Canadian Pork Producers:

[mikey]

Thursday, December 11, 2008Print This Page
Impacts of Gut Microflora and Probiotics
CANADA - More than 40 scientists and experts from different universities and research centers across North America and Europe gathered last month in Quebec City to participate in Institut Rosell-Lallemand’s Scientific Exchange.



With varying though complementary backgrounds ranging from neuroscience to gastroenterology to animal behavior, all shared a common interest in probiotic research and application.

The meeting focused on the intricate and complex relationship between the brain and the gut. New and exciting data were shared, contributing to establishing the interactions between this “brain-gut” axis and the gut microflora, as well as the potential of probiotic use.

At a time when modern farming practices represent an important source of stress factors for animals, affecting their performance, health and well-being, some promising behavioral studies were shared showing that probiotics can help to manage stress and influence behavior. This unique interdisciplinary meeting was a real platform for exchanging ideas and methodology. It allowed the participants to set new directions for future probiotic research and paved the way for new applications in both animal and human nutrition.

The brain, the gut and the bugs: a fascinating triangle
The idea of a brain–gut axis is not a new concept, the first scientific studies of the subject date back to the 1960s. The fact that communication works both ways and that the gut can talk to the brain is a more recent concept. Even more novel is the idea of looking at the role of the intestinal microflora, or microbiota, with the addition of probiotics, in this brain-gut cross-talk.

As explained by Professor Stephen Collins of McMaster University Medical Centre (Canada): “The intestinal microbiota has profound effects on host function and should be incorporated into a modern conceptualization of the gut-brain axis.” He added: “In this model, changes in brain responses, such as stress or anxiety, influence the physiology of the gut, altering the habitat for the microbiota. The microbiota, in turn, influences gut physiology and immunity at the gut mucosa level. Our recent data indicate that perturbation of the microbiota also influences behavior..”

Until now, probiotics had mostly been documented for their role in digestive health and functions: prevention of diarrhea or bloating, transit regulation, lactose intolerance…in human, and optimized feed efficiency and pathogen control in animal production. In recent years, scientists have also studied their interactions with the immune system. With their action on the gut microflora balance, probiotics could also affect the brain-gut axis, as confirmed during the seminar.

Effects of probiotics on behavior, stress and anxiety
More than ten different scientific studies were presented, showing how specific probiotic preparations play a role in animal behavior, their reaction to stress, anxiety, or memory formation post-infection.

For animals raised with modern production methods, stress is a recurrent issue, and probiotics are increasingly used as a natural solution to control pathogens development or to optimize performance. Several significant studies were presented showing how probiotics can also impact stress and behavior and be an ally to reduce the impact of stress in animal production.

During the session dedicated to monogastric animals, for instance, Dr Nicola Walker (Lallemand, Montreal), demonstrated that farrowing, an important stress event for sows and yet an extremely critical step of its production cycle, induced a dramatic change in the sows digestive microflora. She explained that:” In our study, we showed that the normal balance of the sow’s gut microflora was disturbed by farrowing. However, when the sows had received probiotic yeast Saccharomyces boulardii I-1079 for three weeks prior to farrowing, their microflora was less affected by this stress event, indicating a degree of stabilization.” She concluded that: “The probiotic yeast may help to stabilize the gut normal microflora during periods of stress, thus potentially reducing the proliferation of opportunistic pathogens and thereby leading to improved health and performance.” In another presentation by Dr Alex Bach, from IRTA, Barcelona (Spain), it was re-stated that ruminant-specific yeast S. cerevisiae I-1077 can help regularize feeding patterns in dairy cows.

Didier Desor, Professor of Behavioural and Cognitive Neurosciences at University Henri Poincaré in Nancy (France), presented a pre-clinical study with a probiotic preparation (Probio’Stick™ from Institut Rosell-Lallemand) which has already been shown to be effective in humans in reducing the gastro-intestinal symptoms linked to stress. Using a mouse model validated with Diazepam, it was shown that: “the probiotic was able to reduce signs of anxiety, displaying an “anxiolytic-like” effect. Such effect had not been previously described with probiotics.”

All probiotics are different
One of the evident conclusions that came from the numerous discussions during the seminar was the renewed certitude that all strains are different. The benefits exerted by a particular microbial strain or blend of strains cannot be extended to others. Some of the studies presented were conducted on different probiotic preparations and the outcomes were diverging. We are just beginning to comprehend the necessity of matching a probiotic with a state of health.

Looking to the future
During the round-table discussion, it came out loud and clear that experts from different disciplines in both human and animal health have a lot to learn from each other. Professor Phil Sherman, from the Hospital for Sick Children, University of Toronto (Canada), who chaired the discussion, concluded that: “the seminar was a great opportunity to build bridges, not only between the industry and academia but also between the different disciplines.” We are learning that nutrition, gut health and psychological health need, more and more, to be linked together. All the participants left with new ideas and concepts which will be exchanged through new collaborations and interactions

[mikey]

Friday, December 12, 2008Print This Page
High Quality Barley Available as Feed
CANADA - The Canadian Wheat Board reports there will be a large volume of excellent quality barley available this winter for feed, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
2008 saw a strong global production of barley.

Canadian Wheat Board barley marketing manager Lorelle Selinger says when making marketing decisions both buyers and sellers need to keep in mind there's a large volume of barley out there so prices are not likely to up.

Lorelle Selinger-Canadian Wheat Board
This past year western Canadian farmers experienced a good crop.

We had production numbers over 11 million tonnes in western Canada itself of barley, which is averaging over 60 bushels an acre throughout western Canada.

Of this a large proportion of it is selectable for malting.

Possibly up to four million tonnes are of that quality.

Likely, though, the malting program will not be that large.

The remainder of it will go into the feed market.

Quality wise, we've had a very good crop.

We got off to a bit of a rough start during harvest with some wet conditions and such but the late dry time during mid to late-September really finished things off nicely.

We had a very plump crop, heavy barley, very good quality.

Global production this year was very high.

In the EU and Russia combined they've produced over 19 million tonnes more than in past years.

Australia has finished with a bit larger crop than in past years.

They've had some quality issues over the last little while.

They experienced some drought conditions as well as some late rains which will take some of the barley in some of their malting regions and move it into the feed market as well.

Selinger says, while domestic prices have dropped, domestic values are still stronger than export values.

She notes, over the past month, prices in Lethbridge have dropped from about 190 dollars per tonne to 160 dollars or even below.

She says this is still higher than the export market and, as long as the domestic values remain stronger, it's unlikely a lot of barley will be exported as feed.

[mikey]

Tuesday, December 30, 2008Print This Page
Pork Commentary: Mexico Strikes Back
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
At the end of last week, Mexico delisted 39 US Pork Plants from having access to the Mexican Domestic Market. From all indications the delisting was a retaliation for US Country of Origin Labeling (COOL) which has caused severe hardship on the Mexican Feeder Cattle exports to the US. The US pork plant delisting came a week after Mexico had launched a complaint at the World Trade Organization against US Country of Origin Labeling. The Pork plant delisting will put extreme pressure on US hogs as Mexico is the United States’ number one market.

Last year, Mexico sold more than 870,000 head of live cattle to the US to be partly raised and then processed into meat. Mexico’s sales of live cattle have fallen far below that this year.

What we have is an escalation in trade issues. The US Country of Origin Labeling has caused hardship for livestock producers in both Canada and Mexico. Mexico has decided to retaliate. We understand Canada is pondering its move if there is no US compromise. Canada imports more agriculture products from the USA then vise versa. Unfortunately, when Government’s get involved in the marketplace it always seems to become market distorting and many times this is not for the good.

Hogs and Pigs Report
Tuesday, 30 December, the US Hogs and Pigs Report will be released. We expect much of the same attrition in the breeding herd and lower market inventory. We estimate the breeding herd will have declined 50 – 60,000 from September 01 and be down give or take 4 per cent year over year (about 225,000 – 250,000). We need a positive shot of news. Iowa – Minnesota last Friday was 49.13 lean and we suspect many farrow to finish producers have breakevens of 70 -75 cents lean currently. When you put the numbers together, losses are a per head basis of $35 - $50. Nasty! It’s been too long losing money and the equity hole is getting deeper.

The corn and soybean price unfortunately also seems to be gaining strength give or take $1.00 a bushel higher than the contract lows reached a few weeks ago. If there is an upside and we are reaching for these higher corn prices it will encourage spring plantings when coupled with lower fertilizer prices. Also, higher corn prices must be giving the corn ethanol plants (food burners) big indigestion on their breakevens.


Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Monday, January 05, 2009Print This Page
Canada's Pork Producers Look Forward to 2009
CANADA - Canada's pork producers are bidding adieu to 2008 and looking forward to improved fortunes in 2009.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Jurgen Preugschas, a Mayerthorpe, Alberta area producer and president of the Canadian Pork Council (CPC) recalls, producers struggled early in the year with the Canada-U.S. exchange rate, very high input costs and low prices paid for pork.

He acknowledges, while the situation did change somewhat toward the end of 2008 with the exchange rate falling back and input costs dropping, all factors added together made for a very difficult year.

2008 Outstanding as a Difficult Year
“I think 2008 will be remembered as one of the really outstanding awful years in the hog industry,” observes Florian Possberg, a Humboldt, Saskatchewan area producer and the Canadian Pork Council's representative on the Canada Pork International (CPI) board of directors.

Possberg describes 2008 as “an extremely challenging year for hog producers financially” as they had basically everything thrown at them.

“We bid 2008 adieu and look for better things in 2009.”

Preugschas notes initiatives have been introduced provincially to help ease the situation, such as the Alberta Livestock and Meat Strategy (ALMA) and, on the pork side nationally, there's the Pork Value Chain Roundtable.

The whole value chain, he explains, is working together to figure out what the new world might look like in terms of getting more value out of the end product and to ensure all of the players throughout the supply chain get a fair amount of money.

Global Sow Production Declines
Recent hog and pig reports in Canada, the US and around the world, have shown sow numbers have been reduced.

Preugschas observes, “In Canada, of course, we've had significant reductions in production and it's still taking place today as our producers are hurting. To a lesser degree there's been some reduction in the United States. Certainly in other parts of the world, as well, there's been significant reduction.”

He hopes that will translate into profitability in 2009 but, he concedes, with the economic crisis all bets are off in terms of trying to predict where exactly the situation will end up.

Possberg believes 2009 will have to be a profitable year for the hog industry.

“Our industry can not sustain another year of significant losses. Producers are just in a very weakened state and it's time for the turn around. The sooner the better.

Profitability Projected in 2009
“We are expecting a return to profitability, for sure, in the third or fourth quarters of this year,” says Preugschas.

“We're hopeful that it might even occur sooner. The hog producers are eternally optimistic and they feel it will eventually happen. We believe that we're getting close to that but there's a lot of factors that are beyond the control of the hog producers of this country and that's the challenge.”

He concedes further economic collapse could affect what people eat and that is very hard to predict this year.

Financial Crisis Tempers Expectations
Possberg agrees, the financial melt down is creating a great deal of uncertainty.

“There's an issue with trading meats internationally and we're a big exporter. We have to trade and so we do have to have a financial climate that facilitates trade,” he says.

CPC executive director Martin Rice notes, the economic melt down actually did spell some relief in the form of lower grain prices and the decline of the Canadian dollar below 80 cents US by the end of the year (2008).

He acknowledges, the world market is still facing a lot of economic uncertainty and a recession which is not good for meat prices generally so we're not seeing the strength in that meat sector that would have been expected by this point. While there's been some narrowing of the gap, the industry is still not back to profitability.

Financial Crisis Expected to Re-Invigorate WTO Negotiations
“The economic recession has put a lot more focus on keeping the world economy working.”

Rice believes that will require finishing the WTO negotiations.

“We would expect the new US administration will, on balance, be favourable to getting back into those discussions. We see it (restoration of growth in trade) as being a big part of the economic recovery for the world economy for the next couple of years.”

Rice admits in difficult times people do tend to become more protective of their own interests. However he believes there is a recognition of the strong interdependence in the world economy.

“There's going to be a lot of pressure to utilize that trade route to help get back to the economic recovery that we're all looking forward to.”

New US Food Labelling Rules Cause Continued Concern
Meanwhile, US Mandatory Country of Origin Labelling (COOL) also continues to create a great deal of uncertainty for the Canadian pork industry.

“That's front and foremost on hog producers' minds,” says Preugschas. “Two out of every three pigs that are born are exported either as pork or as live animals and that has a very big impact on us as the US is a major customer for our live animals.”

“There's a lot of guessing going on out there and we do hope, in the next little while, to see a US final rule come out,” says Rice.

He notes, “There's been a lot of representation made to the U.S. government to have that final rule reflect as much flexibility as possible so that Country of Origin Labelling doesn't unnecessarily interfere in the normal business practices that have evolved in the last ten years in the North American hog industry.”

Clarification of Rules Necessary
Possberg notes Canada and Mexico have challenged the new US labelling laws through the World trade Organization.

“What we need to know is what the business relationship will be in the US.”

None the less he remains convinced there will be a business based solution found.

“If the rules written for the enforcement of Country of Origin Labelling are such that a number of major packers will continue to source United States and Canadian hogs then the business can go forward with some certainty that there's going to be a reasonable market for the hogs at the end of the day.”

Possberg stresses, “There's negotiations at very high levels going on to help sort out and make sure rules that end up being enforced will be ones that allow business to continue to happen with as little disruption as possible. The challenge is we just don't have those rules yet and the sooner we get them sorted out the better.”

Possberg suggests, “The ironic thing is that there's probably 4,000,000 Canadian born hogs in the US that are at one stage or another of being finished and these hogs are going to go for slaughter there. The only question is how big a discount and how big a market disruption they're going to cause?”

Canadian Position Still Strong
Despite the challenges of 2008, Preugschas is convinced Canada has an industry that's lean and very good with the right fundamentals in place.

“It's a matter of working together as a total supply chain and with the assistance of consumers, especially Canadian consumers, that they buy Canadian pork to assist us through these difficult times so those jobs don't disappear from Canada.”

[mikey]

Tuesday, January 06, 2009Print This Page
Pork Commentary: Hog Supply Plummets
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
After a year and a half which Producers lost in excess of $20.00 per head, with the industry losing in excess of $3 billion, US hog supply according to the USDA quarterly hog and pigs report will plummet in mid April 2009. The USDA indicates that pig supply on the first of December was 21.297 million head for under 60 pound pigs (These hogs will go to market beginning in April), compared to a year ago when the hogs under 60 pounds inventory on the first of December was 22,545 million. That would be 1.250 million fewer under 60 pound pigs year over year. If we use 10 weeks of life for a pig to get to 60 pounds. That translates into 125,000 fewer market hogs a week for May, June compared to a year ago. Throw in all likelihood that imported Canadian Market Hog numbers will be at least 25,000 a week less than 2008 due to COOL and you get 150,000 less hogs a week. At least 6 per cent fewer hogs year over year. A huge decline when coupled with the continued decrease of poultry and beef production year over year.

For weeks we have seen the rapid rise of feeder pig and early wean pig prices. You need to look no further than the under 60 pound inventory to see the demand driver. Iowa, the main destination is down 620,000 head in the under 60 pound category year over year. That means 620,000 pig spaces in Iowa empty that had hogs a year ago. That is why the finishers are chasing pigs and pushing prices.

Breeding Herd
The U.S. Breeding Herd is down about 150,000 sows from a year ago. We are surprised by USDA report showing an appreciation of 20,000 sows on the first of December compared to the first of September. We do not believe the inventory grew. There are no new barns. There is nobody adding sows. A small decline we might find plausible. An increase - we don’t think so.

We expect (we have no facts) of the productivity gains we had in the recent past was possibly a function of an underestimated breeding herd. Maybe there was 50 – 100,000 more sows in prior months than ever were picked up in the inventory. As time has gone on these have been found which has made the breeding inventory decline seem less visible. We believe there is no way the US breeding inventory actually gained from September to December. We see no breeding herd expansion on the near horizon.

Counterbalance to Our Optimism
If you want a counter balance to our rapid price appreciation expectations due to the domestic and global supply decline in all meats the economists from the University of Missouri are predicting a lean hog price average of 61 – 66 cents in 2009. With farrow to finish breakevens of 71 – 75 cents a pound you will lose $10 - $25 per head. If you believe them you might as well get out of the business now. The tenured check off dollar fueled Chicken Little Sky are Falling Economists are alive and well. Our New Year’s Resolution is to be not too mean in the commentary (unless our livelihoods are at stake). Footnote Suggestion: Do not take predictions to your bank or use in cash flows.

Hog Prices
All the pigs have been born that are going to go to market before November 2009. There is next to nothing that will or can happen to alter this biological reality. 6 per cent fewer hogs will translate into hogs pushing past 90 cent lean. We had have US weekly marketings average the last few months over 2.35 million a week. In May 2009 we will be under 2 million, 350,000 less hogs a week. Less meat. Same number of consumers. We averaged 79 cents lean in May 2008. A 20 per cent price appreciation due to 6 per cent fewer hogs pushes prices over 90 cents lean (Missouri Economists predicted 64 – 69 AML).

Short term we see the hog price beginning to increase the second week of January and to follow a relentless increase into May of 35 cents lean improving your cash flow $70.00 per head from where it is now.

Another reason for optimism is the Iowa and Minnesota Live hog weights. Last week Iowa – Minnesota averaged 266.6 pounds. 4.5 pounds per hog lighter than last year’s 271.1 pounds. We have current market inventory. This is bullish.

Other Observations
A new website Pigcareers.com has been recently launched for swine industry related job opportunities. This week Genesus has an ad for a U.S. Midwest salesperson. Currently Pigcareers customs who wish to post an ad can do so free as a onetime introductory offer. We believe it is good for our industry that a dedicated swine industry careers site has been initiated.
European Union which 18 months ago had over 15 million sows continues to show liquidation. Last week Germany announced 140,000 fewer sows in inventory. Poland could be off 20 per cent in 2009 compared to 2007.
United Kingdom is predicted to be down 4 per cent in 2009. Last week one of our associates returned from the UK and reported the hog price was over $1.00 US per pound. UK producers are making a little money now but it had to be hard.
Russia last week agreed to doubling from 50 million to 100 million tonnes (2009) US pork imports at the low tariff rate. Bullish for US producers. We are not surprised Russian hog producers are getting over $1.30 US per pound. There is not enough Pork in Russia to meet the domestic consumption needs. At $1.30 US per pound Russian producers should be making lots of money and obviously some pork being imported is not hurting their fortunes. (Best situation: have the Russian Pork Import Permits).
Brazil last week reported a significant increase of corn in inventory. Less exports and less corn being fed to Brazil’s livestock and poultry was the reason given. US corn exports continue to lag USDA predictions by 10s of millions of bushels. You do not need to import corn if you do not have the livestock or poultry to feed it to. There is less meat coming in 2009 – domestically and globally.
As the US consumer decreases their frequency of visits to restaurants, we expect Pork will do better. A point of purchase in retail stores pork does well. We are weaker than chicken and beef in restaurants but pick up steam at the retail meat counter. This will hold demand. Pork farm to retail price spread is quite high. Currently, (demand positive) as pork supply declines in 2009 this will become price supportive for producer prices as retailers have room for our percent of margin to increase.
Summary
Fewer hogs and stronger prices are coming. Less chicken, less beef, and less pork are creating a scenario not seen for two generations. The global meat decline is a reality. Strong pork prices internationally are going to be a magnet to pull US pork and maintain exports. We all need it.

 
Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Friday, January 09, 2009Print This Page
North American Live Hog Prices Expected to Rise
CANADA - The Saskatchewan Ministry of Agriculture predicts a return to profitability in the western Canadian swine sector by the middle of this year, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Over the last few days, following declines since mid-December, North American hog prices have started to increase.

Livestock economist Brad Marceniuk reports high weekly US hog slaughter numbers in December and increased pork in cold storage had pushed pork cutout values and hog prices lower but prices are expected to continue increasing into the first and second quarters of 2009.

Brad Marceniuk-Saskatchewan Ministry of Agriculture
Combined North American hog production in Canada and in the US have started to decline.

While Canadian pig crops have been declining over the last year, US pigs crops have actually started to decline here in the last quarter.

Last week USDA released their December Quarterly Hogs and Pigs Report.

The December breeding inventory and market inventory numbers were down from a year ago.

So, with the smaller breeding herd, sow farrowing numbers were down about six percent during the September to November quarter and are projected to be down 3.3 per cent in the next quarter which is the December to February 2009 quarter.

Based on the recent USDA pig crops and lower live hog imports from Canada, US hog slaughter numbers are expected to decrease by about three percent in the first quarter of 2009 and 6 per cent in the second quarter of 2009.

While these reductions should be positive on North American hog prices, projected reduced US pork exports during the first half of 2009 may limit some of these US price increases.

In regards to Canadian producers, they'll see a bigger benefit just because of the weaker Canadian dollar in 2009 versus the dollar that we've seen in 2008.

Marceniuk notes, while the global financial situation has resulted in lower feed and energy costs, hog prices have not declined as much as other commodities.

He suggests factors to watch will include US weekly hog slaughter numbers, US pork in cold storage and global demand for pork.

He says demand for pork may be a key factor, if the global economy does slow down and US pork exports are reduced.

[mikey]

Tuesday, January 20, 2009Print This Page
Working Group to Focus on Expanded Trade with India
CANADA - The federal government has announced the creation of a new working group to promote expanded trade in pork after signing new trade deals with India and Hong Kong, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
Speaking to reporters, following his just completed trade missions to India and Hong Kong federal agriculture minister Gerry Ritz announced a series of trade agreements with both countries including a comprehensive memorandum of understanding with India covering a variety of products, expected to provide a framework to expand exports to India and resolve trade irritants quickly.

The creation of a pork industry working group comes in response to India's approval of the import Canadian swine genetics.

Ritz says the working group, builds on that announcement and will focus on opening the Indian market to Canadian pork even further.

Gerry Ritz-Canada Minister of Agriculture and Agri-Food
Certainly we'll have the Canadian Pork Council involved.

Jacques Pomerleau of the Canadian Pork Council was traveling with us.

He met with industry over there as well and was working on some of those details.

The working groups will be finalized within the next days and weeks.

In that specific case it's a working group with India so it will be to move a lot more product into India.

They're very excited about bringing in a lot of our pork genetics.

Of course they do raise hogs over there but not to the productivity and capacity that we do with our hogs.

We've got just much more superior genetics.

They're interested even in looking at our feed rations and how we do those types of things, the housing and so forth.

So the agreement that we signed goes beyond straight trade into innovation and science and genetics and all those types of things so it's a good well rounded memorandum, that will allow us to move a lot more product at a number of different levels.

Ritz says details of who will sit on the working group and how it will move forward will be determined over the next days and weeks.

He notes Canada already sells half a billion dollars in agricultural exports to India and there's room for exports to grow, as India's population increases and people there look for new products.

[mikey]

Tuesday, January 20, 2009Print This Page
Pork Commentary: Rough Week for Lean Hog Futures
CANADA - This week's North American Pork Commentary from Jim Long.

Jim Long on ThePigSite

Jim Long is President &
CEO of Genesus Genetics.
Friday to Friday, February Lean Hog Futures dropped from 62.45 to 55.95, April 68.60 to 66.02. In May, 80.42 to 77.27. There is little market momentum. USDA Pork Cut–outs were 56.26 while Iowa – Minnesota’s lean hog price was 56.76. Packers are bleeding. They have negative margins. Producers are losing about $25.00 to $30.00 per head. Packers are probably minus $10.00 per head. Not much to be positive about. The war of attrition continues.

Is There a Pony in this Pile of Manure? We will never stop looking!!
Despite what the doomsayers have been predicting, November USA pork exports were up 20 per cent from 2007. January to November year over year has been up 61 per cent, a total of $4.5 billion worth. We expect 2009 USA pork exports to be very close to 2008. People want meat protein everywhere in the world. They will do without other things. It’s maybe simplistic but “People have to and want to eat.”


We believe the Cool legislation is manageable for our industry. Let’s hope some underemployed politicians do not make last minute changes that might handicap our industry.


The week of 10 January saw 60,000 fewer market hogs and culls sent to the USA from Canada year over year. There were 36,000 fewer small pigs. Combined, 96,000 less pigs from Canada. The sow liquidation in Canada has eliminated most of this supply – 96,000 fewer is price supportive, Big Time. We expect 90,000 fewer a week average going forward.


The USA slaughter last week was 2.325 million, down 3.9 per cent from last year’s 2.419 million. Year over year marketings will continue to be significantly lower in the coming weeks and months. In May we expect USA weekly marketings to be down 450,000 head from current levels.


Iowa – Minnesota lean price was around 47 cents a year ago. Last week Iowa – Minnesota was 57 cents. A $20.00 per head difference, still not good but an indication what lower supply can do to boost prices.


The latest weekly data has year over year USA pork production down 18 million pounds, beef production minus 18 million pounds, chicken minus 54 million, and turkey down 16 million pounds. Aggregate total of 106 million pounds. About 3,000 truck loads less total meat a week. We believe as we go forward the relentless decline of total meat supply week upon week is price supportive beyond comprehension. 1975 was the last year all meat sectors were down. That’s 34 years ago. We hazard a guess few if any of us have any firsthand experience of managing a business from 34 years ago. It’s unchartered waters for all.


The Tyson chicken division had stood steadfast in not cutting production in the face of industry cut – backs. Now, Tyson has announced they will cut back chicken production 5 per cent. Less chicken supports all meat prices. The USA chicken breeder inventory is the lowest in over a decade. Consequently, the industry will not be able to ramp up production quickly.


We all know Circo virus vaccine has worked. Major mortalities from it have been eliminated. Last year the industry had a production boost from its effectiveness. We do not expect that 2009 productivity will have the big jump that 2008 had. Some analysts have discounted the idea of 6 per cent less hogs in the May – June period, partially due to their belief in productivity gains. We believe Circo – virus vaccine lead to a one time gain in total productivity.
This coming week we will be at the Minnesota Pork Congress. The following week will be at the Iowa Pork Congress. Come visit us at the Genesus Exhibit. We also invite you to the Genesus Reception at the Holiday Inn downtown Wednesday from 5:00 pm to 8:00 pm. Details are available in the Genesus Newsletter below.

Summary
A packer called us last week and took dispute with our belief in 90 cents plus lean hogs coming this year. They are seeing tough margins, lots of supply and have concern for exports. Maybe they are right. We believe that weekly hog marketings will be 1.9 to 1.95 million in May – June. The packer agreed. There will be less chicken, less turkey, and less beef domestically and globally. High feed prices in 2008 have decimated all meat sectors. There are no factual indicators of declining pork exports. We are holding in our belief in 90 cent plus lean hogs.

We Want To Say
We all saw the plane on the Hudson River. The skill of the pilot was extraordinary. The truly special picture to us was the flotilla of boats that came to the rescue of their fellow citizens. As a Canadian, and a foreign observer, it captured for us the essence of America. Problem!! Do something about it. It was individuals who acted. They didn’t wait for instructions. They reacted with decisiveness. There was little time, they had a choice and they made a choice. Women and children first, no one left behind. They saved the passengers. A can do spirit that is the essence of America. Quote: “Let’s roll” – Todd Beamer, a passenger on doomed flight 93 as he and others moved to overcome the hijackers.



Author: Jim Long, President & CEO, Genesus Genetics 

[mikey]

Monday, January 26, 2009Print This Page
Canadian TOPIGS SPF Boars at Varkens K.I. Nederland
NETHERLANDS - On 25 December, TOPIGS and Varkens K.I. Nederland imported 124 boars from Canada.


These boars originate from the TOPIGS nucleus breeding farm in Saskatchewan, have the highest SPF status and belong to the absolute genetic top of the TOPIGS breeding stock.

The boars were imported from Canada via Luxemburg. The transport period, just before Christmas, was specifically chosen, as then hardly any fatteners are being transported to slaughterhouses. This minimises the risk of contact with pathogens during transport. The boars are currently under quarantine in Lienden (Gelderland) where they will be further reared and kept under veterinary surveillance.

Ninety-four of the 124 boars are from the Tempo line. These terminal boars will go to an SPF AI station of Varkens K.I. Nederland, which is also in Lienden. There they will be used for the production of sperm for the Dutch market.

The other boars are A line boars for sow breeding. After the quarantine period these animals will be transported to AIM Iberica, the Spanish sister company of Varkens K.I. Nederland. There they will be used to breed TOPIGS production sows in Spain.

[mikey]

Monday, January 26, 2009Print This Page
Improved Hog Prices Expected in 2009
CANADA - A US based agricultural economist predicts reduced North American pork production and lower input costs will result in improved hog prices in 2009, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
The combination of an over supply of hogs, high input costs, and a strong Canadian dollar resulted in substantial losses for Canadian hog producers during 2008.

Dr Ron Plain, an agricultural economics professor with the University of Missouri-Columbia, told those on hand last week for the Banff Pork Seminar, reduced slaughter numbers and lower feed costs should result in improvement in 2009.

Dr. Ron Plain-University of Missouri-Columbia
If you look at 2008 hog prices really didn't do too badly.

We were about two dollars above the long term average last year.

The problem was cost of production.

It was 14 dollars above the long term average.

Feed has been very expensive on both sides of the border and, because of the bio-fuels industry, we've been using so much corn to make ethanol recently it's left a short supply for the livestock industry.

Our expectation is that, because of the weak economy, exports of corn out of the United States is projected to be down in the current year.

The livestock industry is cutting back so that feed demand for corn is down so we're looking at fairly moderate prices relative to last summer's peak.

Still four dollars corn doesn't really sound very cheap but it's lower than last summer.

Our expectation is that prices are likely to stay somewhere in the four to 4.50 dollar per bushel in the United States in the coming year.

I think is where we're likely to average and I assume probably something like that for Canadian corn.

Dr Plain forecasts losses in the first and fourth quarters of 2009 and profits in the second and third quarters.

He says we can feel fairly confident in a tightening supply of hogs as producers on both sides of the border reduce production but he acknowledges there is a lot of uncertainty around global demand for pork as a result of the recession.

[mikey]

Monday, January 26, 2009Print This Page
Producers Given More Time to Repay Cash Advances
CANADA - Cattle and hog producers facing hard financial times now have until September 30, 2010, to repay cash advances under the Advance Payment Program (APP).



The extension of the repayment deadline for livestock advances was announced yesterday by Agriculture Minister Gerry Ritz. In addition, the first $100,000 of each producer's advance will continue to be interest-free.

"Thousands of farmers across the country have taken advantage of APP loans and this extension will keep them in business and provide relief during the current credit crunch," said Minister Ritz. "This Government will continue to work with livestock producers and their organizations to address the issues facing the sector."

"This extension assists Canadian hog producers to cope with the current financial crisis," said Jurgen Preugschas, President of the Canadian Pork Council. "We are pleased that the Government recognizes the financial difficulties hog producers are experiencing in these tough economic times."

"This is the breathing room Canadian cattle producers need to put their bottom lines back into the black," said Brad Wildeman, President of the Canadian Cattlemen. "We are going to keep working with the Government as we continue to improve programs to make sure they work for Canadian producers."

The extension of the repayment deadline applies to regular and emergency loans taken by cattle and hog producers during the 2008-09 production period. The Stay of Default covers more than $450 million in advances to the livestock sector.

Producers can still apply for APP emergency advances until March 31, 2009. Regular APP advances will continue to be available. Beginning in April, producers who meet eligibility criteria will be able to apply for 2009-10 regular advances.

Improving cash flow to producers through APP and Targeted Advance Payments under AgriStability are just two of a number of measures being taken in response to challenges facing Canadian livestock producers. Minister Ritz has also been working hard developing new marketing opportunities around the world to help Canadian farmers weather the current economic uncertainty and strengthen export markets.

[mikey]

Tuesday, January 27, 2009Print This Page
Canada Eyes Pork Opportunities in Booming India
ONTARIO, CANADA - Canada Pork International (CPI), is pleased to have been invited to join the trade delegation that accompanied the Minister for Agriculture and Agri-Food Canada, Hon. Gerry Ritz, to India from January 12 to 14, 2009.



"We were able to learn from reliable Indian private sector sources that meat consumption is expected to double within the next ten years, if not earlier and that they have identified Canada as a preferred supplier of safe high quality pork" said Jacques Pomerleau, CPI Executive Director. He added that this confirmed CPI's previous assessment of the Indian market potential which could eventually represent a significant opportunity for Canadian pork once it gains full market access into India.

One objective of this ministerial mission to India was to stress the need to come to the conclusion of a mutually acceptable veterinary certificate that would allow Canadian pork products into India. CPI is satisfied that the negotiations have progressed as a result of this mission.

"Such missions are important to our industry as it needs to gain and maintain access to as many markets as possible, especially those that possess growth potential", said Edouard Asnong, President of CPI. He also indicated that the announcement by Minister Ritz on January 9, 2009 of an Agriculture and Agri-Food Market Access Secretariat has been well received by the industry as it clearly demonstrated the commitment of the Government of Canada in supporting our efforts to develop and diversify our export markets.

Canada Pork International is the export market development agency of the Canadian pork industry and its membership includes Canadian pork producers' organizations and pork packing, processing and trading companies.

[mikey]

Tuesday, January 27, 2009Print This Page
Producers Encouraged to Focus on Maximum Profits
CANADA - Canadian swine producers are being encouraged to focus on maximizing profits rather than productivity during tough economic times, writes Bruce Cochrane.





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

Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 
"Bringing Back Profitability" was the theme of the 2009 Banff Pork Seminar, held last week in Banff, Alberta.

Rocky Morrill, with Fahler, Alberta based Peace Pork, says while hog producers are consistently being told higher productivity is better, that may not be the most effective target.

He stresses optimum production doesn't necessarily mean optimum profitability.

Rocky Morrill-Peace Pork
Basically there's a whole different concept of raising pigs when you're losing money and the production parameters that you would be looking at when you're making money.

Too often our research and our guidance is based on profitable times but, for the last three years, she's been very difficult and there has to be almost a paradigm shift on what you're looking at and look at the cost centres.

You've got to look at your fixed costs, you've got to look at your variable costs.

There is no really opportunistic profits.

If your were making 30 dollars a pig and you can make more pigs, well that's more 30 dollars.

The fact, when you're losing 40 or 50 dollars a pig, you really got to understand that fixed costs, yes production will dilute your fixed costs, but when your variable costs, feed fuel, all those things are so high it doesn't take much to shift that.

Most farmers aren't an economist.

They're just trying to go out and raise animals and this is a whole different game now.

You better understand your cost of production and how production affects it.

More production does not mean the cheapest production.

Morrill says the key questions is, how much do you want to expend trying to push for that optimum production at a time when you're losing substantial money?

He suggests producers need to examine the economics in everything and set targets based on their own individual situations not the recommendations of the consultants but understand, it's about economic targets not about production targets.

[mikey]

Tuesday, January 27, 2009Print This Page
Pork Industry Gets Tentative 'Thumbs Up'
CANADA - Pork producers and their industry counterparts, looking nervously at the next few months, got a tentative thumbs-up from two market watchers on prospects for profitability on both sides of the border.



They spoke at the Banff Pork Seminar, an annual seminar that brings together national and international speakers and delegates from around the world.



Grant LazarukGrant Lazaruk, the chief operating officer (COO) of Hytek Ltd., Canada's largest integrated producer of pork, says tackling production cost disadvantages such as high feed costs, transportation, labour and asset utilization may drive opportunities for cost reduction for the Canadian pork industry in spite of the global economic slowdown.

With demand steady, liquidation of supply is key to addressing rising feed costs, says Mr Lazaruk. Put simply, if costs rise by 30 percent, the price of pork will need to increase by the same amount. "In this case, it would require a reduction in supply of approximately seven to 10 percent to achieve this."

Managers should not underestimate the value of experienced, productive staff in keeping production costs down, says Mr Lazaruk. "A decrease in yield at the plant of one percent will decrease your revenue by two dollars a hog. Experienced staff directly impacts the cost per pig."

Keeping links in the pork value chain as close to each other as possible is key to reducing significant transportation costs, says Mr Lazaruk, and is a clear advantage of integrated management systems such as those used by Hytek. Finally, getting maximum value from every asset is crucial.

"We estimate that 12 to 15 per cent of hog production assets are underutilized. Processing facilities are being underutilized if they function only during a single shift. Even with down time for cleanup and repairs, a processing plant can be in operation for 16 hours a day."

Ultimately, Mr Lazaruk believes that pork, while not recession-proof, has a higher chance of survival and profitability in an economic slowdown than many other products simply because it's an affordable source of meat protein that people tend to eat at home. "The world economic recession has slowed down international markets for pork, but in the end we still must eat."



Ron PlainDr Ron Plain, a professor of ag economics with University of Missouri-Columbia and a frequent speaker to the Canadian pork industry, says his call is that the pork market of the near future will be marked by a decrease in Canadian hog exports, a decrease in US pork exports, weak domestic demand in both countries, "semi-high" feed costs, and a decrease in farrowings in response to all of the above.

"Financial losses, due in large part to high feed prices, have caused both US and Canadian hog producers to reduce the number of litters they are producing," says Dr Plain. "This has led to an expected 2.7 per cent decline in combined US and Canadian hog slaughter. This should lift 2009 hog prices closer to break-even levels."

One other factor is the continuing increase in productivity, says Dr Plain. Producers are continually improving the number of pigs produced per litter, which offsets part of the impact of reducing the number of litters farrowed, he says.

Although Dr Plain says producers can expect feed prices to remain high due in part to ongoing government support of ethanol in the US, he does not foresee them returning to the record-breaking highs seen in 2008. "Even if corn is four dollars a bushel, it's still awfully cheap compared to the seven dollar a bushel corn we had back in the summer."

[mikey]

Tuesday, January 27, 2009Print This Page
New Opportunities for Biofuels and Livestock Sector
CANADA - The Government of Canada is creating new economic opportunities in rural Canada by investing $6 million in the Feed Opportunities from the BioFuels Industries (FOBI) research network that will work to develop and harness new market opportunities in the ethanol and livestock sectors.



"Our Government wants to help farmers succeed, and a big part of that success depends on Canadian farmers being able to access new and value-added markets," said Saskatoon-Humboldt Member of Parliament Brad Trost who announced the investment on behalf of Agriculture Minister Gerry Ritz. "This initiative will result in new markets, which will help our livestock sector improve their bottom line and boost our economy."

Led by the University of Saskatchewan, the FOBI network is a multidisciplinary initiative composed of private, public and academic members from the University of Alberta, the University of Calgary, Alberta Agriculture and Rural Development, Feedlot Health Management Services Ltd., Prairie Swine Centre Inc. and the Saskatchewan Research Council. The FOBI network will focus on creating higher quality livestock feed from ethanol waste, also known as co-products or distillers grains. The research will explore the integration of livestock production and wheat-based ethanol production, and focus on creating new co-products and new markets for existing co-products and Canadian farmers.

"This collaborative research network led by the University of Saskatchewan Feeds Innovation Institute will help make Western Canada an international leader in feeds research and commercialization, improve both livestock and bio-fuels production, and provide tremendous new training opportunities for more than 30 students and other research personnel," said Karen Chad, University of Saskatchewan Acting Vice-President Research.

Funding for this project is being provided through Agriculture and Agri-Food Canada's Agricultural Bioproducts Innovation Program (ABIP), a federal funding program designed to integrate Canada's talent from universities, industry and government in order to stimulate creativity, leverage resources, reduce costs and accelerate progress towards commercialization of bioproducts and bioprocesses.