530
Saskatchewan  971 810
Alberta 1,670 1,530
British Columbia 120 116

Hog inventories still decreasing
Canadian hog producers had an estimated 12.1 million hogs on their farms, down 6.7 per cent from 1 July 2008. Hog inventories have been decreasing since 2006, following a period of investments in more efficient barns in the late 1990s and early years of 2000.



Figure 1. Hog inventory on farm per quarter, Canada, 2000 to 2009
The Canadian breeding herd, mainly sows and gilts, declined 4.6 per cent to almost 1.4 million head during the last year. As sows decrease so do the number of farrowings. Farrowing intentions for the third quarter of 2009 are down 4.1 per cent from the same period last year and are expected to be down 5.5 per cent for the fourth quarter. On 1 June, the US breeding herd has decreased 3.0 per cent from the same date last year.

Prior to the onset of this decline, hog producers had tolerated tough times in the industry while waiting for markets to improve. By 2006, some hog producers began leaving the industry, reflecting a number of factors. These include high feed costs, low commodity prices, a strong Canadian dollar and the economic downturn. The downturn has reduced access to credit for producers and decreased meat demand by consumers. Last year, the Canadian government put a Cull Breeding Swine Program in place to help hog producers reduce the size of their breeding herds. Recently, new Country of Origin Labelling (COOL) regulations in the United States have constrained market access. The perception of the H1N1 virus has also had a negative impact on markets.

Despite hog inventories decreasing since 2006, hog slaughter remains strong in 2009 as more weaners were fed to slaughter weight in Canada rather than being exported to US finishing operations. Domestic slaughter capacity increased, mainly in the Prairies.

During the first two quarters of 2009, hog producers nationally exported an estimated 3.3 million hogs, down 34.6 per cent from same period last year. The bulk of hog exports are market hogs shipped to slaughter and weaner hogs shipped for feeding. In the first and second quarters, hogs exported for slaughter are down 58.5 per cent, and weaner hog exports are down 27.6 per cent from the same period one year ago. Manitoba, the main exporting province, had a 32.4 per cent decrease in exports in the first and second quarters of 2009.



Figure 2. Hog exports, Canada, 2000 to 2009
Revenues from the sale of hogs declined 2.9 per cent in 2008, the fourth consecutive annual decrease. The average annual weighted price in Ontario, a leading hog price indicator in Canada, remained virtually unchanged in 2008 from the previous year. This is a decrease of $29 since its peak of $86 per hundredweight in 1996. Historically, decreases in hog prices were generally recovered within a year or two, even following the price collapse in the fall of 1998. However current hog prices have not recovered since 2005.

Calculating Energy Content of Swine Rations
CANADA - An international study indicates margins of error need to be built into net energy calculations when formulating rations for swine, writes Bruce Cochrane.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Research conducted by the Prairie Swine Centre in Saskatoon in collaboration with the Universities of Illinois and Missouri looked at net energy systems used to calculate the energy content of feed ingredients when formulating swine rations.

The goal was determine whether genetic or environmental factors would influence the calculations.

Dr. Denise Beaulieu, a research scientist nutrition with the Prairie Swine Centre, says research techniques were carefully duplicated to ensure accurate comparisons.


Dr. Denise Beaulieu-Prairie Swine Centre:
The maintenance, the requirement to maintain the animals was different between research centres.

Whether this is due to genetics or environment, we're not exactly sure but this certainly confounds our ability to estimate the energy retained in a feed.

We did find also that the net energy was affected by growth so it was affected both by where the animal was, the environment, perhaps the genetics but also the stage of growth of the animal.

So even if a producer is using, for example, the digestible energy system they may have to use different numbers depending upon the stage of growth of the animal that they're feeding.

We've known about that for some time, that we may not be able to use a single number for each feed.

This research certainly has demonstrated that again, that producers depending on where they are and or the stage of pig that they are feeding, they may have to use different numbers to predict the energy requirement of that feedstuff.

Dr. Beaulieu says, because the numbers are not precise, a margin of error is acceptable when formulating rations.

However she suggests, with the current economics, produces may be willing to use lower cost ingredients, estimate the energy content of those ingredients and accept slightly lower performance