Google

Author Topic: Canadian Pork Producers:  (Read 193616 times)

0 Members and 1 Guest are viewing this topic.

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #450 on: April 12, 2014, 12:52:08 PM »

Canada: Hog Markets
11 April 2014
Genesus - The first power in genetics

CANADA - What else can one say when market hog price is near double from the same week a year ago ($260.45 vs $142.32), writes Bob Fraser, Sales & Service at Genesus Ontario.

Canada – WOW!

Plus this has all happened in a seeming heartbeat, with margin after feeder pig and feed going from $68.30 to $126.82 in a mere five weeks. Producers have had little time to adjust to the fact that they’re making money (let alone a lot of money) after ten years wandering in the wilderness.

A look at the OMAFRA Weekly Hog Market Facts compiled by John Bancroft, Market Strategies Program Lead, Stratford OMAFRA



Also Canadian producers can hardly be blamed for being nervous of their newfound fortunes. How many times has the proverbial “light at the end of the tunnel” proved to be a train! The list is long – ongoing COOL frustrations, swine flu, seven dollar plus corn, rapidly appreciating CDN dollar to name a few. So now the “perfect storm” of shortened supply (due to PEDv), smallest cattle herd in living memory, a vastly depreciated CDN dollar and the cheapest corn in North America can seem to be “all too good to be true”. So where may the storm clouds exist? For Ontario there are two.

Ontario PED Update 5 April 2014

There are now 45 diagnosed cases of PED with an estimated 100 sites to be contaminated with planned pig movement. A listing of the diagnosed cases can be seen at www.ontario.ca/swine. There are 3 positive sites emptied, cleaned and have new pigs; testing to occur within a week but looking good so far.

As illustrated in the figure below, current information suggests that the first cluster of cases were primarily linked to contaminated plasma in sow and nursery barns but the second cluster of PED cases are primarily associated with finisher barns. The majority of these finisher barn cases are linked to market hog transport using dirty trucks. We encourage industry to focus on farm gate biosecurity and together we will work to limit the number of cases in the next few months and eliminate virus from positive sites during warmer weather.



Graph courtesy of Canadian Swine Health Intelligence Network

Quality Meat Packers

3 April 2014, ?To our customers: Quality Meat Packers Limited (“QMP”) and Toronto Abattoirs Limited (“TAL”) announce that in order to evaluate restructuring alternatives, they have sought creditor protection under the proposal provisions of the Bankruptcy and Insolvency Act ("BIA"). It is important to note that QMP and TAL are not bankrupt.

On Thursday, 3 April 2014, the Companies filed their respective notices of intention to make a proposal under the BIA which grant the Companies protection from their creditors for an initial period of 30 days. This will give the Companies the opportunity to evaluate and pursue restructuring alternatives. A. Farber & Partners Inc. has been appointed to act as proposal trustee through this process. They will fulfill roles such as monitoring our operations to ensure we are operating in compliance with the BIA and assisting us on identifying and evaluating the alternatives being considered for the business.

How these two will all play out is to early to tell. PEDV has come to Canada in four Provinces. However Manitoba, Quebec and P.E.I. have all reported only one case and none since. A larger issue in Ontario as outlined above. As to whether it’s contained is difficult to say although the disease’s spread seems to be slowing in the province.

As to the bombshell on Quality Meat Packers (representing about a third of Ontario’s kill) it is too hot of the press to predict its full implications. More next Canadian Commentary.



Genesus Global Market Report
Prices for the week of 31 March 2014


Country

Domestic price
(own currency)

US dollars
(Liveweight a lb)

USA (Iowa-Minnesota) 123.48 USD/lb carcass 91.38¢
Canada (Ontario) 283.28 CAD/kg carcass 94.06¢
Mexico (DF) 28.25 MXN/kg liveweight 98.14¢
Brazil (South Region) 3.53 BRL/kg liveweight 72.59¢
Russia 106 RUB/kg liveweight $1.35
China 10.55 RMB/kg liveweight 77.22¢
Spain 1.315 EUR/kg liveweight 82.37¢
Viet Nam 50,000 VND/kg liveweight $1.08
South Korea 4,511 KRW/kg liveweight $1.98


Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #451 on: April 19, 2014, 08:59:16 AM »

Hog Markets Remain Highly Profitable in Canada
16 April 2014

Manitoba Pork Council



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

 FarmScape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
 and Sask Pork.
 

CANADA - The director of risk management with h@ms Marketing Services says, despite a slide over the past couple of weeks in both the cash and futures markets, returns for live hogs remain profitable, writes Bruce Cochrane.

As a result of fears over the potential impact of Porcine Epidemic Diarrhoea (PED) on slaughter hog supplies both cash and futures markets have been extremely strong this spring.

Tyler Fulton, the director of risk management with h@ms Marketing Services reports two weeks ago we were sitting at near record prices but those fears over supplies have eased.

Tyler Fulton - h@ms Marketing Services

The market remains really volatile.

Whether you're talking about the cash market situation, what producers are being paid today or for that matter what's being offered in forward prices or in the futures market, by all accounts things are really volatile.

What we've seen in the last two weeks or so is both of those markets come off of the highs and really I'd say what triggered it was the last Hogs and Pigs Report that the USDA put out.

Effectively what it showed was that the USDA did not think that we would be looking at a hole in marketings in the summer months much bigger than about four to five percent and the market had factored in something probably closer to double that so it had to reconcile the two.

That's possibly what's triggered the sell off in the futures and possibly what's softened the cash market as well with buyers being maybe a little bit more optimistic that they'll be able to source supplies into the summer months.

Mr Fulton says that, while the slide has definitely affected profitability, the industry is still at exceptional levels of profitability.


Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #452 on: May 05, 2014, 05:34:23 AM »

Pork Producers' Vigilance Credited with Helping Contain Spread of PEDv
02 May 2014

Manitoba Pork Council



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

 FarmScape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
 and Sask Pork.
 

CANADA - Manitoba Pork credits the high level of on farm biosecurity with helping contain the spread of PEDv within the province, Bruce Cochrane writes.

On Monday the Office of Manitoba's Chief Veterinary Officer confirmed the presence of Porcine Epidemic Diarrhea virus at a high traffic site in western Manitoba, bringing to eight the number of environmental findings in the province, including two incidents where pigs are believed to have become infected in the high traffic site.

Manitoba Pork chair Karl Kynoch says producers have been maintaining very high biosecurity levels and to date only one hog farm in Manitoba has become infected.

Karl Kynoch-Manitoba Pork

Washing and disinfecting has become a very important practice of any of the trucks moving around the province.

Producers need to make sure they continue washing those trucks and having them cleaned before they come to their premises and any other premises they're going to if they're going to high traffic areas.

The one thing that producers need to consider is that all high traffic areas could possibly be contaminated.

You could actually go in and test and then two days later a site could go from a negative test to a positive test just due to the fact of traffic moving around and, as we've seen lately here, how easily this virus can be spread just from trucks catching a loading chute or something like that.

We always want to encourage producers to make sure that they consider all high traffic areas as contaminated.

Again, they've got to take charge of their own destiny on this.

They have to ask if their trucks have been washed before they come on the yards, they need to wash their own trucks and they also need to make sure again that they do understand the protocols at the high traffic areas they go to.

Don't be scared to ask the question, are they washing their trucks and what are they doing to ensure that they are keeping the virus off of their sites.

Mr Kynoch notes we're just coming through that slushy period which is a real challenge for cleaning trucks.

He says once we get into the warmer weather and things start to dry out that will hopefully help reduce the virus but right now we're at a point where the virus is able to spread easily.

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #453 on: May 12, 2014, 12:02:06 AM »

Pork Commentary: Canadian Packer Saga Continues?
06 May 2014


Jim Long is President &
CEO of Genesus Genetics.


CANADA - It was reported last week that a judge in Toronto, Ontario, will be asked to appoint a receiver to sell the assets of Quality Meat Packers and Toronto Abattoirs Ltd., two related companies, writes Jim Long, CEO of Genesus.

The two companies owned by the Toronto’s Swartz family, owes about $70 million to creditors that include pig farms. Capacity of plant was 30,000 per week approximately.

The plant has been owned by the Swartz family for three generations. Some reasons given for the business failure:
•Recent jump in hog prices
•PED

Our Observations
•All packers have had increased hog prices.
•PED has hit the whole industry. Ontario has had PED but at levels much lower than in the USA.
•70 hog farmers are not paid. Hogs were bought, the pork was sold. Why is there no money for the farmers hogs?
•750 employees will probably lose their jobs
•We are in tough business it’s not for the faint hearted. Adjust or die. Other packers are doing just fine in Ontario, Conestoga a competitor to Quality has just expanded. Fearmans Pork has new aggressive owners moving forward. Buying in the same market, selling pork in the same market. We expect the difference is leadership – management focus.

Strange

We are having record high hog prices a reflection of pork demand. It’s interesting that in the midst of record profits companies like Quality Meats and Choice Genetics go into receivership and or bankruptcy. How bankrupt companies expect to keep their customers when suppliers will demand cash and warranty or product assurances can’t be really guaranteed with credibility. It’s like believing in the Easter Bunny. Maybe in Choice Genetics case who are minus $20+ million to creditors, it is possible as Group Grimaud the French shareholders of the bankrupt Choice Genetics company breeds rabbits as a primary business. Business plan: Easter Bunny Saves the Day!

Hedging

We have written about the margin calls our industry has probably paid in the last few months. Not only putting huge cash flow pressure on companies but also limiting profits in a time of once in a generation profitability.

Mark Greenwood, Senior Vice President, relationship management, Agstar Financial Services writing in April National Hog Farmer.

“We have producers who have practiced margin management over the past year who are now funding margin calls at a record pace. Table 1, shows our portfolio at Agstar. You can see increased volume compared to a year ago. The chart shows that we are up $500 million, and our best guess is that the majority is sitting in Chicago today.”

Agstar is on bank with almost $500 million in Chicago! How much is in Chicago funded by producers and the banks? $2 billion? Seems the sharpies not the producers got a lot of the money in the hog price run up.

If you want to lose all faith in trading read the book Flash Boys by Michael Lewis. Rigged Casino, Sharpies win, Main Street loses.

Margin calls – Hedging and PED combination could be limiting profits of many of a producer. This will limit expansion as profits to fill the equity hole created over the last few years will not be filled as quickly as we might expect.

Markets

Hog prices still very strong at $112 lean. We expect supply will start to see aggressive declines towards the end of May. Prices should surge higher. A producer asked last week if we can average $1.00 lean for the next 18 months.

Good question – Our Answer: We expect so with confidence.

Last week we were in Kansas, Oklahoma, and Texas. We found it remarkable the large cattle feedlots we saw that were totally empty or were significantly less than full. Obviously a cattle inventory the lowest in sixty years leads to empty feedlots. Less beef is obviously quite bullish for pork prices. Droughts, high cost of business, capital needs, lack of profitability, you wonder if the cattle industry will ever expand or just keep contracting.

 


Author: Jim Long, President & CEO, Genesus Genetics

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #454 on: May 23, 2014, 11:25:55 AM »

Pork Commentary: Calm Before the Storm
21 May 2014

Jim Long is President &
CEO of Genesus Genetics.


CANADA - US cash hog prices have been tracking lower over the last few weeks, writes Jim Long.

Off the highs of March but still at over $1.10 lean a pound excellent prices by any measurement. Why we say “Calm before the storm!” is that over the next few weeks we see a strong move to higher prices coming that is a reflected in the hog futures. Compounding these expectations from the lean hog futures we believe we will be the reality of weekly hog marketings that will be well below 1.9 million. Week upon week of lower marketings compiled with strong domestic and export demand, with less beef and no more chicken. The storm is coming.

Currently the USDA is projecting US Meat and Poultry supply to be 1.1 billion pounds less than last year. That’s a lot less protein. With hogs bringing $700 per head in Japan, $600 in South Korea, $260 in Mexico, it doesn’t take a rocket scientist or ag-economist to figure out pork buyers in each of these countries will buy in the US and sell in their country working extra-large wholesale spread.

PED

Our sense is PED is slowing down. PED breaks are less frequent. Producers upping their bio–security and many have stopped using blood plasma in their feeds.

Observation

A couple of years ago we were at a North American packing plant. The plant was shipping intestine to China to be cleaned and then returned to North America to be used in sausage casings. We don’t know if it’s still happening, but wonder how bio-secure and disease preventive such an activity would be. It’s alleged the PED we have in North America came from China. How the heck can you really know if the intestines shipped to China are the ones returned? We hope that we are not being alarmist but we have observed in our life there are implications from particular actions.

Corn Crop

We travelled to Illinois, Indiana, Michigan, and Wisconsin this past week. In the area we travelled there was rain but it appeared that most of the corn crop was in. When the crops are in we become weathermen. That’s what drives the yields and the prices. So far where the corn is there is plenty of moisture. No drought so far.

Vaccines

At Genesus we just did a circo-virus vaccine trial. Our results showed widespread differences in protection afforded. You should do the same, our results showed some vaccines weren’t doing much of anything. The higher priced ones weren’t necessarily the answer. As an industry we spend enough money on health related products. We all need to insure we use products that work. Test, draw the blood, and then compare the results. This is tough business we need to get value for what we buy.

Smithfield Foods

You don’t have to look any further then Smithfield Foods to see the effect of real good hog prices. The world’s largest hog producer and packer generated a record first quarter profit of $196.4 million. WH Group of China looks real smart in their purchase of Smithfield. Smithfield operating as an integrated enterprise captured the whole value of the hogs, packer and processing margins to set those record profits. Let’s hope Smithfield ships lots of pork to China cutting domestic pork supply and driving our hog prices higher. A high tide raises all boats.


Author: Jim Long, President & CEO, Genesus Genetics

gogol32

  • Newbie
  • *
  • Posts: 2
    • View Profile
    • sbobet
Re: Canadian Pork Producers:
« Reply #455 on: June 06, 2014, 12:40:29 PM »

We are pleased to be able to listen to your comments.

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #456 on: June 14, 2014, 11:58:02 PM »

Canadian Minister to Discuss Pork Trade with China
13 June 2014

CANADA - Canada's Agriculture Minister is to lead a mission to China next week to strengthen agricultural science and trade partnerships, along with groups representing the beef, pork, grains and oilseeds, pulses, horticulture and processed food sectors.

Minister Ritz will be in China next week leading a delegation of more than 70 people representing over 30 agricultural groups and four provinces to expand and improve trade access, continue to build on research and science collaboration, showcase Canada's agricultural capabilities, and promote increased imports of Canadian agricultural products.

Building on Minister Ritz's last visit to China in June 2013, a main focus of this mission will be meeting with key Chinese government officials, including Chinese Agriculture Minister Han Changfu, to deepen Canadian-Chinese agricultural partnerships. He will also be delivering a keynote address to delegates of the World Meat Congress in Beijing.

Minister Ritz will be joined by a wide range of agriculture groups representing beef, pork, grains and oilseeds, pulses, horticulture, and processed foods as well as British Columbia and Manitoba Agriculture Ministers and officials from the provinces of Alberta and Saskatchewan.

Since 2003, China has emerged as Canada's second largest trading partner, accounting for over C$5.6 billion in Canadian agri-food and seafood exports in 2013. The agricultural sector is a key part of the Chinese economy, accounting for 10.2 per cent of Gross Domestic Product (GDP) in 2010 ($616 billion).

Minister Ritz said: “This mission represents a great opportunity for Canada to reinforce its long-term mutually-beneficial partnership in agriculture with China. I look forward to working with industry to showcase Canada's agricultural capabilities and high-quality products as we continue to expand and improve market access opportunities for our producers and processors, and pursue our Government's ultimate goal of greater prosperity and economic opportunity for Canada's farming families.”

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #457 on: June 29, 2014, 11:25:20 AM »
News


Pork Commentary: Ontario Pork Congress Report
24 June 2014


Jim Long is President &
CEO of Genesus Genetics.


CANADA - Last week we were at the Ontario Pork Congress held annually in Stratford Ontario, Canada. Genesus Exhibited, writes Jim Long.

The Ontario Industry comprises about 300,000 sows. There are only two production systems over 10,000 sows in Ontario and they are less than 20,000 each. The bulk of the production is owned and managed by independent farmers who have land producing their own feed and are in the hog farm that they own. The bulk of the Ontario Industry is owned and operated by Dutch origin families. They are good stockman and intense business people.

Observations
•Really happy producers. Making money and glad for it. Farrow to Finish profit currently about $100 per head. Never ever been this profitable.


•Corn-Soybean crops are planted, growing and in good shape.


•Producers are making money but Producers in business are survivors, been in it awhile and have seen miserable times. Interesting how many producers wonder when the sky will fall and our profitability disappear. Seems producers know current good time won’t last forever.


•There is no significant expansion going on in Ontario from what we can discern. Renovation to update older equipment, but little of the upgrades are related to new group sow housing renovations.


•Much talk of Quality Meat Packers bankruptcy. Quality a long time Ontario Packer doing about 30,000 hogs a week went bankrupt several weeks ago. Their Toronto plant is being dismantled their smaller one in Mitchell sits idle. There is talk of a buyer for Mitchell, time will tell. Quality when it went broke left producers short a little under 10 million. Many producers think they were pawns of the secured creditors. Their hogs were brought – pork was sold = producers not paid?


•The mismanagement of Quality and subsequent bankruptcy is magnified when their fate is compared to Ontario Packers. Conestoga Packers that just expanded and Sofia that has ramped up production. The demise of Quality is manna from heaven for Conestoga and Sofia. They get lots of hogs while gaining Retail Shelf space that Quality lost. It is one thing to buy the hogs but it’s another to sell the pork at a profit. Quality failed in a market environment where its primary competitors are thriving. Management – leadership was the deciding factor.


•PED hit Ontario harder than any other part of Canada. But PED breaks are not nearly as prevalent as in the US industry. Evidence points to PED entering Ontario via Blood Plasma imported from USA then fed to Ontario pigs. PED losses in Canada are next to irrelevant, effecting total hog supply less than 1 per cent. PED losses in the USA have increased Ontario hog values $30-50 per head due to lower US production and Canada’s pork free access to the US markets (vice-versa). PED market effects have been a huge money maker for Canada’s industry to the tune of 100’s of millions of dollars to the good. Shorting supply in an in-elastic industry reaps huge margin opportunities.


•In Ontario the consolidation of swine genetic industry was evident. NO more Genetiporc, as PIC gobbled them up. Instead Topigs and Norsvin becoming one company Topigs-Norsvin. Of note the short term moniker for the new entity “Nopigs” seems to be sticking. As the “Nopigs” name was used by many at the Congress. Choice Genetics attempting to come out of bankruptcy had no exhibit. A year ago there was Danbred this year DNA. Fast, once a Canadian owned Genetic Company now a Canadian-Japanese owned company. Lots of changes. Like all industries consolidation, some makes sense such as PIC buying Genetiporc, others seem to be consolidation with no end-game.

Markets
•US Cash hog prices are roaring higher, Friday US national lean price average $1.21/lb. with some hogs trading at $1.26/lb.


•Last week the US marketed under 1.9 million hogs. About 80,000 less that the same week a year ago. Compound this with cattle marketings down 50,000 head last week from a year ago and you have total red meat supply cratered. Subsequently prices are sky rocketing.


•We expect hog prices to keep strong through summer and fall. We note cash early weans last week averaged $76.75. These pigs will be December market hogs. A year ago same time early weans were just over $35 each. $50 difference. The difference - tight supply, strong lean hog futures and market optimism.


•Final Note – This once in a generation profit is only for people who are in business now. People jumping in are already too late. Hog cycle has not disappeared.


Author: Jim Long, President & CEO, Genesus Genetics

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #458 on: July 06, 2014, 12:13:56 AM »

Canada: Hog Market
04 July 2014
Genesus - The first power in genetics

CANADA - Bob Fraser, Sales & Service, Genesus Ontario, provides an update on the Canadian hog market.

Strong prices driven by the PEDv situation in the US, a severely contracted cattle herd and the lowest corn basis (Ontario) in North America have created a “perfect storm” in reverse for Canadian (Ontario) pork producers. However pork producers probably more than any other sector in Canadian agriculture can be least accused of “irrational exuberance”.

Even with the gift of the USDA June 'Hog & Pigs Report' well outlined and summarized in Jim Long’s Commentary of margins for 2014 and a good chunk of 2015 (if not all of 2015) for the record books the industry remains cautious.

Having attended the World Pork Expo and the Ontario Pork Congress in the last 30 days you would be challenged to detect producers are making any money, let alone a lot of money. I believe this stems from their intuitive sense that the distance between being in the proverbial “right place at the right time” and being in the “wrong place at the wrong time” are separated by millimeters. That like the Looney Tune cartoons having the anvil fall on the other guys head rather than yours takes no shortage of skill and wit.

Therefore the reason for no expansion and highly unlikely to be until at least year-end. With the challenges of the last decade in this business the survivors - and that’s all we have left - very much understand prosperity can be extremely fleeting. So that scar along with the massive equity hole to be filled will delay expansion and preserve the profitable margins perhaps longer than normal (expected). However in the end, producers hate prosperity or more correctly hate paying income tax!

And come year-end for the first time in a long time, taxes are very likely to be an issue. The conventional wisdom on this prospect is get busy spending money i.e. expansion. They would do well to give this serious consideration because the hog cycle although perhaps altered is alive and well! Just like the cure for low prices is low prices, similarly high prices are high prices. Consideration of diversification or - horror of horror - paying some tax may be a warranted strategy in building the armour for this next round.



Genesus Global Market Report
Prices for the week of 23 June 2014


Country

Domestic price
(own currency)

US dollars
(Liveweight a lb)

USA (Iowa-Minnesota) 126.48 US$/lb carcass 93.60¢
Canada (Ontario) 262.75 C$/kg carcass 89.44¢
Mexico (DF) 30.58 MXP/kg liveweight $1.07
Brazil (South Region) 3.52 BRR/kg liveweight 72.09¢
Russia 105 RUB/kg liveweight $1.39
China 12.48 RMB/kg liveweight 91.15¢
Spain 1.475 €/kg liveweight 91.37¢
Viet Nam 56,000 VND/kg liveweight $1.19
South Korea 5,631 KRW/kg liveweight $2.53

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #459 on: August 02, 2014, 11:27:57 PM »

Pork Commentary: Hog Profits – As Good as It Gets!
29 July 2014


Jim Long is President &
CEO of Genesus Genetics.


US - We continue to marvel at the profits the swine industry is enjoying. Never did we ever in our wildest delusions ever believe North American profits per head could reach over $1.00 per head and $1.30 per pound, writes Jim Long.

Last September when we wrote that summer 2014 would reach $1.10/pound we were way out there, as the Chicken Little Ag - economists as the same time were predicting 89-92 cents/pound for summer 2014.

Most of you who read this commentary are capitalists, you take risk, and you know what it’s like to have your money on the line.

Taking advice from Chicken Little Ag – economists reminds us of Warren Buffet’s quote: “Wall Street is the only place that people ride in a Rolls Royce to get advice from those who take the subway.”

South Korea

Last week we met with Genesus customers in South Korea. A year ago producers there were losing $50 to $80 per head. There was sow herd liquidation.

They also have got hit with PED on top of the other continual health challenges including PRRS. This has led to lower hog numbers and a market price last week of US$420 for a 240-lb. hog.

Profits are $150 per head. Feed costs are double US–Canada’s as all feed inputs are imported.

Last week South Korea reported a case of foot and mouth disease. Their first in three years. The last outbreak led to one-third of Korea’s sow herd liquidated.

Imports of pork from USA are up around 40 per cent year to date. Even with our record hog prices a market hog in the US is $150 per head cheaper than in Korea.

This leaves lots of room for pork from North America to be competitive in the Korean market while still being profitable.

Maple Leaf Foods

Last week Maple Leaf Foods – Canada’s largest packer–processor - had a producer meeting. At the meeting they gave the producers a heads up. Maple Leaf is strongly considering not allowing Paylean (ractopamine) to be fed to hogs they purchase.

We think this is a good idea. China and Russia both will not accept Paylean-fed pork. In the coming months our belief is the liquidation of four million sows in China’s herd will lead to huge export opportunities.

We believe we will need China’s market to hold our profitable market. We know there is no science that should preclude using paylean in hogs for any food safety reasons. We need the markets, it’s not about the science.

We believe the export demand will trump the production benefits of Paylean.

Mark Greenwood – Swine Industry Update at the National Pork Industry Conference

Mark Greenwood is a Senior Executive with Agstar one of the major Ag and swine lenders in the United States.

At the National Pork Industry Conference in Wisconsin he gave data and his observations on the state of the swine industry from a banker’s prospective. Some points from Mark’s talk.
•Agstar’s database have over 20 per cent of the entire US pork industry. Many different production models.
•Agstar database shows in 2013 cost of production was $67.97 and loss per head was $2.80.
•Agstar database shows in first quarter 2014 cost of production was $62.67 with loss per head of $23.54 with $20.64 of this loss coming from hedging losses.(This tells us the database of over 20 per cent of the industry lost big money first quarter due to hedging compounded by PED mortality).
•Hedging put big pressure on operating lines to cover margin calls.

Swine Operating Lines – Principle
•January 2014: $615 million
•April 2014: $1040 million
•July 2014: $769 million

Looks like to us a half a billion dollars or there about went somewhere other than producers. If this was similar across the whole industry - $2 billion to cover margin calls?
•Mark Greenwood believes 2014 will be profitable but not as good as everyone believes (best guess $15-$25 a head profits) a lot of variability due to PEDV.
•Sow – units – right – model – cost to build new is close to $1,900-$2,200 a sow space – you will need to bring in at least $500 per sow of cash in the facility or 35-40 per cent down-payment.
•In addition your cost to get a sow unit running is another $450 a sow to get weaned pig out the door – you will need another $300 a sow of capital as well to get it up and running – maximum debt per sow $150.
•Example: a 2,500-sow farrow-to-wean total cost to get up and running = $2,400 a sow =$6 million you will need $2.4 million cash or 40 per cent cash to get financing or collateral enhancement.
•Preferred size would be 5,000-6,000 sow unit (2,500 will work) – it’s all about pig flow.
•Existing sow facilities more than 2,500 sows – value is holding well even in pig dense areas - $800-$1,200 a space.
•New Nurseries $150-$200 per space, depending on size.
•New Finish Barns are $260-$280 per head.
•New Wean to Finish are $260-$300 per head.
•Existing Wean to Finish and Finishing barns asset values holding well. Nurseries not very good yet sales have been poor.
•Little or no expansion yet.

Summary

Mark Greenwood sees the numbers of over 20 per cent of the US pork industry.

Despite rocketing hog prices in 2014 and lower feed costs, the Agstar database indicates their producers lost $23.54 per head first quarter 2014.

The huge hedging costs of risk management and PEDv hammered producers. Mark Greenwood projects a 2014 average profit of $15-$25 per head far lower than the $60-$70 unhedged non-PEDV producer afected producers will make.

These limited profits in 2014 will stall potential sow herd expansions, especially with the capital needs of the large scale new sow units.


Author: Jim Long, President & CEO, Genesus Genetics

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #460 on: August 10, 2014, 05:44:35 AM »

Pork Producers Concerned Over Russian Ban on Food Imports
08 August 2014

Manitoba Pork Council



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

 FarmScape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
 and Sask Pork.
 

CANADA - The chair of Manitoba Pork is voicing concern over news that Russia has banned the import of Canadian pork and pork products for one year, writes Bruce Cochrane for Farmscape

Russia is responding to new sanctions imposed over the crisis in Ukraine by banning certain food imports from Canada, the US, the European Union, Australia, and Norway, including meat, fish, milk and milk products and fruits and vegetables for a year.

Mr Karl Kynoch, the chair of Manitoba Pork, says the loss of the Russia market will force Canadian processors to seek alternative markets and that will definitely impact pricing for awhile.

Karl Kynoch-Manitoba Pork:

Russia is actually the fourth largest pork buyer of pork out of Canada right behind the United States, Japan and China and then we have Russia coming into place.

In 2012 Canada actually exported C$492,000,000 of Canadian pork over to Russia.

In 2013 that dropped down to 260 but in 2014 we were headed for very good numbers.
In the period of January to May of 2014 Canada had already exported C$213,000,000 of Canadian pork into Russia.

Russia has been one of the markets that we've managed to gain a lot of access to lately but for Manitoba, when you compare it to Canada, Canada exports 50 per cent of the product that is produced in Canada but when you get into Manitoba we actually export 85 per cent of the product that's produced in our province here.

So any time you lose something like Russia, which is the fourth largest market, it will definitely have an impact on product leaving Manitoba as well as Canada for now.

Mr Kynoch suggests, if Russia is importing $500,000,000 worth of pork products out of Canada and they cut that off, it will artificially inflate the price of pork for the Russian people.

He questions why Russia's government would want to hurt its own people but, he acknowledges, when you get into politics and governments reacting to current crisis anything can happen.

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #461 on: August 18, 2014, 12:28:45 AM »

Canada Hog Market
15 August 2014
Genesus - The first power in genetics

CANADA - On 16 July, 2014 South West Vets (the preeminent and largest all swine practice in Ontario) hosted a Porcine Epidemic Diarrhea Summit in Stratford, Ontario with some 250+ producers and industry in attendance, an impressive turnout for an industry of only some 300,000 sows. They stated the following as their goal on PEDv, writes Bob Fraser – Sales & Service, Genesus Ontario.

South West Vision:
•Eliminate or control/contain all sow herds – November 2014
•Eliminate from all primary N/F by – November 2014
•Eliminate from all secondary N/F sites – November 2014 (spring 2015)
•OSHAB PED/PRRS ARC&E success?– Regional collaboration reduces neighbourhood risk – Sharing best practices for elimination and control
•Packer and transport pig status communication – Minimise new cases through transport risk

So what makes Canada so smart (or dumb)?

Ontario PED Cases:
•62 Primary Cases – 28 Sow Sites
•Farrow to Finish: 20
•Farrow to Feeder: One
•Farrow to Wean: Severn – 34 N/F Sites
•Nursery: Four
•Wean to Finish: Two
•Finish: 28
•Unknown number of secondary sites


Only five new cases since 30 April. Also this has been primarily an Ontario issue with to my knowledge one case in PEI, one case in Quebec and two cases in Manitoba. However significant surveillance is being conducted in Quebec, Manitoba & Alberta.

USA PED Cases
•Cumulative cases reported to date 7,522
•This is just what is reported to the National Laboratories.
•Finisher sites reporting?
•≈ 60 -75 per cent of US sow inventory infected.

Even considering that the US industry is approximately five times as large as the Canadian industry this has been a far more prevalent disease state side. Unknown how much of the Ontario sow is infected but wouldn’t be anything close to the case of the US herd.

Other considerations: US vs Canada
•PED- contaminated infrastructure
•Finisher sites
•Large systems continuing to use porcine plasma products.

This last fact has been the source of huge debate in Canada, particularly Ontario. I’m not qualified to comment but a common denominator in an extremely high percentage of the early cases of PED in sow herds in Canada was blood plasma in nursery feed of one feed company. This has resulted in a widespread move by the industry away from such products.

Main point is the Ontario veterinary community believes herd elimination is possible and have demonstrated it in numerous cases to date and continue to refine their techniques and from this believe regional elimination for Ontario is possible as well.



So we shall see but I believe bodes well for an industry that bit by bit are coming to see that cooperation and transparency at least when it comes to disease has considerable merit not only for an industry but for individual producers as a whole.

It has been suggested that PEDV is a “neighbourhood disease”. Therefore it makes great sense for neighbours to work together to get rid of it. I would urge all producers in Ontario to get behind this project. Arguably PEDv has been a contributor to margins we couldn’t even dream of but only one contributor along with smallest cattle herd in living memory, strong export markets and amazingly strong domestic demand.

I’m sure every producer that has wrestled with the disease would say this is one you’re better without.

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #462 on: September 01, 2014, 12:45:09 AM »

Canadian Swine Industry is Positioned for Success
Friday, August 29, 2014


Speaking at this year's London Swine Conference in March, Kevin Grier of the George Morris Centre in Guelph said that Canadian hog producers can look to the future with a sense of promise.

London Swine Conference 2014

Abstract

Over the past several years, outside observers of the Canadian hog industry would likely have the impression that there was little reason for optimism or expansion in the industry. The evidence would have been the reports of serious financial losses resulting from grim market developments such as skyrocketing grain prices and the appreciating dollar.

These negative developments have resulted in a smaller industry as both producers and livestock have left the industry. In the latter half of 2013 and early 2014, however, the fortunes of the industry have turned for the better.

Grain and hog prices have combined to generate profits for hog producers.

The bottom line for the Canadian pork industry is that while there are sound reasons for short term optimism, there are also reasons to look forward positively to the future.

Whether from a global demand perspective or from a competitive supplier perspective
Canadian hog producers can look to the future with a sense of promise.

Introduction

During the past several years the Canadian hog industry has undergone an unprecedented period of financial hardships. The financial stress was caused by market developments, weather, animal health problems and political factors. Within that context, Canadian hog producers entered 2014 with a sense of cautious optimism. This optimism was based on relatively strong financial returns in the second half of 2013 as well as the prospects for profits through most of 2014.

The purpose of this paper is to argue that while there are sound explanations for short-term optimism, there are even more robust reasons for Canadian producers to look favourably on the industry’s long-term prospects in global markets.

Litany of Problems

From approximately the second half of 2006 through the first half of 2013, the Canadian pork industry experienced a nearly uninterrupted string of quarterly financial losses from hog production. While there may have been net profits overall in 2010 and 2011 they were modest and not nearly enough to recover lost equity from 2006 through 2009.

Furthermore while 2012 began with promise, financial prospects quickly eroded during the summer when it became apparent that the US was undergoing a severe drought. That drought once again drove feed prices to new records and hog production returns to new lows. Those dismal returns continued through the first half of 2013.

By the summer of 2013, however, tighter pork supplies and ample grain production worked to drive hog prices higher and feed costs lower. As such, while the spectre of Porcine Epidemic Diarrhoea virus hangs over the industry, generally speaking producers enter 2014 on an optimistic note. The optimism, however is accompanied by caution given the past performance of challenge after challenge.

Grier George Morris Centre London Swine Conference 2014

(Source: George Morris Centre estimates)

With regard to those challenges, details are not necessary but it is instructive to look back at the litany of obstacles and burdens that the industry endured over the past several years.
1.The appreciation of the Canadian dollar resulted in an ongoing, continual erosion of the Canadian hog price relative to the United States.
2.The explosion of grain prices due to the advance of the ethanol subsidies and artificial usage mandates in both Canada and the United States.
3.The Country of Origin Labelling (COOL) law in the United States discriminated against Canadian livestock and resulted in reduced demand, markets and pricing for Canadian hogs.
4.Animal health problems such as Porcine Reproductive & Respiratory Syndrome (PRRS) and H1N1 took out what little opportunity for profit existed.
5.Pork packer rationalisation and inefficiencies resulted in lower price levels in Canada compared to the United States.
6.Global economic weakness during and after the recession made demand prospects weaker than would otherwise have been the case.

Of these problems, the first two were the most relentless and lasting. While the dollar appreciation resulted in lower prices the ethanol mandates resulted in higher costs.

It is little wonder based on those two factors alone that the industry endured such financial stress. Needless to say, these challenges resulted in a significant rationalisation and consolidation of the Canadian pork industry. The sow numbers in Canada as of 2013 were 25 per cent down from their peak in 2004.

Grier George Morris Centre London Swine Conference 2014


(Source: Statistics Canada)

Short Term Reasons for Optimism

In the short term, meaning approximately one year, hog producers in Canada have seen feed costs decline by 35 to 40 per cent while hog prices have risen by approximately 20 per cent. This has translated into robust profits during the past three quarters.

In addition, as producers look to the grain and hog market futures contracts, they can see the ability to lock in profits through most of 2014. The overall picture, in turn, has been significantly aided by a weaker Canadian dollar during the past six months.

Essentially, producers see that while for most of the past several years, factors have worked against them, currently those same factors are working in their favour.

Long Term Reason for Optimism

Canada is the seventh largest pork producer in the world and the third largest pork exporter in the world behind the United States and the European Union. Canada exports about 60 per cent of its pork production. Exports began to exceed domestic consumption in Canada about 10 years ago.

The main point is that Canada is a major player in global pork markets. Canada has pork trading expertise, is well respected as a supplier and is well positioned as a global pork trading power.

This positioning and logistical infrastructure is important because global demand for pork is going to continue to grow, likely rapidly in the coming years. The global population is growing by about 75 million people each year. That is two Canada(s) or 75 Saskatchewan(s) of population growth each year. Fundamentally that means more demand for food by that amount.

What is more interesting, however, is that we know that as incomes rise, the demand for food changes. The change in demand is a change towards proteins and meat. UN FAO estimates show that since 1980, while the population of the world has grown by over 40 per cent, meat consumption has grown by nearly double that rate.

Furthermore, most of the demand has come from developing countries. That is, those countries that are emerging as markets are seeing the biggest growth in meat consumption.

Simply put, this means obviously that the demand for pork is going to be an ongoing source of growth and demand for the Canadian hog and pork industry.

Grier George Morris Centre London Swine Conference 2014

(Source: USDA Foreign Agricultural Service)

Source: USDA Foreign Agricultural Service

As noted above, Canada is well positioned to take advantage of growing demand given its robust production and export infrastructure. Beyond that, however, there are underlying reasons why Canada is positioned for success for the long term in the pork industry.

One main underlying reason that Canada is positioned for success is the fact that with Canada, Brazil and the US, Canada is one of the top competitive, efficient hog-producing regions in the world. While producers often bemoan the fact that Canadian prices are among the lowest in the world, that is because Canada is among the most competitive regions in the world with production far in excess of consumption.

Other reasons for Canadian optimism include the following advantages relative to competing regions:
•fresh water supply
•arable land
•absence of common major animal health problems
•livestock and human contact density
•ample feed grain supply, and
•technological adoption.

Conclusion

The bottom line for the Canadian pork industry is that while there are sound reasons for short-term optimism, there are also reasons to look forward positively to the future.

Whether from a global demand perspective or from a competitive supplier perspective, Canadian hog producers can look to the future with a sense of promise.

Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #463 on: October 27, 2014, 05:24:24 AM »

CANADA - There have been no new outbreaks of Porcine Epidemic Diarrhea reported in Canada.

The province of Ontario is reporting nine additional outbreaks (infected farms) since the previous report, for a total of 63 infected farms since the beginning of this event in January 2014.

The province of Manitoba is reporting two additional outbreaks (infected premises) since the previous report for a total of four infected premises since the beginning of the event. No additional outbreaks were reported in other provinces in Canada.

Cross-contamination from a truck is the most likely source of contamination of the single outbreak detected in the province of Quebec.

This outbreak was resolved on 7 March 2014 and no further outbreak was detected in this province afterward.


Mustang Sally Farm

  • Hero Member
  • *****
  • Posts: 2022
    • View Profile
Re: Canadian Pork Producers:
« Reply #464 on: November 17, 2014, 07:25:48 AM »
13 November 2014

RUSSIA - Russia is to impose temporary restrictions on imports of pig meat from Canada because of concerns over the possible contamination with the growth promoter ractopamine.

The Russian food safety and veterinary authority, Rosselkhoznador said that over a 10 month period it has recorded an increasing number of incidents where pork from Canada had tested positive for a number of contaminants including ractopamine.

Rosselkhoznador said that on each occasion it had notified the Canadian authorities of the breech of food safety regulations.

But it added that despite intense negotiations about developing measures to prevent contaminated meat coming on to the market in Russia, the Canadian meat sector and veterinary authorities had failed to meet the guaranteed performance standards and food safety requirements.

The Russian authorities have started to impose temporary restrictions on the import of pig meat products from Canada from 14 November.

This week telephone talks also took place between Rosselkhoznador and the US authorities over food safety measures in US poultry plants.

The Russian food safety authorities are concerned that the US has not informed them about changes to the safety and inspection measures that could affect the safety of US poultry products.


 

< >

Privacy Policy