Canadian Pork Producers:

[mikey]

Understanding Behaviours Key to Moving Pigs Easily
CANADA - A Saskatchewan based low stress pig handling trainer says understanding the natural behaviours of the pig and overcoming our own natural instincts are key to avoiding the frustrations often associated with moving pigs, according to Bruce Cochrane.





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. 
White Fox, Saskatchewan based DNL Farms uses video to demonstrate how pigs respond to handlers and how the pigs' natural responses can be used to get them to move more easily.

Low stress pig handling trainer Nancy Lidster says virtually all of the handling problems encountered are related to pigs being scared.

Nancy Lidster-DNL Farms
Handlers need to be able to recognise when pigs are getting scared and back off.

They also need to realise that pigs want to keep track of them.

They don't want us out of their sight so they tend to move themselves around and adjust themselves so they can keep track of us.

Fear is one thing and the other thing is using their attention to our advantage.

If they're moving away from us and following other animals we don't want to do things that are going to take their attention back towards us and stop them.

It's just understanding the patterns that we get from them and how to set up the patterns that we want so that they move easily and aren't stopping at doorways, aren't balking, aren't wedging, aren't turning back on us.

A lot of times people are busy pushing and hurrying and rushing to try to get them to go faster and really to get them to go faster all we really need to do is let them move calmly and cut out all the stopping, all the wedging and those sorts of things.

If we cut out the pile-ups and just let them move forward calmly we can save time.

It's not by pushing them harder.

It's by letting them move at their own pace that we save time and take the stress off of them and ourselves as well.

Ms Lidster stresses, while the pigs are relying on their instincts to remain safe, the natural response of the handler when slow-downs occur is to become more aggressive and push harder which only makes the pigs more afraid and even harder to control.

[mikey]

, July 08, 2010
Reduced Hog Numbers, Increased Pork Demand
CANADA - The Saskatchewan Pork Development Board credits a combination of reduced hog supplies and stronger demand for pork for improved live hog prices, writes Bruce Cochrane.


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. 
The latest US Department of Agriculture Hogs and Pigs report has shown a decrease in hog inventories across the board.

Sask Pork industry and policy analyst Mark Ferguson says the report contained pretty good news for the North American pork industry.

Mark Ferguson-Saskatchewan Pork Development Board
As of 1 March the total pig inventory in the US was down by 3.6 per cent and that's a fairly big decline for this industry.

At the same time the breeding stock inventory declined by three per cent.

Basically all categories of animals are down by a few percent so there's going to be fewer animals available for slaughter in the coming months and slaughter plants that want to keep running at full capacity are going to have to bid for hogs so that's great news from a farmer's perspective.

In the March to May period farrowings were down by about five percent which is a fairly large decline, however they're showing an increase in litter size of 2.1 per cent so that mitigates some of the reduction in sows bred.

In terms of Canada, Statistics Canada won't be releasing their 1 July inventory estimates until sometime in August but their last few reports have shown small quarterly reductions in breeding stock and total inventories of around one to two percent per quarter.

The Canadian breeding herd now sits at just under 1.3 million animals and that's down 17 per cent from 2007.

Mr Ferguson says the reduction in the breeding herd in Canada and the US has had an effect on pricing.

He says, in combination with a strong demand for pork, we've seen pork in cold storage decline 23 per cent year over year and the cutout price in the US is also strong so there are generally good returns for packers which is translating into good prices for producers.

[mikey]

Thursday, July 08, 2010
Pork Commentary: Hog Market Languishing
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
The US – Canada hog market is languishing in the mid 70’s. The rapid appreciation of the US dollar since mid April relative to other global currencies has taken the competitive edge of US pork exports. The 10 per cent plus increase of the dollar has in many ways been reflected in the lower price received for market hogs.

US hog marketing’s continue to stay below the year ago levels (-3.6 per cent) which is a reflection of smaller inventory that the USDA continues to find. This is positive for prices to stay above profit levels. Unfortunately, our industry’s dilemma is that hogs in the mid 70’s, although profitable is no panacea for the huge equity hole that was created in the thirty months prior to April. Mid 70’s might be creating $12 - $15 per head in profits but is no bonanza!

The one factor that might be a silver lining in the mid 70’s price is that it has probably taken whatever exuberance there was out of the need for expansion psychology. Some days we wonder if the only way we can get pork buyers excited about our industry is to send them Viagra.

Other Observations
Sow prices continue to be strong with 500 – 550 pounders bringing 57 cents per pound last week. Sausage demand must be good.


Cash early weans are mid $40, 40 pound feeder pigs mid 60’s. Extremely strong prices for this time of year. Obviously reflecting lower pig supply and empty finishing spaces chasing them.


USDA last week revised the corn crop scenario to show lower inventory and supply. This bounced corn 30 cents per bushel higher. The corn market the next few weeks will be weather driven. We expect it will be volatile. US corn exports appear to be slowing. The higher US dollar is affecting corn export demand just like it has had a negative effect on US hog prices.


We still hear of producers considering quitting – they are tired. Buildings and equipment continue to age and deteriorate. Generationaltransition is an ongoing dilemma. Many have told us they don’t want their children marooned in the swine industry. Demands for continual gains in productivity to remain competitive weighs on people. All of this adds up in our opinion to continual erosion of the production base. A reflection of this is hog barns that burn down. How many are rebuilt?
Global Demand
All is not bleak. The International Meat Secretariat is projecting the global growth of beef and pork of 40 per cent by 2025. To service this meat demand we will have to produce upwards of 400 million more hogs globally a year. Over the next 15 years that’s an increase of 30 million plus more globally per year. That is expanding Canada’s production each and every year.

We believe the global pork for export will be mostly positioned in the USA and Brazil, but all countries will benefit from the increase in pork demand for increasing populations.

The main take home message is pork is wanted! 44 per cent of global meat protein consumed is pork. The global pork demand is growing. We are not producing an unwanted product to the contrary a projected 40 per cent increase by 2025 (2.5 per cent per year) is a great reflection that we are in an industry that has legs.


Author: Jim Long, President & CEO, Genesus Genetics

[mikey]

Tuesday, July 13, 2010
Pork Commentary: Prices Profitable But Not Great
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Southern Minnesota averaged 75.29 lean per pound. This is profitable but not great. A year ago lean hogs a pound in Iowa–South Minnesota were hovering around 57 per pound. The good news is we are almost $40 per head better than a year ago, the bad news: we have a huge equity crater to fill and although we are profitable, it is not mortgage lifting levels. A year ago, the hog-to-corn ratio was around 16 while currently, it is around 23. Both numbers are a true barometer of profitability potential. Usually, the hog-to-corn ratio under 20 means red ink.

We continue to be amazed at the counter seasonal strength of cash small pigs. Early weans $45 and 40 pound; feeder pigs $65 average on the USDA report. Last Friday, the DTN–Ag data livestock margin calculation indicated you can pay $55 for a 4-pound feeder pig. The current stronger cash price of $65 is an obvious refection of strong demand and limited supply. No one pays more than they have to if they can find alternatives.

The USDA continues to revise the current corn crop projections usage and carry over. We expect at the end of the day, the only thing that will be much better is US weather the next six weeks. Rain means lower prices – no rain means higher prices. It will be volatile.

One of the factors supporting a hog price around $40 per head more than a year ago is less pork in storage with 31 May number minus 23 per cent compared to a year before. 140 million pounds less year over year. With a lower pork storage number year-over-year, the ability to take pork out of storage to keep prices down becomes more difficult.

We had some visitors from South–east Asia this past week. Market hogs are US$1.20 per pound live weight. Their market hogs are slaughtered daily as fresh pork. The fresh pork – mostly unrefrigerated – limits most import pork dynamics as local consumers buying patterns insist on fresh pork products. Feed is all imported and costing $120 per head farrow-to-finish. Dead stock is fed to crocodiles which are kept for leather production. Only the crocks bellies are used. Crocodiles prefer pork to chicken. Even crocodiles see the taste difference!

This week, we will be attending the National Pork Industry Conference in Wisconsin Dells, it will be a good indication of the mind-set of our industry. Last year, the speakers were obsessed with the idea that massive supply decreases were necessary were to return to profitability with no emphasis on demand. We did not have massive liquidation since last July but fortunately domestic and global demand has improved (H1N1 has disappeared from the news). Profits have returned anyway.

What a difference! Our industry took its lumps last year to the tune of billions of dollars with H1N1 being misnamed as swine flu. We received no government support compensation despite it having nothing to do with us. CNN was no friend of ours! Now watch CNN and their bleeding heart renditions for shrimp farmers of the Gulf. Where were CNN and other media outfits when we needed help? What they did everyday was call it swine flu. A kick in our gut. Now, shrimp farmers (farmer is obviously a subjective word) whose only interest is a boat are to get compensation?

One of the greatest businessmen of all time is Warren Buffet of Berkshire Hathaway. Recently, I read a book called The Tao of Warren Buffet written by Mary Buffet and David Clark. Some quotes:

'Never ask a barber if you need a haircut.'
'Forecasts usually tell us more of the forecaster than the forecast.' True enough!
'There is nothing like writing to force you to think and get your thoughts straight.'
'Investment must be rational. If you don't understand it, don't do it.'
'If past history is all there was to the game, the richest people would be librarians.'
Obviously, Warren Buffet is an extraordinary businessman who has identified leading companies and industries for long term returns and values. One of the most interesting investments is Berkshire Hathaway's major presence in CTB (Chore–Time Brock) and Pig Tek, a hog equipment company. Buffet has made few long term investment mistakes. When we observe the significant investment in the swine equipment business, we see it as an affirmation of the potential long-term growth of the hog industry. The expected 40 per cent growth of hog production globally by 2025 will not be missed by such a shrewd investor.


Author: Jim Long, President & CEO, Genesus Genetics

[mikey]

Movement Needed on Canada/South Korea Trade Deal
CANADA - Canada's Minister of International Trade says the Republic of Korea will need to show signs of movement on a number of issues in order to justify of resumption of negotiations aimed at achieving a free trade agreement between the two nations, writes Bruce Cochrane.





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. 
The Republic of Korea has free trade agreements in place with India, Chile, Singapore, the European free trade area and ten south-east Asian countries, agreements have been negotiated with the United States and the European Union and are awaiting ratification and negotiations are underway with eight other nations including Canada.

International Trade Minister Peter Van Loan says there has been considerable progress since negotiations began in 2005 but there are some relatively intractable issues on which we will need to see some movement by Korea.

Peter Van Loan – Canadian International Trade Minister
One is the question of the automotive sector and what we are looking for there to be able to move forward are at a bare minimum the same kind of terms the United States has in their agreement, which by the way has not yet been ratified by congress, however they have the more amenable terms than those that Korea is proposing for us right now.

Obviously based on the integrated nature of our economy on the automotive side that's simply not acceptable so we need to see some movement there and willingness to be treated on the same level playing field.

Another area that's been of concern has been the area of beef and pork and gaining Canadian access there.

We certainly would like to see that dealt with.

The beef file, as you know, remains unresolved.

Canada made a complaint to the WTO.

We're continuing with that World Trade Organization panel.

We don't see any signs so far that the Koreans are willing to open that up for further negotiations.

So these are some of the major issues that are keeping us from reaching a final agreement.

Mr Van Loan concedes there is a concern that, in the absence of an agreement, Canada's competitors will gain preferred access to South Korea but Canada is not prepared to accept an uneven or unfair deal.

 

[mikey]

Friday, July 16, 2010
US Corn Expected to Drive Feed Ingedient Costs
CANADA - A Winnipeg-based grain market analyst expects US corn to play a key role in influencing the cost of feeding livestock heading into the fall and winter this year, writes Bruce Cochrane.





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. 
Due to the unusually wet spring in the range of 10 million acres of cropland across the prairies have been left unseeded this year which will result in reduced availability of Canadian feed grains.

Chuck Penner, the president of LeftField Commodity Research, says the continued rain and high humidifies are starting to raise concerns among livestock producers related to fusarium while delayed crop development raises the risk of damage from an early frost.

Chuck Penner – LeftField Commodity Research:
I think what they should be doing is they should really be watching what's going on south of the border.

As long as that corn crop in the US is looking in decent shape those large large supplies of corn that are expected to come through from the states will either translate into corn imports into Canada or distillers grain imports into Canada and so will help relieve that situation to some degree.

That's a key one to watch.

They should also be watching, in terms of the corn market, what's going on with Chinese imports of corn because that could take a significant chunk of the US corn crop out of the market as well and that could be a significant factor that could lead to higher prices down the road.

In terms of some of their strategies that they can do is, we thin, that they should be looking at booking some feed grains for the fall months and into the winter months if possible and trying to maintain some supplies, probably into the November-December time period.

Mr Penner notes that because the US corn crop looks to be in good shape, the situation on the Canadian side of the border has had a limited impact on prices so far.

He says cereal grain prices have increased by five and in some cases up to ten dollars a ton, which is a pretty small response to the whole issue of unseeded acres.

[mikey]

DDGS, Zero-Tannin Faba Beans in Swine Rations
CANADA - Research being conducted by the Puratone Corporation in partnership with the University of Manitoba will help swine nutritionists maximise the feeding value of dried distillers grains with solubles and zero-tannin faba beans, writes Bruce Cochrane.


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. 
Researchers with the University of Manitoba's Faculty of Agricultural and Food Sciences in partnership with the Puratone Corporation are conducting digestibility studies on corn DDGS sourced from Minnesota, corn-wheat DDGS sourced from Manitoba and zero-tannin faba beans grown in the Interlake then feeding trials will be conducted from the nursery phase through to market.

Carole Furedi, the continuous improvement and research facilitator with Puratone, says researchers will track feed consumption, water intake and growth rate, manure output will be assessed and carcass characteristics will be evaluated.

Carole Furedi-Puratone Corporation
Usually what we do when we do swine trials is we measure the impact of ingredients on pig performance, how do they grow, what's their feed efficiency and how do they hit the packer's grid but now what we need to start looking at is also how do the ingredients impact the manure end of pig production.

Come 2013 there is new legislation that's coming into play where we're going to have to spread manure based on a crop's ability to remove phosphorus from the soil.

This will change how much manure we can spread on any given field so we're trying to understand the manure end of pig production a bit more than we did before.

The digestibility studies and the metabolisable energy studies should be done by the fall and then our nursery barn will be filling in October which will then fill into our finishing farm in December.

It's looking like all pigs should be marketed by March of 2011.

Ms Furedi is confident the information gathered through this study will be of value to feed manufacturers in formulating rations using these ingredients.

She says if zero-tannin faba beans prove to be viable in swine rations it will give pork producers another ingredient option and crop producers another crop to add to their rotations.

[mikey]

Moose Jaw Pork Plant Renovations Set to Begin
CANADA - Langley, B.C.-based Donald's Fine Foods is set to begin renovations and hopes to have its recently acquired pork processing facility in Moose Jaw, Saskatchewan in operation by the end of the year, writes Bruce Cochrane.


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. 
In May Donald's Fine Foods completed the purchase of the Moose Jaw Pork Packers pork processing plant which had been sitting idle since September 2006.

Donald's runs a 15 hundred head per day pork slaughter fabrication facility at Langley and a distribution and further processing facility at Richmond and distributes products domestically and internationally predominantly to Asia.

Senior vice-president Tony Martinez says Donald's existing capacity had become maxed out, the Moose Jaw plant was available for purchase and officials jumped at the opportunity to expand.

Tony Martinez-Donald's Fine Foods
We just got possession approximately a week ago and so now we begin the process of renovating the facility and getting it ready for the Canadian Food Inspection Agency to obtain federal status and all of those good things.

That's really where we're at now, we're just getting into talking to contractors and getting renovations lined up and cleaning up the facility and all those good things.

There's everything from roof repairs to re-doing inside of the walls to installing so cryovac equipment to ensure we can ship fresh product out of that facility.

Our anticipation is that it's going to take approximately a good five months.

If everything lines up we'll hopefully be running a hog through there before the year's up.

Mr Martinez says there's a large hog supply in Saskatchewan which offers great potential for the company and, although Donald's will be a smaller player, it will be able to offer producers a freight advantage which will be a good option for them.

 

[mikey]

Pork Commentary: National Pork Industry Conference Report
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Last week we attended the National Pork Industry Conference (NPIC), which was held at the Kalhari Resort, Wisconsin Dells, Wisconsin. Genesus was a sponsor, here are our observations:

The NPIC had its largest attendance in its multi – year industry. This year’s location was closer to attend for Mid – West participants than the Lake of the Ozarks where it had been held prior years. Also, Wisconsin Dells is very family friendly as it bills itself as the Water park capital of the Mid – West. We would not argue that point, as there seemed to be water parks everywhere. The conference will be held in Wisconsin Dells next year.


Larry Graham and Glen Shields drove the conference professionally and on time with strong support from their wives. Organising NPIC is their business and it was run very business-like.


There were five speakers whose main focus was the threat of Animal Rights activists. They were all good speakers – they all gave the same message. As an industry we are being threatened by activists such as the Humane Society of the United States and PETA. We have to fight them and there is little room for negotiation. The activists raise money from continual confrontation. The activists like HSUS raise $120 million a year. The principals at the top make good money doing what they believe. Formidable foes.


One of the most effective counter – balances was the choose 2 choose video that we were shown. It is aggressive as it highlights our belief in freedom and the choice of consumers to choose what they eat. Go to www.choose2choose.com to watch the video. To sell and defend an idea you can’t play defense all the time – a positive message that takes us from defense against the HSUS or PETA is more effective than playing defense all the time. You never sell a product sitting waiting for your competition to define or out hustle you.


Another interesting point was that in a culture where pets are treated like members of the family it is easier for HSUS and PETA to get the point across that gestation stalls are bad. Their approach is we just want to give pigs some freedom. Its incremental erosion of our production system. They win the argument when we try to defend. They are winning, California in a vote just recently, and now the alleged leaders of Ohio Pork Industry have made a pact with the devil to agree to a timeline on the elimination of gestational crates. No fight. As Neville Chamberlain said ‘We will have Peace in our time.’ As he negotiated away the Sudenland in 1938. We know that was not the solution. ‘An appeaser is one who feeds a crocodile hoping it will eat him last.’ Winston Churchill.


The greatest advantage we have is Americans love meat. They eat more per capita than they have in history. People don’t want to give it up. We can’t let a small vocal minority disrupt the food chain that has evolved over 2 millenniums. Unnatural and Un American. Choose 2 choose look at it. Offence not defense.
Earlier we pointed out five speakers on Animal Rights. Too many – they were all good but it was overkill. None of the five to the best of our knowledge own livestock. They get paid to speak. They are good at it. They too like HSUS and PETA get money from the issue. I doubt if any of them would have paid their own way to the NPIC.

Bob Toubert of New Horizon Farms, a producer with 11,000 sows farrow to finish in Southern Minnesota gave an interesting talk on Risk Management. It was detailed and you could sense the effort, intelligence, and dedication that has gone into the hedge programme for Hogs and Feed over the last seven years. We were impressed. What we were surprised with was with all the effort and obvious commitment the seven-year hedge programme generated $3.00 per market hog more profit than cash spot hogs and feed. Not that $3.00 is something to sneeze at but we are not sure $3.00 per head hedge return is a panacea for survival as we hear some financial institutions proclaim. At the end of the day the real winners are the brokers doing the trades. Not to be cavalier but for many, adjusting feeders can get $3.00 a head more money over seven years.

Mark Greenwood, a banker with Ag – Star spoke. Mark pointed out that Ag – Star has clients that are quite financially strong who made money over the last low period. Break even for average producers are $65 - $67 lean per pound. Some of Ag – Stars producers made $18.00 per head since 1 January with their break evens down to 62 – 64 cents per pound lean. Early weans cost of production is under $32.00 with some producers in the high 20’s. The producers with the highest profit margins are the ones with lower feed costs, lower mortality, better A.D.G. and lower feed conversions. High health pays. He explained sow units in today’s market in a bio – secure area is $800 per sow, others that are non bio – secure are $400 per sow.


Mark Greenwood sees big challenges for the South – East producers (North Carolina) with corn 80 cents a bushel higher than the Mid West. He believes the model for the future will be farrow to finish with bankers giving little support for farrow to wean producers. That contract growers have “lived off the producer’s too long.” There will be greater risk and lower returns for contract growers going forward. He sees little value in nurseries in todays wean to finish models and sees little support from bankers for nurseries.


Steve Meyer an economist spoke at NPIC. Producers making money. There has been liquidation and little sign of expansion. Chicken production is up 3 per cent year to date. Beef production is up year to date. Pork production is down. Steve Meyer’s future price prediction was current lean future prices for each month going forward. It must have taken a lot of analysis to get to those numbers.
Summary
The NPIC conference was worth the time and money. Producer’s attitudes are much better than a year ago (as if they wouldn’t be). What bothers us as much as it did last year was speaker upon speaker fear mongering – what is wrong with our industry? With almost no speakers having one personal dollar invested in it. Last year several speakers spoke on the need for massive sow liquidation to save us. This year animal welfare. There appears to be a need for balance. Where is the discussion on what is good about our industry? What about driving demand? How to grow ourselves? We are being inward, playing defense. We were recently in Brazil. We were told in the next ten years Brazil could add one million sows. We found a can do attitude. One of offense not navel gazing. The heart and soul of American producers is positive. Our perceived leadership defensive. We have travelled the world. Seen each and every major pork producing country. There is no better place to produce pork now and in the future. Our biggest handicap is a shaken confidence.

Quote: ‘We never look back. We just figure there is so much to look forward to that there is no sense thinking of what we might have done. It just doesn’t make any difference. You can only live life forward.’ Warren Buffet – The Tao of Warren Buffet.


Author: Jim Long, President & CEO, Genesus Genetics

[mikey]

IPVS - PWCS Remains a Mystery
CANADA - Two papers presented at the International Pig Veterinary Society Congress (IPVS) have shed a little more light on Postweaning Wasting/Catabolic Syndrome (PWCS) but the condition remains a mystery, writes Jackie Linden from the Congress in Vancouver.

 
Reports of a new condition, called Postweaning Wasting/Catabolic Syndrome (PWCS) emerged in Canada in 2008. It appeared to be an emerging condition characterised by raised mortality in the nursery. Affected pigs, weaned in good body condition, develop anorexia and most become severely emaciated and die within three weeks of weaning. Mortality rates are reported to rise and fall but they can reach 10 per cent in peak months.

At the IPVS 2010 Congress, Dr Yanyun Huang reported in two papers work carried out by himself and colleagues at the University of Saskatoon on the pathological features of the syndrome and the search to identify the cause(s).

On the pathological changes, Dr Huang reported that the results indicate the principle lesions associated with PWCS are atrophy of the thymus and small intestine villi. He also noted that apparently healthy pigs from the affected herd also suffered villous atrophy, indicating that they may have a subclinical form of the disease or suffering from the early stages or that villous atrophy is a factor pre-disposing these pigs to disease. Dr Huang proposed that villous atrophy may be an indirect result of prolonged anorexia as apparently healthy pigs from the affected herd had no sign of thymus atrophy.

Pigs with PWCS symptoms also showed more colitis than apparently healthy pigs form the farm.

In his second paper, Dr Huang examined the organs of a number of pigs from the PWCS-affected farm for a range of common porcine pathogens. He found no sign of the viruses causing PRRS, influenza, TGE or rotavirus, nor the bacteria, Helicobacter or Campylobacter. The farm regularly vaccinates pigs against PCV so Dr Huang rules out this virus as the cause.

He did highlight that calicivirus was highly prevalent in the intestine of the pigs from the affected farm although it has not previously been reported to cause disease in pigs and calicivirus DNA was found in apparently healthy pigs too.

Dr Huang and his colleagues are continuing their efforts to identify the cause of PWCS, which still remains largely a mystery just now.

References
Harding J., Y. Huang and H. Gauvreau. 2010. Postweaning Wasting/Catabolic Syndrome (PWCS): pathological features.
Harding J., Y. Huang and H. Gauvreau. 2010. Postweaning Wasting/Catabolic Syndrome (PWCS): the initial diagnostic investigations.
Both in Proceedings of the 21st IPVS Congress, Vancouver, Canada, 18-21 July 2010.

[mikey]

Tuesday, July 27, 2010
Pork Commentary: October and December 2010 Lean Hog Contract
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long is President &
CEO of Genesus Genetics.
Last Friday October lean hog contracts at 77.025 and December at 74.350 closed from what we can determine were life of contract highs. Certainly some producers will look at these levels as good selling opportunities.

Last week 53 – 54 per cent lean hogs were averaging nationally 80.32; a year ago they were averaging 60.76. That is 20 cents higher this year ($40 per head). Cheques are certainly bigger! Everyone needs it.

Last week’s US Hog Marketing’s were 1.961 million down. 68,000 head from the same week a year ago. Less hogs, no H1N1 (swine flu), and better demand is leading to the $40 per head difference.

Other Observations
Last week National Direct Cash early weans averaged $42.92 - 40 pound feeder pigs $61.41. Demand is good for small pigs and prices are counter – seasonally strong. What is interesting is reports that we are hearing of reluctance of buyers to sign long term contracts. The reality of the losses in the last three years and the price volatility of both grains and hogs have made long term commitments a nervous proposition.


September CBOT corn a bushel dropped to $3.71 a bushel last Friday down 24 cents a bushel in a week. Crops look excellent in most areas. This significant lower year over year pork in storage bodes well for hog prices in the coming weeks. August lean hog futures of 83 cents plus are not an aberration.


US retail pork prices hit record highs in June at $3.14 per pound. Consumers are definitely wanting our product this is a great sign of demand. We have producers making money, packers making money, and consumers voting with their dollars to buy our pork all positive.


US May Pork Exports were up 22 per cent in May over a year ago. This has helped push US hog prices up year over year $40 per head we have seen in the last three months. When it’s raining enough that lawns don’t need watering at the end of July. Enough moisture for crops is not an issue. Read this week that corn is $2.20 US per bushel in some parts of Brazil. That doesn’t work for corn growers. There is no corn ethanol in Brazil. Cheap feed for livestock and poultry though.


The USDA released 1 July Cattle and Calve Inventory last week. The total cattle and calves were 100,800 million – down 1.2 million head from the year before. Cattle numbers continue to decline year upon year. Less cattle creates Red Meat substitution opportunities for pork.


US pork in storage at the end of June was 410 million pounds, down 167 million pounds from a year ago and down 36 million pounds from the end of May.
Some points from the National Pork Industry Conference two weeks ago
Compared to 1950 the US produces 176 per cent more pork with 44 per cent fewer sows.
Compared to 1930 USA produces 333 per cent more corn on 11 per cent more acres.
Compared to 1930 69 per cent more wheat on 6 per cent fewer acres.
Obviously technology has pushed yields to extraordinary levels but you can see the obvious benefits of the effort and capital put into corn hybrids compared to lesser efforts in wheat.

Swine productivity continues to accelerate. We see herds reaching 35 pigs per sow per year in the not too distant future. The large structural frames of breeding stock needed to have the material capacity to carry large litters also gives the length and frames to carry large carcass weights. We currently have customers producing over 7,400 pounds of hogs per sow per year. 8,000 pounds will soon be reached.

Food productivity has driven the high standard of living we have today. In 1908 50 per cent of an average American annual income went for food. Now it is 10 per cent of income. Less money on food, more money for cars, housing, clothes, vacations, etc... Agriculture has been the catalyst for the American dream. How many Americans realize that?


Author: Jim Long, President & CEO, Genesus Genetics

[mikey]

Wednesday, August 11, 2010
Pork Commentary: Record Price Pork Bellies Become News Story
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
Abracadabra – the US consumer woke up to the media reports last week of pork bellies (ie. Bacon) reaching record prices with wholesale belly prices reaching over $1.50 per pound. This is a historical record. A year ago wholesale bellies were in the 40’s. This is a classic case of the surest cure for low prices are low prices. Unfortunately when the national media discovers a story it is many times the sign of the stories zenith. Bellies will stay high but we don’t expect new records in the coming weeks.

Low pork and bellies in cold storage and weekly hog marketing’s continually lower than last year in compounding supply issues relative to demand. Last week the US hog marketing’s were about 140,000 fewer hogs than the same week a year ago. Give or take 25 million pounds less pork for the week compared to a year ago. Week upon week of lower pork supply is pushing prices higher as the only way to ration limited supply is higher prices. There is little wonder hogs are bringing $40 plus more year over year. We can’t say we are surprised as we predicted significantly higher prices this summer compared to the usual suspect ag-economists that as late as January were predicting lean hog prices in the 60’s this summer.

We guess it is a difference in perspective. Every day we are exposed to the cost of hog ownership and we have seen the financial challenge producers have experienced. Far from an academic exercise we saw the real pain of swine production of an industry losing $6 billion in equity. No way this collective pain was not cutting production. Gilts weren’t being retained. Production corners were cut for lack of capital and courage. There would be less production. We also believed and wrote that the US H1N1 (swine flu) experience (scare) of 1976 would be repeated. Lots of noise! Nothing much would happen and people would soon forget. They have forgotten H1N1. Certainly record high belly and bacon prices are a clear indication of that reality. Consumers are voting with their dollars that they want bacon. Bacon, a product that has taste and flavor, it is certainly not what you would call low fat. This in itself might be telling our industry what the consumer wants and are definitely ready to pay for.

Other Observations
The Russian drought has certainly jolted our feed costs. Since 27 July, September corn has gone up 45 cents per bushel ($3.62 to $4.05) wheat is up from $4.64 on 29 June to $7.25 per bushel last Friday. We are leaving for Russia – Ukraine this Friday and will be in the areas that are drought affected. We will report our first hand from the ground observations.


Weekly Iowa – US Minnesota hog weights are close to a year ago. This year 267.0 pounds last year 266.8 pounds. A few weeks ago this year’s weights were almost 4 pounds higher than a year ago.


Higher feed prices have taken some edge off the early wean and feeder pig market. Last week US cash early weans averaged $42.05 and cash 40 pound feeder pigs averaged $56.30 with a huge range of $44 - $65. Last year feeder pigs were about $15 and were at their extreme low. Over the next few weeks we expect to see early weans – feeder pig prices to stabilise. There is still a pig shortage and we expect feed prices will stabilise when the reality of a record corn crop sinks in to corn prices.


We all have heard of the farmer owned Illinois Packing Plant Meadowbrook that failed and is sitting empty with millions of dollars lost. A contrast to the Meadowbrook unsuccessful venture is Conestoga Packers in Ontario wholly owned producer plant. This group of 150 family farms is currently handling 14,000 head a week up from 3,000 a few years ago. Recently Conestoga announced further expansion in processing which could add up to 40 new jobs to the current 350. Conestoga is working. A testament to the vision and leadership of the family farmers who have stuck together to truly build a pork product from the farm to the fork. A belief and commitment in themselves and their industry for today and the future.
Summary
Hog prices are going to stay strong in the coming months. Hog supply is short. Demand is strong. There is no significant expansion. The empty sow barns are not being restocked yet and new sow barns are a figment of imagination. The equity hole is being refilled. Unfortunately the equity hole is still a crater.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Live Hog Prices See Improvement
CANADA - The Saskatchewan Ministry of Agriculture reports industry led herd reductions have tightened the supply of live hogs resulted in improved prices and restoring the profitability of most western Canadian pork producers, writes Bruce Cochrane.


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. 
The Saskatchewan Ministry of Agriculture released its August Hog Market Update last week.

Livestock market analyst Godwin Pon observes, for the month of July US slaughter numbers were down by about five per cent from the same time last year to approximately 1.9 million head per week while in Canada slaughter numbers have fallen by about six percent from 2009 tightening the supply of market hogs.

Godwin Pon-Saskatchewan Ministry of Agriculture
Prices for live hogs have been increasing mostly due to declining supplies attributed to industry led herd reductions.

Generally speaking beginning May 2010 prices of live hogs began to improve.

In early May Iowa carcass price averaged about 85 dollars US per hundredweight and SPI index 100 ranged between 157 to 167 per 100 kilograms.

These prices have been fairly constant through the summer.

For example the week ending 7 August Iowa carcass price were about 82.29 per hundredweight and signature three prices were 154.22.

This is a significant improvement over last year's prices where during the same week Iowa carcass price was 50.09 per hundredweight.

I think what we're seeing is tight animal supplies forcing processors to bid more aggressively.

Generally speaking producer profitability has improved.

At these hog prices we expect most hog producers to be at least breaking even if not making a small profit though any profits being made right now will go towards covering past losses and rebuilding equity in their operations.

Mr Pon notes at the beginning of June US frozen pork supplies fell about eight per cent, the fourth consecutive month that pork supplies declined and stocks are down 29 percent from one year ago.

He suggests producers should continue to monitor trends in hog and pork markets and input costs and he recommends exploring forward pricing opportunities to ensure continued profitability.

[mikey]

Pork Commentary: Sow Units Sit Empty
CANADA - This week's North American Pork Commentary from Jim Long.
 

Jim Long is President &
CEO of Genesus Genetics.
There is no significant sow herd expansion underway. We know of dozens of existing sow units that are sitting empty. In the breeding stock business it is our job to know where the empty sow units are and sell gilts if something happens. Nothing is happening? Why?

Some Observations
There are excellent empty sow units and marginal ones. Some have economy of scale – some don’t.


It takes capital to acquire an empty sow unit but just as importantly it takes operating capital. Both long term and short term credit is extremely hard to get. Lenders have lost money in their swine accounts. There is little enthusiasm in the banking community and for debt exposure in the swine industry without significant risk aversion (equity).


Producers don’t have cash or resources to self fund expansion. After the $6 billion lost in equity over 30 months. 3 months of profit have not come close to replenishing the hole. Maybe at the most, 15 per cent of the equity loss has been recovered.


It is interesting the number of reports we have received from producers who tell us their profits over the last few months have been limited by hedging positions that was pushed on them by bankers. Their positions they were forced to take have cost them up to $20 per head in lost opportunity. Just as importantly their equity hole has not been refilled at as rapid a rate as possible.


Another issue is many empty sow units have gone empty under financial duress. Consequently, there are issues of ownership, debt, and control. This tangle of circumstances makes it hard or impossible to execute purchases. Tangles will get sorted out in time but it might take many months.


Also empty sow units that are in areas of high pig density are less attractive. Diseases have costs that at times can lead to lower productivity. Health is becoming more and more important and concerns of such affect buyers and lenders.


Bio – secure sow units that are empty are in areas of few people and a in a lot of cases far from markets and potential owners. To find and staff a sow unit in an isolated area is always a challenge. To own a sow unit far from where you live is in itself a leap of faith and risk.
Other Observations
The grain market to say the least is volatile. USDA comes out Thursday with a crop report that has record US corn production. Corn price goes up. A lot of what is happening in the markets is the reports from Russia – Ukraine of drought. As we write we are on a plane bound for Moscow. Over the next two weeks we will be visiting some of our customers in Russia – Ukraine. Producers with 100’s of thousands of hectares (acres) of crop. We will be on the ground – we will see. We will report.


China hog prices have jumped 20 per cent over the last few weeks. This is positive. Higher prices in China means stronger demand. Even a small percentage increase of pork exports to China – Hong Kong will support hog prices.


We were talking to associates in Brazil this week, hog prices in Brazil are the same as the USA. That’s good for both countries. As global competitors for many of the same export markets are lower price in either Brazil or the United States limits profit and export opportunities. Strong prices in both Brazil and the United States reflect strong global pork demand and a lower pork supply compared to a year ago.
Summary
Like many other business we sometimes work too much and are away from home far too often. It is the price we pay. Fortunately, on this trip I am travelling with my 13 year old son. Over the next 16 days he will see much of Russia, Ukraine, and the Czech Republic. It will be an eye opening experience, one that he should remember long after I am gone. Part of what we want him to see is the rapid transition and evolution in these countries - that the values and dreams of most people have no borders. Food, shelter, and to provide for a better life and opportunity covers most parent’s ambitions.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Pork Commentary: Road Trip to Russia
RUSSIA - This week, Jim Long writes, "This past week we spent in Russia."

Jim Long is President &
CEO of Genesus Genetics.
Our Observations:
Russia’s economy is showing vitality if the number of buildings under construction is any indication.


The Russian Market Hog Price is up to 85 rubles a kilogram or about US $1.25 liveweight a pound. Top producers are making over US $150 per head.


Wheat is approximately US $4.00 or US $160 tonne in the Southern Kuban region 1,000 miles south of Moscow it is about US $5.00 a bushel in Voronezh, half way between Moscow and Kuban.


Soy meal is US $500 a ton.


When we were in Moscow Sunday, 15 August, the city was covered with smoke caused by forest fires in the area. It was nasty. Since then the weather has cooled and it has rained some and there are few if any forest fires. On Saturday the temperature was 65°F.


In the Voronezh region, 500 miles south of Moscow as we travelled around we saw many areas with forest fire damage. The scale of the fires we saw were not individually large with many just a few hectares or acres, but there were lots of them. Some houses were burned out.


Voronezh has soil like Illinois. It is black earth, the drought has been intensive. Record high temperatures in the 40°C or 104°F. and no rain for 6 weeks. We were in corn fields with 4 inch corn cobs. The only time I saw crop damage like this was in Northern Indiana several years ago.


The wheat crop had been harvested but it was only about 40 per cent of normal in the Voronezh region. Russian people told us the heat and lack of rainfall as unprecedented.


A week ago the Russian Government banned the export of grains until January 2011. Several producers told us they would not sell grain until the embargo is lifted. If non–sales happen to any great extent the Government’s attempt to limit grain prices might not work.


In the Kuban district in the south between the Black and Caspian Sea the wheat crop was harvested before the drought took a major toll. Yields in that region were down but not by much (60 – 70 bushels per acre). Currently seeding has begun for fall wheat. In Kuban, corn and sunflower crops have been hit by the drought being later crops.


One farm operation we visited had a large cropping enterprise with just less than 450,000 acres (200,000 hectares). 59 new John Deere Combines and 63 John Deere tractors. We have to admit we never thought in our life we would be discussing where to build a new swine barn in a 100,000 acre tract of land (50,000 hectares). Biosecurity distance is under control.


In Russia there is a wide range in productivity on swine farms. Some 12 pigs per year, others 24 plus. With the higher grain prices and the economic shock it will cause in some operations we expect there could be several low productivity producers go out of business. On the other hand, top producers are doing well. A 6,000 sow operation with Genesus Genetics is reporting to us 24.3 hogs marketed. In this operation we had placed full time Genesus management and a complete training program. With super high hog prices and 24 plus hogs per year per sow. It is happy days!!


As I wrote last week, I am travelling with my 13 year old son. It is an eye opening experience for him. Different culture, different language, and a different economic model. It is a good education. As per usual, when we travel we have been treated well by our hosts. I will always marvel on how Ag – people in general are so hospitable around the world. In one town of 70,000 people in Voronezh the police chief heard we were there. They don’t get many foreigners. He came to our hotel, introduced himself, and insisted we visit their new hockey arena (he’s a goalie), after he took us to a huge fertilizer facility with 3,000 employees. Russian’s like American’s are proud of their community.
This coming week we will be visiting Prague and the heart of Ukraine’s grain production.

Other Observations
Statistics Canada released 1 July Inventory Report. No big surprise as Canada’s swine inventory countries to decline year over year. Market hogs are down about 300,000 head while the sow inventory has declined over 60,000. Live exports to the US were down April – June about 200,000 in the quarter year over year. The bottom line is smaller sow herd, smaller inventory and smaller exports. This is price supportive now and in the future.

In the last two weeks prices in Brazil have risen 10 per cent across the country. Prices in the South – East are US $1.70 per kilogram live weight (75 cents live weight per pound) and in the South, US $1.40 a kilogram (about 65 US cents per pound). As we have written before, Brazil and North America are the big hitters in Global Pork Exports. To have high prices both countries need to have prices not undercutting the other.

Last week in China the price of pork had risen for 10 straight weeks and hit 17.09 guan per kilogram (US $1.10 per pound). Reports say the uptrend in pork prices was due to an outbreak of diseases. The rise in breeding costs, Government policies and the impact of the flood in some regions.

Summary
US hog prices are holding in the low 80’s lean per pound. We expect a seasonal price decline but we are buoyed by the prospect of prices staying strong. Canada’s hog supply is down. Brazil’s prices are up (meaning supply is down) and China’s prices are up (supply down). Less pork always leads to better prices.


Author: Jim Long, President & CEO, Genesus Genetics